SCHEDULE: Duluth Holdings CEO Boosts Stake to 7.3% with Equity Grant

Duluth Holdings Inc. CEO Stephanie L. Pugliese increased her beneficial ownership to 7.3% of Class B Common Stock following a significant equity grant tied to her employment agreement.

Summary

• Stephanie L. Pugliese, President and CEO of Duluth Holdings Inc., now beneficially owns 2,477,160 shares of Class B Common Stock.
• This represents 7.3% of the company's outstanding Class B Common Stock.
• The increase in ownership is primarily due to a grant of 730,159 shares of Common Stock on March 23, 2026.
• This grant was made in accordance with the First Amendment to her Employment Agreement (effective March 9, 2026) and a Restricted Stock Agreement (effective March 23, 2026).
• The 730,159 granted shares will vest ratably over three years on March 23, 2027, March 23, 2028, and March 23, 2029, contingent on her continuous employment.
• Ms. Pugliese also serves as a member of the Board of Directors.
• She has sole voting power over all 2,477,160 shares and sole dispositive power over 543,980 shares.
• The calculation of 7.3% is based on 34,129,143 shares outstanding, including 33,398,984 shares outstanding as of March 19, 2026, plus the 730,159 newly issued shares.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this as a moderately positive development, as it strengthens the alignment between the CEO's interests and long-term shareholder value through performance-based equity, while also securing key talent with robust restrictive covenants.

Positives

• Increased alignment of CEO's interests with shareholders through a significant equity grant.
• The equity grant is performance-based and vests over three years, incentivizing long-term commitment and performance.
• The employment agreement includes robust restrictive covenants (confidentiality, non-competition, non-solicitation) protecting the company's intellectual property and competitive position.

Risks

• Forfeiture of unvested stock if employment is terminated for any reason prior to vesting dates.
• Potential impact on executive retention if performance metrics for future annual grants are not met or if the equity incentive plan is not competitive.
• The company's ability to enforce restrictive covenants (non-compete, non-solicitation) could be challenged, though the agreement specifies Wisconsin law and injunctive relief.

Future Outlook

Ms. Pugliese is eligible to receive annual grants of equity compensation in the future, contingent on her performance review and specific performance metrics determined by the Board or Compensation Committee, aligning her incentives with the company's long-term success.

Management Comments

• Ms. Pugliese holds an aggregate of 2,477,160 shares of Common Stock, including 730,159 shares of Common Stock granted by the Issuer to Ms. Pugliese on March 23, 2026 in accordance with the terms of the First Amendment to Employment Agreement.
• The Issuer granted to Ms. Pugliese an aggregate of 730,159 shares of Common Stock in connection with her employment as President and Chief Executive Officer of the Issuer.
• Pursuant to the Employment Agreement, Ms. Pugliese is eligible to receive an annual grant of equity compensation to be based on annual results of her performance review and certain performance metrics as determined by the Board and/or the Compensation Committee of the Board.

Industry Context

StockSavvy.ai notes that increasing executive ownership through performance-based equity grants is a common practice in the retail apparel industry to align leadership incentives with shareholder value creation. This move by Duluth Holdings Inc. reinforces its commitment to retaining key talent and driving long-term strategic objectives in a competitive market.

Comparison to Industry Standards

• The three-year ratable vesting schedule for restricted stock is a standard practice in executive compensation across various industries, including retail, similar to programs seen at companies like Lululemon Athletica Inc. or Gap Inc., designed to encourage long-term retention and performance.
• The inclusion of comprehensive restrictive covenants, such as non-competition and non-solicitation clauses, is typical for C-suite executives in the retail sector, comparable to agreements at competitors like Columbia Sportswear Company or VF Corporation, to protect proprietary information and customer relationships.
• A CEO holding 7.3% of Class B Common Stock represents a significant insider stake, which is generally viewed positively by investors as it indicates strong confidence and alignment with company performance, often exceeding average CEO ownership percentages in similarly sized public companies.

Corporate Governance

Stakeholder Impact

• Shareholders: Increased alignment with CEO's long-term interests, potential for improved performance due to incentive structure.
• Employees: Reinforces stability at the top leadership, but also highlights strict non-solicitation clauses for key personnel.
• Competitors: The non-compete clause for the CEO aims to protect the company's market position and intellectual property.

Next Steps

• Ms. Pugliese's restricted stock will vest in three annual installments on March 23, 2027, March 23, 2028, and March 23, 2029, subject to continuous employment.
• Future annual grants of equity compensation are anticipated, based on performance reviews and metrics determined by the Board or Compensation Committee.

Key Dates

Recommendation

The filing primarily details an expected executive compensation event, increasing the CEO's beneficial ownership and aligning her incentives with long-term company performance. While positive for corporate governance and executive retention, it does not present new information that would fundamentally alter the company's valuation or immediate prospects to warrant a 'buy' or 'sell' recommendation. It reinforces a stable leadership structure, suggesting a 'hold' position for existing investors.

Keywords

Duluth Holdings Inc., DLTH, Schedule 13D, Beneficial Ownership, Stephanie L. Pugliese, CEO, Equity Grant, Restricted Stock, Executive Compensation, Corporate Governance, Insider Ownership, Employment Agreement, Retail Apparel