DEF 14A 1 bp16295x1_def14a.htm DEF 14A

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934

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Volt Information Sciences, Inc.
(Name of Registrant as Specified In Its Charter)
 
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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50 Charles Lindbergh Boulevard, Suite 206
Uniondale, New York 11553
(516) 228-6700
 
   
 
 
February 22, 2019

   

   

   
“I am proud that Volt has emerged from a recent period of transition prepared for sustainable revenue growth in our core domestic staffing business.”
   

Dear valued shareholder,

I am so pleased to address you as Volt’s President and Chief Executive Officer. Now well into my first year leading this great company, I am proud that Volt has emerged from a recent period of transition prepared for sustainable revenue growth in our core domestic staffing business. Our initiatives to reposition the business for profitable growth are also starting to take hold, and we are heartened that our results in the fourth quarter of our 2018 fiscal year began to reflect the traction that we expect to continue in the quarters and years ahead.

We are steadfast in our commitment to positioning Volt for competitive advantage by drawing on our local, regional and global expertise, utilizing our robust sales organization, and by establishing greater internal accountability. We completed a successful campaign in 2018 to increase the company’s focus on a targeted spectrum of clients in the retail, mid-market and global MSP segments. As a result, we are now able to sell to and deliver to clients in a more directed and deliberate way. Further, we have built an improved sales engine and refocused business development managers on selling retail business, which we expect will better enable us to both retain existing clients and compensate for any loss in revenue that occurs as part of the natural ebb and flow in demand from our client base. The past year was also marked by increased success in aligning our European and U.S. teams to create improved operational synergies, share best practices and leverage existing and new client opportunities. As has been the case throughout Volt’s history, our commitment to our customers and quality service endures, and we believe this dedication will translate into improved financial performance for the benefit of our shareholders.

Volt now has a seasoned, talented senior management team with deep industry-specific experience. In addition, our dedicated and passionate employees continue to work to implement the changes we have instituted and are blazing the path forward. Our collaborative spirit, loyalty and teamwork were instrumental to our achievements this past year (and particularly those achieved in recent months) and, together, we remain inspired by our purpose—to partner with our clients to provide innovative workforce solutions with an extremely strong talent pool.

On behalf of the entire executive team, please know that we are dedicated to driving shareholder value, first and foremost. The Board of Directors joins me in extending to you a warm invitation to attend our Annual Meeting of Shareholders. Your vote is very important to us, so we encourage you to promptly vote your shares by submitting your proxy. We look forward to continuing our dialogue with shareholders and we sincerely thank you for your investment in our company.


Linda Perneau
President, Chief Executive Officer and Director

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50 Charles Lindbergh Boulevard, Suite 206
Uniondale, New York 11553
(516) 228-6700

   

   

   
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE SHAREHOLDER MEETING TO BE HELD ON MAY 1, 2019
   

The Annual Meeting of Shareholders of Volt Information Sciences, Inc. (the “Company”) will be held on Wednesday, May 1, 2019, at the offices of the Company, located at 2401 N. Glassell Street, Orange, California 92865, at 10:00 a.m. (PDT). At the meeting, shareholders will be asked to:

elect six directors;
ratify the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for fiscal year 2019;
approve, on a non-binding, advisory basis, the compensation of the Company’s named executive officers as disclosed in these proxy materials;
approve the Company’s 2019 Equity Incentive Plan; and
consider any other matters that may properly be brought before the meeting.

You may vote at the meeting if you were a shareholder of the Company at the close of business on March 12, 2019, the record date for the meeting.

By Order of the Board of Directors,


Linda Perneau
President, Chief Executive Officer and Director

February 22, 2019

You may vote your shares electronically via the internet, by telephone, by mail, or in-person during the annual meeting. Please carefully review the proxy materials and follow the instructions on the proxy card to vote. You may access additional information at www.proxyvote.com for voting instructions as well as to view the Proxy Statement and Annual Report online.

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Volt Information Sciences, Inc.
Proxy Statement
2019 Annual Meeting of Shareholders

   

   
GENERAL INFORMATION
   

Why did I receive this Proxy Statement?

The Board of Directors (the “Board”) of Volt Information Sciences, Inc. (the “Company”, “we” or “us”) is soliciting proxies for the 2019 Annual Meeting of Shareholders (the “Meeting”) to be held on Wednesday, May 1, 2019, at the offices of the Company, located at 2401 N. Glassell Street, Orange, California 92865, at 10:00 a.m. (PDT) and at any adjournment of the Meeting. When the Company asks for your proxy, we must provide you with a proxy statement (this “Proxy Statement”) that contains certain information specified by law. This Proxy Statement summarizes the information you need in order to vote at the Meeting.

As permitted by the Securities and Exchange Commission, we are furnishing to stockholders our Notice of Annual Meeting, Proxy Statement, Proxy Card and Annual Report primarily over the internet. On or about March 22, 2019, we will mail to each of our stockholders (other than those who previously requested electronic or paper delivery) a Notice of Internet Availability of Proxy Materials containing instructions on how to access and review the proxy materials via the internet, and how to access the Proxy Card to vote on the internet or by telephone. The Notice of Internet Availability of Proxy Materials also contains instructions on how to receive, free of charge, paper copies of the proxy materials. If you received the notice, then you will not receive a paper copy of the proxy materials unless you request one.

What will I vote on?

The following items:

election of six directors;
ratification of the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for fiscal year 2019;
approval of, on a non-binding, advisory basis, the Company’s executive compensation as disclosed in these proxy materials;
approval of the Company’s 2019 Equity Incentive Plan; and
any other matters that may properly be brought before the Meeting.

Will there be any other items of business on the agenda?

We do not expect any other items of business at the Meeting. Nonetheless, if there is an unforeseen need, your proxy will give discretionary authority to Linda Perneau, President and Chief Executive Officer, and Paul Tomkins, Senior Vice President and Chief Financial Officer, to vote on any other matters that may be properly brought before the Meeting. These persons will use their best judgment in voting your proxy.

Who is entitled to vote?

Shareholders as of the close of business on the record date, which is March 12, 2019, may vote at the Meeting.

How many votes do I have?

You have one vote at the Meeting for each share of common stock you hold on the record date.

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What constitutes a quorum for the Meeting?

A quorum is necessary to conduct business at the Meeting. A quorum requires the presence at the Meeting of 35% of the outstanding shares entitled to vote, in person or represented by proxy. You are part of the quorum if you have voted by proxy. As of February 15, 2019, 21,191,030 shares of Company common stock were issued and outstanding.

How can I access the proxy materials over the Internet?

Your Notice of Internet Availability, proxy card or voting instruction card will contain instructions on how to:

1.view our proxy materials for the Annual Meeting on the Internet; and
2.instruct us to send our future proxy materials to you electronically by e-mail.

Our proxy materials are also available at www.proxyvote.com and our proxy materials will be available during the voting period starting on March 22, 2019.

How do I vote?

You can vote either in person at the Meeting or by proxy without attending the Meeting. We urge you to vote by proxy even if you plan to attend the Meeting so we will know as soon as possible that enough votes will be present for us to hold the Meeting. If you attend the Meeting in person, you may vote at the Meeting and your earlier proxy will not be counted.

May I vote by telephone or via the Internet?

Yes. Instead of submitting your vote by mail using the proxy card, you may be able to vote on the Internet or by telephone. Please note that there are separate Internet and telephone voting arrangements depending on whether you hold your shares:

as the registered shareholder, also known as the “shareholder” or “holder” of record (that is, if you own shares directly in your own name and they are either kept at our transfer agent or are in your possession); or
as the “beneficial owner”, also known as holding the shares in “street name” (that is, if your shares are held for you by your bank, broker or other holder of record).

If you are a registered shareholder, you may vote by telephone or via the Internet by following the instructions on your proxy card.

If you are a beneficial owner, please refer to the information forwarded by your bank, broker or other holder of record to see which options are available to you. Most brokers and banks offer voting by telephone and via the Internet as well as by mail.

If you vote via the Internet, you may incur costs, such as usage charges from Internet access providers and telephone companies. You will be responsible for those costs.

What should I do if I want to attend the Meeting?

All shareholders of the Company may attend the Meeting. Please bring your admission ticket or proof of ownership of the Company’s stock to enter the Meeting. When you arrive at the Meeting, you may be asked to present photo identification, such as a driver’s license, to be admitted.

If you are a registered shareholder, you will find an admission ticket attached as part of the proxy card sent to you. If you plan to attend the Meeting, please bring this portion of the proxy card with you to the Meeting. If you opted to receive your proxy materials electronically, please print out the admission ticket you will find online and bring it with you.
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If your shares are held in the name of your bank, broker or other holder of record, please bring proof of ownership to be admitted to the Meeting. A recent brokerage statement or letter from your bank or broker is an example of proof of ownership.

For safety and security reasons, no cameras, recording equipment, electronic devices, large bags, briefcases or packages will be permitted in the Meeting.

How do I vote my shares in the Volt Information Sciences, Inc. Savings Plan?

If you received this Proxy Statement because you are or were an employee of the Company who participates in this plan and you have shares of common stock of the Company allocated to your account under this plan, you may vote your shares held in this plan as of March 12, 2019, by mail, by telephone or via the Internet. Instructions are provided on the proxy card. The tabulator must receive your instructions by 4:00 p.m. (EDT) on April 26, 2019 in order to communicate your instructions to the plan’s trustee, who will vote your shares. Any plan shares for which we do not receive instructions from the employee will be voted by the trustee in the same proportion as the shares for which we have received instructions.

Can I revoke or change my vote?

Yes. If you are a shareholder of record, you have the right to revoke your proxy at any time before the Meeting by sending a signed notice to the Company’s Secretary, Volt Information Sciences, Inc., 50 Charles Lindbergh Boulevard, Suite 206, Uniondale, New York 11553. If you want to change your vote at any time before the Meeting, you must deliver a later-dated proxy by telephone, via the Internet or in writing. You may also change your proxy by voting in person at the Meeting.

If you are a beneficial owner, please refer to the information forwarded by your broker, bank or other holder of record for procedures on revoking or changing your proxy.

What are the costs of soliciting these proxies and who will pay them?

The Company will pay all costs of soliciting these proxies. In addition, some of our officers or directors may solicit proxies by telephone or in person. We will reimburse banks and brokers for the expenses they incur in forwarding the proxy materials to you. Broadridge Financial Solutions, Inc. (“Broadridge”) and D.F. King will assist us with the solicitation and tabulation of proxies for estimated fees of $10,000 and $9,000, respectively, plus reasonable out-of-pocket costs and expenses. Our agreements with Broadridge and D.F. King with respect to these matters contains customary indemnification provisions.

How many votes are required for the approval of each item?

Item 1—A plurality of votes cast at the Meeting in person or by proxy is required for the election of each nominee to serve as a director.
Item 2—The affirmative vote of a majority of votes cast at the Meeting in person or by proxy is required to ratify the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for fiscal year 2019.
Item 3—The affirmative vote of a majority of votes cast at the Meeting in person or by proxy is required to approve, on a non-binding, advisory basis, the Company’s executive compensation as disclosed in these proxy materials. This vote is advisory and not binding on the Company, the Board or the Human Resources and Compensation Committee (“Compensation Committee”) of the Board in any way. To the extent there is any significant vote against the executive compensation as disclosed in this Proxy Statement, the Board and the Compensation Committee will evaluate what actions, if any, may be appropriate to address shareholder concerns.
Item 4—The affirmative vote of a majority of votes cast at the Meeting in person or by proxy is required to approve the Company’s 2019 Equity Incentive Plan.
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Are abstentions and broker non-votes part of the quorum?

Yes. Abstentions and broker non-votes count as “shares present” at the Meeting for purposes of determining whether a quorum has been established.

What are broker non-votes?

If your shares are held by a broker, the broker may require your instructions in order to vote your shares. If you give the broker instructions, your shares will be voted as you direct. If you do not give instructions, one of two things can happen depending on the type of proposal. If the proposal is considered “routine”, the broker may vote your shares in its discretion. For other proposals, the broker may not vote your shares without your instructions. When that happens, it is called a “broker non-vote.”

Item 2 in this Proxy Statement (ratification of the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for fiscal year 2019) will be considered routine and the broker may vote your shares for this Item in its discretion. The broker is not entitled to vote your shares on the other Items unless the broker has received instructions from you with respect to such Items.

Who will count the vote?

Votes at the Meeting will be counted by the inspector of election appointed by the Board.

What if I do not vote for some or all of the matters listed on my proxy card?

If you are a registered shareholder and you return a signed proxy card without indicating your vote for certain or all of the matters, your shares will be voted as follows for any matter you did not vote on:

for the nominees to the Board listed on the proxy card;
for the ratification of the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for fiscal year 2019;
for approval of, on a non-binding, advisory basis, the Company’s executive compensation as disclosed in these proxy materials; and
for approval of the Company’s 2019 Equity Incentive Plan.

How do I submit a shareholder proposal for the 2020 annual meeting?

There are two principal means for submitting shareholder proposals. If a shareholder wishes to have a proposal considered for inclusion in next year’s Proxy Statement pursuant to Rule 14a-8 of the Securities Exchange Act of 1934 (the “Exchange Act”), as amended, the proposal must comply with the requirements of Rule 14a-8 and be received by us at our principal executive offices by no later than 120 calendar days before the one-year anniversary of the date on which the Company is releasing this Proxy Statement to shareholders in connection with this year’s Meeting.

If a shareholder wishes to submit a proposal that is not intended to be included in our Proxy Statement, or to nominate a candidate for director, he or she must give the Company written notice no earlier than 150 days and no later than 120 days prior to the one-year anniversary of the date of the notice of this year’s Meeting and must otherwise comply with the requirements set forth in our Amended and Restated By-Laws (the “By-Laws”); provided, however, that if the 2020 annual meeting date is advanced by more than 30 days before or delayed by more than 30 days after the one-year anniversary date of this year’s Meeting, and less than 130 days’ informal notice to shareholders or other prior public disclosure of the date of the 2020 annual meeting is given or made, then shareholders must provide notice to the Company within the time periods specified in the By-Laws. Copies of the By-Laws are available to shareholders free of charge on request to the Company’s Secretary, Volt Information Sciences, Inc., 50 Charles Lindbergh Boulevard, Suite 206, Uniondale, New York 11553.

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Where can I find the voting results?

We will publish voting results in a Form 8-K which we will file with the SEC shortly after the vote is certified. To view this Form 8-K online, visit the Company’s Investor Relations website at https://investor.volt.com.

Can shareholders and other interested parties communicate directly with our Board? If so, how?

Yes. You may communicate directly with one or more members of the Board by writing to the Company’s Secretary, Volt Information Sciences, Inc., 50 Charles Lindbergh Boulevard, Suite 206, Uniondale, New York 11553. The Company’s Secretary will then forward all questions or comments directly to our Board or a specific director, as the case may be.

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Item 1.   Election of Directors

At this year’s Meeting, the Board proposes that the following nominees be elected until the next annual meeting of shareholders and until their respective successors have been duly elected and qualified. The Board has no reason to believe that the persons named below will be unable or unwilling to serve as nominees or as directors if elected.

Assuming a quorum is present, the six nominees receiving the highest number of affirmative votes of shares entitled to be voted for such persons will be elected as directors of the Company until the next annual meeting of shareholders and until their respective successors are duly elected and qualified. In the event that additional persons are nominated for election as directors, the proxy holders intend to vote all proxies received by them in such a manner as will ensure the election of the nominees listed below, and, in such event, the specific nominees to be voted for will be determined by the proxy holders.

The Board recommends that you vote FOR each of the following nominees:

Nick S. Cyprus
Bruce G. Goodman
William J. Grubbs
Linda Perneau
Arnold Ursaner
Celia R. Brown

Please see “Directors, Executive Officers and Corporate Governance—Directors and Executive Officers” for information showing the principal occupation or employment of the nominees for director, the principal business of the corporation or other organization in which such occupation or employment is carried out and such nominees’ business experience during the past five years. Such information has been furnished to the Company by the director nominees.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED SHAREHOLDER MATTERS

The following table sets forth information, as of February 15, 2019 (except as described in the footnotes to the following table), with respect to the beneficial ownership of our common stock, our only class of voting or equity securities, by (a) each person who is known to us to own beneficially more than five percent of the outstanding shares of our common stock, (b) each of the 2018 named executive officers (the “2018 Named Executive Officers” or the “Named Executive Officers”), (c) each of our directors and director nominees and (d) all current executive officers and directors as a group. Unless otherwise indicated, the address for each individual listed below is c/o Volt Information Sciences, Inc., 50 Charles Lindbergh Boulevard, Suite 206, Uniondale, New York 11553.

Name of Beneficial Owner
Shares
of
Common
Stock(1)
Shares
That
May be
Acquired
Within
60 Days(2)
Percent
of
Class
Five Percent Shareholders (other than Named Executive Officers and Directors):
 
 
 
 
 
 
 
 
 
Glacier Peak Capital LLC
 
2,406,584
(3) 
 
 
 
10.96
%
Michael Shaw
 
2,354,395
(4) 
 
8,000
 
 
10.75
%
Deborah Shaw
 
2,234,739
(5) 
 
3,000
 
 
10.19
%
Steven Shaw
 
2,105,986
(6) 
 
8,000
 
 
9.62
%
Wax Asset Management, LLC
 
1,542,386
(7) 
 
 
 
7.02
%
Linda Shaw
 
1,391,095
(8) 
 
 
 
6.33
%
Dimensional Fund Advisors, LP
 
1,214,763
(9) 
 
 
 
5.53
%
ARS Investment Partners LLC
 
1,212,249
(10) 
 
 
 
 
5.52
%
Named Executive Officers, Directors and Director Nominees:
 
 
 
 
 
 
 
 
 
Bruce G. Goodman
 
788,907
(11) 
 
39,675
 
 
3.90
%
Michael D. Dean
 
263,096
(12) 
 
424,710
 
 
3.13
%
Dana Messina
 
54,063
(13) 
 
36,675
 
 
*
 
Laurie Siegel
 
37,753
 
 
36,675
 
 
*
 
Paul Tomkins
 
33,502
 
 
110,855
 
 
*
 
Nick S. Cyprus
 
27,458
(13) 
 
36,675
 
 
*
 
William J. Grubbs
 
27,295
 
 
 
 
*
 
Arnold Ursaner
 
25,000
(13) 
 
 
 
*
 
Linda Perneau
 
15,110
 
 
44,394
 
 
*
 
Nancy Avedissian
 
10,051
 
 
44,463
 
 
*
 
Leonard F. Naujokas
 
1,503
(14) 
 
 
 
*
 
All executive officers, directors and director nominees as a group (10 persons)
 
1,020,642
 
 
349,412
 
 
6.36
%
*Less than 1%.
(1)Except as noted, the named beneficial owners have sole voting and investment power with respect to their beneficially owned shares.
(2)The shares underlying all equity awards that may be exercised within 60 days are deemed to be beneficially owned by the person or persons for whom the calculation is being made and are deemed to have been exercised for the purpose of calculating this percentage, including the shares underlying options where the exercise price is above the current market price.
(3)Based on a Schedule 13G filed with the SEC on February 14, 2019 by Glacier Peak Capital, LLC, an investment adviser. All shares are owned by entities, client accounts or affiliate accounts managed and controlled by Glacier Peak Capital, LLC or its wholly-owned subsidiary Fortis Capital Maagement LLC, which have the sole ability to vote such shares. Glacier Peak Capital, LLC is a registered investment advisor and Glacier Peak U.S. Value Fund, L.P.
(4)Includes (i) 119,852 shares held by Michael Shaw as an individual together with his spouse; (ii) 1,170,367 shares held in a revocable or living trust in which Michael Shaw and his spouse are the current beneficiaries and trustees; (iii) 8,364 shares held through the Company’s 401(k) Savings Plan; (iv) 3,229 shares held in The Jerome and Joyce Shaw Family Administrative Trust; and (v) 1,052,583 shares held in the Rachel Lynn Shaw Trust.
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(5)Includes (i) 5,749 shares held by the William and Jacqueline Shaw Family Foundation, Inc., a charitable foundation of which Deborah Shaw, Linda Shaw and a daughter of Deborah Shaw are directors, as to which shares Deborah Shaw may be deemed to have shared voting and investment power; (ii) 71,220 shares owned by Deborah Shaw as custodian under the California Uniform Transfers to Minors Act for the benefit of her children; (iii) 146,356 shares owned by Deborah Shaw, Bruce G. Goodman (a director of the Company) and Linda Shaw (Deborah Shaw’s sister) as trustees of a trust for the benefit of the children of Linda Shaw, as to which shares Deborah Shaw may be deemed to have shared voting and investment power; and (iv) 557,054 shares owned by Deborah Shaw and Bruce G. Goodman as trustees of a trust for the benefit of Linda Shaw’s children, as to which shares Deborah Shaw may be deemed to have shared voting and investment power. The inclusion of the shares in clauses (i), (ii), (iii) and (iv) is not an admission of beneficial ownership of those shares by Deborah Shaw. Does not include (a) 23,019 shares owned by Deborah Shaw’s husband; (b) 34,584 shares owned by Deborah Shaw’s husband as custodian for children of Deborah Shaw; and (c) 391,243 shares held by Deborah Shaw’s husband and his sister as trustees for the benefit of Deborah Shaw’s children.
(6)Includes (i) 612,315 shares held by Steven Shaw as an individual; (ii) 8,364 shares held through the Company’s 401(k) Savings Plan; (iii) 3,229 shares held in The Jerome and Joyce Shaw Family Administrative Trust; (iv) 1,052,583 shares held in the Rachel Lynn Shaw Trust; (v) 419,495 shares held in the Rachel Lynn Shaw Trust established under The Jerome and Joyce Shaw Family Trust; and (vi) 10,000 shares held in the Joyce Cutler-Shaw Revocable Trust u/d/t 11/15/2006, as amended.
(7)Based on a Schedule 13G filed with the SEC on February 14, 2019 by Wax Asset Management, LLC. Such shares are owned by investment advisory clients of Wax Asset Management, LLC, which is deemed to be a beneficial owner of those shares pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, due to its discretionary power to make investment decisions over such shares for its clients. Investment advisory contracts also grant Wax Asset Management, LLC voting power over the securities held in client accounts. In all cases, persons other than Wax Asset Management, LLC have the right to receive, or the power to direct the receipt of, dividends from, or the proceeds from the sale of the shares. No individual client of Wax Asset Management, LLC holds more than five percent of the class.
(8)Includes (i) 146,356 shares held by Linda Shaw, Bruce G. Goodman (her husband and a director of the Company) and Deborah Shaw (her sister and a former director of the Company) as trustees of trusts for the benefit of the children of Linda Shaw, as to which shares Linda Shaw has shared voting and investment power; and (ii) 5,749 shares held by the William and Jacqueline Shaw Family Foundation, Inc., a charitable foundation of which Linda Shaw, Deborah Shaw and a daughter of Deborah Shaw are the directors, as to which shares Linda Shaw has shared voting and investment power. The inclusion of the shares in clauses (i) and (ii) is not an admission of beneficial ownership of those shares by Linda Shaw. Does not include (a) 80,497 shares owned by Bruce G. Goodman, individually; (b) 39,675 shares underlying a stock option held by Bruce G. Goodman that were granted to him by the Company as a director of the Company; (c) 5,000 shares held by Bruce G. Goodman as trustee of an irrevocable trust for the benefit of a child of Bruce G. Goodman; and (d) 557,054 shares held by trusts for the benefit of Linda Shaw’s children, of which trusts Deborah Shaw and Bruce G. Goodman are trustees.
(9)Based on a Schedule 13G filed with the SEC on February 8, 2019 by Dimensional Fund Advisors LP, an investment adviser registered under Section 203 of the Investment Advisors Act of 1940, that furnishes investment advice to four investment companies registered under the Investment Company Act of 1940 and serves as investment manager or sub-adviser to certain other commingled funds, group trusts and separate accounts (such investment companies, trusts and accounts, collectively referred to as the “Funds”). In certain cases, subsidiaries of Dimensional Fund Advisors LP may act as advisers or sub advisers to certain of the Funds. In their respective roles as investment advisers, sub-advisers and/or managers, Dimensional Fund Advisors LP or its subsidiaries (collectively, “Dimensional”) may possess voting and/or investment power over the securities of the Company that are owned by the Funds, and may be deemed to be the beneficial owners of the shares of the Company held by the Funds. However, all securities reported in this schedule are owned by the Funds. Dimensional disclaims beneficial ownership of such securities.
(10)Based on a Schedule 13G filed wtih the SEC on February 14, 2019, by ARS Investment Partners LLC, an investment adviser in accordance with Rule 13-d-1(b)(1)(ii)E.
(11)Includes (i) 5,000 shares owned by Bruce G. Goodman as trustee of a trust for the benefit of one of his children; (ii) 146,356 shares owned by Bruce G. Goodman, Linda Shaw (his wife), and Deborah Shaw (a former director of the Company) as trustees of trusts for the benefit of the children of Linda Shaw, as to which shares Bruce G. Goodman may be deemed to have shared voting and investment power; and (iii) 557,054 shares owned by Bruce G. Goodman and Deborah Shaw as trustees of a trust for the benefit of Linda Shaw’s children, as to which shares Bruce G. Goodman may be deemed to have shared voting and investment power. The inclusion of the shares in clauses (i), (ii) and (iii) is not an admission of beneficial ownership of those shares by Bruce G. Goodman. Does not include 1,238,990 shares owned by Bruce G. Goodman’s wife individually.
(12)Effective June 6, 2018, Mr. Dean separated from the Company. The beneficial ownership amount for Mr. Dean is shown as of July 10, 2018. The Company is unable to confirm Mr. Dean’s current beneficial ownership.
(13)Each of Messrs. Messina, Cyprus and Ursaner have elected to defer the receipt of 12,295 shares pursuant to the Company’s non-qualified deferred compensation and supplemental savings plan, which shares are not reflected in this table.
(14)Mr. Naujokas has historically received the majority of his equity-based compensation in the form of cash-settled phantom units pursuant to which no shares can be acquired. Such awards are not reflected in the table above.
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The names of our current directors and executive officers and their ages, positions, biographies and outside directorships are set forth below. Also included for our directors is information regarding their specific experience, qualifications, attributes and skills that led to the conclusion that each director should serve on our Board. On February 22, 2019, Dana Messina and Laurie Siegel announced their decision not to stand for re-election and to resign from the Board effective immediately prior to the Annual Meeting. Our executive officers are appointed by, and serve at the discretion of, our Board. The information presented below is current as of February 22, 2019.

Name
Age
Position(s)
Executive Officers and Executive Directors
Linda Perneau
53
President, Chief Executive Officer and Director
Paul Tomkins
61
Senior Vice President and Chief Financial Officer
Nancy Avedissian
45
Senior Vice President, General Counsel and Corporate Secretary
Leonard Naujokas
47
Controller and Chief Accounting Officer
Non-Executive Directors
 
 
Nick S. Cyprus
65
Director
Bruce G. Goodman
70
Director
William J. Grubbs
61
Director
Arnold Ursaner
68
Director
Celia R. Brown
64
Director Nominee

Executive Officers and Executive Directors

Linda Perneau

Linda Perneau was appointed Interim President and Chief Executive Officer in June 2018 and has been a director and our President and Chief Executive Officer since November 2018. Ms. Perneau joined the Company in November 2017. Previously, Ms. Perneau held a number of senior-level positions in the General Staffing Division of Randstad US, most recently as its Co-President. She had served as that division’s Chief Operating Officer from July 2015 to January 2017, as a Division President at Randstad from April 2012 to July 2015, and as an Executive Vice President at Randstad from December 2011 to April 2012. Ms. Perneau’s experience in the staffing industry also includes serving as Executive Vice President at SFN Group (Spherion), Senior Vice President (Southeast Division) at Adecco, and Area Manager-West Region for Kelly Services.

Paul Tomkins

Paul Tomkins has been our Senior Vice President and Chief Financial Officer since March 2015. From August 2014 to March 2015, Mr. Tomkins had a break in service. From May 23, 2011 to July 30, 2014, Mr. Tomkins served as the Executive Vice President and Chief Financial Officer at Reader’s Digest Association, Inc., where he oversaw all aspects of finance and accounting and played an integral role in managing a number of important non-core business divestitures. Prior to his role at Reader’s Digest, Mr. Tomkins spent 27 years at AT&T, where he most recently served as the Vice President and Controller of AT&T Business Solutions and previously held a number of other financial management positions. Mr. Tomkins is an active Certified Public Accountant and is a member of the American Institute of CPAs and the New Jersey Society of CPAs. He earned his MBA with an emphasis in International Finance from Seton Hall University.

Nancy T. Avedissian

Nancy T. Avedissian has been our Senior Vice President, General Counsel and Corporate Secretary since October 2016. From April 2009 through immediately prior to beginning her service with the Company, Ms. Avedissian was the General Counsel of Worldwide Clinical Trials, a global provider of full-service drug development services to the pharmaceutical and biotechnology industries. She also served as the Vice

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President of Legal Affairs of that company beginning in 2012. Prior to April 2009, Ms. Avedissian was a corporate attorney with the law firm Milbank, Tweed, Hadley & McCloy LLP, where she worked since 1999. Ms. Avedissian has over 19 years of experience in corporate legal practice. Ms. Avedissian holds undergraduate degrees from the University of California, Irvine and earned a juris doctorate degree from Loyola Law School, Los Angeles.

Leonard Naujokas

Leonard Naujokas has served as our Controller and Chief Accounting Officer since June 2017. Mr. Naujokas served as the Company’s interim Controller and Chief Accounting Officer from January 2017 to June 2017 and served from August 2012 to January 2017 as the Company’s Vice President and Assistant Corporate Controller. He has 18 years of experience leading accounting functions. Before joining the Company, Mr. Naujokas served as Senior Director of SEC Reporting/Technical Accounting for Monster Worldwide, LLC from January 2011 to August 2012. From November 2003 through December 2010, Mr. Naujokas worked at Motorola, Inc., during which time it acquired Symbol Technologies, Inc. At Motorola, his responsibilities increased over the course of his tenure, culminating in his service as its Director of Accounting, Controller Enterprise Solutions Business. Mr. Naujokas is an active Certified Public Accountant and is a member of the American Institute of CPAs. He holds a Bachelor of Science degree in Accounting from St. John’s University.

Non-Executive Directors

Nick S. Cyprus

Nick S. Cyprus has been a director since May 2015. Mr. Cyprus also serves on the Board of Maxar Technologies as Audit Committee Chair and as a member of its Risk Committee. He previously served as a member of its Governance & Nominating Committee. From 2009 until October 2017, when Maxar Technologies acquired DigitalGlobe, Inc., Mr. Cyprus served as Audit Committee Chair at DigitalGlobe. Mr. Cyprus has also served as the Audit Committee Chair of Trusted Media Brands since June 2012. He also provides advisory services for several smaller clients. From December 2006 to March 2013, Mr. Cyprus was employed by General Motors Company (“GM”), most recently as Vice President, Controller and Chief Accounting Officer. GM filed a petition under Chapter 11 of the Bankruptcy Code in June 2009. Mr. Cyprus continued to serve at GM during the pendency of, and its emergence from, its bankruptcy. Mr. Cyprus was a member of the team involved in the initial public offering of GM stock in November 2010. Prior to joining GM in 2006, Mr. Cyprus was Senior Vice President, Controller and Chief Accounting Officer for The Interpublic Group of Companies, Inc., one of the world’s largest advertising and marketing services companies. Before Interpublic, Mr. Cyprus held positions of increasing responsibility at AT&T for more than 22 years, serving in his most recent role as Vice President, Controller and Chief Accounting Officer from 1999 to 2004. Mr. Cyprus earned his Bachelor’s degree in accounting from Fairleigh Dickinson University and an MBA from New York University, Stern School of Business. He is an active Certified Public Accountant in the State of New Jersey. Mr. Cyprus brings to our Board valuable managerial, financial and accounting experience serving companies with global operations.

Bruce G. Goodman

Bruce G. Goodman has been a director since May 2000. He has been General Counsel of Shepherd Kaplan LLC (an investment advisor registered with the SEC) since April 2008. Effective November 1, 2017, he also became Co-General Counsel of Shepherd Kaplan Krochuk, LLC (also an investment advisor registered with the SEC), when that firm acquired Shepherd Kaplan LLC. From April 1995 to April 2008, he was a partner of the law firm of Hinckley, Allen & Snyder LLP. In addition to his perspective as a non-management director, Mr. Goodman provides to the Board experience as a business lawyer with substantial experience and insight into the investment markets obtained as general counsel to an investment advisory firm.

William J. Grubbs

William J. Grubbs has been a director since February 2017, when he was appointed as an interim director. Mr. Grubbs was subsequently elected as a director in June 2017. Mr. Grubbs became President, Chief Operating Officer and a director of Cross Country Healthcare, a NASDAQ-listed company that specializes in healthcare workforce solutions, in April 2013. He was appointed Chief Executive Officer of Cross Country

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Healthcare in July 2013 and served in that capacity until his retirement on January 16, 2019. Beginning in October 2012 and continuing until March 2013, Mr. Grubbs was Executive Vice President and Chief Operating Officer of Trueblue, Inc. From October 2011 until October 2012, Mr. Grubbs worked as a freelance consultant. From November 2005 through October 2011, Mr. Grubbs held various senior executive positions with SFN Group, Inc., including Executive Vice President and, commencing in January 2007, Chief Operating Officer. Mr. Grubbs holds a B.S. degree in Computer Science from the University of New Hampshire.

Arnold Ursaner

Arnold Ursaner has been a director since June 2017. From April 2015 until the present, Mr. Ursaner has managed the Ursaner Family Office, a private investment firm. Mr. Ursaner served as the founder and president of CJS Securities, Inc. from September 1997 through April 2015. In this capacity, he oversaw the strategy and growth of the company, which specialized in providing in-depth, fundamental research on small-capitalization and mid-capitalization companies viewed by CJS as underfollowed or misunderstood. Since 2010, Mr. Ursaner has served as a board member of Friends of Karen, a nonprofit organization. Previously, Mr. Ursaner served as the head of the Finance Committee of Friends of Karen from 2014 to 2017, and he served as Vice President of the organization in 2015. Mr. Ursaner earned a B.S. degree in Economics from the State University of New York at Stony Brook. He was awarded the Best on the Street Award for General Industrial Services in 2003, Best on the Street Award for Business Services in 2006 and The Wall Street Journal StarMine award as the #1 Rated Analyst in Business and Industrial Services.

Non-Executive Director Nominee

Celia R. Brown

Celia R. Brown has served as a director of 1-800-Flowers.com, Inc. since June 2016, serving as a member of its Compensation and Nominating and Governance Committees. She has also been a management consultant since 2016. From January 2016 through June 2016, Ms. Brown served as an Integration Advisor at Willis Towers Watson and, from 2010 through January 2016, Ms. Brown served as the Executive Vice President and Group HR Director of Willis Group Holdings, a publicly-traded broking, solutions and advisory firm that merged with Willis Towers Watson. In her capacity as Executive Vice President and Group HR Director, she advised the CEO, compensation committee and board of directors on talent strategy, succession planning, reward strategy, culture, climate, and diversity. Ms. Brown earned a B.A. degree from Emory University and earned a J.D. degree from the University of North Carolina School of Law.

Corporate Governance

The Company’s business and affairs are managed and under the direction of the Board. Members of the Board are kept informed of the Company’s business through discussions with the Company’s Chief Executive Officer and other officers, by reviewing materials provided to them and by participating in regular and special meetings of the Board and its committees. Our Board has standing Audit, Nominating/Corporate Governance, and Compensation Committees. In June 2018, a Strategic Alternatives Committee was formed to consider strategic alternatives involving the Company, including potential transactions. The Company’s policies and procedures with respect to the Board, as well as information regarding the roles and responsibilities of Board committee chairs and their committees, which are comprised solely of independent directors, are set forth in the committee charters and in our Corporate Governance Guidelines, copies of which are available in the Corporate Governance section of the Company’s website, at www.volt.com.

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The Board held eleven meetings during fiscal year 2018. No directors serving as of the 2019 Annual Meeting attended the 2018 Annual Meeting.

Audit Committee

The Audit Committee provides assistance to the Company’s directors in fulfilling the Board’s oversight responsibility as to the Company’s accounting, audit and financial reporting practices and as to the quality and integrity of the publicly distributed financial reports of the Company. The Audit Committee is responsible for the appointment, compensation, retention, and oversight of the independent auditor engaged to issue audit reports on our financial statements and internal control over financial reporting. The Audit Committee relies on the expertise and knowledge of management, the internal auditor, and the independent auditor in carrying out its oversight responsibilities. All services provided by our independent registered public accounting firm require the prior approval of the Audit Committee, with limited exceptions as permitted by the SEC’s Rule 2-01 of Regulation S-X. Among the factors considered by the Audit Committee in evaluating the performance of the independent registered public accounting firm are service quality, responsiveness, quality of audit team personnel and lead audit partner, management of the overall annual audit process, and understanding of the Company’s industry, business and internal control environment.

Among its functions, the Audit Committee reviews:

the audit plans and findings of our independent registered public accounting firm and our internal audit activities, as well as the results of regulatory examinations, and tracks management’s corrective action plans when such plans are necessary;
our consolidated financial statements, including any significant financial items and changes in accounting policies, with our senior management and independent registered public accounting firm; and
our financial risk and internal control procedures, and significant tax and legal matters.

Each member of the Audit Committee, which is currently comprised of Nick S. Cyprus (Chair), Bruce G. Goodman, Dana Messina and Arnold Ursaner, is financially literate and meets the current independence requirements for Audit Committee membership under both the rules of the SEC and the NYSE American Exchange (“NYSE American”). The Board has determined that Nick S. Cyprus is an “audit committee financial expert” within the meaning of the applicable SEC rules and that he possesses accounting and related financial management expertise within the meaning of the rules of the NYSE American.

The Audit Committee operates under a written charter, adopted by our Board, the adequacy of which is reviewed at least annually. The Audit Committee held five meetings during fiscal year 2018.

Nominating/Corporate Governance Committee

The Nominating/Corporate Governance Committee currently consists of Bruce G. Goodman (Chair), Nick S. Cyprus, Dana Messina and Laurie Siegel. The Nominating/Corporate Governance Committee is comprised entirely of directors determined by the Board to be “independent” for purposes of the applicable NYSE American rules.

The Nominating/Corporate Governance Committee operates under a written charter adopted by our Board. The responsibilities of the Nominating/Corporate Governance Committee include: identifying, evaluating and recommending to the Board prospective nominees for director; reviewing the Company’s corporate governance policies and making recommendations to the Board from time to time regarding matters of corporate governance; and reviewing the performance of the Board and its members. The Nominating/Corporate Governance Committee has not established a formal process to identify and evaluate prospective nominees for director. However, in considering individuals for nomination to stand for election, the Nominating/Corporate Governance Committee will consider: (1) the current composition of directors and how they function as a group; (2) the skills, experiences or background, and the personalities, strengths, and

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weaknesses of current directors; (3) the value of contributions made by individual directors; (4) the need for a person with specific skills, experiences or background to be added to the Board; (5) any anticipated vacancies due to retirement or other reasons; and (6) other factors that may enter into the nomination decision.

The Nominating/Corporate Governance Committee endeavors to select nominees that contribute requisite skills and professional experience in order to advance the performance of the Board and establish a well-rounded Board with diverse views that reflect the interests of our shareholders. The Nominating/Corporate Governance Committee considers diversity as one of a number of factors in identifying nominees for directors; however, there is no formal policy in this regard. The Nominating/Corporate Governance Committee views diversity broadly to include diversity of experience, skills and viewpoint, in addition to traditional concepts of diversity. The Nominating/Corporate Governance Committee held one meeting during fiscal year 2018. In addition, the Nominating/Corporate Governance Committee led discussions with respect to board composition and director nominations at the Board level.

Compensation Committee

The Compensation Committee currently consists of Laurie Siegel (Chair), Nick S. Cyprus and William J. Grubbs. The Compensation Committee is comprised entirely of directors determined by the Board to be “independent” for purposes of the applicable NYSE American rules. The Compensation Committee operates under a written charter adopted by our Board. Under its charter, the Compensation Committee may delegate certain of its authority to a subcommittee, and, pursuant to its charter, has delegated the authority to review and make certain decisions with respect to the compensation of employees of the Company who are not senior officers to the Chief Executive Officer (“CEO”). The Compensation Committee is responsible for establishing, implementing and monitoring the Company’s executive compensation policies and programs. The Company’s executive compensation program is designed to meet three principal objectives:

attract, motivate and retain the talented executives who are a critical component of the Company’s long-term success by providing each with a competitive total compensation package;
ensure that executive compensation is aligned with both the short- and long-term interests of shareholders; and
motivate and reward high levels of team and individual performance.

During fiscal year 2018, the Compensation Committee continued to make use of the services of ClearBridge Compensation Group, LLC (“ClearBridge”), an independent compensation consultant, as advisor to the Compensation Committee. The Compensation Committee provides direction to its compensation consultant with respect to its role in reviewing management recommendations, attending committee meetings, and with respect to other matters related to the scope of the compensation consultant’s engagement. The Compensation Committee held seven meetings during fiscal year 2018.

Additional information regarding the Compensation Committee and our policies and procedures regarding executive compensation, including the role of compensation advisors and executive officers in recommending executive compensation, is provided in the “Executive Compensation— Discussion & Analysis of Fiscal Year 2018 Executive Compensation Program” section of this Proxy Statement.

Strategic Alternatives Committee

The Strategic Alternatives Committee currently consists of Nick S. Cyprus, William J. Grubbs, Dana Messina and Arnold Ursaner. The Strategic Alternatives Committee is comprised entirely of directors determined by our Board to be “independent”. The Strategic Alternatives Committee operates under a written charter adopted by our Board. Pursuant to its charter, the Strategic Alternatives Committee is empowered to, among other things:

review strategic alternatives to maximize shareholder value, including a sale of the Company or a sale of a division or divisions thereof, a strategic merger, a business combination of the Company or continuing as a standalone entity executing on its business plan;
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make recommendations to the Board with respect to authorizing and approving any strategic transaction and related transactions; and
retain and terminate advisors to assist in discharging its responsibilities.

During fiscal year 2018, the Strategic Alternatives Committee retained the services of Houlihan Lokey Capital, Inc. as financial advisor to assist the Strategic Alternatives Committee in its review of strategic alternatives. On November 8, 2018, the Strategic Alternatives Committee concluded its evaluation of strategic alternatives and, after careful consideration, our Board unanimously determined that it was in the best interests of the Company and its shareholders to execute the Company’s strategic plan as a standalone business. The Strategic Alternatives Committee met five times during fiscal year 2018. In addition, the Strategic Alternatives Committee held numerous update calls and led discussions with respect to strategic alternatives at the Board level.

Board Leadership Structure

We have historically considered whether to combine or separate the roles of Chief Executive Officer and Chairman in light of what was in the best interests of the Company’s shareholders at the time. In 2018, Dana Messina served as our independent, non-executive Chairman and was succeeded in June 2018 by Nick S. Cyprus, as Chairman, and William J. Grubbs, as Vice-Chairman. We believe this structure continues to be appropriate, as it allows Ms. Perneau, as President and Chief Executive Officer, to focus on leading the Company’s business at a time when we are actively seeking to advance the Company’s financial position. Effective immediately after the Meeting, William J. Grubbs will become our independent, non-executive Chairman and Nick S. Cyprus will continue his service as Chair of the Audit Committee.

Our Chairman chairs meetings of our independent directors. Our independent directors confer regularly without management, including our Chief Executive Officer, and are active in the oversight of our Company. Our Board and each Board committee have access to members of our management and the authority to retain independent legal, accounting or other advisors as they deem necessary or appropriate. During fiscal year 2018, our CEOs, Mr. Dean and Ms. Perneau, did not serve on any Board committee, nor does Ms. Perneau currently serve on any Board committee.

Our Chairman fulfilled the role of chairing meetings during fiscal year 2018. In such role, the Chairman:

chairs meetings and executive sessions at which only the independent directors are present; and
recommends to the Chief Executive Officer the retention of outside advisors and consultants who report directly to the Board.

We believe that our Board leadership structure provides an appropriate balance between strong and strategic leadership and independent oversight of our Company, and that our Board leadership structure continues to serve the best interests of our Company and shareholders.

Risk Oversight

The Audit Committee is responsible for consideration of major and emerging risk exposures to the Company including financial, operational, technology, privacy, data and physical security, legal and regulatory risks; as well as management’s actions to address/monitor and mitigate/control those risks. The day-to-day responsibility for our risk management process rests with our Chief Executive Officer, Senior Vice President and Chief Financial Officer, and our Vice President of Risk Management. Our Senior Vice President and Chief Financial Officer and our Vice President of Risk Management provide periodic updates to the Audit Committee and, where necessary, to the full board. Our General Counsel provides periodic updates to the Audit Committee regarding material legal claims against the Company.

Code of Business Conduct and Ethics

The Company has a Code of Business Conduct and Ethics. Directors, officers and all employees of the Company must act in accordance with these policies. The Code of Business Conduct and Ethics requires,

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among other things, all employees to engage in honest and ethical conduct in performing their duties, provides guidelines for the ethical handling of actual or apparent conflicts of interest between personal and professional relationships, and provides mechanisms to report unethical conduct.

Please see the section entitled “Availability of Corporate Governance Documents” below for information on how to view or obtain a copy of our Code of Business Conduct and Ethics.

Corporate Governance Guidelines

As a part of our Board’s commitment to sound corporate governance, our Board has adopted a set of “Corporate Governance Guidelines”, which guides the operation of the Board and its committees. The Nominating/Corporate Governance Committee reviews our Corporate Governance Guidelines annually and recommends any changes to our Board for its consideration and approval.

Our Corporate Governance Guidelines cover, among other topics:

board structure and composition;
director independence;
board member nomination and eligibility requirements;
board leadership and executive sessions;
committees of the board;
director responsibilities;
board and committee resources, including access to officers, employees and independent advisors;
director compensation;
director orientation and ongoing education;
succession planning; and
board and committee self-evaluations.

Please see the section entitled “Availability of Corporate Governance Documents” below for information on how to view or obtain a copy of our Corporate Governance Guidelines.

Availability of Corporate Governance Documents

To learn more about the Company’s corporate governance and to view our Corporate Governance Guidelines, Code of Business Conduct and Ethics, other significant corporate policies and all charters of committees of the Board, please visit the Corporate Governance section of the Company’s website, www.volt.com. Copies of these documents are also available without charge upon request to Volt Information Sciences, Inc., 50 Charles Lindbergh Boulevard, Suite 206 Uniondale, New York 11553, Attention: Investor Relations. The telephone number for this office is (516) 228-6700.

Procedures for Recommending Directors

There have been no material changes to the procedures by which our shareholders may recommend nominees to our Board from those procedures set forth in our By-Laws. According to our By-Laws, in order to do so, a shareholder must give us written notice not less than 120 days nor more than 150 days prior to the one-year anniversary of the date of the notice of the annual meeting of shareholders that was held in the immediately preceding year and must otherwise comply with the requirements set forth in our By-Laws; provided, however, that if the 2020 annual meeting date is advanced by more than 30 days before or delayed by more than 30 days after the one-year anniversary date of this year’s Meeting and less than 130 days’ informal notice to shareholders or other prior public disclosure of the date of the 2020 annual meeting is given or made, then shareholders must provide notice to the Company within the time periods specified in the By-Laws.

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Shareholders may submit names of qualified director candidates, together with detailed information on the proposed candidates’ backgrounds, to Volt Information Sciences, Inc., 50 Charles Lindbergh Boulevard, Suite 206 Uniondale, New York 11553, Attention: Secretary—Director Candidates, for referral to the Nominating/Corporate Governance Committee for consideration.

Family Relationships

Bruce G. Goodman, a 3.90% shareholder and director of the Company, is the husband of Linda Shaw (a 6.33% shareholder). Linda Shaw is (i) the daughter of William Shaw, who co-founded the Company in 1950 and served as its President and Chief Executive Officer until his death in March 2006, (ii) the niece of Jerome Shaw, who co-founded the Company in 1950 and served as an officer of the Company until February 27, 2017, and (iii) sister of Deborah Shaw, a 10.19% shareholder and former Director of the Company. There are no other family relationships among the executive officers or directors of the Company.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires our directors and executive officers and persons who own more than ten percent (10%) of a registered class of our equity securities to file with the SEC initial reports of ownership and reports of changes in ownership of our common stock and other equity securities. Such persons are required by the SEC to furnish the Company with copies of all Section 16(a) forms that they file.

To our knowledge, based solely on a review of the copies of such reports furnished to us and written representations from certain reporting persons, all required Section 16(a) filings applicable to its directors, executive officers and greater-than-ten-percent beneficial owners were properly filed during fiscal year 2018.

Indemnification; Insurance

New York law permits a corporation to purchase insurance covering a corporation’s obligation to indemnify directors and officers and also covering directors and officers individually, subject to certain limitations, in instances in which they may not otherwise be indemnified by the corporation. The Company maintains insurance policies with various insurance companies covering reimbursement to the Company for any obligation it incurs as a result of indemnification of officers and directors and also covering indemnification for officers and directors individually in certain cases where additional exposure might exist.

Committee Interlocks and Insider Participation in Compensation Decisions

During fiscal year 2018, all members of the Compensation Committee were independent directors. During fiscal year 2018, none of our executive officers served on the compensation committee (or its equivalent) or the board of directors of any entity whose executive officers also served on our Compensation Committee. No member of our Compensation Committee was an officer of the Company during fiscal year 2018.

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AUDIT COMMITTEE REPORT
   

The Audit Committee has met and held discussions with management and the Company’s independent registered public accounting firm. The Audit Committee has reviewed and discussed the consolidated financial statements with management and the Company’s independent registered public accounting firm.

The Audit Committee discussed with the independent registered public accounting firm matters to be discussed as required by the Public Company Accounting Oversight Board (“PCAOB”), rules of the Securities and Exchange Commission (“SEC”), and other applicable regulations.

In addition, the Audit Committee has reviewed and discussed with the Company’s independent registered public accounting firm the firm’s independence from the Company and its management. The Audit Committee received from the independent registered public accounting firm the written disclosures and the letter regarding its independence as required by the PCAOB’s applicable requirements.

In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Board that the audited financial statements be included in the Company’s Annual Report on Form 10-K for fiscal year 2018, as filed with the SEC. The Audit Committee also has appointed Ernst & Young LLP as the Company’s independent registered public accounting firm for fiscal year 2019.

Nick S. Cyprus (Chair)
Bruce G. Goodman
Arnold Ursaner
Dana Messina

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Item 2.   Proposal to Ratify the Appointment of Ernst & Young LLP
as the Company’s Independent Registered Public Accounting Firm

The members of our Audit Committee and our Board believe that the continued retention of Ernst & Young LLP as our independent registered public accounting firm is in the best interests of the Company and its shareholders.

In light of this, our Audit Committee has appointed Ernst & Young LLP as our independent registered public accounting firm for fiscal year 2019. We are submitting the appointment of our independent registered public accounting firm for shareholder ratification at the Meeting, although we are not legally required to do so. If our shareholders do not ratify the appointment, our Audit Committee will reconsider whether to retain Ernst & Young LLP, but may still retain them. Even if the appointment is ratified, the Audit Committee may change the appointment at any time if it determines that such a change would be in the best interests of the Company and its shareholders.

Ernst & Young LLP has advised the Company that it has no direct, nor any material indirect, financial interest in the Company or any of its subsidiaries. A representative of Ernst & Young LLP is expected to be present at the Meeting, will have the opportunity to make a statement if he or she desires to do so and will be available to respond to appropriate questions from shareholders.

The Board will offer the following resolution at the Meeting:

RESOLVED: That the appointment by the Board of Ernst & Young LLP to serve as the independent registered public accounting firm of the Company for fiscal year 2019 be, and hereby is, ratified and approved.

Your Board recommends that you vote FOR this item. Unless you specify otherwise, the Board intends the accompanying proxy to be voted for this item.

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Item 3.   Advisory Vote on Executive Compensation (“Say-on-Pay”)

The Dodd-Frank Wall Street Reform and Consumer Protection Act, enacted in July 2010, requires that we provide our shareholders with the opportunity to vote to approve, on a non-binding, advisory basis, the compensation of our 2018 Named Executive Officers as disclosed in this Proxy Statement in accordance with the compensation disclosure rules of the SEC under Section 14A of the Exchange Act. At the 2017 Annual Meeting, our shareholders approved holding these Say-on-Pay advisory votes annually and, accordingly, the Board has adopted a policy of holding Say-on-Pay advisory votes on an annual basis. Following the Say-on-Pay advisory vote at this year’s Annual Meeting, the next Say-on-Pay advisory vote will be held at the Annual Meeting of Shareholders held in 2020.

We were disappointed that only 11.6% of shareholder votes cast on the Say-on-Pay proposal at the 2018 Annual Meeting were cast in favor of our executive compensation program for fiscal year 2017. While we believe that, over the past four years, we have made concerted efforts to better align our executive compensation levels with our financial and stock price performance, we continue to consider new and alternative elements in our executive compensation programs. As a result of shareholder engagement since our 2018 Annual Meeting, we have considered various changes to our executive compensation plan to address shareholder concerns. For example, the Compensation Committee recently revised our existing Annual Incentive Plan (“AIP”) design in order to eliminate entirely the use of individual performance factors. As a result, each executive officer’s AIP opportunity for fiscal year 2019 will be based 100% on financial performance metrics, creating a direct link between actual bonus payouts and the Company’s financial results.

Further, during fiscal year 2018, the Compensation Committee approved grants of performance-based restricted stock units to our executive officers (including our 2018 Named Executive Officers) as part of its annual long-term incentive (“LTI”) program, rather than using stock options or a greater portion of time-vested equity. The Compensation Committee implemented this performance-based award program after considering feedback the Compensation Committee members received from certain shareholders in connection with its shareholder engagement efforts. As a result, the 2018 Named Executive Officers received 50% of their 2018 LTI award in the form of performance-based restricted stock units tied to absolute stock price growth, with the remaining 50% granted in the form of restricted stock units that vest over a three-year period beginning on the grant date. This new LTI program further ties pay with stock price performance, as up to 50% of the LTI grant may be forfeited if certain stock price growth performance goals are not achieved.

Moreover, the Board has taken additional steps outside of the executive compensation program to address concerns raised by shareholders during the Company’s ongoing shareholder engagement efforts. Recognizing the concerns noted by certain shareholders regarding the dilutive impact of annual equity grants, almost all independent directors of the Board elected to forego their 2018 annual equity grant.

The Compensation Committee will continue to evaluate how best to structure the compensation programs to ensure that our executive officers are being appropriately and competitively compensated while also maintaining compensation levels commensurate with our financial and stock performance. Taking into account the positive changes that have been implemented, we believe that our executive compensation program for fiscal year 2018 remains competitive and provides an appropriate balance between risks and rewards. Accordingly, the Board will present the following resolution at the Meeting:

RESOLVED, that our shareholders approve, on an advisory basis, the executive compensation program for the 2018 Named Executive Officers, as disclosed in this Proxy Statement pursuant to Item 402 of Regulation S-K, including the Fiscal Year 2018 Summary Compensation Table and the related tables and narrative disclosures included in this Proxy Statement.

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The vote on this resolution is not intended to address any specific element of compensation; rather, the vote relates to the total compensation of our 2018 Named Executive Officers, as described in this Proxy Statement in accordance with the compensation disclosure rules of the SEC. To the extent there is any significant vote against the 2018 Named Executive Officers’ compensation, the Board and the Compensation Committee will evaluate what actions, if any, may be appropriate to address the concerns of our shareholders.

Your Board recommends that you vote FOR, on a non-binding, advisory basis, the compensation of our 2018 Named Executive Officers, as disclosed in this Proxy Statement, including the Fiscal Year 2018 Summary Compensation Table and the related tables and narrative disclosures included in this Proxy Statement.

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EXECUTIVE COMPENSATION
   

Executive Summary

During fiscal year 2018, we continued to make strides toward returning the Company to a profitable and growing business. However, there is still more work to be done before our business reaches its full potential. As we continue to make progress toward executing our turnaround strategy, we remain focused on recruiting and retaining top talent, but are equally committed to emphasizing the link between the performance of our business and the compensation of our executives.

This year, we successfully transitioned the Company’s leadership through the appointment of Linda Perneau to the role of Interim Chief Executive Officer of the Company, following the departure of our former President and Chief Executive Officer, Michael D. Dean, who stepped down in June 2018. Linda Perneau was subsequently appointed President and Chief Executive Officer in November 2018. Ms. Perneau, with her significant industry experience, will propel our turnaround strategy and drive us to meet our strategic goals.

In reviewing this executive compensation section, please note that the Company is a “smaller reporting company” and is permitted to include scaled disclosure with respect to certain executive compensation information otherwise required by Item 402 of Regulation S-K. For example, this compensation discussion and the accompanying compensation tables cover four Named Executive Officers. However, we have still included a fulsome explanation of our compensation programs and philosophies that is in line with our past disclosure practices.

2018 Business Highlights

During fiscal year 2018, we devoted significant resources to capitalizing on work that had been done during fiscal years 2016 and 2017 to strengthen our foundation, as well as redefining our go-forward business strategies and reorganizing our structure. During fiscal year 2016 and 2017, we focused on strengthening our foundation by simplifying our corporate structure, streamlining operational focus, strengthening our balance sheet and improving financial flexibility.

In fiscal year 2018, we hired several prominent staffing industry veterans to strengthen our sales and leadership teams. With a renewed focus on sales strategies to enhance financial performance and build a foundation for sustainable growth, our strategic priorities include:

Organizational Design. To strengthen the focus on sales and delivery performance across a spectrum of service offerings for maximum competitive advantage, during fiscal year 2018 we formed the Specialty Solutions Group, Strategic Solutions Group and Global Solutions Group, which were designed to transform the Company’s delivery models to achieve dedicated focus, enhanced agility to meet customers’ needs and reduce delivery costs.
Business Optimization. Drive further efficiencies, productivity and cost savings by optimizing technology to drive performance through increased integration of available digital tools, reporting and processes and migrating from manual, customized processes to automated, standard processes.
Delivery Excellence. Improve talent acquisition and delivery with a more focused, customized, agile delivery approach by integrating recruiting tools to increase our speed to match candidates and to mobilize data analytics to drive strategy around job postings and return on investments.
Growth and Expansion. Achieve revenue and margin growth with new and existing client relationships, through realigned sales and delivery efforts. We are in the process of re-establishing our sales culture by realigning the sales teams based upon client buying patterns with an emphasis on building client relationships.
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Development of Performance Metrics in our 2018 Executive Compensation Program

Since fiscal year 2015, we’ve undertaken to thoroughly review our compensation programs on an ongoing and continued basis to ensure that we are appropriately incentivizing our executives while adequately adapting to an evolving business climate and industry challenges.
Beginning in fiscal year 2016, we introduced performance goals and targets for our Annual Incentive Plan that were significantly more formula-driven than those utilized in previous years in order to better align our compensation programs with our pay-for-performance philosophy. Specifically, 65% of the formula is based on Company financial performance targets. We retained this approach for fiscal years 2017 and 2018, but have made alterations to this program for fiscal year 2019 to tie 100% of the AIP to financial performance targets.
During fiscal year 2018, the Compensation Committee changed prior practice and approved grants of performance-based restricted stock units to certain of our executive officers (including our 2018 Named Executive Officers) as part of its LTI program. The Compensation Committee implemented this performance-based award program after considering feedback from certain shareholders as a result of its shareholder engagement efforts.
As a result, the 2018 Named Executive Officers received 50% of their 2018 LTI award (granted in June 2018) in the form of performance-based restricted stock units (“PSUs”), with the remaining 50% granted in the form of restricted stock units that vest over a three-year period beginning on the grant date.
Consistent with prior years, target total direct compensation for the 2018 Named Executive Officers is positioned at or around the 25th percentile of the Company’s peer group.

2018 Target Pay Mix for our Chief Executive Officer

To align pay levels for our 2018 Named Executive Officers with the Company’s performance, our fiscal year 2018 compensation emphasizes performance-based initiatives. As an example, in her role as interim President and CEO during fiscal year 2018, 67% of Ms. Perneau’s target total direct compensation (e.g., annual bonus and long-term incentives), was variable/“at-risk”:


Ms. Perneau’s actual fiscal year 2018 compensation reflects that fiscal year 2018 was a transition year for her role with the Company. Specifically, in February 2018, Ms. Perneau served as an executive advisor to the Company’s international business, and transitioned to the role of President of Volt Workforce Solutions, its North American staffing business, in May 2018. In June of 2018, Ms. Perneau became interim President and Chief Executive Officer, and in November of 2018, Ms. Perneau was appointed President and Chief Executive Officer. As her role within the Company continued to evolve to one of a leader of the entire organization, her compensation was adjusted appropriately to reflect her increased duties and responsibilities as her position developed over time. Ms. Perneau’s fiscal year 2018 compensation package is described in more detail below.

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2018 Advisory Vote on Executive Compensation and Compensation Committee Response

Our Compensation Committee pays close attention to the views of our shareholders when making determinations regarding executive compensation matters. At the 2018 Annual Meeting, we held a “Say-on-Pay” advisory vote on the executive compensation program of the named executive officers for fiscal year 2017. We were disappointed that only 11.6% of shareholder votes cast for this Say-on-Pay advisory vote at the 2018 Annual Meeting were cast in favor of our executive compensation program for fiscal year 2017. We believe that over the past four years, we have made concerted efforts to better align our executive compensation levels with our financial performance, and will continue to consider new and different ways to enhance our executive compensation programs.

Following the 2018 Annual Meeting, the Compensation Committee continued discussions under the shareholder outreach program it had designed the prior year, with the goal of better understanding investor concerns related to the Company’s existing executive compensation program, especially in light of the Say-on-Pay vote result at the 2018 Annual Meeting. Since June 2018, the Chair of the Board, Vice-Chair of the Board, the Chair of the Compensation Committee or other independent directors, have engaged in extensive and ongoing shareholder dialogue, including with eight of our largest shareholders (representing approximately 57% of common stock outstanding). An independent director has spoken directly with each such investor telephonically, and in most cases, on numerous occasions over an extended period of time. Our CEO and CFO also engage with shareholders on a regular basis. Key themes that emerged during discussions with directors included: (1) dissatisfaction with our current stock price performance, (2) concerns regarding dilution from equity grants, and (3) lack of alignment between pay and performance in the executive compensation program (with specific focus on our prior CEO’s compensation). Such concerns were discussed at meetings of the Compensation Committee and the Board.

The table below summarizes the response our Compensation Committee has had to compensation-related concerns raised by shareholders:

Shareholder Concern
Compensation Committee Response
Individual Performance as a Part of Annual Incentive Program
For the 2019 performance period, the Compensation Committee has eliminated individual performance factors as part of the AIP, resulting in the executive’s AIP opportunity being based 100% on the Company’s financial performance metrics.
Lack of Performance Goals Tied to Vesting of Long-Term Equity Awards
For annual equity grants made to NEOs during fiscal year 2018, 50% of the NEO’s target award will vest subject to stock price performance CAGR goals that tie the vesting of such awards directly to the Company’s stock price performance.
Concerns over the Dilutive Effect of Equity-Based Awards
The annual equity grants approved in June 2018 can be either cash-settled or stock-settled, in the discretion of the Compensation Committee. Further, almost all independent directors of the Board elected to forego their 2018 annual equity grant.

With respect to our pay for performance model, the Compensation Committee believes that its existing compensation programs are designed to align executive compensation with our performance. For example, this year, in respect of performance achieved in fiscal 2018, our 2018 Named Executive Officers (not including Mr. Dean) only earned an average of 59% of their target annual bonuses for 2018.

As noted above, during fiscal year 2018, the Compensation Committee approved grants of performance-based restricted stock units to our executive officers (including our 2018 Named Executive Officers) as part of its annual LTI program. As a result, the 2018 Named Executive Officers received 50% of their 2018 LTI award in the form of performance-based restricted stock units, with the remaining 50% granted in the form of restricted stock units that vest over a three-year period beginning on the grant date.

Recognizing room for improvement in our programs, the Compensation Committee also recently revised our existing annual incentive plan design in order to eliminate the use of individual performance factors. As a result, each executive officer’s AIP opportunity for fiscal year 2019 will be based 100% on financial performance metrics.

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The Compensation Committee will consider the results from this year’s shareholder advisory vote in its ongoing evaluation of our executive compensation programs and practices. The Compensation Committee hopes that shareholders will consider the foregoing changes when casting votes on this year’s Say-on-Pay proposal.

Discussion of Fiscal Year 2018 Executive Compensation Program

The sections that follow below are intended to provide shareholders with a description of our executive compensation program(s), our compensation philosophy, the compensation decisions made under those programs, and the Compensation Committee’s considerations in making decisions with respect to such programs.

Our 2018 Named Executive Officers

The descriptions contained in this section focus on the compensation of our 2018 Named Executive Officers, who were:

Linda Perneau, President and Chief Executive Officer
Paul Tomkins, Senior Vice President and Chief Financial Officer
Nancy Avedissian, Senior Vice President, General Counsel & Corporate Secretary
Michael D. Dean, former President and Chief Executive Officer

How Each Element of our Executive Compensation Program Works

Our executive compensation program for our 2018 Named Executive Officers consisted of the elements shown in the chart below. For 2018, target total direct compensation for the 2018 Named Executive Officers is positioned at or around the 25th percentile of the Company’s peer group.

Element
Description
Why We Choose to Pay It
Base Salary
Fixed cash based on the executive’s past and potential future performance, scope of responsibilities, experience and competitive market practices
Provides certainty for a portion of compensation that is not at risk, and is generally unaffected by fluctuations in our performance
Annual Incentive Compensation
Potential cash bonus payment tied to meeting short-term, pre-established goals related to our overall profitability and other key performance indicators
Motivates executives to achieve superior annual financial, operational and strategic performance
Restricted Stock Units
Restricted stock units vest annually in equal installments over a three-year period
Time-vested restricted stock units increase executive stock ownership and strengthen retention in both up and down markets
Performance Stock Units
Performance stock units vest based on the percentage increase of the Company’s “end date” stock price over the “beginning date” stock price, as measured over each of the one-year, two-year and three-year measurement periods
Performance stock units directly align compensation with changes in our stock price and the creation of shareholder value
Stock Options
Time-vested stock price appreciation awards, that typically vest in equal installments over a three-year period
Aligns compensation with changes in our stock price and shareholder return experience, as the ultimate value received by executives holding stock options is wholly dependent on stock price appreciation
 
Granted prior to June 2018
As of February 15, 2019, 100% of outstanding stock options held by our 2018 Named Executive Officers are underwater
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Base Salary

Base salary is the fixed component of an executive’s annual cash compensation. Base salaries for our 2018 Named Executive Officers in respect of fiscal year 2018 were primarily determined based on one or more of the following factors: (i) base salaries paid to similarly positioned executives within the Company and competitive market data for each role; (ii) the terms of any contractual arrangements; (iii) salaries paid historically; and (iv) personal performance as assessed by the CEO (for his/her direct reports) and the Compensation Committee.

Adjustments in base salary for our 2018 Named Executive Officers are discretionary and are generally considered no more frequently than every 12 months. In recognition of the additional time and effort expended on various strategic initiatives and their expanded role as members of the Executive Management Committee in fiscal year 2018, the Compensation Committee increased each of Mr. Tomkins’ and Ms. Avedissian’s annual base salaries by $35,000.

Ms. Perneau’s fiscal year 2018 annual base salary of $550,000 was established at the time of her hire, and was increased to $650,000 during fiscal year 2019 in connection with her transition to President and Chief Executive Officer.

Annual Incentives

Our 2018 Named Executive Officers and other key employees are eligible to receive compensation in the form of cash-based annual bonuses under the AIP. Under the 2018 AIP, participants were eligible to earn bonuses based on the achievement of pre-established financial performance goals and individual performance factors. Target annual bonus opportunities are set by the Compensation Committee at the beginning of each fiscal year and represent a percentage of the participant’s annual base salary. In determining amounts payable under the AIP, each 2018 Named Executive Officer’s financial performance goal(s) were weighted at 65% and the individual performance factors (as discussed below) were weighted at 35%.

For fiscal year 2018, Mr. Tomkins’ and Ms. Avedissian’s target annual bonuses were equal to 65% and 50%, respectively, of his and her annual base salary. Ms. Perneau’s target annual bonus was established at 60% of her annual base salary at the time of her hire, and was increased to 80% of her annual base salary in connection with her appointment to Interim Chief Executive Officer. In fiscal year 2019, Ms. Perneau’s target annual bonus was increased to 100% of her annual base salary as a result of her appointment to President and Chief Executive Officer.

Annual incentives payable to our 2018 Named Executive Officers in respect of fiscal year 2018 were based on the formula illustrated below:


Based on the formula above, our 2018 Named Executive Officers (excluding Mr. Dean, who did not receive an annual bonus payment for fiscal year 2018) only earned an average of 59% of their target bonuses for 2018.

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Summary of 2018 AIP Payouts

NEOs other than Ms. Perneau

For Mr. Tomkins and Ms. Avedissian, the amount earned in respect of his and her AIP was based solely on achievement of their respective individual performance goals, due to the fact that the Company did not achieve the threshold level of achievement applicable to the financial performance goal established for fiscal year 2018 for Mr. Tomkins and Ms. Avedissian (upon which 65% of his and her target annual bonus opportunity was based).

Ms. Perneau

As further described below, because 2018 was a transition year for Ms. Perneau, the financial performance goals (upon which 65% of her target annual bonus opportunity was based) were different from the goals established for the other 2018 Named Executive Officers. As a result, 65% of Ms. Perneau’s AIP payment was based on achievement of the applicable financial performance goals and 35% was based on a holistic review of her individual performance factors.

2018 Financial Performance Goals under the AIP

Performance Goals for NEOs other than Ms. Perneau

At the beginning of fiscal year 2018, the Compensation Committee established the financial performance goals applicable to the fiscal year 2018 performance period, which, for the 2018 Named Executive Officers (other than Ms. Perneau) consisted solely of adjusted corporate operating income (the “2018 Corporate Operating Income Goal”). Given the Company’s current turnaround strategy, the Compensation Committee determined that the 2018 Corporate Operating Income Goal was the most appropriate performance metric against which to measure achievement for those executive officers who dedicate the majority of their business efforts to the Company’s corporate function.

Performance Goal (in 000s)
Threshold
Target
Maximum
Corporate Adjusted Operating Income(1)
($9,496)
($5,792)
$(2,088)

Performance Goals for Ms. Perneau

Because fiscal year 2018 was a transition year for Ms. Perneau, the financial performance goals applicable to Ms. Perneau’s 2018 AIP for the period during which she served as an advisor and then President of Volt Workforce Solutions were International Business Unit Revenue (weighted 20%), International Business Unit Operating Income (weighted 20%), and the 2018 Corporate Operating Income Goal (weighted at 25%). For the period during which she served as Interim President and Chief Executive Officer, the financial performance goals applicable to Ms. Perneau’s 2018 AIP were Total Business Unit Revenue (20%), Total Business Unit Operating Income (weighted at 20%), and the 2018 Corporate Operating Income Goal at (25%).

The “Total” financial performance goals were designed to take into account all of the business units for which Ms. Perneau was responsible for overseeing during the applicable portion of the performance period.

The table below sets forth the applicable threshold, target and maximum level of performance with respect to Ms. Perneau’s financial performance goals (other than Corporate Adjusted Operating Income Goal, which is shown in the chart above):

Performance Goal (in 000s)
Threshold
Target
Maximum
International Business Unit Revenue
$64,019
$68,105
$72,191
International Business Unit Operating Income(1)
$550
$688
$826
Total Business Unit Revenue
$409,931
$439,978
$470,025
Total Business Unit Operating Income(1)
$7,123
$8,760
$10,397
Payout Level (as % of Target)
50%
100%
200%
(1)Excluding special items as indicated below.
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Performance Adjustments for Financial Performance Goals

In connection with its establishment of the financial performance goals described above, the Compensation Committee identified certain unbudgeted items and events that could be applied as adjustments in connection with its determination of the 2018 financial performance goals following the end of fiscal year 2018 (the “Pre-Established Adjustment Items”). The financial performance goals established for fiscal year 2018 are calculated and reported on a “non-GAAP” basis, meaning these metrics were not calculated or reported in accordance with generally accepted accounting principles.

Following the Compensation Committee’s determination of the Company’s achievement of the 2018 financial performance goals, the Compensation Committee decided it was appropriate to apply certain of the Pre-Established Adjustment Items to the financial performance goals actually achieved in respect of fiscal year 2018. Such Pre-Established Adjustment Items consisted of (i) charges for the impairment of goodwill or other intangible assets, (ii) changes in currency exchange rates, (iii) legal judgements and settlements and associated professional expenses, and (iv) restructuring/turnaround costs associated with Board-approved restructuring / turn-around initiatives, including severance costs and related professional fees. Following the end of fiscal year 2018, the Compensation Committee determined it was appropriate to apply additional adjustment items (which had not been pre-established at the time the 2018 financial performance goals were established) in order to account for (i) legal costs associated with potential strategic initiatives, (ii) benefits related to the settlement of an asset retirement obligation, (iii) life insurance acceleration for a former executive officer, and (iv) adjustments to the gain attributable to the sale of our games testing business.

The Compensation Committee reviewed the level of achievement of the 2018 financial performance goals against the applicable financial targets and determined the applicable percentage of achievement as follows:

Achievement of 2018 Corporate Operating Income Goal

As shown in the table below, the results of the 2018 Corporate Operating Income Goal resulted in a 0% achievement level with respect to the portion of the AIP payment that was based on the 2018 Corporate Operating Income Goal.

Performance Factor
Achievement
(as adjusted)
(in 000s)
Percentage
of
Achievement
Corporate Adjusted Operating Income
($18,221)
0%

Achievement of Other 2018 Performance Goals applicable to Ms. Perneau

As shown in the table below, for Ms. Perneau, the portion of her AIP payment that was based on achievement of financial performance goals resulted in a 75% achievement level, based on the level of achievement applicable to the financial performance goals other than the 2018 Corporate Operating Income Goal.

Performance Factor
Achievement
(as adjusted)
(in 000s)
Percentage
of
Achievement
International Business Unit Revenue
$67,002
86%
International Business Unit Operating Income
$690
101%
Total Business Unit Revenue
$443,001
110%
Total Business Unit Operating Income
$12,730
200%

Individual Performance Factors

With respect to the portion of the 2018 AIP that measures individual performance (35%), the Compensation Committee and Ms. Perneau considered the individual performance goal achievements of each of the 2018 Named Executive Officers (other than Mr. Dean). In fiscal 2018, the 2018 Named Executive Officers had the opportunity to achieve anywhere from 0% to 200% of his or her target individual performance factors. For

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the 2019 performance period, the Compensation Committee has eliminated individual performance factors as part of the AIP, which will result in AIP target opportunities being based 100% on the Company’s financial performance metrics.

Individual Performance Factors for Mr. Tomkins and Ms. Avedissian

In fiscal 2018, individual performance factor achievement for Mr. Tomkins and Ms. Avedissian was determined based on Ms. Perneau’s assessment of each of their individual performance against the applicable individual performance factors. Below is a sampling of individual performance factors achieved by the NEOs (other than Ms. Perneau) during fiscal year 2018:

Drove a customer-centric culture through building capability, aligning expectations and structuring the Finance/IT teams appropriately;
Continued the implementation of improved financial tracking and reporting tools;
Led and managed corporate transactions, including financing and potential M&A activity;
Identified and implemented process improvements to enhance efficiency, agility, client satisfaction, and cost savings;
Managed and reduced SG&A costs; and
Improved ability to track departmental metrics and matter management through cost-efficient technology improvements.

Individual Performance Factors for Ms. Perneau

In fiscal 2018, Ms. Perneau’s individual performance factor achievement (i.e., 35% of her total AIP opportunity) was based on factors considered by the Compensation Committee relating to Ms. Perneau’s holistic performance during the course of fiscal 2018. The Compensation Committee assessed Ms. Perneau’s overall contributions to the Company taking into consideration the various different roles that Ms. Perneau has held during her tenure with the Company. A sampling of the factors that the Compensation Committee considered are set forth below:

Various accomplishments measured against strategic initiatives, strong leadership, organizational changes, immediate customer focus and operational improvements; and
Feedback and assessment of Ms. Perneau’s direct reports’ achievement as measured against their individual performance factors.

Initial Payout Amount

After taking into account both the 2018 financial performance results and the individual performance factor achievement levels, the total percentage of each 2018 Named Executive Officer’s annual bonus was determined in accordance with the weightings described above (other than for Mr. Dean, whose 2018 bonus was determined solely based on the Company’s achievement of the 2018 Corporate Operating Income Goal and therefore was $0). The amount for a given participant after applying the individual performance factor weighting (35%) and the financial performance weighting (65%) is referred to as the “Initial Payout Amount”.

Discretionary Modifier

The AIP gives the Compensation Committee the discretion to modify a participant’s Initial Payout Amount by plus or minus 15% if it determines it is appropriate to do so to reflect factors not accounted for in the formulaic design of the AIP. The Compensation Committee did not apply a discretionary modifier to the Initial Payout Amounts determined for fiscal year 2018 for any participant. The only time the Compensation Committee has exercised the discretionary modifier was to reduce AIP payouts to NEOs in respect of 2016 performance.

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The chart below illustrates 2018 AIP pay-for-performance alignment:

Named Executive Officer
Target
Bonus
(as Percentage
of Base Salary)
Target
Bonus
Opportunity
(in $)
Amount
Paid
Amount
Paid in
respect of
Financial
Performance
Goals
Percentage
of Target
Bonus
Paid
Linda Perneau
60% / 80%
$
373,819*
 
$
327,115
 
$
183,195
 
 
88
%
Paul Tomkins
65%
$
269,063*
 
$
94,172
 
$
0
 
 
35
%
Nancy T. Avedissian
50%
$
179,471*
 
$
62,815
 
$
0
 
 
35
%
*For Mr. Tomkins and Ms. Avedissian, target bonus opportunity accounts for increases in base salary, as applied to the applicable portion of fiscal year 2018. For Ms. Perneau, target bonus opportunity accounts for the increase in her target annual bonus percentage from 60% to 80% in June 2018.

AIP Payout for Former CEO

As provided for under his employment agreement and separation agreement, the Compensation Committee did not consider Mr. Dean’s individual performance as a factor in evaluating AIP achievement for fiscal year 2018. Given individual performance was disregarded in determining a potential 2018 AIP payout, achievement was based solely on the 2018 Corporate Operating Income Goal (which was not achieved and resulted in a 0% achievement level for all 2018 Named Executive Officers, including Mr. Dean).

Long-Term Incentives – Equity-Based Awards

Overview

As in prior years, for fiscal year 2018, each of the 2018 Named Executive Officers received long-term incentive compensation in the form of equity-based awards (other than Mr. Dean). We continued to use equity-based awards as the primary vehicle for delivering LTI awards because the value of equity-based awards is directly tied to our stock price at the time such awards are settled or paid to the participants. For this reason, the Compensation Committee strongly believes that equity-based awards foster a pay-for-performance culture.

Starting with grants made in June 2018, the Compensation Committee removed stock options as part of the LTI program. This design change was implemented in an effort to minimize the potential dilutive effect of long-term awards on our shareholders and conserve existing share capacity under our 2015 Equity Incentive Plan. For awards granted in June 2018, LTI awards were granted in the form of time-based restricted stock units (“RSUs”) and PSUs, which can be settled in either cash or shares of common stock as determined by the Compensation Committee, as described in more detail below. As these units increase in value along with our stock price, they incentivize stockholder value creation over the longer-term.

Overview of Fiscal 2018 Equity Awards

LTI Grants to Ms. Perneau

In connection with Ms. Perneau’s position as President of Volt Workforce Solutions, the Compensation Committee approved an LTI award with a target grant date fair value of $350,000. This grant consisted of 2/3 stock options and 1/3 restricted stock units. In recognition of Ms. Perneau’s transition to the role of interim President and Chief Executive Officer, in June of 2018 the Compensation Committee approved an additional LTI grant with an approximate grant date fair value of $550,000, which grant consisted of time-based and performance-based stock units, as described below. The target grant date value of this grant was intended to reflect Ms. Perneau’s adjusted compensation level as a result of her promotion to the role of interim President and Chief Executive Officer, and also reflects Ms. Perneau’s service to the Company in various capacities prior to her becoming President of Volt Workforce Solutions.

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LTI Grants to other 2018 NEOs

The only LTI grants made to Mr. Tomkins and Ms. Avedissian during fiscal 2018 year were annual grants of RSUs and performance-based stock units (as described below).

As a result of his separation from the Company, Mr. Dean did not receive an LTI award in respect of fiscal year 2018.

Discussion of LTI Awards for 2018 – Performance-Based Stock Units

As part of its ongoing effort to execute its pay-for-performance philosophy and enhance its existing performance-based compensation arrangements, the Compensation Committee introduced a performance-based element to its LTI program for fiscal year 2018. As a result, the 2018 Named Executive Officers (other than Mr. Dean) received 50% of their annual long-term incentive award granted in June 2018 in the form of PSUs. For each period ending on June 14th of 2019, 2020 and 2021, the 2018 Named Executive Officers who received these awards will be eligible to vest in 1/3 of the number of PSUs granted (based on 100% of target level achievement, the “Target Award”) up to a maximum of 200% of the Target Award, based on the percentage increase of the Company’s “end date” stock price over the “beginning date” stock price, as measured over each of the one-year, two-year and three-year measurement periods. The “beginning date” stock price is the closing price of a share of the Company’s common stock on June 14, 2018 (the “Grant Date”) of $3.70, and the “end date” stock price will be based on the 20 trading-day average stock price measured over the last 20 trading days of the applicable measurement period.

Each year, 50% of the Target Award will vest if the applicable threshold goal is achieved, 100% of the Target Award will vest if the applicable target goal is achieved, and 200% of the Target Award will vest if the applicable maximum goal is achieved. No portion of the PSUs will vest for any period in which the applicable threshold goal is not achieved, and vesting percentages will be linearly interpolated for performance that falls between two points (i.e., between threshold and target level and between target and maximum level). Vesting of the PSUs is subject to the executive remaining employed by the Company through the last day of the applicable measurement period.

The PSU program described above is summarized in the table below:

Performance Level
# Units
Earned as %
of Target
Stock
Price CAGR
Goal
Below Threshold
0%
< 5.0%
Threshold
50%
5.0%
Target
100%
10.0%
Max
200%
≥20.0%

The 2018 Named Executive Officers (other than Mr. Dean) received the remaining 50% of their annual long-term incentive awards made in June 2018 in the form of time-based RSUs that vest on each of the first, second and third anniversaries of the Grant Date, subject to the executive’s continued employment with the Company on each applicable vesting date.

Upon vesting, PSUs and RSUs will be settled in either cash or stock at the Company’s election, with any stock settlement being subject to the Company having a sufficient number of shares available under its equity incentive plan(s) to satisfy such awards. Any PSUs or RSUs settled in cash will be capped at two times the Company’s closing stock price on the Grant Date (the “Cap Price”), multiplied by the number of PSUs or RSUs vesting.

On the Grant Date, Ms. Perneau, Mr. Tomkins, and Ms. Avedissian, each received awards of PSUs and RSUs with aggregate target grant date values as follows: $554,000, $375,000, and $225,000, respectively. The Compensation Committee considered, among other things, the following factors when establishing the target value of the equity awards granted to our 2018 Named Executive Officers: (i) the executive’s role and

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responsibilities; (ii) retentive value with respect to existing executive officers; (iii) inducement value with respect to Ms. Perneau; (iv) target annual compensation for each executive officer; and (v) market practices compared to our fiscal year 2018 peer group. Due to the accounting valuation of the PSUs and RSUs, the values in the executive compensation tables after the caption “Discussion of Fiscal Year 2018 Executive Compensation Program” differ slightly from these target grant values.

The Compensation Committee strives to make annual equity-based grants in June of each year following our annual meeting. However, the Compensation Committee retains the flexibility to make grants of equity-based awards at other times throughout the year as it determines appropriate (e.g., in connection with hiring a new executive).

2015 Equity Incentive Plan

On October 19, 2015, the Board approved the 2015 Equity Incentive Plan, and our shareholders approved the 2015 Plan at the 2016 annual meeting of shareholders. All of the equity-based awards granted to our executive officers following the implementation of the 2015 Equity Incentive Plan have been awarded under such plan (including fiscal year 2018 RSU and PSU awards, which were granted pursuant to the terms of the 2015 Equity Incentive Plan).

The 2015 Plan and the award agreements governing equity-based awards previously granted to our executive officers (including awards granted during fiscal year 2018) contain so-called “double trigger” vesting provisions, which generally means that the vesting of awards will not be accelerated upon a change in control of the Company if an acquiror replaces or substitutes outstanding awards, and such replaced or substituted awards will only vest to the extent a participant holding the replacement or substitute award is involuntarily terminated within two years following the change in control. If an acquirer does not replace or substitute outstanding awards in connection with such change in control in accordance with the requirements of the 2015 Plan, then the outstanding awards (other than RSUs and PSUs granted to the 2018 Named Executive Officers in June 2018) will fully vest in connection with the change in control.

The RSUs and PSUs granted to the 2018 Named Executive Officers in June 2018 also contain “double-trigger” vesting provisions, but do not provide for full acceleration of unvested awards that are not replaced or substituted by an acquirer upon a change in control. Rather, if a replacement award is not granted in respect of such awards, upon the occurrence of a change in control on or prior to the first anniversary of the grant date, a pro-rated portion of the PSUs and RSUs will vest (with the number of PSUs eligible to vest being based on target level), and if a change in control occurs following the first anniversary of the grant date, all of the then-unvested PSUs and RSUs will vest (with the PSUs vesting based on target level). The Compensation Committee retains discretion to waive the application of the Cap Price (as defined below) with respect to any PSUs and RSUs that vest and are settled in cash upon the occurrence of a change in control.

The award agreements applicable to outstanding, unvested equity-based awards under the 2015 Plan provide that unvested equity awards will be forfeited as a result of the executive’s termination of employment (other than in connection with certain involuntary termination events following a change in control, as described above).

How We Develop Our Executive Compensation Programs

Role of the Compensation Committee

The Compensation Committee generally meets in executive session without any member of management present when discussing compensation matters pertaining to our CEO, and with the CEO when discussing other named executive officers.

When making decisions with respect to the CEO, the Compensation Committee reviews and discusses the CEO’s performance and makes preliminary determinations about his or her compensation, including base salary, annual incentives and long-term incentive compensation. For other named executive officers, the CEO considers performance and makes individual recommendations to the Compensation Committee on

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base salary, annual incentives and long-term incentive compensation. The Compensation Committee then reviews, discusses and modifies, as appropriate, the compensation recommendations with the independent members of the Board and final compensation decisions are approved by the Compensation Committee or Board, as appropriate, after this discussion. In 2016, the Compensation Committee amended its charter in order to, among other things, provide that the Compensation Committee would be responsible for approving the compensation of the named executive officers (other than the CEO) (as opposed to making recommendations to the independent members of the Board).

For more information on the Compensation Committee’s role and responsibilities, please refer to the Compensation Committee’s charter available on the Corporate Governance section of our website at www.volt.com.

Role of Independent Compensation Consultant

Pursuant to its charter, the Compensation Committee is authorized to retain and terminate any compensation consultant, as well as any independent legal, financial or other advisors, as it deems necessary. For fiscal year 2018, the Compensation Committee elected to continue its retention of ClearBridge Compensation Group as its independent compensation consultant. ClearBridge’s role during fiscal year 2018 included:

Reviewing management recommendations to ensure alignment with our business strategy and compensation objectives;
Providing research, analyses and design expertise in developing executive and incentive compensation programs;
Keeping the Compensation Committee apprised of executive compensation-related regulatory developments and market trends; and
Attending Compensation Committee meetings to provide information and recommendations regarding our executive compensation program and communicating with the Compensation Committee between meetings, as appropriate.

The Compensation Committee evaluates annually the advisor’s independence from management, taking into consideration all relevant factors, including the six independence factors specified in the NYSE listing rules and applicable SEC requirements. The Compensation Committee reviewed the independence of ClearBridge and concluded that it is independent and that its work for the Compensation Committee has not raised any conflicts of interest.

Role of our Compensation Peer Group

The Compensation Committee considers a study compiled by its compensation consultant of compensation packages for executives in an industry peer group, pulled from publicly filed documents of each member of the peer group. The compensation consultant identifies a group of staffing and services-related companies that are comparable in terms of business mix and revenue size, some of which are companies we compete with for talent and/or capital, and the Compensation Committee reviews, considers and approves the peer group.

The peer group of companies used as reference for fiscal year 2018 compensation decisions is listed below. This peer group is largely consistent with the peer group used in fiscal year 2017, except that, during fiscal year 2018, the Compensation Committee reviewed the peer group as part of its annual review process and removed CDI Corporation, as the company ceased to be a stand-alone public company.

Our Fiscal Year 2018 Peer Group

AMN Healthcare Services Inc.
Manpower Group Inc.
Barrett Business Services Inc.
On Assignment Inc.
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Cross Country Healthcare Inc.
Paychex Inc.
Hudson Global Inc.
Team Health Holdings Inc.
Insperity Inc.
TriNet Group Inc.
Kelly Services Inc.
TrueBlue Inc.
Kforce Inc.
Resources Connections Inc.
 
Robert Half International Inc.

Consistent with the Compensation Committee’s philosophy and guiding principles for determining overall executive compensation, the Compensation Committee does not target any particular percentile at which to align compensation. However, the Compensation Committee uses the peer group median as one of many factors when making pay decisions. Though target total direct compensation for our executives is at or around the 25th percentile of the Company’s peer group, we believe our compensation levels are competitive for the kind of executives we want to attract and retain. Our executive officers have a greater opportunity to benefit from their efforts, as a significant portion of their total compensation is delivered in the form of LTI awards. Given our current market capitalization is considerably lower than many companies in our peer group, LTI awards with Black-Scholes dollar values closer to our peer group median could be far more dilutive to our shareholders. However, if the Company’s financial performance improves, the potential for equity value is greater than with most of the companies in our peer group. Actual levels of pay depend on a variety of factors, such as individual experience and performance.

Role of our CEO in Determining Compensation

The CEO develops and recommends to the Compensation Committee compensation levels for our other named executive officers and provides her perspectives. For example, prior to his termination, Mr. Dean determined the individual performance factors under the AIP at plan at the beginning of fiscal year 2018, and Ms. Perneau assisted in assessing the level of achievement of those individuals’ performance factors following the end of fiscal year 2018. The individual in the role of CEO does not participate in or otherwise influence recommendations regarding her own compensation, although he or she does provide a self-assessment.

Employment Agreements

During fiscal year 2018, we were party to employment agreements with all of our 2018 Named Executive Officers. We utilize such arrangements in order to attract, motivate and retain high caliber talent. We are not party to any retention or so-called change–in–control agreements with any of our 2018 Named Executive Officers. None of the employment agreements with our 2018 Named Executive Officers contain tax gross-ups. A description of these agreements can be found in “Employment Agreements with 2018 Named Executive Officers.

Clawback/Recoupment

Our employment agreements with the 2018 Named Executive Officers provide that we may recover compensation that is subject to recovery under, or required to be recovered by, applicable law, government regulation or stock exchange listing requirements, including the Sarbanes-Oxley Act of 2002 or the Dodd-Frank Act of 2010. Further, the award agreements governing equity awards granted during fiscal years 2017 and 2018 provide for recoupment of those awards in accordance with applicable government regulation, stock exchange listing requirements, or other applicable law, or pursuant to any then-existing clawback policy of the Company.

Stock Ownership Guidelines

Volt maintains stock ownership and retention guidelines for our named executive officers pursuant to which such individuals are expected to attain minimum levels of stock ownership and retain portions of their equity holdings for a certain period of time. Individuals subject to these guidelines have until the fifth anniversary of

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the guideline’s adoption date to attain the requisite level of ownership. The target ownership level of Company stock is expressed as a multiple of base salary. Specifically, target ownership level is set at 5x base salary for the CEO and 1x base salary for all other named executive officers. Until the ownership threshold is achieved, individuals subject to the guidelines may only sell up to 50% of the net number of shares received after the sale or withholding of taxes in connection with the vesting or exercise of shares underlying such awards.

Hedging; Pledging

The Board has adopted a policy that prohibits hedging transactions and prohibits pledging transactions except in very limited circumstances. Pursuant to the policy, hedging is not permitted, and any officer, director or employee who wishes to pledge shares in accordance with the policy must obtain the prior approval of the Company’s Senior Vice President and General Counsel. This policy is included in the Company’s Insider Trading Policy, which is available on the “Corporate Governance” section of the Company’s website at www.volt.com.

Benefits

Our executive officers do not participate in any tax-qualified defined benefit plan sponsored by us. We do not provide our executives, including our 2018 Named Executive Officers, with a special or supplemental defined benefit pension or post-retirement health benefits. Our named executive officers receive health and welfare benefits under the same programs and are subject to the same eligibility requirements that apply to our employees generally.

Deferred Compensation Opportunity; Other Retirement Benefits

Our 2018 Named Executive Officers are eligible to participate in our 401(k) plan. We currently match 50% of the first 2% of eligible pay that employees contribute to the 401(k) plan. We also have a non-qualified deferred compensation and supplemental savings plan (the “DCP”) which our 2018 Named Executive Officers are eligible to participate in. The DCP was amended in June of 2016 to allow for participation by non-employee directors and to allow for the deferral of stock-settled restricted stock units. Beginning with compensation earned for fiscal year 2017, an employee may elect to defer a portion of base salary and cash bonuses, and may elect to defer all or any portion of his or her restricted stock units. A non-employee director may elect to defer all or any portion of cash retainer fees and may elect to defer all or any portion of his or her restricted stock units. Currently, none of our 2018 Named Executive Officers have elected to participate in the DCP.

Perquisites

We do not provide our 2018 Named Executive Officers with excessive perquisites, and no tax gross-up payments were provided or promised in fiscal year 2018 in connection with any benefits provided to our employees. From time to time, the Company may provide certain benefits to its executive officers in order to attract and retain such executives, taking into account market practices. For example, during 2018, the Company agreed to provide Ms. Perneau with certain housing expenses in connection with her hire, and provided her with a one-time relocation payment in connection with her relocation to California.

Other Compensation-Related Matters

Accounting for Share-Based Compensation

We account for share-based compensation including restricted stock, restricted stock units and stock option awards in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 (“FASB ASC Topic 718”), Compensation—Stock Compensation.

Impact of Tax Treatment on Compensation – Section 162(m)

Prior to its amendment by the Tax Cuts and Jobs Act (the “TCJA”), which was enacted December 22, 2017, section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”) (“Section 162(m)”), disallowed a tax deduction to public companies for compensation paid in excess of $1 million to “covered

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employees” under Section 162(m) (generally, such company’s chief executive officer and its three other highest paid executive officers other than its chief financial officer). Prior to this amendment, there was an exception to this $1 million limitation for performance-based compensation if certain requirements set forth in Section 162(m) and the applicable regulations were met. The TCJA generally amended Section 162(m) to eliminate the exception for performance-based compensation, effective for taxable years following December 31, 2017, unless the amounts are payable pursuant to a written, binding contract established on or prior to November 2, 2017 that qualifies for transition relief under the TCJA. The $1 million compensation limit was also expanded to apply to a public company’s chief financial officer and apply to certain individuals who were covered employees in years other than the then-current taxable year.

The Compensation Committee maintains a practice of considering the anticipated tax treatment to the Company in its review and establishment of compensation programs and awards. As a result of the Company’s historic tax position being such that a lack of compensation-related deduction was not expected to have a negative tax implication, the Company’s pre-existing compensation programs were not structured to qualify as performance-based compensation, and therefore none of the Company’s existing compensation arrangements are expected to qualify for transition relief under the TCJA. The Compensation Committee intends to continue to consider the deductibility of compensation as a factor in assessing whether a particular arrangement is appropriate, based on the goals of maintaining a competitive executive compensation system generally, motivating executives to achieve corporate performance objectives and increasing shareholder value.

Compensation Risk Assessment

As in prior years, during fiscal year 2018, the Compensation Committee formally reviewed and considered its compensation policies and practices, including the elements of its executive compensation programs, to determine whether any portion of such compensation policies, practices or programs encourage excessive risk-taking behaviors that may have a material adverse effect on the Company. In connection with this review, the Compensation Committee reviewed its existing program features to identify which features either encourage excessive risk-taking or mitigate against excessive risk-taking. The Compensation Committee determined that its existing compensation practices and programs include various risk-mitigating controls, such as (i) including caps on annual incentive payout opportunities; (ii) only paying out incentive awards once the internal audit for the applicable fiscal year has been completed; and (iii) inclusion of robust stock ownership guidelines and holding requirements for certain executive officers. Based on the foregoing and in connection with the other aspects of its formal review process, the Compensation Committee does not believe that any risks that may arise from its compensation policies and practices are reasonably likely to have a material adverse effect on the Company.

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Fiscal Year 2018 Executive Compensation

The following table provides information concerning the compensation of the 2018 Named Executive Officers for each of the fiscal years ended October 28, 2018 and October 29, 2017. The Company’s fiscal year ends on the Sunday nearest October 31st of each year.

FISCAL YEAR 2018 SUMMARY COMPENSATION TABLE

Name and
Principal Position
Year
Salary
$(1)
Bonuses
$(2)
Stock
Awards
$(3)
Option
Awards
$(4)
Non-Equity
Incentive Plan
Compensation
$(5)
All Other
Compensation
$(6)
Total
$
Linda Perneau
President, Chief Executive
Officer & Director
 
2018
 
 
528,846
 
 
262,500
 
 
673,856
 
 
233,333
 
 
327,115
 
 
33,373
 
 
2,059,023
 
Paul Tomkins
Senior Vice President
& Chief Financial Officer
 
2018
 
 
413,461
 
 
 
 
377,158
 
 
 
 
94,172
 
 
3,341
 
 
888,132
 
 
2017
 
 
400,000
 
 
50,000
 
 
89,140
 
 
178,278
 
 
104,650
 
 
5,411
 
 
827,479
 
Nancy T. Avedissian
Senior Vice President,
General Counsel
& Corporate Secretary
 
2018
 
 
358,468
 
 
 
 
226,293
 
 
 
 
62,815
 
 
3,341
 
 
650,917
 
 
2017
 
 
345,010
 
 
125,000
 
 
101,771
 
 
203,542
 
 
90,563
 
 
3,234
 
 
869,120
 
Michael D. Dean
President, Chief Executive
Officer & Director
 
2018
 
 
395,000
 
 
 
 
297,925
 
 
73,522
 
 
 
 
2,662,506
 
 
3,428,953
 
 
2017
 
 
650,000
 
 
 
 
380,329
 
 
760,656
 
 
261,625
 
 
3,291
 
 
2,055,901
 
(1)Represents the amount of base salary paid to the 2018 Named Executive Officers during the relevant fiscal year. Mr. Dean's salary represents payment through his last day on June 6, 2018. Mr. Tomkins and Ms. Avedissian's salary includes an increase of $35,000 to their bases salaries effective as of June 11, 2018. Ms. Perneau's fiscal 2018 salary above represents her fiscal year 2018 base salary of $550,000, pro-rated for her start date with the Company.
(2)For fiscal 2017, represents one-time transaction bonuses paid to the 2017 Named Executive Officer in respect of increased time and effort expended in connection with certain strategic transactions during the year (namely, with respect to Mr. Tomkins and Ms. Avedissian, the sale of Maintech and, with respect to Ms. Avedissian, the sale of VMC). For fiscal year 2018, Ms. Perneau was awarded a new hire bonus as part of her agreement in the amount of $350,000. These payments were made quarterly on the three, six, nine and twelve month anniversary of her hire date. Based on this schedule, through year-end 2018, three payments were made in the amount of $262,500.
(3)Amounts shown in the Stock Awards column reflect the aggregate grant date fair value of stock granted to our 2018 Named Executive Officers determined in accordance with FASB ASC Topic 718. For a discussion of valuation assumptions, see Note 15 in our Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for fiscal year 2018 filed on January 9, 2019. The grant date value for awards subject to performance conditions are shown based on the probable outcome of the applicable performance criteria as of the grant date. Assuming maximum level of achievement, the grant date fair value of the PSU awards for each of Ms. Perneau, Mr. Tomkins and Ms. Avedissian would be approximately $560,374, $379,314 and $227,588, respectively. For a detailed explanation of the stock awards granted to our 2018 Named Executive Officers during fiscal year 2018, see the “Long-Term Incentives” discussion in the “Discussion of Fiscal Year 2018 Executive Compensation Program” section. For Mr. Dean, his stock awards represent the incremental fair value of stock awards that were accelerated in connection with his separation of employment.
(4)Amounts reported in the Option Awards column reflect the aggregate grant date fair value of the stock options determined in accordance with FASB ASC Topic 718, excluding the amount of estimated forfeitures. For a discussion of valuation assumptions, see Note 15 in our Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for fiscal year 2018 filed on January 9, 2019. None of our named executive officers, other than Ms. Perneau, received stock options in fiscal year 2018. For details regarding the stock options granted to our 2018 Named Executive Officers during fiscal year 2018, see the “Long-Term Incentives” discussion in the “Discussion of Fiscal Year 2018 Executive Compensation Program” section.
(5)For fiscal year 2018, the amounts in this column reflect amounts earned by each 2018 Named Executive Officer under our AIP. For an explanation of how annual incentives were determined for fiscal year 2018, see the “Annual Incentives” section in the “Discussion of Fiscal Year 2018 Executive Compensation Program” section. Amounts earned in respect of performance achieved in fiscal year 2018 were paid in a lump sum following the end of that fiscal year. Ms. Perneau's AIP amount for 2018 reflects a pro-ration based on the change in her role during fiscal year 2018. Mr. Tomkins’ and Ms. Avedissian’s AIP amounts also reflect a pro-ration based on their respective base salary increases during 2018.
(6)Amounts for fiscal year 2018 consisted of (a) premiums under our group life insurance policy of $591 for each of Mr. Tomkins and Ms. Avedissian, $478 for Ms. Perneau and $387 for Mr. Dean; (b) company contributions under our 401(k) plan in the amount of $2,750 for each of Messrs. Dean and Tomkins and Ms. Perneau and Ms. Avedissian; (c) for Mr. Dean, severance payments and benefits that accrued as of his separation date and accrued vacation payout equal to $2,625,000 and $34,369, respectively; and (d) housing payments for Ms. Perneau of $30,145.
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FISCAL YEAR 2018 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

The following table sets forth certain information concerning shares of our common stock subject to unexercised stock options and equity incentive plan awards held as of October 28, 2018 by the 2018 Named Executive Officers:

 
Option Awards
Stock Awards
Name
Number of
Securities
Underlying
Unexercised
Options
Exercisable
Number of
Securities
Underlying
Unexercised
Options
Unexercisable
Equity
Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
Option
Exercise
Price
$
Option
Expiration
Date
Number of
Shares or
Units that
Have Not
Vested
Market Value
of Shares or
Units of
Stock that
Have Not
Vested(11)
$
Linda Perneau
 
 
 
133,181
(1) 
 
 
 
4.10
 
 
3/1/2028
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
28,455
(2) 
 
103,576
 
 
 
 
 
 
 
 
 
 
 
 
 
86,563
(3) 
 
315,089
 
 
 
 
 
 
 
 
 
 
 
 
 
82,814
(4) 
 
301,443
 
Paul Tomkins
 
30,410
(5) 
 
15,205
(5) 
 
 
 
7.20
 
 
3/11/2026
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3,086
(5) 
 
11,233
 
 
 
32,060
(6) 
 
16,030
(6) 
 
 
 
6.06
 
 
6/13/2026
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3,209
(6) 
 
11,681
 
 
 
33,180
(7) 
 
66,361
(7) 
 
 
 
4.35
 
 
6/14/2027
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
13,661
(7) 
 
49,726
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
58,594
(3) 
 
213,282
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
56,056
(4) 
 
204,044
 
Nancy T. Avedissian
 
12,278
(8) 
 
24,555
(8) 
 
 
 
6.50
 
 
11/1/2026
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4,953
(8) 
 
18,029
 
 
 
19,908
(9) 
 
39,817
(9) 
 
 
 
4.35
 
 
6/14/2027
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
8,197
(9) 
 
29,837
 
 
 
 
 
 
 
 
 
 
 
 
 
35,156
(3) 
 
127,968
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
33,634
(4) 
 
122,428
 
Michael D. Dean
 
424,710
(10) 
 
 
 
 
 
4.35
 
 
6/6/2019
(10) 
 
 
 
 
(1)These stock options were granted on March 1, 2018 and vest ratably on each of the first three anniversaries of December 4, 2017.
(2)These restricted stock units were granted on March 1, 2018 and vest ratably on each of the first three anniversaries of December 4, 2017.
(3)These restricted stock units were granted on June 14, 2018 and vest ratably on each of the first three anniversaries of the grant date. Each restricted stock unit represents a contingent right to receive one share of the registrant's common stock or the cash value thereof, subject to a cap on any cash value received.
(4)Performance-based restricted stock units that are eligible to vest based on achievement of the applicable performance criteria at the end of the performance period. The performance units are eligible to vest and be settled 1/3 each year following the grant date based on certain stock price performance goals measured over the applicable performance period. At maximum level of achievement of the applicable stock price performance goal, up to 200% of the units granted are eligible to vest. Each performance unit represents a contingent right to receive one share of the registrant's common stock or the cash value thereof, subject to a cap on any cash value received.
(5)Options and restricted stock units were granted on March 11, 2016 and vest ratably on each of the first three anniversaries of the grant date.
(6)Options and restricted stock units were granted on June 13, 2016 and vest ratably on each of the first three anniversaries of the grant date.
(7)Options and restricted stock units were granted on June 14, 2017 and vest ratably on each of the first three anniversaries of the grant date.
(8)Options and restricted stock units were granted on November 1, 2016 and vest ratably on each of the first three anniversaries of the grant date.
(9)Options and restricted stock units were granted on June 14, 2017 and vest ratably on each of the first three anniversaries of the grant date.
(10)In connection with his separation of employment, these stock options will remain exercisable until June 6, 2019.
(11)Represents the number of units shown multiplied by the closing price of a share of common stock on the last trading day of the fiscal year.
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EMPLOYMENT AGREEMENTS WITH 2018 NAMED EXECUTIVE OFFICERS

Linda Perneau

In connection with her appointment to the position of President and Chief Executive Officer, the Company and Ms. Perneau entered into an amended and restated employment agreement on December 4, 2018 (the “Employment Agreement”) to memorialize Ms. Perneau’s new role. Prior to entering into the current Employment Agreement, Ms. Perneau and the Company were party to an original employment agreement that was substantially similar to the current Employment Agreement and was entered into at the time of her hire.

The Employment Agreement memorialized Ms. Perneau’s current annual base salary of $650,000 and increased her target annual bonus from 80% to 100% of her annual base salary. During fiscal year 2018 and prior to her appointment as President and Chief Executive Officer, Ms. Perneau’s annual base salary was $550,000. Her original target annual bonus of 60% of her annual base salary was increased to 80% in connection with her appointment to interim President and Chief Executive Officer in June of 2018.

The Employment Agreement also provides that the Company will pay to Ms. Perneau $80,000 for purposes of Ms. Perneau’s relocation to California. If Ms. Perneau’s employment with the Company terminates prior to December 4, 2019 for any reason other than by the Company without “Cause” or by Ms. Perneau for “Good Reason” (each as defined in the Employment Agreement), Ms. Perneau will be required to repay this amount to the Company.

If Ms. Perneau’s employment is terminated by the Company without Cause (other than for death or disability) or by Ms. Perneau for Good Reason, Ms. Perneau will be entitled to receive payment of (i) one year of her then-current annual base salary, payable in 12 monthly installments; (ii) a pro-rated portion of her annual bonus payable in respect of the year of termination, based on actual performance results for that year; (iii) any earned but unpaid annual bonus for the year prior to the year of termination; and (iv) certain costs associated with the payment of health benefits for 12 months following the termination date. Ms. Perneau’s receipt of the severance benefits described above is subject to her execution of a valid release of claims and is conditioned on her compliance with the non-solicitation and confidentiality covenants contained in the Employment Agreement for the relevant period following her termination of employment for any reason.

Under the Employment Agreement, “Good Reason” means, without Ms. Perneau’s consent, (i) a material diminution in her base salary, other than a reduction in base salary that generally affects senior executives of the Company in substantially the same proportion, (ii) a material and adverse change to, or a material reduction of, Ms. Perneau’s duties and responsibilities to the Company, (iii) a relocation of Ms. Perneau’s principal place of employment by more than 50 miles from her principal place of employment as of the effective date of the Employment Agreement (other than to Orange, California), or (iv) the Company’s material breach of the Employment Agreement.

Paul Tomkins

We entered into an employment agreement with Mr. Tomkins effective March 23, 2015. The employment agreement provides a base salary of $400,000 per annum. For fiscal year 2015, Mr. Tomkins was eligible to earn an annual bonus with a target amount of $400,000. With respect to fiscal year 2016 and thereafter, his employment agreement provided that Mr. Tomkins would be eligible to earn an annual bonus with a target amount of $250,000 and an LTI award with a target amount of $250,000 payable 50% in cash and 50% in restricted Company common stock. Following the end of fiscal year 2015, the Compensation Committee revised Mr. Tomkins’ annual bonus to reflect a target of $260,000 and a target LTI award of $375,000. Currently, Mr. Tomkins earns an annual base salary of $435,000 and is eligible to participate in our AIP with a target annual bonus equal to 65% of his annual based salary.

If Mr. Tomkins’ employment is terminated by the Company without “cause” or by Mr. Tomkins for “good reason” (as such terms are defined in the employment agreement), Mr. Tomkins would be entitled to receive payment of, at a minimum, (i) one year of his then-current base salary; (ii) an amount equal to his target annual bonus for the year of termination; (iii) payment of any earned but unpaid annual bonus for the year of

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termination, pro-rated for the number of days actually worked during the applicable fiscal year; and (iv) certain costs associated with the payment of medical benefits for 12 months following the termination date. Receipt of such benefits is conditioned upon his execution of a general release. The payments described in subclauses (i) and (ii) would be payable over 12 months following the termination date. In the event of a termination without cause or resignation for good reason within 90 days of a “change of control”, all unvested portions of the LTI awards granted (if any) will vest immediately. Upon termination of employment for any other reason, Mr. Tomkins is entitled under his employment agreement only to payment of his accrued but unpaid salary and any unused accrued vacation.

Mr. Tomkins will be subject to the Company’s standard non-competition and non-solicitation covenants for one year following his termination of employment, regardless of the reason for termination.

For purposes of the employment agreement with Mr. Tomkins, the following terms are defined generally as set forth below:

“Good Reason” is defined as (i) an aggregate reduction of 10% or more in executive’s base salary, unless such reduction is part of a general reduction applicable to substantially all senior executives of the Company; (ii) a relocation of executive’s principal work location of 50 miles or more; or (iii) a material and adverse change to, or a material reduction of, executive’s duties and responsibilities to the Company.

“Cause” is defined as (i) embezzlement by the executive; (ii) executive’s misappropriation of Company funds; (iii) executive’s conviction of, or plea of guilty or nolo contendere to, any felony; (iv) executive’s commission of any act of dishonesty, deceit or fraud which causes economic harm to the Company; (v) willful breach of executive’s fiduciary duties owed to the Company; (vi) executive’s material breach of the employment agreement; (vii) executive’s willful failure to perform his duties; (viii) significant violation of Company policy, procedure, etc.; or (ix) engaging in activities or conduct reasonably likely to impair the reputation, operations, etc. of the business of the Company.

Nancy T. Avedissian

We entered into an employment agreement with Ms. Avedissian on September 21, 2016, effective October 24, 2016. Ms. Avedissian currently receives an annual base salary of $380,000, and is eligible to participate in our AIP with a target annual bonus equal to 50% of her annual base salary.

If Ms. Avedissian’s employment is terminated by the Company without cause or by Ms. Avedissian’s for good reason (each as defined below), Ms. Avedissian would be entitled to receive payment of (i) one year of her then-current base salary, payable in 12 monthly installments; (ii) a pro-rated portion of her annual incentive award payable in respect of the year of termination, based on actual performance; (iii) payment of any earned but unpaid annual bonus for the year prior to the year of termination; and (iv) certain costs associated with the payment of medical benefits for 12 months following the termination date.

Ms. Avedissian’s receipt of the severance benefits described above is subject to her execution of a valid release of claims and is conditioned on her compliance with the and non-solicitation covenants contained in her employment agreement for one year following her termination of employment.

For purposes of the employment agreement with Ms. Avedissian, the following terms are defined generally as set forth below:

“Good Reason” is defined as (i) an aggregate reduction of 10% or more in executive’s base salary, unless such reduction is part of a general reduction applicable to substantially all senior executives of the Company; (ii) a relocation of executive’s principal work location of 50 miles or more; (iii) a material and adverse change to, or a material reduction of, executive’s duties and responsibilities to the Company; or (iv) the Company’s material breach of the employment agreement.

“Cause” is defined as (i) embezzlement by the executive; (ii) executive’s conviction of, or plea of guilty or nolo contendere to, any felony; (iii) executive’s commission of any act of dishonesty, deceit or fraud which causes economic harm to the Company; (iv) willful breach of executive’s fiduciary duties owed to the

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Company; (v) executive’s material breach of the employment agreement; (vi) executive’s willful failure to perform his duties; (vii) the executive’s material violation of Company policy, procedure, etc.; or (viii) engaging in activities or conduct reasonably likely to impair the reputation, operations, etc. of the business of the Company.

Separation Agreement with Michael D. Dean

Effective June 6, 2018 (the “Separation Date”), Michael D. Dean departed from the Company and stepped down from his role as President and Chief Executive Officer. On June 29, 2018, the Company and Mr. Dean entered into a separation agreement memorializing the terms of his separation from the Company (the “Separation Agreement”).

Consistent with the Company’s obligations under Mr. Dean’s employment agreement, Mr. Dean will receive the following: (A) an amount equal to two times the sum of (i) his annual base salary, and (ii) his target annual bonus (such amount, the “Cash Severance”), and (B) reimbursement for the employer portion of the monthly cost of maintaining health benefits for himself and his eligible dependents for 18 months following the Separation Date. The Cash Severance is currently being paid in equal installments over the 24-month period following the Separation Date. Pursuant to his employment agreement and the Separation Agreement, Mr. Dean remained eligible to receive a pro-rated annual bonus for the Company’s 2018 fiscal year. As discussed above, Mr. Dean was not paid an annual bonus for 2018 because the Company did not achieve “threshold” level performance with respect to its corporate financial goal established for 2018, and, pursuant to the terms of his employment agreement, individual performance factors were disregarded in calculating any pro-rated annual bonus he was eligible to receive in respect of the year in which his employment terminated.

Pursuant to the terms of the Separation Agreement, in exchange for the cancellation of an aggregate of 721,731 stock options granted to him in June of 2015, October of 2015 and June of 2016, Mr. Dean fully vested in (i) his outstanding restricted stock units and (ii) the option to purchase 424,710 shares of common stock granted to him in June of 2017 (with such options remaining exercisable for 12 months following the Separation Date as contemplated by his employment agreement).

The severance payments and benefits described above were subject to Mr. Dean’s execution of an effective release of claims against the Company, and the continuation of any such payments/benefits remain subject to his continued compliance with the restrictive covenants contained in his employment agreement.

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POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL AS OF OCTOBER 28, 2018

The chart below quantifies the payments and benefits to which our 2018 Named Executive Officers would have been entitled to upon termination of employment or in connection with a change in control had either event occurred on October 28, 2018.

Name
Termination
without Cause or
for Good Reason
($)
Death or
Disability
($)
Termination
without Cause or
for Good Reason
in Connection with
a Change in Control
($)(1)
Linda Perneau
 
 
 
 
 
 
 
 
 
Cash Severance(2)
 
877,115
 
 
327,115
 
 
877,115
 
Health Benefits
 
17,101
 
 
 
 
17,101
 
Stock Options(3)
 
 
 
 
 
 
Restricted Stock Units(4)
 
 
 
 
 
172,080
 
Total
 
894,216
 
 
327,115
 
 
1,066,296
 
Paul Tomkins
 
 
 
 
 
 
 
 
 
Cash Severance(2)
 
529,172
 
 
94,172
 
 
529,172
 
Health Benefits
 
17,101
 
 
 
 
17,101
 
Stock Options(3)
 
 
 
 
 
 
Restricted Stock Units(4)
 
 
 
 
 
119,009
 
Total
 
546,273
 
 
94,172
 
 
665,282