UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
the
Securities Exchange Act of 1934 (Amendment No.)
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April 12, 201610, 2024
Dear Stockholders:
It is my pleasure to invite you to join us at the Annual Meeting of Stockholders of TeleTechTTEC Holdings, Inc., to be held at 9197 South Peoria Street, Englewood, Colorado. The meeting will take placebe held on Wednesday, May 25, 2016,22, 2024, at 1:10:00 p.m.a.m., Mountain Daylight Time. AtTime, and will be conducted virtually. You will be able to attend the Annual Meeting, vote and submit your questions during the live webcast of the meeting we will reportby visiting www.virtualshareholdermeeting.com/TTEC2024 and entering the 16-digit control number included in our notice of internet availability within the proxy materials, on TeleTech’s results for fiscal year 2015 and comment on our expectations for the upcoming year. We hope you are able to attend.
Details regarding admission to the meeting and the business to be conducted at the meeting are providedyour proxy card, or in the Notice ofinstructions that accompanied your proxy materials. As permitted by the Annual Stockholders MeetingSecurities and the accompanying Proxy Statement. Together with the Proxy Statement,Exchange Commission (SEC), we are making available a copy of our 2015 Annual Report to Stockholders. We encourage you to read our Annual Report, which includes our audited financial statements and provides detailed information about our business.
We elected to provide access to our proxy materials available to our stockholders electronically via the internet under the U.S. Securities and Exchange Commission’s internet notice and access rules.. In our business, we are focused on improving the engagement between our clients and their customers. Our aspirations with respect to our stockholders are no different about our stockholders.different. We believe that by makingelectronic delivery expedites your receipt of materials, reduces the environmental impact of our proxy materials available via the internet, we enhanceAnnual Stockholders Meeting, reduces costs significantly, and enhances our stockholders’ experience in accessing our information, and understanding our business, and the way in which TeleTechTTEC is governed and managed to maximize our stockholder, client and employee value. By providing the proxy materials via the internet, we also reduce the environmental impact of our Annual Meeting. managed.
For additional information about the Annual Meeting, please see the Important Information About the Proxy Materials and Voting Your Shares section of this Proxy Statement.
PLEASE VOTE
PLEASE VOTE
Your vote is important. Whether or not you plan to attend the Annual Meeting via the webcast, we encourage you to read these materials carefully and promptly vote your shares. There are several ways you can vote: via the internet, by telephone, by mailing the enclosed proxy or by attending our Annual Stockholders Meeting in person.virtually. Please vote as soon as possible to ensure that your vote is recorded promptly. If you hold shares in a brokerage account, your broker will not be able to vote your shares on most matters unless you provide your voting instructions.
On behalf of the Board of Directors and all TeleTechover 60,000 TTEC employees, thank you for your continued support of, and confidence in TeleTechTTEC and our business.
Very truly yours,
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KENNETH D. TUCHMAN
Chairman and Chief Executive Officer
Denver Center for Experience and Innovation (DCXI)
6312 S. Fiddler’s Green Circle, Suite 100N
Table of ContentsGreenwood Village, CO 80111
Notice of 20162024 Annual Meeting of Stockholders
Wednesday, May 25, 201622, 2024
1:10:00 p.m.a.m. Mountain Daylight Time
TeleTech Global HeadquartersJoin the webcast at www.virtualshareholdermeeting.com/TTEC2024.
9197 South Peoria Street
Englewood, Colorado 80112
ITEMS OF BUSINESS:
At the meeting, our stockholders will be asked to:
·Elect eight directors named in the Proxy Statement, for a term of one year;
● | Elect eight directors named in the Proxy Statement, for a term of one year; |
● | Ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for fiscal year 2024; |
● | Approve an amendment to the TTEC 2020 Equity Incentive Plan; and |
● | Transact such other business, including stockholder proposals, as may properly come before the meeting. |
·Ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2016;
·Approve, on an advisory basis, our executive compensation; and
·Transact such other business, including stockholder proposals, as may properly come before the meeting.
The meeting will also include a report on our financial results for fiscal year 2015,2023, an overview of our operations,2023 Impact & Sustainability initiatives, and our business outlook for 2016.the remainder of 2024.
RECORD DATE:
Only stockholders of record at the close of business on March 31, 2016,April 3, 2024, will be entitled to receive notice of, and to vote at, the 20162024 Annual Stockholders Meeting. Our total shares outstanding on the Record Date are 47,448,910.
By Order of the Board of Directors | |
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Margaret B. McLean
General Counsel and Chief Risk Officer
Greenwood Village, Colorado
April 10, 2024
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting to be held on May 25, 2016: this22, 2024: This Notice of Annual Meeting and Proxy Statement and the 20152023 Annual Report are available at teletech.com.ttec.com.
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REVIEW YOUR PROXY STATEMENT AND VOTE IN ONE OF FOUR WAYS: | |||||
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VIA INTERNET |
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Visit the website listed on your proxy card. | BY MAIL Sign, date and return your proxy card in the enclosed envelope. | ||||
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BY TELEPHONE |
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Call the telephone number on your proxy card. | AT THE VIRTUAL MEETING Attend the Annual Meeting virtually and vote | ||||
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ELECTION TO RECEIVE ELECTRONIC DELIVERY OF FUTURE ANNUAL MEETING MATERIALS. You can expedite delivery and avoid costly mailings by confirming in advance your preference for electronic delivery. | |||||
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Table of Contents
iii41
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2021 Long-Term Incentive Plan (LTIP) | 42 | ||
2023 Long-Term Incentive Plan (LTIP) | 43 | ||
2022 Value Creation Program | 43 |
iv77
9197 South Peoria StreetEnglewood, Colorado 80112
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Appendix B – Conformed Copy of TTEC 2020 Equity Incentive Plan | B-1 |
6312 S. Fiddler’s Green Circle, Suite 100N
Greenwood Village, CO 80111
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
PROXY STATEMENT EXECUTIVE SUMMARY
This summary highlights only selected information contained in this Proxy Statement. We encourage you to read the entire Proxy Statement and TeleTech 2015TTEC’s 2023 Annual Report on Form 10-K for the period ended December 31, 2023, and any subsequent financial filings, before voting your shares.
MATTERS TO BE VOTED ON AT 2016THE 2024 ANNUAL MEETING
Proposal | Board Recommendation |
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1.Election of | FOR each Nominee |
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2.Ratification of PricewaterhouseCoopers LLP as our | FOR |
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3.Approval of an Amendment to the TTEC 2020 Equity Incentive Plan | FOR | |||
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OUR COMPANY
·Our Company was founded in 1982 and from early days was a pioneer in the customer engagement management industry. Today, we deliver integrated customer consulting, technology, growth and care solutions on a global scale.
·Our portfolio of products and services allows us to design and deliver superior customer experience and engagement across numerous communication channels for clients in the automotive, communications and media, financial services, government, healthcare, technology, transportation and retail industries.
·Our solutions are supported by approximately 44,000 employees delivering services in 24 countries from 67 delivery centers on six continents.
·Our services are value-oriented, outcome-based, and delivered from our four business segments: Customer Management Services (CMS), Customer Growth Services (CGS), Customer Technology Services (CTS) and Customer Strategy Services (CSS).
·TeleTech is committed to the highest ethical, environmental and safety standards everywhere we do business, and, through our TeleTech Community Foundation, TeleTech invests in education and development in communities where we live and work.
2015 PERFORMANCE HIGHLIGHTS
In 2015, we had the following performance highlights:
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1 TeleTech computes company performance metrics on a constant currency basis in order to compare year-over-year operating performance. To establish a constant currency comparison, actual reported metrics are translated utilizing each underlying exchange rate in effect at the end of the prior year resulting in year-over-year operating performance excluding the impact from currency fluctuations. Additionally, the Company adjusts for non-operating items including, but not limited to, asset impairment and restructuring charges, deconsolidation of subsidiaries, changes in acquisition earn-outs and changes in tax valuation allowances and return to provision adjustments. The same methodology is utilized for other adjusted and non-GAAP constant currency metrics reported in this Proxy Statement. Please review a copy of the 2015 Annual Report and 2015 full year earnings press release for a reconciliation of these non-GAAP adjustments.
CORPORATE GOVERNANCE HIGHLIGHTS
Our Board follows sound governance practices.
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DIRECTOR EXPERIENCE
The Board and our Nominating and Governance Committee believe that diversity in experience and perspectives is important for achieving sound decisions and driving stockholder value. The following chart reflects the experience of our Board in 2015:
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BOARD NOMINEES1
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Director |
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Kenneth D. Tuchman |
| 56 |
| 1994 |
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| · Global executive and entrepreneur · Customer experience innovator · TeleTech founder |
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James E. Barlett |
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| 2000 |
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| · Global CEO experience · Public company director experience |
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Tracy L. Bahl |
| 54 |
| 2013 |
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| · Private equity executive · Healthcare industry · Chief executive of a multi-billion dollar subsidiary of a public company |
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Gregory A. Conley |
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| 2012 |
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| · Global CEO experience · Technology |
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Robert N. Frerichs |
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| 2012 |
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| · Public company director · Public audit experience · Consulting services industry · Technology |
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Marc L. Holtzman |
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| 2014 |
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| · International board experience · Public company director experience · Financial sector experience |
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Shrikant Mehta |
| 72 |
| 2004 |
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| · Global entrepreneurship experience · Innovation |
Steven J. Anenen |
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| · Global CEO experience · Public company director experience · Automotive industry experience · Technology |
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2015 EXECUTIVE COMPENSATION HIGHLIGHTS
·Our executive compensation program is designed to reward financial results and effective strategic leadership, which we believe are key to building sustainable value for our stockholders.
·Our executive compensation program utilizes a mix of base salary, and short- and long-term incentives, to attract and retain highly qualified executives and maintain a strong relationship between executive pay and company performance.
·Our executive compensation program places significant weight on ethical and responsible conduct in pursuit of TeleTech’s strategic goals.
·Our executive compensation programs place a meaningful portion of compensation “at risk” by aligning cash incentive payments to performance and by granting equity that vests over four- and five-year periods to ensure that the actual compensation realized by executives aligns with stockholder value over the long term.
·Our executive officers are subject to stock holding requirements that further align their interests with our stockholders.
·We ensure that our rewards are affordable by aligning them to the Company’s annual business plan.
·Our stockholders have indicated strong support for our executive compensation program with 99.79 percent voting in favor of the program at our 2015 Annual Meeting of Stockholders.
The following table reflects the compensation decisions made by the Compensation Committee for TeleTech’s named executive officers (NEOs) who continue to serve as TeleTech’s executive officers as of the date of this Proxy Statement1.
Named Executive Officers | Actual Total Direct | Market TDC | Market TDC | Market TDC | Peer Group |
Kenneth D. Tuchman | $ 11 | $ 3,281,100 | $ 4,431,000 | $ 6,042,000 | <25th |
Martin F. DeGhetto | $1,386,893 | $ 1,111,000 | $ 1,373,000 | $ 1,957,000 | 50th |
Charles “Keith” Gallacher | $1,647,899 | $ 1,042,000 | $ 1,302,000 | $ 1,740,000 | 70th |
Judi A. Hand | $1,438,470 | $ 1,058,000 | $ 1,308,000 | $ 1,864,000 | 55th |
Regina M. Paolillo | $1,382,085 | $ 1,539,000 | $ 1,970,000 | $ 2,265,000 | <25th |
1At Mr. Tuchman’s request, the Compensation Committee approved Mr. Tuchman’s base salary to be $1 per year. Mr. Tuchman’s salary has remained at this level since 2012.
This proxy statement (“Proxy Statement”) is issued in connection with the solicitation of proxies by the Board of Directors of TeleTech Holdings, Inc. (“TeleTech” or the “Company”) for use at the 2016 Annual Meeting of Stockholders (the “Annual Meeting”) to be held on May 25, 2016 at 1:00 p.m. Mountain Daylight Time, at 9197 South Peoria Street, Englewood, Colorado 80112 and at any adjournment or postponement thereof.
On or about April 12, 2016,10, 2024, we will begin distributing to each stockholder entitled to vote at the Annual Meeting either (1) this Proxy Statement, a proxy card or voting instruction form, and our 20152023 Annual Report to Stockholders, which we collectively refer to as the “proxy materials,” or (2) an email or notice of internet availability of proxy materials, in each case with instructions on how to access electronic copies of our proxy materials.
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OUR COMPANY
Founded in 1982, TTEC Holdings, Inc. (“TTEC”, “the Company”, “we”, “our”, or “us”; pronounced “T-TEC”) is a global customer experience (CX) outsourcing partner for marquis and disruptive brands and public sector clients. The Company designs, builds, and operates technology-enabled customer experiences across digital and live interaction channels to help clients increase customer loyalty, revenue, and profitability. By combining digital solutions with data-driven service capabilities, we help clients improve their customer satisfaction while lowering their total cost to serve. As of December 31, 2023, TTEC served over 750 clients across targeted industry verticals including financial services, healthcare, public sector, telecom, technology, media, travel and hospitality, automotive, and retail.
TTEC operates through two business segments.
● | TTEC Digital is one of the largest CX technology providers and is focused exclusively on the intersection of Contact Center As a Service (CCaaS), Customer Relationship Management (CRM), and Artificial Intelligence (AI) and Analytics. A professional services organization comprised of software engineers, systems architects, data scientists, and CX strategists; this segment creates and implements strategic CX transformation roadmaps; sells, operates, and provides managed services for cloud platforms and premise-based CX technologies including Amazon Web Services, Cisco, Genesys, Google, and Microsoft; and creates proprietary IP to support industry specific and custom client needs. TTEC Digital serves clients across Enterprise and Small & Medium Sized Business (SMB) segments and has a dedicated unit with government technology certifications serving the public sector. |
● | TTEC Engage provides the digitally enabled CX operational and managed services to support large, complex enterprise clients’ end-to-end customer interactions at scale. Tailored to meet industry specific and business needs, this segment delivers data-driven omnichannel customer care, customer acquisition, growth, and retention services, tech support, trust and safety, and back-office solutions. The segment’s technology-enabled delivery model covers the entire associate lifecycle including recruitment, onboarding, training, delivery, workforce management, and quality assurance. |
TTEC demonstrates its market leadership through strategic collaboration across TTEC Digital and TTEC Engage when there is client demand and fit for our integrated solutions. This partnership is central to our ability to deliver comprehensive and transformational customer experience solutions to our clients, including integrated delivery, go-to-market, and innovation for truly differentiated, market-leading CX solutions.
During 2023, the combined TTEC Digital and TTEC Engage global operating platform delivered onshore, nearshore, and offshore services in 22 countries on six continents -- the United States, Australia, Belgium, Brazil, Bulgaria, Canada, Colombia, Costa Rica, Egypt, Germany, Greece, Honduras, India, Ireland, Mexico, the Netherlands, New Zealand, the Philippines, Poland, South Africa, Thailand, and the United Kingdom – with the help of over 60,000 customer care associates, consultants, technologists, and CX professionals.
Our revenue for fiscal 2023 was $2.463 billion, approximately $487 million, or 20%, of which came from our TTEC Digital segment and $1.976 billion, or 80%, of which came from our TTEC Engage segment.
To improve our competitive position in a rapidly changing market and to lead our clients with emerging CX methodologies, we continue to invest in innovation and service offerings for both mainstream and high-growth disruptive businesses, diversifying and strengthening our core customer care services with technology-enabled, outcomes-focused services, data analytics, insights, and consulting.
AI-including generative AI-is and will continue to fundamentally transform how customer experience (CX) business is done and how brands connect with their customers. TTEC has embraced the responsible use of AI technologies for internal use in our business and in our client offerings under principles of accountability, responsibility, and transparency aligned with TTEC’s Values and our AI Use Policy.
TTEC partners with select market leaders to adopt generative AI CX solutions and analytics to meet the needs of industries we serve with the purpose of enhancing the CX experience to deliver a better, faster customer interaction and to generate increased revenue. How TTEC uses generative AI tools and applications in the business is subject to review and approval of the Responsible AI Council, a special-purpose multi-disciplinary team of subject matter experts who review and analyze the use of generative AI technologies before they are deployed in the business to assure that they meet our AI use standards and our Values.
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We also invest to broaden our product and service capabilities, increase our global client base and industry expertise, tailor our geographic footprint to the needs of our clients, and further scale our end-to-end integrated solutions platform. To this end we were acquisitive in the last several years, including our acquisition in April 2022 of certain public sector assets of Faneuil, Inc. that included healthcare exchange and transportation services contracts. We also completed an acquisition in the second quarter of 2021 of a provider of Genesys and Microsoft cloud contact center services, which followed an acquisition in the second half of 2020 of a preferred Amazon Connect cloud contact center service and implementation provider.
We have extensive expertise in the healthcare, automotive, public sector, financial services, communications, technology, travel and logistics, media and entertainment, e-tail/retail, and transportation industries. We serve more than 750 diverse clients globally, including many of the world’s iconic brands, Fortune 1000 companies, public sector clients, and disruptive hypergrowth companies.
2023 PERFORMANCE HIGHLIGHTS
Our 2023 performance is summarized below:
● | Our revenue was $2.46 billion, an increase of 0.8% over the prior year. |
● | Our income from operations was $118.0 million, or 4.8% of revenue, a 30.0% decrease year over year. Income from operations on a non-GAAP basis1 was $200.4 million, or 8.1% of revenue, compared to 10.2% in the prior year. |
● | Our net cash provided by operating activities was $144.8 million compared to $137.0 million in the prior year. |
● | Our diluted earnings per share were $0.18 compared to $2.18 in the prior year, and $2.181 compared to $3.59 in the prior year on a non-GAAP basis. |
● | We paid a total of $49.2 million in cash dividends to our shareholders. |
1. | TTEC presents company performance metrics on a non-GAAP basis to more accurately convey the performance of the business, which adjusts for non-operating items including, but not limited to, asset impairment, restructuring charges, cybersecurity incident-related costs, equity-based compensation expense, depreciation and amortization expense, changes in acquisition contingent consideration, changes in tax valuation allowances, return to provision adjustments, and one-time non-recurring items. For additional information, please review GAAP to Non-GAAP Reconciliation of Performance Metrics on page 59 of this Proxy Statement. |
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CORPORATE GOVERNANCE HIGHLIGHTS
Our Board follows sound governance practices.
Independence | ●In 2023, seven out of our eight Board members were independent directors pursuant to the standards set forth in the NASDAQ Stock Market Rules, which is the standard used by the Company to determine Board member independence. ●All Board Committees, except a limited purpose Executive Committee of the Board, are comprised exclusively of independent directors. ●In 2024, subject to TTEC stockholders voting in favor of the directors nominated by the Board, our independent and executive director mix will continue to be the same as in the prior year.
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Executive Sessions | ●The independent directors regularly meet in executive sessions without management. ●They also regularly meet with the independent auditor and independent compensation consultants in executive sessions without management, as well as with senior executives in internal audit, finance, IT, cybersecurity, compliance, legal, human resources, and compensation functions. |
Board Oversight of Risk Management | ●Our Board understands, oversees, and regularly reviews risks inherent in TTEC’s business with emphasis on the oversight of the appropriateness of the Company’s risk management strategy, long- and short-range risk mitigation planning, and the effectiveness of our risk strategy execution. In 2023, the Board was particularly focused on the evolving risks specific to the use of artificial intelligence in TTEC’s business and the impact and opportunities it is likely to have, over time, on the Company’s offerings and its industry. ●The Audit Committee of the Board reviews our overall enterprise risk management policies and practices, is actively involved in the oversight of our Enterprise Risk Management (ERM) program, and reviews risks inherent in our internal controls over financial reporting; risks specific to our geographic footprint and its expansion and concentration; risks specific to our complex regulatory compliance framework around the world; risks arising from macro- and microeconomic volatility and the related impact on TTEC clients’ and our business outlook; risks specific to our cost structure; and our financial and liquidity risks. ●The Compensation Committee of the Board evaluates: risks associated with TTEC’s management and employee compensation plans; the structure of and risks specific to our employees’ and senior management incentive programs; risks specific to TTEC employment practices including the Company’s commitment to diversity, equality, and inclusion in the TTEC workforce; and risks inherent in hiring, retention, and development of our people. ●The Nominating and Governance Committee of the Board is focused on: risks inherent in our governance, senior management, and board succession planning; risks specific to crisis management and crisis response; and climate risks specific to our business. ●The Security and Technology Committee of the Board oversees and reviews: risks inherent in TTEC’s IT resilience, including TTEC’s cybersecurity initiatives designed to protect TTEC’s IT infrastructure and data, which include the data of the Company’s clients, their customers, and TTEC employees; risks specific to our data governance, including how we collect, store, use, transfer, and protect information; the Company’s incident response and business continuity and disaster recovery practices; and the evolving risks specific to the use of artificial intelligence in TTEC’s business and client offerings. |
Board Oversight of Cybersecurity | ●Although the Board relies on its Security & Technology Committee to oversee technology resilience and cybersecurity at TTEC, the full Board retains the overarching responsibility for cyber-related risk management oversight and business continuity practices. As part of that oversight, the Board routinely seeks information from and offers input to management about the ongoing cybersecurity maturity evolution at the Company, and monitors how TTEC performs against its cybersecurity risk management plans designed to protect TTEC’s IT infrastructure, safeguard the interface between TTEC’s and TTEC clients’ IT environments, and protect TTEC and its clients’ data from unauthorized access. The Board also monitors the evolution of and improvements in the Company’s incident response and business continuity and disaster recovery practices. |
Board Oversight of Environmental, Social and Governance (ESG) Initiatives and the Impact and Sustainability Report | ●Our Board supports and regularly reviews TTEC’s ongoing commitment to ESG initiatives. ●The Nominating and Governance Committee of the Board is tasked with the oversight of ESG at TTEC, including the establishment of climate stewardship and social responsibility priorities for the Company, the identification and implementation of appropriate disclosure and reporting standards, and awareness and training initiatives. ●The Compensation Committee of the Board is tasked with the oversight of diversity, equity and inclusion programs as part of the Company’s impact and sustainability initiative, and challenges management to focus the Company’s employee and philanthropy programs on its social responsibility. ●The Security & Technology Committee of the Board leverages its oversight of global data privacy, technology reliance and business continuity planning to support good governance at TTEC. |
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●The Audit Committee of the Board is focused on financial governance and on the accuracy of auditable ESG-related disclosures, including positioning the Company to be ready to comply with the upcoming SEC climate risk disclosure requirements. ●During 2023, the Board oversaw the publishing of the Company’s Environmental, Social, and Governance report for fiscal year 2022 and guided the Company in its transition from ESG-focused reporting to a broader focus reflected in the Company’s 2023 Impact and Sustainability Report. This Report evolved to expand its climate stewardship activities by disclosing its Scope 1 and Scope 2 greenhouse gas emissions and aligning its disclosures to the Task Force on Climate-related Financial Disclosures (TCFD) framework and to the relevant United Nations Sustainable Development Goals (UNSDG), in addition to the previously reported alignment with the Sustainability Accounting Standards Board (SASB) framework. | |
Stock Ownership Requirements | ●TTEC Board members have committed to hold 5x of their annual cash retainer in TTEC common stock and to attain this level of holdings within five (5) years of joining our Board. ●Our Chief Executive Officer and the Chief Executive Officers of TTEC’s business segments must, within five (5) years of attaining their respective positions, hold TTEC common stock valued at 4x their annual base salary. ●Our Chief Financial Officer is expected, within five (5) years of attaining the position, to hold TTEC common stock valued at 3x the officer’s annual base salary. ●Our other executives at the executive vice president level must, within five (5) years of attaining their respective positions, hold TTEC common stock valued at 2.5x their annual base salary. ●Our senior vice president level executives, within five (5) years of attaining the position, must hold TTEC common stock valued at 1x their base annual salary. |
Board Practices | ●Our Board annually reviews its overall effectiveness utilizing confidential self-assessment surveys that cover topics generally recommended by the National Association of Corporate Directors (NACD) and public company governance experts or engaging third-party specialists for such evaluations. The Board committees conduct similar assessments on the cadence consistent with NASDAQ stock market requirements. The assessment findings are reviewed by the Nominating and Governance Committee of the Board with necessary changes in board practices adopted from time to time to address the insights and feedback developed through such annual evaluations. ●Board nomination priorities are adjusted annually to ensure that our Board, as a whole, continues to reflect the appropriate mix of skills, experience, and competencies necessary to support TTEC’s business strategy. ●Our Board and its committees have access to independent advisors at their sole discretion. ●The Nominating and Governance Committee of the Board maintains and enforces TTEC’s Corporate Governance Guidelines, which include business conduct, conflicts of interest, board qualification, and over-boarding guidelines. ●Our Board also engages in ongoing education and our directors take ethics training consistent with best practices. |
Accountability | ●All directors stand for election annually. ●Our Chairman of the Board and Chief Executive Officer is the controlling stockholder of TTEC. He controls 58.7% of our common stock. ●Although certain listing rules of the NASDAQ stock market are permitted not to be mandatory for controlled companies like TTEC, TTEC does not avail itself of these exceptions and its governance is consistent with best practices of NASDAQ-listed companies that are not controlled companies. |
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DIRECTOR EXPERIENCE
The Board and our Nominating and Governance Committee of the Board believe that diversity in experience and perspectives is important to achieving sound decisions and driving stockholder value. The following chart reflects the experience of our Board members and nominees:
Our Board includes two women and two ethnically diverse directors who we believe further enhance the quality of deliberations and ultimately the decision-making processes of our Board (see, Board Diversity Matrix on page 67).
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IMPACT AND SUSTAINABILITY (ESG): LIVING OUR VALUES
TTEC’s dedication to sustainable growth traces back to our inception over 40 years ago. We continuously refine our impact and sustainability priorities to align with our business strategy, aiming to maximize shareholder value while prioritizing investments in our people and the communities where we operate. Our impact and sustainability focus is synonymous with living our values.
TTEC’s 2023 Impact and Sustainability Report showcases our progress on the journey towards sustainable and socially responsible growth. Specifically, it highlights advancements in three key areas refined from our 2023 Impact materiality assessment: investments in our employees and communities, commitment to good governance, and our contribution to climate stewardship. These focus areas laid the foundation for the significant strides made toward creating a positive impact, contributing to a more diverse, fair, sustainable, and ethical future.
Our 2023 highlights include: the launch of global Scope 1 and Scope 2 carbon emissions reporting, establishment of a foundation for Scope 3 reporting and emission-reduction targets, implementation of our Impact Strategy Practice to foster economic vibrancy worldwide, adoption of transparency initiatives such as the Task Force on Climate-related Financial Disclosures (TFCD) and United Nations Sustainable Development Goals (UNSDG), and alignment with the Sustainability Accounting Standards Board (SASB) framework. Additionally, we formed a Responsible AI Council to oversee the ethical use of artificial intelligence, refined our Diversity
Council’s charter, expanded Diversity, Equity, and Inclusion (DE&I) initiatives globally, and enhanced our Health and Safety program by launching a cross-disciplinary working group to ensure a safe and productive work environment for all employees. To ensure our values are ever-present, we upgraded our supplier onboarding processes to ensure that our suppliers share our principles, expanded our Modern Slavery Statements from regional commitments to a global policy that covers all our operations, and formalized our long-standing environmental stewardship commitment through the new Climate Change and Environmental Responsibility policy.
Looking ahead, we see ample opportunity to continue making a positive impact by maximizing shareholder value through investments in our people, our services, and the communities we serve. TTEC’s 2023 Impact and Sustainability Report (not incorporated into these Proxy materials by reference) can be found at https://www.ttec.com/about-us/impact-and-sustainability-report.
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2024 BOARD NOMINEES
Director | Age | Director Since | Independent | Qualifications |
Kenneth D. Tuchman | 64 | 1994 | ● Business Transformation Experience ● Capital Markets or M&A Experience ● Global Experience ● Industry Experience ● Operator or CEO Experience ● Public Company CEO and Board Experience ● Risk Management Experience ● Service Industry Experience ● Technology/Digital Sector Experience ● TTEC Founder
| |
Steven J. Anenen | 71 | 2016 | ✓ | ● Business Transformation Experience ● Capital Markets or M&A Experience ● Global Experience ● Industry Experience ● Operator or CEO Experience ● Public Company CEO and Board Experience ● Risk Management Experience ● Service Industry Experience
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Tracy L. Bahl | 62 | 2013 | ✓ | ● Business Transformation Experience ● Capital Markets or M&A Experience ● Industry Experience ● Operator or CEO Experience ● Public Company Audit Experience ● Public Company Board Experience ● Risk Management Experience ● Service Industry Experience
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Gregory A. Conley | 69 | 2012 | ✓ | ● Business Transformation Experience ● Capital Markets or M&A Experience ● Global Experience ● Industry Experience ● Operator or CEO Experience ● Public Company Audit Experience ● Public Company Board Experience ● Risk Management Experience ● Service Industry Experience ● Technology/Digital Sector Experience
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Robert N. Frerichs | 72 | 2012 | ✓ | ● Business Transformation Experience ● Capital Markets or M&A Experience ● Global Experience ● Industry Experience ● Operator or CEO Experience ● Public Company Audit Experience ● Public Company Board Experience ● Public Sector Experience ● Risk Management Experience ● Service Industry Experience ● Technology/Digital Sector Experience
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Marc L. Holtzman | 64 | 2014 | ✓ | ● Business Transformation Experience ● Capital Markets or M&A Experience ● ESG Experience ● Global Experience ● Industry Experience ● Operator or CEO Experience ● Public Company Board Experience ● Public Company Audit Experience ● Public Sector Experience ● Risk Management Experience ● Service Industry Experience
|
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Gina L. Loften | 58 | 2021 | ✓ | ● Business Transformation Experience ● Capital Markets or M&A Experience ● ESG Experience ● Global Experience ● Industry Experience ● Public Sector Experience ● Public Company Board Experience ● Risk Management Experience ● Service Industry Experience ● Technology/Digital Sector Experience
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Ekta Singh-Bushell | 52 | 2017 | ✓ | ● Business Transformation Experience ● ESG Experience ● Global Experience ● Public Company Audit Experience ● Public Company Board Experience ● Public Sector Experience ● Risk Management Experience ● Service Industry Experience ● Technology/Digital Sector Experience
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2023 EXECUTIVE COMPENSATION HIGHLIGHTS
Our executive compensation program:
● | Rewards financial results and effective strategic leadership, which we believe are key to building sustainable value for our stockholders. |
● | Utilizes a mix of base salary and short- and long-term incentives to attract and retain highly qualified executives and maintain a strong relationship between executive pay and company performance. |
● | Places significant weight on ethical and responsible conduct in pursuit of TTEC’s strategic goals. Our incentive recoupment (clawback) policy requires our Board of Directors to recoup cash and equity incentive compensation from senior executives in the event of a financial restatement as a result of material noncompliance with accounting standards, or in the event a senior executive’s detrimental conduct causes damage to TTEC in other material respects. |
● | Places a meaningful portion of compensation “at risk” by aligning cash incentive payments to performance and by granting equity that vests over three-, four- and five-year periods to ensure that the actual compensation realized by executives aligns with stockholder value over the long term. |
● | Ensures that our rewards are affordable by aligning them to the Company’s annual business plan. |
● | Includes two components: one that rewards the prior year’s performance but vests over time, and another that is forward looking and rewards growth of key performance indicators like Revenue and Adjusted EBITDA over a three-year period. By emphasizing a longer-term view in equity performance incentives, the Company aligns our Named Executive Officers’ and other executives’ interests with the interests of and value creation for our stockholders. |
● | Aligns executive officers’ interests with stockholders with stock holding requirements. |
● | Considers stockholder views. At our 2023 Annual Meeting of Stockholders, we asked our stockholders to provide an advisory, non-binding vote of support of our executive officer compensation, commonly known as a “Say on Pay” proposal. Stockholders indicated strong support with 99% voting in favor of the program. The stockholders will again consider our executive compensation on an advisory basis as part of the 2026 Annual Stockholder Meeting. |
● | In addition, at our 2023 Annual Meeting of Stockholders, we asked our stockholders to provide an advisory, non-binding vote on the frequency with which they should provide an advisory vote on executive compensation. The stockholders indicated strong support for our existing practices, with 71% voting in favor of executive compensation being considered on an advisory basis once every three years. Stockholders will again consider the frequency with which they should provide an advisory vote on executive compensation as part of the 2029 Annual Stockholder Meeting. |
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The following table reflects the compensation decisions made by the Compensation Committee of the Board for TTEC’s Named Executive Officers (NEOs).
In 2023, we paid the following to our Named Executive Officers:
Named Executive Officers | Actual Total Direct (TDC) Compensation 1 | Market TDC at 25th | Market TDC at 50th | Market TDC at 75th | Percentile |
Kenneth D. Tuchman 2 | $1 | $5,850,000 | $7,208,000 | $9,370,000 | <25th |
Michelle “Shelly” R. Swanback 3 | $5,947,110 | $1,937,000 | $2,984,000 | $4,363,000 | >75th |
Francois Bourret 4 | $917,947 | $382,932 | $505,880 | $811,451 | >75th |
Dustin J. Semach 5 | $159,615 | $2,148,000 | $2,735,000 | $3,327,000 | - |
David J. Seybold | $937,507 | $934,000 | $1,912,000 | $3,350,000 | <50th |
Margaret B. McLean | $686,536 | $746,000 | $1,235,000 | $1,643,000 | <25th |
1. | Actual TDC represents base salary earned in 2023, bonus paid in 2023 for 2022 performance, retention bonuses paid in 2023, fair market value (FMV) of RSU equity grants awarded in 2023, and fair market value (FMV) of performance-based grants, at target achievement, awarded under the 2023 annual long-term incentive plan. |
2. | At Mr. Tuchman’s request, the Compensation Committee approved Mr. Tuchman’s base salary to be $1 per year. |
3. | Ms. Swanback’s actual TDC includes a one-time $2 million RSU equity grant, vesting in equal installments over a five-year period, and a $2 million performance-based equity grant, subject to a 3-year cliff vesting period, both issued in connection with her promotion to President, TTEC Holdings, Inc |
4. | The market data presented for Mr. Bourret corresponds with his primary role as Chief Accounting Officer. |
5. | Due to Mr. Semach’s limited tenure during 2023, we have not compared his 2023 actual TDC against the market benchmarks. |
GENERAL INFORMATION
This proxy statement (Proxy Statement) is issued in connection with the solicitation of proxies by the Company’s Board of Directors for use at the 2024 Annual Meeting of Stockholders (the “Annual Meeting”) to be held on May 22, 2024, at 10:00 a.m. Mountain Daylight Time, completely “virtually” as further covered in this Proxy Statement, and at any adjournment or postponement thereof.
On or about April 10, 2024, we will begin distributing to each stockholder entitled to vote at the Annual Meeting either (1) this Proxy Statement, a proxy card or voting instruction form, and our 2023 Annual Report to Stockholders, which we collectively refer to as the “proxy materials,” or (2) an email or notice of internet availability of proxy materials, in each case with instructions on how to access electronic copies of our proxy materials.
This Proxy Statement contains important information regarding the Annual Meeting, the proposals on which you are being asked to vote, information about our voting procedures, and information you may find useful in determining how to vote.
IMPORTANT INFORMATION ABOUT THE PROXY MATERIALS AND VOTING YOUR SHARES
Why am I receiving these proxy materials?
The Company is soliciting your proxy in connection with the Annual Meeting. As a stockholder, you are invited to attend the Annual Meeting and are requested to vote on the items of business discussed in this Proxy Statement.
How can I vote my shares electronically and participate in the Annual Meeting?
This year’s Annual Meeting will be held entirely online. Stockholders may participate in the virtual Annual Meeting by visiting the following website: www.virtualshareholdermeeting.com/TTEC2024. To participate in the virtual Annual Meeting, you will need the 16-digit control number included on your notice of internet availability of proxy materials (Notice of Internet Availability), on your proxy card or on the instructions that accompanied your proxy materials. Shares held in your name as the stockholder of record may be voted electronically during the virtual Annual Meeting. Shares for which you are the beneficial owner but not the stockholder of record also may be voted electronically during the virtual Annual Meeting. However, even if you plan to attend the virtual Annual Meeting, the Company recommends that you vote your shares in advance, so that your vote will be counted if you later decide not to attend the virtual Annual Meeting.
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In our desire to ensure that the virtual Annual Meeting provides stockholders with a meaningful opportunity to participate, our stockholders will be able to ask questions to the Board of Directors and management both at the time of registration and during the Annual Meeting. Stockholders may submit questions during the Annual Meeting by typing questions in the question/chat section of the meeting screen. Questions relevant to meeting matters will be answered during the Annual Meeting, subject to time constraints and in accordance with the rules of conduct which will be posted on ttec.com under the “Investors” tab. We will also post on our Investors page responses to questions relevant to meeting matters that are not answered during the Annual Meeting due to time constraints.
How can I vote my shares without attending the virtual Annual Meeting?
To vote your shares without attending the virtual Annual Meeting, please follow the instructions for internet or telephone voting on the Notice of Internet Availability. If you request printed copies of the proxy materials by mail, you may also vote by signing and submitting your proxy card and returning it by mail, if you are the stockholder of record, or by signing the voter instruction form provided by your bank or broker and returning it by mail, if you are the beneficial owner but not the stockholder of record. This way your shares will be represented whether or not you are able to attend the virtual meeting.
What will I need in order to attend the virtual Annual Meeting?
You are entitled to attend the virtual Annual Meeting only if you were a stockholder as of the Record Date for the Annual Meeting, or April 3, 2024 (the “Record Date”), or you hold a valid proxy for the Annual Meeting. You may attend the virtual Annual Meeting, vote, and submit a question during the Annual Meeting by visiting www.virtualshareholdermeeting.com/TTEC2024 and using your 16-digit control number to enter the meeting. If you do not comply with the procedures outlined above, you will not be admitted to the virtual Annual Meeting.
Why did I receive a Notice of Internet Availability of proxy materials?
Under the rules of the U.S. Securities and Exchange Commission,SEC, we are using the internet as the primary means of furnishing proxy materials to our stockholders. Most of our stockholders will not receive printed copies of the proxy materials unless they request them. Accordingly, if you received a Notice of Internet Availability of Proxy Materials (the “Notice of Internet Availability”) by mail, you will not receive a printed copy of the proxy materials, unless you request one as instructed in that notice. Instead, the Notice of Internet Availability will instruct you on how you may access and review the proxy materials on the internet, free of charge. This approach to distribution of proxy materials reduces the environmental impact of our Annual Meeting, expedites stockholders’ receipt of theour proxy materials, and lowers our costs. The Notice of Internet Availability also includes instructions allowing stockholders to request to receive future proxy materials in printed form by mail or electronically by email.
How can I vote my shares?
If you are a stockholder of record, you may vote by internet, by telephone or by mail at any time prior to the meeting, or you may vote in person at the meeting, as follows:
·Vote by Internet at www.proxyvote.com. Use the internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Daylight Time on May 24, 2016. Have your proxy card or Notice of Internet Availability in hand when you access the website and follow the instructions to obtain your records and to create an electronic voting instruction form.
·Vote by Phone. Use any telephone to call 1-800-690-6903 to transmit your voting instructions up until 11:59 p.m. Eastern Daylight Time on May 24, 2016. Have your proxy card in hand when you call and then follow the instructions. If you received a Notice of Internet Availability, you may request a proxy card by following the instructions in the notice.
·Vote by Mail. If you received or requested a printed copy of the proxy materials by mail, you may vote by proxy by filling out the proxy card and returning it in the postage-paid envelope we have provided or returning it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. If you received a Notice of Internet Availability, you may request a proxy card by following the instructions in the notice.
·Vote at the Meeting. You may vote your shares at the meeting. You will be admitted to the meeting only if you have a ticket. See “How can I attend the Annual Meeting?” in this Proxy Statement for instructions on obtaining a ticket.
If your shares are held in an account at a brokerage firm, bank or similar organization, you will receive voting instructions from the organization holding your account and you must follow those instructions to vote your shares.
Additional Procedures. Votes cast by proxy prior to the Annual Meeting will be tabulated by an automatic system administered by Broadridge Financial Solutions, Inc. Votes cast by proxy or in person at the Annual Meeting will be counted by the persons we appoint to act as election inspectors for the Annual Meeting. With regard to the election of directors, votes may be cast in favor or withheld; votes that are withheld will be excluded entirely from the tabulation of votes and will have no effect. Cumulative voting is not permitted in the election of directors. Consequently, you are entitled to one vote for each share of our common stock held in your name for as many persons as there are directors to be elected, and for whose election you have the right to vote.
With respect to the other proposals submitted for stockholder approval (other than the election of directors), you may vote for or against the proposal, or you may abstain. Abstentions will have the same effect as a negative vote on the ratification of the appointment of our independent registered public accounting firm for 2016 but will have no effect on the advisory vote on executive compensation.
If you hold shares beneficially in street name and do not provide your broker with voting instructions, your shares may constitute “broker non-votes.” Generally, brokerage firms have the authority to vote your shares without your voting instructions on certain “routine” matters, such as Proposal 2, but not on other “non-routine” items, such as Proposals 1 and 3. In tabulating the voting result for any particular proposal, shares that constitute broker non-votes are not considered votes cast on that proposal. Thus, broker non-votes will not affect the outcome of any matter being voted on at the meeting, assuming that a quorum is obtained.
For your information, voting via the internet is the least expensive to us, followed by telephone voting, with voting by mail being the most expensive. Also, you may help to save us the expense of a second mailing if you vote promptly.
What are the matters to be voted on at the Annual Meeting?
The items of business scheduled to be voted on at the Annual Meeting are:
● | Proposal No. 1: | The election of eight directors (see, page 60); |
·Proposal 1:
● | Proposal No. 2: | The ratification of the appointment of PricewaterhouseCoopers LLP as our Independent Registered Public Accounting firm for 2024 (see, page 68); and |
● | Proposal No. 3: | The approval of an amendment to the TTEC 2020 Equity Incentive Plan (see, page 70). |
We will also consider other business that properly comes before the Annual Meeting.
What are my voting choices?
For the election of eight directors (see page 35);
·Proposal 2: The(Proposal No. 1), you may vote “FOR” or “WITHHOLD” with respect to each nominee. Cumulative voting is not permitted in the election of directors. For ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2016 (see page 39); and
·Proposal 3: The approval, on an advisory basis, of the compensation for our executive officers (see page 40).
We will also consider other business that properly comes before the Annual Meeting.
What are my voting choices?
For the election of directors,2024 (Proposal No. 2), you may vote “FOR”, “AGAINST” or “WITHHOLD” with respect to each nominee.“ABSTAIN”. For the other proposals,approval of an amendment to the TTEC 2020 Equity Incentive Plan (Proposal No. 3), you may vote “FOR” or, “AGAINST” or you may “ABSTAIN” from voting.“ABSTAIN.
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How does the Board recommend that I vote?
Our Board recommends that you vote your shares:
·“FOR” each of the nominees to our Board;
● | “FOR” each of the nominees to our Board; |
● | “FOR” the ratification of PricewaterhouseCoopers LLP as our independent registered public accounting for 2024; and |
● | “FOR” the approval of an amendment to the TTEC 2020 Equity Incentive Plan. |
·“FOR” the ratification of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2016; and
·“FOR” the proposal to approve, on an advisory basis, the compensation for our named executive officers.
Kenneth D. Tuchman, our Chairman and Chief Executive Officer and the beneficial owner of more than 65 percent58.7% of the issued and outstanding shares of common stock as of the record date (65 percentRecord Date (58.7% of the shares entitled to vote, excluding stock options) has indicated that he intends to vote:
·“FOR” each of the nominees to our Board;
● | “FOR” each of the nominees to our Board; |
● | “FOR” the ratification of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2024; and |
● | “FOR” the approval of an amendment to the TTEC 2020 Equity Incentive Plan. |
·“FOR” the ratification of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2016; and
·“FOR” the proposal to approve, on an advisory basis, the compensation for our named executive officers.
Additionally, on April 1, 2011, Mr. Tuchman entered into a Voting Agreement whereby he has agreed to vote shares he beneficially owns “FOR” the election of Mr. Barlett to our Board through and including December 31, 2017.
How will my shares be voted by proxy?
Valid proxies provided to the Company by telephone, over the internet, or by a mailed proxy card will be voted at the Annual Meeting as directed by you unless revoked in accordance with the instructions. If you properly execute and submit your proxy, but do not indicate how you want your shares voted, the persons named as your proxies will vote your shares in accordance with the recommendations of our Board of Directors. These recommendations are:
·“FOR” each of the nominees to our Board;
● | “FOR” each of the nominees to our Board; |
● | “FOR” the ratification of PricewaterhouseCoopers LLP as our independent registered public accounting for 2024; and |
● | “FOR” the approval of an amendment to the TTEC 2020 Equity Incentive Plan. |
·“FOR” the ratification of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2016; and
·“FOR” the proposal to approve, on an advisory basis, the compensation for our named executive officers.
How can I revoke my proxy or change my vote?
You may revoke your proxy or change your vote at any time prior to the taking of the vote at the Annual Meeting. If you are the stockholder of record, you may change your vote by:
·Voting again through the internet or by telephone, or by completing, signing, dating and returning a new proxy card with a later date, all of which automatically revoke the earlier proxy so long as completed prior to the applicable deadline for each method;
● | Voting again through the internet, by telephone, or by completing, signing, dating, and returning a new proxy card with a later date, all of which automatically revoke the earlier proxy so long as completed prior to the applicable deadline for each method; |
● | Providing a written notice of revocation to our Corporate Secretary at TTEC Holdings, Inc., 6312 S. Fiddler’s Green Circle, Suite 100N, Greenwood Village, CO 80111, prior to your shares being voted; or |
● | Attending the virtual Annual Meeting and voting during the meeting. Your virtual attendance at the Annual Meeting alone will not cause your previously granted proxy to be revoked unless you specifically so request before the taking of the vote. |
·Providing a written notice of revocation to our Corporate Secretary at TeleTech Holdings, Inc., 9197 South Peoria Street, Englewood, Colorado 80112 prior to your shares being voted; or
·Attending the Annual Meeting and voting in person. Your attendance at the meeting alone will not cause your previously granted proxy to be revoked unless you specifically so request before the taking of the vote.
For shares you hold beneficially in street name,“street name”, you may change your vote by submitting new voting instructions to your broker, bank, trustee, or nominee following the instructions they provided, or, if you have obtained a legal proxy from your broker, bank, trustee, or nominee giving you the right to vote your shares, by attending the virtual Annual Meeting and voting in person.during the meeting.
Will shares I hold in my brokerage account be voted if I do not provide timely voting instructions?
If your shares are held through a brokerage firm, they will be voted as you instruct on the voting instruction card provided by your broker. If you sign and return your card without giving specific instructions, your shares will be voted in accordance with the recommendations of our Board of Directors.
If you do not provide timely instructions as to how your brokerage shares are to be voted, your broker will have the authority to vote them only on the ratification of our independent registered public accounting firm. Your broker will be prohibited from voting your shares on the election of directors and the advisory approval of our executive compensation.amendment to the TTEC 2020 Equity Incentive Plan. These “broker non-votes” will be counted only for the purpose of determining whether a quorum is present at the meeting and not as votes cast. As a result, broker non-votes will not affect the outcome of any matter being voted on at the meeting, assuming that a quorum is obtained.
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Will shares that I own as a stockholder of record be voted if I do not return my proxy card in a timely manner?
Shares that you own as a stockholder of record will be voted as you instruct on your proxy card. If you sign and return your proxy card without giving specific instructions, they will be voted in accordance with the recommendations of our Board of Directors. If you do not return your proxy card in a timely manner or provide voting instructions through the internet or by phone, your shares will not be voted unless you or your proxy holder attendsattend the virtual Annual Meeting and vote in person.during the meeting.
What is required to conduct the business of the Annual Meeting?
In order to conduct business at the Annual Meeting, a quorum of a majority of the outstanding shares of common stock entitled to vote as of the record dateRecord Date must be present in person or represented by proxy. Both abstentions and broker non-votes are counted for the purpose of determining the presence of a quorum.
How many votes are required to approve each proposal?
Directors are elected by a plurality of the votes cast. This means that the eight individuals nominated for election to the Board who receive the most “FOR” votes (among votes properly cast in person, electronically, telephonically or by proxy) will be elected.
The affirmative vote of the holders of a majority of the outstanding shares of Common Stockcommon stock present in person or represented by proxy at the meeting and entitled to vote is required to approve the ratification of PricewaterhouseCoopers LLP as our independent registered public accounting firm.
The affirmative vote of the holders of a majority of the outstanding shares of common stock present in person or represented by proxy at the meeting and entitled to vote is required to approve the amendment to the TTEC 2020 Equity Incentive Plan.
As of the Record Date, there were 47,448,910 shares of common stock outstanding and entitled to vote. Each share of common stock entitles the holder thereof to one vote on executive compensation is advisory and non-binding, but we will consider stockholders to have approved the compensation of our named executive officers if the number of votes cast “FOR” the proposal exceeds the number of votes cast “AGAINST” theeach proposal.
How are votes counted?
Votes cast by proxy prior to the Annual Meeting will be tabulated by an automatic system administered by Broadridge Financial Solutions, Inc. Votes cast by proxy or in person at the Annual Meeting will be counted by the persons we appoint to act as election inspectors for the Annual Meeting.
Votes withheld from a director nominee will have no effect on the election of the director from whom votes are withheld. Abstentions will be treated as shares that are present and entitled to vote and will consequently have the effect of a vote “AGAINST” the particular matter, except inratification of PricewaterhouseCoopers LLP as our independent registered public accounting firm and the caseapproval of an amendment to the vote on executive compensation for which an abstention will have no effect. Votes withheld from a director nominee will have no effect on the election of the director from whom votes are withheld. TTEC 2020 Equity Incentive Plan.
If a broker indicates on the proxy card that it does not have discretionary authority to vote certain shares on a particular matter, it is referred to as a “broker non-vote.” Broker non-votes will be treated as shares that are present and entitled to vote for purposes of determining the presence of a quorum but will not be considered as voted for the purpose of determining the approval of the particular matter.
If I own or hold shares in a brokerage account, can my broker vote my shares for me?
The election of directors and the executive compensation vote are matters on which brokers do not have discretionary authority to vote. Thus, if your shares are held in a brokerage account and you do not provide instructions as to how your shares are to be voted on these proposals, your broker or other nominee will not be able to vote your shares on these matters. Accordingly, we urge you to provide instructions to your broker or nominee so that your votes may be counted. You should vote your shares by following the instructions provided on the voting instruction card that you receive from your broker.
If I share an address with another stockholder, how will we receive our proxy materials?
For stockholders of record, we have adopted a procedure called “householding,”“householding”, which the U.S. Securities and Exchange CommissionSEC has approved. Under this procedure, we are delivering a single copy of the Notice of Internet Availability and, if applicable, this Proxy Statement and the 20152023 Annual Report to multiple stockholders who share the same address unless we have received contrary instructions from one or more of the stockholders. This procedure reduces our printing and mailing costs and the impact of printing and mailing these materials on the environment. Stockholders who participate in householding will continue to be able to access and receive separate proxy cards. Upon written or verbal request, we will deliver promptly a separate copy of the Notice of Internet Availability and, if applicable, this Proxy Statement and the 20152023 Annual Report to any stockholder at a shared address to which we delivered a single copy of any of these documents. To receive a separate copy of the Notice of Internet Availability and, if applicable, this Proxy Statement, or the 20152023 Annual Report, or to request delivery of a single copy of these materials if multiple copies are currently being delivered, stockholders may contact us at TeleTechTTEC Holdings, Inc., 9197 South Peoria Street, Englewood, Colorado 80112,6312 S. Fiddler’s Green Circle, Suite 100N, Greenwood Village, CO 80111, Attention: Investor Relations, or by calling 1.800.TELETECH (1.800.835.3832)send an email to investor.relations@ttec.com. Outside of the U.S., please dial +1.303.397.8100.
Stockholders who hold shares in “street name” (as described above) may contact their brokerage firm, bank, broker- dealer, or other similar organization to request information about householding.
How can I attend the Annual Meeting?
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If you plan to attend the Annual Meeting, please mark the appropriate box on the proxy card and return the proxy card promptly. The admission ticket for the meeting will be forwarded to you. If you are a stockholder of record and arrive at the Annual Meeting without an admission ticket, we will have to verify your share ownership before you are admitted to the meeting. If you are a beneficial owner, you will only be admitted upon presentation of evidence of your beneficial holdings, such as a bank or brokerage firm account statement.
How can I see the list of stockholders entitled to vote?
A complete list of stockholders entitled to vote at the Annual Meeting will be available for examination by any stockholder, for any purpose germane to the meeting, at the Annual Meeting by means of a link to be made available on the meeting screen and at our principal office located at 9197 South Peoria Street, Englewood, Colorado 801126312 S. Fiddler’s Green Circle, Suite 100N, Greenwood Village, CO 80111, during normal business hours for a period of at least 10 days prior to the Annual Meeting.
What happens if additional items of business are presented at the Annual Meeting?
We are not aware of any itemitems that may be voted on at the Annual Meeting that isare not described in this Proxy Statement. However, the holders of the proxies that we are soliciting will have the discretion to vote them in accordance with their best judgment on any additional matters that may be voted on, including matters incidental to the conduct of the Annual meeting.Meeting.
Is my vote confidential?
Stockholders may elect that their identity and individual vote be held confidential by marking the appropriate box on their proxy card or ballot. Confidentiality will not apply to the extent that voting disclosure is required by law or is necessary or appropriate to assert or defend any claim relating to voting. Confidentiality also will not apply with respect to any matter for which votes are solicited in opposition to the director nominees or voting recommendations of our Board of Directors, unless the persons engaging in the opposing solicitation provide stockholders with voting confidentiality comparable to that which we provide.
Where can I find the voting results?
We expect to announce preliminary voting results at the Annual Meeting and to publish final results in a Current Report on Form 8-K that we will file with the U.S. Securities and Exchange CommissionSEC within four business days following the meeting. The report will be available on our website at teletech.comttec.com under the “Investors” and “SEC Filings” tabs.
How may I obtain financial and other information about TeleTech?TTEC?
Additional financial and other information about the Company is included in our Annual Report on Form 10-K, which we file with the U.S. Securities and Exchange Commission,SEC, and which is available on our website at teletech.comttec.com under the “Investors” and “SEC Filings” tabs. We will also furnish a copy of our 20152023 Annual Report (excluding exhibits,exhibits), except those that are specifically requested)requested, without charge to any stockholder who so requests by contacting our Investor Relations department at TeleTechTTEC Holdings, Inc., 9197 South Peoria Street, Englewood, Colorado, 80112,6312 S. Fiddler’s Green Circle, Suite 100N, Greenwood Village, CO 80111, Attention: Investor Relations, by calling 1.800.TELETECH (1.800.835.3832). Outside of the U.S., please dial +1.303.397.8100, or by emailing investor.relations@teletech.com.send an email to investor.relations@ttec.com.
You can also obtain, without charge, a copy of our bylaws, codes of conduct and Board committee charters by contacting the Investor Relations department, or you can view these materials on the internet by accessing our website at teletech.comttec.com and clicking on the “Investors” tab, then clicking on the “Corporate Governance” tab.
Who will conduct and pay for the cost of this proxy solicitation?
We will bear all costs of soliciting proxies, including reimbursement of banks, brokerage firms, custodians, nominees, and fiduciaries for reasonable expenses they incur. Proxies may be solicited personally, by mail, by telephone, or via internet; by our directors, officers, or other regular employees without remuneration other than regular compensation. We will request brokers and other fiduciaries to forward proxy materials to the beneficial owners of shares of common stock that are held of record by such brokers and fiduciaries and will reimburse such persons for their reasonable out-of-pocket expenses.
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TeleTechTTEC is committed to best practices in corporate governance. The Company is governed by our Board of Directors. The role of the Board includes:
·Oversight of the Company’s management;
·Appointment of the Chief Executive Officer;
·Goal setting for and overseeing performance of the Company’s executive management team;
·Management succession planning;
·Oversight of effective corporate governance, including selecting and recommending for stockholders’ approval nominees for the Board of Directors;committees include:
·Assessment of Board performance;
● | Oversight of the Company’s management; |
● | Appointment of the Chief Executive Officer; |
● | Goal setting for and overseeing performance of the Company’s executive management team; |
● | Management succession planning; |
● | Oversight of effective corporate governance, including selecting and recommending for stockholders’ approval nominees for the Board of Directors; |
● | Annual assessment of Board performance; |
● | Board succession planning; |
● | Forming and staffing Board Committees; |
● | Review and oversight of the development and implementation of the Company’s annual strategic, financial, and operational plans and budgets; |
● | Oversight of the Company’s impact and sustainability (aka ESG) practices, including the progress that it makes against its environmental stewardship and diversity, equity and inclusion commitments; |
● | Assessment and monitoring of Company’s risk and risk management practices; |
● | Oversight of TTEC’s cybersecurity programs and protection of TTEC data and data of TTEC clients, their customers, and the Company’s employees; |
● | Review and approval of significant corporate actions; |
● | Monitoring of processes designed to assure TTEC’s integrity and transparency to its stakeholders, including financial reporting, compliance with legal and regulatory obligations, maintenance of confidential channels to report concerns about violations of laws and policies, and protection against reprisals for those who report such violations; and |
● | Oversight of the relationship between the Company and its stockholders. |
·Board succession planning;
·Forming and staffing Board committees;
·Review and oversight of the development and implementation of the Company’s annual strategic, financial, and operations plans and budgets;
·Assessment and monitoring of Company’s risk and risk management practices;
·Review and approval of significant corporate actions;
·Monitoring of processes designed to assure TeleTech’s integrity and transparency to its stakeholders, including financial reporting, compliance with legal and regulatory obligations, maintenance of confidential channels to report concerns about violations of laws and policies, and protection against reprisals for those who report such violations;
·Oversight of the relationship between the Company and its stockholders; and
·Support for the Company’s commitment to its corporate responsibility and sustainable business.
Our Board is led by TeleTech’sTTEC’s founder, Mr. Kenneth D. Tuchman, who serves as the Chairman of the Board. Mr. Tuchman is also TeleTech’sTTEC’s Chief Executive Officer. The Board retains the flexibility to determine from time to time whether the position of the Chief Executive Officer and the Chairman of the Board should be combined or separated, whether an independent director should serve as Chairman of the Board, and whether to appoint a lead independent director to serve as a liaison between independent directors and the Chairman.
At present, the Board believes that the Company is best served by having Mr. Tuchman serve as both the Chairman of the Board and Chief Executive Officer of TeleTech.TTEC. The Board’s view is based on the facts that Mr. Tuchman beneficially owns more than 65 percent58.7% of the outstanding equity in the Company, has a unique insight into the Company’s customer engagementCX solutions strategy as an industry innovator and the Company founder, and is intimately involved in the day-to-day strategic direction of the Company.
Since the size of the Company’s Board is relatively small and each independent director has unrestricted access to Mr. Tuchman and the Company’s management, the independent members of the Board do not currently perceive the need for an appointment of a lead independent director. Our Board also believes that appointing a lead independent director may serve to create a potential conflict among the directors and interfere with the current collaborative environment in the boardroom that permits the Board to leverage the knowledge and experience of each Board member to drive strategic initiatives necessary to support the Company’s transformation from a business process outsourcing service provider to an integrated customer consulting,engagement technology growth and care services company.digital solutions provider.
With the exception of Mr. Tuchman, and Mr. Barlett, who is the Board’s executive Vice Chairman, all of ourTTEC’s other directors are independent. In addition, there are no family relationships among any director, executive officer, or any person nominated or chosen by us to become a director.
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The Board is aware of the potential conflicts that may arise in having Mr. Tuchman, the Company’s largest and controlling stockholder, serve as the Chairman of the Board, but believes that there are adequate governance safeguards in place to mitigate against such risks. Such safeguards include, but are not limited to,to:
● | The Board and Board committees hold executive sessions comprised entirely of the independent directors.
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● | During
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● | Our Compensation Committee of the Board, comprised entirely of independent directors, makes all executive management compensation determinations based on the individual manager’s performance and input from independent compensation consultants.
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● | Our Compensation Committee of the Board retains an independent compensation consultant when it deems it appropriate. |
● |
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● | Our Board members and executives have a shareholding guideline consistent with industry best practices.
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● | Our Board |
● | Our Board committees perform periodic self-assessments and act on the findings.
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● | Our Board published Corporate Governance Guidelines to communicate to the stockholders and other stakeholders how the Company is governed. |
Although we qualify as a “controlled company” under the listing rules of the NASDAQ Stock Market,stock market, the Company elects not to avail itself of governance exceptions available to “controlled companies” under these rules. Specifically, a majority of our Board of Directors is independent and our Board’s committees, including our Nominating and Governance Committee of the Board and our Compensation Committee of the Board are comprised solely of independent directors, even though the Company is exempt from these corporate governance requirements as a controlled company.
Lastly, our Board has in the past demonstrated the independence necessary to address potential conflicts of interest through the use of special ad hoc committees to address specific matters when they arise or requesting that the Chairman abstain from deliberations and voting on certain decisions that may represent a conflict with his controlling stockholdings in the Company.
Board Participation in | 2023 |
| 2023 |
| |
| where the director is a member, either in person or virtually |
| |
2023. Although the Company does not require the directors to always attend the Annual Meeting of Stockholders, the directors are encouraged to do so; and most attend the Meetings regularly. |
While our executive officers are responsible for day-to-day management of TeleTech risk at TTEC, our Board oversees and monitors our enterprise risk managementEnterprise Risk Management (ERM), regulatory compliance, impact and sustainability (aka ESG) initiatives, technology resilience and cybersecurity, business continuity, and financial disclosure practices, in the course of its ongoing review of the Company’s strategy, business plans, risk management, and risk transferfinancial reporting programs. The Board recognizes that certain risk takingrisk-taking is essential for any company to stay competitive. It is the view of the Board, however, that the risk takingrisk-taking must be reasoned and measured, and must be evaluated and mitigated appropriately. To this end, the Board as a whole and through its Audit Committee actively participates in the oversight of the Company’s ERM program.
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In 2015,2023, the Board’s ERM oversight primarily focused on, but was not limited to, the following areas:areas (i) the oversight of the Company’s strategy and long-term growth plans; (ii) technology resilience and stability of TTEC information technology platforms; (iii) cybersecurity preparedness and incident response; (iv) risks inherent in our work from home service delivery; (v) crisis management, business continuity planning, emergency preparedness, critical incident response, and disaster recovery planning and execution; (vi) risks arising from the oversightcomplexities of acquisition integration; (iii) the oversightregulatory compliance framework that affects TTEC’s regulated business around the globe; (vii) the service delivery effectiveness of the Company’s business continuity planning; (iv)segments; (viii) anticipating and planning for the oversightrapidly evolving micro- and macro-economic conditions in the market place, how such conditions may impact our clients and, therefore, have an indirect impact on our business volumes and liquidity; and (ix) our ongoing effort to embed AI into our solutions so that our offerings are at the forefront of the Company’s information security preparedness; and (v) the oversight of the Company’s internal controls over its financial reporting.offerings that leverage these technological disruptors. The responsibility for managing each of these high priority risks,high-priority risk areas, as identified by the ERM process, was assigned to one or more members of the Company’s executive managementleadership team. The Board has delegated the oversight of certain categories of risk management to designated Board committees, which periodically report to the Board on matters related to the specific areas of risk they oversee.
Board/Committee | Primary Areas of Risk Oversight | |
Full Board | Enterprise risk management structure; strategic risk associated with | |
Audit Committee | Risks | |
Compensation Committee | Executive recruiting, retention, and succession planning; compensation policies and practices, including incentive compensation; and health and welfare benefits programs. Assessment of the risks associated with compensation policies and practices applicable to TTEC. Employee engagement and turnover risks and the Company’s commitment to diversity, equality, and inclusion in the workforce. | |
Nominating and Governance Committee | Corporate governance risks; effectiveness of the Board’s and its committees’ performance; senior management and Board | |
Security and Technology Committee | Risk management oversight of the Company’s technology resilience, including cybersecurity initiatives designed to protect the Company’s IT infrastructure and data; practices and stability of our technology platforms used to support our business and services delivered to our clients; data governance risks; the Company’s incident response and continuity and disaster recovery practices; and risks specific to the evolving use of artificial intelligence in the Company’s business. |
The Board and its committees periodically request and receive comprehensive reports from Digital and Engage business segments and key Company functions including(including finance, treasury, tax, legal and regulatory compliance, information security, human capital, risk management, and IT;the Company’s ESG leadership team including its Diversity Council), and have the opportunity to assess risk exposures ofto the business in these specific functional areas. The Audit Committee, with assistance and input from management, conducts an annual enterprise-wide risk assessment and adopts the Company’s annual internal audit plan, designed to test business processes that may represent special risk exposures to the Company. The Audit Committee quarterly reviews the results of completed internal audits and actively monitors the progress of recommended remedial and mitigation plans. In addition to the Company’s ERM and internal audit processes, the Board and the Audit Committee monitor and oversee the Company’s periodic assessment of the effectiveness of its internal controls over financial reporting.
To ensure that the Company’s compensation practices and policies do not have a material adverse effect on the Company and its business, the Compensation Committee of the Board annually reviews TeleTech’sTTEC’s executive compensation programs for inherent risks and alignment with the Company’s objectives. The Committee receives periodic reports from the Company’s human capitalpeople and culture and legal departments on steps that TeleTechTTEC takes to anticipate and mitigate any potential risks in longlong- and short termshort-term incentive and performance-based compensation programs. The Compensation Committee of the Board believes that executive compensation should be contingent on performance relative to targets and business plans. It expects TeleTechTTEC senior executives to achieve these targets in a manner consistent with TeleTech’sTTEC’s values, ethical standards, and policies. The Board engages in periodic discussions with management on how to maximize executives’ performance through compensation incentives without creating unreasonable risks to the business. For additional information on TeleTechTTEC compensation programs’program risks, please review section titled“Executive Compensation – Compensation Discussion and Analysis” in these proxy materials.
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Communications with OurThe Board
The Board established a process for stockholders and other interested parties to communicate with the Board or any directors by requesting that all communication be sent via email to corporatesecretary@ttec.com or to the following address:
Board of Directors
c/o Corporate Secretary
TeleTechTTEC Holdings, Inc.
9197 South Peoria Street6312 S. Fiddler’s Green Circle, Suite 100N
Englewood, Colorado 80112Greenwood Village, CO 80111
Since most members of the TTEC leadership team, including the Corporate Secretary, work hybrid schedules where they attend meetings and plenary sessions in the offices while performing most of their day-to-day functions remotely working from home, communication via email through the corporatesecretary@ttec.com dedicated mailbox may be a more reliable method to connect with our Board of Directors as there can be no assurance that physical mail delivery would be monitored on a daily basis. The Corporate Secretary reviews all communications addressed to the Board and shares them with the Board Chair and the Chair of the Nominating and Governance Committee of the Board, as long as they are not offensive or inappropriate. Offensive and inappropriate communications, if any, are mentioned as received at the regularly scheduled Nominating and Governance Committee of the Board meetings but are not distributed to directors, unless the Chair of the Nominating and Governance Committee of the Board specifically directs for them to be distributed.
The following table outlines the composition of each of our Board committees during 2015:2023:
Director | Audit Committee |
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| Nominating and | Security and Technology Committee | Executive | ||
Kenneth D. Tuchman | Chair | |||||||
| ✓ | ✓ |
| |||||
Tracy L. Bahl | Chair |
|
|
| ||||
Gregory A. Conley | Chair |
|
| |||||
Robert N. Frerichs | ✓ |
| Chair |
| ||||
|
|
| ||||||
Marc L. Holtzman |
| ✓ | ||||||
Gina L. Loften | ✓ | ✓ | ||||||
Ekta Singh-Bushell | ✓ | ✓ | Chair |
TableThe Nominating and Governance Committee of Contentsthe Board, with input from the Board Chairman, periodically reviews Committee membership and chairmanships and makes adjustments as needed to address the needs of the business, appropriately leverage Board members’ expertise, and provide important development opportunities to Board members as part of its longer-term succession planning for the Board.
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The Audit Committee of the Board operates under the Audit Committee charter adopted by our Board and available at teletech.com/ttec.com/investors/corporate-governance/ (“Corporate Governance” under the “Investors” tab on our public website teletech.comttec.com). It is responsible for, among other things:
● | Assisting the Board in its oversight of the integrity of TTEC’s financial statements including any critical audit matters; |
● | Overseeing the adequacy of internal controls over our financial reporting and disclosure processes; |
● | Selecting, evaluating, and appointing the independent registered public accounting firm, including assessing the registered public accounting firm’s independence and qualifications; |
● | Reviewing and approving all non-audit services performed by the independent registered public accounting firm; |
● | Overseeing the activities and processes of the TTEC internal audit department; |
● | Overseeing TTEC’s ethics program and its confidential hotline process, including reviewing the establishment of and compliance by employees and executives with the Company’s employee code of conduct, Code of Ethics: How TTEC Does Business and the Company’s Ethics Code for Executive and Financial Officers; |
● | Overseeing investigations into any matters within the Audit Committee’s scope of responsibility; |
● | Overseeing the Company’s enterprise business risk process; |
● | Reviewing and approving all related-party transactions; and |
● | Overseeing business continuity and disaster recovery plans and practices of the Company. |
·Assisting the Board in its oversight of the integrity of TeleTech’s financial statements;
·Overseeing the adequacy of internal controls and the financial reporting and disclosure processes;
·Selecting, evaluating, and appointing the independent registered public accounting firm, including assessing the public accounting firm’s independence and qualifications;
·Reviewing and approving all non-audit services performed by the independent registered public accounting firm;
·Overseeing the activities and progresses of the TeleTech internal audit department;
·Overseeing TeleTech’s ethics program and its confidential hotline process, including reviewing the establishment of and compliance of executives with the Company’s employee code of conduct, Ethics Code: How TeleTech Does Business, and the Company’s Code of Conduct for Senior Executive and Financial Officers;
·Overseeing investigations into any matters within the Audit Committee’s scope of responsibility;
·Overseeing our enterprise risk management programs; and
·Reviewing and approving all related-party transactions.
In 2015,2023, the members of the Audit Committee of the Board included Gregory A. Conley (Chair), Robert N. Frerichs, Ekta Singh-Bushell, and Marc L. Holtzman.Steven J. Anenen. Throughout 2015,2023, each Committee member was “independent” within the meaning ofin accordance with the NASDAQ Stock Market Rules and Rule 10A-3(b)(l)(1) under the U.S. Securities Exchange Act of 1934.
Our Board determined that Mr. Conley, qualifiesMr. Frerichs, Ms. Singh-Bushell, and Mr. Anenen each qualify as an “audit committee financial expert” within the meaning of the U.S. Securities and Exchange CommissionSEC rules. Mr. Conley’s relevant experience includes his experience as a chief executive officer and director of several public and private companies, and his tenure as the chair of the TTEC Audit Committee of the Board since May 2014. Mr. Frerichs’ relevant experience includes his CPA credentials, his role as chair of one of the largest public consultancies in the world, his career in audit and risk management, and his tenure on the audit committees of several companies. Ms. Singh-Bushell’s relevant experience includes her CPA credentials, her tenure as a member of several audit committees for public companies, and her two decades of experience working for a global public accounting and consultancy firm. Mr. Anenen’s relevant experience includes his experience as a chief executive officer and director of several public and private companies, and his tenure as a member of the TTEC Audit Committee of the Board.
The Audit Committee of the Board oversees TeleTech’s internalTTEC’s disclosure processes, including TeleTech’s anonymous and confidential channels available to employees to report concerns about financial reporting. The Committee established procedures for, and oversees receipt and treatment of, confidential (including anonymous) submissions by TeleTech employees of concerns about the Company’s accounting, internal control and auditing practices.processes. These processes are established to assureensure accurate and complete financial reporting and to identify timely any potential issues that could impact TeleTech’sTTEC’s accounting, financial reporting, and effectiveness of its internal controls. The Committee also established procedures for, and oversees receipt and treatment of, confidential (including anonymous) submissions by TTEC employees of concerns about the Company’s accounting, internal control, and auditing practices. The Audit Committee of the Board reviews and assesses the matters raised through these reporting channels and monitors management’s response to these reports, engaging when warranted.
The Audit Committee of the Board evaluates the independence, qualifications, and performance of TeleTech’sTTEC’s internal audit function and annually approves the Company’s internal audit plan. The Committee also discusses with management TeleTech’sTTEC’s risk assessment and management practices,practices; the Company’s major financial, operational, and regulatory risk exposuresexposures; and the steps management has taken to monitor and mitigate such exposures to be within the Company’s risk tolerance levels.
During 2015,2023, the Audit Committee of the Board held four regularly scheduled meetings and four special meetings, and did not approve any mattersmeetings. The Committee also approved one matter through unanimous written consent.
The Audit Committee of the Board reviews and assesses the adequacy of its charter, and revises it, asif appropriate, on an annual basis.
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The Compensation Committee of the Board operates under the Compensation Committee charter adopted by our Board and available at teletech.com/ttec.com/investors/corporate-governance/ (“Corporate Governance” under the “Investors” tab on our public website teletech.comttec.com). It is responsible for, among other things:
● | Reviewing performance goals and approving the annual salary, incentives, and all other compensation for each executive officer, including any employment arrangements and change in control agreements with such officers; |
● | Reviewing and approving compensation programs for independent Board members; |
● | Reviewing and approving material employee benefit plans (and changes to such plans); |
● | Reviewing and evaluating risks associated with our compensation programs; |
● | Adopting and administering various equity-based incentive plans; and |
● | Overseeing the company’s diversity, equality and inclusion programs. |
·Reviewing performance goals and approving the annual salary, incentives and all other compensation for each executive officer, including any employment arrangements and change of control agreements with such officers;
·Reviewing and approving compensation programs for independent Board members;
·Reviewing and approving material employee benefit plans (and changes thereto);
·Reviewing and evaluating risks associated with our compensation programs; and
·Adopting and administering various equity-based incentive plans.
In 2015,2023, the members of the Compensation Committee of the Board included Tracy L. Bahl (Chair), Gregory A. Conley, and Robert N. Frerichs.Frerichs, and Gina L. Loften. Throughout 2015,2023, each member of the Committee was “independent,” as“independent” (as defined under the NASDAQ Stock
Market Rules and the SEC’s Rule 10C-1(b)(1)) and a “non-employee director,” asdirector” (as defined under U.S. Securities and Exchange CommissionSEC’s Rule 16b-3, and an “outside director,” as defined under section 162(m) of the Internal Revenue Code of 1986, as amended.16b-3).
During 2015,2023, the Compensation Committee of the Board held four regularly scheduled meetings and onethree special meeting,meetings and approved one matter through unanimous written consent.consent process. The Compensation Committee of the Board reviews and assesses the adequacy of its charter, and revises it, asif appropriate, on an annual basis.
Nominating and Governance Committee
The Nominating and Governance Committee of the Board operates under the Nominating and Governance Committee charter adopted by our Board and available at teletech.com/ttec.com/investors/corporate-governance/ (“(“Corporate Governance” under the “Investors” tab on our public website teletech.comttec.com). It is responsible for, among other things:
·Identifying and recommending to our Board qualified candidates to stand for election to the Board (or be appointed pending the election at the Annual Stockholders Meeting); and
● | Overseeing and managing the Board of Directors’ overall governance practices; |
● | Identifying and recommending to our Board qualified candidates to stand for election to the Board (or be appointed pending the election at the Annual Stockholders Meeting); |
● | Overseeing development and succession planning for executive officers and the Board of Directors of the Company; |
● | Overseeing TTEC’s corporate governance, including the evaluation of the Board and its committees’ performance and processes, and assignment and rotation of Board members to various committees; and |
● | Overseeing TTEC’s ESG initiatives and reporting. |
·Overseeing TeleTech’s corporate governance, including the evaluation of the Board and its committees’ performance and processes, and assignment and rotation of Board members to various committees.
During 2015,2023, the members of the Nominating and Governance Committee of the Board included Shrikant MehtaRobert N. Frerichs (Chair), Ekta Singh-Bushell, Steven J. Anenen, and TracyMarc L. Bahl, each of whom satisfies the independence requirements for nominating committee members pursuant toHoltzman. Each Committee member was “independent” in accordance with the NASDAQ Stock Market Rules.
During 2015,2023, the Nominating and Governance Committee of the Board held four regularly scheduled meetings, no special meetings, and approved no matters through unanimous written consent. The Nominating and Governance Committee of the Board reviews and assesses the adequacy of its charter, and revises it, asif appropriate, on an annual basis.
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Security and Technology Committee
The Security and Technology Committee of the Board operates under the Security and Technology Committee charter adopted by our Board and available at ttec.com/investors/corporate-governance/ (“Corporate Governance” under the “Investors” tab on our public website ttec.com). It is responsible for, among other things:
● | Overseeing the risk management of the Company’s security practices, resiliency capabilities, and strategic plans of the Company’s technology used to support its business and deliver services to its clients; |
● | Overseeing the practices and controls that management uses to identify, manage and mitigate risks related to cybersecurity, disaster recovery, cyber event management and response, fraud and physical security, and data governance; |
● | Reviewing management’s crisis preparedness, incident response and business continuity plans, and the Company’s disaster recovery plans, capabilities, and testing practices; |
● | Reviewing the outcomes of the Company’s internal and third-party security compliance audits; |
● | Reviewing evolving risks specific to the use of artificial intelligence in the Company’s business and client offerings; |
● | Reviewing, periodically, risk assessments relevant to the Company’s security and technology conducted by, or on behalf of, the Company; |
● | Reviewing the Company’s security risk mitigation strategies including risk transfer (through insurance programs or otherwise); and |
● | Addressing any other matters as the Committee members determine relevant to the Committee’s oversight of the Company’s security and technology risk management practices. |
During 2023, the members of the Security and Technology Committee of the Board included Ekta Singh-Bushell (Chair), Gregory A. Conley, and Gina L. Loften.
During 2023, the Security and Technology Committee of the Board held four regularly scheduled meetings, no special meetings, and approved no matters through unanimous written consent. The Security and Technology Committee of the Board reviews and assesses the adequacy of its charter, and revises it, if appropriate, on an annual basis.
The Board’s Executive Committee is a special standing committee of the Board appointed to take certain action, under a delegation of authority resolution from the Board, between regularly scheduled Board meetings that are otherwise reserved to the full Board, under a delegation of authority from the Board. All actions taken by the Executive Committee of the Board are reported to and reviewed by the full Board at the Board meeting immediately following the action taken. The Executive Committee of the Board is authorized to consider and approve, among other things:
·Mergers, acquisitions, and divestiture transactions at a level in excess of management’s authority but below a certain specific authority limit designated by the Board, provided that such transactions are not inconsistent with TeleTech’s overall strategy as approved by the Board;
● | Mergers, acquisitions, and divestiture transactions at a level in excess of management’s authority of up to $35M but below a certain specific authority limit of up to $60M designated by the Board, provided that such transactions are not inconsistent with TTEC’s overall strategy as approved by the Board; any mergers, acquisitions, and divestiture transactions in excess of this $60M threshold are exclusively reserved to the full Board; |
● | Capital expenditure transactions at a level in excess of management’s authority of up to $35M but below a certain specific authority limit of up to $60M designated by the Board, provided that such transactions are consistent with the annual business plan approved by the Board; and |
● | Funding for the share repurchase program at a level in excess of management’s authority but below a certain specific limit designated by the Board. |
·Capital expenditure transactions at a level in excess of management’s authority but below a certain specific authority limit designated by the Board, provided that such transactions are consistent with the annual business plan approved by the Board; and
·Funding for the share repurchase program at a level in excess of management’s authority but below a certain specific limit designated by the Board.
During 2015,2023, the members of the Executive Committee of the Board included James E. BarlettKenneth D. Tuchman (Chair), Shrikant Mehta, and Tracy L. Bahl.Bahl, and Steven J. Anenen.
The Executive Committee did not meetof the Board held no meetings during 2015.2023.
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Ethics Code for Senior Executive and Financial Officers
We have adopted an Ethics Code for Senior Executive and Financial Officers. It applies to allOfficers that guides the behavior of our senior executives and financial officers beyond our code of business conduct that applies to all employees, including our Chief Executive Officer, Chief Financial Officer, Executive Vice Presidentschief executive officers leading each of our business segments, General Counsel, Treasurer, Vice President of Finance,Chief Accounting Officer/Controller, senior accounting and Global Controller,finance executives who support our key business segments, financial directors, and controllers of each of our business segments and any person performing similar functions. The Ethics Code for Senior Executive and Financial Officers is available on our website at teletech.com/ttec.com/investors/corporate-governance/ (“(“Corporate Governance” under the “Investors” tab on our public website teletech.comttec.com) and we intend to disclose any waiver of, or amendments to, the Ethics Code for Senior Executive and Financial Officers on our website. You may also obtain a copy of the document without charge via email at corporatesecretary@ttec.com or by writing to:
TeleTechTTEC Holdings, Inc.
9197 South Peoria Street6312 S. Fiddler’s Green Circle, Suite 100N
Englewood, Colorado 80112Greenwood Village, CO 80111
Attention: Corporate Secretary
In addition to our Ethics Code for Senior Executive and Financial Officers, TeleTechTTEC also has a code of business conduct (Ethics Code: How TeleTechTTEC Does BusinessBusiness). This document mandates rules of ethical business conduct for all TeleTechTTEC employees, members of our Board of Directors, and members of our supply chain,suppliers and partners, including our executives and financial officers. We maintain a confidential web-based and telephonethird-party operated hotline, where employees can seek guidance or report concerns about possible violations of laws, our policies, or either of the ethics codes, including any concerns about financial reporting, misconduct, or fraud.
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Director Compensation Overview
During 2015,2023, the independent directors’ compensation was set as follows:
·An annual retainer of $75,000;
·Additional annual retainer fees for Board committee service as follows:
● | An annual retainer of $75,000; |
● | Additional annual retainer fees for Board committee service as follows: |
Chair of Audit Committee | $27,000 | ||
Members of Audit Committee | $13,500 | ||
Chair of Compensation Committee | $20,000 | ||
Members of Compensation Committee | $10,000 | ||
Chair of Nominating and Governance Committee | $15,000 | ||
Members of Nominating and Governance Committee | $ | ||
Chair of the Security and Technology Committee | $ 15,000 | ||
Members of the Security and Technology Committee | $ 7,500 |
● | An annual grant of $190,000 of restricted stock units in TTEC stock, based on the fair market value of our common stock on the grant date. The annual grant of restricted stock units vest on the earlier of the first anniversary of the grant date or the date of the succeeding year’s Annual Meeting of Stockholders, or any change-in-control event (as defined in the relevant restricted stock unit agreement). |
·An annual grant of $75,000 of restricted stock units in TeleTech stock, based on the fair market value of our common stock on the grant date; and
·Non-employee directors who join the Board also receive an initial fair market value-grant in the amount of $100,000, based on the fair market value of our common stock on the grant date. The initial restricted stock unit grant vests on the earlier of the first anniversary of the grant date or the date of the succeeding year’s Annual Meeting of Stockholders, or any change-in-control event (as defined in the relevant restricted stock unit agreement).
The employee directorsdirector(s) do not receive additional compensation for their Board service.
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The following table summarizes the actual compensation earned by independent directors during 2015:2023 without regard to how it was paid:
Name | Fees Earned or Paid in Cash ($) | Stock Awards ($) 1,2,3 | Total ($) |
Tracy L. Bahl | $100,000 | $ 74,978 | $174,978 |
Gregory A. Conley | $112,000 | $ 74,978 | $186,978 |
Robert N. Frerichs | $ 98,500 | $ 74,978 | $173,478 |
Marc L. Holtzman | $ 88,500 | $ 74,978 | $163,478 |
Shrikant Mehta | $ 90,000 | $ 74,978 | $164,978 |
Name | Fees Earned or Paid in Cash ($) | Stock Awards ($) 1,2 | Total ($) |
Steven J. Anenen | $96,000 | $189,988 | $285,988 |
Tracy L. Bahl | $98,750 | $189,988 | $288,738 |
Gregory A. Conley | $119,500 | $189,988 | $309,488 |
Robert N. Frerichs | $113,500 | $189,988 | $303,488 |
Marc L. Holtzman | $82,500 | $189,988 | $272,488 |
Gina L. Loften | $92,500 | $189,988 | $282,488 |
Ekta Singh-Bushell | $107,250 | $189,988 | $297,238 |
1. | Reflects the aggregate grant date fair value of 2023 non-employee director restricted stock unit awards for financial statement reporting purposes determined in accordance with the guidance in Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation—Stock Compensation (“FASB ASC Topic 718”). For information regarding assumptions used to compute grant date fair value with respect to the restricted stock unit awards, see Note 19 to our financial statements in our Annual Report on Form 10-K for the year ended December 31, 2023. Each 2023 non-employee director restricted stock unit award covered 5,982 shares of TTEC stock, with the number of shares calculated by taking the intended value of $190,000 divided by the $31.76 per share closing price of our common stock on the date of grant and rounding down to the nearest whole number of shares. |
2. | As of December 31, 2023, independent directors each held 5,982 unvested restricted stock unit awards. |
1ReflectsIn February 2023, the aggregate dollar amounts recognized for stock awards for financial statement reporting purposes in accordanceBoard of Directors of TTEC Holdings, Inc., on the recommendation of the Compensation Committee of the Board, reviewed the Board’s compensation with the guidanceindependent compensation consultant, Meridian Compensation Partners, LLC, against benchmarks for our Compensation Peer Group and recommended changes in Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation—Stock Compensation (“FASB ASC Topic 718”).
For information regarding assumptions used to compute grant date fair market value with respect to the stock awards, see, Note 20 to our financial statements in our Annual Report on Form 10-Kcompensation arrangements for the year ended December 31, 2015.
2As December 31, 2015, all the independent directors held 2,938 unvested restricted stock unit awards.
3As of December 31, 2015, Mr. Mehta held 15,000the Company to be effective as of outstanding options.
the start of the 2023/2024 board cycle in May 2023. The recommended changes involved the equity component of the Board members’ compensation only and did not impact either the cash retainer or Committee fees. In February of 2016, based on market data,2024, the Compensation Committee approved a recommendation to increaseBoard reviewed the value of the annual fair market restricted stock unit grant from $75,000 to $100,000. The increase in the size of the fair market value grant coupled with the annual cash retainer, aligns the board compensation with market and increases our ability to attract and retain independent board members.arrangements, but did not make any changes.
23
The TeleTechTTEC Audit Committee of the Board (the “Audit Committee”) is comprised entirely of independent directors who meet the independence requirements of the U.S. Securities and Exchange Commission (the “SEC”) and NASDAQ Stock Market’s Listing Rules. TTEC’s Board of Directors has determined that at least four members of the Audit Committee have accounting and other relevant financial management expertise, and, therefore, qualify as “audit committee financial experts,” as that term is defined by the SEC. The Audit Committee operates pursuant to a charter that is reviewed annually and updated to comply with the relevant regulatory requirements. The Audit Committee charter was most recently reviewed and updated in May 2023 and is available in the Investor Relations section of our website at teletech.com/sites/default/files/audit_committee_charter.pdfhttps://investors.ttec.com/static-files/081c5dc8-a944-4805-b2ab-d20675ca20a4.
In performing its functions, the Audit Committee acts in an oversight capacity: the Auditcapacity. The Committee is responsible for overseeing TeleTech’sTTEC’s financial reporting processprocesses and internal control structure on behalf of the Company’s Board of Directors, while management is responsible for the preparation, presentation, and integrity of the financial statements, and the effectiveness of TeleTech’sTTEC’s internal controlcontrols over financial reporting. TeleTech’sTTEC’s independent auditors,auditor, PricewaterhouseCoopers LLC (“PwC” or the “Auditor”), areis responsible for auditing TeleTech’sTTEC’s financial statements and providing an opinion on the conformity of TeleTech’sTTEC’s consolidated financial statements with generally accepted accounting principles and on the effectiveness of TeleTech’sTTEC’s internal control over financial reporting.
In 2023, the Audit Committee met eight times. The Audit Committee’s agenda for each meeting was set by the Committee’s chairperson in consultation with and on the recommendation of TTEC’s acting Chief Financial Officer. During the meetings, the Audit Committee met with the senior members of TTEC’s financial management team, and, when appropriate, had separate executive sessions with TTEC’s acting Chief Financial Officer, PwC, TTEC General Counsel, and the Internal Audit Executive to discuss financial management, legal and compliance matters, accounting, IT controls and system dependencies, the status of internal and external audits, and internal control issues.
As part of its oversight function, the Audit Committee reviews TeleTech’sTTEC’s quarterly and annual reports on Form 10-Q and Form 10-K prior to their filing with the U.S. Securities and Exchange Commission,SEC and has detailed discussions with
management about the quality and reasonableness of significant accounting judgments and estimates, and the clarity of disclosures in the financial statements. In addressing the quality of management’s accounting judgments, the Audit Committee asks for management’s representations and reviews certifications prepared by the Chairman andTTEC’s Chief Executive Officer and theacting Chief Financial Officer that the unaudited quarterly and audited annual consolidated financial statements of the companyCompany fairly present,represent, in all material respects, the financial condition, results of operations and cash flows of TeleTech. As partTTEC.
In 2022, the Committee transferred its cybersecurity, technology resilience, and critical incident response planning oversight responsibilities to a newly created Security & Technology Committee of TeleTech’sthe Board, staffed with Board members who have special expertise on the issues of cybersecurity and technology, and technology-related risk management. The Audit and Security & Technology Committees of the Board have overlapping members and exchange information regularly, especially in connection with information technology controls that are relevant to internal controls over financial reporting. During 2023, the Audit Committee continued to oversee TTEC’s evolving strategy for its enterprise risk management program,resources planning (ERP) systems and the professional services automation (PSA) platforms and how they support the Company’s internal controls over financial reporting and the accuracy and reliability of its financial reporting. During the year, the Audit Committee also periodically reviews the status of TeleTech’s key risks and risk mitigation activities, including its cyber security risks and steps that management takes to protect TeleTech’s systems and information against possible cyberattacks, business continuity and disaster recovery planning and TeleTech’s emergency preparedness and mitigation and recovery planning. The Audit Committee also receivesreceived periodic status reports on the effectiveness of the company’sCompany’s treasury function, including the Company’s liquidity; its foreign exchange exposure management,management; the impact on the Company due to changes in interest rates; its tax function and its global tax planning practices, andpractices; the Company’s acquisition integration activities; and its investor relations activities.
In 2015,Further in 2023, the Audit Committee held eight meetings. periodically reviewed TTEC’s Enterprise Risk Management program and steps that the Company had taken to execute against its risk management priorities. The Committee’s risk oversight continued to focus on strategy execution in the uncertainty of volatile macroeconomic conditions, regulatory and business continuity risks specific to the distributed work-from-home environment, the impacts on the business due to the rapidly evolving artificial intelligence offerings, and business-as-usual risks critical to the business, including the competitiveness of the Company’s technology solutions, M&A execution and integration effectiveness, fraud in the business, the risks inherent in the complexities of the Company’s international operations, and regulatory compliance framework that affects TTEC’s business.
24
The Audit Committee’s agenda is set by the Audit Committee’s chairperson in consultation with TeleTech’s Chief Financial Officer. During 2015, at each of its regularly scheduled meetings, the Audit Committee met with the senior members of TeleTech’s financial management team, and, when appropriate, had separate private sessions, with TeleTech’s Chief Financial Officer, General Counsel, head of internal audit, and PwC, to discuss financial management, legal, accounting, auditing, and internal control issues. Periodically duringalso monitored, throughout the year, the AuditCompany’s confidential hotline activities, focusing on procedures that the Company has in place for confidential submission of employee concerns about accounting, financial reporting practices and internal controls, possible violations of laws and policies, and other concerns about the business. The Committee also periodically reviewed the processes that the Company uses to ensure that the Company’s employees are familiar with senior management and the independent auditors the overall adequacy and effectiveness of the company’s legal, regulatory and ethical compliance programs, including the company’sits code of business conduct (Ethics Code: How TeleTechTTEC Does Business), and the Ethics Code for Senior Executive and Senior Financial Officers.Officers, and the training that the Company provides on these codes of conduct and Company values.
The Audit Committee periodically reviews the rules and regulations adopted, from time to time, by the Public Company Accounting Oversight Board (the “PCAOB”) and works with the Auditor to ensure that its opinion conforms with these requirements. During 2023, the Audit Committee discussed with the Auditor those matters that are required to be discussed under the applicable requirements of the PCAOB and the SEC and received required written disclosures and the letter from the Auditor required by the applicable requirements of the PCAOB regarding the Auditor’s communication with the Audit Committee concerning the Auditor’s independence.
As part of its oversight responsibilities, the Audit Committee also oversees TeleTech’sTTEC’s annual audit by its independent auditors,auditor, PwC, including PwC’sthe Auditor’s audit approach, and audit plan, and critical audit matters; and whether the provision of minor non-audit services wasis appropriate given the auditors’Auditor’s independence. The Audit Committee also works with the Auditor to make sure that the PwC audit team that serves TTEC has the appropriate level of professional expertise to oversee the conduct of the TTEC annual independent audit and is appropriately supported by PwC partners with specific experience in key countries where TTEC does business, and by other PwC subject matter experts as necessary.
Each year, the Audit Committee evaluates the performance of PwC and its senior engagement team as TeleTech’s independent auditors, in order to determineand determines whether to re-engage themthe Auditor for the coming year. In doing so, the Audit Committee considers the quality and efficiency of the services provided by the auditors,Auditor, the auditors’Auditor’s global capabilities, the auditors’Auditor’s technical expertise including innovation and technologies that the Auditor uses to provide its services to the Company, the Auditor’s tenure as TeleTech’sTTEC’s independent auditors,auditor, its knowledge of the company’sCompany’s global operations and industry, the competitiveness of the Auditor’s pricing for the services, and the quality of the auditors’Auditor’s interactions with the Audit Committee of the Board. Based on this evaluation, the Audit Committee decided to engage PwC as TeleTech’sTTEC’s independent auditorsauditor for the year endedending December 31, 2015.2023. This appointment was ratified by TeleTechTTEC stockholders at the 20152023 Annual Stockholders Meeting.
Starting in 2015, PwC audit team was led by a new engagement partner after the previous engagement partner rotated off TeleTech’s account, as part of a mandatory rotation schedule. Therefore, in 2015, in addition to reviewing PwC’s performance overall, the Audit Committee also assessed PwC’s new engagement team, and considered its suitability for TeleTech’s independent audit needs. As a result of this review, the Audit Committee has worked with PwC to make sure that the PwC audit team, supported by PwC’s partners with experience related to TeleTech’s operations in key countries where TeleTech does business and other PwC subject matter experts, has the appropriate level of professional expertise to oversee the conduct of the TeleTech annual independent audit.
In 2015, theThe Audit Committee also considered the fees that PwC charged by PwCthe Company for the audit services in 2023 and determined them to be reasonable and adequate to ensure a comprehensive audit. In 2023, PwC’s total fees were $4.9 million, a $0.2 million increase year over year, primarily related to additional IT review and testing as well as fee increases related to inflation.
In accordance with SEC rules, the Auditor’s engagement partner for TTEC is subject to the five-year rotation requirement. 2022 was the last year in PwC’s prior engagement partner’s rotation period; and, therefore, during the previous year, the Audit Committee worked with PwC and the new engagement partner to fully onboard the partner into the business and the role.
The Audit Committee reviewed and discussed with management TeleTech’sTTEC’s audited annual consolidated financial statements.statements for the year ended December 31, 2023. Based on this review, the discussions referenced above about the quality and reasonableness of management’s significant accounting judgments,with management, and in reliance on the reports and opinions of the independent auditors,Auditor, the Audit Committee unanimously recommended to the TeleTechTTEC Board of Directors that the audited consolidated financial statements be included in the company’sCompany’s Annual Report on Form 10-K for the year ended December 31, 2015.2023.
The Audit Committee also discussed with the independent auditors those matters required to be discussed under the rules adopted by the Public Company Accounting Oversight Board (the “PCAOB”). The Audit Committee received written disclosures from the independent auditors required by applicable PCAOB requirements regarding the independent auditors’ communication with the Audit Committee concerning their independence.
Although the Audit Committee has the sole authority to appoint the independent auditors,auditor, the Audit Committee will continue its long-standing practice of recommending that the Board ask the stockholders, at their annual meeting,the Annual Stockholders Meeting, to ratify the appointment of the independent auditorsauditor for the coming year (see, Proposal No. 2 beginning on page 39)68).
25
Audit Committee | |
Gregory A. Conley, Chair |
|
Robert N. Frerichs | |
| |
Steven J. Anenen |
15
STOCK OWNERSHIP OF DIRECTORS, MANAGEMENT, AND CERTAIN BENEFICIAL OWNERS
The table below sets forth information, as of March 31, 2016,April 3, 2024, concerning the beneficial ownership of the following persons and entities:
● | Each person or entity known to us to beneficially own more than 5% of our outstanding common stock; |
● | Each of the directors on our Board; |
● | Each of our Named Executive Officers; and |
● | All of our current directors and executive officers as a group. |
·Each person or entity known to us to beneficially own more than five percent of our outstanding common stock;
·Each of our directors and nominees for our Board;
·Each of our executive officers, including our named executive officers; and
·All of our current directors and executive officers as a group.
We have determined beneficial ownership in accordance with U.S. SECURITIES AND EXCHANGE COMMISSIONthe SEC rules. Except as indicated by the footnotes below, we believe, based on the information furnished to us, that the persons and entities named in the table below have sole voting and/or investment power with respect to all shares of common stock that they beneficially own, subject to applicable community property laws.
Applicable percentage ownership is based on 48,231,63247,448,910 shares of common stock outstanding at March 31, 2016.as of April 3, 2024. In computing the number of shares of common stock beneficially owned by a person or entity and the percentage ownership of that person or entity in accordance with U.S. Securities and Exchange Commissionthe SEC rules, we deemed outstanding shares of common stock: (1) subject to stock options held by that person that are currently exercisable or exercisable within 60 days of March 31, 2016;April 3, 2024; and (2) issuable upon the vesting of Restricted Stock Units (“RSUs”)restricted stock units (RSUs) or performance-based restricted stock units (PRSUs) within 60 days of March 31, 2016. Also inApril 3, 2024. In accordance with U.S. Securities and Exchange Commissionthe SEC rules, we did not deem outstanding these two categories of shares of common stock for the purpose of computing the percentage ownership of any other person or entity.
The information provided in the table is based solely on our records, and information filed with the U.S. Securities and Exchange CommissionSEC with respect to the owners of our shares of common stock, except where otherwise noted. Unless otherwise indicated, the address of each beneficial owner listed in the table is c/o TeleTechTTEC Holdings, Inc., 9197 Peoria Street, Englewood, Colorado 80112.6312 S. Fiddler’s Green Circle, Suite 100N, Greenwood Village, CO 80111.
Stock Ownership of Directors, Management and Certain Beneficial Owners
26
|
| Shares Beneficially Owned |
| |||||||||||
Name and Address of the Beneficial Owner |
| Common Stock |
| Options Vested and Options and RSUs Vesting Within 60 Days of 3/31/2016 |
| Total Beneficial Ownership as of 3/31/2016 |
| Percent of Class |
| |||||
5% Stockholders |
|
|
|
|
|
|
|
|
| |||||
|
|
|
|
|
|
|
|
|
| |||||
Kenneth D. Tuchman |
| 31,464,707 |
| - |
| 31,464,7071,6 |
| 65.2% |
| |||||
|
|
|
|
|
|
|
|
|
| |||||
Executive Officers and Directors |
|
|
|
|
|
|
|
|
| |||||
|
|
|
|
|
|
|
|
|
| |||||
Kenneth D. Tuchman |
| 31,464,707 |
| - |
| 31,464,7071,6 |
| 65.2% |
| |||||
|
|
|
|
|
|
|
|
|
| |||||
James E. Barlett |
| 456,966 |
| - |
| 456,966 |
| * |
| |||||
|
|
|
|
|
|
|
|
|
| |||||
Tracy L. Bahl |
| 6,889 |
| 2,938 |
| 9,8272 |
| * |
| |||||
|
|
|
|
|
|
|
|
|
| |||||
Gregory A. Conley |
| 4,229 |
| 2,938 |
| 7,1672 |
| * |
| |||||
|
|
|
|
|
|
|
|
|
| |||||
Martin F. DeGhetto |
| 86,942 |
| 2,987 |
| 89,9293 |
| * |
| |||||
|
|
|
|
|
|
|
|
|
| |||||
Robert N. Frerichs |
| 12,104 |
| 2,938 |
| 15,0422 |
| * |
| |||||
|
|
|
|
|
|
|
|
|
| |||||
Charles “Keith” Gallacher |
| 25,232 |
| - |
| 25,232 |
| * |
| |||||
|
|
|
|
|
|
|
|
|
| |||||
Judi A. Hand |
| 164,427 |
| - |
| 164,427 |
| * |
| |||||
|
|
|
|
|
|
|
|
|
| |||||
Marc L. Holtzman |
| 7,523 |
| 2,938 |
| 10,4614 |
| * |
| |||||
|
|
|
|
|
|
|
|
|
| |||||
Robert N. Jimenez |
| - |
| - |
| - |
| * |
| |||||
|
|
|
|
|
|
|
|
|
| |||||
Shrikant Mehta |
| 58,571 |
| 17,938 |
| 76,5095 |
| * |
| |||||
|
|
|
|
|
|
|
|
|
| |||||
Margaret B. McLean |
| 10,618 |
| - |
| 10,618 |
| * |
| |||||
|
|
|
|
|
|
|
|
|
| |||||
Regina M. Paolillo |
| 117,376 |
| 2,987 |
| 120,3633 |
| * |
| |||||
|
|
|
|
|
|
|
|
|
| |||||
Steven C. Pollema |
| 4,808 |
| - |
| 4,808 |
| * |
| |||||
|
|
|
|
|
|
|
|
|
| |||||
All directors, director nominees and executive officers as a group (14 persons) |
| 32,420,392 |
| 35,664 |
| 32,456,056 |
| 67.3% |
| |||||
|
|
|
|
|
|
|
|
|
| |||||
Shares Beneficially Owned | |||||||||||
Name of the Beneficial Owner | Common Stock | Options Vested and Options and RSUs Vesting Within 60 Days of April 3, 2024 | Total Beneficial April 3, 2024 | Percent of Class
| |||||||
5% Stockholders | |||||||||||
Kenneth D. Tuchman | 27,853,207 | 1 | - | 27,853,207 | 1 | 58.7% | |||||
BlackRock Inc. | 3,333,995 | 2 | - | 3,333,995 | 2 | 7.03% | |||||
The Vanguard Group | 2,409,680 | 3 | - | 2,409,680 | 3 | 5.08% | |||||
Executive Officers, Directors | |||||||||||
Kenneth D. Tuchman | 27,853,207 | 1 | - | 27,853,207 | 1 | 58.7% | |||||
Steven J. Anenen | 21,829 | 5,982 | 27,811 | * | |||||||
Tracy L. Bahl | 17,935 | 5,982 | 23,917 | * | |||||||
Francois Bourret | 5,051 | 1,191 | 6,242 | * | |||||||
Gregory A. Conley | 17,025 | 5,982 | 23,007 | * | |||||||
Robert N. Frerichs | 18,150 | 5,982 | 24,132 | * | |||||||
Marc L. Holtzman | 38,004 4 | 5,982 | 43,986 4 | * | |||||||
Gina L. Loften | 4,195 | 5,982 | 10,177 | * | |||||||
Margaret B. McLean | 53,123 | 1,634 | 54,757 | * | |||||||
David J. Seybold | - | - | - | * | |||||||
Ekta Singh-Bushell | 16,785 | 5,982 | 22,767 | * | |||||||
Michelle “Shelly” R. Swanback | 16,513 | 12,190 | 28,703 | * | |||||||
Kenneth “Kenny” R. Wagers | - | - | - | * | |||||||
All directors, director nominees and executive officers as a group (13 persons) | 28,061,817 | 56,889 | 28,118,706 | 59.3% | |||||||
*Less than 1 percent.1%.
1 1. Includes 31,454,70727,843,207 shares subject to sole voting and investment power, and 10,000 shares with shared voting and investment power. The shares with sole voting and investment power consist of: (i) 6,687,9016,526,401 shares held by Mr. Tuchman; (ii) 14,766,806 shares held by a limited liability partnership controlled by Mr. Tuchman; and (iii) 10,000,0006,550,000 shares held by a revocable trust controlled by Mr. Tuchman. The shares with shared voting and investment power consist of 10,000 shares owned by Mr. Tuchman’s spouse. Mr. Tuchman is the beneficial owner of approximately 65.2 percent58.7% of the shares of common stock entitled to vote at the meeting.
2.The common stock shown for BlackRock, Inc. located at 55 East 52nd Street New York, NY 10055, corresponds with their 13G filed as of December 31, 2023 and includes 3,291,993 shares with sole voting power, 3,333,995 shares with sole dispositive power and 3,333,995 shares in the aggregate.
2 3.The common stock shown for The Vanguard Group located at 100 Vanguard Boulevard, Malvern, PA 19355, corresponds with their 13G filed as of December 29, 2023 and includes 35,865 shares with shared voting power, 2,354,973 shares with sole dispositive power, 54,707 shares with shared dispositive power and 2,409,680 shares in the aggregate.
4. Includes 2,938 RSUs scheduled to vest within 60 days after March 31, 2016.
3Includes 2,987 RSUs scheduled to vest within 60 days after March 31, 2016.
4 Includes 4,22333,229 shares held by Mr. Holtzman directly 3,300and 4,775 shares held for Mr. Holtzman’s spouse and minor children and 2,938 shares scheduled to vest within 60 days after March 31, 2016.children.
5 Includes 15,000 options exercisable within 60 days after March 31, 2016TTEC Insider Trading Policy – Hedging/Pledging Restrictions
The Company’s insider trading policy prohibits its directors, officers, employees, and 2,938 RSUs scheduled to vest within 60 days after March 31, 2016.
6 On December 15, 2015, Mr. Tuchman entered into a Security Agreementmembers of TTEC supply chain from engaging in hedging and pledging transactions with Wells Fargo Bank, N.A., pursuant toTTEC securities. Under the terms of which he agreed to collateralize a certain personal loan with 2,453,000 shares of TeleTech common stock held in KDT Stock Revocable Trust, controlled by Mr. Tuchman (the “Trust”). Pursuant to the Security Agreement, Mr. Tuchman may pledge additional TeleTech shares held by the Trust, directly, or through other vehicles to collateralized additional advancements on the personal loan.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a)policy, TTEC Chairman of the Securities Exchange Act of 1934, as amended, requires our directors, executive officersBoard and holders of more than 10 percent of our common stockChief Executive Officer, who is the Company’s controlling shareholder, is permitted to filepledge his shareholdings, with the U.S. Securitiesprior review and Exchange Commission reports regarding their ownership and changes in ownership of our equity securities. Based on our reviewapproval of the Forms 3, 4 and 5 filed, we believe that all our directors, executive officers and 10 percent stockholders filed all Section 16(a) reports onTTEC Board of Directors, provided such pledge does not involve a timely basis during 2015.material portion of his overall holdings.
27
In accordance with our written Related PartyRelated-Party Transaction Policy, the Audit Committee of the Board is responsible for reviewingreview and approvingapproval of transactions required to be disclosed as a “related party”“related-party” transaction under applicable law, including U.S. Securities and Exchange Commissionthe SEC rules (generally, transactions involving amounts in excess of $120,000 in which a related person has a direct or indirect material interest). TeleTechTTEC management monitors all related-party transactions, and reports onabout their status to the Audit Committee quarterly. TeleTechTTEC executive officers and directors complete a questionnaire during the first quarter of each fiscal year, in which they provide information about the terms of all their related-party transactions (as defined in Item 404(a) of Regulation S-K) that occurred during the prior year and that are expected to occur during the current year. In reviewing related-party transactions, the Audit Committee of the Board considers whether these transactions are executed at “arm’s length”“arms-length” by reviewing all relevant facts and circumstances, including among others, the commercial reasonableness of the terms, the actual and perceived benefit to the Company, opportunity costs of alternate transactions, the materiality and character of the related party’srelated-party’s interest, the actual and apparent conflict of interests, the impact on a director’s independence (if the related partyrelated-party is a director, an immediate family member of a director, or an entity controlled by a director), and the terms on which a similar transaction can be secured from unrelated third parties.
During 2015, TeleTech2023, TTEC has undertaken the following related-party transactions subject to disclosure:transaction(s) with prior approval of the Audit Committee of the Board:
The Company entered into an agreement under which Avion, LLC (“Avion”)(Avion) and Airmax LLC (“Airmax”)(Airmax) provide certain aviation flight services as requested by the Company. Such services include the use of an aircraft and flight crew. Kenneth D. Tuchman, Chairman and Chief Executive Officer of the Company, has a direct 100 percentan indirect 100% beneficial ownership interest in Avion and Airmax. During 2015, 20142023, 2022, and 2013,2021, the Company expensed $1.7 million, $1.0 million$1,000,000, $500,000, and $0.6 million,$600,000, respectively, to Avion and Airmax for services provided to the Company. There was $120 thousand$218,000 in payments due and outstanding to Avion and Airmax as of December 31, 2015.2023.
During 2014, the Company entered into a vendor contract with Convercent Inc. (“Convercent”) to provide learning management and web and telephony based global helpline solutions. The majority owner of Convercent is a company which is owned and controlled by Kenneth D. Tuchman, Chairman and Chief Executive Officer of the Company. During 2015 and 2014, the Company paid $100 thousand and $20 thousand, respectively, to Convercent and is expecting to spend another $100 thousand during 2016.
During 2015, the Company entered into a vendor contract with Netlink to help the Company develop a key stroke monitoring solution. Shrikant Mehta, a member of the Board of Directors, has an ownership interest in Netlink. During 2015, the Company paid $98 thousand to Netlink for these services.
During 2015, the Company entered into a contract to purchase software from CaféX, which is a company that TeleTech holds a 17.2 equity investment in. During the second quarter of 2015, the Company purchased $0.4 million of software from CaféX.
17
EXECUTIVES AND EXECUTIVE COMPENSATION
TeleTechTTEC Executive TeamOfficers
The following persons are our executive officers:
Michelle “Shelly” R. Swanback, 55, serves as President of the Company and chief executive officer of TTEC Engage. She joined the Company in May 2022 as the chief executive officer of TTEC Engage and was named President for TTEC Holdings, Inc. in November 2022. With a proven track record driving growth in the digital environment, Shelly is both a market maker and a strong cultural leader with over 30 years of experience in digital transformation, strategic consulting, technology, services, analytics and M&A.
28
Information regarding Kenneth D. Tuchman, Chairman and
COMPENSATION DISCUSSION AND ANALYSIS In this section, we discuss our compensation philosophy and describe the
2023 Executive Compensation Summary
Our executive compensation program is designed to reward financial results and effective strategic leadership, which we believe are key elements in building sustainable value for stockholders. Our compensation
We carefully benchmark our compensation decisions against a relevant group of peer companies,
Our executive compensation
In
31
The mix of base and variable
CONSIDERATION OF
At our
The Compensation Committee
Stockholders will again consider our executive compensation on an advisory basis as part of the 2026 Annual Stockholder Meeting, and the Compensation Committee of the Board will continue to take into account this input when making future compensation decisions for our Named Executive Officers. CONSIDERATION OF “FREQUENCY ON SAY-ON-PAY” VOTE At our 2023 Annual Meeting of Stockholders, we asked stockholders to consider how often they wish to vote, on an advisory basis, on Say-On-Pay matters (the “Frequency of Say-On-Pay” vote). Stockholders indicated strong support of our existing practice, with 71% voting in favor of an advisory, non-binding vote on executive compensation every three years. In the two previous stockholder votes, occurring at the 2020 and 2017 Annual Meetings of Stockholders, TTEC stockholders approved the Company’s executive compensation by 99% or higher. The stockholders will next consider how often they wish to vote on “Say-On-Pay” matters involving executive compensation as part of the 2029 Annual Meeting of Stockholders. 32 EXECUTIVE LEADERSHIP TEAM COMPENSATION APPROACH AND STRUCTURE
Our Approach to Executive Leadership Compensation
We structure our executive compensation to attract and retain executive talent who can maximize our performance results. Our compensation program is designed to motivate our executive leadership team to remain focused on delivering superior performance that creates long-term investor value. Our executive compensation program also places significant weight on how our leaders align their conduct with
EXECUTIVE LEADERSHIP TEAM COMPENSATION STRUCTURE To achieve its overarching objectives, our executive compensation program consists of the following three
In addition to these primary components of compensation, our senior executives are also eligible to participate in our general health and OVERSIGHT OF OUR EXECUTIVE COMPENSATION PROGRAM
Role of the Compensation Committee of the Board
Our Compensation Committee of the Board determines all compensation for
34
The Compensation Committee of the Board utilizes these subjective factors because it believes they are critical to increasing stockholder value. These factors are not quantified or weighted for
Funding for performance-based cash incentives
Our ability to achieve the funding target is heavily dependent not only on factors within our control, but also on current economic conditions,
In addition to its discretion with respect to the performance-based cash incentives,
How We Use Compensation Consultants
From time to time, and as needed, the Compensation Committee of the Board retains services of compensation consultants, law firms, and other
At least every other year,
In those years when
How We Use Peer Group, Survey, and Benchmark Data
Each year, the Compensation Committee of the Board reviews the competitiveness of our compensation For use with 2023 pay decisions, the Compensation Committee of the Board, with the assistance of Meridian, reviewed the Company’s peer group. The peer group
This peer group also competes with us for executive talent
Peer group data for executive officers performing the same or similar roles is one factor the Compensation Committee of the Board uses in establishing
Mr. Tuchman, our Chief Executive Officer, beneficially owns
36
2023 BASE SALARY COMPENSATION FOR NAMED EXECUTIVE OFFICERS
The Compensation Committee of the Board analyzed benchmarks for competitive base salaries using the peer group as The Compensation Committee of the Board determined that the base salaries for other
Performance-Based Cash Incentives Funding Criteria
The Compensation Committee of the Board resets the variable, annual cash incentive award funding targets at the beginning of each year.
37
Individual Performance Targets and Awards for Performance-Based Cash Incentives
If and when any cash incentives are available, based on the overall performance of the Company, how the funds are allocated to each
Our cash incentives
We maintain an incentive recoupment (clawback) policy which was updated in 2023 to comply with NASDAQ listing standards implementing Exchange Act Rule 10D-1. Under this policy, if we are required to undergo an accounting restatement as the result of material noncompliance with financial reporting requirement under the securities laws, the Compensation Committee of the Board must, subject to limited exceptions, seek to recoup compensation received by a covered executive (including the Named Executive Officers) in excess of the amount the covered executive would have received based on the restated results. We may also pursue other remedies under applicable law, including disciplinary actions up to and including termination of employment, in addition to recouping any excess incentive compensation.
2023 Cash Award Funding and Pre-Bonus Adjusted Operating Income Results for 2022 Performance For purposes of determining the 2023 cash incentive funding for 2022 performance, the Compensation Committee of the Board adjusted 2022 results of operations due to foreign exchange fluctuations, which account for variance between foreign exchange (FX) rates used to set 2022 targets and the actual 2022 FX rates. The Compensation Committee of the Board determined that such adjustment was appropriate because these events were outside of direct control of the Company and the management team. The 2022 Pre-Bonus Adjusted Operating Income results measured against the targets were as follows:
38 Cash Incentives Paid in
As Mr. Bourret was not a Named Executive Officer in 2022, he was eligible for and did receive a cash incentive.
2024 Cash Award Funding and Pre-Bonus Adjusted Operating Income Results for 2023 Performance For purposes of determining the 2024 cash incentive funding for 2023 performance, the Compensation Committee of the Board adjusted 2023 results of operations due to foreign exchange fluctuations, which account for variance between FX rates used to set 2023 targets and the actual 2023 FX rates. The Compensation Committee of the Board determined that such adjustments were appropriate because these events were outside of direct control of the Company and the management team. Based on each segment’s performance against their annual Pre-Bonus Adjusted Operating Income targets, the Compensation Committee of the Board approved only the minimum funding level of $8 million. The 2023 Pre-Bonus Adjusted Operating Income results measured against the targets were as follows:
39 Cash Incentives Paid in 2024 For 2023 Performance In 2024, based on 2023 company financial performance, the Compensation Committee of the Board awarded $697,703 in cash incentives to the
Annual Grants
As Mr. Bourret was not a Named Executive Officer in 2022, he was eligible for and did receive an annual equity grant. Generally, the primary characteristics of
40
2023 Retention Grants In 2023 Promotional Grants In connection with her promotion to President, TTEC Holdings, Inc., the Compensation Committee of the Board agreed to provide Ms. Swanback, in March 2023, a one-time $2 million RSU equity grant, vesting in equal installments over a five-year period, and a $2 million performance-based equity grant, subject to a 3-year cliff vesting period. Ms. Swanback may earn between 0% to 200% of the performance-based equity award based on the achievement of the established financial targets for 2025. In connection with Mr. Bourret’s appointment to interim Chief Financial Officer, the Compensation Committee of the Board agreed to provide him a one-time RSU grant of $400,000 vesting in four equal installments Long-Term Incentive Plans (LTIP) Our executive compensation program includes a three-year long-term incentive program (the “LTIP”). The LTIP program provides select senior executives with an incentive opportunity in addition to TTEC’s regular annual RSU equity grant. Each performance-based equity award is aligned to company financial targets with a three-year measurement period. Under the award, each 41 2021 Long-Term Incentive Plan (LTIP) In March of 2021, the Compensation Committee of the Board approved performance metrics of Revenue and Adjusted Operating Income for the 2021 LTIP award. Each performance metric is weighted 50%. The 2021 LTIP has one measurement period – ending as of the end of fiscal year 2023 (three-year measurement period). Each senior executive eligible to Under the 2021 LTIP, the performance criteria, at max target, are aligned with an average 10% annual growth rate in the
With respect to the 2023 measurement period of the 2021 LTIP, senior executives earned 75% of their target award. In determining the Company’s 2023 achievement under the LTIP, the Compensation Committee of the Board considered adjustments related to foreign exchange fluctuations (the variance between foreign exchange rate estimates used to set 2023 performance targets and the actual 2023 foreign exchange rates). The Compensation Committee of the Board determined that such adjustments were appropriate because these events were outside of direct control of the Company and the management team and could not have been reasonably anticipated by them. Based on the Company’s 2023 Revenue and the terms of the 2021 LTIP, the Revenue component (weighted 50%) was earned at 150% of target, while no portion of the Adjusted Operating Income component of the award was earned. 42 2023 Long-Term Incentive Plan (LTIP) In March of 2023, the Compensation Committee of the Board approved performance metrics of Revenue and Adjusted earnings before interest, taxes, depreciation and amortization1 (Adjusted EBITDA) for the 2023 LTIP award. Each performance metric is weighted 50%. The 2023 LTIP has one measurement period – ending as of the end of fiscal year 2025 (three-year measurement period). Each senior executive eligible to participate in the 2023 LTIP may earn between 0% to 200% of the award target, based on achievement to the established Revenue and Adjusted EBITDA targets for fiscal year 2025. Under the 2023 LTIP, the performance criteria, at max target, are aligned with an average 8.6% annual growth rate in the Company’s Revenue and 10.3% annual growth rate in Adjusted EBITDA, compared to 2022 financial results, over the three-year measurement period (2023-2025).
2022 Value Creation Program
43 EMPLOYMENT AGREEMENTS As a matter of policy, the Company does not usually enter into employment agreements, except with members of the executive leadership team, in
Tuchman Agreement
Swanback Agreement
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Seybold Agreement
Bourret Agreement
45
McLean Agreement
Wagers Agreement
46
Provisions in our
As discussed above under the heading “
TAX
Section 409A of the Internal Revenue Code (the “Code”) imposes additional income taxes on executive officers for certain types of deferred compensation that do not comply with Section 409A of the Code. In 2008, we revised several of our compensation plans and agreements with technical changes designed to cause any
ACCOUNTING CONSIDERATIONS The Compensation Committee of the Board also considers the accounting and cash flow implications of our executive compensation program. In our financial statements, we record salaries and cash incentives as expenses in the amount paid, or to be paid, to the
Summary Compensation Table for
The following table sets forth the compensation for the services in all capacities to us and our subsidiary companies paid for the years ended December 31,
48 Non-qualified Deferred Compensation
The following table describes the perquisites and other compensation received by the
49
Each of the Non-Equity Incentive Plan Awards reported in this “Grants of Plan-Based Awards” table refers to discretionary performance-based cash incentive award payments. The material terms of these incentive awards are described in the section entitled “Compensation Discussion and Analysis.” The following table sets forth information about the discretionary performance-based cash incentive awards or discretionary cash bonuses for the
Outstanding Equity Awards at Year-End
The following table presents information regarding the outstanding equity awards held by each of the
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51
The following table presents information regarding the
Potential Payments Upon Termination or Change in Control
Named Executive Officers are also entitled to certain severance and continuation of benefits if they are terminated without cause during the above-stated change in control termination window. The amount of severance varies among Named Executive Officers and is disclosed as part of Employment 52 Termination and Change in Control Table The following table lists the
Note: Mr. Semach has been excluded from this table as he exited the Company in April 2023. Mr. Semach did not receive any payments or benefits as a result of his exit. 53 2023 CEO Pay Ratio
Pay Versus Performance In 2022, the Securities and Exchange Commission (the “SEC”) adopted Pay versus Performance (PvP) rules as required by the Dodd–Frank Wall Street Reform and Consumer Protection Act. These rules require that companies disclose how NEOs’ “Compensation Actually Paid” relates to the disclosures in the Summary Compensation Table and to the financial performance of the company. The following Pay Versus Performance (PvP) Table summarizes the key points demonstrated in the accompanying tables. 54 Pay Versus Performance (PvP) Table
Reconciliation of
For purposes of the above adjustments, the fair value of equity awards on the applicable date were determined in accordance with FASB’s ASC Topic 718, using valuation methodologies that are 55 The assumptions used in calculating the fair value of the equity awards did not differ in any material respect from the assumptions used to calculate the grant date fair value of the awards as reported in the Summary Compensation Table, except for the Most Important Performance Measures
Relationship between Compensation Actually Paid and Performance As described in "Compensation Discussion and Analysis" above, the Company uses several performance measures to align executive compensation with Company performance. Not all such measures are presented in the Pay versus Performance table above. As described in greater detail in “Compensation Discussion and Analysis,” TTEC’s executive compensation program reflects a pay-for performance philosophy. In accordance with Item 402(v) of Regulation S-K, we are providing the following graphical descriptions showing certain information presented in the table above. The following chart illustrates the relationship between CAP for our PEO and the average CAP for our Non-PEO NEOs against the Company’s TSR, as well as the relationship between our TSR and the TSR of our peer group: 56 Relationship between CAP vs. Net Income The following chart illustrates the relationship between CAP for our PEO and the average CAP for our Non-PEO NEOs against the Company’s Net Income: Relationship between CAP vs. Pre-Bonus Adjusted Operating Income The following chart illustrates the relationship between CAP for our PEO and the average CAP for our Non-PEO NEOs against the Company’s Pre-Bonus Adjusted Operating Income:
57 Equity Compensation Plan Information The following table sets forth,
Compensation Committee Interlocks and Insider Participation No member of the
58 GAAP TO NON-GAAP RECONCILIATION OF PERFORMANCE METRICS The following tables reconcile our operating income and Earnings Per Share (EPS) from the GAAP results to the Non-GAAP comparisons for years ended December 31, 2023 and 2022.
59 PROPOSALS TO BE VOTED ON AT THE ANNUAL MEETING
PROPOSAL NO. 1:
We are seeking your support to elect eight Board member candidates who we have nominated
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Limits on Director Service on Other Public Company Boards TTEC has a highly effective and engaged Board, and we believe that our directors' service on other companies’ boards enables them to contribute valuable knowledge and perspective to TTEC’s Board activities. Nonetheless, the Board is sensitive to the external obligations of its directors and the potential for overboard to compromise their ability to effectively serve the Company. Our Corporate Governance Guidelines limit each director's service on other boards of public companies to 1-4, depending on their circumstances. Directors whose main job is to sit on boards are limited to four (4) public company board memberships, other than the TTEC Board, and to two (2) audit committee memberships; while those who are employed by a public company may only be on the TTEC Board in addition to the board of their employer. Further, the ability of each director to devote sufficient time and attention to director duties is expressly considered as part of the annual Board evaluation process, which aims to evaluate the effectiveness and engagement of TTEC’s directors. While the Board considers its directors' outside directorships during this evaluation process, the Board recognizes that this is one of many outside obligations which could potentially impair a director's capacity to dedicate sufficient time and focus to their service on the TTEC Board. As such, the Board evaluates many factors when assessing the effectiveness and active involvement of each director. Such other factors include:
61 Director Term, Availability, and Ability to Serve We schedule our Board and committee meetings up to three full years in advance to ensure directors’ availability and maximum participation. Directors are elected for a one-year term only and, accordingly, there is an opportunity to evaluate annually each director's ability to serve. If any of the nominees become unable or unwilling to serve before the Annual Stockholder Meeting, shares represented by valid proxies will be voted FOR the election of such other person as our Board may nominate, or the number of directors that constitutes the full Board may be reduced to eliminate the vacancy. Those elected to the
While our Board and its Nominating and Governance Committee have not set specific minimum qualifications for director qualifications, they believe that it is important that
As part of the nomination process, the Nominating and Governance Committee of the Board carefully considers strategic objectives of the Company and evaluates them against the Board composition and skill set of each director. The Nominating and Governance Committee of the Board considers potential candidates for membership on the Board of Directors throughout the year based on the recommendations brought forward by members of the Board, members of management, professional executive search firms, and stockholders. When evaluating candidates for recommendation to stand for election to the Board, the Nominating and Governance Committee of the Board considers each potential nominee’s skills, experience in areas of current significance to the Company, diversity, independence, the Board’s skills and dynamic as a group, and the
The Nominating and Governance Committee of the Board will consider stockholder recommendations for Board candidates if the names and qualifications of such candidates are submitted in writing to our Corporate Secretary in accordance with our Amended and Restated
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63
65
66 Board Diversity Matrix
The eight director nominees receiving the highest number of affirmative votes of the outstanding shares of common stock present or represented by proxy and voting at the Annual Meeting will be elected as directors to serve until the next annual meeting of stockholders and until their successors are duly elected and qualified.
Our Board recommends that you vote “FOR” all of the nominees for election to our Board.
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PROPOSAL NO. 2: RATIFICATION OF THE APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM PricewaterhouseCoopers LLP (PwC) served as
In accordance with its charter, the Audit Committee of
PricewaterhouseCoopers LLP has served as our independent registered public accounting firm since May of 2007. The following table shows the fees for the audit and other services provided by PricewaterhouseCoopers LLP for the years ended December 31,
This category includes the audit of our annual financial statements; review of financial statements included in our quarterly reports on Form 10-Q; the audit of management’s assessment of the effectiveness of our internal
This category consists of assurance and related services provided by the independent registered public accounting firm that are reasonably related to the performance of the audit or review of our financial statements and are not reported above under “Audit Fees.” Audit-related fees included accounting consultations and other attestation procedures.
This category consists of professional services rendered by the independent registered public accounting firm, primarily in connection with our tax planning and compliance activities, including the preparation of tax returns in certain overseas jurisdictions and technical tax advice related to the preparation of tax returns.
This category consists of professional services related to
The Audit Committee of the Board has considered whether the independent registered public accounting firm’s provision of non-audit services is compatible with their independence and determined that it is compatible. All of the services provided by PricewaterhouseCoopers LLP were approved by the Audit Committee of the Board pursuant to its policy on pre-approval of audit and permissible non-audit services.
68 Policy on Audit Committee of the Board Pre-Approval of Audit and Non-Audit Services
All audit and non-audit services provided by PricewaterhouseCoopers LLP to us must be permissible under Section 10A of the Securities Exchange Act of 1934, as amended, and must be pre-approved in advance by the Audit
Ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for
Recommendation of the Board and the Audit Committee
Our Board and the Audit Committee of the Board recommend that you vote “FOR” Proposal No. 2.
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PROPOSAL NO. 3: APPROVAL OF AN AMENDMENT TO THE TTEC 2020 EQUITY INCENTIVE PLAN We are asking you to approve an amendment to the TTEC Holdings, Inc. 2020 Equity Incentive Plan (the “2020 Plan” or the “Plan”) to increase the number of shares available for issuance under the 2020 Plan by 4,500,000 shares and to allow certain shares that are withheld for taxes to be added back to the number of shares available for issuance under the 2020 Plan. The amendment to the 2020 Plan was approved by the Reasons for Adopting an Amendment to the 2020 Plan The 2020 Plan is the only compensation plan under which we grant equity-based awards to our employees, contractors, and
Shares Available for Issuance As noted above, the 2020 Plan is the only compensation plan under which we grant equity-based awards to our employees, contractors and outside directors1. If the amendment to the 2020 Plan is approved by the Company’s stockholders, we will have the following shares available for issuance pursuant to equity-based awards (all share counts determined as of March 31, 2024):
Outstanding Awards under Existing Plans As of March 31, 2024, there were 1,904,674 total outstanding shares of the Company’s common stock. As of March 31, 2024, there were no options outstanding under the Company’s equity compensation plans, and there were 1,471,975 RSUs and 432,699 PRSUs (calculated at target) outstanding under the Company’s equity compensation plans. Other than the foregoing, no other awards were outstanding as of March 31, 2024 under the Company’s equity compensation plans. Description of the 2020 Plan The following summary of material terms of the 2020 Plan, as amended, does not purport to be complete and is subject to and qualified in its entirety by the actual terms of the 2020 Plan. A conformed copy of the 2020 Plan incorporating the amendment is provided as Appendix B to this Proxy Statement. 70 Purpose of the 2020 Plan The purpose of the 2020 Plan is to promote the success of the Company and the interests of its stockholders by providing an additional means for the Company to attract, motivate, retain, and reward directors, officers, employees, and other eligible persons (including certain consultants and advisors). The Board or one or more committees of the Board consisting of directors appointed by the Board will administer the 2020 Plan. The Board intends to delegate general administrative authority for the 2020 Plan to the Compensation Committee of the Board, which is comprised of directors who qualify as independent under the rules promulgated by the SEC and NASDAQ. Except where prohibited by applicable law, a The Administrator has broad authority under the 2020 Plan with respect to award grants including, without limitation, the authority:
Eligibility Persons eligible to receive awards under the 2020 Plan include officers and employees of the Company or any of its subsidiaries, non-employee directors of the Company, and certain individual consultants who Authorized Shares If the amendment to the 2020 Plan is approved by stockholders, the number of shares of Company common stock authorized for Shares that are subject to or underlie awards that expire or for any reason are canceled or terminated, are forfeited, fail to vest, or for any other reason are not paid or delivered under the 2020 Plan are available for reissuance under the 2020 Plan. The 2020 Plan prohibits share recycling with respect to options and stock appreciation rights. Accordingly, shares tendered or withheld to satisfy the exercise price of options or tax withholding obligations with respect to options or SARs, and shares covering the portion of exercised stock-settled SARs (regardless of the number of shares actually delivered), count against the share limit. Shares that are withheld to cover taxes on other types of awards are added back to the share reserve and are available for reissuance under the 2020 Plan. 71 Awards Under the 2020 Plan Because awards under the 2020 Plan are granted in the discretion of the Board or a No Repricing In no event will any adjustment be made to a stock option or stock appreciation right award under the 2020 Plan (by amendment, cancellation and regrant, exchange for other awards or cash or other means) that
Minimum Vesting Schedule The 2020 Plan requires a minimum one-year cliff vesting schedule for equity award types under the 2020 Plan. This minimum vesting schedule will apply to at least 95% of the Dividends and Accrued dividends or dividend equivalent amounts shall not be paid unless and until the awards to which they relate become vested. Types of The 2020 Plan authorizes stock options, SARs, restricted stock, RSUs, PSUs and other forms of awards that Stock Options A stock option is a right to purchase shares of the Company’s common stock at a future date at a specified price per share (the “exercise price”). The per share exercise price of an option generally may not be less than the fair market value of a share of the Company’s common stock on the date of grant. On March 28, 2024, the last sale price of the Company’s common stock as reported on NASDAQ was $10.37 per share. The maximum term of an option is 10 years from the date of grant. An option may be either an incentive stock option or a nonqualified stock option. Incentive stock options are taxed differently than nonqualified stock options and are subject to more restrictive terms under the Internal Revenue Code of 1986, as amended (the “Code”) and the 2020 Plan. Incentive stock options may be granted only to employees of the Company or a subsidiary. Stock Appreciation Rights A stock appreciation right is the right to receive payment of an amount equal to the excess of the fair market value of shares of the Company’s common stock on the date of exercise of the stock appreciation right over the base price of the stock appreciation right. The base price is established by the Administrator at the time of grant of the stock appreciation right and may not be less than the fair market value of a share of the Company’s common stock on the date of grant. Stock appreciation rights may be granted in connection with other awards or independently. The maximum term of a stock appreciation right is 10 years from the date of grant. Restricted Stock Shares of restricted stock are shares of the Company’s common stock that are subject to forfeiture and to certain restrictions on sale, pledge, or other transfer by the recipient during a particular period of employment or service or until certain performance vesting conditions are satisfied. Subject to the restrictions provided in the applicable award agreement and the 2020 Plan, a participant receiving restricted stock may have all of the rights of a stockholder as to such shares, including the right to vote Restricted Stock Units A restricted stock unit represents the right to receive one share of the Company’s common stock on a specific future vesting or payment date. Subject to the restrictions provided in the applicable award agreement and the 2020 Plan, a participant receiving RSUs has no rights as a stockholder with respect to the RSUs until the shares of common stock are issued to the participant. RSUs may be granted with dividend equivalent rights that are payable only if the underlying RSUs vest. RSUs may be settled in cash if so provided in the applicable award agreement. 72 Performance Stock Units A performance stock unit (PSU) is a performance-based award that entitles the recipient to receive shares of the Company’s common stock based on attainment of one or more performance goals. Each PSU shall designate a target number of shares payable under the award, with the actual number of shares earned (if any) based on a formula set forth in the award agreement related to the attainment of one or more performance goals. Subject to the restrictions provided in the applicable award agreement and the 2020 Plan, a participant receiving PSUs has no rights as a stockholder until the shares of common stock are issued to the participant. PSUs may be granted with dividend equivalent rights that are payable only if the underlying PSUs are earned. PSUs may be settled in cash if so provided in the applicable award agreement. Cash Awards The Administrator, in its sole discretion, may grant cash awards, including, without limitation, discretionary awards, awards based on objective or subjective performance criteria, and awards subject to other vesting criteria. Other Awards The other types of awards that may be granted under the 2020 Plan include, without limitation, stock bonuses, and similar rights to purchase or acquire shares of the Company’s common stock, and similar securities with a value derived from the value of, or related to, the Company’s common stock or returns thereon. Change In Control Unless otherwise provided in an applicable award agreement, upon a change in control (as defined in the 2020 Plan), the Administrator shall have discretion to take whatever actions it deems necessary or appropriate, including but not limited to the following
Transferability of Awards Awards under the 2020 Plan generally are not transferable by the recipient other than by will or the laws of descent and distribution, or pursuant to domestic relations orders. Awards with exercise features are generally exercisable during the recipient’s lifetime only by the recipient. Any amounts payable or shares issuable pursuant to an award generally will be paid only to the recipient or the recipient’s beneficiary or representative. The Administrator has discretion, however, to establish written conditions and procedures for the transfer of awards to other persons or entities, as long as such transfers comply with applicable federal and state securities laws and provided that any such transfers are not for consideration. Adjustments As is customary in plans of this nature, the share limits and the number and kind of shares available under the 2020 Plan and any outstanding awards, as well as the exercise or purchase prices of awards, are subject to adjustment in the event of certain reorganizations, mergers, combinations, recapitalizations, stock splits, stock dividends, or other similar events that change the number or kind of shares outstanding, and extraordinary dividends or distributions of property to the stockholders. No Limit on Other Authority The 2020 Plan does not limit the authority of the Board or any committee of the Board to grant awards or authorize any other compensation, with or without reference to the Company’s common stock, under any other plan or authority. Restrictive Covenants and Recoupment (Clawback) Policy By accepting awards and as a condition to the exercise of awards and the enjoyment of any benefits of the 2020 Plan, participants agree to be bound by any incentive recoupment (clawback) policy adopted by the Company from time to time. Participants may also be subject to restrictive covenants if so required by the Administrator in any award agreement. 73 Termination of, or Changes to, the 2020 Plan The Administrator may amend or terminate the 2020 Plan at any time and in any manner. Stockholder approval for an amendment will be required only to the extent then required by applicable law or any applicable stock exchange rules, or as required to preserve the intended tax consequences of the 2020 Plan. For example, stockholder approval is required for any proposed amendment to increase the maximum number of shares that may be delivered with respect to awards granted under the 2020 Plan. Adjustments as a result of stock splits or similar events will not, however, be considered amendments requiring stockholder approval. Unless terminated earlier by the Board, the authority to grant new awards under the 2020 Plan will terminate on February 27, 2030 (10 years after the date on which the 2020 Plan was originally approved by the Board). Outstanding awards will generally continue following the expiration or termination of the 2020 Plan. Generally speaking, outstanding awards may be amended by the Administrator (except for a repricing), but the consent of the award holder is required if the amendment (or any plan amendment) materially and adversely affects the award holder. Certain Federal Tax Consequences The following summary of the federal income tax consequences of awards under the 2020 Plan is based upon federal income tax laws in effect on the date of this proxy statement. This summary does not purport to be complete, and does not discuss state, local or non-U.S. tax consequences. The tax consequences of individual awards may vary depending upon the particular circumstances applicable to any individual participant.
The grant of a nonqualified stock option under the 2020 Plan will not result in any federal income tax consequences to the participant or to the Company. Upon exercise of a nonqualified stock option, the participant will recognize ordinary compensation income equal to the excess of the fair market value of the shares of common stock at the time of exercise over the option exercise price. If the participant is an employee, this income is subject to withholding for federal income and employment tax purposes. The Company is entitled to an income tax deduction in the amount of the income recognized by the participant, subject to possible limitations imposed by the Code, including Section 162(m) thereof. Any gain or loss on the participant’s subsequent disposition of the shares will be treated as long-term or short-term capital gain or loss, depending on the sales proceeds received and whether the shares are held for more than one year following exercise. The Company does not receive a tax deduction for any subsequent capital gain. Incentive Stock Options The grant of an incentive stock option (or “ISO”) under the 2020 Plan will not result in any federal income tax consequences to the participant or to the Company. A participant recognizes no federal taxable income upon exercising an ISO (subject to the alternative minimum tax rules discussed below), and the Company receives no deduction at the time of exercise. In the event of a disposition of stock acquired upon exercise of an ISO, the tax consequences depend upon how long the participant has held the shares. If the participant does not dispose of the shares within two years after the ISO was granted, nor within one year after the ISO was exercised, the participant will recognize a long-term capital gain (or loss) equal to the difference between the sale price of the shares and the exercise price. The Company is not entitled to any deduction under these circumstances. If the participant fails to satisfy either of the foregoing holding periods (referred to as a “disqualifying disposition”), he or she will recognize ordinary compensation income in the year of the disposition. The amount of ordinary compensation income generally is the lesser of (i) the difference between the amount realized on the disposition and the exercise price or (ii) the difference between the fair market value of the stock at the time of exercise and the exercise price. Such amount is not subject to withholding for federal income and employment tax purposes, even if the participant is an employee of the Company. Any gain in excess of the amount taxed as ordinary income will generally be treated as a short-term capital gain. The Company, in the year of the disqualifying disposition, is entitled to a deduction equal to the amount of ordinary compensation income recognized by the participant, subject to possible limitations imposed by the Code, including Section 162(m) thereof. The “spread” under an ISO (i.e., the difference between the fair market value of the shares at exercise and the exercise price) is classified as an item of adjustment in the year of exercise for purposes of the alternative minimum tax. If a participant’s alternative minimum tax liability exceeds such participant’s regular income tax liability, the participant will owe the alternative minimum tax liability. 74 Restricted Stock Restricted stock is generally taxable to the participant as ordinary compensation income on the date that the Participants receiving restricted stock awards may make an election under Section 83(b) of the To the extent dividends are paid while the restrictions on the stock are in effect, any such dividends will be taxable to the participant as ordinary income (and will be treated as additional wages for federal income and Other Awards Other awards (such as RSUs and PSUs) are generally treated as ordinary compensation income as and when common stock or cash are paid to the participant upon vesting or settlement of such awards. If the participant is an employee, this income is subject to withholding for income and employment tax purposes. The Company is generally entitled to an income tax deduction equal to the amount of ordinary income recognized by the recipient, subject to possible limitations imposed by the Code, including Section 162(m) thereof. Section 162(m) of the Under Code Section 162(m), no deduction is generally allowed in any taxable year of the
Section 409A of the Internal Revenue Code Section 409A of the Code provides certain requirements for the deferral and payment of deferred compensation arrangements. In the event that any award under the 2020 Plan is deemed to be a deferred compensation arrangement, and if such arrangement does not comply with Section 409A of the Code, the recipient of such award will recognize ordinary income once such award is vested, as opposed to at the time or times set forth above. In addition, the amount taxable will be subject to an additional 20% federal income tax along with other potential taxes and penalties. It is
Because approval of the
75 Required Vote Approval of the amendment to the 2020 Plan will require the affirmative vote of a majority of the shares present or represented at the Annual Meeting. Abstentions will be counted as votes against this matter, and broker non-votes will have no effect on the vote on this matter.
Our Board recommends that you vote “FOR” Proposal No. 3.
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Stockholder Submission of Nominations and Proposals
In order for a proposal of a stockholder to be included in the
If a stockholder wishes to present a proposal at the
We know of no other matter to be acted upon at the
Our
By Order of the Board of Directors
KENNETH D. TUCHMAN Chairman and Chief Executive Officer Englewood, Colorado April
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To be approved by the Company’s Stockholders on May TTEC HOLDINGS, INC. 2020 EQUITY INCENTIVE PLAN Amendment No. 1 THIS AMENDMENT No. 1 to the TTEC Holdings, Inc. 2020 Equity Incentive Plan (the “Plan”) is adopted as of February 21, 2024. WHEREAS, the Board of Directors (the “Board”) of TTEC Holdings, Inc. (the “Company”) has the general authority to amend the Plan pursuant to Section 10.5 of the Plan; WHEREAS, the Board desires to amend the Plan (i) to increase the number of shares of Company common stock available for issuance under the Plan from 4,000,000 to 8,500,000 shares, and (ii) to provide that shares withheld to cover taxes due with respect to full value awards shall be added back to the number of shares available for issuance under the Plan, in NOW THEREFORE, the Board hereby amends the Plan as follows:
“4.1 Shares of Common Stock Subject to the Plan; Share Limit. Subject to the adjustment as provided in Sections 8.1 and
“Notwithstanding the foregoing, shares that are withheld from an Option or SAR as payment of the exercise price or the withholding taxes relating to the exercise of such Option or SAR, shares that are separately surrendered by the Participant as payment of the exercise price or the withholding taxes relating to the exercise of such Option or SAR, and the total number of shares subject to the exercised portion of a stock-settled SAR (regardless of the actual lesser of number shares delivered to the Participant), shall be deemed to have been issued hereunder and shall reduce the number of shares remaining available for issuance under the Plan. Shares that are withheld as payment of withholding taxes on any type of Award other than an Option or SAR shall be added back to the number of shares available for issuance under the Plan. “
This Amendment No. 1 to the Plan was adopted by action of the Board on date first indicated above. A - 1 Appendix B – Conformed Copy of TTEC 2020 Equity Incentive Plan To be approved by the Company’s Stockholders on May 22, 2024. TTEC HOLDINGS, INC. 2020 EQUITY INCENTIVE PLAN Adopted by the Board on February 27, 2020 Conformed copy incorporating the Amendment adopted by the Board on February 21, 2024 ESTABLISHMENT AND PURPOSE OF PLAN TTEC Holdings, Inc., a Delaware corporation (the “Company”), hereby establishes the TTEC Holdings, Inc. 2020 Equity Incentive Plan (the “Plan”) as set forth in this document. The purpose of the Plan is to promote the success of the Company and to DEFINITIONS Defined Terms. As used in the Plan, the following capitalized terms shall have the meanings set forth below: “Administrator” shall mean the Board or one or more Committees appointed by the Board or another Committee (within that Committee’s delegated authority) to administer all or certain aspects of this Plan, as set forth in Section 3 hereof. “Affiliate” shall have the meaning ascribed to such term in Rule 12b-2 of the General Rules and Regulations of the Exchange Act. “Award” shall mean any award granted under the Plan, including any Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Unit, Performance Stock Unit, cash Award, or Other Stock-Based Award. “Award Agreement” shall mean a written or electronic Award agreement between the Company and a Participant evidencing the grant of an Award under the Plan and containing the terms and conditions of such Award, as determined by the Administrator. “Board” shall mean the board of directors of the Company. “Cause” shall have the meaning ascribed to such term in any written agreement between the Participant and the Company or an Affiliate defining such term and, in the absence of such agreement, such term means, with respect to a Participant, the occurrence of any of the following events, in each case as determined by the Administrator, a Participant’s: (i) commission of a felony or the commission of any crime involving moral turpitude, theft, embezzlement, fraud, misappropriation of funds, breach of fiduciary duty, abuse of trust or the violation of any other law or ethical rule relating to the Company; (ii) material or repeated dishonesty or misrepresentation involving the Company or any Affiliate; (iii) material or repeated misconduct in the performance or non-performance of the Participant’s responsibilities as an employee, officer, director, or consultant; (iv) violation of a material condition of employment; (v) unauthorized use of trade secrets or confidential information (or the Company’s reasonable belief that a Participant has or has attempted to do so); or (vi) aiding a competitor of the Company or any Affiliate. Any determination by the Administrator whether an event constituting Cause has occurred will be final, binding and conclusive. For purposes of this definition, the term “Company” shall be interpreted to include any Subsidiary, Affiliate or parent of the Company, as appropriate. “Change in Control” shall mean and shall be deemed to have occurred upon the occurrence of any one of the following: any consolidation, merger or other similar transaction (i) involving the Company and its Affiliates (“TTEC”), if TTEC is not the continuing or surviving corporation, or (ii) which contemplates that all or substantially all of the business and/or assets of TTEC will be controlled by another corporation, in each case unless, following such consolidation, merger or other similar transaction, more than fifty one percent (51%) of the combined voting B - 1 outstanding Common Stock and/or other voting securities of TTEC immediately prior to such consolidation, merger or other similar transaction, in substantially the same proportion as their ownership immediately prior to such consolidation, merger or other similar transaction; any sale, lease, exchange or transfer (in one transaction or series of related transactions) of all or substantially all of the assets of TTEC (a “Disposition”); provided, however, that the foregoing shall not apply to any Disposition to a corporation with respect to which, following such Disposition, more than fifty one percent (51%) of the combined voting power of the then outstanding voting securities of such corporation is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners of at least fifty one percent (51%) of the then outstanding Common Stock and/or other voting securities of TTEC immediately prior to such Disposition, in substantially the same proportion as their ownership immediately prior to such Disposition; approval by the stockholders of TTEC of any plan or proposal for the liquidation or dissolution of TTEC, unless such plan or proposal is abandoned within sixty (60) days following such approval; the acquisition by any “person” (as such term is used in Sections 13(d) and 14(d)(2) of the Exchange), or two (2) or more persons acting in concert, of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of fifty one percent (51%) or more of the outstanding shares of voting stock of TTEC; provided, however, that for purposes of the foregoing, “person” excludes Kenneth D. Tuchman and his affiliates; provided, further that the foregoing shall exclude any such acquisition (A) by any person made directly from TTEC, (B) made by TTEC or any Affiliate, or (C) made by an employee benefit plan (or related trust) sponsored or maintained by TTEC or any Affiliate; or if, during any period of fifteen (15) consecutive calendar months commencing at any time on or after the date of grant of any Award, those individuals (the “Continuing Directors”) who either (A) were directors of TTEC on the first day of each such fifteen (15)-month period, or (B) subsequently became directors of TTEC and whose actual election or initial nomination for election subsequent to that date was approved by a majority of the Continuing Directors then on the board of directors of TTEC, cease to constitute a majority of the board of directors of TTEC. If “Code” shall mean the Internal Revenue Code of 1986, as amended. “Committee” shall mean the Compensation Committee of the Board, or such other Committee of the Board to which administration of the Plan, or a part of the Plan, has been duly delegated as permitted by applicable law and in accordance with the Plan. “Common Stock” shall mean the common stock of the Company, par value $0.01 per share, and such other securities or property as may become the subject of Awards under this Plan pursuant to an adjustment made under Section 8.1. “Company” shall mean TTEC Holdings, Inc., a Delaware corporation. “Disability” shall have the meaning ascribed to such term in any written agreement between the Participant and the Company or an Affiliate defining such term and, in the absence of such agreement, such term means that, in each case as determined by the Administrator: (i) the Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, or (ii) the Participant is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees of the Company; provided that, in either case, the Participant’s condition also qualifies as a “disability” for purposes of Section 409A with respect to an Award subject to Section 409A. “Effective Date” shall mean the date on which this Plan is approved by the stockholders of the Company. “Eligible Person” shall mean any person who is either: (a) an officer, whether or not a director, or employee of the Company or one of its Subsidiaries; (b) a non-employee director of the Company or one of its Subsidiaries; or (c) an individual consultant who renders bona fide services (other than services in connection with the offering or sale of securities of the Company or one of its Subsidiaries in a capital-raising transaction or as a market maker or promoter of securities of the Company or one of its Subsidiaries) to the Company or one of its Subsidiaries and who is selected to participate in this Plan by the Administrator; provided, however, that a person who is otherwise an Eligible Person under clause (c) above may participate in this Plan only if such participation would B - 2 “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended. “Fair Market Value” shall mean, unless otherwise determined by the Committee, the fair market value of a share of Common Stock as of a particular date, determined as follows: (i) the closing sale price reported for such share of Common Stock for such date on the national securities exchange or national market system on which such stock is principally traded, or if no sale of shares of Common Stock is reported for such trading day, on the last preceding day on which a sale was reported, or (ii) if the shares of Common Stock are not then listed on a national securities exchange or national market system, or the value of such shares is not otherwise determinable, such value as determined by the Committee in good faith in its sole discretion consistent with the requirements under Section 409A of the Code. “Incentive Stock Option” or “ISO” shall mean an Option that is intended to comply with the requirements of Section 422 of the Code. “Non-Qualified Stock Option” shall mean an Option that is not intended to comply with the requirements of Section 422 of the Code. “Option” shall mean a right to purchase a specified number of shares of Common Stock during a specified period at a pre-established exercise price as determined by the Administrator, granted pursuant to Section 6.1.1. “Other-Stock Based Award” shall mean a stock-based Award issued pursuant to Section 6.1.7. “Participant” shall mean any Eligible Person that has been issued an Award under the Plan. “Performance Stock Unit” or “PSU” shall mean an Award evidencing the right to receive shares of Common Stock or equivalent value (as determined by the Administrator) based on the attainment of certain performance goals, issued pursuant to Section 6.1.5. “Plan” shall have the meaning set forth in Section 1 hereof. “Restricted Stock” shall mean shares of Common Stock that are subject to forfeiture and restrictions on transferability, issued pursuant to Section 6.1.3. “Restricted Stock Unit” or “RSU” shall mean an Award evidencing the right to receive one share of Common Stock or equivalent value (as determined by the 4 Administrator) that is restricted or subject to forfeiture provisions, issued pursuant to Section 6.1.4. “Section 409A” shall mean section 409A of the Code and related Treasury regulations and guidance promulgated thereunder. “Securities Act” shall mean the Securities Act of 1933, as amended. “Share Limit” shall have the number of shares available for issuance under the Plan as set forth in Section 4.1. “Stock Appreciation Right” or “SAR” shall mean a right to receive the appreciation value on the shares of Common Stock subject to the Award, issued pursuant to Section 6.1.2. “Subsidiary” shall mean any corporation (other than the Company) or other entity controlled by the Company directly or indirectly though one or more intermediaries. Construction. Except where otherwise indicated by the context, any masculine term used herein also shall include the feminine, the plural shall include the singular, and the singular shall include the plural. PLAN ADMINISTRATION Plan Administrator. This Plan shall be administered by, and all Awards under this Plan shall be authorized by, the Administrator. Any Committee appointed by the Board to act as the Administrator shall be comprised solely of one or more directors or such other number of directors as may be required under applicable law and the rules of any applicable stock exchange. A Committee may delegate some or all of its authority to another Committee so constituted. The Board or a Committee comprised solely of directors may also delegate, to the extent permitted by applicable law and the rules of any applicable stock exchange, to one or more officers of the Company, its powers under this Plan (a) to determine the Eligible Persons who will receive grants of Awards under this Plan, and (b) to determine the number of shares subject to, and the other terms and conditions of, such Awards. The Board may delegate different levels of authority to different Committees with administrative and grant authority under this Plan. Unless otherwise provided in the bylaws of the Company or the applicable charter of any Administrator: (a) a majority of the members of the acting Administrator shall constitute a quorum, and (b) the affirmative vote of a majority of the members present assuming the presence of a quorum or the unanimous written consent of the members of the Administrator shall constitute due authorization of an action by the acting Administrator. B - 3 Grants of Awards, and transactions in or involving Awards, intended to be exempt under Rule 16b-3 under the Exchange Act, must be duly and timely authorized by the Board or a Committee consisting solely of two or more non-employee directors, as this requirement is applied under Rule 16b-3 promulgated under the Exchange Act. Awards granted to non-employee directors shall not be subject to the discretion of any officer or employee of the Company and shall be administered exclusively by the Board or a Committee consisting solely of independent directors. Powers of the Administrator. Subject to the express provisions of this Plan, the Administrator is authorized and empowered to do all things deemed necessary or desirable in connection with the authorization of Awards and the administration of this Plan (in the case of a delegation to a Committee or one or more officers, within the authority delegated to that Committee or person(s)), including, without limitation, the authority to: determine eligibility and, from among those persons determined to be eligible, the particular Eligible Persons who will receive Awards under this Plan; grant Awards to Eligible Persons, determine the type of Awards to be granted, the price at which securities will be offered or awarded and the number of securities to be offered or awarded to any of such persons, determine the other specific terms and conditions of such Awards consistent with the express limits of this Plan, establish the installments, if any, in which such Awards shall become exercisable or shall vest (which may include, without limitation, performance and/or time-based schedules), or determine that no delayed exercisability or vesting is required, establish any applicable performance targets, and establish the events of termination or reversion of such Awards; approve the forms of Award Agreements, which need not be identical either as to type of Award or among Participants; construe and interpret this Plan and any Award Agreements defining the rights and obligations of the Company, its Subsidiaries, and Participants under this Plan, further define the terms used in this Plan, and prescribe, amend and rescind rules and regulations relating to the administration of this Plan or the Awards granted under this Plan; cancel, modify, or waive the Company’s rights with respect to, or modify, discontinue, suspend, or terminate any or all outstanding Awards, subject to any required consent under Section 10.5.5; accelerate or extend the vesting or exercisability or extend the term of any or all outstanding Awards (in the case of Options or Stock Appreciation Rights, within the maximum ten (10)-year term of such Awards) in such circumstances as the Administrator may deem appropriate, including, without limitation, in connection with a termination of employment or services or other events of a personal nature, subject to any required consent under Section 10.5.5; adjust the number of shares of Common Stock subject to any Award, adjust the price of any or all outstanding Awards or otherwise change previously imposed terms and conditions, in such circumstances as the Administrator may deem appropriate, in each case subject to compliance with applicable stock exchange requirements, Sections 4 and 10.5.5, and provided that in no case, except due to an adjustment contemplated by Section 8, shall the terms of any outstanding Awards be amended, by amendment, cancellation and regrant, or other means, to reduce the determine the date of grant of an Award, which may be a designated date after but not before the date of the Administrator’s action, unless otherwise designated by determine whether, and the extent to which, adjustments are required pursuant to Section 8 hereof and authorize the termination, conversion, substitution, acceleration or succession of Awards upon the occurrence of an event of the type described in acquire or settle rights under Awards in cash, stock of equivalent value, or other consideration, subject to determine the Fair Market Value of the Common Stock or Awards under this Plan from time to time and/or the Binding Determinations. Any action taken by, or inaction of, the Company, any Subsidiary, or the Administrator relating or pursuant to this Plan and within its authority hereunder or under applicable law shall be within the absolute discretion of that entity or body and shall be conclusive and binding upon all persons. Neither the Board, the Administrator, nor any Committee, nor any member thereof or person acting at the direction thereof, shall be liable for B - 4 resulting therefrom to the fullest extent permitted by law. The foregoing right of indemnification shall be in addition to any right of indemnification set forth in the Company’s certificate of incorporation and bylaws, as the same may be amended from time to time, or under any directors and officers liability insurance coverage or written indemnification agreement with the Company that may be in effect from time to time. Reliance on Experts. In making any determination or in taking or not taking any action under this Plan, the Administrator may obtain and may rely upon the advice of experts, including professional advisors to the Company. The Administrator shall not be liable for any such action or determination taken or made or omitted in good faith based upon such advice. Delegation of Non-Discretionary Functions. In addition to the ability to delegate certain grant authority to officers of the Company as set forth in Section 3.1, the Administrator may also delegate ministerial, non-discretionary functions to individuals who are officers or employees of the Company or any of its Subsidiaries or to third parties. SHARES OF COMMON STOCK SUBJECT TO THE PLAN; SHARE LIMIT Shares of Common Stock Subject to the Plan; Share Limit. Subject to the adjustment as provided in Sections 8.1 and 10.9, the maximum number of shares of Common Stock available for issuance under the Plan will be equal to 8,500,000 shares of Common Stock, all of which may be granted, in the sole discretion of the Administrator, as Incentive Stock Options. Common Stock issued under the Plan shall be either authorized but unissued shares of Common Stock or, to the extent permitted, shares of Common Stock that have been reacquired by the Company or any Subsidiary. Counting of Shares. The Administrator may adopt reasonable counting procedures to ensure appropriate counting and to avoid double counting (as, for example, in the case of tandem or substitute Awards) as it may deem necessary or desirable in its sole discretion. Shares shall be counted against those reserved to the extent shares have been delivered pursuant to an Award and are no longer subject to a substantial risk of forfeiture. Accordingly, to the extent that an Award under the Plan, in whole or in part, is canceled, expired, forfeited, settled in cash, or otherwise terminated without delivery Reservation of Shares; No Fractional Shares. The Company shall at all times reserve a number of shares of Common Stock sufficient to cover the Company’s obligations and contingent obligations to deliver shares with respect to Awards then outstanding under this Plan, exclusive of any dividend equivalent obligations to the extent the Company has the right to settle such rights in cash. No fractional shares shall be delivered under this Plan. The Administrator may pay cash in lieu of any fractional shares in settlements of Awards under this Plan. PARTICIPATION The Administrator may grant Awards under this Plan only to those persons that the Administrator determines to be Eligible Persons. The Administrator shall, in its sole and absolute discretion, select from among the Eligible Persons those individuals who shall receive Awards and become Participants under the Plan. There is no right of any Eligible Person to receive an Award under the Plan, and the Administrator has absolute discretion to treat Eligible Persons differently from one another under the Plan. Receipt of an Award by a Participant shall not create the right to receive future Awards under the Plan, but a Participant who has been granted an Award may, if otherwise eligible, be granted additional Awards if the Administrator shall so determine. AWARDS Type and Form of Awards. The Administrator shall determine the type or 6.1.1 Stock Options. General Option Provisions. Options may only be granted to Eligible Persons for whom the Company would be deemed to be an “eligible issuer of service recipient stock,” as defined in Treasury Regulation 1.409A-1(b)(5)(iii)(E). An Option may be intended to be an Incentive Stock Option or a Non-Qualified Stock Option. The Award Agreement for an Option will indicate if the Option is intended to be an ISO or a Non-Qualified Stock Option. The maximum term of each Option, whether an ISO or a Non-Qualified Stock Option, shall be ten (10) years. B - shall be subject to Additional Rules Applicable to ISOs. Notwithstanding the general Option rules set forth in Section 6.1.1(a), the following rules shall apply to Options intended to qualify as ISOs. ISOs may only be granted to employees of the Company or its Subsidiaries (for this purpose, the term “subsidiary” is used as defined in Section 424(f) of the Code, which generally requires an unbroken chain of ownership of at least fifty percent (50%) of the total combined voting Stock Appreciation Rights. A SAR is an Award that entitles the Participant to receive, upon exercise of the SAR, a payment in cash and/or Common Stock, or a combination of the two, equal to, or having a Fair Market Value equal to, the product of (x) number of SARs being exercised multiplied by (y) the excess of (i) the Fair Market Value of a share of Common Stock on the date the SAR is exercised, over (ii) the “base price” applicable to the SAR. SARs may only be granted to Eligible Persons for whom the Company would be deemed to be an “eligible issuer of service recipient stock,” as defined in Treasury Regulation 1.409A-1(b)(5)(iii)(E). The base price of the SAR shall be determined by the Administrator but shall be not less than the Fair Market Value of the Company’s Common Stock on the date of grant. The maximum term of a SAR shall be ten (10) years. SARs shall become exercisable at such times and under such conditions and shall be subject to such other terms as may be determined by the Administrator in its discretion consistent with the terms and conditions of the Plan. Restricted Stock. General Restricted Stock Provisions. Restricted Stock is Common Stock subject to such restrictions on transferability, risk of forfeiture and other restrictions, if any, as the Administrator may impose, which restrictions may lapse separately or in combination at such times, under such circumstances, including based on achievement of performance goals and/or future service requirements, in such installments or otherwise, as the Administrator may determine at the date of grant or thereafter. Except to the extent restricted under the terms of this Plan and the applicable Award Agreement relating to the Restricted Stock, a Participant granted Restricted Stock shall have all of the
Dividends and Splits. As a condition to the grant of an Award of Restricted Stock, any cash dividends paid on shares of Restricted Stock and any stock distributed in connection with a stock split or stock dividend, and any other property distributed as a dividend, shall be subject to restrictions and a risk of forfeiture to the same extent as the Restricted Stock with respect to which such dividend or distribution was made. In addition, and subject to applicable law, the Administrator may require or permit a Participant to elect that any cash dividends paid on Restricted Stock be automatically reinvested in additional shares of Restricted Stock or applied to the purchase of additional Awards under this Plan, subject to the same vesting schedule as the Restricted Stock to which the dividend relates. Restricted Stock Units. Grant of Restricted Stock Units. An RSU represents the right to receive from the Company on the relevant scheduled vesting or payment date for such RSU, one share of Common Stock or, if specified in the applicable Award Agreement, the Fair Market Value of one share of Common Stock paid in cash. The vesting or payment of an Award B - 6 of RSUs may be subject to the attainment of specified performance goals or targets, forfeitability provisions and such other terms and conditions as the Administrator may determine, subject to the provisions of this Plan. Dividend Equivalent Accounts. If, and only if, required by the applicable Award Agreement, prior to the expiration of the applicable vesting period of an RSU, the Administrator shall provide dividend equivalent rights with respect to RSUs, in which case the Company shall establish an account for the Participant and reflect in that account any securities, cash or other property comprising any dividend or property distribution with respect to the shares of Common Stock underlying each RSU. Each amount or other property credited to any such account shall be subject to the same vesting conditions as the RSU to which it relates. In addition, subject to applicable law, the Administrator may require or permit a Participant to elect that any such dividend equivalent amounts credited to the Participant’s account be automatically deemed reinvested in additional RSUs or applied to the purchase of additional Awards under the Plan, subject to the same vesting schedule as the RSUs to which the dividend equivalent amounts relate. The Participant shall be paid the amounts or other property credited to such dividend equivalent account at the same time as payment of the RSU. Rights as a Stockholder. Subject to the restrictions imposed under the terms and conditions of this Plan and the applicable Award Agreement, each Participant receiving RSUs shall have no rights as a stockholder of the Company with respect to such RSUs until such time as shares of Common Stock are issued to the Participant. In the event an RSU is settled in cash, the Participant receiving RSUs shall never receive stockholder rights with respect to such Award. No shares of Common Stock shall be issued at the time an RSU is granted, and the Company will not be required to set aside funds for the payment of any such Award. Performance Stock Units. Grant of Performance Stock Units. A PSU is a performance-based Award that entitles the Participant to receive shares of Common Stock or, if specified in the Award Agreement, the Fair Market Value of such shares of Common Stock paid in cash, based on the attainment of one or more performance goals. Each Award of PSUs shall designate a target number of PSUs covered by the Award, with the actual number of shares of Common Stock earned, if any, to be based on a formula set forth in the Award Agreement related to the attainment of one or more performance goals set forth in the Award Agreement. Dividend Equivalent Accounts. If, and only if, required by the applicable Award Agreement, the Administrator shall pay dividend equivalent rights with respect to PSUs, in which case a Participant shall be entitled to a cash payment with respect to each PSU earned and payable in an amount based on the ordinary cash dividends that would have been payable to the Participant had the Participant been the owner of a number of actual shares of Common Stock equal to the number of PSUs earned, from the date of grant of the PSU Award through the date the PSU is paid. If so determined by the Administrator and set forth in the applicable Award Agreement, such cash amount may be credited with earnings or losses as if deemed reinvested in Common Stock or as if used to purchase additional Awards under the Plan. The amount payable shall be made in a single lump sum on the date on which payment is made in respect of the related PSUs. Rights as a Stockholder. Subject to the restrictions imposed under the terms and conditions of this Plan and the applicable Award Agreement, each Participant receiving PSUs shall have no rights as a stockholder of the Company with respect to such PSUs until such time as shares of Common Stock are issued to the Participant. In the event a PSU is settled in cash, the Participant receiving PSUs shall never receive stockholder rights with respect to such Award. No shares of Common Stock shall be issued at the time a PSU is granted, and the Company will not be required to set aside funds for the payment of any such Award. 6.1.6 Cash Awards. The Administrator may, from time to time, subject to the provisions of the Plan and such other terms and conditions as it may determine, grant cash bonuses, including without limitation, discretionary Awards, Awards based on objective or subjective performance criteria, Awards subject to other vesting criteria or Awards granted consistent with Section 6.1.7 below. Cash Awards may be awarded in such amount and at such times during the term of the Plan as the Administrator shall determine. 6.1.7 Other Awards. The other types of Awards that may be granted under this Plan include: (a) stock bonuses or similar rights to purchase or acquire shares, whether at a fixed or variable price or ratio related to the Common Stock (subject to compliance with applicable laws), upon the passage of time, the occurrence of one or more events, or the satisfaction of performance criteria or other conditions, or any combination thereof; or (b) any similar securities or rights with a value derived from the value of, or related to, the Common Stock and/or returns thereon. Award Agreements. Each Award, other than cash Awards described in Section 6.1.6, shall be evidenced by a written or electronic Award Agreement in the form approved by the Administrator and, if required by the Administrator, executed or accepted by the recipient of the Award. The Administrator may authorize any officer of the Company, other than the particular Award recipient, to execute any or all Award Agreements on behalf of the Company (electronically or otherwise). The Award Agreement shall set forth the material terms and conditions of the Award as established by the Administrator consistent with the express limitations of this Plan. B - 7 Deferrals and Settlements. Except as otherwise set forth herein, payment of Awards may be in the form of cash, Common Stock, other Awards or combinations thereof as the Administrator shall determine, and with such restrictions as it may impose. The Administrator may also require or permit Participants to elect to defer the issuance of shares of Common Stock or the settlement of Awards in cash under such rules and procedures as it may establish under this Plan. The Administrator may also provide that deferred settlements include the payment or crediting of interest or other earnings on the deferral amounts, or the payment or crediting of dividend equivalents where the deferred amounts are denominated in shares. All mandatory or elective deferrals of the issuance of shares of Common Stock or the settlement of Awards in cash shall be structured in a manner that is intended to comply with, or be exempt from, the requirements of Section 409A of the Code. Consideration for Common Stock or Awards. The purchase price for any Award granted under this Plan or the Common Stock to be delivered pursuant to an Award, as applicable, may be paid by means of any lawful consideration as determined by the Administrator and subject to compliance with applicable laws, including, without limitation, one or a combination of the following methods: services rendered by the recipient of such Award; cash, check payable to the order of the Company, or electronic funds transfer; notice and third-party payment in such manner as may be authorized by the Administrator; the delivery of previously owned shares of Common Stock that are fully vested and unencumbered; by a reduction in the number of shares otherwise deliverable pursuant to the Award; or subject to such procedures as the Administrator may adopt, pursuant to a “cashless exercise” with an approved broker or dealer who provides financing for the purposes of, or who otherwise facilitates, the purchase or exercise of Awards. In the event that the Administrator allows a Participant to exercise an Award by delivering shares of Common Stock previously owned by such Participant and unless otherwise expressly provided by the Administrator, any shares delivered which were initially acquired by the Participant from the Company upon exercise of an Option or otherwise must have been owned by the Participant at least six (6) months as of the date of delivery, or such other period as may be required by the Administrator in order to avoid adverse accounting treatment. Shares of Common Stock used to satisfy the exercise price of an Option shall be valued at their Fair Market Value on the date of exercise. The Company will not be obligated to deliver any shares with respect to any Award unless and until it receives full payment of the exercise or purchase price therefor and any related withholding amounts under Section 9.1, and any other conditions to exercise or purchase, as established from time to time by the Administrator, have been satisfied. Unless otherwise expressly provided in the applicable Award Agreement, the Administrator may at any time eliminate or limit a Participant’s ability to pay the purchase or exercise price of any Award by any method other than cash payment to the Company. Minimum Vesting Schedule. Except as provided below, all Awards granted under the Plan shall have a minimum one (1) year cliff vesting schedule meaning that no portion of any Award may be scheduled to vest prior to one (1) year after the date of grant of such Award. Notwithstanding the foregoing, up to five percent (5%) of the total number of shares of Common Stock authorized by the Board and the stockholders for issuance under the Plan may be granted pursuant to Awards not subject to the minimum vesting schedule described above. The Administrator may adopt reasonable counting procedures to determine whether the five percent (5%) limit in the preceding sentence has been attained. The Administrator may also apply reasonable rules and rounding conventions to determine whether an Award complies with the above-referenced minimum vesting schedule. Transfer Restrictions. Limitations on Exercise and Transfer. Unless otherwise expressly provided in or pursuant to this Section 6.6, by applicable law or by an Award Agreement, as the same may be amended, (a) all Awards are non-transferable by the Participant and shall not be subject in any manner to sale, transfer, anticipation, alienation, assignment, pledge, encumbrance or charge; (b) Awards shall be exercised only by the Participant; and (c) amounts payable or shares issuable pursuant to any Award shall be delivered only to, or for the account of, the Participant. Exceptions. The Administrator may permit Awards to be exercised by and paid to, or otherwise transferred to, other persons or entities pursuant to such conditions and procedures, including limitations on subsequent transfers, as the Administrator may, in its sole discretion, establish in writing; provided that any such transfers of ISOs shall be limited to the extent permitted under the federal tax laws governing ISOs. Any permitted transfer shall be subject to compliance with applicable federal and state securities laws. Further Exceptions to Limits on Transfer. The exercise and transfer restrictions in Section 6.6.1 shall not apply to: transfers to the Company, the designation of a beneficiary to receive benefits in the event of the Participant’s death or, if the Participant has died, transfers to or exercise by the Participant’s beneficiary, or, in the absence of a validly designated beneficiary, transfers by will or the laws of descent and distribution, B - 8 subject to any applicable limitations on ISOs, transfers to a current or former family member pursuant to a domestic relations order if approved or ratified by the Administrator, subject to any applicable limitations on ISOs, if the Participant has suffered a Disability, permitted transfers or exercises on behalf of the Participant by his or her legal representative, or the authorization by the Administrator of “cashless exercise” procedures with approved brokers or dealers who provide financing for the purpose of, or who otherwise facilitate, the exercise of Awards consistent with applicable laws and the express authorization of the Administrator. International Awards. One or more Awards may be granted to Eligible Persons who provide services to the Company or one of its Subsidiaries outside of the United States. Any Awards granted to such persons may, if deemed necessary or advisable by the Administrator, be granted pursuant to the terms and conditions of any applicable sub-plans, if any, appended to this Plan and approved by the Administrator. Dividend and Dividend Equivalents. Notwithstanding anything to the contrary herein, in no event may accrued dividends or dividend equivalents with respect to any Award issued under the Plan be paid prior to the vesting of the Award to which they relate. EFFECT OF TERMINATION OF SERVICE ON AWARDS Termination of Employment. Administrator Determination. The Administrator shall establish the effect of a termination of employment or service on the rights and benefits under each Award under this Plan and in so doing may make distinctions based upon, inter alia, the cause of termination and type of Award. If the Participant is not an employee of the Company or one of its Subsidiaries and provides other services to the Company or one of its Subsidiaries, the Administrator shall be the sole judge for purposes of this Plan, unless a contract or the Award Agreement otherwise provides, of whether the Participant continues to render services to the Company or one of its Subsidiaries and the date, if any, upon which such services shall be deemed to have terminated. General. For any Award issued under the Plan, unless the Award Agreement provides otherwise, the portion of such Award that is unvested at the time that a Participant’s employment or service is terminated for any or no reason shall be forfeited and reacquired by the Company; provided however, that the Administrator may provide, by rule or regulation or in any Award Agreement, or may determine in any individual case, that such forfeiture requirement shall be waived in whole or in part. Stock Options and SARs. For Awards of Options or SARs, unless the Award Agreement provides otherwise, the exercise period of such Options or SARs shall expire: three (3) months after the last day that the Participant is employed by, or provides services to, the Company or its Subsidiaries; provided however, that in the event of the Participant’s death during this period, those persons entitled to exercise the Option or SAR pursuant to the laws of descent and distribution shall have one (1) year following the date of the Participant’s death within which to exercise such Option or SAR; twelve (12) months after the last day that the Participant is employed by, or provides services to, the Company or a Subsidiary in the case of a Participant whose termination of employment or service is due to death or Disability; and immediately upon a Participant’s termination for Cause. The Administrator will, in its absolute discretion, determine the effect of all matters and questions relating to a termination of a Participant’s employment or service, including, but not limited to, the question of whether a leave of absence constitutes a termination of employment or service and whether a Participant’s termination is for Cause. Events Not Deemed Terminations of Service. Unless the express policy of the Company or any of its Subsidiaries or the Administrator otherwise provides, the employment relationship shall not be considered terminated in the case of (a) sick leave, (b) military leave, or (c) any other paid leave of absence authorized by the Company or one of its Subsidiaries, or the Administrator; provided that unless reemployment upon the expiration of such leave is guaranteed by contract or law, such leave is for a period of not more than three (3) months. In the case of any employee of the Company or one of its Subsidiaries on an approved leave of absence, continued vesting of the Award while on leave from the employ of the Company or one of its Subsidiaries may be suspended until the employee returns to service, unless the Administrator otherwise provides or applicable law otherwise requires. In no event shall an Award be exercised after the expiration of the term set forth in the Award Agreement. Change in Time Commitment. In the event a Participant’s regular level of time commitment in the performance of his or her services for the Company or any Subsidiaries is reduced (for example, and without limitation, if the Participant is an employee of the Company and the Participant has a change in status from full-time to part-time or takes an extended leave of absence) after the date of grant of any Award, the Administrator, in its sole discretion, may (a) make a corresponding reduction in the number of shares or cash amount subject to any portion of such Award that is scheduled to vest or become payable after the date of such change in time B - 9 commitment, and (b) in lieu of or in combination with such a reduction, extend the vesting schedule applicable to such Award in accordance with Section 409A, as applicable. In the event of any such reduction, the Participant will have no right with respect to any portion of the Award that is so amended. Effect of Change of Subsidiary Status. For purposes of this Plan and any Award, if an entity ceases to be a Subsidiary of the Company, a termination of employment or service shall be deemed to have occurred with respect to each Eligible Person in respect of such Subsidiary who does not continue as an Eligible Person in respect of the Company or another Subsidiary that continues as such after giving effect to the transaction or other event giving rise to the change in status. ADJUSTMENTS; ACCELERATION Adjustments. Upon or in contemplation of (a) any reclassification, recapitalization, stock split (including a stock split in the form of a stock dividend) or reverse stock split, (b) any merger, arrangement, combination, consolidation, or other reorganization, (c) any spin-off, split-up, or similar extraordinary dividend distribution in respect of the Common Stock, whether in the form of securities or property, or (d) any exchange of Common Stock or other securities of the Company, or any similar unusual or extraordinary corporate event or transaction affecting the Common Stock, the Administrator shall in such manner, to such extent and at such time as it deems appropriate and equitable in the circumstances, but subject to compliance with applicable laws and stock exchange requirements, proportionately adjust any or all of (1) the number and type of shares of Common Stock or other securities that thereafter may be made the subject of Awards, including the Share Limit and the limit on the number of ISOs issuable under the Plan, (2) the number, amount and type of shares of Common Stock or other securities or property subject to any or all outstanding Awards, (3) the grant, purchase or exercise price, including the base price of any SAR or similar right, of any or all outstanding Awards, and (4) the securities, cash or other property deliverable upon exercise or payment of any outstanding Awards. Any adjustment made pursuant to this Section 8.1 shall be made in a manner that, in the good faith determination of the Administrator, will not likely result in the imposition of additional taxes or interest under Section 409A of the Code. With respect to any Award of an ISO, the Administrator may make an adjustment that causes the Option to cease to qualify as an ISO without the consent of the affected Participant. Any determinations made by the Administrator pursuant to this Section 8.1 shall be final, binding and conclusive. Except as expressly provided herein, no issuance by the Company of shares of Common Stock of Change in Control. Unless otherwise provided in an applicable Award Agreement, in the event of a Change in Control, the Administrator shall have full discretion to take whatever actions it deems necessary or appropriate with respect to outstanding Awards, including, but not limited to: (a) to provide for full or partial accelerated vesting of any Award or portion thereof, either immediately prior to such Change in Control or on such terms and conditions following the Change in Control (such as a termination without Cause) as the Administrator determines in its sole and absolute discretion, (b) to provide for the assumption of such Awards or portions thereof or the substitution of such Awards or portions thereof with similar awards of the surviving or acquiring company or parent thereof, in a manner designed to comply with Section 409A of the Code, (c) to provide for the settlement in cash or property and cancellation of any Award or portions thereof immediately prior to such Change in Control, which settlement may, in a manner designed to comply with Code Section 409A, be subject to any escrow, earn-out or other contingent or deferred payment arrangement that is contemplated by such Change in Control, and (d) take any other actions as the Administrator deems necessary or advisable in connection with such Change in Control transaction; provided, however, that in the event the surviving or acquiring company does not assume the outstanding Awards or portions thereof or substitute similar stock awards for those outstanding under the Plan as of the Change in Control, then (a) the vesting and exercisability, if applicable, of all Awards or portions thereof shall be accelerated in full immediately prior to such Change in Control, with all performance goals or other vesting criteria applicable to any performance-based Awards deemed achieved based on performance measured through the date of the Change in Control, and (b) such outstanding Awards or portions thereof shall terminate and/or be payable upon the occurrence of the Change in Control. The Administrator may take different actions with respect to different Participants under the Plan, different Awards under the Plan, and different portions of Awards granted under the Plan. TAX PROVISIONS Tax Withholding. Upon any exercise, vesting, or payment of any Award, the Company or one of its Subsidiaries shall have the right at its option to: require the Participant, or the Participant’s personal representative or beneficiary, as the case may be, to pay or provide for payment of at least the minimum amount of any taxes which the Company or its Subsidiaries may be required to withhold with respect to such Award event or payment; or deduct from any amount otherwise payable in cash to the Participant, or the Participant’s personal representative or beneficiary, as the case may be, the minimum amount of any taxes which the Company or its Subsidiaries may be required to withhold with respect to such cash payment. In any case where a tax is required to be withheld in connection with the delivery of shares of Common Stock under this Plan, the Administrator may in its sole discretion, subject to Section 10.1, grant (either at the time of the Award or thereafter) to the Participant the right to elect, pursuant to such rules and subject to such conditions as the Administrator may establish, to have the Company reduce the number of shares to be delivered by or otherwise reacquire the appropriate number of shares, valued in a consistent manner at their Fair Market Value or at the sales price in accordance with authorized procedures for cashless exercises, necessary to satisfy the applicable withholding obligation on exercise, vesting or payment, not in excess of the maximum statutory rates in the Participant’s applicable jurisdictions. B - 10 Requirement of Notification of Code Section 83(b) Election. If any Participant shall make an election under Section 83(b) of the Code (to include in gross income in the year of transfer the amounts specified in Section 83(b) of the Code) or under a similar provisions of the laws of a jurisdiction outside the United States, such Participant shall notify the Company of such election within ten (10) days after filing notice of the election with the Internal Revenue Service or other government authority, in addition to any filing and notification required pursuant to regulations issued under Code Section 83(b) or other applicable provision. Requirement of Notification of Disqualifying Disposition. If any Participant shall make any disposition of shares of Common Stock delivered to the Participant pursuant to the exercise of an ISO under the circumstances described in Code Section 421(b) relating to certain disqualifying dispositions, such Participant shall notify the Company of such disposition within ten (10) days thereof. OTHER PROVISIONS Compliance with Laws. This Plan, the granting and vesting of Awards under this Plan, the offer, issuance and delivery of shares of Common Stock, the payment of money under this Plan or under Awards are subject to compliance with all applicable federal and state laws, rules and regulations and to such approvals by any applicable stock exchange listing, regulatory or governmental authority as may, in the opinion of the counsel for the Company, be necessary or advisable in connection therewith. The person acquiring any securities under this Plan will, if requested by the Company or any of its Subsidiaries, provide such assurances and representations to the Company or any of its Subsidiaries as the Administrator may deem necessary or desirable to assure compliance with all applicable legal and accounting requirements. Future Awards/Other Rights. No person shall have any claim or rights to be granted an Award or additional Awards, as the case may be, under this Plan, subject to any express contractual rights set forth in a document other than this Plan to the contrary. No Employment/Service Contract. Nothing contained in this Plan or in any other documents under this Plan or in any Award Agreement shall confer upon any Eligible Person or other Participant any right to continue in the employ or other service of the Company or any of its Subsidiaries, constitute any contract or agreement of employment or other service or affect an employee’s status as an employee at-will, nor shall interfere in any way with the right of the Company or its Subsidiaries to change a person’s compensation or other benefits, or to terminate his or her employment or other service, with or without Cause. Nothing in this Section 10.3, however, is intended to adversely affect any express independent right of such person under a separate employment or service contract other than an Award Agreement. Plan Not Funded. Awards payable under this Plan shall be payable in shares of Common Stock or from the general assets of the Company, and no special or separate reserve, fund or deposit shall be made to assure payment of such Awards. No Participant, beneficiary or other person shall have any right, title or interest in any fund or in any specific asset (including shares of Common Stock, except as expressly otherwise provided) of the Company or any of its Subsidiaries by reason of any Award hereunder. Neither the provisions of this Plan or of any related documents, nor the creation or adoption of this Plan, nor any action taken pursuant to the provisions of this Plan shall create, or be construed to create, a trust of any kind or a fiduciary relationship between the Company or any of its Subsidiaries and any Participant, beneficiary or other person. To the extent that a Participant, beneficiary or other person acquires a right to receive payment pursuant to any Award hereunder, such right shall be no greater than the right of any unsecured general creditor of the Company. Effective Date, Termination and Suspension, Amendments Effective Date and Termination. This Plan was approved by the Board and shall become effective upon approval by the stockholders of the Company. Unless earlier terminated by the Board, this Plan shall terminate at the close of business ten (10) years after the date on which it was approved by the Board. After the termination of this Plan either upon such stated expiration date or its earlier termination by the Board, no additional Awards may be granted under this Plan, but previously granted Awards and the authority of the Administrator with respect thereto, including the authority to amend such Awards, shall remain outstanding in accordance with their applicable terms and conditions and the terms and conditions of this Plan. Amendment; Termination. The Board may, at any time, terminate or, from time to time, amend, modify or suspend this Plan, in whole or in part. No Awards may be granted during any period that the Board suspends this Plan. Stockholder Approval. To the extent then required by applicable law or any applicable stock exchange rule or required to preserve the intended tax consequences of this Plan, or deemed necessary or advisable by the Board, this Plan and any amendment to this Plan shall be subject to approval by the stockholders of the Company. Amendments to Awards. Without limiting any other express authority of the Administrator under, but subject to, the express limits of this Plan, the Administrator may by agreement or resolution waive conditions of or limitations on Awards to Participants that the Administrator in the prior exercise of its discretion has imposed, without the consent of a Participant, and, subject to the requirements of Sections 3.2 and 10.5.5, may make other changes to the terms and conditions of Awards. Any amendment or other action that would constitute a repricing of an Award is subject to the limitations and stockholder approval requirements set forth in Section 3.2(g). Limitations on Amendments to Plan and Awards. No amendment, suspension or termination of this Plan or change of or affecting any outstanding Award shall, without written consent of the Participant, affect in any manner materially adverse B - 11 to the Participant any rights or benefits of the Participant or obligations of the Company under any Award granted under this Plan. Changes, settlements and other actions contemplated by Section 8 shall not be deemed to constitute changes or amendments for purposes of this Section 10.5.5. Privileges of Stock Ownership. Except as otherwise expressly authorized by the Administrator or this Plan, a Participant shall not be entitled to any privilege of stock ownership as to any shares of Common Stock not actually delivered to and held of record by the Governing Law; Severability; Construction. Choice of Law. This Plan, the Awards, all documents evidencing Awards and all other related documents shall be Severability. If a court of competent jurisdiction holds any provision of this Plan invalid and unenforceable, the remaining provisions of this Plan shall continue in effect and the Plan shall be construed and enforced without regard to the illegal or invalid provision. Plan Construction Rule 16b-3. It is the intent of the Company that the Awards and transactions permitted by the Awards be interpreted in a manner that, in the case of Participants who are or may be subject to Section 16 of the Exchange Act, qualify, to the maximum extent compatible with the express terms of the Award, for exemption from matching liability under Rule 16b-3 promulgated under the Exchange Act. Notwithstanding the foregoing, the Company shall have no liability to any Participant for Section 16 consequences of Awards or events under Awards if an Award or event does not so qualify. Compliance with Section 409A of the Code. The Board intends that, except as may be otherwise determined by the Administrator, any Awards under the Plan will be either exempt from, or satisfy the requirements of, Section 409A to avoid the imposition of any taxes, including additional income or penalty taxes, thereunder. If the Administrator determines that an Award, Award Agreement, acceleration, adjustment to the terms of an Award, payment, distribution, deferral election, transaction or any other action or arrangement contemplated by the provisions of the Plan would, if undertaken, cause a Participant’s Award to violate Section 409A, unless the Administrator expressly determines otherwise, such Award, Award Agreement, payment, acceleration, adjustment, distribution, deferral election, transaction or other action or arrangement shall not be undertaken and the related provisions of the Plan and/or Award Agreement will be deemed modified or, if necessary, rescinded in order to comply with the requirements of Section 409A to the extent determined by the Administrator without the consent of or notice to the Participant. Notwithstanding the foregoing, neither the Company nor the Administrator shall have any obligation to take any action to prevent the assessment of any excise tax or penalty on any Participant under Section 409A. No Guarantee of Favorable Tax Treatment. Although the Company intends that Awards under the Plan will be exempt from, or will comply with, the requirements of Section 409A of the Code, the Company does not warrant that any Award under the Plan will qualify for favorable tax treatment under Section 409A of the Code or any other provision of federal, state, local or foreign law. The Company shall not be liable to any Participant for any tax, interest or penalties the Participant might owe as a result of the grant, holding, vesting, exercise or payment of any Award under the Plan. Stock-Based Awards in Substitution for Stock Options or Awards Granted by Other Corporation. Awards may be granted to Eligible Persons in substitution for or in connection with an assumption of employee stock options, stock appreciation right, restricted stock or other stock-based awards granted by other entities to persons who are or who will become Eligible Persons in respect of the Company or one of its Subsidiaries, in connection with a distribution, arrangement, business combination, merger or other reorganization by or with the granting entity or an affiliated entity, or the acquisition by the Company or one of its Subsidiaries, directly or indirectly, of all or a substantial part of the stock or assets of the employing entity. The Awards so granted need not comply with other specific terms of this Plan, provided the Awards reflect only adjustments giving effect to the assumption or substitution consistent with the conversion applicable to the Common Stock in the transaction and any change in the issuer of the security. Any shares that are delivered and any Awards that are granted by, or become obligations of, the Company, as a result of the assumption by the Company of, or in substitution for, outstanding Awards previously granted by an acquired company or previously granted by a predecessor employer (or direct or indirect parent thereof) in the case of persons that become employed by the Company or one of its Subsidiaries in connection with a business or asset acquisition or similar transaction, shall not be counted against the Share Limit or other limits on the Non-Exclusivity of Plan. Nothing in this Plan shall limit or be deemed to limit the authority of the Board or the Administrator to grant Awards or authorize any other compensation, with or without reference to the Common Stock, under any other plan or authority. No Corporate Action Restriction. The B - 12 adjustment, recapitalization, reorganization or other change in Other Company Benefit and Compensation Programs. Payments and other benefits received by a Participant under an Award made pursuant to Restrictive Covenants; Cause Forfeiture; Recoupment Policy. 10.12.1 Restrictive Covenants. The Company may retain the right in an Award Agreement to cause a forfeiture of the gain realized by a Participant on account of actions taken by the Participant in violation or breach of or in conflict with any non-competition agreement, any agreement prohibiting solicitation of employees of the Company or any Affiliate thereof or any confidentiality obligation or post-employment cooperation agreement with respect to the Company or any Affiliate, to the extent specified in such Award Agreement applicable to the Participant. 10.12.2 Annulment upon Termination for Cause. The Administrator may annul an Award if the Participant is an employee of the Company or an Affiliate thereof and is terminated for Cause. 10.12.3 Awards Subject to Recoupment. Notwithstanding any other provision of this Plan to the contrary, any Award granted or amount payable or paid under this Plan shall be subject to the terms of any compensation recoupment policy then applicable, if any, of the Company, to the extent the policy applies to such Award or amount. By accepting an Award or the payment of any amount under the Plan, each Participant agrees and consents to the Company’s application, implementation and enforcement of (a) any such policy and (b) any provision of applicable law relating to cancellation, rescission, payback or recoupment of compensation, and expressly agrees that the Company may take such actions as are permitted under the policy or applicable law without further consent or action being required by such Participant. To the extent that the terms of this Plan and the policy or applicable law conflict, then the terms of the policy or applicable law shall prevail. Captions. Captions and headings are given to the sections and subsections of this Plan solely as a convenience to facilitate reference. Such headings shall not be deemed in any way material or relevant to the construction or interpretation of this Plan or any provision thereof. As adopted by the Board of Directors
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