VERA BRADLEY, INC. FORM DEF 14A (Proxy Statement (definitive)) Filed 04/27/16 for the Period Ending 05/26/16 Address 12420 STONEBRIDGE ROAD ROANOKE, IN 46783 Telephone 260-482-4673 CIK 0001495320 Symbol VRA SIC Code 3100 - Leather & Leather Products Industry Apparel/Accessories Sector Consumer Cyclical Fiscal Year 01/31 http://www.edgar-online.com © Copyright 2016, EDGAR Online, Inc. All Rights Reserved. Distribution and use of this document restricted under EDGAR Online, Inc. Terms of Use. Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 14A Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 Filed by the Registrant x 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)) x Definitive Proxy Statement ¨ Definitive Additional Materials ¨ Soliciting Material under §240.14a-12 VERA BRADLEY, 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): x No fee required. ¨ Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. (1) Title of each class of securities to which transaction applies: (2) Aggregate number of securities to which transaction applies: (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): (4) Proposed maximum aggregate value of transaction: (5) Total fee paid: ¨ 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. Table of Contents 2016 PROXY STATEMENT AND NOTICE OF ANNUAL MEETING OF SHAREHOLDERS Table of Contents Welcome to the Vera Bradley, Inc. Annual Meeting of Shareholders Dear Shareholder of Vera Bradley, Inc.: You are cordially invited to attend the 2016 Annual Meeting of Shareholders of Vera Bradley, Inc., to be held at 11:00 a.m., Eastern Time, on May 26, 2016 at our Design Center located at 12420 Stonebridge Road, Roanoke, Indiana 46783. The attached Notice of 2016 Annual Meeting of Shareholders and Proxy Statement provide information concerning the matters to be considered and voted on at the Annual Meeting. Please take the time to carefully read each of the proposals. Regardless of the number of shares you hold or whether you plan to attend the meeting in person, your vote is important. Accordingly, please vote your shares as soon as possible by following the instructions you received on your proxy card. Voting your shares prior to the Annual Meeting will not prevent you from voting your shares in person if you subsequently choose to attend the meeting. To make it easier for you to vote, Internet and telephone voting are available. The instructions for voting via the Internet and telephone can be found on your proxy card. Thank you for your continued support of Vera Bradley. Sincerely, Robert Wallstrom President and Chief Executive Officer April 27, 2016 Table of Contents NOTICE OF 2016 ANNUAL MEETING OF SHAREHOLDERS Date: May 26, 2016 Time: 11:00 a.m., Eastern Time Place: Vera Bradley Design Center 12420 Stonebridge Road Roanoke, Indiana 46783 Record Date: March 28, 2016. You are entitled to vote at the Annual Meeting only if you were a shareholder at the close of business on the record date. Items of Business: • To elect four Directors for a three-year term to expire at the 2019 Annual Meeting of Shareholders • To ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for fiscal 2017 • To transact any other business as may properly come before the meeting or at any adjournments or postponements thereof Proxy Voting: Shareholders of record may vote in person at the Annual Meeting in Fort Wayne, but may also appoint proxies to vote their shares in one of the following ways, by: Via Internet – cast your vote at Via Phone – cast your vote by phone at 1-800-690- Via Mail – Mark, sign and date your proxy card www.proxyvote.com 24/7 until 11:59 p.m., Eastern 6903 24/7 until 11:59 p.m., Eastern Time on and return it in the postage-paid envelope Time on May 25, 2016 May 25, 2016 provided Shareholders whose shares are held by a bank, broker or other nominee (in “street name”) may instruct such records holders how to vote their shares. Any proxy may be revoked at any time prior to its exercise at the meeting by following the procedures described in the proxy solicitation materials. If you hold your shares in “street name” and wish to vote your shares in person at the Annual Meeting, you must obtain a legal proxy from your bank, broker or other nominee, giving you the right to vote the shares. By Order of the Board of Directors, Anastacia S. Knapper Secretary April 27, 2016 Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Shareholders to be Held on May 26, 2016: This 2016 Proxy Statement and Notice of Annual Meeting of Shareholders and our Fiscal 2016 Annual Report are available in the “Investor Relations” section of our website at www.verabradley.com. Table of Contents TA BLE OF CONTENTS PROXY SUMMARY i PROPOSAL NO. 2 RATIFICATION OF Fiscal 2016 Business Highlights i INDEPENDENT AUDITOR 12 Strategic Progress i PROPOSAL 12 Financial Results i Principal Accounting Fees and Services 12 Executive Compensation ii VOTE REQUIRED AND BOARD 12 Corporate Governance ii RECOMMENDATION Shareholder Engagement iii 13 Board Nominees iii AUDIT COMMITTEE REPORT Auditors iii EXECUTIVE COMPENSATION 14 Questions and Answers iv COMPENSATION COMMITTEE REPORT 14 Note About Forward-Looking Statements iv EXECUTIVE COMPENSATION DISCUSSION 14 PROPOSAL NO. 1 ELECTION OF DIRECTORS 1 AND ANALYSIS VOTE REQUIRED AND BOARD Our Compensation Philosophy and Objectives 15 RECOMMENDATION 1 Compensation Mix and Pay for Performance 15 THE BOARD OF DIRECTORS 2 Pay Policies 16 Director Qualifications and Selection Process 2 How We Make Executive compensation Decisions 16 Director Nominees for Election at the 2016 Annual Meeting 2 Elements of Our Executive Compensation Program in Fiscal 2016 18 Directors Continuing in Office 3 Agreements with Named Executive Officers 23 Compensation and Risk 24 CORPORATE GOVERNANCE 6 Effect of Accounting and Tax Treatment on Compensation Decisions 25 Corporate Governance Guidelines 6 26 Conflict of Interest and Business Ethics Policy 6 COMPENSATION TABLES Code of Ethics for Senior Financial Officers 6 Summary Compensation Table 26 Risk Oversight 6 Grants and Plan-Based Awards 27 Stock Ownership Guidelines 6 Outstanding Equity Awards at Fiscal Year-End 28 Hedging, Derivatives and Pledging 7 Option Exercises and Shares Vested 30 Compensation Committee Interlocks and Insider Participation 7 Pension Benefits 30 Policy on Related Party Transactions 7 Nonqualified Deferred Compensation 30 Related Party Transactions for Fiscal 2016 7 Potential Payments Upon Termination or Change in Control 31 Family Relationships 8 Severance Agreements and Arrangements 34 Copies of Governance Documents 8 QUESTIONS AND ANSWERS ABOUT THE THE BOARD AND ITS COMMITTEES 8 PROXY MATERIALS AND THE 2016 ANNUAL Board Responsibilities 8 MEETING OF SHAREHOLDERS 37 Board Independence 8 SHARE OWNERSHIP OF CERTAIN Board Leadership Structure and Lead Independent Director 9 BENEFICIAL OWNERS AND MANAGEMENT 40 Standing Committees and Meetings of the Board 9 OTHER BUSINESS & ADDITIONAL Annual Board and Committee Evaluations 10 INFORMATION 42 Committee Charters 10 Section 16(A) Beneficial Ownership Reporting Compliance 42 Communications with Directors 10 Requirements, Including Deadlines, for Submission of Proxy DIRECTOR COMPENSATION 11 Proposals, Nomination of Directors and Other Business of Cash Compensation for Non-Employee Directors 11 Shareholders 42 Restricted Stock Units for Non-Employee Directors 11 Fiscal 2016 Director Compensation 11 Table of Contents PROXY SUMMARY This summary highlights information contained elsewhere in this Proxy Statement. This summary does not contain all of the information you should consider, and we encourage you to read the entire Proxy Statement before voting. FISCAL 2016 BUSINESS HIGHLIGHTS Strategic Progress Fiscal 2016 (beginning February 1, 2015 and running through January 30, 2016) was the second year of our multi-year turnaround, and we made significant progress against key elements of our long-term strategic plan, laid out in March 2014, focusing on the key planks of product, distribution and marketing. We made progress on our product strategies, We made progress on our distribution strategies, We began to modernize our marketing and including : including : increase brand and product awareness through : v Delivering innovation, newness and v Opening 15 full-line stores, all in our new v Launching our multi-media national ad diversification through the introduction of modern store design campaign several new fabrications, the launch of our v Opening 11 factory outlet stores and v Increasing investment in social media, which Collegiate Collection and partnering with successfully transitioning to a MFO model resulted in a significant increase in the size of industry experts to launch