UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549
SCHEDULE 14A(Rule 14a-101)
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of theSecurities Exchange Act of 1934
Check the appropriate box:
C.H. Robinson Worldwide, Inc.(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
14701 Charlson Road
6, 2021
Our Board of Directors has selected Wednesday, March 13, 2019,10, 2021, as our record date. Shareholders who own shares of our Common Stock on the record date are entitled to be notified of, and to vote at, our Annual Meeting.
Directors:
C.H. ROBINSON WORLDWIDE, INC.
6, 2021
We provide our shareholders with the opportunity to access the 20192021 Annual Meeting proxy materials via the internet.online. A Notice of Internet Availability of Proxy Materials is being mailed to all our shareholders, except those who have previously provided instructions to receive paper copies of our proxy materials. The notice contains instructions on how to access and review our proxy materials on the internetonline and how to vote your shares. The notice will also tell you how to request our proxy materials in printed form or by email, at no charge, if that is your preference. The notice contains your 12-digit16-digit control number that you will need to vote your shares and attendat our virtual only meeting.Annual Meeting. Please keep the notice for your reference until after our Annual Meeting.
26, 2021.
Shares are counted as present at the Annual Meeting if either the shareholder is present and votes during the Annual Meeting, or has properly submitted a proxy by mail, by telephone, or by internet. To achieve a quorum and conduct business at the Annual Meeting, a majority of our issued and
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outstanding Common Stock as of March 13, 2019,10, 2021, must be present and entitled to vote. If a quorum is not represented at the Annual Meeting, the shareholders and proxies entitled to vote will have the power to adjourn the Annual Meeting until a quorum is represented.
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Your vote is important, and we encourage you to vote promptly. InternetOnline and telephone voting are available through 11:59 p.m. Eastern Time on Wednesday, May 8, 2019,5, 2021, for all shares entitled to vote. The company will be hosting the Annual Meeting virtually this year, which we believe allows C.H. Robinson to be more inclusive and reach a greater number of our shareholders. To attend the virtual meeting please visit www.virtualshareholdermeeting.com/CHRW2019CHRW2021 and be sure to have the 16-digit control number provided to you on your Notice of Internet Availability of Proxy Materials or Proxy Card. If you are a beneficial shareholder (you hold your shares through a nominee, such as a broker), your nominee can advise you whether you will be able to submit voting instructions by telephone or via the internet. Submitting your proxy will not affect your right to vote in person,electronically, if you decide to login with your 16-digit control number and attend the virtual only Annual Meeting. Shareholders logging into the Annual Meeting with their 16-digit control number will receive the same rights and opportunities to participate in the Annual Meeting as they would if the meeting was an in-person meeting, includingmeeting. This includes having the ability to ask questions throughout the meetingAnnual Meeting and having those questions answered during the meeting,question and answer period at the end of the Annual Meeting, to the extent theysuch questions are related to the business being conducted at the meeting.Annual Meeting. Shareholders logging in with their 16-digit control number will be able to ask questions at any time during the Annual Meeting. Relevant questions related to business being conducted at the Annual Meeting will be answered following the adjournment of the Annual Meeting, and the company will prioritize questions that relate to the proposals considered at the Annual Meeting. If a shareholder asks general questions about C.H. Robinson, a representative of the company will respond to the shareholder afterfollowing the adjournment of the Annual Meeting. Shareholders can learn more information about how to access the Annual Meeting by visiting www.virtualshareholdermeeting.com/CHRW2019.
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Regarding the advisory proposal on the compensation of our named executive officers:
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Shareholder Proposals and Other Matters
In November 2018, we receivedC.H. Robinson did not receive written notice of aany shareholder proposal and, that shareholder proposal is described in detail within this Proxy Statement. Asas of the date of this Proxy Statement, except for the shareholder proposal and the other matters described in this Proxy Statement, neither the company nor the Board of Directors knows of any otherno business that will be presented for consideration at the Annual Meeting.Meeting other than the matters described in this Proxy Statement. If any other matters are properly brought before the Annual Meeting, the persons named in the proxy card will have discretionary authority to vote on such matters and will vote according to their best judgment.
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PROPOSAL ONE: ELECTION OF DIRECTORS
John P. WiehoffJr. and Ben G. Campbell will vote the proxies received by them for the election of Ms. Guilfoile, Ms. Kozlak, and Ms. Tolliver and Messrs.Directors Anderson, Biesterfeld, Crawford, Fortun, Gokey, Guilfoile, Kozlak, Short, Stake, and WiehoffTolliver unless otherwise directed. If any nominee becomes unavailable for election at the Annual Meeting, John P. WiehoffMr. Biesterfeld and Ben G.Mr. Campbell may vote for a substitute nominee at their discretion as recommended by the Board of Directors.
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PROPOSAL ONE: ELECTION OF DIRECTORS
The Board considered these relationships and their significance in determining that these directors are independent. Information concerning the nominees is below.
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Scott P. Anderson | Scott P. Anderson, 54 years old, has been a director of the company since | ||||
Mr. Anderson has significant public company senior management and executive experience through his service in several senior leadership positions at Patterson Companies. He also has public company board experience, having served as a member of Patterson’s board of directors |
Robert C. Biesterfeld Jr. | Robert C. Biesterfeld Jr., | ||||
Mr. Biesterfeld has |
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PROPOSAL ONE: ELECTION OF DIRECTORS
Kermit R. Crawford (Director Nominee) | Kermit R. Crawford, 61 years old, joined C.H. Robinson as a director in 2020. Mr. Crawford previously served as president and chief operating officer at Rite Aid Corporation from October 2017 to March 2019. Prior to joining Rite Aid, Mr. Crawford was an operating partner and advisor with the private equity firm Sycamore Partners from 2015 to 2017. He previously worked for Walgreens Co. from 1983 to 2014 where he served in multiple roles of increasing responsibility, including executive vice president and president of Pharmacy, Health, and Wellness and executive vice president and senior vice president of Pharmacy Services. Mr. Crawford is a member of the board of directors at TransUnion (NYSE: TRU) and The Allstate Corporation (NYSE: ALL), where he chairs the audit committee. He also serves on the Board of Directors of Northwestern Medicine North/Northwest Region and the Board of Trustees for The Field Museum. Mr. Crawford holds a Bachelor of Science from The College of Pharmacy and Health Sciences at Texas Southern University. | ||||
Mr. Crawford has significant executive and leadership experience based on his senior roles with Rite Aid Corporation and Walgreens. He has also developed expertise in the areas of strategic investment and digital transformation. Mr. Crawford has relevant public company board experience through his membership on the boards of TransUnion and The Allstate Corporation. |
Wayne M. Fortun (Director Nominee) | Wayne M. Fortun, 72 years old, has been a director of C.H. Robinson since 2001. Mr. Fortun joined Hutchinson Technology Inc., a global technology manufacturer, in 1975 and until 1983, he held various positions in engineering, marketing, and operations. In 1983, he was elected | ||||
Through Mr. Fortun’s long tenure with Hutchinson, including as chief executive officer and member of the board, he possesses significant leadership and strategic planning skills. Because of Hutchinson’s worldwide footprint, Mr. Fortun has broad international business experience relevant to the company’s operations. He also has public company board experience through his former membership on the boards of Hutchinson and G&K Services, Inc. |
Timothy C. Gokey (Director Nominee) | Timothy C. Gokey, 59 years old, joined C.H. Robinson as a director in 2017. | ||||
Through his service as president and chief operating officer of Broadridge Financial Solutions, Mr. Gokey has developed exceptional leadership and execution skills and has broad public company knowledge and expertise. He is also deeply involved in Broadridge’s international operations and technology organization. In his prior roles with Broadridge, as well as H&R Block and McKinsey & Company, Mr. Gokey has demonstrated expertise in the areas of mergers and acquisitions, sales and marketing, and other growth-related activities. Mr. Gokey meets the definition of an “Audit Committee Financial Expert” as established by the Securities and Exchange Commission. |
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PROPOSAL ONE: ELECTION OF DIRECTORS
Mary J. Steele Guilfoile (Director Nominee) | Mary J. Steele Guilfoile, 66 years old, joined C.H. Robinson as a director in 2012. Ms. Guilfoile is chairman of MG Advisors, Inc., a privately owned financial services merger and acquisition advisory and consulting services firm. Prior to joining MG Advisors in 2002, Ms. Guilfoile spent twelve years with JP Morgan Chase (NYSE: JPM) and its predecessor companies, Chase Manhattan Corporation and Chemical Banking Corporation, as executive vice president, corporate treasurer, and chief administrative officer for its investment bank, and various merger integration, executive management, and strategic planning positions. Ms. Guilfoile currently serves on the boards of The Interpublic Group of Companies (NYSE: IPG), where she is chairman of the | ||||
Ms. Guilfoile has significant experience and expertise in the areas of corporate mergers and acquisitions, business integration, and financing through her association with the investment banks of several large financial institutions. She also has public board experience through her membership on the boards of Interpublic, Hudson, and Pitney Bowes. |
Jodee A. Kozlak (Director Nominee) | Jodee A. Kozlak, 57 years old, joined C.H. Robinson as a director in 2013. Ms. Kozlak is the founder and | ||||
Through her human resources executive leadership at Target and Alibaba Group, Ms. Kozlak has developed significant knowledge and expertise in human capital strategy, global operations, and digital transformation. Her experience has also given her a deep understanding of executive compensation within a public company. |
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PROPOSAL ONE: ELECTION OF DIRECTORS
Brian P. Short (Director Nominee) | Brian P. Short, 71 years old, has been a director of the company since 2002. He is chief executive officer of Leamington Co., a holding company with interests in transportation, community banking, agricultural production, and real estate. Leamington operates AMMF, St. Paul Flight Center, Inc., First Farmers & Merchants Banks, and Benson Parking Services, Inc. Mr. Short also serves as a legal mediator and previously served as a United States Magistrate. His community service has included service on the | ||||
Mr. Short has significant executive experience and, in particular, has experience in the trucking industry through his leadership position at |
James B. Stake (Director Nominee) | James B. Stake, 68 years old, joined C.H. Robinson as a director in 2009. Mr. Stake retired from 3M Company (NYSE: MMM) in 2008, | ||||
Throughout his career at 3M Company, Mr. Stake gained extensive public company senior management experience at a large company that operates worldwide. In particular, Mr. Stake’s foreign leadership positions and his position with Enterprise Services, |
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PROPOSAL ONE: ELECTION OF DIRECTORS
Paula C. Tolliver (Director Nominee) | Paula C. Tolliver, 56 years old, joined C.H. Robinson as a director in 2018. Ms. Tolliver | ||||
Ms. Tolliver has significant experience and expertise in the areas of information technology and innovation. She also has demonstrated the ability to successfully lead a service business. Ms. Tolliver meets the definition of an “Audit Committee Financial Expert” as established by the Securities and Exchange Commission. |
BOARD VOTING RECOMMENDATION
The Board of Directors recommends a vote FOR the election of Scott P. Anderson, Robert C. Biesterfeld Jr., Kermit R. Crawford, Wayne M. Fortun, Timothy C. Gokey, Mary J. Steele Guilfoile, Jodee A. Kozlak, Brian P. Short, James B. Stake, and Paula C. Tolliver C.H. Robinson Worldwide, Inc. |
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PROPOSAL ONE: ELECTION OF DIRECTORS
The Board of Directors (or the “Board”) has a policy that all directors and nominees nominated for election at the Annual Meeting are expected to attend the Annual Meeting. In 2018,2020, all of the director nominees who were directors at that time attended the Annual Meeting.
.
Independent Directors | Audit | Compensation | Governance | ||||||||
Scott P. Anderson | x | Chair | |||||||||
Kermit R. Crawford | x | x | |||||||||
Wayne M. Fortun | x | ||||||||||
Timothy C. Gokey | x | x | |||||||||
Mary J. Steele Guilfoile | x | x | |||||||||
Jodee A. Kozlak | x | ||||||||||
Brian P. Short | x | x | |||||||||
James B. Stake | Chair | x | |||||||||
Paula C. Tolliver | x | x |
Board Leadership Structure
Our Board of Directors is led by John P. Wiehoff, who has been our president since 1999 and our chief executive officer since 2002. Mr. Wiehoff joined the Board of Directors in 2001 and was appointed chairman of the board in 2007. Mr. Wiehoff, who is resigning as chief executive officer of C.H. Robinson effective May 9, 2019, will continue to serve as executive chairman of the board. The Board has determined that Mr. Wiehoff’s continued service as executive chairman will allow him to utilize his Board leadership experience during the time of chief executive officer transition.
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PROPOSAL ONE: ELECTION OF DIRECTORS
Risk Oversight
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PROPOSAL ONE: ELECTION OF DIRECTORS
The Compensation Committee
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PROPOSAL ONE: ELECTION OF DIRECTORS
(6)Making recommendations to the Board on whether each director is independent under all applicable requirements;
2020.
C.H. Robinson shareholders and other interested parties may send written communications to the Board of Directors or to any individual director by mailing it to C.H. Robinson Worldwide, Inc., Board of Directors, c/o C.H. Robinson corporate secretary,Corporate Secretary, 14701 Charlson Road, Suite 1200, Eden Prairie, MN 55347. These communications will be compiled by the corporate secretary and periodically submitted to the Board or individual director.
The Governance Committee considers director nominee recommendations from a wide variety of sources, including members of the Board of Directors, business contacts, community leaders, and members of management. The Governance Committee will also consider shareholder recommendations for director nominees using the same selection criteria and qualifications as nominees identified by other sources, as described below. The Governance Committee may also engage search firms to assist in the director recruitment process.
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PROPOSAL ONE: ELECTION OF DIRECTORS
The Governance Committee initially evaluates a prospective nominee based on his or her resume and other background information that has been provided to the committee. A member of the committee will contact for further review those candidates whom the committee believes are qualified, who may fulfill a specific need of the Board of Directors, and who would otherwise best contribute to the Board of Directors. Based on the information the Governance Committee learns during this process, it determines which nominee(s) to recommend to the Board of Directors to submit for election. The Governance Committee uses the same process for evaluating all nominees, regardless of the source of the nomination.
In 2018,2020, each independent director of C.H. Robinson was paideligible to receive an annual retainer of $90,000 and no$100,000. The Board of Directors approved a 50% reduction in base annual retainer payments from May 1, 2020 through July 31, 2020; these reductions were realized between April 1, 2020 through June 30, 2020. These changes were enacted as part of cost savings measures in response to the COVID-19 pandemic. Directors do not receive additional compensation for each meeting fees.they attend. The Audit Committee chair received an additional annual retainer of $30,000, and the chairs of the Governance and Compensation Committees each received an additional annual retainer of $20,000. Other members of the Audit Committee received an additional annual retainer of $12,500, and other members of the Governance and
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All directors are in compliance with the company stock ownership requirements.
Name | Fees Earned or Paid in Cash(1) | Stock Awards(2) | Total | Aggregate Number of Shares Outstanding as of December 31, 2020(3) | |||||||||||||
Scott P. Anderson | $ | 193,790 | $ | 150,000 | $ | 343,790 | 20,333 | ||||||||||
Kermit R. Crawford | 28,750 | (4) | 37,500 | 66,250 | 399 | ||||||||||||
Wayne M. Fortun | 106,868 | (5) | 150,000 | 256,868 | 41,750 | ||||||||||||
Timothy C. Gokey | 107,500 | (7) | 150,000 | 257,500 | 9,584 | ||||||||||||
Mary J. Steele Guilfoile | 102,500 | 150,000 | 252,500 | 15,147 | |||||||||||||
Jodee A. Kozlak | 110,632 | (6) | 150,000 | 260,632 | 16,074 | ||||||||||||
Brian P. Short | 107,500 | (7) | 150,000 | 257,500 | 63,538 | ||||||||||||
James B. Stake | 125,000 | (8) | 150,000 | 275,000 | 24,018 | ||||||||||||
Paula C. Tolliver | 107,500 | (7) | 150,000 | 257,500 | 6,872 | ||||||||||||
John P. Wiehoff | 176,923 | (9) | — | 176,923 | 0 |
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PROPOSAL ONE: ELECTION OF DIRECTORS
2018 Director Compensation Table
Name | Fees Earned or Paid in Cash | Stock Awards(1) | Total | Aggregate Number of Shares Outstanding as of December 31, 2018(2) | ||||||||
Scott P. Anderson | $ | 122,500 | $ | 135,000 | $ | 257,500 | #16,732 | |||||
Wayne M. Fortun | 117,500 | 135,000 | 252,500 | 38,149 | ||||||||
Timothy C. Gokey | 110,000 | (3) | 135,000 | 245,000 | 3,380 | |||||||
Mary J. Steele Guilfoile | 105,000 | (4) | 135,000 | 240,000 | 11,546 | |||||||
Jodee A. Kozlak | 105,000 | (5) | 135,000 | 240,000 | 12,473 | |||||||
Brian P. Short | 110,000 | (3) | 135,000 | 245,000 | 57,163 | |||||||
James B. Stake | 127,500 | (6) | 135,000 | 262,500 | 18,908 | |||||||
Paula C. Tolliver(7) | 22,500 | (3) | 33,750 | 56,250 | 668 |
Compensation Committee Interlocks and Insider Participation
The members of the Compensation Committee are Kermit R. Crawford, Wayne M. Fortun, Timothy C. Gokey, Mary J. Steele Guilfoile, Jodee A. Kozlak (Chair), James B. Stake, and Paula C. Tolliver. The Compensation Committee members have no interlocking relationships requiring disclosure and are deemed independent under the rules of the Securities and Exchange Commission.
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Key Compensation Philosophy and Structure
The company reviews general industry survey data preparedprovided by an independent compensation consultant to assess market competitiveness of the components of NEO compensation, including the appropriate mix of cash and equity. The company also relies on broader survey data to assess market competitiveness of executive compensation components. Internal equity is an important and necessary consideration in valuing executive positions. Individual pay decisions are made based on a variety of factors, such as company, business unit, and individual performance; scope and complexity of responsibility; critical needs and skills; leadership potential; and succession planning.
Compensation component considerations
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Element | Performance Period | Objective | Performance Measured/ Rewarded | ||||||||
Base | Annual | Attracts, retains, and rewards top talent and reflects a NEOs responsibilities, performance, leadership potential, succession planning, and relevant market data. | Provides NEOs with fixed compensation that acts as a vehicle to attract and retain. Rewards executives for key performance and contributions. Generally reflects the |
Annual Cash Incentive (Variable) | In 2020, the annual cash incentive |
•Operating Executive Officers - Target opportunity varied from 40 percent to 80 percent of base salary and was based on the APTI of the business division and/or region of responsibility for the executive, enterprise APTI, and management business objectives (MBOs). •Administrative Officers - Target opportunity varied from 65 percent to 85 percent of base salary and was based on enterprise APTI and MBOs. •For all executive officers the maximum annual incentive that may be paid is two times the planned annual incentive at target. •Threshold and maximum performance goals for NEOs were set at 70 percent and 120 percent of the relevant APTI targets, respectively. | |||||||||||
Performance Based Restricted Stock (Variable) | Long-Term | Aligns the interests of management and shareholders. | •Accounts for 50% of NEOs' equity grant value. •Performance shares vest over five years based on company performance. •Performance vesting is constructed in a manner as to vest 0 to 100 percent of •The performance shares have a two year delayed delivery following the five year vesting period. |
Long-Term | Supports the achievement of strong share price growth. | ![]() |
2018 EXECUTIVE COMPENSATION
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Equity
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2018 EXECUTIVE COMPENSATION
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It is expected that new or recently promoted members of the executive team will achieve the appropriate level of ownership within five years of their appointment.
2018 All NEOs are in compliance with the company stock ownership requirements.
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In 2018, we achieved record
2020.
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Say On Pay
Performance-basedPerformance based compensation and alignment of individual, company, and shareholder goals are integral components of C.H. Robinson’s company culture and management approach. Within our office network, a significant portion of the cash compensation of our managers is based on the growth and profitability of their office. Performance based compensation makes up a significant portion of our employees’ total compensation package. In addition, approximately 2,500 employees, or over 16.416 percent of our total employees hold equity they received through our current equity incentive plan.
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2018 EXECUTIVE COMPENSATION
Compensation decisions regarding individual executive officers are based on several factors, including individual performance, level of responsibility, unique skills of the executive, tenure, demands and demandscomplexity of the position.
position, and critical nature of the role.
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Our compensation framework and pay-for-performance practices provide appropriate incentives to our executive officers to achieve our financial goals and better align our executives with our shareholders’ interests.
What We Do | What We Don’t Do | ||||
Executive compensation and incentive payouts are subject to the approval of our independent Compensation Committee | No guaranteed bonuses | ||||
Pay opportunity is companies | No supplemental pension or executive retirement plan (SERP) benefits | ||||
A | No repricing of underwater options or stock appreciation rights without shareholder approval | ||||
No hedging or pledging of company shares | |||||
Appropriate caps on incentive plan payouts; two times target opportunity | No discounted option or SAR grants | ||||
Performance based restricted stock and stock option grants to create alignment with shareholders | No executive only severance plan | ||||
Executives are subject to robust stock ownership guidelines and a minimum of a two-year post-vest holding requirement on all performance shares | No automatic vesting and delivery of equity upon a change in control | ||||
Incentive compensation, including cash incentives and equity subject to claw-back for material misconduct and restatement | No executive only perquisite benefits | ||||
Equity compensation subject to forfeiture and claw-back if executive violates company employment agreements | No favorable adjustments were made to our compensation practices as a result of the COVID-19 pandemic | ||||
Our Compensation Committee is comprised entirely of independent directors | |||||
Our Compensation Committee engages an independent consultant | |||||
Our Compensation Committee regularly meets in executive session without management present |
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20182020 EXECUTIVE COMPENSATION
Base Salary
the COVID-19 pandemic.
NEO | Title | 2019 Base Salary | 2020 Base Salary(1) | % Change | ||||||||||
Robert C. Biesterfeld Jr.(2) | President and Chief Executive Officer | $ | 975,000 | $ | 1,025,000 | 5 | % | |||||||
Michael P. Zechmeister(3) | Chief Financial Officer | 700,000 | 710,000 | 1 | % | |||||||||
Christopher J. O’Brien | Chief Commercial Officer | 500,000 | 515,000 | 3 | % | |||||||||
Mac S. Pinkerton(4) | President of NAST | 475,000 | 600,000 | 26 | % | |||||||||
Michael J. Short | President of Global Forwarding Freight | 525,000 | 540,000 | 3 | % | |||||||||
January 1, 2019.
performance, and motivate and incent the company's executive leaders for achievement of important goals aligned to their function or division MBOs. The Compensation Committee included MBOs as part of our fiscal 2020 annual cash incentive compensation plan for each NEO, other than our CEO, to incentivize the achievement of more individualized financial and operational objectives that are critical to our long-term strategy.
The MBOs were designed to recognize the initiatives that help the company navigate the large cyclical swings that affect the freight transportation environment, as well as our initiatives to continue driving operating margin expansion over the long-term, achieve overall market-share growth, and the successful implementation of our digital transformation efforts.22 | ![]() | 2021 Proxy Statement |
For performance between threshold and target or target and maximum, the achievement percentage is determined by linear interpolation. The performance range for the financial metrics of the annual incentive compensation target for NEOs ranges from 70 percent of target at threshold and 120 percent of target at maximum. The performance range for the MBO metric of the annual incentive plan for NEOs is 90 percent to 110 percent of target. The NEO annual incentive compensation plan is capped at two times the target opportunity.
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2018 EXECUTIVE COMPENSATION
In 2018,2020, the Compensation Committee established these APTI targets based on the expectation that our stated long-term dilutedgrowth objective is to grow earnings per share growth rate forby at least 10 percent annually. As noted below, the company would be in the range of 7 to 12 percent.Compensation Committee aligned our shorter term targets more closely with anticipated outcomes that will drive our longer term goals. The Compensation Committee certified the following actual performance levels and percentage of target payout for each of the NEOs.
2018 NEO Annual Incentive Compensation Metrics | Target | Actual | ||||
Enterprise APTI growth(1) | 7 | % | 21 | % | ||
North America Surface Transportation APTI growth(2) | 7 | % | 24 | % | ||
Global Forwarding APTI growth(3) | 10 | % | 6 | % |
Incentive compensation plans are reviewed annually. The Non-Equity Incentive Plan Compensation column
2020 NEO Annual Incentive Compensation Metrics | Target | Actual | |||||||||
Enterprise APTI growth(1) | 7% | -15 | % | (2) | |||||||
North American Surface Transportation APTI growth(3) | 7% | -33 | % | ||||||||
Global Forwarding APTI growth(4) | 10% | 111 | % |
year. Performance against these MBOs was evaluated after year end, with the CEO making recommendations to the Compensation Committee on the achievement of each NEO’s MBO.
The Compensation Committee then determined the level of achievement of the MBOs to determine the level of payout for this component of the plan. Each NEO’s MBOs are described in more detail in the tables beginning on page 28.NEO Awards
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Equity awards are reviewed and granted annually. The Stock Awards and Option Awards columns of the Summary Compensation Table on page 32 contain the grant date fair value of theour equity awards granted during 2018 to each of the NEOs.
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2018 EXECUTIVE COMPENSATION
The annual vesting percentage for performance based restricted share awards is equal to the year-over-year percentage increase (or decrease) in diluted net incomeearnings per share, plus ten percentage points.
For awards made prior to 2015, NEOs could elect a different time for the delivery of the vested shares before the vesting period began. However, that delivery cannot be less than two years after termination or the five-year vesting period.
Performance Vesting Year | 2013 Award | 2014 Award | 2015 Award | 2016 Award | 2017 Award | 2018 Award | ||||||||||||
2014 | 25 | % | — | — | — | — | — | |||||||||||
2015 | 25 | % | 25 | % | — | — | — | — | ||||||||||
2016 | 12 | % | 12 | % | 12 | % | — | — | — | |||||||||
2017 | 9 | % | 9 | % | 9 | % | 9 | % | — | — | ||||||||
2018 | 29 | % | 43 | % | 43 | % | 43 | % | 43 | % | — | |||||||
Total Cumulative Vesting | 100 | % | 89 | % | 64 | % | 52 | % | 43 | % | 0 | % | ||||||
Vesting Years Remaining | 0 | 1 | 2 | 3 | 4 | 5 |
Performance Vesting Year | 2015 Grant | 2016 Grant | 2017 Grant | 2018 Grant | 2020 Grant (1) | ||||||||||||
2016 | 12% | — | — | — | — | ||||||||||||
2017 | 9% | 9% | — | — | — | ||||||||||||
2018 | 43% | 43% | 43% | — | — | ||||||||||||
2019 | 0% | 0% | 0% | 0% | — | ||||||||||||
2020 | 0% | 0% | 0% | 0% | 0% | ||||||||||||
Total Cumulative Vesting | 64% | 52% | 43% | 0% | 0% | ||||||||||||
Vesting Years Remaining | 0 | 1 | 2 | 3 | 4 |
C.H. Robinson awarded performance-based incentive stock options
Vesting Year | 2013 Award | 2014 Award | 2015 Award | 2016 Award | 2017 Award | 2018 Award | ||||||||||||
2014 | 25 | % | — | — | — | — | — | |||||||||||
2015 | 25 | % | 25 | % | — | — | — | — | ||||||||||
2016 | 12 | % | 12 | % | 20 | % | — | — | — | |||||||||
2017 | 9 | % | 9 | % | 20 | % | 20 | % | — | — | ||||||||
2018 | 29 | % | 43 | % | 20 | % | 20 | % | 20 | % | — | |||||||
Total Cumulative Vesting | 100 | % | 89 | % | 60 | % | 40 | % | 20 | % | 0 | % | ||||||
Vesting Years Remaining | 0 | 1 | 2 | 3 | 4 | 5 |
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Vesting Year | 2015 Grant | 2016 Grant | 2017 Grant | 2018 Grant | 2020 Grant (1) | ||||||||||||
2016 | 20% | — | — | — | — | ||||||||||||
2017 | 20% | 20% | — | — | — | ||||||||||||
2018 | 20% | 20% | 20% | — | — | ||||||||||||
2019 | 20% | 20% | 20% | 20% | — | ||||||||||||
2020 | 20% | 20% | 20% | 20% | 20% | ||||||||||||
Total Cumulative Vesting | 100% | 80% | 60% | 40% | 20% | ||||||||||||
Vesting Years Remaining | 0 | 1 | 2 | 3 | 4 |
2018 EXECUTIVE COMPENSATION
V. Additional Compensation Policies and Practices
Equity Plan Acceleration and Post EmploymentPost-Employment Vesting
Sum of Age and Tenure at Termination of Employment | Post-Employment Additional Vesting | ||||
Less than 50 | 2 Years | ||||
At least 50 but less than 60 | 3 Years | ||||
At least 60 but less than 70 | 4 Years | ||||
70 and greater | 5 Years |
Employment Agreements
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plans.
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2018 EXECUTIVE COMPENSATION
Other Broad-Based Employee Benefits
However, C.H. Robinson suspended the match on the 401(k) plan from May 22, 2020, through the end of the year, which was enacted as part of our cost savings initiatives related to the COVID-19 pandemic. The match was reinstated on January 1, 2021.
The Compensation Committee
26 | ![]() | 2021 Proxy Statement |
The Compensation Committee Report on executive compensation is found on page 3739 of this Proxy Statement.
Prior to the beginning of each calendar year,
![]() |
2018 EXECUTIVE COMPENSATION
At the February 2018 Compensation CommitteeAdditionally, at this same meeting, after the financial results of the previous year have been finalized, our chief executive officer presents to the Compensation Committee his recommendation on annual cash incentive compensation plans for the company’s executive leaders, including each of the NEOs. During this meeting, the Compensation Committee certifies the APTI results and corresponding incentive compensation for the executive officers for the prior year and approves recommended non-equityannual cash incentive targets for the current year.
on these matters going forward.
2021 Proxy Statement | ![]() | 27 |
Realized Annual Compensation
Named Executive Officers
![]() |
2018 EXECUTIVE COMPENSATION
(6)
Chairman and Chief Executive Officer Performance Evaluation and Compensation
John P. Wiehoff, Chairman, President, and Chief Executive Officer
Comparison to market survey information.
The Compensation Committee set John P. Wiehoff’s
John P. Wiehoff 2018 Incentive Compensation Plan
Base Salary | Target Incentive as % of Base Salary | Maximum Incentive as % of Base Salary | Enterprise Target APTI Growth % | Enterprise Actual APTI Growth % | ||||||||
$1,167,000 | 125 | % | 250 | % | 7 | % | 21 | % |
Total 2018 Realized Annual Compensation: The table below illustrates Mr. Wiehoff’s total realized compensation in 2018 of $10,085,489, an increase of 166.1 percent from 2017. Our strong performance in 2018 resulted in enterprise APTI growth of 21 percent, significantly exceeding target growth of 7 percent and therefore Mr. Wiehoff earned a large increase in non-equity incentive compensation. In addition, our earnings per share growth of 33 percent resulted in performance equity vesting of 43 percent.
Salary | Non-Equity Incentive | Total Cash | % of Target Incentive Achieved | Equity Earned(1) | Total Realized Compensation | |||||||||||||
2018 | $ | 1,167,000 | $ | 2,427,366 | $ | 3,594,366 | 166 | % | $ | 6,491,123 | $ | 10,085,489 | ||||||
2017 | 1,167,000 | 871,475 | 2,038,475 | 60 | % | 1,752,027 | 3,790,502 | |||||||||||
2016 | 1,167,000 | 937,270 | 2,104,270 | 80 | % | 1,645,457 | 3,749,727 |
Andrew C. Clarke, Chief Financial Officer
The base salary for Andrew C. Clarke was $550,000 in 2018. He earned annual incentive compensation of $640,642 for 2018 paid in cash on February 28, 2019. Mr. Clarke’s 2018 incentive compensation and equity compensation increased compared to 2017. This was primarily due to enterprise performance exceeding our 2018 target performance goal, which resulted in an above-target incentive payout and a higher performance vesting percentage in 2018 compared to prior years. Mr. Clarke was awarded 6,010 performance shares and 21,410 time-based incentive stock options in 2018. These shares and options are available to begin vesting in 2019.
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2018 EXECUTIVE COMPENSATION
Andrew C. Clarke 2018 Incentive Compensation Plan
Base Salary | Target Incentive as % of Base Salary | Maximum Incentive as % of Base Salary | Enterprise Target APTI Growth % | Enterprise Actual APTI Growth % | ||||||||
$550,000 | 70 | % | 140 | % | 7 | % | 21 | % |
Total 2018 Realized Annual Compensation: The table below illustrates Mr. Clarke’s total realized compensation in 2018 of $2,314,432, an increase of 115.9 percent over 2017. Our strong performance in 2018 resulted in enterprise APTI growth of 21 percent, significantly exceeding target growth of 7 percent and therefore Mr. Clarke earned a large increase in non-equity incentive compensation. In addition, our earnings per share growth of 33 percent resulted in performance equity vesting of 43 percent.
Salary | Non-Equity Incentive | Total Cash | % of Target Incentive Achieved | Equity Earned(1) | Total Realized Compensation | |||||||||||||
2018 | $ | 550,000 | $ | 640,642 | $ | 1,190,642 | 166 | % | $ | 1,123,790 | $ | 2,314,432 | ||||||
2017 | 550,000 | 230,004 | 780,004 | 60 | % | 292,080 | 1,072,084 | |||||||||||
2016 | 525,000 | 210,826 | 735,826 | 80 | % | 213,071 | 948,897 |
Robert C. Biesterfeld Jr., Chief Operating Officer and President of North America Surface Transportation
Mr. Biesterfeld began 2018 as the company's president of NAST, earning a salary of $475,000. On March 1, 2018, Mr. Biesterfeld was promoted to chief operating officer of the company, earning a salary of $625,000. He earned annual incentive compensation for 2018 of $849,620 paid in cash on February 28, 2019. Mr. Biesterfeld’s 2018 incentive compensation and equity compensation increased compared to 2017. This was primarily due to both enterprise and NAST performance exceeding our 2018 target performance goal, which resulted in an above-target incentive payout and a higher performance vesting percentage in 2018 compared to prior years. In March 2018 and in conjunction with Mr. Biesterfeld’s promotion to Chief Operating Officer, Mr. Biesterfeld received 3,970 performance shares and 20,640 time-based incentive stock options. These shares and options were available to begin vesting in 2018. In December 2018,2020 as part of our regular equityannual grant cycle, Mr. Biesterfeld received 10,84034,611 performance based restricted shares and 37,970 time-based incentive161,820 time based stock options. These shares and options are available to beginBoth of these equity awards began vesting in 2019.
2020.
Base Salary | Target Incentive as % of Base Salary | Maximum Incentive as % of Base Salary | North America Surface Transportation Target APTI Growth % | North America Surface Transportation Actual APTI Growth % | ||||||||
$625,000 | 100 | % | 150 | % | 7 | % | 24 | % |
Enterprise Target APTI Growth % | Enterprise Target APTI Growth % | |||||
7 | % | 21 | % |
Annual Base Salary | Target Incentive as % of Base Salary | Maximum Incentive as % of Base Salary | Target Enterprise APTI Growth % | Actual Enterprise APTI Growth % | ||||||||||
$1,025,000 | 140 | % | 280 | % | 7 | % | -15 | % |
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2018 EXECUTIVE COMPENSATION
Following Mr. Biesterfeld’s promotion to chief operating officer on March 1, 2018, Mr. Biesterfeld’s target growth also began to be measured on the company’s enterprise wide target growth of 7 percent and actual growth of 21 percent.
Total 20182020 Realized Annual Compensation: The following table below illustrates Mr. Biesterfeld’s total realized compensation in 20182020 of $2,666,932,$2,578,411, an increase of 166.021 percent from 2017.2019. Mr. Biesterfeld was appointed CEO in May 2019 and his 2020 compensation is reflective of this change in role. For the period from May 1, 2020 through July 31, 2020, Mr. Biesterfeld's base salary payments were reduced by 50%, which was enacted as part of our cost savings initiatives related to the COVID-19 pandemic. Our strong performancebusiness results in 2018 resulted2020 led to a decline in enterprise APTI, growth of 21 percent and NAST APTI growth of 24 percent, each significantly exceeding their respective target growth amounts of 7 percent and therefore Mr. Biesterfeld, who was measured on bothresulting in low annual cash incentive compensation as well as no performance vesting for our enterprise and NAST APTI growth metrics, earned a large increase in non-equity incentive compensation. In addition, our earnings per share growth of 33 percent resulted in performance equity vesting of 43 percent.
Salary | Non-Equity Incentive | Total Cash | % of Target Incentive Achieved | Equity Earned(1) | Total Realized Compensation | |||||||||||||
2018 | $ | 600,000 | $ | 849,620 | $ | 1,449,620 | 136 | % | $ | 1,217,312 | $ | 2,666,932 | ||||||
2017 | 475,000 | 245,848 | 720,848 | 65 | % | 281,602 | 1,002,450 | |||||||||||
2016 | 450,000 | 250,378 | 700,378 | 74 | % | 212,795 | 913,173 |
28 | ![]() | 2021 Proxy Statement |
Base Salary Paid | Cash Incentive Compensation | Total Cash | % of Target Incentive Achieved(1) | Equity Earned(2) | Total Realized Compensation | |||||||||||||||
2020 | $ | 878,750 | $ | 467,577 | $ | 1,346,327 | 33 | % | $ | 1,232,084 | $ | 2,578,411 | ||||||||
2019 | 870,833 | 428,895 | 1,299,728 | 42 | % | 827,858 | 2,127,586 | |||||||||||||
2018 | 600,000 | 849,620 | 1,449,620 | 136 | % | 1,217,312 | 2,666,932 |
Christopher J. O’Brien,
Christopher J. O’Brien’s
Christopher J. O’Brien 20182020.
Base Salary | Target Incentive as % of Base Salary | Maximum Incentive as % of Base Salary | Enterprise Target APTI Growth % | Enterprise Actual APTI Growth % | ||||||||
$500,000 | 60 | % | 120 | % | 7 | % | 21 | % |
Annual Base Salary | Target Incentive as % of Base Salary | Maximum Incentive as % of Base Salary | % Tied to Enterprise APTI | % Tied to Division APTI | % Tied to MBO | ||||||||||||
$710,000 | 85 | % | 170 | % | 80 | % | 0 | % | 20 | % |
Target Enterprise APTI Growth % | Actual Enterprise APTI Growth % | Target Division APTI Growth % | Actual Division APTI Growth % | MBO Achievement % | ||||||||||
7 | % | -15 | % | N/A | N/A | 110 | % |
Base Salary Paid | Cash Incentive Compensation(1) | Total Cash | % of Target Incentive Achieved(2) | Equity Earned(3) | Total Realized Compensation | |||||||||||||||
2020 | $ | 666,839 | $ | 290,084 | $ | 956,923 | 48 | % | $ | 616,075 | $ | 1,572,998 | ||||||||
2019 | 235,985 | 283,945 | 519,930 | 42 | % | 145,266 | 665,196 |
2021 Proxy Statement | ![]() | 29 |
Annual Base Salary | Target Incentive as % of Base Salary | Maximum Incentive as % of Base Salary | % Tied to Enterprise APTI | % Tied to Division APTI | % Tied to MBO | ||||||||||||||||||
$515,000 | 65 | % | 130 | % | 70 | % | 0 | % | 30 | % |
Target Enterprise APTI Growth % | Actual Enterprise APTI Growth % | Target Division APTI Growth % | Actual Division APTI Growth % | MBO Achievement % | ||||||||||
7 | % | -15 | % | N/A | N/A | 108 | % |
Base Salary Paid | Cash Incentive Compensation | Total Cash | % of Target Incentive Achieved(1) | Equity Earned(2) | Total Realized Compensation | |||||||||||||||
2020 | $ | 482,412 | $ | 184,811 | $ | 667,223 | 55 | % | $ | 400,596 | $ | 1,067,819 | ||||||||
2019 | 500,000 | 126,975 | 626,975 | 42 | % | 316,439 | 943,414 | |||||||||||||
2018 | 500,000 | 499,201 | 999,201 | 166 | % | 1,283,716 | 2,282,917 |
30 | ![]() | 2021 Proxy Statement | ![]() |
20182020 EXECUTIVE COMPENSATION
enterprise
Annual Base Salary | Target Incentive as % of Base Salary | Maximum Incentive as % of Base Salary | % Tied to Enterprise APTI | % Tied to Division APTI | % Tied to MBO | ||||||||||||
$600,000 | 80 | % | 160 | % | 30 | % | 40 | % | 30 | % |
Target Enterprise APTI Growth % | Actual Enterprise APTI Growth % | Target Division APTI Growth % | Actual Division APTI Growth % | MBO Achievement % | ||||||||||
7 | % | -15 | % | 7 | % | -33 | % | 104 | % |
Salary | Non-Equity Incentive | Total Cash | % of Target Incentive Achieved | Equity Earned(1) | Total Realized Compensation | |||||||||||||
2018 | $ | 500,000 | $ | 499,201 | $ | 999,201 | 166 | % | $ | 1,283,716 | $ | 2,282,917 | ||||||
2017 | 500,000 | 179,224 | 679,224 | 60 | % | 351,189 | 1,030,413 | |||||||||||
2016 | 500,000 | 200,786 | 700,786 | 80 | % | 348,571 | 1,049,357 |
Base Salary Paid | Cash Incentive Compensation | Total Cash | % of Target Incentive Achieved(1) | Equity Earned(2) | Total Realized Compensation | |||||||||||||||
2020 | $ | 544,250 | $ | 196,681 | $ | 740,931 | 41 | % | $ | 280,134 | $ | 1,021,065 | ||||||||
2019 | 475,000 | 212,943 | 687,943 | 56 | % | 177,291 | 865,234 |
2021 Proxy Statement | ![]() | 31 |
2020.
Base Salary | Target Incentive as % of Base Salary | Maximum Incentive as % of Base Salary | Global Forwarding Target APTI Growth % | Global Forwarding Actual APTI Growth % | ||||||||
$500,000 | 70 | % | 140 | % | 10 | % | 6 | % |
Annual Base Salary | Target Incentive as % of Base Salary | Maximum Incentive as % of Base Salary | % Tied to Enterprise APTI | % Tied to Division APTI | % Tied to MBO | ||||||||||||
$540,000 | 70 | % | 140 | % | 30 | % | 40 | % | 30 | % |
Target Enterprise APTI Growth % | Actual Enterprise APTI Growth % | Target Division APTI Growth % | Actual Division APTI Growth % | MBO Achievement % | ||||||||||
7 | % | -15 | % | 10 | % | 111 | % | 110 | % |
Salary | Non-Equity Incentive | Total Cash | % of Target Incentive Achieved | Equity Earned(1) | Total Realized Compensation | |||||||||||||
2018 | $ | 500,000 | $ | 316,464 | $ | 816,464 | 90 | % | $ | 1,003,326 | $ | 1,819,790 | ||||||
2017 | 500,000 | 393,549 | 893,549 | 112 | % | 349,610 | 1,243,159 | |||||||||||
2016 | 500,000 | 302,724 | 802,724 | 101 | % | 274,318 | 1,077,042 |
Base Salary Paid | Cash Incentive Compensation | Total Cash | % of Target Incentive Achieved(1) | Equity Earned(2) | Total Realized Compensation | |||||||||||||||
2020 | $ | 505,950 | $ | 464,090 | $ | 970,040 | 123 | % | $ | 478,831 | $ | 1,448,871 | ||||||||
2019 | 520,833 | 192,398 | 713,231 | 52 | % | 399,344 | 1,112,575 | |||||||||||||
2018 | 500,000 | 316,464 | 816,464 | 90 | % | 1,003,326 | 1,819,790 |
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2018 EXECUTIVE COMPENSATION
Section 162(m) Disclosure
32 | ![]() | 2021 Proxy Statement |
Name of Executive Officer and Principal Position | Year | Salary | Bonus | Stock Awards(1) | Option Awards(2) | Non-Equity Incentive Plan Compensation(3) | All Other Compensation(4) | Total | |||||||||||||||||||||||||||||||||||||||
Robert C. Biesterfeld Jr | 2020 | $ | 878,750 | $ | — | $ | 2,053,817 | $ | 2,021,132 | $ | 467,577 | $ | 11,394 | $ | 5,432,670 | ||||||||||||||||||||||||||||||||
President and Chief Executive Officer | 2019 | 870,833 | (5) | — | 1,879,415 | (5) | 1,869,985 | (5) | 428,895 | (5) | 16,800 | 5,065,928 | |||||||||||||||||||||||||||||||||||
2018 | 600,000 | (6) | — | 1,110,877 | (6) | 1,081,727 | (6) | 849,620 | (6) | 11,000 | 3,653,224 | ||||||||||||||||||||||||||||||||||||
Michael P. Zechmeister | 2020 | 666,839 | — | 698,550 | 687,200 | 290,084 | 24,325 | 2,366,998 | |||||||||||||||||||||||||||||||||||||||
Chief Financial Officer | 2019 | 235,985 | (7) | 200,000 | (8) | 1,681,567 | (7)(9) | 726,328 | (7) | 83,945 | (7) | 57,637 | 2,985,462 | ||||||||||||||||||||||||||||||||||
Christopher J. O'Brien | 2020 | 482,412 | — | 454,722 | 420,788 | 184,811 | 15,633 | 1,558,366 | |||||||||||||||||||||||||||||||||||||||
Chief Commercial Officer | 2019 | 500,000 | — | — | (10) | — | (10) | 126,975 | 16,800 | 643,775 | |||||||||||||||||||||||||||||||||||||
2018 | 500,000 | — | 447,805 | 439,333 | 499,201 | 11,000 | 1,897,339 | ||||||||||||||||||||||||||||||||||||||||
Mac S. Pinkerton | 2020 | 544,250 | — | 555,719 | 514,213 | 196,681 | 17,100 | 1,827,964 | |||||||||||||||||||||||||||||||||||||||
President of North America | 2019 | 475,000 | — | 50,250 | (11) | 50,027 | (11) | 212,943 | 16,800 | 805,020 | |||||||||||||||||||||||||||||||||||||
Surface Transportation | |||||||||||||||||||||||||||||||||||||||||||||||
Michael J. Short | 2020 | 505,950 | — | 429,622 | 397,432 | 464,090 | 17,100 | 1,814,194 | |||||||||||||||||||||||||||||||||||||||
President of Global Freight Forwarding | 2019 | 520,833 | — | — | (10) | — | (10) | 192,398 | 16,800 | 730,031 | |||||||||||||||||||||||||||||||||||||
2018 | 500,000 | — | 423,217 | 414,914 | 316,464 | 11,000 | 1,665,595 |
2021 Proxy Statement | ![]() | ![]() |
20182020 EXECUTIVE COMPENSATION
Name of Executive Officer and Principal Position | Year | Salary | Bonus | (1) Stock Awards | (2) Option Awards | (3) Non-Equity Incentive Plan Compensation | (4) All Other Compensation | Total | ||||||||||||||||
John P. Wiehoff | 2018 | $ | 1,167,000 | $ | 0 | $ | 2,515,458 | $ | 2,428,542 | $ | 2,427,366 | $ | 20,490 | $ | 8,558,856 | |||||||||
President and Chief | 2017 | 1,167,000 | 0 | 2,383,725 | 2,383,349 | 871,475 | 28,638 | 6,834,187 | ||||||||||||||||
Executive Officer | 2016 | 1,167,000 | 0 | 2,369,215 | 1,825,236 | 937,270 | 23,344 | 6,322,065 | ||||||||||||||||
Andrew C. Clarke | 2018 | 550,000 | 0 | 447,805 | 439,333 | 640,642 | 11,000 | 2,088,780 | ||||||||||||||||
Chief Financial Officer | 2017 | 550,000 | 0 | 451,075 | 451,693 | 230,004 | 10,800 | 1,693,572 | ||||||||||||||||
2016 | 525,000 | 0 | 470,598 | 354,186 | 210,826 | 10,600 | 1,571,210 | |||||||||||||||||
Robert C. Biesterfeld Jr. | 2018 | 600,000 | 0 | 1,110,877 | (5) | 1,081,727 | (5) | 849,620 | 11,000 | 3,653,224 | ||||||||||||||
Chief Operating | 2017 | 475,000 | 0 | 451,075 | 451,693 | 245,848 | 10,800 | 1,634,416 | ||||||||||||||||
Officer | 2016 | 450,000 | 0 | 470,598 | 314,874 | 250,378 | 10,600 | 1,496,450 | ||||||||||||||||
Christopher J. O'Brien | 2018 | 500,000 | 0 | 447,805 | 439,333 | 499,201 | 11,000 | 1,897,339 | ||||||||||||||||
Chief Commercial | 2017 | 500,000 | 0 | 425,851 | 426,630 | 179,224 | 10,800 | 1,542,505 | ||||||||||||||||
Officer | 2016 | 500,000 | 0 | 444,634 | 334,530 | 200,786 | 10,600 | 1,490,549 | ||||||||||||||||
Michael J. Short | 2018 | 500,000 | 0 | 423,217 | 414,914 | 316,464 | 11,000 | 1,665,595 | ||||||||||||||||
President-Global | 2017 | 500,000 | 0 | 400,626 | 401,426 | 393,549 | 10,800 | 1,706,401 | ||||||||||||||||
Freight Forwarding | 2016 | 500,000 | 0 | 418,020 | 314,874 | 302,724 | 10,600 | 1,546,218 |
Supplemental All Other Compensation Table
Name of Executive Officer | Year | Perks and Other Personal Benefits | Tax Reimbursements | (1) Registrant Contributions to Defined Contributions | Insurance Premiums | Other | Total | ||||||||||||||
John P. Wiehoff | 2018 | $ | 0 | $ | 0 | $ | 11,000 | $ | 0 | $ | 9,490 | (2) | $ | 20,490 | |||||||
Andrew C. Clarke | 2018 | 0 | 0 | 11,000 | 0 | 0 | 11,000 | ||||||||||||||
Robert C. Biesterfeld Jr. | 2018 | 0 | 0 | 11,000 | 0 | 0 | 11,000 | ||||||||||||||
Christopher J. O'Brien | 2018 | 0 | 0 | 11,000 | 0 | 0 | 11,000 | ||||||||||||||
Michael J. Short | 2018 | 0 | 0 | 11,000 | 0 | 0 | 11,000 |
Name of Executive Officer | Year | Perks and Personal Benefits | Tax Reim-bursements | Registrant Contributions to Defined Contributions(1) | Other | Total | |||||||||||||||||
Robert C. Biesterfeld Jr | 2020 | $ | — | $ | — | $ | 11,394 | $ | — | $ | 11,394 | ||||||||||||
Michael P. Zechmeister | 2020 | 12,925 | (2) | — | 11,400 | — | 24,325 | ||||||||||||||||
Christopher J. O'Brien | 2020 | — | — | 15,633 | — | 15,633 | |||||||||||||||||
Mac S. Pinkerton | 2020 | — | — | 17,100 | — | 17,100 | |||||||||||||||||
Michael J. Short | 2020 | — | — | 17,100 | — | 17,100 |
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2018 EXECUTIVE COMPENSATION
Dividend Equivalents Paid on Unvested Shares
(1) | ||||||
Name of Executive Officer | Year | Dividend Equivalents | ||||
John P. Wiehoff | 2018 | $ | 243,782 | (2) | ||
2017 | 229,525 | (2) | ||||
2016 | 195,417 | (2) | ||||
Andrew C. Clarke | 2018 | 45,794 | (2) | |||
2017 | 36,624 | (2) | ||||
2016 | 26,313 | (2) | ||||
Robert C. Biesterfeld Jr. | 2018 | 52,634 | (2) | |||
2017 | 35,346 | (2) | ||||
2016 | 25,845 | (2) | ||||
Christopher J. O'Brien | 2018 | 47,043 | (2) | |||
2017 | 46,162 | (2) | ||||
2016 | 41,089 | (2) | ||||
Michael J. Short | 2018 | 46,701 | (3) | |||
2017 | 41,428 | (3) | ||||
2016 | 34,910 | (3) |
Name of Executive Officer | Year | Dividend Equivalents(1) | |||||||||
Robert C. Biesterfeld Jr | 2020 | $ | 129,576 | (2) | |||||||
2019 | 87,638 | (2) | |||||||||
2018 | 52,634 | (2) | |||||||||
Michael P. Zechmeister | 2020 | 52,513 | (3) | ||||||||
2019 | 22,776 | (3) | |||||||||
Christopher J. O'Brien | 2020 | 35,241 | (2) | ||||||||
2019 | 32,237 | (2) | |||||||||
2018 | 47,043 | (2) | |||||||||
Mac S. Pinkerton | 2020 | 28,134 | (2) | ||||||||
2019 | 18,841 | (2) | |||||||||
Michael J. Short | 2020 | 34,442 | (4) | ||||||||
2019 | 34,564 | (4) | |||||||||
2018 | 46,701 | (4) |
34 | ![]() | 2021 Proxy Statement | ![]() |
Name of Executive Officer | Grant Date | (1) Estimated Future Payouts Under Non-Equity Incentive Plan Awards | Estimated Future Payouts Under Equity Incentive Plan Awards | All Other Option Awards: Number of Securities Underlying Options | Exercise or Base Price of Option Awards ($/Sh) | (2) Grant Date Fair Value of Stock and Option Awards | ||||||||||||||||||||||||
Threshold | Target | Maximum | Threshold | Target | Maximum | |||||||||||||||||||||||||
John P. Wiehoff | 12/5/2018 | $ | — | $ — | $ — | — | — | $ | 33,760 | (3) | — | $ — | $ | 2,515,458 | ||||||||||||||||
12/5/2018 | — | — | — | — | — | — | $ | 118,350 | (4) | 88.87 | 2,428,542 | |||||||||||||||||||
0 | 1,458,750 | 2,917,500 | — | — | — | — | — | — | ||||||||||||||||||||||
Andrew C. Clarke | 12/5/2018 | — | — | — | — | — | 6,010 | (3) | — | — | 447,805 | |||||||||||||||||||
12/5/2018 | — | — | — | — | — | — | 21,410 | (4) | 88.87 | 439,333 | ||||||||||||||||||||
0 | 385,000 | 770,000 | — | — | — | — | — | — | ||||||||||||||||||||||
Robert C. Biesterfeld Jr. | 3/1/2018 | — | — | — | — | — | 3,970 | (5) | — | — | 303,189 | |||||||||||||||||||
3/1/2018 | — | — | — | — | — | — | 20,640 | (6) | 89.70 | 302,582 | ||||||||||||||||||||
12/5/2018 | — | — | — | — | — | 10,840 | (3) | — | — | 807,688 | ||||||||||||||||||||
12/5/2018 | — | — | — | — | — | — | 37,970 | (4) | 88.87 | 779,144 | ||||||||||||||||||||
0 | 625,000 | 937,500 | — | — | — | — | — | — | ||||||||||||||||||||||
Christopher J. O'Brien | 12/5/2018 | — | — | — | — | — | 6,010 | (3) | — | — | 447,805 | |||||||||||||||||||
12/5/2018 | — | — | — | — | — | — | 21,410 | (4) | 88.87 | 439,333 | ||||||||||||||||||||
0 | 300,000 | 600,000 | — | — | — | — | — | — | ||||||||||||||||||||||
Michael J. Short | 12/5/2018 | — | — | — | — | — | 5,680 | (3) | — | — | 423,217 | |||||||||||||||||||
12/5/2018 | — | — | — | — | — | — | 20,220 | (4) | 88.87 | 414,914 | ||||||||||||||||||||
0 | 350,000 | 700,000 | — | — | — | — | — | — |
Name of Executive Officer | Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | Estimated Future Payouts Under Equity Incentive Plan Awards | All Other Option Awards: Number of Securities Underlying Options | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards(2) | ||||||||||||||||||||||||||||||||
Threshold | Target | Maximum | Threshold | Target | Maximum | |||||||||||||||||||||||||||||||||
Robert C. Biesterfeld Jr. | 2/5/2020 | $ | — | $ | — | $ | — | — | — | 34,611 | (3) | — | $ | — | $ | 2,053,817 | ||||||||||||||||||||||
2/5/2020 | — | — | — | — | — | — | 161,820 | (4) | 72.74 | 2,021,132 | ||||||||||||||||||||||||||||
0 | 1,435,000 | 2,870,000 | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Michael P. Zechmeister | 2/5/2020 | — | — | — | — | — | 11,772 | (3) | — | — | 698,550 | |||||||||||||||||||||||||||
2/5/2020 | — | — | — | — | — | — | 55,020 | (4) | 72.74 | 687,200 | ||||||||||||||||||||||||||||
0 | 603,500 | 1,207,000 | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Christopher J. O’Brien | 2/5/2020 | — | — | — | — | — | 7,663 | (3) | — | — | 454,722 | |||||||||||||||||||||||||||
2/5/2020 | — | — | — | — | — | — | 33,690 | (4) | 72.74 | 420,788 | ||||||||||||||||||||||||||||
0 | 334,750 | 669,500 | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Mac S. Pinkerton | 2/5/2020 | — | — | — | — | — | 9,365 | (3) | — | — | 555,719 | |||||||||||||||||||||||||||
2/5/2020 | — | — | — | — | — | — | 41,170 | (4) | 72.74 | 514,213 | ||||||||||||||||||||||||||||
0 | 480,000 | 960,000 | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Michael J. Short | 2/5/2020 | — | — | — | — | — | 7,240 | (3) | — | — | 429,622 | |||||||||||||||||||||||||||
2/5/2020 | — | — | — | — | — | — | 31,820 | (4) | 72.74 | 397,432 | ||||||||||||||||||||||||||||
0 | 378,000 | 756,000 | — | — | — | — | — | — |
2021 Proxy Statement | ![]() | 35 |
![]() |
2018 EXECUTIVE COMPENSATION
Outstanding Equity Awards at Fiscal Year-End 2018
Name of Executive Officer | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Options Exercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Options Unexercisable | Option Exercise Price | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested | Market Value of Shares or Units of Stock Held That Have Not Vested | (1) Equity Incentive Plan Awards: Number of Shares or Units of Stock That Have Not Vested | (1) Equity Incentive Plan Awards: Market Value of Shares or Units of Stock That Have Not Vested | ||||||||||
John P. Wiehoff | (#)41,830(2) | (#)0(2) | $ | 68.81 | 12/7/2021 | (#)86,699 | $ | 7,290,511 | ||||||||||
47,257(2) | 0(2) | 61.91 | 12/5/2022 | |||||||||||||||
126,800(2) | 0(2) | 58.25 | 12/4/2023 | |||||||||||||||
106,462(2) | 13,158(2) | 74.57 | 12/3/2024 | |||||||||||||||
90,432(3) | 60,288(3) | 63.58 | 12/2/2025 | |||||||||||||||
57,944(3) | 86,916(3) | 76.72 | 12/7/2026 | |||||||||||||||
33,474(3) | 133,896(3) | 87.15 | 12/6/2027 | |||||||||||||||
0(3) | 118,350(3) | 88.87 | 12/5/2028 | |||||||||||||||
Andrew C. Clarke | 27,393(2) | 3,387(2) | 62.11 | 6/2/2025 | 16,557 | 1,392,303 | ||||||||||||
18,090(3) | 12,060(3) | 63.58 | 12/2/2025 | |||||||||||||||
11,244(3) | 16,866(3) | 76.72 | 12/7/2026 | |||||||||||||||
6,344(3) | 25,376(3) | 87.15 | 12/6/2027 | |||||||||||||||
0(3) | 21,410(3) | 88.87 | 12/5/2028 | |||||||||||||||
Robert C. Biesterfeld Jr. | 11,644(2) | 0(2) | 58.25 | 12/4/2023 | 23,144 | 1,946,215 | ||||||||||||
9,748(2) | 1,205(2) | 74.57 | 12/3/2024 | |||||||||||||||
18,090(3) | 12,060(3) | 63.58 | 12/2/2025 | |||||||||||||||
11,244(3) | 16,866(3) | 76.72 | 12/7/2026 | |||||||||||||||
6,344(3) | 25,376(3) | 87.15 | 12/6/2027 | |||||||||||||||
4,128(3) | 16,512(3) | 89.70 | 3/1/2028 | |||||||||||||||
0(3) | 37,970(3) | 88.87 | 12/5/2028 | |||||||||||||||
Christopher J. O'Brien | 10,460(2) | 0(2) | 68.81 | 12/7/2021 | 16,038 | 1,348,661 | ||||||||||||
10,237(2) | 0(2) | 61.91 | 12/5/2022 | |||||||||||||||
27,480(2) | 0(2) | 58.25 | 12/4/2023 | |||||||||||||||
22,819(2) | 2,821(2) | 74.57 | 12/3/2024 | |||||||||||||||
18,090(3) | 12,060(3) | 63.58 | 12/2/2025 | |||||||||||||||
10,620(3) | 15,930(3) | 76.72 | 12/7/2026 | |||||||||||||||
5,992(3) | 23,968(3) | 87.15 | 12/6/2027 | |||||||||||||||
0(3) | 21,410(3) | 88.87 | 12/5/2028 | |||||||||||||||
Michael J. Short | 2,412(2) | 0(2) | 58.25 | 12/4/2023 | (#)3,722(4) | $ | 312,949 | 14,872 | 1,250,613 | |||||||||
3,532(2) | 905(2) | 74.57 | 12/3/2024 | |||||||||||||||
12,060(3) | 12,060(3) | 63.58 | 12/2/2025 | |||||||||||||||
9,996(3) | 14,994(3) | 76.72 | 12/7/2026 | |||||||||||||||
5,638(3) | 22,552(3) | 87.15 | 12/6/2027 | |||||||||||||||
0(3) | 20,220(3) | 88.87 | 12/5/2028 |
Option Awards | Stock Awards | ||||||||||||||||||||||||||||||||||
Name of Executive Officer | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Options Exercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Options Unexercisable | Option Exercise Price | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested | Market Value of Shares or Units of Stock That Have Not Vested | Equity Incentive Plan Awards: Number of Shares or Units of Stock That Have Not Vested(1) | Equity Incentive Plan Awards: Market Value of Shares or Units of Stock That Have Not Vested(1) | |||||||||||||||||||||||||||
Robert C. Biesterfeld Jr. | 11,644 | (2) | 0 | (2) | $ | 58.25 | 12/4/2023 | 81,889 | $ | 7,686,920 | |||||||||||||||||||||||||
9,748 | (2) | 0 | (2) | 74.57 | 12/3/2024 | ||||||||||||||||||||||||||||||
30,150 | (3) | 0 | (3) | 63.58 | 12/2/2025 | ||||||||||||||||||||||||||||||
22,488 | (3) | 5,622 | (3) | 76.72 | 12/7/2026 | ||||||||||||||||||||||||||||||
19,032 | (3) | 12,688 | (3) | 87.15 | 12/6/2027 | ||||||||||||||||||||||||||||||
12,384 | (4) | 8,256 | (4) | 89.70 | 3/1/2028 | ||||||||||||||||||||||||||||||
15,188 | (3) | 22,782 | (3) | 88.87 | 12/5/2028 | ||||||||||||||||||||||||||||||
42,548 | (4) | 63,822 | (4) | 82.68 | 5/9/2029 | ||||||||||||||||||||||||||||||
32,364 | (4) | 129,456 | (4) | 72.74 | 2/5/2030 | ||||||||||||||||||||||||||||||
Michael P. Zechmeister | 16,784 | (4) | 25,176 | (4) | 82.05 | 9/3/2029 | 8,127 | (5) | 762,881 | 22,132 | 2,077,531 | ||||||||||||||||||||||||
11,004 | (4) | 44,016 | (4) | 72.74 | 2/5/2030 | ||||||||||||||||||||||||||||||
Christopher J. O’Brien | 7,676 | (2) | 0 | (2) | 58.25 | 12/4/2023 | 20,232 | 1,899,178 | |||||||||||||||||||||||||||
22,819 | (2) | 0 | (2) | 74.57 | 12/3/2024 | ||||||||||||||||||||||||||||||
30,150 | (3) | 0 | (3) | 63.58 | 12/2/2025 | ||||||||||||||||||||||||||||||
21,240 | (3) | 5,310 | (3) | 76.72 | 12/7/2026 | ||||||||||||||||||||||||||||||
17,976 | (3) | 11,984 | (3) | 87.15 | 12/6/2027 | ||||||||||||||||||||||||||||||
8,564 | (3) | 12,846 | (3) | 88.87 | 12/5/2028 | ||||||||||||||||||||||||||||||
6,738 | (4) | 26,952 | (4) | 72.74 | 2/5/2030 | ||||||||||||||||||||||||||||||
Mac S. Pinkerton | 8,368 | (2) | 0 | (2) | 68.81 | 12/7/2021 | 16,973 | 1,593,256 | |||||||||||||||||||||||||||
6,853 | (2) | 0 | (2) | 61.91 | 12/5/2022 | ||||||||||||||||||||||||||||||
17,965 | (2) | 0 | (2) | 58.25 | 12/4/2023 | ||||||||||||||||||||||||||||||
11,576 | (2) | 0 | (2) | 74.57 | 12/3/2024 | ||||||||||||||||||||||||||||||
15,606 | (3) | 0 | (3) | 63.58 | 12/2/2025 | ||||||||||||||||||||||||||||||
10,348 | (3) | 2,586 | (3) | 76.72 | 12/7/2026 | ||||||||||||||||||||||||||||||
8,966 | (3) | 5,978 | (3) | 87.15 | 12/6/2027 | ||||||||||||||||||||||||||||||
5,128 | (3) | 7,693 | (3) | 88.87 | 12/5/2028 | ||||||||||||||||||||||||||||||
1,084 | (4) | 1,626 | (4) | 79.92 | 1/3/2029 | ||||||||||||||||||||||||||||||
8,234 | (4) | 32,936 | (4) | 72.74 | 2/5/2030 | ||||||||||||||||||||||||||||||
Michael J. Short | 6,030 | (3) | 0 | (3) | 63.58 | 12/2/2025 | 19,089 | 1,791,884 | |||||||||||||||||||||||||||
9,996 | (3) | 4,998 | (3) | 76.72 | 12/7/2026 | ||||||||||||||||||||||||||||||
16,914 | (3) | 11,276 | (3) | 87.15 | 12/6/2027 | ||||||||||||||||||||||||||||||
8,088 | (3) | 12,132 | (3) | 88.87 | 12/5/2028 | ||||||||||||||||||||||||||||||
6,364 | (4) | 25,456 | (4) | 72.74 | 2/5/2030 |
36 | ![]() | 2021 Proxy Statement | ![]() |
20182020 EXECUTIVE COMPENSATION
Option Exercises and Stock Vested During 2018
Name of Executive Officer | No. of Shares Acquired on Exercise or Vesting | Value Realized Upon Exercise or Vesting | Grant Date Fair Value Previously Reported in Summary Compensation Table | |||
John P. Wiehoff | Options | #0 | $0 | $0 | ||
Stock | 67,755 | 5,697,518 | 4,100,898 | |||
Andrew C. Clarke | Options | 0 | 0 | 0 | ||
Stock | 12,212 | 1,026,907 | 730,623 | |||
Robert C. Biesterfeld Jr. | Options | 5,968 | 170,194 | 86,372 | ||
Stock | 12,810 | 1,077,193 | 812,332 | |||
Christopher J. O'Brien | Options | 0 | 0 | 0 | ||
Stock | 13,395 | 1,126,386 | 803,919 | |||
Michael J. Short | Options | 4,527 | 109,771 | 62,622 | ||
Stock | 11,783(1) | 1,003,041 | 704,831 |
Name of Executive Officer | No. of Shares Acquired on Exercise or Vesting | Value Realized Upon Exercise or Vesting | Grant Date Fair Value Previously Reported in Summary Compensation Table | ||||||||||||||
Robert C. Biesterfeld Jr. | Options | 0 | $ | 0 | $ | 0 | |||||||||||
Stock | 0 | 0 | 0 | ||||||||||||||
Michael P. Zechmeister | Options | 0 | 0 | 0 | |||||||||||||
Stock | 4,063 | (1) | 404,959 | 333,369 | |||||||||||||
Christopher J. O’Brien | Options | 40,501 | 1,355,215 | 533,329 | |||||||||||||
Stock | 0 | 0 | 0 | ||||||||||||||
Mac S. Pinkerton | Options | 0 | 0 | 0 | |||||||||||||
Stock | 0 | 0 | 0 | ||||||||||||||
Michael J. Short | Options | 31,618 | 800,257 | 405,229 | |||||||||||||
Stock | 1,861 | (1) | 150,983 | 96,762 |
Contributions
in 2018
Registrant
Contributions
in 2018
Earnings in
2018
Withdrawals/
Distributions
Aggregate
Balance at
December 31,
2018Name of Executive Officer Executive Contributions in 2020 Aggregate Earnings in 2020 Aggregate Withdrawals/ Distributions Robert C. Biesterfeld Jr. $ 0 $ 2,517,604 $ 1,908,721 $ (56,312) $ 9,964,676 Michael P. Zechmeister 0 856,295 220,707 0 2,840,412 Christopher J. O’Brien 0 557,407 1,393,935 (206,597) 7,174,953 Mac S. Pinkerton 0 681,210 580,758 (138,475) 3,407,950 Michael J. Short 0 526,638 529,293 (226,434) 3,860,685 (1)All awards referred to in this table are in the form of performance based restricted shares, except Mr. Short’s 2015 time-based restricted share award.(2)All values in this column represent the closing market price of the company stock on the grant date of the restricted share award.2021 Proxy Statement 37 (3)All values in this column are based on the closing market price of the company stock as of December 31, 2018.36 2019 Proxy Statement
2018 EXECUTIVE COMPENSATION
all or substantially all of the company’s assets where the company’s directors and shareholders prior to the transaction do not comprise at least 60 percent of the board of the surviving entity and 60 percent of its shareholder base, respectively, or (iii) a majority of the Board of Directors are no longer “continuing directors”. The amounts listed are calculated based on the assumption that the NEOs’ employment was terminated or that a change in control occurred on December 31, 2018,2020, the last day of our reporting year. C.H. Robinson does not gross up payments to executive officers due to a change in control.
Name of Executive Officer | Benefits and Payments Upon Termination | Change in Control, Death, or Disability | ||
John P. Wiehoff | Vesting of nonvested stock options | $ | 2,002,344 | |
Vesting of nonvested restricted shares | 7,290,511 | |||
Andrew C. Clarke | Vesting of nonvested stock options | 446,095 | ||
Vesting of nonvested restricted shares | 1,392,303 | |||
Robert C. Biesterfeld Jr. | Vesting of nonvested stock options | 383,123 | ||
Vesting of nonvested restricted shares | 1,946,215 | |||
Christopher J. O'Brien | Vesting of nonvested stock options | 391,614 | ||
Vesting of nonvested restricted shares | 1,348,661 | |||
Michael J. Short | Vesting of nonvested stock options | 366,469 | ||
Vesting of nonvested restricted shares | 1,563,563 |
Name of Executive Officer | Benefits and Payments Upon Termination | Change in Control, Death, or Disability | ||||||
Robert C. Biesterfeld Jr. | Vesting of nonvested stock options | $ | 3,779,592 | |||||
Vesting of nonvested restricted shares | 7,686,920 | |||||||
Michael P. Zechmeister | Vesting of nonvested stock options | 1,227,638 | ||||||
Vesting of nonvested restricted shares | 2,077,531 | |||||||
Christopher J. O’Brien | Vesting of nonvested stock options | 805,325 | ||||||
Vesting of nonvested restricted shares | 1,899,178 | |||||||
Mac S. Pinkerton | Vesting of nonvested stock options | 841,599 | ||||||
Vesting of nonvested restricted shares | 1,593,256 | |||||||
Michael J. Short | Vesting of nonvested stock options | 760,036 | ||||||
Vesting of nonvested restricted shares | 1,791,884 |
38 | ![]() | 2021 Proxy Statement |
Jodee A. Kozlak, Chair Kermit R. Crawford Wayne M. Fortun Timothy C. Gokey Mary J. Steele Guilfoile James B. Stake Paula C. Tolliver | |||||
The Members of the Compensation Committee of the Board of Directors |
2021 Proxy Statement | ![]() | ![]() |
20182020 EXECUTIVE COMPENSATION
Based on this information, for 2018,2020, we reasonably estimate that the ratio of our CEO’s annual total compensation to the annual total compensation of our median employee was 135:101:1. Our pay ratio estimate has been calculated in a manner consistent with Item 402(u) of Regulation S-K.
While conducting
the footnotes to the Summary Compensation Table.
40 | ![]() | ![]() |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
(1) Number of Shares Beneficially Owned | Percentage of Outstanding Shares | (2) Number of Performance Shares Granted | |||||||
The Vanguard Group(3) 100 Vanguard Blvd. Malvern, PA 19355 | #16,810,895 | 12.22 | % | ||||||
BlackRock Inc.(4) 55 East 52nd Street New York, NY 10055 | 11,683,425 | 8.50 | % | ||||||
FMR LLC(5) 245 Summer Street Boston, MA 02210 | 8,014,309 | 5.83 | % | ||||||
State Street Corporation(6) State Street Financial Center One Lincoln Street Boston, MA 02111 | 7,964,567 | 5.80 | % | ||||||
John P. Wiehoff(7) | 1,294,676 | 0.94 | % | #752,784 | |||||
Andrew C. Clarke(8) | 81,383 | 0.06 | % | 34,410 | |||||
Robert C. Biesterfeld Jr.(9) | 84,477 | 0.06 | % | 45,390 | |||||
Christopher O’Brien(10) | 169,334 | 0.12 | % | 72,309 | |||||
Michael J. Short(11) | 57,957 | 0.04 | % | 29,458 | |||||
Scott P. Anderson | 16,732 | 0.01 | % | ||||||
Wayne M. Fortun | 38,149 | 0.03 | % | ||||||
Timothy C. Gokey | 3,380 | 0.00 | % | ||||||
Mary J. Steele Guilfoile | 11,546 | 0.01 | % | ||||||
Jodee A. Kozlak | 12,473 | 0.01 | % | ||||||
Brian P. Short | 57,163 | 0.04 | % | ||||||
James B. Stake | 18,908 | 0.01 | % | ||||||
Paula C. Tolliver | 668 | 0.00 | % | ||||||
All current executive officers and directors as a group (19 people) | 2,271,008 | 1.65 | % | 1,125,820 |
Number of Shares Beneficially Owned(1) | Percentage of Outstanding Shares | Number of Performance Shares Granted(2) | |||||||||
The Vanguard Group(3) 100 Vanguard Blvd. Malvern, PA 19355 | 16,549,492 | 12.17% | |||||||||
BlackRock Inc.(4) 55 East 52nd Street New York, NY 10055 | 15,998,262 | 11.80% | |||||||||
First Eagle Investment Management, LLC(5) 1345 Avenue of the Americas New York, NY 10105 | 10,558,642 | 7.77% | |||||||||
State Street Corporation(6) State Street Financial Center One Lincoln Street Boston, MA 02111 | 8,298,003 | 6.10% | |||||||||
Robert C. Biesterfeld Jr.(7) | 262,728 | 0.20% | 142,928 | ||||||||
Michael P. Zechmeister(8) | 49,664 | 0.04% | 33,072 | ||||||||
Christopher O’Brien(9) | 179,429 | 0.14% | 72,984 | ||||||||
Mac S. Pinkerton(10) | 125,643 | 0.10% | 39,753 | ||||||||
Michael J. Short(11) | 73,442 | 0.06% | 39,009 | ||||||||
Scott P. Anderson | 20,333 | 0.02% | |||||||||
Kermit R. Crawford | 399 | 0.00% | |||||||||
Wayne M. Fortun | 41,750 | 0.03% | |||||||||
Timothy C. Gokey | 9,584 | 0.01% | |||||||||
Mary J. Steele Guilfoile | 15,147 | 0.01% | |||||||||
Jodee A. Kozlak | 16,074 | 0.01% | |||||||||
Brian P. Short | 63,538 | 0.05% | |||||||||
James B. Stake | 24,018 | 0.02% | |||||||||
Paula C. Tolliver | 6,872 | 0.01% | |||||||||
All current executive officers and directors as a group (20 people) | 1,252,683 | 0.95% | 530,120 |
2021 Proxy Statement | ![]() | ![]() |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
42 | ![]() | 2021 Proxy Statement |
![]() |
DELINQUENT SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
REPORTS
The following is the number of late reports filed during 2018, under Section 16(a) and the number of transactions reflected therein as not reported on a timely basis during such fiscal year or prior fiscal years by such executive officers and directors:
2021 Proxy Statement | ![]() | ![]() |
and the Securities and Exchange Commission.
James B. Stake, Chair Scott P. Anderson Timothy C. Gokey Brian P. Short Paula C. Tolliver | |||||
The Members of the Audit Committee of the Board of Directors |
44 | ![]() | ![]() |
PROPOSAL TWO: ADVISORY VOTE ON THE COMPENSATION OF NAMED EXECUTIVE OFFICERS (“SAY-ON-PAY”)
NEOs.
NEOs.
The Board of Directors recommends a vote FOR the approval of the compensation of our NEOs. |
2021 Proxy Statement | ![]() | ![]() |
PROPOSAL THREE: RATIFICATION OF THE SELECTION OF INDEPENDENT AUDITORS
The following table summarizes the total fees for audit services provided by the independent auditor for the audit of our annual consolidated financial statements for the years ended December 31, 2018,2020, and December 31, 2017.2019. The table also includes fees billed for audit related, tax, and other services provided by the independent auditor during the same periods.
Fees | 2018 | 2017 | ||||
Audit Fees(1) | $ | 1,884,581 | $ | 1,992,116 | ||
Audit-Related Fees(2) | 342,290 | 134,258 | ||||
Tax Fees(3) | 907,416 | 1,930,081 | ||||
Other Fees(4) | — | 290,000 | ||||
Total | $ | 3,134,287 | $ | 4,346,455 |
Fees | 2020 | 2019 | ||||||
Audit Fees(1) | $ | 1,971,574 | $ | 2,228,175 | ||||
Audit-Related Fees(2) | 59,912 | 233,452 | ||||||
Tax Fees(3) | 261,194 | 458,511 | ||||||
Other Fees(4) | — | 22,606 | ||||||
Total | $ | 2,292,680 | $ | 2,942,744 |
![]() |
PROPOSAL THREE: RATIFICATION OF THE SELECTION OF INDEPENDENT AUDITORS
Preapproval Policy
All the professional services were approved or preapprovedpre-approved in accordance with policies of the Audit Committee and the company. These policies describe the permitted audit, audit-related, tax, and other services (collectively, the “Disclosure Categories”) that the independent auditor may perform. The policy requires that before work begins, a description of the services (the “Service List”) expected to be performed by the independent auditor, in each of the Disclosure Categories, be presented to the Audit Committee for approval.
pre-approval.
46 | ![]() | 2021 Proxy Statement |
3.The services were not recognized |
BOARD VOTING RECOMMENDATION
![]() |
PROPOSAL FOUR: APPROVE ADDING SHARES OFC.H. ROBINSON WORLDWIDE, INC. COMMON STOCK TO THE 2013 EQUITY INCENTIVE PLAN
Introduction
We are asking our shareholders to approve an increase in the current number of shares available in the share reserve of our Amended and Restated 2013 Equity Incentive Plan (the “2013 Plan”). The original 2013 Plan became effective upon approval by our shareholders on May 9, 2013, and since such approval, has been the only plan under which equity awards have been made to our employees and non-employee directors. The 2013 Plan’s original share reserve of 3,400,000 shares was initially supplemented by 3,641,803 shares remaining available for future awards under the company’s prior existing 1997 Omnibus Stock Plan, for a total initial authorized share amount of 7,041,803 shares. At the company’s Annual Meeting on May 12, 2016, shareholders approved amending and restating the original 2013 Plan to, among other things, add 6,000,000 shares to the 2013 Plan, for a total authorized share amount of 13,041,803. Since the company’s 2016 Annual Meeting, the company has granted shares to employees and non-employee directors under the 2013 Plan and as of March 1, 2019, there are 1,417,433 shares of our Common Stock in the share reserve that remain available for future grants under the 2013 Plan. We are asking to further amend and restate the 2013 Plan to increase the current number of shares authorized for award under the 2013 Plan by 4,000,000 shares, to 17,041,803 shares. This will increase the current number of shares available in the share reserve of our 2013 Plan from 1,417,433 shares to 5,417,433 shares. The proposed amendment and restatement of the 2013 Plan would not make any other changes to the 2013 Plan at this time.
Shareholder Approval and Board of Directors Recommendation
Shareholder approval to increase the 2013 Plan’s available share reserve by amending and restating the 2013 Plan is being sought in order to (i) satisfy the shareholder approval requirements of the Nasdaq Stock Market and (ii) obtain shareholder approval of the increased number of shares that may be subject to incentive stock options under to Internal Revenue Code Section 422.
For the reasons listed below, our Board of Directors recommends that our shareholders vote FOR the approval of additional available shares to the 2013 Plan because it believes that increasing the 2013 Plan’s share reserve will be critical in enabling us to continue to provide a competitive mix of compensation to our key employees. Unless a contrary choice is specified, proxies solicited by the Board of Directors will be voted FOR approval of the increase of available shares to the 2013 Plan. If the Proposal Four is not approved by our shareholders, the 2013 Plan in its current form will remain in effect, and we will remain subject to its existing share reserve.
Basis for the Requested Share Reserve Increase
Long-term equity-based incentives play a critical role in our executive compensation program, motivating executives to make decisions that focus on long-term shareholder value creation, aligning executives’ interests with the interests of shareholders and serving as an effective retention device. Our ability to continue to provide a competitive level of long-term equity-based compensation is considered to be of utmost importance to our success. Given the importance of providing competitive levels of equity-based compensation, particularly during this critical period of our CEO succession, and the shares remaining available for awards under the 2013 Plan’s existing share reserve, the Compensation Committee and the Board of Directors have decided to seek shareholder approval to amend and restate the 2013 Plan in order to increase the share reserve.
In determining the number of additional shares proposed to be added to the 2013 Plan’s share reserve, our Compensation Committee considered a number of factors, including the following:
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PROPOSAL FOUR: APPROVE ADDING SHARES OFC.H. ROBINSON WORLDWIDE, INC. COMMON STOCK TO THE 2013 EQUITY INCENTIVE PLAN
These factors are further discussed below.
Shares available and outstanding awards. Under the heading “Equity Compensation Plan Information” on page 55, we provide information about the shares of our Common Stock that may be issued under the 2013 Plan and our Employee Stock Purchase Plan as of December 31, 2018, the end of our most recent fiscal year. To facilitate approval of the request to add additional shares to the 2013 Plan, we are providing updated information as of March 1, 2019.
As of March 1, 2019, there were 137,434,622 shares of our Common Stock issued and outstanding. The closing sale price of a share of our Common Stock on the Nasdaq Stock Market on that date was $90.20. The following table summarizes information regarding awards outstanding and shares of our Common Stock remaining available for grant under the 2013 Plan as of March 1, 2019:
Historical equity granting practices. Our three-year average annual equity grant rate, or “burn rate,” for the 2016-2018 period was 2.24 percent, calculated on the basis utilized by the Proxy Advisory Services division of Institutional Shareholder Services, Inc. (“ISS”). This compares to ISS’s benchmark guidance of 2.04 percent for our industry classification among S&P 500 companies.
Fiscal Year | Stock Options Granted | Time-based RSU/Restricted Share Award Granted(1) | Performance-based RSU/Restricted Share Award Earned/Vested | Weighted-Average Shares Outstanding | ||||||||
2018 | #1,074,655 | #276,587 | #687,463 | #139,010,000 | ||||||||
2017 | 1,452,765 | 280,097 | 121,030 | 140,610,000 | ||||||||
2016 | 1,250,154 | 345,033 | 175,413 | 142,706,000 |
Expected duration of available shares. We expect to continue making equity awards consistent with our practices over the past three years, and to maintain an average annual burn rate over the next three years in line with our average for the 2016-2018 period. On that basis, we expect that shares currently remaining available for awards under the 2013 Plan will likely be insufficient to continue making awards beyond 2018, but that the shares of Common Stock available for future awards if the amendment and restatement of the 2013 Plan is approved would be sufficient for equity awards grants for approximately two years.
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PROPOSAL FOUR: APPROVE ADDING SHARES OFC.H. ROBINSON WORLDWIDE, INC. COMMON STOCK TO THE 2013 EQUITY INCENTIVE PLAN
Potential Dilution. As of March 1, 2019, the 137,434,622 shares of our Common Stock subject to outstanding awards under the 2013 Plan and available for future awards under the 2013 Plan represented approximately 7.3 percent of the fully-diluted number of our common shares outstanding. The 4,000,000 shares of Common Stock proposed to be added to the 2013 Plan’s share reserve would increase the voting power dilution percentage to approximately 9.73% percent.
Expectations regarding future share usage under the 2013 Plan are naturally based on a number of assumptions regarding factors such as future growth in the population of eligible participants, the rate of future compensation increases, the rate at which shares are returned to the 2013 Plan reserve through forfeitures, cancellations and the like, the level at which performance-based awards pay out, and our future stock price performance. While the Compensation Committee believes that the assumptions utilized are reasonable, future share usage will differ from current expectations to the extent that actual events differ from the assumptions utilized.
Key Compensation Practices
The 2013 Plan currently includes a number of features that we believe are consistent with the interests of our shareholders and sound corporate governance practices, including the following:
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PROPOSAL FOUR: APPROVE ADDING SHARES OFC.H. ROBINSON WORLDWIDE, INC. COMMON STOCK TO THE 2013 EQUITY INCENTIVE PLAN
Description of the Proposed Amended and Restated 2013 Plan
The major features of the 2013 Plan as proposed to be amended and restated are summarized below. For the avoidance of doubt, the only change being made to the 2013 Plan by the proposed amendment and restatement is to increase the authorized share reserve by 4,000,000 shares of our Common Stock. References to the “2013 Plan” in the following discussion refer to the 2013 Plan as proposed to be amended and restated unless otherwise indicated. The summary is qualified in its entirety by reference to the full text of the 2013 Plan as proposed to be amended and restated, which is attached as Appendix A to this Proxy Statement.
Purpose of the Plan. The 2013 Plan is intended to advance the interests of our company and its shareholders by enabling us to attract and retain the best available personnel for positions of responsibility, and to provide them with incentive awards intended to align their interests with those of our shareholders and thereby promote our long-term business success.
Eligible Participants. Employees, consultants, advisors, and independent contractors of the company or any subsidiary, as well as non-employee directors of the company, are eligible to receive awards under the 2013 Plan. As of March 1, 2019, there were approximately 15,400 employees of the company and its subsidiaries, eight non-employee directors of the company and an immaterial number of consultants and advisors who would be eligible to receive awards under the 2013 Plan. Although not necessarily indicative of future grants under the 2013 Plan, as of the same date, approximately 2,500 of the 15,400 eligible employees and all of the non-employee directors have been granted awards under the 2013 Plan, but no consultants or advisors have been granted awards under the 2013 Plan.
Administration. The 2013 Plan is administered by the Compensation Committee. To the extent consistent with applicable law, the Compensation Committee may delegate its duties, power, and authority under the 2013 Plan to any of its members, to our executive officers, or non-employee directors with respect to awards to participants who are not themselves our directors or executive officers, or to one or more agents or advisors with respect to non-discretionary administrative duties.
The Compensation Committee has the authority to determine the persons to whom awards will be granted, the timing, type, and number of shares covered by each award, and the terms and conditions of the awards. The Compensation Committee may also establish and modify rules to administer the 2013 Plan, interpret the 2013 Plan and any related award agreement, cancel or suspend an award, accelerate the vesting of an award in connection with a change in control or the death or disability of a participant, and otherwise modify or amend the terms of outstanding awards to the extent permitted under the 2013 Plan, and require or permit the deferral of the settlement of an award. Unless an amendment to the terms of an award is necessary to comply with applicable laws or stock exchange rules, a participant who would be adversely affected by such an amendment must consent to it.
Except in connection with equity restructurings and other situations in which share adjustments are specifically authorized, the 2013 Plan prohibits the Compensation Committee from repricing any outstanding “underwater” option or SAR awards without the prior approval of our shareholders. For these purposes, a “repricing” includes amending the terms of an option or SAR award to lower the exercise price, canceling an option or SAR award and granting in exchange replacement options or SARs having a lower exercise price, or canceling an underwater option or SAR award in exchange for cash, other property, or a full value award.
Subject to certain limits in the 2013 Plan, the Compensation Committee may also establish subplans or modify the terms of awards under the 2013 Plan with respect to participants who reside outside of the United States or are employed by a non-U.S. subsidiary in order to comply with local legal requirements.
Authorized Shares,Available Shares, and Limitations on Awards. A maximum of 17,041,803 shares of our Common Stock are authorized for awards under the 2013 Plan, of which approximately 5,417,433
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PROPOSAL FOUR: APPROVE ADDING SHARES OFC.H. ROBINSON WORLDWIDE, INC. COMMON STOCK TO THE 2013 EQUITY INCENTIVE PLAN
shares of our Common Stock remain available for future grants. No more than 50 percent of the total shares available for issuance under the 2013 Plan may be the subject of full value awards. All of the shares available for issuance under the 2013 Plan may be the subject of incentive stock option awards. The shares of Common Stock that may be issued under the 2013 Plan are authorized but unissued or treasury shares. The number of shares of Common Stock subject to options or SARs that may be granted to any one participant during a calendar year under the 2013 Plan may not exceed 500,000. These share limitations are subject to adjustment for changes in our corporate structure or shares, as described below.
The aggregate grant date fair value of all awards granted during any calendar year under the 2013 Plan to any non-employee director (other than awards granted at the election of the director in lieu of cash retainers or fees otherwise payable to the director) may not exceed $500,000.
The 2013 Plan share reserve will be reduced by one share for every one share issued or issuable pursuant to an award under the 2013 Plan. Any shares of Common Stock subject to an award under the 2013 Plan, or to an award under the 1997 Plan that was outstanding on the date our shareholders originally approved the 2013 Plan, that expires, is forfeited or terminated, or is settled or paid in cash will, to the extent of such expiration, forfeiture, termination, or cash settlement, automatically replenish the 2013 Plan share reserve and become available for future awards. However, any shares tendered or withheld to pay the exercise price of an option award, any shares tendered or withheld to satisfy a tax withholding obligation in connection with any award, any shares repurchased by us using option exercise proceeds, and any shares subject to an option or SAR award that are not issued in connection with the stock settlement of that award on its exercise will not replenish the 2013 Plan share reserve and may not be used again for future awards.
Awards granted or shares of our Common Stock issued under the 2013 Plan upon the assumption of, or in substitution or exchange for, outstanding equity awards previously granted by an entity acquired by us or any of our subsidiaries (referred to as “substitute awards”) will not reduce the share reserve under the 2013 Plan. Additionally, if a company acquired by us or any of our subsidiaries has shares available under a pre-existing plan approved by its shareholders and not adopted in contemplation of such acquisition, the unused shares under that pre-existing plan may be used for awards under the 2013 Plan and will not reduce the share reserve under the 2013 Plan, but only if the awards are made to individuals who were not employed by or providing services to us or any of our subsidiaries immediately prior to such acquisition.
Types of Awards. The 2013 Plan permits us to grant stock option awards, SAR awards, restricted stock awards, stock unit awards, and other stock-based awards to eligible recipients. These types of awards are described in more detail below.
Options. Employees of our company or any subsidiary may be awarded “incentive stock options” within the meaning of Internal Revenue Code Section 422, and any eligible recipient may be awarded options to purchase shares of our Common Stock that do not qualify as incentive stock options, referred to as “nonqualified stock options”. The exercise price to be paid by a participant at the time an option is exercised may not be less than 100 percent of the fair market value of one share of our Common Stock on the date of grant, unless the option is granted as a substitute award as described earlier. “Fair market value” under the 2013 Plan as of any date means the closing sale price of a share of our Common Stock on the Nasdaq Stock Market on that date.
The total purchase price of the shares of Common Stock to be purchased upon exercise of an option will be paid by the participant in cash unless the Compensation Committee allows exercise payments to be made, in whole or in part, (i) by means of a broker-assisted sale and remittance program, (ii) by delivery to us of shares of Common Stock already owned by the participant, or (iii) by a “net exercise” of the option in which a portion of the shares otherwise issuable upon exercise of the option are withheld by us. Any shares delivered or withheld in payment of an exercise price will be valued at their fair market value on the exercise date.
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PROPOSAL FOUR: APPROVE ADDING SHARES OFC.H. ROBINSON WORLDWIDE, INC. COMMON STOCK TO THE 2013 EQUITY INCENTIVE PLAN
An option will vest and become exercisable at such time, in such installments and subject to such conditions as may be determined by the Compensation Committee, and no option may have a term greater than 10 years from its date of grant.
Stock Appreciation Rights. A SAR award provides the right to receive a payment from us equal to the difference between (i) the fair market value as of the date of exercise of the number of shares of our Common Stock as to which the SAR is being exercised, and (ii) the aggregate exercise price of that number of shares. The Compensation Committee determines whether payment will be made in shares of our Common Stock, cash, or a combination of both. The exercise price per share of a SAR award will be determined by the Compensation Committee, but may not be less than 100 percent of the fair market value of one share of our Common Stock on the date of grant, unless the SAR is granted as a substitute award as described earlier. A SAR award may not have a term greater than 10 years from its date of grant and will be subject to such other terms and conditions, consistent with the terms of the 2013 Plan, as may be determined by the Compensation Committee.
Restricted Stock Awards. A restricted stock award is an award of our Common Stock that vests at such times and in such installments as may be determined by the Compensation Committee. Until it vests, the shares subject to the award are subject to restrictions on transferability and the possibility of forfeiture. The Compensation Committee may impose such restrictions or conditions to the vesting of restricted stock awards as it deems appropriate, including that the participant remain continuously in our service for a certain period or that we, or any of our subsidiaries or business units, satisfy specified performance goals. Unless otherwise specified by the Compensation Committee, dividends and distributions, other than regular cash dividends, that are paid on restricted shares will be subject to the same restrictions as the underlying shares. Participants are entitled to vote restricted shares prior to the time they vest.
Stock Unit Awards. The grant of a stock unit provides the right to receive the fair market value a share of our Common Stock, payable in cash, shares, or a combination of both. A stock unit award vests at such times and in such installments as may be determined by the Compensation Committee. Until it vests, a stock unit award is subject to restrictions on transferability and the possibility of forfeiture. Stock unit awards will be subject to such terms and conditions, consistent with the other provisions of the 2013 Plan, as may be determined by the Compensation Committee. The Compensation Committee may provide for the payment of dividend equivalents on stock unit awards and other stock-based awards.
Other Stock-Based Awards. The Compensation Committee may grant awards of Common Stock and other awards that are valued by reference to and/or payable in shares of our Common Stock under the 2013 Plan. The Compensation Committee has complete discretion in determining the terms and conditions of such awards.
Minimum Vesting Periods. Awards that vest based solely on the satisfaction of service-based vesting conditions are subject to a minimum vesting period of one year from the date of grant, and awards whose grant or vesting is subject to performance-based vesting conditions must be subject to a performance period of at least one year. These required vesting and performance periods will not apply: (i) to awards granted in payment of other compensation that is already earned and payable, (ii) upon a change in control, (iii) upon termination of service due to death or disability, (iv) to a substitute award that does not reduce the vesting period of the award being replaced, or (v) to awards involving an aggregate number of shares not in excess of 5 percent of the 2013 Plan’s share reserve.
Transferability of Awards. In general, no right or interest in any award under the 2013 Plan may be assigned or transferred by a participant, except by will or the laws of descent and distribution. However, the Compensation Committee may provide that an award (other than an incentive stock option) may be
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PROPOSAL FOUR: APPROVE ADDING SHARES OFC.H. ROBINSON WORLDWIDE, INC. COMMON STOCK TO THE 2013 EQUITY INCENTIVE PLAN
transferable by gift to a participant’s family member or pursuant to a qualified domestic relations order. Any permitted transferee of an award will remain subject to all the terms and conditions of the award applicable to the participant.
Effect of Termination of Service. If a participant’s employment or other service relationship with us and our subsidiaries is terminated, the 2013 Plan provides that unvested portions of his or her outstanding awards will be forfeited and vested portions of outstanding option and SAR awards will continue to be exercisable for a period of either 90 days or one year after termination, depending on the reason for the termination, unless the termination is for cause. In that case, the vested but unexercised portions of option and SAR awards will also be terminated. “Cause” for termination generally involves misappropriation of our cash or property or failure to comply with applicable confidentiality, noncompetition, and data security obligations. The Compensation Committee may provide for different termination consequences in an individual award agreement.
Performance Awards. Any award under the 2013 Plan may be granted as a performance-based award if the Compensation Committee establishes one or more measures of corporate, business unit, or individual performance which must be attained, and the performance period over which the specified performance is to be attained, as a condition to the vesting, exercisability, lapse of restrictions, and/or settlement in cash or shares of the award. The Compensation Committee will determine the extent to which performance goals have been attained and other applicable terms and conditions have been satisfied, and the degree to which vesting, exercisability, lapse of restrictions, and/or settlement in cash or shares of a performance award has been earned. The Compensation Committee also has the ability to provide, in an individual award agreement or elsewhere, for the modification of a performance period and/or an adjustment or waiver of the achievement of performance goals upon the occurrence of certain events, which may include a change in control, a corporate transaction, a recapitalization, a change in the accounting practices of our company, or a participant’s death or disability.
Change in Control. If a change in control of our company occurs, the Compensation Committee may take such actions with respect to outstanding awards as it deems appropriate under the circumstances, which may include (i) providing for the continuation, assumption, or replacement of outstanding awards by the surviving or successor entity; (ii) providing that outstanding awards will terminate upon or immediately prior to the consummation of such change in control; (iii) providing that outstanding awards will vest and become exercisable or payable, in whole or in part, prior to or upon consummation of such change in control, or upon termination of a participant’s employment or other service under specified conditions within a specified period of time after the change in control; or (iv) providing for the cancellation of any outstanding award in exchange for a payment equal to the intrinsic value of the award at the time of the change in control. The Compensation Committee may specify the actionengagement to be taken in an award agreement or may takenon-audit services;
For these purposes, a “change in control” generally refers to a merger or consolidation involving us, a sale of all or substantially all of our assets, the acquisition by a person or group of more than 50 percentattention of the voting power of our stock,Audit Committee and approved by the Audit Committee or certain changesits designee; and
Share Adjustment Provisions. If certain transactions with our shareholders occur that cause the per share value of our Common Stock to change, such as stock splits, spin-offs, stock dividends, or certain recapitalizations (referred to as “equity restructurings”), the Compensation Committee will equitably adjust (i) the class of shares issuable and the maximum number and kind of shares subject to the 2013 Plan, (ii) outstanding awards as to the class, number of shares, and exercise price per share, and (iii) award limitations prescribed by the 2013 Plan. In connection with other types of transactions that may also affect our Common Stock, such as reorganizations, mergers, or consolidations, the Compensation Committee may make similar equitable adjustments in its discretion.
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PROPOSAL FOUR: APPROVE ADDING SHARES OFC.H. ROBINSON WORLDWIDE, INC. COMMON STOCK TO THE 2013 EQUITY INCENTIVE PLAN
Deferral of Payouts. The Compensation Committee may permit or require the deferral by a participantRegulation S-X of the receiptSecurities Exchange Act of shares or cash in settlement of any full value award under the 2013 Plan, and will prescribe the terms, conditions, and procedures for such deferrals, which may include effecting a deferral in accordance with our Nonqualified Deferred Compensation Plan. Shares to effect the settlement of any such deferral will be drawn from and charged against the 2013 Plan’s share reserve.
Effective Date and Term of the 2013 Plan. The 2013 Plan became effective on May 9, 2013, the date it was originally approved by our shareholders. The amendment and restatement of the 2013 Plan will become effective on the date our shareholders approve it. Unless terminated earlier, the 2013 Plan will terminate on May 9, 2023. Awards outstanding under the 2013 Plan at the time it is terminated will continue in accordance with their terms. Our Board of Directors may suspend or terminate the 2013 Plan at any time.
Amendment of the Plan. Our Board of Directors may amend the 2013 Plan at any time, but no amendments will be effective without shareholder approval if such approval is required under applicable laws or regulations or under the rules of the Nasdaq Stock Market. No amendment of the 2013 Plan may adversely affect any outstanding award without the consent of the affected participant, except for amendments necessary to comply with applicable laws or stock exchange rules.
U.S. Federal Income Tax Consequences
The following is a summary of the principal United States federal income tax consequences to the company and to participants subject to U.S. taxation with respect to awards granted under the 2013 Plan, based on current statutes, regulations, and interpretations.
Nonqualified Stock Options. If a participant is granted a nonqualified stock option under the 2013 Plan, the participant will not recognize taxable income upon the grant of the option. Generally, the participant will recognize ordinary income at the time of exercise in an amount equal to the difference between the fair market value of the shares acquired at the time of exercise and the exercise price paid. The participant’s basis in the Common Stock for purposes of determining gain or loss on a subsequent sale or disposition of such shares generally will be the fair market value of our Common Stock on the date the option was exercised. Any subsequent gain or loss will be taxable1934, as a capital gain or loss. The company will generally be entitled to a federal income tax deduction at the time and for the same amount as the participant recognizes as ordinary income.
Incentive Stock Options. If a participant is granted an incentive stock option under the 2013 Plan, the participant will not recognize taxable income upon grant of the option. Additionally, if applicable holding period requirements (a minimum of two years from the date of grant and one year from the date of exercise) are met, the participant will not recognize taxable income at the time of exercise. However, the excess of the fair market value of the shares acquired at the time of exercise over the aggregate exercise price is an item of tax preference income potentially subject to the alternative minimum tax. If shares acquired upon exercise of an incentive stock option are held for the holding period described above, the gain or loss (in an amount equal to the difference between the fair market value on the date of sale and the exercise price) upon disposition of the shares will be treated as a long-term capital gain or loss, and the company will not be entitled to any deduction. Except in the event of death, if the holding period requirements are not met, the incentive stock option will be treated as one that does not meet the requirements of the Internal Revenue Code for incentive stock options and the tax consequences described for nonqualified stock options will generally apply.
Other Awards. The current federal income tax consequences of other awards authorized under the 2013 Plan generally follow certain basic patterns. SAR awards are taxed and deductible in substantially the same manner as nonqualified stock options. An award of restricted stock results in income recognition by a participant in an amount equal to the fair market value of the shares received at the time the restrictions
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PROPOSAL FOUR: APPROVE ADDING SHARES OFC.H. ROBINSON WORLDWIDE, INC. COMMON STOCK TO THE 2013 EQUITY INCENTIVE PLAN
lapse and the shares vest, unless the participant elects under Internal Revenue Code Section 83(b) to accelerate income recognition and the taxability of the award to the date of grant. Stock unit awards generally result in income recognition by a participant at the time payment of such an award is made in an amount equal to the amount paid in cash or the then-current fair market value of the shares received, as applicable. In each of the foregoing cases, the company will generally have a corresponding deduction at the time the participant recognizes ordinary income, subject to Internal Revenue Code Section 162(m) with respect to covered employees.
Section 162(m) of the Internal Revenue Code. Internal Revenue Code Section 162(m) prevents the company from taking a federal income tax deduction for compensation paid in excess of $1 million to our “covered employees” (which as of 2018 includes the CEO, CFO, and the three other most highly compensated executive officers of the company as of the end of the applicable calendar year, and any other person who was considered a covered employee in a previous taxable year (but not earlier than 2017). Prior to 2018, this deduction limitation did not apply to qualified “performance-based” compensation and a company’s CFO was not considered to be a “covered officer”. Any awards the company grants in the future pursuant to the 2013 Plan to covered employees, whether performance-based or otherwise, will be subject to the $1 million annual deduction limitation.
Section 409A of the Internal Revenue Code. The foregoing discussion of tax consequences of awards under the 2013 Plan assumes that the award discussed is either not considered a “deferred compensation arrangement” subject to Section 409A of the Internal Revenue Code (“Section 409A”), or has been structured to comply with its requirements. If an award is considered a deferred compensation arrangement subject to Section 409A but fails to comply, in operation or form, with the requirements of Section 409A, the affected participant would generally be required to include in income when the award vests the amount deemed “deferred”, would be required to pay an additional 20 percent income tax on such amount, and would be required to pay interest on the tax that would have been paid but for the deferral.
Awards Under the Proposed Amended and Restated 2013 Plan
Because the proposed amendment and restatement of the 2013 Plan will not become effective until it is approved by our shareholders, the Compensation Committee has not yet approved any awards under, or subject to, the 2013 Plan as proposed to be amended and restated. In addition, because all awards under the 2013 Plan are discretionary with the Compensation Committee, neither the number nor types of future 2013 Plan awards to be received by or allocated to particular participants or groups of participants is presently determinable. Information regarding awards made under the 2013 Plan during 2018 to our named executive officers is provided under the caption “Grants of Plan-Based Awards” on page 34 of this proxy statement.
Board Voting Recommendation:
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PROPOSAL FOUR: APPROVE ADDING SHARES OFC.H. ROBINSON WORLDWIDE, INC. COMMON STOCK TO THE 2013 EQUITY INCENTIVE PLAN
EQUITY COMPENSATION PLAN INFORMATION TABLE
The following table summarizes share and exercise price information about our equity compensation plans as of December 31, 2018:
Plan Category | Number of Securities to Be Issued Upon Exercise of Outstanding Options, Warrants, and Rights | Weighted Average Exercise Price of Outstanding Options, Warrants, and Rights | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in the First Column) |
Equity compensation plans approved by security holders(1) | #10,848,823 | $74.42 | #1,571,347 |
Equity compensation plans not approved by security holders | — | — | — |
Total | 10,848,823 | 74.42 | 1,571,347 |
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PROPOSAL FIVE: SHAREHOLDER PROPOSAL ON THE ADOPTION OF GREENHOUSE GAS EMISSIONS REDUCTION TARGETS
C.H. Robinson has been advised that one of its shareholders, the Sisters of the Presentation of the Blessed Virgin Mary, intends to present a proposal at our Annual Meeting. Please contact our corporate secretary, orally or in writing, if you would like the address and stock ownership information of the Sisters of the Presentation of the Blessed Virgin Mary. If the Sisters of the Presentation of the Blessed Virgin Mary continue to qualify to propose a shareholder proposal under applicable law and it, or its representative, is present at the Annual Meeting and submits this proposal for a vote, then the shareholder proposal will be voted upon at our Annual Meeting. As applicable proxy regulations require, we have included the proposed resolution and supporting statement, exactly as submitted by the shareholder, both of which are set forth below. We disclaim all responsibility for the content of the proposal and the supporting statement.
For the reasons set forth in its Statement in Opposition to Proposal Five immediately following the shareholder proposal below, the Board of Directors does not support this proposal and urges you to vote AGAINST this proposal.
Beginning of Shareholder Proposal and Statement of Support by the Sisters of the Presentation of the Blessed Virgin Mary:
RESOLVED: Shareholders request that C.H. Robinson Worldwide, Inc.’s (Company) board oversee the adoption of time-bound, quantitative, company-wide, science-based targets for reducing total greenhouse gas (GHG) emissions, taking into account the goals of the Paris Climate Agreement, and report, at reasonable cost and omitting proprietary information, on its plans to achieve these goals.
Supporting Statement
In order to mitigate the worst impacts of climate change, the Intergovernmental Panel on Climate Change estimates that a 45% reduction in anthropogenic GHG emissions globally is needed by 2030 (from 2010 levels) to stabilize global temperatures (Global Warming of 1.5 degrees C, IPCC, Oct. 2018). The Fourth U.S. National Climate Assessment concluded that climate change is expected to cause growing losses to American Infrastructure and property and impede the rate of economic growth over this century (upward of $500 billion a year) without substantial and sustained global efforts to reduce greenhouse gas emissions.
In 2017, the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD) recommended that companies adopt targets to manage climate-related risks and disclose related strategies. The TCFD is supported by a cross section of influential investors and business leaders including BlackRock, Fidelity, Glass Lewis, Statoil, and Vanguard.
63 percent of Fortune 100 companies have established targets that will lead to emissions reductions (Source: Power Forward 3.0). Many Company peers and industry associations throughout their value chain have set GHG emissions targets and are reducing operating costs by boosting fuel efficiency. For instance, Expeditors International set a 27 percent reduction target for Scope 1 and 2 emissions by 2017; the International Air Transport Association committed to a 50 percent reduction in emissions by 2050 (with carbon neutral growth from 2020); and the International Maritime Organization has a mandatory ship energy efficiency management plan, along with a 50 percent reduction target per ton/km in 2050.
Climate change has significant potential to adversely impact the Company’s business. As the Company notes in their most recent 10-K, their contract carriers are subject to increasingly stringent regulations around climate change, which could increase contract costs. As the frequency and intensity of extreme weather events increases with climate change, along with infrastructure risks, shipments may be subject to more frequent delays and losses, ultimately increasing operating costs and potentially threatening revenue.
A similar proposal made by the proponent last year received a favorable vote of nearly 38%. Since then, the Company has taken little action to monitor, manage, or meaningfully mitigate these risks or capture the opportunities. This is confirmed by MSCI rating the Company as worst-in-class for management of risks from
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carbon emissions, and by Sustainalytics placing the Company below their peer group average for carbon intensity and GHG reduction programs. As the world’s largest third-party logistics provider, the Company has a unique opportunity to lead the transition of the commercial freight sector into the low carbon future.
End of Shareholder Proposal and Statement of Support by the Sisters of the Presentation of the Blessed Virgin Mary
Statement of Opposition to and Recommendation of the Board of Directors on Proposal Five
The Board of Directors recommends that youa vote against this proposal.
As a non-asset-based logistics company, C.H. Robinson does not directly controlFOR ratification of the greenhouse gas (“GHG”) emissions produced from the useselection of motor carrier or other transportation equipment. In addition, our facilities consist primarily of office space, some warehouse space, and not manufacturing or other facilities that consume large amounts of energy and release a commensurate amount of greenhouse gas. However, C.H. Robinson understands the impacts that global integrated supply chains can have on the world’s climate. We also recognize the importance of taking actionable steps designed to help our customers and service providers make informed decisions about how their supply chains operate so the supply chains of today and tomorrow support global environmental sustainability, including reducing greenhouse gas emissions, and making a positive sustainable impact.
In 2018, the company began working with a leading third party environmental sustainability consultant to formally inventory and measure Scope 1 and 2 GHG emissions arising from C.H. Robinson’s operations. By the beginning of 2019, C.H. Robinson had completed its initial global GHG emissions footprint, the initial collection of GHG emissions data related to that footprint,Deloitte & Touche LLP as well as calculated the company’s global Scope 1 and 2 GHG emissions inventory. In 2019 and beyond, the company is committed to identifying methods to increase the accuracy of its gathering of primary emissions data for its owned and leased facilities and is also committed to establishing Scope 1 and 2 GHG emissions baselines and setting both qualitative and quantitative short and long term GHG emissions reduction targets.
In addition to focusing on methods of reducing the GHG emissions arising from our own operations, our service offerings positively impact our customers’ abilities to improve environmental sustainability in many ways, including:
C.H. Robinson’s service offerings also raise awareness of and enable our contracted motor carriers to increase resource efficiencies designed to reduce carbon emissions, including:
2021 Proxy Statement | ![]() | ![]() |
C.H. Robinson has and will continue to take steps to positively influence the profitability of its operations and its own impact on environmental sustainability, including:
C.H. Robinson has made great progress inventorying and measuring its Scope 1 and 2 GHG emissions and is in the process of analyzing its emissions data to establish qualitative and quantitative short- and long-term GHG emissions reduction targets. The company will also continue to offer services and capabilities to our customers and options to its contracted motor carriers to improve their operations’ environmental sustainability methods.
C.H. Robinson does not believe that the Shareholder’s proposal accurately reflects the most efficient or effective manner for C.H. Robinson to achieve GHG emissions reduction initiatives.
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SOLICITATION OF PROXIES
HOUSEHOLDING
23 2021. Please see "Proposal One: Election of Directors - Nominations" for information regarding the shareholder nomination process.
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The information in this Proxy Statement under the captions “Compensation Discussion and Analysis”, the “Compensation Committee Report”, and “Audit Committee Report” is not incorporated by reference into any filing by the company under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that in any such filing the company expressly so incorporates such information by reference. Additionally, the “Compensation Committee Report”, and “Audit Committee Report” are not “soliciting material” or to be “filed’“filed" with the Securities and Exchange Commission.
By Order of the Board of | |||||
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Ben G. Campbell Chief Legal Officer and Secretary |
March 28, 2019
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APPENDIX A
C.H. ROBINSON WORLDWIDE, INC.2013 EQUITY INCENTIVE PLAN(As Amended and Restated as of May 9, 2019)
1. Purpose. The purpose of the C.H. Robinson Worldwide, Inc. 2013 Equity Incentive Plan (the “Plan”) is to attract and retain the best available personnel for positions of responsibility with the Company, to provide additional incentives to them and align their interests with those of the Company’s stockholders, and to thereby promote the Company’s long-term business success.
2. Definitions. In this Plan, the following definitions will apply.
(a) “Affiliate” means any entity that is a Subsidiary or Parent of the Company.
(b) “Agreement” means the written or electronic agreement or notice containing the terms and conditions applicable to each Award granted under the Plan. An Agreement is subject to the terms and conditions of the Plan.
(c) “Award” means the grant of a compensatory award under the Plan in the form of an Option, Stock Appreciation Right, Restricted Stock, Stock Unit, or an Other Stock-Based Award.
(d) “Board” means the Board of Directors of the Company.
(e) “Cause” means what the term is expressly defined to mean in a then-effective written agreement (including an Agreement) between a Participant and the Company or any Affiliate, or in the absence of any such then-effective agreement or definition, a Participant’s (i) embezzlement or misappropriation of Company funds or property, (ii) failure to comply, as determined by the Company, with any applicable confidentiality, noncompetition or data security agreement or obligation, or (iii) failure to comply, as determined by the Company, with any applicable Management-Employee Agreement, Sales Employee Agreement or other agreement containing post-employment restrictions.
(f) “Change in Control” means any one of the following:
(1) An Exchange Act Person becomes the beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act) of securities of the Company representing more than 50% of the combined voting power of the Company’s then outstanding Voting Securities, except that the following will not constitute a Change in Control:
(A) any acquisition of securities of the Company by an Exchange Act Person directly or indirectly from the Company for the purpose of providing financing to the Company;
(B) any formation of a Group consisting solely of beneficial owners of the Company’s Voting Securities as of the effective date of this Plan; or
(C) any repurchase or other acquisition by the Company of its Voting Securities that causes any Exchange Act Person to become the beneficial owner of more than 50% of the Company’s Voting Securities.
If, however, an Exchange Act Person or Group referenced in clause (A), (B) or (C) above acquires beneficial ownership of additional Company Voting Securities after initially becoming the beneficial owner of more than 50% of the combined voting power of the Company’s Voting Securities by one of the means described in those clauses, then a Change in Control will be deemed to have occurred.
(2) Individuals who are Continuing Directors cease for any reason to constitute a majority of the members of the Board.
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(3) The consummation of a Corporate Transaction unless, immediately following such Corporate Transaction, (i) all or substantially all of the Persons who were the beneficial owners of the Company’s Voting Securities immediately prior to such Corporate Transaction beneficially own, directly or indirectly, at least 60% of the combined voting power of the then outstanding Voting Securities of the surviving or acquiring entity (or its Parent) resulting from such Corporate Transaction in substantially the same proportions as their ownership, immediately prior to such Corporate Transaction, of the Company’s Voting Securities, or (ii) at least 60% of the directors of the surviving or acquiring entity (or its Parent) are Continuing Directors.
Notwithstanding the foregoing, to the extent that any Award constitutes a deferral of compensation subject to Code Section 409A, and if that Award provides for a change in the time or form of payment upon a Change in Control, then no Change in Control shall be deemed to have occurred upon an event described in this Section 2(f) unless the event would also constitute a change in ownership or effective control of, or a change in the ownership of a substantial portion of the assets of, the Company under Code Section 409A.
(g) “Code” means the Internal Revenue Code of 1986, as amended and in effect from time to time, and the regulations promulgated thereunder.
(h) “Committee” means two or more Non-Employee Directors designated by the Board to administer the Plan under Section 3, each member of which shall be (i) an independent director within the meaning of the rules and regulations of the NASDAQ Stock Market, (ii) a non-employee director within the meaning of Exchange Act Rule 16b-3, and (iii) an outside director for purposes of Code Section 162(m). The Committee shall be the Compensation Committee of the Board unless otherwise specified by the Board.
(i) “Company” means C.H. Robinson Worldwide, Inc., a Delaware corporation, or any successor thereto.
(j) “Continuing Director” means an individual (A) who is, as of the effective date of the Plan, a director of the Company, or (B) who becomes a director of the Company after the effective date hereof and whose initial election, or nomination for election by the Company’s stockholders, was approved by at least a majority of the then Continuing Directors, but excluding for purposes of this clause (B) any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest.
(k) “Corporate Transaction” means (i) a sale or other disposition of all or substantially all of the assets of the Company, or (ii) a merger, consolidation, statutory share exchange or similar transaction involving the Company, regardless of whether the Company is the surviving corporation.
(l) “Disability” means (A) any permanent and total disability under any long-term disability plan or policy of the Company or its Affiliates that covers the Participant, or (B) if there is no such long-term disability plan or policy, “total and permanent disability” within the meaning Code Section 22(e)(3).
(m) “Employee” means an employee of the Company or an Affiliate.
(n) “Exchange Act” means the Securities Exchange Act of 1934, as amended and in effect from time to time.
(o) “Exchange Act Person” means any natural person, entity or Group other than (i) the Company or any Subsidiary; (ii) any employee benefit plan (or related trust) sponsored or maintained by the Company or any Affiliate; (iii) an underwriter temporarily holding securities in connection with a registered public offering of such securities; or (iv) an entity whose Voting Securities are beneficially owned by the beneficial owners of the Company’s Voting Securities in substantially the same proportions as their beneficial ownership of the Company’s Voting Securities.
(p) “Fair Market Value” means the fair market value of a Share determined as follows:
(1) If the Shares are readily tradable on an established securities market (as determined under Code Section 409A), then Fair Market Value will be the closing sales price for a Share on the
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principal securities market on which it trades on the date for which it is being determined, or if no sale of Shares occurred on that date, on the next preceding date on which a sale of Shares occurred, as reported in The Wall Street Journal or such other source as the Committee deems reliable; or
(2) If the Shares are not then readily tradable on an established securities market (as determined under Code Section 409A), then Fair Market Value will be determined by the Committee as the result of a reasonable application of a reasonable valuation method that satisfies the requirements of Code Section 409A.
(q) “Full Value Award” means an Award other than an Option or Stock Appreciation Right.
(r) “Good Reason” means what the term is expressly defined to mean in a then-effective written agreement (including an Agreement) between a Participant and the Company or any Affiliate, or in the absence of any such then-effective agreement or definition, any of the following acts by the Company or the Affiliate to which the Participant provides Service and which occur without the Participant’s consent: (i) a material diminution in the Participant’s authority, duties or responsibilities; (ii) requiring the Participant to be based or to regularly perform Services at any location that is in excess of 50 miles from the principal location at which the Participant previously provided Services; or (iii) a material reduction in the Participant’s base salary or other material adverse change in the elements of compensation provided to Participant (other than a reduction or change applied generally to all salaried employees of the Company). Notwithstanding the foregoing, Good Reason shall not exist unless the Participant shall have first provided written notice to the Company of the occurrence of one or more of the conditions under clauses (i) through (iii) of this paragraph within 90 days of the condition’s initial occurrence, and such condition is not fully remedied by the Company within 30 days after the Company’s receipt of written notice from you.
(s) “Grant Date” means the date on which the Committee approves the grant of an Award under the Plan, or such later date as may be specified by the Committee on the date the Committee approves the Award.
(t) “Group” means two or more persons acting as a partnership, limited partnership, syndicate or other group for the purpose of acquiring, holding or disposing of securities of the Company.
(u) “Non-Employee Director” means a member of the Board who is not an Employee.
(v) “Option” means a right granted under the Plan to purchase a specified number of Shares at a specified price. An “Incentive Stock Option” or “ISO” means any Option designated as such and granted in accordance with the requirements of Code Section 422. A “Non-Qualified Stock Option” means an Option other than an Incentive Stock Option.
(w) “Other Stock-Based Award” means an Award described in Section 11 of this Plan.
(x) “Parent” means a “parent corporation,” as defined in Code Section 424(e).
(y) “Participant” means a person to whom an Award is or has been made in accordance with the Plan.
(z) “Performance-Based Compensation” means an Award to a person who is, or is determined by the Committee to likely become, a “covered employee” (as defined in Code Section 162(m)(3)) and that is intended to constitute “performance-based compensation” within the meaning of Section 162(m)(4)(C) of the Code.
(aa) “Plan” means this C.H. Robinson Worldwide, Inc. 2013 Equity Incentive Plan, as amended and in effect from time to time.
(bb) “Prior Plan” means the C.H. Robinson Worldwide, Inc. 1997 Omnibus Stock Plan, as amended and restated as of the effective date of this Plan.
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(cc) “Restricted Stock” means Shares issued to a Participant that are subject to such restrictions on transfer, forfeiture conditions and other restrictions or limitations as may be set forth in this Plan and the applicable Agreement.
(dd) “Service” means the provision of services by a Participant to the Company or any Affiliate in any Service Provider capacity. A Service Provider’s Service shall be deemed to have terminated either upon an actual cessation of providing services or upon the entity for which the Service Provider provides services ceasing to be an Affiliate. Except as otherwise provided in this Plan or any Agreement, Service shall not be deemed terminated in the case of (i) any approved leave of absence; (ii) transfers among the Company and any Affiliates in any Service Provider capacity; or (iii) any change in status so long as the individual remains in the service of the Company or any Affiliate in any Service Provider capacity.
(ee) “Service Provider” means an Employee, a Non-Employee Director, or any consultant or advisor who is a natural person and who provides services (other than in connection with (i) a capital-raising transaction or (ii) promoting or maintaining a market in Company securities) to the Company or any Affiliate.
(ff) “Share” means a share of Stock.
(gg) “Stock” means the common stock, $0.10 par value, of the Company.
(hh) “Stock Appreciation Right” or “SAR” means the right to receive, in cash and/or Shares as determined by the Committee, an amount equal to the appreciation in value of a specified number of Shares between the Grant Date of the SAR and its exercise date.
(ii) “Stock Unit” means a right to receive, in cash and/or Shares as determined by the Committee, the Fair Market Value of a Share, subject to such restrictions on transfer, forfeiture conditions and other restrictions or limitations as may be set forth in this Plan and the applicable Agreement.
(jj) “Subsidiary” means a “subsidiary corporation,” as defined in Code Section 424(f), of the Company.
(kk) “Substitute Award” means an Award granted upon the assumption of, or in substitution or exchange for, outstanding awards granted by a company or other entity acquired by the Company or any Affiliate or with which the Company or any Affiliate combines.
(ll) “Voting Securities” of an entity means the outstanding equity securities entitled to vote generally in the election of directors of such entity.
3. Administration of the Plan.
(a) Administration. The authority to control and manage the operations and administration of the Plan shall be vested in the Committee in accordance with this Section 3.
(b) Scope of Authority. Subject to the terms of the Plan, the Committee shall have the authority, in its discretion, to take such actions as it deems necessary or advisable to administer the Plan, including:
(1) determining the Service Providers to whom Awards will be granted, the timing of each such Award, the types of Awards and the number of Shares or amount of cash covered by each Award, the terms, conditions, performance criteria, restrictions and other provisions of Awards, and the manner in which Awards are paid or settled;
(2) cancelling or suspending an Award, accelerating the vesting of an Award (but only in situations involving the death or Disability of the applicable Participant or in connection with a Change in Control), or otherwise amending the terms and conditions of any outstanding Award, subject to the requirements of Sections 6(b), 15(d) and 15(e);
(3) establishing, amending or rescinding rules to administer the Plan, interpreting the Plan and any Award or Agreement made under the Plan, correcting any defect or omission or reconciling any inconsistency in the Plan and any Award or Agreement, and making all other determinations necessary or desirable for the administration of the Plan; and
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(4) taking such actions as are described in Section 3(c) with respect to Awards to foreign Service Providers.
(c) Awards to Foreign Service Providers. The Committee may grant Awards to Service Providers who are foreign nationals, who are located outside of the United States or who are not compensated from a payroll maintained in the United States, or who are otherwise subject to (or could cause the Company to be subject to) legal or regulatory requirements of countries outside of the United States, on such terms and conditions different from those specified in the Plan as may, in the judgment of the Committee, be necessary or desirable to comply with applicable foreign laws and regulatory requirements and to promote achievement of the purposes of the Plan. In connection therewith, the Committee may establish such subplans and modify exercise procedures and other Plan rules and procedures to the extent such actions are deemed necessary or desirable, and may take any other action that it deems advisable to obtain local regulatory approvals or to comply with any necessary local governmental regulatory exemptions.
(d) Acts of the Committee; Delegation. A majority of the members of the Committee shall constitute a quorum for any meeting of the Committee, and any act of a majority of the members present at any meeting at which a quorum is present or any act unanimously approved in writing by all members of the Committee shall be the act of the Committee. Any such action of the Committee shall be valid and effective even if the members of the Committee at the time of such action are later determined not to have satisfied all of the criteria for membership in clauses (i), (ii) and (iii) of Section 2(h). To the extent not inconsistent with applicable law or stock exchange rules, the Committee may delegate all or any portion of its authority under the Plan to any one or more of its members or, as to Awards to Participants who are not subject to Section 16 of the Exchange Act, to one or more directors or executive officers of the Company. The Committee may also delegate non-discretionary administrative responsibilities in connection with the Plan to such other persons as it deems advisable.
(e) Finality of Decisions. The Committee’s interpretation of the Plan and of any Award or Agreement made under the Plan and all related decisions or resolutions of the Board or Committee shall be final and binding on all parties with an interest therein.
(f) Indemnification. Each person who is or has been a member of the Committee or of the Board, and any other person to whom the Committee delegates authority under the penultimate sentence of Section 3(d), shall be indemnified by the Company, to the maximum extent permitted by law, against liabilities and expenses imposed upon or reasonably incurred by such person in connection with or resulting from any claims against such person by reason of the performance of the individual’s duties under the Plan. This right to indemnification is conditioned upon such person providing the Company an opportunity, at the Company’s expense, to handle and defend the claims before such person undertakes to handle and defend them on such person’s own behalf. The Company will not be required to indemnify any person for any amount paid in settlement of a claim unless the Company has first consented in writing to the settlement. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such person or persons may be entitled under the Company’s Certificate of Incorporation or Bylaws, as a matter of law, or otherwise.
4. Shares Available Under the Plan.
(a) Maximum Shares Available. Subject to Section 4(b) and to adjustment as provided in Section 12(a), the number of Shares that may be the subject of Awards and issued under the Plan shall be 17,041,803. No more than fifty percent (50%) of the total Shares available for issuance under the Plan as provided in the previous sentence may be the subject of Full Value Awards. Shares issued under the Plan may come from authorized and unissued shares or treasury shares. In determining the number of Shares to be counted against the Plan’s share reserve in connection with any Award, the following rules shall apply:
(1) Where the number of Shares subject to an Award is variable on the Grant Date, the number of Shares to be counted against the share reserve shall be the maximum number of Shares that could be received under that particular Award, until such time as it can be determined that only a lesser number of Shares could be received.
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(2) Where two or more types of Awards are granted to a Participant in tandem with each other, such that the exercise of one type of Award with respect to a number of Shares cancels at least an equal number of Shares of the other, the number of Shares to be counted against the share reserve shall be the largest number of Shares that would be counted against the share reserve under either of the Awards.
(3) Substitute Awards shall not be counted against the share reserve, nor shall they reduce the Shares authorized for grant to a Participant in any calendar year.
(4) Awards that may be settled solely in cash shall not be counted against the share reserve, nor shall they reduce the Shares authorized for grant to a Participant in any calendar year.
(b) Effect of Forfeitures and Other Actions. Any Shares subject to an Award, or to an award granted under the Prior Plan that is outstanding on the effective date of this Plan (a “Prior Plan Award”), that is forfeited, terminated or expires or is settled for cash shall, to the extent of such forfeiture, termination, expiration or cash settlement, become available for future Awards under this Plan, and the total number of Shares available for grant under Section 4(a) shall be correspondingly increased. The following Shares shall not, however, become available for future Awards or increase the number of Shares available for grant under Section 4(a): (i) Shares tendered by the Participant or withheld by the Company in payment of the purchase price of a stock option issued under this Plan or the Prior Plan, (ii) Shares tendered by the Participant or withheld by the Company to satisfy any tax withholding obligation with respect to any awards under this Plan or the Prior Plan, (iii) Shares repurchased by the Company with proceeds received from the exercise of a stock option issued under this Plan or the Prior Plan, and (iv) Shares subject to a stock option or stock appreciation rights award issued under this Plan or the Prior Plan that are not issued in connection with the stock settlement of that award upon its exercise.
(c) Effect of Plans Operated by Acquired Companies. If a company acquired by the Company or any Subsidiary or with which the Company or any Subsidiary combines has shares available under a pre-existing plan approved by stockholders and not adopted in contemplation of such acquisition or combination, the shares available for grant pursuant to the terms of such pre-existing plan (as adjusted, to the extent appropriate, using the exchange ratio or other adjustment or valuation ratio or formula used in such acquisition or combination to determine the consideration payable to the holders of common stock of the entities party to such acquisition or combination) may be used for Awards under the Plan and shall not reduce the Shares authorized for grant under the Plan. Awards using such available shares shall not be made after the date awards or grants could have been made under the terms of the pre-existing plan, absent the acquisition or combination, and shall only be made to individuals who were not Employees or Non-Employee Directors prior to such acquisition or combination.
(d) No Fractional Shares. Unless otherwise determined by the Committee, the number of Shares subject to an Award shall always be a whole number. No fractional Shares may be issued under the Plan, but the Committee may, in its discretion, either pay cash in lieu of any fractional Share in settlement of an Award or eliminate any fractional Share.
(e) Individual Option and SAR Limit. The aggregate number of Shares subject to Options and/or Stock Appreciation Rights granted during any calendar year to any one Participant shall not exceed 500,000 Shares, subject to adjustment as provided in Section 12(a).
(f) Performance-Based Compensation Limit. With respect to Awards of Performance-Based Compensation, (i) the maximum number of Shares that may be the subject of Full Value Awards that are denominated in Shares or Share equivalents and that are granted to any Participant during any calendar year shall not exceed 500,000 Shares (subject to adjustment as provided in Section 12(a)); and (ii) the maximum amount payable with respect to Full Value Awards that are denominated other than in Shares or Share equivalents and that are granted to any one Participant during any calendar year shall not exceed $10,000,000.
(g) Limits on Awards to Non-Employee Directors. The aggregate grant date fair value (as determined in accordance with generally accepted accounting principles applicable in the United States)
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of all Awards granted during any calendar year to any Non-Employee Director (excluding any Awards granted at the election of a Non-Employee Director in lieu of all or any portion of retainers or fees otherwise payable to Non-Employee Directors in cash) shall not exceed $500,000.
5. Eligibility. Participation in the Plan is limited to Service Providers. Incentive Stock Options may only be granted to Employees.
6. General Terms of Awards.
(a) Award Agreement. Except for any Award that involves only the immediate issuance of unrestricted Shares, each Award shall be evidenced by an Agreement setting forth the number of Shares subject to the Award together with such other terms and conditions applicable to the Award (and not inconsistent with the Plan) as determined by the Committee. An Award to a Participant may be made singly or in combination with any form of Award. Two types of Awards may be made in tandem with each other such that the exercise of one type of Award with respect to a number of Shares reduces the number of Shares subject to the related Award by at least an equal amount.
(b) Vesting and Term. Each Agreement shall set forth the period until the applicable Award is scheduled to expire (which shall not be more than ten years from the Grant Date), and any applicable performance period. Awards that vest based solely on the satisfaction by the Participant of service-based vesting conditions shall be subject to a vesting period of not less than one year from the applicable Grant Date, and Awards whose grant or vesting is subject to the satisfaction of performance goals over a performance period shall be subject to a performance period of not less than one year. The foregoing minimum vesting and performance periods will not, however, apply in connection with: (i) a Change in Control, (ii) a termination of Service due to death or Disability, (iii) to a Substitute Award that does not reduce the vesting period of the award being replaced, (iv) Awards made in payment of or exchange for other compensation already earned and payable, and (v) Awards involving an aggregate number of Shares not in excess of 5% of the Plan’s share reserve specified in Section 4(a).
(c) Transferability. Except as provided in this Section 6(c), and except for an Award that involves only the immediate issuance of unrestricted Shares, (i) during the lifetime of a Participant, only the Participant or the Participant’s guardian or legal representative may exercise an Option or SAR, or receive payment with respect to any other Award; and (ii) no Award may be sold, assigned, transferred, exchanged or encumbered other than by will or the laws of descent and distribution. Any attempted transfer in violation of this Section 6(c) shall be of no effect and unenforceable against the Company or any Affiliate. The Committee may, however, provide in an Agreement or otherwise that an Award (other than an Incentive Stock Option) may be transferred pursuant to a qualified domestic relations order or may be transferable by gift to any “family member” (as defined in General Instruction A(5) to Form S-8 under the Securities Act of 1933) of the Participant. Any Award held by a transferee shall continue to be subject to the same terms and conditions that were applicable to that Award immediately before the transfer thereof. For purposes of any provision of the Plan relating to notice to a Participant or to acceleration or termination of an Award upon the death or termination of employment of a Participant, the references to “Participant” shall mean the original grantee of an Award and not any transferee.
(d) Designation of Beneficiary. To the extent permitted by the Committee, a Participant may designate a beneficiary or beneficiaries to exercise any Award or receive a payment under any Award payable on or after the Participant’s death. Any such designation shall be on a form approved by the Committee and shall be effective upon its receipt by the Company.
(e) Termination of Service. Unless otherwise provided in an Agreement, and subject to Section 12 of this Plan, if a Participant’s Service with the Company and all of its Affiliates terminates, the following provisions shall apply (in all cases subject to the scheduled expiration of an Option or Stock Appreciation Right, as applicable):
(1) Upon termination of Service for Cause or conduct during a post-termination exercise period that would constitute Cause, all unexercised Options and SARs and all unvested portions of any other outstanding Awards shall be immediately forfeited without consideration.
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(2) Upon termination of Service for any other reason, all unvested and unexercisable portions of any outstanding Awards shall be immediately forfeited without consideration.
(3) Upon termination of Service for any reason other than Cause, death or Disability, the currently vested and exercisable portions of Options and SARs may be exercised for a period of three months after the date of such termination. However, if a Participant thereafter dies during such three-month period, the vested and exercisable portions of the Options and SARs may be exercised for a period of one year after the date of such termination.
(4) Upon termination of Service due to death or Disability, the currently vested and exercisable portions of Options and SARs may be exercised for a period of one year after the date of such termination.
(f) Rights as Stockholder. No Participant shall have any rights as a stockholder with respect to any Shares covered by an Award unless and until the date the Participant becomes the holder of record of the Shares, if any, to which the Award relates.
(g) Performance-Based Awards. Any Award may be granted as a performance-based Award if the Committee establishes one or more measures of corporate, business unit or individual performance which must be attained, and the performance period over which the specified performance is to be attained, as a condition to the vesting, exercisability, lapse of restrictions and/or settlement in cash or Shares of such Award. In connection with any such Award, the Committee shall determine the extent to which performance goals have been attained and other applicable terms and conditions have been satisfied, and the degree to which vesting, exercisability, lapse of restrictions and/or settlement in cash or Shares of such Award has been earned. Any performance-based Award that is intended by the Committee to qualify as Performance-Based Compensation shall additionally be subject to the requirements of Section 17 of this Plan. Except as provided in Section 17 with respect to Performance-Based Compensation, the Committee shall also have the authority to provide, in an Agreement or otherwise, for the modification of a performance period and/or an adjustment or waiver of the achievement of performance goals upon the occurrence of certain events, which may include a Change in Control, a Corporate Transaction, a recapitalization, a change in the accounting practices of the Company, or the Participant’s death or Disability.
(h) Dividends and Dividend Equivalents. No dividends, dividend equivalents or distributions will be paid with respect to Shares subject to an Option or SAR. Any dividends or distributions, other than regular cash dividends, that are paid with respect to Shares that are subject to the unvested portion of a Restricted Stock Award will be subject to the same restrictions as the Shares to which such dividends or distributions relate. In its discretion, the Committee may provide in an Award Agreement for a Stock Unit Award or an Other Stock-Based Award that the Participant will be entitled to receive dividend equivalents on the units or other Share equivalents subject to the Award based on dividends actually declared on outstanding Shares. The terms of any dividend equivalents will be as set forth in the applicable Agreement, including the time and form of payment and whether such dividend equivalents will be credited with interest or deemed to be reinvested in additional units or Share equivalents. The Committee may, in its discretion, provide in an Agreement for restrictions on dividends and dividend equivalents in addition to those specified in this Section 6(h).
(i) Deferrals of Full Value Awards. The Committee may, in its discretion, permit or require the deferral by a Participant of the issuance of Shares or payment of cash in settlement of any Full Value Award, subject to such terms, conditions, rules and procedures as it may establish or prescribe for such purpose and subject further to compliance with the applicable requirements of Code Section 409A. The terms, conditions, rules and procedures for any such deferral shall be set forth in writing in the relevant Agreement or in such other agreement, plan or other document as the Committee may determine, including the Robinson Companies Nonqualified Deferred Compensation Plan, as amended (the “NQDC Plan”), or some combination of such documents. The terms, conditions, rules and procedures for any such deferral shall address, to the extent relevant, matters such as: (i) the permissible time(s) and form(s) of payment of deferred amounts; (ii) the terms of any deferral elections by a Participant or of any deferral required by the Company; and (iii) the crediting of interest or dividend equivalents on
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deferred amounts. To the extent that any such deferral is effected in accordance with the NQDC Plan, the stock units credited to the NQDC Plan account of a Participant shall be deemed Stock Units for purposes of this Plan, and if settled in Shares, such Shares shall be drawn from and charged against the Plan’s share reserve.
7. Stock Option Awards.
(a) Type and Exercise Price. The Agreement pursuant to which an Option is granted shall specify whether the Option is an Incentive Stock Option or a Non-Qualified Stock Option. The exercise price at which each Share subject to an Option may be purchased shall be determined by the Committee and set forth in the Agreement and shall not be less than the Fair Market Value of a Share on the Grant Date, except in the case of Substitute Awards (to the extent consistent with Code Section 409A).
(b) Payment of Exercise Price. The purchase price of the Shares with respect to which an Option is exercised shall be payable in full at the time of exercise, which may include, to the extent permitted by the Committee, payment under a broker-assisted sale and remittance program acceptable to the Committee. The purchase price may be paid in cash or in such other manner as the Committee may permit, including by withholding Shares otherwise issuable to the Participant upon exercise of the Option or by delivery to the Company of Shares (by actual delivery or attestation) already owned by the Participant (in each case, such Shares having a Fair Market Value as of the date the Option is exercised equal to the purchase price of the Shares being purchased).
(c) Exercisability and Expiration. Each Option shall be exercisable in whole or in part on the terms provided in the Agreement. No Option shall be exercisable at any time after its scheduled expiration. When an Option is no longer exercisable, it shall be deemed to have terminated.
(d) Incentive Stock Options.
(1) An Option will constitute an Incentive Stock Option only if the Participant receiving the Option is an Employee, and only to the extent that (i) it is so designated in the applicable Agreement and (ii) the aggregate Fair Market Value (determined as of the Option’s Grant Date) of the Shares with respect to which Incentive Stock Options held by the Participant first become exercisable in any calendar year (under the Plan and all other plans of the Company and its Affiliates) does not exceed $100,000 or such other amount specified by the Code. To the extent an Option granted to a Participant exceeds this limit, the Option shall be treated as a Non-Qualified Stock Option. The maximum number of Shares that may be issued upon the exercise of Incentive Stock Options shall be the total number of Shares in the Plan’s share reserve as specified in the first sentence of section 4(a), subject to adjustment as provided in Section 12(a).
(2) No Participant may receive an Incentive Stock Option under the Plan if, immediately after the grant of such Award, the Participant would own (after application of the rules contained in Code Section 424(d)) Shares possessing more than 10% of the total combined voting power of all classes of stock of the Company or an Affiliate, unless (i) the option price for that Incentive Stock Option is at least 110% of the Fair Market Value of the Shares subject to that Incentive Stock Option on the Grant Date and (ii) that Option will expire no later than five years after its Grant Date. (3) For purposes of continued Service by a Participant who has been granted an Incentive Stock Option, no approved leave of absence may exceed three months unless reemployment upon expiration of such leave is provided by statute or contract. If reemployment is not so provided, then on the date six months following the first day of such leave, any Incentive Stock Option held by the Participant shall cease to be treated as an Incentive Stock Option and shall be treated for tax purposes as a Non-Qualified Stock Option.
(4) If an Incentive Stock Option is exercised after the expiration of the exercise periods that apply for purposes of Code Section 422, such Option shall thereafter be treated as a Non-Qualified Stock Option.
(5) The Agreement covering an Incentive Stock Option shall contain such other terms and provisions that the Committee determines necessary to qualify the Option as an Incentive Stock Option.
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8. Stock Appreciation Rights.
(a) Nature of Award. An Award of Stock Appreciation Rights shall be subject to such terms and conditions as are determined by the Committee, and shall provide a Participant the right to receive upon exercise of the SAR Award all or a portion of the excess of (i) the Fair Market Value as of the date of exercise of the SAR Award of the number of Shares as to which the SAR Award is being exercised, or (ii) the aggregate exercise price for such number of Shares. The per Share exercise price for any SAR Award shall be determined by the Committee and set forth in the applicable Agreement and shall not be less than the Fair Market Value of a Share on the Grant Date, except in the case of Substitute Awards (to the extent consistent with Code Section 409A).
(b) Exercise of SAR. Each Stock Appreciation Right may be exercisable in whole or in part at the times, on the terms and in the manner provided in the Agreement. No SAR shall be exercisable at any time after its scheduled expiration. When a SAR Right is no longer exercisable, it shall be deemed to have terminated. Upon exercise of a SAR, payment to the Participant shall be made at such time or times as shall be provided in the Agreement in the form of cash, Shares or a combination of cash and Shares as determined by the Committee. The Agreement may provide for a limitation upon the amount or percentage of the total appreciation on which payment (whether in cash and/or Shares) may be made in the event of the exercise of a SAR.
9. Restricted Stock Awards.
(a) Vesting and Consideration. Shares subject to a Restricted Stock Award shall be subject to vesting conditions, and the corresponding lapse or waiver of forfeiture conditions and other restrictions, based on such factors and occurring over such period of time as the Committee may determine in its discretion. The Committee may provide whether any consideration other than Services must be received by the Company or any Affiliate as a condition precedent to the grant of a Restricted Stock Award, and may correspondingly provide for Company repurchase rights if such additional consideration has been required and some or all of a Restricted Stock Award does not vest.
(b) Shares Subject to Restricted Stock Awards. Unvested Shares subject to a Restricted Stock Award shall be evidenced by a book-entry in the name of the Participant with the Company’s transfer agent. Any such book-entry shall be subject to transfer restrictions and accompanied by corresponding stop transfer instructions. Upon the vesting of Shares of Restricted Stock and the corresponding lapse of the restrictions and forfeiture conditions, the corresponding transfer restrictions will be removed from the book-entry evidencing such Shares. Such vested Shares may, however, remain subject to additional restrictions as provided in Section 18(c). Except as otherwise provided in the Plan or an applicable Agreement (which may include a waiver by the Participant of the right to vote or receive any dividend or distribution with respect to Shares of Restricted Stock), a Participant with a Restricted Stock Award shall have all the rights of a stockholder with respect to the Shares of Restricted Stock subject thereto.
10. Stock Unit Awards.
(a) Vesting and Consideration. A Stock Unit Award shall be subject to vesting conditions, and the corresponding lapse or waiver of forfeiture conditions and other restrictions, based on such factors and occurring over such period of time as the Committee may determine in its discretion. The Committee may provide whether any consideration other than Services must be received by the Company or any Affiliate as a condition precedent to the settlement of a Stock Unit Award.
(b) Payment of Award. Following the vesting of a Stock Unit Award, settlement of the Award and payment to the Participant shall be made at such time or times in the form of cash, Shares (which may themselves be considered Restricted Stock under the Plan subject to restrictions on transfer and forfeiture conditions) or a combination of cash and Shares as determined by the Committee. If the Stock Unit Award is not by its terms exempt from the requirements of Code Section 409A, then the applicable Agreement shall contain terms and conditions intended to avoid adverse tax consequences specified in Code Section 409A.
11. Other Stock-Based Awards. The Committee may from time to time grant Shares and other Awards that are valued by reference to and/or payable in whole or in part in Shares under the Plan. The Committee, in its sole discretion, shall determine the terms and conditions of such Awards, which shall be consistent with the
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terms and purposes of the Plan. The Committee may, in its sole discretion, direct the Company to issue Shares subject to restrictive legends and/or stop transfer instructions that are consistent with the terms and conditions of the Award to which the Shares relate.
12. Changes in Capitalization, Corporate Transactions, Change in Control.
(a) Adjustments for Changes in Capitalization. In the event of any equity restructuring (within the meaning of FASB ASC Topic 718—Stock Compensation, or any successor provision) that causes the per share value of Shares to change, such as a stock dividend, stock split, spinoff, rights offering or recapitalization through an extraordinary dividend, the Committee shall make such adjustments as it deems equitable and appropriate to (i) the aggregate number and kind of Shares or other securities issued or reserved for issuance under the Plan, (ii) the number and kind of Shares or other securities subject to outstanding Awards, (iii) the exercise price of outstanding Options and SARs, and (iv) any maximum limitations prescribed by the Plan with respect to certain types of Awards or the grants to individuals of certain types of Awards. In the event of any other change in corporate capitalization, including a merger, consolidation, reorganization, or partial or complete liquidation of the Company, such equitable adjustments described in the foregoing sentence may be made as determined to be appropriate and equitable by the Committee to prevent dilution or enlargement of rights of Participants. In either case, any such adjustment shall be conclusive and binding for all purposes of the Plan. No adjustment shall be made pursuant to this Section 12(a) in connection with the conversion of any convertible securities of the Company, or in a manner that would cause Incentive Stock Options to violate Section 422(b) of the Code or cause an Award to be subject to adverse tax consequences under Section 409A of the Code.
(b) Change in Control. In the event of a Change in Control, the Committee may take such actions with respect to outstanding Awards as it deems appropriate under the circumstances, which may include one or more of the following: (i) providing for the continuation, assumption or replacement of outstanding Awards by the surviving or successor entity (or an affiliate thereof) with appropriate adjustments as may be required or permitted by Section 12(a); (ii) providing that outstanding Awards will terminate upon or immediately prior to the consummation of such Change in Control; (iii) providing that outstanding Awards will vest and become exercisable, realizable or payable, in whole or in part, prior to or upon consummation of such Change in Control, or upon termination of a Participant’s Service under specified conditions within a specified period of time after the Change in Control; or (iv) providing for the cancellation of any outstanding Award at or immediately prior to a Change in Control in exchange for a payment (in cash or other property) in an amount equal to the difference, if any, between (A) the fair market value (as determined in good faith by the Committee) of the consideration that would otherwise be received in the Change in Control for the number of Shares subject to the Award (or, if no such consideration would be received, the Fair Market Value of such number of Shares immediately prior to such Change in Control), and (B) the aggregate exercise price (if any) for the Shares subject to such Award (it being understood that if such amount would not be a positive number, then such Award may be canceled by the Company without payment). Any action contemplated under this Section 12(b) may be specified by the Committee at the time an Award is made in the applicable Agreement or be taken by the Committee prior to or coincident with the time of the Change in Control. The Committee will not be required to treat all Awards or all Participants similarly.
(1) For purposes of this Section 12(b), an Award shall be considered assumed or replaced if, in connection with the Change in Control and in a manner consistent with Code Sections 409A and 424, either (i) the contractual obligations represented by the Award are expressly assumed by the surviving or successor entity (or an affiliate thereof) with appropriate adjustments to the number and type of securities subject to the Award and the exercise price thereof that preserves the intrinsic value of the Award existing at the time of the Change in Control, or (ii) the Participant has received a comparable award that preserves the intrinsic value of the Award existing at the time of the Change in Control and contains terms and conditions that are substantially similar to those of the Award.
(2) Payment of any amount under this Section 12(b) shall be made in such form, on such terms and subject to such conditions as the Committee determines in its discretion, which may or
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may not be the same as the form, terms and conditions applicable to payments to the Company’s stockholders in connection with the Change in Control transaction, and may, in the Committee’s discretion, include subjecting such payments to vesting conditions comparable to those of the Award canceled, subjecting such payments to escrow or holdback terms comparable to those imposed upon the Company’s stockholders under the Change in Control transaction, or calculating and paying the present value of payments that would otherwise be subject to escrow or holdback terms.
(c) Dissolution or Liquidation. Unless otherwise provided by the Committee (in an applicable Agreement or otherwise at the time of the event), if the stockholders of the Company approve the complete dissolution or liquidation of the Company, all outstanding Awards shall vest and become fully exercisable, and will terminate immediately prior to the consummation of any such proposed action. The Committee will notify each Participant as soon as practicable of such accelerated vesting and exercisability and pending termination.
13. Plan Participation and Service Provider Status. Status as a Service Provider shall not be construed as a commitment that any Award will be made under the Plan to that Service Provider or to eligible Service Providers generally. Nothing in the Plan or in any Agreement or related documents shall confer upon any Service Provider or Participant any right to continued Service with the Company or any Affiliate, nor shall it interfere with or limit in any way any right of the Company or any Affiliate to terminate the person’s Service at any time with or without Cause or change such person’s compensation, other benefits, job responsibilities or title.
14. Tax Withholding. The Company or any Affiliate, as applicable, shall have the right to (i) withhold from any cash payment under the Plan or any other compensation owed to a Participant an amount sufficient to cover any required withholding taxes related to the grant, vesting, exercise or settlement of an Award, and (ii) require a Participant or other person receiving Shares under the Plan to pay a cash amount sufficient to cover any required withholding taxes before actual receipt of those Shares. In lieu of all or any part of a cash payment from a person receiving Shares under the Plan, the Committee may permit the individual to cover all or any part of the required withholdings (up to the Participant’s minimum required tax withholding rate) through a reduction in the number of Shares delivered or through a delivery (either actually or by attestation) to the Company of Shares held by the Participant or other person, in each case valued in the same manner as used in computing the withholding taxes under applicable laws.
15. Effective Date, Duration, Amendment and Termination of the Plan.
(a) Effective Date. The Plan originally became effective on May 9, 2013, the date it was initially approved by the Company’s stockholders, and which is considered the date of its adoption for purposes of Treasury Regulation §1.422-2(b)(2)(i). The Plan as amended and restated will become effective on the date it is approved by the Company’s stockholders. If the Company’s stockholders fail to approve the amendment and restatement of the Plan by June 30, 2016, the Plan will continue in effect in the form in which it existed immediately prior to that date, and any Awards made under the Plan that were contingent upon approval of the amendment and restatement of the Plan by the Company’s stockholders shall be void and of no effect.
(b) Duration of the Plan. The Plan shall remain in effect until all Shares subject to it shall be distributed, all Awards have expired or terminated, the Plan is terminated pursuant to Section 15(c), or the tenth anniversary of the original effective date of the Plan, whichever occurs first (the “Termination Date”). Any Award made before the Termination Date may extend beyond the Termination Date and will continue to be subject to the terms of the Plan and the applicable Agreement, and the authority of the Committee provided for hereunder with respect to the Plan and any Awards, and the authority of the Board of Directors of the Company to amend the Plan, shall extend beyond the Termination Date.
(c) Amendment and Termination of the Plan. The Board may at any time terminate, suspend or amend the Plan. The Company shall submit any amendment of the Plan to its stockholders for approval only to the extent required by applicable laws or regulations or the rules of any securities exchange on
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which the Shares may then be listed. No termination, suspension, or amendment of the Plan may materially impair the rights of any Participant under a previously granted Award without the Participant’s consent, unless such action is necessary to comply with applicable law or stock exchange rules.
(d) Amendment of Awards. Subject to Sections 3(b)(2) and 15(e), the Committee may unilaterally amend the terms of any Agreement previously granted, except that no such amendment may materially impair the rights of any Participant under the applicable Award without the Participant’s consent, unless such amendment is necessary to comply with applicable law, stock exchange rules or any compensation recovery policy as provided in Section 18(i)(2).
(e) No Option or Stock Appreciation Right Repricing. Except as provided in Section 12(a), no Option or SAR Award granted under the Plan may be (i) amended to decrease the exercise price thereof, (ii) canceled in conjunction with the grant of any new Option or SAR Award with a lower exercise price, (iii) canceled in exchange for cash, other property or the grant of any Full Value Award at a time when the exercise price of the Option or SAR Award is greater than the current Fair market Value of a Share, or (iv) otherwise subject to any action that would be treated under accounting rules as a “repricing” of such Option or SAR Award, unless such action is approved by the Company’s stockholders.
16. Substitute Awards. The Committee may also grant Awards under the Plan in substitution for, or in connection with the assumption of, existing awards granted or issued by another corporation and assumed or otherwise agreed to be provided for by the Company pursuant to or by reason of a transaction involving a merger, consolidation, acquisition of property or stock, separation, reorganization or liquidation to which the Company or an Affiliate is a party. The terms and conditions of the Substitute Awards may vary from the terms and conditions set forth in the Plan to the extent that the Board at the time of the grant may deem appropriate to conform, in whole or in part, to the provisions of the awards in substitution for which they are granted.
17. Performance-Based Compensation.
(a) Designation of Awards. If the Committee determines at the time a Full Value Award is granted to a Participant that such Participant is, or may likely be, a “covered employee” for purposes of Code Section 162(m) as of the end of the tax year in which the Company would ordinarily claim a tax deduction in connection with such Award, then the Committee may provide that this Section 17 will be applicable to such Award, which shall be considered Performance-Based Compensation.
(b) Compliance with Code Section 162(m). If an Award is subject to this Section 17, then the lapsing of restrictions thereon and the distribution of cash, Shares or other property pursuant thereto, as applicable, shall be subject to the achievement over the applicable performance period of one or more performance goals based on one or more of the performance measures specified in Section 17(c). The Committee will select the applicable performance measure(s) and specify the performance goal(s) based on those performance measures for any performance period, specify in terms of an objective formula or standard the method for calculating the amount payable to a Participant if the performance goal(s) are satisfied, and certify the degree to which applicable performance goals have been satisfied and any amount that vests and is payable in connection with an Award subject to this Section 17, all within the time periods prescribed by and consistent with the other requirements of Code Section 162(m). In specifying the performance goals applicable to any performance period, the Committee may provide that one or more objectively determinable adjustments shall be made to the performance measures on which the performance goals are based, which may include adjustments that would cause such measures to be considered “non-GAAP financial measures” within the meaning of Rule 101 under Regulation G promulgated by the Securities and Exchange Commission, including adjustments for events that are unusual in nature or infrequently occurring, such as a Change in Control, acquisitions, divestitures, restructuring activities or asset write-downs, or for changes in applicable tax laws or accounting principles. The Committee may also adjust performance measures for a performance period to the extent permitted by Code Section 162(m) in connection with an event described in Section 12(a) to prevent the dilution or enlargement of a Participant’s rights with respect to Performance-Based Compensation. The Committee may adjust downward, but not upward, any amount determined to be
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otherwise payable in connection with such an Award. The Committee may also provide, in an Agreement or otherwise, that the achievement of specified performance goals in connection with an Award subject to this Section 17 may be waived upon the death or Disability of the Participant or under any other circumstance with respect to which the existence of such possible waiver will not cause the Award to fail to qualify as “performance-based compensation” under Code Section 162(m).
(c) Performance Measures. For purposes of any Full Value Award considered Performance-Based Compensation subject to this Section 17, the performance measures to be utilized shall be limited to one or a combination of two or more of the following: sales values; volume; revenue; income from operations; net sales; net earnings; earnings before one or more of interest expense, interest income, taxes, depreciation, amortization or incentive compensation expense; profitability as measured by return ratios (including, but not limited to, return on assets, return on equity, return on costs, return on invested or average capital employed and return on net sales) or by the degree to which any of the foregoing earnings measures exceed a percentage of revenue or net sales; cash flow; market share; margins (including, but not limited to, one or more of gross, operating and net earnings margins); stock price; economic value; cumulative total return to shareholders; asset quality; non-performing assets; operating assets; improvement in or attainment of expense levels or cost savings; and improvement in or attainment of working capital levels.1 Any performance goal based on one or more of the foregoing performance measures may be expressed in absolute amounts, on a per share basis (basic or diluted), as a growth rate or change from preceding periods, or as a comparison to the performance of specified companies or other external measures, and may relate to one or any combination of corporate, group, unit, division, Affiliate or individual performance.
18. Other Provisions.
(a) Unfunded Plan. The Plan shall be unfunded and the Company shall not be required to segregate any assets that may at any time be represented by Awards under the Plan. Neither the Company, its Affiliates, the Committee, nor the Board shall be deemed to be a trustee of any amounts to be paid under the Plan nor shall anything contained in the Plan or any action taken pursuant to its provisions create or be construed to create a fiduciary relationship between the Company and/or its Affiliates, and a Participant. To the extent any person has or acquires a right to receive a payment in connection with an Award under the Plan, this right shall be no greater than the right of an unsecured general creditor of the Company.
(b) Limits of Liability. Except as may be required by law, neither the Company nor any member of the Board or of the Committee, nor any other person participating (including participation pursuant to a delegation of authority under Section 3(c) of the Plan) in any determination of any question under the Plan, or in the interpretation, administration or application of the Plan, shall have any liability to any party for any action taken, or not taken, in good faith under the Plan.
(c) Compliance with Applicable Legal Requirements. No Shares distributable pursuant to the Plan shall be issued and delivered unless the issuance of the Shares complies with all applicable legal requirements, including compliance with the provisions of applicable state and federal securities laws, and the requirements of any securities exchanges on which the Company’s Shares may, at the time, be listed. During any period in which the offering and issuance of Shares under the Plan is not registered under federal or state securities laws, Participants shall acknowledge that they are acquiring Shares under the Plan for investment purposes and not for resale, and that Shares may not be transferred except pursuant to an effective registration statement under, or an exemption from the registration requirements of, such securities laws. Stock certificates evidencing Shares issued under the Plan that are subject to such securities law restrictions shall bear an appropriate restrictive legend.
(d) Other Benefit and Compensation Programs. Payments and other benefits received by a Participant under an Award made pursuant to the Plan shall not be deemed a part of a Participant’s regular, recurring compensation for purposes of the termination, indemnity or severance pay laws of any country or state and shall not be included in, nor have any effect on, the determination of benefits under
1 List of performance measures should be reviewed to confirm its adequacy.
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any other employee benefit plan, contract or similar arrangement provided by the Company or an Affiliate unless expressly so provided by such other plan, contract or arrangement, or unless the Committee expressly determines that an Award or portion of an Award should be included to accurately reflect competitive compensation practices or to recognize that an Award has been made in lieu of a portion of competitive cash compensation.
(e) Governing Law. To the extent that federal laws do not otherwise control, the Plan and all determinations made and actions taken pursuant to the Plan shall be governed by the laws of the State of Delaware without regard to its conflicts-of-law principles and shall be construed accordingly.
(f) Severability. If any provision of the Plan shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not been included.
(g) Code Section 409A. It is intended that (i) all Awards of Options, SARs and Restricted Stock under the Plan will not provide for the deferral of compensation within the meaning of Code Section 409A and thereby be exempt from Code Section 409A, and (ii) all other Awards under the Plan will either not provide for the deferral of compensation within the meaning of Code Section 409A, or will comply with the requirements of Code Section 409A, and Awards shall be structured and the Plan administered and interpreted in accordance with this intent. The Plan and any Agreement may be unilaterally amended by the Company in any manner deemed necessary or advisable by the Committee or Board in order to maintain such exemption from or compliance with Code Section 409A, and any such amendment shall conclusively be presumed to be necessary to comply with applicable law. Notwithstanding anything to the contrary in the Plan or any Agreement, with respect to any Award that constitutes a deferral of compensation subject to Code Section 409A:
(1) If any amount is payable under such Award upon a termination of Service, a termination of Service will be deemed to have occurred only at such time as the Participant has experienced a “separation from service” as such term is defined for purposes of Code Section 409A;
(2) If any amount shall be payable with respect to any such Award as a result of a Participant’s “separation from service” at such time as the Participant is a “specified employee” within the meaning of Code Section 409A, then no payment shall be made, except as permitted under Code Section 409A, prior to the first business day after the earlier of (i) the date that is six months after the Participant’s separation from service or (ii) the Participant’s death. Unless the Committee has adopted a specified employee identification policy as contemplated by Code Section 409A, specified employees will be identified in accordance with the default provisions specified under Code Section 409A.
None of the Company, the Board, the Committee nor any other person involved with the administration of this Plan shall in any way be responsible for ensuring the exemption of any Award from, or compliance by any Award with, the requirements of Code Section 409A. By accepting an Award under this Plan, each Participant acknowledges that the Company has no duty or obligation to design or administer the Plan or Awards granted thereunder in a manner that minimizes a Participant’s tax liabilities, including the avoidance of any additional tax liabilities under Code Section 409A.
(h) Rule 16b-3. It is intended that the Plan and all Awards granted pursuant to it shall be administered by the Committee so as to permit the Plan and Awards to comply with Exchange Act Rule 16b-3. If any provision of the Plan or of any Award would otherwise frustrate or conflict with the intent expressed in this Section 18(h), that provision to the extent possible shall be interpreted and deemed amended in the manner determined by the Committee so as to avoid the conflict. To the extent of any remaining irreconcilable conflict with this intent, the provision shall be deemed void as applied to Participants subject to Section 16 of the Exchange Act to the extent permitted by law and in the manner deemed advisable by the Committee.
(i) Forfeiture and Compensation Recovery.
(1) The Committee may specify in an Agreement that the Participant’s rights, payments, and benefits with respect to an Award will be subject to reduction, cancellation, forfeiture or recovery by
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the Company upon the occurrence of certain specified events, in addition to any otherwise applicable vesting or performance conditions of an Award. Such events may include termination of Service for Cause; violation of any material Company or Affiliate policy; breach of noncompetition, non-solicitation or confidentiality provisions that apply to the Participant; a determination that the payment of the Award was based on an incorrect determination that financial or other criteria were met or other conduct by the Participant that is detrimental to the business or reputation of the Company or its Affiliates.
(2) Awards and any compensation associated therewith may be made subject to forfeiture, recovery by the Company or other action pursuant to any compensation recovery policy adopted by the Board or the Committee at any time, including in response to the requirements of Section 10D of the Exchange Act and any implementing rules and regulations thereunder, or as otherwise required by law. Any Agreement may be unilaterally amended by the Committee to comply with any such compensation recovery policy.
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