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- To Be Held On May 10, 2018
5, 2022
By Thursday, March 29, 2018, we will have completed mailing www.proxyvote.com.
GENERAL INFORMATION | |||||
PROPOSAL ONE: ELECTION OF DIRECTORS | |||||
2021 EXECUTIVE COMPENSATION | |||||
I. Executive Summary | |||||
II. Compensation Philosophy | |||||
III. Key Compensation Practices | |||||
IV. Elements of Executive Compensation | |||||
V. Additional Compensation Policies and Practices | |||||
VI. Compensation Process | |||||
VII. Named Executive Officer | |||||
PROPOSAL TWO: ADVISORY VOTE ON THE COMPENSATION OF NAMED EXECUTIVE OFFICERS | |||||
PROPOSAL THREE: RATIFICATION OF THE SELECTION OF INDEPENDENT AUDITORS | |||||
PROPOSAL FOUR: APPROVAL OF THE 2022 EQUITY INCENTIVE PLAN | |||||
OTHER INFORMATION | |||||
APPENDIX A: C.H. ROBINSON WORLDWIDE, INC. 2022 EQUITY INCENTIVE PLAN | |||||
March 29, 2018
FOR THE
2018 2022 ANNUAL MEETING OF SHAREHOLDERS
5, 2022
25, 2022.
1
Shares are counted as present at the Annual Meeting if either the shareholder is present and votes during the Annual Meeting, or has properly submitted a proxy by mail, by telephone, or by internet. In order toTo achieve a quorum and conduct business at the Annual Meeting, a majority of our issued and outstanding Common Stock as of March 14, 2018,9, 2022, must be present and entitled to vote. If a quorum is not represented at the Annual Meeting, the shareholders and proxies entitled to vote will have the power to adjourn the Annual Meeting until a quorum is represented.
2022 Proxy Statement | 1 |
•Online: You can vote your shares at www.proxyvote.com. You may access this website 24 hours a day, and voting is available through 11:59 p.m. Eastern Time on Wednesday, May 4, 2022. You will need your 16-digit control number that was included in the notice that was mailed to you. The voting website has easy-to-follow instructions and allows you to confirm that the system has properly recorded your votes. If your shares are held beneficially, please follow the internet voting instructions in the notice you received from your bank, broker, trustee, or other record holder. •By Telephone: You can vote your shares by telephone. To vote your shares by telephone, please go to www.proxyvote.com and log in using your 16-digit control number provided on your notice. At that website, you will be provided with a telephone number for voting. Alternatively, if you request paper copies of the proxy materials, your proxy card or voting instruction form will have a toll-free telephone number that you may use to vote your shares. Telephone voting is available through 11:59 p.m. Eastern Time on Wednesday, May 4, 2022. When you vote by telephone, you will be required to enter your 16-digit control number, so please have it available when you call. As with online voting, you will be able to confirm that the system has properly recorded your votes. • |
Shareholders logging in with their 16-digit control number will be able to ask questions at any time during the Annual Meeting. Relevant questions related to business being conducted at the Annual Meeting will be answered following the adjournment of the Annual Meeting, and the company will prioritize questions that relate to the proposals considered at the Annual Meeting. If a shareholder asks general questions about C.H. Robinson, a representative of the company will respond to the shareholder following the adjournment of the Annual Meeting. Shareholders can learn more information about how to access the Annual Meeting by visiting www.virtualshareholdermeeting.com/CHRW2022.
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2 | 2022 Proxy Statement |
With regard to
With regard to
2022 Proxy Statement 3 In November 2017, we receivedaany shareholder proposal and, that shareholder proposal is described in detail within this Proxy Statement. Asas of the date of this Proxy Statement, except for the shareholder proposal and the other matters described in this Proxy Statement, neither the company nor the Board of Directors knows of any otherno business that will be presented for consideration at the Annual Meeting.Meeting other than the matters described in this Proxy Statement. If any other matters are properly brought before the Annual Meeting, the persons named in the proxy card will have discretionary authority to vote on such matters and will vote according to their best judgment.3
4 | 2022 Proxy Statement |
The director
11, following Messrs. Fortun and Short’s retirements.
John P. WiehoffBiesterfeld and Ben G. Campbell will vote the proxies received by them for the election of Ms.director nominees Anderson, Biesterfeld, Crawford, Gokey, Goodburn, Guilfoile, Kozlak, Maier, Stake, Tolliver, and Ms. Kozlak, and Messrs. Anderson, Ezrilov, Fortun, Gokey, Short, Stake, and WiehoffWinship unless otherwise directed. If any nominee becomes unavailable for election at the Annual Meeting, John P. WiehoffMr. Biesterfeld and Ben G.Mr. Campbell may vote for a substitute nominee at their discretion as recommended by the Board of Directors.
Directors, subject to the terms of the cooperation agreement with the Ancora Group described below.
2022 Proxy Statement | 5 |
Scott P. Anderson (Director Nominee) | Scott P. Anderson, |
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Alliance, and has served on the board of the directors of the Ordway Theater. Mr. Anderson is a trustee of Gustavus Adolphus |
Mr. Anderson has significant public company senior management and executive experience through his service in several senior leadership positions at Patterson Companies. He also has public company board experience, having served as a member of Patterson’s | ||
Robert (Director Nominee) | Robert Mr. Biesterfeld has over 20 years of experience with C.H. Robinson, including roles in |
6 | 2022 Proxy Statement |
Kermit R. Crawford (Director Nominee) | Kermit R. Crawford, 62 years |
|
Mr. Crawford has significant executive and leadership experience based on his senior roles with Rite Aid Corporation and Walgreens. He has also developed expertise in the areas of strategic investment and digital transformation. Mr. Crawford has relevant public company board experience through his membership on the boards of | ||
5
Timothy C. Gokey (Director Nominee) | Timothy C. Gokey, |
Engineering from Princeton University. Through his service as president and chief operating officer of Broadridge Financial Solutions, Mr. Gokey has developed exceptional leadership and execution skills and has broad public company knowledge and expertise. He is also deeply involved in Broadridge’s international operations and technology organization. In his prior roles with Broadridge, as well as H&R Block and McKinsey & Company, Mr. Gokey has demonstrated expertise in the areas of mergers and acquisitions, sales and marketing, and other | ||
2022 Proxy Statement | 7 |
Mark A. Goodburn (Director Nominee) | Mark A. Goodburn, 59 years old, has been nominated to serve on C.H. Robinson Board of Directors for election at the Annual Meeting. Mr. Goodburn has served as Senior Advisor to KPMG LLP since 2021. From 2011 to 2021, Mr. Goodburn was Chairman and Global Head of Advisory for KPMG International, a multinational professional services network. He was a member of the KPMG International executive team and held top executive responsibilities for their consulting and deal advisory businesses. From 2018 to 2021, Mr. Goodburn also held the role of Global Head of Strategic Investments and Innovation. Mr. Goodburn previously held various positions including Vice Chairman of KPMG LLP and Americas Head of Advisory and Strategic Investments from 2005 to 2011, Managing Partner-Silicon Valley, Member of KPMG US and Americas Board of Directors and Global Head of KPMG’s Technology, Media and Telecommunications line of business at differing times between 1997 to 2005. Mr. Goodburn held numerous other roles of increasing responsibility at KPMG LLP from 1984 to 1997. Mr. Goodburn received a Bachelor of Science in Business from Minnesota State University, Mankato. Mr. Goodburn is also a Certified Public Accountant. Mr. Goodburn has significant executive and leadership experience based on his senior leadership roles with KPMG. Mr. Goodburn has significant experience and expertise in the areas of strategy, finance, mergers and acquisitions and global management and operations. | ||||
Mary J. Steele Guilfoile (Director Nominee) | Mary J. Steele Guilfoile, |
Ms. Guilfoile is also a Certified Public Accountant. Ms. Guilfoile has significant experience and expertise in the areas of corporate mergers and acquisitions, business integration, and financing through her association with the investment banks of several large financial institutions. She also has public board experience through her membership on the boards of Interpublic, Hudson, and | |||||
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8 | 2022 Proxy Statement |
Jodee A. Kozlak (Director Nominee) | Jodee A. Kozlak, |
Thomas. Through her | |||||
| |||||
Henry J. Maier (Director Nominee) | Henry J. Maier, 68 years old, |
Michigan. Throughout his career at FedEx, Mr. | |||||
2022 Proxy Statement | 9 |
James B. Stake (Director Nominee) | James B. Stake, |
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Pennsylvania and a Bachelor of Science in Chemical Engineering from Purdue University. Throughout his career at 3M Company, Mr. Stake gained extensive public company senior management experience at a large company that operates worldwide. In particular, Mr. Stake’s foreign leadership positions and his position with 3M's Enterprise Services, | |||||
| |||||
Paula C. Tolliver (Director Nominee) | Paula C. Tolliver, 57 years old, Ms. Tolliver has significant experience and expertise in the areas of information technology and innovation. She also has demonstrated the ability to successfully lead a service business. Ms. Tolliver meets the definition of an “Audit Committee Financial Expert” as established by the Securities and Exchange Commission. | ||||
10 | 2022 Proxy Statement |
Henry W. “Jay” Winship (Director Nominee) | Henry W. “Jay” Winship, 54 years old, joined C.H. Robinson as a director |
the University of Arizona. Mr. Mr. Winship has | |||||
Board Diversity Matrix (As of March 22, 2022) | ||||||||
Female | Male | |||||||
Total Number of Directors | 12 | |||||||
Part I: Gender Identity | ||||||||
Directors | 3 | 9 | ||||||
Part II: Demographic Background | ||||||||
African American or Black | 0 | 1 | ||||||
White | 3 | 8 |
The Board of Directors recommends a vote FOR the election of Scott P. Anderson, Robert Ezrilov, Wayne M. Fortun, Timothy C. Gokey, Mary J. Steele Guilfoile, Jodee A. Kozlak, Brian P. Short, James B. Stake, and John P. Wiehoff as directors of C.H. Robinson Worldwide, Inc.
The Board of Directors recommends a vote FOR the election of Scott P. Anderson, Robert C. Biesterfeld Jr., Kermit R. Crawford, Timothy C. Gokey, Mark A. Goodburn, Mary J. Steele Guilfoile, Jodee A. Kozlak, Henry J. Maier, James B. Stake, Paula C. Tolliver, and Henry W. "Jay" Winship as directors of C.H. Robinson Worldwide, Inc. |
2022 Proxy Statement | 11 |
8
During 2017,2021, the Board of Directors held fourfive meetings. Each director holding office during the year attended at least 75 percent75% of the aggregate of the meetings of the Board of Directors (held during the period for which he or she had been a director) and the meetings of the Committeescommittees of the Board on which he or she served (held during the period for which he or she served)served on a committee).
Our
| Audit | Talent & Compensation | Governance | Capital Allocation and Planning | |||||||||||||
Scott P. Anderson | (1) | x | Chair | ||||||||||||||
| |||||||||||||||||
| x | ||||||||||||||||
| Biesterfeld Jr. | x | |||||||||||||||
Kermit R. Crawford(1) | x | x | |||||||||||||||
Wayne M. Fortun(1) | x | x | |||||||||||||||
Timothy C. Gokey(1) | x | x | |||||||||||||||
Mary J. Steele Guilfoile(1) | x | x | |||||||||||||||
Jodee A. Kozlak(1) | Chair | x | |||||||||||||||
Henry J. Maier(1) | x | x | |||||||||||||||
| Brian P. Short(1) | x | |||||||||||||||
| x | ||||||||||||||||
James B. Stake | (1) | Chair | x | ||||||||||||||
Paula C. Tolliver(1) | x | x | |||||||||||||||
Henry W. "Jay" Winship(1) | x | Chair |
Our Board of Directors is led by John P. Wiehoff,
As stated in our Corporate Governance Guidelines, the Board believes it is beneficial to have flexibility in allocating the responsibilities of the offices of chairman and of chief executive officer in the manner the Board determines to be in the best interests of the company. When the Board appointed Mr. Wiehoff as chairman, it considered numerous factors, including the benefits to the decision-making process with a leader who fills both offices, the significant operating experience and qualifications of Mr. Wiehoff, the importance ofin-depth C.H. Robinson knowledge to optimize board leadership, the size and complexity of our business, and the significant business experience and tenure of many of our directors.
The Board does not have a “lead director.” However, under our Corporate Governance Guidelines, the Chair of the Governance Committee is expected to preside at the executive sessions of the independent directors, coordinate and develop the agenda for those executive sessions, act as a liaison between the independent directors and management, and handle responses to shareholder inquiries that are directed to the independent directors. Mr. Anderson serves as the Chair of the Governance Committee.
Board.
9
assist it in this oversight function,Management is responsible for our Enterprise Risk Management ("ERM") program, which includes key risk identification, mitigation efforts, day-to-day management, and communication to the vice president of risk ofAudit Committee. The ERM program allows the company presents ato evaluate risks and their potential impact to the company based on multiple factors, including but not limited to business conditions, company capabilities, and risk management update at eachtolerance. The ERM program is facilitated by the company's Internal Audit Department and consists of the quarterly Audit Committee meetings. In addition,identifying and classifying risks, enlisting risk owners, facilitating risk mitigation efforts, and communicating results to senior management and the Audit Committee. Changes in
12 | 2022 Proxy Statement |
has oversight of ethics and compliance, risk management, cybersecurity and data privacy.
2022 Proxy Statement | 13 |
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(1)Reviewing the performance of the chief executive officer;
14 | 2022 Proxy Statement |
2021.
www.chrobinson.com.
directors.
11
management. The Governance Committee will also consider shareholder recommendations for director nominees using the same selection criteria and qualifications as nominees identified by other sources, as described below. The Governance Committee may also engage search firms to assist in the director recruitment process.
2022 Proxy Statement | 15 |
No candidates for director nominations were submitted to the Governance Committee by any shareholder for the 2018 Annual Meeting.
In 2017, each independent director
16 | 2022 Proxy Statement |
Compensation Element | Compensation Amount ($) | |||||||
Non-Employee Director Compensation: | ||||||||
Annual Cash Retainer | $110,000 | |||||||
Annual Equity Award (RSUs) | 175,000(1) | |||||||
Independent Chairman of the Board Additional Cash Retainer | 100,000 | |||||||
Committee Service Compensation(2): | Chair | Member | ||||||
Audit Committee | $30,000 | $12,500 | ||||||
Governance Committee | 20,000 | 7,500 | ||||||
Talent & Compensation Committee | 20,000 | 7,500 |
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Governance and Compensation Committees each received an additional annual retainer of $20,000. Other members(2)Members of the AuditCapital Allocation and Planning Committee, received anincluding non-employee directors, do not earn additional annual retainer of $10,000, and other members of the Governance and Compensation Committees received additional annualcompensation for their participation.
The annual equity award is delivered in the form of fully vested restricted stock units that settle in shares of stock after the director leaves the Board of Directors.
In 2017, All directors are in compliance with the Board of Directors granted each director a fully vested restrictedcompany stock unit award valued at $135,000, deliverable after leaving the Board of Directors. ownership requirements.
Directors who are also employees of C.H. Robinson are not separately compensated for beingserving as a member of the Board of Directors.
2017
2022 Proxy Statement | 17 |
Name | Fees Earned or Paid in Cash | Stock Awards (1) | Total | |||||||||
Scott P. Anderson | $ | 105,000 | $ | 135,000 | $ | 240,000 | ||||||
Robert Ezrilov | 95,000 | 135,000 | 230,000 | |||||||||
Wayne M. Fortun | 105,000 | 135,000 | 240,000 | |||||||||
Timothy C. Gokey | 23,750 | (2) | 33,750 | 57,500 | ||||||||
Mary J. Steele Guilfoile | 95,000 | (3) | 135,000 | 230,000 | ||||||||
Jodee A. Kozlak | 90,000 | (2) | 135,000 | 225,000 | ||||||||
Brian P. Short | 95,000 | (2) | 135,000 | 230,000 | ||||||||
James B. Stake | 115,000 | (4) | 135,000 | 250,000 |
Name | Fees Earned or Paid in Cash | Stock Awards(1) | Total | Aggregate Number of Shares Subject to Stock Awards Outstanding as of December 31, 2021(2) | |||||||||||||
Scott P. Anderson | $ | 242,500 | $ | 120,000 | $ | 362,500 | 21,904 | ||||||||||
Kermit R. Crawford | 125,000 | 120,000 | 245,000 | 1,970 | |||||||||||||
Wayne M. Fortun | 125,000 | 120,000 | 245,000 | 18,663 | |||||||||||||
Timothy C. Gokey | 130,000 | (3) | 120,000 | 250,000 | 12,515 | ||||||||||||
Mary J. Steele Guilfoile | 125,000 | 120,000 | 245,000 | 13,620 | |||||||||||||
Jodee A. Kozlak | 137,500 | 120,000 | 257,500 | 17,645 | |||||||||||||
Brian P. Short | 130,000 | (3) | 120,000 | 250,000 | 44,626 | ||||||||||||
James B. Stake | 147,500 | 120,000 | 267,500 | 25,189 | |||||||||||||
Paula C. Tolliver | 130,000 | 120,000 | 250,000 | 8,443 |
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18 | 2022 Proxy Statement |
2017
Key
Our overall
We:
2022 Proxy Statement | 19 |
Compensation component considerationswe achieved above-target incentive payouts for our NEOs.
20 | 2022 Proxy Statement |
Element | Performance Period | Objective | Performance Measured/ Rewarded | ||||||||
Base | Annual | Attracts, retains, and rewards top talent and reflects an NEO's responsibilities, performance, leadership potential, succession planning, and relevant market data. | Provides NEOs with fixed compensation that serves as a vehicle to attract and retain. Rewards executives for key performance and contributions. Generally we target the |
Annual Cash Incentive | Motivates and rewards our executives for the achievement of financial performance and certain strategic goals for the company related to its transformation. | In 2021, the annual cash incentive |
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•Administrative Officers - Target opportunity varied from 70% to 85% of base salary and was based on enterprise APTI and MBOs, one specific to DEI. •For all executive officers the maximum annual incentive that may be •Threshold and |
Equity compensation is approximately 50 percent of the value of target total direct compensation (salary plus target annual incentive plus grant date fair value of equity awards) for our executives, and 62 percent of target total direct compensation for our CEO. Because equity compensation is a significant component, it is important that our equity compensation instruments are consistent with market practices and viewed as competitive for top executive talent.
Performance Stock Units (PSUs) | Long-Term | Aligns the interests of management and shareholders. | •Accounts for 50% of NEOs' equity grant value. •75% of PSUs are aligned to Earnings Per Share ("EPS"), whichaligns to business strategy for long-term performance, across varying market cycles and longer-term secular changes. EPS awards vest based on a cumulative 3-year measure. •25% of PSUs are aligned to budgeted adjusted gross profit which aligns to our •To reward for driving high levels of performance, participants may earn up to two times the number of shares granted. | ||||||||
Restricted Stock Units (RSUs) | Long-Term | Aligns the interests of management and shareholders.Supports our desire to retain our critical talent to drive our long-term business transformation. | •Accounts for 50% of NEOs' equity grant value. •RSUs have a vesting period of 3 years and a 1-year delayed distribution of shares. |
22 | 2022 Proxy Statement |
2017 Performance Highlights and Incentive Payouts
In 2017, challenging market conditions impacted our results. All NEOs are in compliance with the company stock ownership requirements.
CEO 2017 TARGET COMPENSATION Base Salary 17% Non-Equity Incentive 21% Equity Incentive 62% ISOs 50% Performance Shares 50% At-Risk Pay At-Risk Pay 83% NEO 2017 TARGET COMPENSATION Base Salary 31%Non-Equity Incentive 21% Equity Incentive 48% ISOs 50% Performance Shares 50% 31% At-Risk Pay 69%
15
costs. Margin compression in our North American Surface Transportation (“NAST”) business negatively impacted our net revenues. Asincentive compensation to the extent it, or a result, our NAST and enterprise performanceportion of it, was below our target performance goals. This resulted in below-target incentive payouts under our annual cash incentive plan for fourawarded, vested or paid based on the achievement of our NEOs, and lower vesting in our performance-based equity awards for all NEOs. Our enterprise APTI, which is the measure we used to determine annualnon-equity incentive payments for three of our NEOs in 2017, decreased 10 percent in 2017.
NAST APTI decreased 8 percent in 2017. This was primarilyfinancial results that were, within a year later, restated due to margin compression, partially offset by increased volumes. NAST APTI ismaterial non-compliance with any financial reporting requirement under securities laws that results from the performance measure for Mr. Biesterfeld, one of our 2017 NEOs.
2017 Global Forwarding APTI increased 13 percent. This was primarily due to an increaseexecutive's misconduct or supervisory or other failure.
Say On Pay
transactions in puts, calls or other derivative securities or hedging their investments in company stock.
What We Heard.... | How We Responded.... | ||||
Consider linking the payment of dividends to the vesting of underlying shares | Effective with our 2022 grant cycle, C.H. Robinson will no longer pay dividends on unvested shares | ||||
Consider, on a going-forward basis, having the treatment of equity awards that are assumed or converted following a change in control be double trigger | Effective January 1, 2022, C.H. Robinson has included a double trigger for time-based awards made after that date | ||||
Enhance disclosure regarding the clawback policy to demonstrate coverage of all current and former Section 16 officers and both cash and equity incentive compensation | C.H. Robinson currently has a clawback policy. We have included the language of this policy within our equity plan document and described the policy in this Proxy Statement | ||||
Consider disclosing a peer group that can be used to make executive compensation decisions | C.H. Robinson continues to explore the use of a formal peer group and we are considering this change for 2023 | ||||
Consider having more than a single, absolute metric under the long term incentive plan | In 2021, C.H. Robinson introduced a new Long Term Incentive Plan that has two performance measures: EPS and budgeted Adjusted Gross Profit | ||||
Consider the performance period for the long term incentive plan | In 2021, C.H. Robinson introduced a new Long Term Incentive Plan where the measure for EPS has a cumulative 3-year performance period |
2022 Proxy Statement | 23 |
Performance-based
plan.
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24 | 2022 Proxy Statement |
|
| |||||
We Do require approval of our executive compensation and incentive payouts | We Don't have guaranteed bonuses | |||||
We Do target pay opportunity that is generally aligned to the | ||||||
We Don't have supplemental pension or executive retirement plan (SERP) benefits | ||||||
We Do have the majority of pay | We Don't allow repricing of underwater options or stock appreciation rights without shareholder approval | |||||
We Do have the majority of annual incentive compensation performance metrics | We Don't allow hedging or pledging of company shares by our officers or directors | |||||
We Do have appropriate caps on incentive plan | We Don't allow discounted | |||||
We Do have double trigger change of control provisions in time-based equity awards made after January 1, 2022 | We Don't have single trigger change of control provisions in time-based equity awards | |||||
We Do have long-term incentives that are performance based | We Don't have executive only | |||||
We Do have long term incentive plan performance metrics that, one of which is multi-year, that reward management for scaling the business and creating profitable market share growth | We Don't allow transactions in company stock by our executive officers without pre-clearance | |||||
We Do have robust stock ownership guidelines and a minimum of a 1-year deferred delivery requirement for shares earned under equity awards | ||||||
We Do have a clawback policy | ||||||
We Do have our equity compensation subject to forfeiture and clawback if executive violates company employment agreements | ||||||
We Do have a Talent & Compensation Committee | ||||||
We Do have our Talent & Compensation Committee engage with an independent consultant | ||||||
We Do have our Talent & Compensation Committee regularly |
2022 Proxy Statement | 25 |
Base
NEO | Title | 2020 Base Salary | 2021 Base Salary | % Change | ||||||||||
Robert C. Biesterfeld Jr. | President and Chief Executive Officer | $ | 1,025,000 | $ | 1,075,000 | 5% | ||||||||
Michael P. Zechmeister | Chief Financial Officer | 710,000 | 725,000 | 2% | ||||||||||
Mac S. Pinkerton | President of NAST | 600,000 | 610,000 | 2% | ||||||||||
Arun D. Rajan(1) | Chief Product Officer | N/A | 800,000 | N/A | ||||||||||
Michael J. Short | President of Global Forwarding Freight | 540,000 | 550,000 | 2% | ||||||||||
September 1, 2021.
17
The Talent & Compensation Committee approves an individualized incentive compensation plan for each NEO early in the first quarter of the calendar year. NEO annual incentive compensation amounts are set as a percentage of their base salary, to reflect the executive’s responsibilities, performance, and contribution to overall company goals. The financial measure used to determine the financial component of annual incentive compensation is APTI.
APTI is a non-GAAP financial measure calculated as pre-tax net income adjusted for executive short-term incentives and the impact of acquisitions. See below for a reconciliation of APTI to pre-tax net income. APTI in a non-GAAP financial measure calculated as income before provision for income taxes adjusted for executive bonuses and unusual or extraordinary items. See below for a reconciliation of APTI to income before provision for income taxes. We believe growth in APTI is the appropriate measure for our annual cash incentive compensation because it rewards profitable growth, which is aligned with the interests of our shareholders.
26 | 2022 Proxy Statement |
2021 NEO Annual Incentive Compensation Financial Metrics ($ in 000's) | Threshold | Target | Maximum | Actual | |||||||||||||
Enterprise APTI(1) | $ | 480,705 | $ | 686,722 | $ | 824,066 | $ | 1,029,675 | (2) | ||||||||
North American Surface Transportation APTI(3) | 361,281 | 516,116 | 619,339 | 542,430 | |||||||||||||
Global Forwarding APTI(4) | 133,449 | 190,641 | 228,769 | 504,623 |
Reconciliation of APTI to income before provision for income taxes ($ in 000's) | Enterprise | NAST | Global Forwarding | ||||||||
APTI | $ | 1,029,675 | $ | 542,430 | $ | 504,623 | |||||
Less: Executive bonuses(1)(3)(4) | 7,521 | 692 | 796 | ||||||||
Less: Impact of unusual or extraordinary items (2) | (137) | — | — | ||||||||
Income before provision for income taxes | $ | 1,022,291 | $ | 541,738 | $ | 503,827 |
In 2017,MBOs to determine the Compensation Committee established these APTI targets based onlevel of payo
2017 NEO Annual Incentive Compensation Metrics | Target | Actual | ||||||
Enterprise APTI growth (1) | 7 | % | -10 | % | ||||
North America Surface Transportation APTI growth (2) | 7 | % | -8 | % | ||||
Global Forwarding APTI growth (3) | 10 | % | 13 | % |
2022 Proxy Statement | 27 |
Incentive compensation plans are reviewed annually. TheNon-Equity Incentive Plan Compensation column of the Summary Compensation Table on page 27 contains the annual incentive compensation earned for 2017 for each of the NEOs.
18
component of meeting our compensation goals as outlined in our compensation philosophy above.philosophy. Our shareholder-approved 2013 Equity Incentive Planequity incentive plan is designed to give us flexibility to achieve these objectives. It allows us
NEO Awards
Equitycompensation philosophy is to pay for performance and reward profitable long-term growth. The metrics we use in our plan reward management for scaling the business and creating profitable market share growth. More specifically, EPS aligns to our business strategy for long-term performance, across varying market cycles and longer-term secular changes, and AGP aligns to our commitment to our customers and rewards management for profitable growth. We also shortened the vesting and delivery timeframes, which will make our program more attractive, retentive and market competitive.
Equity Mix | % of Award Value | Vesting | Vesting Indicator | |||||||||||
PSUs | 50% | Performance-based | 75% of PSUs tied to 3-year cumulative EPS growth | |||||||||||
25% of PSUs tied to annual adjusted gross profit growth | ||||||||||||||
RSUs | 50% | Time-based | 3-year ratable |
Equity awardsPSUs are reviewed and granted annually. The Stock Awards and Option Awards columnseligible to vest in each of the Summary Compensation Tablethree years within the three-year period based on page 27achievement of adjusted gross profit. For 2021, the threshold, target, and maximum were set at 0%, 11.3% and 13.3%, respectively, with the threshold set to recognize the uncertainty that existed coming out of the COVID-19 pandemic at the time the metrics were set. Based upon our adjusted gross profit growth of 30.7% in 2021, one-third of the PSUs tied to this measure vested at 200% of target.
28 | 2022 Proxy Statement |
grant and is then discounted because employees have a one year deferred delivery following the completion of vesting.
Granted Between 2016 and 2020 Earned or Outstanding in 2021
For performance share awards granted prior to 2013, the annual vesting percentage is equal to the average of the year–over–year percentage growth in income from operations2019 and diluted net income per share, plus 5 percentage points. In 2013, the Compensation Committee adjusted the equity vesting formula to better align it with the company’s long-range growth plan. 2020.
Performancepoints to 70% equates to the sum of 80% earned vesting in 2021.
Performance Vesting Year | 2011 Award | 2012 Award | 2013 Award | 2014 Award | 2015 Award | 2016 Award | 2017 Award | |||||||||||||||||||||
2012 | 24 | % | — | — | — | — | — | — | ||||||||||||||||||||
2013 | 0 | % | 0% | — | — | — | — | — | ||||||||||||||||||||
2014 | 17 | % | 17% | 25% | — | — | — | — | ||||||||||||||||||||
2015 | 20 | % | 20% | 25% | 25% | — | — | — | ||||||||||||||||||||
2016 | 5 | % | 5% | 12% | 12% | 12% | — | — | ||||||||||||||||||||
2017 | 0 | % | 1% | 9% | 9% | 9% | 9% | — | ||||||||||||||||||||
Total Cumulative Vesting | 66 | % | 43% | 71% | 46% | 21% | 9% | 0% | ||||||||||||||||||||
Years Left Available to Vest | 0 | 0 | 1 | 2 | 3 | 4 | 5 |
19
For awards made to NEOs in 20102016 through 2017,2020, we have a post-vest holding period whereby the standard delivery of theall vested shares occurs on the earlier of two years after termination of employment or after two years following the end of the five yearfive-year vesting period.period or two years after termination of employment. We believe thea delayed delivery two years after vesting or termination strengthens our employment agreements and aligns with shareholders’ interests.
Performance Vesting Year | 2016 Grant | 2017 Grant | 2018 Grant | 2020 Grant (1) | |||||||||||||
2017 | 9% | — | — | — | |||||||||||||
2018 | 43% | 43% | — | — | |||||||||||||
2019 | 0% | 0% | 0% | — | |||||||||||||
2020 | 0% | 0% | 0% | 0% | |||||||||||||
2021 | 48% | 57% | 80% | 80% | |||||||||||||
Total Cumulative Vesting | 100% | 100%(2) | 80% | 80% | |||||||||||||
Vesting Years Remaining | 0 | 1 | 2 | 3 |
Dividend equivalents are paid
2022 Proxy Statement | 29 |
shares under this award. The grant date fair value of each share-based award is established on the date of grant. For grants of performance shares anda restricted stock units, the fair value is established based on the market price of our common stock on the date of the grant, discounted for post-vesting holding restrictions.
Stock Options
C.H. Robinson awarded performance-based incentive stock options to executives, including the NEOs, in 2014. These awards contain performance-based vesting terms and conditions identical to the performance share grants made to our executives. As noted above, beginning in 2015, incentive stock options granted were time-based, vesting ratably over five years beginning in 2016 and 2017, respectively. For grants of incentive stock options, the fair valueunit award is established using the Black-Scholes option pricing model-protective put method.
We do not have a separate severance pay plan for NEOs.
| ||
| ||
| ||
| ||
|
20
Executive Stock Ownership Guidelines
In order to ensure alignment with our shareholders, the Compensation Committee has established stock ownership guidelines for our executive officers. The Compensation Committee believes that linking a significant portionnon-compete agreement and certain other agreements in favor of the executive officer’s personal holdings to the company’s success aligns our executive interests withcompany, for two years of continued post-employment vesting. For PSUs that of our shareholders. Therefore, executive officers are expected to acquire and hold a significant amount of C.H. Robinson stock. The Compensation Committee has established stock ownership guidelinesvest based on all shares of company stock deemed owned by an executive officer, which includes vested stock options, stock held in the company 401(k) plan, vested and unvested performance sharesAGP growth and restricted stock units,unit grants, if the NEO complies with the non-compete agreement and stock beneficially owned by the officer, including ownedcertain other agreements in a trust, by a spouse, or by dependent children, for our executive officers.
Our equity ownership guidelines for executive officers are as follows:
It is expected that new or recently promoted membersfavor of the executive teamcompany, the awards will achieve the appropriate level of ownership within five years of their appointment. As of the end of 2017, all the executive officers had met these ownership guidelines.
continue to vest post-employment for two additional years.
30 | 2022 Proxy Statement |
plans.
NEOs, including the aggregate incremental cost of the perquisites.
21
employees are eligible to contribute up to 50 percent75% of their cash compensation to the 401(k) plan, subject to Internal Revenue Service limitations. To support our compensation objectives, in 2021, the company currently matches 100 percentmatched 100% of the first 4 percent6% of eligible compensation that employees contributecontributed to the plan during the year.
2022 Proxy Statement | 31 |
Prior to the beginning of each calendar year,
At the February Compensation Committee
22
survey information from independent experts. For the past foureight years, the Talent & Compensation Committee engaged Aon’s Human Capital Solutions practice a division of Aon Hewitt plc (“Aon”)to present executive compensation market data and practices information to the Talent & Compensation Committee in preparation for determining and approving executive compensation. Typically,Given the digital transformation underway at the company, the Talent & Compensation Committee reviewsis continually assessing best practices related to the core components, general industry benchmark data every oneprinciples, and compensation philosophy needed to two years as provided by Aon Hewitt. The Compensation Committee does periodically plansupport its business strategies and to enhance long-term shareholder value creation. We will continue to seek independent consultative input and consideration of the company’s executive compensation as it continues to assess the company’s executive officer compensation practices.
Equity Compensation
In 2017, our NEOs were awarded performance shares and time-based stock options. Our chief executive officer presents equity recommendations to the Compensation Committee for our executive officers, excluding himself. The Compensation Committee determines the chief executive officer’s equity compensation award. The Compensation Committee approves the awards for each of the executive officers and approves the equity grants to all other recipients through theon these matters going forward.
32 | 2022 Proxy Statement |
NEO | Target Incentive as % of Base Salary | Maximum Incentive as % of Base Salary | % Tied to Enterprise APTI | % Tied to Division APTI | % Tied to MBO | ||||||||||||
Robert C. Biesterfeld Jr. | 150 | % | 300 | % | 100 | % | 0 | % | 0 | % | |||||||
Michael P. Zechmeister | 85 | % | 170 | % | 80 | % | 0 | % | 20 | % | |||||||
Mac S. Pinkerton | 80 | % | 160 | % | 30 | % | 50 | % | 20 | % | |||||||
Arun D. Rajan | 85 | % | 170 | % | 100 | % | 0 | % | 0 | % | |||||||
Michael J. Short | 80 | % | 160 | % | 30 | % | 50 | % | 20 | % |
2022 Proxy Statement | 33 |
NEO | % of Target Incentive Achieved(1) | Actual Enterprise APTI Growth % (2) | Actual Division APTI Growth % | MBO Achievement % | ||||||||||||||||
Robert C. Biesterfeld Jr. | 200 | % | 60 | % | N/A | N/A | ||||||||||||||
Michael P. Zechmeister | 180 | % | 60 | % | N/A | 97.5 | % | (3) | ||||||||||||
Mac S. Pinkerton | 142 | % | 60 | % | 14 | % | 95 | % | (4) | |||||||||||
Arun D. Rajan | 200 | % | (5) | 60 | % | N/A | N/A | |||||||||||||
Michael J. Short | 181 | % | 60 | % | 178 | % | 105 | % | (6) |
Named Executive Officers
NEO | Base Salary Paid | Cash Incentive Compensation | Total Cash | Equity Earned(1) | Total Realized Compensation | ||||||||||||
Robert C. Biesterfeld Jr. | $ | 1,066,346 | $ | 3,225,000 | $ | 4,291,346 | $ | 7,080,920 | $ | 11,372,266 | |||||||
Michael P. Zechmeister | 722,404 | 1,106,169 | 1,828,573 | 2,099,349 | 3,927,922 | ||||||||||||
Mac S. Pinkerton | 608,269 | 691,732 | 1,300,001 | 1,495,842 | 2,795,843 | ||||||||||||
Arun D. Rajan(2) | 261,539 | 462,027 | 723,566 | 1,192,530 | 1,916,096 | ||||||||||||
Michael J. Short | 548,269 | 796,400 | 1,344,669 | 1,594,200 | 2,938,869 |
The NEOs are all paid the same compensation elements. The determination of the other NEOs’ 2017 base salary, annual incentive compensation award,Time-Based Restricted Stock Units and equity compensation followed the practices explained above for executive compensation. Each member of this group is evaluated and his or her compensation is basedStock Options beginning on a number of different factors, including, but not limited page 28 pertaining
Chairmanactual vesting percentages earned.
John P. Wiehoff, Chairman, President, and Chief Executive Officer
The Compensation Committee annually conducts an evaluation14,590 RSUs upon his hire in 2021. Each of the chairman and chief executive officer’s performance. Based on this evaluation, the Compensation Committee determines base salary, annual incentive compensation, andthese equity compensation of the chairman and chief executive officer.
23
The Compensation Committee set John P. Wiehoff’s base salary at $1,167,000 in 2017. In 2017, Mr. Wiehoff earned annual incentive compensation of $871,475, which was paid in cash on February 28, 2018. The amount was calculated based on his annual incentive compensation agreement, as described in Section IV above. Mr. Wiehoff’s annual incentive compensation plan awarded compensation for the company’s achievement of APTI in certain ranges. Mr. Wiehoff’s 2017 incentive compensation decreased compared to 2016. This was primarily due to enterprise performance not attaining our 2017 target performance goal, which resulted in a below-target incentive payout.
John P. Wiehoff 2017 Incentive Compensation Plan
Base Salary | Target Incentive as % of Base Salary | Maximum Incentive as % of Base Salary | Enterprise Target Growth % | Enterprise Actual Growth % | ||||
$1,167,000 | 100% | 200% | 7% | -10% |
Total 2017 Realized Annual Compensation: The table below illustrates Mr. Wiehoff’s total realized compensation in 2017 of $3,790,502, an increase of 1.1 percent from 2016.
Salary | Nonequity Incentive | Total Cash | Equity Earned | Total Realized Compensation | ||||||||||||||||
2017 | $1,167,000 | $ 871,475 | $2,038,475 | $1,752,027 | $3,790,502 | |||||||||||||||
2016 | 1,167,000 | 937,270 | 2,104,270 | 1,645,457 | 3,749,727 | |||||||||||||||
2015 | 410,000 | 1,767,315 | 2,177,315 | 3,295,592 | 5,472,907 |
In December 2017 and pursuant to the 2013 Equity Incentive Plan, Mr. Wiehoff was granted 32,130 performance shares and 167,370 time-based incentive stock options with a combined grant date fair value of approximately $4.8 million, which is an increase of 13.7 percent over his 2016 grant date fair value. These shares and options are available to begingrants began vesting in 2018.
Andrew C. Clarke, Chief Financial Officer
Andrew C. Clarke joined the company on June 1, 2015. His 2017 annual base salary was $550,000. He earned annual incentive compensation of $230,004 for 2017 paid in cash on February 28, 2018. The increase in 2017 incentive compensation compared to 2016 was primarily the result of2021. In addition, Mr. Clarke’s base salary increase, andRajan receivenon-equityd 22,380 incentive target as a percent of base salary increase. This was offset by the fact that our company APTI growth did not obtain our target performance goal, which resulted in a below-target incentive payout.
Andrew C. Clarke 2017 Incentive Compensation Plan
Base Salary | Target Incentive as % of Base Salary | Maximum Incentive as % of Base Salary | Enterprise Target Growth % | Enterprise Actual Growth % | ||||
$550,000 | 70% | 140% | 7% | -10% |
Total 2017 Realized Annual Compensation: The table below illustrates Mr. Clarke’s total realized compensation in 2017 of $1,072,084, an increase of 13 percent over 2016.
Salary | Nonequity Incentive | Bonus | Total Cash | Equity Earned | Total Realized Compensation | |||||||||||||||||||
2017 | $ | 550,000 | $ | 230,004 | $ | 0 | $ | 780,004 | $ | 292,080 | $ | 1,072,084 | ||||||||||||
2016 | 525,000 | 210,826 | 0 | 735,826 | 213,071 | 948,897 | ||||||||||||||||||
2015 | 291,667 | 150,208 | 196,063 | 637,938 | 183,951 | 821,889 |
Mr. Clarke was awarded 6,080 performance shares and 31,720 time-based incentive stock options in 2017 pursuant to the 2013 Equity Incentive Plan. The grant date fair value of these awards was approximately
24
19.5 percent greater than those he received in 2016. These shares and options are available to begin vesting in 2018.
Robert C. Biesterfeld, Chief Operating Officer and President of North America Surface Transportation
The base salary for Robert C. Biesterfeld was $475,000 in 2017. He earned annual incentive compensation for 2017 of $245,848 paid in cash on February 28, 2018. The 2017 annual incentive compensation award decreased compared to 2016 award due to NAST APTI growth not attaining our target performance goal, which resulted in a below-target incentive payout.
Robert C. Biesterfeld 2017 Incentive Compensation Plan
Base Salary | Target Incentive as % of Base Salary | Maximum Incentive as % of Base Salary | North America Surface Transportation Target Growth % | North America Surface Transportation Actual Growth % | ||||
$475,000 | 80% | 160% | 7% | -8% |
Total 2017 Realized Annual Compensation: The table below illustrates Mr. Biesterfeld’s total realized compensation in 2017 of $1,002,450, an increase of 9.8 percent from 2016.
Salary | Nonequity Incentive | Total Cash | Equity Earned | Total Realized Compensation | ||||||||||||||||
2017 | $475,000 | $245,848 | $720,848 | $281,602 | $1,002,450 | |||||||||||||||
2016 | 450,000 | 250,378 | 700,378 | 212,795 | 913,173 | |||||||||||||||
2015 | 210,000 | 236,379 | 446,379 | 239,747 | 686,125 |
In 2017, Mr. Biesterfeld received 6,080 performance shares and 31,720 time-based incentive stock options pursuant to the 2013 Equity Incentive Plan. The grant date fair value of these awards represented a 9.5 percent increase in award value year-over-year. These shares and options are available to begin vesting in 2018.
Chad M. Lindbloom, Chief Information Officer
Chad M. Lindbloom’s base salary was $590,000 in 2017. He earned annual incentive compensation of $211,484 for 2017, which was paid in cash on February 28, 2018. Mr. Lindbloom’s annual incentive compensation agreement compensated him for the company achieving APTI in certain ranges. The decrease in 2017 incentive compensation compared to 2016 was primarily the result of company APTI growth not attaining our target performance goal, which resulted in a below-target incentive payout.
Chad M. Lindbloom 2017 Incentive Compensation Plan
Base Salary | Target Incentive as % of Base Salary | Maximum Incentive as % of Base Salary | Enterprise Target Growth % | Enterprise Actual Growth % | ||||
$590,000 | 60% | 120% | 7% | -10% |
Total 2017 Realized Annual Compensation: The table below illustrates Mr. Lindbloom’s total realized compensation in 2017 of $1,184,899, a decrease of 2.6 percent from 2016.
Salary | Nonequity Incentive | Total Cash | Equity Earned | Total Realized Compensation | ||||||||||||||||
2017 | $590,000 | $211,484 | $801,484 | $383,415 | $1,184,899 | |||||||||||||||
2016 | 590,000 | 236,928 | 826,928 | 390,183 | 1,217,111 | |||||||||||||||
2015 | 270,000 | 592,195 | 862,195 | 774,633 | 1,636,828 |
25
Mr. Lindbloom was awarded 6,080 performance shares and 31,720 time-based incentive stock options in 2017 pursuant to the 2013 Equity Incentive Plan. The grant date fair value of these awards was approximately 9.5 percent greater than those he received in 2016. These shares and options are available to begin vesting in 2018.
Michael J. Short, President of Global Freight Forwarding
In May of 2015, Michael J. Short was promoted to the role of president, Global Freight Forwarding. Mr. Short’s base salary in 2017 was $500,000. He earned $393,549 annual incentive compensation for 2017. The 2017 award increased 30 percent compared to 2016 due to Global Forwarding APTI surpassing target performance of 10 percent growth over 2016.
Michael J. Short 2017 Incentive Compensation Plan
Base Salary | Target Incentive as % of Base Salary | Maximum Incentive as % of Base Salary | Global Forwarding Target Growth % | Global Forwarding Actual Growth % | ||||
$500,000 | 70% | 140% | 10% | 13% |
Total 2017 Realized Annual Compensation: The table below illustrates Mr. Short’s total realized compensation in 2017 of $1,244,782, a 15.4 percent increase over 2016.
Salary | Nonequity Incentive | Total Cash | Equity Earned | Total Realized Compensation | ||||||||||||||||
2017 | $500,000 | $393,549 | $893,549 | $351,233 | $1,244,782 | |||||||||||||||
2016 | 500,000 | 302,724 | 802,724 | 275,940 | 1,078,664 | |||||||||||||||
2015 | 458,750 | 159,397 | 618,147 | 109,961 | 728,108 |
In 2017, Mr. Short received 5,400 performance shares and 28,190 time-based incentive stock options pursuant to the 2013 Equity Incentive Plan. These shares and options are available to begin vesting in 2018. The grant date fair value of these awards represented a 9.4 percent increase in award value year-over-year. Mr. Short received an additional time-based award of 9,460 restricted sharesRSUs upon his promotion in May 2015, whichhire that were 1/3 vested and the remaining 2/3 vest ratably over five years.
two calendar years beginning in 2022.
34 | 2022 Proxy Statement |
Recent tax reform legislation retained the $1.0 million deduction limit, but repealed the performance-based compensation exemption and expanded the definition of covered employees, effective for taxable years beginning after December 31, 2017, to include any person who served as a company’s chief executive officer or chief financial officer at any time during a taxable year, as well as any person who was ever identified as a covered employee in 2017 or any subsequent year. Consequently, compensation paid in 2018 and later to these covered employees in excess of $1.0$1 million will not be deductible unless it qualifies for transitional relief applicable to certain binding, written arrangements that were in place asour “covered employees”.
26
Summary Compensation Table
Name and Principal Position | Year | (1) Salary ($) | Bonus ($) | (2) Stock Awards ($) | (3) Option Awards ($) | (4) Non-Equity Incentive Plan Compensation ($) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) | (5) All Other Compensation ($) | Total ($) | |||||||||||||||||||||||||
John P. Wiehoff |
|
2017 |
|
|
$1,167,000 |
|
|
$ 0 |
|
|
$2,383,725 |
|
|
$2,383,349 |
|
|
$ 871,475 |
|
$0 |
|
$28,638 |
|
|
$6,834,187 |
| |||||||||
President and Chief Executive Officer | | 2016 2015 |
| | 1,167,000 410,000 |
| | 0 0 |
| | 2,369,215 2,016,057 |
| | 1,825,236 1,908,115 |
| | 937,270 1,767,315 |
| 0 0 | | 23,344 34,102 |
| | 6,322,065 6,135,589 |
| |||||||||
Andrew C. Clarke | 2017 | 550,000 | 0 | 451,075 | 451,693 | 230,004 | 0 | 10,800 | 1,693,572 | |||||||||||||||||||||||||
Chief Financial Officer | | 2016 2015 | | | 525,000 291,667 | | | 0 196,063 | | | 470,598 777,458 | | | 354,186 743,672 | | | 210,826 150,208 | | 0 0 | | 10,600 21,200 | | | 1,571,210 2,180,268 | | |||||||||
Robert C. Biesterfeld | 2017 | 475,000 | 0 | 451,075 | 451,693 | 245,848 | 0 | 10,800 | 1,634,416 | |||||||||||||||||||||||||
Chief Operating Officer and President- NAST | | 2016 2015 |
| | 450,000 210,000 |
| | 0 40,600 |
| | 470,598 403,626 |
| | 314,874 381,699 |
| | 250,378 236,379 |
| 0 0 | | 10,600 21,200 |
| | 1,496,450 1,293,504 |
| |||||||||
Chad M. Lindbloom | 2017 | 590,000 | 0 | 451,075 | 451,693 | 211,484 | 0 | 10,800 | 1,715,052 | |||||||||||||||||||||||||
Chief Information Officer | | 2016 2015 |
| | 590,000 270,000 |
| | 0 0 |
| | 470,598 429,048 |
| | 354,186 405,626 |
| | 236,928 592,195 |
| 0 0 | | 10,600 21,200 |
| | 1,662,312 1,718,069 |
| |||||||||
Michael J. Short | 2017 | 500,000 | 0 | 400,626 | 401,426 | 393,549 | 0 | 10,800 | 1,706,401 | |||||||||||||||||||||||||
President-Global Freight Forwarding | | 2016 2015 |
| | 500,000 458,750 |
| | 0 0 |
| | 418,020 895,546 | (6) | | 314,874 381,699 |
| | 302,724 159,397 |
| 0 0 | | 10,600 21,200 |
| | 1,546,218 1,916,592 |
|
27
Supplemental All Other Compensation Table
Name | Year | Perks and Other Personal Benefits | Tax Reimbursements | (1) Registrant Contributions to Defined Contributions | Insurance Premiums | Other | Total | |||||||||||||||
John P. Wiehoff | 2017 | $0 | $0 | $10,800 | $0 | $17,838 | (2) | $28,638 | ||||||||||||||
Andrew C. Clarke | 2017 | 0 | 0 | 10,800 | 0 | 0 | 10,800 | |||||||||||||||
Robert C. Biesterfeld | 2017 | 0 | 0 | 10,800 | 0 | 0 | 10,800 | |||||||||||||||
Chad M. Lindbloom | 2017 | 0 | 0 | 10,800 | 0 | 0 | 10,800 | |||||||||||||||
Michael J. Short | 2017 | 0 | 0 | 10,800 | 0 | 0 | 10,800 |
Dividend Equivalents Paid on Unvested Performance Shares
Name | Year | (1) Performance Shares | ||||
Unvested Shares | ||||||
John P. Wiehoff | 2017 | $162,989 | ||||
2016 | 195,417 | |||||
2015 | 175,719 | |||||
Andrew C. Clarke | 2017 | 36,624 | ||||
2016 | 26,313 | |||||
2015 | 12,021 | |||||
Robert C. Biesterfeld | 2017 | 26,652 | ||||
2016 | 25,845 | |||||
2015 | 16,112 | |||||
Chad M. Lindbloom | 2017 | 35,064 | ||||
2016 | 45,879 | |||||
2015 | 44,734 | |||||
Michael J. Short | 2017 | 35,046 | ||||
2016 | 34,910 | |||||
2015 | 20,289 |
28
Grants of Plan-Based Awards in 2017
Name of Executive | Grant Date | (1) Estimated Future Payouts UnderNon-Equity Incentive Plan Awards ($) | Estimated Future Payouts Under Equity Incentive Plan Awards (#) | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($/Sh) | (2) Grant Date Fair Value of Stock and Option Awards ($) | ||||||||||||||||||||||||||
Threshold | Target | Maximum | Threshold | Target | Maximum | |||||||||||||||||||||||||||
John P. Wiehoff | 12/6/17 | — | $ — | — | — | — | 32,130 | (3) | — | $ | — | $2,383,725 | ||||||||||||||||||||
12/6/17 | — | — | — | — | — | — | 167,370 | (4) | 87.15 | 2,383,349 | ||||||||||||||||||||||
0 | 1,167,000 | 2,334,000 | — | — | — | — | — | — | ||||||||||||||||||||||||
Andrew C. Clarke | 12/6/17 | — | — | — | — | — | 6,080 | (3) | — | — | 451,075 | |||||||||||||||||||||
12/6/17 | — | — | — | — | — | — | 31,720 | (4) | 87.15 | 451,693 | ||||||||||||||||||||||
0 | 385,000 | 770,000 | — | — | — | — | — | — | ||||||||||||||||||||||||
Robert C. Biesterfeld | 12/6/17 | — | — | — | — | — | 6,080 | (3) | — | — | 451,075 | |||||||||||||||||||||
12/6/17 | — | — | — | — | — | — | 31,720 | (4) | 87.15 | 451,693 | ||||||||||||||||||||||
0 | 380,000 | 760,000 | — | — | — | — | — | — | ||||||||||||||||||||||||
Chad M. Lindbloom | 12/6/17 | — | — | — | — | — | 6,080 | (3) | — | — | 451,075 | |||||||||||||||||||||
12/6/17 | — | — | — | — | — | — | 31,720 | (4) | 87.15 | 451,693 | ||||||||||||||||||||||
0 | 354,000 | 708,000 | — | — | — | — | — | — | ||||||||||||||||||||||||
Michael J. Short | 12/6/17 | — | — | — | — | — | 5,400 | (3) | — | — | 400,626 | |||||||||||||||||||||
12/6/17 | — | — | — | — | — | — | 28,190 | (4) | 87.15 | 401,426 | ||||||||||||||||||||||
0 | 350,000 | 700,000 | — | — | — | — | — | — |
29
Outstanding Equity Awards at FiscalYear-End 2017
Stock Option Awards | Stock Awards | |||||||||||||||||||||||
Name | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Options (#) Exercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | (1) Equity Incentive Plan Awards: Number of Shares or Units of Stock That Have Not Vested (#) | (1) Equity Incentive Plan Awards: Market Value of Shares or Units of Stock Held That Have Not Vested ($) | ||||||||||||||||||
John P. Wiehoff | 41,830 | (1) | 0 | (1) | $ | 68.81 | 12/7/2021 | 120,694 | $ | 10,752,593 | ||||||||||||||
47,257 | (1) | 0 | (1) | 61.91 | 12/5/2022 | |||||||||||||||||||
90,028 | (1) | 36,772 | (1) | 58.25 | 12/4/2023 | |||||||||||||||||||
55,025 | (1) | 64,595 | (1) | 74.57 | 12/3/2024 | |||||||||||||||||||
60,288 | (2) | 90,432 | (2) | 63.58 | 12/2/2025 | |||||||||||||||||||
28,972 | (2) | 115,888 | (2) | 76.72 | 12/7/2026 | |||||||||||||||||||
0 | (2) | 167,370 | (2) | 87.15 | 12/6/2027 | |||||||||||||||||||
Andrew C. Clarke | 14,158 | (1) | 16,622 | (1) | 62.11 | 6/2/2025 | 22,759 | 2,027,626 | ||||||||||||||||
12,060 | (2) | 18,090 | (2) | 63.58 | 12/2/2025 | |||||||||||||||||||
5,622 | (2) | 22,488 | (2) | 76.72 | 12/7/2026 | |||||||||||||||||||
0 | 31,720 | (2) | 87.15 | 12/6/2027 | ||||||||||||||||||||
Robert C. Biesterfeld | 3,071 | (1) | 0 | (1) | 68.81 | 12/7/2021 | 21,144 | 1,883,716 | ||||||||||||||||
2,897 | (1) | 0 | (1) | 61.91 | 12/5/2022 | |||||||||||||||||||
8,267 | (1) | 3,377 | (1) | 58.25 | 12/4/2023 | |||||||||||||||||||
5,038 | (1) | 5,915 | (1) | 74.57 | 12/3/2024 | |||||||||||||||||||
12,060 | (2) | 18,090 | (2) | 63.58 | 12/2/2025 | |||||||||||||||||||
5,622 | (2) | 22,488 | (2) | 76.72 | 12/7/2026 | |||||||||||||||||||
0 | (2) | 31,720 | (2) | 87.15 | 12/6/2027 | |||||||||||||||||||
Chad M. Lindbloom | 12,553 | (1) | 0 | (1) | 68.81 | 12/7/2021 | 25,265 | 2,250,886 | ||||||||||||||||
11,816 | (1) | 0 | (1) | 61.91 | 12/5/2022 | |||||||||||||||||||
22,507 | (1) | 9,193 | (1) | 58.25 | 12/4/2023 | |||||||||||||||||||
13,364 | (1) | 15,686 | (1) | 74.57 | 12/3/2024 | |||||||||||||||||||
12,060 | (1) | 18,090 | (2) | 63.58 | 12/2/2025 | |||||||||||||||||||
756 | (2) | 1,134 | (2) | 63.58 | 12/24/2025 | |||||||||||||||||||
5,622 | (2) | 22,488 | (2) | 76.72 | 12/7/2026 | |||||||||||||||||||
0 | (2) | 31,720 | (2) | 87.15 | 12/6/2027 | |||||||||||||||||||
Michael J. Short | 749 | (1) | 2,412 | (1) | 58.25 | 12/4/2023 | 24,790 | 2,208,579 | ||||||||||||||||
3,778 | (1) | 4,437 | (1) | 74.57 | 12/3/2024 | |||||||||||||||||||
6,030 | (2) | 18,090 | (2) | 63.58 | 12/2/2025 | |||||||||||||||||||
4,998 | (2) | 19,992 | (2) | 76.72 | 12/7/2026 | |||||||||||||||||||
0 | (2) | 28,190 | (2) | 87.15 | 12/6/2027 |
30
Option Exercises and Stock Vested During 2017
2022 Proxy Statement | 35 |
Name of Executive Officer and Principal Position | Year | Salary | Bonus | Stock Awards(1) | Option Awards(2) | Non-Equity Incentive Plan Compensation(3) | All Other Compensation(4) | Total | ||||||||||||||||||||||||||||||||||||
Robert C. Biesterfeld Jr | 2021 | $ | 1,066,346 | $ | — | $ | 5,924,530 | (5) | $ | — | $ | 3,225,000 | $ | 17,400 | $ | 10,233,276 | ||||||||||||||||||||||||||||
President and Chief Executive Officer | 2020 | 878,750 | — | 2,053,817 | 2,021,132 | 467,577 | 11,394 | 5,432,670 | ||||||||||||||||||||||||||||||||||||
2019 | 870,833 | (6) | — | 1,879,415 | (6) | 1,869,985 | (6) | 428,895 | (6) | 16,800 | 5,065,928 | |||||||||||||||||||||||||||||||||
Michael P. Zechmeister | 2021 | 722,404 | — | 1,521,488 | (7) | — | 1,106,169 | 17,400 | 3,367,461 | |||||||||||||||||||||||||||||||||||
Chief Financial Officer | 2020 | 666,839 | — | 698,550 | 687,200 | 290,084 | 24,325 | 2,366,998 | ||||||||||||||||||||||||||||||||||||
2019 | 235,985 | (8) | 200,000 | (9) | 1,681,567 | (8)(10) | 726,328 | (8) | 83,945 | (8) | 57,637 | 2,985,462 | ||||||||||||||||||||||||||||||||
Mac S. Pinkerton | 2021 | 608,269 | — | 1,321,813 | (11) | — | 691,732 | 17,400 | 2,639,214 | |||||||||||||||||||||||||||||||||||
President of North America | 2020 | 544,250 | — | 555,719 | 514,213 | 196,681 | 17,100 | 1,827,964 | ||||||||||||||||||||||||||||||||||||
2019 | 475,000 | — | 50,250 | (12) | 50,027 | (12) | 212,943 | 16,800 | 805,020 | |||||||||||||||||||||||||||||||||||
Arun D. Rajan | 2021 | 261,539 | (15) | — | 4,129,752 | (13)(14) | — | 462,027 | (15) | 52,773 | 4,906,090 | |||||||||||||||||||||||||||||||||
Chief Product Officer | ||||||||||||||||||||||||||||||||||||||||||||
Michael J. Short | 2021 | 548,269 | — | 1,040,865 | (16) | — | 796,400 | 17,400 | 2,402,934 | |||||||||||||||||||||||||||||||||||
President of Global Freight Forwarding | 2020 | 505,950 | — | 429,622 | 397,432 | 464,090 | 17,100 | 1,814,194 | ||||||||||||||||||||||||||||||||||||
2019 | 520,833 | — | — | — | 192,398 | 16,800 | 730,031 |
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Name of Executive Officer | Year | Perks and Personal Benefits | Tax Reim-bursements | Registrant Contributions to Defined Contributions(1) | Other | Total | |||||||||||||||||
Robert C. Biesterfeld Jr | 2021 | $ | — | $ | — | $ | 17,400 | $ | — | $ | 17,400 | ||||||||||||
Michael P. Zechmeister | 2021 | — | — | 17,400 | — | 17,400 | |||||||||||||||||
Mac S. Pinkerton | 2021 | — | — | 17,400 | — | 17,400 | |||||||||||||||||
Arun D. Rajan | 2021 | 27,655 | (2) | 12,194 | 12,923 | — | 52,772 | ||||||||||||||||
Michael J. Short | 2021 | — | — | 17,400 | — | 17,400 |
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Name of Executive Officer | Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | Estimated Future Payouts Under Equity Incentive Plan Awards | All Other Stock Awards: Number of Shares of Stock or Units | Grant Date Fair Value of Stock Awards(2) | |||||||||||||||||||||||||||||||||||||||
Threshold | Target | Maximum | Threshold | Target | Maximum | |||||||||||||||||||||||||||||||||||||||
Robert C. Biesterfeld Jr. | 2/3/2021 | $ | — | $ | — | $ | — | 7,983 | 31,930 | 63,860 | (3) | — | $ | 2,414,866 | ||||||||||||||||||||||||||||||
2/3/2021 | — | — | — | 888 | 3,550 | 7,100 | (4) | — | 237,637 | |||||||||||||||||||||||||||||||||||
2/3/2021 | — | — | — | — | — | — | 42,570 | (5) | 3,034,390 | |||||||||||||||||||||||||||||||||||
— | 1,612,500 | 3,225,000 | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Michael P. Zechmeister | 2/3/2021 | — | — | — | 2,050 | 8,200 | 16,400 | (3) | — | 620,166 | ||||||||||||||||||||||||||||||||||
2/3/2021 | — | — | — | 228 | 913 | 1,826 | (4) | — | 61,116 | |||||||||||||||||||||||||||||||||||
2/3/2021 | — | — | — | — | — | — | 10,930 | (5) | 779,090 | |||||||||||||||||||||||||||||||||||
— | 616,250 | 1,232,500 | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Mac S. Pinkerton | 2/3/2021 | — | — | — | 1,780 | 7,120 | 14,240 | (3) | — | 538,486 | ||||||||||||||||||||||||||||||||||
2/3/2021 | — | — | — | 198 | 793 | 1,586 | (4) | — | 53,083 | |||||||||||||||||||||||||||||||||||
2/3/2021 | — | — | — | — | — | — | 9,500 | (5) | 677,160 | |||||||||||||||||||||||||||||||||||
— | 488,000 | 976,000 | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Arun D. Rajan | 9/1/2021 | — | — | — | 2,735 | 10,940 | 21,880 | (3) | — | 868,089 | ||||||||||||||||||||||||||||||||||
9/1/2021 | — | — | — | 304 | 1,217 | 2,434 | (4) | — | 86,809 | |||||||||||||||||||||||||||||||||||
9/1/2021 | — | — | — | — | — | — | 14,590 | (5) | 1,092,645 | |||||||||||||||||||||||||||||||||||
9/1/2021 | — | — | — | — | — | — | 22,380 | (6) | 1,995,401 | |||||||||||||||||||||||||||||||||||
— | 231,014 | (7) | 462,027 | (7) | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Michael J. Short | 2/3/2021 | — | — | — | 1,403 | 5,610 | 11,220 | (3) | — | 424,284 | ||||||||||||||||||||||||||||||||||
2/3/2021 | — | — | — | 156 | 623 | 1,246 | (4) | — | 41,704 | |||||||||||||||||||||||||||||||||||
2/3/2021 | — | — | — | — | — | — | 7,480 | (5) | 533,174 | |||||||||||||||||||||||||||||||||||
— | 440,000 | 880,000 | — | — | — | — | — |
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| 2022 Proxy Statement |
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||||
Name of Executive Officer | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Options Exercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Options Unexercisable | Option Exercise Price | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested | Market Value of Shares or Units of Stock That Have Not Vested | Equity Incentive Plan Awards: Number of Shares or Units of Stock That Have Not Vested | Equity Incentive Plan Awards: Market Value of Shares or Units of Stock That Have Not Vested | ||||||||||||||||||||||||||||||
Robert C. Biesterfeld Jr. | 11,644 | (1) | 0 | (1) | $ | 58.25 | 12/4/2023 | 2,168 | (4) | $ | 233,342 | |||||||||||||||||||||||||||
9,748 | (1) | 0 | (1) | 74.57 | 12/3/2024 | 1,816 | (4) | 195,456 | ||||||||||||||||||||||||||||||
30,150 | (2) | 0 | (2) | 63.58 | 12/2/2025 | 3,630 | (4) | 390,697 | ||||||||||||||||||||||||||||||
28,110 | (2) | 0 | (2) | 76.72 | 12/7/2026 | 6,922 | (4) | 745,036 | ||||||||||||||||||||||||||||||
25,376 | (2) | 6,344 | (2) | 87.15 | 12/6/2027 | 31,930 | (5) | 3,436,626 | ||||||||||||||||||||||||||||||
16,512 | (3) | 4,128 | (3) | 89.70 | 3/1/2028 | 3,550 | (6) | 382,087 | ||||||||||||||||||||||||||||||
22,782 | (2) | 15,188 | (2) | 88.87 | 12/5/2028 | 3,550 | (6) | 382,087 | ||||||||||||||||||||||||||||||
63,822 | (3) | 42,548 | (3) | 82.68 | 5/9/2029 | 28,381 | (7) | 3,054,647 | ||||||||||||||||||||||||||||||
64,728 | (3) | 97,092 | (3) | 72.74 | 2/5/2030 | |||||||||||||||||||||||||||||||||
Michael P. Zechmeister | 25,176 | (3) | 16,784 | (3) | 82.05 | 9/3/2029 | 4,064 | (8) | 437,408 | 2,072 | (4) | 223,009 | ||||||||||||||||||||||||||
22,008 | (3) | 33,012 | (3) | 72.74 | 2/5/2030 | 2,354 | (4) | 253,404 | ||||||||||||||||||||||||||||||
8,200 | (5) | 882,566 | ||||||||||||||||||||||||||||||||||||
913 | (6) | 98,266 | ||||||||||||||||||||||||||||||||||||
914 | (6) | 98,374 | ||||||||||||||||||||||||||||||||||||
7,287 | (7) | 784,300 | ||||||||||||||||||||||||||||||||||||
Mac S. Pinkerton | 956 | (1) | 0 | (1) | 61.91 | 12/5/2022 | 732 | (4) | 78,742 | |||||||||||||||||||||||||||||
11,865 | (1) | 0 | (1) | 58.25 | 12/4/2023 | 150 | (4) | 16,145 | ||||||||||||||||||||||||||||||
11,576 | (1) | 0 | (1) | 74.57 | 12/3/2024 | 1,873 | (4) | 201,591 | ||||||||||||||||||||||||||||||
15,606 | (2) | 0 | (2) | 63.58 | 12/2/2025 | 7,120 | (5) | 766,326 | ||||||||||||||||||||||||||||||
12,934 | (2) | 0 | (2) | 76.72 | 12/7/2026 | 793 | (6) | 85,351 | ||||||||||||||||||||||||||||||
11,955 | (2) | 2,989 | (2) | 87.15 | 12/6/2027 | 794 | (6) | 85,458 | ||||||||||||||||||||||||||||||
7,692 | (2) | 5,129 | (2) | 88.87 | 12/5/2028 | 6,334 | (7) | 681,728 | ||||||||||||||||||||||||||||||
1,626 | (3) | 1,084 | (3) | 79.92 | 1/3/2029 | |||||||||||||||||||||||||||||||||
16,468 | (3) | 24,702 | (3) | 72.74 | 2/5/2030 | |||||||||||||||||||||||||||||||||
Arun D. Rajan | 14,920 | (9) | 1,605,840 | 10,940 | (5) | 1,177,472 | ||||||||||||||||||||||||||||||||
1,217 | (6) | 130,986 | ||||||||||||||||||||||||||||||||||||
1,216 | (6) | 130,878 | ||||||||||||||||||||||||||||||||||||
9,727 | (7) | 1,046,917 | ||||||||||||||||||||||||||||||||||||
Michael J. Short | 4,998 | (2) | 0 | (2) | 76.72 | 12/7/2026 | 1,136 | (4) | 122,268 | |||||||||||||||||||||||||||||
5,638 | (2) | 5,638 | (2) | 87.15 | 12/6/2027 | 1,448 | (4) | 155,848 | ||||||||||||||||||||||||||||||
12,132 | (2) | 8,088 | (2) | 88.87 | 12/5/2028 | 5,610 | (5) | 603,804 | ||||||||||||||||||||||||||||||
12,728 | (3) | 19,092 | (3) | 72.74 | 2/5/2030 | 623 | (6) | 67,053 | ||||||||||||||||||||||||||||||
624 | (6) | 67,161 | ||||||||||||||||||||||||||||||||||||
4,987 | (7) | 536,751 |
2022 Proxy Statement | 39 |
Name of Executive Officer | Option Awards | Stock Awards | |||||||||||||||
Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | ||||||||||||||
Robert C. Biesterfeld Jr. | 0 | $ | 0 | 88,642 | $ | 9,540,538 | (1) | ||||||||||
Michael P. Zechmeister | 0 | 0 | 27,238 | 2,860,361 | (2) | ||||||||||||
Mac S. Pinkerton | 20,365 | 709,658 | 18,970 | 2,041,741 | (3) | ||||||||||||
Arun D. Rajan | 0 | 0 | 14,757 | 1,450,510 | (4) | ||||||||||||
Michael J. Short | 32,940 | 626,437 | 20,244 | 2,178,862 | (5) |
40 | 2022 Proxy Statement |
Name of Executive | Executive Contributions in Last Fiscal Year ($) | (2) Registrant Contributions in Last Fiscal Year ($) | Aggregate Earnings in Last Fiscal Year ($) | Aggregate Withdrawals/ Distributions ($) | (3) Aggregate Balance at last Fiscal Year ($) | |||||||||||||||
John P. Wiehoff | $ | 0 | $ | 2,800,130 | $ | 10,560,188 | $ | 3,310,129 | $ | 66,070,008 | ||||||||||
Andrew C. Clarke | 0 | 529,872 | 365,121 | 0 | 2,530,156 | |||||||||||||||
Robert C. Biesterfeld | 0 | 529,872 | 30,662 | 130,985 | 2,949,763 | |||||||||||||||
Chad M. Lindbloom | 0 | 529,872 | 1,051,410 | 562,731 | 8,202,374 | |||||||||||||||
Michael J. Short | 0 | 470,610 | 451,151 | 0 | 2,961,173 |
Name of Executive Officer | Executive Contributions in 2021 | Registrant Contributions in 2021 | Aggregate Earnings in 2021 | Aggregate Withdrawals/ Distributions | Aggregate Balance at December 31, 2021(2) | ||||||||||||
Robert C. Biesterfeld Jr. | $ | 0 | $ | 12,595,185 | $ | 246,273 | $ | (274,357) | $ | 14,581,928 | |||||||
Michael P. Zechmeister | 0 | 3,278,625 | — | — | 3,278,625 | ||||||||||||
Mac S. Pinkerton | 0 | 2,723,470 | 170,818 | (423,267) | 4,152,796 | ||||||||||||
Arun D. Rajan | 0 | 1,832,293 | — | — | 1,832,293 | ||||||||||||
Michael J. Short | 0 | 2,715,613 | 180,313 | (647,267) | 4,054,530 |
(1)All awards referred to in this table are in the form of performance based restricted shares, performance stock units, and restricted stock units, except Mr. Short's 2015 time based restricted shares award. (2)All values in this column are based on the closing market price of the company stock as of December |
31,
2021.Name of Executive | Benefit and Payments Upon Termination | Change in Control, Death or Disability | ||||
John P. Wiehoff | Vesting of nonvested stock options | $ | 6,137,118 | |||
Vesting of nonvested restricted shares | 10,752,593 | |||||
Andrew C. Clarke | Vesting of nonvested stock options | 1,249,656 | ||||
Vesting of nonvested restricted shares | 2,027,626 | |||||
Robert C. Biesterfeld | Vesting of nonvested stock options | 991,209 | ||||
Vesting of nonvested restricted shares | 1,883,716 | |||||
Chad M. Lindbloom | Vesting of nonvested stock options | 1,341,390 | ||||
Vesting of nonvested restricted shares | 2,250,886 | |||||
Michael J. Short | Vesting of nonvested stock options | 902,276 | ||||
Vesting of nonvested restricted shares | 2,208,579 |
CEO Pay Ratio
As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of RegulationS-K, we are providing the following information about the relationship of the annual total compensation of our employees and the annual total compensation of John P. Wiehoff, our President, Chairman, and Chief Executive Officer (the “CEO”):
For 2017, our last completed fiscal year:
Name of Executive Officer | Benefits and Payments Upon Termination | Change in Control, Death, or Disability | ||||||
Robert C. Biesterfeld Jr. | Vesting of nonvested stock options | $ | 4,937,980 | |||||
Vesting of nonvested restricted shares and units | 11,868,360 | |||||||
Michael P. Zechmeister | Vesting of nonvested stock options | 1,581,123 | ||||||
Vesting of nonvested restricted shares and units | 3,603,775 | |||||||
Severance | 725,000 | |||||||
Mac S. Pinkerton | Vesting of nonvested stock options | 1,049,329 | ||||||
Vesting of nonvested restricted shares and units | 2,508,532 | |||||||
Arun D. Rajan | Vesting of nonvested stock options | 0 | ||||||
Vesting of nonvested restricted shares and units | 3,399,278 | |||||||
Severance | 800,000 | |||||||
Michael J. Short | Vesting of nonvested stock options | 933,317 | ||||||
Vesting of nonvested restricted shares and units | 2,591,300 |
Based on this information, for 2017, we reasonably estimate that the ratio of our CEO’s annual total compensation to the annual total compensation of our median employee was 130:1. Our pay ratio estimate has been calculated in a manner consistent with Item 402(u) of RegulationS-K.
We identified our median employee based on the base salary plus overtime actually paid during fiscal year 2017 to all members of our workforce (including full-time, part-time and temporary employees), other than our CEO and Milgram
2022 Proxy Statement | 41 |
In determining the employee population from which we identified the median employee, we excluded the approximately 333 employees who were employed by Milgram & Company Ltd., a company we acquired in 2017.
For purposes of determining the base salary plus overtime actually paid, we included the amount of base salary the employee received during the year, and the amount of overtime the employee received during the year. We included adjustments for annualizing the pay for any permanent employees who were employed by us for only part of the year.
32
After we performed this calculation using the methodology described above, we reasonably determined that there were irregular compensation characteristics of the median employee’s compensation that would have significant impact on our CEO pay ratio. We then determined to substitute an alternate employee, who had substantially similar base salary plus overtime actually paid to the original median employee, who was a U.S. employee, whose annual total compensation we reasonably believe better reflects our compensation practices for a representative median employee.
Once we identified our median employee, we then determined that employee’s annual total compensation, including any perquisites and other benefits, in the same manner that we determine the annual total compensation of our named executive officers for purposes of the Summary Compensation Table disclosed above. The annual total compensation of our median employee was determined to be $52,606. This annual total compensation amount for our median employee was then compared to the annual total compensation of our CEO, disclosed above in the Summary Compensation Table, of $6,834,187. The elements included in the CEO’s total compensation are fully discussed above in the footnotes to the Summary Compensation Table.
RELATED PARTY TRANSACTIONS
One of our directors, Brian P. Short, is the president, chief executive officer and, with a number of his family members, holds a controlling interest in Admiral Merchants Motor Freight, Inc. (“AMMF”), a privately held trucking and transportation services company. In 2017, C.H. Robinson engaged AMMF in the ordinary course of business as a carrier to haul approximately 408 truckloads. The company paid approximately $1,283,000 to AMMF for these services, which represented just more than one percent of AMMF’s revenues for 2017. Management reported to the Audit Committee that the prices paid for the trucking services provided by AMMF were negotiated by 18 separate offices and were consistent with similar loads carried by other third party vendors using comparable equipment.
Mr. Biesterfeld, our chief operating officer and president of NAST, received a $400,000 loan to cover real estate expenses in connection with his relocation from Arizona to Minnesota in 2011. Mr. Biesterfeld was not an executive officer of our company at the time he received the loan; accordingly, the loan was not subject to approval under our Related Party Transaction policy at the time it was made. Mr. Biesterfeld completed all remaining payments due on the loan in 2017.
C.H. Robinson’s transactions with AMMF and Mr. Biesterfeld were reviewed by our Audit Committee consistent with our Related Party Transaction policy. The Audit Committee considered C.H. Robinson’s transactions with AMMF and Mr. Biesterfeld in light of the factors listed in its Related Party Transactions policy. Based on its review, the Audit Committee determined that the company’s transactions conducted with AMMF and Mr. Biesterfeld were fair and reasonable to the company and on terms no less favorable to C.H. Robinson than could be obtained in a comparable arm’s length transaction with an unrelated third party. In approving these transactions, the Audit Committee also determined that they were in the best interests of C.H. Robinson.
The Board of Directors and the Governance Committee also considered C.H. Robinson’s transactions with AMMF in its assessment of Mr. Short’s independence.
33
COMPENSATION COMMITTEE REPORT
Wayne M. Fortun
Robert Ezrilov
Mary J. Steele Guilfoile
Jodee A. Kozlak
James B. Stake
Jodee A. Kozlak, Chair Kermit R. Crawford Wayne M. Fortun Timothy C. Gokey Mary J. Steele Guilfoile James B. Stake Paula C. Tolliver Henry W. "Jay" Winship | |||||
The Members of the Talent & Compensation Committee of the Board of Directors |
42 | 2022 Proxy Statement |
Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K, we are providing the following information about the relationship of the annual total compensation of our median employee and the annual total compensation of Robert C. Biesterfeld Jr., our president and CEO.
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2022 Proxy Statement | 43 |
(1) Number of Shares Beneficially Owned | Percentage of Outstanding Shares | (2) Number of Performance Shares Granted | ||||||||||
The Vanguard Group (3) | 15,731,733 | 11.28 | % | |||||||||
100 Vanguard Blvd. Malvern, PA 19355 | ||||||||||||
BlackRock Inc. (4) | 10,914,859 | 7.8 | % | |||||||||
55 East 52nd Street New York, NY 10055 | ||||||||||||
Capital International Investors (5) | 10,181,506 | 7.3 | % | |||||||||
11100 Santa Monica Boulevard Sixteenth Floor Los Angeles, CA 90025 | ||||||||||||
T. Rowe Price Associates, Inc. (6) | 8,095,505 | 5.8 | % | |||||||||
100 East Pratt Street Baltimore, MD 21202 | ||||||||||||
John P. Wiehoff (7) | 467,093 | .33 | % | 718,857 | ||||||||
Andrew C. Clarke (8) | 31,840 | .02 | % | 28,400 | ||||||||
Robert C. Biesterfeld (9) | 32,255 | .02 | % | 31,491 | ||||||||
Chad M. Lindbloom (10) | 162,966 | .12 | % | 85,112 | ||||||||
Michael J. Short (11) | 16,092 | .01 | % | 23,778 | ||||||||
Scott P. Anderson | 15,258 | .01 | % | |||||||||
Robert Ezrilov | 105,619 | .08 | % | |||||||||
Wayne M. Fortun | 36,641 | .03 | % | |||||||||
Timothy C. Gokey | 644 | .00 | % | |||||||||
Mary J. Steele Guilfoile | 9,918 | .01 | % | |||||||||
Jodee A. Kozlak | 10,965 | .01 | % | |||||||||
Brian P. Short | 54,413 | .04 | % | |||||||||
James B. Stake | 16,688 | .01 | % | |||||||||
All current executive officers and directors as a group (18 people) | 1,365,913 | .97 | % | 1,173,099 |
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35
Number of Shares Beneficially Owned(1) | Percentage of Outstanding Shares | Number of Performance Shares Granted(2) | |||||||||
BlackRock Inc.(3) 55 East 52nd Street New York, NY 10055 | 18,078,740 | 13.90% | |||||||||
The Vanguard Group(4) 100 Vanguard Blvd. Malver, PA 19355 | 15,612,088 | 12.01% | |||||||||
First Eagle Investment Management, LLC(5) 1345 Avenue of the Americas New York, NY 10105 | 10,588,958 | 8.15% | |||||||||
State Street Corporation State(6) Street Financial Center One Lincoln Street Boston, MA 02111 | 9,339,701 | 7.19% | |||||||||
Robert C. Biesterfeld Jr.(7) | 458,659 | 0.36% | 188,850 | ||||||||
Michael P. Zechmeister(8) | 98,101 | 0.08% | 44,625 | ||||||||
Mac S. Pinkerton(9) | 152,311 | 0.12% | 48,351 | ||||||||
Arun D. Rajan | 52,720 | 0.04% | 31,477 | ||||||||
Michael J. Short(10) | 80,897 | 0.06% | 47,632 | ||||||||
Scott P. Anderson | 21,904 | 0.02% | |||||||||
Kermit R. Crawford | 2,970 | 0.00% | |||||||||
Wayne M. Fortun | 43,321 | 0.03% | |||||||||
Timothy C. Gokey | 12,515 | 0.01% | |||||||||
Mark A. Goodburn | 0 | 0.00% | |||||||||
Mary J. Steele Guilfoile | 16,718 | 0.01% | |||||||||
Jodee A. Kozlak | 17,645 | 0.01% | |||||||||
Henry J. Maier | 0 | 0.00% | |||||||||
Brian P. Short | 66,577 | 0.05% | |||||||||
James B. Stake | 22,589 | 0.02% | |||||||||
Paula C. Tolliver | 8,443 | 0.01% | |||||||||
Henry W. "Jay" Winship(11) | 269,462 | 0.21% | |||||||||
All current executive officers and directors as a group (24 people) | 2,071,034 | 1.64% | 660,172 |
44 | 2022 Proxy Statement |
2022 Proxy Statement | 45 |
36
REPORTS
37
46 | 2022 Proxy Statement |
and the Securities and Exchange Commission.
James B. Stake
Scott P. Anderson
Robert Ezrilov
Timothy C. Gokey
Brian P. Short
The Members of the Audit Committee
of the Board of Directors
38
James B. Stake, Chair Scott P. Anderson Timothy C. Gokey Brian P. Short Paula C. Tolliver | |||||
The Members of the Audit Committee of the Board of Directors |
2022 Proxy Statement | 47 |
OFFICERS(“SAY-ON-PAY”)
NEOs.
NEOs.
The Board of Directors recommends a vote FOR the approval of the compensation of our named executive officers.
39
The Board of Directors recommends a vote FOR the approval of the compensation of our NEOs. |
48 | 2022 Proxy Statement |
Fees | 2017 | 2016 | ||||||
Audit Fees (a) | $ | 1,992,116 | $ | 1,728,046 | ||||
Audit-Related Fees (b) | 134,258 | 1,133,037 | ||||||
Tax Fees (c) | 1,930,081 | 2,144,627 | ||||||
Other Fees (d) | 290,000 | 0 | ||||||
|
|
|
| |||||
Total | $ | 4,177,087 | $ | 5,005,710 |
Fees | 2021 | 2020 | ||||||
Audit Fees(1) | $ | 2,252,419 | $ | 1,971,574 | ||||
Audit-Related Fees(2) | 291,499 | 59,912 | ||||||
Tax Fees(3) | 71,618 | 261,194 | ||||||
Total | $ | 2,615,536 | $ | 2,292,680 |
40
Exchange Commission to implement the Sarbanes-Oxley Act of 2002, as well as the American Institute of Certified Public Accountants. All services provided by the independent auditor during 20172021 and 20162020 were preapproved,pre-approved, following the policies and procedures of the Audit Committee.
Preapproval
pre-approval.
2022 Proxy Statement | 49 |
1.The service is not an audit, review, or other attest service; 2.The total amount of all such services provided under this provision does not exceed the lesser of $20,000 or 5% of total fees paid to the independent auditor in a given fiscal year; 3.The services were not recognized at the time of the engagement to be non-audit services; 4.The services are promptly brought to the attention of the Audit Committee and approved by the Audit Committee or its designee; and 5.The service and fee are specifically disclosed in the Proxy Statement as meeting the de minimis requirements of Regulation S-X of the Securities Exchange Act of 1934, as amended. BOARD VOTING RECOMMENDATION
PROPOSAL FOUR:
C.H.
Introduction On March 17, 2022, the Board of Directors,
After the 2022 Plan obtains approval by our shareholders, no new awards will be made under the 2013 Plan. As of March 1, 2022, the
Shareholder Approval and Board of Directors Recommendation Shareholder approval of the 2022 Plan is being sought in order to (i) satisfy the shareholder approval requirements of the Nasdaq Stock Market and (ii) obtain shareholder approval of the number of shares that may be subject to
The Board of Directors recommends that
Basis for the Long-term equity-based incentives play a critical role in our executive compensation program, motivating executives to make decisions that focus on long-term shareholder value creation, aligning executives’ interests with the interests of As of March 1, 2022, there were 128,801,036 shares of our
PROPOSAL FOUR: APPROVAL OF THE C.H. ROBINSON WORLDWIDE, INC. 2022 EQUITY INCENTIVE PLAN Historical equity granting practices. Our three-year average annual equity grant rate, or “burn rate,” for the 2019-2021 period was 1.77%, calculated on the basis utilized by the Proxy Advisory Services division of Institutional Shareholder Services, Inc. (“ISS”).
(1)Excludes shares issued in connection with acquisitions (other than inducement awards). Some shareholders view the burn rate as a helpful measure to compare the rates at which peer companies have granted equity. The more equity that a company grants in relation to the total number of its shares of Common Stock outstanding, the higher that company’s burn rate will be. Over the past three years, our average burn rate has been 1.77%, which is below the ISS S&P 500 median burn rate. Expected duration of available shares. We expect to continue making equity awards consistent with our practices over the past three years, and to maintain an average annual burn rate over the next three years in line with our average for the 2019-2021 period. On that basis, we expect that shares currently remaining available for awards under the 2013 Plan will likely be insufficient to continue making awards beyond 2022, but that the shares of Common Stock available for future awards if the 2022 Plan is approved would be sufficient for equity awards grants for approximately two years. Expected dilution. As of March 1, 2022, our estimated existing voting power dilution attributable to shares subject to outstanding awards under the 2013 Plan was 9.5%. We define existing voting power dilution as the sum of (i) the total number of shares of our Common Stock subject to outstanding awards under the Prior Plans, and (ii) the total number of shares available for future grants under the 2013 Plan, divided by the fully diluted number of our common shares outstanding. Our projected voting power dilution as of that same date would be 12.6%, based on including the 4,000,000 share reserve under the 2022 Plan in the formula. Over the long-term, we have sought to address shareholder concerns about
Expectations regarding future share usage under the 2022 Plan are naturally based on a number of assumptions regarding factors such as future growth in the population of eligible participants, the rate of future compensation increases, the rate at which shares are returned to the 2022 Plan reserve through forfeitures, cancellations and the like, the level at which performance-based awards pay out, and our future stock price performance. While the Committee believes that the assumptions utilized are reasonable, future share usage will differ from current expectations to the extent that actual events differ from the assumptions utilized.
PROPOSAL FOUR: APPROVAL OF THE C.H. ROBINSON WORLDWIDE, INC. 2022 EQUITY INCENTIVE PLAN Key Compensation Practices The 2022 Plan includes a number of features that we believe are consistent with the interests of our shareholders and sound corporate governance practices, including a.No repricing of underwater options or stock appreciation rights without shareholder approval. The 2022 Plan prohibits, without shareholder approval, actions to reprice, replace, or repurchase options or stock appreciation rights (“SARs”) when the exercise price per share of an option or SAR exceeds the fair market value of the underlying shares. b.No evergreen. The 2022 Plan does not have an evergreen or similar provision, which provides for an automatic replenishment of shares available for grant. c.No liberal share recycling. We may not add back to the 2022 Plan’s share reserve shares that are delivered or withheld to pay the exercise price of an option award or to satisfy a tax withholding obligation in connection with any awards, shares that we repurchase using option exercise proceeds and
d.No liberal definition of “change in control.” No change in control would be triggered by shareholder approval of a business combination transaction, the announcement or commencement of a tender offer or any board assessment that a change in control may be imminent. e.No automatic accelerated vesting of equity awards upon a change in control. f.Minimum vesting period for all awards. A minimum vesting or performance period of one year is prescribed for all awards, subject only to limited exceptions. g.No payment of dividends or dividend equivalents on unearned awards. The 2022 Plan prohibits the payment of dividends or dividend equivalents in connection with an award until it vests. h.Annual limit on compensation to non-employee directors. The 2022 Plan contains an annual limit on the aggregate value of all awards granted during a calendar year to any non-employee director. i.Clawback. The 2022 Plan allows the Committee to require the recapture or claw back of all or a portion of awards in connection with financial restatements and other events. Description of the 2022 Plan The major features of the 2022 Plan are summarized below. The summary is qualified in its entirety by reference to the full text of the 2022 Plan, which is attached to this proxy statement as Appendix A to this Proxy Statement. Eligible Participants. Employees, consultants, advisors and independent contractors and non-employee directors of the Company will be eligible to receive awards under the 2022 Plan. As of March 1, 2022, there were over 17,400 employees, 11 non-employee directors of the Company and an indeterminate number of consultants, advisors and independent contractors who would be eligible to receive awards under the 2022 Plan. Administration. The 2022 Plan will be administered by the Committee. To the extent consistent with applicable law, the Committee may delegate its duties, power and authority under the 2022 Plan to any one or more of its members, or, with respect to awards to participants who are not themselves our The Committee has the authority to determine the persons to whom awards will be granted, the timing, type and number of shares covered by each award, and the terms and conditions of the awards. The Committee may also establish and modify rules to administer the 2022 Plan, interpret the 2022 Plan and any related award agreement, cancel or suspend an award, accelerate the vesting of an award and otherwise modify or amend the terms of outstanding awards to the extent permitted under the 2022 Plan, and require or permit the deferral of the settlement of an award. Unless an amendment to the terms of an award is necessary to comply with applicable laws or stock exchange rules, a participant who would be adversely affected by such an amendment must consent to it. Except in
PROPOSAL FOUR: APPROVAL OF THE C.H. ROBINSON WORLDWIDE, INC. 2022 EQUITY INCENTIVE PLAN Available Shares and Any shares of Common Stock subject to an award under the 2022 Plan, or to an award under the Prior Plans that
Awards that may be settled solely in
The 2022 Plan provides that the aggregate grant date fair value of all awards granted during any calendar year to any non-employee director (excluding any awards granted at the election of a non-employee director in lieu of all or any portion of retainers or fees otherwise payable to non-employee directors in cash), together with the amount of any cash fees or retainers paid to such non-employee director during such calendar year with respect to such individual’s service as a non-employee director, shall not exceed $500,000. Share Adjustment Provisions. If certain transactions with our shareholders occur that cause the per share value of our Common Stock to change, such as stock splits, spin‑offs, stock dividends or certain recapitalizations (referred to as “equity restructurings”), the Committee will equitably adjust (i) the class of shares issuable and Clawback and Recoupment. The Committee may cancel any award or require the participant to reimburse any previously paid compensation provided under the Plan or an award agreement in the event of problems relating to accounting restatements, as well as additional events specified by the Types of Options. Employees of our company or any subsidiary may be granted options to purchase Common Stock that qualify as “incentive stock options” within the meaning of Section 422 of the Code, and The total purchase price of the shares to be purchased upon exercise of an option will be paid by the participant in cash unless the Committee allows exercise payments to be made, in whole or in part, (i) by means of a broker‑assisted sale and remittance program, (ii) by delivery to us (or attestation as to ownership) of shares of Common Stock already owned by the participant, or (iii) by a “net exercise” of the option in which a portion of the shares otherwise issuable upon exercise of the option are withheld by us. Any shares delivered or withheld in payment of an exercise price will be valued at their fair market value on the exercise date. An option will vest and become exercisable at such time, in such installments and subject to such conditions as may be determined by the Committee, and no option may have a term greater than 10 years from its date of grant. No dividends or dividend equivalents may be paid or credited with respect to shares subject to an option award.
PROPOSAL FOUR: APPROVAL OF THE C.H. ROBINSON WORLDWIDE, INC. 2022 EQUITY INCENTIVE PLAN The aggregate fair market value of shares of our Common Stock with respect to which incentive stock options granted to any participant may first become exercisable during any calendar year may not exceed $100,000. Any incentive stock options that become exercisable in excess of this amount will be treated as nonqualified stock options. The maximum number of shares that may be issued upon the exercise of incentive stock option awards under the 2022 Plan is equal to the size of the 2022 Plan’s share reserve as described above. Stock Appreciation Rights. A SAR award provides the right to receive a payment from us equal to the difference between (i) the fair market value as of the date of exercise of the number of shares of our Common Stock as to which the SAR is being exercised, and (ii) the aggregate exercise price of that number of shares. The Committee determines whether payment will be made in shares of our Common Stock, cash or a combination of both. The exercise price per share of a SAR award will be determined by the Committee, but may not be less than 100% of the fair market value of one share of our Common Stock on the date of grant, unless the SAR is granted as a substitute award as described earlier. No dividends or dividend equivalents may be paid or credited with respect to shares subject to a SAR award. A SAR award may not have a term greater than 10 years from its date of grant, and will be subject to such other terms and conditions, consistent with the terms of the 2022 Plan, as may be determined by the Committee. Restricted Stock Awards. A restricted stock award is an award of our Common Stock that vests at such times and in such installments as may be determined by the Committee. Until it vests, the shares subject to the award are subject to restrictions on transferability and the possibility of forfeiture. The Committee may impose such restrictions or conditions to the vesting of restricted stock awards as it deems appropriate, including that the participant remain continuously in our service for a certain period or that we, or any of our subsidiaries or business units, satisfy specified performance goals. Any dividends or distributions payable with respect to shares that are subject to the unvested portion of a restricted stock award will be subject to the same restrictions and risk of forfeiture as the shares to which such dividends or distributions relate. Participants are entitled to vote restricted shares prior to the time they vest. Stock Unit Awards. A stock unit award is a right to receive the fair market value of a specified number of shares of our Common Stock, payable in cash, shares, or a combination of both, that vests at such times, in such installments and subject to such conditions as may be determined by the Committee. Until it vests, a stock unit award is subject to restrictions and the possibility of forfeiture. Stock unit awards will be subject to such terms and conditions, consistent with the other provisions of the 2022 Plan, as may be determined by the Committee. The Committee may provide for the payment of dividend equivalents on stock unit awards and other stock‑based awards, but any such dividend equivalents will be subject to the same restrictions and risk of forfeiture as the underlying units or other share equivalents to which such dividend equivalents relate. Performance Awards. A performance award is an award of shares of Common Stock or units that are only earned if certain conditions are met. Any award under the 2022 Plan may be granted as a performance-based award if the Committee establishes one or more measures of corporate, Other Stock‑Based Awards. The Committee may grant awards of Common Stock and other awards that are valued by reference to and/or payable in shares of our Common Stock under the 2022 Plan. The Committee has discretion in determining the terms and conditions of such awards. Vesting. The Plan allows for awards subject to either time-based vesting or performance-based vesting, or both. Awards that vest based solely on the satisfaction of service-based vesting conditions are subject to a minimum vesting period of one year from the date of grant, and awards whose grant or vesting is subject to performance-based vesting conditions must be subject to a performance period of at least one year. These required vesting and performance periods will not apply to (i) awards granted in payment of other compensation that is already earned and payable, (ii) a substitute award that does not reduce the vesting period of the award being replaced, or (iii) awards involving an aggregate number of shares not in excess of 5% of the 2022 Plan’s share reserve.
PROPOSAL FOUR: APPROVAL OF THE C.H. Transferability of Awards. In general, no right or interest in any award under the 2022 Plan may be assigned, transferred, exchanged or encumbered by a participant, voluntarily or involuntarily, except by will or the laws of descent and distribution. However, the Committee may provide that an award (other than an incentive stock option) may be transferable by gift to a participant’s family member or pursuant to a domestic relations order. Any permitted transferee of such an award will remain subject to all the terms and conditions of the award applicable to the participant. Corporate Transactions; Change in Control. If a corporate transaction or other change in control occurs, the Committee may, in its discretion, provide for one or more of the following with respect to awards under the 2022 Plan: (i) the continuation, assumption or replacement of outstanding awards; (ii) if awards are not assumed or replaced, the acceleration of vesting and exercisability of outstanding awards, in whole or in part, prior to or upon consummation of such change in control, or upon termination of a participant’s employment or other service under specified conditions within a specified period of time after the change in control; (iii) the cancellation of outstanding unexercised awards; or (iv) the cancellation of awards in exchange for payment to participants in cash equal to the difference, if any, between the fair market value of the consideration that would be received in the corporate transaction for the number of shares subject to the award and the aggregate exercise price (if any) of the shares subject to the award. The Committee may specify the action to be taken in an award agreement or may take the action prior to or coincident with the change in control and is not required to treat all awards or all participants similarly. In the case of performance awards, in the event of a change in control, all performance goals or other vesting criteria will be deemed achieved at the greater of actual or 100% of target levels, and all other terms and conditions will be deemed met. For purposes of the 2022 Plan, the following terms have the meanings indicated: a.A “corporate transaction” generally means (i) a sale or other disposition of all or substantially all of the assets of the company, or (ii) a merger, consolidation, share exchange or similar transaction involving the company. b.A “change in control” generally refers to a corporate transaction (as defined above), the acquisition by a person or group of beneficial ownership of 50% or more of the voting power of our stock, or our “continuing directors” ceasing to constitute a majority of our Board of Directors. Effect of Termination of Service. Unless otherwise set forth in an applicable agreement, if a participant’s employment or other service relationship with us and our subsidiaries is terminated, the 2022 Plan provides that unvested portions of his or her outstanding awards will be forfeited, and vested portions of outstanding option and SAR awards will continue to Effective Date and Term of the 2022 Plan. The 2022 Plan will become effective on Amendment of the Plan. The Board of Directors may amend the 2022 Plan from time to time. However, except in the case of adjustments upon changes in Common Stock, no amendment will be effective unless approved by the shareholders of the company to the extent shareholder approval is necessary to satisfy applicable laws or the rules of the Nasdaq Stock Market. Termination, suspension or amendment of the 2022 Plan may not adversely affect any outstanding award without the consent of the affected participant. U.S. Federal Income Tax Consequences The following is a summary of the principal United States federal income tax consequences to the company and to participants subject to U.S. taxation with respect to awards granted under the 2022 Plan, based on current statutes, regulations and interpretations. Non-qualified Stock Options. If a participant is granted a non-qualified stock option under the 2022 Plan, the participant will not recognize taxable income upon the grant of the option. Generally, the participant will recognize ordinary income at
PROPOSAL FOUR: APPROVAL OF THE C.H. the time of exercise in an amount equal to the difference between the fair market value of the shares acquired at the time of exercise and the exercise price paid. The participant’s basis in the Common Stock for purposes of determining gain or loss on a subsequent sale or disposition of such shares generally will be the fair market value of our Common Stock on the date the option was exercised. Any subsequent gain or loss will be taxable as a capital gain or loss. The company will generally be entitled to a federal income tax deduction at the time and for the same amount as the participant recognizes as ordinary income. Incentive Stock Options. If a participant is granted an incentive stock option under the 2022 Plan, the participant will not recognize taxable income upon grant of the option. Additionally, if applicable holding period requirements (a minimum of two years from the date of grant and one year from the date of exercise) are met, the participant will not recognize taxable income at the time of exercise. However, the excess of the fair market value of the shares acquired at the time of exercise over the aggregate exercise price is an item of tax preference income potentially subject to the alternative minimum tax. If shares acquired upon exercise of an incentive stock option are held for the holding period described above, the gain or loss (in an amount equal to the difference between the fair market value on the date of sale and the exercise price) upon disposition of the shares will be treated as a long-term capital gain or loss, and the company will not be entitled to any deduction. Except in the event of death, if the holding period requirements are not met, the incentive stock option will be treated as one that does not Other Awards. The current federal income tax consequences of other awards authorized under the 2022 Plan generally follow certain basic patterns. An award of restricted stock results in income recognition by a participant in an amount equal to the fair market value of the shares received at the time the restrictions lapse and the shares vest, unless the participant elects under Code Section 83(b) to accelerate income recognition and the taxability of the award to the date of grant. Stock unit awards generally result in income recognition by a participant at the time payment of such an award is made in an amount equal to the amount paid in cash or the then-current fair market value of the shares received, as applicable. SAR awards result in income recognition by a participant at the time such an award is exercised in an amount equal to the amount paid in cash or the then-current fair market value of the shares received by the participant, as applicable. In each of the foregoing cases, the company will generally have a corresponding deduction at the time the participant recognizes ordinary income, subject to Code Section 162(m) with respect to covered employees. Section 409A of the Code. The foregoing discussion of tax consequences of awards under the 2022 Plan assumes that the Awards Under the 2022 Plan The Committee has not yet approved any awards under, or subject to, the 2022 Plan. In addition, because all awards under the 2022 Plan are discretionary with the Committee, neither the number nor types of future 2022 Plan awards to be received by or allocated to particular participants or groups of participants is presently determinable. BOARD VOTING RECOMMENDATION
PROPOSAL FOUR: APPROVAL OF THE C.H. EQUITY COMPENSATION PLAN INFORMATION TABLE The following table summarizes share and
(1)Includes 6,493,864 stock options remaining outstanding for future exercise. (2)Includes 2,344,694 shares available for issuance under our Employee Stock Purchase Plan and 1,780,727 shares that may become subject to future awards in the form of stock options, restricted stock units, performance shares and performance-based restricted stock units under our 2013 Equity Incentive Plan.
OTHER INFORMATION SOLICITATION OF PROXIES C.H. Robinson is making this solicitation and is paying the costs of solicitation, including the cost of preparing and mailing the Notice of Internet Availability of Proxy Materials and this Proxy Statement. Proxies are being solicited primarily PROPOSALS FOR THE Consistent with our Bylaws and federal securities laws, any shareholder proposal to be presented at the
Tuesday, November 22, 2022. Please see "Proposal One: Election of Directors - Nominations" for information regarding the shareholder nomination process. The Securities and Exchange Commission has adopted rules that permit companies and intermediaries such as brokers to satisfy delivery requirements for proxy statements and annual reports with respect to two or more shareholders sharing the same address by delivering a single proxy statement or annual report, as applicable, addressed to those shareholders. This process, which is commonly referred to as If, at any time, you no longer wish to participate in householding and would prefer to receive a separate proxy statement or GENERAL Our Annual Report and Form10-K for the fiscal year ended December 31,
The information in this Proxy Statement under the captions “Compensation Discussion and
March 22, 2022
C.H. ROBINSON WORLDWIDE, INC. 2022 EQUITY INCENTIVE PLAN 1.Purpose. The purpose of the C.H. Robinson Worldwide, Inc. 2022 Equity Incentive Plan (the “Plan”) is to attract and retain the best available personnel for positions of responsibility with the Company, to provide additional incentives to them and align their interests with those of the Company’s stockholders, and to thereby promote the Company’s long-term business success. 2.Definitions. In this Plan, the following definitions will apply. a.“Affiliate” means any entity that is a Subsidiary or Parent of the Company. b.“Agreement” means the written or electronic agreement or notice containing the terms and conditions applicable to each Award granted under the Plan. An Agreement is subject to the terms and conditions of the Plan. c.“Award” means the grant of a compensatory award under the Plan in the form of an Option, Stock Appreciation Right, Restricted Stock, Stock Unit, or an Other Stock-Based Award. d.“Board” means the Board of Directors of the Company. e.“Cause” means what the term is expressly defined to mean in a then-effective written agreement (including an Agreement) between a Participant and the Company or any Affiliate, or in the absence of any such then-effective agreement or definition, a Participant’s (i) embezzlement or misappropriation of Company funds or property, (ii) failure to comply, as determined by the Company, with any applicable confidentiality, noncompetition or data security agreement or obligation, or (iii) failure to comply, as determined by the Company, with any applicable Management-Employee Agreement, Sales Employee Agreement or other agreement containing post-employment restrictions. f.“Change in Control” means any one of the following: i.An Exchange Act Person becomes the beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act) of securities of the Company representing more than 50% of the combined voting power of the Company’s then outstanding Voting Securities, except that the following will not constitute a Change in Control: 1.any acquisition of securities of the Company by an Exchange Act Person directly or indirectly from the Company for the purpose of providing financing to the Company; 2.any formation of a Group consisting solely of beneficial owners of the Company’s Voting Securities as of the effective date of this Plan; or 3.any repurchase or other acquisition by the Company of its Voting Securities that causes any Exchange Act Person to become the beneficial owner of more than 50% of the Company’s Voting Securities. If, however, an Exchange Act Person or Group referenced in clause (A), (B) or (C) above acquires beneficial ownership of additional Company Voting Securities after initially becoming the beneficial owner of more than 50% of the combined voting power of the Company’s Voting Securities by one of the means described in those clauses, then a Change in Control will be deemed to have occurred. i.Individuals who are Continuing Directors cease for any reason to constitute a majority of the members of the Board. ii.The consummation of a Corporate Transaction unless, immediately following such Corporate Transaction, (i) all or substantially all of the Persons who were the beneficial owners of the Company’s Voting Securities immediately prior to such Corporate Transaction beneficially own, directly or indirectly, more than 50% of the combined voting power of the then outstanding Voting Securities of the surviving or acquiring entity (or its Parent) resulting from such Corporate Transaction in substantially the same proportions as their ownership, immediately prior to such Corporate Transaction, of the Company’s Voting Securities, or (ii) more than 50% of the directors of the surviving or acquiring entity (or its Parent) are Continuing Directors. Notwithstanding the foregoing, to the extent that any Award constitutes a deferral of compensation subject to Code Section 409A, and if that Award provides for a change in the time or form of payment upon a Change in Control, then no Change in Control shall be deemed to have occurred upon an event described in this Section 2(f) unless the event would also constitute a change in ownership or effective control of, or a change in the ownership of a substantial portion of the assets of, the Company under Code Section 409A. g.“Code” means the Internal Revenue Code of 1986, as amended and in effect from time to time, and the regulations promulgated thereunder. h.“Committee” means two or more Non-Employee Directors designated by the Board to administer the Plan under Section 3, each member of which shall be (i) an independent director within the meaning of the rules and regulations of the NASDAQ Stock Market, and (ii) a non-employee director within the meaning
of Exchange Act Rule 16b-3. The Committee shall be the Compensation Committee of the Board unless otherwise specified by the Board. i.“Company” means C.H. Robinson Worldwide, Inc., a Delaware corporation, or any successor thereto. j.“Continuing Director” means an individual (A) who is, as of the effective date of the Plan, a director of the Company, or (B) who becomes a director of the Company after the effective date hereof and whose initial election, or nomination for election by the Company’s stockholders, was approved by at least a majority of the then Continuing Directors, but excluding for purposes of this clause (B) any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest. k.“Corporate Transaction” means (i) a sale or other disposition of all or substantially all of the assets of the Company, or (ii) a merger, consolidation, statutory share exchange or similar transaction involving the Company, regardless of whether the Company is the surviving corporation. l.“Disability” means (A) any permanent and total disability under any long-term disability plan or policy of the Company or its Affiliates that covers the Participant, or (B) if there is no such long-term disability plan or policy, “total and permanent disability” within the meaning Code Section 22(e)(3). m.“Employee” means an employee of the Company or an Affiliate. n.“Exchange Act” means the Securities Exchange Act of 1934, as amended and in effect from time to time. o.“Exchange Act Person” means any natural person, entity or Group other than (i) the Company or any Subsidiary; (ii) any employee benefit plan (or related trust) sponsored or maintained by the Company or any Affiliate; (iii) an underwriter temporarily holding securities in connection with a registered public offering of such securities; or (iv) an entity whose Voting Securities are beneficially owned by the beneficial owners of the Company’s Voting Securities in substantially the same proportions as their beneficial ownership of the Company’s Voting Securities. p.“Fair Market Value” means the fair market value of a Share determined as follows: i.If the Shares are readily tradable on an established securities market (as determined under Code Section 409A), then Fair Market Value will be the closing sales price for a Share on the principal securities market on which it trades on the date for which it is being determined, or if no sale of Shares occurred on that date, on the next preceding date on which a sale of Shares occurred, as reported in The Wall Street Journal or such other source as the Committee deems reliable; or ii.If the Shares are not then readily tradable on an established securities market (as determined under Code Section 409A), then Fair Market Value will be determined by the Committee as the result of a reasonable application of a reasonable valuation method that satisfies the requirements of Code Section 409A. q.“Full Value Award” means an Award other than an Option or Stock Appreciation Right. r.“Global Service Provider” means a Service Provider who is located outside of the United States, who is not compensated from a payroll maintained in the United States, or who is otherwise subject to (or could cause the Company to be subject to) legal, tax or regulatory requirements of countries outside of the United States. s.“Good Reason” means what the term is expressly defined to mean in a then-effective written agreement (including an Agreement) between a Participant and the Company or any Affiliate, or in the absence of any such then-effective agreement or definition, any of the following acts by the Company or the Affiliate to which the Participant provides Service and which occur without the Participant’s consent: (i) a material diminution in the Participant’s authority, duties or responsibilities; (ii) requiring the Participant to be based or to regularly perform Services at any location that is in excess of 50 miles from the principal location at which the Participant previously provided Services; provided that (A) if the Participant’s principal place of Services is his or her personal residence, this clause (ii) shall not apply and (B) neither the Participant’s relocation to remote work or back to the office from remote work will be considered a relocation of such employee’s principal location of Services for purposes of this definition; (iii) a material reduction in the Participant’s base salary or other material adverse change in the elements of compensation provided to Participant (other than a reduction or change applied generally to all salaried employees of the Company); or (iv) a material breach by the Company of any provision of Participant’s written employment agreement with the Company. Notwithstanding the foregoing, Good Reason shall not exist unless the Participant shall have first provided written notice to the Company of the occurrence of one or more of the conditions under clauses (i) through (iii) of this paragraph within 90 days of the condition’s initial occurrence, and such condition is not fully remedied by the Company within 30 days after the Company’s receipt of written notice from the Participant. t.“Grant Date” means the date on which the Committee approves the grant of an Award under the Plan, or such later date as may be specified by the Committee on the date the Committee approves the Award. u.“Group” means two or more persons acting as a partnership, limited partnership, syndicate or other group for the purpose of acquiring, holding or disposing of securities of the Company. v.“Non-Employee Director” means a member of the Board who is not an Employee.
w.“Option” means a right granted under the Plan to purchase a specified number of Shares at a specified price. An “Incentive Stock Option” or “ISO” means any Option designated as such and granted in accordance with the requirements of Code Section 422. A “Non-Qualified Stock Option” means an Option other than an Incentive Stock Option. x.“Other Stock-Based Award” means an Award described in Section 11 of this Plan. y.“Parent” means a “parent corporation,” as defined in Code Section 424(e). z.“Participant” means a person to whom an Award is or has been made in accordance with the Plan. aa.“Performance-Based Compensation” means an Award that is intended to constitute “performance-based compensation” and is awarded under Sections 6(g) and 17. ab.“Plan” means this C.H. Robinson Worldwide, Inc. 2022 Equity Incentive Plan. ac.“Prior Plans” means the C.H. Robinson Worldwide, Inc. 2013 Equity Incentive Plan and the 1997 Omnibus Stock Plan, as amended and restated as of the effective date of this Plan. ad.“Restricted Stock” means Shares issued to a Participant that are subject to such restrictions on transfer, forfeiture conditions and other restrictions or limitations as may be set forth in this Plan and the applicable Agreement. ae.“Service” means the provision of services by a Participant to the Company or any Affiliate in any Service Provider capacity. A Service Provider’s Service shall be deemed to have terminated either upon an actual cessation of providing services or upon the entity for which the Service Provider provides services ceasing to be an Affiliate. Except as otherwise provided in this Plan or any Agreement, Service shall not be deemed terminated in the case of (i) any approved leave of absence; (ii) transfers among the Company and any Affiliates in any Service Provider capacity; or (iii) any change in status so long as the individual remains in the service of the Company or any Affiliate in any Service Provider capacity. af.“Service Provider” means an Employee, a Non-Employee Director, or any consultant or advisor who is a natural person and who provides services (other than in connection with (i) a capital-raising transaction or (ii) promoting or maintaining a market in Company securities) to the Company or any Affiliate. ag.“Share” means a share of Stock. ah.“Stock” means the common stock, $0.10 par value, of the Company. ai.“Stock Appreciation Right” or “SAR” means the right to receive, in cash and/or Shares as determined by the Committee, an amount equal to the appreciation in value of a specified number of Shares between the Grant Date of the SAR and its exercise date. aj.“Stock Unit” means a right to receive, in cash and/or Shares as determined by the Committee, the Fair Market Value of a Share, subject to such restrictions on transfer, forfeiture conditions and other restrictions or limitations as may be set forth in this Plan and the applicable Agreement. ak.“Subsidiary” means a “subsidiary corporation,” as defined in Code Section 424(f), of the Company. al.“Substitute Award” means an Award granted upon the assumption of, or in substitution or exchange for, outstanding awards granted by a company or other entity acquired by the Company or any Affiliate or with which the Company or any Affiliate combines. am.“Voting Securities” of an entity means the outstanding equity securities entitled to vote generally in the election of directors of such entity. 3.Administration of the Plan. a.Administration. The authority to control and manage the operations and administration of the Plan shall be vested in the Committee in accordance with this Section 3. b.Scope of Authority. Subject to the terms of the Plan, the Committee shall have the authority, in its discretion, to take such actions as it deems necessary or advisable to administer the Plan, including: i.determining the Service Providers to whom Awards will be granted, the timing of each such Award, the types of Awards and the number of Shares or amount of cash covered by each Award, the terms, conditions, performance criteria, restrictions and other provisions of Awards, and the manner in which Awards are paid or settled; ii.cancelling or suspending an Award, accelerating the vesting of an Award , or otherwise amending the terms and conditions of any outstanding Award, subject to the requirements of Sections 6(b), 15(d) and 15(e); iii.establishing, amending or rescinding rules to administer the Plan, interpreting the Plan and any Award or Agreement made under the Plan, correcting any defect or omission or reconciling any inconsistency in the Plan and any Award or Agreement, and making all other determinations necessary or desirable for the administration of the Plan; and
iv.taking such actions as are described in Section 3(c) with respect to Awards to Global Service Providers. c.Awards to Global Service Providers. The Committee may grant Awards to Global Service Providers, on such terms and conditions different from those specified in the Plan as may, in the judgment of the Committee, be necessary or desirable to comply with applicable foreign laws and regulatory requirements and to promote achievement of the purposes of the Plan. In connection therewith, the Committee may establish such subplans, annexes to Award Agreements, and modify exercise procedures and other Plan rules and procedures to the extent such actions are deemed necessary or desirable, and may take any other action that it deems advisable to obtain local regulatory approvals or to comply with any necessary local governmental regulatory exemptions. Notwithstanding Section 18(f) of this Plan, to the extent that a provision set forth in an appendix to an Award Agreement for a Global Service Provider conflicts with the terms of the Plan, the Award Agreement Annex shall control. d.Acts of the Committee; Delegation. A majority of the members of the Committee shall constitute a quorum for any meeting of the Committee, and any act of a majority of the members present at any meeting at which a quorum is present or any act unanimously approved in writing by all members of the Committee shall be the act of the Committee. Any such action of the Committee shall be valid and effective even if the members of the Committee at the time of such action are later determined not to have satisfied all of the criteria for membership in clauses (i), (ii) and (iii) of Section 2(h). To the extent not inconsistent with applicable law or stock exchange rules, the Committee may delegate all or any portion of its authority under the Plan to any one or more of its members or, as to Awards to Participants who are not subject to Section 16 of the Exchange Act, to one or more directors or executive officers of the Company. The Committee may also delegate non-discretionary administrative responsibilities in connection with the Plan to such other persons as it deems advisable. e.Finality of Decisions. The Committee’s interpretation of the Plan and of any Award or Agreement made under the Plan and all related decisions or resolutions of the Board or Committee shall be final and binding on all parties with an interest therein. f.Indemnification. Each person who is or has been a member of the Committee or of the Board, and any other person to whom the Committee delegates authority under the penultimate sentence of Section 3(d), shall be indemnified by the Company, to the maximum extent permitted by law, against liabilities and expenses imposed upon or reasonably incurred by such person in connection with or resulting from any claims against such person by reason of the performance of the individual’s duties under the Plan. This right to indemnification is conditioned upon such person providing the Company an opportunity, at the Company’s expense, to handle and defend the claims before such person undertakes to handle and defend them on such person’s own behalf. The Company will not be required to indemnify any person for any amount paid in settlement of a claim unless the Company has first consented in writing to the settlement. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such person or persons may be entitled under the Company’s Certificate of Incorporation or Bylaws, as a matter of law, or otherwise. 4.Shares Available Under the Plan. a.Maximum Shares Available. Subject to Section 4(b) and to adjustment as provided in Section 12(a), the number of Shares that may be the subject of Awards and issued under the Plan shall be 4,261,884. Shares issued under the Plan may come from authorized and unissued shares or treasury shares. In determining the number of Shares to be counted against the Plan’s share reserve in connection with any Award, the following rules shall apply: i.Where the number of Shares subject to an Award is variable on the Grant Date, the number of Shares to be counted against the share reserve shall be the maximum number of Shares that could be received under that particular Award, until such time as it can be determined that only a lesser number of Shares could be received. ii.Where two or more types of Awards are granted to a Participant in tandem with each other, such that the exercise of one type of Award with respect to a number of Shares cancels at least an equal number of Shares of the other, the number of Shares to be counted against the share reserve shall be the largest number of Shares that would be counted against the share reserve under either of the Awards. iii.Substitute Awards shall not be counted against the share reserve, nor shall they reduce the Shares authorized for grant to a Participant in any calendar year. iv.Awards that may be settled solely in cash shall not be counted against the share reserve, nor shall they reduce the Shares authorized for grant to a Participant in any calendar year. b.Effect of Forfeitures and Other Actions. Any Shares subject to an Award, or to an award granted under the Prior Plans that is outstanding on the effective date of this Plan (a “Prior Plan Award”), that is forfeited, terminated or expires or is settled for cash shall, to the extent of such forfeiture, termination, expiration or
cash settlement, become available for future Awards under this Plan, and the total number of Shares available for grant under Section 4(a) shall be correspondingly increased. The following Shares shall not, however, become available for future Awards or increase the number of Shares available for grant under Section 4(a): (i) Shares tendered by the Participant or withheld by the Company in payment of the purchase price of a stock option issued under this Plan or the Prior Plans, (ii) Shares tendered by the Participant or withheld by the Company to satisfy any tax withholding obligation with respect to any awards under this Plan or the Prior Plans, (iii) Shares repurchased by the Company in the open market with proceeds received from the exercise of a stock option issued under this Plan or the Prior Plans, and (iv) Shares subject to a stock option or stock appreciation rights award issued under this Plan or the Prior Plans that are not issued in connection with the stock settlement of that award upon its exercise. c.Effect of Plans Operated by Acquired Companies. If a company acquired by the Company or any Subsidiary or with which the Company or any Subsidiary combines has shares available under a pre-existing plan approved by stockholders and not adopted in contemplation of such acquisition or combination, the shares available for grant pursuant to the terms of such pre-existing plan (as adjusted, to the extent appropriate, using the exchange ratio or other adjustment or valuation ratio or formula used in such acquisition or combination to determine the consideration payable to the holders of common stock of the entities party to such acquisition or combination) may be used for Awards under the Plan and shall not reduce the Shares authorized for grant under the Plan. Awards using such available shares shall not be made after the date awards or grants could have been made under the terms of the pre-existing plan, absent the acquisition or combination, and shall only be made to individuals who were not Employees or Non-Employee Directors prior to such acquisition or combination. d.No Fractional Shares. Unless otherwise determined by the Committee, the number of Shares subject to an Award shall always be a whole number. No fractional Shares may be issued under the Plan, but the Committee may, in its discretion, either pay cash in lieu of any fractional Share in settlement of an Award or eliminate any fractional Share. e.Limits on Awards to Non-Employee Directors. The aggregate grant date fair value (as determined in accordance with generally accepted accounting principles applicable in the United States) of all Awards granted during any calendar year to any Non-Employee Director (excluding any Awards granted at the election of a Non-Employee Director in lieu of all or any portion of retainers or fees otherwise payable to Non-Employee Directors in cash) shall not exceed $500,000. 5.Eligibility. Participation in the Plan is limited to Service Providers. Incentive Stock Options may only be granted to Employees who are not Global Service Providers. 6.General Terms of Awards. a.Award Agreement. Except for any Award that involves only the immediate issuance of unrestricted Shares, each Award shall be evidenced by an Agreement setting forth the number of Shares subject to the Award together with such other terms and conditions applicable to the Award (and not inconsistent with the Plan) as determined by the Committee. An Award to a Participant may be made singly or in combination with any form of Award. Two types of Awards may be made in tandem with each other such that the exercise of one type of Award with respect to a number of Shares reduces the number of Shares subject to the related Award by at least an equal amount. b.Vesting and Term. Each Agreement shall set forth the period until the applicable Award is scheduled to expire (which shall not be more than ten years from the Grant Date), and any applicable performance period. Awards that vest based solely on the satisfaction by the Participant of service-based vesting conditions shall be subject to a vesting period of not less than one year from the applicable Grant Date, and Awards whose grant or vesting is subject to the satisfaction of performance goals over a performance period shall be subject to a performance period of not less than one year. The foregoing minimum vesting and performance periods will not, however, apply in connection with: (i) a Substitute Award that does not reduce the vesting period of the award being replaced, (ii) Awards made in payment of or exchange for other compensation already earned and payable, and (iii) Awards involving an aggregate number of Shares not in excess of 5% of the Plan’s share reserve specified in Section 4(a). c.Transferability. Except as provided in this Section 6(c), and except for an Award that involves only the immediate issuance of unrestricted Shares, (i) during the lifetime of a Participant, only the Participant or the Participant’s guardian or legal representative may exercise an Option or SAR, or receive payment with respect to any other Award; and (ii) no Award may be sold, assigned, transferred, exchanged or encumbered other than by will or the laws of descent and distribution. Any attempted transfer in violation of this Section 6(c) shall be of no effect and unenforceable against the Company or any Affiliate. The Committee may, however, provide in an Agreement or otherwise that an Award (other than an Incentive Stock Option) may be transferred pursuant to a qualified domestic relations order or may be transferable by gift to any “family member” (as defined in General Instruction A(5) to Form S-8 under the Securities Act
of 1933) of the Participant. Any Award held by a transferee shall continue to be subject to the same terms and conditions that were applicable to that Award immediately before the transfer thereof. For purposes of any provision of the Plan relating to notice to a Participant or to acceleration or termination of an Award upon the death or termination of employment of a Participant, the references to “Participant” shall mean the original grantee of an Award and not any transferee. d.Designation of Beneficiary. To the extent permitted by the Committee, a Participant may designate a beneficiary or beneficiaries to exercise any Award or receive a payment under any Award payable on or after the Participant’s death. Any such designation shall be on a form approved by the Committee and shall be effective upon its receipt by the Company. e.Termination of Service. Unless otherwise provided in an Agreement, and subject to Section 12 of this Plan, if a Participant’s Service with the Company and all of its Affiliates terminates, the following provisions shall apply (in all cases subject to the scheduled expiration of an Option or Stock Appreciation Right, as applicable): i.Upon termination of Service for Cause or conduct during a post-termination exercise period that would constitute Cause, all unexercised Options and SARs and all unvested portions of any other outstanding Awards shall be immediately forfeited without consideration. ii.Upon termination of Service for any other reason, all unvested and unexercisable portions of any outstanding Awards shall be immediately forfeited without consideration. iii.Upon termination of Service for any reason other than Cause, death or Disability, the currently vested and exercisable portions of Options and SARs may be exercised for a period of three months after the date of such termination. However, if a Participant thereafter dies during such three-month period, the vested and exercisable portions of the Options and SARs may be exercised for a period of one year after the date of such termination. iv.Upon termination of Service due to death or Disability, the currently vested and exercisable portions of Options and SARs may be exercised for a period of one year after the date of such termination. f.Rights as Stockholder. No Participant shall have any rights as a stockholder with respect to any Shares covered by an Award unless and until the date the Participant becomes the holder of record of the Shares, if any, to which the Award relates. g.Performance-Based Awards. Any Award may be granted as Performance-Based Compensation if the Committee establishes one or more measures of corporate, business unit or individual performance which must be attained, and the performance period over which the specified performance is to be attained, as a condition to the vesting, exercisability, lapse of restrictions and/or settlement in cash or Shares of such Award. In connection with any such Award, the Committee shall determine the extent to which performance goals have been attained and other applicable terms and conditions have been satisfied, and the degree to which vesting, exercisability, lapse of restrictions and/or settlement in cash or Shares of such Award has been earned. Any Performance-Based Compensation shall additionally be subject to the requirements of Section 17 of this Plan. Except as provided in Section 17 with respect to Performance-Based Compensation, the Committee shall also have the authority to provide, in an Agreement or otherwise, for the modification of a performance period and/or an adjustment or waiver of the achievement of performance goals upon the occurrence of certain events, which may include a recapitalization, a change in the accounting practices of the Company, or the Participant’s death or Disability. h.Dividends and Dividend Equivalents. No dividends, dividend equivalents or distributions will be paid with respect to Shares subject to an Option or SAR. Any dividends or distributions that are paid with respect to Shares that are subject to the unvested portion of a Restricted Stock Award will be subject to the same restrictions as the Shares to which such dividends or distributions relate. Any dividends, dividend equivalents or distributions that are paid with respect to Stock Unit Award or Other Stock-Based Award Shares will be subject to the same vesting restrictions as the Shares to which such dividends or distributions relate. Subject to the vesting restrictions above, the terms of any dividend equivalents will be as set forth in the applicable Agreement, including the time and form of payment and whether such dividend equivalents will be credited with interest or deemed to be reinvested in additional units or Share equivalents. The Committee may, in its discretion, provide in an Agreement for restrictions on dividends and dividend equivalents in addition to those specified in this Section 6(h). i.Deferrals of Full Value Awards. The Committee may, in its discretion, permit or require the deferral by a Participant of the issuance of Shares or payment of cash in settlement of any Full Value Award, subject to such terms, conditions, rules and procedures as it may establish or prescribe for such purpose and subject further to compliance with the applicable requirements of Code Section 409A. The terms, conditions, rules and procedures for any such deferral shall be set forth in writing in the relevant Agreement or in such other agreement, plan or other document as the Committee may determine, including the Robinson Companies Nonqualified Deferred Compensation Plan, as amended (the “NQDC
Plan”), or some combination of such documents. The terms, conditions, rules and procedures for any such deferral shall address, to the extent relevant, matters such as: (i) the permissible time(s) and form(s) of payment of deferred amounts; (ii) the terms of any deferral elections by a Participant or of any deferral required by the Company; and (iii) the crediting of interest or dividend equivalents on deferred amounts. To the extent that any such deferral is effected in accordance with the NQDC Plan, the stock units credited to the NQDC Plan account of a Participant shall be deemed Stock Units for purposes of this Plan, and if settled in Shares, such Shares shall be drawn from and charged against the Plan’s share reserve. 7.Stock Option Awards. a.Type and Exercise Price. The Agreement pursuant to which an Option is granted shall specify whether the Option is an Incentive Stock Option or a Non-Qualified Stock Option. The exercise price at which each Share subject to an Option may be purchased shall be determined by the Committee and set forth in the Agreement and shall not be less than the Fair Market Value of a Share on the Grant Date, except in the case of Substitute Awards (to the extent consistent with Code Section 409A). b.Payment of Exercise Price. The purchase price of the Shares with respect to which an Option is exercised shall be payable in full at the time of exercise, which may include, to the extent permitted by the Committee, payment under a broker-assisted sale and remittance program acceptable to the Committee. The purchase price may be paid in cash or in such other manner as the Committee may permit, including by withholding Shares otherwise issuable to the Participant upon exercise of the Option or by delivery to the Company of Shares (by actual delivery or attestation) already owned by the Participant (in each case, such Shares having a Fair Market Value as of the date the Option is exercised equal to the purchase price of the Shares being purchased). c.Exercisability and Expiration. Each Option shall be exercisable in whole or in part on the terms provided in the Agreement. No Option shall be exercisable at any time after its scheduled expiration. When an Option is no longer exercisable, it shall be deemed to have terminated. d.Incentive Stock Options. i.An Option will constitute an Incentive Stock Option only if the Participant receiving the Option is an Employee who is not a Global Service Provider, and only to the extent that (i) it is so designated in the applicable Agreement and (ii) the aggregate Fair Market Value (determined as of the Option’s Grant Date) of the Shares with respect to which Incentive Stock Options held by the Participant first become exercisable in any calendar year (under the Plan and all other plans of the Company and its Affiliates) does not exceed $100,000 or such other amount specified by the Code. To the extent an Option granted to a Participant exceeds this limit, the Option shall be treated as a Non-Qualified Stock Option. The maximum number of Shares that may be issued upon the exercise of Incentive Stock Options shall be the total number of Shares in the Plan’s share reserve as specified in the first sentence of section 4(a), subject to adjustment as provided in Section 12(a). ii.No Participant may receive an Incentive Stock Option under the Plan if, immediately after the grant of such Award, the Participant would own (after application of the rules contained in Code Section 424(d)) Shares possessing more than 10% of the total combined voting power of all classes of stock of the Company or an Affiliate, unless (i) the option price for that Incentive Stock Option is at least 110% of the Fair Market Value of the Shares subject to that Incentive Stock Option on the Grant Date and (ii) that Option will expire no later than five years after its Grant Date. (3) For purposes of continued Service by a Participant who has been granted an Incentive Stock Option, no approved leave of absence may exceed three months unless reemployment upon expiration of such leave is provided by statute or contract. If reemployment is not so provided, then on the date six months following the first day of such leave, any Incentive Stock Option held by the Participant shall cease to be treated as an Incentive Stock Option and shall be treated for tax purposes as a Non-Qualified Stock Option. iii.If an Incentive Stock Option is exercised after the expiration of the exercise periods that apply for purposes of Code Section 422, such Option shall thereafter be treated as a Non-Qualified Stock Option. iv.The Agreement covering an Incentive Stock Option shall contain such other terms and provisions that the Committee determines necessary to qualify the Option as an Incentive Stock Option; however, the Company does not guarantee that an Option designated as an Incentive Stock Option will qualify as an Incentive Stock Option. 8.Stock Appreciation Rights. a.Nature of Award. An Award of Stock Appreciation Rights shall be subject to such terms and conditions as are determined by the Committee, and shall provide a Participant the right to receive upon exercise of the
SAR Award all or a portion of the excess of (i) the Fair Market Value as of the date of exercise of the SAR Award of the number of Shares as to which the SAR Award is being exercised, or (ii) the aggregate exercise price for such number of Shares. The per Share exercise price for any SAR Award shall be determined by the Committee and set forth in the applicable Agreement and shall not be less than the Fair Market Value of a Share on the Grant Date, except in the case of Substitute Awards (to the extent consistent with Code Section 409A). b.Exercise of SAR. Each Stock Appreciation Right may be exercisable in whole or in part at the times, on the terms and in the manner provided in the Agreement. No SAR shall be exercisable at any time after its scheduled expiration. When a SAR Right is no longer exercisable, it shall be deemed to have terminated. Upon exercise of a SAR, payment to the Participant shall be made at such time or times as shall be provided in the Agreement in the form of cash, Shares or a combination of cash and Shares as determined by the Committee. The Agreement may provide for a limitation upon the amount or percentage of the total appreciation on which payment (whether in cash and/or Shares) may be made in the event of the exercise of a SAR. 9.Restricted Stock Awards. a.Vesting and Consideration. Shares subject to a Restricted Stock Award shall be subject to vesting conditions, and the corresponding lapse or waiver of forfeiture conditions and other restrictions, based on such factors and occurring over such period of time as the Committee may determine in its discretion. The Committee may provide whether any consideration other than Services must be received by the Company or any Affiliate as a condition precedent to the grant of a Restricted Stock Award, and may correspondingly provide for Company repurchase rights if such additional consideration has been required and some or all of a Restricted Stock Award does not vest. b.Shares Subject to Restricted Stock Awards. Unvested Shares subject to a Restricted Stock Award shall be evidenced by a book-entry in the name of the Participant with the Company’s transfer agent. Any such book-entry shall be subject to transfer restrictions and accompanied by corresponding stop transfer instructions. Upon the vesting of Shares of Restricted Stock and the corresponding lapse of the restrictions and forfeiture conditions, the corresponding transfer restrictions will be removed from the book-entry evidencing such Shares. Such vested Shares may, however, remain subject to additional restrictions as provided in Section 18(c). Except as otherwise provided in the Plan or an applicable Agreement (which may include a waiver by the Participant of the right to vote or receive any dividend or distribution with respect to Shares of Restricted Stock), a Participant with a Restricted Stock Award shall have all the rights of a stockholder with respect to the Shares of Restricted Stock subject thereto. 10.Stock Unit Awards. a.Vesting and Consideration. A Stock Unit Award shall be subject to vesting conditions, and the corresponding lapse or waiver of forfeiture conditions and other restrictions, based on such factors and occurring over such period of time as the Committee may determine in its discretion. The Committee may provide whether any consideration other than Services must be received by the Company or any Affiliate as a condition precedent to the settlement of a Stock Unit Award. b.Payment of Award. Following the vesting of a Stock Unit Award, settlement of the Award and payment to the Participant shall be made at such time or times in the form of cash, Shares (which may themselves be considered Restricted Stock under the Plan subject to restrictions on transfer and forfeiture conditions) or a combination of cash and Shares as determined by the Committee. If the Stock Unit Award is not by its terms exempt from the requirements of Code Section 409A, then the applicable Agreement shall contain terms and conditions intended to avoid adverse tax consequences specified in Code Section 409A. 11.Other Stock-Based Awards. The Committee may from time to time grant Shares and other Awards that are valued by reference to and/or payable in whole or in part in Shares under the Plan. The Committee, in its sole discretion, shall determine the terms and conditions of such Awards, which shall be consistent with the terms and purposes of the Plan. The Committee may, in its sole discretion, direct the Company to issue Shares subject to restrictive legends and/or stop transfer instructions that are consistent with the terms and conditions of the Award to which the Shares relate. 12.Changes in Capitalization, Corporate Transactions, Change in Control. a.Adjustments for Changes in Capitalization. In the event of any equity restructuring (within the meaning of FASB ASC Topic 718—Stock Compensation, or any successor provision) that causes the per share value of Shares to change, such as a stock dividend, stock split, spinoff, rights offering or recapitalization through an extraordinary dividend, the Committee shall make such adjustments as it deems equitable and appropriate to (i) the aggregate number and kind of Shares or other securities issued or reserved for issuance under the Plan, (ii) the number and kind of Shares or other securities subject to outstanding
Awards, and (iii) the exercise price of outstanding Options and SARs. In the event of any other change in corporate capitalization, including a merger, consolidation, reorganization, or partial or complete liquidation of the Company, such equitable adjustments described in the foregoing sentence may be made as determined to be appropriate and equitable by the Committee to prevent dilution or enlargement of rights of Participants. In either case, any such adjustment shall be conclusive and binding for all purposes of the Plan. No adjustment shall be made pursuant to this Section 12(a) in connection with the conversion of any convertible securities of the Company, or in a manner that would cause Incentive Stock Options to violate Section 422(b) of the Code or cause an Award to be subject to adverse tax consequences under Section 409A of the Code. b.Change in Control. In the event of a Change in Control, the Committee may take such actions with respect to outstanding Awards as it deems appropriate under the circumstances, which may include one or more of the following: (i) providing for the continuation, assumption or replacement of outstanding Awards by the surviving or successor entity (or an affiliate thereof) with appropriate adjustments as may be required or permitted by Section 12(a); (ii) providing that outstanding Awards will terminate upon or immediately prior to the consummation of such Change in Control; (iii) if Awards are not assumed or replaced, providing that outstanding Awards will vest and become exercisable, realizable or payable, in whole or in part, immediately prior to or upon consummation of such Change in Control, or; (iv) providing that outstanding Awards will vest and become exercisable, realizable or payable, in whole or in part, upon termination of a Participant’s Service under specified conditions within a specified period of time after the Change in Control; or (iv) providing for the cancellation of any outstanding Award at or immediately prior to a Change in Control in exchange for a payment (in cash or other property) in an amount equal to the difference, if any, between (A) the fair market value (as determined in good faith by the Committee) of the consideration that would otherwise be received in the Change in Control for the number of Shares (vested and unvested) subject to the Award (or, if no such consideration would be received, the Fair Market Value of such number of Shares immediately prior to such Change in Control), and (B) the aggregate exercise price (if any) for the Shares subject to such Award (it being understood that if such amount would not be a positive number, then such Award may be canceled by the Company without payment). To the extent vesting of any Award is subject to satisfaction of specified performance goals, such Award shall be vested in connection with this Section 12(b) as if the performance goals are deemed to have been satisfied at the greater of the actual or target level of performance. Any action contemplated under this Section 12(b) may be specified by the Committee at the time an Award is made in the applicable Agreement or be taken by the Committee prior to or coincident with the time of the Change in Control. The Committee will not be required to treat all Awards or all Participants similarly. i.For purposes of this Section 12(b), an Award shall be considered assumed or replaced if, in connection with the Change in Control and in a manner consistent with Code Sections 409A and 424, either (i) the contractual obligations represented by the Award are expressly assumed by the surviving or successor entity (or an affiliate thereof) with appropriate adjustments to the number and type of securities subject to the Award and the exercise price thereof that preserves the intrinsic value of the Award existing at the time of the Change in Control, or (ii) the Participant has received a comparable award that preserves the intrinsic value of the Award existing at the time of the Change in Control and contains terms and conditions that are substantially similar to those of the Award. ii.Payment of any amount under this Section 12(b) shall be made in such form, on such terms and subject to such conditions as the Committee determines in its discretion, which may or may not be the same as the form, terms and conditions applicable to payments to the Company’s stockholders in connection with the Change in Control transaction, and may, in the Committee’s discretion, include subjecting such payments to vesting conditions comparable to those of the Award canceled, subjecting such payments to escrow or holdback terms comparable to those imposed upon the Company’s stockholders under the Change in Control transaction, or calculating and paying the present value of payments that would otherwise be subject to escrow or holdback terms. c.Parachute Payment Limitation. Notwithstanding any other provision of this Plan, if any of the payments or benefits provided or to be provided by the Company or its Affiliates to a Participant or for the Participant’s benefit pursuant to the terms of this Plan or another plan, arrangement or agreement ("Covered Payments") constitute "parachute payments" within the meaning of Section 280G of the Code, and would, but for this Section 12(c) be subject to the excise tax imposed under Section 4999 of the Code (or any successor provision thereto) or any similar tax imposed by state or local law and any interest or penalties with respect to such taxes (collectively, the "Excise Tax"), then the Covered Payments provided by this Plan shall be reduced (but not below zero) to the minimum extent necessary to ensure that no portion of the Covered Payments is subject to the Excise Tax.
d.Dissolution or Liquidation. Unless otherwise provided by the Committee (in an applicable Agreement or otherwise at the time of the event), if the stockholders of the Company approve the complete dissolution or liquidation of the Company, all outstanding Awards shall vest and become fully exercisable, and will terminate immediately prior to the consummation of any such proposed action. The Committee will notify each Participant as soon as practicable of such accelerated vesting and exercisability and pending termination. 13.Plan Participation and Service Provider Status. Status as a Service Provider shall not be construed as a commitment that any Award will be made under the Plan to that Service Provider or to eligible Service Providers generally. Nothing in the Plan or in any Agreement or related documents shall confer upon any Service Provider or Participant any right to continued Service with the Company or any Affiliate, nor shall it interfere with or limit in any way any right of the Company or any Affiliate to terminate the person’s Service at any time with or without Cause or change such person’s compensation, other benefits, job responsibilities or title. 14.Tax Withholding. The Company or any Affiliate, as applicable, shall have the right to (i) withhold from any cash payment under the Plan or any other compensation owed to a Participant an amount sufficient to cover any required withholding taxes related to the grant, vesting, exercise or settlement of an Award, and (ii) require a Participant or other person receiving Shares under the Plan to pay a cash amount sufficient to cover any required withholding taxes before actual receipt of those Shares. In lieu of all or any part of a cash payment from a person receiving Shares under the Plan, the Committee may permit the individual to cover all or any part of the required withholdings (up to the Participant’s maximum required tax withholding rate) through a reduction in the number of Shares delivered or through a delivery (either actually or by attestation) to the Company of Shares held by the Participant or other person, in each case valued in the same manner as used in computing the withholding taxes under applicable laws. 15.Effective Date, Duration, Amendment and Termination of the Plan. a.Effective Date. The Plan will become effective on the date it is approved by the Board, and the date of such approval will be considered the date of its adoption for purposes of Treasury Regulation §1.422-2(b)(2)(i). No Awards shall be made under the Plan prior to its effective date. If the Company’s stockholders fail to approve the Plan by May 4, 2023, the Plan will be of no further force or effect. b.Duration of the Plan. The Plan shall remain in effect until all Shares subject to it shall be distributed, all Awards have expired or terminated, the Plan is terminated pursuant to Section 15(c), or the tenth anniversary of the original effective date of the Plan, whichever occurs first (the “Termination Date”). Any Award made before the Termination Date may extend beyond the Termination Date and will continue to be subject to the terms of the Plan and the applicable Agreement, and the authority of the Committee provided for hereunder with respect to the Plan and any Awards, and the authority of the Board of Directors of the Company to amend the Plan, shall extend beyond the Termination Date. c.Amendment and Termination of the Plan. The Board may at any time terminate, suspend or amend the Plan. The Company shall submit any amendment of the Plan to its stockholders for approval only to the extent required by applicable laws or regulations or the rules of any securities exchange on which the Shares may then be listed. No termination, suspension, or amendment of the Plan may materially impair the rights of any Participant under a previously granted Award without the Participant’s consent, unless such action is necessary to comply with applicable law or stock exchange rules. d.Amendment of Awards. Subject to Sections 3(b)(2) and 15(e), the Committee may unilaterally amend the terms of any Agreement previously granted, except that no such amendment may materially impair the rights of any Participant under the applicable Award without the Participant’s consent, unless such amendment is necessary to comply with applicable law, stock exchange rules or any compensation recovery policy as provided in Section 18(i)(2). e.No Option or Stock Appreciation Right Repricing. Except as provided in Section 12(a), no Option or SAR Award granted under the Plan may be (i) amended to decrease the exercise price thereof, (ii) canceled in conjunction with the grant of any new Option or SAR Award with a lower exercise price, (iii) canceled in exchange for cash, other property or the grant of any Full Value Award at a time when the exercise price of the Option or SAR Award is greater than the current Fair market Value of a Share, or (iv) otherwise subject to any action that would be treated under accounting rules as a “repricing” of such Option or SAR Award, unless such action is approved by the Company’s stockholders. 16.Substitute Awards. The Committee may also grant Awards under the Plan in substitution for, or in connection with the assumption of, existing awards granted or issued by another corporation and assumed or otherwise agreed to be provided for by the Company pursuant to or by reason of a transaction involving a merger, consolidation, acquisition of property or stock, separation, reorganization or liquidation to which the Company or an Affiliate is a
party. The terms and conditions of the Substitute Awards may vary from the terms and conditions set forth in the Plan to the extent that the Board at the time of the grant may deem appropriate to conform, in whole or in part, to the provisions of the awards in substitution for which they are granted. 17.Performance-Based Compensation. a.Designation of Awards. If the Committee determines that an Award is Performance-Based, then the lapsing of restrictions thereon and the distribution of cash, Shares or other property pursuant thereto, as applicable, shall be subject to the achievement over the applicable performance period of one or more performance goals based on one or more of the performance measures specified in Section 17(b). The Committee will select the applicable performance measure(s) and specify the performance goal(s) based on those performance measures for any performance period, specify in terms of an objective formula or standard the method for calculating the amount payable to a Participant if the performance goal(s) are satisfied, and certify the degree to which applicable performance goals have been satisfied and any amount that vests and is payable in connection with an Award subject to this Section 17. In specifying the performance goals applicable to any performance period, the Committee may provide that one or more objectively determinable adjustments shall be made to the performance measures on which the performance goals are based, which may include adjustments that would cause such measures to be considered “non-GAAP financial measures” within the meaning of Rule 101 under Regulation G promulgated by the Securities and Exchange Commission, including adjustments for events that are unusual in nature or infrequently occurring, such as a Change in Control, acquisitions, divestitures, restructuring activities or asset write-downs, or for changes in applicable tax laws or accounting principles. The Committee may also adjust performance measures for a performance period in connection with an event described in Section 12(a) to prevent the dilution or enlargement of a Participant’s rights with respect to Performance-Based Compensation. The Committee may also provide, in an Agreement or otherwise, that the achievement of specified performance goals in connection with an Award subject to this Section 17 may be waived upon the death or Disability of the Participant. b.Performance Measures. For purposes of any Full Value Award considered Performance-Based Compensation subject to this Section 17, the performance measures to be utilized shall include but not be limited to one or a combination of two or more of the following: sales values; volume; revenue; income from operations; net sales; net earnings; earnings before one or more of interest expense, interest income, taxes, depreciation, amortization or incentive compensation expense; profitability as measured by return ratios (including, but not limited to, return on assets, return on equity, return on costs, return on invested or average capital employed and return on net sales) or by the degree to which any of the foregoing earnings measures exceed a percentage of revenue or net sales; cash flow; market share; margins (including, but not limited to, one or more of gross, operating and net earnings margins); stock price; economic value; cumulative total return to shareholders; asset quality; non-performing assets; operating assets; improvement in or attainment of expense levels or cost savings; and improvement in or attainment of working capital levels. Any performance goal based on one or more of the foregoing performance measures may be expressed in absolute amounts, on a per share basis (basic or diluted), as a growth rate or change from preceding periods, or as a comparison to the performance of specified companies or other external measures, and may relate to one or any combination of corporate, group, unit, division, Affiliate or individual performance. 18.Other Provisions. a.Unfunded Plan. The Plan shall be unfunded and the Company shall not be required to segregate any assets that may at any time be represented by Awards under the Plan. Neither the Company, its Affiliates, the Committee, nor the Board shall be deemed to be a trustee of any amounts to be paid under the Plan nor shall anything contained in the Plan or any action taken pursuant to its provisions create or be construed to create a fiduciary relationship between the Company and/or its Affiliates, and a Participant. To the extent any person has or acquires a right to receive a payment in connection with an Award under the Plan, this right shall be no greater than the right of an unsecured general creditor of the Company. b.Limits of Liability. Except as may be required by law, neither the Company nor any member of the Board or of the Committee, nor any other person participating (including participation pursuant to a delegation of authority under Section 3(c) of the Plan) in any determination of any question under the Plan, or in the interpretation, administration or application of the Plan, shall have any liability to any party for any action taken, or not taken, in good faith under the Plan. c.Compliance with Applicable Legal Requirements. No Shares distributable pursuant to the Plan shall be issued and delivered unless the issuance of the Shares complies with all applicable legal requirements, including compliance with the provisions of applicable state and federal securities laws, and the requirements of any securities exchanges on which the Company’s Shares may, at the time, be listed. During any period in which the offering and issuance of Shares under the Plan is not registered under
federal or state securities laws, Participants shall acknowledge that they are acquiring Shares under the Plan for investment purposes and not for resale, and that Shares may not be transferred except pursuant to an effective registration statement under, or an exemption from the registration requirements of, such securities laws. Stock certificates evidencing Shares issued under the Plan that are subject to such securities law restrictions shall bear an appropriate restrictive legend. d.Other Benefit and Compensation Programs. Payments and other benefits received by a Participant under an Award made pursuant to the Plan shall not be deemed a part of a Participant’s regular, recurring compensation for purposes of the termination, indemnity or severance pay laws of any country or state and shall not be included in, nor have any effect on, the determination of benefits under any other employee benefit plan, contract or similar arrangement provided by the Company or an Affiliate unless expressly so provided by such other plan, contract or arrangement, or unless the Committee expressly determines that an Award or portion of an Award should be included to accurately reflect competitive compensation practices or to recognize that an Award has been made in lieu of a portion of competitive cash compensation. e.Governing Law. To the extent that federal laws do not otherwise control, the Plan and all determinations made and actions taken pursuant to the Plan shall be governed by the laws of the State of Delaware without regard to its conflicts-of-law principles and shall be construed accordingly. f.Severability. If any provision of the Plan shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not been included. g.Code Section 409A. It is intended that all Awards granted under the Plan will be exempt from, or will comply with, the requirements of Code Section 409A, and to the maximum extent permitted the Awards and the Plan will be limited, construed and interpreted in accordance with such intent. Notwithstanding anything to the contrary in the Plan or any Agreement, with respect to any Award that constitutes a deferral of compensation subject to Code Section 409A: i.If any amount is payable under such Award upon a termination of Service, a termination of Service will be deemed to have occurred only at such time as the Participant has experienced a “separation from service” as such term is defined for purposes of Code Section 409A; ii.If any amount shall be payable with respect to any such Award as a result of a Participant’s “separation from service” at such time as the Participant is a “specified employee” within the meaning of Code Section 409A, then no payment shall be made, except as permitted under Code Section 409A, prior to the first business day after the earlier of (i) the date that is six months after the Participant’s separation from service or (ii) the Participant’s death. Unless the Committee has adopted a specified employee identification policy as contemplated by Code Section 409A, specified employees will be identified in accordance with the default provisions specified under Code Section 409A. Each amount to be paid under an Award or this Plan shall be construed as a separate and distinct payment for purposes of Code Section 409A. None of the Company, the Board, the Committee nor any other person involved with the administration of this Plan shall in any way be responsible for ensuring the exemption of any Award from, or compliance by any Award with, the requirements of Code Section 409A. By accepting an Award under this Plan, each Participant acknowledges that the Company has no duty or obligation to design or administer the Plan or Awards granted thereunder in a manner that minimizes a Participant’s tax liabilities, including the avoidance of any additional tax liabilities under Code Section 409A. a.Rule 16b-3. It is intended that the Plan and all Awards granted pursuant to it shall be administered by the Committee so as to permit the Plan and Awards to comply with Exchange Act Rule 16b-3. If any provision of the Plan or of any Award would otherwise frustrate or conflict with the intent expressed in this Section 18(h), that provision to the extent possible shall be interpreted and deemed amended in the manner determined by the Committee so as to avoid the conflict. To the extent of any remaining irreconcilable conflict with this intent, the provision shall be deemed void as applied to Participants subject to Section 16 of the Exchange Act to the extent permitted by law and in the manner deemed advisable by the Committee. b.Forfeiture and Compensation Recovery. i.The Committee may specify in an Agreement that the Participant’s rights, payments, and benefits with respect to an Award will be subject to reduction, cancellation, forfeiture or recovery by the Company upon the occurrence of certain specified events, in addition to any otherwise applicable vesting or performance conditions of an Award. Such events may include termination of Service for Cause; violation of any material Company or Affiliate policy; breach of noncompetition, non-solicitation or confidentiality provisions that apply to the Participant; a determination that the payment of the Award was based on an incorrect determination that financial or other criteria were met or other conduct by the Participant that is detrimental to the business or reputation of the Company or its Affiliates.
ii.Awards and any compensation associated therewith may be made subject to forfeiture, recovery by the Company or other action pursuant to any compensation recovery policy adopted by the Board or the Committee at any time, including in response to the requirements of Section 10D of the Exchange Act and any implementing rules and regulations thereunder, or as otherwise required by law. Any Agreement may be unilaterally amended by the Committee to comply with any such compensation recovery policy. iii.Notwithstanding the terms of an Award, the Committee may, in its discretion, to the extent permitted by applicable law, require reimbursement or forfeiture of all or a portion of an Award granted under this Plan where the Committee has determined that all of the following factors are present: (i) the Company is required to prepare an accounting restatement due to material noncompliance with any financial reporting requirement under the securities laws that results from the Participant’s misconduct or supervisory or other failure, (ii) the award, vesting or payment of the Award was predicated upon the achievement of certain financial results for the Company or any of its Subsidiaries, Affiliates, divisions or other business units that were the subject of the restatement and such Award or its vesting or payment occurred or was received during the one-year period preceding the date on which the Company is required to prepare the restatement, and (iii) a smaller amount of an Award, vesting or payment would have occurred or been made to the Participant based upon the restated financial results. In the Committee’s discretion, the Company may seek to recover or cancel the amount(s) by which a Participant’s Award’s, or vesting or payment thereunder that was vested or paid during the one-year period referenced above, exceeded the amount(s) that would have been awarded, vested or paid based on the restated financial results. The right to seek recovery of equity issued upon vesting or payment of an Award subject to recovery shall extend to any proceeds from the sale of such equity, and the amount of any reimbursement shall be based on the pre-tax amount of such recoverable compensation. If the Participant does not reimburse the Company for such amount(s) promptly after request by the Company for such reimbursement, the Company, among other remedies, may elect to recover the amount(s) by cancelling outstanding Awards or offsetting other amounts due or which may come due to the Participant under other compensation plans or programs.
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