Vera Bradley, Inc. appointed new CEO

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.


On September 20, 2022, Vera Bradley, Inc. (the "Company") announced that Jacqueline Ardrey will join the Company as President and Chief Executive Officer ("CEO") effective November 1, 2022, replacing retiring President and CEO Robert Wallstrom. Mr. Wallstrom will work closely with Ms. Ardrey through December 2022 to ensure a smooth transition. Ms. Ardrey will also join the Company's Board of Directors on November 1, 2022.


Since 2018, Ms. Ardrey has held the post of President at home furnishings and seasonal décor catalog retailer Grandin Road, part of the Qurate Retail Group. Previously, Ms. Ardrey was CEO of Trading Company Holdings and Senior Vice President of Merchandising and Supply Chain for iconic omnichannel gourmet food and gifting brand Harry and David. Prior to that, she spent 14 years at multi-channel high-end children's retailer Hanna Andersson in various roles of increasing responsibility, including Senior Vice President of Merchandising, Design, and Wholesale. Ms. Ardrey began her retail career with the May Company.


Ms. Ardrey's employment agreement with the Company is effective November 1, 2022 (the "Employment Agreement") and will continue until the end of the Company's fiscal year ending on or about February 3, 2024, provided that the employment agreement renews automatically for a one-year period after that date unless either party gives notice of its intent not to renew.


Under the Employment Agreement, Ms. Ardrey's initial annual base salary will be $850,000. Ms. Ardrey will have a target annual fiscal bonus of 100% of her base salary, with a maximum annual cash bonus of up 200% of her annual base salary. Ms. Ardrey will become eligible for participation in the Company's annual bonus plan for the 2024 fiscal year. Ms. Ardrey also will be eligible to participate in the Company's 2020 Equity and Incentive Plan (the "Equity Plan"). For the Company's 2024 fiscal year, Ms. Ardrey's equity-based compensation grant will have an economic value at grant of $1,400,000. Upon the commencement of her employment, Ms. Ardrey will receive restricted stock units under the Equity Plan in an amount equal to the result of dividing $500,000 by the Company's closing stock price on the date of the grant (the "Sign-On Award"). Fifty percent of these restricted stock units will vest based on performance, and fifty percent will vest in equal amounts on each of the first three anniversaries of the effective date of the Ardrey Employment Agreement. In addition, the Company shall pay Ms. Ardrey a sign-on bonus in the amount of $860,000 (the "Sign-On Bonus"). 


Under the Employment Agreement, if the Company terminates Ms. Ardrey's employment without Cause or Ms. Ardrey terminates her employment for Good Reason (each as defined in the Employment Agreement), Ms. Ardrey will be entitled to (i) any Bonus earned in the fiscal year prior to the employment termination that has not yet been paid, (ii) a pro rata portion of the amount of Bonus, if any, that she would have received for the year in which her employment terminated, (iii) a lump sum payment equal to two times the sum of her (A) Base Salary and (B) target Bonus for the fiscal year of termination, (iv) immediate accelerated full vesting of the time-based restricted stock units under the Sign-On Award and immediate accelerated vesting of the time-based vesting provisions of the portion of the restricted stock units under the Sign-On Award that are performance-based, which will remain outstanding pending the satisfaction (or not) of the performance-based vesting criteria, full payment of the Sign-On Bonus, and (v) monthly cash reimbursement of COBRA premiums. If the Company terminates Ms. Ardrey's employment without Cause or Ms. Ardrey terminates her employment for Good Reason and such termination is within 24 months after a Change in Control of the Company, Ms. Ardrey will receive, in addition to the payments and benefit described in the preceding sentence, an additional lump sum payment equal to the sum of her (A) Base Salary and (B) target Bonus for the fiscal year of termination, in exchange for her continued compliance with the Restrictive Covenants set forth in the Employment Agreement after the Change in Control and reimbursement for outplacement assistance up to a maximum amount of $50,000. If the payments and benefits to Ms. Ardrey under the Employment Agreement, together with all other amounts payable to her following a Change in Control (the "Total Payments"), would be subject to an excise tax under the provisions of Code Section 4999 (the "Excise Tax"), then Ms. Ardrey will receive either the Total Payments or the Total Payments will be reduced so that the amount of the Total Payments (after reduction) is $1.00 less than the amount that would cause the payments to be subject to the Excise Tax, which would provide her with a greater after-tax value of amounts received.


The foregoing description of the Employment Agreement is a summary of the material terms of the Employment Agreement and is qualified in its entirety by reference to the Employment Agreement filed as Exhibit 10.1 to this Current Report on Form 8-K and incorporated by reference herein.