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
(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 Pursuant to §240.14a-12

​

NATIONAL VISION HOLDINGS, 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.

​

☐

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.

​

(1)

Amount Previously Paid:
   

​

(2)

Form, Schedule or Registration Statement No.:
   

​

(3)

Filing Party:
   

​

(4)

Date Filed:
   

​

National Vision Holdings, Inc.

2020 Proxy Statement
Notice of Annual Meeting of Stockholders

Wednesday, June 10, 2020

1:00 pm, Eastern Time​

National Vision

2435 Commerce Avenue, Building 2200

Duluth, Georgia 30096

 

TABLE OF CONTENTS

2020 Proxy Statement      i

 

ii      2020 Proxy Statement

 

Dear Stockholders:

We are pleased to invite you to attend the National Vision Holdings, Inc. 2020 Annual Meeting of Stockholders on Wednesday, June 10, 2020, at 1:00 p.m., Eastern Time.

2019 was another record year filled with a number of highlights at National Vision. We delivered double-digit growth in net revenue in 2019, as well as our 72nd consecutive quarter of positive comparable store sales growth. We opened 75 stores in 2019, ending the year with 1,151 stores, and continued to gain share in the attractive optical retail market. The talent, passion and innovation of our optometrists and associates continue to inspire us as they work hard every day to make quality eye exams and eyewear more affordable to our patients and customers throughout the United States. Our financial performance also allows us to make key investments in our business, while also progressing our philanthropic activities focused on giving back to communities in the U.S. and around the world.

As we move further into 2020, we continue to closely monitor developments related to the coronavirus (COVID-19) pandemic. The safety and health of our customers, optometrists and employees remains our highest priority as we find ways to continue to deliver for our customers. Despite the uncertainty created by COVID-19 and the related volatility in the global economy, we remain focused on delivering value for you over the long term. We are also grateful to the heroic doctors, nurses, public servants and others who are on the frontlines of this unprecedented challenge.

Whether you own a few shares or many, and whether or not you plan to attend the Annual Meeting, your vote is important to us. We encourage you to review the proxy materials and submit your vote today. Detailed information concerning the Annual Meeting is set forth in the Notice of Internet Availability of Proxy Materials you received in the mail and in the attached Notice of Annual Meeting of Stockholders and Proxy Statement, which describe the business to be conducted at the meeting. Whether or not you plan to attend the Annual Meeting, it is important that your shares be represented and voted during the meeting. Instructions for voting your shares are set forth in the Proxy Statement as well as in the Notice of Internet Availability of Proxy Materials you received in the mail. The Notice of Internet Availability of Proxy Materials, the Proxy Statement, and the enclosed proxy card and annual report are first being sent to stockholders on or about April 24, 2020.

Although we presently intend to hold the Annual Meeting in person at National Vision’s headquarters, located at 2435 Commerce Avenue, Building 2200, Duluth, Georgia 30096, we are sensitive to the public health and travel concerns our stockholders may have and recommendations that public health officials may issue in light of the evolving situation regarding COVID-19. As a part of our precautions regarding COVID-19, we may impose additional procedures or limitations on meeting attendees (beyond those described in the Proxy Statement) and are also planning for the possibility that the Annual Meeting may be held solely by means of remote communication. If we take this step, we will announce the decision to do so in advance in a press release and SEC filing, and details on how to participate will be available at www.nationalvision.com/investors. The Notice of Internet Availability of Proxy Materials, the proxy card and related materials would not be updated to reflect the change to a virtual meeting and you would need the control number provided to attend the virtual Annual Meeting. If we hold the Annual Meeting virtually, all shareholders will be afforded the same rights they would have had at a physical meeting. Please see the enclosed Notice of Annual Meeting of Stockholders for more details.

On behalf of the Board of Directors and everyone at National Vision, we are grateful for your continued support. Thank you for being a stockholder of National Vision Holdings, Inc.

Sincerely,

April 24, 2020

2020 Proxy Statement      1

 

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

By Order of the Board of Directors,

Jared Brandman
Senior Vice President, General Counsel and Secretary

2      2020 Proxy Statement

 

PROXY STATEMENT SUMMARY

We are providing this proxy statement to you in connection with the solicitation of proxies by the Board of Directors (the “Board of Directors” or the “Board”) of National Vision Holdings, Inc. (the “Company”) for the 2020 Annual Meeting of Stockholders (the “Annual Meeting”) and for any adjournment or postponement of the Annual Meeting. This summary highlights information contained elsewhere in this proxy statement. This summary does not contain all the information you should consider, and you should read the entire proxy statement carefully before voting.

2020 ANNUAL MEETING OF STOCKHOLDERS

​

*

See disclosure earlier in the Notice of Annual Meeting regarding any potential change in location, procedures or the possibility that the Annual Meeting may be held solely by remote communications due to precautions regarding COVID-19.

​

AGENDA AND VOTING RECOMMENDATIONS

HOW TO VOTE

If at the close of business on April 15, 2020, you were a stockholder of record or held shares through a broker or bank, you may vote your shares by proxy at the Annual Meeting. You may vote your shares over the Internet, by telephone or by mail, or you may vote in person at the Annual Meeting. See full instructions under the Important Information About Voting At the Annual Meeting section of this proxy statement on page 46.

If you are a stockholder of record, your vote must be received by 11:59 p.m., Eastern Time, on June 9, 2020 to be counted. If you hold shares through a broker, bank or other nominee, please refer to information from your bank, broker or nominee for voting instructions.

CORPORATE GOVERNANCE AND BOARD HIGHLIGHTS

2020 Proxy Statement      3

CURRENT NATIONAL VISION BOARD

​

*

All directors are independent, except for Mr. Fahs

​

**

Mr. N. Taylor serves as the independent Chair of the Board

​

RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The audit committee of the Board has selected Deloitte & Touche LLP as our independent registered public accounting firm for fiscal 2020. Each year the audit committee evaluates the qualifications and performance of the Company’s independent registered public accountants and determines whether to re-engage the current independent registered public accountants. Based on this evaluation, the audit committee believes the continued retention of Deloitte & Touche LLP is in the best interests of the Company and its stockholders.

4      2020 Proxy Statement

EXECUTIVE COMPENSATION HIGHLIGHTS

We strive to create an executive compensation program that strikes the right balance of pay for performance with an overarching goal to motivate our leaders to contribute to the achievement of our financial goals and focus on long-term value for our stockholders without taking undue risk. Our executive compensation program has three main components: (1) base salary; (2) annual cash incentive compensation; and (3) long-term incentive awards. Each component is designed to be consistent with the Company’s compensation philosophy.

The Company’s fiscal 2019 performance included the following significant financial and operational results:

•

Net revenue increased 12.2% to $1.72 billion

​

•

72nd consecutive quarter of positive comparable store sales growth as of fiscal 2019 end

​

•

Overall store count grew 6.4%, and fiscal 2019 ended with 1,151 stores

​

•

Comparable store sales growth1 was 6.5%; adjusted comparable store sales growth1 was 6.2%

​

•

Net income increased 38.7% to $32.8 million; adjusted net income1 increased 27.3% to $66.1 million

​

•

Adjusted EBITDA1 increased 15.1% to $200.7 million

​

•

Diluted EPS increased 34.2% to $0.40; adjusted diluted EPS1 increased 23.2% to $0.81

​

(1) For an explanation of our non-GAAP financial measures and a reconciliation of adjusted comparable store sales growth, adjusted net income, Adjusted EBITDA and adjusted diluted EPS to the most directly comparable GAAP measures, see Appendix A to this proxy statement.

The discussion on pages 21-43 more fully describes the design and evolution of our executive compensation program, including the Company’s performance for fiscal 2019 and its connection to executive officer compensation.

The compensation and governance practices that support these principles include the following:

2020 Proxy Statement      5

PROXY STATEMENT

PROPOSAL NO. 1—ELECTION OF DIRECTORS

Our Board of Directors oversees or directs our business and affairs, as provided by Delaware law, and conducts its business through meetings of the Board and three standing committees: the audit committee, the nominating and corporate governance committee and the compensation committee. The Board is currently comprised of seven directors, six of whom are independent.

Our Certificate of Incorporation provides for a classified Board, with two directors currently in Class I (Messrs. N. Taylor and Fahs), two directors currently in Class II (Mr. Peeler and Ms. Cianfrocco), and three directors currently in Class III (Messrs. Tehle and T. Taylor and Ms. Hepner). One class of directors stands for election at each of our Annual Meetings of Stockholders, with directors elected to serve for staggered three-year terms. Upon the recommendation of our nominating and corporate governance committee, our Board has committed to submit for stockholder vote at the 2021 Annual Meeting a proposal to amend our certificate of incorporation to eliminate the classified Board and other governance provisions. See “Classified Board and Supermajority Sunset Commitment” below for more details.

The terms of our three current Class III directors expire on the date of the Annual Meeting, subject to the election and qualification of their successors. Upon the recommendation of the nominating and corporate governance committee, the Board has nominated David M. Tehle, Thomas V. Taylor, Jr. and Virginia A. Hepner for election as Class III directors for a three-year term expiring in 2023.

Unless otherwise instructed, the persons named in the form of proxy card (the “proxyholders”) included with this proxy statement intend to vote the proxies held by them “FOR” the election of David M. Tehle, Thomas V. Taylor, Jr. and Virginia A. Hepner. We have no reason to believe that Messrs. Tehle and T. Taylor and Ms. Hepner will be unable or unwilling to serve if elected. If Messrs. Tehle and T. Taylor and Ms. Hepner cease to be a candidates for election by the time of the Annual Meeting (a contingency which the Board does not expect to occur), such proxies may be voted by the proxyholders in accordance with the recommendation of the Board.

6      2020 Proxy Statement

Nominees for Election to the Board of Directors

Set forth below is certain information regarding each director nominee. Beneficial ownership of equity securities of each director nominee is shown under “Ownership of Our Securities” below.

2020 Proxy Statement      7

Continuing Members of the Board of Directors

Set forth below is certain information regarding each director whose term continues beyond the Annual Meeting and who is not subject to election this year. Beneficial ownership of equity securities for these directors is also shown under “Ownership of Our Securities” below.

8      2020 Proxy Statement

2020 Proxy Statement      9

Board Oversight

The primary responsibility of our Board is to oversee the affairs of the Company for the benefit of our stockholders and other stakeholders. As part of its responsibility, the Board oversees critical matters such as strategy, management succession planning, financial and other internal controls, corporate governance, risk management and compliance. To assist it in fulfilling its duties, our Board has delegated certain authority to its standing committees—the audit committee, the nominating and corporate governance committee and the compensation committee. The duties and responsibilities of these standing committees are described below under “Board Committees and Meetings.”

Director Independence

We believe the Company benefits from having a strong and independent Board. Under our Corporate Governance Guidelines and the Nasdaq Listing Rules, a director is not independent unless the Board affirmatively determines that he or she does not have a relationship with management that, in the opinion of the Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.

Our Corporate Governance Guidelines define independence in accordance with the independence standards in the current Nasdaq Listing Rules. Our Corporate Governance Guidelines require the Board to review the independence of all directors at least annually.

Our Board has affirmatively determined that all of the directors and nominees for director, except Mr. Fahs, are independent under the guidelines for director independence set forth in the Corporate Governance Guidelines and under all applicable Nasdaq guidelines. Mr. Fahs is not considered an independent director because of his employment as Chief Executive Officer of the Company. All members of the audit committee, compensation committee and nominating and corporate governance committee are independent.

In making its independence determinations, the Board considered and reviewed all information known to it, including information identified through annual directors’ questionnaires.

Composition of the Board of Directors

At each Annual Meeting, the successors to directors whose terms then expire will be elected to serve from the time of election and qualification until the third Annual Meeting following their election. Our Certificate of Incorporation provides that the authorized number of directors may be changed only by resolution of our Board of Directors. Any additional directorships resulting from an increase in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one-third of the directors. The division of our Board of Directors into three classes with staggered three-year terms may delay or prevent a change of our management or a change in control of our Company. See “Classified Board and Supermajority Sunset Commitment” below for more details of our Board’s commitment to submit for stockholder vote at the 2021 Annual Meeting a proposal that would eliminate the classified Board structure and certain other governance provisions.

Director Nomination Process

The nominating and corporate governance committee weighs the characteristics, experience, independence and skills of potential candidates for election to the Board and recommends nominees for director to the Board for election by our stockholders in accordance with our Corporate Governance Guidelines. As the application of these factors involves the exercise of judgment, the nominating and corporate governance committee does not have a standard set of fixed qualifications that is applicable to all director candidates, although the nominating and corporate governance committee does at a minimum assess each candidate’s integrity, accountability, skills, experience, independence, other outside commitments and ability to work collegially with the other members of the Board of Directors. In addition, although the Board considers a diversity of viewpoints, background and experiences (including age, race and ethnicity) as important to the selection of directors to enhance the Board’s cognitive diversity, the Board does not have a formal diversity policy. The nominating and corporate governance committee may identify candidates for election to the Board of Directors on its own, or by considering recommendations from stockholders, officers and employees of the Company and other sources that the nominating and corporate governance committee deems appropriate. The nominating and corporate governance committee may retain a third-party search firm to assist in the identification of possible candidates for election to the Board of Directors.

10      2020 Proxy Statement

When considering whether directors and nominees have the experience, qualifications, attributes or skills, taken as a whole, to enable our Board of Directors to satisfy its oversight responsibilities effectively in light of our business and structure and address areas where additional expertise or skills may be needed, the Board of Directors focused primarily on each person’s background and experience as reflected in the information discussed in each of the directors’ individual biographies set forth above. We believe that our directors provide an appropriate mix of experience and skills relevant to the size and nature of our business.

In particular, the members of our Board of Directors considered the following important characteristics, among others:

•

Mr. Fahs, our Chief Executive Officer, has many years of executive experience in the optical retail industry.

​

•

Mr. N. Taylor has significant financial, investment and operational experience from his involvement with numerous portfolio companies of KKR & Co. and its affiliated funds and has played active roles in overseeing those businesses.

​

•

Mr. Peeler has significant experience and expertise in private equity investments through his involvement in Berkshire’s investments.

​

•

Mr. Tehle has many years of experience as the chief financial officer of a publicly held company and as a director of publicly held companies and has significant knowledge of financial reporting, internal controls and procedures and risk management.

​

•

Ms. Hepner has leadership experience as the president and chief executive officer of a nationally-esteemed arts center, has significant financial expertise in corporate banking and capital markets having served as a senior officer with financial oversight responsibilities and has served as a director of publicly held companies.

​

•

Mr. T. Taylor has significant executive, financial and operational experience as the chief executive officer of a publicly held retail company.

​

•

Ms. Cianfrocco has leadership and business expertise, a depth of knowledge and experience in the health care industry as well as experience in private legal practice where she focused on corporate and securities law.

​

The nominating and corporate governance committee will consider director candidates recommended by stockholders on the same basis as recommendations from other sources. Any recommendation submitted to the Secretary of the Company should be in writing and should include any supporting material the stockholder considers appropriate in support of that recommendation, but must include information that would be required under the rules of the U.S. Securities and Exchange Commission (the “SEC”) to be included in a proxy statement soliciting proxies for the election of such candidate and a written consent of the candidate to serve as one of our directors if elected. Stockholders also must satisfy the notification, timeliness, consent and information requirements set forth in our Bylaws. Stockholders wishing to propose a candidate for consideration may do so by submitting the required information to the attention of the Secretary, National Vision Holdings, Inc., 2435 Commerce Ave, Building 2200, Duluth, Georgia 30096. All recommendations for nomination received by the Secretary that satisfy our Bylaw requirements relating to director nominations will be presented to the nominating and corporate governance committee for its consideration. These requirements are also described under “Stockholder Proposals for the 2021 Annual Meeting.”

Leadership Structure of the Board of Directors

As described in our Corporate Governance Guidelines, our Board directs and oversees the management of the business and the affairs of the Company using its business judgment to act in the best interests of the Company and its stockholders. As part of this oversight role, the Board selects and oversees the members of senior management who are charged by the Board with conducting the business of the Company. While our Corporate Governance Guidelines provide our Board with flexibility to combine or separate the positions of Chairman of the Board and Chief Executive Officer in accordance with its determination that utilizing one or the other structure would be in the best interests of our Company, our Board currently believes that having these positions separated, with Mr. N. Taylor serving as Chairman of the Board and Mr. Fahs serving as our Chief Executive Officer and also as a director, is the appropriate leadership structure at this time and demonstrates our commitment to good corporate governance. However, our Board of Directors will continue to periodically review our leadership structure and may make such changes in the future as it deems appropriate. Under our Corporate Governance Guidelines, should the Board determine that such positions should not be separated and the Chairperson of the Board is also the Chief Executive

2020 Proxy Statement      11

Officer or a director who does not qualify as an independent director, the independent directors may annually elect from among themselves a lead independent director.

Board Oversight of Risk Management

Management is responsible for the day-to-day management of risk, while the Board, as a whole and through its committees has extensive involvement in the oversight of the Company’s risk management. The Board engages in risk oversight throughout the year as a matter of course in fulfilling its role overseeing management and business operations, including receiving reports from management on the strategic plans and related risks facing the Company which range from financial risks to regulatory, legal, supply chain, COVID-19 or pandemic-related, competitive and information technology risks. The Board has delegated to its committees certain elements of its risk oversight function to better coordinate with management and serve the long-term interests of our stockholders. We believe that the leadership structure of our Board of Directors, along with the allocation of risk management responsibilities described below by appropriate committee oversight, provides appropriate risk oversight of our activities.

The audit committee oversees our risk management process with a specific focus on internal controls, financial statement integrity, compliance programs, fraud risk, legal matters and related risk mitigation. Along with the Board, the audit committee also receives regular reports from management to help ensure effective and efficient oversight and to assist in proper risk management, including with respect to cybersecurity, and the ongoing evaluation of management controls. Through its regular meetings with management, including the finance, legal, internal audit, and compliance functions and discussions, as appropriate, with our independent registered public accounting firm and internal auditors, the audit committee reviews and discusses significant areas of our business, including areas of risk and appropriate mitigating factors. Internal audit reports functionally and administratively to our Chief Financial Officer and directly to the audit committee.

The compensation committee reviews the risk profile of the Company’s compensation policies and practices, including a review of a risk assessment of our compensation programs and managing risk associated with human capital management, including employee recruitment and retention.

The nominating and corporate governance committee monitors risks relating to governance matters, including corporate responsibility and sustainability, and recommends appropriate actions in response to those risks.

Management Succession Planning

The Board believes that one of its primary responsibilities is to oversee the development and retention of senior talent and to ensure that an appropriate succession plan is in place for our Chief Executive Officer and other members of senior management. The Board and compensation committee, together with the Chief Executive Officer, regularly reviews senior management talent and succession planning.

Executive Sessions

Executive sessions, which are meetings of the independent directors of the Board, are regularly scheduled throughout the year, typically at the time of each regular Board meeting and as frequently as such independent directors deem appropriate.

Board and Committee Evaluations

In order to increase the effectiveness of the Board, the nominating and corporate governance committee supervises a review and evaluation of the performance of the Board and its committees. The evaluation is conducted through a range of questions related to topics including structure of the Board and its committees, overall Board and committee effectiveness, oversight and risk management, strategy and Board access to information and resources. In 2019, an evaluation was conducted and completed with each director providing direct feedback. The evaluation results about the Board and its committees were reviewed and discussed by the nominating and corporate governance committee as well as the full Board.

Communications with the Board

As described in our Corporate Governance Guidelines, stockholders and other interested parties who wish to communicate with a member or members of our Board of Directors, including the chairperson of our Board of

12      2020 Proxy Statement

Directors, the chairperson of any of the audit, compensation and nominating and corporate governance committees, or to the non-management or independent directors as a group, may do so by addressing such communications or concerns to the Secretary of the Company, 2435 Commerce Ave, Building 2200, Duluth, GA 30096, who will forward such communication to the appropriate party.

Board Committees and Meetings

Our Board of Directors has an audit committee, a nominating and corporate governance committee and a compensation committee, each of which operates under a charter that has been approved by our Board.

The following table summarizes the current membership of each of the Board’s committees.

All directors are expected to make every effort to attend all meetings of the Board of Directors, meetings of the committees of which they are members and the Annual Meeting of Stockholders. During the fiscal year ended December 28, 2019, the Board held seven meetings, the audit committee held eight meetings, the compensation committee held four meetings and the nominating and corporate governance committee, held four meetings. In addition, the Board, the audit committee, the compensation committee and the nominating and corporate governance committee acted by unanimous written consent several times during fiscal 2019. In fiscal 2019, other than Mr. N. Taylor and Ms. Cianfrocco, all directors attended 100% of the meeting of the Board of Directors and committees. Mr. N. Taylor attended 71% of the meetings of the Board of Directors as he was unable to attend two Board meetings due to extenuating circumstances. Ms. Cianfrocco attended 50% of the Board and committee meetings held after her appointment to the Board in July 2019 due to a pre-existing conflict for one meeting date prior to her joining the Board.

Audit Committee

Our audit committee consists of David M. Tehle, who serves as the Chair, Virginia A. Hepner and Thomas Taylor, Jr. Mr. Tehle, Ms. Hepner and Mr. T. Taylor each qualifies as an independent director under Nasdaq corporate governance standards and the independence requirements of Rule 10A-3 of the Securities Exchange Act of 1934 (the “Exchange Act”). Our Board of Directors has determined that Mr. Tehle and Ms. Hepner each qualifies as an “audit committee financial expert” as such term is defined in Item 407(d)(5) of Regulation S-K.

The audit committee is responsible for, among other things, preparing the audit committee report required by the SEC to be included in our proxy statement and assisting our Board of Directors with respect to its oversight of   (1) our risk management policies and procedures, (2) the audits and integrity of our financial statements, and the effectiveness of internal control over financial reporting, (3) our compliance with legal and regulatory requirements, including SEC filings, (4) the qualifications, engagement, performance and independence of the outside auditors, including approving all auditing and non-auditing services performed by our outside auditors and (5) approving the annual audit plans and the performance of our internal audit function.

Nominating and Corporate Governance Committee

Our nominating and corporate governance committee consists of Virginia Hepner, who serves as the Chair, Nathaniel H. Taylor and D. Randolph Peeler. Each member of the nominating and corporate governance committee has been determined to be independent under the applicable listing standards of Nasdaq and our Corporate Governance Guidelines.

2020 Proxy Statement      13

The primary purpose of the nominating and corporate governance committee is to provide assistance to the Board of Directors by, among other things, determining the size, structure, composition, processes and practices of the Board and its committees and assessing director independence and qualifications. The committee also identifies, recommends and assists the Board in recruiting individuals qualified to become Board members, and takes a leadership role in shaping the corporate governance of the Company.

Compensation Committee

Our compensation committee consists of Thomas Taylor, Jr., who serves as the Chair, Nathaniel H. Taylor and Heather Cianfrocco. Each member of the compensation committee has been determined to be independent under the applicable listing standards of Nasdaq and our Corporate Governance Guidelines.

The primary purpose of the compensation committee is to assist our Board of Directors in discharging its responsibilities relating to (1) setting our compensation philosophy and compensation of our executive officers and directors, (2) monitoring our equity-based and certain incentive compensation plans and (3) preparing the compensation committee report required to be included in our proxy statement or annual report under the rules and regulations of the SEC.

Committee Charters and Corporate Governance Guidelines

Our commitment to good corporate governance is reflected in our Corporate Governance Guidelines, which describe our Board of Directors’ views and policies on a wide range of governance topics. These Corporate Governance Guidelines are reviewed from time to time by our Board of Directors and, to the extent deemed appropriate in light of emerging practices, revised accordingly, upon recommendation to and approval by our Board of Directors.

Our Corporate Governance Guidelines, audit, nominating and corporate governance and compensation committee charters, and other corporate governance information are available in the investors section of our website, www.nationalvision.com.

Code of Conduct

We are committed to ensuring our business is conducted ethically and legally. We maintain a written code of conduct that applies to our directors, officers and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, which we call our Code of Conduct. Our Code of Conduct is a “code of ethics” as defined in Item 406(b) of Regulation S-K and is posted in the investors section of our website, www.nationalvision.com.

We intend to make any legally required disclosures regarding amendments to, or waivers of, provisions of our Code of Conduct on our website.

Hedging and Pledging Policies

The Company’s Securities Trading Policy requires executive officers and directors to consult the Company’s General Counsel prior to engaging in transactions involving the Company’s securities. Directors and executive officers are prohibited from hedging or monetization transactions including, but not limited to, variable forward contracts, equity swaps, collars and exchange funds, or from trading in options, warrants, puts and calls or similar instruments on the Company’s securities or establishing a short position in the Company’s securities. The Company’s Securities Trading Policy discourages employees from purchasing the Company’s securities on margin, or borrowing against any account in which the Company’s securities are held, or pledging the Company’s securities as collateral for a loan. For directors and officers, the pledging of Company securities is limited to those situations approved by the Company’s General Counsel.

Transactions with Related Persons

The Board has adopted a written related person transaction policy that sets forth the policies and procedures for the review and approval or ratification of related person transactions. This policy covers, with certain exceptions set forth in Item 404 of Regulation S-K under the Securities Act, any transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships, in which we were or are to be a participant, where the

14      2020 Proxy Statement

amount involved exceeds $120,000 and a related person had or will have a direct or indirect material interest, including, without limitation, purchases of goods or services by or from the related person or entities in which the related person has a material interest, indebtedness, guarantees of indebtedness and employment by us of a related person. It is our policy that no related person transaction will be executed without the approval or ratification of the disinterested members of the Board or a committee of the Board.

Certain Related Person Transactions

Registration Rights Agreement. In connection with the acquisition of NVI in March 2014 by affiliates of KKR (the “KKR Acquisition”), we entered into a registration rights agreement with affiliates of KKR and private equity funds managed by Berkshire (the “Sponsors”) and with other persons who may become party thereto. Subject to certain conditions, the registration rights agreement provided certain affiliates of KKR with an unlimited number of  ”demand” registrations, and provided certain affiliates of Berkshire with two “demand” registrations following an initial public offering. The registration rights agreement also provided that we would pay certain expenses of these holders relating to such registrations and indemnify them against certain liabilities which may arise under the Securities Act. Following secondary offerings in 2018 and 2019, neither Sponsor retains any further demand registration rights following our IPO.

Relationship with KKR Capital Markets. KKR Capital Markets LLC, an affiliate of KKR, acted as a lead arranger with respect to the refinancing of our first lien credit agreement, dated as of July 18, 2019, and received $1.0 million in fees in connection therewith.

Relationship with KKR Credit. As of December 28, 2019, investment funds or accounts managed or advised by the global credit business of KKR no longer held our term loans under our first lien and second lien credit agreements.

Management Stockholder’s Agreements. In connection with the KKR Acquisition and thereafter, we entered into Management Stockholder’s Agreements with certain of our senior executive officers and other employees who made an equity investment in us or were granted equity based awards. The Management Stockholder’s Agreements provide for management stockholders’ ability to cause us to repurchase their outstanding stock and options in the event of their death or disability, and for our ability to cause a management stockholder to sell his or her stock or options back to the Company upon certain termination events.

Agreements with Directors and Officers. In addition, we have certain agreements with our directors and officers which are described in the Executive Compensation section below. In connection with our IPO, we entered into indemnification agreements with our directors. These agreements and our Bylaws require us to indemnify these individuals to the fullest extent permitted under Delaware law against liabilities that may arise by reason of their service to us, and to advance expenses incurred as a result of any proceeding against them as to which they could be indemnified. The indemnification provided under the indemnification agreements is not exclusive of any other indemnity rights. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, we have been informed that in the opinion of the SEC such indemnification is against public policy and is therefore unenforceable. There is currently no pending material litigation or proceeding involving any of our directors for which indemnification is sought.

Stockholder Engagement

In connection with and following our IPO, we have been committed to stockholder engagement and we greatly value the input we receive from our stockholders. Our investor relations team and members of our senior management are in frequent communication with stockholders on a variety of matters, primarily focused on our operations and financial performance. In 2019, we established an additional component of our stockholder engagement program focused on corporate governance, executive compensation, corporate social responsibility and other ESG matters of interest to our stockholders. As part of our engagement efforts, we conducted stockholder outreach with several of the Company’s top institutional investors representing approximately 55% of our shares outstanding. Many of these stockholders expressed the view that they were looking for progress over time on the Company’s governance practices, continued evolution and disclosure on the Company’s philanthropic, environmental and social responsibilities, and had no major issues or concerns with the Company’s executive compensation program. After careful consideration of the stockholder feedback, the Board approved a commitment to sunset our classified Board and supermajority voting provisions in our organizational documents (as discussed further below in “Classified Board and Supermajority Sunset Commitment”).

2020 Proxy Statement      15

Classified Board and Supermajority Sunset Commitment

Our nominating and corporate governance committee and our Board carefully considered the advantages of a classified board, majority and plurality voting standards for the election of directors, analyzed current corporate governance trends, and evaluated the appropriateness of a classified Board and supermajority voting provisions in light of our overall corporate governance structure and recent stockholder engagement efforts (as discussed further above). Following consideration of our current governance structure and strong corporate governance practices, as well as feedback received from stockholders, the Board, upon the recommendation of the nominating and corporate governance committee, has committed to submitting for stockholder vote at the 2021 Annual Meeting a management proposal to amend our certificate of incorporation to eliminate the classified Board and certain supermajority provisions within it.

Philanthropy and Corporate Social Responsibility

We strive to align our actions with our Company vision—“We believe everyone deserves to see their best to live their best.” The need for eye care and eyewear is a critical national and global issue. We focus our philanthropy efforts in the optical sector, where we feel we can make the greatest difference. We are proud to be working with organizations and individuals, both domestically and around the world, to provide solutions so more people can get the care they need.

In addition to our philanthropic efforts, we understand the importance of acting responsibly as a business, employer and corporate citizen. Engagement on corporate social responsibility is important to us and our stakeholders. Following our stockholder engagement outlined above, we are focused on a commitment to balancing the social, economic, human capital management and environmental aspects of our business and to developing additional disclosure to highlight our aspirations and achievements in these areas in the future.

Compensation of Directors

Directors who are our employees do not receive remuneration for serving on our Board. In 2019, our director compensation program consisted of the following:

•

Annual cash retainer of $75,000, paid quarterly, in arrears.

​

•

The Chair of the audit committee, compensation committee and nominating and corporate governance committee received annual cash retainers of $20,000, $15,000 and $10,000, respectively, paid quarterly, in arrears.

​

•

Annual $100,000 restricted stock grant, which will vest on the first anniversary of the grant date, subject to continued service through the applicable vesting date.

​

Our directors are not paid any fees for attending meetings. However, our directors are reimbursed for reasonable travel and related expenses associated with attendance at board or committee meetings.

The compensation committee, with assistance from its independent compensation consultant, reviews the director compensation program regularly to ensure the program is structured consistent with best practices and current trends. As part of this review, the director compensation program is benchmarked against the same compensation peer group used for executive compensation benchmarking, as described later in the Compensation Discussion & Analysis section. The compensation committee last reviewed director compensation in December 2018 and made appropriate changes based upon the results at that time.

2020 Matters. On March 25, 2020, in light of the unprecedented impact of COVID-19, the Board elected to reduce the remainder of their annual cash retainers for 2020 to $1.

16      2020 Proxy Statement

The following table reflects all cash compensation paid and the aggregate market value of stock awards granted earned to our non-employee directors for service in fiscal 2019:

​

(1)

Includes all annual retainer fees paid in cash to the directors. Messrs. N. Taylor and Peeler became eligible to receive annual cash retainers halfway through the 2019 board service year, and, in lieu of receiving such cash retainers, Messrs. N. Taylor and Peeler donated their cash retainers to 20/20 Quest, a National Vision sponsored charitable foundation. Ms. Cianfrocco joined our Board on July 24, 2019 and her annual cash retainer was prorated for her partial year of service. Ms. Cianfrocco donated $9,375 of her cash retainer to 20/20 Quest.

​

(2)

The amount reported reflects the grant date fair value calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation—Stock Compensation (“ASC Topic 718”) associated with the grant to each director as of such grant date. See Note 5 of the Notes to Consolidated Financial Statements contained in the Company’s Annual Report on Form 10-K for the year ended December 28, 2019 (the “2019 Form 10-K”) for an explanation of the assumptions made in the valuation of these awards. The grant date fair value of the annual award that was granted on June 12, 2019 for all directors (other than Ms. Cianfrocco) was $100,000 for the 3,532 shares of restricted stock granted to such directors. The grant date fair value of the 3,116 shares of restricted stock granted to Ms. Cianfrocco in July 2019 was $100,000. As of December 28, 2019, Ms. Cianfrocco held 3,116 shares of unvested restricted stock, Ms. Hepner held 5,108 shares of unvested restricted stock, Mr. T. Taylor held 4,997 shares of unvested restricted stock, Mr. Tehle held 7,407 shares of unvested restricted stock.

​

(3)

At the request of Mr. N. Taylor, the compensation committee approved in September 2019 a program in which (i) in lieu of paying his cash retainer for Board service and any committee chairperson service directly to Mr. N. Taylor, the Company would instead make a quarterly donation of such retainer in Mr. N. Taylor’s name to the Company’s foundation or another charity of his choosing and (ii) Mr. N. Taylor would not receive the restricted stock award to which non-employee directors are entitled under the director compensation program.

​

(4)

In 2019, upon recommendation of the compensation committee, Ms. Hepner received a one-time additional retainer fee of  $10,000 as Chair of the nominating and corporate governance committee in light of the anticipated workload in the first year following the creation of the committee.

​

(5)

At the request of Mr. Peeler, the compensation committee approved in June 2019 a program in which (i) in lieu of paying his cash retainer for Board service and any committee chairperson service directly to Mr. Peeler, the Company would instead make a quarterly donation of such retainer in Mr. Peeler’s name to the Company’s foundation or another charity of his choosing and (ii) Mr. Peeler would not receive the restricted stock award to which non-employee directors are entitled under the director compensation program.

​

Director Stock Ownership Guidelines. In February 2019, the Board of Directors adopted stock ownership guidelines (the “Guidelines”) applicable to our executive officers and directors who are not members of management and who are not affiliated with KKR and Berkshire (the “Covered Directors”). Under the Guidelines, Covered Directors are required to hold a specific level of equity ownership, as a multiple of annual cash retainer. The Guidelines currently require Covered Directors to hold 5x the annual cash retainer. There is no required time frame within which a Covered Director must attain the applicable stock ownership level under the Guidelines. However, until the applicable ownership level is achieved, Covered Directors must retain 50% of vested shares net of stock option exercise and tax withholding. Shares that count toward these ownership guidelines include shares owned outright, shares held in the Company’s 401(k) or other retirement plan, shares of time-based restricted stock (whether vested or unvested) and vested stock options issued prior to the Company’s IPO. The retention requirement applies to all prior and future grants.

2020 Proxy Statement      17

PROPOSAL NO. 2—RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The audit committee has selected Deloitte & Touche LLP to serve as our independent registered public accounting firm for fiscal 2020.

Although ratification is not required by our Bylaws or otherwise, the Board is submitting the selection of Deloitte & Touche LLP to our stockholders for ratification because we value our stockholders’ views on the Company’s independent registered public accounting firm. If our stockholders fail to ratify the selection, it will be considered as notice to the Board and the audit committee to consider the selection of a different firm. Even if the selection is ratified, the audit committee, in its discretion, may select a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of the Company and its stockholders. One or more representatives of Deloitte & Touche LLP are expected to be present at the Annual Meeting. The representative(s) will have an opportunity to make a statement if they desire and will be available to respond to questions from stockholders.

The shares represented by your proxy will be voted “FOR” the ratification of the selection of Deloitte & Touche LLP unless you specify otherwise.

Audit and Non-Audit Fees

The following table presents fees for professional services rendered by our independent registered public accounting firm, Deloitte & Touche LLP for the audit of our financial statements for 2019 and 2018 and for fees billed for other services rendered by Deloitte during those periods.

​

(1)

Includes the aggregate fees for professional services rendered for the audit of the Company’s annual financial statements and the quarterly reviews of its financial statements, and assistance with documents filed with the SEC

​

(2)

Includes the aggregate fees for professional services rendered for tax compliance, and tax consultation and planning.

​

Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services

Consistent with SEC policies regarding auditor independence and the audit committee’s charter, the audit committee has responsibility for engaging, setting compensation for and reviewing the performance of the independent registered public accounting firm. In exercising this responsibility, the audit committee has adopted policies and procedures relating to the approval of all audit and non-audit services that are to be performed by our independent registered public accounting firm and pre-approves all audit and permitted non-audit services provided by any independent registered public accounting firm prior to each engagement. The audit committee, prior to such engagement, pre-approves independent public accounting firm services within each category and the fees of each category are budgeted. During the year, circumstances may arise when it may become necessary to engage the

18      2020 Proxy Statement

independent registered public accounting firm for additional services not contemplated in the original pre-approval categories. In those instances, the audit committee requires specific pre-approval before engaging the independent registered public accounting firm.

Report of the Audit Committee

The audit committee operates pursuant to a charter which is reviewed annually by the audit committee. Additionally, a brief description of the primary responsibilities of the audit committee is included in this proxy statement under “The Board of Directors and Certain Governance Matters—Board Committees and Meetings—Audit Committee.” Under the audit committee charter, our management is responsible for the preparation, presentation and integrity of our financial statements, the application of accounting and financial reporting principles and our internal controls and procedures designed to assure compliance with accounting standards and applicable laws and regulations. The independent registered public accounting firm is responsible for auditing our financial statements and expressing an opinion as to their conformity with accounting principles generally accepted in the United States of America.

In the performance of its oversight function, the audit committee reviewed and discussed the audited financial statements of the Company with management and with the independent registered public accounting firm. The audit committee also discussed with the independent registered public accounting firm the matters required to be discussed by Public Company Accounting Oversight Board Auditing Standard No. 1301 “Communications with Audit Committees.” In addition, the audit committee received the written disclosures and the letter from the independent registered public accounting firm required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent registered public accounting firm’s communications with the audit committee concerning independence, and discussed with the independent registered public accounting firm their independence.

Based upon the review and discussions described in the preceding paragraph, the audit committee recommended to the Board that the audited financial statements of the Company be included in the Annual Report on Form 10-K for the fiscal year ended December 28, 2019 filed with the SEC.

Submitted by the audit committee of the Company’s Board of Directors:

Audit Committee

David M. Tehle, Chair
Virginia A. Hepner
Thomas V. Taylor, Jr.

2020 Proxy Statement      19

PROPOSAL NO. 3—NON-BINDING VOTE ON EXECUTIVE COMPENSATION

At the Company’s 2018 Annual Meeting of Stockholders, our stockholders indicated their preference that we should seek future advisory votes every year on named executive officer compensation. Based on the recommendation of the Board in the Company’s 2018 proxy statement and the voting results with respect to the advisory vote on the frequency of future advisory votes on named executive officer compensation, the Company determined to hold an advisory vote on named executive officer compensation every year. Accordingly, our stockholders are being asked to approve, in a non-binding advisory vote, the compensation of our named executive officers as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion. While the results of the vote are non-binding and advisory in nature, the Board intends to carefully consider the results of this vote.

The text of the resolution in respect of Proposal No. 3 is as follows:

“RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed in this proxy statement pursuant to the rules of the SEC, including the Compensation Discussion and Analysis, compensation tables and any related narrative discussion is hereby APPROVED.”

In considering their vote, stockholders may wish to review the information on our compensation policies and decisions regarding the named executive officers presented in Compensation Discussion and Analysis on pages 21 to 32, the compensation tables and narrative discussion on pages 33 to 37, and the discussion regarding the compensation committee on page 32.

20      2020 Proxy Statement

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

Section Overview

Our executive compensation program is designed to attract and retain a talented executive team with the skills and qualifications to manage and lead the Company effectively. We strive to create an executive compensation program that strikes the right balance of paying for performance with an overarching goal to motivate our leaders to contribute to the achievement of our financial goals and focus on long-term value creation for our stockholders, without taking undue risk.

This section contains a discussion of the material elements of compensation awarded to, earned by or paid to our named executive officers (“NEOs”), which include our Chief Executive Officer, Chief Financial Officer, our three other most highly compensated executive officers and two former executive officers who served in such capacities during the fiscal year ended December 28, 2019. Our NEOs for fiscal 2019 were:

​

*

On January 10, 2019, Mr. McAllister transitioned from his position as Chief Operating Officer to a new position as Special Advisor to the Board. Mr. Beasley resigned his role as Chief Accounting Officer on July 29, 2019 and terminated his employment with the Company on September 4, 2019.

​

Mr. Brandman joined the Company in 2017 as Vice President, Assistant General Counsel and Assistant Secretary and transitioned to the role of Senior Vice President, General Counsel and Secretary effective February 13, 2019. Mr. Clark joined the Company in June 2019 as Senior Vice President, Chief People Officer, responsible for leading, integrating and enhancing the human resources, training and organizational development functions. Ms. Rasmussen joined the Company in July 2019 as Chief Accounting Officer, responsible for overseeing all aspects of the Company’s accounting function.

Executive Summary

The following information summarizes the Company’s 2019 performance and our key executive compensation actions and decisions. Additional information about these topics can be found in the Company’s 2019 Form 10-K and this proxy statement.

2020 Proxy Statement      21

2019 Business Highlights

In fiscal 2019, we achieved significant financial and operational results including:

•

Net revenue increased 12.2% to $1.72 billion

​

•

72nd consecutive quarter of positive comparable store sales growth as of fiscal 2019 end

​

•

Overall store count grew 6.4%, and fiscal 2019 ended with 1,151 stores

​

•

Comparable store sales growth1 was 6.5%; adjusted comparable store sales growth1 was 6.2%

​

•

Net income increased 38.7% to $32.8 million; adjusted net income1 increased 27.3% to $66.1 million

​

•

Adjusted EBITDA1 increased 15.1% to $200.7 million

​

•

Diluted EPS increased 34.2% to $0.40; adjusted diluted EPS1 increased 23.2% to $0.81

​

(1)

For an explanation of our non-GAAP financial measures and a reconciliation of adjusted comparable store sales growth, adjusted net income, Adjusted EBITDA and adjusted diluted EPS to the most directly comparable GAAP measures, see Appendix A to this proxy statement.

​

2019 Compensation Highlights

National Vision became a publicly traded company in 2017. In prior years, the Company’s compensation programs reflected the transition from private to public ownership. In 2019, the compensation committee moved to more closely align our compensation programs with those found in the competitive market to continue attracting and retaining high-quality executives capable of executing the Company’s strategy and delivering value for stockholders. Key actions taken by the compensation committee include the following highlights:

•

Base Salary—In February, the compensation committee approved executive officer salary increases ranging from 3% to 5%, to more closely align compensation opportunities with the competitive market.

​

•

Annual Cash Incentive Plan—Starting for fiscal 2019, the compensation committee simplified the incentive performance/payout schedule from six tiers (Threshold and Tiers I through V) to three points for 2019 (Threshold, Target, and Maximum). Annual incentive awards pay out between 0% and 200% of target, based on performance against our Adjusted EBITDA target. Based on Adjusted EBITDA performance of  $210.16 million, the fiscal 2019 Short Term Incentive Plan (“STIP”) funded at 139.4% of target.

​

•

Long-Term Incentive Program—The Company adopted a long-term incentive program, granting each of our NEOs (other than Mr. McAllister) time-vesting stock options and performance-based restricted stock units (“PSUs”). PSUs will vest between 0% and 200% of target, based on performance against our three-year Adjusted EBITDA growth target.

​

•

Pay-for-Performance—National Vision is committed to aligning executive compensation to the Company’s performance. The charts below illustrate that the majority of our NEOs’ compensation is performance-based.

​

22      2020 Proxy Statement

Compensation Philosophy and Approach

Our mission is making quality eye care and eyewear more accessible and affordable. In order to do this, we must attract, engage and retain highly talented individuals who are committed to our core values of doing what is right, creating happiness every day and being energized to serve. Our compensation programs are designed to help us achieve these goals. We expect our executive team to possess and demonstrate strong leadership and management capabilities and continue to execute against our strategic growth initiative. To reward and retain our leaders, including our NEOs, we have designed a total compensation approach that rewards both short-term and long-term success.

Compensation Objectives

Our compensation program for executives is currently designed to support the following objectives:

•

Motivate executives to meet or exceed Company performance goals. A significant portion of each NEO’s total compensation is directly tied to the achievement of the Company’s overall business and performance goals;

​

•

Attract and retain talented executives. The Company seeks to provide overall levels of compensation that are market competitive to attract, retain and motivate highly qualified executives to continue to enhance long-term equity value; and

​

•

Link the financial interests of executives and stockholders. In order to foster a strong relationship between stockholder value and executive compensation, a significant portion of compensation is composed of equity-based incentive awards. Additionally, NEOs are subject to stock ownership guidelines that ensure they retain a significant portion of their vested equity awards.

​

Program Design. Our executive compensation program has three main components: (1) base salary; (2) annual cash incentive compensation (STIP); and (3) long-term incentive awards (LTIP). Each component is designed to be consistent with the Company’s compensation philosophy.

Our compensation packages are designed to promote integrity, leadership, teamwork, ownership and initiative by our employees whose performance and responsibilities directly affect our results. We strive to create competitive compensation packages for all employees that encourage them to achieve our long-term business goals without taking unnecessary risks. We believe that, to attract and retain talented senior executives, we must provide them with a competitive level of predictable compensation that rewards their continued service. We also believe that performance-based compensation plays a significant role in aligning senior executives’ interests with those of our stockholders and should be emphasized in the overall program structure. We motivate and reward NEOs for successfully executing our business strategy and believe that a combination of both short-term and long-term compensation creates an optimal pay-for-performance environment.

2020 Proxy Statement      23

Consistent with prior practice, we do not intend to adhere to rigid formulas or react to short-term changes in business performance in determining the amount and mix of compensation elements.

Consideration of Say on Pay Votes. We are pleased that stockholders representing over 99% of the shares voted on the Say on Pay Proposal at the 2019 Annual Meeting expressed their support and approval of our NEO compensation described in our 2019 proxy statement. Following the compensation committee’s review and consideration of this stockholder support, as well as the other factors discussed in more detail in “—Our Annual Compensation-Setting Process” below, the compensation committee determined to make no changes to its approach to executive compensation except as discussed further in this “Compensation Discussion and Analysis.” During 2019, we established our stockholder engagement program and sought feedback from stockholders representing approximately 55% of the Company’s outstanding common stock (see “Stockholder Engagement” earlier in this proxy statement for a description of our program) and feedback was received across a range of topics, including executive compensation.

Our Annual Compensation-Setting Process

Role of the Compensation Committee

Our executive compensation plans and programs are administered by our compensation committee. Our compensation committee is responsible for reviewing and approving, or recommending to our full Board of Directors, equity compensation grants and other aspects of compensation, including base salaries and the administration of our Short Term Incentive Plan (“STIP”) for employees at and above the Vice President level. Our compensation committee is also responsible for recommending to the full Board of Directors, the compensation of our CEO and determining and approving the compensation of other executive officers, as recommended by our CEO and Chief People Officer. At the beginning of each performance cycle, the compensation committee or the Board of Directors, as applicable, approves financial goals designed to align executive pay with company performance and stockholder interests, provide competitive pay opportunities dependent on performance, retain talent, create optimal stockholder value and mitigate material risk. These approvals include reviewing and setting performance goals under the STIP and Long-Term Incentive Program (“LTIP”), and reviewing and approving awards (including the terms and conditions of such awards) under the STIP and LTIP for all executive officers (other than the CEO).

Role of Independent Members of the Board of Directors

Independent members of our Board assist in setting executive compensation by assessing the performance of the CEO, reviewing the compensation committee’s assessment of the CEO’s performance and approving the compensation of the CEO based on the recommendation of the compensation committee.

24      2020 Proxy Statement

Role of Management

In setting executive compensation for 2019, our CEO and our former Chief Human Resources Officer worked closely with the compensation committee in managing the executive compensation program, along with gathering information for and attending meetings of the compensation committee. Our CEO made recommendations to the compensation committee regarding compensation for the executive officers (other than himself), including base salary amounts and equity compensation grants. Our CEO and CFO also provided input in discussions regarding the development of annual Company performance goals for which annual incentive payouts under our STIP and PSU awards under LTIP could be earned.

Role of the Compensation Consultant

The compensation committee has engaged Meridian Compensation Partners, LLC (“Meridian”) to assist the Committee regarding various executive compensation matters and to serve as its independent compensation consulting firm. In connection with this appointment, in 2019 the compensation committee reviewed Meridian’s independence, including considering the factors specified in the NASDAQ listing standards and receiving confirmation by Meridian of its independent status. The compensation committee believes that Meridian is independent and that there is no conflict of interest between Meridian and the compensation committee. Meridian assists the compensation committee in reviewing the effectiveness and competitiveness of the Company’s executive compensation program, including an annual risk assessment of the program, and makes recommendations consistent with the Company’s pay philosophy, market trends, legal and regulatory considerations and the Company’s overall business needs. In addition to providing advice regarding executive compensation best practices, Meridian also provides market data as a background for recommendations regarding CEO and other executive base salary and annual and long-term incentives.

Use of Comparative Market Data

We aim to compensate our executive officers competitively in the market for executive talent. To gain a general understanding of current market compensation practices, our compensation committee reviewed the findings as presented in a market study conducted by Meridian. The external market data reviewed included proxy data from the peer group companies described below and general industry survey data. The peer group reflects a mix of industries that together represent our business and scope of operations (as measured by annual revenue, market capitalization and number of employees). At the time of the selection of the peer group, the Company was near the 45th percentile of the peer group in revenue and 43rd percentile in market capitalization. We believe it is appropriate for the peer group to reflect both the retail component as well as the health care aspects of our business. In 2018, the compensation committee approved updates to the peer group and Alere, Inc., Amsurg Corp, Kate Spade & Co., Surgical Care Affiliates Inc., Ulta Salon Cosmetics and Fragrances, U.S. Physical Therapy Inc. and VCA Inc. were removed from the peer group and At Home Group, Inc., Floor & Decor Holdings, Inc., Movado Group, Inc., Merit Medical Systems, Inc., Ollie’s Bargain Outlet Holdings, Inc., Oxford Industries, Inc. and Quorum Health Corporation were added to the peer group. These updates were made as certain prior peer companies were acquired by other companies and to align with the selection criteria for the peer group noted above. The data from the peer group below was reviewed in connection with compensation decisions for 2019. The current peer group consists of the following 15 companies:​

​

*

For 2020 compensation decisions, Quorum Health Corporation and Movado Group, Inc. were removed and Caleres, Inc. and ICU Medical, Inc. were added to better align the peer group to the selection criteria described above.

​

As more fully described below under “—Compensation Elements,” the compensation committee reviewed the compensation data provided by Meridian and set total compensation for our NEOs accordingly. The compensation committee did not target a specific percentile with respect to the peer group in determining our NEOs’ total compensation, nor did it establish a prescribed mix of pay for our executives.

2020 Proxy Statement      25

Compensation Elements

Each element of the compensation program complements the others and, together, is intended to achieve the compensation committee’s principal compensation objectives. When decisions about compensation for an executive officer are made, the impact on the total value of all these elements of compensation for the individual is considered. For executives, the compensation committee reviews competitive market data and establishes target total direct compensation opportunities (i.e., salary, annual incentive and annual long-term incentive targets) based on the following factors: corporate performance, competitive market data and the circumstances surrounding the executive’s initial hiring or promotion to a position with increased responsibilities.

Base Salary

We believe it is important to provide a competitive fixed level of pay to attract and retain talented and experienced executives capable of driving the Company’s business strategy. In determining the amount of base salary that each NEO receives, we look to the executive’s current compensation, time in position, any change in the executive’s position or responsibilities (including complexity and scope), and the relation of his or her position to those of other executives within the Company and in similar positions at peer companies. Base salaries are reviewed annually or at other times when appropriate and may be increased from time to time pursuant to such review.

Consistent with this approach, in February 2019, the compensation committee approved adjustments to the base salaries of Mr. Fahs from $900,000 to $927,000, and Mr. Moore from $430,000 to $450,000, effective in April 2019. Mr. Clark, Mr. Brandman, and Ms. Rasmussen each began serving in their current roles in 2019. Their salaries in their roles as of June, February and July 2019, respectively, were $320,000, $300,000, and $270,000, respectively. Mr. McAllister transitioned in 2019 to the role of Special Advisor to the Board, a non-officer position. Mr. McAllister’s salary in this role as of February 2019 was $591,000. Mr. Beasley’s employment with the Company ended in September 2019 and, at that time, his salary was $257,500.

On March 25, 2020, in light of the unprecedented impact of COVID-19, Mr. Fahs elected to reduce his base salary to $1 for the remainder of 2020 and the Company’s other executive officers elected to reduce their respective base salaries by 30% until further notice.

Annual Cash Incentive Program—Short Term Incentive Plan (STIP)

In fiscal year 2019, our executives participated in the STIP, which is an annual cash incentive program. The primary purpose of the STIP is to focus management on key measures that drive financial performance and to provide competitive bonus opportunities tied to the achievement of our annual financial and strategic growth objectives.

We believe that tying NEO bonuses to Company performance goals encourages collaboration across the executive leadership team. For fiscal 2019, STIP awards were based on achievement of a STIP Adjusted EBITDA goal (with Adjusted EBITDA as defined on Annex A plus STIP expense and change in the margin on unearned revenue). The compensation committee has reserved the ability to adjust the actual Adjusted EBITDA results to exclude the effects of unplanned or unusual items (whether favorable or unfavorable).

The compensation committee approved the STIP design, targets and Adjusted EBITDA goal in February 2019 as part of the annual compensation setting process. Each NEO’s target annual bonus under the STIP is expressed as a percentage of base salary with the targets ranging from 37.5% to 100% for 2019. Actual STIP awards were calculated by multiplying each NEO’s base salary by his or her payout percentage. STIP awards could be earned at 100% of target if the Company achieved 2019 STIP Adjusted EBITDA of  $201.4 million. For 2019, the STIP was simplified to include threshold, target, and maximum levels of performance and corresponding payouts. Awards could be earned at more or less than target based on the pre-established scale set forth in the following table:

26      2020 Proxy Statement

For performance percentages between the specified threshold, target, and maximum levels, payouts were interpolated on a straight-line basis.

The compensation committee has the ability to exercise positive or negative discretion and award a greater or lesser amount to our NEOs than the amount determined by the scale above if it determines that circumstances so warrant. The compensation committee did not exercise such discretion in fiscal 2019.

For fiscal 2019, the Company’s STIP Adjusted EBITDA achieved was $210.2 million, resulting in a payout percentage of 139.4%. The NEOs earned STIP awards for fiscal 2019 as follows, which are included in the “Non-Equity Incentive Plan Compensation” column of the “Summary Compensation Table” later in this proxy statement.

Long-Term Incentive Program

In connection with our IPO, our Board of Directors adopted, and our stockholders approved, the National Vision Holdings, Inc. 2017 Omnibus Incentive Plan (the “2017 Omnibus Plan”). The 2017 Omnibus Plan replaced the 2014 Stock Incentive Plan for Key Employees of Nautilus Parent, Inc. and its Subsidiaries (the “2014 Stock Plan,” and together with the 2017 Omnibus Plan, the “Equity Incentive Plans”). The purpose of our 2017 Omnibus Plan is to provide a means through which to attract and retain key personnel and to provide a means whereby our directors, officers, employees, consultants and advisors can acquire and maintain an equity interest in the Company, or be paid incentive compensation, including incentive compensation measured by reference to the value of our common stock, thereby strengthening their commitment to the Company’s long-term success and aligning their interests with those of our stockholders.

2019 LTIP Awards

In February 2019, following an evaluation, with the assistance of Meridian, of the equity-based incentives for our executive officers, the compensation committee adopted a new long-term incentive program (“LTIP”). As part of our normal annual compensation cycle, all of our NEOs, excluding those who were not employed at the time, were granted the following awards under the 2017 Omnibus Plan: (1) time-vesting stock options (representing 50% of the total target value of fiscal 2019 LTIP awards for each NEO) and (2) performance-vesting restricted stock units (“PSUs”) (representing the remaining 50% of the total target value of fiscal 2019 LTIP awards for each NEO). Messrs. Clark and McAllister and Ms. Rasmussen did not receive a February 2019 grant as they were either not employed or were not executive officers at the time of grant.

2019 Stock Option Awards. Stock option awards are granted for shares of Company common stock and generally vest over a three-year period. The options granted in fiscal 2019 vest in three equal annual installments, with one-third of the total number of shares underlying the options vesting on each of the first, second, and third anniversaries of March 1, 2019, subject to the executive’s continued employment through the applicable vesting date.

2019 PSU Awards. PSU awards are earned over a three-year performance period and are conditioned on the Company’s achievement of certain Adjusted EBITDA growth targets, as set forth in the PSU award agreement. The actual value of the PSUs that vest based on the Adjusted EBITDA growth performance measure is based on an achievement factor which, in each case, ranges from a 50% payout for threshold performance, 100% for target performance, and 200% for maximum performance. To the extent that performance falls between the applicable

2020 Proxy Statement      27

threshold, target or maximum levels, payouts will be determined using linear interpolation. Should the Adjusted EBITDA performance fall below the threshold performance level, the achievement factor for the PSUs will be 0% of the target award and no PSUs would be earned. PSU performance goals and the target awards for our executive officers are established each February, shortly after the beginning of the fiscal year. The PSU awards granted in fiscal 2019 will be settled after the end of the respective three-year performance period, which began on the first day of our 2019 fiscal year and ends on the last day of our 2021 fiscal year. The Adjusted EBITDA definition for the 2019 PSU awards performance measure is set forth in Annex A attached to this proxy statement.

Changes for 2020 STIP and LTIP Awards

For fiscal 2020, the compensation committee has approved a new vehicle mix for LTIP awards under the 2017 Omnibus Plan. NEOs received their 2020 LTIP awards in a mix of 25% time-based stock options, 50% PSUs and the remaining 25% in time-based restricted stock units (“RSUs”).

In addition, beginning with the STIP and LTIP awards granted in fiscal 2020, the Company has updated its definition of certain non-GAAP measures, including Adjusted EBITDA. Adjusted EBITDA will no longer exclude new store pre-opening expenses and non-cash rent. The 2019 PSU awards will continue to use the prior 2019 definition of Adjusted EBITDA for the Adjusted EBITDA growth performance measure for the remainder of the three-year performance period.

In light of the COVID-19 pandemic, the Compensation Committee may reevaluate the performance goals and incentives associated with our executive incentive program later in 2020 when more information regarding the impact of the pandemic is known. We will communicate any material changes in accordance with applicable disclosure obligations.

2019 Special Retention and Sign-On Awards

In November 2019, the compensation committee approved special one-time retention awards to each of the NEOs (other than Mr. Fahs) consisting of time-based RSUs valued at $300,000. The RSUs were awarded on November 18, 2019 (the grant date) and vest over four years, with half of the total number of shares underlying the RSUs vesting on the second anniversary of the grant date and one-quarter vesting on each of the third and fourth anniversaries of the grant date, subject to the executive’s continued employment through the applicable vesting date.

In order to attract talented executives and compensate individuals for compensation forfeited at their prior employers, the compensation committee approved certain payments to two NEO hires in 2019. In 2019, Mr. Clark received (i) a cash sign-on bonus of  $50,000, (ii) a one-time stock option award grant valued at $250,000, which vests over a three year period in three equal annual installments on the first, second and third anniversaries of June 11, 2019 (the grant date) and (iii) a one-time PSU award grant valued at $250,000 to be earned over a three-year performance period conditioned on the Company’s achievement of certain Adjusted EBITDA growth targets, as set forth in the PSU award agreement, subject to Mr. Clark’s continued employment with the Company through each vesting date for the equity awards.

In 2019, Ms. Rasmussen received (i) a cash sign-on bonus of  $25,000, (ii) a one-time stock option award grant valued at $80,000, which vests over a three year period in three equal annual installments on the first, second and third anniversaries of July 29, 2019 (the grant date) and (iii) a one-time PSU award grant valued at $80,000 to be earned over a three-year performance period conditioned on the Company’s achievement of certain Adjusted EBITDA growth targets, as set forth in the PSU award agreement, subject to Ms. Rasmussen’s continued employment with the Company through each vesting date for the equity awards.

Prior Outstanding Equity Awards

Pre-IPO Options

Messrs. Fahs, Moore, Brandman and Beasley received grants of stock option awards, which we refer to as the “Pre-IPO Options” under the 2014 Stock Plan in 2014 (for Messrs. Fahs, Moore and Beasley) and 2017 (for Mr. Brandman).

28      2020 Proxy Statement

These Pre-IPO Options consisted of 40% time-based and 60% performance-based options. All of the performance-based Pre-IPO Options vested and are exercisable. Other than Mr. Brandman’s time-based Pre-IPO Options, all time-based Pre-IPO Options vested and are exercisable. The time-based Pre-IPO Options granted to Mr. Brandman vest as to 20% of the shares subject to such option on each anniversary of grant. Accordingly, all shares subject to such time-based options that were awarded to Mr. Brandman in 2017 will be vested and exercisable as of August 14, 2022, the fifth anniversary of the grant date to Mr. Brandman.

On August 14, 2017, in connection with the start of his employment, our Board of Directors granted Mr. McAllister an option to purchase 362,317 shares of our common stock under our 2014 Stock Plan, with an exercise price of  $15.74 per share (the “McAllister 2017 Options”), with such options consisting of 40% time-based and 60% performance-based options. On February 1, 2019, in connection with his transition from the Chief Operating Officer position to Special Advisor to the Board and pursuant to the McAllister Transition Agreement (as discussed in further detail below), the vesting terms of the remaining McAllister 2017 Options were modified as follows:

•

The time-based options continue to vest as to 20% of the shares subject to such option on each anniversary of the grant date, except that, with respect to the 28,985 time-based options scheduled to vest on August 14, 2021, such options will instead vest on December 31, 2021, subject to Mr. McAllister’s continued employment with the Company through such date.

​

•

The first tranche of 43,478 performance-based options scheduled to vest based on actual performance through December 31, 2018, vested as of such date based on actual performance.

​

•

With respect to the two remaining tranches of 43,478 performance-based options, the first tranche vested on December 31, 2019 and the second scheduled tranche will vest on December 31, 2020, but subject to Mr. McAllister’s continued employment with the Company through such date.

​

In the event that Mr. McAllister terminates his employment prior to December 31, 2020 for any reason (other than when grounds for “cause” exist), the McAllister 2017 Options will continue to vest as if no such termination of employment had taken place (subject only to Mr. McAllister’s continued compliance with the restrictive covenant agreement, as defined in the McAllister Transition Agreement). The time-based and performance-based McAllister 2017 Options fully vest upon a change in control.

IPO-Related Options

In connection with our IPO, on October 25, 2017, our Board of Directors granted Mr. Moore a time-based stock option award to purchase 92,443 shares of our common stock under our 2017 Omnibus Plan, with an exercise price of  $22.00 per share (the “Moore 2017 Options”). The Moore 2017 Options vest in three substantially equal installments on each of the first, second and third anniversaries of the grant date, subject to continued employment through the applicable vesting date.

Management Stockholder’s Agreement

Each of our NEOs, other than Mr. Clark and Ms. Rasmussen, is party to a Management Stockholder’s Agreement with the Company. The Management Stockholder’s Agreement, along with an applicable option agreement, generally govern each such NEO’s rights with respect to shares of common stock of the Company held by such NEO prior to our IPO, including such NEO’s stock option awards and contain certain rights and obligations of the parties thereto. The Pre-IPO Options are subject to certain put and call rights pursuant to the Management Stockholder’s Agreement.

Restrictive Covenants

In addition, our NEOs have agreed to specified restrictive covenants, including confidentiality and non-disparagement covenants and covenants related to non-competition and non-solicitation of our employees, consultants and independent contractors at all times during the NEO’s employment, and for specific periods following the termination of employment for any reason. The post-employment restricted time periods are as follows: Mr. Fahs for twenty four months after termination; Messrs. Moore, Brandman and McAllister for eighteen months after termination; and Messrs. Clark and Beasley and Ms. Rasmussen for twelve months after termination.

2020 Proxy Statement      29

Perquisites and Other Benefits

The benefits and perquisites provided to our NEOs are not a material part of executive compensation and are largely limited to those offered to our employees generally, or that we have otherwise determined are necessary or appropriate to attract and retain talented executives. Our NEOs are eligible for specified benefits, such as group health, dental, disability and life insurance. These benefits are intended to provide competitive and adequate protection in case of sickness and the NEOs participate in these plans on the same basis as all other employees.

We provide specified perquisites to our NEOs when appropriate, including relocation as required. We also provide our executives, including our NEOs, with additional basic life insurance coverage and supplemental long-term disability and accidental death insurance. In addition, we provide our CEO with tax accounting services and a Young Presidents’ Organization (“YPO”) membership. These perquisites are intended to enable us to attract and retain highly qualified employees for key positions and the compensation committee considers them to be reasonable and consistent with our overall compensation program. The value of these perquisites and other personal benefits are reflected in the “All Other Compensation” column to the “Summary Compensation Table” and the accompanying footnotes below.

401(k) Savings Plan. Our eligible U.S. employees, including our NEOs, participate in the National Vision, Inc. 401(k) Retirement Savings Plan (the “401(k) Plan”). Eligible employees are eligible to enroll in the 401(k) Plan during the first month following three months of service with the Company. Under the 401(k) Plan, we match 50% of the first 3% of a participant’s contributions. The Company’s matching contributions vest pro rata over each of the following four years of employment with the Company.

Associate Stock Purchase Plan. We have maintained an Associate Stock Purchase Plan (the “ASPP”) since 2018. The ASPP provides all our eligible U.S. employees, including our NEOs, the opportunity to purchase up to $25,000 in our common stock annually at a 10% discount to the market price of our stock.

Severance Benefits

The Company provides severance benefits to its executives in order to offer competitive total compensation packages and to be competitive in the Company’s executive attraction and retention efforts. On December 11, 2018, the Board of Directors adopted and approved the National Vision Holdings, Inc. Executive Severance Plan (the “Executive Severance Plan”), which replaced our prior severance plan for eligible employees in the Executive Severance Plan (as well as any supplements to that plan in which our NEOs were previously eligible to participate). The Executive Severance Plan provides for severance payments and benefits to eligible executives, including our NEOs, upon a termination of employment by the Company without cause or by the executive for good reason (each as defined in the Executive Severance Plan), in each case, subject to the (i) executive’s execution and non-revocation of a release of claims in favor of the Company and (ii) continued compliance with the executive’s confidentiality, non-interference and invention assignment obligations to the Company. See “Potential Payments upon Termination or Change in Control,” which describes the payments to which each of the NEOs may be entitled under the Executive Severance Plan.

McAllister Transition Agreement

Mr. McAllister transitioned from his position as Chief Operating Officer of the Company to Special Advisor to the Board of Directors, effective January 10, 2019. In connection with his transition, the Company and Mr. McAllister entered into a Transition Agreement, dated February 1, 2019 (the “McAllister Transition Agreement”), pursuant to which Mr. McAllister will serve as a Special Advisor to the Company’s Board through December 31, 2020. Under the McAllister Transition Agreement, (i) Mr. McAllister will receive a base salary of  $591,000 for 2019 and $606,000 for 2020, (ii) his other compensation and benefits will remain the same as in effect immediately prior to the role change, providing that his annual STIP award for 2019 and 2020 will be no lower than the target STIP amount, (iii) his outstanding stock option awards will continue to vest in ordinary course, provided that performance-vesting stock options scheduled to vest based on performance in 2019 or 2020 will vest at the end of the applicable performance period based solely upon continued employment through such date, and (iv) in the event Mr. McAllister resigns prior to the expiration of his employment term as a Special Advisor, provided he is not in violation of his restrictive covenant agreement, he will continue to receive his base salary, annual STIP award and continued vesting of his outstanding stock options as if no such termination of employment had taken place.

Beasley Separation Agreement

Mr. Beasley terminated his position as Senior Vice President, Accounting and Controller of the Company, effective September 4, 2019. In connection with Mr. Beasley’s separation, the Company and Mr. Beasley entered into a Separation

30      2020 Proxy Statement

Agreement and General Release, dated July 18, 2019 (the “Beasley Separation Agreement”), pursuant to which Mr. Beasley agreed to a customary release and restrictive covenants and received payments consistent with the Executive Severance Plan and as described below under “Potential Payments upon Termination or Change in Control—Separation and Transition Agreements.” The value of these payments is reflected in the “All Other Compensation” column to the “Summary Compensation Table” and the accompanying footnotes below.

Stock Ownership Guidelines

As noted earlier in this proxy statement, in February 2019, the Board of Directors adopted stock ownership guidelines (the “Guidelines”) applicable to our executive officers and directors who are not members of management and who are not affiliated with KKR and Berkshire. These Guidelines align the interests of our management and directors with those of our stockholders. Such executive officers will be required to hold a specific level of equity ownership, as a multiple of annual base salary or annual cash retainer, as applicable, as follows:

•

Chief Executive Officer: 6x annual base salary.

​

•

Other Executive Officers: 3x annual base salary.

​

There is no required time period within which an executive officer must attain the applicable stock ownership level under the Guidelines. However, until the applicable ownership level is achieved, executive officers must retain 50% of vested shares net of stock option exercise and tax withholding.

•

Shares that count toward these ownership guidelines include shares owned outright, shares held in the Company’s 401(k) or other retirement plan, shares of time-based restricted stock (whether vested or unvested) and vested stock options issued prior to the Company’s IPO. The retention requirement applies to all prior and future grants.

​

Hedging and Pledging Policies

Our NEOs are subject to our hedging and pledging policies as outlined in the Company’s Securities Trading Policy described on page 14.

Compensation Risk Assessment

The compensation committee, with the assistance of Meridian, reviewed our incentive programs to assess whether the program encourages undue risks and confirmed that our executives are not incented to focus on short-term stock performance or take excessive risk in managing the business that are reasonably likely to have a material adverse effect on the Company.

Tax and Accounting Considerations

We consider the effect of tax, accounting and other regulatory requirements in designing and implementing compensation programs so that our programs meet regulatory requirements and efficiently deliver compensation. While these factors may impact plan designs, ultimately, decisions reflect the pay strategy of the Company and the program intent.

Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”) generally disallows tax deductions to publicly-held companies for individual compensation over $1 million paid to certain executive officers in a taxable year. Historically, compensation above $1 million could be deducted if it was considered “performance-based compensation” within the meaning of the Code, but as a result of tax legislation enacted at the end of 2017, this exemption is no longer available.

Currently, but subject to final rules with respect to the new tax legislation, we are able to claim the benefit of a special exemption rule that applies to compensation paid (or compensation in respect of equity awards such as stock options or restricted stock granted) during a specified transition period under Section 162(m) for corporations that become publicly traded. This transition period may extend until the first annual stockholders meeting that occurs after the end of the third calendar year following the calendar year in which our initial public offering occurs, unless the transition period is terminated earlier under the Section 162(m) post-offering transition rules. At such time as we are subject to the deduction limitations of Section 162(m), as a result of the elimination of the performance-based compensation exemption, as described above, we would not expect that the compensation committee will take the deductibility limitations of Section 162(m) into account in its compensation decisions.

2020 Proxy Statement      31

Compensation Committee Report

The compensation committee has reviewed and discussed the Compensation Discussion and Analysis with management. Based on its review and discussion with management, the compensation committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement and incorporated by reference in the Annual Report on Form 10-K for the fiscal year ended December 28, 2019 filed with the Securities and Exchange Commission.

Compensation Committee

Thomas V. Taylor, Jr., Chair
Heather Cianfrocco
Nathaniel H. Taylor

32      2020 Proxy Statement

Compensation Tables

Summary Compensation Table

The following table presents summary information regarding the total compensation awarded to, earned by, or paid to each of our NEOs for services rendered in all capacities for the fiscal years ended December 28, 2019, December 29, 2018 and December 30, 2017.

​

(1)

Mr. Clark joined the Company in June 2019, Ms. Rasmussen joined the Company in July 2019, and Mr. Brandman was appointed as an executive officer at the Company effective February 2019.

​

(2)

Mr. McAllister transitioned from his role as Chief Operating Officer, effective January 2019. Pursuant to the McAllister Transition Agreement, he received (i) a base salary of  $591,000 for 2019 (the rate of  $590,342 is reflected in the table because the effective date for the increase was in the middle of the first pay period), (ii) other compensation and benefits at the same level as in effect immediately prior to the role change, provided that his 2019 STIP award was not lower than the target STIP amount, and (iii) continued vesting of his outstanding stock option awards in ordinary course, along with other items. See “McAllister Transition Agreement” in the Compensation Discussion and Analysis section for a further description.

​

(3)

Mr. Beasley terminated his position as Senior Vice President, Accounting and Controller, effective September 2019. Pursuant to the Beasley Separation Agreement, he received (i) a lump sum payment of his 2019 base salary and his 2019 STIP award at the target STIP amount, (ii) a lump sum payment of his 2019 STIP award based on actual performance for 2019 (pro-rated for 8 months of service), and (iii) continued vesting of his outstanding stock option awards in ordinary course, along with other items. See “Beasley Separation Agreement” in the Compensation Discussion and Analysis section for a further description.

​

(4)

The Salary column reflects salaries paid in the years indicated to each of the NEOs. Salary increases, if any, for each year are generally approved in February and effective in April of that year or in connection with an NEO’s promotion.

​

(5)

See “2019 Special Retention and Sign-On Awards” in the Compensation Discussion and Analysis section for a description of the sign-on awards provided in connection with Mr. Clark’s and Ms. Rasmussen’s decisions to join the Company, including their respective cash sign-on bonuses reflected in the Bonus column.

​

(6)

The values in the Stock Awards column represent the aggregate grant date fair value for the stock awards granted in the applicable

​

2020 Proxy Statement      33

year, computed in accordance with FASB ASC Topic 718. These awards include PSUs, one-time 2019 special retention RSU awards and 2019 sign-on awards of PSUs. Awards with performance conditions are computed based on the probable outcome of the performance condition as of the grant date for the award. Information about the assumptions used to value these awards can be found in Note 5 “Stock Incentive Plans” in our 2019 Form 10-K. The amounts reported for these awards may not represent the amounts that the individuals will actually receive. The amounts received, if any, ultimately will depend on Company performance and the change in our stock price over time. An overview of the features of these awards can be found in under “2019 Special Retention and Sign-On Awards” in the Compensation Discussion and Analysis section above.

 

For PSU awards granted in March 2019 to Messrs. Fahs, Moore, Brandman, and Beasley, the maximum performance shares payable and valued at the grant date price of  $35.19 are 63,940 shares or $2,250,049; 17,052 shares or $600,060; 7,106 shares or $250,060; and 4,548 shares or $160,044, respectively. For PSU awards granted in June 2019 to Mr. Clark, the maximum performance shares payable and valued at the grant date price of  $28.48 are 17,558 shares or $500,052. For PSU awards granted in July 2019 to Ms. Rasmussen, the maximum performance shares payable and valued at the grant date price of  $31.73 are 5,044 shares or $160,046.

​

(7)

The values in the Option Awards column represent the aggregate grant date fair value for the option awards granted in the applicable year, computed in accordance with FASB ASC Topic 718. The assumptions used to value these awards can be found in Note 5 “Stock Incentive Plans” in our 2019 Form 10-K. The amounts reported for these awards may not represent the amounts that the individuals will actually receive. The amounts received, if any, ultimately will depend on the change in our stock price over time. An overview of the features of these awards can be found in the “2019 Option Awards,” “2019 Special Retention and Sign-On Awards,” “Pre-IPO Options” and “IPO-Related Options” in the Compensation Discussion and Analysis section above.

​

(8)

The Non-Equity Incentive Plan Compensation column reflects the cash bonus awarded under the STIP to each NEO. The Company pays these amounts, if any, in the month of March following the year in which they are earned. The cash bonuses under the 2019 STIP were earned at 139.4% of target. Additional explanation of the non-equity incentive plan compensation for each NEO appears in “Annual Cash Incentive Program” in the Compensation Discussion and Analysis section above and below in the footnotes to the 2019 Grants of Plan-Based Awards table.

​

(9)

All Other Compensation for 2019 included:

​

​

(a)

Our 401(k) Plan provides for a 50% matching contribution on the first 3% of participants’ pre-tax contributions up to IRS limits.

​

(b)

This column represents all amounts paid by the Company on behalf of each NEO in 2019 for (a) life insurance premiums: Mr. Fahs $648; Mr. Moore $648; Mr. Brandman $648; Mr. Clark $216; Ms. Rasmussen $162; Mr. McAllister $648; Mr. Beasley $432; and (b) long-term disability insurance premiums: Mr. Fahs $3,237; Mr. Moore $841; Mr. Brandman $1,656; Mr. Clark $280; Ms. Rasmussen $210; Mr. McAllister $4,919; Mr. Beasley $1,518.

​

(c)

This column represents the compensation received by Mr. Beasley related to his separation from the Company.

​

(d)

This column reflects $16,000 for YPO membership and $4,430 for reasonable cost of tax accounting services for Mr. Fahs, and fees paid for Mr. Clark’s and Ms. Rasmussen’s respective relocation expenses.

​

34      2020 Proxy Statement

2019 Grants of Plan-Based Awards

The following table sets forth information concerning grants of plan-based awards to the NEOs during the fiscal year ended December 28, 2019.

​

(1)

Reflects the possible payouts of cash incentive compensation under the STIP. See “Annual Cash Incentive Program” in the Compensation Discussion and Analysis section above for a description of the STIP. Potential payouts under the STIP were based on performance in 2019 and resulted in a payout percentage of 139.4%. The actual amounts paid are described in the “Non-Equity Incentive Plan Compensation” column of the “Summary Compensation Table.” Mr. McAllister was entitled under the McAllister Transition Agreement to receive a STIP award with the threshold level set to be no less than the target level for such STIP award. Mr. Beasley was entitled under the Beasley Separation Agreement to receive a pro-rated STIP bonus for 8 months of service.

​

(2)

Reflects the number of PSUs granted in 2019 to the NEOs under the LTIP. The target number of shares in the table for the PSUs reflects the number of shares that will be awarded if, for the PSUs granted in February 2019, the three-year total performance conditions are met at the target level. Actual shares, if any, will be awarded in February 2022 and may range from 50% to 200% of the target. Mr. McAllister did not receive a PSU award as a result of his transition to Special Advisor to the Board in January 2019 pursuant to the McAllister Transition Agreement. See “2019 PSU Awards” in the Compensation Discussion and Analysis section above for additional information on the PSUs. Mr. Clark and Ms. Rasmussen also received special sign-on equity awards when they joined the Company. See “2019 Special Retention and Sign-On Awards” in the Compensation Discussion and Analysis section above for additional information on these PSUs.

​

(3)

Reflects the number of time-based RSUs granted to NEOs (other than Mr. Fahs) as part of a 2019 one-time special retention. The special retention RSU awards vest over four years, with half of the total number of shares underlying the RSUs vesting on the second anniversary of the grant date and one-quarter vesting on each of the third and fourth anniversaries of the grant date, subject to the executive’s continued employment through the applicable vesting date. Given that Mr. Beasley and Mr. McAllister were no longer NEOs at the time of the award, neither were eligible to receive the 2019 special retention RSU award.

​

(4)

Reflects the number of stock options granted in 2019. Given that Mr. McAllister was no longer a NEO at the time of the award, he was not eligible to receive the award. See “2019 Option Awards” in the Compensation Discussion and Analysis section above for additional information on the 2019 stock option awards. Mr. Clark and Ms. Rasmussen also received special sign-on equity awards when they joined the Company. See “2019 Special Retention and Sign-On Awards” in the Compensation Discussion and Analysis section above for additional information on these stock options.

​

2020 Proxy Statement      35

(5)

Reflects the grant date fair value of awards of PSUs, the one-time special retention and sign-on PSUs and stock options granted to each of the NEOs in 2019 under FASB ASC Topic 18. The grant date fair values are calculated using the NASDAQ closing price of our common stock on the date of grant for PSUs and RSUs and the Black-Scholes option pricing model for stock options. The grant date fair value of the PSUs, which have performance conditions, are computed based on the probable outcome of the performance condition as of the grant date for the award. Mr. Clark and Ms. Rasmussen also received special sign-on equity awards when they joined the Company. See “2019 Special Retention and Sign-On Awards” in the Compensation Discussion and Analysis section above for additional information on these PSU awards.

​

Outstanding Equity Awards at 2019 Fiscal Year End

The following table sets forth information regarding outstanding equity awards held by our NEOs as of December 28, 2019.