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Filed by a Party other than the Registrant ☐

Check the appropriate box:







Payment of Filing Fee (Check the appropriate box):

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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.



☐  Fee paid previously with preliminary materials.

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☐  Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

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ROCKY BRANDS, INC.

39 East Canal Street

Nelsonville, Ohio 45764





April 16, 2018





Dear Shareholder:



I am pleased to invite you to the Annual Meeting of Shareholders of Rocky Brands, Inc. to be held on Wednesday, May 16, 2018, at 3:00 p.m., at the Company’s Rocky Community Room in the Outlet Store Building located at 45 East Canal Street, Nelsonville, Ohio.  We look forward to meeting all of our shareholders who are able to attend.



At the annual meeting, you will be asked to (i) elect Michael L. Finn, G. Courtney Haning, William L. Jordan, Curtis A. Loveland and Robert B. Moore, Jr. for two-year terms as Class II Directors; (ii) approve, on an advisory nonbinding basis, the compensation of our named executive officers; (iii) ratify the selection of Schneider Downs & Co., Inc. as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2018; and (vi) transact any other business which may properly come before the meeting or any adjournment thereof.  A copy of the proxy statement and the proxy card are enclosed.



It is very important that your shares are represented and voted at the meeting whether or not you plan to attend.  Accordingly, please sign, date, and return your proxy card in the enclosed envelope at your earliest convenience.  You may vote over the internet, by telephone or by submitting your proxy by mail. If you are a shareholder of record and attend the meeting, you may vote in person if you wish, and your proxy will not be used.



Your interest and participation in the affairs of the Company are greatly appreciated.  Thank you for your continued support.



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ROCKY BRANDS, INC.

39 East Canal Street

Nelsonville, Ohio 45764





NOTICE OF ANNUAL MEETING OF SHAREHOLDERS



April 16, 2018



To Our Shareholders:



The Annual Meeting of Shareholders of Rocky Brands, Inc. will be held at the Company’s Rocky Community Room in the Outlet Store Building located at 45 East Canal Street, Nelsonville, Ohio, on Wednesday, May 16, 2018, at 3:00 p.m. local time, for the following purposes:



Owners of record of common stock of the Company at the close of business on April 2, 2018, will be entitled to vote at the meeting.



You will be most welcome at the meeting, and we hope you can attend.  Shareholders may obtain directions to the annual meeting by visiting the Company’s website: www.rockybrands.com.  Directors and officers of the Company and representatives of its independent registered public accounting firm will be present to answer your questions and to discuss its business.

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We urge you to execute and return the enclosed proxy, or vote electronically over the Internet or by telephone, as soon as possible so that your shares may be voted in accordance with your wishes.  Please refer to the proxy card enclosed for information on voting electronically or by telephone.  If you attend the meeting, you may vote in person if you are a shareholder of record or authorized by a shareholder of record, and your proxy will not be used.



Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to be Held on May 16, 2018: 
The proxy statement and annual report to security holders are available at www.edocumentview.com/RCKY.





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Rocky  Brands, Inc.

39 East Canal Street

Nelsonville, Ohio 45764

_____________________________



PROXY STATEMENT

_____________________________



ANNUAL MEETING OF SHAREHOLDERS



May 16, 2018

_____________________________

 



This proxy statement is furnished to the shareholders of Rocky Brands, Inc. (throughout the proxy statement the terms “Company,” “we” and “our” refer to Rocky Brands, Inc.) in connection with the solicitation of proxies to be used in voting at the Annual Meeting of Shareholders to be held on May 16, 2018, and at any adjournment thereof.  The enclosed proxy is solicited by the Board of Directors of the Company.  We began mailing this proxy statement to the Company’s shareholders on approximately April 16, 2018.



The Company will bear the cost of the solicitation of proxies, including the charges and expenses of brokerage firms and others for forwarding solicitation material to beneficial owners of stock.  Representatives of the Company may solicit proxies by mail, telephone, or personal interview. 



All shares represented by a properly submitted proxy will be voted as directed if the proxy is received by the Company before the meeting or, in the absence of specific instructions to the contrary, will be voted in accordance with the unanimous recommendations of the Board of Directors, which are:









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Any shareholder giving a proxy has the power to revoke it at any time before it is exercised by filing a written notice with the Secretary of the Company prior to the meeting.  Shareholders of record who attend the meeting may vote in person, and their proxies will not be used.



Holders of record of common stock of the Company at the close of business on April 2, 2018, the record date for the annual meeting, will be entitled to vote at the annual meeting.  At that time, the Company had 7,406,801 shares of common stock outstanding and entitled to vote.  Each share of common stock outstanding on the record date entitles the holder to one vote on each matter submitted at the annual meeting.



The presence, in person or by proxy, of a majority of the outstanding shares of common stock of the Company is necessary to constitute a quorum for the transaction of business at the annual meeting.  Abstentions and broker non-votes are counted for purposes of determining the presence or absence of a quorum.  Broker non-votes occur when brokers, who hold their customers’ shares in street name, sign and submit proxies for such shares and vote such shares on some matters, but not others.  Typically, this would occur when brokers have not received any instructions from their customers, in which case the brokers, as the holders of record, are permitted to vote on “routine” matters.



The election of each director nominee requires the favorable vote of a plurality of all votes cast by the holders of common stock at a meeting at which a quorum is present.  Proxies that are marked “Withhold Authority” and broker non-votes will not be counted toward such nominee’s achievement of a plurality and thus will have no effect.



Approval of the proposal relating to the compensation of our named executive officers requires the affirmative vote of a majority of the shares of our common stock represented in person or by proxy at the annual meeting.  Abstentions will be counted as represented and entitled to vote and will therefore have the effect of a vote against the proposal.  Broker non-votes are disregarded and will have no effect.



The ratification of Schneider Downs & Co., Inc. as the Company’s independent registered public accounting firm requires the affirmative vote of the holders of a majority of the common stock present and entitled to vote on the matter.  Broker non-votes will not be counted as being in favor or against the ratification of Schneider Downs & Co., Inc., while abstentions will be counted and will have the effect of a vote against the ratification of Schneider Downs & Co., Inc.



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Proposal 1 – Election of Directors



The Company’s Code of Regulations provides for a classified board of directors with two classes.  Each class of directors consists, as nearly as practical, of one-half of the total number of directors.  The total number of authorized directors has been fixed by the Board of Directors at ten.  The Board of Directors proposes the re-election of the five incumbent Class II Directors to continue their service as Class II Directors at the 2018 Annual Meeting of Shareholders.  The five incumbent Class I Directors will continue in office until the 2019 Annual Meeting of Shareholders.



Michael L. Finn, G. Courtney Haning, William L. Jordan, Curtis A. Loveland and Robert B. Moore, Jr. are currently Class II Directors of the Company and are being nominated by the Board of Directors for re-election as Class II Directors.



It is intended that, unless otherwise directed, the shares represented by the enclosed proxy will be voted FOR the election of Messrs. Michael L. Finn, G. Courtney Haning, William L. Jordan, Curtis A. Loveland and Robert B. Moore, Jr. as Class II Directors.  In the event that any of the nominees for director should become unavailable, the number of directors of the Company may be decreased pursuant to the Company’s Code of Regulations, or the Board of Directors may designate a substitute nominee, in which event the shares represented by the enclosed proxy will be voted for such substitute nominee. 



The Board of Directors recommends that the shareholders vote FOR the election of each of the nominees for Director.

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The following table sets forth for each nominee and each continuing director of the Company, such person’s name, age, the year in which he became a director of the Company, and his position with the Company.



Class II Directors

(Nominees – Terms Expire in 2018)







Class I Directors

(Terms Expire in 2019)







The following information is provided for each director and each person nominated for election as a director, and includes descriptions of each individual’s specific experience, qualifications, attributes, and skills that led to the

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conclusion that he should serve on the Board of Directors.



Michael L. Finn has served as Chairman of Power Distributors, LLC, a wholesale distributor of outdoor power equipment in Columbus, Ohio, since 2014, and President of Chesapeake Realty Co., a real estate development and management company in Columbus, Ohio, since 1970.  Prior to that, he served as President of Central Power Systems, the predecessor of Power Distributors, LLC, from 1985 until 2014. Mr. Finn has also served as Chairman of the Board of Directors of Power Source Canada, a Canadian corporation that markets and distributes outdoor power equipment, since 2004.  Mr. Finn’s board member experience, operations and management experience in retail and distribution, and business management experience, including his service as a president of both a distribution company and real estate development company, qualify him to continue serving as a member of the Board of Directors.



G. Courtney Haning has served as Chairman and Chief Executive Officer of Peoples National BancShares Inc., a bank holding company, since its formation in 1996.  He served as Chairman and Chief Executive Officer of Peoples National Bank, a community bank in New Lexington, Ohio, from January 1991 until April 2015.  He also served as President of Peoples National Bank from January 1991 until January 2015 and President of Peoples National BancShares Inc. from 1996 until April 2015.  Mr. Haning’s business management experience in finance, corporate credit, and community relations, including his service as a chief executive officer, qualify him to continue serving as a member of the Board of Directors.



William L. Jordan has served as Executive Vice President and Chief Administrative Officer of DSW, Inc. since February 2015.  DSW is a leading branded footwear and accessories retailer headquartered in Columbus, Ohio, which offers a wide selection of brand name and designer shoes and accessories for women, men and kids.  In his current position, Mr. Jordan serves on DSW’s six person executive committee and his direct responsibilities include strategy, supply chain, logistics, human resources, real estate, store design and construction, and legal.  He joined DSW in January 2006 as Vice President & General Counsel and was promoted to Senior Vice President in March 2006.  He was then promoted to Executive Vice President and General Counsel of DSW in March 2009.  Mr. Jordan’s experience in the retail footwear and accessories industry qualify him to serve as a member of the Board of Directors.



Curtis A. Loveland has served as Secretary of the Company since October 1992.  Mr. Loveland has been a practicing attorney for over 40 years and has been a partner in the law firm of Porter Wright Morris & Arthur llp, Columbus, Ohio since 1979.  He has served as a board member, secretary, or counsel for numerous public and private companies in a variety of industries, including technology, medical devices, retailing, and telecommunications.  Mr. Loveland’s board member experience and knowledge and skills with respect to corporate governance, public company regulation, and general business law qualify him to continue serving as a member of the Board of Directors.



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Robert B. Moore, Jr. has over 43 years of experience in the footwear and apparel industry.  He served as Chief Executive Officer of Bhartiya International, Ltd., headquartered in New Delhi, India from April 2013 through March 2017, and is now serving as a consultant to Bhartiya.  Bhartiya is a public company listed on the Mumbai and NSE exchanges, whose customers include many prominent brands and retailers including Ralph Lauren, Tommy Hilfiger, Calvin Klein, Levi Strauss, and All Saints.  At Bhartiya and in his prior positions, Mr. Moore has had executive experience and responsibilities managing several footwear and leather companies.  Prior to joining Bhartiya, Mr. Moore was President and CEO of Shanghai Richina Leather Company, Ltd., Shanghai, China, a producer of finished leather for the footwear, handbag and auto seat industries, from March 2009 until February 2013.  He also served as President and CEO of Prime Tanning Company, Inc., Berwick, Maine; President of Sperry Topsider, Inc., Lexington, Massachusetts; and President of Bostonian Shoe Company, Kennett Square, Pennsylvania.  Mr. Moore’s experience in the footwear and apparel industry qualify him to serve as a member of the Board of Directors.



Mike Brooks has served as Chairman of the Company since January 2005, and before that served as Chief Executive Officer of the Company from January 2005 until July 2011, and from September 2016 until May 2017. Prior to that, he served as President and Chief Executive Officer of the Company from August 1991 to January 2005.  Mr. Brooks is a pattern engineering and shoe design graduate of the Ars Sutoria in Milan, Italy. After employment with U.S. Shoe Corporation and various tanning companies, Mr. Brooks returned to the family shoe business in Nelsonville, Ohio, in 1975, serving first as Manager of Product Development and a national salesman and then, in 1984, becoming President.  He has been a director of American Apparel and Footwear Association (formerly Footwear Industries of America) since April 1986 and currently serves on the Executive Board. Mr. Brooks’ education with respect to shoe design and business management experience in product development and strategy development, including decades of service in the footwear industry, qualify him to continue serving as a member of the Board of Directors. 



Jason Brooks has served as President and Chief Executive Officer of the Company since May 2017. Prior to that, he served as President, Core Brands, of Rocky Brands US, LLC from February 2016 until May 2017. He previously served as President, U.S. Wholesale Sales, of Rocky Brands US, LLC from March 2011 until February 2016. Prior to that, he served as the Senior Vice President, U.S. Wholesale from August 2010 until March 2011. From September 2001 until August 2010, Mr. Brooks held various Vice President of Sales positions within the Company. He began his career with the Company in 1997 as an independent sales representative. Mr. Brooks’ position as Chief Executive Officer and his experience in the footwear industry qualifies him to serve as a member of the Board of Directors. Jason Brooks is the son of Mike Brooks.



Glenn E. Corlett was a professor of accounting of the College of Business at Ohio University, Athens, Ohio, from July 1997 until July 2007, and was Dean of the College from July 1997 until he retired on June 30, 2007.  From 1993 to 1996, Mr. Corlett was Executive Vice President and Chief Operating Officer of N.W. Ayer & Partners, an international advertising agency, headquartered in New York, New York.  Mr. Corlett also served as Chief Financial Officer of N.W. Ayer & Partners from 1990 to 1995.  Prior to joining N.W. Ayer & Partners, Mr. Corlett had a long history with PricewaterhouseCoopers where he was partner-in-charge for mergers and acquisitions in New York from 1988 to 1990; tax partner-in-charge in Denver from 1984 to 1988 and in Cleveland from 1979 to 1984; and held partner and staff positions from 1971 to 1979.  Mr. Corlett also serves on the board of directors of Preformed Line Products Company, an international designer and manufacturer of products and systems employed in the construction and maintenance of overhead and underground networks for energy, communications and broadband network companies.  Mr. Corlett’s education and business management experience in the areas of marketing,

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finance, treasury, accounting, and tax, including the skills and knowledge he developed as an accounting practitioner and educator, qualify him to continue serving as a member of the Board of Directors.  



Harley E. Rouda, Jr. has served as Chief Executive Officer of Trident Holdings, Inc., an independently-owned real estate brokerage and related services firm headquartered in Columbus, Ohio, since February 2002.  From November 2009 until November 2012, he served as President of Real Living Real Estate, a national franchisor of real estate services headquartered in Columbus, Ohio and Chicago, Illinois.  He has also served as Chief Executive Officer and General Counsel of HER Realtors, a Columbus based real estate firm, since May 1999 and May 1997, respectively.  Prior to serving as Chief Executive Officer, Mr. Rouda served as President of HER Realtors from May 1996 until May 1999.  Mr. Rouda’s business management experience in marketing and operations, including his service as a chief executive officer, qualify him to continue serving as a member of the Board of Directors.



James L. Stewart has served as the proprietor of Rising Wolf Ranch, Inc., East Glacier, Montana, a summer resort and a winter rehabilitation center for teenage boys involved with drug abuse.  Mr. Stewart also consults for various retail and catalog companies.  Between 1984 and 1991, Mr. Stewart served as the President and Chief Executive Officer of Dunns Inc. and as the Vice President and General Manager of Gander Mountain Inc.  Before that time, he served Sears Roebuck & Co. for 28 years in various management capacities.  Mr. Stewart’s business management experience in retail sales and marketing, process management, and corporate leadership qualify him to continue serving as a member of the Board of Directors.

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Proposal 2 – Advisory Vote on the Compensation Paid to Named Executive Officers



Section 14A of the Securities Exchange Act of 1934, as amended, requires the Company to include in its proxy statement at least once every three years an advisory vote regarding named executive officer compensation.  In a non-binding advisory vote on the frequency of future say-on-pay votes held at the 2017 Annual Meeting of Shareholders, the Company’s shareholders approved conducting a say-on-pay vote every year by a majority of the votes cast.  The Company has considered the outcome of this advisory vote and has determined that the Company will hold say-on-pay votes on an annual basis until the occurrence of the next advisory vote on the frequency of say-on-pay votes.  The Company asks that you indicate your approval of the compensation paid to our named executive officers as described in this proxy statement under the heading “Executive Compensation,” which includes compensation tables and narratives included elsewhere in this proxy statement.



Because your vote is advisory, it will not be binding on the Board of Directors.  However, the Board of Directors and the Compensation Committee will review the voting results and take them into consideration when making future decisions regarding executive compensation.  The Compensation Committee has structured its executive compensation programs primarily to motivate executives to achieve the business goals established by the Company and reward executives for meeting business goals and delivering superior performance as measured against those business goals.



For the reasons discussed above and in this proxy statement under the heading “Executive Compensation,” the Board of Directors recommends that shareholders vote to approve the following resolution:



“RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion is hereby APPROVED.”



The Board of Directors recommends that shareholders vote FOR the approval of the resolution relating to the compensation of named executive officers.

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Information Concerning the Board of Directors and Corporate Governance



The Board of Directors of the Company held a total of seven meetings during 2017.  During 2017, each of the directors attended 75% or more of the total number of (i) meetings of the Board, and (ii) meetings of committees of the Board on which such director served during the period that he served.



Upon consideration of the criteria and requirements regarding director independence set forth in the Marketplace Rules of the NASDAQ Stock Market, the Board of Directors has determined that a majority of its members are independent.  Specifically, the Board has determined that each of Messrs. Corlett, Finn, Haning, Jordan, Loveland, Moore, Rouda, and Stewart, meet the standards of independence established by Marketplace Rule 5605(a)(2). 



The Company has a standing Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee.  The members of the Audit Committee are Messrs. Corlett (Chairman), Haning, and Jordan. At its meeting on May 18, 2017, the Board of Directors appointed Mr. Jordan to the Audit Committee, replacing Harley E. Rouda, Jr. The Board of Directors has determined that each of Messrs. Corlett, Haning, Jordan and Rouda are independent as independence is defined in Marketplace Rule 5605(a)(2) and Rule 10A-3(b)(1) of the Securities Exchange Act of 1934, as amended, and that the Audit Committee meets the composition requirements of Marketplace Rule 5605(c)(2).  The Board of Directors has determined that Mr. Corlett meets the requirements of an “audit committee financial expert” as set forth in Section 407(d)(5) of Regulation S-K promulgated by the Securities and Exchange Commission (“SEC”).



The Audit Committee met eight times during 2017.  The Audit Committee oversees and monitors management’s and the independent registered public accounting firm’s participation in the accounting and financial reporting processes and the audits of the financial statements of the Company.  The Audit Committee has the responsibility to appoint, compensate, retain and oversee the work of the independent registered public accounting firm and to consult with the independent registered public accounting firm on matters relating to the scope of the audit, any non-audit assignments and related fees, the accounting principles used by the Company in financial reporting, internal financial auditing procedures, and the adequacy of the Company’s internal control procedures.  The Audit Committee is governed by an Amended and Restated Audit Committee Charter, which is posted on the Company’s website at www.rockybrands.com.  The Audit Committee Report relating to the 2017 fiscal year appears beginning on page 48.



The members of the Compensation Committee are Messrs. Finn (Chairman), Stewart, and Moore. At its meeting on May 18, 2017, the Board of Directors appointed Mr. Moore to the Compensation Committee, replacing Glenn E. Corlett. The Board of Directors has determined that each of Messrs. Finn, Stewart, Moore and Corlett are independent as independence is defined in Marketplace Rule 5605(a)(2).  The Compensation Committee is governed by an Amended and Restated Compensation Committee Charter, which is posted on the Company’s website at www.rockybrands.com.  The Compensation Committee met six times during 2017.  This Committee administers the 2014 Omnibus Incentive Plan, the 2017 Incentive Compensation Plan, and approves compensation for the Company’s executive officers.  The Compensation Committee report relating to the 2017 fiscal year appears on page 45.  For more information on the Compensation Committee, please refer to “Executive Compensation – Compensation Discussion and Analysis – The Compensation Committee,” beginning on page 18.



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The members of the Nominating and Corporate Governance Committee are Messrs. Haning (Chairman), Finn, and Rouda.  The Board of Directors has determined that each of Messrs. Haning, Finn, and Rouda are independent as independence is defined in Marketplace Rule 5605(a)(2).  The Nominating and Corporate Governance Committee Charter is posted on the Company’s website at www.rockybrands.com.  The Nominating and Corporate Governance Committee met four times during 2017.  The Nominating and Corporate Governance Committee oversees the director nomination process and reviews related party transactions.  The Nominating and Corporate Governance Committee has the responsibility to identify and recommend individuals qualified to become directors.



When considering potential candidates, the Nominating and Corporate Governance Committee reviews the candidate’s character, judgment, and skills, including financial literacy, and experience in the context of the needs of the Board of Directors.  Neither the Nominating and Corporate Governance Committee nor the Board of Directors has a formal policy with regard to the consideration of diversity in identifying director nominees; however, how a specific nominee contributes to the diversity of the Board of Directors is considered by both the Nominating and Corporate Governance Committee and the Board of Directors in determining candidates for the Board.  The Committee and the Board consider diversity by identifying a nominee’s experience and background and determining how such experience and background will complement the overall makeup of the Board.  The Committee and the Board prefer nominees who will contribute to a board that is diverse in terms of business training, experience across a range of industries, leadership, background, and education.  The Company generally does not pay any third parties to identify or evaluate, or assist in identifying or evaluating, potential nominees.



The Nominating and Corporate Governance Committee considers the recommendations of shareholders regarding potential director candidates.  In order for shareholder recommendations regarding possible director candidates to be considered by the Nominating and Corporate Governance Committee: 









The Nominating and Corporate Governance Committee also has the responsibility to develop and recommend to the Board of Directors a set of corporate governance principles applicable to the Company and to administer and oversee the Company’s Code of Business Conduct and Ethics.



Mr. J. Brooks serves as the Chief Executive Officer, and Mr. M. Brooks serves as the Chairman of the Board of Directors.  Although the Board does not have a lead independent director position, the Board believes that each incumbent director’s knowledge of the Company and industry as a result of his years of service on the Board, and the fact that each of the directors other than Mr. M. Brooks and Mr. J. Brooks is independent, allows the independent directors to provide appropriate independent oversight of management and to hold management accountable for the execution of strategy.  The Board has determined that its leadership structure, including each of the committees of

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the Board, is appropriate because it allows for beneficial communication between the outside directors and the management of the Company and effective management of the oversight tasks required of the Board.



Our Chief Executive Officer is responsible for providing day-to-day leadership and establishing the Company’s course of action for achieving performance goals, while the independent directors provide strategic guidance.  The Board of Directors believes that this structure helps facilitate the role of the independent directors in the oversight of the Company and the active participation of the independent directors in setting agendas and establishing priorities and procedures that work for the Board of Directors.  The Chairman acts as a key liaison between the Board of Directors and the other members of management.



Our Chief Executive Officer and senior management are responsible for the day-to-day management of the risks we face.  Our Board of Directors, as a whole and through its committees, has responsibility for the oversight of risk management, including general oversight of (i) the financial exposure of the Company, (ii) risk exposure as related to the overall Company portfolio and impact on earnings, (iii), oversight of information technology security and cybersecurity risk, and (iv) all systems, processes, and organizational structures and people responsible for finance and risk functions.  Certain risks are overseen by committees of the Board of Directors and these committees make reports to the full Board of Directors, including reports on noteworthy risk management issues.  Financial risks are overseen by the Audit Committee which meets with management to review the Company’s major financial risk exposure and the steps management has taken to monitor and control such exposures.  Compensation risks are overseen by the Compensation Committee.



We have adopted a Code of Business Conduct and Ethics that applies to our directors, officers and all employees.  The Code of Business Conduct and Ethics is posted on our website at www.rockybrands.com.  The Code of Business Conduct and Ethics may be obtained free of charge by writing to Rocky Brands, Inc., Attn: Chief Financial Officer, 39 East Canal Street, Nelsonville, Ohio 45764.



Members of the Company’s senior management report to the full Board of Directors about their areas of responsibility, including reports regarding risk within such areas of responsibility and the steps management has taken to monitor and control such exposures.  Additional review or reporting of risks is conducted as needed or as requested by the Board of Directors or its committees.



We believe that our board leadership structure promotes effective oversight of the Company’s risk management by providing unified leadership through a single person, while allowing for contributions from our independent Board members, all of whom are fully engaged in Board deliberations and decisions.



The Company’s Board of Directors welcomes communications from shareholders.  Shareholders may send communications to the Board of Directors, or to any director in particular, c/o Rocky Brands, Inc., 39 East Canal Street, Nelsonville, Ohio 45764.  Any correspondence addressed to the Board of Directors, or to any one of the Company’s directors in care of our offices is forwarded to the addressee without review by management.



It is the Company’s expectation that all members of the Board of Directors attend the Annual Meeting of Shareholders.  All members of the Company’s Board of Directors were present at the Company’s 2017 Annual Meeting of Shareholders.

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Information Concerning Executive Officers



Executive Officers



In addition to Jason Brooks, the following individuals are executive officers of the Company:



David P. Dixon, 53, has served as President, Sourcing and Manufacturing since September 2016. Prior to that, he served as Vice President, Military Liaison Officer since March 2015. He previously served as Senior Vice President of Manufacturing and Distribution Operations from 2013 until March 2015, and Senior Vice President, Product Acquisition from 2009 until 2013.  Prior to that, he served as Vice President, Manufacturing from 2003 until 2009, as Director of Operations from 1997 to 2003, and as Manufacturing Cost Controller from 1993 to 1997.  Mr. Dixon is a nephew of Mike Brooks and a first cousin of Jason Brooks, both by marriage.



Thomas D. Robertson, 33, a CPA (certified public accountant), has served as Vice President, Chief Financial Officer and Treasurer since March 2017.  Before that, he served as Senior Financial Analyst since joining the Company in October 2016.  Prior to that, from July 2015 until September 2016, he was an audit manager with Deloitte & Touche LLP. From September 2008 until July 2015, he held various audit positions with Schneider Downs & Co., Inc.  While practicing with Schneider Downs and Deloitte, Mr. Robertson spent the majority of his time working with publicly-traded footwear companies.



Richard Simms, 44, has served as President, Operations of the Company since March 2018. Prior to that, he served as President, Digital Resources and Brand General Manager, Georgia Boot since February 2016.  He previously served as President of Marketing Services from October 2014 until February 2016, and President, Retail Sales, of Lehigh Outfitters, LLC from March 2011 until February 2016.  Prior to that, he served as Senior Vice President and General Manager of Lehigh from February 2007 until March 2011, as Senior Vice President, Sales of Lehigh from May 2006 until February 2007, and as Vice President, Key Accounts of Lehigh from October 2005 until May 2006.  Mr. Simms began his career with Lehigh in 1994 and held various sales and operations positions with Lehigh until his appointment as Vice President, Key Accounts in October 2005.



Byron Wortham, 51, has served as President, Core Brands since June 2017. Prior to that, he served as Vice President, Brand General Manger of Durango since December 2015.  He previously served as Vice President, Sales – Western Division from August 2011 to December 2015. Prior to that, he served Manager, National Sales – Western Division from November 2010 to August 2011, Region Sales Manager from September 2009 to November 2010, and Key Account Manager from March 2005 to September 2009. Mr. Wortham began his career with the Company in January 2003 as a Sales Representative.



Officers are elected annually by the Board of Directors and serve at its discretion.  There are no family relationships among directors and executive officers of the Company, except as disclosed above.



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Principal Holders of Voting Securities



Ownership of Common Stock by Principal Shareholders



The following table sets forth information relating to the beneficial ownership of common stock by each person known by the Company to own beneficially more than 5% of the outstanding shares of common stock:











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Ownership of Common Stock by Management

The following table sets forth information regarding beneficial ownership of the Company’s common stock by each nominee for director, each director, each of the Company’s executive officers named in the Summary Compensation Table, and the directors and executive officers of the Company as a group as of February 28, 2018:







* indicates less than 1%



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Executive Compensation



The following information provides discussion, analysis and data tables regarding the compensation of our named executive officers (“NEOs”), who are those officers listed in our Summary Compensation Table on page 29.



Compensation Discussion and Analysis



We have prepared this Compensation Discussion and Analysis (“CD&A”) to provide you with our perspective on executive compensation so that you may understand our compensation policies and our decisions regarding compensation for our NEOs.  We recommend that you review the various executive compensation tables below in conjunction with this CD&A.  Unless otherwise noted, the policies, plans and other information in this CD&A apply to all of our NEOs.  Our CD&A covers the following topics:











The Compensation Committee



The Compensation Committee (referred to in this CD&A as the “Committee”) was appointed by our Board of Directors and is governed by a written charter that is available in the corporate governance section of our website, www.rockybrands.com.  The Committee members are Michael L. Finn, Chairman, James L. Stewart and Robert B. Moore, Jr.  At its meeting on May 18, 2017, the Board of Directors appointed Mr. Moore to the Compensation Committee, replacing Glenn E. Corlett. Our Board of Directors has determined that each of the Committee members, including former member Mr. Corlett, is independent under the standards of independence established by Marketplace Rule 5605(a)(2).  In addition, each of the Committee members, including former member Mr. Corlett, is a “non-employee” director as defined by Rule 16b-3 under the Securities Exchange Act of 1934 and an “outside director” as defined by the Internal Revenue Code.



Pursuant to its charter, the Committee has the authority and responsibility to:





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The Committee has the sole authority, to the extent it deems necessary or appropriate, to retain any compensation consultant to assist in the evaluation of executive compensation and has the sole authority to approve any such firm’s fees.  The Committee also has the authority to obtain the advice of and assistance from internal or external legal, accounting or other advisors, and may request any officer or employee of our Company, our outside counsel or independent registered public accounting firm to attend a meeting of the Committee or meet with any member of, or consultants to, the Committee.  The Committee will evaluate whether any compensation consultant retained or to be retained by it has any conflict of interest in accordance with Item 407(e)(3)(iv) of Regulation S-K.  Any compensation consultant retained by the Committee to assist with its responsibilities relating to executive compensation will not be retained by the Company for any compensation or other human resource matters.



The Committee meets as often as its members deem necessary to discharge its duties and responsibilities and held six meetings during fiscal 2017.  The Chairman of the Committee works in conjunction with our Chairman, Chief Executive Officer and Chief Financial Officer to establish the meeting agenda.  The Committee typically meets with the Chairman, Chief Executive Officer, Chief Financial Officer and outside legal advisors and, where appropriate, other executive officers of our Company.  In addition, the Committee regularly meets in executive session without management.  Generally, the Committee receives and reviews materials in advance of each meeting.  These materials include information that management believes will be helpful to the Committee as well as materials that the Committee has specifically requested.

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Compensation Philosophy



The philosophy of the Committee is to make compensation decisions based on an executive compensation program that is designed to meet the following objectives:













The Committee believes that an executive compensation program designed with these objectives in mind has a direct impact on the success of the business by helping to ensure we have qualified executive talent in the right positions at the right time.  Our executive compensation program helps ensure that our leadership group is focused on performing effectively to deliver results and build long-term shareholder value.



The Committee periodically reviews the compensation programs and policies that apply to all of our employees and has determined that such programs and policies are not reasonably likely to have a material adverse effect on us.  Additionally, in establishing and reviewing the executive compensation programs, the Committee considers whether the programs encourage unnecessary or excessive risk taking and has determined that they do not.  On the Committee’s recommendation, the Board of Directors adopted a clawback/recoupment policy during 2015, which provides for the recoupment of certain incentive compensation in the event of an accounting restatement resulting from material noncompliance with financial reporting requirements under the securities laws.  The clawback/recoupment policy also provides for the potential recoupment of certain incentive compensation in the event of misconduct by our executive officers and other specified employees.



The Committee also considered the result of the 2017 advisory, non-binding “say-on-pay” vote in connection with the discharge of its responsibilities.  Because approximately 86% of the votes cast approved the compensation for our NEOs described in our 2017 proxy statement, the Committee determined that no changes to our compensation programs were warranted as a result of the shareholder advisory vote.

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Compensation Tax Philosophy



Internal Revenue Code Section 162(m) generally bars a deduction to any publicly held corporation for compensation paid to a “covered employee” which historically included the Chief Executive Officer and three other executive officers (exclusive of the Chief Financial Officer) who were the highest paid and employed at fiscal year-end, in excess of $1 million per year, with an exception for “performance-based” compensation. Code Section 162(m) required several requirements be satisfied in order for compensation to qualify as performance-based.  Historically, we considered the impact of Code Section 162(m) in structuring our executive compensation program.  However, we reserved the discretion to make payments regardless of the tax deductibility limits of Code Section 162(m) if, in our judgment, such payments were necessary to achieve our compensation objectives and to protect shareholder interests.



In December 2017, the bill popularly referred to as the “Tax Cuts and Jobs Act” (the “TCJA”) was signed into law. The TCJA eliminates the performance-based exception to the $1 million deduction limit effective for tax years beginning after December 31, 2017, unless it qualifies for transition relief that applies to compensation paid under binding contracts that were in effect as of November 2, 2017.  The TCJA also revised the definition of “covered officers” to now include anyone who has served as our Chief Financial Officer, Chief Executive Officer, and the three other highest paid named executive officers in any fiscal year beginning after December 31, 2016.



Because of the lack of regulatory guidance regarding the interpretation of Code Section 162(m) and the transition relief rule, we cannot assure that payments previously intended to qualify for the performance-based exception will actually qualify.  We reserve the right to modify compensation that was initially intended to be exempt from Code Section 162(m) if we determine that such modifications are consistent with our business needs.  In addition, we may continue to award payments in the future that are not deductible under Code Section 162(m) if such payments are necessary to achieve our compensation objectives and to protect shareholder interests.

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Compensation Committee Process for Determining Executive Compensation



A substantial amount of the Committee’s annual cycle of work relates to the determination of compensation for our executive officers, including our Chief Executive Officer.  Generally, during or prior to the first quarter of our fiscal year, the Committee makes determinations of base cash compensation, incentive compensation percentages for the year, and equity grants for executive officers, including our Chief Executive Officer.  For a discussion of each individual element of compensation and how it is specifically determined, refer to “Compensation Program Elements” below.



Although many compensation decisions are made near the beginning of the first quarter of the fiscal year, our compensation planning process is not a rigid yearly process with fixed beginning and end points.  Rather, compensation decisions are designed to promote our compensation philosophy and principles throughout the year.  The Committee believes that evaluation of executive performance, business and succession planning, and consideration of our business environment are year-round processes, and the Committee members monitor these as such.



Our Chief Executive Officer is not permitted to be present during deliberations or voting on his compensation.  During this process, the Committee reviews and approves any new corporate goals and objectives with respect to compensation for our Chief Executive Officer.  In light of the established goals and objectives, the Committee evaluates the performance of the Chief Executive Officer and, based upon these evaluations, sets the Chief Executive Officer’s compensation.  The Compensation Committee also reviews and approves on an annual basis the evaluation and compensation structure for the Company’s other executive officers, including approval of salary, bonus, incentive, and equity compensation.  Our Chief Executive Officer is present and provides input at the meetings and deliberations on the compensation of the Company’s other executive officers but is not permitted to be present at the vote.



Compensation Program Elements



In fiscal 2017, our NEOs received the following elements of compensation:













The Committee carefully considered and chose each compensation program element as a critical component in a comprehensive “total compensation” package.  Each element is intended to reward and motivate executives in different ways consistent with our overall compensation principles and philosophy.  Each of the elements has a critical relationship with one another with each focusing on and rewarding different areas.  These elements are necessary for us to achieve our compensation program objectives.

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Salary is utilized to compensate our executive officers for services rendered during the fiscal year.  The Committee annually reviews and approves the compensation package of each NEO, including salary.  The Committee considers an individual’s qualifications and experience in setting an executive’s salary.  In determining salary increases, the Committee considers the size and responsibility of the individual’s position and the individual’s overall performance and future potential.  The Committee considers these factors subjectively in the aggregate.  Because the Committee believes that each of the factors is significant, the Committee does not assign a formula weight to any single factor in determining a salary increase.



Please refer to the “Salary” column in the Summary Compensation Table on page 29 for more information on each NEO’s salary for fiscal 2017.





Non-equity incentive compensation (“IC”) for our NEOs is determined under our Incentive Compensation Plan (the “IC Plan”).  Our IC Plan is designed to provide a competitive cash compensation program for recruiting and retaining executive talent and a short-term incentive and reward program that aligns pay with performance and motivates our executives to achieve results.  Shareholders approved the terms of our IC Plan, which is designed to satisfy the provisions of Section 162(m) of the Internal Revenue Code at the 2017 Annual Meeting of Shareholders. 



When setting IC, the Committee considers individual and corporate performance, levels of responsibility, prior experience, breadth of knowledge and competitive pay practices.  The Committee considers these factors subjectively in the aggregate.  IC is based on base salary and a corresponding percentage of all IC payouts if Company performance goals are met.  Payment of IC is prorated based on the performance level achieved.  The Committee establishes the financial performance goals under the IC Plan for the fiscal year.  These goals are generally determined near the beginning of the year and are based on an analysis of historical performance and growth expectations for our business, expectations of the public markets, and progress toward achieving our long-range strategic plan for the business.



Messrs. J. Brooks, Robertson, Simms, Dixon, Wortham, Staude and McDonald were eligible to receive IC under the IC Plan.  The cash incentive was based on a percentage of base salary if performance goals were met for the year. 



The Committee determined that the performance criteria for IC in fiscal 2017 would be based upon the Company’s adjusted operating income for all participants. Adjusted operating income was based on the Company’s actual operating income, less any expenses attributable to the IC Plan, unrelated bonus compensation, and the grants of restricted shares and stock options to employees. The Committee has the discretion to exclude gains or losses resulting from extraordinary events in calculating the adjusted operating income. For fiscal 2017, the threshold was set at 85% of the target and the maximum was set at 120% of the target. 



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The Committee approved the following threshold, target and maximum payouts based on specified levels of adjusted operating income:













No IC payments were to be made if we did not meet our threshold performance target.  No IC payments were to be made if the executive was not employed by the Company on the date of payment. When the performance results fall somewhere between the threshold and target amounts or between the target and maximum amounts, the payout is prorated accordingly.  The Committee believes that the fiscal 2017 goals represented an appropriate and substantial degree of difficulty for achieving a payout.



At year end, the Committee reviewed the Company’s operating income and determined the extent to which objectives were met. The Committee exercised its discretion to exclude from adjusted operating income certain extraordinary expenses for participants who remained employed at the time of payment of the IC. Subject to the foregoing, the actual 2017 IC payouts were based on achievement at the Company level of the target level.





The Committee believes that equity-based compensation opportunities encourage a high level of long-term performance that enhances shareholder value, thereby further linking leadership and shareholder objectives.  Equity compensation is intended to motivate our NEOs to contribute to our future growth and profitability and to reward performance in a manner that:







Equity compensation is granted to our NEOs under our 2014 Omnibus Incentive Plan.  The Committee determines

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the award opportunity level for each NEO based on the individual’s responsibility level and potential with our Company, competitive practices, the number of shares available for grant, business needs, individual and Company performance, and the market price of our common stock.



In 2017, we awarded stock options to NEOs in the amounts set forth in the Summary Compensation Table and Grants of Plan-Based Awards Table found below beginning on page 29. 





The “All Other Compensation” column in our Summary Compensation Table on page 29 primarily consists of these items:









We sponsor a qualified retirement and 401(k) plan for eligible employees (the “Retirement Plan”).  The Retirement Plan allows NEOs to defer a portion of their total cash compensation (up to IRS limits) into this retirement account on a pre-tax basis.  Our NEOs do not receive a Company match on any money they defer into the Retirement Plan.  We make an annual contribution into the Retirement Plan for eligible employees, including NEOs, of three percent of applicable salary. 



These annual employer contribution amounts to NEOs are included in the Summary Compensation Table’s “All Other Compensation” column on page 29 below.





We provide Messrs. J. Brooks, Robertson, Simms, Dixon and Wortham with basic group term life insurance with a death benefit of $150,000. This is a relatively inexpensive benefit that we offer to our executives.  This element of compensation, though relatively small, provides one additional item to the overall compensation package which strengthens our ability to recruit and retain talented executives.



We also provided Mr. McDonald with an individual term life insurance policy that has death benefits of $500,000, to be paid to his beneficiary in the event of his death.



For specific premium amounts paid, please refer to the Summary Compensation Table’s “All Other Compensation” column and footnotes below on page 29.





We have entered into employment agreements with each of Messrs. J. Brooks and Simms, and had an employment agreement with Mr. McDonald until it was terminated when he resigned on January 12, 2017.  For a discussion of these agreements, please refer to “Agreements with NEOs and Potential Payments upon Termination or Change in

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Control” beginning on page 37 below.    





In addition to the compensation and benefits programs discussed in this proxy statement, we offer our employees, including our NEOs, a comprehensive benefits program.  This program is designed to provide the employees and their families with competitive coverage at competitive rates.  We strive to provide the employees with appropriate health benefits (medical, pharmacy, dental, and vision) to help protect the physical, mental, and financial health of our employees and their immediate families.

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Summary Compensation Table



The following table sets forth certain information regarding compensation paid during the Company’s last complete fiscal year to the Company’s named executive officers (“NEOs”) for the 2017 fiscal year.  For a discussion of the various elements of compensation provided in the table below, please refer to the discussion of our various compensation elements in our Compensation Discussion & Analysis under the heading “Compensation Program Elements” beginning on page 23 above.

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SUMMARY COMPENSATION TABLE FOR FISCAL YEAR 2017







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With respect to the above performance based awards, we did not achieve a level of performance required to vest the awards noted above and during each vesting period we did not consider the achievement of the performance criteria probable.



For a discussion of the assumptions made in the valuation of the dollar amount recognized, please refer to the Share-based Compensation Note to the Company’s financial statements, which are set forth in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017.  The amounts reflected are for the grant date fair value of RSUs and PSUs granted and do not necessarily correspond to the actual value that will be recognized by the NEOs upon vesting.





2015, for Mr. McDonald:  $26,344, reflecting life insurance premiums paid by the Company and $10,563, reflecting employer contributions to the 401(k) retirement plan.  For Mr. M. Brooks, includes $90,000 reflecting payment for his services as Chairman of the Board of Directors.



2016, for Mr. McDonald:  $26,344, reflecting life insurance premiums paid by the Company and $10,488, reflecting employer contributions to the 401(k) retirement plan.  For Mr. M. Brooks, includes $90,000 reflecting payment for his services as Chairman of the Board of Directors.



2017, for Mr. McDonald:  $338,400 of severance payments and $564, reflecting employer contributions to the 401(k) retirement plan.  For Mr. M. Brooks, includes $90,000 reflecting payment for his services as Chairman of the Board of Directors. 







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Grants of Plan-Based Awards for Fiscal Year 2017



The following table provides certain information concerning each grant of an award made to the listed officers in the last completed fiscal year under any plan.  For more information on the grants represented in the table, please refer to the discussions in our Compensation Discussion & Analysis under the headings “Non-Equity Incentive Compensation” beginning on page 24 and “Equity Compensation” beginning on page 25.



GRANTS OF PLAN-BASED AWARDS TABLE FOR FISCAL YEAR 2017









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Outstanding Equity Awards at Fiscal Year-End Table



The following table provides information concerning unexercised options, shares that have not vested, and equity incentive plan awards outstanding as of the end of the last completed fiscal year:



OUTSTANDING EQUITY AWARDS AT FISCAL 2017 YEAR-END





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Option Exercises and Stock Vested Table



The following table provides information concerning stock option exercises and vested RSUs as of the end of the last completed fiscal year:



2017 OPTION EXERCISES AND STOCK VESTED TABLE