Document:

Document

Exhibit 10.1

Executive Officer Annual Incentive Compensation Plan
Fiscal 2023

Plan Overview
Awards under this Annual Incentive Compensation Plan ("Annual Plan") are granted under and governed by the terms and conditions of the Vera Bradley, Inc. 2020 Equity and Incentive Plan (the “2020 Plan”), as amended.  Any term capitalized herein but not defined will have the meaning set forth in the 2020 Plan.

This Annual Plan is designed to give each eligible Participant (as defined in the attached Administrative Guidelines) an opportunity to share in the Company's success for the fiscal year ending January 28, 2023 (the "Performance Period").  The incentive is intended to be an inducement for future faithful service as well as a reward for performance. The incentive opportunity for the Performance Period is based on a percentage of each Participant's Base Salary (as defined herein) and will be earned based on three independent performance measures: (1) Brand/Enterprise Performance (made up of net revenue and operating income), (2) Brand/ Enterprise Strategic Objectives, and (3) Individual Financial Goals.  Collectively, these are referred to as the “FY23 Performance Measures.”

Calculation of Incentive Opportunity
The incentive opportunity for each Participant is determined based on a percentage of each Participant's Base Salary (as defined below) based upon the Participant’s level:												
				
		Incentive Opportunity as a Percentage of Base Salary
	Participant Level	Threshold	Target	Excellence
	Chief Executive Officer	37.5%	100%	200%
	Brand President	26.25%	70%	140%
	Executive Officer II	18.75%	50%	100%
	Executive Officer I	15%	40%	80%

"Base Salary" is defined as the Participant's gross base salary (before taxes and deductions) paid by the Company to the Participant during the Performance Period.

Each Participant will have the opportunity to earn the incentive set forth above based on the level of achievement against the FY23 Performance Measures.   The applicability and weighting of the FY23 Performance Measures relative to the total incentive opportunity is also based upon the Participant’s level as follows: 

Vera Bradley/Pura Vida Brand  - 80% Brand; 20% Enterprise																		
		As a Percentage of Total Target Incentive Opportunity Shown Above
	Brand Performance	Enterprise Performance	Brand Strategic Objectives	Individual Financial Goals
	Participant Level	Net Revenue	Operating Income	Operating Income
	Brand President	20%	20%	10%	25%	25%
	Executive Officer II	20%	20%	10%	25%	25%
	Executive Officer I	20%	20%	10%	25%	25%

Enterprise - 100% Enterprise Performance; 0% Brand Performance																						
		As a Percentage of Total Target Incentive Opportunity Shown Above	
	Brand
Performance	Enterprise Performance	Enterprise Strategic Objectives	Individual Financial Goals	
	Participant Level	Net Revenue	Operating Income	Net Revenue	Operating Income	
	
	Chief Executive Officer	0%	0%	25%	25%	25%	25%	
	Executive Officer II	0%	0%	25%	25%	25%	25%	
	Executive Officer I	0%	0%	25%	25%	25%	25%	

Brand and Enterprise Financial Performance
Payouts for Financial Performance are based on meeting two independent financial metrics, which are net revenue and operating income. Assuming at least threshold levels of performance against the Performance goals are met during the Performance Period, the actual payout levels will range from 25%-200% of target.  The actual amount of Financial Performance goals is considered to be confidential information and is not included in this document, but can be obtained from Human Resources.  
						
	Net Revenue Performance Level	Payout as a Percentage of the Portion of Incentive Tied to Corporate Performance*
	Threshold	25%
	Target	100%
	Excellence	200%
	Operating Income Performance Level	Payout as a Percentage of the Portion of Incentive Tied to Corporate Performance*
	Threshold	25%
	Target	100%
	Excellence	200%

*Payout levels are determined using linear interpolation for results falling between the three performance levels.

Brand and Enterprise Strategic Objectives 
Payouts for performance against the Brand and Enterprise Strategic Objectives will be based on performance against the following objectives:  

Vera Bradley Brand Strategic Objectives: 
a.Product – Achieve gross margin goal
b.Marketing – Achieve Direct traffic goal
c.Experience – Achieve cross-channel shopping initiatives
d.Revenue – Achieve revenue by channel goal
e.Expense Management – Execute plan and achieve targets

Pura Vida Brand Strategic Objectives:
a.Consumer & Positioning – Achieve customer count plan
b.Product – Achieve gross margin and revenue goals
c.Performance and Brand Marketing – Achieve goal
d.Channels – Achieve new store revenue plan

Enterprise Strategic Objectives:
a.Supply Chain Management & Cost Containment – Achieve gross margin goal
b.Shareholder Return – Achieve overall M&A efforts

c.Talent Management – Achieve engagement score goal
d.ESG Strategy Execution – Achieve ISS ESG corporate initiatives
e.Expense Management – Execute plan and achieve targets

Assuming threshold levels of performance against the Brand and Enterprise Strategic Objectives are met during the Performance Period, the actual payout levels will range from 25%-200% of target.  The Compensation Committee of the Board of Directors of the Company (the “Compensation Committee”) shall determine the level of performance achieved against the Brand and Enterprise Strategic Objectives in its sole discretion.

Individual Financial Goals
Payouts for performance against the Individual Financial Goals will be based on a Participant’s overall achievement of personal objectives, as determined by the Participant’s supervisor and approved by the Compensation Committee.  Payout levels for achievement of the Individual Financial Goals range from 0%-200% of that portion of incentive tied to the Individual Financial Goals.   

Administrative Guidelines

1.The CEO direct reports at an Executive Officer level and certain designated Executive Officers are eligible to participate in this Annual Plan.  Any question regarding eligibility for participation in this Annual Plan shall be resolved by the Compensation Committee, in the Committee’s sole discretion.

2.Participation in this Annual Plan neither gives any employee the right to be retained as an employee nor limits the Company's right to discharge or discipline any employee.

3.Final payout of any bonus under this Plan is subject to the final approval of the Chief Financial Officer and Vice President, Human Resources and as necessary the Compensation Committee.

4.Participants placed on a Performance Improvement Plan or who are on Step 3 Probation within six months of when payment is made under this Plan will not be eligible for such payment.  

5.Certification of Results.  Before any Awards under the Annual Plan are deemed earned with respect to a Performance Period, the Compensation Committee shall certify, in accordance with Section 9.5 of the 2020 Plan, in writing (i) that the performance goals have been met for the Performance Period, and (ii) the calculation of "Operating Income" and "Net Revenue" for the Performance Period.
a.Definition of "Operating Income".  For purposes of this Annual Plan, the term "Operating Income" means, with respect to the Performance Period related to any Awards, the Company's consolidated operating income, as determined in accordance with U.S. GAAP, adjusted to exclude the effects, as shown on the financial statements furnished as part of Form 8-K (announcing the Company's fiscal year-end financial results) for any fiscal year of the Company ending with or within the Performance Period, of (i) any acquisition during the Performance Period, including the amortization expense of intangible assets acquired during the Performance Period, (ii) material charges or income arising from litigation, (iii) corporate restructuring, asset impairment, or other special charges, and (iv) cumulative effect of changes to U.S. GAAP accounting.
b.Definition of "Net Revenue".  For purposes of this Annual Plan, the term "Net Revenue" means, with respect to the Performance Period related to any Awards, the Company's consolidated net revenue, as determined in accordance with U.S. GAAP.  

6.Except as provided herein, (a) no Participant will be entitled to an incentive payment under the Plan unless the Participant is employed by the Company or an Affiliate in an eligible position on the day the incentive payment is made, and (b) a Participant who separates from Service for any reason prior to the date of payment of such incentive will not be entitled to a prorated award, unless otherwise required by applicable state law. By way of clarification, should a Participant separate from Service and be rehired within the same Performance Period, the Participant shall not be given credit for prior periods Service. Notwithstanding the preceding provisions, the following provisions will apply if, during the Performance Period (or after the Performance Period and prior to the date of payment), you cease providing Services due to death, Disability or Retirement (and provided that you have not otherwise engaged in an act that would constitute Cause):

i.Death or Disability: In the event a Participant's Service terminates as a result of death or Disability prior to the date on which the incentive payment is made, the outstanding Award shall be treated as earned at the actual level for both the Company performance and at the target level for individual performance with any such earned Awards becoming fully vested and paid out as provided in section 8, below.

ii.Retirement:      In   the   event   a   Participant's Service   with   the   Company terminates as a result of Retirement during the Performance Period, the outstanding Award shall be earned based on the actual Company performance level obtained (determined at the end of the Performance Period) and target individual performance level, with any such earned Awards becoming fully vested and paid out as provided in section 8, below.

7.Notwithstanding anything to the contrary in this Annual Plan, in the event of a Change in Control of the Company during the Performance Period, then the outstanding Award shall be treated as earned at the target level, but prorated based on the number of full fiscal months (in which the Participant provided Service throughout such month) during the Performance Period, with any such earned

Awards becoming fully vested and paid out on a as soon as practicable (but not later than 30 calendar days) following the Change in Control.  For purposes of this Annual Plan, the term "Change in Control" shall mean the occurrence of any one or more of the following: (a) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or group (within the meaning of the Exchange Act and the rules of the Securities and Exchange Commission as in effect on the date of this Award), other than (i) Barbara Baekgaard, Patricia Miller, Michael Ray and Kim Colby and their respective heirs and descendants and any trust established for the benefit of such Persons, (ii) the Company or a corporation owned directly or indirectly by the shareholders of the Company in substantially the same proportions as their ownership of stock of the Company, or (iii) any employee benefit plan (or related trust) sponsored or maintained by the Company or any Affiliate, of securities of the Company representing more than twenty-five percent (25%) of the combined voting power of the Company's then outstanding securities; (b) the occupation of a majority of the seats (other than vacant seats) on the Board by Persons who were neither (i) nominated by the Board nor (ii) appointed by directors so nominated; or (c) the consummation of (i) an agreement for the sale or disposition of all or substantially all of the Company's assets, or (ii) a merger, consolidation or reorganization of the Company with or involving any other corporation, other than a merger, consolidation or reorganization that results in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least fifty percent (50%) of the combined voting power of the voting securities of the Company (or such surviving entity) outstanding immediately after such merger, consolidation or reorganization.

8.All Participants will receive an award that is prorated based on Base Salary earned during the Performance Period. 

9.In the event that a Participant joins the Company at any time during the final three fiscal months of the Performance Period, such participant will not be eligible to participate in this Plan.

10.All goal attainment calculations will follow normal rounding guidelines (i.e., 93.1% to 93.49% = 93%; 93.5% to 93.9% = 94%).  

11.Payments under the Annual Plan will be paid in cash after the end of the Company's fiscal tax year but no later than the 15th day of the third month following the Company's fiscal tax year on which the annual incentives under this Annual Plan are based.  

12.The Company shall have the power and the right to deduct or withhold an amount sufficient to satisfy federal, state, and local taxes (including FICA obligations), domestic or foreign, and other deductions required to be withheld by law with respect to this Award.

13.Record keeping and computation required by this Annual Plan will be subject to review by third-party auditors, and by the Compensation Committee.

14.Interpretations, determinations, and actions regarding plan administration shall be made by the Compensation Committee.  Any such determinations and any interpretation, rule, or decision under the Annual Plan or in carrying out or administering the Annual Plan, is final and binding for all purposes and upon all interested persons, their heirs, and personal representatives.  The Company or its designee may rely conclusively on determinations made by the Company and its auditors to determine related information for purposes of administration of the Annual Plan, whether such information is determined by the Company, its auditors, or a third-party vendor engaged to provide such information to the Company.  

15.While it is the intent of the Company to continue this Annual Plan as stated herein, the Company reserves the right to amend or discontinue the plan at any time in its sole discretion.

16.No Participant can assign, encumber or transfer any of his or her rights and interests under the Award described in this document, except, in the event of his or her death, by will or the laws of descent and distribution.

17.The rights granted under this document are in all respects subject to the provisions of the 2020 Plan to the same extent and with the same effect as if they were set forth fully therein.  If the terms of this document or the Award conflict with the terms of the 2020 Plan, the 2020 Plan will control.

18.Awards under this Plan shall be subject to all other Company policies, as amended, including but not limited to the Vera Bradley Compensation Recoupment Policy.Document

Exhibit 10.2

Vera Bradley, Inc.
2020 Equity and Incentive Plan

LONG TERM INCENTIVE PLAN 
RESTRICTED STOCK UNIT/PERFORMANCE UNIT TERMS AND CONDITIONS

1.Definitions.  Any term capitalized herein but not defined will have the meaning set forth in the Vera Bradley, Inc. 2020 Equity and Incentive Plan (the "Plan").  

2.Grant and Vesting of Restricted Stock Units.

a.As of the grant date specified in the Award Agreement (the "Grant Date"), the Participant will be credited with the number of Restricted Stock Units set forth in the Award Agreement.  Each Restricted Stock Unit is a notional amount that represents one unvested share of Common Stock.  Each Restricted Stock Unit constitutes the right, subject to the terms and conditions of the Plan and this document, to the distribution of a Share if and when the Restricted Stock Unit vests. 

b.Restricted Stock Units will vest in accordance with the terms of the Award Agreement. If the Participant's Service with the Company and all of its Affiliates terminates before the date that a grant of Restricted Stock Units vests, his or her right to receive the Shares underlying such unvested Restricted Stock Units will be only as provided in Section 5.  

3.Grant and Vesting of Performance Units ("Performance RSUs").

a.As of the Grant Date, the Participant will be credited with the number of Performance RSUs set forth in the Award Agreement.  Each Performance RSU is a notional amount that represents one unvested share of Common Stock.  Each Performance RSU constitutes the right, subject to the terms and conditions of the Plan and this document, to the distribution of a Share if and when the Performance RSU is deemed earned and vested.  

b.Performance RSUs granted under the Plan will become earned only if the Company achieves a stated level of "Earnings Per Share" (as defined below) during the applicable Performance Year within the Performance Period as set forth in the Award Agreement.  Except as provided in Section 5, any earned Performance RSUs (and the Participant's right to receive the Shares underlying such Performance RSUs) will become vested only if the Participant remains continuously employed with the Company during the Performance Period.  The following additional provisions apply to grants of Performance RSUs: 

i.Certification of Results.  Before any award of Performance RSUs is deemed earned with respect to a Performance Period, the Committee shall certify, in accordance with Section 9.5 of the Plan, in writing (i) that the performance goals described in the Award Agreement has been achieved for the Performance Period, and (ii) the calculation of "Earnings Per Share" (as defined below) for each Performance Year within the Performance Period.

ii.Definition of "Earnings Per Share."  For purposes of this Subsection 3(b), the term "Earnings Per Share" means, with respect to any Awards of Performance RSUs, the Company's consolidated earnings per share, as determined in accordance with U.S. GAAP, adjusted to exclude the effects, as shown on the financial statements furnished as part of Form 8-K (announcing the Company's fiscal year-end financial results) for any fiscal year of the Company ending with or within the Performance Period, of (i) any acquisition during the Performance Period, including the amortization expense of intangible assets acquired during the Performance Period, (ii) material charges or income arising from litigation, (iii) corporate restructuring, asset impairment, or other special charges, (iv) the benefit related to tariff savings from Generalized System of Preferences (“GSP”) countries, and (v) cumulative effect of changes to U.S. GAAP accounting.

iii.Definition of "Performance Year."  For purposes of this Subsection 3(b), the term "Performance Year" means, with respect to any Awards of Performance RSUs, each fiscal year of the Company ending within the Performance Period.

iv.Finality of Committee Determinations.  Any determination by the Committee of Earnings per Share and the level and entitlement to the Award of Performance RSUs, and any interpretation, rule, or decision adopted by the Committee under the Plan or in carrying out or administering the Plan, is final and binding for all purposes and upon all interested persons, their heirs, and personal representatives.  The Committee may rely conclusively on determinations made by the Company and its auditors to determine Earnings per Share and related information for purposes of administration of the Plan, whether such information is determined by the Company, its auditors, or a third-party vendor engaged to provide such information to the Company.  This Subsection is not intended to limit the Committee's power, to the extent it deems proper in its sole discretion, to take any action permitted under the Plan. 

4.Rights as a Stockholder.

a.Unless and until a Restricted Stock Unit or an earned Performance RSU, as applicable, has vested and the Share underlying it has been distributed to the Participant, the Participant will not be entitled to vote in respect of that Restricted Stock Unit or Performance RSU (as applicable) or that Share.

b.If the Company declares a cash dividend on its Shares, then, on the payment date of the dividend, the Participant will be credited with dividend equivalents equal to the amount of cash dividend per Share multiplied by the number of outstanding Restricted Stock Units or Performance RSUs (as applicable) credited to the Participant through the record date.  The dollar amount credited to a Participant under the preceding sentence will be credited to an account ("Account") established for the Participant for bookkeeping purposes only on the books of the Company.  The amounts credited to the Account will be credited as of the last day of each month with interest, compounded monthly, until the amount credited to the Account is paid to the Participant.  The rate of interest credited under the previous sentence will be the prime rate of interest as reported by the Midwest edition of the Wall Street Journal for the second business day of each fiscal quarter on an annual basis.  The balance in the Account will be subject to the same terms regarding vesting and forfeiture as the Participant's Restricted Stock Units or Performance RSUs, as applicable, awarded under the applicable Award Agreement, and will be paid in cash in a single sum at the time that the Shares associated with the Participant's Restricted Stock Units or Performance RSUs, as applicable, are delivered (or forfeited at the time that the Participant's Restricted Stock Units or Performance RSUs, as applicable, are forfeited).  

5.Termination of Service; Change in Control.  If a Participant's Service is terminated for any reason during the applicable Restricted Period or Performance Period, the terms and conditions of the underlying Award Agreement will govern when and whether the Participant will forfeit the right to receive Shares underlying any Restricted Stock Units or Performance RSUs, as applicable, that have not yet vested.  To the extent provided in the underlying Award Agreement, all or a portion of the previously unvested Restricted Stock Units or Performance RSUs, as applicable, then outstanding will vest immediately prior to or upon the consummation of a Change in Control.
  
For purposes hereof, a "Change in Control" shall mean the occurrence of any one or more of the following: (a) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or group (within the meaning of the Exchange Act and the rules of the Securities and Exchange Commission as in effect on the date of this Award), other than (i) Barbara Baekgaard, Patricia Miller, Michael Ray and Kim Colby and their respective heirs and descendants and any trust established for the benefit of such Persons, (ii) the Company or a corporation owned directly or indirectly by the shareholders of the Company in substantially the same proportions as their ownership of stock of the Company, or (iii) any employee benefit plan (or related trust) sponsored or maintained by the Company or any Affiliate, of securities of the Company representing more than twenty-five percent (25%) of the combined voting power of the 

Company's then outstanding securities; (b) the occupation of a majority of the seats (other than vacant seats) on the Board by Persons who were neither (i) nominated by the Board nor (ii) appointed by directors so nominated; or (c) the consummation of (i) an agreement for the sale or disposition of all or substantially all of the Company's assets, or (ii) a merger, consolidation or reorganization of the Company with or involving any other corporation, other than a merger, consolidation or reorganization that results in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least fifty percent (50%) of the combined voting power of the voting securities of the Company (or such surviving entity) outstanding immediately after such merger, consolidation or reorganization.  

6.Timing and Form of Payment.  Except as provided in this Section or in clauses 2(b) or 3(b) or Section 5, above, once a Restricted Stock Unit vests or a Performance RSU is earned and vested, as applicable, the Participant will be entitled to receive a Share in its place.  Delivery of the Share will be made, including delivery with respect to a Disabled Participant, or to the estate of a deceased Participant, after the end of the Restricted Period or Performance Period, as applicable, and not later than the 15th day of the third month following the end of the Restricted Period or Performance Period, as applicable.  Shares will be credited to an account established for the benefit of the Participant with the Company's administrative agent.  The Participant will have full legal and beneficial ownership with respect to the Shares at that time.  

7.Assignment and Transfers.  The Participant may not assign, encumber or transfer any of his or her rights and interests under the Award described in this document, except, in the event of his or her death, by will or the laws of descent and distribution.

8.Withholding Tax.  The Company shall have the power and the right to deduct or withhold an amount sufficient to satisfy federal, state, and local taxes (including FICA obligations), domestic or foreign, and other deductions required by law to be withheld with respect to the Award.  Unless the Committee or its designee agrees to a different method for withholding such taxes, the number of Shares (underlying the Award) necessary to cover applicable withholdings will be withheld from the issuance of any Shares of exchange for the Award.  

9.Securities Law Requirements.  

a.The Restricted Stock Units and Performance RSUs are subject to the further requirement that, if at any time the Committee determines in its sole discretion that the listing or qualification of the Shares subject to the Restricted Stock Units and Performance RSUs under any securities exchange requirements or under any applicable law, or the consent or approval of any governmental regulatory body, is necessary as a condition of, or in connection with, the issuance of Shares under it, then Shares will not be issued under the Restricted Stock Units and Performance RSUs, unless the necessary listing, qualification, consent or approval has been effected or obtained free of any conditions not acceptable to the Committee.

b.No person who acquires Shares pursuant to the Award reflected in this document may, during any period of time during which that person is an affiliate of the Company (within the meaning of the rules and regulations of the Securities and Exchange Commission under the Securities Act), sell the Shares, unless the offer and sale is made pursuant to (i) an effective registration statement under the Securities Act, which is current and includes the Shares to be sold, or (ii) an appropriate exemption from the registration requirements of the Securities Act, such as that set forth in Rule 144 promulgated under the Securities Act.  With respect to individuals subject to Section 16 of the Exchange Act, transactions under this Award are intended to comply with all applicable conditions of Rule 16b-3, or its successors under the Exchange Act.  To the extent any provision of the Award or action by the Committee fails to so comply, the Committee may determine, to the extent permitted by law, that the provision or action will be null and void.

10.No Limitation on Rights of the Company.  Subject to Sections 4.3, 14.1 and 14.2 of the Plan, the grant of the Award described in this document will not in any way affect the right or power of the Company to make adjustments, reclassifications or changes in its capital or business structure, or to merge, consolidate, dissolve, liquidate, sell or transfer all or any part of its business or assets.

11.Plan, Restricted Stock Units, Performance RSUs and Award Not a Contract of Employment.  Neither the Plan, the Restricted Stock Units, the Performance RSUs nor any other right or interest that is part of the Award granted under the Plan or this document is a contract of employment, and no terms of employment or Service of the Participant will be affected in any way by the Plan, the Restricted Stock Units, the Performance RSUs, the Award, this document or related instruments, except as specifically provided therein.  Neither the establishment of the Plan nor the Award will be construed as conferring any legal rights upon the Participant for a continuation of employment or Service, nor will it interfere with the right of the Company or any Affiliate to discharge the Participant and to treat him or her without regard to the effect that treatment might have upon him or her as a Participant.

12.Participant to Have No Rights as a Stockholder.  Except as provided in Section 4 above, the Participant will have no rights as a stockholder with respect to any Shares subject to the Restricted Stock Units or Performance RSUs, as applicable, prior to the date on which he or she is recorded as the holder of those Shares on the records of the Company.

13.Notice.  Any notice or other communication required or permitted hereunder must be in writing and must be delivered personally, or sent by certified, registered or express mail, postage prepaid.  Any such notice will be deemed given when so delivered personally or, if mailed, three days after the date of deposit in the United States mail, in the case of the Company to 12420 Stonebridge Road, Roanoke, Indiana 46783, Attn: Corporate Secretary, and, in the case of the Participant, to the last known address of the Participant in the Company's records.

14.Governing Law.  This document and the Award will be construed and enforced in accordance with, and governed by, the laws of the State of Indiana, determined without regard to its conflict of law rules.

15.Code Section 409A.  Notwithstanding any other provision in this document, if a Participant is a "specified employee" (as such term is defined for purposes of Code Section 409A) at the time of his or her termination of Service, no amount that is subject to Code Section 409A and that becomes payable by reason of such termination of Service shall be paid to the Participant before the earlier of (i) the expiration of the six-month period measured from the date of the Participant's termination of Service, and (ii) the date of the Participant's death.  

16.Plan Document Controls.  The rights granted under this document are in all respects subject to the provisions of the Plan to the same extent and with the same effect as if they were set forth fully therein.  If the terms of this document or the Award conflict with the terms of the Plan, the Plan will control.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00345-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00345-of-00352.parquet"}]]