1. Governing Framework
Zumiez Inc. is a Washington State Corporation. The Company was incorporated in 1978, opened its first store in 1978 and became a publicly traded company in 2005. The Company's common stock is listed on the Nasdaq Global Select Market, under the symbol ZUMZ.
The Company's charter documents include its Amended and Restated Articles of Incorporation and its Amended and Restated Bylaws, each as may in the future be amended. The Company's Board of Directors (the "Board") has adopted our Code of Conduct and Ethics and various other Company policies, which are subject to amendment but which set forth other governance matters as applicable to the Company and its personnel. The Company is also subject to applicable laws of the United States of America and the various states, as well as certain local and foreign jurisdictions in certain cases. Additionally, the Company must comply with rules and regulations of various government and quasi-government agencies such as the Securities Exchange Commission and Nasdaq.
Pursuant to the Company's charter documents, and subject to applicable laws including those relating to actions that must be approved by the shareholders, the Company's Board is charged with managing the business and affairs of the Company and exercising all the Company powers either itself or under its direction. With certain exceptions, such committees authorized by the Board may have all the authority of the Board to the extent that the Board so delegates it. In accordance with its power to delegate authority, the Company's Board has created certain committees described below, the general powers of which are set forth in Board-approved charter documents or applicable Board resolutions.
The Company's officers serve at the pleasure of the Board and are subject to the direction of, and policy and other decisions of, the Board. Officers are authorized and directed to perform certain activities by resolution of the Board, and otherwise possess and are expected to exercise power consistent with the generally accepted authority of their respective position.
2. Board Structure and Composition
Our Board currently consists of nine members. Currently, the Board has determined, under consultation with Counsel to the Company, that Mr. Hyde, Mr. Weber, Ms. Holmes, Ms. McCoy, Mr. Johnson, Mr. Bailey and Mr. Smith qualify as an independent director under the rules of The Nasdaq Stock Market. We are in compliance with all applicable rules of the SEC and The Nasdaq Stock Market with respect to the independence of our directors.
Our Board is divided into three classes of directors, each serving staggered three-year terms as follows:
Class I consisting of Ms. Holmes, Mr. Bailey and Mr. Smith, whose terms expire at the annual meeting of shareholders to be held in 2016; and
Class II consisting of Mr. Campion, Ms. McCoy and Mr. Johnson, whose terms expire at the annual meeting of shareholders to be held in 2017; and
Class III consisting of Mr. Brooks, Mr. Hyde and Mr. Weber, whose terms expire at the annual meeting of shareholders to be held in 2018.
3. Board Activities
The Board meets as it deems necessary at both regular and special meetings. Regular meetings are held four times each year. Special meetings are held as circumstances require. Certain agenda items are established in advance and discussed at particular meetings during each year; other agenda items are determined as meetings near, and members of the Board are also able to raise additional items during the meetings themselves. The Board reviews the Company's long-term strategic plans and the principal issues that the Company faces, and consults with the Company's officers both at meetings and at other times in order to remain abreast of the Company business and other activities and give guidance as appropriate.
As required under Nasdaq listing standards, the Company's independent directors meet in regularly scheduled executive sessions at which only independent directors are present.
Persons interested in communicating to the Board their concerns or issues may address correspondence to the Secretary of the Company at 4001 204th Street SW, Lynnwood, WA 98036. If no particular director is named, letters will be forwarded, depending on the subject matter, to the Chair of the Audit, Compensation or Governance and Nominating Committee.
4. Board Committees
As more fully described in its charter, our audit committee has responsibility for, among other things:
the sole authority to appoint, determine the funding for, and oversee the independent registered public accounting firm;
assisting our board in monitoring the integrity of our financial statements and other SEC filings;
discussing with our management and our independent registered public accounting firm significant financial reporting issues and judgments and any major issues as to the adequacy of our internal controls;
reviewing our annual and quarterly financial statements prior to their filing with the SEC and prior to the release of our results of operations;
reviewing the independence, performance and qualifications of our independent registered public accounting firm and presenting its conclusions to our board and approving, subject to permitted exceptions, any non-audit services proposed to be performed by the independent registered public accounting firm;
oversight of the performance of the Company's internal audit function; and
reviewing its charter at least annually for appropriate revisions.
The audit committee has the power to investigate any matter brought to its attention within the scope of its duties and to retain counsel for this purpose where appropriate. .
Governance and Nominating Committee.
As more fully described in its charter, our governance and nominating committee, has the responsibility for, among other things:
recommending persons to be selected by the board as nominees for election as directors and as chief executive officer;
assessing our directors' and our board's performance;
making recommendations to the board regarding membership and the appointment of chairpersons of the board's committees;
recommending director compensation and benefits policies;
reviewing its charter at least annually for appropriate revisions; and
recommending to the board other actions related to corporate governance principles and policies.
As more fully described in its charter, our compensation committee has responsibility for, among other things:
establishing the Company's philosophy, policies, and strategy relative to executive compensation, including the mix of base salary, short-term and long-term incentive and equity based compensation within the context of the stated policies and philosophy including management development and succession planning practices and strategies;
reviewing corporate goals and objectives relevant to compensation of our Chief Executive Officer and other senior executives including review and approval of performance measures and targets for all executive officers participating in the annual executive incentive bonus plan and certify achievement of performance goals after the annual measurement period to permit bonus payouts under the plan;
determining and approving our Chief Executive Officer's compensation and making recommendations to the board with respect to compensation of other executive employees, including any special discretionary compensation and benefits;
administering our incentive compensation plans and equity based plans and making recommendations to the board with respect to those plans;
making recommendations to our board with respect to the compensation of directors;
the sole authority to appoint, determine the funding for, and oversee the independent compensation consultant; and
reviewing its charter at least annually for appropriate revisions.
5. Director Compensation
The Board has adopted a compensation policy with respect to its non-employee directors.
As consideration for service on the Board, each non-employee director is reimbursed for reasonable out-of-pocket expenses in connection with such director's travel to and attendance at Board and committee meetings. In addition, non-employee directors receive a set fee for their attendance at Board and committee meetings. Each non-employee director of the Company also receives a restricted stock or stock option grant in the year elected as well as each year of service, which is subject to vesting provisions.
6. Code of Conduct and Ethics
Our Board has adopted a code of conduct and ethics applicable to our directors, executive officers, including our chief financial officer and other of our senior financial officers, and employees, in accordance with applicable rules and regulations of the SEC and The Nasdaq Stock Market.
7. Shareholder Communications With the Board Of Directors
Zumiez has a process by which Shareholders may communicate directly with directors, including non-employee directors, by mailing such communication to the Board, in care of the Company's Secretary, at the Company's headquarters in Lynnwood, Washington. The mailing envelope must contain a clear notation indicating that the enclosed letter is a "Shareholder-Board Communication" or "Shareholder-Director Communication." All such letters must identify the author as a shareholder and clearly state whether the intended recipients are all members of the Board or just certain specified individual directors. The Secretary will make copies of all such letters and circulate them to the appropriate director or directors. All such communications will be forwarded to the intended director(s) without editing or screening. If these foregoing procedures are modified, then updated procedures will be posted on the Company's corporate website.
8. Conflict Minerals Information
The Company is in support of efforts to end the violence and human rights abuses taking place in the Democratic Republic of Congo and its adjoining countries. Accordingly, in support of this goal and in connection with the Company’s compliance obligations under Rule 13p-1 under the Securities Exchange Act of 1934, as amended, and Form SD, the Company has adopted and communicated to its suppliers its Conflict Minerals Policy for the supply chain of Conflict Minerals. "Conflict Minerals" refer to cassiterite (tin), wolframite (tungsten), columbite-tantalite (tantalum) and gold. The Conflict Minerals Policy and the Company’s Conflict Minerals Report for calendar year ended December 31, 2015 included with Specialized Disclosure Report on Form SD are posted on the Company’s corporate website.