| | Emphasis on deferrals The committee has designed our executive compensation program so a significant portion of an executive’s compensation is in the form of deferred incentives. The committee believes this appropriately aligns our executive’s interests with our shareholders as it focuses on long-term shareholder value creation. Approximately, 60% - 69%70% of incentive compensation of our CEO and each of our senior managing directors is deferred. The committee has nopre-established policy or target on the compensation mix between pay elements.
Performance-based equity awards Fifty percentNew for 2020, 60% of the combined value of the annual deferral award and the long-term equity award is performance-based. New for 2018 awardsVesting is tied to be granted in February 2019, the committee approved the following two performance measures –—adjusted operating margin (current) andRelativerelative TSR (new) over a three-year period.
The committee believes tying vesting to both adjusted operating margin and relative TSR over a multi-year period aligns with shareholder interests and the following goals with respect to performance-based awards: Relative TSR ∎
tracks value created for shareholders as a quantitative measure ∎
aligns with shareholder interests Adjusted operating margin (AOM) ∎
focuses discipline in corporate investments, initiatives and capital allocation ∎
is consistent with the way the business is managed ∎
is an important measure of overall strength of an asset manager ∎
aligns with Invesco’s shareholder value framework ∎
is a primary measure of focus of industry analysts ∎
is improved through effective management over the long term∎long-term
more effectively avoids conflicts of interest with clients Performance award vesting matrix The number of shares that vest will equal the target award amount multiplied by the vesting percentage associated with the Average AOM and Relative TSR ranking on the chart below. Vesting may range from 0% to 150%. We believe that the linked vesting performance thresholds provides significant rigor to our incentive program, as payouts are not a range of outcomes but represent specific performance levels.
The below vesting matrix is for performance-based equity awards granted in connection with 2020 pay. | | | | | | | | | | | | | | | | | | | | | Absolute 3-year | | Relative TSR1 | | average AOM (%) | | | Lowest | | | | 7th | | | | Median | | | | 3rd | | | | Highest | | | | | | | | < 41.0 | | | 100% | | | | 116% | | | | 133% | | | | 142% | | | | 150% | | | | | | | | 40.0 | | | 83% | | | | 103% | | | | 122% | | | | 133% | | | | 142% | | | | | | | | 39.0 | | | 67% | | | | 90% | | | | 111% | | | | 123% | | | | 133% | | | | | | | | 37.5 | | | 50% | | | | 75% | | | | 100% | | | | 113% | | | | 125% | | | | | | | | 36.0 | | | 33% | | | | 58% | | | | 83% | | | | 100% | | | | 117% | | | | | | | | 34.5 | | | 17% | | | | 42% | | | | 68% | | | | 88% | | | | 108% | | | | | | | | < 33.0 | | | 0% | | | | 25% | | | | 50% | | | | 75% | | | | 100% | |
43
1 | Points between the stated data points are determined by ratable straight line interpolation.
| | | | | | | | | | | | | | | | | | | | | | | | | | | Performance award vesting matrix | | | | | | In response to shareholder feedback, the committee added a second performance measure for performance-based equity awards. The number of shares that vest will equal the target amount multiplied by the vesting percentage associated with the Average AOM and Relative TSR ranking on the chart below. Vesting to range from 0% to 150%. We believe that the linked vesting performance thresholds adds to the significant rigor of our incentive program as payouts are not a range of outcomes but represent specific performance levels. The company’s adjusted operating margin for 2018 was 36.5% and its Relative TSR was in the bottom quartile. Applying the 2018 performance results on a three-year average basis would result in a vesting percentage of 33% in respect to the 2018 performance-based awards – a meaningful impact on the compensation outcomes for our NEOs. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Relative TSR | | | Average AOM (%) | | | £ 25th%ile | | |
| > 25th%ile and
< 55th%ile |
| | | 55th%ile | | |
| > 55th%ile and
< 75th%ile |
| | | ³ 75th%ile | | | | | | < 44.5 | | | 100 | | | | 113 | | | | 125 | | | | 138 | | | | 150 | | | | | | 42.5 | | | 83 | | | | 101 | | | | 117 | | | | 129 | | | | 142 | | | | 40.5 | | | 67 | | | | 88 | | | | 108 | | | | 121 | | | | 133 | | | | 38.5 | | | 50 | | | | 75 | | | | 100 | | | | 113 | | | | 125 | | | | 36.5 | | | 33 | | | | 58 | | | | 83 | | | | 101 | | | | 117 | | | | 34.5 | | | 17 | | | | 42 | | | | 68 | | | | 88 | | | | 108 | | | | £ 28.0 | | | 0 | | | | 25 | | | | 50 | | | | 75 | | | | 100 | | | | As noted above, if Invesco’s Relative TSR is equal to or below the 25th percentile and average adjusted operating margin is 28.0% or less, then our CEO and each of our senior managing directors will not be entitled to a distribution of any shares or accrued dividends. | | | | | The rigor of the thresholds, as well as the partial vesting of awards for failure to meet the target range and an upside opportunity for performance beyond the target range, align with the committee’s belief that the company’s performance-based awards demonstrate our pay-for-performance philosophy. | | | | | Below is a summary of the features of our performance awards: | | | | | | | | | | | | | | | | | | | | | | | | | | | | Performance-based award features | | | Performance period | | | | Three years | | | Performance metrics | | | | Adjusted operating margin and Relative TSR | | | Performance vesting range | | | | 0% - 150%; straight line interpolation used for actual result | | | Vesting | | | | 3-year cliff | | | Dividends | | | | Deferred and paid only to the extent an award vests | | | Settlement | | | | Shares | | | Clawback | | | | Subject to clawback policy in the event of fraudulent or willful misconduct |
44
| | | | | | | 3 | | Compensation Determination Process |
| | | | | | | | | | | | | | | | Determining NEO compensationIf Invesco’s Relative TSR is the lowest ranked and average adjusted operating margin is 33% or less, then our CEO and each of our executives will not be entitled to a distribution of any shares or accrued dividends.
The rigor of the thresholds, as well as the partial vesting of awards for failure to meet the target range and an upside opportunity for performance beyond the target range, align with the the company’s operating plan and committee’s belief that the company’s performance-based awards demonstrate our pay-for-performance philosophy. Below is our“4-step” timeline that describesa summary of the committee’s year-long compensation responsibilities and process for determining executive compensation, including individual NEO compensation. In making compensation decisions, the committee makes a quantitative assessmentfeatures of companyour performance (as described on pages35-36) and a qualitative assessment of individual performance. As noted, the committee reviews firm and peer financial data as well as progress against our annual operating plan. The committee’s philosophy demonstrates alignment with our executive compensation outcomes and our annual financial performance and multi-year strategic objectives. SeeNEO Compensation and Performance Summaries starting on page 48 for a description of NEO achievements in the context of quantitative company performance.awards: | | | | | Performance-based award features | | |
| | | | | 1 | | Step one| January- February
Confirm strategic objectives and establish operating plan
| | | | | | | | Review annual plan and set CEO goals and objectives | | | | | The Board reviews and affirms the firm’s multi-year strategic objectives. The Board establishes an annual operating plan, including financial planning and operational performance based upon the multi-year-strategic objectives. The committee approves the CEO’s performance goals, which are the firm’s annual operating plan. The Board and the committee are regularly updated on progress against our strategic objectives and operating plan which provides the context for performance evaluations atyear-end.
| | | | | | | | 2 | | Step two| March– Januaryof thefollowing year
Review financials and other firm data
| | | | | | | | Review company performance (financial performance, delivery to clients and organizational strength) and other firm data | | | | | The committee and executives review the firm’s performance against the annual operating plan within the context of the multi-year strategic objectives and projected financial information. Throughout the year, the Board reviews strategic plans, financial and business results, talent development and succession planning, as well as other areas relevant to the firm’s performance.
| | | | | | | | 3 | | Step three| October– January of the following year
Assess preliminary performance
| | | | | | | | Review firm and peer market data | | | | | Management reports to the Board and the committee on absolute and relative performance metrics compared to its peers, including financial performance, delivering to clients and organizational strength. | | | | | | | | Review consultant’s reports on compensation | | | | | During an executive session, the committee’s independent consultant reports on publicly disclosed financial and compensation information for the firm’s peers and provides general market trends and recommendations regarding the firm’s approach to compensation. | | | | | | | | Discuss preliminary NEO performance and pay | | | | | During an executive session, the CEO and Head of Human Resources meet with the committee to discuss a preliminary assessment of the performance of each NEO (other than the CEO) against company performance. During a later part of this executive session that excludes the CEO, the committee and Head of Human Resources engage in a preliminary assessment of the performance of the CEO against the firm’s annual operating plan. Company performance is assessed on a scorecard of three quantitative measures (financial performance, delivery to clients and organizational strength). | | | | | | | |
45
| Performance period | | Three years | | | Performance metrics | | Adjusted operating margin and Relative TSR | | | Performance vesting range | | 0% - 150%; straight line interpolation used for actual result | | | Vesting | | 3-year cliff | | | Dividends | | Deferred and paid only to the extent an award vests | | | Settlement | | Shares | | | Clawback | | Subject to clawback policy in the event of fraudulent or willful misconduct | 4 | | |
Step fourI December– FebruarySee page 57 for a list of thefollowingyear
Establish annual incentive pool; assess final performance; and determine compensation
| | | | | Establish annual incentive pool | | | The committee establishes a company-wide annual incentive pool using a range of34-48% ofpre-tax bonus operating income (“PCBOI”). The committee may go outside the range in circumstances it deems exceptional. Linking the aggregate incentive compensation pool to a defined range of PCBOI ensures incentive compensation is paid only when the company is generating operating income. The final pool is based on a review of full year financial information as well as peer compensation data and input from the committee’s independent consultant. | | | | | Determine executive compensation | | | During an executive session attended by the committee’s independent consultant, the committee reviews each NEO’s performance against individual goals and company performance and determines compensation based upon each NEO’s compensation target. Company performance is assessed based on a scorecard of three quantitative measures (financial performance, delivery to clients and organizational strength). | | | | | The committee reviews and confirms compensation targetspeers that we use for each NEO for the upcoming year as well as setting the terms of the time-based andour performance-based equity awards. See pages 42-43 for information about each of Invesco’s elements of pay and their purpose.
|
| | | | | | | Role of the compensation committee | | | | | The committee’s responsibilities include: | | | | | ∎
reviewing and making recommendations to the Boardboard about the company’s overall compensation philosophy; | | | | | ∎
approving the aggregate compensation pool; | | | | | ∎
evaluating the performance of, and setting the compensation for, the CEO; and | | | | | ∎
overseeing management’s annual process for evaluating the performance of, and approving the compensation for, all other executive officers. | | | | | | | | | | Role of the independent compensation consultant | | | | | The committee has engaged Johnson Associates, an independent consulting firm, to advise it on director and executive compensation matters. Johnson Associates assists the committee throughout the year by: | | | | | ∎
providing analysis and evaluation of our overall executive compensation program, including compensation paid to our directors and NEOs; | | | | | ∎
attending certain meetings of the committee and periodically meeting with the committee without members of management present; | | | | | ∎
providing the committee with market data and analysis that compares executive compensation paid by the company with that paid by other firms in the financial services industry, which we consider generally comparable to us; and | | | | | ∎
providing commentary regarding market conditions, market impressions and compensation trends. | |
Under the terms of its engagement with the committee, Johnson Associates does not provide any other services to the company unless the committee has approved such services. No such other services were provided in 2018.2020. The committee has considered various factors as required by NYSE rules as to whether the work of Johnson Associates with respect to director and executive compensation-related matters raised any conflict of interest. The committee has determined no conflict of interest was raised by the engagement of Johnson Associates. | | | | | | | | | Role of the executive officers | | | | | Our chief executive officer meets with thenon-executive directors throughout the year to discuss executive performance and compensation matters, including proposals on compensation for individual executive officers (other than himself). Our chief executive officer and head of human resources work with the committee to implement our compensation philosophy. They also provide to the committee information regarding financial and investment performance of the company as well as our progress toward our long-term strategic objectives. Our chief financial officer assists as needed in explaining specific aspects of the company’s financial performance. | | |
46
| | | | | | | | | Market data | | | The committee, with assistance from Johnson Associates, reviews the composition of our peer group to ensure that the group continues to serve as an appropriate market data provided byreference for executive compensation purposes. In considering the composition of our peer group, the committee considers a broad set of comparators firms from several perspectives. The committee evaluates business model and scope, historical pay ranges, and competitors who we compete for talent. Recent industry consolidation and a corresponding decline in the number of relevant peer firms, have created challenges in identifying a meaningful peer group. During the committee’s independent consultant includes performance and pay practices of firms in the financial services industry, which we consider generally comparablerecent peer group assessment, emphasis was given to us. Thisa narrower, exclusively investment management focused peer group. The peer group as described below, includes a mix of publicly traded US and globalemphasizes pure asset management firms supplemented by firms with significant business overlap and banks. | | | | | | | | | | similar scale. The reference material provided by the committee’s independent consultant assists the committee in gaining an awareness of industry compensation standards, practices and trends and informs the committee’s compensation determinations for our executive officers, including our NEOs. | | | | | | | | | | The committeecompany’s peer group does not targetsolely determine executive pay outcomes but is a percentilereasonable reference point and one of market ormultiple perspectives considered when determining executive (including NEO) pay.Below is the compensation peer group with respect to total pay packages or any individual components. Individual NEO compensation decisions are primarily based onthat we will use for 2021 as well as for the committee’s assessment of company and individual performance. | | | | | | | | | | Peer group composition – compensation | | | In determining executive compensation, the committee reviews the executive compensation practices and levels of our industry peer companies, which consists of: | | | | | | | | | | US focused (7 peers) | | | - Affiliated Managers Group | | - Eaton Vance | | - TD Ameritrade | | | - Ameriprise Financial | | - Federated Investors | | - T. Rowe Price | | | - Charles Schwab | | | | | | | | | | | | | | Global (6 peers) | | | - AB | | - Franklin Resources | | - Lazard | | | - BlackRock | | - Legg Mason | | - Principal Financial Group | | | | | | | | | | Custody and trust banks (3 peers) | | | - Bank of New York Mellon | | - Northern Trust | | - State Street | | | | | | | | | | Peer group composition –2020 performance-based awards | | | In determining vesting for 2018 performance-based awards that were granted in February 2019, Relative TSR will be calculated based on the TSR of the company and the constituents of the S&P 500 asset managementsub-index for the performance measurement period. The committee believes that the S&P 500 asset management sub-index, although small, reflects the company’s core business activities. The committee will evaluate, from time to time, the appropriateness of this peer group. The current firms (other than Invesco) that comprise the S&P 500 asset management sub-index are: | 2021: | | | | | | | | | US focused (3 firms) | | | - Affiliated Managers Group | | - Ameriprise Financial | | - T. Rowe Price | | | | | | | | | | Global (2 firms) | | | - BlackRock | | - Franklin Resources | | | | | | | | | | | | Custody and trust banks (1 firm) | | | - Bank of New York Mellon | | | | | Peer group | | | | | • AllianceBernstein1 | | • Goldman Sachs (Asset Management) | | • Northern Trust1 | • Bank of NY Mellon1 | | • Janus Henderson1 | | • State Street1 | • BlackRock1 | | • Lazard1 | | • T. Rowe Price1 | • Franklin Resources1 | | • Morgan Stanley (Investment Management) | | |
47
1 | Vesting for performance-based equity awards is calculated based on absolute adjusted operating margin and the TSR of the company and its designated peer group. The above firms comprise the designated peer group for purposes of determining relative TSR for performance-based equity awards. |
| | | | | | | 4 | | NEO Compensation and Performance Summaries | | | | | Compensation policies and practices |
| | | | | | | | | Linking pay and performance
Below is a summary of 2018 NEO compensation and material accomplishments the committee considered when determining compensation for 2018.
|
Martin L. Flanagan
President and CEO
| | 2018 Compensation
(in 000s)
| | | | Responsibilities
Mr. Flanagan is President and CEO. He develops, guides and oversees execution of Invesco’s long-term strategic priorities to deliver value for clients and shareholders over the long-term.
Mr. Flanagan is responsible for senior leadership development and succession planning, defining and reinforcing Invesco’s purpose and engaging with key clients, industry leaders, regulators and policy makers.
| | | | Base salary | | $790 | | | | Annual incentive award - Cash | | $3,300 | | | | Annual incentive award - Stock deferral | | $1,350 | | | | Long-term equity award | | $5,560 | | | | Total annual compensation | | $11,000 | | | | | | | | | | | | | | | | | | | | | | | | In determining Mr. Flanagan’s compensation, the committee took into consideration (i) the positive achievements with respect to the company’s multi-year strategic objectives as discussed on page 2 and the “effective” rating of the company’s quantitative measures as discussed on pages 36 and 40, (ii) the company’s disappointing 2018 financial performance and short-term financial impact to shareholders (including the underperformance of Invesco’s stock relative to our peers) as discussed in the letter from the Chairperson and CEO and further on page 1, and (iii) overall market dynamics.
The committee decided, and Mr. Flanagan agreed, that his total incentive compensation should be lowered to $10.2 million, which is 78.5% of his 2018 incentive target of $13 million. Mr. Flanagan’s total 2018 compensation was down 20.1% from 2017.
| | | 2018 Key achievements
- Mr. Flanagan led the planned acquisition of MassMutual’s asset management affiliate, OppenheimerFunds, which is expected to close in the second quarter of 2019. The combination with OppenheimerFunds will help accelerate Invesco’s growth initiatives, increase our scale and client relevance, and expand our comprehensive suite of differentiated investment products. This strategic transaction is expected to bring Invesco’s total AUM to more than $1.1 trillion.
- Further strengthened our market-leading solutions capability, leveraging one of the industry’s strongest, most experienced solutions teams to deliver customized outcomes for clients.
- Under Mr. Flanagan’s leadership, the firm completed the acquisition of Guggenheim Investments’ exchange-traded funds (ETF) and Intelliflo, the No. 1 technology platform1 for financial advisors in the UK. The Guggenheim acquisition strengthened Invesco’s market-leading ETF capabilities as well as the firm’s efforts to meet the needs of institutional and retail clients in the U.S. and across the globe. Intelliflo builds on the 2016 acquisition of Jemstep to enable an advisor-focused digital platform that enhances the firm’s ability to meet evolving client needs.
| | | - Invesco launched a fixed income fund for investors to invest in China’s “Belt and Road” (B&R) initiative.
- Invesco Great Wall experienced strong growth. In June, Invesco Great Wall’s Jingyi Money Market Fund was selected as one of seven money market funds to be included in the money market program, Yu’E Bao, administered by Ant Financial, an affiliate of Alibaba. In addition, Invesco Great Wall won numerous industry awards sponsored by the Asset Management Association of China.
- Invesco won the 2018 Multi Asset Manager of the year award sponsored by the LAPF Investment Awards and was named best-performing ETF in the U.S. Small Cap Healthcare and Software categories.
- Invesco earned an A+ rating in PRI (Principles for Responsible Investment) for its overall approach to responsible investment for the second consecutive year.
- Mr. Flanagan continued to champion our corporate culture and provide development opportunities for our talented professionals across the globe. We continued to make progress toward our commitment to improve diversity across our global business.
- In 2018, Invesco was named one of the best places to work in money management byPensions and Investments®.
1 Platform - Adviser Market: Fintech and Digital, January 2018 report
|
48
| | | | | | | CEO pay and financial performance
The below charts demonstrate that over the last five years the committee has ensured that the CEO’s compensation has aligned closely with the financial outcomes of the firm.
| | | | | | | | | | | | | | | 1 Consists of salary, annual cash bonus, annual stock deferral award and long-term equity award (50% of the combined value of the annual stock deferral and long-term equity awards is performance based for 2017 and 2018). See note on page 41 regarding differences from the summary compensation table.
2 The adjusted financial measures are allnon-GAAP financial measures. See the information in Appendix B of this Proxy Statement regardingNon-GAAP financial measures.
| | | | | | | | | | The table below shows the year-over-year change in adjusted operating income, adjusted operating margin and CEO compensation: | | |
49
| | | | | | | | | Other NEO pay and performance
|
Loren M. Starr
Senior Managing Director
and Chief Financial Officer
| | 2018 Compensation
(in 000s)
| | | | Responsibilities
Mr. Starr serves as Senior Managing Director and Chief Financial Officer.
Mr. Starr is responsible for planning, implementing, managing and controlling all corporate financial-related activities of the firm,
including forecasting, strategic planning, capital allocations and expense management. He also oversees corporate finance, accounting, investor relations and corporate strategy.
| | Base salary | | $450 | | Annual incentive award - Cash | | $912 | | Annual incentive award - Stock deferral | | $397 | | Long-term equity award | | $1,641 | | Total annual compensation | | $3,400 | | | | | | | | | | | | | | | | | | | | | | | | | | | Based on the quantitative outcome of Invesco’s performance and a qualitative review of Mr. Starr’s individual performance, our committee determined that Mr. Starr’s total incentive compensation should be $2.95 million, which is 95.2% of his incentive target of $3.1 million. Mr. Starr’s total 2018 compensation was down 3.3% from 2017. | | | | | 2018 Key achievements
- Mr. Starr was responsible for identifying funding to support investments in long-term, strategic initiatives (the “growth initiatives”), which include ETFs, factor-based investing, solutions capabilities, expansion in China and our digital platforms.
- Mr. Starr assisted in the planning and execution of the Guggenheim and Intelliflo acquisitions. Mr. Starr was responsible for obtaining the funding, managing the synergies and delivering positive shareholder impacts for these transactions. Mr. Starr played a critical role in the planned acquisition of OppenheimerFunds, which is expected to close the second quarter of 2019.
- Under Mr. Starr’s leadership, the firm saved approximately $35 million through the elective application of the US Tax Reform opportunities and VAT refunds.
- In 2018, Mr. Starr took on the responsibility of client reporting for the Private Markets Investment Services Platform thereby creating a centralized approach to reporting and servicing clients across the private markets, including direct real estate, Invesco private capital and collateralized loan obligations.
- Mr. Starr continued to drive savings through our business optimization efforts, which delivered approximately $56 million in annualizedrun-rate savings as of the end of 2018. The savings are being reinvested in initiatives that strengthen our ability to meet client needs and key growth initiatives for future years.
|
50
| | | | | | |
Andrew T. S. Lo
Senior Managing Director
and Head of Asia Pacific
| | 2018 Compensation
(in 000s)
| | | | Responsibilities
Mr. Lo is Senior Managing Director and Head of Asia Pacific.
Mr. Lo is responsible for the firm’s operation in the Asia Pacific region where he endeavors to address the large and growing needs of our investors in the region. He works with clients to understand their issues and objectives and finding solutions for them.
| | Base salary | | $458 | | Annual incentive award – Cash | | $1,337 | | Annual incentive award – Stock deferral | | $529 | | Long-term equity award | | $2,200 | | Total annual compensation | | $4,524 | | | | | | | | | | | Based on the quantitative outcome of Invesco’s performance and a qualitative review of Mr. Lo’s individual performance, our committee determined that Mr. Lo’s total incentive compensation should be $4.1 million, which is 101.7% of his incentive target of $4.0 million. Mr. Lo’s total 2018 compensation was up 1.4% from 2017.
| | | 2018 Key achievements
- Under Mr. Lo’s leadership, the Asia-Pacific region experienced strong investment results with 66%, 79% and 78% of assets above peers on a1-,3- and5-year basis, respectively. AUM exceeded $104.5 billion, a record high for the region, representing a year-over-year growth of 17.4%, with 2018 net inflows of $13.4 billion.
- Mr. Lo led the initiative to accelerate our China growth opportunities. China-sourced AUM grew from $28 billion to $36.8 billion and net inflows increased by $14.0 billion. Growth of Invesco Great Wall’se-commerce business accelerated in 2018, with a 2014 - 2018 compound annual growth rate of 548% in money market funds, 48% in equity and 133% in fixed income. Thee-commerce business has transformed the digital distribution engagement with key online platforms in China, accounting for 44% of total Invesco Great Wall AUM as of the end of 2018. Invesco Great Wall is ranked amongst the top fund management firms on Ant FinancialsE-commerce platform, in terms of growth and number of clients, with AUM of $11.1 billion. Additionally, Invesco’s investment performance in China was recognized by numerous awards, including Excellent FMC & Management Leadership and Excellent Portfolio Management & Team by Asset Management Association of China.
- Mr. Lo assisted with expanding the firm’s relevance in Australia by creating and launching specialized and differentiating strategies; AUM grew over 60% in 2018.
- Mr. Lo’s continued success in delivering Invesco’s global capabilities to meet clients’ needs grew gross sales in the region by $29.6 billion.
- Under Mr. Lo’s leadership, the firm has seen success with Invesco’s growth initiatives - winning the first factor mandate and assisting with positioning Invesco as the number one fixed maturity products provider in Taiwan.
- Mr. Lo received the Lifetime Achievement Award in 2018 by Asia Asset Management.
|
51
| | | | | | |
Gregory G. McGreevey
Senior Managing Director,
Investments
| | 2018 Compensation
(in 000s)
| | | | Responsibilities
Mr. McGreevey serves as Senior Managing Director, Investments. He has responsibility for certain of Invesco’s global investment teams, trading, Global Performance and Risk Group and investment administration.
| | Base salary | | $450 | | Annual incentive award – Cash | | $1,801 | | Annual incentive award – Stock deferral | | $674 | | Long-term equity award | | $2,075 | | Total annual compensation | | $5,000 | | | | | |
|
|
|
|
|
| | | | | | | | | | | | | | | | | | | | | Based on the quantitative outcome of Invesco’s performance and a qualitative review of Mr. McGreevey’s individual performance, our committee determined that Mr. McGreevey’s total incentive compensation should be $4.55 million, which is 98.9% of his incentive target of $4.6 million. Mr. McGreevey’s total 2018 compensation was unchanged from 2017.
| | | | | 2018 Key achievements
- The fixed income teams under his direction maintained strong investment performance with 64%, 72%, and 74% of assets in the top quartile of peer groups on a1-,3-, and5-year basis, respectively.
- Mr. McGreevey advanced the firm’s global leadership in factor investing by creating the Office of Global Factor Investing. He reinitiated the Factor Research Forum to ensure Invesco maintains the highest quality factor research within the organization. He also grew the Invesco Solutions team globally, adding expertise in Advisory, Analytics, and Portfolio Management. He led the establishment of the Solutions client engagement model, developing capabilities to reach retail and institutional clients in all regions.
- Mr. McGreevey advanced our global ESG presence. He played a key role in accepting the CIO Industry Innovation Award by advancing Invesco’s global ESG presence. The award recognizes Invesco as a global advocate for sustainability and leadership in sustainability reporting.
- Mr. McGreevey played a key role in driving diversity of thought among investors by forming the Global Investments Council and holding Invesco’s first annual Global Investors’ Forum Summit to foster strong relationships among the various investment teams through collaboration. The council encourages greater connectivity and improved access to team research. In addition, Mr. McGreevey is leading the effort to innovate across investment teams by creating twoinvestment-led innovation focus groups (Research and Implementation) to facilitate innovative capabilities that generate alpha and close technology gaps among current investment processes.
|
52
| | | | | | |
Philip A. Taylor
Vice Chair (formerly Senior
Managing Director and Head
of the Americas)
| | 2018 Compensation
(in 000s)
| | | | Responsibilities
Mr. Taylor has served as Vice Chair since March 2019. In his role as Vice Chair, Mr. Taylor continues to oversee activities in connection with the planned acquisition of Oppenheimer Funds and the succession of Mr. Schlossberg as senior managing director and head of the Americas.
Previously, Mr. Taylor served as senior managing director and head of Invesco’s Americas business and had responsibility for the firm’s exchange-traded funds capabilities globally, corporate communications and for human resources.
| | Base salary | | $492 | | Annual incentive award - Cash | | $2,235 | | Annual incentive award - Stock deferral | | $946 | | Long-term equity award | | $3,338 | | Total annual compensation | | $7,011 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Mr. Taylor’s compensation is based on his separation agreement entered into with the company in 2018. See page 56 for further details regarding 2019 payments required pursuant to Canadian employment law.
| | | | | | | 2018 Key achievements in prior role as Senior Managing Director and Head of the Americas
- Under Mr. Taylor’s leadership, the BulletShares ETFsline-up, acquired through the Guggenheim acquisition, saw $2.1 billion net inflows during 2018.
- Mr. Taylor played a key role in the expected acquisition of OppenheimerFunds, anticipated to close in second quarter 2019, which is expected to increase AUM by $213 billion and strengthen Invesco’s distribution capabilities.
- Mr. Taylor’s leadership increased distribution excellence in the Americas by creating a “Distribution Lab” to test and explore a variety of strategies utilizing data from the data analytics team created in 2017. The marketing team onboarded new automation capabilities to help increase recommendation lists, model placements and deepen platform intelligence.
| | |
53
| | | | | | | 5 | | Compensation Policies and Practices | | | | | |
| | | | | | | | | Summary of executive compensation practices Our executive compensation program reflects our commitment to responsible financial and risk management and is demonstrated by the following policies and practices: | | | | | | | ✓ | Align pay with performance |
✓ | Link incentive compensation to the firm’s performance |
✓ | Emphasize deferred compensation with long vesting periods in order to align executives with client and shareholder interests |
✓ | Robust performance measures |
✓ | Require 60% of equity awards for executive officers to be performance-based |
✓ | Maintain a clawback policy for executive officers for performance-based compensation |
✓ | Engage in frequent outreach to provide shareholders and major proxy advisory firms with opportunities for feedback and insights on our executive compensation program |
✓ | Maintain significant stock ownership guidelines for our executive officers |
✓ | Maintain a cap on cash bonuses for our executive officers and total compensation cap for our CEO |
✓ | Utilize “double triggers” for vesting of equity awards in the event of a change in control |
✓ | Retain an independent compensation consultant to assess our executive compensation program |
What we don’t do X | No dividends or dividend equivalents on unvested performance-based awards | | | ✓ Align pay with performance
✓ Link incentive compensation to the firm’s performance
✓ Emphasize deferred compensation with long vesting periods in order to align executives with client and shareholder interests
✓ Require 50% of equity awards to be performance based
✓ Maintain a clawback policy allowing for the recoupment of performance-based compensation in the event of a material restatement of our financial results
✓ Engage in frequent outreach in order to provide shareholders with opportunities to provide feedback and insights on our executive compensation program
✓ Ensure executives meet our significant stock ownership guidelines
✓ Maintain a cap on CEO cash bonus and total compensation
✓ Utilize “double triggers” for vesting of equity awards in the event of a change in control
✓ Retain an independent compensation consultant to assess our executive compensation program
✓ Limit perquisites
✓ Monitor risk by regularly reviewing incentive compensation program and practices
| | | | × Pay dividends or dividend equivalents on unvested performance-based awards
× Provide tax gross ups
× Allow short selling, hedging or pledging of company stock by insiders
× Permit share recycling on stock options and stock appreciation rights
× Provide
|
X | No short selling, hedging or pledging of company stock by insiders |
X | No share recycling on stock options and stock appreciation rights |
X | No reloads on stock options or SARs |
X | No supplemental retirement benefits or retirement arrangements |
X | No supplemental severance benefit arrangements outside of standard benefits | | |
X | No repricing of stock options without shareholder approval | | | |
Stock ownership policy Our Executive Officer Stock Ownership Policy requires the CEO to hold at least 250,000 shares of Invesco common stock. All other NEOsexecutives must hold at least 100,000 shares of Invesco common stock. All of our NEOsexecutives have exceeded the stock ownership requirements. | | | Hedging policy As part of our Insider Trading Policy, our hedging policy prohibits hedging or monetization transactions, such as zero-cost collars and forward sale contracts, involving our securities; however, limited exceptions are allowed. To date, no exceptions have been made. The hedging policy is in place for all of our directors, officers, employees and any of their respective (i) family members that reside in the same household as the individual, (ii) anyone else who lives in the household, (iii) family members outside of the household that the individual directs or influences control and (iv) any entities, including any corporations, partnerships or trusts that the individual influences or controls. Certain aspects of this policy do not apply to Trian, an institutional investment manager of which Mr. Garden is Chief Investment Officer and Mr. Peltz is Chief Executive Officer, and the funds and investment vehicles managed by Trian. The company’s general policy nevertheless applies to each of Mr. Garden and Mr. Peltz in his individual capacity. Clawback policy All performance-based equity awards ofheld by our executivesexecutive officers are subject to forfeiture or “clawback” provisions, which provide that any vested or unvested shares, any dividends and the proceeds from any sale of such shares, are subject to recovery by the company in the event that: ∎
the company issues a restatement of financial results to correct a material error; ∎
the committee determines that fraud or willful misconduct on the part of the employee was a significant contributing factor; and ∎
some or all of the shares granted or received prior to such restatement would not have been granted or received based upon the restated financial results. |
| | | | | | | | All NEOs are entitled to receive medical, life and disability insurance coverage and other corporate benefits available to most of the company’s employees working in the same country. NEOs are also eligible to participate in the Employee Stock Purchase Plan on the same terms as the company’s other employees. In addition, the NEOs may participate in the 401(k) plan or similar retirement savings plans in the NEO’s home country. | | | | | | Perquisites | | | The company provides limited perquisites to its NEOs to aid the executives in their execution of company business. The committee believes the value of perquisites are reasonable in amount and consistent with its overall compensation plan. | | | | | Mr. Flanagan has personal use of company-provided aircraft. The company leases an airplane for which it pays direct operating expenses, monthly lease payments and management fees. | | | | | The compensationCompensation attributed to our NEOs for 20182020 perquisites is included in theAll Other Compensation Table for 20182020 on page 59. | | | | | | 62. Tax reimbursements | | | Invesco did not provide tax reimbursements for any perquisites or other compensation paid to our NEOs. | | | | | | Tax deductibility of compensation | | | With respectThe committee considers the tax and accounting consequences of the compensation plans applicable to tax years prior to 2018, Section 162(m) of theexecutive officers. Under Internal Revenue Code generally limited the deductibilitySection 162(m), compensation paid to certain executive officers of annual compensation paidpublic companies in excess of $1 million in any tax year to covered employees of publicly held corporations to $1 million per executive, unless such compensation qualified as performance-based. Covered employees include the chief executive officer and chief financial officer and the next three highest paid executive officers. | | | | | generally is not deductible. The Tax Cuts and Jobs Act, which was signed into law on December 22, 2017, substantially modified Section 162(m) and eliminated the performance-based pay exception to the $1 million deduction limit effective January 1, 2018. As a result, equity awards granted, or other compensation providedpreviously available under arrangements entered into or materially modified after November 2, 2017 generally will not be deductible to the extent they result in compensationSection 162(m) is no longer available except with respect to certain executivesgrandfathered amounts which may continue to be deductible. No actions have been taken that exceeds $1 million inwere intended to impact the status of any one year for such executive, whether or not it is performance-based. In addition, covered employees will include any individual who served as chief executive officer or chief financial officer at any time during the tax year and the three other most highly compensated officers (other than the chief executive officer and chief financial officer) for the tax year. Once an individual becomes a covered employee during any tax year beginning after December 31, 2016, that individual will remain a covered employee for all future tax years, including following any termination of employment. | | | | | The Tax Cuts and Jobs Act includes a transition relief rule under which the changes to Section 162(m) described above will not apply to compensation payable pursuant to a written binding contract that was in effect on November 2, 2017 and is not materially modified after that date. However, because of uncertainties as to the application and interpretation of the transition relief rule, no assurances can be given at this time that our existing contracts and awards, even if in place on November 2, 2017, will meet the requirements of the transition relief rule. | grandfathered amounts. 55
| | | | | Employment agreements | | | Martin L. Flanagan –— Our CEO has an employment agreement with the company. Under the employment agreement, Mr. Flanagan is employed as President and Chief Executive Officer of the company. The agreement terminates upon the earlier of December 31, 2025 (the year in which Mr. Flanagan reaches age 65) or the occurrence of certain events, including death, disability, termination by the company for “cause” or termination by Mr. Flanagan for “good reason.” | | | | | The terms of Mr. Flanagan’s amended employment agreement provide: | | | ∎
an annual base salary of not less than $790,000; | | | ∎
the opportunity to receive an annual cash bonus award based on the achievement of performance criteria; | | | ∎
the opportunity to receive share awards based on the achievement of performance criteria; | | | ∎
eligibility to participate in incentive, savings and retirement plans, deferred compensation programs, benefit plans, fringe benefits and perquisites and paid vacation, all as provided generally to other U.S.-based senior executives of the company; and | | | ∎ post-employment compensation of one times the sum of base, bonus and share awards, subject to certain agreed minimums described below; and
| | | ∎
certain stipulations regarding termination of employment that are described inPotential Payments Upon Termination or Change in Control. | | | | | In the event of his termination without “cause” or resignation for “good reason” he, Mr. Flanagan is entitled to receive the following payments and benefits (provided he has not breached certain restrictive covenants): | | | ∎
his then-effective base salary through the date of termination; | | | ∎
a prorated portion of the greater of $4,750,000 or his most recent annual cash bonus; | | | ∎
immediate vesting and exercisability of all outstanding share-based awards;awards (with performance-based awards vested at 100% of target); | | | ∎
any compensation previously deferred under a deferred compensation plan (unless a later payout date is stipulated in his deferral arrangements); | | | ∎
a cash severance payment generally equal to the sum of (i) his base salary; (ii) the greater of $4,750,000 or his most recent annual cash bonus; and (iii) the amount of his most recently maderecent annual equity grant (unless the value thereof is less than 50% of the next previously-made grant, in which case the value of the next previously-made grant will be used); | | | ∎
continuation of medical benefits for him, his spouse and his covered dependents for a period of up to 36 months following termination; | | | ∎
any accrued vacation; and | | | ∎
any other vested amounts or benefits under any other plan or program.
Philip TaylorLoren Starr -— On November 20, 2018,February 24, 2020, the company announced the planned departurethat Mr. Starr would transition from chief financial officer to Vice Chair of Mr. Taylor at the end of 2019. Mr. Taylor and the company entered intoeffective August 1, 2020. As Vice Chair, Mr. Starr acted as a separation agreement, which provides for certain payments as outlined below:
| | | ∎ Continuation of current monthly salary until Mr. Taylor’s departure date;
| | | ∎ For 2018, a cash bonus of $2,117,232, annual deferral award of $895,752 and long-term equity of $3,337,960;1
| | | ∎ For 2019, a cash bonus of $1,459,090 as compensation for continuing to oversee activities in connection with the planned acquisition of Oppenheimer Funds and the succession of Mr. Schlossberg as senior managing director and head of the Americas;
| | | ∎ Pursuant to applicable Canadian employment laws, required termination payments equal to (i) two years of salary and cash bonuses in the amount of $5,463,983; (ii) a cash payment of $1,058,428 equaladvisor to the amount of annual stock deferred awardscompany’s executive management team and long-term restricted stock awards that would vest during atwo-year term; and (iii) two years of groupled special projects. Mr. Starr remained Vice Chair until his retirement savings plan benefits infrom the amount of $20,576; andcompany on March 1, 2021.
| | | ∎ Acceleration of vestingIn July 2020, the committee approved the acceleration of all unvested annual stock deferral awards and long-term equity awards (with performance-based awards vesting at 100% of target) given Mr. Taylor’s 20Starr’s 15 years of valuable service to the company.
| | | | | Mr. Starr’s incentive awards were accelerated as of March 1, For 2018, Mr. Taylor’s actual cash bonus, annual deferred award and long-term equity were nominally larger to reflect the size of the final incentive pool. See page 53 for Mr. Taylor’s 2018 compensation outcomes. | 2021.56
| | | | | Other NEOs – — Our other NEOs are parties to employment arrangements that create salary continuation periods of six or twelve months in the event of voluntary termination of service or involuntary termination of service without cause or unsatisfactory performance. See Potential Payments Upon Terminationpayments upon termination or Changechange in Control control below. | | | | | | Potential payments upon termination or change in control | | | Generally, all participants in our global equity incentive plans who hold equity awards (other than the parties covered by UCITS), including our NEOs, are eligible, under certain circumstances, for accelerated vesting in the event of a change of control of the company that is followed by involuntary termination of employment other than for cause or unsatisfactory performance or by voluntary termination for “good reason”. Philip Taylor has entered into an agreement with the company regarding his departure from the company at the end of 2019. This agreement is described in detail above. | | | | | | Compensation Committeecommittee report | | | The compensation committee has reviewed and discussed with management the Compensation Discussion and Analysis included in this Proxy Statement. Based on this review and discussion, the compensation committee has recommended to the Boardboard that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference into our Annual Report on Form10-K for the year ended December 31, 2018. | | | | | 2020. Respectfully submitted by the compensation committee: | | | | | C. Robert Henrikson (Chairperson) | | | (Chair) Sarah E. Beshar | | | BenThomas M. Finke1 Edward P. Garden1 William F. Johnson III | | | Glavin, Jr. Denis Kessler | | | Sir Nigel Sheinwald | | | G. Richard Wagoner, Jr. | | | Phoebe A. Wood |
57
1 | Mr. Finke joined the Compensation Committee effective December 1, 2020, and Mr. Garden joined the Compensation Committee effective November 4, 2020. |
| | | | | Summary compensation table for 20182020 The following table sets forth information about compensation earned by our named executive officers during 2016, 20172018, 2019 and 20182020 in accordance with SEC rules. The information presented below may be different from compensation information presented in this Proxy Statement under the captionExecutive compensation –— Compensation discussion and analysis, as such section describes compensation decisions made in respect of the indicated fiscal year, regardless of when such compensation was actually paid or granted. For an explanation of the principal differences between the presentation in the Compensation discussion and analysis and the table below, please see the note on page 41.44. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name and Principal Position | | Year | | | Salary ($)1 | | | Share awards ($)2 | | | Non-equity incentive plan compensation ($)3 | | | All other compensation ($)4 | | | Total ($) | | Martin L. Flanagan | | | 2020 | | | | 790,000 | | | | 7,755,984 | | | | 3,093,000 | | | | 108,118 | | | | 11,747,102 | | President and Chief | | | 2019 | | | | 790,000 | | | | 6,909,962 | | | | 3,704,000 | | | | 114,987 | | | | 11,518,949 | | Executive Officer | | | 2018 | | | | 790,000 | | | | 8,714,798 | | | | 3,300,000 | | | | 116,901 | | | | 12,921,699 | | | | L. Allison Dukes | | | 2020 | | | | 500,000 | | | | 1,499,996 | | | | 900,000 | | | | 7,550 | | | | 2,907,546 | | Senior Managing Director and Chief Financial Officer | | | | | | | | | | | | | | | | | | | | | | | | | | | Andrew T.S. Lo | | | 2020 | | | | 462,398 | | | | 2,941,920 | | | | 1,400,000 | | | | 69,536 | | | | 4,873,854 | | Senior Managing Director | | | 2019 | | | | 458,070 | | | | 2,729,163 | | | | 1,400,000 | | | | 63,677 | | | | 4,650,910 | | and Head of Invesco Asia Pacific | | | 2018 | | | | 457,978 | | | | 2,628,842 | | | | 1,337,213 | | | | 63,570 | | | | 4,487,603 | | | | Gregory G. McGreevey | | | 2020 | | | | 450,000 | | | | 3,499,978 | | | | 1,890,000 | | | | 30,024 | | | | 5,870,002 | | Senior Managing Director, | | | 2019 | | | | 450,000 | | | | 2,749,364 | | | | 2,100,000 | | | | 30,309 | | | | 5,329,673 | | Investments | | | 2018 | | | | 450,000 | | | | 2,632,942 | | | | 1,800,610 | | | | 29,349 | | | | 4,912,901 | | | | Andrew R. Schlossberg | | | 2020 | | | | 450,000 | | | | 2,729,981 | | | | 1,638,000 | | | | 63,676 | | | | 4,881,657 | | Senior Managing Director, | | | 2019 | | | | 450,000 | | | | 2,186,395 | | | | 1,820,000 | | | | 87,966 | | | | 4,544,361 | | Head of the Americas | | | 2018 | | | | 450,000 | | | | 2,159,940 | | | | 1,457,600 | | | | 47,442 | | | | 4,114,982 | | | | Loren M. Starr | | | 2020 | | | | 450,000 | | | | 2,037,974 | | | | 848,160 | | | | 32,096 | | | | 3,368,230 | | Retired Vice Chair, Former | | | 2019 | | | | 450,000 | | | | 2,037,854 | | | | 912,000 | | | | 31,934 | | | | 3,431,788 | | Senior Managing Director and | | | 2018 | | | | 450,000 | | | | 2,072,928 | | | | 911,976 | | | | 30,830 | | | | 3,465,734 | | Chief Financial Officer | | | | | | | | | | | | | | | | | | | | | | | | | | |
1 | For each of the named executive officers, includes salary that was eligible for deferral, at the election of the named executive officer, under our 401(k) plan or similar retirement savings plan in the named executive officer’s country. For each of the named executive officers, salary is unchanged from 2019. For Mr. Lo, base salary is converted to U.S. dollars using an average annual exchange rate, which accounts for the different salary amounts shown despite the fact Mr. Lo’s salary has not charged during the periods shown. |
2 | For share awards granted in 2020, includes (i) time-based equity awards that vest in four equal annual installments on each anniversary of the date of grant; and (ii) performance-based awards, which are subject to a three-year performance period (2020-2022) and vest on February 28, 2023. The value of performance-based awards is based on the grant date value and reflects the probable outcome of such conditions and represents the target level (100%) of achievement. If maximum level of performance had been assumed, the grant date fair value of the performance-based awards would have been: (i) $$5,816,988 for Mr. Flanagan; (ii) $1,528,481 for Mr. Starr; (iii) $2,206,440 for Mr. Lo; (iv) $2,624,983 for Mr. McGreevey; and (v) $2,047,486 for Mr. Schlossberg. See Grants of plan-based share awards for 2020 below for information about the number of shares underlying each of the equity awards. Grant date fair values were calculated in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 718 “Compensation — Stock Compensation” (“ACS 718”). The grant date fair value was calculated by multiplying the target number of shares granted by the closing price of the company’s common shares on the date of grant. The amounts disclosed do not reflect the value actually realized by the named executive officers. For additional information, please see Note 12 — “Common Share-Based Compensation” to the financial statements in our 2020 Annual Report on Form 10-K. |
3 | Reflects annual cash bonus award earned for the year by the named executive officers and paid in February of the following year. |
4 | The table below reflects the items that are included in the All Other Compensation column for 2020. |
All other compensation table for 2020 | | | | | | | | | | | | | | | | | | | | | | | | | | | Name | | Insurance premiums ($) | | | Company contributions to retirement and 401(k) plans ($)1 | | | Tax consultation ($) | | | Perquisites ($)2 | | | Total all other compensation ($) | | Martin L. Flanagan | | | 9,558 | | | | 23,100 | | | | — | | | | 75,460 | | | | 108,118 | | L. Allison Dukes | | | 300 | | | | 6,000 | | | | — | | | | — | | | | 6,300 | | Andrew T.S. Lo | | | 8,186 | | | | 53,425 | | | | 6,000 | | | | — | | | | 69,536 | | Gregory G. McGreevey | | | 6,924 | | | | 23,100 | | | | — | | | | — | | | | 30,024 | | Andrew R. Schlossberg | | | 2,460 | | | | 23,100 | | | | 30,961 | | | | 7,155 | | | | 63,676 | | Loren M. Starr | | | 8,996 | | | | 23,100 | | | | — | | | | — | | | | 32,096 | |
1 | Amounts of matching contributions paid by the company to our retirement savings plans are calculated on the same basis for all plan participants, including the named executive officers. |
2 | Perquisites include the following: |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Non-equity | | | All other | | | | | | | | | | | | | | | | incentive plan | | | compensation | | | | | Name and Principal Position | | Year | | | Salary ($)1 | | | Share awards ($)2 | | | compensation ($)3 | | | ($)4 | | | Total ($) | | | | | | | | | | | | | | | | | | | | | | | | | | | Martin L. Flanagan | | | 2018 | | | | 790,000 | | | | 8,714,708 | | | | 3,300,000 | | | | 116,901 | | | | 12,921,609 | | President and Chief | | | 2017 | | | | 790,000 | | | | 8,622,702 | | | | 4,268,003 | | | | 124,490 | | | | 13,805,195 | | Executive Officer | | | 2016 | | | | 790,000 | | | | 9,644,970 | | | | 4,045,500 | | | | 126,585 | | | | 14,607,055 | | | | | | | | | | | | | | | | | | | | | | | | | | | Loren M. Starr | | | 2018 | | | | 450,000 | | | | 2,072,928 | | | | 911,976 | | | | 30,830 | | | | 3,465,734 | | Senior Managing Director | | | 2017 | | | | 450,000 | | | | 2,050,470 | | | | 991,278 | | | | 29,709 | | | | 3,521,457 | | and Chief Financial Officer | | | 2016 | | | | 450,000 | | | | 2,293,987 | | | | 939,600 | | | | 28,374 | | | | 3,711,961 | | | | | | | | | | | | | | | | | | | | | | | | | | | Andrew T.S. Lo | | | 2018 | | | | 457,978 | | | | 2,628,842 | | | | 1,337,213 | | | | 63,570 | | | | 4,487,603 | | Senior Managing Director | | | 2017 | | | | 460,419 | | | | 2,549,447 | | | | 1,371,500 | | | | 66,011 | | | | 4,447,377 | | and Head of Invesco Asia Pacific | | | 2016 | | | | 462,062 | | | | 2,782,980 | | | | 1,300,000 | | | | 68,656 | | | | 4,613,698 | | | | | | | | | | | | | | | | | | | | | | | | | | | Gregory G. McGreevey5 | | | 2018 | | | | 450,000 | | | | 2,632,942 | | | | 1,800,610 | | | | 29,349 | | | | 4,912,901 | | Senior Managing Director, | | | 2017 | | | | 450,000 | | | | 3,274,988 | | | | 1,917,000 | | | | 27,861 | | | | 5,669,849 | | Investments | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Philip A. Taylor | | | 2018 | | | | 492,444 | | | | 4,333,222 | | | | 2,234,856 | | | | 18,617 | | | | 7,079,139 | | Vice Chair | | | 2017 | | | | 491,458 | | | | 4,034,918 | | | | 2,352,480 | | | | 16,579 | | | | 6,895,435 | | | | | 2016 | | | | 481,346 | | | | 4,519,953 | | | | 2,262,000 | | | | 17,494 | | | | 7,280,793 | |
1 | For each of the named executive officers, includes salary that was eligible for deferral, at the election of the named executive officer, under our 401(k) plan or similar plan in the named executive officer’s country. For each of the named executive officers, salary is unchanged from 2017.
|
| For Messrs. Lo and Taylor, base salary is converted to U.S. dollars using an average annual exchange rate, which accounts for the different salary amounts shown despite the fact neither has experienced a salary change during the period shown.
|
2 | For share awards granted in 2018, includes (i) time-based equity awards that generally vest in four equal annual installments on each anniversary of the date of grant; and (ii) performance-based awards, which are subject to a three-year performance period (2018-2020) and vest on February 28, 2021; except that, with respect to Mr. Taylor, the performance-based equity award is subject to a33-month performance period (January 1, 2018 - September 30, 2020) and vests on December 15, 2020. The value of performance-based awards is based on the grant date value and reflects the probable outcome of such conditions and represents the target level (100%) of achievement. SeeGrants of plan-based share awards for 2018below for information about the number of shares underlying each of the time-based equity awards.
|
| Grant date fair values were calculated in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 718 “Compensation – Stock Compensation” (“ACS 718”). The grant date fair value was calculated by multiplying the target number of shares granted by the closing price of the company’s common shares on the date of grant. The amounts disclosed do not reflect the value actually realized by the named executive officers. For additional information, please see Note 11 – “Share-Based Compensation” to the financial statements in our 2018 Annual Report on Form10-K.
|
3 | Reflects annual cash bonus award earned for the fiscal year by the named executive officers and paid in February of the following year.
|
4 | The table below reflects the items that are included in the All Other Compensation column for 2018.
|
5 | Mr. McGreevey became an executive officer in 2017.
|
58
| | | | | | | | | | | | | | | | | | | | | All other compensation table for 2018 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Company | | | | | | | | | | | | | | | | contributions to | | | Tax | | | | | | Total all other | | | | Insurance | | | retirement and | | | consultation | | | Perquisites | | | compensation | | Name | | premiums ($) | | | 401(k) plans ($)1 | | | ($) | | | ($)2 | | | ($) | | | | | | | | | | | | | | | | | | | | | | | Martin L. Flanagan | | | 7,698 | | | | 23,625 | | | | – | | | | 85,578 | | | | 116,901 | | | | | | | | | | | | | | | | | | | | | | | Loren M. Starr | | | 7,205 | | | | 23,625 | | | | – | | | | – | | | | 30,830 | | | | | | | | | | | | | | | | | | | | | | | Andrew T.S. Lo | | | 6,323 | | | | 52,872 | | | | 4,375 | | | | – | | | | 63,570 | | | | | | | | | | | | | | | | | | | | | | | Gregory G. McGreevey | | | 5,724 | | | | 23,625 | | | | – | | | | – | | | | 29,349 | | | | | | | | | | | | | | | | | | | | | | | Philip A. Taylor | | | 3,518 | | | | 10,419 | | | | 4,680 | | | | – | | | | 18,617 | | | | | | | | | | | | | | | | | | | | | | |
| | | | | 1 Amounts of matching contributions paid by the company to our retirement plans are calculated on the same basis for all plan participants, including the named executive officers.
2 Perquisites include the following:
With respect to Mr. Flanagan, includes $85,578$69,125 for his personal use of company-provided aircraft. The company leases an airplane for which it pays direct operating expenses and monthly lease payments and management fees. We calculate the aggregate incremental cost to the company for personal use based on the average variable costs of operating the airplanes.airplane. Variable costs include fuel, repairs, travel expenses for the flight crews and other miscellaneous expenses. This methodology excludes fixed costs that do not change based on usage, such as depreciation, maintenance, taxes and insurance. Mr. Flanagan’s total also includes certain amounts for technology support and feesthe value of a gift presented by the company. With respect to Mr. Schlossberg, includes (i) $6,431 for temporary housing paid for by the company forin connection with his relocation, and his spouse’s recreational activities in conjunction with(ii) the value of a company-sponsoredoff-site business meeting.gift presented by the company. |
| | | | | Grants of plan-based share awards for 20182020 The compensation committee granted equity awards to each of the named executive officers during 2018.2020. Equity awards are subject to transfer restrictions and are generally subject to forfeiture prior to vesting upon a recipient’s termination of employment. All equity awards immediately become vested upon the recipient’s termination of employment during the24-month period following a change in control (i) by the company other than for cause or unsatisfactory performance, or (ii) by the recipient for good reason. | | | | | The following table presents information concerning plan-based awards granted to each of the named executive officers during 2018. | 2020. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Estimated future payouts under | | | | | Estimated future payout under | | | All | | | Grant | | | | | | | | | non-equity incentive plan awards | | | | | equity incentive plan awards | | | other | | | date | | Name | | Grant date1 | | Type of award2 | | | Threshold (#)3 | | | Target (#)3 | | | Maximum (#)3 | | | | | Threshold (#)3 | | | Target (#)3 | | | Maximum (#)3 | | | share awards (#)4 | | | fair value of share awards ($)5 | | | | Martin L. | | 02/28/20 | | | Time | | | | — | | | | — | | | | — | | | | | | — | | | | — | | | | — | | | | 269,305 | | | | 3,877,992 | | Flanagan | | 02/28/20 | | | Performance | | | | — | | | | — | | | | — | | | | | | — | | | | 269,305 | | | | 403,958 | | | | — | | | | 3,877,992 | | | | L. Alison | | 05/15/20 | | | Time | | | | — | | | | — | | | | — | | | | | | — | | | | — | | | | — | | | | 223,880 | | | | 1,499,996 | | Dukes | | | | | | | | | — | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | Andrew | | 02/28/20 | | | Time | | | | — | | | | — | | | | — | | | | | | — | | | | — | | | | — | | | | 102,150 | | | | 1,470,960 | | T.S. Lo | | 02/28/20 | | | Performance | | | | — | | | | — | | | | — | | | | | | — | | | | 102,150 | | | | 153,225 | | | | — | | | | 1,470,960 | | | | Gregory G. | | 02/28/20 | | | Time | | | | — | | | | — | | | | — | | | | | | — | | | | — | | | | — | | | | 121,527 | | | | 1,749,989 | | McGreevey | | 02/28/20 | | | Performance | | | | — | | | | — | | | | — | | | | | | — | | | | 121,527 | | | | 182,291 | | | | — | | | | 1,749,989 | | | | Andrew R. | | 02/28/20 | | | Time | | | | — | | | | — | | | | — | | | | | | — | | | | — | | | | — | | | | 94,791 | | | | 1,364,990 | | Schlossberg | | 02/28/20 | | | Performance | | | | — | | | | — | | | | — | | | | | | — | | | | 94,791 | | | | 142,187 | | | | — | | | | 1,364,990 | | | | Loren M. Starr6 | | 02/28/20 | | | Time | | | | — | | | | — | | | | — | | | | | | — | | | | — | | | | — | | | | 70,763 | | | | 1,018,987 | | | | 02/28/20 | | | Performance | | | | — | | | | — | | | | — | | | | | | — | | | | 70,763 | | | | 106,145 | | | | — | | | | 1,018,987 | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Estimated future payout under | | | | | | | | | | | | | | | | | | | | | | | | | equity incentive plan awards | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Closing | | | | | | | | | | | | | | | | | | | | | | | | | | | | All | | | market | | | | | | | | | | | | | | | | | | | | | | | | | | | | other | | | price on | | | Grant date | | | | | | | | | | | | | | | | | | | | | | | | | share | | | date of | | | fair value | | | | | | | Committee | | | Type of | | | | | | Threshold | | | Target | | | Maximum | | | awards | | | grant | | | of share | | Name | | Grant date | | | action date | | | award1 | | | Vesting2 | | | (#)3 | | | (#)3 | | | (#)3 | | | (#)4 | | | ($/Share) | | | awards ($)5 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Martin L. | | | 02/28/18 | | | | 02/08/18 | | | | Time | | | | 4-year ratable | | | | – | | | | – | | | | – | | | | 133,909 | | | | 32.54 | | | | 4,357,399 | | Flanagan | | | 02/28/18 | | | | 02/08/18 | | | | Performance | | | | 36-month cliff | | | | – | | | | 133,909 | | | | 200,864 | | | | – | | | | 32.54 | | | | 4,357,399 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Loren M. Starr | | | 02/28/18 | | | | 02/08/18 | | | | Time | | | | 4-year ratable | | | | – | | | | – | | | | – | | | | 31,852 | | | | 32.54 | | | | 1,036,464 | | | | | 02/28/18 | | | | 02/08/18 | | | | Performance | | | | 36-month cliff | | | | – | | | | 31,852 | | | | 47,778 | | | | – | | | | 32.54 | | | | 1,036,464 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Andrew T.S. Lo | | | 02/28/18 | | | | 02/08/18 | | | | Time | | | | 4-year ratable | | | | – | | | | – | | | | – | | | | 40,394 | | | | 32.54 | | | | 1,314,421 | | | | | 02/28/18 | | | | 02/08/18 | | | | Performance | | | | 36-month cliff | | | | – | | | | 40,394 | | | | 60,591 | | | | – | | | | 32.54 | | | | 1,314,421 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Gregory G. | | | 02/28/18 | | | | 02/08/18 | | | | Time | | | | 4-year ratable | | | | – | | | | – | | | | – | | | | 40,457 | | | | 32.54 | | | | 1,316,471 | | McGreevey | | | 02/28/18 | | | | 02/08/18 | | | | Performance | | | | 36-month cliff | | | | – | | | | 40,457 | | | | 60,686 | | | | – | | | | 32.54 | | | | 1,316,471 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Philip A. Taylor | | | 02/28/18 | | | | 02/08/18 | | | | Time | | | | 3-year ratable | | | | – | | | | – | | | | – | | | | 49,937 | | | | 32.54 | | | | 1,624,950 | | | | | 02/28/18 | | | | 02/08/18 | | | | Time | | | | 4-year cliff | | | | – | | | | – | | | | – | | | | 16,646 | | | | 32.54 | | | | 541,661 | | | | | 02/28/18 | | | | 02/08/18 | | | | Performance | | | | 33-month cliff | | | | – | | | | 66,583 | | | | 99,875 | | | | – | | | | 32.54 | | | | 2,166,611 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
1 | Time-based equity awards and performance-based awards were granted under the 2016 Global Equity Incentive Plan.
|
2 | Time-based equity awards. For each of the named executive officers other than Mr. Taylor, time-based equity awards are four-year awards that vest 25% each year on the anniversary of the date of grant. With respect to Mr. Taylor, time-based equity awards are comprised of (i) a3-year award that vests ratably on the first and second anniversary of the grant date and on December 15 of the second calendar year after the grant date and (ii) a4-year award that vests 100% on the fourth anniversary of the date of grant.
1 | For equity awards granted on February 28, 2020, the compensation committee approved the awards on February 6, 2020. For the equity award granted on May 15, 2020, the compensation committee approved the award on May 14, 2020. |
| Performance-based equity awards. For each of the named executive officers other than Mr. Taylor, performance-based equity awards are subject to a three-year performance period (2018-2020) and vest on February 28, 2021. With respect to Mr. Taylor, the performance-based equity award is subject to a33-month performance period (January 1, 2018 - September 30, 2020) and vests on December 15, 2020.
|
3 | Performance-based equity awards are tied to the achievement of specified levels of adjusted operating margin. Vesting ranges from 0 to 150%; straight line interpolation to be used for actual results. Dividend equivalents are deferred for such performance-based equity awards and will be paid at the same rate as on our shares if and to the extent an award vests. The threshold, target and maximum financial measures for the performance-based equity awards granted in 2018 are illustrated below.
2 | Time-based equity awards and performance-based awards were granted under the 2016 Global Equity Incentive Plan. For each of the named executive officers, time-based equity awards are four-year awards that vest 25% each year on the anniversary of the date of grant. For each of the named executive officers who hold performance-based equity awards, the awards are subject to a three- year performance period (2020-2022) and are scheduled to vest on February 28, 2023. |
3 | NEO incentive compensation is based upon, among other things, the outcome of the company scorecard and the executive’s performance against his or her individual goals. The committee makes incentive pay decisions with respect to the executive’s annual cash bonus, annual stock deferral, and long-term equity, subject to certain caps on the cash bonus portion. For the cash bonus portion of the incentive award for our CEO, the maximum cash bonus is the lesser of $10 million or 30% of the CEO’s incentive compensation for the performance year. For the cash bonus portion of the incentive award for our NEOs other than our CEO, the maximum is 50% of total compensation for the performance year. Performance-based equity awards are tied to the achievement of specified levels of adjusted operating margin and Relative TSR. Vesting ranges from 0 to 150%; straight line interpolation to be used for actual results. Dividend equivalents are deferred for such performance-based equity awards and will be paid at the same rate as on our shares if and to the extent an award vests. | | | | | | | Adjusted operating margin | | Vesting Name | | Vesting% | | | | | | | | | Equal to or less than 28%
| | Threshold | | | 0% | | | | | | | | | Between36-44%
| | Target | | | 100% | | | | | | | | | Equal to or greater than 54%
| | Maximum | | | 150% | | | | | | | | |
4 | Dividends and dividend equivalents on unvested time-based equity awards are paid at the same time and rate as on our shares. | It should be noted that beginning in 2019, performance-based awards will have the following two performance measures: adjusted operating margin and relative TSR. SeePerformance-based awardsabove.
|
4 | Dividends and dividend equivalents on unvested time-based equity awards are paid at the same time and rate as on our shares.
|
5 | The grant date fair value is the total amount that the company will recognize as expense under applicable accounting requirements if the share awards fully vest.This amount is included in our Summary Compensation Table each year. Grant date fair values were calculated in accordance with ASC 718. The grant date fair value is calculated by multiplying the number of shares granted by the closing price of our common shares on the day the award was granted. With respect
|
5 | The closing market price on the date of grant for all NEOs other than Ms. Dukes was $14.40. The closing market price on the date of grant for Ms. Dukes was $6.70. The grant date fair value is the total amount that the company will recognize as expense under applicable accounting requirements if the share awards fully vest. This amount is included in our Summary Compensation Table each year. Grant date fair values were calculated in accordance with ASC 718. The grant date fair value is calculated by multiplying the number of shares granted by the closing price of our common shares on the day the award was granted. With espect to the performance-based equity awards, the grant date fair value also represents the probable outcome of such performance conditions and represents the target (100%) level of achievement. |
60
6 | Mr. Starr transitioned from his role as Senior Managing Director and Chief Financial Officer to Vice Chair effective August 1, 2020. He served as Vice Chair until his retirement from the company on March 1, 2021. |
| | | | | Outstanding share awards at fiscalyear-end for 20182020 The following table provides information as of December 31, 20182020 about the outstanding equity awards held by our named executive officers. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name | | Footnotes | | Grant Date | | Number of shares or units that have not vested (#) | | | Market value of shares or units that have not vested ($) | | | Equity incentive plan awards that have not vested (#) | | | Market value of equity incentive plan awards that have not vested ($) | | | | Martin L. Flanagan | | 1 | | 02/28/17 | | | 39,987 | | | | 696,973 | | | | — | | | | — | | | | 2 | | 02/28/18 | | | 66,955 | | | | 1,167,026 | | | | — | | | | — | | | | 3 | | 02/28/18 | | | — | | | | — | | | | 133,909 | | | | 2,334,034 | | | | 4 | | 02/28/19 | | | 133,914 | | | | 2,334,121 | | | | — | | | | — | | | | 3 | | 02/28/19 | | | — | | | | — | | | | 178,552 | | | | 3,112,161 | | | | 5 | | 02/28/20 | | | 269,305 | | | | 4,693,986 | | | | — | | | | — | | | | 3 | | 02/28/20 | | | — | | | | — | | | | 269,305 | | | | 4,693,986 | | | | Total | | | | | | | 510,161 | | | | 8,892,106 | | | | 581,766 | | | | 10,140,181 | | | | L. Alison Dukes | | 5 | | 05/15/20 | | | 223,880 | | | | 3,902,228 | | | | — | | | | — | | | | Total | | | | | | | 223,880 | | | | 3,902,228 | | | | — | | | | — | | | | Andrew T.S. Lo | | 1 | | 02/28/17 | | | 11,898 | | | | 207,382 | | | | — | | | | — | | | | 2 | | 02/28/18 | | | 20,197 | | | | 352,034 | | | | — | | | | — | | | | 3 | | 02/28/18 | | | — | | | | — | | | | 40,394 | | | | 704,067 | | | | 4 | | 02/28/19 | | | 52,891 | | | | 921,890 | | | | — | | | | — | | | | 3 | | 02/28/19 | | | — | | | | — | | | | 70,521 | | | | 1,229,181 | | | | 5 | | 02/28/20 | | | 102,150 | | | | 1,780,475 | | | | — | | | | — | | | | 3 | | 02/28/20 | | | — | | | | — | | | | 102,150 | | | | 1,780,475 | | | | Total | | | | | | | 187,136 | | | | 3,261,780 | | | | 213,065 | | | | 3,713,723 | | | | Gregory G. McGreevey | | 1 | | 02/28/17 | | | 17,669 | | | | 307,971 | | | | — | | | | — | | | | 2 | | 02/28/18 | | | 20,229 | | | | 352,591 | | | | — | | | | — | | | | 3 | | 02/28/18 | | | — | | | | — | | | | 40,457 | | | | 705,166 | | | | 4 | | 02/28/19 | | | 53,283 | | | | 928,723 | | | | — | | | | — | | | | 3 | | 02/28/19 | | | — | | | | — | | | | 71,043 | | | | 1,238,279 | | | | 5 | | 02/28/20 | | | 121,527 | | | | 2,118,216 | | | | — | | | | — | | | | 3 | | 02/28/20 | | | — | | | | — | | | | 121,527 | | | | 2,118,216 | | | | Total | | | | | | | 212,708 | | | | 3,707,500 | | | | 233,027 | | | | 4,061,661 | | | | Andrew R. Schlossberg | | 1 | | 02/28/17 | | | 7,339 | | | | 127,919 | | | | — | | | | — | | | | 1 | | 03/15/17 | | | 1,385 | | | | 24,141 | | | | — | | | | — | | | | 2 | | 02/28/18 | | | 16,595 | | | | 289,251 | | | | — | | | | — | | | | 3 | | 02/28/18 | | | — | | | | — | | | | 33,189 | | | | 578,484 | | | | 4 | | 02/28/19 | | | 42,372 | | | | 738,544 | | | | — | | | | — | | | | 3 | | 02/28/19 | | | — | | | | — | | | | 56,496 | | | | 984,725 | | | | 5 | | 02/28/20 | | | 94,791 | | | | 1,652,207 | | | | — | | | | — | | | | 3 | | 02/28/20 | | | — | | | | — | | | | 94,791 | | | | 1,652,207 | | | | Total | | | | | | | 162,482 | | | | 2,832,061 | | | | 184,476 | | | | 3,215,417 | | | | Loren M. Starr | | 1 | | 02/28/17 | | | 9,551 | | | | 166,474 | | | | — | | | | — | | | | 2 | | 02/28/18 | | | 15,926 | | | | 277,590 | | | | — | | | | — | | | | 3 | | 02/28/18 | | | — | | | | — | | | | 31,852 | | | | 555,180 | | | | 4 | | 02/28/19 | | | 39,494 | | | | 688,380 | | | | — | | | | — | | | | 3 | | 02/28/19 | | | — | | | | — | | | | 52,658 | | | | 917,829 | | | | 5 | | 02/28/20 | | | 70,763 | | | | 1,233,399 | | | | — | | | | — | | | | 3 | | 02/28/20 | | | — | | | | — | | | | 70,763 | | | | 1,233,399 | | | | Total | | | | | | | 135,734 | | | | 2,365,844 | | | | 155,273 | | | | 2,706,408 | | | |
1 | February 28, 2017 and March 15, 2017. Time-based share award vests in four equal installments. As of December 31, 2020, the unvested share award represents 25% of the original grant. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Number of shares or | | | Market value of | | | Equity incentive plan | | | Equity incentive plan | | | | | | | | | | units that have not | | | shares or units that | | | awards that have | | | awards that have | | Name | | Footnotes | | | Date of grant | | | vested (#) | | | have not vested ($) | | | not vested (#) | | | not vested ($) | | Martin L. Flanagan | | | 1 | | | | 02/28/15 | | | | 38,227 | | | | 639,920 | | | | – | | | | – | | | | | 2 | | | | 02/28/15 | | | | – | | | | – | | | | 25,624 | | | | 428,946 | | | | | 3 | | | | 02/28/16 | | | | 106,734 | | | | 1,786,727 | | | | – | | | | – | | | | | 4 | | | | 02/28/16 | | | | – | | | | – | | | | 71,218 | | | | 1,192,189 | | | | | 5 | | | | 02/28/17 | | | | 119,961 | | | | 2,008,147 | | | | – | | | | – | | | | | 6 | | | | 02/28/17 | | | | – | | | | – | | | | 107,921 | | | | 1,806,598 | | | | | 7 | | | | 02/28/18 | | | | 133,909 | | | | 2,241,637 | | | | – | | | | – | | | | | 8 | | | | 02/28/18 | | | | – | | | | – | | | | 133,909 | | | | 2,241,637 | | | | | | | | | | | | | | | | | | | | | | | | | | | Loren M. Starr | | | 1 | | | | 02/28/15 | | | | 9,033 | | | | 151,212 | | | | – | | | | – | | | | | 2 | | | | 02/28/15 | | | | – | | | | – | | | | 5,960 | | | | 99,770 | | | | | 3 | | | | 02/28/16 | | | | 25,498 | | | | 426,837 | | | | – | | | | – | | | | | 4 | | | | 02/28/16 | | | | – | | | | – | | | | 16,827 | | | | 281,684 | | | | | 5 | | | | 02/28/17 | | | | 28,651 | | | | 479,618 | | | | – | | | | – | | | | | 6 | | | | 02/28/17 | | | | – | | | | – | | | | 25,498 | | | | 426,837 | | | | | 7 | | | | 02/28/18 | | | | 31,852 | | | | 533,202 | | | | – | | | | – | | | | | 8 | | | | 02/28/18 | | | | – | | | | – | | | | 31,852 | | | | 533,202 | | | | | | | | | | | | | | | | | | | | | | | | | | | Andrew T.S. Lo | | | 1 | | | | 02/28/15 | | | | 10,448 | | | | 174,900 | | | | – | | | | – | | | | | 2 | | | | 02/28/15 | | | | – | | | | – | | | | 6,829 | | | | 114,317 | | | | | 3 | | | | 02/28/16 | | | | 31,052 | | | | 519,810 | | | | – | | | | – | | | | | 4 | | | | 02/28/16 | | | | – | | | | – | | | | 20,295 | | | | 339,738 | | | | | 5 | | | | 02/28/17 | | | | 35,694 | | | | 597,518 | | | | – | | | | – | | | | | 6 | | | | 02/28/17 | | | | – | | | | – | | | | 31,609 | | | | 529,135 | | | | | 7 | | | | 02/28/18 | | | | 40,394 | | | | 676,196 | | | | – | | | | – | | | | | 8 | | | | 02/28/18 | | | | – | | | | – | | | | 40,394 | | | | 676,196 | | | | | | | | | | | | | | | | | | | | | | | | | | | Gregory G. | | | 1 | | | | 02/28/15 | | | | 9,623 | | | | 161,089 | | | | – | | | | – | | McGreevey | | | 9 | | | | 12/15/15 | | | | 7,977 | | | | 133,535 | | | | – | | | | – | | | | | 3 | | | | 02/28/16 | | | | 47,048 | | | | 787,584 | | | | – | | | | – | | | | | 5 | | | | 02/28/17 | | | | 53,006 | | | | 887,320 | | | | – | | | | – | | | | | 10 | | | | 03/15/17 | | | | – | | | | – | | | | 30,769 | | | | 515,073 | | | | | 7 | | | | 02/28/18 | | | | 40,457 | | | | 677,250 | | | | – | | | | – | | | | | 8 | | | | 02/28/18 | | | | – | | | | – | | | | 40,457 | | | | 677,250 | | | | | | | | | | | | | | | | | | | | | | | | | | | Philip A. Taylor | | | 1 | | | | 02/28/15 | | | | 18,186 | | | | 304,434 | | | | – | | | | – | | | | | 2 | | | | 02/28/15 | | | | – | | | | – | | | | 11,050 | | | | 184,977 | | | | | 11 | | | | 02/28/16 | | | | 25,922 | | | | 433,934 | | | | – | | | | – | | | | | 5 | | | | 02/28/17 | | | | 58,154 | | | | 973,498 | | | | – | | | | – | | | | | 6 | | | | 02/28/17 | | | | – | | | | – | | | | 47,809 | | | | 800,323 | | | | | 7 | | | | 02/28/18 | | | | 66,583 | | | | 1,114,599 | | | | – | | | | – | | | | | 8 | | | | 02/28/18 | | | | – | | | | – | | | | 66,583 | | | | 1,114,599 | |
2 | February 28, 2018. Time-based share award vests in four equal installments. As of December 31, 2020, the unvested share award represents 50% of the original grant. 1 | February 28, 2015. Share award vests in four equal installments. As of December 31, 2018, the unvested share award represents 25% of the original grant.
|
2 | February 28, 2015. Performance-based share award vests in four equal installments. As of December 31, 2018, the unvested share award represents 25% of the target award.
|
3 | February 28, 2016. Share award vests in four equal installments. As of December 31, 2018, the unvested share award represents 50% of the original grant.
|
4 | February 28, 2016. Performance-based share award vests in one installment. As of December 31, 2018, the unvested share award represents 100% of the target award.
|
5 | February 28, 2017. Share award vests in four equal installments. As of December 31, 2018, the unvested share award represents 75% of the original grant.
|
6 | February 28, 2017. Performance-based share award vests in one installment. As of December 31, 2018, the unvested share award represents 100% of the target award.
|
7 | February 28, 2018. Share award vests in four equal installments. As of December 31, 2018,
|
3 | Performance-based share award vests in one installment. As of December 31, 2020, the unvested share award represents 100% of the target award. |
4 | February 28, 2019. Time-based share award vests in four equal installments. As of December 31, 2020, the unvested share award represents 75% of the original grant. |
5 | February 28, 2020 and May 15, 2020. Time-based share award vests in four equal installments. As of December 31, 2020, the unvested share award represents 100% of the original grant. |
8 | February 28, 2018. Performance-based share award vests in one installment. As of December 31, 2018, the unvested share award represents 100% of the target award.
9 | December 15, 2015. Share award vests in four equal installments. As of December 31, 2018, the unvested share award represents 25% of the original grant.
|
10 | March 15, 2017. Performance-based share award vests in one installment. As of December 31, 2018, the unvested share award represents 100% of the target award.
|
11 | February 28, 2016. Share award vests in four equal installments. As of December 31, 2018, the unvested share award represents 25% of the original grant.
|
61
| | | | | Shares vested for 20182020 The following table provides information about equity awards held by our named executive officers that vested in 2018.2020. | | | | | | | | | | | | | | | | | | | Share Awards | | Name | | Grant Date | | Type of Award | | Vesting Date | | | Number of shares acquired on vesting1 | | | Value realized on vesting ($) | | | | | | | | | | Martin L. Flanagan | | 02/28/16 | | Time | | | 02/28/20 | | | | 53,367 | | | | 768,485 | | | | | | | | | | 02/28/17 | | Time | | | 02/28/20 | | | | 39,987 | | | | 575,813 | | | | | | | | | | 02/28/17 | | Performance | | | 02/28/20 | | | | 107,921 | | | | 1,554,062 | | | | | | | | | | 02/28/18 | | Time | | | 02/28/20 | | | | 33,477 | | | | 482,069 | | | | | | | | | | 02/28/19 | | Time | | | 02/28/20 | | | | 44,638 | | | | 642,787 | | | | | | | | | | | Total | | | | | | | | | | | 279,390 | | | | 4,023,216 | | | | | | | | | | | L. Alison Dukes2 | | | | | | | | | | | — | | | | — | | | | | | | | | | | Total | | | | | | | | | | | — | | | | — | | | | | | | | | | | Andrew T.S. Lo | | 02/28/16 | | Time | | | 02/28/20 | | | | 15,526 | | | | 223,574 | | | | | | | | | | 02/28/17 | | Time | | | 02/28/20 | | | | 11,898 | | | | 171,331 | | | | | | | | | | 02/28/17 | | Performance | | | 02/28/20 | | | | 31,609 | | | | 455,170 | | | | | | | | | | 02/28/18 | | Time | | | 02/28/20 | | | | 10,099 | | | | 145,426 | | | | | | | | | | 02/28/19 | | Time | | | 02/28/20 | | | | 17,630 | | | | 253,872 | | | | | | | | | | | Total | | | | | | | | | | | 86,762 | | | | 1,249,373 | | | | | | | | | | | Gregory G. McGreevey | | 02/28/16 | | Time | | | 02/28/20 | | | | 23,524 | | | | 338,746 | | | | | | | | | | 02/28/17 | | Time | | | 02/28/20 | | | | 17,668 | | | | 254,419 | | | | | | | | | | 03/15/17 | | Performance | | | 03/15/20 | | | | 30,769 | | | | 332,305 | | | | | | | | | | 02/28/18 | | Time | | | 02/28/20 | | | | 10,114 | | | | 145,642 | | | | | | | | | | 02/28/19 | | Time | | | 02/28/20 | | | | 17,760 | | | | 255,744 | | | | | | | | | | | Total | | | | | | | | | | | 99,835 | | | | 1,326,856 | | | | | | | | | | | Andrew R. Schlossberg | | 02/28/16 | | Time | | | 02/28/20 | | | | 12,177 | | | | 175,349 | | | | | | | | | | 02/28/17 | | Time | | | 02/28/20 | | | | 7,339 | | | | 105,682 | | | | | | | | | | 02/28/17 | | Performance | | | 02/28/20 | | | | 19,415 | | | | 279,576 | | | | | | | | | | 03/15/17 | | Time | | | 03/15/20 | | | | 1,384 | | | | 14,947 | | | | | | | | | | 02/28/18 | | Time | | | 08/31/20 | | | | 8,297 | | | | 84,629 | | | | | | | | | | 02/28/19 | | Time | | | 08/31/20 | | | | 14,124 | | | | 144,065 | | | | | | | | | | | Total | | | | | | | | | | | 62,736 | | | | 804,248 | | | | | | | | | | | Loren M. Starr3 | | 02/28/16 | | Time | | | 02/28/20 | | | | 12,749 | | | | 183,586 | | | | | | | | | | 02/28/17 | | Time | | | 02/28/20 | | | | 9,550 | | | | 137,520 | | | | | | | | | | 02/28/17 | | Performance | | | 02/28/20 | | | | 25,498 | | | | 367,171 | | | | | | | | | | 02/28/18 | | Time | | | 02/28/20 | | | | 7,963 | | | | 114,667 | | | | | | | | | | 02/28/19 | | Time | | | 02/28/20 | | | | 13,164 | | | | 189,562 | | | | | | | | | | | Total | | | | | | | | | | | 68,924 | | | | 992,506 | | | |
1 | Represents vesting at 100% for both time-based and performance-based awards. |
2 | Ms. Dukes assumed the role of senior managing director and chief financial officer effective August 1, 2020. |
3 | Mr. Starr transitioned from his role as senior managing director and chief financial officer to Vice Chair effective August 1, 2020. He served as Vice Chair until his retirement from the company on March 1, 2021. |
| | | | | | | | | | | Share awards | | | | Number of shares | | | Value realized | | Name | | acquired on vesting | | | on vesting ($) | | | | | | | | | | | Martin L. Flanagan | | | 299,376 | | | | 9,451,379 | | | | | | | | | | | Loren M. Starr | | | 70,518 | | | | 2,294,656 | | | | | | | | | | | Andrew T.S. Lo | | | 84,165 | | | | 2,738,729 | | | | | | | | | | | Gregory G. McGreevey | | | 70,089 | | | | 2,156,335 | | | | | | | | | | | Philip A. Taylor | | | 166,951 | | | | 4,536,266 | |
62
| | | | | Potential payments upon termination or change in control for 20182020 The following tables summarizetable summarizes the estimated payments to be made under each agreement, plan or arrangement in effect as of December 31, 20182020 which provides for payments to a named executive officer at, following or in connection with a termination of employment or a change in control. However, in accordance with SEC regulations, weWe do not report any amount to be provided to a named executive officer under any arrangement which does not discriminate in scope, terms or operation in favor of our named executive officers and which is available generally to all salaried employees. In accordance with SEC regulations, thisThis analysis assumes that the named executive officer’s date of termination is December 31, 2018,2020, and the price per share of our common shares on the date of termination is the closing price of our common shares on the NYSE on that date, which was $16.74.$17.43. |
| | | | | | | | | | | | | | | | | | | | | Potential payments upon termination or change in control of the company | | | | | | | Termination | | | | | | | | | | | | | | | | by executive | | | | | | | | | | | | | | | | for good reason | | | | | | | | | | | | | | | | or involuntary | | | | | | | | | | | | | | | | termination | | | | | | | | | | | | | Voluntary termination | | | by the company | | | | | | | | | Qualified termination | | Benefit and payments | | without good reason | | | without | | | Death | | | Change | | | following change in | | upon termination1 | | ($) | | | cause ($) | | | or disability ($) | | | in control ($)2 | | | control ($)3 | | Martin L. Flanagan | | | | | | | | | | | | | | | | | | | | | Annual cash bonus4 | | | 4,750,000 | | | | 4,750,000 | | | | 4,750,000 | | | | 4,750,000 | | | | 4,750,000 | | Cash severance5 | | | – | | | | 14,254,798 | | | | – | | | | – | | | | 14,254,798 | | Value of equity acceleration | | | – | | | | 12,345,800 | | | | 12,345,800 | | | | 12,345,800 | | | | 12,345,800 | | Value of benefits6 | | | – | | | | 66,415 | | | | – | | | | – | | | | 66,415 | | Loren M. Starr | | | | | | | | | | | | | | | | | | | | | Value of equity acceleration | | | – | | | | 2,932,363 | | | | 2,932,363 | | | | 2,932,363 | | | | 2,932,363 | | Andrew T.S. Lo | | | | | | | | | | | | | | | | | | | | | Value of equity acceleration | | | – | | | | 3,627,809 | | | | 3,627,809 | | | | 3,627,809 | | | | 3,627,809 | | Gregory G. McGreevey | | | | | | | | | | | | | | | | | | | | | Value of equity acceleration | | | – | | | | 3,839,101 | | | | 3,839,101 | | | | 3,839,101 | | | | 3,839,101 | | Philip A. Taylor | | | | | | | | | | | | | | | | | | | | | Value of equity acceleration | | | – | | | | 4,926,364 | | | | 4,926,364 | | | | 4,926,364 | | | | 4,926,364 | | | | | | | | | | | | | | | | | | | | | | |
Potential payments upon termination or change in control of the company | | | | | | | | | | | | | | | | | | | | | Benefit and payments upon termination 1 | | Voluntary termination without good reason ($) | | | Termination by executive for good reason or involuntary termination by the company without cause ($) | | | Death or disability ($) | | | Change in control ($)2 | | | Qualified termination following change in control ($)3 | | | | | | | | | | Martin L. Flanagan | | | | | | | | | | | | | | | | | | | | | | | | | | | Annual cash bonus4 | | | 4,750,000 | | | | 4,750,000 | | | | 4,750,000 | | | | 4,750,000 | | | | 4,750,000 | | | | | | | | Cash severance5 | | | — | | | | 13,295,984 | | | | — | | | | — | | | | 13,295,984 | | | | | | | | Value of equity acceleration | | | — | | | | 19,032,288 | | | | 19,032,288 | | | | 19,032,288 | | | | 19,032,288 | | | | | | | | Value of benefits6 | | | — | | | | 74,431 | | | | — | | | | — | | | | 74,431 | | | | | | | | | | L. Allison Dukes | | | | | | | | | | | | | | | | | | | | | | | | | | | Value of equity acceleration | | | — | | | | 3,902,228 | | | | 3,902,228 | | | | 3,902,228 | | | | 3,902,228 | | | | | | | | | | Andrew T.S. Lo | | | | | | | | | | | | | | | | | | | | | | | | | | | Value of equity acceleration | | | — | | | | 6,975,503 | | | | 6,975,503 | | | | 6,975,503 | | | | 6,975,503 | | | | | | | | | | Gregory G. McGreevey | | | | | | | | | | | | | | | | | | | | | | | | | | | Value of equity acceleration | | | — | | | | 7,769,161 | | | | 7,769,161 | | | | 7,769,161 | | | | 7,769,161 | | | | | | | | | | Andrew R. Schlossberg | | | | | | | | | | | | | | | | | | | | | | | | | | | Value of equity acceleration | | | — | | | | 6,047,478 | | | | 6,047,478 | | | | 6,047,478 | | | | 6,047,478 | | | | | | | | | | Loren M. Starr | | | | | | | | | | | | | | | | | | | | | | | | | | | Value of equity acceleration | | | — | | | | 5,072,252 | | | | 5,072,252 | | | | 5,072,252 | | | | 5,072,252 | | | |
1 | Under the terms of the employment agreement with Mr. Flanagan (the “Flanagan Agreement”), Mr. Flanagan is entitled to certain benefits upon termination of employment. Following any notice of termination, Mr. Flanagan would continue to receive salary and benefits compensation, and the vesting periods with respect to any outstanding share awards would continue to run, in the normal course until the date of termination. SeeEmployment agreements and Potential payments upon termination or a change in control above. |
Under the terms of an agreement with Mr. Taylor, Mr. Taylor is entitled to certain benefits to be paid in 2019
| Each of Ms. Dukes and Messrs. Lo, McGreevey, Schlossberg and Starr is a party to an agreement that provides for a termination notice period of either six or twelve months. Following any notice of termination, the employee would continue to receive salary and benefits compensation, and the vesting periods with respect to any outstanding share awards would continue to run, in the normal course until the date of termination. |
| In accordance with SEC rules, the information presented in this table assumes a termination date of December 31, 2020 in connection with his termination of employment. SeeEmployment agreements and Potential payments upon termination or a change in control above. Each of Messrs. Starr, Lo, McGreevey and Taylor is a party to an agreement that provides for a termination notice period of either six or twelve months. Following any notice of termination, the employee would continue to receive salary and benefits compensation, and the vesting periods with respect to any outstanding share awards would continue to run, in the normal course until the date of termination.
In accordance with SEC rules, the information presented in this table assumes a termination date of December 31, 2018 and that the applicable notice had been given prior to such date.
|
2 | Payment would only be made in the event that the share award was not assumed, converted or replaced in connection with a change in control. We do not provide excise tax “gross up.” |
3 | Assumes termination for “good reason” or a termination by the company other than for cause or unsatisfactory performance following a change in control. We do not provide excise tax “gross up.” |
4 | Under the Flanagan Agreement, Mr. Flanagan is entitled to an annual cash bonus that is equal to the greater of $4,750,000 or his most recent annual cash bonus upon certain terminations of employment. |
5 | Under the Flanagan Agreement, Mr. Flanagan’s severance payment is equal to the sum of (i) his base salary; (ii) the greater of $4,750,000 or his most recent annual cash bonus; and (iii) the fair market value at grant of his most recent equity award. |
6 | Under the Flanagan Agreement, Mr. Flanagan and his covered dependents are entitled to medical benefits for a period of 36 months following termination. Represents cost to the company for reimbursement of such medical benefits. |
3 | Assumes termination for “good reason” or a termination by the company other than for cause or unsatisfactory performance following a change in control. We do not provide excise tax “gross up.”
4 | Under the Flanagan Agreement, Mr. Flanagan is entitled to an annual cash bonus that is equal to the greater of $4,750,000 or his most recent annual cash bonus upon certain terminations of employment.
|
5 | Under the Flanagan Agreement, Mr. Flanagan’s severance payment is equal to the sum of (i) his base salary; (ii) the greater of $4,750,000 or his most recent annual cash bonus; and (iii) the fair market value at grant of his most recent equity award.
|
6 | Under the Flanagan Agreement, Mr. Flanagan and his covered dependents are entitled to medical benefits for a period of 36 months following termination. Represents cost to the company for reimbursement of such medical benefits.
|
63
| | | | | | | | | | 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 of the Exchange Act, we are providing the following information about the relationship of the annual total compensation of Mr. Martin L. Flanagan, our Chief Executive Officer (our “CEO”), and our employees (other than our CEO): | | | | | For 2018,2020, our last completed fiscal year: | | | ∎
the annual total compensation of our median employee (other than our CEO), was $119,367;$150,082; and | | | ∎
the annual total compensation of our CEO as reflected in the 2020 Summary Compensation Table was $12,921,609. | | | | | For 2018,$11,747,102.As a result for 2020, the ratio of the annual total compensation of our CEO to the annual total compensation of our median employee (other than our CEO) was 10878 to 1. | | | | | Our CEO to median employee pay ratio is calculated in accordance with the SEC requirements. As of October 1, 2018, we identified a new median employee since the median employee identified in 2017 based on 2016 total compensation is no longer with the company. The 2016 compensation for this employee was substantially similar in value to the median employee identified in 2017. We examined 2016 total compensation for all individuals, excluding our CEO. We included all employees who were employed by us during all of 2016 (our base fiscal year) and included base salary, cash bonus, commissions, overtime, performance fees and deferred incentive compensation. We did not make any assumptions, adjustments or estimates with respect to compensation, and we did not annualize the compensation for any employees. | | | | | After identifying the median employee, we calculated 2018 annual total compensation for such employee and the CEO using the same methodology we use for our named executive officers as set forth in the 2018 Summary Compensation table in this proxy statement. |
64
| | | | | Compensation Committee Interlockscommittee interlocks and Insider Participation | | | | | insider participation During fiscal year 2018,2020, the following directors served as members of the compensation committee: C. Robert Henrikson (Chairperson)(Chair), Sarah E. Beshar, BenThomas M. Finke1, Edward P. Garden1, William F. Johnson III,Glavin, Jr., Denis Kessler, Sir Nigel Sheinwald, G. Richard Wagoner, Jr. and Phoebe A. Wood. No member of the compensation committee was an officer or employee of the company or any of its subsidiaries during 2018,2020, and no member of the compensation committee was formerly an officer of the company or any of its subsidiaries or was a party to any disclosable related person transaction involving the company. During 2018,2020, none of the executive officers of the company has served on the board of directors or on the compensation committee of any other entity that has or had executive officers serving as a member of the Board of Directors or compensation committee of the company. 1 Mr. | Finke joined the Compensation Committee effective December 1, 2020, and Mr. Garden joined the Compensation Committee effective November 4, 2020. |
Certain Relationshipsrelationships and Related Transactions | | | | | | | | related transactions Share repurchases In order to pay withholding or other similar taxes due in connection with the vesting of equity awards granted under our incentive plans, employee participants, including our executive officers may elect theare required to “net shares” method whereby the company purchases from the participant shares equal in value to an approximation of the tax withholding liability in connection with vesting equity awards.liability. Under the “net shares” method, the price per share paid by the company for repurchases is the closing price of the company’s common shares on the NYSE on the vesting date. During 2018,2020, the company repurchased common shares from the executive officers for the aggregate consideration shown in the following table. |
| | | | | | | | | | | | Name and current title | | Number of shares repurchased (#) | | | Aggregate consideration ($) | | Kevin M. Carome Senior Managing Director and General Counsel | | | 23,608 | | | | $339,955 | | Martin L. Flanagan Chief Executive Officer | | | 126,008 | | | | $1,814,515 | | Gregory M. McGreevey Senior Managing Director, Investments | | | 45,028 | | | | $598,446 | | Colin D. Meadows Senior Managing Director, Head of Digital Ventures | | | 34,561 | | | | $497,678 | | Andrew R. Schlossberg Senior Managing Director and Head of the Americas | | | 28,058 | | | | $359,315 | | Doug Sharp Senior Managing Director and Head of EMEA | | | 11,372 | | | | $163,757 | | Loren M. Starr Retired Vice Chair | | | 30,189 | | | | $434,722 | |
| | | | | | | | | | | | | | | | | | Number of shares | | | Aggregate | | Name and current title | | repurchased (#) | | | consideration ($) | | | | | | | | | | | Kevin M. Carome | | | 24,431 | | | | 794,985 | | Senior Managing Director and General Counsel | | | | | | | | | | | | | | | | | | Gregory M. McGreevey | | | 31,788 | | | | 977,977 | | Senior Managing Director, Investments | | | | | | | | | | | | | | | | | | Colin D. Meadows | | | 34,526 | | | | 1,123,476 | | Senior Managing Director and Head of Private Markets and Global Institutional | | | | | | | | | | | | | | | | | | Andrew R. Schlossberg | | | 15,386 | | | | 451,931 | | Senior Managing Director and Head of the Americas | | | | | | | | | | | | | | | | | | Loren M. Starr | | | 31,948 | | | | 1,039,588 | | Senior Managing Director and Chief Financial Officer | | | | | | | | | | | | | | | | | | Philip A. Taylor | | | 89,374 | | | | 2,428,419 | | Vice Chair | | | | | | | | |
| | | | | Interests in or alongside certain Invesco-sponsored private fundsor managed investment products Some of our employees, including our executive officers, their spouses, related charitable foundations or entities they own or control are provided the opportunity to invest in or alongside certain Invesco-sponsored private funds that we offer to independent investors. We generally limit such investments to employees that meet certain accreditation requirements.our clients. Employees who make such investments usually do not pay management or performance fees charged to independent investors.our clients. In addition, certain of our employees, including some of our executive officers, receive |
65
| | | | | the right to share in performance fees earned by Invesco in connection with our management of Invesco-sponsored private funds. Messrs. Flanagan, Carome, Meadows, Schlossberg, Sharpe and Starr have made investments in or alongside Invesco-sponsored private funds. Messrs. Flanagan and Starr receivedThere were no distributions (consistingexceeding $120,000 from Invesco sponsored private funds during the year ended December 31, 2020 made to our executive officers (or persons or entities affiliated with them) consisting of profits, other income, return of capital and performance fees) exceedingfees as applicable.In the ordinary course of our business, we may conduct transactions or make investments on behalf of funds or client accounts we manage in securities and other financial assets offered or managed by Massachusetts Mutual Life Insurance Company (“MassMutual”) and its subsidiaries. Likewise in the ordinary course of business MassMutual, its subsidiaries and affiliates may invest in funds we manage. The amount of compensation or other value received (or in some cases not charged) by MassMutual or Invesco in connection with those transactions may exceed $120,000 individually or in the aggregate per year. Mr. Glavin is nominated pursuant to the MassMutual Shareholder Agreement and was employed by certain subsidiaries of MassMutual prior to his retirement in 2017. Mr. Finke was employed by a wholly-owned subsidiary of MassMutual prior to his retirement as of November 30, 2020. Further, in the ordinary course of their asset management businesses, subsidiaries of the Company may from Invesco-sponsored privatetime to time (i) invest client assets in companies for which Mr. Peltz and/or Mr. Garden is a director or in which Mr. Peltz, Mr. Garden, their affiliates or investment funds duringmanaged by Trian and/or its affiliates may be significant stockholders or (ii) invest client assets in investment funds or other investment vehicles managed by Trian and/or its affiliates. Investment management, performance and other fees paid to Trian, its subsidiaries or affiliates may exceed $120,000 individually or in the fiscalaggregate per year. Each of Messrs. Peltz and Garden are partners of Trian. We also manage investments for SCOR SE and its subsidiaries in the ordinary course of business and earn fees in excess of $120,000 per year in connection with those relationships. Mr. Kessler is CEO of SCOR. MassMutual and its subsidiaries As of February 18, 2021, MassMutual owned approximately 16.5% of our common stock outstanding. MassMutual owns substantially all of the issued and outstanding shares of our preferred stock, the terms of which are set forth in the
certificate of designation of the preferred stock, a copy of which is filed as Exhibit 3.3 to our Form 10-K for the year ended December 31, 2018. | | | | | | | | 2019. MassMutual shareholder agreement In connection with Invesco’s acquisition of OppenheimerFunds, an investment management subsidiary of MassMutual, Invesco entered into the MassMutual Shareholder Agreement, which governs the ongoing relationship between MassMutual and Invesco. See below for a summary of key provisions of the MassMutual Shareholder Agreement. It does not purport to be complete and is qualified in its entirety by the full text of the MassMutual Shareholder Agreement, a copy of which was filed as Exhibit 10.34 to Invesco’s annual report on Form 10-K, filed on March 2, 2020, with the SEC. Share ownership: Subject to certain exceptions, MassMutual and its controlled affiliates are prohibited from acquiring any additional Invesco capital stock such that if after giving effect to such acquisition, MassMutual together with its controlled affiliates would beneficially own more than 22.5% of the total voting power of Invesco capital stock (which we refer to as the “ownership cap”). MassMutual is subject to the ownership cap until the date (which we refer to as the “governance termination date”) on which MassMutual and its controlled affiliates cease to beneficially own at least (i) 10% of the issued and outstanding Invesco common shares or (ii) (x) 5% of the issued and outstanding Invesco common shares and (y) $2.0 billion in aggregate liquidation preference of Invesco Series A preferred shares. Prohibited actions: Until the governance termination date, MassMutual and its controlled affiliates are generally prohibited from soliciting, knowingly encouraging, acting in concert or assisting third parties, negotiating or making any public announcement with respect to: any acquisition the purpose or result of which would be that MassMutual and its controlled affiliates beneficially own (i) Invesco capital stock in excess of the ownership cap or (ii) any equity securities of any subsidiary of Invesco; any form of business combination or similar or other extraordinary transaction involving Invesco or any subsidiary of Invesco; any form of restructuring, recapitalization or similar transaction with respect to Invesco or any subsidiary of Invesco; agreeing with any third party with respect to the voting of any shares of Invesco capital stock or the capital stock of any subsidiary of Invesco, or otherwise entering into any voting trust or voting agreement with any third party; selling any share of Invesco capital stock in a tender or exchange offer that either (i) is unanimously opposed by the Invesco board or (ii) arises out of a breach by MassMutual of its obligations under the MassMutual Shareholder Agreement to not engage in certain prohibited actions; any proposal to seek representation on the Invesco board or any proposal to control or influence management, the Invesco board, Invesco or its subsidiaries (except as expressly permitted by the MassMutual Shareholder Agreement and the certificate of designation for the Series A preferred shares); and calling any special meeting of shareholders of Invesco or engaging in any written consent of shareholders regarding any of the foregoing. Additional purchase of voting securities: Until the governance termination date, except in certain cases, if at any time Invesco issues voting securities (or securities convertible into voting securities), MassMutual will have the right to purchase directly from Invesco additional securities of the same class or series being issued up to an amount that would result in MassMutual and its controlled affiliates beneficially owning the lesser of (i) the ownership cap and (ii) the same ownership percentage as they owned immediately prior to such stock issuance. Share repurchases: If Invesco engages in any share repurchase program or selftender that (i) will, or would reasonably be expected to, cause Invesco capital stock beneficially owned by MassMutual and its controlled affiliates to exceed 24.5% or (ii) would otherwise reasonably be likely to result in a deemed “assignment” of any investment advisory agreement of Invesco or its affiliates under the Investment Advisers Act or Investment Company Act, then Invesco may require, subject to certain exceptions, MassMutual and its controlled affiliates to promptly sell or self-tender such number of shares of Invesco capital stock to Invesco as would be necessary to prevent the occurrence of either of the foregoing events. Transfer restrictions: Until (a) in the case of Invesco common shares, the earlier to occur of May 24, 2021 or the consummation of a change of control transaction of Invesco and (b) in the case of Invesco Series A preferred shares, the earliest to occur of May 24, 2024, certain credit rating downgrades of Invesco Series A preferred shares or the consummation of a change of control transaction of Invesco (which date we refer to as the “transfer restriction termination date”), MassMutual and its controlled affiliates are generally prohibited from transferring or agreeing to transfer, directly or indirectly, any Invesco capital stock beneficially owned by them to anyone other than to a controlled affiliate of MassMutual which agrees in writing with Invesco to be bound by the MassMutual Shareholder Agreement Other
or to Invesco directly. In the case of Invesco common shares, following the transfer restriction termination date and until the governance termination date, MassMutual would still be subject to the transfer restrictions in the preceding sentence except that it is permitted to transfer its Invesco common shares in certain specified categories of transactions. Right of first offer: If MassMutual and/or any of its controlled affiliates intend to transfer any Series A relativepreferred shares to a non-affiliate, MassMutual must provide written notice to Invesco. Upon receipt of Mr. Flanagan wassuch notice, Invesco will have the right to purchase all, but not less than all, of the shares proposed to be transferred, at the price and terms described in the notice. Registration rights: MassMutual has certain customary shelf, demand and “piggyback” registration rights with respect to the Invesco common shares and the Invesco Series A preferred shares. Board designation: The MassMutual Shareholder Agreement requires Invesco to elect an employeeindividual designated by MassMutual to the Invesco board (whom we refer to as the “MassMutual designee”). The current MassMutual designee serving on the Invesco board is William Glavin. Until the governance termination date, Invesco is required to use reasonable best efforts to cause the election of the MassMutual designee at each meeting of Invesco shareholders. Except in our US business during partconnection with succession planning, until the governance termination date, the size of the Invesco board of directors cannot exceed 12 members without the prior approval of the MassMutual designee. The MassMutual designee is entitled to be a member of each standing committee of the Invesco board or, if not permitted by applicable law, to be an observer on such committee. Approval rights of MassMutual: Until the governance termination date, Invesco may not generally enter into or effect the following transactions without the prior written approval of MassMutual: change its capital structure in a manner that would be reasonably likely to result in certain corporate credit rating downgrades; amend its Memorandum of Association or Bye-Laws such that the rights of MassMutual would be adversely affected compared to those of the holders of Invesco capital stock generally; adopt a shareholder rights plan; make (or permit any of its material subsidiaries to make) any voluntary bankruptcy or similar filing or declaration; subject to certain exceptions, engage in any acquisition, exchange or purchase of equity interests or other similar transaction that involves the issuance of more than 10% of the total voting power of Invesco capital stock; make any changes in accounting principles that is disproportionately adverse to MassMutual and its affiliates compared to other holders of Invesco capital stock, except to the extent required by changes in GAAP or applicable law; materially alter Invesco’s principal line of business; or adopt any director qualifications to be imposed upon the MassMutual designee, other than those required by the Bye-Laws as of October 17, 2018 or those generally applicable to all directors. Voting agreements: Until the governance termination date, MassMutual and earned $238,184its controlled affiliates are generally required to vote (i) in total compensation duringfavor of each matter required to effectuate any provision of the fiscal year ended December 31, 2018. His compensation was establishedMassMutual Shareholder Agreement and against any matter the approval of which would be inconsistent with any provision of the MassMutual Shareholder Agreement, and (ii) to the extent consistent with the preceding clause (i), in accordance with the company’s employmentrecommendation of the Invesco board on all matters approved by the Invesco board relating to (a) the elections of directors, (b) matters that have been approved or recommended by the compensation committee of the Invesco board, (c) any change of control transaction of Invesco that the Invesco board has unanimously recommended in favor of or against, and compensation practices applicable(d) any transaction that arises out of a breach by MassMutual of its obligations under the MassMutual Shareholder Agreement to employeesnot engage in certain prohibited actions. Additionally, if MassMutual and its controlled affiliates beneficially own at least 20% of the issued and outstanding Invesco common shares as of the record date for a vote on any matter, they must, subject to some exceptions, vote on such matter as recommended by the Invesco board to the extent that such matter does not conflict with equivalent qualificationsany provision of the MassMutual Shareholder Agreement. Information rights: Invesco is required to (i) provide MassMutual and responsibilitiesits representatives certain information, such as monthly management reporting packages and holding similar positions.information relating to the credit rating of Invesco and its securities and material changes involving executive officers, on an ongoing and current basis and (ii) give access to such other personnel and information, including with respect to Invesco’s business, operations, plans and prospects, as MassMutual may reasonably request from time to time. Termination of the MassMutual shareholder agreement: The MassMutual Shareholder Agreement will terminate upon the later to occur of the governance termination date and the transfer restriction termination date, although certain provisions of the MassMutual Shareholder Agreement may survive for a certain period of time beyond the termination of the MassMutual Shareholder Agreement.
| | | | | | | | | | Related Person Transaction Policy |
| | | | | Related person transaction policy | | | Management is required to present for the approval or ratification of the audit committee all material information regarding an actual or potential related person transaction. | | The Board of Directors has adopted written Policies and Procedures with Respect to Related Person Transactions to address the review, approval, disapproval or ratification of related person transactions. “Related persons” include the company’s executive officers, directors, director nominees, holders of more than five percent (5%) of the company’s voting securities, immediate family members of the foregoing persons and any entity in which any of the foregoing persons is employed, is a partner or is in a similar position, or in which such person has a 5% or greater ownership interest. A “related person transaction” means a transaction or series of transactions in which the company participates, the amount involved exceeds $120,000 and a related person has a direct or indirect interest (with certain exceptions permitted by SEC rules). | | | | | Management is required to present for the approval or ratification of the audit committee all material information regarding an actual or potential related person transaction. The policy requires that, after reviewing such information, the disinterested members of the audit committee will approve or disapprove the transaction. Approval will be given only if the audit committee determines that such transaction is in, or is not inconsistent with, the best interests of the company and its shareholders. The policy further requires that in the event management becomes aware of a related person transaction that has not been previously approved or ratified, it must be submitted to the audit committee promptly. | | | | | | | | Section 16(a) Beneficial Ownership Reporting Compliance | | | | | Section 16(a) of the Exchange Act requires certain officers, directors and persons who beneficially own more than 10% of the company’s common shares to file reports of ownership and reports of changes in ownership with the SEC. The reporting officers, directors and 10% shareholders are also required by SEC rules to furnish the company with copies of all Section 16(a) reports they file. Based solely on its review of copies of such reports, the company believes that all Section 16(a) filing requirements applicable to its directors, reporting officers and 10% shareholders were complied with during 2018 with the exception of a late amendment to a Form 4 filing on behalf of Annette Lege due to an administrative error initially under reporting the number of shares granted in March 2018. This amendment was filed as soon as the error was identified. |
66
Security Ownershipownership of Principal Shareholders | | | | | principal shareholders The following table sets forth the common shares beneficially owned as of February 15, 201918, 2021 by each shareholder known to us to beneficially own more than five percent of the company’s outstanding common shares. The percentage of ownership indicated in the following table is based on 396,981,176459,003,969 common shares outstanding as of February 15, 2019.18, 2021. | | | | | | | | | | | | Name and address of beneficial owner | | Amount and nature of beneficial ownership1 | | | Percent of class (%) | | Massachusetts Mutual Life Insurance Company 1295 State Street, Springfield, MA 01111 | | | 75,665,666 | 2 | | | 16.5 | | Trian Fund Management, L.P. 280 Park Avenue, 41st Floor, New York, New York 10017 | | | 45,459,623 | 3 | | | 9.9 | | The Vanguard Group 100 Vanguard Boulevard, Malvern, Pennsylvania 19355 | | | 43,137,387 | 4 | | | 9.4 | | BlackRock, Inc. 55 East 52nd Street, New York, NY 10055 | | | 35,541,431 | 5 | | | 7.7 | |
1 | Except as described otherwise in the footnotes to this table, each beneficial owner in the table has sole voting and investment power with regard to the shares beneficially owned by such owner. |
| | | | | | | | | | | Amount and
| | | | | | | nature of beneficial | | | Percent | | Name and address of beneficial owner | | ownership1 | | | of class (%) | | | | | | | | | | | The Vanguard Group
| | | 44,448,8722 | | | | 11.2 | | 100 Vanguard Boulevard, Malvern, Pennsylvania 19355
| | | | | | | | | | | | | | | | | | BlackRock, Inc.
| | | 34,987,8723 | | | | 8.8 | | 55 East 52nd Street, New York, NY 10055
| | | | | | | | | | | | | | | | | On November 16, 2020, Massachusetts Mutual Life Insurance Company, on behalf of itself and certain of its affiliates (collectively “MassMutual”), filed a Schedule 13D/A with the SEC indicating that MassMutual had sole voting power with respect to 75,643,326 common shares of Invesco and sole dispositive power with respect to 75,665,666 common share of Invesco. |
| 3 | This information is based on (i) a Schedule 13D/A filed on November 5, 2020 (the “Schedule 13D/A”) by Trian Fund Management, L.P. (“Trian”) and certain of its affiliates, (ii) Form 4s filed by Nelson Peltz and Trian, and Ed Garden and Trian, subsequent to November 5, 2020, and (iii) information provided to the company by Trian. Includes (i) 36,739,343 common shares directly owned by an investment vehicle managed by Trian, (ii) 8,718,084 common shares underlying privately negotiated back-to-back call and put transactions as a result of which such investment vehicle is subject to the same economic gain or loss as if it had purchased the underlying shares and (iii) 1,098 common shares directly owned by Nelson Peltz and 1,098 common shares directly owned by Ed Garden, with respect to which Trian may be deemed to have beneficial ownership by virtue of director fee agreements entered into by Trian with Mr. Peltz and Mr. Garden, respectively, which are described in further detail in the Schedule 13D/A. Trian may be deemed to have shared voting power and shared dispositive power with regard to all of the foregoing shares. | | | 1 Except as described otherwise in the footnotes to this table, each beneficial owner in the table has sole voting and investment power with regard to the shares beneficially owned by such owner.
2 On February 11, 2019, The Vanguard Group, on behalf of itself and certain of its affiliates (collectively, “Vanguard”) filed a Schedule 13G/A with the SEC indicating that Vanguard had sole voting power with respect to 480,791 common shares, shared voting power with respect to 109,169 common shares, sole dispositive power with respect to 43,880,369 common shares and shared dispositive power with respect to 568,503 common shares, of Invesco.
3 On February 4, 2019, BlackRock, Inc., on behalf of itself and certain of its affiliates (collectively, “BlackRock”) filed a Schedule 13G/A with the SEC indicating that BlackRock had sole voting power with respect to 31,186,040 common shares and sole dispositive power with respect to 34,987,298
|
4 | On February 10, 2021, The Vanguard Group, on behalf of itself and certain of its affiliates (collectively, “Vanguard”) filed a Schedule 13G/A with the SEC indicating that Vanguard had shared voting power with respect to 583,859 common shares, sole dispositive power with respect to 41,723,076 common shares and shared dispositive power with respect to 1,414,311 common shares, of Invesco. |
67
5 | On January 29, 2021, BlackRock, Inc., on behalf of itself and certain of its affiliates (collectively, “BlackRock”) filed a Schedule 13G/A with the SEC indicating that BlackRock had sole voting power with respect to 31,716,083 common shares of Invesco and sole dispositive power with respect to 35,541,431 common shares of Invesco. |
Security Ownershipownership of Management | | | | | management The following table lists the common shares beneficially owned as of February 15, 201918, 2021 by (i) each director;director and director nominee; (ii) each executive officer named in the Summary Compensation Table above; and (iii) all current directors, director nominee and executive officers as a group. The percentage of ownership indicated below is based on 396,981,176459,003,969 of the company’s common shares outstanding on February 15, 2019. | | | | | 18, 2021. Beneficial ownership reported in the below table has been determined according to SEC regulations and includes common shares that may be acquired within 60 days after February 15, 2019,18, 2021, but excludes deferred shares which are disclosed in a separate column. Unless otherwise indicated, all directors and executive officers have sole voting and investment power with respect to the shares shown. No shares are pledged as security. As of February 15, 2019,18, 2021, no individual director or named executive officer owned beneficially 1% or more of our common shares other than Mr. Flanagan, who owns 1.1% of our outstanding common shares and Mr. Garden and Mr. Peltz, who each may be deemed to indirectly beneficially own 9.9% of our outstanding common shares as a result of their respective relationships with Trian. Our directors, director nominee and executive officers as a group owned approximately 1.9%12% of our outstanding common shares. |
| | | | | | | | | | | | | | | | | Name | | Common shares beneficially owned | | | Deferred share awards | | | Total | | Sarah E. Beshar | | | 51,484 | | | | — | | | | 51,484 | | Thomas M. Finke | | | 575 | | | | — | | | | 575 | | Martin L. Flanagan1 | | | 4,410,454 | | | | 581,766 | | | | 4,992,220 | | Edward P. Garden2 | | | 45,459,623 | | | | — | | | | 45,459,623 | | William F. Glavin, Jr. | | | 17,421 | | | | — | | | | 17,421 | | C. Robert Henrikson | | | 63,216 | | | | — | | | | 63,216 | | Denis Kessler | | | 62,293 | | | | 12,529 | | | | 74,822 | | Nelson Peltz3 | | | 45,459,623 | | | | — | | | | 45,459,623 | | Sir Nigel Sheinwald | | | 38,305 | | | | — | | | | 38,305 | | Paula Tolliver | | | 3,566 | | | | — | | | | 3,566 | | G. Robert Wagoner, Jr.4 | | | 59,207 | | | | — | | | | 59,207 | | Phoebe A. Wood | | | 55,272 | | | | — | | | | 55,272 | | L. Allison Dukes | | | 223,880 | | | | — | | | | 223,880 | | Andrew T.S. Lo | | | 570,048 | | | | 400,201 | | | | 970,249 | | Gregory G. McGreevey | | | 537,776 | | | | 233,027 | | | | 770,803 | | Andrew R. Schlossberg5 | | | 167,438 | | | | 337,834 | | | | 505,272 | | Loren M. Starr | | | 265,273 | | | | 155,273 | | | | 420,546 | | All Directors, Director Nominee and Executive Officers as a Group (21 persons)6 | | | 53,011,210 | | | | 2,169,116 | | | | 55,180,326 | |
| | | | | | | | | | | | | | | Common shares | | | Deferred share | | | | | Name | | beneficially owned | | | awards1 | | | Total | | | | | | | | | | | | | | | Sarah E. Beshar | | | 15,331 | | | | – | | | | 15,331 | | | | | | | | | | | | | | | Joseph R. Canion | | | 64,451 | | | | 5,925 | | | | 70,376 | | | | | | | | | | | | | | | Martin L. Flanagan2 | | | 3,614,959 | | | | 313,048 | | | | 3,928,007 | | | | | | | | | | | | | | | C. Robert Henrikson | | | 30,332 | | | | – | | | | 30,332 | | | | | | | | | | | | | | | Ben F. Johnson III | | | 42,953 | | | | – | | | | 42,953 | | | | | | | | | | | | | | | Denis Kessler | | | 54,598 | | | | – | | | | 54,598 | | | | | | | | | | | | | | | Sir Nigel Sheinwald | | | 18,081 | | | | – | | | | 18,081 | | | | | | | | | | | | | | | G. Richard Wagoner, Jr.3 | | | 33,983 | | | | – | | | | 33,983 | | | | | | | | | | | | | | | Phoebe A. Wood | | | 35,108 | | | | – | | | | 35,108 | | | | | | | | | | | | | | | Andrew T. S. Lo | | | 408,192 | | | | 216,715 | | | | 624,907 | | | | | | | | | | | | | | | Gregorgy G. McGreevey | | | 390,717 | | | | 71,226 | | | | 461,943 | | | | | | | | | | | | | | | Loren M. Starr | | | 545,640 | | | | 74,177 | | | | 619,817 | | | | | | | | | | | | | | | Philip A. Taylor | | | 237,385 | | | | 294,287 | | | | 531,672 | | | | | | | | | | | | | | | All Directors and Executive | | | 6,358,666 | | | | 1,198,721 | | | | 7,557,387 | | Officers as a Group (17 persons)4 | | | | | | | | | | | | |
| | | | | 1 For Mr. Canion, represents deferred shares awarded under our legacy Deferred Fees Share Plan. For the named executive officers, represents restricted stock units under the 2011 Global Equity Incentive Plan and 2016 Global Equity Incentive Plan. None of the shares subject to such awards may be voted or transferred by the participant.
2 For Mr. Flanagan, includes an aggregate of 3,190,004
1 | For Mr. Flanagan, includes an aggregate of 3,899,793 shares held in trust and 400 shares held by Mr. Flanagan’s spouse. Mr. Flanagan has shared voting and investment power with respect to these shares. 3 For Mr. Wagoner, includes 5,000 shares held in trust via a defined benefit account. Mr. Wagoner has sole voting and investment power with respect to these shares.
4 For one of the executive officers of the group, the executive officer has shared voting and investment power with respect to 68,758 shares.
|
68
| | | | | Proposal
| | | | Advisory Vote to Approve the Company’s Executive Compensation | 2 | | | | | | | General
| | | | | The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd Frank Act”) enables our shareholders to vote to approve, on an advisory (nonbinding) basis, the compensation of our named executive officers as disclosed in this proxy statement in accordance with the SEC’s rules. This proposal, commonly known as a“say-on-pay” proposal, gives our shareholders the opportunity to express their views on our named executive officer compensation. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the philosophy, policies and practices described in this proxy statement. | | | | | | | | | | | We are asking our shareholders to vote “FOR” the following resolution at the Annual General Meeting: | | | | | | | | “RESOLVED, that the Company’s shareholders approve, on an advisory(non-binding) basis, the compensation of the named executive officers, as disclosed in the Company’s Proxy Statement for the 2019 Annual General Meeting of Shareholders pursuant to the Securities and Exchange Commission’s compensation disclosure rules, including the Compensation Discussion and Analysis, the compensation tables and related narrative discussion.” | | | | | | | | Invesco’s compensation programs, particularly our annual incentive pools, are tied to the achievement of our multi-year strategic objectives and financial results and our success in serving our clients’ and shareholders’ interests, as further described inExecutive Compensation above. In considering their vote, we urge shareholders to review the information included in this proxy statement inExecutive Compensation. The extent there is any significant vote against the named executive officer compensation as disclosed in this proxy statement, we will consider our shareholders’ concerns, and the compensation committee will evaluate whether any actions are necessary to address those concerns. Under the Board’s current policy, shareholders are given an opportunity to cast an advisory vote on this topic annually. | | | | | Recommendation of the board
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE APPROVAL OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS, AS DISCLOSED IN THIS PROXY STATEMENT PURSUANT TO THE COMPENSATION DISCLOSURE RULES OF THE SEC.This proposal requires the affirmative vote of a majority of votes cast at the Annual General Meeting.
2 | Includes 1,098 common shares directly owned by Mr. Peltz and an additional 45,458,525 common shares which may be deemed to be beneficially owned by Trian. Trian Fund Management GP, LLC, of which each of Mr. Peltz and Mr. Garden are members, is the general partner of Trian, and therefore is in a position to determine the investment and voting decisions made by Trian. Accordingly, each of Mr. Peltz and Mr. Garden may be deemed to indirectly beneficially own all of the common shares that Trian beneficially owns. |
3 | Includes 1,098 common shares directly owned by Mr. Garden and an additional 45,458,525 common shares which may be deemed to be beneficially owned by Trian. Trian Fund Management GP, LLC, of which each of Mr. Peltz and Mr. Garden are members, is the general partner of Trian, and therefore is in a position to determine the investment and voting decisions made by Trian. Accordingly, each of Mr. Peltz and Mr. Garden may be deemed to indirectly beneficially own all of the common shares that Trian beneficially owns. |
4 | For Mr. Wagoner, includes 15,000 shares held in trust via a defined benefit account. Mr. Wagoner has sole voting and investment power with respect to these shares. |
5 | Mr. Schlossberg has shared voting and investment power with respect to 158, 714 shares. |
6 | Total counts the 45,459,623 shares that may be deemed to be beneficially owned by Mr. Garden and Mr. Peltz once as the beneficial ownership of the shares is shared by Mr. Garden and Mr. Peltz. |
| | | | | | | Proposal 2 | | Advisory vote to approve the company’s executive compensation | | General The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd Frank Act”) enables our shareholders to vote to approve, on an advisory (nonbinding) basis, the compensation of our named executive officers as disclosed in this proxy statement in accordance with the SEC’s rules. This proposal, commonly known as a “say-on-pay” proposal, gives our shareholders the opportunity to express their views on our named executive officer compensation. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the philosophy, policies and practices described in this proxy statement. | | | | | We are asking our shareholders to vote “FOR” the following resolution at the Annual General Meeting: | | | | | “RESOLVED, that the Company’s shareholders approve, on an advisory (nonbinding) basis, the compensation of the named executive officers, as disclosed in the Company’s Proxy Statement for the 2021 Annual General Meeting of Shareholders pursuant to the Securities and Exchange Commission’s compensation disclosure rules, including the Compensation Discussion and Analysis, the compensation tables and related narrative discussion.” | | | | | Invesco’s compensation programs, particularly our annual incentive pools, are tied to the achievement of our multi-year strategic objectives and financial results and our success in serving our clients’ and shareholders’ interests, as further described in ExecutiveCompensation above. In considering their vote, we urge shareholders to review the information included in this proxy statement in Executive Compensation. To the extent there is any significant vote against the named executive officer compensation as disclosed in this proxy statement, we will consider our shareholders’ concerns, and the compensation committee will evaluate whether any actions are necessary to address those concerns. Under the Board’s current policy, shareholders are given an opportunity to cast an advisory vote on this topic annually. | | | | | | | | | FOR | | Recommendation of the Board The board of the directors unanimously recommends a vote “FOR” the approval of the compensation of our named executive officers, as disclosed in this proxy statement pursuant to the compensation disclosure rules of the SEC. | | | | | | | | | | | Vote required: This proposal requires the affirmative vote of a majority of votes cast at the Annual General Meeting. 69
| | | | | Proposal
3
| | | | Amendment of Company’s Third Amended and RestatedBye-Laws to Eliminate Certain Super Majority Voting Standards
| | | | | |
General
| | | | | Our Board of Directors is committed to good corporate governance and has carefully considered the advantages and disadvantages of the various voting standards contained in ourBye-Laws. In general, ourBye-Laws require matters submitted for a shareholder vote to receive affirmative approval of a majority of the shares voting on the matter. However, certain provisions include a higher voting standard, as follows: | | | | | | | | | | | | | | ∎ Modification of Rights. OurBye-Laws currently provide that modifying the rights of a class of shares requires the approval of not less than three-quarters of the issued shares of the applicable class.
| | | | | ∎ Certain Business Combinations. OurBye-Laws currently provide that certain business combinations with “interested shareholders” require, among other things, the approval oftwo-thirds of the outstanding voting shares not beneficially owned by the interested shareholder.
| | | | | ∎Bye-Law Amendments. OurBye-Laws currently require the approval of not less than three-quarters of the outstanding voting power to amend certain provisions of theBye-Laws, including with respect to the size of the board, board tenure, shareholder proposals, proxy access, removal of directors, board vacancies, written resolutions, rights of shares, certain business combinations andBye-Law amendments.
| | | | | ∎ Actions with Respect to Directors. OurBye-Laws currently require that a majority of our outstanding voting shares approve the removal of directors for cause and approve the filling of vacancies resulting from such removal.
| | | | | | | | Supermajority voting requirements are intended to facilitate corporate governance stability by requiring broad shareholder consensus to effect certain changes. However, evolving corporate governance practices have come to view supermajority voting provisions as conflicting with principles of good corporate governance. After careful deliberation, and after discussions held with a number of our largest shareholders in the fall and winter of 2018 representing approximately 19% of our outstanding shares as of October 31, 2018 who are supportive of the following proposed changes, the Board has determined that the elimination of certain of the supermajority voting provisions from our Bylaws is in the best interests of Invesco and its shareholders. The Board has determined that it is in the best interests of Invesco and its shareholders to revise the voting standards under theBye-Laws to require: | | | | | ∎ Modification of Rights. The proposed amendedBye-Laws would provide that modification of the rights of (1) common shares requires approval by a majority of the votes cast by the holders of common shares and (2) preference shares requires approval bytwo-thirds of the outstanding shares of the applicable class of preference shares (or such lower threshold as may be set forth in the instrument defining the rights of the applicable class of preference shares).
| | | | | ∎ Certain Business Combinations. The proposed amendedBye-Laws would require a majority of the votes cast by holders of shares not beneficially owned by the interested shareholder for approving certain business combinations with interested shareholders.
| | | | | ∎Bye-Law Amendments and Actions with Respect to Directors. The proposed amendedBye-Laws would require a majority of the votes cast to approveBye-Law amendments (other than certain amendments relating to the preference share provisions addressed above, which would utilize the same standard applicable to modifying the rights of preference shares), removal of directors for cause and filling vacancies resulting from the removal of such
|
| | | Proposal 3 | | Approval of the amended and restated Invesco Ltd. 2016 global equity incentive plan General We are asking our shareholders to vote in favor of the amended and restated Invesco Ltd. 2016 Global Equity Incentive Plan, (the “Equity Plan”). The Equity Plan will: • make a total of 16 million shares of company common stock available for issuance; and • affirm minimum vesting requirements and make several non-material changes as described further below. The Equity Plan is the equity compensation plan for our employees and non-executive directors. The Equity Plan was originally approved by our shareholders in 2016 and was later amended to replenish shares in 2019. The complete text of the Equity Plan is attached as Appendix B to this Proxy Statement. If our shareholders approve the Equity Plan, the maximum number of shares available for issuance will be 16 million common shares. As of March 1, 2021, 6.9 million shares remained available for grant. |
70
| | | | | | | | | Appendix A shows the proposed changes to the relevantBye-Laws implementing the above revisions to our voting standards and other clean up revisions regarding the list of defined terms, with deletions indicated by strikeouts and additions indicated by underlining. You are urged to read the revisedBye-Laws provisions in their entirety. | | | | | | | | The affirmative vote of at least three-fourths of the issued and outstanding shares of stock is required to approve this Proposal. This means that if you abstain from voting on this Proposal, your vote will count against this Proposal. If approved by the requisite shareholder vote, the proposed changes to theBye-Laws will become effective and will be set forth in amended and restatedBye-Laws. If this Proposal is not approved, the proposed amendments to ourBye-Laws will not be made and the existing provisions will remain in effect.
| | | | | Recommendation of the board
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE APPROVAL OF THE AMENDMENTS TO THEBYE-LAWS. | | We are asking our shareholders to make a total of 16 million common shares available for issuance under our Equity Plan | | Timing of proposal and factors regarding our equity usage • Equity is essential to talent acquisition and retention. We use the Equity Plan for granting equity awards to our non-executive directors and employees. We believe that equity- based compensation is critical for attracting, retaining and aligning the interests of non- executive directors and employees. We believe that equity-based compensation aligns the interests of our non-executive directors and employees with those of our shareholders and creates long-term shareholder value. |
|
71
| | | | | Proposal
4
| | | | To amend the Invesco Ltd. 2016 Global Equity Incentive Plan (the “2016 Equity Plan”) to increase the number of shares authorized for issuance under the plan
| | | | | General
| | | | | We are asking our shareholders to approve an amendment to the 2016 Equity Plan (the “2016 Equity Plan Amendment”) to approve an additional 9.8 million shares for issuance under the 2016 Equity Plan. As of March 1, 2019, 4.5 million shares remained available for grant. The 2016 Equity Plan is our primary equity compensation plan for our employees andnon-executive directors. | | | | | | | | | | | | | | | | | | | | The Board and the compensation committee are mindful of their responsibility to our shareholders to exercise judgment in granting equity-based awards. Upon recommendation of the compensation committee, the Board adopted the 2016 Equity Plan Amendment on February 7, 2019, subject to shareholder approval. The Board recommends that shareholders approve the 2016 Equity Plan Amendment to permit the Company’s continued use of equity-based compensation awards. The material terms of the 2016 Equity Plan, as amended, are described below. The complete text of the 2016 Equity Plan Amendment is attached as Annex D | | | • Increased market volatility driving need for more shares. In 2020, given the then-current condition of the market resulting from the COVID-19 pandemic, the significant decline in our stock price negatively impacted the pool of shares under the Equity Plan and caused a sooner-than-expected need for additional shares. | | | | | As noted above, we are seeking shareholder approval to make a maximum of 16 million shares available for issuance under the Equity Plan. We expect that this share pool will be sufficient for equity grants for up to the next three years at the current stock price, or longer if our stock price increases. We believe that it is in the best interests of our shareholders to limit potential dilution from incentive share issuances and seek shareholder approval for additional shares on a more frequent basis as necessary in the future. | | | | | Why should you vote FOR approval of the Equity Plan? | | | Under NYSE rules, listed companies such as Invesco are generally not permitted to grant shares of common stock as compensation except under a plan that is approved by shareholders. Equity awards are an important part of our pay-for-performance compensation program. | | | | | The Board and the compensation committee are mindful of their responsibility to our shareholders to exercise judgment in granting equity-based awards. Upon recommendation of the compensation committee, the Board approved the Equity Plan on February 18, 2021, subject to shareholder approval. | | | | | The Board recommends a vote “FOR” the approval of the Equity Plan because it will continue to allow Invesco to achieve important business objectives in ways that are consistent with our shareholders’ interests. Material terms of the Equity Plan are described below. The complete text of the Equity Plan is attached as Appendix B to this Proxy Statement. |
| | | | | Why should you vote FOR approval of the 2016 Equity Plan Amendment? | | | | | Under NYSE rules, listed companies such as Invesco are generally not permitted to grant shares of common stock as compensation except under a plan that is approved by shareholders. Equity awards are an important part of ourpay-for-performance compensation program. The Board recommends a vote “FOR” the approval of the 2016 Equity Plan Amendment because it will continue to allow Invesco to achieve important business objectives in ways that are consistent with our shareholders’ interests. | | | | | | | | ∎
|
Equity compensation facilitates alignment of employee and shareholder interests. Consistent with industry practice and accepted good governance standards, a significant portion of compensation for our executive officers is delivered in the form of company equity. Further, our compensation philosophy reflects our belief that equity compensation is a critical means of aligning the interests of employees with those of our shareholders. In recent years, all employee time-based equity awards have been made in the form of restricted stock and restricted stock units that generally vest over a four-year period. Performance-based equity awards granted to our executive officers are subject to three-year cliff vesting. We believe that this is the best and simplest way to align the interests of our employees with the interests of our shareholders, giving our employees a significant incentive to appropriately increase shareholder value. | | | | | ∎
Equity compensation is an important tool to recruit and retain talent. Our competitors in the industry routinely use equity awards to compensate employees, and we believe that employees place a high value on equity compensation. Our equity compensation awards are an important component of our compensation program and play a significant role in our ability to attract and retain talented employees and senior management. Approximately 28% of our employee population hold equity awards. | | | | | ∎
Use of “full-value” awards.Our equity compensation program favors the use of “full-value” awards (as opposed to “appreciation” awards, such as stock options or stock appreciation rights). This can mitigate the potential dilutive effect of equity compensation, because the same value can be delivered in the form of a stock award using fewer shares than would be needed if delivered in the form of a stock option.option or a stock appreciation right. Invesco has not granted employee stock options since 2005 and has never granted stock appreciation rights. | | | | | ∎
The 2016 Equity Plan has key features that serve shareholder interests.The 2016 Equity Plan includes bestgood practices with respect to governance and administration of equity compensation programs described in more detail below in below Key Features. | features of the Equity Plan.72
| | | | | | | Following our annual grant of equity awards in February 2019,2021, approximately 4.56.9 million shares were available for grant under the 2016 Equity Plan. If this proposal is not approved, the 2016 Equity Plan will remain in effect although the remaining shares will not be insufficientsufficient to maintain our current approach to employee compensation. We believe that this change would adversely affect shareholders and shareholder value and negatively impact the alignment between employee and shareholder interests. Without an equity plan under which Invesco can issue additional shares, we would need to reduce significantly, or eliminate entirely, compensation that is paid in a form other than cash. In addition, if our shareholders do not approve the 2016 Equity Plan, Amendment, we believe such action will impair our ability to compete for and retain our most talented employees. | | | | | Key features of the 2016 Equity Plan as amended | | | The 2016 Equity Plan as amended, includes a number of features that promote best practices and protect shareholders’ interests, including: | | | | | | | | | | Independent committee | | Administered by the compensation committee, which is composed entirely of independent directors who meet the SEC and NYSE standards for independence. | | Fixed number of shares available for grant that will not automatically increase because of an “evergreen” feature. | | Includes a double-trigger change-in-control provision that provides for the accelerated vesting of awards assumed following a change in control if a participant’s employment is terminated by the company involuntarily (other than for cause or unsatisfactory performance) or by the participant for good reason. | | All performance-based awards are subject to forfeiture or “clawback” provisions. See Compensation policies and practices – Clawback policy above. | | Prohibits participants from borrowing against or transferring awards. | | Prohibits tax gross ups on awards. | | Provides a minimum vesting period of one year for all awards. Employee time-based equity awards vest over a period of four years. Our executive officers’ performance-based equity awards are subject to 3-year cliff vesting. Beginning in 2020, director equity awards are subject to one-year cliff vesting. | | Prohibits the payment of dividends or dividend equivalents on unvested performance-based awards unless and until the committee has certified that the applicable performance goals for such awards have been met. |
| | | | | Prohibits share recycling for stock options and stock appreciation rights. • No grants of discounted options or stock appreciation rights • No use of reload options • No repricing of stock options or stock appreciation rights without shareholder approval. Material changes, including a material increase in authorized shares, require shareholder approval. | |
|
Historic use of equity and outstanding awards When considering the number of shares to add to the Equity Plan, the compensation committee which is composed entirelyreviewed, among other things, the potential dilution to current shareholders as measured by run rate and overhang, and projected future share usage. We recognize the dilutive impact of independent directors who meet the SEC and NYSE standards for independence. | | | No “evergreen” provision | | Fixed number of shares available for grant that will not automatically increase because of an “evergreen” feature.
| | | Double-trigger change-in-control provision | | Includes a double-triggerchange-in-control provision that provides for the accelerated vesting of awards assumed following a change in control if a participant’s employment is terminated by the company involuntarily (other than for cause or unsatisfactory performance) or by the participant for good reason.
| | | Forfeiture and clawback | | All performance-based awards are subject to forfeiture or “clawback” provisions. See Compensation Policies and Practices – Clawback policy above.
| | | No loans against or transferability of awards | | Prohibits participants from borrowing against or transferring awards.
| | | No excise tax gross ups | | Prohibits tax gross ups on awards.
| | | Minimum vesting requirements | | Provides a minimum vesting period of two years for time-based and performance-based restricted stock awards and restricted stock units. Invesco’s time-based equity awards generally vest over a period of four years. Beginning in 2016, our executive officers’ performance-based equity awards are subject to3-year cliff vesting.
| | | No dividends or dividend equivalents on performance-based awards | | Prohibits the payment of dividends or dividend equivalents on unvested performance-based awards unless and until the committee has certified that the applicable performance goals for such awards have been met.
| | | No liberal share recycling | | Prohibits share recycling for stock options and stock appreciation rights.
| | | Best practices for stock options and stock appreciation rights
| | – No grants of discounted options or stock appreciation rights
– No use of reload options
– No repricing of stock options or stock appreciation rights without shareholder approval.
| | | Material amendments require shareholder approval
| | Material changes, including a material increase in authorized shares, require shareholder approval. | | | | | | | | Key data
The compensation committee regularly reviews “run rate,” “overhang” and dilution impact associated with our equity compensation plans, including the proposed 2016 Equity Plan Amendment.programs on our shareholders. We believe that our historical share usage and proposed 2016 Equity Plan are prudent and in the best interests of our shareholders.
| | | | | Run rate “Run rate” provides a measure of our annual share utilization relative to the number of shares outstanding. As shown in the following table below, the company’s three-year average run rate was 1.5%1.9%. |
| | | | | | | | | | | | | | | | | | | (share amounts in millions) | | 2020 | | | 2019 | | | 2018 | | | | Granted during the year1 | | | 9.7 | | | | 9.9 | | | | 6.1 | | | | Weighted average shares outstanding (basic) | | | 459.5 | | | | 437.8 | | | | 412.4 | | | | Run rate | | | 2.1% | | | | 2.3% | | | | 1.5% | | | |
73
| | | | | | | | | | | | | | | | | | | | | | (share amounts in millions) | | | 2018 | | | | 2017 | | | | 2016 | | | | | | Granted during the year1 | | | 6.1 | | | | 5.6 | | | | 6.9 | | | | | | Weighted average shares outstanding | | | 412.4 | | | | 409.4 | | | | 414.7 | | | | | | (basic) | | | | | | | | | | | | | | | | | Run rate | | | 1.5% | | | | 1.4% | | | | 1.7% | | | | | | | | | | |
1 | Represents time-based and performance-based awards as reported in Note 12 of our Annual Report on Form 10-K for the year ended December 31, 2020. For 2019, the number of shares granted has been adjusted to exclude 6.2 million of shares granted as employment inducement awards in connection with completed acquisitions. |
| | | | | | | 1 Represents time-based and performance-based awards as reported in Note 12 of our Annual Report on Form10-K for the year ended December 31, 2018.
Overhang and unvested share awards “Overhang” refers to potential shareholder dilution represented by outstanding employee equity awards and shares available for future grant. Overhang is equal to the sum of outstanding awards plus shares available for grant, divided by common shares outstanding. | | | | | | | | | | | | | | | | | | | | | | | | | (share amounts in millions) | | Outstanding awards1 | | | Shares available for grant2 | | | Common shares outstanding3 | | | Overhang | | | | As of December 31, 2020 | | | 22.4 | | | | 11.7 | | | | 459.5 | | | | 7.4% | | | |
1 | The company has no outstanding stock options or stock appreciation rights. Represents time-based and performance-based awards. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | (share amounts in millions) | | Outstanding awards1 | | | Shares available for grant2 | | | Common shares outstanding3 | | | Overhang | | | | | As of December 31, 2018 | | | 13.4 | | | | 13.7 | | | | 412.4 | | | | 6.5% | | | | | | As of March 1, 2019 | | | 19.4 | | | | 4.5 | | | | 412.4 | | | | 5.8% | | | | | | | | | | | |
| | | 2 | Represents shares available for grant under the 2016 Equity Plan. | | |
3 | 1 The company has no outstanding stock options or stock appreciation rights. Represents time-based and performance-based awards.
2 Represents shares available for grant under the 2016 Equity Plan.
3 Represents basic weighted average shares oustanding.
|
Information regarding equity compensation plans The following table sets forth information about common shares that may be issued under our existing equity compensation plans as of December 31, 2018.2020. | | |
| | | | | | | | | | | | | | | | | | | | | | Name of plan | | Approved by
security holders1 | | | Number of securities to
be issued upon exercise
of outstanding options,
warrants and rights | | | Weighted average
exercise price of
outstanding options,
warrants and rights | | | Number of securities
remaining available for
future issuance under
equity compensation
plans (excluding
outstanding options) | | 2016 Global Equity Incentive Plan
| | | ü
| | | | N/A | | | | N/A | | | | 13,732,511 | | 2012 Employee Stock Purchase Plan
| | | ü
| | | | N/A | | | | N/A | | | | 1,924,071 | | 2010 Global Equity Incentive Plan (ST)
| | | | | | | N/A | | | | N/A | | | | 1,474,340 | | Total
| | | | | | | N/A | | | | N/A | | | | 17,130,922 | | | | | | | | | Name of plan | | Approved by security holders1 | | | Number of securities to be issued upon exercise of outstanding options, warrants and rights | | | Weighted average exercise price of outstanding options, warrants and rights | | | Number of securities remaining available for future issuance under equity compensation plans (excluding outstanding options) | | | | 2016 Global Equity Incentive Plan | | | ✓ | | | | N/A | | | | N/A | | | | 8,834,478 | | | | 2012 Employee Stock Purchase Plan | | | ✓ | | | | N/A | | | | N/A | | | | 934,276 | | | | 2010 Global Equity Incentive Plan (ST) | | | | | | | N/A | | | | N/A | | | | 2,822,190 | | | | Total | | | | | | | N/A | | | | N/A | | | | 12,590,944 | | | |
1 | With respect to the 2010 Global Equity Incentive Plan (ST), shares are issued only as employment inducement awards in connection with a strategic transaction and, as a result, do not require shareholder approval under the rules of the New York Stock Exchange or otherwise. |
| | | | | | | Impact on dilution The 2016 Equity Plan currently authorizes the issuance of up to 21.7 million shares. As noted above, if our shareholders approve the 2016 Equity Plan, Amendmentthe maximum number of shares available for issuance will authorize the issuance of up to 9.8 million shares. If the 2016 Equity Plan Amendment is approved by our shareholders, the 2016 Equity Plan will authorize the issuance of up to 31.5be 16 million shares. The Board believes that the potential dilution resulting from these additional shares is reasonable and that the issuance of these additional shares will provide an appropriate incentive for employees to increase the value of the company for shareholders. Based
If our shareholders approve the Equity Plan, based on historical grant levels and the company’s current stock price, the company anticipates that the shares available for grant under the 2016 Equity Plan after the 2016 Equity Plan Amendment becomes effective will be sufficient to provide projected equity incentives to our employees until our 20202023 Annual General Meeting. We believe that it is in the best interests of our shareholders to limit potential dilution from incentive share issuances and to seek shareholder approval for additional shares on a more frequent basis as necessary in the future. Summary of terms of 2016 equity plan, as amended
The following summary of the material features of the 2016 Equity Plan, as amended by the 2016 Equity Plan Amendment, does not purport to be complete and is qualified by the specific provisions of the 2016 Equity Plan and the 2016 Equity Plan Amendment, copies of which are available to any shareholder of the company upon written request to the Corporate Secretary of the company at Company’s principal executive offices.
| | 74
| | | | | Requests for copies should be addressed to:
E-mail: company.secretary@invesco.com
Mail: Invesco Ltd.
1555 Peachtree Street N.E.
Atlanta, Georgia 30309
Attn: Office of the Secretary
| Summary of terms of the Equity Plan The following summary of the material features of the Equity Plan. This summary is not intended to complete and is qualified in its entirety by reference to the Equity Plan, a copy of which is attached as Appendix B to this Proxy Statement. | | | | | The 2016 Equity Plan was originally approved by our shareholders in May 2016. A copy of the 2016 Equity Plan also is included as Appendix A to the Company’s Proxy Statement filed with the SEC on March 24, 2016. Please also see Annex D to this proxy statement for a copy of the 2016 Equity Plan Amendment. | | | | | |
General. Under the terms of the 2016 Equity Plan, the compensation committee will havehas the authority to grant restricted stock, restricted stock units, stock options, stock appreciation rights (“SARs”) and other stock-based awards. We anticipate that we will continue our current equity compensation practice of granting only restricted stock and restricted stock units and other stock-based awards.units. We have not granted stock options since 2005 and have never granted SARs. | | | | Eligibility. Eligible individuals means non-employee directors, officers, employees and consultants of the Company or any of its Affiliates, including a Participating Company, and prospective officers, employees and consultants who have accepted offers of employment or consultancy from a Company Affiliate or a Participating Company. As of December 31, 2020, (i) approximately 8,400 employees of the company were eligible for awards under the Equity Plan, of which approximately 2,400 had outstanding awards, and (ii) all of our non-executive directors were eligible for awards under the Equity Plan, all of whom receive compensation in the form of restricted stock or restricted stock units granted under the Equity Plan. Shares subject to the 2016 Equity Plan.As noted above, an aggregate of 21.7 We are asking our shareholders to approve the Equity Plan which will authorize up to 16 million common shares currently is authorized for issuance under the 2016 Equity Plan.shares. As noted above, as of March 1, 2019,2020, awards representing 19.415.5 million common shares were outstanding under the 2016 Equity Plan and 4.56.9 million common shares remained available for grant. We are asking our shareholders to approve an additional 9.8 million shares under the 2016 Equity Plan. | | | | | Shares delivered in connection with awards under the 2016 Equity Plan may be shares that are authorized but unissued shares, shares held by the company as treasury shares or, if required by local law, shares delivered from a trust established pursuant to applicable law. | | | | | The number of common shares authorized for issuance under the 2016 Equity Plan, as well as the number of shares subject to outstanding awards and the annual limitation on grants to any single individual, are subject to equitable adjustment upon the occurrence of any stock dividend or other distribution, recapitalization, stock split, reverse split, reorganization, merger, consolidation,spin-off, combination, repurchase or share exchange or other similar corporate transaction or event.
Share counting. Under the following circumstances, shares that are subject to awards granted under the 2016 Equity Plan shall not be counted for purposes of the limits on the total number of shares that can be issued under the 2016 Equity Plan or the number of shares that can be issued as incentive stock options in the following circumstances: | | | ∎
The award is forfeited, canceled or terminates, expires or lapses without shares having been delivered; | | | ∎
The award is settled in cash; or | | | ∎
The shares are withheld by the company to satisfy all or part of any tax withholding obligation related to an award of restricted stock or restricted stock units. | | | | | Shares tendered or withheld by the company in payment of the exercise price of stock options or SARs or to satisfy all or part of any tax withholding obligation related to such stock option or SAR shall be counted as shares that were issued under the 2016 Equity Plan. | | | | | Limits on incentive stock options. The total number of shares that can be issued pursuant to incentive stock options cannot exceed six million under the 2016 Equity Plan. |
75
| | | | | Eligibility. As of December 31, 2018, (i) approximately 7,400 employees of the company were eligible for awards under the 2016 Equity Plan, of which 2,100 had outstanding awards, and (ii) all of ournon-executive directors were eligible for awards under the 2016 Equity Plan, all of whom receive quarterly compensation in the form of equity awards granted under the 2016 Equity Plan. | | | | | Types of awards. The 2016 Equity Plan authorizes awards in the form of restricted stock, restricted stock units, stock options, SARs and other stock-based awards. | | | ∎
Restricted Stock and Restricted Stock Units.Awards of restricted stock are actual shares of common stock that are issued to a participant. An award of a restricted stock unit represents the right to receive cash or common stock at a future date. In each case, the award is subject to restrictions on transferability and such other restrictions, if any, as the compensation committee may impose at the date of grant. The restrictions may lapse separately or in combination at such times, under such circumstances, including, without limitation, a specified period of employment or the satisfaction ofpre-established performance goals, in such installments, or otherwise, as the compensation committee may determine. Except to the extent provided in the applicable award agreement, a participant granted restricted stock will have all of the rights of a shareholder, including, without limitation, the right to vote and the right to receive dividends. If provided in the applicable award agreement, a holder of restricted stock units will be entitled to dividend equivalents with respect to such restricted stock units. | | | | | Upon termination of employment or other service relationship during the applicable restriction period, shares of restricted stock and restricted stock units that are subject to restrictions will be forfeited unless the award agreement provides otherwise. | | | ∎
Other stock-based awards.The 2016 Equity Plan provides for the award of company shares and other awards that are valued by reference to our shares. Other stock-based awards may only be granted in lieu of compensation that would otherwise be payable to the participant.Non-executive director awards are considered No more than 5% of the Shares authorized to grant under Section 6 of the Equity Plan may be granted with a formminimum vesting schedule of other stock-based awards. Each year, the committee establishes the value of such stock-based awards fornon-executive directors for the upcomingless than one year. Such awards are subject to thenon-executive director stock ownership policy. | | | ∎
Stock options and SARs. A stock option is an award that gives the participant the right, but not the obligation, to purchase a specified number of company shares at a specified price for a stated period of time. Stock options may be granted in the form of incentive stock options, which are intended to qualify for favorable treatment for the recipient under U.S. federal tax law, or as nonqualified stock options, which do not qualify for this favorable tax treatment. SARs represent the right to receive an amount in cash, shares or both equal to the fair market value of the shares subject to the award on the date of exercise minus the exercise price of the award. | | | | | As noted above, the 2016 Equity Plan provides for stock options even though the company has not granted stock options since 2005. The 2016 Equity Plan also provides for SARs, although the company has never granted SARs. If stock options or SARs are granted under the 2016 Equity Plan, they will be subject to the following limitations: | | | ∎
No discounted stock options or SARs – All stock options and SARs must have an exercise price that is not less than the fair market value of the underlying shares on the date of grant. | | | ∎
No reloads – The grant of a stock option will not be conditioned on the delivery of shares to the company in payment of an exercise price or satisfaction of a withholding or other payment obligation (i.e., a “reload option”). | | | ∎
No repricing – Repricing of stock options or SARs is not permitted without shareholder approval. | | | ∎
Term – The term of a stock option or SAR cannot exceed 10 years. | | | ∎
No liberal share recycling – Share recycling for stock options and SARs is prohibited. | | | ∎Minimum vesting requirements – The 2016 Equity Plan provides a minimum vesting period of one year for stock options and SARs.
|
76
| | | | | Minimum vesting requirements Restricted stock and restricted stock units. Except with respect to the death, disability or involuntary termination (other than for cause or unsatisfactory performance) of a participant or the occurrence of a corporate transaction (including a change of control) or special circumstances determined by the committee, an award of restricted stock or restricted stock units subject solely to continued services shall have a minimum vesting period of not less than two yearsone year from the date of grant (permitting pro rata vesting over such time).grant. In recent years, restricted stock awards and restricted stock units generallygranted to employees vest over a four-year period. Our executive officers’ performance-based equity awards are subject to3-year three-year cliff vesting. Beginning in 2020, restricted stock awards and restricted stock units granted to non-executive directors vest on the one year anniversary of the date of grant.
Stock options and SARs. Stock options and SARs are subject to a one yearone-year minimum vesting period. The company has not granted stock options since 2005 and has never granted SARs. | | | | | Performance-based awards. To the extent the compensation committee grants an award under the 2016 Equity Plan with payment or vesting based on the attainment of one or more performance goals, such payment or vesting is permitted if, and only to the extent that, the performance goals established by the compensation committee are met. | | | | | The performance goals may relate to the performance of the company or the performance of the company relative to apre-established group. The performance goals may include a threshold level of performance below which no payment will be made, levels of performance at which specified payments will be made and a maximum level of performance above which no additional payment will be made. The performance measure or measures and the performance goals established by the compensation committee may be different for different fiscal years. With respect to 2018 performance-based awards that were granted in February 2019,2021, the compensation committee designated the following performance goals: adjusted operating margin and relative TSR. | | | | | Termination of employment/services. Except as otherwise provided in an award agreement, all unvested awards under the 2016 Equity Plan are forfeited when a participant terminates employment with, or ceases performing services for, the company. | | | | | Effect of a change of control.Awards that are not assumed in connection with a change of control will immediately vest at 100 percent. In the event of a change of control, with respect to awards that are assumed by the acquirer, then upon the participant’s termination of employment during the 24 months following a change in control (i) by the company (other than for cause or unsatisfactory performance) or (ii) by the participant for good reason (as defined in the 2016 Equity Plan), awards will vest at 100 percent unless otherwise provided in an award agreement. | | | | | Changes in capitalization and other corporate events. In the case of events affecting the capital structure of the company or certain corporate events such as a merger, the committee shall make adjustments and substitutions to shares reserved for issuance, awards limits, the number of shares subject to outstanding awards and the exercise price of outstanding awards under the 2016 Equity Plan as it deems equitable and appropriate. The committee may also adjust performance goals to reflect unusual ornon-recurring events and extraordinary items and for other similar reasons, but only to the extent that such adjustments would not cause awards that are intended to be exempt from Section 162(m) of the Internal Revenue Code (the “Code”) to lose that exemption. | | | | | Non-transferability.Awards under the 2016 Equity Plan cannot be sold, assigned, transferred, pledged or otherwise encumbered, except by will and the laws of descent and distribution. |
77
| | | | | Tax withholding; no gross ups. The participant is responsible for all taxes legally due from a participant. Except as otherwise provided in an award agreement, withholding obligations under the 2016 Equity Plan may be settled in shares. | | | | | Administration. The Equity Plan will continue to be administered by the compensation committee of the Board, unless the Board appoints a different committee. The committee will consist of two or more “non-employee directors” as defined in Rule 16b-3 under the Exchange Act. The committee is authorized to establish administrative rules and procedures, select the eligible individuals to whom awards will be granted, determine the types of awards and the number of shares covered by the awards and establish the terms and conditions for awards. The committee may delegate its authority to administer the Equity Plan to one or more persons, subject to applicable law. All decisions made by the committee with respect to the Equity Plan will be final and binding on all persons. Plan amendments and changes. The Board of Directorsboard or the compensation committee may amend, alter or discontinue the 2016 Equity Plan, but no change is permitted without a participant’s consent to the extent that it would materially impair the participant’s rights under an outstanding award unless the change is made to comply with applicable law or stock exchange rules or to prevent adverse tax consequences to the company or a participant. In addition, no amendment will be made without the approval of the company’s shareholders if approval is required by applicable law or the listing standards of an applicable exchange. | | | | | Effective date. The 2016Pending shareholder approval, the Amended and Restated Equity Plan Amendment will be effective onas of the date that it is approved by our shareholders, as requested herein,June 15, 2021 and will terminate on the tenth anniversary of the effective date of the 2016 Equity Plan. | | | | | Securities registration. We intend to file with the SEC an amendment to our registration statement ofon FormS-8 covering the increase in to cover the number of shares of common stock authorized for issuance under the 2016 Equity Plan, as amended.Plan.
Certain U.S. federal income tax consequences The following discussion is intended only as a general summary of the material U.S. federal income tax consequences of awards issued to employees under the 2016 Equity Plan for the purposes of shareholders considering how to vote on this proposal. It is not intended as tax guidance to participants in the 2016 Equity Plan. This summary does not take into account certain circumstances that may change the income tax treatment of awards for individual participants, and it does not describe the state or local income tax consequences of any award or the taxation of awards in jurisdictions outside of the U.S. | | | | | Restricted stock awards and restricted stock units. The fair market value of stock granted under a restricted stock award is generally includable by the participant as ordinary income when the award vests. In the case of restricted stock unit awards, any cash and the fair market value of any stock issued as payment under the awards is includibleincludable as ordinary income when paid. Any dividends or dividend equivalents paid on unvested restricted stock and restricted stock units are treated as ordinary income when paid. | | | | | Stock options and SARs.The grant of a stock option or SAR generally has no tax consequences for a participant or the company. The exercise of an incentive stock option generally does not have tax consequences for a participant or the company, except that it may result in an item of adjustment for alternative minimum tax purposes for the participant. If a participant holds the shares acquired through the exercise of an incentive stock option for the time specified in the Code, any gain or loss arising from a subsequent disposition of the shares will be taxed as long-termlong- term capital gain or loss. If the shares are disposed of before the holding period is satisfied, the participant will recognize ordinary income equal to the lesser of (1) the amount realized upon the disposition and (2) the fair market value of such shares on the date of exercise minus the exercise price paid for the shares. | | | | | A participant recognizes ordinary income upon the exercise of a nonqualified stock option equal to the fair market value of the shares minus the exercise price for the shares. Upon the exercise of a SAR, the participant recognizes ordinary income equal to the amount paid to the participant, in cash and shares that represents the excess of the fair market value of a SAR over its exercise price. Any subsequent disposition of shares acquired through the exercise of a nonqualified stock option or a SAR will generally result in capital gain or loss, which may be short- or long-term, depending upon the holding period for the shares. |
78
| | | | | Deductions by the company.Except as explained below, the company generally is entitled to a deduction equal to the amount included in the ordinary income of participants and does not receive a deduction for amounts that are taxable to participants as capital gain. | | | | | Section 409A. The grant of certain types of incentive awards under the 2016 Equity Plan, may be subject to the requirements of Section 409A of the Code. If an award is subject to Section 409A, and if the requirements of Section 409A are not met, a participant may be subject to tax on all or a portion of the award earlier than the times described above, and additional taxes, penalties and interest could apply. Stock options, SARs and restricted stock awards that comply with the terms of the 2016 Equity Plan are intended to be exempt from the requirements of Section 409A. Restricted stock units granted under the 2016 Equity Plan may be subject to the requirements of Section 409A but are intended to comply with those requirements to avoid early taxation, additional taxes, penalties and interest. Notwithstanding the foregoing, the company is not responsible for any taxes, penalties or interest imposed with respect to any awards granted under the 2016 Equity Plan, including taxes, penalties or interest imposed under Section 409A. | | | | | New plan benefits. Future grants under the 2016 Equity Plan will be made at the discretion of the compensation committee and, accordingly, are not yet determinable. In addition, benefits under the 2016 Equity Plan will depend on a number of factors, including fair market value of the common shares on future dates. Consequently, it is not possible to determine the benefits that might be received by participants under the 2016 Equity Plan. | | | | | For information relating to grants under the 2016 Equity Plan for the last fiscal year to our named executive officers, seeGrants of Plan-based Share Awardsplan-based share awards for 20182020 table on page 60. | | | | | 63. RecommendationThe closing price of our shares on the boardNew York Stock Exchange on March 11, 2021 was $25.33 per share.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE APPROVAL OF 2016 EQUITY PLAN AMENDMENT.This proposal requires the affirmative vote of a majority of votes cast at the Annual General Meeting.
|
79
| | | | | Proposal 5
| | | | | | | | | | FOR | | Recommendation of the Board The board of directors unanimously recommends a vote “FOR” the approval of the equity plan. | | | | Appointment of Independent Registered Public Accounting Firm | | | | | | | | Vote required: This proposal requires the affirmative vote of a majority of votes cast at the Annual General Meeting. |
General
| | | | | The audit committee of the Board has proposed the appointment of PricewaterhouseCoopers LLP (“PwC”) as the independent registered public accounting firm to audit the company’s consolidated financial statements for the fiscal year ending December 31, 2019 and to audit the company’s internal control over financial reporting as of December 31, 2019. During and for the fiscal year ended December 31, 2018, PwC audited and rendered opinions on the financial statements of the company and certain of its subsidiaries. PwC also rendered an opinion on the company’s internal control over financial reporting as of December 31, 2018. In addition, PwC provides the company with tax consulting and compliance services, accounting and financial reporting advice on transactions and regulatory filings and certain other services not prohibited by applicable auditor independence requirements. SeeFees Paid to Independent Registered Public Accounting Firm below. Representatives of PwC are expected to be present at the Annual General Meeting and will have the opportunity to make a statement if they desire to do so. It is also expected that they will be available to respond to appropriate questions. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Recommendation of the board
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE APPOINTMENT OF PWC AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING
| | | | | | | Proposal 4 | | Appointment of independent registered public accounting firm | | General The audit committee of the Board has proposed the appointment of PricewaterhouseCoopers LLP (“PwC”) as the independent registered public accounting firm to audit the company’s consolidated financial statements for the year ending December 31, 2021 and to audit the company’s internal control over financial reporting as of December 31, 2021. During and for the year ended December 31, 2020, PwC audited and rendered opinions on the financial statements of the company and certain of its subsidiaries. PwC also rendered an opinion on the company’s internal control over financial reporting as of December 31, 2020. In addition, PwC provides the company with tax consulting and compliance services, accounting and financial reporting advice on transactions and regulatory filings and certain other services not prohibited by applicable auditor independence requirements. See Fees paid to independent registered public accounting firm below. Representatives of PwC are expected to be present at the Annual General Meeting and will have the opportunity to make a statement if they desire to do so. It is also expected that they will be available to respond to appropriate questions. | | | | | | | | | FOR | | Recommendation of the Board The board of directors unanimously recommends a vote “FOR” the appointment of PwC as the company’s independent registered public accounting firm for the year ending December 31, 2021. Vote required: This proposal requires the affirmative vote of a majority of votes cast at the Annual General Meeting. If the appointment is not approved, the audit committee will reconsider the selection of PwC as the company’s independent registered public accounting firm. |
80
| | | | | Fees Paid to Independent Registered Public Accounting Firm | | | | | |
Fees paid to independent registered public accounting firm The audit committee of the Board, with the approval of the shareholders, engaged PwC to perform an annual audit of the company’s consolidated financial statements for fiscal year 2018.2020. The following table sets forth the approximate aggregate fees billed or expected to be billed to the company by PwC for fiscal year 20182020 and 2017,2019, for the audit of the company’s annual consolidated financial statements and for other services rendered by PwC in 20182020 and 2017. | 2019. | | | | | | | Year ($ in millions)5 | | | 2020 | | 2019 | | | | Audit fees1 | | 6.0 | | 6.6 | | | | Audit-related fees2 | | 2.3 | | 2.1 | | | | Tax fees3 | | 2.1 | | 1.8 | | | | All other fees4 | | 0.1 | | 0.0 | | | | Total fees | | 10.5 | | 10.5 |
| | | | | | | | | | | Fiscal year ($ in millions)5 | | | | 2018 | | | 2017 | | Audit fees1 | | | 6.1 | | | | 5.0 | | Audit-related fees2 | | | 2.3 | | | | 1.7 | | Tax fees3 | | | 2.3 | | | | 1.4 | | All other fees4 | | | 0.3 | | | | 1.1 | | Total fees | | | 11.0 | | | | 9.2 | |
| | | | | | | 1 The 2018 audit fees amount includes approximately $4.3 million (2017: $3.2 million) for audits of the company’s consolidated financial statements and $1.8 million (2017: $1.8
1 | The 2020 audit fees amount includes approximately $3.3 million (2019: $4.0 million) for audits of the company’s consolidated financial statements and $2.5 million (2019: $2.5 million) for statutory audits of subsidiaries. 2 Audit-related fees consist of attest services not required by statute or regulation, audits of employee benefit plans and accounting consultations in connection with new accounting pronouncements and acquisitions.
3 Tax fees consist of compliance and advisory services.
4 In 2017 and 2018, all other fees relate primarily to professional consulting services.
5 These amounts do not include fees paid to PwC associated with audits conducted on certain of our affiliated investment companies, unit trusts and partnerships.
|
| 2 | Audit-related fees consist of attest services not required by statute or regulation, audits of employee benefit plans and accounting consultations in connection with new accounting pronouncements and acquisitions. | | |
3 | Tax fees consist of compliance and advisory services. |
4 | In 2020, all other fees relate primarily to professional consulting services. In 2020, these fees were $121,155. |
5 | These amounts do not include fees paid to PwC associated with audits conducted on certain of our affiliated investment companies, unit trusts and partnerships. |
Pre-Approval ProcessPre-approval process and Policy
| | | All audit andnon-auditpolicy
services provided to the
company and its subsidiaries
by PwC during fiscal years
2018 and 2017 were either
specifically approved orpre-
approved under the audit
andnon-audit servicespre-
approval policy.
| | The Invesco audit committee has adopted policies and procedures forpre-approving (the “Pre-Approval Policy”) all audit andnon-audit services provided by ourInvesco’s independent auditors. The policy is designedauditors, in order to ensureconclude that the auditor’sprovision of auditor services are compatible with the audit firm’s independence is not impaired.for conducting the audit function. The policy sets forth the audit committee’s views onresponsibility for pre-approval of audit, audit-related,audit related, non-audit, tax and other services.services and reviews services performed by the independent registered public accounting firm. It provides that, before the company engages the independent auditor to render any service, the engagement must either be specifically approved by the audit committee or fall into one of the defined categories that have beenpre-approved. The policy defines In the services that the committee haspre-approved. The termintervals between scheduled meetings of any such categorical approval is from the date ofpre-approval to the next annual update of suchpre-approval, unless the committee specifically provides otherwise. The policy also prohibits the company from engaging the auditors to provide certain definednon-audit services that are prohibited under SEC rules. Under the policy, the audit committee, may delegatepre-approval authority to one or more of its members, but may not delegate such authority to the company’s management. Under the policy, our management must inform the audit committee of each service performed by our independent auditor pursuant tohas delegated pre-approval authority under the policy. This requirement normally is satisfied by a report issuedPre-Approval Policy to the audit committee from the independent auditor. Requestschair, which are reported to the audit committee for separate approval must be submitted by bothat the independent auditor and our chief financial officer and the request must include a joint statement as to whether it is deemed consistent with the SEC’s and Public Company Accounting Oversight Board’s rules on auditor independence.next scheduled meeting. |
| | | | | Report of the Audit Committee | | | | | | audit committee Membership and role of the Audit Committee | | | The audit committee of the Board consists of Phoebe A. Wood (Chairperson)(Chair), Sarah E. Beshar, Thomas M. Finke, William F. Glavin, Jr., C. Robert Henrikson, Ben F. Johnson III, Denis Kessler, Sir Nigel Sheinwald and G. Richard Wagoner, Jr. Each of the members of the audit committee is independent as such term is defined under the NYSE listing standards and applicable law. The primary purpose of the audit committee is to assist the Board of Directors in fulfilling its responsibility to oversee (i) the company’s financial reporting, auditing and internal control activities, including the integrity of the company’s financial statements, (ii) the independent auditor’s qualifications and independence, (iii) the performance of the company’s internal audit function and independent auditor, and (iv) the company’s compliance with legal and regulatory requirements. The audit committee’s function is more fully described in its written charter, which is available on the company’s website. | | | Review of the company’s audited consolidated financial statements for the fiscal year ended December 31, 2018 | | | 2020 The audit committee has reviewed and discussed the audited financial statements of the company for the fiscal year ended December 31, 20182020 with the company’s management. The audit committee has also performed the other reviews and duties set forth in its charter. The audit committee has discussed with PricewaterhouseCoopers LLP (“PwC”), the company’s independent registered public accounting firm, the matters required to be discussed by professional auditing standards. The audit committee has also received the written disclosures and the letter from PwC required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent auditor’s communications with the audit committee concerning independence, and has discussed the independence of PwC with that firm. Based on the audit committee’s review and discussions noted above, the audit committee recommended to the Board of Directors that the company’s audited consolidated financial statements be included in the company’s Annual Report for filing with the SEC. | | | | | Respectfully submitted by the audit committee: | | | | | Phoebe A. Wood (Chairperson) | | | (Chair) Sarah E. Beshar | | | Thomas M. Finke1 William F. Glavin, Jr. C. Robert Henrikson | | | Ben F. Johnson III | | | Denis Kessler | | | Sir Nigel Sheinwald | | | G. Richard Wagoner, Jr. |
82
1 | Mr. Finke joined the Audit Committee effective December 1, 2020. |
| | | | | General Information Regardinginformation regarding the Annual General Meeting | | | | | | annual general meeting Questions and answers about voting your common shares | | | | | Q. Why did I receive this Proxy Statement? | | | You have received these proxy materials because Invesco’s Board of Directors is soliciting your proxy to vote your shares at the Annual General Meeting on May 9, 2019.13, 2021. This proxy statement includes information that is designed to assist you in voting your shares and information that we are required to provide to you under SEC rules. | | | | | Q. What is a proxy? | | | A “proxy” is a written authorization from you to another person that allows such person (the “proxy holder”) to vote your shares on your behalf. The Board of Directors is asking you to allow any of the following persons to vote your shares at the Annual General Meeting: Ben F. Johnson III, ChairpersonG. Richard Wagoner, Jr., Chair of the Board of Directors; Martin L. Flanagan, President and Chief Executive Officer; Loren M. Starr,L. Allison Dukes, Senior Managing Director and Chief Financial Officer; Colin D. Meadows, Senior Managing Director and Chief Administrative Officer and Kevin M. Carome, Senior Managing Director and General Counsel. | | | | | Q. Why did I not receive my proxy materials in the mail? | | | As permitted by rules of the SEC, Invesco is making this Proxy Statement and its Annual Report on Form10-K for the fiscal year ended December 31, 20182020 (“Annual Report”) available to its shareholders electronically via the Internet. The“e-proxy” “e-proxy” process expedites shareholders’ receipt of proxy materials and lowers the costs and reduces the environmental impact of our Annual General Meeting. | | | | | OnBeginning on March [.], 2019,26, 2021, we mailed to shareholders of record as of the close of business on March 11, 201915, 2021 (“Record Date”) a Notice of Internet Availability of Proxy Materials (“Notice”) containing instructions on how to access this Proxy Statement, our Annual Report and other soliciting materials via the Internet. If you received a Notice by mail, you will not receive a printed copy of the proxy materials in the mail. Instead, the Notice instructs you on how to access and review all of the important information contained in the Proxy Statement and Annual Report. The Notice also instructs you on how you may submit your proxy. If you received a Notice by mail and would like to receive a printed copy of our proxy materials, you should follow the instructions included in the Notice to request such materials. | | | | | Q. Who is entitled to vote? | | | Each holder of record of Invesco common shares on the Record Date for the Annual General Meeting is entitled to attend and vote at the Annual General Meeting. | | | | | Q. What is the difference between holding shares as a “shareholder of record” and as a “beneficial owner”? | | | ∎
Shareholders of record.You are a shareholder of record if at the close of business on the Record Date your shares were registered directly in your name with Computershare, our transfer agent. | | | ∎
Beneficial owner.You are a beneficial owner if at the close of business on the Record Date your shares were held by a brokerage firm or other nominee and not in your name. Being a beneficial owner means that, like most of our shareholders, your shares are held in “street name.” As the beneficial owner, you have the right to direct your broker or nominee how to vote your shares by following the voting instructions your broker or nominee provides. If you do not provide your broker or nominee with instructions on how to vote your shares, your broker or nominee will be able to vote your shares with respect to some of the proposals, but not all. Please see “WhatWhat if I return a signed proxy or voting instruction card, but do not specify how my shares are to be voted?” below for additional information. |
83
| | | | | ∎
Invesco has requested banks, brokerage firms and other nominees who hold Invesco common shares on behalf of beneficial owners of the common shares as of the close of business on the Record Date to forward the Notice to those beneficial owners. Invesco has agreed to pay the reasonable expenses of the banks, brokerage firms and other nominees for forwarding these materials. | | | | | Q. How many votes do I have? | | | Every holder of a common share on the Record Date will be entitled to one vote per share for each Director to be elected at the Annual General Meeting and to one vote per share on each other matter presented at the Annual General Meeting. On the Record Date there were [.]461,280,055 common shares outstanding and entitled to vote at the Annual General Meeting.
Q. What proposals are being presented at the Annual General Meeting? | | | Invesco intends to present proposals numbered one through fivefour for shareholder consideration and voting at the Annual General Meeting. These proposals are for: 1 | Election of twelve (12) members of the Board of Directors; | | |
2 | Advisory vote to approve the company’s executive compensation; |
3 | Amendment and restatement of the Invesco Ltd. 2016 Global Equity Incentive Plan to increase the number of shares authorized under the plan; and |
4 | 1 Election of eight (8) members of the Board of Directors;
2 Advisory vote to approve the company’s executive compensation;
3 Amendment of the company’s Third Amended and RestatedBye-Laws to eliminate certain super majority voting standards;
4 Amendment of the Invesco Ltd. 2016 Global Equity Incentive Plan to increase the number of shares authorized for issuance under the plan; and
5 Appointment of PricewaterhouseCoopers LLP as the company’s independent registered public accounting firm.
| | | | | |
Other than the matters set forth in this Proxy Statement and matters incident to the conduct of the Annual General Meeting, Invesco does not know of any business or proposals to be considered at the Annual General Meeting. If any other business is proposed and properly presented at the Annual General Meeting, the proxies received from our shareholders give the proxy holders the authority to vote on such matter in their discretion. | | | | | Q. How does the Board of Directors recommend that I vote? | | | The Board of Directors recommends that you vote: | | | ∎
FOR the election of the eight (8)twelve (12) directors nominated by our Board and named in this proxy statement; | | | ∎
FOR the approval, on an advisory basis, of the compensation of our named executive officers; | | | ∎
FOR the amendment of the company’s Third Amended and RestatedBye-Laws to eliminate certain super majority voting standards; | | | ∎ FOR the amendmentrestatement of the Invesco Ltd. 2016 Global Equity Incentive Plan to increase the number of shares authorized for issuance under the plan; and
| | | ∎
FOR appointment of PricewaterhouseCoopers LLP as the company’s independent registered public accounting firm. | | | | | Q. How do I attend the Annual General Meeting? | | | AllDue to the public health impact of the COVID-19 pandemic and to support the health and well-being of our shareholders, are invited to attendemployees, and our community, the Annual General Meeting. An admission ticket (or other proof of share ownership) and some form of government-issued photo identification (such as a valid driver’s license or passport)Meeting will be required for admissionheld over the Internet in a virtual meeting format only, with no in-person access. Shareholders attending the Annual Meeting remotely will have the same opportunities they have had at past annual meetings to participate, vote, ask questions, and provide feedback to the Annual General Meeting. Only shareholders who own Invesco common shares ascompany’s management team and the Board of Directors. If you were a shareholder of record at the close of business on the Record Daterecord date of March 15, 2021, you are eligible to access, participate in and invited guestsvote at the virtual meeting. The meeting will be entitled to attend the meeting. An admission ticket will serve as verification of your ownership. Registrationhosted at www.meetingcenter.io/293405929. The meeting will begin promptly at [11:1:00 a.m.] Central European Summerp.m., Eastern Time and online access will open 15 minutes prior to allow time to log-in. The login password is IVZ2021. You will also need your voter control number, which, if you are a shareholder of record, you can find on your original proxy card or Notice of Internet Availability of Proxy Materials. If you hold your shares in “street name” or through an intermediary, such as a bank or broker (a “Beneficial Holder”), you have two options: 1. Registration in Advance of the Annual General Meeting will begin at [12:00 p.m.] Central European Summer Time. | | | ∎ IfSubmit proof of your proxy power (“Legal Proxy”) from your broker or bank reflecting your Invesco shares are registered inLtd. holdings along with your name and youemail address to Computershare. Requests for registration must be labeled as “Legal Proxy” and be received no later than 5:00 p.m., Eastern Time, on May 7, 2021. You will receive a confirmationemail from Computershare of your registration, which will include your voter control number. Requests for registration should include an email from your broker or accessedan image of your legal proxy materials electronicallyand be directed to Computershare via the Internet, click the appropriate box on the electronic proxy cardemail at legalproxy@computershare.com or follow the telephone instructions when prompted and an admission ticket will be held for youby mail at thecheck-in areaComputershare, Invesco Ltd. Legal Proxy, P.O. Box 43001, Providence, RI 02940-3001.
2. Register at the Annual General Meeting For the 2021 proxy season, an industry solution has been agreed upon to allow Beneficial Holders to register online at the Annual General Meeting to attend, ask questions and vote. We expect that the vast majority of Beneficial Holders will be able to fully participate using the control number received with their voting instruction form. Please note, however, that this option is intended to be provided as a convenience to Beneficial Holders only. There is noguarantee this option will be available for every type of Beneficial Holder voting control number. The inabilityto provide this option to any or all Beneficial Holders shall in no way impact the validity of the Annual GeneralMeeting. Beneficial Holders may choose the register in advance of the Annual Meeting option above, if they want to ensure full access to the Annual General Meeting. | | | ∎ If you received
You may submit your proxy materialsin advance of the Annual Meeting via the Internet, by phone or by mail and voted by completingfollowing the instructions included on your proxy card and checked the box indicating thator notice of Internet availability. Whether or not you plan to attend the meeting, an admission ticket will be held forvirtual Annual Meeting, we urge you at thecheck-in area at the Annual General Meeting. |
84
| | | | | ∎ Ifto vote and submit your Invesco shares are held in a bank or brokerage account, contact your bank or broker to obtain a written legal proxy in orderadvance of the meeting using one of the methods described in the proxy materials.
Q. Do I need to vote your shares at the meeting. If you do not obtain a legal proxy from your bank or broker, you will not be entitledregister to vote your shares, but you can still attend the Annual General Meeting virtually? Registration is only required if you bringare a recent bank or brokerage statement showing that you owned Invesco common shares on March 11, 2019. You should report to thecheck-in area for admission to the Annual General Meeting.Beneficial Holder, as set forth above.
Q. How do I vote and what are the voting deadlines? | | | You may vote your shares in person at the Annual General Meeting or by proxy. There are three ways to vote by proxy: | | | ∎
Via the internet:You can submit a proxy via the Internet until 11:59 a.m. eastern time on May 8, 2019,the adjournment of the virtual annual meeting, by accessing the web site at http://www. envisonreports.com/www.envisonreports.com/IVZ and following the instructions you will find on the web site. Internet proxy submission is available 24 hours a day. You will be given the opportunity to confirm that your instructions have been properly recorded. | | | ∎
By telephone:You can submit a proxy by telephone until 11:59 a.m.p.m. eastern time on May 8, 2019,12, 2021, by calling toll-free 1-800-652-VOTE (8683) (from the U.S. and Canada) and following the instructions. | | | ∎
By mail:If you have received your proxy materials by mail, you can vote by marking, dating and signing your proxy card and returning it by mail in the enclosed postage-paid envelope. If you hold your common shares in an account with a bank or broker (i.e., in “street name”), you can vote by following the instructions on the voting instruction card provided to you by your bank or broker. Proxy cards returned by mail must be received no later than the close of business on May 8, 2019. | | | | | 12, 2021. Even if you plan to be present atparticipate in the Annual General Meeting, we encourage you to vote your common shares by proxy using one of the methods described above. Invesco shareholders of record who attend the meeting may vote their common shares in person, even though they have sent in proxies. | | | | | Q. What if I hold restricted shares? | | | For participants in the 2016 Global Equity Incentive Plan and the 2011 Global Equity Incentive Plan who hold restricted share awards through the company’s stock plan administrator, your restricted shares will be voted as you instruct the custodian for such shares, Invesco Ltd. (the “Custodian”). There are three ways to vote: via the Internet, by telephone or by returning your voting instruction card. Please follow the instructions included on your voting instruction card on how to vote using one of the three methods. Your vote will serve as voting instructions to the Custodian for your restricted shares. If you do not provide instructions regarding your restricted shares, the Custodian will not vote them. You cannot vote your restricted shares in person at the meeting.To allow sufficient time for votingby the Custodian, the Custodian must receive your vote by no later than 11:59p.m. eastern time on May 6, 2021. 3, 2019. | | | | | Q. May I change or revoke my vote? | | | Yes. You may change your vote in one of several ways at any time before it is cast prior to the applicable deadline for voting: | | | ∎
Grant a subsequent proxy via the Internet or telephone; | | | ∎
Submit another proxy card (or voting instruction card) with a date later than your previously delivered proxy; | | | ∎
Notify our Company Secretary in writing before the Annual General Meeting that you are revoking your proxy or, if you hold your shares in “street name,” follow the instructions on the voting instruction card; or | | | ∎
If you are a shareholder of record, or a beneficial owner with a proxy from the shareholder of record, vote in person at the virtual Annual General Meeting. | | | | | Q. What will happen if I do not vote my shares? | | | ∎
Shareholders of record.If you are the shareholder of record and you do not vote in person at the virtual Annual General Meeting, or by proxy via the Internet, by telephone, or by mail, your shares will not be voted at the Annual General Meeting. |
85
| | | | | ∎
Beneficial owners.If you are the beneficial owner of your shares, your broker or nominee may vote your shares only on those proposals on which it has discretion to vote. Under NYSE rules, your broker or nominee has discretion to vote your shares on routine matters, such as Proposal No. 5,4, but does not have discretion to vote your shares onnon-routine matters, such as Proposals No. 1, 2 3 or 4.3. Therefore, if you do not instruct your broker as to how to vote your shares on Proposals No. 1, 2 3 or 4,3, this would be a “brokernon-vote,” and your shares would not be counted as having been voted on the applicable proposal.Wetherefore strongly encourage you to instruct your broker or nominee onhow you wish to vote your shares. | | | | | Q. What is the effect of a brokernon-vote or abstention? | | | Under NYSE rules, brokers or other nominees who hold shares for a beneficial owner have the discretion to vote on a limited number of routine proposals when they have not received voting instructions from the beneficial owner at least ten days prior to the Annual General Meeting. A “brokernon-vote” occurs when a broker or other nominee does not receive such voting instructions and does not have the discretion to vote the shares. Pursuant to Bermuda law, brokernon-votes and abstentions are not included in the determination of the common shares voting on such matter, but are counted for quorum purposes. | | | | | Q. What if I return a signed proxy or voting instruction card, but do not specify how my shares are to be voted? | | | ∎
Shareholders of record.If you are a shareholder of record and you submit a proxy, but you do not provide voting instructions, all of your shares will be voted FOR Proposals No. 1, 2, 3 4 and 5.4. ∎
Beneficial owners.If you are a beneficial owner and you do not provide the broker or other nominee that holds your shares with voting instructions, the broker or other nominee will determine if it has the discretionary authority to vote on the particular matter. Under NYSE rules, brokers and other nominees have the discretion to vote on routine matters, such as Proposal No. 5,4, but do not have discretion to vote onnon-routine matters, such as Proposals No. 1, 2 3 and 4.3. Therefore, if you do not provide voting instructions to your broker or other nominee, your broker or other nominee may only vote your shares on Proposal No. 54 and any other routine matters properly presented for a vote at the Annual General Meeting. | | | | | Q. What does it mean if I receive more than one Notice of Internet Availability of Proxy Materials? | | | It means you own Invesco common shares in more than one account, such as individually and jointly with your spouse.Please vote all of your common sharesshares.. Please see “Householding of Proxy Materials” below for information on how you may elect to receive only one Notice. | | | | | Q. What is a quorum? | | | A quorum is necessary to hold a valid meeting. The presence in person, of two or more persons representing, in personvirtually or by proxy, more than 50% of the issued and outstanding common shares entitled to vote at the virtual meeting as of the Record Date constitutes a quorum for the conduct of business. | | | | | Q. What vote is required in order to approve each proposal? | | | For Proposals 1, 2 , 4 and 5,Each proposal requires the affirmative vote of a majority of the votes cast on such proposal at the Annual General Meeting is required.Meeting. Under ourBye-Laws, a majority of the votes cast means the number of shares voted “for” a proposal must exceed 50% of the votes cast with respect to such proposal. Votes “cast” include only votes cast with respect to shares present in personat the virtual Annual General Meeting or represented by proxy and excludes abstentions. For Proposal 3, the affirmative vote for at least 75% of the issued and outstanding shares of the company is required. | | | | | Q. How will voting on any other business be conducted? | | | Other than the matters set forth in this Proxy Statement and matters incident to the conduct of the Annual General Meeting, we do not know of any business or proposals to be considered at the Annual General Meeting. If any other business is proposed and properly presented at the Annual General Meeting, the persons named as proxies will vote on the matter in their discretion. |
86
| | | | | Q. What happens if the Annual General Meeting is adjourned or postponed? | | | Your proxy will still be effective and will be voted at the rescheduled Annual General Meeting. You will still be able to change or revoke your proxy until it is voted. | | | | | Q. Who will count the votes? | | | A representative of Computershare, our transfer agent, will act as the inspector of election and will tabulate the votes. | | | | | Q. How can I find the results of the Annual General Meeting? | | | Preliminary results will be announced at the Annual General Meeting. Final results will be published in a Current Report on Form8-K that we will file with the SEC within four business days after the Annual General Meeting. | | | | | Important additional information | | | | | Costs of solicitation | | | The cost of solicitation of proxies will be paid by Invesco. We have retained Alliance Advisors LLC to solicit proxies for a fee of approximately $18,000 plus a reasonable amount to cover expenses. Proxies may also be solicited in person, by telephone or electronically by Invesco personnel who will not receive additional compensation for such solicitation. Copies of proxy materials and our Annual Report will be supplied to brokers and other nominees for the purpose of soliciting proxies from beneficial owners, and we will reimburse such brokers or other nominees for their reasonable expenses. | | | | | Presentation of financial statements | | | In accordance with Section 84 of the Companies Act 1981 of Bermuda, Invesco’s audited consolidated financial statements for the fiscal year ended December 31, 20182020 will be presented at the Annual General Meeting. These statements have been approved by the Board. There is no requirement under Bermuda law that these statements be approved by shareholders, and no such approval will be sought at the Annual General Meeting. | | | | | Registered and principal executive offices | | | The registered office of Invesco is located at Canon’s Court, 22Victoria Place, 31 Victoria Street, Hamilton HM12,HM10, Bermuda. The principal executive office of Invesco is located at 1555 Peachtree Street N.E., Atlanta, Georgia 30309, and the telephone number there is1-404-892-0896.
Shareholder proposals for the 20202022 annual general meeting | | | In accordance with the rules established by the SEC, any shareholder proposal submitted pursuant to Rule14a-8 under the Exchange Act intended for inclusion in the proxy statement for next year’s annual general meeting of shareholders must be received by Invesco no later than 120 days before the anniversary of the date of this proxy statement (e.g., not later than November 23, 2019)26, 2021). Such proposals should be sent to our Company Secretary in writing to Invesco Ltd., Attn: Office of the Company Secretary, Legal Department, 1555 Peachtree Street N.E., Atlanta, Georgia 30309, or by email to company.secretary@invesco.com. To be included in the Proxy Statement, the proposal must comply with the requirements as to form and substance established by the SEC and ourBye-Laws, and must be a proper subject for shareholder action under Bermuda law. | | | | | The company implemented “proxy access”In addition, a shareholder (or a group of up to 20 shareholders) who has owned at least 3% of our shares continuously for at least three years and has complied with the other requirements in 2017. Proxy access allows eligible shareholders toour bye-laws may nominate and include their director nominees in the company’s proxy materials director nominees constituting up to 20% of our Board of Directors. Notice of a proxy access nomination for an annual general meetingconsideration at our 2022 Annual General Meeting of shareholders, along with the candidates nominated by the Board as long as certain criteria are met and such request to include a shareholder-nominated candidate isShareholders must be received not less than 90 nornot more than 120 days prior to the first anniversary of the preceding year’s annual general meeting2021 Annual General Meeting of Shareholders (e.g. from January 10, 202013, 2022 to February 9, 2020)12, 2022). Subject to the terms and conditions set forth in ourBye-Laws, generally, eligible shareholders who have continuously maintained qualifying ownership of at least 3% of the company’s outstanding shares for at least the previous three years are generally permitted to use the company’s proxy statement to nominate, at the company’s annual general |
87
| | | | | meeting of shareholders, a number of eligible director candidates equal to the greater of two and the largest whole number that does not exceed 20% of the number of directors in office as of the last day on which a proxy access notice may be delivered. | | | | | A shareholder may otherwise propose business for consideration or nominate persons for election to the Board in compliance with SEC proxy rules, Bermuda law, ourBye-Laws and other legal requirements, without seeking to have the proposal included in Invesco’s proxy statement pursuant to Rule14a-8 under the Exchange Act. Under ourBye-Laws, notice of such a proposal must generally be provided to our Company Secretary not less than 90 nor more than 120 days prior to the first anniversary of the preceding year’s annual general meeting. The period under ourBye-Laws for receipt of such proposals for next year’s meeting is thus from January 10, 202013, 2022 to February 9, 2020.12, 2022. (However, if the date of the annual general meeting is more than 30 days before or more than 60 days after such anniversary date, any notice by a shareholder of business or the nomination of directors for election or reelection to be brought before the annual general meeting to be timely must be delivered (i) not earlier than the close of business on the 120th day prior to such annual general meeting; and (ii) not later than the close of business on the later of (A) the 90th day prior to such annual general meeting and (B) the 10th day following the day on which public announcement of the date of such meeting is first made.) SEC rules permit proxy holders to vote proxies in their discretion in certain cases if the shareholder does not comply with these deadlines, and in certain other cases notwithstanding compliance with these deadlines. | | | | | In addition, Sections79-80 of the Bermuda Companies Act allows shareholders holding at least 5% of the total voting rights or totaling 100 record holders (provided that they advance to the company all expenses involved and comply with certain deadlines) to require Invesco (i) to give notice of any resolution that such shareholders can properly propose at the next annual general meeting; and/or (ii) to circulate a statement regarding any proposed resolution or business to be conducted at a general meeting. | | | | | United States Securities and Exchange Commission reports | | | A copy of the company’s Annual Report on Form10-K (“Annual Report”), including financial statements, for the fiscal year ended December 31, 2018,2020, is being furnished concurrently herewith to all shareholders holding shares as of the Record Date. Please read it carefully. | | | | | Shareholders may obtain a copy of the Annual Report, without charge, by visiting the company’s web site atwww.invesco.com www.invesco.com/corporate or by submitting a request to our Company Secretary at: company.secretary@invesco.comcompany.secretary@invesco. com or by writing Invesco Ltd., Attn: Office of the Company Secretary, Legal Department, 1555 Peachtree Street N.E., Atlanta, Georgia 30309. Upon request to our Company Secretary, the exhibits set forth on the exhibit index of the Annual Report may be made available at a reasonable charge (which will be limited to our reasonable expenses in furnishing such exhibits). | | | | | Further, we make available free of charge through our corporate website, our Quarterly Reports of Form 10-Q, Current Reports of Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after we electronically file such material with, or furnish to, the SEC. Householding of proxy materials | | | The SEC has adopted rules that permit companies and intermediaries (such as banks and brokers) to satisfy the 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 and Annual Report to those shareholders. This process, which is commonly referred to as “householding,” potentially means extra convenience for shareholders and cost savings for companies. |
| | | | | A number of banks and brokers with account holders who are beneficial holders of the company’s common shares will be householding the company’s proxy materials or the Notice. Accordingly, a single copy of the proxy materials or Notice will be delivered to multiple shareholders sharing an address unless contrary instructions have been received from the affected shareholders. Once you have received notice from your bank or broker that it will be householding communications to your address, householding will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in householding and would prefer to receive separate proxy materials or copies of the Notice, please notify your bank or broker, or contact our Company Secretary at: company.secretary@invesco.com,company. secretary@invesco.com, or by mail to Invesco Ltd., Attn: Office of the Company Secretary, Legal Department, 1555 Peachtree Street N.E., Atlanta, Georgia 30309, or by telephone to404-892-0896. The company undertakes, upon oral or written request to the address or telephone number above, to deliver promptly a separate copy of the company’s proxy materials or the Notice to a shareholder at a shared address to which a single copy of the applicable document was delivered. Shareholders who currently receive multiple copies of the proxy materials or the Notice at their address and would like to request householding of their communications should contact their bank or broker or the Company Secretary at the contact address and telephone number provided above. |
| | | | | Appendix A | | | | | | Appendix A | U.S. GAAP rules on consolidation require the company to consolidate certain investment product assets and liabilities which significantly distort our balance sheet and associated financial metrics. | | Schedule of Non-GAAP information We utilize the following non-GAAP performance measures: net revenue (and by calculation, net revenue yield on AUM), adjusted operating income, adjusted operating margin, adjusted net income attributable to Invesco Ltd. and adjusted diluted earnings per common share (EPS). The company believes the adjusted measures provide valuable insight into the company’s ongoing operational performance and assist in comparisons to its competitors. These measures also assist the company’s management with the establishment of operational budgets and forecasts and assist the Board of Directors and management of the company in determining incentive compensation decisions. The most directly comparable U.S. GAAP measures are operating revenues (and by calculation, gross revenue yield on AUM), operating income, operating margin, net income attributable to Invesco Ltd. and diluted EPS. Each of these measures is discussed more fully below. The following are reconciliations of operating revenues, operating income (and by calculation, operating margin), and net income attributable to Invesco Ltd. (and by calculation, diluted EPS) on a U.S. GAAP basis to a non-GAAP basis of net revenues, adjusted operating income (and by calculation, adjusted operating margin), and adjusted net income attributable to Invesco Ltd. (and by calculation, adjusted diluted EPS). These non-GAAP measures should not be considered as substitutes for any U.S. GAAP measures and may not be comparable to other similarly titled measures of other companies. Additional reconciling items may be added in the future to these non-GAAP measures if deemed appropriate. The tax effects related to the reconciling items have been calculated based on the tax rate attributable to the jurisdiction to which the transaction relates. Notes to the reconciliations follow the tables. |
AUM ranking disclosure
| | | | | | | | | | | | | | | | | | | | | Reconciliation of operating revenues to net revenues: | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ in millions | | 2020 | | 2019 | | 2018 | | 2017 | | 2016 | | | | | | | Operating revenues, U.S. GAAP basis | | | 6,145.6 | | | | 6,117.4 | | | | 5,314.1 | | | | 5,160.3 | | | | 4,734.4 | | | | | | | | Invesco Great Wall1 | | | 263.2 | | | | 157.2 | | | | 83.6 | | | | 48.7 | | | | 43.7 | | | | | | | | Revenue Adjustments:2 | | | | | | | | | | | | | | | | | | | | | | | | | | | Investment management fees | | | -779.8 | | | | -814.4 | | | | -817.9 | | | | -914.2 | | | | -840.1 | | | | | | | | Service and distribution fees | | | -986.1 | | | | -886.3 | | | | -629.7 | | | | -551.2 | | | | -547.6 | | | | | | | | Other | | | -181.7 | | | | -192.3 | | | | -160.6 | | | | -21.1 | | | | -19.5 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total revenue adjustments | | | -1,947.6 | | | | -1,893.0 | | | | -1,608.2 | | | | -1,486.5 | | | | -1,407.2 | | | | | | | | Assets of Consolidated Investment Products (“CIP”)3 | | | 39.8 | | | | 33.5 | | | | 28.6 | | | | 32.4 | | | | 22.3 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Net revenues | | | 4,501.0 | | | | 4,415.1 | | | | 3,818.1 | | | | 3,754.9 | | | | 3,393.2 | | | | | | | | | | | | | | | | | | | | | | | | Reconciliation of operating income to adjusted operating income: | | | | | | | | | | | | | | | | | | | $ in millions | | 2020 | | 2019 | | 2018 | | 2017 | | 2016 | | | | | | | Operating income, U.S. GAAP basis | | | 920.4 | | | | 808.2 | | | | 1,204.9 | | | | 1,279.1 | | | | 1,152.4 | | | | | | | | Invesco Great Wall1 | | | 143.7 | | | | 76.5 | | | | 31.1 | | | | 18.4 | | | | 15.9 | | | | | | | | CIP3 | | | 62.0 | | | | 61.6 | | | | 44.8 | | | | 42.9 | | | | 51.0 | | | | | | | | Transaction, integration, and restructuring 4 | | | 393.3 | | | | 673.0 | | | | 136.9 | | | | 101.8 | | | | 69.0 | | | | | | | | Compensation expense related to market valuation changes in deferred compensation plans5 | | | 39.8 | | | | 36.5 | | | | -3.2 | | | | 20.3 | | | | 8.1 | | | | | | | | Other reconciling items6 | | | 105.3 | | | | — | | | | -22.8 | | | | 19.7 | | | | 1.0 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Adjusted operating income | | | 1,664.5 | | | | 1,655.8 | | | | 1,391.7 | | | | 1,482.2 | | | | 1,297.4 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Operating margin7 | | | 15.0% | | | | 13.2% | | | | 22.7% | | | | 24.8% | | | | 24.3% | | | | | | | | Adjusted operating margin8 | | | 37.0% | | | | 37.5% | | | | 36.5% | | | | 39.5% | | | | 38.2% | |
| 90 Invesco Ltd. | | | Our AUM ranking data excludes passive products,closed-end funds, private equity limited partnerships,non-discretionary funds, unit investment trusts, fund of funds with component funds managed by Invesco, stable value building block funds and consolidated debt obligations. Certain funds and products were excluded from the analysis because of limited benchmark or peer group data. Had these been available, results may have been different. These results are preliminary and subject to revision. | | | | | Data is as of December 31, 2018. AUM measured in theone-, three- and five-year peer group rankings represents 52%, 52% and 51% of total Invesco AUM, respectively. | | | | | Peer group rankings are sourced from a widely-used third party ranking agency in each fund’s market (Lipper, Morningstar, IA, Russell, Mercer, eVestment Alliance, SITCA, Value Research) and asset-weighted in U.S. dollars. Rankings are as of priorquarter-end for most institutional products and priormonth-end for Australian retail funds due to their late release by third parties. Rankings are calculated against all funds in each peer group. Rankings for the primary share class of the most representative fund in each composite are applied to all products within each composite. Performance assumes the reinvestment of dividends. Past performance is not indicative of future results and may not reflect an investor’s experience. |
| | | | | | | | | | | | | | | | | | | | | Reconciliation of net income attributable to Invesco Ltd. to adjusted net income attributable to Invesco Ltd.: | | | | | | | | | | | | | | | | | | | $ in millions, except per share data | | 2020 | | 2019 | | 2018 | | 2017 | | 2016 | | | | | | | Net income attributable to Invesco Ltd., U.S. GAAP basis | | | 524.8 | | | | 564.7 | | | | 882.8 | | | | 1,127.3 | | | | 854.2 | | | | | | | | CIP3 | | | -9.4 | | | | 1.6 | | | | -8.8 | | | | -2.3 | | | | -3.0 | | | | | | | | Transaction, integration and restructuring, net of tax4 | | | 339.7 | | | | 558.1 | | | | 138.6 | | | | 91.9 | | | | 68.3 | | | | | | | | Deferred compensation plan market valuation changes and dividend income less compensation expense, net of tax5 | | | -20.1 | | | | -7.9 | | | | 15.4 | | | | -4.6 | | | | -2.5 | | | | | | | | Other reconciling items, net of tax6 | | | 57.9 | | | | 7.5 | | | | -25.3 | | | | -106.4 | | | | 7.1 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Adjusted net income attributable to Invesco Ltd. | | | 892.9 | | | | 1,124.0 | | | | 1,002.7 | | | | 1,105.9 | | | | 924.1 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Average shares outstanding - diluted | | | 462.5 | | | | 440.5 | | | | 412.5 | | | | 409.9 | | | | 415.0 | | | | | | | | Diluted EPS | | | $1.13 | | | | $1.28 | | | | $2.14 | | | | $2.75 | | | | $2.06 | | | | | | | | Adjusted diluted EPS9 | | | $1.93 | | | | $2.55 | | | | $2.43 | | | | $2.70 | | | | $2.23 | |
90
| | | | | Appendix B | | | | U.S. GAAP rules on
consolidation require the
company to consolidate
certain investment product
assets and liabilities which
significantly distort our
balance sheet and associated
financial metrics.
| | Schedule ofNon-GAAP information
We utilize the followingnon-GAAP performance measures: net revenue (and by calculation, net revenue yield on AUM), adjusted operating income, adjusted operating margin, adjusted
1 | Invesco Great Wall: Prior to the third quarter of 2018, management reflected its interests in Invesco Great Wall on a proportional consolidation basis, which was consistent with the presentation of our share of the AUM from these investments. Given the company’s influence on Invesco Great Wall, a change in regulation allowing increased foreign ownership, and reaching oral agreement in principle in the third quarter of 2018 to obtain a majority stake of the joint venture, the company began reporting 100% of the flows and AUM for Invesco Great Wall. Also beginning in the third quarter of 2018, the company’s non-GAAP operating results reflect the economics of these holdings on a basis consistent with the underlying AUM and flows. Adjusted net income is reduced by the amount of earnings attributable to Invesco Ltd. and adjusted diluted earnings per share (EPS). The company believes the adjusted measures provide valuable insight into the company’s ongoing operational performance and assist in comparisons to its competitors. These measures also assist the company’s management with the establishment of operational budgets and forecasts and assist the Board of Directors and management of the company in determining incentive compensation decisions. The most directly comparable U.S. GAAP measures are operating revenues (and by calculation, gross revenue yield on AUM), operating income, operating margin, net income attributable to Invesco Ltd. and diluted EPS. Each of these measures is discussed more fully below. | | | | | The following are reconciliations of operating revenues, operating income (and by calculation, operating margin), and net income attributable to Invesco Ltd. (and by calculation, diluted EPS) on a U.S. GAAP basis to anon-GAAP basis of net revenues, adjusted operating income (and by calculation, adjusted operating margin), and adjusted net income attributable to Invesco Ltd. (and by calculation, adjusted diluted EPS). Thesenon-GAAP measures should not be considered as substitutes for any U.S. GAAP measures and may not be comparable to other similarly titled measures of other companies. Additional reconciling items may be added in the future to thesenon-GAAP measures if deemed appropriate. The tax effects related to the reconciling items have been calculated based on the tax rate attributable to the jurisdiction to which the transaction relates. Notes to the reconciliations follow the tables. Further details regarding the reconciliations are available in the company’s Annual Report on Form 10-K. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Reconciliation of operating revenues to net revenues: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ in millions | | 2018 | | | | | 2017 | | | | | 2016 | | | | | 2015 | | | | | 2014 | | | | Operating revenues, U.S. GAAP basis | | | 5,314.1 | | | | | | 5,160.3 | | | | | | 4,734.4 | | | | | | 5,122.9 | | | | | | 5,147.1 | | | | Invesco Great Wall1 | | | 83.6 | | | | | | 48.7 | | | | | | 43.7 | | | | | | 61.0 | | | | | | 56.7 | | | | Third party distribution, service and advisory expenses2 | | | (1,608.2) | | | | | | (1,486.5) | | | | | | (1,407.2) | | | | | | (1,579.9) | | | | | | (1,630.7) | | | | (CIP)3 | | | 28.6 | | | | | | 32.4 | | | | | | 22.3 | | | | | | 39.2 | | | | | | 35.2 | | | | Net revenues | | | 3,818.1 | | | | | | 3,754.9 | | | | | | 3,393.2 | | | | | | 3,643.2 | | | | | | 3,608.3 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Reconciliation of operating income to adjusted operating income: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ in millions | | 2018 | | | | | 2017 | | | | | 2016 | | | | | 2015 | | | | | 2014 | | | | Operating income, U.S. GAAP basis | | | 1,204.9 | | | | | | 1,279.1 | | | | | | 1,152.4 | | | | | | 1,344.7 | | | | | | 1,270.1 | | | | Invesco Great Wall1 | | | 31.1 | | | | | | 18.4 | | | | | | 15.9 | | | | | | 27.4 | | | | | | 25.9 | | | | CIP3 | | | 44.8 | | | | | | 42.9 | | | | | | 51.0 | | | | | | 63.2 | | | | | | 69.8 | | | | Transaction, integration, and restructuring4 | | | 136.9 | | | | | | 101.8 | | | | | | 69.0 | | | | | | 22.6 | | | | | | 52.9 | | | | Compensation expense related to market valuation changes in deferred compensation plans5 | | | (3.2) | | | | | | 20.3 | | | | | | 8.1 | | | | | | 4.3 | | | | | | 11.5 | | | | Other reconciling items6 | | | (22.8) | | | | | | 19.7 | | | | | | 1.0 | | | | | | 17.8 | | | | | | 58.0 | | | | Adjusted operating income | | | 1,391.7 | | | | | | 1,482.2 | | | | | | 1,297.4 | | | | | | 1,480.0 | | | | | | 1,488.2 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Operating margin7 | | | 22.7% | | | | | | 24.8% | | | | | | 24.3% | | | | | | 26.2% | | | | | | 24.7% | | | | Adjusted operating margin8 | | | 36.5% | | | | | | 39.5% | | | | | | 38.2% | | | | | | 40.6% | | | | | | 41.2% | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
91
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Reconciliation of net income attributable to Invesco Ltd. to adjusted net income attributable to Invesco Ltd.: | $ in millions, except per share data | | 2018 | | | | | 2017 | | | | | 2016 | | | | | 2015 | | | | | 2014 | | | | Net income attributable to Invesco Ltd., U.S. GAAP basis | | | 882.8 | | | | | | 1,127.30 | | | | | | 854.2 | | | | | | 968.1 | | | | | | 988.1 | | | | CIP3 | | | (8.8) | | | | | | (2.3) | | | | | | (3.0) | | | | | | 40.4 | | | | | | (7.8) | | | | Transaction, integration and restructuring, net of tax4 | | | 138.6 | | | | | | 91.9 | | | | | | 68.3 | | | | | | 36.8 | | | | | | 67.9 | | | | Deferred compensation plan market valuation changes and dividend income less compensation expense, net of tax5 | | | 15.4 | | | | | | (4.6) | | | | | | (2.5) | | | | | | 5.9 | | | | | | (0.3) | | | | Other reconciling items, net of tax6 | | | (25.3) | | | | | | (106.4) | | | | | | 7.1 | | | | | | (2.5) | | | | | | 46.9 | | | | Adjusted net income attributable to Invesco Ltd.9 | | | 1,002.7 | | | | | | 1,105.9 | | | | | | 924.1 | | | | | | 1,048.7 | | | | | | 1,094.8 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Average shares outstanding - diluted | | | 412.5 | | | | | | 409.9 | | | | | | 415.0 | | | | | | 429.3 | | | | | | 435.6 | | | | Diluted EPS | | | $2.14 | | | | | | $2.75 | | | | | | $2.06 | | | | | | $2.26 | | | | | | $2.27 | | | | Adjusted diluted EPS10 | | | $2.43 | | | | | | $2.70 | | | | | | $2.23 | | | | | | $2.44 | | | | | | $2.51 | | | |
1 | Invesco Great Wall: Prior to the third quarter 2018, management reflected its interests in Great Wall Fund Management Company (“Invesco Great Wall”) on a proportional consolidation basis, which was consistent with the presentation of our share of the AUM from these investments. Given the company’s influence on Invesco Great Wall, a change in regulation allowing increased foreign ownership, and reaching agreement in principle in the third quarter of 2018 to obtain a majority stake of the joint venture, the company began reporting 100% of the flows and AUM for Invesco Great Wall. Also beginning in the third quarter of 2018, the company’snon-GAAP operating results reflect the economics of these holdings on a basis consistent with the underlying AUM and flows. Adjusted net income is reduced by the amount of earnings attributable tonon-controlling interests.
|
2 | Third-party distribution, service and advisory expenses:Third-party distribution, service and advisory expenses include renewal commissions and distribution costs(12b-1 and marketing support) paid to brokers and independent financial advisors, and other service and administrative fees paid to third parties. While the terms used for these types of expenses vary by geography, they are all expense items that are closely linked to the value of AUM and the revenue earned by Invesco from AUM. Since the company has been deemed to be the principal in the third-party arrangements, the company must reflect these expenses gross of operating revenues under U.S. GAAP.
|
| Management believes that the deduction of third-party distribution, service and advisory expenses from operating revenues appropriately reflects the nature of these expenses as being passed through to external parties who perform functions on behalf of, and distribute, the company’s managed funds. Further, these expenses vary extensively by geography due to the differences in distribution channels. The net presentation assists in identifying the revenue contribution generated by the business, removing distortions caused by the differing distribution channel fees and allowing for a fair comparison with U.S. peer investment managers and within Invesco’s own investment units. Additionally, management evaluates net revenue yield on AUM, which is equal to net revenues divided by average AUM during the reporting period. This financial measure is an indicator of the basis point net revenues we receive for each dollar of AUM we manage and is useful when evaluating the company’s performance relative to industry competitors and within the company for capital allocation purposes.
|
3 | CIP: See Item 8, Financial Statements and Supplementary Data, Note 20 - “Consolidated Investment Products” in the Company’s Annual Report on Form 10-K for the period ending December 31, 2018 filed with the SEC on February 22, 2019 for a detailed analysis of the impact to the Company’s Consolidated Financial Statements from the consolidation of CIP. The reconciling items add back the management and performance fees earned by Invesco from the consolidated products and remove the revenues and expenses recorded by the consolidated products that have been included in the U.S. GAAP Consolidated Statements of Income.
|
| Management believes that the consolidation of investment products may impact a reader’s analysis of our underlying results of operations and could result in investor confusion or the production of information about the company by analysts or external credit rating agencies that is not reflective of the underlying results of operations and financial condition of the company. Accordingly, management believes that it is appropriate to adjust operating revenues, operating income and net income for the impact of CIP in calculating the respective net revenues, adjusted operating income and adjusted net income.
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | CIP revenues: | | Year ended December 31, | | | | $ in millions, except per share data | | 2018 | | | | | 2017 | | | | | 2016 | | | | | 2015 | | | | | 2014 | | | | Management fees earned from CIP, eliminated upon consolidation | | | 28.6 | | | | | | 25.5 | | | | | | 20.8 | | | | | | 30.7 | | | | | | 26.7 | | | | Performance fees earned from CIP, eliminated upon consolidation | | | – | | | | | | 6.9 | | | | | | 1.5 | | | | | | 8.5 | | | | | | 9.1 | | | | Other revenues recorded by CIP | | | – | | | | | | – | | | | | | – | | | | | | – | | | | | | (0.6) | | | | CIP related adjustments in arriving at net revenues | | | 28.6 | | | | | | 32.4 | | | | | | 22.3 | | | | | | 39.2 | | | | | | 35.2 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
2 | Revenue adjustments: Management believes that adjustments to investment management fees, service and distribution fees and other revenues from operating revenues appropriately reflect these revenues as being passed through to external parties who perform functions on behalf of, and distribute, the company’s managed funds. Further, these adjustments vary by geography due to the differences in distribution channels. The net revenue presentation assists in identifying the revenue contribution generated by the business, removing distortions caused by the differing distribution channel fees and allowing for a fair comparison with U.S. peer investment managers and within Invesco’s own investment units. Additionally, management evaluates net revenue yield on AUM, which is equal to net revenues divided by average AUM during the reporting period. This financial measure is an indicator of the basis point net revenues we receive for each dollar of AUM we manage and is useful when evaluating the company’s performance relative to industry competitors and within the company for capital allocation purposes. |
| Investment management fees are adjusted by renewal commissions and certain administrative fees. Service and distribution fees are primarily adjusted by distribution fees passed through to broker dealers for certain share classes and pass through fund-related costs. Other is primarily adjusted by transaction fees passed through to third parties. While the terms used for these types of adjustments vary by geography, they are all costs that are driven by the value of AUM and the revenue earned by Invesco from AUM. Since the company has been deemed to be the principal in the third-party arrangements, the company must reflect these revenues and expenses gross under U.S. GAAP on the consolidated statements of income. |
3 | CIP: See Item 8, Financial Statements and Supplementary Data, Note 21, “Consolidated Investment Products,” for a detailed analysis of the impact to the company’s Consolidated Financial Statements from the consolidation of CIP. The reconciling items add back the management and performance fees earned by Invesco from the consolidated products and remove the revenues and expenses recorded by the consolidated products that have been included in the U.S. GAAP Consolidated Statements of Income. |
| Management believes that the consolidation of investment products may impact a reader’s analysis of our underlying results of operations and could result in investor confusion or the production of information about the company by analysts or external credit rating agencies that is not reflective of the underlying results of operations and financial condition of the company. Accordingly, management believes that it is appropriate to adjust operating revenues, operating income and net income for the impact of CIP in calculating the respective net revenues, adjusted operating income and adjusted net income. |
4 | | | | | | | | | | | | | | | | | | | | | | CIP revenues: | | | | Year ended December 31, | | | | | | | | | | | | | | $ in millions, except per share data | | 2020 | | 2019 | | 2018 | | 2017 | | 2016 | | | | | | | Management fees earned from CIP, eliminated upon consolidation | | | 39.8 | | | | 33.5 | | | | 28.6 | | | | 25.5 | | | | 20.8 | | | | | | | | Performance fees earned from CIP, eliminated upon consolidation | | | — | | | | — | | | | — | | | | 6.9 | | | | 1.5 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | CIP related adjustments in arriving at net revenues | | | 39.8 | | | | 33.5 | | | | 28.6 | | | | 32.4 | | | | 22.3 | | | | | | | | | | | | | | | | | | | | | | |
Transaction, integration and restructuring related adjustments:Management believes it is useful to investors and other users of our Consolidated Financial Statements to adjust for the transaction, integration and restructuring charges in arriving at adjusted operating income, adjusted operating margin and adjusted diluted EPS, as this will aid comparability of our results period to period, and aid comparability with peer companies that may not have similar acquisition and disposition related income or charges. See “Results of Operations for the Years Ended December 31, 2018 compared to December 31, 2017 compared to December 31, 2016 –
4 | Transaction, integration and restructuring related adjustments: The transaction, integration and restructuring charges reflect legal, regulatory, advisory, valuation and other professional services or consulting fees, and travel costs related to a business combination transaction or restructuring initiatives related to changes in the scope of the business, or manner in which the business is conducted. Also included in these charges are severance-related expenses and any contract termination costs associated with these efforts. Additionally, these charges reflect the costs of temporary staff involved in executing the transaction or initiative, and the post-closing costs of amortizing acquired intangible assets and integrating an acquired business into the company’s existing operations, including incremental costs associated with achieving synergy savings following a business combination or restructuring initiative. |
| Management believes it is useful to investors and other users of our Consolidated Financial Statements to adjust for the transaction, integration and restructuring charges in arriving at adjusted operating income, adjusted operating margin and adjusted diluted EPS, as this will aid comparability of our results period to period, and aid comparability with peer companies that may not have similar acquisition and restructuring related charges. See “Results of Operations for the Year Ended December 31, 2020 compared to December 31, 2019 -- Transaction, Integration and Restructuring” in the company’s Annual Report on Form10-K for the period ending December 31, 2018 filed with the SEC on February 22, 2019 for additional details. |
5 | Market movement on deferred compensation plan liabilities: Certain deferred compensation plan awards are linked to the appreciation (depreciation) of specified investments, typically managed by the company. Invesco hedges economically the exposure to market movements by holding these investments on its balance sheet and through a total return swap financial instrument.
5 | Market movement on deferred compensation plan liabilities: Certain deferred compensation plan awards are linked to the appreciation (depreciation) of specified investments, typically managed by the company. Invesco hedges economically the exposure to market movements by holding these investments on its balance sheet and through total return swap financial instruments. U.S. GAAP requires the appreciation (depreciation) in the compensation liability to be expensed over the award vesting period in proportion to the vested amount of the award as part of compensation expense. The full value of the investment and financial instrument appreciation (depreciation) are immediately recorded below operating income in other gains and losses. This creates a timing difference between the recognition of the compensation expense and the investment gain or loss impacting net income attributable to Invesco Ltd. and diluted EPS which will reverse over the life of the award and net to zero at the end of the multi-year vesting period. During periods of high market volatility these timing differences impact compensation expense, operating income and operating margin in a manner which, over the life of the award, will ultimately be offset by gains and losses recorded below operating income on the Consolidated Statements of Income. The full value of the investment and financial instrument appreciation (depreciation) are immediately recorded below operating income in other gains and losses. This creates a timing difference between the recognition of the compensation expense and the investment gain or loss impacting net income attributable to Invesco Ltd. and diluted EPS which will reverse over the life of the award and net to zero at the end of the multi-year vesting period. During periods of high market volatility these timing differences impact compensation expense, operating income and operating margin in a manner which, over the life of the award, will ultimately be offset by gains and losses recorded below operating income on the Consolidated Statements of Income. Thenon-GAAP measures exclude the mismatch created by differing U.S. GAAP treatments of the market movement on the liability and the investments. |
| Since these plans are hedged economically, management believes it is useful to reflect the offset ultimately achieved from hedging the investment market exposure in the calculation of adjusted operating income (and by calculation, adjusted operating margin) and adjusted net income (and by calculation, adjusted diluted EPS), to produce results that will be more comparable period to period. The related fund shares or swaps will have been purchased on or around the date of grant, eliminating any ultimate cash impact from market movements that occur over the vesting period. |
| Additionally, dividend income from investments held to hedge economically deferred compensation plans is recorded as dividend income and as compensation expense on the company’s Consolidated Statements of Income on the record dates. This dividend income is passed through to the employee participants in the plan and is not retained by the company. The non-GAAP measures exclude this dividend income and related compensation expense. |
| See below for a reconciliation of deferred compensation related items: |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ in millions | | 2020 | | 2019 | | 2018 | | 2017 | | 2016 | | | | | | | Market movement on deferred compensation plan liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | | | Compensation expense related to market valuation changes in deferred compensation liability | | | 39.8 | | | | 36.5 | | | | -3.2 | | | | 20.3 | | | | 8.1 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Adjustments to operating income | | | 39.8 | | | | 36.5 | | | | -3.2 | | | | 20.3 | | | | 8.1 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Market valuation changes and dividend income from investments and instruments held related to deferred compensation plans in other income/(expense) | | | -65.8 | | | | -46.8 | | | | 23.1 | | | | -27.6 | | | | -12.1 | | | | | | | | Taxation: | | | | | | | | | | | | | | | | | | | | | | | | | | | Taxation on deferred compensation plan market valuation changes and dividend income less compensation expense | | | 5.9 | | | | 2.4 | | | | -4.5 | | | | 2.7 | | | | 1.5 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Adjustments to net income attributable to Invesco Ltd. | | | -20.1 | | | | -7.9 | | | | 15.4 | | | | -4.6 | | | | -2.5 | | | | | | | | | | | | | | | | | | | | | | |
6 | Other reconciling items: Each of these other reconciling items has been adjusted from U.S. GAAP to arrive at the company’s non-GAAP financial measures for the reasons either outlined in the paragraphs above, due to the unique character and magnitude of the reconciling item, or because the item represents a continuation of a reconciling item adjusted from U.S. GAAP in a prior period. |
| Additionally, dividend income from investments held to hedge economically deferred compensation plans is recorded as dividend income and as compensation expense on the company’s Consolidated Statements of Income on the record dates. This dividend income is passed through to the employee participants in the plan and is not retained by the company. Thenon-GAAP measures exclude this dividend income and related compensation expense. |
See below for a reconciliation of deferred compensation related items: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ in millions | | 2020 | | 2019 | | 2018 | | 2017 | | 2016 | Other non-GAAP adjustments: | | | | | | | | | | | | | | | | | | | | | | | | | | | Fund rebalancing correctiona | | | 105.3 | | | | — | | | | | | | | — | | | | | | | | | | | | Prior period impact of multi-year VAT tax recoveryb | | | — | | | | — | | | | -22.8 | | | | — | | | | — | | | | | | | | Senior executive retirement and related costsc | | | — | | | | — | | | | — | | | | 19.7 | | | | — | | | | | | | | Regulatory charge | | | — | | | | — | | | | — | | | | — | | | | 1.0 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Adjustments to operating income | | | 105.3 | | | | — | | | | -22.8 | | | | 19.7 | | | | 1.0 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Foreign exchange hedged | | | -1.2 | | | | 0.9 | | | | -8.2 | | | | 20.6 | | | | -14.2 | | | | | | | | Change in contingent consideration estimatese | | | -15.2 | | | | 7.8 | | | | -0.9 | | | | -7.6 | | | | 7.4 | | | | | | | | Foreign exchange gain related to business acquisitionsf | | | — | | | | — | | | | — | | | | -12.1 | | | | — | | | | | | | | Other-than-temporary impairmentg | | | — | | | | — | | | | — | | | | — | | | | 17.8 | | | | | | | | Employee benefit plan terminationh | | | — | | | | — | | | | — | | | | — | | | | -8.6 | | | | | | | | Taxation: | | | | | | | | | | | | | | | | | | | | | | | | | | | Taxation on fund rebalancing correctiona | | | -25.3 | | | | — | | | | — | | | | — | | | | — | | | | | | | | Taxation on foreign exchange hedge amortizationd | | | 0.3 | | | | -0.2 | | | | 2.1 | | | | -7.8 | | | | 5.0 | | | | | | | | Taxation on change in consideration estimatese | | | 3.7 | | | | -1.0 | | | | 0.2 | | | | 2.9 | | | | -2.8 | | | | | | | | State tax uncertain tax positioni | | | -9.0 | | | | — | | | | — | | | | 12.2 | | | | — | | | | | | | | Impact of tax rate changesj | | | -0.7 | | | | — | | | | — | | | | -130.7 | | | | — | | | | | | | | Taxation on prior period impact of multi-year VAT tax recoveryb | | | — | | | | — | | | | 4.3 | | | | — | | | | — | | | | | | | | Taxation on senior executive retirement and related costsc | | | — | | | | — | | | | — | | | | -5.9 | | | | — | | | | | | | | Taxation on foreign exchange gain related to business acquisitionsf | | | — | | | | — | | | | — | | | | 2.3 | | | | — | | | | | | | | Taxation on employee benefit plan terminationh | | | — | | | | — | | | | — | | | | — | | | | 3.3 | | | | | | | | Taxation on regulatory-related charges | | | — | | | | — | | | | — | | | | — | | | | -1.8 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Adjustments to net income attributable to Invesco Ltd. | | | 57.9 | | | | 7.5 | | | | -25.3 | | | | -106.4 | | | | 7.1 | | | | | | | | | | | | | | | | | | | | | | |
a. | The company recorded a charge of $105.3 million in the second quarter of 2020 due to a previously disclosed S&P 500 equal weight funds rebalancing correction. Due to the unique character and magnitude of this item, it has been adjusted from U.S. GAAP to arrive at the company’s non-GAAP financial measures. |
92
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ in millions | | 2018 | | | | | 2017 | | | | | 2016 | | | | | 2015 | | | | | 2014 | | | | Market movement on deferred compensation plan liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Compensation expense related to market valuation changes in deferred compensation liability | | | (3.2) | | | | | | 20.3 | | | | | | 8.1 | | | | | | 4.3 | | | | | | 11.5 | | | | Adjustments to operating income | | | (3.2) | | | | | | 20.3 | | | | | | 8.1 | | | | | | 4.3 | | | | | | 11.5 | | | | Market valuation changes and dividend income from investments and instruments held related to deferred compensation plans in other income/(expense) | | | 23.1 | | | | | | (27.6) | | | | | | (12.1) | | | | | | 4.8 | | | | | | (11.2) | | | | Taxation: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Taxation on deferred compensation plan market valuation changes and dividend income less compensation expense | | | (4.5) | | | | | | 2.7 | | | | | | 1.5 | | | | | | (3.2) | | | | | | (0.6) | | | | Adjustments to net income attributable to Invesco Ltd. | | | 15.4 | | | | | | (4.6) | | | | | | (2.5) | | | | | | 5.9 | | | | | | (0.3) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
b. | As a result of an increase in our recoverable VAT from applying additional regulatory guidance, a credit was recorded in the third quarter of 2018. The portion of the cumulative adjustment representing 2015 through 2017 has been removed for non-GAAP purposes 6 | Other reconciling items: Each of these other reconciling items has been adjusted from U.S. GAAP to arrive at the company’snon-GAAP financial measures for the reasons either outlined in the paragraphs above, due to the unique character and magnitude of the reconciling item, or because the item represents a continuation of a reconciling item adjusted from U.S. GAAP in a prior
|
c. | Operating expenses for 2017 reflect the cost of multiple senior executive retirements. The costs incurred in one quarter was unprecedented and the company deemed it appropriate to adjust these costs from the U.S. GAAP total compensation in an effort to isolate and evaluate our level of compensation going forward. The result of this adjustment was $19.7 million related to accelerated vesting of deferred compensation and other separation costs. |
d. | Included within other gains and losses, net is the mark-to-market of foreign exchange put option contracts intended to provide protection against the impact of a significant decline in the Pound Sterling/U.S. Dollar and the Euro/U.S. Dollar foreign exchange rates. The Pound Sterling contracts provided coverage through June 30, 2020 and the Euro contracts provided coverage through December 27, 2017. The adjustment from U.S. GAAP to non-GAAP earnings removes the impact of market volatility; therefore, the company’s non-GAAP results include only the amortization of the cost of the contracts during the contract period. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ in millions | | | | 2018 | | | | | 2017 | | | | | 2016 | | | | | 2015 | | | | | 2014 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Othernon-GAAP adjustments: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Regulatory chargea | | | | | – | | | | | | – | | | | | | 1.0 | | | | | | 12.6 | | | | | | 31.1 | | | | Legal fees for regulatory chargea | | | | | – | | | | | | – | | | | | | – | | | | | | 0.5 | | | | | | 0.5 | | | | Prior period impact of multi-year VAT tax recoveryb | | | | | (22.8) | | | | | | – | | | | | | – | | | | | | – | | | | | | – | | | | Senior executive retirement and related costsc | | | | | – | | | | | | 19.7 | | | | | | – | | | | | | – | | | | | | – | | | | Fund reimbursement expensed | | | | | – | | | | | | – | | | | | | – | | | | | | 4.7 | | | | | | 31.1 | | | | U.K. FSCS levye | | | | | – | | | | | | – | | | | | | – | | | | | | – | | | | | | (4.7) | | | | Adjustments to operating income | | | | | (22.8) | | | | | | 19.7 | | | | | | 1.0 | | | | | | 17.8 | | | | | | 58.0 | | | | Foreign exchange hedgef | | | | | (8.2) | | | | | | 20.6 | | | | | | (14.2) | | | | | | 1.0 | | | | | | (0.2) | | | | Employee benefit plan terminationg | | | | | – | | | | | | – | | | | | | (8.6) | | | | | | – | | | | | | – | | | | Change in contingent consideration estimatesh | | | | | (0.9) | | | | | | (7.6) | | | | | | 7.4 | | | | | | (27.1) | | | | | | – | | | | Foreign exchange gain related to business acquisitionsi | | | | | – | | | | | | (12.1) | | | | | | – | | | | | | – | | | | | | – | | | | Other-than-temporary impairmentj | | | | | – | | | | | | – | | | | | | 17.8 | | | | | | – | | | | | | – | | | | Taxation: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Taxation on regulatory-related chargesa | | | | | – | | | | | | – | | | | | | (1.8) | | | | | | (2.7) | | | | | | (0.1) | | | | Taxation on prior period impact of multi-year VAT tax recoveryb | | | | | 4.3 | | | | | | – | | | | | | – | | | | | | – | | | | | | – | | | | Taxation on senior executive retirement and related costsc | | | | | – | | | | | | (5.9) | | | | | | – | | | | | | – | | | | | | – | | | | Taxation on fund reimbursement expensed | | | | | – | | | | | | – | | | | | | – | | | | | | (1.8) | | | | | | (11.7) | | | | Taxation on U.K. FSCS levye | | | | | – | | | | | | – | | | | | | – | | | | | | – | | | | | | 1.0 | | | | Taxation on foreign exchange hedge amortizationf | | | | | 2.1 | | | | | | (7.8) | | | | | | 5.0 | | | | | | – | | | | | | – | | | | Taxation on employee benefit plan terminationg | | | | | – | | | | | | – | | | | | | 3.3 | | | | | | – | | | | | | – | | | | Taxation on change in consideration estimatesh | | | | | 0.2 | | | | | | 2.9 | | | | | | (2.8) | | | | | | 10.3 | | | | | | – | | | | Taxation on foreign exchange gain related to business acquisitionsi | | | | | – | | | | | | 2.3 | | | | | | – | | | | | | – | | | | | | – | | | | Retroactive state tax adjustmentk | | | | | – | | | | | | 12.2 | | | | | | – | | | | | | – | | | | | | – | | | | Tax impact of regulation changesk | | | | | – | | | | | | (103.7) | | | | | | – | | | | | | – | | | | | | – | | | | Adjustments to net income attributable to Invesco Ltd. | | | | | (25.3) | | | | | | (106.4) | | | | | | 7.1 | | | | | | (2.5) | | | | | | 47.0 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| a. | General and administrative expenses for 2015 include a provision of $12.6 million pertaining to regulatory actions and related legal fees of $0.5 million (2018: none; 2017: none; 2016: $1.0 million). This includes $7.6 million associated with our private equity business.
|
| | Operating expenses for 2014 include a charge of $31.1 million (in respect of the penalty under a settlement of an enforcement proceeding reached with the U.K. Financial Conduct Authority (FCA) pertaining to the company’s compliance with certain FCA rules and regulations for the period from May 2008 to November 2012).
|
| b. | As a result of an increase in our recoverable VAT from applying additional regulatory guidance, a credit was recorded in the third quarter of 2018. The portion of the cumulative adjustment representing 2014 through 2017 has been removed fornon-GAAP purposes.
|
| c. | Operating expenses for 2017 reflect the cost of multiple senior executive retirements, including, among others, the former Senior Managing Director of EMEA and the Chairman of our Private Equity business, which resulted in expenses of $19.7 million related to accelerated vesting of deferred compensation and other separation costs. The number of senior executive retirements and magnitude of their retirement costs incurred in one quarter was unprecedented for Invesco. The company deemed it appropriate to adjust these costs from U.S. GAAP total compensation expenses in an effort to isolate and evaluate our level of ongoing compensation expenses and to allow for more appropriate comparisons to internal metrics and with the level of compensation expenses incurred by industry peers.
|
| d. | General and administrative expenses for 2014 and 2015 include charges of $31.1 million and $4.7 million, respectively, in respect of a multi-year fund reimbursement expense associated with historical private equity management fees. The charge resulted primarily from using a more appropriate methodology regarding the calculation of offsets to management fees.
|
| e. | Included within general and administrative expenses for 2014 is a credit of $4.7 million related to the partial refund of a $15.3 million levy in 2010 from the U.K. Financial Services Compensation Scheme.
|
| f. | Included within other gains and losses, net is themark-to-market of foreign exchange put option contracts intended to provide protection against the impact of a significant decline in the Pound Sterling/U.S. Dollar and the Euro/U.S. Dollar foreign exchange rates. The Pound Sterling contracts provide coverage through June 29, 2019 and the Euro contracts provided coverage through December 27, 2017. The adjustment from U.S. GAAP tonon-GAAP earnings removes the impact of market volatility; therefore, the company’snon-GAAP results include only the amortization of the cost of the contracts during the contract period.
|
| g. | Employee benefit plan termination: Operating expenses for 2016 include an incremental credit of $8.6 million related to an employee benefit plan termination.
|
| h. | During 2015, the company acquired investment management contracts from Deutsche Bank and the purchase price was solely comprised of contingent consideration payable in future periods.
e. | In 2019, the company made digital wealth acquisitions, which resulted in a contingent consideration liability. Adjustment to the fair value of the digital wealth acquisitions contingent consideration liability is a decrease of $6.2 million in 2020. In 2015, the company acquired investment management contracts from Deutsche Bank and the purchase price was solely comprised of contingent consideration payable in future periods. Remaining adjustments represents the change in the fair value of the Deutsche Bank contingent consideration liability. |
f. | Other gains and losses for 2017 includes a realized gain of $12.1 million related to revaluation of Euros held in the UK in anticipation of payment for the European ETF business acquisition. |
g. | Other-than-temporary impairment includes an impairment charge of $17.8 million in 2016 that is related to the acquisition of Invesco Asset Management (India) Private Limited. |
h. | Employee benefit plan termination: Operating expenses for 2016 include an incremental credit of $8.6 million related to an employee benefit plan termination. |
i. | The income tax provision for 2020 includes a tax benefit of $9.0 million resulting from the reversal of an accrual for uncertain tax positions which was originally recorded in the $12.2 million accrual for uncertain tax positions reflected in the income tax provision in 2017. Both the 2017 expense and the 2020 benefit have been removed from the company’s non-GAAP results in the respective periods. |
j. | 2020 included both a non-cash income tax benefit of $4.3 million arising from the revaluation of certain intangible deferred tax liabilities due to tax rate changes partially offset by a non-cash income tax expense of $3.6 million arising from the revaluation of certain deferred tax liabilities due to the increase in the UK corporate tax rate. 2017 included a $130.7 million tax benefit due to the revaluation of deferred tax assets and liabilities to reflect the impacts of the 2017 Tax Cut and Jobs Act enacted in the United States. |
7 | Operating margin is equal to operating income divided by operating revenues. |
8 | Adjusted operating margin is equal to adjusted operating income divided by net revenues. |
9 | Adjusted diluted EPS is equal to adjusted net income attributable to Invesco Ltd. divided by the weighted average number of common and restricted shares outstanding. There is no difference between the calculated earnings per share amounts presented above and the calculated earnings per share amounts under the two class method. |
Appendix B 93
| i. | Other gains and losses for 2017 includes a realized gain of $12.1 million related to revaluation of Euros held in the U.K. in anticipation of payment for the European ETF business acquisition.
|
| j. | Other-than-temporary impairment includes an impairment charge of $17.8 million in 2016 that is related to the acquisition of Invesco Asset Management (India) Private Limited.
|
| k. | The income tax provision for 2017 includes a retroactive state tax expense of $12.2 million related to 2016 and prior open tax years caused by changes in state tax regulations. 2017 also included a $130.7 million tax benefit as a result of the revaluation of deferred tax assets and liabilities following the 2017 Tax Act enacted in the United States.
|
7 | Operating margin is equal to operating income divided by operating revenues.
|
8 | Adjusted operating margin is equal to adjusted operating income divided by net revenues.
|
9 | The effective tax rate on adjusted net income attributable to Invesco Ltd. is 27.0% (2016: 26.8%; 2015: 27.1%; 2014: 26.6%; 2013: 26.3%).
|
10 | Adjusted diluted EPS is equal to adjusted net income attributable to Invesco Ltd. divided by the weighted average number of common and restricted shares outstanding. There is no difference between the calculated earnings per share amounts presented above and the calculated earnings per share amounts under the two class method.
|
94
| | | | | Appendix C | | | | | | Proposed Amendments to the Company’s Third Amended and RestatedBye-Laws
| | | | | ThirdFourth Amended and RestatedBye-Laws of Invesco Ltd. | | | | | | Interpretation
| | | | | 1. Interpretation
| | | (1) In theseBye-Laws the following words and expressions shall have the following meanings, respectively:
| | | (a) “Act” means the Companies Act 1981 of Bermuda as amended from time to time;
| | | (b) “Affiliate” means, with respect to any Person, any other Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with such Person. For the purposes of this definition, “control”, with respect to any Person, means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract, or otherwise;
| | | (c) “Associate” has the meaning set forth inBye-Law 53(1);
| | | (d) “Audit committee” means the committee appointed by the Board in accordance with theseBye-Laws;
| | | (e) “Auditor” includes any individual, partnership or other entity appointed in accordance with the Act to audit the accounts of the Company;
| | | (f) “beneficially own” has the meaning set forth inBye-Law 53(2);
| | | (g) “beneficially owned” has the meaning set forth inBye-Law 10(34);
| | | (h) “Beneficial owner” has the meaning set forth inBye-Law 53(2);
| | | (i) “Board” means the Board of Directors appointed or elected pursuant to theseBye-Laws and acting pursuant to the Act and theseBye-Laws;
| | | (j) “Business combination” has the meaning set forth inBye-Law 53(3);
| | | (k) “Business day” means any day other than a Saturday, a Sunday, any day on which commercial banking institutions in Hamilton, Bermuda or Atlanta, Georgia are authorized or obligated by law to close or any day on which the New York Stock Exchange is not open for trading;
| | | (l) “Cause” means (1) willful misconduct or gross negligence which is materially injurious to the Company, (2) fraud or embezzlement or (3) a conviction of, or a plea of “guilty” or “no contest” to, a felony;
| | | (m) “Chairperson” means the person designated by the Board as the chairperson of the Board;
| | | (n) “Common shares” has the meaning set forth inBye-Law 43;
| | | (o) “Company” means the company for which theseBye-Laws are approved and confirmed;
| | | (p) “Constituent holder” has the meaning set forth inBye-Law 10(3).
| | | (q) “Director” means a director of the Company;
| | | (r) “Eligible shareholder” has the meaning set forth inBye-Law 10(3).
| | | (s) “Exchange act” means the U.S. Securities Exchange Act of 1934, as amended;
| | | (t) “InterestedsShareholder” has the meaning set forth inBye-Law 53(4);
| | | (u) “legal proceeding” has the meaning set forth inBye-Law 59;
| | | (v) “legal representative” has the meaning set forth inBye-Law 59.
| | | (w) “Nomination and corporate governance committee” means the committee appointed by the Board in accordance with theseBye-Laws as such;
| | | (x) “notice” means written notice as further defined in theseBye-Laws unless otherwise specifically stated;
| | | (y) “Officer” means any person appointed by the Board to hold an office in the Company;
| | | (z) “own” has the meaning set forth inBye-Law 10(3).
|
95
| | | | | (aa) “Person” means an individual, corporation, partnership, association, joint-stock company, trust, unincorporated organization or government or political subdivision thereof;
| | | (bb) “Preferenceshares” has the meaning set forth inBye-Law 44(3);
| | | (cc) “Proceeding” has the meaning set forth inBye-Law 25(1);
| | | (Dd) “Proxy access request required shares” has the meaning set forth inBye-Law 10(3).
| | | (ee) “Public announcement” has the meaning set forth inBye-Law 10(3);
| | | (ff) “Qualifying fund” has the meaning set forth inBye-Law 10(3).
| | | (gg) “Register of directors and officers” means the Register of Directors and Officers referred to in theseBye-Laws and shall be the same “register of directors and officers” required to be kept by the Company under the Act;
| | | (hh) “Register of shareholders” means the Register of Shareholders referred to in theseBye-Laws and shall be the same “register of members” required to be kept by the Company under the Act;
| | | (ii) “Resident representative” means any Person appointed to act as resident representative of the Company in accordance with the Act;
| | | (jj) “Secretary” means the person appointed to perform any or all of the duties of secretary of the Company and includes any deputy or assistant or acting secretary;
| | | (kk) “Securities act” means the U.S. Securities Act of 1933, as amended;
| | | (ll) “Shareholder” shall have the same meaning as the term “Member” in the Act and means the Person registered in the Register of Shareholders as the holder of shares (sometimes referred to in theseBye-Laws as the direct holder) of the Company or, when two or more Persons are so registered as joint holders of shares, means the Person whose name stands first in the Register of Shareholders as one of such joint holders or all of such Persons as the context so requires;
| | | (mm)“Undesignated shares” has the meaning set forth inBye-Law 43;
| | | (nn) “United States of America” or “U.S.” means the United States of America and dependent territories or any part thereof;
| | | (oo) “Voting commitment” has the meaning set forth inBye-Law 8(4).
| | | (pp) “Voting stock” has the meaning set forth inBye-Law 10(3).
| | | | | (2) In theseBye-Laws, where not inconsistent with the context:
| | | (a) words denoting the plural number include the singular number and vice versa;
| | | (b) words denoting the masculine gender include the feminine and neuter gender;
| | | (c) the words:
| | | (i) “may” shall be construed as permissive;
| | | (ii) “shall” shall be construed as imperative;
| | | (d) references to particular laws, rules and regulations (including references to particular Sections of, Rules under and filings pursuant to the Exchange Act), shall be deemed to refer to any applicable successor laws, rules, regulations or filings as may be enacted or promulgated from time to time; and
| | | (e) unless otherwise provided herein, words or expressions defined in the Act shall bear the same meaning in theseBye-Laws.
| | | (3) Expressions referring to writing or its cognates shall, unless the contrary intention appears, include facsimile, printing, lithography, photography, electronic mail and other modes of representing words in a visible form.
| | | (4) Headings used in theseBye-Laws are for convenience only and are not to be used or relied upon in the construction hereof.
|
96
| | | | | Board of directors
| | | | | 2. Board of directors
| | | The Board shall have the full power and authority provided to it by the Act and theseBye-Laws. | | | | | 3. Powers of the board
| | | (1) In exercising such power and authority, the Board may exercise all such powers of the Company as are not, by statute or by theseBye-Laws, required to be exercised by the Company in a general meeting subject, nevertheless, to theseBye-Laws and the provisions of any statute.
| | | (2) No regulation or alteration to theseBye-Laws made by the Company in a general meeting shall invalidate any prior act of the Board that would have been valid if such regulation or alteration had not been made.
| | | (3) The Board may procure that the Company pays all expenses incurred in promoting and incorporating the Company.
| | | (4) The Board may from time to time and at any time by power of attorney appoint any company, firm, person or body of persons, whether nominated directly or indirectly by the Board, to be an attorney of the Company for such purposes and with such powers, authorities and discretions (not exceeding those vested in or exercisable by the Board) and for such period and subject to such conditions as it may think fit and any such power of attorney may contain such provisions for the protection and convenience of Persons dealing with any such attorney as the Board may think fit and may also authorize any such attorney tosub-delegate all or any of the powers, authorities and discretions so vested in the attorney. Such attorney may, if so authorized by the power of attorney, execute any deed or instrument or other document on behalf of the Company under hand or under its common seal.
| | | | | 4. Power to delegate to a committee
| | | The Board may delegate any of its powers to a committee appointed by the Board (including the power tosub-delegate) and every such committee shall conform to such directions as the Board shall impose on them. Committees may consist of one or more Directors. | | | | | The meetings and proceedings of any such committee shall be governed by the provisions of theseBye-Laws regulating the meetings and proceedings of the Board, so far as the same are applicable and are not superseded by directions imposed by the Board, and in that connection the Board may authorize a committee to adopt such rules for its meetings. | | | | | 5. Power to appoint and dismiss employees
| | | The Board may appoint, suspend or remove any Officer, employee, agent or representative of the Company and may determine their duties. | | | | | 6. Power to borrow and charge property
| | | The Board may exercise all of the powers of the Company to borrow money and to mortgage or charge its undertaking, property and uncalled capital, or any part thereof, and may issue debentures, debenture stock and other securities whether outright or as security for any debt, liability or obligation of the Company or any third party. | | | | | 7. Exercise of power to purchase shares of or discontinue the company
| | | (1) The Board may exercise all of the powers of the Company to purchase (sometimes referred to in theseBye-Laws as “repurchase”) all or any part of its own shares pursuant to the Act.
| | | (2) The Board may exercise all of the powers of the Company to discontinue or redomesticate the Company to a named country or jurisdiction outside Bermuda pursuant to the Act.
| | | | | 8. Board size; term of directors
| | | (1) Subject to the rights of the holders of any class or series of preference shares, the Board shall consist of such number of Directors (not less than 3) as the Board may determine from time to time by resolution adopted by the affirmative vote of at least a majority of the Board then in office. Any increase in the number of Directors on the Board pursuant to thisBye-Law 8 shall be deemed to be a vacancy and may be filled in accordance withBye-Law 12 hereof. A decrease in the number of Directors shall not shorten the term of any Director then in office.
| | | (2) Subject to the rights of the holders of any class or series of preference shares, Directors shall be elected, except in the case of a vacancy (as provided for inBye-Law 11 or12, as the case may be), by the Shareholders in the manner set forth in theseBye-Laws at an annual general meeting of Shareholders or any special general meeting called for such purpose and shall hold office for the term set forth in paragraph (3) of thisBye-Law 8.
|
97
| | | | | (3) Directors shall be elected annually for aone-year term expiring at the next annual general meeting of Shareholders. A Director shall hold office until such Director’s successor shall have been duly elected and qualified or until such Director is removed from office pursuant toBye-Law 11 or such Director’s office is otherwise earlier vacated.
| | | (4) No person may be appointed, nominated or elected a Director unless such person, at the time such person is nominated and appointed or elected, would then be able to serve as a Director without conflicting in any material respect with any law or regulation applicable to the Company, as determined in good faith by the Board of Directors. In addition, to be eligible to be a nominee for election or reelection as a Director pursuant to any provision of theseBye-Laws, a person must deliver (in accordance with the time periods prescribed for delivery of notice underBye-Law 10) to the Secretary at the principal executive offices of the Company a written questionnaire with respect to the background and qualification of such person and the background of any other person or entity on whose behalf the nomination is being made (which questionnaire shall be provided by the Secretary upon written request) and a written representation and agreement (in the form provided by the Secretary upon written request) that such person (i) will abide by the requirements of theseBye-Laws, (ii) is not and will not become a party to (a) any agreement, arrangement or understanding with, and has not given any commitment or assurance to, any person or entity as to how such person, if elected as a Director, will act or vote on any issue or question (a “Voting Commitment”) that has not been disclosed to the Company or (b) any Voting Commitment that could limit or interfere with such person’s ability to comply, if elected as a Director, with such person’s fiduciary duties under applicable law, (iii) is not and will not become a party to any agreement, arrangement or understanding with any person or entity other than the Company with respect to any direct or indirect compensation, reimbursement or indemnification in connection with service or action as a Director that has not been disclosed therein, and (iv) in such person’s individual capacity and on behalf of any person or entity on whose behalf the nomination is being made, would be in compliance, if elected as a Director, and will comply with all applicable publicly disclosed corporate governance, conflict of interest, confidentiality and stock ownership and trading policies and guidelines of the Company.
| | | (5) Subject to the rights of the holders of any class or series of preference shares, at any meeting for the election of Directors at which a quorum is present, each nominee shall be elected by the vote of the majority of the votes cast with respect to the Director, provided that if the number of nominees exceeds the number of positions available for the election of Directors, the Directors shall be elected by a plurality of the votes cast in person or by proxy at any such meeting. For purposes of thisBye-Law 8(5), a majority of the votes cast means that the number of shares voted “for” a Director must exceed 50% of the votes cast with respect to that Director. Votes cast with respect to the election of a Director shall include only votes cast with respect to stock present in person or represented by proxy at the meeting and entitled to vote and shall exclude abstentions.
| | | (6) If a nominee for Director who is an incumbent Director is not elected and no successor has been elected at such meeting, the Director will promptly tender his or her resignation to the Board. The nomination and corporate governance committee shall make a recommendation to the Board as to whether to accept or reject the tendered resignation, or whether other actions should be taken. The Board shall act on the tendered resignation, taking into account the nomination and corporate governance committee’s recommendation, and publicly disclose (by a press release, a filing with the U.S. Securities and Exchange Commission or other broadly disseminated means of communication) its decision regarding the tendered resignation and the rationale behind the decision within 90 days from the date of the certification of the election results. The nomination and corporate governance committee in making its recommendation, and the Board in making its decision, may each consider any factors or other information that it considers appropriate and relevant. The Director who tenders his or her resignation shall not participate in the recommendation of the nomination and corporate governance committee or the decision of the Board with respect to his or her resignation. If such incumbent Director’s resignation is not accepted by the Board, such Director shall continue to serve until the next annual meeting and until his or her successor is duly elected, or his or her earlier resignation or removal. If a Director’s resignation is accepted by the Board pursuant to theseBye-Laws, or if a nominee for Director is not elected and the nominee is not an incumbent Director, then the Board, in its sole discretion, may fill any resulting vacancy pursuant toBye-Law 12 or may decrease the size of the Board pursuant to thisBye-Law 8.
| | | | | 9. Defects in appointment of directors
| | | All acts done by any meeting of the Board or by a committee of the Board shall, notwithstanding that it be afterwards discovered that there was some defect in the appointment of any person as a Director, or that they or any of them were disqualified, be as valid as if every such person had been duly appointed and was qualified to be a Director. |
98
| | | | | 10. Shareholder proposals and nominations; proxy access
| | | (1) Annual general meeting
| | | (a) At any annual general meeting of Shareholders, nominations of persons for election to the Board of Directors of the Company may be made only (i) pursuant to the Company’s notice of meeting, (ii) by or at the direction of a majority of the Board, (iii) by any Shareholder who (A) is a Shareholder of record at the time of giving of notice provided for in theseBye-Laws, (B) is entitled to vote at the meeting and (C) complies with the notice and other procedures set forth in paragraph (1) of thisBye-Law 10 as to such nomination or (iv) by any Eligible Shareholder (as defined in paragraph (3) of thisBye-Law 10) who (A) is entitled to vote at the meeting and (B) complies with the notice and other procedures set forth in paragraph (3) of thisBye-Law 10; the preceding clauses (iii) and (iv) shall be the exclusive means for a Shareholder to make nominations before an annual general meeting of Shareholders. At any annual general meeting of Shareholders, proposals of any other business to be considered by the Shareholders may be made only (i) pursuant to the Company’s notice of meeting, (ii) by or at the direction of a majority of the Board or (iii) by any Shareholder who (A) is a Shareholder of record at the time of giving of notice provided for in theseBye-Laws, (B) is entitled to vote at the meeting and (C) complies with the procedures set forth in theseBye-Laws; the preceding clause (iii) shall be the exclusive means for a Shareholder to submit other business (other than matters properly brought under Rule14a-8 under the Exchange Act and included in the Corporation’s notice of meeting) before an annual general meeting of Shareholders. To be properly brought before a meeting of Shareholders, business must be of a proper subject for action by Shareholders under applicable law and must not, if implemented, cause the Company to violate any applicable law or regulation, each as determined in good faith by the Board.
| | | (b) For nominations or other business to be properly brought before an annual general meeting by a Shareholder pursuant to theseBye-Laws, the Shareholder must have given timely notice thereof in writing to the Secretary and such other business must otherwise be a proper matter for Shareholder action. Notice shall be considered timely only if given to the Secretary of the Company not less than 90 nor more than 120 days prior to the first anniversary of the date of the preceding year’s annual general meeting of Shareholders;provided,however, that if the date of the annual general meeting is more than 30 days before or more than 60 days after such anniversary date, any notice by the Shareholder of business or the nomination of Directors for election or reelection to be brought before the annual general meeting to be timely must be so delivered not earlier than the close of business on the 120th day prior to such annual general meeting and not later than the close of business on the later of the 90th day prior to such annual general meeting and the 10th day following the day on which public announcement of the date of such meeting is first made. Notwithstanding the foregoing, in the event that the number of Directors to be elected to the Board at the applicable annual general meeting is increased and there is no public announcement by the Company naming all of the nominees for Director or specifying the size of the increased Board of Directors at least 100 days prior to the first anniversary of the preceding year’s annual general meeting, a Shareholder’s notice required by thisBye-Law 10 shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be delivered to the Secretary at the principal executive offices of the Company not later than the close of business on the 10th day following the day on which such public announcement is first made by the Company.
| | | (c) Any Shareholder who gives notice of any such proposal shall deliver therewith, in writing: the text of the proposal to be presented and a brief statement of the reasons why such Shareholder and the beneficial owner, if any, on whose behalf the proposal is made favors the proposal; the name and address, as they appear on the Company’s books, of any such Shareholder and the name and address of any such beneficial owner; the number and class of all shares of each class of stock of the Company beneficially owned by such Shareholder and any such beneficial owner and evidence thereof reasonably satisfactory to the Secretary of the Company; a description of any material interest in the proposal of such Shareholder and any such beneficial owner (other than any interest as a Shareholder) and of all arrangements or understandings between such Shareholder and any such beneficial owner and any other Person or Persons in connection with the proposal of such business; and a representation that such Shareholder intends to appear in person or by proxy at the annual general meeting to bring such business before the meeting.
| | | (d) Any Shareholder desiring to nominate any person for election as a Director, whether pursuant to paragraph (1), (2) or (3) of thisBye-Law 10, shall deliver with such notice a statement in writing setting forth: the name of the person to be nominated; the number and class of all shares of each class of stock of the Company beneficially owned by such person; the information regarding such person required by paragraphs
|
99
| | | | | (d), (e) and (f) of Item 401 of RegulationS-K adopted by the U.S. Securities and Exchange Commission; all other information relating to such person that is required to be disclosed in solicitations of proxies for Directors pursuant to Regulation 14A under the Exchange Act (including such person’s signed consent to serve as a Director if elected); a certification by each Shareholder nominee that such nominee is as of the time of nomination and will be as of the time of the applicable meeting eligible to serves as a Director in accordance with thisBye-Law 10 and (in both such person’s individual capacity and on behalf of any Person for whom such person may be a representative), has complied withBye-Law 8 and has complied and will comply with all applicable corporate governance, conflicts, confidentiality and stock ownership and trading policies of the Company; the name and address, as they appear on the Company’s books, of such Shareholder and the name and address of any such beneficial owner, if any, on whose behalf the nomination is made; the number and class of all shares of each class of stock of the Company beneficially owned by such Shareholder or any such beneficial owner; and a description of all arrangements or understandings between such Shareholder or any such beneficial owner and each nominee and any other Person or Persons (including their names) pursuant to which the nomination or nominations are to be made. The Company may require any proposed nominee, whether pursuant to paragraph (1), (2) or (3) of thisBye-Law 10, to furnish such other information as may be reasonably required by the Company to determine the qualifications of such proposed nominee to serve as a Director or to determine whether any of the matters contemplated by clause (I) of paragraph (3) of thisBylaw 10 apply to such proposed nominee.
| | | (2) Special general meeting
| | | (a) The Chairperson, the Chief Executive Officer or the Board acting by vote of a majority of the Board may convene a special general meeting of the Company whenever in its judgment such a meeting is necessary or desirable. Subject to the next sentence and subject to the rights of the holders of any class or series of preference shares, special general meetings of the Company may only be called as provided in the preceding sentence. In addition, the Board shall, (i) on the requisition of the holders of any class or series of preference shares as may have express rights to requisition special general meetings, and (ii) on the requisition of Shareholders holding at the date of the deposit of the requisition not less thanone-tenth of such of thepaid-up capital of the Company as at the date of the deposit carries the right to vote in general meetings of the Company, forthwith proceed to convene a special general meeting of the Company (or the applicable class(es) of shares) and the provisions of Section 74 of the Act shall apply. Special general meetings may be held at such place as may from time to time be designated by the Board and stated in the notice of the meeting. In any special general meeting of the Company only such business shall be conducted as is set forth in the notice thereof.
| | | (b) Nominations of persons for election to the Board may be made at a special general meeting at which Directors are to be elected pursuant to the Company’s notice of meeting (i) by or at the direction of the Board or (ii) provided that the Board has determined that Directors shall be elected at such meeting, by any Shareholder who is a Shareholder of record at the time of giving of notice provided for in thisBye-Law, who shall be entitled to vote at the meeting and who complies with the notice procedures set forth in theseBye-Laws; the preceding clause (ii) shall be the exclusive means for a Shareholders to make nominations before any special general meeting of Shareholders. In the event the Company calls a special general meeting for the purpose of electing one or more Directors to the Board, any such Shareholder may nominate a person or persons (as the case may be) for election to such position(s) as specified in the Company’s notice of meeting, if the Shareholder’s notice containing the information specified inBye-Laws 10(1)(d) and 8(4) shall be delivered to the Secretary at the principal executive offices of the Company not earlier than the close of business on the 120th day prior to such special general meeting and not later than the close of business on the later of the 90th day prior to such special general meeting and the 10th day following the day on which public announcement of the date of such meeting is first made and of the nominees proposed by the Board to be elected at such meeting.
| | | (3) Inclusion of shareholder director nominations in the company’s proxy materials Subject to the terms and conditions set forth in theseBye-Laws, the Company shall include in its proxy materials for an annual general meeting of Shareholders the name, together with the Required Information (as defined below), of any person nominated for election (the “Shareholder Nominee”) to the Board of Directors by a Shareholder or group of Shareholders that satisfy the requirements of thisBye-Law 10(3) and that expressly elects at the time of providing the written notice required by thisBye-Law 10(3) (a “Proxy Access Notice”) to have its nominee included in the Company’s proxy material pursuant to thisBye-Law 10(3). For the purposes of thisBye-Law 10(3):
| | | (1) “Voting stock” shall mean outstanding shares of capital stock of the Company entitled to vote generally for the election of Directors;
|
100
| | | | | (2) “Constituent holder” shall mean any Shareholder, collective investment fund included within a Qualifying Fund (as defined in paragraph (D) below) or beneficial holder whose stock ownership is counted for the purposes of qualifying as an Eligible Shareholder (as defined in paragraph (D) below);
| | | (3) “affiliate” and “associate” shall have the meanings ascribed thereto in Rule 405 under the Securities Act;provided,however, that the term “partner” as used in the definition of “associate” shall not include any limited partner that is not involved in the management of the relevant partnership; and
| | | (4) a Shareholder (including any Constituent holder) shall be deemed to “own” only those outstanding shares of Voting Stock as to which the Shareholder (or such Constituent Holder) possesses both (a) the full voting and investment rights pertaining to the shares and (b) the full economic interest in (including the opportunity for profit and risk of loss on) such shares. The number of shares calculated in accordance with the foregoing clauses (a) and (b) shall be deemed not to include (and, to the extent any of the following arrangements have been entered into by affiliates of the Shareholder (or of any Constituent Holder), shall be reduced by) any shares (x) sold by such Shareholder or Constituent Holder (or any of either’s affiliates) in any transaction that has not been settled or closed, including any short sale, (y) borrowed by such Shareholder or Constituent Holder (or any of either’s affiliates) for any purposes or purchased by such Shareholder or Constituent Holder (or any of either’s affiliates) pursuant to an agreement to resell, or (z) subject to any option, warrant, forward contract, swap, contract of sale, other derivative or similar agreement entered into by or effecting such Shareholder or Constituent Holder (or any of either’s affiliates), whether any such instrument or agreement is to be settled with shares, cash or other consideration, in any such case which instrument or agreement has, or is intended to have, or if exercised by either party thereto would have, the purpose or effect of (i) reducing in any manner, presently or in the future, the full voting and investment rights pertaining to such shares, and/or (ii) hedging, offsetting or altering to any degree the full economic interest in (including the opportunity for profit and risk of loss on) such shares. A Shareholder (including any Constituent Holder) shall “own” shares held in the name of a nominee or other intermediary so long as the Shareholder (or such Constituent Holder) retains the right to instruct how the shares are voted with respect to the election of Directors and the right to direct the disposition thereof and possesses the full economic interest in the shares. A Shareholder’s (including any Constituent Holder’s) ownership of shares shall be deemed to continue during any period in which such person has (i) loaned such shares, provided that such Shareholder has the power to recall such loaned shares on not more than five (5) business days’ notice and includes in its Proxy Access Notice an agreement that it (A) will promptly recall such loaned shares upon being notified that any of its Shareholder Nominees will be included in the Company’s proxy materials and (B) will continue to hold such recalled shares through the date of the annual meeting or (ii) delegated any voting power over such shares by means of a proxy, power of attorney or other instrument or arrangement which in all such cases is revocable at any time by the Shareholder. The terms “owned,” “owning” and other variations of the word “own” shall have correlative meanings.
| | | (A) For purposes of thisBye-Law 10(3), the “Required Information” that the Company will include in its proxy statement is (1) the information concerning the Shareholder Nominee and the Eligible Shareholder that the Company determines is required to be disclosed in the Company’s proxy statement by the regulations promulgated under the Exchange Act; and (2) if the Eligible Shareholder so elects, a Statement (as defined in paragraph (F) below). The Company shall also include the name of the Shareholder Nominee in its proxy card. For the avoidance of doubt, and any other provision of theseBye-Laws notwithstanding, the Company may in its sole discretion solicit against, and include in the proxy statement its own statements or other information relating to, any Eligible Shareholder and/or Shareholder Nominee.
| | | (B) To be timely, a Shareholder’s Proxy Access Notice, together with all related materials provided for herein, must be delivered to the principal executive offices of the Company within the time periods applicable to Shareholder notices of nominations pursuant to paragraph (1)(b) ofBye-Law 10. In no event shall any adjournment or postponement of an annual general meeting, the date of which has been announced by the Company, commence a new time period for the giving of a Proxy Access Notice.
| | | (C) The number of Shareholder Nominees (which shall include Shareholder Nominees that were submitted by all Eligible Shareholders for inclusion in the Company’s proxy materials pursuant to thisBye-Law 10(3) but either (x) are subsequently withdrawn (or withdraw) or (y) the Board of Directors decides to nominate as Board of Directors’ nominees) appearing in the Company’s proxy materials with respect to an annual general meeting of Shareholders shall not exceed the greater of (x) two (2) and (y) the largest whole number that does not exceed 20% of the
|
101
| | | | | number of directors in office as of the last day on which a Proxy Access Notice may be delivered in accordance with the procedures set forth in thisBye-Law 10(3) (such greater number, the “Permitted Number”); provided, however, that the Permitted Number shall be reduced by:
| | | (1) the number of directors in office that will be included in the Company’s proxy materials with respect to such annual general meeting for whom access to the Company’s proxy materials was previously provided pursuant to thisBye-Law 10(3), other than any such director who at the time of such annual general meeting will have served as a director continuously, as a nominee of the Board of Directors, for at least two (2) successive annual terms; and
| | | (2) the number of directors in office or director candidates that in either case will be included in the Company’s proxy materials with respect to such annual general meeting as an unopposed (by the Company) nominee pursuant to an agreement, arrangement or other understanding with a Shareholder or group of Shareholders (other than any such agreement, arrangement or understanding entered into in connection with an acquisition of Voting Stock, by such Shareholder or group of Shareholders, directly from the Company), other than any such director referred to in this clause (2) who at the time of such annual general meeting will have served as a director continuously, as a nominee of the Board of Directors, for at least two (2) successive annual terms;
| | | | | provided, further, that in the event the Board of Directors resolves to reduce the size of the Board of Directors effective on or prior to the date of the annual general meeting, the Permitted Number shall be calculated based on the number of directors in office as so reduced. An Eligible Shareholder submitting more than one Shareholder Nominee for inclusion in the Company’s proxy statement pursuant to this paragraph (C) of thisBye-Law 10(3) shall rank such Shareholder Nominees based on the order that the Eligible Shareholder desires such Shareholder Nominees to be selected for inclusion in the Company’s proxy statement and include such specified rank in its Proxy Access Notice. If the number of Shareholder Nominees pursuant to this paragraph (C) of thisBye-Law 10(3) for an annual general meeting of Shareholders exceeds the Permitted Number, then the highest ranking qualifying Shareholder Nominee from each Eligible Shareholder will be selected by the Company for inclusion in the proxy statement until the Permitted Number is reached, going in order of the amount (largest to smallest) of the ownership position as disclosed in each Eligible Shareholder’s Proxy Access Notice. If the Permitted Number is not reached after the highest ranking Shareholder Nominee from each Eligible Shareholder has been selected, this selection process will continue as many times as necessary, following the same order each time, until the Permitted Number is reached.
| | | | | Notwithstanding anything to the contrary contained in thisBye-Law 10(3), the Company shall not be required to include any Shareholder Nominees in its proxy materials pursuant to thisBye-Law 10(3) for any meeting of Shareholders for which the Secretary of the Company receives notice (whether or not subsequently withdrawn) that a Shareholder intends to nominate one or more persons for election to the Board of Directors pursuant to the advance notice requirements for Shareholder nominees set forth inBye-Law 10(1).
| | | (D) An “Eligible Shareholder” is one or more Shareholders of record who own and have owned, or are acting on behalf of one or more beneficial owners who own and have owned, in each case continuously for at least three (3) years as of both the date that the Proxy Access Notice is received by the Company pursuant to thisBye-Law 10(3), and as of the record date for determining Shareholders eligible to vote at the annual general meeting, at least three percent (3%) of the aggregate voting power of the Voting Stock (the “Proxy Access Request Required Shares”), and who continue to own the Proxy Access Request Required Shares at all times between the date such Proxy Access Notice is received by the Company and the date of the applicable annual general meeting, provided that the aggregate number of Shareholders (and, if and to the extent that a Shareholder is acting on behalf of one or more beneficial owners, of such beneficial owners) whose stock ownership is counted for the purpose of satisfying the foregoing ownership requirement shall not exceed twenty (20).
| | | | | Two or more collective investment funds that are (I) part of the same family of funds or sponsored by the same adviser or (II) a “group of investment companies” as such term is defined in Section 12(d)(1)(G)(ii) of the Investment Company Act of 1940 (a “Qualifying Fund”) shall be treated as one Shareholder for the purpose of determining the aggregate number of Shareholders in this paragraph
|
102
| | | | | (D). For the avoidance of doubt, each fund included within a Qualifying Fund must meet the requirements set forth in thisBye-Law 10(3), including by providing the required information and materials.
| | | | | No share may be attributed to more than one group constituting an Eligible Shareholder under thisBye-Law 10(3). For the avoidance of doubt, no Shareholder may be a member of more than one group constituting an Eligible Shareholder.
| | | | | A record holder acting on behalf of one or more beneficial owners will not be counted separately as a Shareholder with respect to the shares owned by such beneficial owner(s). Each such beneficial owner will be counted separately as a Shareholder with respect to the shares owned by such beneficial owner, subject to the other provisions of this paragraph (D).
| | | | | For the avoidance of doubt, Proxy Access Request Required Shares will qualify as such only if the beneficial owner of such shares as of the date of the Proxy Access Notice has individually beneficially owned such shares continuously for the three-year (3 year) period ending on that date and through the other applicable dates referred to above (in addition to the other applicable requirements being met).
| | | (E) On the date on which an Eligible Shareholder delivers a nomination pursuant to thisBye-Law 10(3), such Eligible Shareholder (including each Constituent Holder) must provide the following information in writing to the Secretary of the Company with respect to such Eligible Shareholder (and each Constituent Holder):
| | | (1) the name and address of, and number of shares of Voting Stock owned by, such person;
| | | (2) one or more written statements from the record holder of the shares (and from each intermediary through which the shares are or have been held during the requisite three-year (3 year) holding period) verifying that, as of a date within seven (7) calendar days prior to the date the Proxy Access Notice is delivered to the Company, such person owns, and has owned continuously for the preceding three (3) years, the Proxy Access Request Required Shares, and such person’s agreement to provide:
| | | (a) within ten (10) days after the record date for the annual general meeting, written statements from the record holder and intermediaries verifying such person’s continuous ownership of the Proxy Access Request Required Shares through the record date, together with any additional information reasonably requested by the Company to verify such person’s ownership of the Proxy Access Request Required Shares; and
| | | (b) immediate notice to the Company if the Eligible Shareholder ceases to own any of the Proxy Access Request Required Shares prior to the date of the applicable annual general meeting of Shareholders;
| | | (3) the information that would be required to be submitted pursuant to paragraph (1)(d) ofBye-Law 10 for Director nominations;
| | | (4) a description of all direct and indirect compensation and other material monetary agreements, arrangements and understandings during the past three (3) years, and any other material relationships, between or among the Eligible Shareholder (including any Constituent Holder) and its or their respective affiliates and associates, or others acting in concert therewith, on the one hand, and each of such Eligible Shareholder’s Shareholder Nominees, and his or her respective affiliates and associates, or others acting in concert therewith, on the other hand, including without limitation all information that would be required to be disclosed pursuant to Rule 404 promulgated under RegulationS-K of the U.S. Securities and Exchange Commission if the Eligible Shareholder (including any Constituent Holder), or any affiliate or associate thereof or person acting in concert therewith, were the “registrant” for purposes of such rule and the Shareholder Nominee or any affiliate or associate thereof or person acting in concert therewith were a director or executive officer of such registrant;
| | | (5) a representation that the Eligible Shareholder (and each Constituent Holder):
| | | (a) acquired the Proxy Access Request Required Shares in the ordinary course of business and not with the intent to change or influence control of the Company, and does not presently have any such intent;
| | | (b has not nominated and will not nominate for election to the Board of Directors at the annual general meeting any person other than the Shareholder Nominees being nominated pursuant to thisBye-Law 10(3);
| | | (c) has not engaged and will not engage in, and has not and will not be a “participant” in another person’s, “solicitation” within the meaning of Rule14a-1(l) under the Exchange Act in support of the election of any individual as a director at the annual general meeting other than its Shareholder Nominees or a nominee of the Board of Directors;
|
103
| | | | | (d) will not distribute to any Shareholder any form of proxy for the annual general meeting other than the form distributed by the Company; and
| | | (e) will provide facts, statements and other information in all communications with the Company and its Shareholders that are and will be true and correct in all material respects and do not and will not omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading, and will otherwise comply with all applicable laws, rules and regulations in connection with any actions taken pursuant to thisBye-Law 10(3) (and the other provisions of thisBye-Law 10 to the extent related to thisBye-Law 10(3));
| | | (6) in the case of a nomination by a group of Shareholders that together is such an Eligible Shareholder, the designation by all group members of one group member that is authorized to act on behalf of all members of the nominating Shareholder group with respect to the nomination and matters related thereto, including withdrawal of the nomination; and
| | | (7) an undertaking that the Eligible Shareholder (and each Constituent Holder) agrees to:
| | | (a) assume all liability stemming from, and indemnify and hold harmless the Company and each of its directors, officers, and employees individually against any liability, loss or damages in connection with any threatened or pending action, suit or proceeding, whether legal, administrative or investigative, against the Company or any of its directors, officers or employees arising out of any legal or regulatory violation arising out of the communications of the Eligible Shareholder (and any Constituent Holder) with the Shareholders of the Company or out of the information that the Eligible Shareholder (and any Constituent Holder) provided to the Company in connection with the nomination of the Shareholder Nominee(s) or efforts to elect the Shareholder Nominee(s); and
| | | (b) file with the Securities and Exchange Commission any solicitation by the Eligible Shareholder of Shareholders of the Company relating to the annual general meeting at which the Shareholder Nominee will be nominated.
| | | | | In addition, on the date on which an Eligible Shareholder delivers a nomination pursuant to thisBye-Law 10(3), any Qualifying Fund whose stock ownership is counted for purposes of qualifying as an Eligible Shareholder must provide to the Secretary of the Company documentation reasonably satisfactory to the Board of Directors that demonstrates that the funds included within the Qualifying Fund satisfy the definition thereof.
| | | | | In order to be considered timely, all information required by this paragraph (E) to be provided to the Company must be supplemented, by delivery to the Secretary of the Company, to disclose such information (1) as of the record date for the applicable annual general meeting and (2) as of the date that is no earlier than ten (10) days prior to such annual general meeting. Any supplemental information delivered pursuant to clause (1) of the preceding sentence must be delivered to the Secretary of the Company no later than ten (10) days following the record date for the applicable annual general meeting, and any supplemental information delivered pursuant to clause (2) of the preceding sentence must be delivered to the Secretary of the Company no later than the fifth day before the applicable annual general meeting. For the avoidance of doubt, the requirement to update and supplement such information shall not permit any Eligible Shareholder (or any Constituent Holder) or other person to change or add any proposed Shareholder Nominee or be deemed to cure any defects or limit the remedies (including without limitation under theseBye-Laws) available to the Company relating to any defect.
| | | (F) The Eligible Shareholder may provide to the Secretary of the Company, at the time the information required by thisBye-Law 10(3) is originally provided, a written statement for inclusion in the Company’s proxy statement for the annual general meeting, not to exceed five hundred (500) words, in support of the candidacy of each such Eligible Shareholder’s Shareholder Nominee (the “Statement”). Notwithstanding anything to the contrary contained in thisBye-Law 10(3), the Company may omit from its proxy materials any information or Statement that it, in good faith, believes is materially false or misleading, omits to state any material fact, or would violate any applicable law or regulation.
| | | (G) On the date on which an Eligible Shareholder delivers a nomination pursuant to thisBye-Law 10(3), each Shareholder Nominee must:
|
104
| | | | | (1) provide to the Company an executed agreement, in a form deemed satisfactory by the Board of Directors or its designee (which form shall be provided by the Company reasonably promptly upon written request of a Shareholder), that such Shareholder Nominee consents to being named in the Company’s proxy statement and form of proxy card (and will not agree to be named in any other person’s proxy statement or form of proxy card with respect to the applicable annual general meeting of the Company) as a nominee and to serving as a director of the Company if elected;
| | | (2) provide the information with respect to a Shareholder Nominee that would be required to be submitted pursuant to paragraph (1)(d) ofBye-Law 10 for Director nominations;
| | | (3) complete, sign and submit all questionnaires, representations and agreements required by theseBye-Laws or of the Company’s directors generally, including the questionnaire, representation and agreement required by paragraph (4) ofBye-Law 8; and
| | | (4) provide such additional information as necessary to permit the Board of Directors to determine if such Shareholder Nominee:
| | | (a) is independent under the listing standards of each principal U.S. exchange upon which the Common Shares of the Company is listed, any applicable rules of the Securities and Exchange Commission and any publicly disclosed standards used by the Board of Directors in determining and disclosing the independence of the Company’s directors;
| | | (b) has any direct or indirect relationship with the Company;
| | | (c) would, by serving on the Board of Directors, violate or cause the Company to be in violation of theseBye-Laws, the rules and listing standards of the principal U.S. exchange upon which the Common Shares of the Company is listed or any applicable law, rule or regulation; and
| | | (d) is or has been subject to any event specified in Item 401(f) of RegulationS-K (or successor rule) of the Securities and Exchange Commission.
| | | | | In the event that any information or communications provided by the Eligible Shareholder (or any Constituent Holder) or the Shareholder Nominee to the Company or its Shareholders ceases to be true and correct in all material respects or omits a material fact necessary to make the statements made, in light of the circumstances under which they were made, not misleading, each Eligible Shareholder (or any Constituent Holder) or Shareholder Nominee, as the case may be, shall promptly notify the Secretary of the Company of any defect in such previously provided information and of the information that is required to correct any such defect; it being understood for the avoidance of doubt that providing any such notification shall not be deemed to cure any such defect or limit the remedies (including without limitation under theseBye-Laws) available to the Company relating to any such defect.
| | | (H) Any Shareholder Nominee who is included in the Company’s proxy materials for a particular annual general meeting of Shareholders but either (1) withdraws from or becomes ineligible or unavailable for election at that annual general meeting (other than by reason of such Shareholder Nominee’s disability or other health reason), or (2) does not receive at least twenty-five (25)% of the votes cast in favor of his or her election, will be ineligible to be a Shareholder Nominee pursuant to thisBye-Law 10(3) for (x) such particular annual general meeting and (y) the next two annual general meetings.
| | | (I) The Company shall not be required to include, pursuant to thisBye-Law 10(3), a Shareholder Nominee in its proxy materials for any annual general meeting of Shareholders, or, if the proxy statement already has been filed, to permit a vote with respect to the election of a Shareholder Nominee, notwithstanding that proxies in respect of such vote may have been received by the Company:
| | | (1) who is not independent under the listing standards of the principal U.S. exchange upon which the Common Shares of the Company is listed, any applicable rules of the U.S. Securities and Exchange Commission and any publicly disclosed standards used by the Board of Directors in determining and disclosing independence of the Company’s Directors, who does not meet the audit committee independence requirements under the rules of any stock exchange on which the Company’s Common Shares are traded and applicable securities laws, who is not a“non-employee director” for the purposes of Rule16b-3 under the Exchange Act (or any successor rule), who is not an “outside director” for the purposes of Section 162(m) of the
|
105
| | | | | Internal Revenue Code of 1986, as amended (or any successor provision), in each of the foregoing cases as determined by the Board of Directors in its sole discretion;
| | | (2) whose service as a member of the Board of Directors would violate or cause the Company to be in violation of theseBye-Laws, the rules and listing standards of the principal U.S. exchange upon which the Common Shares of the Company is traded, or any applicable law, rule or regulation;
| | | (3) who is or has been, within the past three years, an employee, officer or director of, or otherwise affiliated with, a competitor, as defined in Section 8 of the Clayton Antitrust Act of 1914;
| | | (4) who is or has been a named subject of a pending criminal proceeding (excludingnon-criminal traffic violations) or has been convicted in such a criminal proceeding within the past ten years, or who is or has been a named subject of any legal, regulatory or self-regulatory proceeding, action or settlement as a result of which the service of such Shareholder Nominee on the Board of Directors would result in any restrictions on the ability of any of the Company or its affiliates to conduct business in any jurisdiction;
| | | (5) who is subject to any order of the type specified in Rule 506(d) of Regulation D promulgated under the Securities Act;
| | | (6) who shall have provided information to the Company in respect of such nomination that was untrue in any material respect or omitted to state a material fact necessary in order to make the statement made, in light of the circumstances under which they were made, not misleading, as determined by the Board of Directors or any committee thereof, in each of the foregoing cases as determined by the Board of Directors in its sole discretion;
| | | (7) who otherwise breaches or fails to comply in any material respect with its obligations pursuant to thisBye-Law 10(3) or any agreement, representation or undertaking required by theseBye-Laws; or
| | | (8) was proposed by an Eligible Shareholder who ceases to be an Eligible Shareholder for any reason, including but not limited to not owning the Proxy Access Request Required Shares through the date of the applicable annual general meeting.
| | | | | In addition, if any Constituent Holder (i) shall have provided information to the Company in respect of a nomination under thisBye-Law 10(3) that was untrue in any material respect or omitted to state a material fact necessary in order to make the statement made, in light of the circumstances under which they were made, not misleading, as determined by the Board of Directors or any committee thereof, in each of the foregoing cases as determined by the Board of Directors in its sole discretion or (ii) otherwise breaches or fails to comply in any material respect with its obligations pursuant to thisBye-Law 10(3) or any agreement, representation or undertaking required by theseBye-Laws, the Voting Stock owned by such Constituent Holder shall be excluded from the Proxy Access Request Required Shares and, if as a result the Eligible Shareholder no longer meets the requirements as such, all of the applicable Eligible Shareholder’s Shareholder Nominees shall be excluded from the Company’s proxy statement for the applicable annual general meeting of Shareholders, if such proxy statement has not been filed, and, in any case, all of such Shareholder’s Shareholder Nominees shall be ineligible to be nominated at such annual general meeting.
| | | | | Notwithstanding anything contained herein to the contrary, no Shareholder Nominee shall be eligible to serve as a Shareholder Nominee in any of the next two (2) successive annual general meetings following an act or omission specified in clause (6) or (7) of this paragraph (I) by such person, in each case as determined by the Board of Directors or any committee thereof in its sole discretion. In addition, no Person who has submitted materials as a purported Eligible Shareholder (or Constituent Holder) under thisBye-Law 10(3), or any of its affiliates or associates, shall be eligible to be an Eligible Shareholder (or Constituent Holder) in any of the next two (2) successive annual general meetings following a nomination proposed under thisBye-Law 10(3) if, in connection therewith, such purported Eligible Shareholder (or such Constituent Holder) shall have provided information to the Company in respect of such nomination that was untrue in any material respect or omitted to state a material fact necessary in order to make the statement made, in light of the circumstances under which they were made, not misleading, or shall have otherwise materially breached or failed to comply with its obligations pursuant to thisBye-Law
|
106
| | | | | 10(3) or any agreement, representation or undertaking required by theseBye-Laws, in each case as determined by the Board of Directors or any committee thereof in its sole discretion.
| | | (4) General.As used in thisBye-Law 10, shares “beneficially owned” shall mean all shares as to which such Person, together with such Person’s affiliates and associates (as defined in Rule12b-2 under the Exchange Act), may be deemed to beneficially own pursuant to Rules13d-3 and13d-5 under the Exchange Act, as well as all shares as to which such Person, together with such Person’s affiliates and associates, has the right to become the beneficial owner pursuant to any agreement or understanding, or upon the exercise of warrants, options or rights to convert or exchange (whether such rights are exercisable immediately or only after the passage of time or the occurrence of conditions). The person presiding at the meeting shall determine whether such notice has been duly given and shall direct that proposals and nominees not be considered if such notice has not been so given. For purposes of thisby-law, “public announcement” shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service or in a document publicly filed by the Company with the U.S. Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act. In no event shall the public announcement of an adjournment or postponement of an annual meeting or a special meeting commence a new time period for the giving of a Shareholder’s notice as described above.
| | | (5) The chairperson of the annual general meeting of Shareholders or special general meeting shall, if the facts warrant, refuse to acknowledge a proposal or nomination not made in compliance with the foregoing procedure and any such proposal or nomination not properly brought before the meeting shall not be considered.
| | | | | 11. Removal of directors
| | | (1) Subject to the rights of the holders of any class or series of preference shares, the Shareholders may, at any annual general or special general meeting convened and held in accordance with theseBye-Laws, remove a Director before the stated expiry of his term only for Cause by the affirmative vote of at least a majority of thetotal combined voting power of all of the issued and outstandingvotes cast by the holders of shares of the Company entitled to votegenerally on the election of Directors.
| | | (2) Subject to the rights of the holders of any class or series of preference shares, a vacancy on the Board created by the removal of a Director under the provisions of paragraph (1) of thisBye-Law 11 may be filled by the Shareholders at the meeting at which such Director is removed, acting by the affirmative vote ofShareholders holding at least a majority of thetotal combined voting power of all of the issued and outstandingvotes cast by the holders of shares of the Company entitled to votegenerally on the election of Directors, and, in the absence of such election or appointment, the Board may fill the vacancy. A Director so elected or appointed shall hold office until the next annual general meeting of Shareholders.
| | | (3) Subject to the rights of the holders of any class or series of preference shares, the Board may, at any meeting of the Board convened and held in accordance with theseBye-Laws, remove a Director before the stated expiry of his term only for Cause by a resolution of the Board carried by the affirmative vote of at least atwo-thirds majority of the Board then in office.
| | | | | 12. Vacancies on the board
| | | (1) Subject to the rights of the holders of any class or series of preference shares, the Board shall have the power from time to time and at any time to appoint any person as a Director to fill a vacancy on the Board occurring as the result of any of the events listed in paragraph (3) of thisBye-Law 12 or from an increase in the size of the Board pursuant toBye-Law 8. The Board shall also have the power from time to time to fill any vacancy left unfilled at a general meeting. A Director appointed by the Board to fill a vacancy shall hold office until the next annual general meeting of Shareholders.
| | | (2) The Board may act notwithstanding any vacancy in its number but, if and so long as its number is reduced below the number fixed by theseBye-Laws as the quorum necessary for the transaction of business at meetings of the Board, the continuing Directors or Director may act, notwithstanding the absence of a quorum, for the purpose of (i) summoning a general meeting of the Company or (ii) preserving the assets of the Company.
| | | (3) The office of a Director shall be vacated if the Director:
| | | (a) is removed from office pursuant to theseBye-Laws or is prohibited from being a Director by law;
| | | (b) is or becomes bankrupt or makes any arrangement or composition with his creditors generally;
| | | (c) is or becomes disqualified, disabled, of unsound mind, or dies; or
| | | (d) resigns his or her office by notice in writing to the Company.
| | | (4) Notwithstanding anything contained herein to the contrary, the provisions ofBye-Law 11, thisBye-Law 12 and all other provisions contained in theseBye-Laws related to the filling
|
107
| | | | | of vacancies on the Board shall be subject to any contractual or other legally binding obligation hereafter created by the Company and approved by the Board to provide any third party with the ability to nominate persons for election as Directors.
| | | | | 13. Notice of meetings of the board
| | | (1) The Chairperson may, and the Chairperson on the requisition of the Chief Executive Officer or a majority of the Directors then in office shall, at any time, upon two days’ notice (or such shorter notice as may be reasonable under the circumstances), summon a meeting of the Board.
| | | (2) Notice of a meeting of the Board shall be deemed to be duly given to a Director if it is sent to such Director by mail, courier service, facsimile, email or other mode of representing words in a legible form at such Director’s last known address or any other address given by such Director to the Company for this purpose.
| | | | | 14. Quorum at meetings of the board
| | | The quorum necessary for the transaction of business at a meeting of the Board shall be as fixed by the Board from time to time and, unless so fixed at any other level, shall be at leastone-half of the total number of the Directors then in office, present in person or represented by a duly authorized representative appointed in accordance with the Act. The Directors present at a duly called meeting at which a quorum is present may continue to transact business until adjournment or termination, notwithstanding the withdrawal of enough Directors to leave less than a quorum. | | | | | 15. Meetings of the board
| | | (1) The Board may meet for the transaction of business, adjourn and otherwise regulate its meetings as it sees fit.
| | | (2) Directors may participate in any meeting of the Board by means of such telephone, electronic or other communication facilities as permit all persons participating in the meeting to communicate with each other simultaneously and instantaneously, and participation in such a meeting shall constitute presence in person at such meeting.
| | | (3) Unless otherwise provided in theseBye-Laws, a resolution put to the vote at a meeting of the Board shall be carried by the affirmative votes of a majority of the Directors present.
| | | | | 16. Unanimous written resolutions
| | | A resolution in writing signed by all of the Directors then in office, which may be in counterparts, shall be as valid as if it had been passed at a meeting of the Board duly called and constituted, such resolution to be effective on the date on which the last Director signs the resolution. | | | | | 17. Contracts and disclosure of directors’ interests
| | | (1) Any Director, or any Director’s firm, partner or any company with whom any Director is associated, may act in any capacity for, be employed by or render services to the Company and such Director or such Director’s firm, partner or company shall be entitled to remuneration as if such Director were not a Director. Nothing herein contained shall authorize a Director or Director’s firm, partner or company to act as Auditor to the Company.
| | | (2) A Director who is directly or indirectly interested in a contract or proposed contract or arrangement with the Company or any of its subsidiaries shall declare the nature of such interest to the Board or any duly appointed committee thereof, whether or not such declaration is required by law.
| | | (3) Following a declaration being made pursuant to thisBye-Law 17, and unless disqualified by the chairperson of the relevant Board meeting or recused, a Director may vote in respect of any contract or proposed contract or arrangement in which such Director is interested and may be counted in the quorum for such meeting.
| | | | | 18. Remuneration of Directors
| | | The remuneration and benefits (if any) of the Directors shall be determined by the Board or any duly appointed committee thereof in accordance with applicable law and securities exchange rules. The Directors may also be paid or reimbursed for all travel, hotel and other expenses incurred by them in attending and returning from meetings of the Board, any committee appointed by the Board, general or special meetings of the Company or in connection with the business of the Company or their duties as Directors generally. | | | | | | Officers
| | | | | 19. Officers of the company
| | | The Officers of the Company, who may or may not be Directors, may be appointed at any time by the Board or by such other persons as may be designated by the Board. Any person appointed pursuant to thisBye-Law 19 shall hold office for such period and upon such |
108
| | | | | terms as the Board or, in the case of Officers other than the Chief Executive Officer, as the Chief Executive Officer may determine and the Board (or the Chief Executive Officer unless otherwise directed by the Board) may revoke or terminate any such appointment. Any such revocation or termination shall be without prejudice to any claim for damages that such Officer may have against the Company or the Company may have against such Officer for any breach of any contract of service between him and the Company which may be involved in such revocation or termination. | | | | | 20. Remuneration of officers
| | | The Officers shall receive such remuneration and benefits as the Board or any duly appointed committee thereof (or, in the case of Officers who are not “executive officers” as defined under applicable Rules promulgated under the Exchange Act, as management acting under authority duly delegated by the Board) may from time to time determine in accordance with applicable law and securities exchange rules. | | | | | 21. Duties of officers
| | | The Officers shall have such powers and perform such duties in the management, business and affairs of the Company as may be delegated to them from time to time by the Board or, in the case of Officers other than the Chief Executive Officer, by the Chief Executive Officer (or by any other Officer or employee of the Company acting, directly or indirectly, under his direction). | | | | | 22. Chairperson and secretary of meetings
| | | (1) The Chairperson shall act as chairperson at all meetings of the Shareholders and of the Board at which he or she is present. In the Chairperson’s absence, the Chief Executive Officer or any other Director or Officer designated in writing by the Chairperson, the Chief Executive Officer or a majority of the Board shall act as chairperson of the applicable meeting.
| | | (2) The Secretary shall act as secretary at all meetings of the Shareholders and of the Board and any committee thereof at which he or she is present. In the Secretary’s absence, a secretary shall be appointed by the chairperson of such meeting.
| | | | | 23. Register of directors and officers
| | | The Board shall cause to be kept in one or more books at the registered office of the Company a Register of Directors and Officers and shall enter therein the particulars required by the Act. | | | | | | Minutes | | | | | 24. Obligations of board to keep minutes
| | | (1) The Board shall cause minutes to be duly entered in books provided for the purpose:
| | | (a) of all elections and appointments of Officers;
| | | (b) of the names of the Directors present at each meeting of the Board and of any committee appointed by the Board; and
| | | (c) of all resolutions and proceedings of general meetings of the Shareholders, meetings of the Board and meetings of committees appointed by the Board.
| | | (2) Minutes prepared in accordance with the Act and theseBye-Laws shall be kept by the Secretary at the registered office of the Company.
| | | | | | Indemnity | | | | | 25. Indemnification and exculpation of directors of the company and others
| | | (1) The Company shall indemnify in accordance with and to the full extent now or (if greater) hereafter permitted by Bermuda law, each person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (including, without limitation, an action by or in the right of the Company) (hereinafter, a “proceeding”), by reason of the fact that he or she is or was a Director or Officer (or is or was a director or officer of any subsidiary or any predecessor of the Company or any subsidiary) or is or was serving at the request of the Company (or any subsidiary of the Company or any predecessor of the Company or any subsidiary) as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise (or any predecessor of any of such entities), including without limitation any service with respect to employee benefit plans maintained or sponsored by the Company (or any subsidiary of the Company or any predecessor of the Company or any subsidiary), whether the basis of such proceeding is alleged action in an official capacity as a director, officer, employee or agent or in any other capacity while serving as a director, officer, employee or agent, against any liability or expense actually and reasonably incurred by such person
|
109
| | | | | in respect thereof. For the avoidance of doubt, the indemnity provided in thisBye-Law 25 shall extend, without limitation, to any matter in which an indemnified party may be guilty of negligence, default, breach of duty or breach of trust in relation to the Company or any of its subsidiaries, but shall not extend to any matter as to which such indemnified party admits that he is guilty, or is found, by a court of competent jurisdiction in a final judgment or decree not subject to appeal, guilty, of any fraud or dishonesty in relation to the Company or any such subsidiary. In connection with the foregoing, the Company shall advance the expenses of Directors and Officers in defending any such act, suit or proceeding;provided that such advancement shall be subject to reimbursement to the extent such person shall be found not to be entitled to such advancement of expenses under Bermuda law. In addition to the foregoing, the Company shall have the power, to the extent and in the manner permitted by Bermuda law, to indemnify each of its other employees and agents against any liability or expense (including advancement of expenses) incurred in connection with any proceeding arising by reason of the fact that such person is or was an employee or agent of the Company (or is or was an employee or agent of any subsidiary or any predecessor of the Company or any subsidiary) or is or was serving at the request of the Company (or any subsidiary of the Company or any predecessor of the Company or any subsidiary) as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise (or any predecessor of any of such entities), including without limitation any service with respect to employee benefit plans maintained or sponsored by the Company (or any subsidiary of the Company or any predecessor of the Company or any subsidiary).
| | | (2) The Board may authorize the Company to purchase and maintain insurance on behalf of any person who is or was a Director, Officer, employee or agent of the Company, or is or was serving at the request of the Company as a Director, Officer, employee or agent of another company, partnership, joint venture, trust or other enterprise, or in a fiduciary or other capacity with respect to any employee benefit plan maintained by the Company (or any subsidiary of the Company or any predecessor of the Company or any subsidiary), against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the Company would have the power to indemnify him against such liability under the provisions of thisBye-Law 25.
| | | (3) Directors, Officers and employees of the Company shall have no personal liability to the Company or its Shareholders for any action or failure to act to the fullest extent now or (if greater) hereafter permitted by Bermuda law.
| | | (4) The indemnification, expense reimbursement, exculpation and other provisions provided by thisBye-Law 25 shall not be deemed exclusive of any other rights to which the persons identified in thisBye-Law 25 may be entitled under anybye-law, agreement, vote of Shareholders or Directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office; shall continue as to a person who has ceased to be a Director, Officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person; and shall be deemed to be a contractual right of such benefited Persons.
| | | | | 26. Waiver of certain claims
| | | (1) Each present and future Shareholder agrees to waive any claim or right of action such Shareholder might have, whether individually or by or in the right of the Company, against any Director, Officer or employee on account of any action taken by such Director, Officer or employee, or the failure of such Director, Officer or employee to take any action, in the performance of his duties with or for the Company (including, for the avoidance of doubt, with respect to the approval or disapproval of any transaction between the Company and one or more of its Affiliates or the pursuit of corporate opportunities), in each case to the fullest extent now or (if greater) hereafter permitted by Bermuda law.
| | | (2) The provisions of thisBye-Law 26 shall apply to, and for the benefit of, any person acting as (or with the reasonable belief that he or she will be appointed or elected as) a Director, Officer or employee in the reasonable belief that he or she has been so appointed or elected notwithstanding any defect in such appointment or election and to any person who is no longer, but at one time was, a Director, Officer or employee.
| | | | | | Meetings | | | | | 27. Notice of annual general meeting of shareholders
| | | The annual general meeting of Shareholders shall be held in each year other than the year of incorporation at such time and place as the Chairperson or the Chief Executive Officer may determine. At least 20 days’ notice of such meeting shall be given to each Shareholder, stating the date, place and time at which the meeting is to be held, that the election of Directors will take place thereat and such additional information as may be required by the Act. |
110
| | | | | 28. Notice of special general meeting
| | | Special general meetings may be called as specified inBye-Law 10 upon not less than twenty days’ notice (or as otherwise prescribed by the Act), which notice shall state the date, time, place and such additional information as may be required by the Act orBye-Law 10. | | | | | 29. Accidental omission of notice of general meeting
| | | The accidental omission to give notice of a general meeting to, or the non-receipt of notice of a general meeting by, any Person entitled to receive notice shall not invalidate the proceedings at that meeting. | | | | | 30. Short notice
| | | Subject to any applicable requirements of the New York Stock Exchange (or any other applicable stock exchange), a general meeting of the Company shall, notwithstanding that it is called by shorter notice than that specified in these Bye-Laws, be deemed to have been properly called if it is so agreed by (i) all of the Shareholders entitled to attend and vote thereat, in the case of an annual general meeting of Shareholders or (ii) by a majority in number of the Shareholders having the right to attend and vote at the meeting, being a majority together holding not less than 95% in nominal value of the shares giving a right to attend and vote thereat, in the case of a special general meeting. | | | | | 31. Postponement of meetings
| | | The Chairperson or the Chief Executive Officer may, and the Secretary on instruction from the Chairperson or the Chief Executive Officer shall, postpone any general meeting called in accordance with the provisions of these Bye-Laws,provided that notice of postponement is given to each Shareholder before the time for such meeting. Fresh notice of the date, time and place for the postponed meeting shall be given to each Shareholder in accordance with the provisions of these Bye-Laws. | | | | | 32. Quorum for general meeting
| | | At the commencement of any general meeting of the Company, two or more Persons present in person and representing in person or by proxy more than fifty percent (50%) of the issued and outstanding shares entitled to vote at the meeting shall form a quorum for the transaction of business,provided that, if the Company shall at any time have only one Shareholder, such one Shareholder present in person or by proxy shall form a quorum for the transaction of business at any general meeting of the Company held during such time. If the holders of the number of shares necessary to constitute a quorum shall fail to attend in person or by proxy at the time and place fixed in accordance with these Bye-Laws for any annual or special general meeting, the chairperson or a majority in interest of the Shareholders present, in person or by proxy, may adjourn from time to time without notice other than announcement at the meeting until the holders of the amount of shares requisite to constitute a quorum shall attend;provided that in the case of any such meeting convened pursuant to requisition of Shareholders, the meeting shall be cancelled. At any such adjourned meeting at which a quorum shall be present, any business may be transacted which might have been transacted at the meeting as originally notified. The Shareholders present at a duly called meeting at which a quorum is present may continue to transact business until adjournment, notwithstanding the withdrawal of enough Shareholders to leave less than a quorum. | | | | | 33. Adjournment of meetings
| | | (1) The chairperson of a general meeting may, with the consent of the majority of the Shareholders present at any general meeting at which a quorum is present (and shall if so directed), adjourn the meeting. In addition, the chairperson may adjourn the meeting to another time and place without such consent or direction if it appears to him that:
| | | (a) it is likely to be impracticable to hold or continue that meeting because of the number of Shareholders wishing to attend who are not present;
| | | (b) the unruly conduct of persons attending the meeting prevents, or is likely to prevent, the orderly continuation of the business of the meeting; or
| | | (c) an adjournment is otherwise in the best interests of the Company or is necessary so that the business of the meeting may be properly conducted.
| | | (2) Unless the meeting is adjourned to a specific date, place and time announced at the meeting being adjourned, fresh notice of the date, place and time for the resumption of the adjourned meeting shall be given to each Shareholder entitled to attend and vote thereat in accordance with the provisions of these Bye-Laws.
| | | | | 34. Attendance at meetings
| | | (1) If a majority of the Board shall so determine, Shareholders may participate in any general meeting by means of such telephone, electronic or other communication facilities as permit all persons participating in the meeting to communicate with each other simultaneously and instantaneously, and participation in such a meeting shall constitute presence in person at such meeting.
|
111
| | | | | (2) The Board may, and at any general meeting the chairperson of such meeting may, make any arrangement and impose any requirement or restriction as may be considered appropriate to ensure the security of a general meeting including, without limitation, requirements for evidence of identity to be produced by those attending the meeting, the searching of their personal property and the restriction of items that may be taken into the meeting place. The Board is, and at any general meeting the chairperson of such meeting is, entitled to refuse entry to a person who refuses to comply with any such arrangements, requirements or restrictions.
| | | | | 35. Written resolutions
| | | (1) Subject to paragraph (4) of thisBye-Law 35, anything that may be done by resolution of the Company in a general meeting or by resolution of a meeting of any class of the Shareholders of the Company may, without a meeting and without any previous notice being required, be done by resolution in writing signed by all of the Shareholders who at the date of the resolution would be entitled to attend the meeting and vote on the resolution, in as many counterparts as may be necessary.
| | | (2) A resolution in writing made in accordance with thisBye-Law 35 is as valid as if it had been passed by the Company in a general meeting or by a meeting of the relevant class of Shareholders, as the case may be, and any reference in any Bye-Law to a meeting at which a resolution is passed or to Shareholders voting in favor of a resolution shall be construed accordingly.
| | | (3) A resolution in writing made in accordance with thisBye-Law 35 shall constitute minutes for the purposes of the Act.
| | | | | 36. Attendance of directors
| | | The Directors of the Company shall be entitled to receive notice of and to attend any general meeting. | | | | | 37. Voting at meetings
| | | Subject to the provisions of the Act and except as otherwise provided under these Bye-Laws, any question proposed for the consideration of the Shareholders at any general meeting shall be decided by the affirmative votes of a majority of the votes cast in accordance with the provisions of these Bye-Laws and, in the case of an equality of votes, the resolution shall fail. | | | | | 38. Voting by hand or by poll
| | | (1) At any general meeting, a resolution put to the vote of the meeting shall be decided on a show of hands or by a count of votes received in the form of electronic records, unless (before or on the declaration of the result of the show of hands or count of votes received as electronic records or on the withdrawal of any other demand for a poll) a poll is demanded by:
| | | (a) the chairman of the meeting or a majority of the Board; or
| | | (b) at least three (3) Shareholders present in person or represented by proxy; or
| | | (c) any Shareholder or Shareholders present in person or represented by proxy and holding between them not less than one tenth (1/10) of the total voting rights of all the Shareholders having the right to vote at such meeting; or
| | | (d) any Shareholder or Shareholders present in person or represented by proxy holding shares conferring the right to vote at such meeting, being shares on which an aggregate sum has been paid up equal to not less than one tenth (1/10) of the total sum paid up on all such shares conferring such right.
| | | (2) The demand for a poll may, before the poll is taken, be withdrawn but only with the consent of the chairman and a demand so withdrawn shall not be taken to have invalidated the result of a show of hands or count of votes received as electronic records declared before the demand was made. If the demand for a poll is withdrawn, the chairman or any other Shareholder entitled may demand a poll.
| | | (3) Unless a poll is so demanded and the demand is not withdrawn, a declaration by the chairman that a resolution has, on a show of hands or count of votes received as electronic records, been carried or carried unanimously or by a particular majority or not carried by a particular majority or lost shall be final and conclusive, and an entry to that effect in the minute book of the Company shall be conclusive evidence of the fact without proof of the number or proportion of votes recorded for or against such resolution.
| | | (4) If a poll is duly demanded, the result of the poll shall be deemed to be the resolution of the meeting at which the poll is demanded.
| | | (5) A poll demanded on a question of adjournment shall be taken forthwith. A poll demanded on any other question shall be taken in such manner consistent with the Act as the chairman shall direct.
| | | (6) The demand for a poll shall not prevent the continuance of a meeting for the transaction of any business other than the question on which the poll has been demanded and it may be withdrawn at any time before the close of the meeting or the taking of the poll, whichever is the earlier.
| | | (7) On a poll, votes may be cast either personally or by proxy.
|
112
| | | | | (8) A Person entitled to more than one vote on a poll need not use all his votes or cast all the votes he uses in the same way.
| | | (9) Where a vote is taken by poll, each Person present and entitled to vote shall be furnished with a ballot paper on which such Person shall record his or her vote in such manner as shall be determined at the meeting having regard to the nature of the question on which the vote is taken, and each ballot paper shall be signed or initialed or otherwise marked so as to identify the voter and the registered holder in the case of a proxy.
| | | (10) At the conclusion of any poll, the ballot papers shall be examined and counted by a committee of one or more inspectors appointed by the Board or the Chief Executive Officer of the Company prior to the general meeting to act at such meeting as provided hereunder and to make a written report thereof. If no inspector (or any alternate previously designated by the Board or the Chief Executive Officer) is able to act at the meeting, the chairperson of the meeting shall appoint one or more inspectors to act at the meeting. Each inspector, before entering upon the discharge of his or her duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of his or her ability. In connection with the applicable poll, the inspectors shall ascertain the number of shares outstanding and the voting power of each, determine the shares represented at the meeting and the validity of proxies and ballots, count all votes and ballots, determine and retain for a reasonable period a record of the disposition of any challenges made to any determination by the inspectors and certify their determination of the number of shares represented at the meeting and their count of all votes and ballots. The inspectors may appoint or retain other persons to assist them in the performance of their duties. The date and time of the opening and closing of the polls during the meeting for each matter upon which the Shareholders will vote by poll at a meeting shall be announced at the meeting. No ballot, proxy or vote, nor any revocation thereof or change thereto, shall be accepted by the inspectors after the closing of the polls. In determining the validity and counting of proxies and ballots, the inspectors shall be limited to an examination of (i) the proxies, any envelopes submitted therewith, any information provided by a Shareholder who submits a proxy by telegram, cablegram or other electronic transmission from which it can be determined that the proxy was authorized by the Shareholder and (ii) the ballots and (iii) the regular books and records of the Company
| | | | | In addition, the inspectors may also consider other reliable information for the limited purpose of reconciling proxies and ballots submitted by or on behalf of banks, brokers, their nominees or similar Persons which represent more votes than the holder of a proxy is authorized by the record owner to cast or more votes than the Shareholder holds of record. If the inspectors consider such other reliable information for such purpose, they shall, at the time they make their certification, specify the precise information considered by them, including the Person or Persons from whom they obtained the information, when the information was obtained, the means by which the information was obtained and the basis for the inspectors’ belief that such information is accurate and reliable.
| | | | | 39. Decision of chairperson
| | | (1) At any general meeting if an amendment shall be proposed to any resolution under consideration and the chairperson of the meeting shall rule on whether the proposed amendment is out of order, the proceedings on the substantive resolution shall not be invalidated by any error in such ruling.
| | | (2) At any general meeting a declaration by the chairperson of the meeting that a question proposed for consideration has been carried, or carried unanimously, or by a particular majority, or lost, and an entry to that effect in a book containing the minutes of the proceedings of the Company shall be conclusive evidence of that fact.
| | | | | 40. Instrument of proxy
| | | (1) Every Shareholder entitled to vote has the right to do so either in person or by one or more persons authorized by a proxy executed and delivered in accordance with these Bye-Laws.
| | | (2) A person so authorized as a proxy shall be entitled to exercise the same power on behalf of the grantor of the proxy as the grantor could exercise at a general meeting of the Company.
| | | (3) No proxy shall be valid after eleven months from its date, unless the proxy provides for a longer period. A proxy shall be revocable unless expressly provided therein to be irrevocable and the proxy is coupled with an interest sufficient in law to support an irrevocable power.
| | | (4) Subject to paragraph (3) of thisBye-Law 40, the instrument appointing a proxy, together with such other evidence as to its due execution as the Board may from time to time require, shall be delivered at the registered office of the Company (or at such place or places as may be specified in the notice convening the meeting or in any notice of any adjournment or, in either case, in any document sent therewith) prior to the holding
|
113
| | | | | of the relevant meeting or adjourned meeting at which the individual named in the instrument proposes to vote and, if not so delivered, the instrument of proxy shall not be treated as valid.
| | | (5) Instruments of proxy shall be in such form as the Board may approve (including, without limitation, written or electronic form) and the Board may, if it thinks fit, send out with the notice of any meeting forms of instruments of proxy for use at the meeting. The instrument of proxy shall be deemed to confer authority to vote on any amendment of a resolution put to the meeting for which it is given as the proxy thinks fit. The instrument of proxy shall, unless the contrary is stated therein, be valid as well for any adjournment of the meeting as for the meeting to which it relates.
| | | (6) A vote given in accordance with the terms of an instrument of proxy shall be valid notwithstanding the death or unsoundness of mind of the principal subsequent to giving the proxy but before the vote or revocation of the instrument of proxy or of the authority under which it was executed.
| | | (7) The decision of the chairperson of any general meeting as to the validity of any appointment of a proxy shall be final.
| | | | | 41. Representation of corporations at meetings
| | | A corporation or other Person that is not an individual that is a Shareholder may, by written instrument, authorize any person as it thinks fit to act as its representative at any meeting of the Shareholders or for all meetings of the Shareholders or for all meetings of the Shareholders for a certain or determinable period or until revocation and such person so authorized shall be entitled to exercise the same powers on behalf of such corporation or other such Person as such corporation or other such Person could exercise if it were an individual Shareholder and such corporation or other such Person shall be deemed to be present in person as a Shareholder at any such meeting attended by its authorized representative or representatives. Notwithstanding the foregoing, the chairperson of the meeting may accept such assurances as he or she thinks fit as to the right of any person to attend and vote at general meetings on behalf of a corporation or other such Person that is a Shareholder. | | | | | | Votes of shareholders
| | | | | 42. General
| | | Subject to the rights of the holders of any class or series of preference shares, at any general meeting of the Company, each Shareholder present in person shall be entitled to one vote on any question to be decided on a show of hands and each Shareholder present in person or by proxy shall be entitled on a poll to one vote for each share held by him in his name in the Register of Shareholders. | | | | | | Share capital and shares
| | | | | 43. Share capital
| | | The authorised share capital of the Company is 1,070,000,000 divided into 1,050,000,000 common shares of par value $0.20 each (“Common Shares”) and 20,000,000 undesignated shares of par value $0.20 each, which may be issued, without any prior Shareholder approval, as Common Shares or Preference Shares (“Undesignated Shares”). | | | | | 44. Rights of Shares
| | | (1) Common shares. The Common Shares shall, subject to the other provisions of theseBye-Laws, entitle the holders thereof to the following rights:
| | | (a) as regards dividend: after making all necessary provisions, where relevant, for payment of any preferred dividend in respect of any preference shares in the Company then outstanding, the Company shall apply any profits or reserves which the Board resolves to distribute in paying such profits or reserves to the holders of the Common Shares in respect of their holding of such shares pari passu and pro rata to the number of Common Shares held by each of them;
| | | (b) as regards capital: on a return of assets on liquidation, reduction of capital or otherwise, the holders of the Common Shares shall be entitled to be paid the surplus assets of the Company remaining after payment of its liabilities (subject to the rights of holders of anypreferredpreferenceshares in the Company then in issue having preferred rights on the return of capital) in respect of their holdings of Common Shares pari passu and pro rata to the number of Common Shares held by each of them;
| | | (c) as regards voting in general meetings: the holders of the Common Shares shall be entitled to receive notice of, and to attend and vote at, general meetings of the Company; every holder of Common Shares present in person or by proxy shall on a poll have one vote for each Common Share held by him.
|
114
| | | | | (2) Undesignated shares. The rights attaching to the Undesignated Shares, subject to theseBye-Laws, shall be as follows:
| | | (a) each Undesignated Share shall have attached to it such preferred, qualified or other special rights, privileges and conditions and be subject to such restrictions, whether in regard to dividend, return of capital, redemption, conversion into Common Shares or voting or otherwise, as the Board may determine on or before its allotment;
| | | (b) the Board may allot the Undesignated Shares in more than one series and, if it does so, may name and designate each series in such manner as it deems appropriate to reflect the particular rights and restrictions attached to that series, which may differ in all or any respects from any other series of Undesignated Shares;
| | | (c) the particular rights and restrictions attached to any Undesignated Shares shall be recorded in a resolution of the Board. The Board may at any time before the allotment of any Undesignated Share by further resolution in any way amend such rights and restrictions or vary or revoke its designation. A copy of any such resolution or amending resolution for the time being in force shall be annexed as an appendix to (but shall not form part of) theseBye-Laws; and
| | | (d) the Board shall not attach to any Undesignated Share any rights or restrictions which would alter or abrogate any of the special rights attached to any other class of series of shares for the time being in issue without such sanction as is required for any alteration or abrogation of such rights, unless expressly authorised to do so by the rights attaching to or by the terms of issue of such other class or series.
| | | (3) Preference shares. Without limiting the foregoing and subject to the Act, the Company may issue preference shares (“Preference Shares”) without any prior Shareholder approval which:
| | | (a) are liable to be redeemed on the happening of a specified event or events or on a given date or dates and/or;
| | | (b) are liable to be redeemed at the option of the Company and/or, if authorised by the Memorandum of Association of the Company, at the option of the holder.
| | | | | The terms and manner of the redemption of any redeemable shares created pursuant to thisBye-Law 44(3) shall be as the Board may by resolution determine. The terms of any redeemable preference shares may provide for the whole or any part of the amount due on redemption to be paid or satisfied otherwise than in cash, to the extent permitted by the Act.
| | | | | In addition, subject to any special rights conferred on the holders of any share or class of shares, any Preference Shares may be issued with or have attached thereto such preferred, deferred, qualified or other special rights or such restrictions, whether in regard to dividend, voting, return of capital or otherwise, as the Board may determine pursuant toBye-Law 44(2).
| | | (4) The Board may, at its discretion and without the sanction of a resolution of the Shareholders, authorise the purchase or acquisition by the Company of its own shares, of any class, at any price (whether at par or above or below par), and any shares to be so purchased or acquired may be selected in any manner whatsoever, upon such terms as the Board may in its discretion determine, provided always that such purchase or acquisition is effected in accordance with the provisions of the Act. The whole or any part of the amount payable on any such purchase may be paid or satisfied otherwise than in cash, to the extent permitted by the Act. Any shares acquired may be held as treasury shares in accordance with and subject to the Act.
| | | | | 45. Modification of rights
| | | (1) Subject to the Act, all or any of the special rights attached to any class of(i)common shares issued may from time to time (whether or not the Company is being wound up) be altered or abrogated with the consent in writing of the holders of not less thanthree-quartersa majorityof the issued shares of that class or with the sanction of a resolution passedwith the approval of a majority of the votes cast by the holdersof not less than three-quartersof the issued shares of that class at a separate general meeting of the holders of such shares voting in person or by proxyand (ii) preference shares issued may from time to time (whether or not the Company is being wound up) be altered or abrogated with the consent in writing of the holders of not less thantwo-thirds of the issued shares of that class or with the sanction of a resolution passed with the approval oftwo-thirds of the issued shares of that class outstanding at a separate general meeting of the holders of such shares voting in person or by proxy (or, in either case, such lower threshold as may be set forth in the instrument defining the rights of the applicable class of preference shares). To any such separate general meeting, all the provisions of theseBye-Laws as to general meetings of the Company shallmutatis mutandis apply, but so that the necessary quorum shall be two (2) or more persons holding or representing by proxy at leastthree-quartersa majorityof theissued shares of the relevant class, that every holder of shares of the relevant class shall be entitled on a poll to one vote for every such share held by him and that any holder of
|
115
| | | | | shares of the relevant class present in person or by proxy may demand a poll; provided, however, that if the Company or a class of Shareholders shall have only one Shareholder, such one Shareholder present in person or by proxy shall constitute the necessary quorum.
| | | (2) For the purposes of thisBye-Law, unless otherwise expressly provided by the rights attached to any shares or class of shares, those rights attaching to any class of shares for the time being shall not be deemed to be altered by:
| | | (a) the creation or issue of further shares ranking pari passu with them;
| | | (b) the creation or issue for full value (as determined by the Board) of further shares ranking as regards participation in the profits or assets of the Company or otherwise in priority to them; or
| | | (c) the purchase or redemption by the Company of any of its own shares.
| | | | | 46. Shares
| | | (1) Subject to the provisions of theseBye-Laws, the unissued shares of the Company (whether forming part of the original capital or any increased capital) shall be at the disposal of the Board, which may offer, allot, grant options over or otherwise dispose of them to such Persons, at such times and for such consideration and upon such terms and conditions as the Board may determine.
| | | (2) Subject to the provisions of theseBye-Laws, any shares of the Company held by the Company as treasury shares shall be at the disposal of the Board, which may hold all or any of the shares, dispose of or transfer all or any of the shares for cash or other consideration, or cancel all or any of the shares.
| | | (3) The Board may in connection with the issue of any shares exercise all powers of paying commission and brokerage conferred or permitted by law. Subject to the provisions of the Act, any such commission or brokerage may be satisfied by the payment of cash or by the allotment of fully or partly paid shares or partly in one way and partly in the other.
| | | (4) Shares may be issued in fractional denominations and in such event the Company shall deal with such fractions to the same extent as its whole shares, so that a share in a fractional denomination shall have, in proportion to the fraction of a whole share that it represents, all the rights of a whole share, including (but without limiting the generality of the foregoing) the right to vote, to receive dividends and distributions and to participate in awinding-up.
| | | | | 47. Registered holder of shares
| | | (1) The Company shall be entitled to treat the registered holder of any share as the absolute owner thereof and, accordingly, shall not be bound to recognize any equitable or other claim to, or interest in, such share on the part of any other Person.
| | | (2) Any dividend, interest or other moneys payable in cash in respect of shares may be paid by check or draft sent through the post directed to the Shareholder at such Shareholder’s address as recorded in the Register of Shareholders or, in the case of joint holders, to such address of the holder first named in the Register of Shareholders, or (subject to applicable law) to such Person and to such address as such holder or joint holders may in writing direct. If two or more Persons are registered as joint holders of any shares, anyone can give an effectual receipt for any dividend paid in respect of such shares.
| | | | | 48. Death of a joint holder
| | | Where two or more Persons are registered as joint holders of a share or shares then, in the event of the death of any joint holder or holders, the remaining joint holder or holders shall be absolutely entitled to such share or shares and the Company shall recognize no claim in respect of the estate of any joint holder except in the case of the last survivor of such joint holders. | | | | | 49. Share certificates
| | | (1) Every Shareholder shall be entitled to a certificate under the seal of the Company (or a facsimile thereof) specifying the number and, where appropriate, the class or series of shares held by such Shareholder and whether the same are fully paid up and, if not, how much has been paid thereon. The Company may determine, either generally or in a particular case, that any or all signatures on certificates may be printed thereon or affixed by mechanical means. NotwithstandingBye-Law 76, the Company may determine that a share certificate need not be signed on behalf of the Company or that the seal of the Company need not be attested.
| | | (2) The Company shall be under no obligation to complete and deliver a share certificate unless specifically called upon to do so by the Person to whom such shares have been allotted.
| | | (3) If any such certificate shall be proved to the satisfaction of the Company to have been worn out, lost, mislaid or destroyed, the Company may cause a new certificate to be issued and request an indemnity for the lost certificate if it sees fit.
|
116
| | | | | 50. Calls on shares
| | | (1) The Board may from time to time make such calls as it thinks fit upon the Shareholders in respect of any monies unpaid on the shares allotted to or held by such Shareholders and, if a call is not paid on or before the day appointed for payment thereof, the Shareholder may, at the discretion of the Board, be liable to pay the Company interest on the amount of such call at such rate as the Board may determine, from the date when such call was payable up to the actual date of payment. The joint holders of a share shall be jointly and severally liable to pay all calls in respect thereof.
| | | (2) The Board may, on the issue of shares, differentiate between the holders as to the amount of calls to be paid and the times of payment of such calls.
| | | (3) Any sum that, by the terms of allotment of a share, becomes payable upon issue or at any fixed date, whether on account of the nominal value of the share or by way of premium, shall for all of the purposes of theseBye-Laws be deemed to be a call duly made and payable, on the date on which, by the terms of issue, the same becomes payable and, in case ofnon-payment, all of the relevant provisions of theseBye-Laws as to payment of interest, costs, charges and expenses, forfeiture or otherwise shall apply as if such sum had become payable by virtue of a call duly made and notified.
| | | (4) The Company may accept from any Shareholder the whole or a part of the amount remaining unpaid on any shares held by him, although no part of that amount has been called up.
| | | | | 51. Forfeiture of shares
| | | (1) If any Shareholder fails to pay, on the day appointed for payment thereof, any call in respect of any share allotted to or held by such Shareholder, the Board may, at any time thereafter during such time as the call remains unpaid, direct the Secretary to forward to such Shareholder a notice in the form (or as near thereto as circumstances admit) set forth in Schedule A hereto.
| | | (2) If the requirements of such notice are not complied with, any such share may at any time thereafter before the payment of such call and the interest due in respect thereof be forfeited by a resolution of the Board to that effect, and such share shall thereupon become the property of the Company and may be disposed of as the Board shall determine.
| | | (3) A Shareholder whose share or shares have been forfeited as aforesaid shall, notwithstanding such forfeiture, be liable to pay to the Company all calls owing on such share or shares at the time of the forfeiture and all interest due thereon.
| | | (4) The Board may accept the surrender of any shares that it is in a position to forfeit on such terms and conditions as may be agreed. Subject to those terms and conditions, a surrendered share shall be treated as if it has been forfeited.
| | | | | | Interested shareholders
| | | | | 52. Limitations on business combinations.
| | | Notwithstanding anything contained herein to the contrary, the Company shall not engage in any Business Combination with any Interested Shareholder for a period of 3 years following the time that such Shareholder became an Interested Shareholder, unless: (a) prior to such time the Board approved either the Business Combination or the transaction which resulted in the Shareholder becoming an Interested Shareholder; (b) upon consummation of the transaction which resulted in the Shareholder becoming an Interested Shareholder, the Interested Shareholder Beneficially Owned at least 85% of the total voting stock of the Company outstanding at the time the transaction commenced, excluding for purposes of determining the total voting stock outstanding (but not the outstanding voting stock Beneficially Owned by the Interested Shareholder) those shares Beneficially Owned (i) by persons who are Directors and also Officers and (ii) employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or (c) at or subsequent to such time the Business Combination is approved by the Board and authorized at an annual general meeting or special general meeting of Shareholders, and not by written consent, by the affirmative vote of at leasttwo-thirds of the outstanding voting stock which isa majority of thevotes cast by holders of shares that are not Beneficially Owned by the Interested Shareholder. | | | | | 53. Certain definitions
| | | (1) “Associate” has the meaning ascribed to such term in Rule12b-2 of the Exchange Act.
| | | (2) As used inBye-Laws52-53, a Person shall be deemed the “Beneficial Owner” of and shall be deemed to “beneficially own” any securities:
| | | (a) which such Person or any of such Person’s Affiliates or Associates beneficially owns, directly or indirectly;
| | | (b) which such Person or any of such Person’s Affiliates or Associates has (i) the right to acquire (whether such right is exercisable immediately or only after the passage
|
117
| | | | | of time) pursuant to any agreement, arrangement or understanding (other than customary agreements with and between underwriters and selling group members with respect to abona fide public offering of securities), or upon the exercise of conversion rights, exchange rights, rights, warrants or options, or otherwise;provided,however, that a Person shall not be deemed the Beneficial Owner of, or to beneficially own, securities tendered pursuant to a tender or exchange offer made by or on behalf of such Person or any of such Person’s Affiliates or Associates until such tendered securities are accepted for purchase or exchange; or (ii) the right to vote pursuant to any agreement, arrangement or understanding;provided,however, that a Person shall not be deemed the Beneficial Owner of, or to beneficially own, any security if the agreement, arrangement or understanding to vote such security (x) arises solely from a revocable proxy or consent given to such Person in response to a public proxy or consent solicitation made pursuant to, and in accordance with, the applicable rules and regulations promulgated under the Exchange Act and (y) is not also then reportable on Schedule 13D under the Exchange Act; or
| | | (c) which are beneficially owned, directly or indirectly, by any other Person with which such Person or any of such Person’s Affiliates or Associates has any agreement, arrangement or understanding (other than customary agreements with and between underwriters and selling group members with respect to a bona fide public offering of securities) for the purpose of acquiring, holding, voting (except to the extent contemplated by the proviso to clause (ii) of the preceding subsection (b)) or disposing of any securities of the Company.
| | | (d) Notwithstanding anything in this definition of Beneficial Ownership to the contrary, the phrase “then outstanding,” when used with reference to a Person’s Beneficial Ownership of securities of the Company, shall mean the number of such securities then issued and outstanding together with the number of such securities not then actually issued and outstanding which such Person would be deemed to own beneficially hereunder.
| | | (3) “Business combination”means any:
| | | (a) merger, amalgamation, scheme of arrangement or consolidation of the Company or any direct or indirect majority-owned subsidiary of the Company with (i) the Interested Shareholder, or (ii) with any other corporation, partnership, unincorporated association or other entity if the merger or consolidation is caused by the Interested Shareholder;
| | | (b) sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), except proportionately as a Shareholder, to or with the Interested Shareholder, whether as part of a dissolution or otherwise, of assets of the Company or of any direct or indirect majority-owned subsidiary of the Company which assets have an aggregate market value equal to 10% or more of either the aggregate market value of all the assets of the Company determined on a consolidated basis or the aggregate market value of all the outstanding stock of the Company;
| | | (c) transaction which results in the issuance or transfer by the Company or by any direct or indirect majority-owned subsidiary of the Company of any stock of the Company or of such subsidiary to the Interested Shareholder, except (i) Pursuant to the exercise, exchange or conversion of securities exercisable for, exchangeable for or convertible into stock of such corporation or any such subsidiary which securities were outstanding prior to the time that the Interested Shareholder became such, (ii) pursuant to a dividend or distribution paid or made, or the exercise, exchange or conversion of securities exercisable for, exchangeable for or convertible into stock of such corporation or any such subsidiary which security is distributed, pro rata to all holders of a class or series of stock of such corporation subsequent to the time the Interested Shareholder became such; (iii) pursuant to an exchange offer by the Company to purchase stock made on the same terms to all holders of said stock; or (iv) any issuance or transfer of stock by the Company; provided however, that in no case under items (i)-(iv) of this subparagraph shall there be an increase in the Interested Shareholder’s proportionate share of the stock of any class or series of the Company or of the voting stock of the Company;
| | | (d) transaction involving the Company or any direct or indirect majority-owned subsidiary of the Company which has the effect, directly or indirectly, of increasing the proportionate share of the stock of any class or series, or securities convertible into the stock of any class or series, of the Company or of any such subsidiary which is Beneficially Owned by the Interested Shareholder, except as a result of immaterial changes due to fractional share adjustments or as a result of any purchase or redemption of any shares of stock not caused, directly or indirectly, by the Interested Shareholder; or
| | | (e) receipt by the Interested Shareholder of the benefit, directly or indirectly (except proportionately as a Shareholder of such corporation), of any loans, advances, guarantees, pledges or other financial benefits (other than those expressly permitted
|
118
| | | | | in subparagraphs (a)-(d) of this paragraph) provided by or through the Company or any direct or indirect majority-owned subsidiary.
| | | (4) “Interested shareholder” means any Person (other than the Company and any direct or indirect majority-owned subsidiary of the Company) that (i) is the Beneficial Owner of 15% or more of the outstanding voting stock of the Company, or (ii) is an Affiliate or Associate of the Company and was the Beneficial Owner of 15% or more of the outstanding voting stock of the Company at any time within the3-year period immediately prior to the date on which it is sought to be determined whether such Person is an Interested Shareholder, and the Affiliates and Associates of such Person; provided, however, that the term “Interested Shareholder” shall not include (x) any Person who becomes an Interested Shareholder inadvertently and (i) as soon as practicable divests itself of Beneficial Ownership of sufficient shares so that the Shareholder ceases to be an Interested Shareholder and (ii) would not, at any time within the3-year period immediately prior to a Business Combination between the Company and such Shareholder, have been an Interested Shareholder but for the inadvertent acquisition of ownership; or (y) any Person whose Beneficial Ownership of shares in excess of the 15% limitation set forth herein is the result of action taken solely by the Company;provided that such Person shall be an Interested Shareholder if thereafter such Person acquires additional shares of voting stock of the Company, except as a result of further corporate action not caused, directly or indirectly, by such Person;provided further that no savings, profit sharing, stock bonus or employee stock ownership plan or plans established or sponsored by the Company (or any subsidiary of the Company or any predecessor of the Company or any subsidiary) and qualified under Section 401(a) of the Internal Revenue Code of 1986, as amended, or any comparable provisions of anynon-U.S. law, which holds Common Shares on behalf of participating employees and their beneficiaries with the right to instruct the trustee how to vote such Common Shares with respect to all matters submitted to Shareholders shall not be deemed to be an “Interested Shareholder.”
| | | | | | Register of shareholders
| | | | | 54. Contents of Register of Shareholders
| | | The Board shall cause to be kept in one or more books a Register of Shareholders and shall enter therein the particulars required by the Act. | | | | | 55. Inspection of Register of Shareholders
| | | The Register of Shareholders shall be open to inspection at the registered office of the Company on every Business Day, subject to such reasonable restrictions as the Company may impose, so that not less than two hours in each Business Day be allowed for inspection. The Register of Shareholders may, after notice has been given by advertisement in an appointed newspaper to that effect, be closed for any time or times not exceeding in the whole thirty days in each year. | | | | | 56. Determination of record dates
| | | Notwithstanding any other provision of theseBye-Laws, the Board may fix any date as the record date for: | | | (a) determining the Shareholders entitled to receive any dividend or distribution; and
| | | (b) determining the Shareholders entitled to receive notice of and to vote at any general meeting of the Company.
| | | | | | Transfer of shares
| | | | | 57. Instrument of transfer
| | | (1) Subject to paragraph (4) ofBye-Law 58, an instrument of transfer shall be in the form (or as near thereto as circumstances admit) set forth inSchedule B hereto or in such other common form as the Company may accept. Such instrument of transfer shall be signed by or on behalf of the transferor and transferee,provided that, in the case of a fully paid share, the Company may accept the instrument signed by or on behalf of the transferor alone. The transferor shall be deemed to remain the holder of such share until the same has been transferred to the transferee in the Register of Shareholders.
| | | (2) The Company may refuse to recognize any instrument of transfer unless it is accompanied by the certificate in respect of the shares to which it relates and by such other evidence as the Company may reasonably require to show the right of the transferor to make the transfer.
|
119
| | | | | 58. Restrictions on transfer
| | | (1) Unless otherwise required by any applicable requirements of the New York Stock Exchange (or any other applicable stock exchange), the Company (i) may decline to approve or to register any transfer of any share if a written opinion from counsel acceptable to the Company shall not have been obtained to the effect that registration of such shares under the U.S. Securities Act of 1933, as amended, is not required and (ii) shall decline to approve or to register any transfer of any share if the transferee shall not have been approved by applicable governmental authorities if such approval is required or if not in compliance with applicable consent, authorization or permission of any governmental body or agency in Bermuda.
| | | (2) If the Company refuses to register a transfer of any share, the Secretary shall send, or procure that there shall be sent, within one month after the date on which the transfer was lodged with the Company, to the transferor and transferee notice of the refusal.
| | | (3) The registration of transfers may be suspended at such times and for such periods as the Company may from time to time determine,provided always that such registration shall not be suspended for more than 45 days in any year.
| | | (4) Shares may be transferred without a written instrument if transferred by an appointed agent or otherwise in accordance with the Act.
| | | | | | Transmission of shares
| | | | | 59. Representative of deceased shareholder
| | | In the case of the death of a Shareholder, the survivor or survivors where the deceased Shareholder was a joint holder, and the legal personal representatives of the deceased Shareholder where the deceased Shareholder was a sole holder, shall be the only persons recognized by the Company as having any title to the deceased Shareholder’s interest in the shares. Nothing herein contained shall release the estate of a deceased joint holder from any liability in respect of any share that had been jointly held by such deceased Shareholder with other persons. Subject to the provisions of the Act, for the purpose of this Bye-Law 59, “legal personal representative” means the executor or administrator of a deceased Shareholder or such other Person as the Company may decide as being properly authorized to deal with the shares of a deceased Shareholder. | | | | | 60. Registration on death or bankruptcy
| | | Any Person becoming entitled to a share in consequence of the death or bankruptcy of any Shareholder may be registered as a Shareholder upon such evidence as the Company may deem sufficient or may elect to nominate another Person to be registered as a transferee of such share, and in such case such Person becoming entitled shall execute in favor of such nominee an instrument of transfer in the form (or as near thereto as circumstances admit) set forth inSchedule C hereto. On the presentation thereof to the Company, accompanied by such evidence as the Company may require to prove the title of the transferor, the transferee shall be registered as a Shareholder,provided that the Company shall, in either case, have the same right to decline or suspend registration as it would have had in the case of a transfer of the share by such Shareholder before such Shareholder’s death or bankruptcy, as the case may be. | | | | | | Dividends and other distributions
| | | | | 61. Declaration of dividends by the board
| | | (1) The Board may, subject to these Bye-Laws and in accordance with the Act, declare a dividend to be paid to the Shareholders in proportion to the number of shares held by them, and such dividend may be paid in cash or wholly or partly in specie in which case the Board may fix the value for distribution in specie of any assets. No unpaid dividend shall bear interest as against the Company.
| | | (2) The Company may pay dividends in proportion to the amount paid up on each share where a larger amount is paid up on some shares than on others.
| | | | | 62. Other distributions
| | | The Board may declare and make such other distributions (in cash or in specie) to the Shareholders as may be lawfully made out of the assets of the Company. No unpaid distribution shall bear interest as against the Company. | | | | | 63. Reserve Fund
| | | The Board may from time to time before declaring a dividend set aside, out of the surplus or profits of the Company, such sum as it thinks proper as a reserve to be used to meet contingencies or for equalizing dividends or for any other special purpose. |
120
| | | | | 64. Deduction of amounts due to the company
| | | The Board may deduct from the dividends or distributions payable to any Shareholder all monies due from such Shareholder to the Company on account of calls. | | | | | | Capitalization
| | | | | 65. Issue of bonus shares: capitalization of profits
| | | (1) The Board may resolve to capitalize any part of the amount for the time being standing to the credit of any of the Company’s share premium or other reserve accounts or to the credit of the profit and loss account or otherwise available for distribution by applying such sum in paying up unissued shares to be allotted as fully paid bonus shares pro rata to the Shareholders.
| | | (2) The Board may from time to time resolve to capitalise all or any part of any amount for the time being standing to the credit of any reserve or fund which is available for distribution or to the credit of any share premium account and accordingly that such amount be set free for distribution amongst the Shareholders or any class of Shareholders who would be entitled thereto if distributed by way of dividend and in the same proportions, on the footing that the same be not paid in cash but be applied either in or towards paying up amounts for the time being unpaid on any shares in the Company held by such Shareholders respectively or in payment up in full of unissued shares, debentures or other obligations of the Company, to be allotted and distributed credited as fully paid amongst such Shareholders, or partly in one way and partly in the other, provided that for the purpose of this Bye-Law 65, a share premium account may be applied only in paying up of unissued shares to be issued to such Shareholders credited as fully paid. Where any difficulty arises in regard to any distribution under thisBye-Law 65, the Board may settle the same as it thinks expedient and, in particular, may authorise any Person to sell and transfer any fractions or may resolve that the distribution should be as nearly as may be practicable in the correct proportion but not exactly so or may ignore fractions altogether, and may determine that cash payments should be made to any Shareholders in order to adjust the rights of all parties, as may seem expedient to the Board. The Board may appoint any person to sign on behalf of the Persons entitled to participate in the distribution any contract necessary or desirable for giving effect thereto and such appointment shall be effective and binding upon the Shareholders.
| | | | | | Accounts and financial statements
| | | | | 66. Records of account
| | | The Board shall cause to be kept proper records of account with respect to all transactions of the Company and in particular with respect to: | | | (a) all sums of money received and expended by the Company and the matters in respect of which the receipt and expenditure relates;
| | | (b) all sales and purchases of goods by the Company; and
| | | (c) the assets and liabilities of the Company.
| | | | | Such records of account shall be kept at the registered office of the Company or, subject to the Act, at such other place as the Company may determine and shall be available for inspection by the Directors during normal business hours.
| | | | | 67. Financial year end
| | | The financial year end of the Company may be determined by resolution of the Board and failing such resolution shall be 31st December of each year. | | | | | 68. Financial statements
| | | Subject to any rights to waive laying of accounts pursuant to the Act, financial statements as required by the Act shall be laid before the Shareholders at the annual general meeting of Shareholders. | | | | | | Audit
| | | | | 69. Appointment of auditor
| | | The Company shall appoint Auditors to hold office for such period and otherwise as in accordance with the Act. Whenever a casual vacancy occurs in the office of the Auditors, the audit committee may appoint Auditors to hold office until the close of the next annual general meeting. No Auditor may be a Shareholder and no Director, Officer or employee of the Company shall, during his or her continuance in office, be eligible to act as an Auditor of the Company. |
121
| | | | | 70. Remuneration of auditor
| | | Unless fixed by the Company in a general meeting, the remuneration of the Auditor shall be as determined by the audit committee. | | | | | 71. Report of the auditor
| | | Subject to any rights to waive laying of accounts or appointment of an Auditor pursuant to provisions of the Act, the accounts of the Company shall be audited by the Auditor at least once in every year. | | | | | | Notices
| | | | | 72. Notices to shareholders of the company
| | | A notice may be given by the Company to any Shareholder either by delivering it to such Shareholder in person or by sending it to such Shareholder’s address in the Register of Shareholders or to such other address given for the purpose. For the purposes of thisBye-Law 72, a notice may be sent by mail, courier service, facsimile, email or other mode of representing words in a legible form. | | | | | 73. Notices to joint shareholders
| | | Any notice required to be given to a Shareholder shall, with respect to any shares held jointly by two or more Persons, be given to whichever of such Persons is named first in the Register of Shareholders and notice so given shall be sufficient notice to all of the holders of such shares. | | | | | 74. Service and delivery of notice
| | | Any notice shall be deemed to have been served at the time when the same would be delivered in the ordinary course of transmission (which shall be deemed to be two calendar days from deposit in the case of mail) and, in proving such service, it shall be sufficient to prove that the notice was properly addressed and prepaid, if mailed, and the time when it was mailed, delivered to the courier or transmitted by facsimile, email, or such other method, as the case may be. | | | | | | Seal of the company
| | | | | 75. The seal
| | | The seal of the Company shall be in such form as the Board may from time to time determine. The Board may adopt one or more duplicate seals. | | | | | 76. Manner in which seal is to be affixed
| | | Subject toBye-Law 48, the seal of the Company shall not be affixed to any instrument except attested by the signature of a Director and the Secretary or any two Directors, or any person appointed by the Board for the purpose, provided that any Director, Officer or Resident Representative, may affix the seal of the Company attested by such Director, Officer or Resident Representative’s signature to any authenticated copies of theseBye-Laws, the incorporating documents of the Company, the minutes of any meetings or any other documents required to be authenticated by such Director, Officer or Resident Representative.Any such signature may be printed or affixed by mechanical means on any share certificate, debenture, share or other security certificate. | | | | | | Winding-up
| | | | | 77. Winding-up/distribution by liquidator
| | | If the Company shall be wound up, the liquidator may, with the sanction of a resolution of the Shareholders, divide amongst the Shareholders in specie or in kind the whole or any part of the assets of the Company (whether they shall consist of property of the same kind or not) and may, for such purpose, set such value as he deems fair upon any property to be divided as aforesaid. The liquidator may, with the like sanction, vest the whole or any part of such assets in trustees upon such trusts as the liquidator shall think fit for the benefit of the Shareholders, provided that no Shareholder shall be compelled to accept any shares or other securities or assets whereon there is any liability. |
122
| | | | | Alteration ofbye-laws
| | | | | 78. Alteration ofbye-laws
| | | NoBye-Law shall be rescinded, altered or amended and no newBye-Law shall be made until the same has been approved by a resolution of the Board and by a resolution of the Shareholders; provided that (i)the approval of such resolution of the Shareholders with respect to anyno such rescission, alteration or amendment of, or the adoption of anyBye-Law or provision inconsistent with,Bye-Laws 8, 10, 11, 12, 35, 44, 52 and 53, thisBye-Law7845 or any material defined term used inany suchBye-Laws shall requiresuchBye-Law, shall permit the alteration or abrogation of any of the special rights attached to any class of preference shares then outstanding unless such rescission, alteration or amendment, or such newBye-Law, receives the affirmative vote of the holders of atleastthree-quarters of the total combined voting power of alltwo-thirds of the issued and outstanding shares ofthe Companythat class (or such lower threshold as may be set forth in the instrument defining the rights of that class), and (ii)anyno such rescission, alteration or amendment of, or the adoption of anyBye-Law or provision inconsistent with,Bye-Law 25 or 26 or any material defined term used in suchBye-Laws, shallnot affect the waiver of any claim or right of action with respect to past acts or omissions. |
123
| | | | | Appendix D | | | | | | Proposed Amendment to the Invesco Ltd. 2016 Global Equity Incentive Plan | | | | | First Amendment to the Invesco Ltd. 2016 Global Equity Incentive Plan | | | | | THIS FIRST AMENDMENT (this “Amendment”) is made as (As Amended And Restated June 15, 2021)1. Purpose The purpose of February 7, 2019 to the Invesco Ltd. 2016 Global Equity Incentive Plan (the “Plan”) is to give Invesco Ltd., a company organized under the laws of Bermuda (the “Company”) a competitive advantage in attracting, retaining and motivating officers, employees, directors and/or consultants and to provide the Company and its Affiliates with a long-term incentive plan providing incentives directly linked to Shareholder value. 2. Effective Date and Term of Plan The Plan was initially adopted by the Board on February 11, 2016 and was amended effective May 9, 2019. This amendment and restatement was adopted by the Board on February 18, 2021 and, pending shareholder approval, is effective as of June 15, 2021 (the “Effective Date”). AnyAwards may be granted under the Plan until the date that is ten years after the Effective Date, unless the Plan is discontinued earlier pursuant to Section 14. 3. Types of Awards Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units and Other Stock-Based Awards may be granted under the Plan. 4. Definitions Except as otherwise specifically provided in an Award Agreement, each capitalized termsword, term or phrase used and not defined hereinin the Plan shall have the meaningsmeaning set forth in this Section 4 or, if not defined in this Section, the first place that it appears in the Plan. “Affiliate” means a corporation or other entity controlled by, controlling or under common control with, the Company; provided, however, that solely for purposes of determining whether a Participant has a Termination of Service that is a “separation from service” within the meaning of Section 409A of the Code, an “Affiliate” of a corporation or other entity means all other entities with which such corporation or other entity would be considered a single employer under Sections 414(b) or 414(c) of the Code. “Applicable Exchange” means the New York Stock Exchange or such other securities exchange as may at the applicable time be the principal market for the Shares. “Award” means an Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Unit or Other Stock-Based Award granted pursuant to the terms of the Plan. “Award Agreement” means a written document or agreement setting forth the terms and conditions of a specific Award and any addendum thereto. “Beneficiary” means the person(s) or trust(s) entitled by will or the laws of descent and distribution to receive any amounts payable or exercise any applicable rights under the Participant’s Awards after the Participant’s death. “Board” means the Board of Directors of the Company. “Cause” means, with respect to a Participant, (i) if such Participant is a party to an Individual Agreement at the time of the Termination of Service that defines such term (or word(s) of similar meaning), the meaning given in such Individual Agreement or (ii) if there is no such Individual Agreement or if it does not define Cause (or word(s) of similar meaning): (A) the Participant’s plea of guilty or nolo contendere to, or conviction of, (1) a felony (or its equivalent in a non-United States jurisdiction) or (2) other conduct of a criminal nature that has or is likely to have a material adverse effect on the reputation or standing in the community of the Company or any of its Affiliates, as determined by the Committee in its sole discretion, or that legally prohibits the Participant from working for the Company or any of its Affiliates; (B) a breach by the Participant of a regulatory rule that adversely affects the Participant’s ability to perform the Participant’s employment duties to the Company or any of its Affiliates in any material respect; (C) the Participant’s failure, in each case in any material respect, to (1) perform the Participant’s employment duties, (2) comply with the applicable policies of the Company or any of its Affiliates, (3) follow reasonable directions received from the Company or any of its Affiliates or (4) comply with covenants contained in any Individual Agreement or Award Agreement to which the Participant is a party; or (D) with respect to Participants employed outside of the United States, such other definition as may be codified under local laws, rules and regulations. With respect to a Participant’s termination of directorship, “Cause” shall include only an act or failure to act that constitutes cause for removal of a director under the Company’s Bye-Laws.
“Change in Control” means any of the following events: (i) the acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of twenty-five percent (25%) or more of either (A) the then outstanding shares of the Company (the “Outstanding Company Shares”) or (B) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that for purposes of this subsection (i), the following acquisitions shall not constitute a Change in Control: (1) any acquisition directly from the Company; (2) any acquisition by the Company; (3) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company; or (4) any acquisition pursuant to a transaction which complies with clauses (A), (B) and (C) of subsection (iii) below; or (ii) during any period of twelve (12) consecutive months, individuals who, as of January 1, 2021 constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to January 1, 2021 whose election, or nomination for election by the Company’s Shareholders, was approved by a vote of at least two-thirds (2/3) of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or (iii) consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company or the acquisition of assets of another entity (each, a “Corporate Transaction”), in each case, unless, following such Corporate Transaction, (A) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Shares and Outstanding Company Voting Securities immediately prior to such Corporate Transaction beneficially own, directly or indirectly, more than fifty percent (50%) of, respectively, the then outstanding shares and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation or other entity resulting from such Corporate Transaction (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Corporate Transaction of the Outstanding Company Shares and Outstanding Company Voting Securities, as the case may be, (B) no Person (excluding any employee benefit plan or related trust of the Company or of such corporation resulting from such Corporate Transaction) beneficially owns, directly or indirectly, twenty-five percent (25%) or more of, respectively, the then outstanding shares of the corporation resulting from such Corporate Transaction or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Corporate Transaction and (C) at least a majority of the members of the board of directors of the corporation (or other governing board of a non-corporate entity) resulting from such Corporate Transaction were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Corporate Transaction; or (iv) approval by the Shareholders of the Company of a complete liquidation or dissolution of the Company. Notwithstanding the foregoing, an event described above shall be a Change in Control with respect to an Award that constitutes a “nonqualified deferred compensation plan” within the meaning of Section 409A of the Code only if such event is also a change in the ownership or effective control of the Company or a change in the ownership of a substantial portion of the assets of the Company within the meaning of Section 409A of the Code to the extent necessary to avoid the imposition of any tax or interest or the inclusion of any amount in income thereunder. “Code” means the Internal Revenue Code of 1986, as amended from time to time, and any successor thereto, the Treasury Regulations thereunder and other relevant interpretive guidance issued by the Internal Revenue Service or the Treasury Department. Reference to any specific section of the Code shall be deemed to include such regulations and guidance, as well as any successor section, regulations and guidance. “Committee” means the Compensation Committee of the Board or such other committee or subcommittee of the Board as may be appointed by the Board to act as the Committee under the Plan. If at any time there is no such Compensation Committee or other committee or subcommittee appointed by the Board, the Board shall be the Committee. The Committee shall consist of two or more directors, each of whom is intended to be, to the extent required by Rule 16b-3 of the Exchange Act, a “non-employee director” as defined in Rule 16b-3 of the Exchange Act and, to the extent required by Section 162(m) of the Code, an “outside director” as defined under Section 162(m) of the Code. Any member of the Committee who does not meet the foregoing requirements shall abstain from any decision regarding an Award and shall not be considered a member of the Committee to the extent required to comply with Rule 16b-3 of the Exchange Act or Section 162(m) of the Code.
“Disability” means, with respect to a Participant, (i) a “disability” (or words of similar meaning) as defined in any Individual Agreement to which the Participant is a party or (ii) if there is no such Individual Agreement or it does not define “disability” (or words of similar meaning): (A) a permanent and total disability as determined under the long-term disability plan applicable to the Participant; (B) if there is no such plan applicable to the Participant, “Disability” as determined by the Committee in its sole discretion; or (C) with respect to Participants employed outside the United States, such other definition as may be codified under local laws, rules and regulations. The Committee may require such medical or other evidence as it deems necessary to judge the nature and permanency of the Participant’s condition. Notwithstanding the foregoing, with respect to an Incentive Stock Option, “Disability” shall mean a “Permanent and Total Disability” as defined in Section 22(e)(3) of the Code and, with respect to any Award that constitutes a “nonqualified deferred compensation plan” within the meaning of Section 409A of the Code, “Disability” shall mean a “disability” as defined under Section 409A of the Code to the extent necessary to avoid the imposition of any tax or interest or the inclusion of any amount in income thereunder. “Disaffiliation” means an Affiliate’s or business division’s ceasing to be an Affiliate or business division for any reason (including, without limitation, as a result of a public offering, or a spinoff or sale by the Company, of the stock of the Affiliate or a sale of a business division of the Company). “Eligible Individuals” means non-employee directors, officers, employees and consultants of the Company or any of its Affiliates, and prospective officers, employees and consultants who have accepted offers of employment or consultancy from the Company or any of its Affiliates. “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, and any successor thereto. Reference to any specific section of the Exchange Act shall be deemed to include such regulations and guidance issued thereunder, as well as any successor section, regulations and guidance. “Fair Market Value” means, unless otherwise determined by the Committee, the closing price of a Share on the Applicable Exchange on the date of measurement or, if Shares are not traded on the Applicable Exchange on such measurement date, then on the next preceding date on which Shares are traded, all as reported by such source as the Committee may select. If the Shares are not listed on a national securities exchange, Fair Market Value shall be determined by the Committee in its good faith discretion. “Good Reason” means, with respect to a Participant, during the 24-month period following a Change in Control, actions taken by the Company or any of its Affiliates resulting in a material negative change in the employment relationship of the Participant who is an officer or an employee including, without limitation: (i) the assignment to the Participant of duties materially inconsistent with the Participant’s position (including status, titles and reporting requirements), authority, duties or responsibilities, or a material diminution in such position, authority, duties or responsibilities, in each case from those in effect immediately prior to the Change in Control; (ii) a material reduction of the Participant’s aggregate annual compensation, including, without limitation, base salary and annual bonus opportunity, from that in effect immediately prior to the Change in Control; (iii) a change in the Participant’s principal place of employment that increases the Participant’s commute by 40 or more miles or materially increases the time of the Participant’s commute as compared to the Participant’s commute immediately prior to the Change in Control; or (iv) any other action or inaction that constitutes a material breach by the Company or an Affiliate of any Individual Agreement. In order to invoke a Termination of Service for Good Reason, a Participant must provide written notice to the Company or Affiliate with respect to which the Participant is employed or providing services of the existence of one or more of the conditions constituting Good Reason within ninety (90) days following the Participant’s knowledge of the initial existence of such condition or conditions, specifying in reasonable detail the conditions constituting Good Reason, and the Company shall have thirty (30) days following receipt of such written notice (the “Cure Period”) during which it may remedy the condition. In the event that the Company or Affiliate fails to remedy the condition constituting Good Reason during the applicable Cure Period, the Participant’s Termination of Service must occur, if at all, within ninety (90) days following such Cure Period in order for such termination as a result of such condition to constitute a Termination of Service for Good Reason. “Grant Date” means (i) the date on which the Committee by resolution selects an Eligible Individual to receive a grant of an Award, establishes the number of Shares to be subject to such Award and, in the case of an Option or Stock Appreciation Right, establishes the exercise price of such Award or (ii) such later date as the Committee shall provide in such resolution.
“Incentive Stock option” means any Option that is designated in the applicable Award Agreement as an “incentive stock option” within the meaning of Section 422 of the Code and otherwise meets the requirements to be an “incentive stock option” set forth in Section 422 of the Code. “Individual Agreement” means a written employment, consulting or similar agreement between a Participant and the Company or one of its Affiliates. “ISO Eligible Employees” means an employee of the Company, any subsidiary corporation (within the meaning of Section 424(f) of the Code) or parent corporation (within the meaning of Section 424(e) of the Code). “Nonqualified Option” means any Option that is not an Incentive Stock Option. “Option” means an Incentive Stock Option or Nonqualified Option granted under Section 8. “Other Stock-Based Award” means an Award of Shares or any other Award that is valued in whole or in part by reference to, or is otherwise based upon, Shares, including (without limitation) unrestricted stock, dividend equivalents and convertible debentures, granted under Section 11. “Participant” means an Eligible Individual to whom an Award is or has been granted and who has accepted the terms and conditions of the Plan as set forth in Section 5(f) hereof. “Performance Goals” means the performance goals established by the Committee in connection with the grant of Awards. In the case of Qualified Performance-Based Awards, (i) such goals shall be based on the attainment of specified levels of one or more of the following objective measures with regard to the Company (or an Affiliate, business division or other operational unit of the Company): operating revenues, annual revenues, net revenues, clients’ assets under management (“AUM”), gross sales, net sales, net asset flows, revenue weighted net asset flows, cross selling of investment products across regions and distribution channels, investment performance by account or weighted by AUM (relative and absolute performance), investment performance ratings as measured by recognized third parties, risk adjusted investment performance (information ratio, Sharpe ratio), expense efficiency ratios, expense management, operating margin, adjusted operating margin, net revenue yield on AUM, client redemption rates and new account wins and size of pipeline, market share, customer service measures or indices, success of new product launches as measured by revenues, asset flows, AUM and investment performance, profit margin, operating profit margin, earnings (including earnings before taxes, earnings before interest and taxes or earnings before interest, taxes, depreciation and amortization), earnings per share, adjusted earnings per share, diluted earnings per share, adjusted diluted earnings per share, earnings per share growth, adjusted earnings per share growth, diluted earnings per share growth, adjusted diluted earnings per share growth, operating income (including pre-cash bonus operating income or pre-incentive operating income), adjusted operating income (including pre-cash bonus adjusted operating income or pre-incentive adjusted operating income), cash bonus expense, incentive expense, pre- or after-tax income, net income, adjusted net income, free cash flow (operating cash flow less capital expenditures), cash flow per share, return on equity (or return on equity adjusted for goodwill), return on capital (including return on total capital or return on invested capital), return on investment, stock price appreciation, total shareholder return (measured in terms of stock price appreciation and dividend growth), cost control, business expansion or consolidation, diversification of AUM by investment objectives, growth in global position (AUM domiciled outside of United States), diversified distribution channels, successful integration of acquisitions, market value of a business or group based on independent third-party valuation) or change in working capital, and (ii) such Performance Goals shall be set by the Committee within the time period prescribed by Section 162(m) of the Code. “Performance Period” means that period established by the Committee during which any Performance Goals specified by the Committee with respect to such Award are to be measured. “Qualified Performance-Based Award” means an Award intended to qualify for the Section 162(m) Exemption, as provided in Section 13. “Restricted Stock” means an Award granted under Section 9. “Restricted Stock Unit” means an Award granted under Section 10. “Restriction Period” means, with respect to Restricted Stock and Restricted Stock Units, the period commencing on the date of such Award to which vesting restrictions apply and ending upon the expiration of the applicable vesting conditions and/or the achievement of the applicable Performance Goals (it being understood that the Committee may provide that restrictions shall lapse with respect to portions of the applicable Award during the Restriction Period).
“Section 162(m) Exemption” means the exemption from the limitation on deductibility imposed by Section 162(m) of the Code that is set forth in Section 162(m)(4)(C) of the Code. “Share” or “Shares” means common shares, par value $0.20 each, of the Company or such other equity securities that may become subject to an Award. “Shareholder” has the same meaning as the term “Member” in the Companies Act 1981 of Bermuda. “Stock Appreciation Right” means an Award granted under Section 8(b). “Term” means the maximum period during which an Option, Stock Appreciation Right or, if applicable, Other Stock-Based Award may remain outstanding as specified in the applicable Award Agreement. “Termination of Service” means the termination of the Participant’s employment or consultancy with, or performance of services (including as a director) for, the Company and any of its Affiliates or, in the case of a director, when a director no longer holds office as a director of the Company. For Participants employed outside the United States, the date on which such Participant incurs a Termination of Service shall be the earlier of (i) the last day of the Participant’s active service with the Company and its Affiliates or (ii) the last day on which the Participant is considered an employee of the Company and its Affiliates, as determined in each case without including any required advance notice period and irrespective of the status of the termination under local labor or employment laws. Temporary absences from employment because of illness, vacation or leave of absence and transfers among the Company and its Affiliates shall not be considered Terminations of Service. With respect to any Award that constitutes a “nonqualified deferred compensation plan” within the meaning of Section 409A of the Code, “Termination of Service” shall mean a “separation from service” as defined under Section 409A of the Code to the extent required by Section 409A of the Code to avoid the imposition of any tax or interest or the inclusion of any amount in income thereunder. A Participant has a separation from service within the meaning of Section 409A of the Code if the Participant terminates employment with the Company and all Affiliates for any reason. A Participant will generally be treated as having terminated employment with the Company and all Affiliates as of a certain date if the Participant and the Company or Affiliate that employs the Participant reasonably anticipate that the Participant will perform no further services for the Company or any Affiliate after such date or that the level of bona fide services that the Participant will perform after such date (whether as an employee or an independent contractor) will permanently decrease to no more than 20 percent of the average level of bona fide services performed (whether as an employee or an independent contractor) over the immediately preceding 36-month period (or the full period of services if the Participant has been providing services for fewer than 36 months); provided, however, that the employment relationship is treated as continuing while the Participant is on military leave, sick leave or other bona fide leave of absence if the period of leave does not exceed six months or, if longer, so long as the Participant retains the right to reemployment with the Company or any Affiliate. 5. Administration (a) Committee. The Plan shall be administered by the Committee. The Committee shall, subject to Section 13, have plenary authority to grant Awards pursuant to the terms of the Plan to Eligible Individuals. Among other things, the Committee in its sole discretion shall have the authority, subject to the terms and conditions of the Plan: (i) to select the Eligible Individuals to whom Awards may from time to time be granted; (ii) to determine whether and to what extent Awards are to be granted hereunder; (iii) to determine the number of Shares to be covered by each Award granted hereunder; (iv) to determine the terms and conditions of each Award granted hereunder, based on such factors as the Committee shall determine, and to approve the form of Award Agreement and any related addendum; (v) to adopt sub-plans and special provisions applicable to Awards granted to Participants employed outside of the United States, which sub-plans and special provisions may take precedence over other provisions of the Plan, and to approve the form of Award Agreement and any related addendum as may be applicable to such Awards; (vi) subject to Sections 6(e), 8(e), 13 and 14, to modify, amend or adjust the terms and conditions of any Award; (vii) to adopt, alter and repeal such administrative rules, guidelines and practices governing the Plan as it shall from time to time deem advisable; (viii) to interpret the terms and provisions of the Plan and any Award issued under the Plan (and any Award Agreement relating thereto); (ix) subject to Section 13, to accelerate the vesting or lapse of restrictions of any outstanding Award, based in each case on such considerations as the Committee determines; (x) to decide all other matters to be determined in connection with an Award;
(xi) to determine whether, to what extent and under what circumstances cash, Shares and other property and other amounts payable with respect to an Award under the Plan shall be deferred either automatically or at the election of the Participant; (xii) to establish any “blackout” period that the Committee deems necessary or advisable; and (xiii) to otherwise administer the Plan. (b) Delegation of Authority. To the extent permitted under applicable law and Section 13, the Committee may delegate any of its authority to administer the Plan to any person or persons selected by the Committee, including one or more members of the Committee, and such person or persons shall be deemed to be the Committee with respect to, and to the extent of, its or their authority. (c) Procedures. (i) The Committee may act by a majority of its members and, except to the extent prohibited by applicable law or the listing standards of the Applicable Exchange and subject to Section 13, through any person or persons to whom it has delegated its authority pursuant to Section 5(b). (ii) Any authority granted to the Committee may also be exercised by the independent directors of the full Board. To the extent that any permitted action taken by the Board conflicts with action taken by the Committee, the Board action shall control. (d) Discretion of Committee and Binding Effect. Any determination made by the Committee or an appropriately delegated person or persons with respect to the Plan or any Award shall be made in the sole discretion of the Committee or such delegate, including, without limitation, any determination involving the appropriateness or equitableness of any action, unless in contravention of any express term of the Plan. All decisions made by the Committee or any appropriately delegated person or persons shall be final and binding on all persons, including the Company, Participants and Eligible Individuals. Notwithstanding the foregoing, following a Change in Control, any determination by the Committee as to whether “Cause” or “Good Reason” exists shall be subject to de novo review. (e) Cancellation or Suspension. Notwithstanding any other terms of the Plan (other than Section 8(e)), an Award Agreement or an Award, the Committee or an appropriately delegated person or persons, in its or their sole discretion, shall have full power and authority to determine whether, to what extent and under what circumstances any Award or any portion thereof shall be cancelled or suspended and may cancel or suspend any Award or any portion thereof. Without in any way limiting the generality of the preceding sentence, the following are examples, without limitation, of when all or any portion of an outstanding Award to any Participant may be canceled or suspended: (1) in the sole discretion of the Committee or any appropriately delegated person or persons, a Participant materially breaches (A) any duties of Participant’s employment (whether express or implied), including without limitation Participant’s duties of fidelity, good faith and exclusive service, (B) any general terms and conditions of Participant’s employment such as an employee handbook or guidelines, (C) any policies and procedures of the Company or any of its Affiliates applicable to the Participant, or (D) any other agreement regarding Participant’s employment with the Company or any of its Affiliates, or (2) without the prior written explicit consent of the Committee or any appropriately delegated person or persons (which consent may be granted or denied in the sole discretion of the Committee or such person or persons), a Participant, while employed by, or providing services to, the Company or any of its Affiliates, becomes associated with, employed by, renders services to, or owns any interest in (other than any nonsubstantial interest, as determined by the Committee or any appropriately delegated person or persons in its or their sole discretion), any business that is in competition with the Company or any of its Affiliates or with any business in which the Company or any of its Affiliates has a substantial interest, as determined by the Committee or any appropriately delegated person or persons in its or their sole discretion. (f) Award Agreements. The terms and conditions of each Award, as determined by the Committee, shall be set forth in a written (including electronic) Award Agreement, which shall be delivered to the Participant receiving such Award upon, or as promptly as is reasonably practicable following, the grant of such Award. Except (i) as otherwise specified by the Committee, in its sole discretion, (ii) as otherwise provided in the Award Agreement, or (iii) in the case of non-executive directors who may not be required to sign or accept an Award, an Award shall not be effective unless the Award Agreement is signed or otherwise accepted by the Participant receiving the Award (including by electronic signature or acceptance). The Committee, in its sole discretion, may deliver any documents related to an Award or Award Agreement by electronic means. Award Agreements may be amended only in accordance with Section 14. 6. Shares Subject to Plan (a) Plan Maximums. Subject to adjustment as described in Section 6(e), the maximum number of Shares that may be issued pursuant to Awards under the Plan shall be 16,000,000. (b) Individual and Award Limits. Subject to adjustment as described in Section 6(e), (i) no Participant shall be granted Qualified Performance Based-Awards covering more than 2,000,000 Shares during any calendar year;
(ii) the maximum number of Shares that may be issued pursuant to Options intended to be Incentive Stock Options shall be 6,000,000 Shares; and (c) Source of Shares. Shares subject to Awards under the Plan may be authorized but unissued Shares, Shares held by the Company as treasury shares or, if required by local law, Shares delivered from a trust established pursuant to applicable law. (d) Rules for Calculating Shares Issued; No “Share recycling” for Options or Stock Appreciation Rights. Shares that are subject to Awards granted under the Plan shall be deemed not to have been issued for purposes of the Plan maximums set forth in Section 6(a) and 6(b)(ii) to the extent that: (i) the Award is forfeited or canceled, or the Award terminates, expires or lapses for any reason without Shares having been delivered; (ii) the Award is settled in cash; or (iii) the Shares are withheld by the Company to satisfy all or part of any tax withholding obligation related to an Award of Restricted Stock or an Award of a Restricted Stock Unit. Shares that are tendered or withheld by the Company in payment of the exercise price of Options or Stock Appreciation Rights or to satisfy all or part of any tax withholding obligation related to such an Option or Stock Appreciation Right shall be counted as Shares that were issued. For the avoidance of doubt, Shares subject to an Option or a Stock Appreciation Right issued under the Plan that are not issued in connection with the stock settlement of that Option or Stock Appreciation Right upon its exercise shall not again become available for Awards or increase the number of Shares available for grant. (e) Adjustment Provision. (i) In the event of a merger, consolidation, stock rights offering, liquidation, or similar event affecting the Company or any of its Affiliates (each, a “Corporate Event”) or a stock dividend, stock split, reverse stock split, separation, spinoff, Disaffiliation, reorganization, extraordinary dividend of cash or other property, share combination, or recapitalization or similar event affecting the capital structure of the Company (each, a “Share Change”), the Committee or the Board shall make such equitable and appropriate substitutions or adjustments to (A) the aggregate number and kind of Shares or other securities reserved for issuance and delivery under the Plan, (B) the various maximum limitations set forth in Sections 6(a) and 6(b) upon certain types of Awards and upon the grants to individuals of certain types of Awards, (C) the number and kind of Shares or other securities subject to outstanding Awards and (D) the exercise price of outstanding Awards. (ii) In the case of Corporate Events, such adjustments may include, without limitation, (A) the cancellation of outstanding Awards in exchange for payments of cash, securities or other property or a combination thereof having an aggregate value equal to the value of such Awards, as determined by the Committee or the Board in its sole discretion (it being understood that in the case of a Corporate Event with respect to which Shareholders receive consideration other than publicly traded equity securities of the ultimate surviving entity, any such determination by the Committee that the value of an Option or Stock Appreciation Right shall for this purpose be deemed to equal the excess, if any, of the value of the consideration being paid for each Share pursuant to such Corporate Event over the exercise price of such Option or Stock Appreciation Right shall conclusively be deemed valid), and (B) the substitution of securities or other property (including, without limitation, cash or other securities of the Company and securities of entities other than the Company) for the Shares subject to outstanding Awards. (iii) In connection with any Disaffiliation, separation, spinoff, or other similar event, the Committee or the Board may arrange for the assumption of Awards, or replacement of Awards with new awards based on securities or other property (including, without limitation, other securities of the Company and securities of entities other than the Company), by the affected Affiliate or business division or by the entity that controls such Affiliate or business division following such event (as well as any corresponding adjustments to Awards that remain based upon Company securities). Such replacement with new awards may include revision of award terms reflective of circumstances associated with the Disaffiliation, separation, spinoff or other similar event. (iv) The Committee may, in its discretion, adjust the Performance Goals applicable to any Awards to reflect any unusual or non-recurring events and other extraordinary items, impact of charges for restructurings, discontinued operations and the cumulative effects of accounting or tax changes, each as defined by generally accepted accounting principles or as identified in the Company’s financial statements, notes to the financial statements, management’s discussion and analysis or other Company filings with the Securities and Exchange Commission; provided, however, that no such modification shall be made if the effect would be to cause an Award that is intended to be a Qualified Performance-Based Award to no longer constitute a Qualified Performance-Based Award. If the Committee determines that a change in the business, operations, corporate structure or capital structure of the Company or the applicable Affiliate, business division or other operational unit of, or the manner in which any of the foregoing conducts its business, or other events or circumstances render the Performance Goals to be unsuitable, the Committee may modify such Performance Goals or the related minimum acceptable
level of achievement, in whole or in part, as the Committee deems appropriate and equitable; provided, however, that no such modification shall be made if the effect would be to cause an Award that is intended to be a Qualified Performance-Based Award to no longer constitute a Qualified Performance-Based Award. (f) Section 409A. Notwithstanding the foregoing: (i) any adjustments made pursuant to Section 6(e) to Awards that are considered “deferred compensation” within the meaning of Section 409A of the Code shall be made in compliance with the requirements of Section 409A of the Code; (ii) any adjustments made pursuant to Section 6(e) to Awards that are not considered “deferred compensation” subject to Section 409A of the Code shall be made in such a manner as to ensure that after such adjustment, the Awards either (A) continue not to be subject to Section 409A of the Code or (B) comply with the requirements of Section 409A of the Code; and (iii) in any event, neither the Committee nor the Board shall have the authority to make any adjustments pursuant to Section 6(e) to the extent the existence of such authority would cause an Award that is not intended to be subject to Section 409A of the Code at the Grant Date to be subject thereto. 7. Eligibility and Participation Awards may be granted under the Plan to Eligible Individuals; provided, however, that Incentive Stock Options may be granted only to ISO Eligible Employees. 8. Options and Stock Appreciation Rights (a) Options. An Option is a right to purchase a specified number of Shares at a specified price that continues for a stated period of time. Options granted under the Plan may be Incentive Stock Options or Nonqualified Options. The Award Agreement for an Option shall indicate whether the Option is intended to be an Incentive Stock Option or a Nonqualified Option. (b) Stock Appreciation Rights. A Stock Appreciation Right is a right to receive upon exercise of the Stock Appreciation Right an amount in cash, Shares or both, in value equal to the product of (i) the excess of the Fair Market Value of one Share over the exercise price per Share subject to the applicable Stock Appreciation Right, multiplied by (ii) the number of Shares in respect of which the Stock Appreciation Right has been exercised. The applicable Award Agreement shall specify whether such payment is to be made in cash or Shares or both or shall reserve to the Committee or the Participant the right to make that determination prior to or upon the exercise of the Stock Appreciation Right. (c) Award Agreement. Each grant of an Option and Stock Appreciation Right shall be evidenced by an Award Agreement that shall specify the Grant Date, the exercise price, the term, vesting schedule, and such other provisions as the Committee shall determine. (d) Exercise Price; Not Less Than Fair Market Value. The exercise price per Share subject to an Option or Stock Appreciation Right shall be determined by the Committee and set forth in the Plan.applicable Award Agreement, and shall not be less than the Fair Market Value of a Share on the Grant Date, except as provided under Section 6(e) or with respect to Options or Stock Appreciation Rights that are granted in substitution of similar types of awards of a company acquired by the Company or an Affiliate or with which the Company or an Affiliate combines (whether in connection with a corporate transaction, such as a merger, combination, consolidation or acquisition of property or stock, or otherwise) to preserve the intrinsic value of such awards. (e) Prohibition on Repricing; No Cash Buyouts. Except as provided in Section 6(e) relating to adjustments due to certain corporate events, the exercise price of outstanding Options or Stock Appreciation Rights may not be amended to reduce the exercise price of such Options or Stock Appreciation Rights, nor may outstanding Options or Stock Appreciation Rights be canceled in exchange for (i) cash, (ii) Options or Stock Appreciation Rights with an exercise price that is less than the exercise price of the original outstanding Options or Stock Appreciation Rights or (iii) other Awards, unless in each case such action is approved by the Company’s Shareholders. (f) Prohibition on Reloads. Options or Stock Appreciation Rights shall not be granted under the Plan that contain a reload or replenishment feature pursuant to which a new Option or Stock Appreciation Right would be granted upon receipt or delivery of Shares to the Company in payment of the exercise price or any tax withholding obligation under any other stock option, stock appreciation right or other Award. (g) Term. The term of an Option or Stock Appreciation Right granted under the Plan shall be determined by the Committee, in its sole discretion; provided, however, that such term shall not exceed 10 years. (h) Accelerated Expiration Date. Unless the Committee specifies otherwise in the applicable Award Agreement, an Option or Stock Appreciation Right granted under the Plan will expire upon the earliest to occur of the following: (i) The original expiration date of the Option or Stock Appreciation Right; (ii) Death. The one-year anniversary of the Participant’s death; (iii)Disability. The one-year anniversary of the Participant’s termination of employment with the Company and all Related Companies due to Disability; | 2021 Proxy Statement 101 | | | | | WHEREAS, |
(iv) Termination of Employment. The date of the Participant’s termination of employment with the Company and all Related Companies for any reason other than death or Disability. Provided, however, that if the Participant is terminated by the Company other than for Cause or unsatisfactory performance, then 60 days following the Participant’s termination of employment. (i) Vesting. (i) Generally. Options and Stock Appreciation Rights shall have a vesting period of not less than one year from the date of grant except with respect to the death, Disability, involuntary termination (other than for Cause or unsatisfactory performance) of a Participant, the occurrence of a Change of Control as outlined in Section 12 of this Plan, or as may be required or otherwise be deemed advisable by the Committee in connection with an Award granted through the assumption of, or substitution for, outstanding awards previously granted by a company acquired by the Company or any Affiliate or with which the Company or any Affiliate combines. (j) Method of Exercise and Payment. (i) Generally. Subject to the provisions of this Section 8 and the terms of the applicable Award Agreement, Options and Stock Appreciation Rights may be exercised, in whole or in part, by giving written (including electronic) notice of exercise specifying the number of Shares as to which such Options or Stock Appreciation Rights are being exercised and paying, or making arrangements satisfactory to the Company for the payment of, all applicable taxes pursuant to Section 1416(d). (ii) In the case of the exercise of an Option, such notice shall be accompanied by payment in full of the exercise price by (i) certified or bank check (ii) delivery of unrestricted Shares of the same class as the Shares subject to the Option already owned by the Participant (based on the Fair Market Value of the Shares on the date the Option is exercised), provided that the Shares have been held by the Participant for such period as may established by the Committee to comply with applicable law or (iii) such other method as the Committee shall permit in its sole discretion (including a broker-assisted cashless exercise or netting of Shares). (k) No Shareholder Rights. A Participant shall have no right to dividends or any other rights as a Shareholder with respect to Shares subject to an Option or Stock Appreciation Right until such Shares are issued to the Participant pursuant to the terms of the Award Agreement. 9. Restricted Stock (a) Nature of Awards and Certificates. Shares of Restricted Stock are actual Shares that are issued to a Participant subject to forfeiture under certain circumstances and shall be evidenced in such manner as the Committee may deem appropriate, including book-entry registration. (b) Award Agreement. Each grant of Restricted Stock shall be evidenced by an Award Agreement that shall specify the Grant Date, the period of restriction, the number of shares of Restricted Stock, vesting schedule, and such other provisions as the Committee shall determine. The Committee may, prior to or at the time of grant, condition the grant or vesting of an Award of Restricted Stock upon (A) the continued service of the Participant, (B) the attainment of Performance Goals or (C) the attainment of Performance Goals and the continued service of the Participant. In the event that the Committee conditions the grant or vesting of an Award of Restricted Stock upon the attainment of Performance Goals or the attainment of Performance Goals and the continued service of the Participant, the Committee may, prior to or at the time of grant, designate an Award of Restricted Stock as a Qualified Performance-Based Award. The conditions for grant or vesting and the other provisions of Restricted Stock Awards (including, without limitation, any applicable Performance Goals) need not be the same with respect to each Participant. (c) Vesting. (i) Generally. Shares of Restricted Stock shall have a vesting period of not less than one year from the date of grant except with respect to the death, Disability, involuntary termination (other than for Cause or unsatisfactory performance) of a Participant, the occurrence of a Change of Control as outlined in Section 12 of this Plan, or as may be required or otherwise be deemed advisable by the Committee in connection with an Award granted through the assumption of, or substitution for, outstanding awards previously granted by a company acquired by the Company or any Affiliate or with which the Company or any Affiliate combines. The Committee shall, prior to or at the time of grant, condition the grant or vesting of an Award of Restricted Stock upon such terms as outlined in the Award Agreement. For purposes of an Award to a Non-Executive Director that is granted as of the date of the annual general meeting of shareholders, a vesting period shall be deemed to one year if it runs from the date of one annual general meeting of shareholders to the next annual general meeting of shareholders provided that such next meetings are at least 50 weeks apart. (ii) Accelerated Vesting. Unless the Committee specifies otherwise in the applicable Award Agreement, in the event of the death, Disability or involuntary termination (other than for Cause or unsatisfactory performance) of a Participant, a Change of Control as outlined in Section 12 of this Plan, or special circumstances determined by the Committee, an Award of Restricted Stock shall vest as of the termination of employment.
(d) Restricted Shares Non-Transferrable. Subject to the provisions of the Plan and the applicable Award Agreement, during the Restriction Period, the Participant shall not be permitted to sell, assign, transfer, pledge or otherwise encumber Shares of Restricted Stock. (e) Rights of a Shareholder. Except as otherwise provided in this Section 9 or in the applicable Award Agreement, the Participant shall have, with respect to the Shares of Restricted Stock, all of the rights of a Shareholder of the Company holding the class or series of Shares that is the subject of the Restricted Stock, including, if applicable, voting and dividend rights. (f) Dividends. Except as otherwise provided in the applicable Award Agreement, cash dividends with respect to the Restricted Stock will be currently paid to the Participant and, subject to Section 16(e) of the Plan, dividends payable in Shares shall be paid in the form of Restricted Stock of the same class as the Shares with which such dividend was paid, held subject to the vesting of the underlying Restricted Stock; provided, however, that no dividends shall be paid with respect to Restricted Stock that is designated as a Qualified Performance-Based Award unless and until the Committee has certified that the applicable Performance Goals for such award have been met. Dividends shall accrue at the same rate as cash dividends paid on the Shares and applied to the number of Shares that vest. Such dividend equivalents shall be paid to the Participant in cash at the time the Shares are delivered. If any Shares of Restricted Stock are forfeited, the Participant shall have no right to future cash dividends with respect to such Restricted Stock, withheld stock dividends or earnings with respect to such Shares of Restricted Stock. (g) Delivery of Shares. If and when any applicable Performance Goals are satisfied and/or the Restriction Period expires without a prior forfeiture of the Shares of Restricted Stock, unrestricted Shares shall be delivered to the Participant as soon as administratively practicable. (h) Termination of Service. Except as otherwise provided in the applicable Award Agreement, a Participant’s Shares of Restricted Stock shall be forfeited upon his or her Termination of Service. 10. Restricted Stock Units (a) Nature of Awards. Restricted Stock Units represent a contractual obligation by the Company to deliver a number of Shares, an amount in cash or a combination of Shares and cash equal to the specified number of Shares subject to the Award, or the Fair Market Value thereof, in accordance with the terms and conditions set forth in the Plan and any applicable Award Agreement. (b) Award Agreement. Each grant of Restricted Stock Units shall be evidenced by an Award Agreement that shall specify the Grant Date, the period of restriction, the number of Restricted Stock Units, vesting schedule, and such other provisions as the Committee shall determine. The Committee may, prior to or at the time of grant, condition the grant or vesting of an Award of Restricted Stock Units upon (A) the continued service of the Participant, (B) the attainment of Performance Goals or (C) the attainment of Performance Goals and the continued service of the Participant. In the event that the Committee conditions the grant or vesting of an Award of Restricted Stock Units upon the attainment of Performance Goals or the attainment of Performance Goals and the continued service of the Participant, the Committee may, prior to or at the time of grant, designate an Award of Restricted Stock as a Qualified Performance-Based Award. The conditions for grant or vesting and the other provisions of Restricted Stock Units (including, without limitation, any applicable Performance Goals) need not be the same with respect to each Participant. (c) Vesting. (i) Generally. Restricted Stock Units shall have a vesting period of not less than one year from the date of grant except with respect to the death, Disability, involuntary termination (other than for Cause or unsatisfactory performance) of a Participant, the occurrence of a Change of Control as outlined in Section 12 of this Plan, or as may be required or otherwise be deemed advisable by the Committee in connection with an Award granted through the assumption of, or substitution for, outstanding awards previously granted by a company acquired by the Company or any Affiliate or with which the Company or any Affiliate combines. The Committee shall, prior to or at the time of grant, condition the grant or vesting of an Award of Restricted Stock Units upon such terms as outlined in the Award Agreement. For purposes of an Award to a Non-Executive Director that is granted as of the date of the annual general meeting of shareholders, a vesting period shall be deemed to one year if it runs from the date of one annual general meeting of shareholders to the next annual general meeting of shareholders provided that such next meetings are at least 50 weeks apart. (ii) Accelerated Vesting. Unless the Committee specifies otherwise in the applicable Award Agreement, in the event of the death, Disability or involuntary termination (other than for Cause or unsatisfactory performance) of a Participant, a Change of Control as outlined in Section 12 of this Plan, or special circumstances determined by the Committee, an Award of Restricted Stock Units shall vest as of the termination of employment. (d) Dividend Equivalents. The Committee may, in its discretion, provide for current or deferred payments of cash, Shares or other property corresponding to the dividends payable on the Shares (subject to Section 16(e) below),
as set forth in an applicable Award Agreement; provided, however, that no such dividend equivalents shall be paid with respect to Restricted Stock Units that are designated as a Qualified Performance-Based Awards unless and until the Committee has certified that the applicable Performance Goals for such award have been met. Dividend equivalents shall accrue at the same rate as cash dividends paid on the Shares and applied to the number of Shares that vest. Such dividend equivalents shall be paid to the Participant in cash at the time the Shares are delivered. If a Participant’s Restricted Stock Units are forfeited, the Participant shall have no right to future dividend equivalents with respect to such Restricted Stock Units, withheld stock dividends or earnings with respect to such Restricted Stock Units. (e) Termination of Service. Except as otherwise provided in the applicable Award Agreement, a Participant’s Restricted Stock Units shall be forfeited upon his or her Termination of Service. (f) Payment. Except as otherwise provided in the applicable Award Agreement, Shares, cash or a combination of Shares and cash, as applicable, payable in settlement of Restricted Stock Units shall be delivered to the Participant as soon as administratively practicable after the date on which payment is due under the terms of an Award Agreement. (g) No Shareholder Rights. Except as otherwise provided in the applicable Award Agreement, a Participant shall have no rights as a Shareholder with respect to Shares subject to Restricted Stock Units until such Shares are issued to the Participant pursuant to the terms of the Award Agreement. 11. Other Stock-Based Awards Other Stock-Based Awards may be granted under the Plan; provided, that any Other Stock-Based Awards that are Awards of Shares that are unrestricted or with a minimum vesting schedule of less than one year shall only be granted in lieu of other compensation due and payable to the Participant Notwithstanding the foregoing, no more than 5% of the Shares authorized to grant under Section 6 may be granted with a minimum vesting schedule of less than one year. 12. Change in Control Provisions The provisions of this Section 12 shall apply in the case of a Change in Control, unless otherwise provided in the applicable Award Agreement or any other provision of the Plan. (a) Awards Not Assumed, etc. in Connection with Change in Control. Upon the occurrence of a transaction that constitutes a Change in Control, if any Awards are not assumed, converted or otherwise equitably converted or substituted in a manner approved by the Committee, then such Awards shall vest immediately at 100 percent before the Change in Control. (b) Awards Assumed, etc. in Connection with Change in Control. Upon the occurrence of a transaction that constitutes a Change in Control, with respect to any Awards that are assumed, converted or otherwise equitably converted or substituted in a manner approved by the Committee, then, in the event of a Participant’s Termination of Service during the twenty-four (24) month period following such Change in Control, (x) by the Company other than for Cause or unsatisfactory performance, or (y) by the Participant for Good Reason: (i) each outstanding Award shall be deemed to satisfy any applicable Performance Goals at 100 percent as set forth in the applicable Award Agreement; (ii) any Options and Stock Appreciation Rights outstanding which are not then exercisable and vested shall become fully exercisable and vested. Any such Option or Stock Appreciation Right held by the Participant as of the date of the Change in Control that remain outstanding as of the date of such Termination of Service may thereafter be exercised until the earlier of the third anniversary of such Change in Control and the last date on which such Option or Stock Appreciation Right would have been exercisable in the absence of this Section 12(b) (ii) (taking into account the applicable terms of any Award Agreement); (iii) the restrictions and deferral limitations applicable to any Shares of Restricted Stock shall lapse and such Shares of Restricted Stock shall become free of all restrictions and become fully vested and transferable; (iv) all Restricted Stock Units shall be considered to be earned and payable in full, and any deferral or other restriction shall lapse, and any Restriction Period shall terminate, and such Restricted Stock Units shall be settled in cash or Shares (consistent with the terms of the Award Agreement after taking into account the effect of the Change in Control transaction on the Shares) as promptly as is practicable; and (v) subject to Section 14, the Committee may also make additional adjustments and/or settlements of outstanding Awards as it deems appropriate and consistent with the Plan’s purposes. (c) 409A Matters. Notwithstanding the foregoing, if any Award to a Participant who is subject to U.S. income tax is considered a “nonqualified deferred compensation plan” within the meaning of Section 409A of the Code, this Section 12 shall apply to such Award only to the extent that its application would not result in the imposition of any tax or interest or the inclusion of any amount in income under Section 409A of the Code.
(d) Other. In the event of a Change in Control, the Committee may in its discretion and upon at least ten (10) days’ advance notice to the affected Participants, cancel any outstanding Awards and pay to the holders thereof, in cash or Shares, or any combination thereof, the value of such Awards based upon the price per Share received or to be received by other Shareholders of the Company as a result of the Change in Control. 13. Qualified Performance-Based Awards; Section 16(b); Section 409A (a) Qualified Performance-Based Awards. (i) The provisions of the Plan are intended to ensure that all Options and Stock Appreciation Rights granted hereunder to any Participant who is or may be a “covered employee” (within the meaning of Section 162(m)(3) of the Code) in the tax year in which such Option or Stock Appreciation Right is expected to be deductible to the Company qualify for the Section 162(m) Exemption, that all such Awards shall therefore be considered Qualified Performance-Based Awards, and the Plan shall be interpreted and operated consistent with that intention. When granting any Award other than an Option or Stock Appreciation Right, the Committee may designate such Award as a Qualified Performance-Based Award, based upon a determination that (x) the recipient is or may be a “covered employee” (within the meaning of Section 162(m)(3) of the Code) with respect to such Award and (y) the Committee wishes such Award to qualify for the Section 162(m) Exemption, and the terms of any such Award (and of the grant thereof) shall be consistent with such designation (including, without limitation, that all such Awards be granted by a committee composed solely of “outside directors” (within the meaning of Section 162(m) of the Code)). (ii) The Committee shall determine whether the applicable Performance Goals for a Qualified Performance-Based Award have been met with respect to a Participant for a Performance Period and, if they have been met, shall so certify and ascertain the amount of the applicable Qualified Performance-Based Award. No Qualified Performance-Based Awards will be paid or granted for a Performance Period until such certification is made by the Committee. The amount of such a Qualified Performance-Based Award designed to qualify for the Section 162(m) Exemption that is actually paid or granted to a Participant may be less than the amount determined by the applicable Performance Goal formula, at the discretion of the Committee, subject to the terms and conditions of the applicable Award Agreement, and shall be paid to the Participant at the time set forth in the applicable Award Agreement. (iii) Performance Goals may be applied on a per share or absolute basis and relative to one or more peer group companies or indices, or any combination thereof, and may be measured pursuant to U.S. GAAP, non-GAAP or other objective standards in a manner consistent with the Company’s established accounting policies, all as the Committee shall determine at the time the Performance Goals for a Performance Period are established. In addition, to the extent consistent with the requirements of the Section 162(m) Exemption, the Committee may provide at the time Performance Goals are established for Qualified Performance-Based Awards that the manner in which such Performance Goals are to be calculated or measured may take into account, or ignore, capital costs, interest, taxes, depreciation and amortization and other factors over which the Participant has no (or limited) control including, but not limited to, restructurings, discontinued operations, impairments, changes in foreign currency exchange rates, extraordinary items, certain identified expenses (including cash bonus expenses, incentive expenses and acquisition-related transaction and integration expenses), the consolidation of investment products, other unusual non-recurring items, industry margins, general economic conditions, interest rate movements and the cumulative effects of tax or accounting changes. (iv) No delegate of the Committee shall exercise authority granted to the Committee to the extent that the exercise of such authority would cause an Award designated as a Qualified Performance-Based Award not to qualify, or to cease to qualify, for the Section 162(m) Exemption. (b) Section 16(b). (i) The provisions of the Plan are intended to ensure that transactions under the Plan are not subject to (or are exempt from) the short-swing recovery rules of Section 16(b) of the Exchange Act and shall be construed and interpreted in a manner so as to comply with such rules. (ii) Notwithstanding any other provision of the Plan to the contrary, if for any reason the appointed Committee does not meet the requirements of Rule 16b-3 of the Exchange Act or Section 162(m) of the Code, such noncompliance with the requirements of Rule 16b-3 of the Exchange Act and Section 162(m) of the Code shall not affect the validity of Awards, grants, interpretations or other actions of the Committee. (c) Section 409A. It is the intention of the Company that any Award to a Participant who is subject to U.S. income tax that constitutes a “nonqualified deferred compensation plan” within the meaning of Section 409A of the Code shall comply in all respects with the requirements of Section 409A of the Code to avoid the imposition of any tax or interest or the inclusion of any amount in income thereunder, and the terms of each such Award shall be interpreted, administered and deemed amended, if applicable, in a manner consistent with this intention. Notwithstanding the foregoing, neither the Company nor any of its Affiliates nor any of its or their directors, officers, employees, agents or other service providers will be liable for any taxes, penalties or interest imposed on any Participant, Beneficiary or other person with respect to any amounts paid or payable (whether in cash, Shares or
other property) under any Award, including any taxes, penalties or interest imposed under or as a result of Section 409A of the Code. Notwithstanding any other provision of the Plan to the contrary, with respect to any Award to any Participant who is subject to U.S. income tax that constitutes a “nonqualified deferred compensation plan” within the meaning of Section 409A of the Code: (i) any payments (whether in cash, Shares or other property) to be made with respect to the Award upon the Participant’s Termination of Service that would otherwise be paid within six months after the Participant’s Termination of Service shall be accumulated (without interest, to the extent applicable) and paid on the first day of the seventh month following the Participant’s Termination of Service if the Participant is a “specified employee” within the meaning of Section 409A of the Code (as determined in accordance with the uniform policy adopted by the Committee with respect to all of the arrangements subject to Section 409A of the Code maintained by the Company and its Affiliates); and (ii) any payment to be made with respect to an Award of Restricted Stock Units shall be delivered no later than 60 days after the date on which payment is due under the Award or as otherwise permitted under Treasury Regulations section 1.409A-3(g) for any portion of the payment subject to a dispute. 14. Amendment and Discontinuance (a) Amendment and Discontinuance of the Plan. The Board or the Committee may amend, alter or discontinue the Plan, so long asbut no amendment, alteration or discontinuation shall be made which would materially impairsimpair the rights of a Participant with respect to a previously granted Award without such Participant’s consent, except thatsuch an amendment made to comply with applicable law or Applicable Exchange rule or to prevent adverse tax or accounting consequences to the Company or Participants. (b) Amendment of Awards. Subject to Section 8(e), the Committee may unilaterally amend the terms of any Award theretofore granted, but no such amendment shall be madematerially impair the rights of any Participant with respect to an Award without the approvalParticipant’s consent, except such an amendment made to cause the Plan or Award to comply with applicable law, Applicable Exchange rule or to prevent adverse tax or accounting consequences for the Participant or the Company or any of its Affiliates. 15. Unfunded Status of Plan It is currently intended that the Plan constitute an “unfunded” plan. The Committee may authorize the creation of trusts or other arrangements to meet the obligations created under the Plan to deliver Shares or make payments; provided, however, that unless the Committee otherwise determines, the existence of such trusts or other arrangements is consistent with the “unfunded” status of the Company’s ShareholdersPlan. 16. General Provisions (a) Conditions for Issuance. The Committee may require each person purchasing or receiving Shares pursuant to an Award to represent to and agree with the Company in writing that such person is acquiring the Shares without a view to the distribution thereof. The certificates or book entry for such Shares may include any legend or appropriate notation that the Committee deems appropriate to reflect any restrictions on transfer, and the Committee may take such other steps as it deems necessary or desirable to restrict the transfer of Shares issuable under the Plan to comply with applicable law or Applicable Exchange rules. Notwithstanding any other provision of the Plan or agreements made pursuant thereto, the Company shall not be required to issue or deliver Shares under the Plan unless such issuance or delivery complies with all applicable laws, rules and regulations, including the requirements of any Applicable Exchange or similar entity and the Company has obtained any consent, approval or permit from any federal, state or foreign governmental authority that the Committee determines to be necessary or advisable. (b) Additional Compensation Arrangements. Nothing contained in the Plan shall prevent the Company or any Affiliate from adopting other or additional compensation arrangements for its employees. (c) No Contract of Employment. Neither the Plan nor any Award Agreement shall constitute a contract of employment, and neither the adoption of the Plan nor the granting of any Award shall confer upon any employee any right to continued employment. Neither the Plan nor any Award Agreement shall interfere in any way with the right of the Company or any Affiliate to terminate the employment of any employee at any time. (d) Required Taxes; No Tax Gross Ups. No later than the date as of which an amount first becomes includible in the gross income of a Participant for federal, state, local or foreign income or employment or other tax purposes with respect to any Award under the Plan, such Participant shall pay to the Company, or make arrangements satisfactory to the Company regarding the payment of, any federal, state, local or foreign taxes of any kind required by law to be withheld with respect to such amount. Unless otherwise determined by the Company, withholding obligations may be settled with Shares, including Shares that are part of the Award that gives rise to the withholding requirement, having a Fair Market Value on the date of withholding equal to the rate required to be withheld for tax purposes under applicable law, all in accordance with such procedures as the Committee establishes. The obligations of the Company under the Plan shall be conditional on such payment or arrangements, and the Company and its
Affiliates shall, to the extent permitted by law, have the right to deduct any such amendment would materially increasetaxes from any payment otherwise due to such Participant. The Committee may establish such procedures as it deems appropriate, including making irrevocable elections, for the numbersettlement of securities which may be issued under the Plan or to a Participant. | | | | | WHEREAS, the Board has determined to amend the Plan in the manner set forth below, subject to approvalwithholding obligations with Shares. Regardless of any arrangements made by the Shareholders. | | | | | NOW, THEREFORE,Company, any Affiliate or the Plan is hereby amended as follows, subject to approval by the Shareholders: | | | 1. Section 6(a) of the Plan is hereby amended and restated in its entirety as follows: “Subject to adjustment as provided in Section (e), the maximum number of Shares that may be issued pursuant to Awards under the plan shall be 31.5.”
| | | 2. The last sentence of Section 9(b) of the Plan is hereby amended and restated in its entirety as follows: “ExceptCommittee with respect to the death, Disabilitywithholding or involuntary termination (other thanother payment of any federal, state, local or foreign taxes of any kind, the liability for Cause or unsatisfactory performance) ofall such taxes legally due from a Participant orremains the occurrenceresponsibility of the Participant. By accepting an Award, a corporate transaction (including but not limitedParticipant consents to a Changethe methods of Control) or special circumstances determinedtax withholding established by the Committee an Awardor otherwise made or arranged by the Company.
(e) Limitation on Dividend Reinvestment and Dividend Equivalents. Reinvestment of dividends in additional Restricted Stock subject solely toat the continued servicetime of an employee and/orany dividend payment, and the attainmentpayment of Performance Goals shall have a vesting period of not less than two years from the date of grant.” | | | 3. The last sentence of Section 10(b) of the Plan is hereby amended and restated in its entirety as follows: “ExceptShares with respect to the death, Disability or involuntary termination (other than for Cause or unsatisfactory performance) of a Participant, or the occurrence of a corporate transaction (including but not limiteddividends to a Change of Control) or special circumstances determined by the Committee, an AwardParticipants holding Awards of Restricted Stock Units, subject solelyshall only be permissible if sufficient Shares are available under Section 6 for such reinvestment or payment (taking into account then outstanding Awards). In the event that sufficient Shares are not available for such reinvestment or payment, such reinvestment or payment shall be made in the form of a grant of Restricted Stock Units equal in number to the continued serviceShares that would have been obtained by such payment or reinvestment, the terms of which Restricted Stock Units shall provide for settlement in cash and for dividend equivalent reinvestment in further Restricted Stock Units on the terms contemplated by this Section 16(e).
(f) Rights of a Beneficiary. Any amounts payable and any rights exercisable under an Award after a Participant’s death shall be paid to and exercised by the Participant’s Beneficiary, except to the extent prohibited by applicable law, Applicable Exchange rule or the terms of an applicable Award Agreement. (g) Affiliate Employees. In the case of a forfeiture or cancellation of an Award to an employee and/orof any Affiliate, all Shares underlying such Awards shall revert to the attainment of Performance Goals shall have a vesting period of not less than two years from the date of grant.”Company. | | | 4. This Amendment(h) Governing Law and Interpretation. The Plan and all determinationsAwards made and actions taken pursuant heretothereunder shall be governed by and construed in accordance with the laws of the State of Georgia, without giving effectreference to principles of conflict of laws. The captions of the Plan are not part of the provisions hereof and shall have no force or effect.
(i) Non-Transferability. Awards under the Plan cannot be sold, assigned, transferred, pledged or otherwise encumbered other than by will or the laws of descent and distribution, except as provided in Section 6(e). (j) Foreign Employees and Foreign Law Considerations. The Committee may grant Awards to Eligible Individuals who are foreign nationals, who are employed outside the United States or who are not compensated from a payroll maintained in the United States, or who are otherwise subject to (or could cause the Company to be subject to) tax, legal or regulatory provisions of countries or jurisdictions outside the United States, 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 foster and promote achievement of the purposes of the Plan. Notwithstanding any other provision of the Plan, Awards to Participants who are employed and/or otherwise subject to the conflictlaws of laws principles thereof. | | | 5. Excepta jurisdiction outside of the United States shall be subject to such terms and conditions as amended above,the Committee shall establish and set forth in an applicable Award Agreement, including any addendum thereto.
(k) Use of English Language. The Plan, each Award Agreement, and all other documents, notices and legal proceedings entered into, given or instituted pursuant to an Award shall be written in English, unless otherwise determined by the Committee. If a Participant receives an Award Agreement, a copy of the Plan or any other documents related to an Award translated into a language other than English, and if the meaning of the translated version is different from the English version, the English version shall control. (l) Recovery of Amounts Paid. All Awards granted under the Plan shall remainbe subject to any policy established by the Committee under which the Company may recover from current and former Participants any amounts paid or Shares issued under an Award and any proceeds therefrom. The Committee may apply such policy to Awards granted before the policy is adopted to the extent required by applicable law or Applicable Exchange rule or as otherwise provided by such policy. (m) Notices. A notice or other communication to the Committee shall be valid only if given in full forcethe form and effect.to the location specified by the Committee. 124
invesco.com PROXY-BRO-103-19
2021 Proxy Statement 107 | |
| | | | invesco.com PROXY-BRO-1 03-21 |
Your vote matters – here’s how to vote! You may vote online or by phone instead of mailing this card. Online Go to www.envisionreports.com/IVZ or scan the QR code – login details are located in the shaded bar below. Phone Call toll free 1-800-652-VOTE (8683) within the USA, US territories and Canada Save paper, time and money! Using a black ink pen, mark your votes with an X as shown in this example. Sign up for electronic delivery at Please do not write outside the designated areas. www.envisionreports.com/IVZ 2021 Annual Meeting Proxy Card IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. A Proposals - The Board of Directors recommend a vote FOR all the nominees listed and FOR Proposals 2, 3 and 4. 1. Election of Directors: + For Against Abstain For Against Abstain For Against Abstain 01 - Sarah E. Beshar 02 - Thomas M. Finke 03 - Martin L. Flanagan 04 - Edward P. Garden 05 - William F. Glavin, Jr. 06 - C. Robert Henrikson 07 - Denis Kessler 08 - Nelson Peltz 09 - Sir Nigel Sheinwald 10 - Paula C. Tolliver 11 - G. Richard Wagoner, Jr. 12 - Phoebe A. Wood For Against Abstain For Against Abstain 2. Advisory vote to approve the company’s 2020 3. Approval of the Amendment and Restatement of the Invesco executive compensation Ltd. 2016 Global Equity Incentive Plan 4. Appointment of PricewaterhouseCoopers LLP as the company’s independent registered public accounting firm for 2021 B Authorized Signatures - This section must be completed for your vote to count. Please date and sign below. Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title. Date (mm/dd/yyyy) – Please print date below. Signature 1 – Please keep signature within the box. Signature 2 – Please keep signature within the box. 1UPX + 03ELFB
The 2021 Annual Meeting of Shareholders of Invesco Ltd. will be held on Thursday, May 13, 2021 at 1:00 p.m. Eastern Time, virtually via the internet at www.meetingcenter.io/293405929. To access the virtual meeting, you must have the information that is printed in the shaded bar located on the reverse side of this form. The password for this meeting is – IVZ2021. Important notice regarding the Internet availability of proxy materials for the Annual Meeting of Shareholders. The material is available at: www.envisionreports.com/IVZ Small steps make an impact. Help the environment by consenting to receive electronic delivery, sign up at www.envisionreports.com/IVZ IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. Invesco Ltd. + Notice of 2021 Annual Meeting of Shareholders Proxy Solicited by Board of Directors for Annual Meeting – May 13, 2021 The undersigned hereby appoints G. Richard Wagoner, Jr., Martin L. Flanagan, L. Allison Dukes and Kevin Carome, and each of them, with power to act without the others and with power of substitution, as proxies and attorneys-in-fact, and hereby authorizes them to represent and vote, as provided on the other side, all the common shares of Invesco Ltd., which the undersigned is entitled to vote, and, in their discretion, to vote upon such other business as may properly come before the 2021 Annual General Meeting of Shareholders, or at any adjournment or postponement thereof, of Invesco Ltd., with all powers which the undersigned would possess if present at the meeting. (Items to be voted appear on reverse side) Restricted Shares Voting Instructions For certain Invesco Ltd. Employees who hold restricted shares received through one of the company’s equity incentive plans, when casting your vote, you are directing the record holder to vote all restricted common shares of Invesco Ltd. that are held in your account or participant trust, as applicable, that you are entitled to vote, in accordance with your instructions, and in accordance with the judgment of the record holder upon such other business as may come before the meeting and any adjournments or postponements thereof. C Non-Voting Items Change of Address – Please print new address below. Comments – Please print your comments below.
Using a black ink pen, mark your votes with an X as shown in this example. Please do not write outside the designated areas. 2021 Annual Meeting Proxy Card IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. A Proposals – The Board of Directors recommend a vote FOR all the nominees listed and FOR Proposals 2, 3 and 4. 1. Election of Directors: + For Against Abstain For Against Abstain For Against Abstain 01 - Sarah E. Beshar 02 - Thomas M. Finke 03 - Martin L. Flanagan 04 - Edward P. Garden 05 - William F. Glavin, Jr. 06 - C. Robert Henrikson 07 - Denis Kessler 08 - Nelson Peltz 09 - Sir Nigel Sheinwald 10 - Paula C. Tolliver 11 - G. Richard Wagoner, Jr. 12 - Phoebe A. Wood For Against Abstain For Against Abstain 2. Advisory vote to approve the company’s 2020 3. Approval of the Amendment and Restatement of the Invesco executive compensation Ltd. 2016 Global Equity Incentive Plan 4. Appointment of PricewaterhouseCoopers LLP as the company’s independent registered public accounting firm for 2021 B Authorized Signatures – This section must be completed for your vote to count. Please date and sign below. Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title. Date (mm/dd/yyyy) – Please print date below. Signature 1 – Please keep signature within the box. Signature 2 – Please keep signature within the box. 1UPX + 03ELDB
The 2021 Annual Meeting of Shareholders of Invesco Ltd. will be held on Thursday, May 13, 2021 at 1:00 p.m. Eastern Time, virtually via the internet at www.meetingcenter.io/293405929. All shareholders will need the password: IVZ2021. Shareholders who hold shares through an intermediary must register to attend the Annual Meeting by 5:00 p.m. Eastern Standard Time, on May 7, 2021. For additional information regarding how shareholders who hold shares through an intermediary, such as a bank or broker, may access, participate in, and/or vote at the virtual Annual Meeting, please refer to the Company’s Proxy Statement. Important notice regarding the Internet availability of proxy materials for the Annual Meeting of Shareholders. The material is available at: www.edocumentview.com/IVZ IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. Invesco Ltd. Notice of 2021 Annual Meeting of Shareholders Proxy Solicited by Board of Directors for Annual Meeting – May 13, 2021 The undersigned hereby appoints G. Richard Wagoner, Jr., Martin L. Flanagan, L. Allison Dukes and Kevin Carome, and each of them, with power to act without the others and with power of substitution, as proxies and attorneys-in-fact, and hereby authorizes them to represent and vote, as provided on the other side, all the common shares of Invesco Ltd., which the undersigned is entitled to vote, and, in their discretion, to vote upon such other business as may properly come before the 2021 Annual General Meeting of Shareholders, or at any adjournment or postponement thereof, of Invesco Ltd., with all powers which the undersigned would possess if present at the meeting. (Items to be voted appear on reverse side) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|