Entitled to Vote | | Holders of record of shares of our common stock, $0.01 par value (“Common Stock”), and the holder of the share of special voting preferred stock, par value $0.01 per share (the “Special Voting Share” and together with the Common Stock, the “Voting Stock”), at the close of business on the Record Date, will be entitled to notice of and to vote at the Annual Meeting. Each share of Common Stock is entitled to one vote on any matter presented to stockholders at the Annual Meeting. In addition, the holder of the Special Voting Share is entitled to vote on all matters on which a holder of our Common Stock is entitled to vote on and is entitled to cast a number of votes equal to the number of shares of Common Stock issuable upon exchange of the exchangeable shares of Ceridian AcquisitionCo ULC (the “Exchangeable Shares”) then outstanding. As of the Record Date, the Exchangeable Shares outstanding were exchangeable for 2,352,923 shares of our Common Stock. | | | Record Date | | March 4, 2019 | | | Quorum | | A majority of the shares of all issued and outstanding stock entitled to vote on the Record Date must be present at the Annual Meeting or represented by proxy to constitute a quorum. The quorum includes the number of shares of Common Stock equal to the number of shares of Common Stock issuable upon the exchange of the Exchangeable Shares.exchangeable shares of Ceridian AcquisitionCo ULC (the “Exchangeable Shares”) then outstanding. | | | Shares Outstanding | | As of March 4, 2019, 138,181,331the Record Date, 142,667,267 shares of Common Stock were outstanding and the Special Voting Share represents an additional 2,352,9232,171,157 shares of Common Stock issuable upon the exchange of the Exchangeable Shares, for a total of 140,534,254144,838,424 votes represented by the outstanding shares of Voting Stock. |
| | | | | VotingProxy Materials | | On or about March 19, 2020, we mailed or made available to our stockholders the proxy materials, including our Proxy Statement, the 2019 Annual Report, and form of proxy or the Notice of Internet Availability. | How to Vote | | There are four ways a stockholder of record can vote: (1) By internet at www.proxypush.com/CDAY 24 hours a day, seven days a week (have your proxy card in hand when you visit the website); (2) By toll-free telephone at855-668-4180 (have your proxy card in hand when you call); (3) By completing and mailing your proxy card; or (4) By written ballot at the Annual Meeting. In order to be counted, proxies submitted by telephone, internet or U.S. mail must be received before the start of the Annual Meeting. If you hold your shares through a bank, broker or broker,other nominee, please follow the bank’s, broker’s or broker’sother nominee’s instructions. |
| | | | |  | | 1 | | 2020 PROXY STATEMENT |
| | | | | If you hold Exchangeable Shares, you are entitled to direct, via one of the voting methods described above, the trustee who holds the Special Voting Share (the “Trustee”) to cast the number of votes equal to the number of shares of Common Stock issuable upon the exchange of the Exchangeable Shares you held on the Record Date. The Trustee will vote pursuant to your voting instructions, which must be received prior to 5:00pm (Central Daylight Time) on April 23, 2020. Holders of Exchangeable Shares will receive a separate notice containing further details regarding voting instructions. | Admission | | Admission to the Annual Meeting is restricted to stockholders as of the close of business on the Record Date, valid proxy holders of such stockholders, and/or their designated representatives. If you plan to attend the Annual Meeting in person, you should be prepared to present photo identification, such as a valid driver’s license. If you are a stockholder of record, your ownership as of the Record Date will be verified through the records held by the Company’s transfer agent. If you are not a stockholder of record but hold shares through a bank, broker or other nominee, you must provide proof of beneficial ownership as of the Record Date, such as an account statement or similar evidence of ownership. Please allow ample time for the admittance process. | Quorum | | A majority of the shares of all issued and outstanding stock entitled to vote on the Record Date must be present at the Annual Meeting or represented by proxy to constitute a quorum. For purposes of determining whether a quorum is present, “all issued and outstanding stock entitled to vote” will include the number of shares of Common Stock issuable upon the exchange of the Exchangeable Shares. | Revoking Your Proxy | | Stockholders of record may revoke their proxies by attending the Annual Meeting and voting in person, by filingsubmitting an instrument in writing revoking the proxy, by filingsubmitting another duly executed proxy bearing a later date withto our Corporate Secretary before the vote is counted, or by voting again using the telephone or internet before the start of the Annual Meeting (your latest telephone or internet proxy is the one that will be counted). If you hold shares through a bank, broker or broker,other nominee, you may revoke any prior voting instructions by contacting that firm. | | | Votes Required to Adopt Adopt Proposals | | Each share of our Common Stock outstanding on the Record Date is entitled to one vote on any proposal presented to stockholders at the Annual Meeting, and the holder of the Special Voting Share on the Record Date is entitled to vote on all matters that a holder of our Common Stock is entitled to vote on and is entitled to cast a number of votes equal to the number of shares of Common Stock issuable upon the exchange of the Exchangeable Shares then outstanding. At the closeAs of business on the Record Date, there were 138,181,331142,667,267 shares of Common Stock issued andwere outstanding and entitled to vote at the Annual Meeting and the Special Voting Share represents an additional 2,352,9232,171,157 shares issued andof Common Stock issuable upon exchange of the Exchangeable Shares, for a total of 144,838,424 votes represented by the outstanding and entitled to vote at the Annual Meeting.shares of Voting Stock. ForProposal 1, regardingOne, the election of directors requires the approval of a plurality of votes cast. This means that the threetwo nominees receiving the most “FOR”“FOR” votes from the holders of sharesthe votes represented by the Voting Stock present at the Annual Meeting (either in person or represented by proxyproxy) and entitled to votevoting on the election of directorsmatter will be elected. Only votes “FOR”“FOR” will affect the outcome. There is no cumulative voting for the election of directors.If your broker holds your shares, your broker is not entitled to vote your shares on this proposal without your instruction. Votes “Withheld” and brokernon-votes will have no effect on the outcome of the election of directors. To be approved, eachForProposal Two, regarding the frequency of Proposal 2, approvalfuture advisory votes to approve the compensation of our NEOs, the frequency receiving the greatest number of votes – one year, two years, or three years – from the holders of the Ceridian HCM Holding Inc. Global Employeevotes represented by the Voting Stock Purchase Plan,present at the Annual Meeting (either in person or by proxy) and voting on the matter will be the frequency approved by our stockholders. Votes may be cast in favor of “One Year”, “Two Years” or “Three Years” or you may “Abstain.”If your broker holds your shares, your broker is not entitled to vote your shares on this proposal without your instruction.
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| | | | | | | 2 | | 2020 PROXY STATEMENT |
| | | | | ForProposal 3,Three, regarding the advisory vote on the compensation of our NEOs, the proposal must receive “FOR” votes from the holders of a majority of the votes represented by the Voting Stock present at the Annual Meeting (in person or by proxy) and voting on the matter. Votes may be cast in favor of or against the proposal or you may “Abstain.”If your broker holds your shares, your broker is not entitled to vote your shares on this proposal without your instruction. As the vote on this proposal is advisory in nature, it will not affect any compensation already paid or awarded to any NEO and will not be binding on or overrule any decisions by the Compensation Committee or the Board. However, because we value our stockholders’ view, the Compensation Committee and Board will carefully consider the results of this advisory vote when formulating future executive compensation philosophy, policies and practices. ForProposal Four, ratification of the appointment of KPMG LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2019,2020, the proposal must receive “FOR”“FOR” votes from the holders of at least a majority of the votes represented by the Voting Stock representedpresent at the Annual Meeting (in person or represented by proxy) and voting on the matter. Votes may be cast in favor of or against the proposal or you may “Abstain.”Your broker or other nominee will have the discretion to vote your shares on this proposal without your instruction. |
| | | BrokerNon-Votes | | If you “ABSTAIN” from voting, it will have no effect with respect to Proposals 2 and 3. Brokernon-votes will have no effect on Proposal 2 because brokers do not have discretionary authority to vote on the approval of the Global Employee Stock Purchase Plan. Because brokers have discretionary authority to vote on Proposal 3, we do not expect any brokernon-votes in connection with Proposal 3.
| | | BrokerNon-Votes | | A brokernon-vote occurs when a nominee, such as a broker or bank, holding shares for a beneficial owner does not vote on a particular proposal because the nominee does not have discretionary authority to vote with respect to that proposal and has not received instructions with respect to that proposal from the beneficial owner. In the event thatIf a broker, bank, custodian, nominee or other record holder of our Common Stock indicates on a proxy that it does not have discretionary authority to vote certain shares on a particular proposal, then the votes represented by those shares will be treated as brokernon-votes with respect to that proposal. In this regard, the election of directors (Proposal 1)One), Say on Frequency (Proposal Two), and the approval of the Ceridian HCM Holding Inc. Global Employee Stock Purchase PlanSay on Pay (Proposal 2)Three) are matters considerednon-routine under applicable rules. A broker or other nominee cannot vote without instructions onnon-routine matters, and therefore we expect brokernon-votes on Proposal 1One, Proposal Two and Proposal 2.Three. Proposal 3Four is a routine matter, so we do not expect any brokernon-votes on this proposal. Thus, ifIf you do not instruct your broker how to vote with respect to either Proposal 1 andOne, Proposal 2,Two, or Proposal Three, your broker may not vote with respect to that proposal.those proposals. Accordingly, if you own shares through a nominee, such as a broker or bank, please be sure to instruct your nominee how to vote to ensure that your vote is counted on all of the proposals.
| | | Voting Instructions | | If you complete and submit your proxy voting instructions, the persons named as proxies will follow your instructions. If you submit proxy voting instructions but do not indicate how your shares should be voted on each item, the persons named as proxies will vote “FOR”“FOR” the election of directors “FOR”(Proposal One), “ONE YEAR” on the approval ofSay on Frequency vote (Proposal Two), “FOR” the Ceridian HCM Holding Inc. Global Employee Stock Purchase PlanSay on Pay vote (Proposal Three), and “FOR”“FOR” the ratification of the appointment of KPMG LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2019.2020 (Proposal Four). The persons named as proxies will vote on any other matters properly presented at the Annual Meeting in accordance with their best judgment, although wejudgment. We have not received timely notice of any other matters that may be properly presented for voting at the Annual Meeting. | | | Voting Results | | We will announce preliminary voting results at the Annual Meeting. We will report final voting results by filing a Current Report onForm 8-K with the Securities Exchange Commission (“SEC”) within four business days after the Annual Meeting. If final results are not available at that time, we will provide preliminary voting results in theForm 8-K and will provide the final results in an amendment to theForm 8-K as soon as they become available. |
| | | | | | | 3 | | 2020 PROXY STATEMENT |
| | | | | Additional Solicitation/Costs | | We are paying for the distribution of the proxy materials and solicitation of the proxies. As part of this process, we reimburse brokerage houses and other custodians, nominees and fiduciaries for their reasonableout-of-pocket expenses for forwarding proxy and solicitation materials to our stockholders. Proxy solicitation expenses that we will pay include those for preparation, mailing, returning and tabulating the proxies. Our directors, officers and employees may also solicit proxies on our behalf in person, by telephone, email or facsimile, but they do not receive additional compensation for providing those services. | | | Emerging Growth CompanyHouseholding | | As a company with less than $1.07 billion in gross revenue during our last fiscal year, we qualify as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). An emerging growth company may take advantage of specified reduced reporting and other regulatory requirements for up to five years that are otherwise applicable generally to public companies. These provisions include, among other matters, an exemption from the requirement to seeknon-binding advisory votes on executive compensation and golden parachute arrangements, and reduced disclosure about executive compensation arrangements.
We will remain an emerging growth company until December 31, 2023 (the last day of the fiscal year following the fifth anniversary of the completion of our initial public offering) unless, prior to that time, we have more than $1.07 billion in annual gross revenue, have a market value for our Common Stock held bynon-affiliates of more than $700.0 million as of the last day of our second fiscal quarter of the fiscal year and a determination is made that we are deemed to be a “large accelerated filer,” as defined inRule 12b-2 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or issue more than $1.0 billion ofnon-convertible debt over a three-year period, whether or not issued in a registered offering. We have availed ourselves of the reduced reporting obligations with respect to executive compensation disclosure in this Proxy Statement and expect to continue to avail ourselves of the reduced reporting obligations available to emerging growth companies in future filings. As a result of our decision to avail ourselves of certain provisions of the JOBS Act, the information that we provide may be different than what you may receive from other public companies in which you hold an equity interest.
| | | Householding | | The Securities and Exchange Commission (“SEC”)SEC has adopted rules that permit companies and intermediaries such as brokers to satisfy delivery requirements for proxy statements with respect to two or more stockholders sharing the same address by delivering a single proxy statement addressed to those stockholders. This process, which is commonly referred to as “householding,” can provide extra convenience for stockholders and cost savings for companies. The CompanyCeridian and some brokers household proxy materials, delivering a single proxy statement to multiple stockholders sharing an address |
| | | | | unless contrary instructions have been received from the affected stockholders. Once you have received notice from your broker or the CompanyCeridian that they or we will be householding materials to your address, householding will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in householding and would prefer to receive a separate proxy statement, or if you are receiving multiple copies of the proxy statement and wish to receive only one, please notify your broker if your shares are held in a brokerage account or the Company if you hold Common Stock directly. Any such requests to the Companyus in writing should be addressed to: Ceridian HCM Holding Inc., c/o Corporate Secretary, 3311 East Old Shakopee Road, Minneapolis, Minnesota.Minnesota 55425. |
| | | | | | | 4 | | 2020 PROXY STATEMENT |
BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
Board Membership
Our business and affairs are managed under the direction of our Board. Our third amended and restated certificate of incorporation provides that our Board will consist of between one and 14 directors. Pursuant to that certain voting agreement (the “Voting Agreement”) by and among the Company, and certain affiliates of Thomas H. Lee Partners, L.P. (“THL”) and Cannae Holdings, Inc. (“Cannae”), which was spun off from Fidelity National Financial, Inc. (“FNF”), the authorized number of directors has been established at nine directors. During the term of the Voting Agreement, THL and Cannae have certain governance rights, including the right to determine the total number of directors. THL and Cannae together are referred to as the “Sponsors.” Our Board currently has one vacancy in Class II and consists of eight members: David D. Ossip, Brent B. Bickett, Ronald F. Clarke, William P. Foley, II, Thomas M. Hagerty, Ganesh B. Rao, Andrea S. Rosen and Gerald C. Throop. We are maintaining one vacancy because we anticipate electing an independent director to our audit committee by April 30, 2019.
Pursuant to the Voting Agreement, for so long as THL and Cannae collectively hold 50% or more of the then outstanding voting power, then THL and Cannae will have the power to designate a total of five directors to the Board. The allocation of the power to designate the five directors will be determined by reference to the outstanding voting power held by Cannae. If THL and Cannae collectively hold 50% or more of the then outstanding voting power, then:
for so long as Cannae holds at least 12.5% of the then outstanding voting power, THL and Cannae shall have the power to designate (by mutual agreement) five directors to the Board;
for so long as Cannae holds at least 7.5% but less than 12.5% of the then outstanding voting power, THL shall be entitled to designate in its own right four directors and Cannae shall be entitled to designate in its own right one director; and
if Cannae holds less than 7.5% of the then outstanding voting power, THL shall be entitled to designate in its own right all five directors and Cannae shall not be entitled to designate any directors.
As of March 4, 2019, THL and Cannae collectively hold over 50% of our outstanding voting power, with THL holding 43.7% and Cannae holding 23.3%. Thus, THL and Cannae have together designated Messrs. Bickett, Clarke, Foley, Hagerty and Rao to our Board.
Once THL and Cannae cease to collectively hold 50% or more of the then outstanding voting power, then each of THL and Cannae will be able to in their own right designate:
four directors, for so long as it holds at least 40% of the then outstanding voting power;
three directors, for so long as it holds at least 30% of the then outstanding voting power;
two directors, for so long as it holds at least 20% of the then outstanding voting power; and
one director, for so long as it holds at least 10% of the then outstanding voting power.
The Voting Agreement will terminate as to each Sponsor when the Sponsor is no longer entitled to designate a director to the Board, and will terminate upon the time when neither Sponsor is entitled to designate a director to the Board.
| PROPOSAL ONE Election of Directors |
Our third amended and restated certificate of incorporation provides that our Board is divided into three classes, with one class being elected at each annual meeting of stockholders. Each director serves a three-year term, with termination staggered according to class. Class I consists of three directors, Class II consists of two directors, and Class III consists of three directors. The Class I directors, whose terms will expire at the Annual Meeting, are Messrs. Bickett, Clarke, and Rao. The Class II directors, whose terms will expire at the 2020 Annual Meeting of Stockholders, are Messrs. FoleyMs. Farrington and Mr. Hagerty. The Board has nominated each of Ms. Farrington and Mr. Hagerty forre-election as Class IIIII directors whose terms will expire atof the 2021 Annual Meeting of Stockholders, are Messrs. Ossip and Throop and Ms. Rosen. Director Nominees and Continuing DirectorsBoard.
The following table sets forth summary information regarding each director nominee and continuing director as of March 4, 2019:the Record Date. Additional information regarding the six continuing directors is available in the Corporate Governance section, beginning on page 8 of the Proxy Statement. | | | | | | | | | | | | | | | | | | | | | | | | | Name/Age | | Class | | Principal
Occupation | | Company
Director
Since | | Independent | | Other
public
company
boards | | Committee Memberships | | | Audit | | Compensation | | Corporate
Governance
and
Nominating | Nominees: | | | | | | | | | | | | | | | | | Deborah A. Farrington Age: 69 | | II | | President, StarVest
Management, Inc. | | 2019 | | ✓ | | 2 | |   | | | |  | Thomas M. Hagerty Age: 57 | | II | | Managing Director,
Thomas H. Lee
Partners, L.P. | | 2013 | | | | 3 | | | |  | | | Continuing Directors: | | | | | | | | | | | | | | | | | Brent B. Bickett Age: 55 | | I | | President, Cannae
Holdings, Inc. | | 2013 | | ✓ | | 0 | | | | | | | Ronald F. Clarke Age: 64 | | I | | Chief Executive
Officer, FleetCor
Technologies, Inc. | | 2018 | | ✓ | | 1 | | | | | | | Ganesh B. Rao Age: 43 | | I | | Managing Director,
Thomas H. Lee
Partners, L.P. | | 2013 | | | | 2 | | | | | | | David D. Ossip Age: 53 | | III | | Chief Executive
Officer, Ceridian | | 2015 | | | | 0 | | | | | | | Andrea S. Rosen Age: 65 | | III | | Independent
Director | | 2018 | | ✓ | | 3 | | | | | | | Gerald C. Throop Age: 62 | | III | | Independent
Director | | 2018 | | ✓ | | 0 | |  | | | | |
| Chair |
| Member |
| Audit Committee Financial Expert |
Board Selection Criteria The Corporate Governance and Nominating Committee has recommended, and the Board has nominated, each Class II nominee for election to the Board after considering the following criteria: Personal qualities and characteristics, accomplishments and reputation in the business community; Current knowledge and contacts in the communities in which Ceridian does business and in Ceridian’s industry or other industries relevant to Ceridian’s business; Ability and willingness to commit adequate time to Board and committee matters; The fit of the individual’s skills and personality with those of other directors and potential directors in building a Board that is effective, collegial and responsive to Ceridian’s needs; and Diversity of viewpoints, background, experience, and other demographics. In considering the diversity of a potential nominee, the Board will consider all aspects of diversity in order to enable the Board to perform its duties and responsibilities effectively. | | | | | | | | | | | | | | | | | | | | | Name
| | Class | | | Age5 | | | Audit Committee | | | Compensation
Committee | | | Corporate Governance and
Nominating Committee | | 2019 Director Nominees:
| | | | | | | | | | | | | | | | | | | | | | | | | | | Brent B. Bickett
| | | I | | | | 54 | | | | | | | | | | | |  | | | | | | | | Ronald F. Clarke
| | | I | | | | 63 | | | | | | | |  | | | | | | | | | | | | Ganesh B. Rao
| | | I | | | | 42 | | | | | | | | | | | | | | Continuing Directors:
| | | | | | | | | | | | | | | | | | | | | | | | | | | William P. Foley, II
| | | II | | | | 74 | | | | | | | | | | | | | | | | | | | | Thomas M. Hagerty
| | | II | | | | 56 | | | | | | | | | | | | | | | | | | | | Andrea S. Rosen
| | | III | | | | 64 | | | |  | | | | | | | | | | | | | | | | David D. Ossip
| | | III | | | | 52 | | | | | | | | | | | | | | | | | | | | Gerald C. Throop
| | | III | | | | 61 | | | | | | | | | | | | | 2020 PROXY STATEMENT |
|
|
| Member
|
| Audit Committee Financial Expert
|
The biographies of each of the nominees and continuing directors, below, contain information regarding each such person’s service as a director, business experience, public company director positions held currently or at any time during the last five years and the experience, qualifications, attributes or skills that caused our Board to determine that the person should serve as a director of the Company. In addition to the information presented below regarding each nominee’s and continuing director’s specific experience, qualifications, attributes and skills that led the Board to the conclusion that such person should serve as a director, we also believe that each of our directors has a reputation for integrity, honesty and adherence to high ethical standards. Each of our directors has demonstrated business acumen and an ability to exercise sound judgment, as well as a commitment of service to us and our Board. Finally, we value our directors’ experience in relevant areas of business management and on other boards of directors and board committees.
Stockholder Recommendations The Board will consider all submitted stockholder recommendations for Board nominees in making its nominations. Stockholders may submit recommendations for director candidates to the Corporate Governance and Nominating Committee by sending the individual’s name and qualifications to Ceridian HCM Holding Inc., c/o Corporate Secretary, 3311 East Old Shakopee Road, Minneapolis, Minnesota 55425. The Corporate Secretary will forward all stockholder recommendations to the Corporate Governance and Nominating Committee. The Corporate Governance and Nominating Committee will evaluate any candidates recommended by stockholders against the same criteria and pursuant to the same policies and procedures applicable to the evaluation of candidates proposed by directors or management. Voting Agreement In its nomination process, the Board has also considered the requirements of the voting agreement (the “Voting Agreement”) by and among Ceridian and Cannae. The Voting Agreement has terminated with respect to THL as it is no longer entitled to designate a director to the Board. Our third amended and restated certificate of incorporation provides that our Board will consist of between one and 14 directors. Pursuant to the Voting Agreement, the authorized number of directors is currently set at nine directors, and Cannae can set the number of directors. During the term of the Voting Agreement, Cannae has certain governance rights, including the right to determine the total number of directors. Our Board currently has one vacancy in Class II and consists of eight members: Brent B. Bickett, Ronald F. Clarke, Deborah A. Farrington, Thomas M. Hagerty, David D. Ossip, Ganesh B. Rao, Andrea S. Rosen, and Gerald C. Throop. As of the Record Date, Cannae holds 13.7% of the outstanding voting power of Ceridian. As a result, and pursuant to the terms of the Voting Agreement, Cannae can designate one director. Cannae has designated Mr. Bickett to our Board. The Voting Agreement will terminate in its entirety when Cannae is no longer entitled to designate a director to the Board. Director Nominees Our Board has nominated Deborah A. Farrington and Thomas M. Hagerty for election as Class II directors to hold office until the 2023 Annual Meeting or until their successors are duly elected and qualified, subject to their earlier death, resignation or removal. Each of the nominees is a current member of our Board and has consented to serve if elected. Unless you direct otherwise through your proxy voting instructions, the persons named as proxies will vote all proxies received “FOR” the election of each of the nominees. If any nominee is unable or unwilling to serve at the time of the Annual Meeting, the persons named as proxies may vote for a substitute nominee chosen by the present Board. In the alternative, the proxies may vote only for the remaining nominees, leaving a vacancy on the Board. The Board may fill such vacancy at a later date or reduce the size of the Board. We have no reason to believe that any of the nominees will be unwilling or unable to serve if elected as a director. | | | | | | | 6 | | 2020 PROXY STATEMENT |
Information Concerning Nominees for Election for a Three-Year Term Ending at the 20222023 Annual Meeting Brent B. Bickett. Mr. Bickett has servedThe biographies of each of the nominees contain information regarding each such person’s service as a director, since November 2007. Mr. Bickett isbusiness experience, public company director positions held currently or at any time during the president of Cannae, a position he has held since April 2017. Mr. Bickett also holdslast five years and the position of executive vice president of corporate strategy at FNF, which he joined in January 1999. Mr. Bickett currently servesexperience, qualifications, attributes or skills that caused our Board to determine that the person should serve as a director of American Blue Ribbon Holdings, LLC, and Coltthe Company.
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Deborah A. Farrington Age 69 Director since 2019 Independent Committees • Audit • Corporate Governance and Nominating (Chair) | | Background | | Ms. Farrington has served as a director since April 2019. Ms. Farrington is a founder and President of StarVest Management, Inc. and since 1999 has been a general partner of StarVest Partners, L.P., a venture capital fund. Ms. Farrington currently serves on the boards of directors of NCR Corporation, a New York Stock Exchange listed company (2017 to present), and Collectors Universe, Inc., a NASDAQ listed company (2003 to present). On the board of directors of NCR, Ms. Farrington has served as a member of the audit committee. On the board of directors of Collectors Universe, Mr. Farrington has served as a member of the audit and governance committees and is the chair of the compensation committee. Ms. Farrington is also a member of the boards of directors of certain StarVest portfolio companies. Ms. Farrington was lead director, chair of the compensation and governance committees, and member of the audit and transaction committees as a member of the board of directors of NetSuite, Inc., a New York Stock Exchange listed company. Earlier in her career, Ms. Farrington was an investment banker and executive with Merrill Lynch & Co. | | Qualifications | | We believe that Ms. Farrington’s executive leadership and extensive experience on boards of directors, as well as her experience in software and financial services, makes her well-qualified to serve as a director. | | Other Current Public Company Boards | | | Collectors Universe, Inc.
NCR Corporation | | | 
Thomas M. Hagerty Age 57 Director since 2013 Non-Independent Committees • Compensation | | Background | | Mr. Hagerty has served as a director of Ceridian HCM Holding Inc. since September 2013, and other Ceridian entities between April 2008 and April 2018. Mr. Hagerty is a managing director of THL, which he joined in 1988. Mr. Hagerty currently serves on the boards of directors of Black Knight, Inc., a New York Stock Exchange listed company (2014 to present), Fidelity National Financial, Inc., a New York Stock Exchange listed company (2005 to present), FleetCor Technologies, Inc., a New York Stock Exchange listed company (2014 to present), ServiceLink Holdings, LLC., a private company, and The Dun and Bradstreet Corporation, a private company. Mr. Hagerty previously served as a director for MoneyGram International, Inc., First Bancorp and Fidelity National Information Services, Inc. | | Qualifications | | We believe that Mr. Hagerty’s managerial and strategic expertise working with large growth-oriented companies as a managing director of THL and his experience in enhancing value at such companies, along with his expertise in corporate finance, make him well-qualified to serve as a director. | | Other Current Public Company Boards | | Black Knight, Inc. Fidelity National Financial, Inc. FleetCor Technologies, Inc. | | |
Recommendation of the Board | | | | THE BOARD RECOMMENDS THAT YOU VOTE “FOR” THE ELECTION OF EACH OF THE NOMINEES. | | 
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| | | | | | | 7 | | 2020 PROXY STATEMENT |
In addition to the director nominees described above, six directors will continue to serve on the Board following the Annual Meeting. The biographies of each a private company. Mr. Bickett previously servedof the incumbent directors is below, including information regarding each such person’s service as a director, for Digital Insurance, Inc., J. Alexander’s Holdings, Inc., Old Remco Holdings, L.L.C.,business experience, public company director positions held currently or at any time during the last five years and Remy International, Inc. We believethe experience, qualifications, attributes or skills that Mr. Bickett’s extensive investment, management, transaction, and corporate strategy expertise make him well qualifiedcaused our Board to serve as a director. Ronald F. Clarke. Mr. Clarke has served as a director since July 2018. Mr. Clarke has beendetermine that the chief executive officer of FleetCor Technologies since August 2000 and has served as chairman of its board of directors since March 2003. We believe that Mr. Clarke’s management and leadership experience make him well-qualified toperson should serve as a director.
Ganesh B. Rao. Mr. Rao has served as a director since November 2007. Mr. Rao is a managing director of THL, which he joined in 2000. Prior to joining THL, Mr. Rao worked at Morgan Stanley & Co. Incorporated in the mergers & acquisitions department. Mr. Rao is currently a director of Black Knight, Inc. and MoneyGram International, Inc. Mr. Rao also serves on the following private company boards: Prime Risk Partners Inc.;Ten-X Commercial; Auction.com, Inc.; ServiceLink Holdings, LLC; and Hightower Advisors, LLC. Mr. Rao formerly served as a director for Nielsen Holdings N.V. and LifeWorks Corporation. We believe that Mr. Rao’s managerial and strategic expertise working with large growth-oriented companies as a managing director of THL and his experience enhancing value at such companies make him well-qualified to serve as a director.
Information Concerning Directors Continuing in Office Until the 2020 Annual Meeting
Thomas M. Hagerty. Mr. Hagerty has served as a director since November 2007. Mr. Hagerty has also served as a director of FNF since 2005. In addition, Mr. Hagerty is a managing director of THL, which he joined in 1988. Mr. Hagerty also serves as a director of Black Knight, Inc., FleetCor Technologies Inc., and ServiceLink Holdings, LLC., a private company. Mr. Hagerty previously served as a director for MoneyGram International, Inc., First Bancorp and Fidelity National Information Services, Inc. We believe that Mr. Hagerty’s managerial and strategic expertise working with large growth-oriented companies as a managing director of THL, and his experience in enhancing valuethe Company.
Incumbent Class III Directors – Term Expiring at such companies, along with his expertise in corporate finance make him well-qualified to serve as a director. William P. Foley, II.Mr. Foley has served as a director since September 2013. Mr. Foley currently holds the position of executive chairman at Black Knight, Inc., and its predecessors, a position he has held since January 2014, the position of chairman of Cannae, a position he has held since May 2018, and the position of chairman of FNF, a position he has held since 1984. Mr. Foley served as executive chairman of Cannae from April 2017 until May 2018, and executive chairman of FNF from October 2006 until January 2016. Mr. Foley is the executive chairman of Dun & Bradstreet, theco-executive chairman of FGL Holdings, thenon-executive chairman of Foley Family Wine Holdings, Inc., a privately ownednon-operating holding company, and the executive chairman and CEO of Black Knight Sports and Entertainment LLC. In addition, Mr. Foley also serves as a director for Foley Family Charitable Foundation and Cummer Museum of Arts and Gardens, and he is the founder, trustee and director of The Folded Flag Foundation. Mr. Foley previously served as a director for Fidelity National Information Services, Inc., and Remy International, Inc. We believe that Mr. Foley’s depth and expertise in managing and, as a member of the board of directors, leading a variety of businesses across many industries make him well-qualified to serve as a director.
Information Concerning Directors Continuing in Office Until the 2021 Annual MeetingMeeting:
David D. Ossip. Mr. Ossip is our Chair of the Board and Chief Executive Officer, positions he has held since August 2015 and July 2013, respectively. Mr. Ossip joined us following our acquisition of Dayforce Corporation in 2012, where he held the position of chief executive officer. Mr. Ossip is currently a director for Ossip Consulting Inc., OSDAC Corp., and 100 Wingarden Properties Ltd., each a private company.
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David D. Ossip Age 53 Director since 2015 Non-Independent | | Background | | Mr. Ossip is our Chair of the Board and Chief Executive Officer, positions he has held since August 2015 and July 2013, respectively. Mr. Ossip joined us following our acquisition of Dayforce Corporation in 2012, where he held the position of chief executive officer. Mr. Ossip is currently a director for Ossip Consulting Inc., OSDAC Corp., and 100 Wingarden Properties Ltd., each a private company. | | Qualifications | | We believe that Mr. Ossip’s managerial and strategic expertise along with his deep knowledge of our industry make him well-qualified to serve as a director. | | Other Current Public Company Boards | | None | | | | | | | | | | | | | | | 
Andrea S. Rosen Age 65 Director since 2018 Independent Committees • Audit | | Background | | Ms. Rosen has served as a director since July 2018. In addition, Ms. Rosen currently serves on the boards of directors of Emera Inc., a Toronto Stock Exchange (“TSX”) listed company (2007 to present), Manulife Financial Corporation, a New York Stock Exchange and TSX listed company (2011 to present), and Element Fleet Management Corp., a TSX listed company (2019 to present). Ms. Rosen was vice chair of TD Bank Financial Group and president of TD Canada Trust from 2002 to 2005. Previously, she was executive vice president of TD Commercial Banking and vice chair of TD Securities. Further, she has served as a director of Alberta Investment Management Corporation (2008 to 2017), and Hiscox Ltd., a company listed on the London Stock Exchange (2006 to 2015). | | Qualifications | | Andrea S. Rosen. Ms. Rosen has served as a director since July 2018. In addition, Ms. Rosen has served as a director of Emera Inc. since 2007 and Manulife Financial Corporation since 2011. Ms. Rosen was vice chair of TD Bank Financial Group and president of TD Canada Trust from 2002 to 2005. Previously, she was executive vice president of TD Commercial Banking and vice chair of TD Securities. Further, she has served as a director of Alberta Investment Management Corporation from 2008 until 2017 and Hiscox Ltd., a company listed on the London Stock Exchange from 2006 until 2015. We believe that Ms. Rosen’s experience on boards of directors and her strategic experience in those roles make her well-qualified to serve as a director.
| | Other Current Public Company Boards | | Element Fleet Management Corp. Emera Inc. Manulife Financial Corporation | | |
| | | | | | | 8 | | 2020 PROXY STATEMENT |
Gerald C. Throop. Mr. Throop has served as a director since April 2018.
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Gerald C. Throop Age 62 Director since 2018 Independent Committees • Audit (Chair) • Corporate Governance and Nominating | | Background | | Mr. Throop has served as a director since April 2018 and lead independent director since November 2019. In addition, Mr. Throop currently serves as a director of Nasdaq Canada Inc., a wholly-owned subsidiary of The Nasdaq Stock Market Inc. Since 2011, Mr. Throop has worked independently as a private equity investor, director, and advisor to early stage companies. Prior to 2011, he spent 17 years in executive leadership positions in the securities and banking industry, including the position of executive vice president, managing director, and head of equities for both National Bank of Canada and Merrill Lynch Canada. Mr. Throop has served as either a member of the board of directors or the chief financial officer of several companies that were Toronto Stock Exchange listed at the time of his service, including Workbrain Corporation, Toronto Stock Exchange,Call-Net Enterprises/Sprint Canada Inc., and Tie Telecommunications Canada Limited. Mr. Throop is a Chartered Public Accountant. | | Qualifications | | We believe that Mr. Throop’s financial, managerial, and investment experience make him well-qualified to serve as a director. | | Other Current Public Company Boards | | None | | |
Incumbent Class I Directors – Term Expiring at the time of his service, including Workbrain Corporation, Toronto Stock Exchange,Call-Net2022 Annual Meeting: Enterprises/Sprint Canada Inc., and Tie Telecommunications Canada Limited. Mr. Throop is a Chartered Public Accountant. We believe that Mr. Throop’s financial, managerial, and investment experiences make him well-qualified to serve as a director. Code of Conduct
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Brent B. Bickett Age 55 Director since 2013 Independent Committees • Compensation (Chair) • Corporate Governance and Nominating | | Background | | Mr. Bickett has served as a director of Ceridian HCM Holding Inc. since December 2013, and other Ceridian entities between May 2007 and April 2018. Mr. Bickett is currently the president of Cannae Holdings, Inc., a New York Stock Exchange listed company, a position he has held since April 2017. Mr. Bickett previously held the position of executive vice president of corporate strategy at Fidelity National Financial, Inc., from January 1999 to November 2019. Mr. Bickett currently serves as a director of Colt Holdings, LLC and Triple Tree Holdings, LLC, each a private company. Mr. Bickett previously served as a director for Digital Insurance, Inc., J. Alexander’s Holdings, Inc., Old Remco Holdings, LLC, Remy International, Inc., and American Blue Ribbon Holdings, LLC. | | Qualifications | | We believe that Mr. Bickett’s extensive investment, management, transaction, and corporate strategy expertise make him well-qualified to serve as a director. | | Other Current Public Company Boards | | None | | | | | | | | | | | |
| | | | | | | 9 �� | | 2020 PROXY STATEMENT |
We have a Code of Conduct that applies to all of our employees, officers and directors. A copy of the Code of Conduct is available on our website located atwww.ceridian.com. Any amendments or waivers from our Code of Conduct granted to directors or executive officers will be disclosed on our website promptly following the date of such amendment or waiver.
Corporate Governance Guidelines
Our Board has adopted corporate governance guidelines in accordance with the corporate governance rules of the New York Stock Exchange (“NYSE”) and the Toronto Stock Exchange (“TSX”), which serve as a flexible framework within which our Board and its committees operate. These guidelines cover a number of areas, including Board composition, roles of the chair and lead independent director, director nominations and Board criteria, Board meetings and executive sessions, Board committees, management succession, Board compensation, expectations of directors, Board performance evaluations, and access to management and outside advisors. A copy of our corporate governance guidelines is posted on our website atwww.ceridian.com.
Indemnification of Directors and Officers
Our third amended and restated certificate of incorporation provides that we will indemnify our directors and officers to the fullest extent permitted by the Delaware General Corporation Law (“DGCL”).
We have entered into indemnification agreements with each of our directors. These indemnification agreements provide the directors with contractual rights to indemnification and expense advancement and reimbursement to the fullest extent permitted under the DGCL, subject to certain exceptions contained in those agreements.
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Ronald F. Clarke Age 64 Director since 2018 Independent Committees • Compensation | | Background Mr. Clarke has served as a director since July 2018. Mr. Clarke has been the chief executive officer of FleetCor Technologies, Inc., a New York Stock Exchange listed company, since August 2000 and has served as chairman of its board of directors since March 2003. From 1999 to 2000, Mr. Clarke served as president and chief operating officer of AHL Services, Inc., a staffing firm. From 1990 to 1998, Mr. Clarke served as chief marketing officer and later as a division president with Automatic Data Processing, Inc., a computer services company. From 1987 to 1990, Mr. Clarke was a principal with Booz Allen Hamilton, a global management consulting firm. Earlier in his career, Mr. Clarke was a marketing manager for General Electric Company, a diversified technology, media, and financial services corporation. | | Qualifications We believe that Mr. Clarke’s management and leadership experience make him well-qualified to serve as a director. | | Other Current Public Company Boards FleetCor Technologies, Inc. | | | | | | | | | | | | | 
Ganesh B. Rao Age 43 Director since 2013 Non-Independent | | Background | | Mr. Rao has served as a director of Ceridian HCM Holding Inc. since September 2013, and other Ceridian entities between May 2013 and April 2018. Mr. Rao is a managing director of THL, which he joined in 2000. Prior to joining THL, Mr. Rao worked at Morgan Stanley & Co. Incorporated in the mergers & acquisitions department. Mr. Rao currently serves on the boards of directors of Black Knight, Inc., a New York Stock Exchange listed company (2014 to present), and MoneyGram International, Inc., a NASDAQ listed company (2008 to present). Mr. Rao also serves on the following private company boards: The Dun and Bradstreet Corporation;Ten-X Commercial; Auction.com, Inc.; ServiceLink Holdings, LLC; and Hightower Advisors, LLC. Mr. Rao formerly served as a director for Prime Risk Partners Inc., Nielsen Holdings N.V. and LifeWorks Corporation. | | Qualifications | | We believe that Mr. Rao’s managerial and strategic expertise working with large growth-oriented companies as a managing director of THL and his experience enhancing value at such companies make him well-qualified to serve as a director. | | Other Current Public Company Boards | | Black Knight, Inc. MoneyGram International, Inc. | | |
Board’s Role in Risk Oversight Our Board’s role in overseeing the management of our risks is conducted primarily through committees of our Board, as disclosed in the descriptions of each of the Board committees, below, and in the charters of each of the Board committees. Our full Board (or the appropriate boardBoard committee in the case of risks that are under the purview of a particular committee) discusses with management our major risk exposures, including cyber risk, their potential impact on us and the steps we take to manage them. When a Board committee is responsible for evaluating and overseeing the management of a particular risk or risks, the chair of the relevant committee reports on the discussion to the full Board during the committee reports portion of the next Board meeting. This enables the Board and its committees to coordinate the risk oversight role, particularly with respect to risk interrelationships. Director Independence and Controlled Company Exemption Our Sponsors beneficially own more than 50% of the voting power for the election of directors. As a result, we qualify as a “controlled company” under the rules of the NYSE. “Controlled companies” under those rules are companies of which more than 50% of the voting power for the election of directors is held by an individual, a group or another company. On this basis, we will continue to avail ourselves of the “controlled company” exemption under the corporate governance rules of the NYSE. As a controlled company, we are not required to have a majority of “independent directors” (as defined under the rules of the NYSE) on our Board; or have a compensation committee and a corporate governance and nominating committee composed entirely of independent directors. The “controlled company” exemption does not modify the independence requirements for the audit committee. The NYSE and the SEC rules require that our audit committee be composed of at least three members, subject to certain permittedphase-in rules for newly public companies. We are currently in compliance with these“phase-in” provisions, with two of the three members of our audit committee satisfying applicable independence requirements and we intend for all members of the audit committee to meet the required independence standards within one year of our IPO (April 30, 2019).
Additionally, even though we qualify as a controlled company, we have a majority of independent directors serving on our Board and the Compensation Committee of the Board. Further, the Audit Committee and the Corporate Governance and Nominating Committee are each comprised solely of independent directors. Our Board has affirmatively determined that Messrs. Bickett, Clarke, Foley, and Throop, and Ms.Mses. Farrington and Rosen are independent directors under the applicable rules of the NYSE.New York Stock Exchange (“NYSE”). In assessing the independence of Messrs. Bickett, Foley, Hagerty, and Rao, the Board considered their relationships with the Sponsors,THL and Cannae, as well as their interests, as applicable, in any related party transactions described below under “Certain Relationships and Related Party Transactions”.
If at any time
| | | | | | | 10 | | 2020 PROXY STATEMENT |
Effective August 1, 2019, we cease to beno longer qualify as a “controlled company”“Controlled Company” under the rules of the NYSE, our Board will take all action necessaryNYSE. As a result, we are subject to comply withcertain “phase in” provisions, including the corporate governance rulesrequirement to establish fully independent committees within one year of the NYSE, including as applicable, appointing a majorityloss of our “Controlled Company” status. We will establish fully independent directorscommittees prior to the Board and establishing certain committees composed entirelyone-year anniversary of independent directors, subject to a permitted“phase-in” period. We are currently in compliance with the applicable“phase-in” provisions.loss of our “Controlled Company” status. Board Leadership Structure Under our Board’s current leadership structure, we have an executive Chair and an independent Lead Director. Mr. Ossip, our Chief Executive Officer, serves as Chair of our Board. He presides over meetings of our Board and holds such other powers and carries out such other duties as are customarily carried out by the Chairchair of our Board.a board of directors. Our Board believes that the current boardBoard leadership structure, which includes a Lead Director, provides effective independent oversight of management while allowing our Board and management to benefit from Mr. Ossip’s leadership and years of managerial and strategic experience. Our Board believes Mr. Ossip is best positioned to identify strategic priorities, lead critical discussions and execute our strategy and business plans, and that he possesses detailedin-depth knowledge of the issues, opportunities and challenges facing us.Ceridian. Our Board believes that Mr. Ossip’s combined role enables strong leadership, creates clear accountability, facilitates information flow between management and our Board and enhances our ability to communicate our message and strategy clearly and consistently to our stockholders. Mr. Throop is our independent, Lead Director. He is empowered with, and exercises, robust, well-defined duties as set forth in our Corporate Governance Guidelines, a copy of which is available on our website located atwww.ceridian.com. The duties are to: preside at meetings of the Board in the absence of, or upon the request of, the Chair; call and preside over all executive sessions ofnon-employee directors and independent directors and report to the Board, as appropriate, concerning such executive sessions; review Board meeting agendas and schedules in collaboration with the Chair and recommend matters for the Board to consider and information to be provided to the Board; serve as a liaison and supplemental channel of communication between non-employee/independent directors and the Chair without inhibiting direct communications between the Chair and other directors; serve as the principal liaison for consultation and communication between thenon-employee/independent directors and stockholders; advise the Chair concerning the retention of advisors and consultants who report directly to the Board; and be available to major stockholders for consultation and direct communication. Meetings of the Board of Directors and Stockholders Our Board held five meetings in fiscal year 2018.2019. Each incumbent director attended at least 75 percent75% of all meetings of the Board and the committees on which they served that were held during fiscal year 20182019 (and to the extent that such meetings were held during the time that each director served on our Board). All directors are encouraged to attend our annual meetingsmeeting of stockholders. All current directors attended last year’s annual meeting of stockholders except for Ms. Rosen. Ms. Rosen was unable to attend the meeting in person due to attending the annual meeting of another publicly held company in Canada. Committees of the Board of Directors Our Board has established an audit committee,Audit Committee, a compensation committeeCompensation Committee, and a corporate governanceCorporate Governance and nominating committee.Nominating Committee. Each committee operates under a charter that has been approved by our Board and has the composition and responsibilities described below. Members serve on these committees until their resignations or until otherwise determined by our Board. The charter of each committee is available on our website atwww.ceridian.com. www.ceridian.com. Audit Committee
| | | | | | | 11 | | 2020 PROXY STATEMENT |
Meetings held in 2019:Eight The primary purposes of our audit committee isAudit Committee are to assist the Board’s oversight of, among other things: audits of our financial statements;
| • | | audits of our financial statements; | |
the integrity of our financial statements;
| • | | the integrity of our financial statements; | |
our process relating to risk management and the conduct and systems of internal control over financial reporting and disclosure controls and procedures;
| • | | our process relating to risk management and the conduct and systems of internal control over financial reporting and disclosure controls and procedures; | |
the qualifications, engagement, compensation, independence, and performance of our independent auditor; and
| • | | the qualifications, engagement, compensation, independence, and performance of our independent auditor; and | |
the performance of our internal audit function. The audit committeeAudit Committee is currently composed of Messrs. RaoMses. Farrington and ThroopRosen and Ms. Rosen.Mr. Throop. Mr. Throop serves as chair of the audit committeeAudit Committee, and each of Mses. Farrington and Rosen, and Mr. Throop and Ms. Rosen qualify as an “audit committee financial expert” as such term has been defined by the SEC in Item 407(d) ofRegulation S-K. Our Board has affirmatively determined that each of Ms.Mses. Farrington and Rosen, and Mr. Throop qualify as audit committee financial experts and meet the definition of an “independent director” for the purposes of serving on the audit committeeAudit Committee under applicable NYSE rules andRule 10A-3 under the Exchange Act. In accordance with the NYSE and the SEC rules, we intend for all members of the audit committee to meet the required independence standards within one year of our IPO. In connection therewith, Mr. Rao will step down from the audit committee by theone-year anniversary of our IPO (April 30, 2019), and we intend to appoint a new independent director by such date. The audit committeeAudit Committee is governed by a charter that complies with the rules of the NYSE. The audit committee met five times during the year ended December 31, 2018.
Compensation CommitteeMeetings held in 2019:Seven
The primary purposes of our compensation committee isCompensation Committee are to assist the Board in overseeing our management compensation policies and practices, including, among other things: determining and approving the compensation of our executive officers;
| • | | determining and approving the compensation of our executive officers; | |
reviewing and approving incentive compensation awards to executive officers; and
| • | | reviewing and approving incentive compensation awards to executive officers; and | |
make recommendations to the Board with respect to all equity-based compensation plans.
| • | | making recommendations to the Board with respect to all equity-based compensation plans. | |
Our compensation committeeCompensation Committee is composed of Messrs. Bickett, Clarke Foley, Hagerty, and Rao.Hagerty. Mr. HagertyBickett serves as chair of the compensation committee. We have elected to avail ourselvesCompensation Committee. Our “Controlled Company” status expired on August 1, 2019. As a result, in accordance with the NYSE and the SEC rules, we intend for all members of the “controlled company” exemption underCompensation Committee to meet the rules of the NYSE, which exempts us from the requirement that we have a compensation committee composed entirely of independent directors.required independence standards by August 1, 2020. The compensation committeeCompensation Committee is governed by a charter that complies with the rules of the NYSE. The compensation committee met three times during the year ended December 31, 2018.
Compensation Committee Interlocks and Insider Participation No member of our compensation committeeCompensation Committee has ever been one of our executive officers or employees. None of our executive officers currently serves, or in the past year has served, as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving on our Board or compensation committee.Compensation Committee. Corporate Governance and Nominating Committee
| CORPORATE GOVERNANCE AND NOMINATING COMMITTEE |
Meetings held in 2019:Three The primary purposes of our corporate governanceCorporate Governance and nominating committee isNominating Committee are to, among other things: | • | | subject to the director designation rights of Cannae under the Voting Agreement, make recommendations to the Board regarding nomination of individuals as members of the Board and its committees; | |
subject to the director designation rights of THL
| • | | assist the Board with identifying individuals qualified to become Board members; and | |
| • | | determine corporate governance practices and related matters. | |
Our Corporate Governance and Cannae under the Voting Agreement,make recommendations to the Board regarding nomination of individuals as members of theBoard and its committees; assist the Board with identifying individuals qualified to become Board members; and
determine corporate governance practices and related matters.
Our corporate governance and nominating committeeNominating Committee is comprised of Messrs. Bickett and Throop. Mr. BickettThroop, and Ms. Farrington. Ms. Farrington serves as chair of the corporate governanceCorporate Governance and nominating committee.Nominating Committee. Our Board has affirmatively determined that each of Messrs. Bickett and Throop, and Ms. Farrington meet the definition of an “independent director” for purposes of serving on the Corporate Governance and Nominating Committee under applicable NYSE rules. The corporate governanceCorporate Governance and nominating committeeNominating Committee is governed by a charter that complies with the rules of the NYSE.
The
| | | | | | | 12 | | 2020 PROXY STATEMENT |
Code of Conduct We have a Code of Conduct that applies to our employees, officers and directors. A copy of the Code of Conduct is available on our website located at www.ceridian.com. Any amendments to or waivers from our Code of Conduct granted to directors or executive officers will be disclosed on our website promptly following the date of such amendment or waiver. Corporate Governance Guidelines Our Board has adopted corporate governance and nominating committee met two times during the year ended December 31, 2018. Identifying and Evaluating Director Nominees
The Board has delegated toguidelines in accordance with the corporate governance rules of the NYSE and nominating committee the responsibilityToronto Stock Exchange (“TSX”), which serve as a flexible framework within which our Board and its committees operate. These guidelines cover several areas, including Board composition, roles of identifying suitable candidates for nominationthe Chair and Lead Director, director nominations and Board membership criteria, Board meetings and executive sessions, Board committees, management succession, Board compensation, expectations of directors, Board performance evaluations, and access to management and outside advisors. A copy of our Corporate Governance Guidelines is posted on our website atwww.ceridian.com.
Director Evaluations Our Board and Board committees conduct annual self-assessments of the effectiveness of the Board, (including candidates to fill any vacancies that may occur)Board committees and assessing their qualifications in lightour directors. The evaluation process was developed and administered under the direction of the policiesCorporate Governance and principles in our corporate governance guidelines, the committee’s charter and any other criteria for selection of directors as established by the Board.Nominating Committee. The corporate governance and nominating committee may gather information about the candidatesassessment is conducted through interviews, detailed questionnaires, comprehensive background checks or any other means that the committee deemsa questionnaire process, which is designed to be appropriate in the evaluation process. Based on the results of the evaluation process, the corporate governance and nominating committee recommends new candidates for the Board’s approval as director nominees for election to the Board. In identifying prospective director candidates, the corporate governance and nominating committee may consider all facts and circumstances that it deems appropriate or advisable, including, among other things, such factors as integrity, experience, judgment, independence, diversity, skills, education, expertise, length of service, understanding of our business and industry, other commitments and the size and composition of the Board. Although our Board does not currently maintain a specific policyelicit feedback with respect to board diversity, ourareas such as Board believesand committee composition, governance, communication, culture, mission statement, risk and strategy. Responses are discussed with each of the Board committees and the full Board. Recommendations are discussed with the Board and within the appropriate Board committees, and then considered and implemented as appropriate.
Indemnification of Directors and Officers Our third amended and restated certificate of incorporation provides that it should be a diverse body reflecting our business, workforce, customer base and society in general, and our Board has directed our corporate governance and nominating committee to consider the benefits of diverse viewpoints when making determinations regarding nominations of directors in order to ensure a diverse mix of skills, background and experience. As we work to expand the number of independent directors on our Board, we will continue to consider a diverse group of potential candidates. Stockholder Recommendations
Stockholders may submit recommendations for director candidatesindemnify our directors and officers to the corporate governancefullest extent permitted by the Delaware General Corporation Law (“DGCL”).
We have entered into indemnification agreements with each of our directors. These indemnification agreements provide the directors with contractual rights to indemnification and nominating committee by sending the individual’s nameexpense advancement and qualifications to our Secretary, c/o Ceridian HCM Holding Inc., 3311 East Old Shakopee Road, Minneapolis, Minnesota 55425, who will forward all recommendationsreimbursement to the corporate governance and nominating committee. The corporate governance and nominating committee will evaluate any candidates recommended by stockholders againstfullest extent permitted under the same criteria and pursuantDGCL, subject to the same policies and procedures applicable to the evaluation of candidates proposed by directors or management. Stockholder Communications The Board provides to every stockholder the ability to communicate with the Board through an established process for stockholder communications. Stockholders and other interested parties may send such communicationcommunications to our Board through our Corporate Secretary at stockholders@ceridian.com or via U.S. mail: Secretary, c/o Ceridian HCM Holding Inc., c/o Corporate Secretary, 3311 East Old Shakopee Road, Minneapolis, Minnesota 55425, Attn: Board of Directors. Stockholders may indicate that their communications are intended for the full Board or any subset of directors, including only the Chair of the Board, only the Lead Director, or only thenon-management directors. The Corporate Secretary will review all such incoming communications and forward any stockholder communication to the appropriate member(s) of the Board.Board or Board committees. The Corporate Secretary will generally not forward communications that are unrelated to the duties and responsibilities of the Board, including communications that the Corporate Secretary determines to be primarily commercial in nature, product complaints or inquiries, or materials that are patently offensive or otherwise inappropriate. Stockholder Engagement In 2019, we engaged with the corporate governance teams at our largest stockholders to better understand their desired priorities for Ceridian going forward. THL and Cannae, who collectively held approximately 29% ownership of our outstanding Common Stock as of December 31, 2019, hold seats on our Board. Further, since last year’s annual meeting, we sought engagement with the topnon-THL and Cannae stockholders of Ceridian that collectively beneficially owned approximately 65% of our outstanding Common Stock (excluding THL and Cannae ownership) as of December 31, 2019. We met telephonically with the corporate governance teams at six of those stockholders, representing approximately 47% of our Common Stock (excluding THL and Cannae ownership) as of December 31, 2019. Collectively, total engagement with all our stockholders (including THL and Cannae) constituted approximately 76% of our shares outstanding as of December 31, 2019. | | | | | | | 13 | | 2020 PROXY STATEMENT |
PROPOSAL ONEThe main themes of our stockholders’ feedback were:
ELECTION OF DIRECTORS
An interest in continued evaluation and recruitment of talent to add to our Board that reflects the evolution of Ceridian’s stockholder base; A desire to continue to link executive pay to our performance; and A recommendation that as Ceridian considers formalizing an Environmental Social Governance (“ESG”) program, that such a program fits Ceridian’s business and drives stockholder value. In response to that feedback, we will continue to evaluate the marketplace of director talent as we consider additions to our Board. Further, as described more thoroughly in the Executive Compensation section beginning on page 20 of the Proxy Statement, we believe we do effectively link executive compensation to our performance, but our Compensation Committee together with its independent compensation consultants at Willis Towers Watson will continue to make this a priority in 2020. In response to ESG feedback, while we believe as a human capital management company that is driven by “giving where we’re living” we do put ESG at the forefront of our business model, we are planning to take steps beginning in 2020 to develop a formalized internal program that will drive towards more disclosure on what we do in the ESG space in the coming years. NomineesNo-Hedging andNo-Pledging Policy
Our Insider Trading and Tipping Policy generally prohibits the hedging or pledging of Ceridian stock by directors or executive officers of Ceridian. As previously reported, Cannae Holdings, Inc., a stockholder of Ceridian, announced that one of its subsidiaries pledged 25 million shares of Ceridian stock on November 7, 2018 to secure a margin loan (the “Pledge”). Because the Pledge was made by Cannae as a stockholder and not by an employee or director of Ceridian, the Pledge did not violate the prohibition on the pledging of our Common Stock by our employees or directors contained in our Insider Trading and Tipping Policy. Further, on February 21, 2020, the margin loan was terminated. As a result, no Common Stock owned by Cannae Holdings, Inc. remains subject to the Pledge. Stock Ownership Guidelines The Compensation Committee has established stock ownership guidelines (the “Stock Ownership Guidelines”) to encourage equity ownership by our executive officers and directors in order to reinforce the link between their financial interests and those of our stockholders. We set the Stock Ownership Guidelines for our independent directors not designated or employed by Cannae Holdings, Inc. or THL based on a multiple of their annual cash retainer on the first day of the fiscal year. Stock ownership (as defined under the Stock Ownership Guidelines) consists of Ceridian stock beneficially owned by the director. Under our Stock Ownership Guidelines, each of the independent directors not designated or employed by Cannae Holdings, Inc. or THL are expected to own an amount of our stock equal in value to five times their annual cash retainer. The first measurement date for share ownership will be December 31, 2020. The following table reflects the stock owned as of the Record Date and the restricted stock units held as of the Record Date and expected to vest by the December 31, 2020 measurement date (the “Projected Stock Ownership”) against the stock ownership guidelines for each of the independent directors not designated or employed by Cannae Holdings, Inc. or THL. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Covered Directors | | Guideline
Multiple | | Annual
Cash
Retainer
($) | | Stock
Ownership
Guideline
Requirement
($) | | Projected
Stock
Ownership
(#) | | Total Value
of Projected
Stock
Ownership
($)(1) | | Projected
% of
Guidelines
Achieved
(%) | Ronald F. Clarke | | | | 5x | | | | $ | 50,000 | | | | $ | 250,000 | | | | | 7,777 | (2) | | | $ | 577,131.17 | | | | | 230.85 | % | Deborah A. Farrington | | | | 5x | | | | $ | 50,000 | | | | $ | 250,000 | | | | | 2,991 | (3) | | | $ | 221,962.11 | | | | | 88.78 | % | Andrea S. Rosen | | | | 5x | | | | $ | 50,000 | | | | $ | 250,000 | | | | | 5,731 | (4) | | | $ | 425,297.51 | | | | | 170.12 | % | Gerald C. Throop | | | | 5x | | | | $ | 50,000 | | | | $ | 250,000 | | | | | 41,212 | (5) | | | $ | 3,058,342.52 | | | | | 1223.34 | % |
| (1) | For purposes of this disclosure, we have valued the projected stock ownership based on the value of our common stock as of the close of trading on the Record Date ($74.21 per share). |
| (2) | Consists of (i) 1,894 shares of Common Stock; (ii) 3,988 shares of Common Stock that are issuable pursuant to restricted stock units that vest on May 15, 2020; and (iii) 1,895 shares issuable pursuant to restricted stock units that vest on August 10, 2020. |
| | | | | | | 14 | | 2020 PROXY STATEMENT |
| (3) | Consists of 2,991 shares of Common Stock that are issuable pursuant to restricted stock units that vest on May 15, 2020. |
| (4) | Consists of (i) 845 shares of Common Stock; (ii) 2,991 shares of Common Stock that are issuable pursuant to restricted stock units that vest on May 15, 2020; and (iii) 1,895 shares of Common Stock that are issuable pursuant to restricted stock units that vest on August 10, 2020. |
| (5) | Consists of (i) 8,736 shares of Common Stock; (ii) 2,651 shares of Common Stock that are issuable pursuant to restricted stock units that are currently vested; (iii) 23,185 shares of Common Stock that are issuable upon the exchange of Exchangeable Shares; (iv) 3,988 shares of Common Stock issuable pursuant to restricted stock units that vest on May 15, 2020; and (v) 2,652 shares of Common Stock issuable pursuant to restricted stock units that vest on April 25, 2020. |
Discussion of the Stock Ownership Guidelines as they apply to NEOs who are our executive officers as of the record date is contained in the CD&A at page 27 of the Proxy Statement. | | | | | | | 15 | | 2020 PROXY STATEMENT |
| | | CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS |
Set forth below is a description of certain relationships and related person transactions between us or our subsidiaries and our directors, executive officers or holders of more than 5% of our voting securities. Registration Rights Agreement On April 30, 2018, in connection with our initial public offering, we entered into a registration rights agreement with THL, Cannae, David D. Ossip, Alon Ossip, the brother of David D. Ossip, and entities controlled by each of David D. Ossip and Alon Ossip in respect of the shares of Common Stock and Exchangeable Shares held by such holder immediately following the initial public offering. This agreement provides these holders (and their permitted transferees) with the right to require us, at our expense, to register shares of our Common Stock that they hold. The agreement also provides that we will pay certain expenses of these electing holders relating to such registrations and indemnify them against certain liabilities that may arise under the Securities Act of 1933, as amended. Voting Agreement On April 30, 2018, in connection with our initial public offering, we entered into a Voting Agreement with THL and Cannae, pursuant to which we are required to take all necessary action to cause the Board to include individuals designated by THL and Cannae. These designation rights are described in this Proxy Statement in the section titled “Proposal One – Election of Directors – Voting Agreement”. Service and Vendor Related Agreements We are a party to a service agreement with CompuCom Systems, Inc. (“CompuCom”), an investment portfolio company of THL. Pursuant to this service agreement, CompuCom agrees to provide us with service desk and desk side support services. Pursuant to this arrangement, we made payments to CompuCom totaling $1.7 million for the year ended December 31, 2019. Other Transactions We provide services to FleetCor Technologies, Inc. or one of its wholly owned affiliates through certain commercial arrangements entered into in the ordinary course of business, which include provision of Dayforce HCM services and other administrative services. For these services, we have recorded revenue of $0.8 million for the year ended December 31, 2019. Ronald F. Clarke is a current director, and the chief executive officer and the chairman of the board of FleetCor Technologies, Inc. We provide Dayforce and related services to The Stronach Group, for which we recorded revenue of $0.2 million for the year ended December 31, 2019. Alon Ossip, the brother of David D. Ossip, was the chief executive officer, and is currently a minority shareholder, of The Stronach Group. We provide payroll-related tax filing services to Fidelity National Financial, Inc. (“FNF”), which spun off Cannae Holdings, Inc., the indirect parent company of Cannae, for which we recorded revenue of $0.4 million for the year ended December 31, 2019. We provide Dayforce and related services to Cannae Holdings, Inc. and related entities, for which we recorded revenue of $0.2 million for the year ended December 31, 2019. We provide Dayforce and related services to certain investment portfolio companies of THL and Cannae. We recorded revenue of $1.6 million from American Blue Ribbon Holdings, LLC; $0.8 million from Guaranteed Rate, Inc.; $0.5 million from Essex Technology Group, LLC o/a Essex Bargain Hunt Superstores; $0.4 million fromTen-X, LLC; $0.3 million from Phillips Feed Services; $0.2 million from Hightower Holding, LLC; and $0.2 million from Black Knight Sports and Entertainment, LLC for the year ended December 31, 2019. Policies for Approval of Related Person Transactions Our Board has nominatedadopted a Code of Conduct that contains a written policy relating to the approval of related person transactions. A “related person transaction” is a transaction or arrangement or series of transactions or arrangements in which we participate (whether or not we are a party) and a related person has a direct or indirect material interest in such transaction. Our Audit Committee reviews and approves or ratifies all relationships and related person transactions between us and (i) our directors, director nominees, or executive officers, (ii) any 5% record or beneficial owner of our Common Stock, or (iii) any immediate family member of any person specified in (i) and (ii) above. The Audit Committee reviews all related person transactions and, where the Audit Committee determines that such transactions are in our best interests, approves such transactions in advance of such transaction being given effect or ratified. | | | | | | | 16 | | 2020 PROXY STATEMENT |
In 2019, we paid our independent directors not employed by Ceridian, THL or Cannae total annual compensation in the amount of $200,000. Annual compensation is comprised of restricted stock units valued at $150,000 and $50,000 in cash, which the director may elect to be paid in whole or in part in the form of additional restricted stock units. The chair of the Audit Committee receives an additional annual cash fee of $20,000, the chair of the Compensation Committee receives an additional annual cash fee of $12,500, the chair of the Corporate Governance and Nominating Committee receives an additional annual cash fee of $7,500, and the Lead Director receives an additional annual cash fee of $30,000. Any cash fees are paid in quarterly installments. Directors who are employees of THL or Cannae (i.e., Messrs. Bickett, Hagerty, and Rao) did not receive any compensation from Ceridian for Board or Board committee service. All of ournon-employee directors may be reimbursed for approved director education courses andout-of-pocket travel expenses incurred in connection with attendance at Board and Board committee meetings and other Board-related activities. The following table presents the total compensation for each person who served as a member of our Board during 2019, other than Mr. Ossip. Mr. Ossip received no additional compensation for his service as a member of our Board during 2019. Director Compensation for Fiscal Year 2019 | | | | | | | | | | | | | | | | Name | | Compensation Earned or
Paid in Cash ($)(1)(2) | | Stock Awards
($)(1)(2) | | Total ($)(3) | Brent B. Bickett* | | | | — | | | | | — | | | | | — | | Ronald F. Clarke | | | | — | | | | $ | 200,000 | | | | $ | 200,000 | | Deborah A. Farrington | | | $ | 38,419 | | | | $ | 150,000 | | | | $ | 188,419 | | William P. Foley, II*# | | | | — | | | | | — | | | | | — | | Thomas M. Hagerty* | | | | — | | | | | — | | | | | — | | Ganesh B. Rao* | | | | — | | | | | — | | | | | — | | Andrea S. Rosen | | | $ | 33,380 | | | | $ | 150,000 | | | | $ | 183,380 | | Gerald C. Throop | | | $ | 33,306 | | | | $ | 200,000 | | | | $ | 233,306 | |
| * | Denotes employee of THL or Cannae |
| # | Mr. Foley resigned as a Cannae designated director on August 1, 2019 |
| (1) | Mr. Clarke and Ms. Rosen have served as directors since July 2018, Ms. Farrington has served as a director since April 2019, and Mr. Throop has served as a director since April 2018. Effective May 1, 2019, Mr. Clarke elected to receive all $200,000 of his 2019 annual compensation in the form of restricted stock units, for a total of 3,988 restricted stock units. |
Effective April 9, 2019, Ms. Farrington elected to receive $150,000 of her 2019 annual compensation in the form of restricted stock units, for a total of 2,991 restricted stock units, and the remaining $50,000 of her 2019 annual compensation in cash. In 2019, Ms. Farrington earned $36,401, representing a pro rata portion of the $50,000 elected cash portion of her 2019 annual compensation based on the effective date of her election as a director. Further, effective September 24, 2019, Ms. Farrington began serving as the Chair of the Corporate Governance and Nominating Committee and earned $2,018 in 2019 representing a pro rata portion of the $7,500 annual Corporate Governance and Nominating Committee Chair cash fee. Effective May 1, 2019, Ms. Rosen elected to receive $150,000 of her 2019 annual compensation in the form of restricted stock units, for a total of 2,991 restricted stock units, and the remaining $50,000 of her 2019 annual compensation in cash. In 2019, Ms. Rosen earned $33,380 representing a pro rata portion of the $50,000 elected cash portion of her 2019 annual compensation. Effective May 1, 2019, Mr. Throop elected to receive all $200,000 of his 2019 annual compensation in the form of restricted stock units, for a total of 3,988 restricted stock units. In 2019, Mr. Throop was paid $8,333 against the prior year $25,000 annual compensation through April 30, 2019 and earned $20,000 representing the annual chair cash fee for serving as Chair of the Audit Committee. Further, effective November 1, 2019, Mr. Throop began serving as Lead Director and earned $4,973, representing a pro rata portion of the $30,000 annual Lead Director cash fee. | (2) | Represents the aggregate grant date fair value of the restricted stock unit awards granted in 2019, computed in accordance with Financial Accounting Standards Board Account Standards Codification (“FASB ASC”) Topic 718. These values have been determined based on the assumptions set forth in Note 2 to our consolidated financial statements included in the 2019 Annual Report. |
| | | | | | | 17 | | 2020 PROXY STATEMENT |
| (3) | As of December 31, 2019, (a) Mr. Clarke holds 3,988 restricted stock units that vest on May 15, 2020 and 3,790 restricted stock units that vest in two annual installments beginning on August 10, 2020; (b) Ms. Farrington holds 2,991 restricted stock units that vest on May 15, 2020; (c) Ms. Rosen holds 2,991 restricted stock units that vest on May 15, 2020 and 3,790 restricted stock units that vest in two annual installments beginning on August 10, 2020; and (d) Mr. Throop holds 2,651 vested and issuable restricted stock units, 3,988 restricted stock units that vest on May 15, 2020, 5,304 restricted stock units that vest in two annual installments beginning on April 25, 2020, and 23,185 Exchangeable Shares. None of Messrs. Bickett, Hagerty, or Rao holds any restricted stock units or Exchangeable Shares. |
| | | | | | | 18 | | 2020 PROXY STATEMENT |
| | PROPOSAL TWO Advisory Vote on the Frequency of Future Advisory Votes on Ceridian’s
Named Executive Officers’ Compensation |
We are asking stockholders to vote, on an advisory andnon-binding basis, on the frequency of future advisory votes on the compensation of our NEOs, commonly referred to as a “Say on Pay” vote. The choices available on the proxy card, in accordance with SEC rules, are every one year, every two years or every three years. You may also abstain from voting on this Proposal Two. This Proposal Two is advisory andnon-binding on our Board. However, the Board and the Compensation Committee will review and consider the results of the vote when determining the frequency of the “Say on Pay” vote, pursuant to the following resolution: RESOLVED, that the shareholders of the Company indicate, by their vote on this resolution, whether the vote on the compensation of the Company’s named executive officers, pursuant to Rule14a-21(b) of the Exchange Act, should take place every one year, every two years or every three years. After careful consideration of the frequency alternatives, our Board and the Compensation Committee believe that conducting an annual “Say on Pay” vote is appropriate for Ceridian and our stockholders at this time. Our Board has determined that an annual “Say on Pay” vote will allow our stockholders to provide timely input on our executive compensation philosophy, policies and practices as disclosed in our future proxy statements. Recommendation of the Board | | | THE BOARD RECOMMENDS THAT YOU VOTE “ONE YEAR” WITH RESPECT TO THE FREQUENCY OF FUTURE ADVISORY VOTES ON OUR NEO COMPENSATION. | |
|
| | | | | | | 19 | | 2020 PROXY STATEMENT |
We are seeking anon-binding, advisory vote to approve our executive compensation for 2019. Because of our new status as a Large Accelerated Filer, we are no longer an Emerging Growth Company and are required to conduct anon-binding “Say on Pay” vote at our Annual Meeting. As the vote on this proposal is advisory in nature, it will not affect any compensation already paid or awarded to any NEO and will not be binding on or overrule any decisions by the Compensation Committee or the Board. However, because we value our stockholders’ view, the Compensation Committee and Board will carefully consider the results of this advisory vote when formulating future executive compensation philosophy, policies and practices. Our Board believes that our current executive compensation program appropriately links compensation realized by our executive officers to our performance and properly aligns the interests of our executive officers with those of our stockholders. The details of the compensation for 2019, and the reasons we awarded it, are described in the “Compensation Discussion and Analysis” section starting below. | | | COMPENSATION DISCUSSION & ANALYSIS |
Executive Summary In April 2018, Ceridian, led by David D. Ossip, our Chair and Chief Executive Officer, completed our initial public offering (“IPO”) and the listing of our Common Stock on the NYSE and TSX. Our IPO was one of the most successful performing IPOs of 2018, and that positive momentum has continued into 2019. In fiscal year 2019, we met several significant milestones while continuing to lay the foundation for long-term value creation. Specifically, we have five strategic growth levers that drive long-term perspectives, near-term decision-making and stockholder alignment: | | | | | | | | | | | | | | | | | Strategic Growth Levers | Continue growth in existing markets | |
| | Expand Dayforce horizontally and vertically | |
| | Expand into Enterprise segment | |
| | Expand globally | |
| | Address gig economy’s needs |
| Achievement Against Growth Levers in 2019 |
| » | Grew Dayforce revenue by 30% and Dayforce recurring revenue by 32% |
| » | Increased Dayforce revenue per customer by 11.5%, which was $131,171 for the trailing twelve months ended December 31, 2019, on a constant currency basis |
| » | Launched Dayforce native payroll in Australia and Ireland during 2019. Global sales, primarily in the UK and Australia, grew by more than 150% compared to 2018 |
| » | Acquired RITEQ, a provider of enterprise workforce management solutions, which expanded our operations in Australia, New Zealand and the United Kingdom |
| » | Successful Dayforce product launches in 2019 included our benefits decisions support module, engagement surveys, and learning management |
| | | | | | | 20 | | 2020 PROXY STATEMENT |
The execution on these growth levers in fiscal year 2019 supported our transformation from an Emerging Growth Company to a Large Accelerated Filer. In addition, Ceridian and its executive leadership team demonstrated conviction to deliver revenue and adjusted EBITDA performance that exceeded itspre-established targets. Specifically, in fiscal year 2019, total revenue increased 11.3% from $740.7 million to $824.1 million and Dayforce revenue increased 30.2% from $437.5 million to $569.7 million. Profitability also improved, with adjusted EBITDA increasing 14.9% from $160.6 million to $184.6 million, and operating profit increasing 28.9% from $56.1 million to $72.3 million. | | | | | $569.7 million Dayforce revenue +30.2% year-over-year Represents 69% of total revenue | | $184.6 million Adjusted EBITDA +14.9% year-over-year 22.4% Adj. EBITDA margin | | 4,363 Live Dayforce customers +645 vs 12/31/2018 3.9 million global active users | 69.6% Cloud recurring gross margin +350 basis points year-over-year | | $0.46 Adjusted diluted EPS +$0.20 year-over-year | | $131,171 Dayforce revenue per
customer +11.5% year-over-year |
Overlaying these significant financial and operational accomplishments was a near doubling of our Common Stock price during fiscal year 2019, from $34.49 at the end of fiscal year 2018 to $67.88 at the end of fiscal year 2019. This stock price performance drove a market capitalization increase of approximately $5 billion during the year ended December 31, 2019, and drove a cumulative total return for our stockholders that outpaced the market as a whole for the period between April 26, 2018 (the date our common stock began trading on the NYSE) through December 31, 2019. The following graph compares the cumulative total shareholder returns on our common stock with the cumulative total return on the S&P 500 Index and the S&P 1500 Application Software Index. The graph assumes $100 was invested in each, based on closing prices, from our initial public offering to the last trading day of each quarter for the period April 26, 2018 (the date our common stock began trading on the NYSE) through December 31, 2019. Stock price performance shown in the Stock Performance Graph for our common stock is historical and not necessarily indicative of future performance. COMPARISON OF CUMULATIVE TOTAL RETURN 
| | | | | | | 21 | | 2020 PROXY STATEMENT |
Additional Information on Financial and Operating Results andNon-GAAP Performance Measures Please see our 2019 Annual Report which accompanies this Proxy Statement for additional information on our financial and operational results. Pages 59-63 of our 2019 Annual Report contain a reconciliation of Adjusted EBITDA and Adjusted diluted EPS, each anon-GAAP financial measure, to the most directly comparable GAAP financial measures. Alignment of Executive Compensation to Stockholder Value The Compensation Committee believes in an executive compensation program that is significantly performance-based and stockholder aligned. As a result, in 2019, we provided executives with total direct compensation in the form of base salary, annual cash incentive, and long-term incentive equity grants of stock options and restricted stock units. The annual cash incentive compensates the executive team for achievement of annual financial performance objectives, while the long-term incentive equity grants are intended to focus the executive team on sustained long-term value creation. The Compensation Committee further believes that the decisions made in fiscal year 2019 will help to align executive and stockholder interests as Ceridian continues to execute on its five strategic growth levers. This Compensation Discussion & Analysis describes Ceridian’s executive compensation philosophy, design and decisions as it relates to our 2019 NEOs. | | | | | Named Executive Officers for 2019 | | Role | | Joined Ceridian | David Ossip | | Chair and Chief Executive Officer | | April 2012 | Leagh Turner | | President and Chief Operating Officer | | September 2018 | Christopher Armstrong | | Executive Vice President, Chief Customer Officer | | January 2004 | Arthur Gitajn | | Executive Vice President and Chief Financial Officer | | September 2016 | Ozzie Goldschmied | | Executive Vice President, Chief Technology Officer | | April 2012 | Erik Zimmer | | Executive Vice President, Head of Mergers & Acquisitions
(formerly Executive Vice President, Chief Strategy Officer) | | August 2018 |
In September 2018, Ms. Turner joined Ceridian to accelerate our growth strategy. Ms. Turner is a seasoned global technology leader with over 20 years of experience in the software industry and a proven ability to drive growth. Ms. Turner added the title of Chief Operating Officer role in January 2020 when it was announced that Mr. Armstrong would be appointed Chief Customer Officer in recognition of his growing role in managing the entire customer experience. In August 2018, Mr. Zimmer joined Ceridian with extensive experience in finance, operations, innovation, sales and strategy, and having advised Ceridian while at THL. In November 2019, upon Mr. Zimmer’s move to his current role as Head of Mergers & Acquisitions, the Board determined that Mr. Zimmer no longer was an “executive officer” of Ceridian as he would focus his efforts on acquisition opportunities for Ceridian and Mr. Ossip would direct the strategic direction of Ceridian. Compensation Design Compensation Philosophy and Objectives As a global, cloud-based software company specializing in human capital management, our success is directly linked to our ability to recruit, incentivize and retain top talent in software management and engineering, sales, software implementation and corporate support functions. With these realities as background, our philosophy is that Ceridian’s executive compensation program should: | ✓ | Be competitive with the labor markets in which we operate; |
| ✓ | Attract and retain executive talent critical to our business; |
| ✓ | Reward according to the overall performance of Ceridian consistent with our plan design; |
| ✓ | Align the executives with Ceridian’s financial and strategic objectives to build sustainable stockholder value; |
| ✓ | Be administered according to high standards of corporate governance; and |
| ✓ | Balance a significant performance-based culture with reasonable risk mitigating elements to reinforce behavior that is consistent with Ceridian’s strategic planning and standards of conduct. |
| | | | | | | 22 | | 2020 PROXY STATEMENT |
With a brand promise of “Makes Work Life Better”™, our executive compensation program is part of an overall corporate talent strategy that drives a culture of excellence rooted in the belief that healthy and engaged employees create the best outcomes for our employees, customers and stockholders. Ceridian believes in diversity and equality for all people and in 2019 our executives played a crucial role in fostering a culture that engaged and celebrated our employees. In 2019, we were recognized with over 15 awards related to our company culture and workplace experiences, including Great Place to Work certification (Canada and United States), Fortune 100 Best Workplace for Diversity, 2019 Working Mother 100 Best Companies, and 2019 Working Mother Best Companies for Dads. 
Compensation Elements To drive business performance and stockholder value creation and attract, retain and motivate our executives, our compensation program is designed to be simple and transparent. As our business continues to grow, we anticipate aspects of our design will change, but the four core components of base salary, a short-term incentive, long-term equity awards and benefits and perquisites will remain. More detailed discussion related to how we determine the amount (and, where applicable, the formula) for each element is continued below under the heading “2019 Compensation Decisions and Outcomes” beginning on page 28 of the Proxy Statement. | | | | | Element | | Purpose(s) | | Key Features | Base Salary | | • Provide market competitive fixed compensation • Attract and retain exceptional talent capable of performing in a dynamic high-growth environment | | • Reviewed annually • Increases are provided depending on each executive’s leadership role, scope, complexity, individual performance and competitive market trends | Management Incentive Plan (“MIP”) (short-term incentives) | | • Align compensation with annual financial performance goals/objectives • Motivate to meet and achieve againstpre-defined criteria in areas of strategic importance to Ceridian | | • Variable compensation • In 2019, maximum opportunity capped at 100% of target with discretion to pay out more if performance exceeds goals • Based on the achievement of financial performance goals, which are established annually in the first quarter • 2019 financial performance metrics were revenue and adjusted EBITDA • Assessment against thepre-determined goals informs actualpay-out |
| | | | | | | 23 | | 2020 PROXY STATEMENT |
| | | | | Element | | Purpose(s) | | Key Features | Long Term Incentive Plan (“LTI”) | | • To align the interests of executive officers and stockholders via equity while encouraging retention and the continuity of our strategic plan | | Stock Options • Provides value to the executive only when the share price exceeds the grant price • Exercise price of stock options is equal to the fair market value at the date of grant • 10-year term and four-year rateable vesting provide long term perspective Restricted Stock Units • In certain circumstances, such as promotions, restricted stock units are awarded to motivate the executive and increase ownership • Full value stock grants that vest rateably over three to four years and support the stock ownership guidelines | Benefits and Perquisites | | • Benefits and perks for every employee at Ceridian enhance the employee/workplace experience | | • Benefits are substantially the same for all employees and executive officers and are based on country location • Retirement plan with Ceridian contributions and global employee stock purchase plan encourage financial fitness • Additional perquisites for the executive officers are provided in the Summary Compensation Table under “All Other Compensation” on page 33 of the Proxy Statement |
2019 Target Compensation Mix The majority of our NEOs’ target compensation is variable andat-risk, maximizing alignment with our stockholders’ interests and long-term value creation. In 2019, the target compensation mix for the CEO and the other NEOs was as follows: | | | | CEO | | Other NEOs (average) | | |  | |  |
Since executive compensation is paid principally in the form of annual and LTI awards, a significant percentage of executive pay is at risk and variable based on the annual and long-term performance of Ceridian. Stock options, which have comprised the majority of the LTI awards, derive their value directly from our Common Stock price appreciation, which in the long-term is a reflection of Ceridian’s performance and is directly linked to stockholder returns. Stock options have no value if our Common Stock price does not appreciate prior to the expiration of the | | | | | | | 24 | | 2020 PROXY STATEMENT |
stock options. For our NEOs to earn their intended target compensation from these awards, we must show sustained competitive performance. Compensation Policies and Practices As a high-growth company, we recognize the importance of establishing strong governance practices at the outset of our corporate governance journey. | | | | | | | What We Do: | | What We Avoid: | | | ✓ Focus compensation on “pay for performance” ✓ Put majority of compensation“at-risk” ✓ Align performance measures with our strategy ✓ Set rigorous and objective performance goals ✓ Require meaningful share ownership ✓ Mitigate financial reporting controls risk via a compensation recovery (claw back) policy ✓ Maintain Compensation Committee comprised of a majority of independent directors ✓ Engage an independent compensation consultant ✓ Propose an annual Say on Pay vote ✓ Conduct stockholder engagement | | ✗ No taxgross-ups on any severance payments ✗ No excessive perquisites, benefits or pension payments ✗ No discounting, reloading or repricing of stock options |
Compensation Governance Compensation Oversight The Compensation Committee is comprised of a majority of independent directors. Brent B. Bickett, Ronald F. Clarke, and Ganesh B. RaoThomas M. Hagerty are the current members, with Mr. Bickett serving as the Compensation Committee chair. Details of the Compensation Committee’s duties are summarized in the Corporate Governance overview of this Proxy Statement (beginning on page 8 of the Proxy Statement) and are fully set out in the Compensation Committee’s Charter which can be found on our website atwww.ceridian.com. One key purpose of the Compensation Committee is to determine and approve all aspects related to the CEO’s compensation, including setting and assessing goals and objectives, as well as setting and approving compensation for electionthe broader executive officer team at Ceridian. In addition, the Compensation Committee makes recommendations related to equity-based compensation plans to the Board. The Annual Committee Process The Compensation Committee typically meets a minimum of three times per year, but usually meets at least quarterly to consider the following items: | | | | Quarter | | Typical Meeting Topics | Q1 | | Review CEO and executive officer compensation and market comparisons; review prior year performance results and corresponding payouts under the MIP; approve metrics, weightings and goals for the current year MIP awards; approve annual LTI equity grant strategy; review equity plan share replenishment provision; and approve CD&A, proxy statement disclosures and awards. On anad-hoc basis, the Compensation Committee reviews our overall Total Reward Strategy and competitive position | Q2 | | Approve executive officer cash compensation; discuss any stockholder feedback on compensation matters in the proxy statement; and review and approve director compensation of independent directors not employed by THL or Cannae | Q3 | | Review succession planning and talent management report; review overview of North America retirement plans; and review global employee stock purchase plan | Q4 | | Review results of compensation risk review; review Compensation Committee Charter; review appointment of independent compensation consultant; and review annual self-assessment results |
| | | | | | | 25 | | 2020 PROXY STATEMENT |
Role of Management Compensation Committee meetings are typically attended by the Chief Executive Officer, the Executive Vice President, Chief Human Resources Officer, and the Corporate Secretary. The Chief Executive Officer provides recommendations on compensation for all other executive officer roles. The Chief Executive Officer is not present when the Compensation Committee discusses his compensation. Use of an Independent Advisor As set out in its charter, the Compensation Committee has the authority to retain outside consultants to provide independent advice to the Compensation Committee and to determine the fees and terms of engagement of such consultants. In 2019, the Compensation Committee engaged Willis Towers Watson (“WTW”) as Class I directorsits independent compensation consultant. WTW reported directly to hold office until the 2022 Annual MeetingCompensation Committee and took direction from the Chair of the Compensation Committee. The Compensation Committee assessed the independence of WTW on both a qualitative and quantitative basis, referencing the six factors suggested by the SEC. Having assessed WTW’s independence through these qualitative and quantitative factors, the Compensation Committee concluded that the work of WTW did not raise any conflicts of interest, and that WTW was independent. During the year, WTW assisted in designing and reviewing our management and director compensation programs, including developing compensation market comparisons, providing competitive program and policies information, attending Compensation Committee meetings and providing general advice. The Compensation Committee considers the analysis and advice from WTW as well as support and insight from management when making decisions. In 2019, WTW provided approximately $280,000 in services to the Compensation Committee. WTW also provides certain other services to Ceridian, including health and welfare benefits consulting, broad-based compensation consulting, strategic talent consulting and corporate risk and brokerage services. WTW received approximately $1.0 million for these services in 2019. In addition, WTW received approximately $290,000 from insurance carriers related to health and welfare benefits during 2019. The Compensation Committee is aware of the other services provided by WTW to the Company but did not review or untilapprove the provision of these services because they are of the type directly procured by management in the ordinary course of business. Views of our Stockholders We value the opinions of our stockholders and the Compensation Committee will continue to consider the outcome of future Say on Pay votes, as well as feedback received throughout the year, when making compensation decisions for our NEOs. As part of this Proxy Statement, we are seeking an advisory,non-binding stockholder vote with respect to compensation for our NEOs for the fiscal year ended December 31, 2019. The Compensation Committee anticipates that the results of this Say on Pay vote will be a key part of annual executive compensation review. In addition to the Say on Pay vote, in 2019 we implemented a stockholder engagement program designed to informally solicit input from the stockholders of Ceridian on topics that included corporate governance and compensation. A more fulsome description of the engagement program, the feedback we received, and our responses to that feedback is set forth in the Corporate Governance section, beginning on page 8 of this Proxy Statement. | | | | | | | 26 | | 2020 PROXY STATEMENT |
Managing Compensation-Related Risk As part of our sound governance practices and to reinforce the alignment of executives’ interests with those of our stockholders, the following risk-mitigating policies have been approved by the Compensation Committee and the Board: | | | | | | Policy | | Key Features | | | No-Hedging and No-Pledging | | • Please see discussion of Ceridian’s anti-hedging and anti-pledging policy described on page 14 of the Proxy Statement | | | Compensation Recovery Policy | | • In the event that the Board determines that a material accounting restatement of our financial statements has occurred, Ceridian may seek to recoup all or a portion of the excess incentive compensation received by our executive officers in the three completed fiscal years immediately preceding the date of the material accounting restatement • In addition to the standalone Compensation Recovery Policy, the Ceridian HCM Holding Inc. 2018 Equity Incentive Plan (the “2018 Equity Incentive Plan”) contains a recovery provision whereby Ceridian may recoup (i) gain on awards granted under the plan in the event of a termination for cause; and (ii) excess on awards granted under the plan in the event of an accounting restatement | | | Stock Ownership Guidelines (“SOG”) | | • Our Chief Executive Officer is required to own and hold shares of our stock with a value that is at least equal tosix-times his annual base salary • Our other executive officers are required to own and hold shares of our stock with a value that is at least three-times his or her annual base salary • Each of our executive officers are expected to reach his or her respective ownership threshold within the later of (i) five years from when they become an executive officer of Ceridian; or (ii) the adoption of the SOG (which occurred in February 2020) • Until an executive officer meets the stock ownership requirements, the executive officer must retain at least 75% of theafter-tax shares received in connection with the receipt of shares of Common Stock from the exercise or vesting and issuance of equity awards • The first measurement date will be December 31, 2020 • The following table reflects (as to our NEOs who are executive officers as of the Record Date) (i) the stock beneficially owned as of the Record Date; and (ii) the restricted stock units currently held and expected to vest by the December 31, 2020 measurement date (the “Projected Stock Ownership”) against the stock ownership guidelines for each of the executive officer | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | NEOs | | Guideline
Multiple
of Base
Salary | | Annual
Base
Salary
($) | | SOG
Requirement
($) | | Projected
Stock
Ownership (#) | | Total Value of
Projected
Stock
Ownership
($) | | Projected % of SOG Achieved (%) | Mr. Ossip | | | | 6x | | | | | $700,000 | | | | | $4,200,000 | | | | | 405,595 | (1) | | | | $30,099,205 | | | | | 716.65% | | Ms. Turner | | | | 3x | | | | | $655,000 | | | | | $1,965,000 | | | | | 37,500 | (2) | | | | $ 2,782,875 | | | | | 141.62% | | Mr. Armstrong | | | | 3x | | | | | $655,000 | | | | | $1,965,000 | | | | | 18,313 | (3) | | | | $ 1,359,008 | | | | | 69.16% | | Mr. Gitajn | | | | 3x | | | | | $307,929 | | | | | $ 923,787 | | | | | 11,627 | (4) | | | | $ 862,840 | | | | | 93.40% | |
| (1) | Consists of (i) 22,267 shares of Common Stock, (ii) 250,000 shares of Common Stock that are issuable pursuant to restricted stock units that are currently vested, (iii) 8,328 shares of Common Stock that are issuable upon the exchange of Exchangeable Shares, and (iv) 125,000 shares of Common Stock that are issuable pursuant to restricted stock units that vest on March 20, 2020. Excludes (i) 229,085 shares of Common Stock held by OsFund Inc., of which Mr. Ossip disclaims beneficial ownership, and (ii) 1,860,902 shares of Common Stock that are issuable upon the exchange of Exchangeable Shares held by Osscer Inc., of which Mr. Ossip disclaims beneficial ownership. |
| (2) | Consists of (i) 12,500 shares of Common stock that are issuable at the election of the recipient pursuant to restricted stock units that are currently vested, (ii) 12,500 shares of Common Stock that are issuable pursuant to restricted stock units that vest on September 4, 2020, and (iii) 12,500 shares of Common Stock that are issuable pursuant to restricted stock units that vest on September 9, 2020. |
| (3) | Consists of 18,313 shares of Common Stock. |
| (4) | Consists of 11,627 shares of Common Stock. |
In connection with their successorsoversight of compensation-related risks, the Compensation Committee, and WTW, as the Compensation Committee’s independent compensation consultant, reviewed Ceridian’s compensation policies and practices to ensure that compensation programs do not encourage risk-taking that is reasonably likely to have a material adverse effect on us. The Compensation Committee and WTW reviewed all compensation plans and | | | | | | | 27 | | 2020 PROXY STATEMENT |
identified those plans that are duly electedmost likely to pose material risks and qualified,balanced these against our existing processes and compensation program safeguards. The review process considered mitigating features contained within our compensation plan design, which includes elements such as mix of pay, timing of payouts relative to performance periods, and goal diversification. We believe, and the results of the risk analysis concluded, that our compensation programs do not encourage risk-taking that is reasonably likely to result in a material adverse effect on Ceridian. Compensation Comparison Definition In reviewing compensation for the executive officers, the Compensation Committee considers several factors, including practices and policies within a relevant market for talent. Our definition of market comparisons includes companies that, like us, are high-growth, cloud-based technology and software companies. The Compensation Committee determined that the most appropriate way to capture our unique attributes was to focus on survey data with similar characteristics, as opposed to specifically identifying a “compensation peer group.” Therefore, the Compensation Committee reviewed competitive data from the following surveys: IPAS, Radford, and WTW. The combination of these various survey sources provided comparisons covering our size and scale, growth profile, specific industry and broad labor market. While these surveys provided a range of practices for the Compensation Committee to consider, the Compensation Committee also reviewed the compensation arrangements of three companies: Paycom Software, Inc.; The Ultimate Software Group, Inc.; and Workday, Inc. These additional and supplemental reference points provided the Compensation Committee with perspective on the design, mix and delivery of compensation by companies with products and services that are not dissimilar to ours. The Compensation Committee did not emphasize one data point or data set over another, nor did the Compensation Committee target a specific percentile in comparison to the other companies. Instead, the Compensation Committee considered the data from each relevant source relative to key internal criteria (e.g., business strategy, individual responsibilities, comparative compensation of our executives, etc.). 2019 Target Direct Compensation In setting total target direct compensation for fiscal year 2019, the Compensation Committee reviewed the various market references provided by WTW, the realities of our aggressive business environment, and our compensation philosophy. Reflecting these factors, total target direct compensation for each of our NEOs (i.e., the combination of base salary, annual short-term incentives and LTI equity grant values) is fully competitive within the labor markets for which we compete for talent. Further, the Compensation Committee considered the superior performance of Ceridian as noted in the “Executive Summary” above when it determined the amount of the LTI equity awards for the NEOs. Please see the discussion of “2019 Long Term Incentive Awards” below. The following total target direct compensation amounts were approved for fiscal year 2019: | | | | | | | | | | | | | | | | | | | | | NEO | | Base Salary ($) | | MIP
(short term
incentive) ($) | | LTI (equity) ($) | | Total Target Direct Compensation ($) | Mr. Ossip | | | $ | 700,000 | | | | $ | 800,000 | | | | $ | 28,634,210 | | | | $ | 30,134,210 | | Ms. Turner | | | $ | 655,000 | | | | $ | 393,000 | | | | $ | 3,877,367 | | | | $ | 4,925,367 | | Mr. Armstrong | | | $ | 655,000 | | | | $ | 393,000 | | | | $ | 3,013,708 | | | | $ | 4,061,708 | | Mr. Gitajn | | | $ | 307,929 | | | | $ | 246,343 | | | | $ | 1,908,329 | | | | $ | 2,462,601 | | Mr. Goldschmied | | | $ | 351,686 | | | | $ | 211,012 | | | | $ | 2,517,491 | | | | $ | 3,086,189 | | Mr. Zimmer | | | $ | 655,000 | | | | $ | 393,000 | | | | $ | 3,392,056 | | | | $ | 4,440,056 | |
2019 Compensation Decisions and Outcomes Base Salary The Compensation Committee reviews base salaries of the CEO and executive officers on an annual basis. When setting base salaries, the Compensation Committee considers several factors including experience in the position, industry experience, scope of responsibilities, and individual performance. In 2019, the base salaries for Mr. Ossip, Mr. Gitajn and Ms. Turner did not increase. Mr. Armstrong’s salary increased 121.8% as a result of his promotion to | | | | | | | 28 | | 2020 PROXY STATEMENT |
become our Chief Operating Officer, and Mr. Goldschmied’s salary increased 17.1% as a result of the Compensation Committee’s recognition of his important role in leading the development of our flagship Dayforce product. 2019 Management Incentive Plan Our MIP provides an opportunity for our NEOs and other management employees to earn a short-term incentive, contingent on the successful achievement of financial goals of strategic significance. As a high-growth, cloud-based software company, our performance metrics focus ontop-line growth and profitable operations, providing us with a platform for future growth and success. These metrics are reflected within our MIP. In 2019, our MIP provided for a cash payment at 100% of the NEO’s individual short-term incentive plan target if one or both of the financial goals were achieved at the target performance level. Payments below or above the target level of performance are subject to their earlier death, resignation or removal. Eachthe approval of the nominees isBoard, in its discretion. | | | | | | | | | | | | Metric | | Why it Matters | | Metric Target ($) | | Metric Achieved ($) | | Percentage
Achieved (%) | Revenue (50%) | | Emphasizes growth in our core products, solutions and geographies as well as emerging markets | | | $ | 810 million | | | $826.1 million* | | 102.0% | Adjusted EBITDA (50%) | | Indicator of our profitability, operating efficiencies and the scalability of our growth | | | $ | 182 million | | | $184.6 million* | | 101.4% |
| * | Both revenue and adjusted EBITDA were calculated based on the Company’s operating results, adjusted for foreign currency and interest rate impacts plus other unique impacts as approved by the Compensation Committee. |
In 2019, both financial metrics in the 2019 MIP exceeded the target level. This strong performance represented material growth over the prior year of 11.5% on revenue and 14.9% on adjusted EBITDA. Based on this strong financial performance which resulted in exceeding both metrics at target, the Compensation Committee accordingly approved a current memberfull target cash incentive payout. | | | | | | | | | | | | | | | | NEO | | Target Payout (% of Base Salary) | | Actual Payout (% of Base Salary) | | Actual Payout ($) | Mr. Ossip | | | | 114 | % | | | | 114 | % | | | $ | 800,000 | | Ms. Turner | | | | 60 | % | | | | 60 | % | | | $ | 393,000 | | Mr. Armstrong | | | | 60 | % | | | | 60 | % | | | $ | 393,000 | | Mr. Gitajn | | | | 80 | % | | | | 80 | % | | | $ | 246,343 | | Mr. Goldschmied | | | | 60 | % | | | | 60 | % | | | $ | 211,012 | | Mr. Zimmer | | | | 60 | % | | | | 60 | % | | | $ | 393,000 | |
Additionally, in February 2020, the Compensation Committee recommended, and the Board approved a special restricted stock unit (“RSU”) award to our participants in the 2019 MIP, including the following amounts to our NEOs: Mr. Ossip (3,129 RSUs), Ms. Turner (1,538 RSUs), Mr. Armstrong (1,538 RSUs), Mr. Gitajn (964 RSUs), Mr. Goldschmied (826 RSUs), and Mr. Zimmer (1,538 RSUs). Such RSUs were granted on February 28, 2020 under the 2018 Equity Incentive Plan, and vest annually over three years. 2019 Long-Term Incentive Awards As described in more detail in the Compensation Philosophy and Objectives at page 22 above, an important facet of our NEO compensation packages are long term incentive awards granted primarily in the form of stock options. Because the long-term incentives played such a significant role in 2019 NEO compensation, we have provided more specific discussion and analysis with regard to the Committee and Board’s goals in providing those grants to our NEOs. LTI Structure Considerations The Compensation Committee’s intent is to grant long-term incentives annually to our NEOs that are structured in such a way as to align their interests with those of Ceridian stockholders. The Compensation Committee considers a | | | | | | | 29 | | 2020 PROXY STATEMENT |
variety of factors in determining the form of long-term incentives (e.g., shareholder alignment, share usage, performance, and retention) in order to achieve this goal. The LTI equity awards granted in 2019 reinforce our objectives of shareholder alignment and long-term value creation. The stock options granted in 2019 only generate value for recipients with share price appreciation and are structured with a four-year vesting schedule andten-year term to encourage a longer-term perspective and retain key leaders. The Compensation Committee also has in certain circumstances (e.g., new hires, extraordinary performance, promotions or retention) provided time-based restricted stock units (“RSUs”), vesting over three or four years. Company Performance Considerations in Grant Decisions Within the long-term incentive structure laid out above, in fiscal year 2019, the Compensation Committee recommended, and the Board and has consented to serve if elected. Unless you direct otherwise through your proxy voting instructions,granted stock option grants reflecting the persons named as proxies will vote all proxies received “FOR” the election of eachbelief of the nominees. If any nomineeCompensation Committee and the Board in the outstanding work by the Company’s management in driving the Company’s strong performance since its IPO in 2018. In determining the awards, the Compensation Committee also considered the following accomplishments of the Company led by Mr. Ossip and our NEOs in 2018, as compared to 2017:
Increased revenue from $676.2 million in 2017 to $740.7 million in 2018, a 9.5% increase Increased Dayforce revenue from $325.5 million in 2017 to $437.5 million in 2018, a 34.4% increase Increased adjusted EBITDA from $131.4 million in 2017 to $160.6 million in 2018, a 22.2% increase Increased our Common Stock price from $22.00 as of IPO to $34.49 as of December 31, 2018, a 56.8% increase Increased our market cap from $3.0 billion as of IPO to $3.9 billion as of December 31, 2018, a 28.4% increase Grew the number of employees from 4,212 as of December 31, 2017 to 4,444 as of December 31, 2018, an increase of 5.5% Expanded the functionality of Dayforce 2019 Grant Amounts The stock options granted to our NEOs in fiscal year 2019 were as follows: | | | | | | | | | | | | | | | | | | NEO | | Number of
Option Shares*
(#)* | | Grant Date | | Exercise
Price
($) | | Grant Date Fair Value** ($) | Mr. Ossip | | | | 10,390 1,750,000 | | | February 8, 2019 March 20, 2019 | | | $ $ | 44.91 49.93 | | | | $ $ | 152,610 28,481,600 | | Ms. Turner | | | | 76,335 | | | March 20, 2019 | | | $ | 49.93 | | | | $ | 1,242,367 | | Mr. Armstrong | | | | 50,000 2,301 | | | February 8, 2019 February 8, 2019 | | | $ $ | 44.91 44.91 | | | | $ $ | 734,410 33,798 | | Mr. Gitajn | | | | 3,048 114,503 | | | February 8, 2019 March 20, 2019 | | | $ $ | 44.91 49.93 | | | | $ $ | 44,770 1,863,559 | | Mr. Goldschmied | | | | 2,229 152,671 | | | February 8, 2019 March 20, 2019 | | | $ $ | 44.91 49.93 | | | | $ $ | 32,740 2,484,751 | | Mr. Zimmer | | | | 50,000 4,127 | | | March 20, 2019 May 15, 2019 | | | $ $ | 49.93 50.16 | | | | $ $ | 813,760 57,296 | |
| * | The stock options vest annually over four years, have a10-year term, and an exercise price equal to the fair market value on the date of grant. |
| ** | The grant date fair values are computed in accordance with ASC Topic 718, based on the assumptions set forth in Note 2 to our consolidated financial statements included in the 2019 Annual Report. These amounts do not reflect the actual economic value that may ultimately be realized by the NEOs. |
2019 Grant Specific Discussion and Analysis While the goals of both the structure and company performance of the long-term incentive plans overlaid every decision to grant long term incentive awards in 2019, included below is unable or unwillingcommentary with regard to serveeach specific grant and the intention of the Compensation Committee and Board behind the grant. | | | | | | | 30 | | 2020 PROXY STATEMENT |
On February 8, 2019, in addition to the 2018 management incentive plan cash payout and in recognition of our fiscal 2018 performance, including the execution of a successful IPO and new records in Dayforce and Cloud revenue, the Compensation Committee recommended, and the Board approved, a special stock option grant to Messrs. Ossip (10,390 shares), Gitajn (3,048 shares), Armstrong (2,301 shares), and Goldschmied (2,229 shares), as noted in the table above. On May 15, 2019, for the reasons noted above, the Compensation Committee recommended, and the Board approved, a special stock option grant to Mr. Zimmer in the amount of 4,127 shares. The amounts of the stock option awards represented the fair value of approximately 15% of the individual’s target cash payout under the 2018 management incentive plan. On February 8, 2019, Mr. Armstrong was granted a50,000-share stock option award as noted in the table above. The award was made pursuant to the terms of his employment agreement and as a result of his promotion to Executive Vice President, Chief Operating Officer. As a result of this stock option grant, Mr. Armstrong did not receive an annual LTI equity grant in 2019. On March 20, 2019, the stock option awards reflected in the table above were granted to the NEOs as their annual LTI equity grant. Mr. Ossip was granted 1,000,000 stock options in recognition of Ceridian being a founder led, high growth company, and 750,000 stock options in recognition of our exceptional organizational performance in 2018 under his leadership, which included a successful IPO, the creation of significant increases in stockholder value through his leadership and management of the organization, and his enhancement of the executive leadership of Ceridian to provide for future growth and scale (as described more fully in “Company Performance Considerations in Grant Decisions” on page 30 above. The amounts of the stock option awards made to Ms. Turner, and Messrs. Gitajn, Goldschmied and Zimmer were in recognition of the Compensation Committee’s recognition of the stockholder value creation, the long-term performance-based orientation of the compensation program and relevant market comparisons. As discussed above, Mr. Armstrong did not receive an annual LTI equity grant in 2019 as a result of his50,000-share stock option award granted pursuant to his employment agreement and as a result of his promotion to Executive Vice President, Chief Operating Officer. In addition to the stock options outlined above, the following NEOs were granted time-based RSUs due to special circumstances: Mr. Armstrong received an award of 50,000 RSUs on February 8, 2019 at a value of $2,245,500 in recognition of his then new role as Executive Vice President, Chief Operating Officer. Mr. Zimmer received an award of 50,000 RSUs on August 14, 2019 at a value of $2,521,000 as outlined in his employment agreement entered into at the time he joined Ceridian. This RSU award was part of an overall recruitment strategy to provide a competitive long-term equity award as the Annual Meeting, the persons named as proxies may vote for a substitute nominee chosen by the present Board. In the alternative, the proxies may vote only for the remaining nominees, leaving a vacancythen Executive Vice President, Chief Strategy Officer. Ms. Turner received an award of 50,000 RSUs on the Board. The Board may fill such vacancySeptember 9, 2019 at a later date or reducevalue of $2,635,000 as outlined in her employment agreement entered into at the sizetime she joined Ceridian as our President. This RSU award was part of an overall recruitment strategy to provide a competitive long-term equity award as the Board. We have no reason to believe that anynew President of the nominees will be unwilling or unable to serve if elected as a director.Ceridian. Other Elements of Compensation Recommendation of the Board
THE BOARD RECOMMENDS THAT YOU VOTE “FOR” THE ELECTION OF EACH OF THE NOMINEES.
PROPOSAL TWOEmployee Benefits
APPROVAL OF CERIDIAN HCM HOLDING INC. GLOBAL EMPLOYEE STOCK PURCHASE PLANWe offer a variety of benefits and perks for every employee at Ceridian, including our executive officers, to foster a healthy and happy work experience. Benefits are substantially the same for all employees, including executive officers, based on country location. In addition, we offer select executive perquisites (e.g., executive physicals, parking benefit and recreational dues).
At the Annual Meeting, our stockholders will be askedIn summary, we offer:
Medical and dental plans to considerpromote employee-health and act upon a proposalwelfare Retirement plan with Ceridian contributions An employee stock purchase plan to approve theencourage financial fitness The Ceridian HCM Holding Inc. Global Employee Stock Purchase Plan (the “GESPP”(“GESPP”). provides an opportunity for all employees to become Ceridian stockholders and drives employee engagement. This plan provides a 15% discount on the stock purchase price with a lookback feature. | | | | | | | 31 | | 2020 PROXY STATEMENT |
Additional information on the employee benefits provided to our NEOs is provided in the “Summary Compensation Table” below. Executive Severance Within the employment agreements of the NEOs, we provide for severance payments and benefits in the event of a qualifying termination of employment, which may include varying severance payments based on the length of service to Ceridian. The GESPP was approved unanimouslyCompensation Committee believes that these arrangements are competitively reasonable and adoptednecessary to recruit and retain key executives. The material terms of these severance payments to our NEOs are described in “Potential Payments upon Termination” below. Compensation Committee Report The members of the Compensation Committee hereby state: We have reviewed and discussed the Compensation Discussion & Analysis that is required by the SEC rules with Ceridian’s management. Based on such review and discussions, the Compensation Committee recommended to Ceridian’s Board at its meeting on November 9, 2018, at which time it became effective, subject to approval by our stockholders. We commencedof Directors that the first offering period under the GESPP on January 1, 2019, with the actual purchase of shares of our Common Stock under the GESPP contingent upon approval by our stockholders. If this proposal is approved by the holders of a majority of the votes represented by our Voting Stock and voting on the matter, the maximum aggregate number of shares of Common Stock that mayCompensation Discussion & Analysis be issued under the GESPP will be 2,500,000, which will be used to satisfy the purchase of shares of Common Stock under either the Code Section 423 Component or theNon-Code Section 423 Component of the GESPP. We do not maintain any other employee stock purchase plans. However, we do maintain the Ceridian HCM Holding Inc. 2018 Equity Incentive Plan, which allows us to grant various forms of equity compensation awards to our employees, officers andnon-employee directors and to those of our subsidiaries.
If this proposal is approved by our stockholders as described above, the first offering period will conclude and the first purchase of shares of Common Stock under the GESPP will occur on June 28, 2019. In the event that our stockholders as described above do not approve this proposal, all contributions made under the GESPP for the applicable offering period will be refunded to participants, without interest, as soon as reasonably practicable and no shares of Common Stock will be issued under the GESPP.
The following description of the GESPP is a summary and is qualifiedincluded in its entirety by reference to the plan document for the GESPP, a copy of which is attached asAnnex A to this Proxy Statement.
PurposeMEMBERS OF THE COMPENSATION COMMITTEE
The purpose of the GESPP is to provide an incentive to eligible employees by giving them an opportunity to become owners of Ceridian and play a role in our future.Brent B. Bickett, Chair
Plan AdministrationRonald F. Clarke
The GESPP will be administered by the compensation committee of the Board. The compensation committee will have broad administrative authority over the GESPP. All questions regarding (a) the interpretation of the GESPP, any form of agreement or other document employed by us in the administration of the GESPP, (b) any purchase rights granted under the GESPP, and (c) the correction of any errors arising under the GESPP will be determined by the compensation committee and such determinations will be final and binding upon all persons having an interest in the GESPP or the purchase rights. The compensation committee also will determine all relevant terms and conditions of the purchase rights granted to employees, provided that all employees have the same rights and privileges within the meaning of Section 423(b) of the United States Internal Revenue Code of 1986, as amended, and any applicable regulations promulgated thereunder (the “Code”), for purposes of the Code Section 423 Component of the GESPP. Any of the compensation committee’s administrative tasks may be assigned to an individual designated by us to receive enrollment agreements, withdrawal notices and other communications from eligible employees (the “Administrator”).Thomas M. Hagerty
Available Shares
Subject to adjustment for certain changes in recapitalization or reorganization, in which we are a party, the maximum aggregate number of shares of Common Stock that may be issued under the GESPP will be
| | | | | | | 32 | | 2020 PROXY STATEMENT |
2,500,000 shares of Common Stock. For the sake of clarity, the aggregate share limitation may be used to satisfy the purchase of shares of Common Stock under either the Code Section 423 Component or theNon-Code Section 423 Component of the GESPP. Shares of Common Stock that may be issued under the GESPP may consist of authorized but unissued shares and/or reacquired shares (treasury shares). If any rights to purchase shares of Common Stock granted under the GESPP expire or are terminated or canceled, the shares of Common Stock allocable to the unexercised portion of such rights will again be available for issuance under the GESPP.
Offerings
The GESPP will be implemented by offering all eligible employees an option to purchase shares of Common Stock, which the employee may or may not exercise during an offering period (“Purchase Right”). The duration of each offering period will be the calendar year commencing on January 1 and concluding on December 31 of each year (each, an “Offering Period”). Each Offering Period will consist of four quarterly purchase periods (each, a “Purchase Period”) commencing on January 1, April 1, July 1 and October 1; provided, the initial Purchase Period under the GESPP will run from January 1, 2019 to June 30, 2019.
Eligibility
Our employees (or those employees of our subsidiaries that are designated for offering participation in either the Code Section 423 Component orNon-Code Section 423 Component of the GESPP) may participate in offerings under the GESPP provided they were employed prior to the start of an enrollment period for an applicable Purchase Period (“Eligible Employee”).
No employee will be eligible to participate in the GESPP if, immediately after the grant of Purchase Rights, the employee would own, directly or indirectly, stock possessing 5% or more of the total combined voting power or value of all classes of our stock, a future parent corporation, or our subsidiary companies, including any stock that such employee may purchase under all outstanding Purchase Rights and other equity compensation awards. In addition, no employee may purchase more than $25,000 worth of shares of Common Stock (determined based on the fair market value of the shares at the time such Purchase Right is granted) under the GESPP and anyNon-Code Section 423 Componentsub-plans of our subsidiary companies for each calendar year during which such Purchase Right is outstanding.
As of the date of this proposal, approximately 4,498 employees in the United States and other countries will be eligible to participate in the GESPP if approved by our stockholders as described above.
Participation
An Eligible Employee who elects to participate in the GESPP (“Participant”) must enroll in the GESPP by timely submitting a properly completed enrollment agreement to the Administrator during the enrollment period that precedes each Purchase Period, authorizing payroll deductions in whole percentages from 1% to 10% of his or her compensation to be deducted from each pay period during the Offering Period. The compensation committee may, in its sole discretion, permit additional lump sum contributions on a periodic basis during the Offering Period in a form and manner as determined by the compensation committee; provided, the amount of any additional lump sum contributions made by a Participant, when combined with other Participant contributions, shall not exceed the maximum amount allowed under the terms of the GESPP.
Payment of Purchase Price; Payroll Deductions
The purchase of shares during each Offering Period will be funded by a Participant’s payroll deductions accumulated during the Offering Period. Participant payroll deductions will commence on the first pay day following the first day of the Offering Period and will continue to be deducted each pay day through the end of the Offering Period. Interest will not be paid on Participant accumulated payroll deductions, which will be
deposited with our general funds and may be used by us for any corporate purpose. A Participant may not increase, but may decrease the rate of payroll deductions once during an Offering Period by timely submitting an amended enrollment agreement to the Administrator. A Participant who elects to decrease the rate of his or her payroll deductions to 0% will remain in the GESPP unless he or she elects to withdraw from the GESPP. Unless a Participant’s participation is withdrawn, his or her Purchase Right will be exercised automatically on each Purchase Date.
Purchase Price
The price at which a share of Common Stock will be purchased on the last trading day of each Purchase Period (the “Purchase Date”) will be the lower of (i) 85% of the fair market value of a share of Common Stock on the first trading day of the Offering Period, or (ii) 85% of the fair market value of a share of Common Stock on the Purchase Date (the “Purchase Price”).
Purchase Limits
Each Participant will be granted a Purchase Right to purchase on the Purchase Date for such Offering Period up to a maximum number of shares of Common Stock determined by dividing such Participant’s contributions accumulated prior to such Purchase Date by the applicable Purchase Price; provided, however, that in no event will a Participant be permitted to purchase more than $25,000 worth of shares of Common Stock (determined based on the fair market value of the shares at the time such Purchase Right is granted) under the GESPP and anyNon-Code Section 423 Componentsub-plans of our subsidiary companies for each calendar year during which such Purchase Right is outstanding.
Termination of Employment
In the event a Participant’s employment is terminated, prior to a Purchase Date, for any reason, including retirement, disability or death, or in the event he or she is no longer eligible to participate in the GESPP, his or her rights under any offering under the GESPP will terminate immediately. Contributions credited to the Participant’s account since the last Purchase Date will be, as soon as practicable, returned to the Participant, or, in the case of the Participant’s death, to the Participant’s legal representative.
Voluntary Withdrawal
Participants may withdraw from the GESPP at any time and receive a refund of all payroll deductions, without interest, credited to his or her GESPP account that have not been applied toward the purchase of shares of Common Stock by submitting a withdrawal election to the Administrator no later than the 15th day of the month in which the applicable Purchase Date falls. The payroll deductions will be returned as soon as practicable after the withdrawal and may not be applied to the purchase of shares of Common Stock in any other offering under the GESPP. Participants who withdraw from the GESPP will be prohibited from resuming participation for the same Offering Period, but may participate in any subsequent Offering Period.
Restrictions on Transferability
Payroll deductions credited to a Participant’s account and any Purchase Rights granted under the GESPP may not be assigned, alienated, pledged, attached, sold or otherwise disposed of in any way (other than by will, the laws of descent and distribution) by the Participant. Any attempt at assignment, transfer, pledge or other disposition will be without effect, except that we may treat such act as an election to withdraw from the GESPP.
Effect of Recapitalization and Reorganization
In the event of certain changes in our capitalization, the compensation committee will appropriately adjust the number and class of shares of Common Stock subject to the GESPP and each Purchase Right and/or the Purchase Price. The compensation committee also has discretion to make equitable adjustments to the GESPP in the event of other changes in our capital structure or business to prevent the substantial dilution or enlargement of rights granted to, or available for, Participants under the GESPP.
Effect of Change in Control
In the event of a change in control, as defined by the GESPP, any surviving or acquiring corporation may assume our rights and obligations under the GESPP. If the surviving or acquiring corporation does not assume our rights and obligations under outstanding Purchase Rights, the Purchase Date of the then current Offering Period will be accelerated to a date before the date of the change in control, but the number of shares of Common Stock subject to outstanding Purchase Rights will not be adjusted. All Purchase Rights that are neither assumed nor exercised as of the date of the change in control will terminate and cease to be outstanding effective as of the date of the change in control.
Amendment and Termination
The Board or the compensation committee may amend the GESPP at any time; provided that any outstanding Purchase Right granted before an amendment of the GESPP is not materially adversely affected by any such amendment, except as necessary to comply with applicable laws, listing requirements or governmental regulations (including Section 423 of the Code), or as necessary to obtain or maintain favorable tax, listing or regulatory treatment. An amendment must be approved by our stockholders as described above within 12 months of the adoption of such amendment if the amendment authorizes the sale of more shares of Common Stock than are authorized for issuance under the GESPP or changes the definition of the corporations or companies that may be designated by the compensation committee as participating in the GESPP.
Certain U.S. Federal Income Tax Consequences
The following is a summary of the principal United States federal income tax consequences to Participants in the United States and to us with respect to participation in the Code Section 423 Component of the GESPP. The rules concerning the federal income tax consequences with respect to participation in the GESPP are quite technical. Moreover, the applicable statutory provisions are subject to change, as are their interpretations and applications which may vary in individual circumstances. Therefore, the following is designed to provide a general understanding of the federal income tax consequences. In addition, the following discussion does not set forth any gift, estate, social security or state or local tax consequences that may be applicable, and such discussion is limited to the U.S. federal income tax consequences to individuals who are citizens or residents of the United States, other than those individuals who are taxed on a residence basis in a foreign country. Because the tax consequences to any Participant may depend on his or her particular situation, each Participant should consult his or her own tax adviser regarding the federal, state, local, and other tax consequences of the grant or exercise of a Purchase Right or the sale or other disposition of shares of Common Stock acquired under the GESPP. The GESPP is not subject to any of the requirements of the Employee Retirement Income Security Act of 1974, as amended. The GESPP is not, nor is it intended to be, qualified under Section 401(a) of the Code.
Rights granted under the GESPP are intended to qualify for favorable federal income tax treatment associated with rights granted under an employee stock purchase plan which qualifies under the provisions of Section 423 of the Code.
A Participant will be taxed on amounts withheld for the purchase of shares of Common Stock, but will not recognize taxable income as a result of the granting or exercise of a Purchase Right until a sale or other
disposition of the acquired shares. The taxation upon such sale or other disposition will depend upon the holding period of the acquired shares.
If the shares are sold or otherwise disposed of more than two years after the beginning of the Offering Period and more than one year after the shares are transferred to the Participant, then the lesser of the following will be treated as ordinary income: (i) the excess of the fair market value of the shares at the time of such sale or other disposition over the Purchase Price, or (ii) the excess of the fair market value of the shares as of the beginning of the Offering Period over the Purchase Price (determined as of the beginning of the Offering Period). Any further gain or any loss will be taxed as a long-term capital gain or loss.
If the shares are sold or otherwise disposed of before the expiration of either of the holding periods described above, then the excess of the fair market value of the shares on the Purchase Date over the Purchase Price will be treated as ordinary income at the time of such sale or other disposition. The balance of any gain will be treated as capital gain. Even if the shares are later sold or otherwise disposed of for less than their fair market value on the purchase date, the same amount of ordinary income is attributed to the Participant, and a capital loss is recognized equal to the difference between the sales price and the fair market value of the shares on such purchase date. Any capital gain or loss will be short-term or long-term, depending on how long the shares have been held.
There are no federal income tax consequences to us by reason of the grant or exercise of rights under the GESPP. We will be entitled to a deduction to the extent amounts are taxed and reported as ordinary income to a Participant for shares sold or otherwise disposed of before the expiration of the holding periods described above (subject to the requirement of reasonableness and the satisfaction of tax reporting obligations).
New Plan Benefits
Participation in the GESPP is voluntary and each eligible employee will make his or her own decision regarding whether and to what extent to participate in the GESPP. In addition, the Board and the compensation committee have not granted any Purchase Rights under the GESPP that are subject to stockholder approval of this proposal. Accordingly, the benefits or amounts that will be received by or allocated to our executive officers and other employees under the GESPP, as well as the benefits or amounts that would have been received by or allocated to our executive officers and other employees for fiscal year 2018 if the GESPP had been in effect, are not determinable. Ournon-employee directors will be ineligible to participate in the GESPP.
“FOR” votes from the holders of a majority of the votes represented by our Voting Stock present at the Annual Meeting or represented by proxy and voting on the matter are required in order to approve Proposal Two.
Recommendation of the Board
THE BOARD RECOMMENDS THAT YOU VOTE “FOR” THE APPROVAL OF THE CERIDIAN HCM HOLDING INC. GLOBAL EMPLOYEE STOCK PURCHASE PLAN.
PROPOSAL THREE
RATIFICATION OF THE APPOINTMENT OF
OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Our audit committee has appointed KPMG LLP as our independent registered public accounting firm to perform the audit of our consolidated financial statements for the fiscal year ending December 31, 2019, and we are asking our stockholders to ratify this appointment.
The audit committee annually reviews the independent registered public accounting firm’s independence, including reviewing all relationships between the independent registered public accounting firm and us and any disclosed relationships or services that may impact the objectivity and independence of the independent registered public accounting firm, and the independent registered public accounting firm’s performance. As a matter of sound corporate governance, the Board determined to submit to stockholders for ratification the appointment of KPMG LLP.
“FOR” votes from the holders of a majority of the votes represented by the Voting Stock present at the Annual Meeting (in person or represented by proxy) and voting on the matter are required in order to ratify the appointment of KPMG LLP. In the event that this appointment is not ratified, we will review our future appointment of KPMG LLP.
We expect that a representative of KPMG LLP will attend the Annual Meeting, and the representative will have an opportunity to make a statement if he or she so chooses. The representative will also be available to respond to appropriate questions from stockholders.
Policy on Audit CommitteePre-Approval of Audit and PermissibleNon-Audit Services of Independent Registered Public Accounting Firm
We have adopted a policy under which the audit committee mustpre-approve all audit and permissiblenon-audit services to be provided by the independent registered public accounting firm. As part of its review, the audit committee also considers whether the categories ofpre-approved services are consistent with the rules on independence. The audit committeepre-approved all services performed by KPMG LLP in fiscal year 2018.
Audit Fees
The following table sets forth the fees billed or expected to be billed by KPMG LLP for audit, audit-related, tax and all other services rendered for fiscal years 2018 and 2017 (in thousands):
| | | | | | | | | Fee Category | | 2018 | | | 2017 | | | | | (In thousands) | | Audit Fees | | $ | 1,995 | | | $ | 1,075 | | Audit-Related Fees | | | 1,077 | | | | 884 | | Tax Fees | | | 130 | | | | 180 | | All Other Fees | | | 0 | | | | 0 | | | | | | | | | | | Total Fees | | $ | 3,202 | | | $ | 2,139 | | | | | | | | | | |
Audit Fees. Consist of fees for services rendered for the audit and/or review of our consolidated financial statements. Audit fees also include fees for services rendered in connection with the filing of registration statements and other documents with the SEC, and the issuance of accountant consents and comfort letters.
Audit-Related Fees. Consist of aggregate fees for accounting consultations and other services that were reasonably related to the performance of audits or reviews of our consolidated financial statements and were not reported above under “Audit Fees.”
Tax Fees. Consist of aggregate fees for tax compliance, tax advice and tax planning services, including the review and preparation of certain foreign income tax returns.
All Other Fees. Consist of fees billed in the indicated year for other permissible work performed by KPMG LLP that is not included within the above category descriptions.
Recommendation of the Board
THE BOARD RECOMMENDS THAT YOU VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF KPMG LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER 31, 2019.
Report of the Audit Committee of the Board of Directors
The audit committee’s general role is to assist the Board in monitoring our financial reporting process and related matters. Its specific responsibilities are set forth in its charter.
The audit committee has reviewed our consolidated financial statements for fiscal year 2018 and met with management, as well as with representatives of KPMG LLP, our independent registered public accounting firm, to discuss the consolidated financial statements. The audit committee also discussed with members of KPMG LLP the matters required to be discussed by Auditing Standard No. 16, “Communications with Audit Committees,” as adopted by the PCAOB.
In addition, the audit committee received the written disclosures and the letter from KPMG LLP required by applicable requirements of the PCAOB regarding the independent accountant’s communications with the audit committee concerning independence and discussed with members of KPMG LLP its independence.
Based on these discussions, the financial statement review and other matters it deemed relevant, the audit committee recommended to the Board that Ceridian’s audited consolidated financial statements for fiscal year 2018 be included in its Annual Report onForm 10-K for fiscal year ended December 31, 2018.
Audit Committee
Ganesh B. Rao
Andrea S. Rosen
Gerald C. Throop (Chair)
EXECUTIVE AND DIRECTOR COMPENSATION
Overview
The discussion below includes a review of our compensation decisions with respect to 2018 for our “named executive officers,” or “NEOs”, namely our principal executive officer and our two other most highly compensated executive officers. Our NEOs for 2018 were:
David D. Ossip, our Chief Executive Officer;
Paul D. Elliott, our Chief Operating Officer; and
Leagh E. Turner, our President.
In 2018, we compensated our NEOs through a combination of base salary and annual cash bonuses as well as grants of stock options and restricted stock units under the terms of our Ceridian HCM Holding Inc. 2018 Equity Incentive Plan (“2018 Plan”). Our executive officers are also eligible to receive certain benefits, which include defined contribution retirement plan contributions, life insurance and group health insurance (including medical, dental, long-term disability and critical illness), parking, executive physical, and recreational club dues.
Summary Compensation Table The following table sets forth certain information for fiscal years 2019, 2018 and 2017 concerning the total compensation awarded to, earned by or paid to our NEOs. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name and Principal Position | | Year | | | Salary
(1)(2) | | | Bonus
(1)(2) | | | Stock
Awards
(3) | | | Option
Awards
(3) | | | Nonequity
Incentive Plan
Compensation
(1)(4) | | | All Other
Compensation
(2)(5) | | | Total
(2) | | David D. Ossip | | | 2018 | | | $ | 700,000 | | | $ | 480,000 | | | $ | — | | | $ | 10,109,113 | | | $ | 320,000 | | | $ | 44,358 | | | $ | 11,653,471 | | Chief Executive Officer | | | 2017 | | | $ | 517,063 | | | $ | 700,000 | | | $ | 8,600,000 | | | $ | 7,875,000 | | | $ | — | | | $ | 39,741 | | | $ | 17,731,804 | | Paul D. Elliott | | | 2018 | | | $ | 348,317 | | | $ | 317,192 | | | $ | — | | | $ | 3,639,289 | | | $ | 111,462 | | | $ | 38,083 | | | $ | 4,454,343 | | Chief Operating Officer | | | 2017 | | | $ | 367,910 | | | $ | 527,854 | | | $ | — | | | $ | — | | | $ | — | | | $ | 34,120 | | | $ | 929,884 | | Leagh E. Turner | | | 2018 | | | $ | 213,715 | | | $ | 593,000 | | | $ | 1,931,500 | | | $ | 1,302,000 | | | $ | — | | | $ | 13,171 | | | $ | 4,053,386 | | President | | | 2017 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name and Principal Position | | Year | | Salary
($)(1)(2) | | Bonus
($)(2)(3) | | Stock
Awards
($)(4) | | Option
Awards
($)(4) | | Non-Equity
Incentive Plan
Compensation
($)(1)(2)(5) | | All Other
Compensation
($)(2)(6) | | Total ($)(2) | David D. Ossip | | | | 2019 | | | | $ | 700,000 | | | | $ | — | | | | $ | — | | | | $ | 28,634,210 | | | | $ | 800,000 | | | | $ | 46,747 | | | | $ | 30,180,957 | | Chair and Chief Executive Officer | | | | 2018 | | | | $ | 700,000 | | | | $ | 480,000 | | | | $ | — | | | | $ | 10,109,113 | | | | $ | 320,000 | | | | $ | 44,358 | | | | $ | 11,653,471 | | | | | | 2017 | | | | $ | 517,063 | | | | $ | 700,000 | | | | $ | 8,600,000 | | | | $ | 7,875,000 | | | | $ | — | | | | $ | 39,741 | | | | $ | 17,731,804 | | Arthur Gitajn | | | | 2019 | | | | $ | 307,929 | | | | $ | — | | | | $ | — | | | | $ | 1,908,329 | | | | $ | 246,343 | | | | $ | 23,038 | | | | $ | 2,485,639 | | Executive Vice President and
Chief Financial Officer | | | | 2018 | | | | $ | 293,320 | | | | $ | 140,793 | | | | $ | — | | | | $ | 1,819,637 | | | | $ | 93,862 | | | | $ | 22,135 | | | | $ | 2,369,747 | | | | | | 2017 | | | | $ | 318,193 | | | | $ | 254,554 | | | | $ | — | | | | $ | 145,121 | | | | $ | — | | | | $ | 23,015 | | | | $ | 740,883 | | Leagh E. Turner(7) | | | | 2019 | | | | $ | 655,000 | | | | $ | — | | | | $ | 2,635,000 | | | | $ | 1,242,367 | | | | $ | 393,000 | | | | $ | 96,676 | | | | $ | 5,022,043 | | President and Chief Operating Officer | | | | 2018 | | | | $ | 213,715 | | | | $ | 593,000 | | | | $ | 1,931,500 | | | | $ | 1,302,000 | | | | $ | — | | | | $ | 13,171 | | | | $ | 4,053,386 | | Christopher R. Armstrong(8) | | | | 2019 | | | | $ | 646,699 | | | | $ | — | | | | $ | 2,245,500 | | | | $ | 768,208 | | | | $ | 393,000 | | | | $ | 12,674 | | | | $ | 4,066,081 | | Executive Vice President, Chief Customer Officer | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Ozzie Goldschmied(8) | | | | 2019 | | | | $ | 334,541 | | | | $ | — | | | | $ | — | | | | $ | 2,517,491 | | | | $ | 211,012 | | | | $ | 27,900 | | | | $ | 3,090,944 | | Executive Vice President, Chief Technology Officer | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Erik J. Zimmer(9) | | | | 2019 | | | | $ | 655,000 | | | | $ | — | | | | $ | 2,521,000 | | | | $ | 871,056 | | | | $ | 393,000 | | | | $ | 7,233 | | | | $ | 4,447,289 | | Executive Vice President, Head of Mergers & Acquisitions | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (1) | Represents annual salary earnedpaid to and performance bonus amounts paid toearned by each NEO in fiscal 2019, 2018, and 2017 pursuant to the terms of each NEO’s employment agreement and a shared success plan. In 2018, Messrs. Ossip and Elliott received sixty percent (60%)agreement. See “Employment Agreements” on page 38 of their respective bonus amount at the compensation committee’s discretion and forty percent (40%) of their respective bonus amount due to the achievement of a Company financial goal at target under the 2018 annual performance-based cash incentive plan. See “ —Employment and Separation Agreements.”this Proxy Statement. |
| (2) | Amounts in the Summary Compensation Table for Salary, Bonus, andNon-Equity Incentive Plan Compensation for Mr. Gitajn and Mr. Goldschmied were converted to U.S. dollars from Canadian dollars. Stock Awards and Option Awards are based on U.S. dollars. For All Other Compensation, amounts were converted to U.S. dollars from Canadian dollars only if such amounts were paid to the NEOs in Canadian dollars,dollars. Currency was converted, based on the exchange rate of $1.299, $1.3637, and $1.2571 Canadian dollars per U.S. dollar as of December 31, 2019, December 31, 2018 and December 31, 2017, respectively. |
| (3) | Amounts reflect either (i) discretionary bonuses or bonuses that are subjectively determined, or(ii) non-performance bonus amounts paid to a NEO pursuant to the terms of such NEO’s employment agreement. See “Employment Agreements” on page 38 of this Proxy Statement. In fiscal 2019, all of the NEOs received 100% of their bonus based on achievement of the financial metrics at 100% of target. In fiscal 2018, Mr. Ossip and Mr. Gitajn received sixty percent (60%) of their bonus amount ($480,000 and $140,793, respectively) at the Compensation Committee’s discretion. Annual cash incentive award payouts based on performance againstpre-established financial performance goals are reported in the“Non-Equity Incentive Plan Compensation” column. |
| (4) | Represents the aggregate grant date fair value of the share awards and option awards granted in fiscal 2019, 2018, and 2017 computed in accordance with FASB ASC Topic 718. These values have been determined based on the assumptions set forth in Note 2 to our consolidated financial statements included in the 20182019 Annual Report. |
(4)(5) | Reflects amounts earnedincentive payments made in fiscal 2020 and 2019 based on achievement of thepre-established financial performance goals satisfied in fiscal 2019 and 2018. |
| (6) | Includes the following “All Other Compensation” over $10,000 for fiscal 2019 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name | | Retirement Plan
Contribution | | Health
Benefits | | Life Insurance
Benefits | | Parking
Benefit | | Executive
Physical | | Recreational
Dues (A) | | Executive Development (B) | Mr. Ossip | | | $ | 20,962 | | | | $ | 12,198 | | | | $ | 880 | | | | $ | 1,441 | | | | $ | — | | | | $ | 11,266 | | | | $ | — | | Mr. Gitajn | | | $ | 12,317 | | | | $ | 10,050 | | | | $ | — | | | | $ | 517 | | | | $ | — | | | | $ | 154 | | | | $ | — | | Ms. Turner | | | $ | 20,962 | | | | $ | 13,012 | | | | $ | 880 | | | | $ | 1,441 | | | | $ | — | | | | $ | 19,800 | | | | $ | 40,581 | | Mr. Armstrong | | | $ | 8,400 | | | | $ | 4,274 | | | | $ | — | | | | $ | — | | | | $ | — | | | | $ | — | | | | $ | — | | Mr. Goldschmied | | | $ | 13,381 | | | | $ | 12,198 | | | | $ | 880 | | | | $ | 1,441 | | | | $ | — | | | | $ | — | | | | $ | — | |
| (A) | Includes reimbursement for recreational club membership dues and fees and/or recreational equipment rental. |
| (B) | Includes $23,922 for services for executive coach and $16,659 reimbursement for Institute of Corporate Directors at the Rotman School of Management as outlined in Ms. Turner’s Employment Agreement. |
| (7) | Ms. Turner joined the Company in September 2018 by Messrs. Ossip and Elliottwas a NEO in fiscal 2019 and paid2018; therefore, her information is provided only for fiscal 2018 and fiscal 2019. |
| | | | | | | 33 | | 2020 PROXY STATEMENT |
| (8) | Neither Mr. Armstrong nor Mr. Goldschmied were NEOs in fiscal 2017 or fiscal 2018; therefore, Mr. Armstrong’s and Mr. Goldschmied’s information is provided only for fiscal 2019. |
| (9) | Mr. Zimmer was deemed an “executive officer” of the Company while he served as Executive Vice President, Chief Strategy Officer. In his new role as Head of Mergers & Acquisitions, the Board determined that Mr. Zimmer was no longer an “executive officer” for purposes of Item 401(b) of RegulationS-K of the Securities Act of 1933, as amended. |
Grant of Plan Based Awards in Fiscal Year 2019 During fiscal 2019, plan-based awards granted to our NEOs included annual short-term incentive awards under our 2019 MIP, and RSUs and stock options awards granted under the 2018 Equity Incentive Plan. The following table summarizes all plan-based awards granted to our NEOs during fiscal 2019. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name | | Grant Date | | Estimated Future Payouts
UnderNon-Equity Incentive
Plan Awards(1) | | All Other Stock
Awards:
Number of
shares of stock
or units (#)(2) | | All Other Option
Awards: Number of Securities
Underlying
Options (#)(3) | | Exercise or Base Price
of Option
Awards ($/Sh)(4) | | Grant Date Fair Value of Stock and Option Awards ($)(5)(6) | | | Threshold
($) | | Target ($) | | Maximum
($) | Mr. Ossip | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Short-Term Incentive | | | | — | | | | | — | | | | $ | 800,000 | | | | | — | | | | | | | | | | | | | | | | | | | | | | Stock Options | | | | 03/20/2019 | | | | | | | | | | | | | | | | | | | | | | | | | 1,750,000 | | | | $ | 49.93 | | | | $ | 28,481,600 | | Stock Options | | | | 02/08/2019 | | | | | | | | | | | | | | | | | | | | | | | | | 10,390 | | | | $ | 44.91 | | | | $ | 152,610 | | Mr. Gitajn | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Short-Term Incentive | | | | — | | | | | — | | | | $ | 246,343 | | | | | — | | | | | | | | | | | | | | | | | | | | | | Stock Options | | | | 03/20/2019 | | | | | | | | | | | | | | | | | | | | | | | | | 114,503 | | | | $ | 49.93 | | | | $ | 1,863,559 | | Stock Options | | | | 02/08/2019 | | | | | | | | | | | | | | | | | | | | | | | | | 3,048 | | | | $ | 44.91 | | | | $ | 44,770 | | Ms. Turner | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Short-Term Incentive | | | | — | | | | | — | | | | $ | 393,000 | | | | | — | | | | | | | | | | | | | | | | | | | | | | Stock Options | | | | 03/20/2019 | | | | | | | | | | | | | | | | | | | | | | | | | 76,335 | | | | $ | 49.93 | | | | $ | 1,242,367 | | Restricted Stock Units | | | | 09/09/2019 | | | | | | | | | | | | | | | | | | | | 50,000 | | | | | | | | | | | | | | $ | 2,635,000 | | Mr. Armstrong | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Short-Term Incentive | | | | — | | | | | — | | | | $ | 393,000 | | | | | — | | | | | | | | | | | | | | | | | | | | | | Stock Options | | | | 02/08/2019 | | | | | | | | | | | | | | | | | | | | | | | | | 50,000 | | | | $ | 44.91 | | | | $ | 734,410 | | Stock Options | | | | 02/08/2019 | | | | | | | | | | | | | | | | | | | | | | | | | 2,301 | | | | $ | 44.91 | | | | $ | 33,798 | | Restricted Stock Units | | | | 02/08/2019 | | | | | | | | | | | | | | | | | | | | 50,000 | | | | | | | | | | | | | | $ | 2,245,500 | | Mr. Goldschmied | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Short-Term Incentive | | | | — | | | | | — | | | | $ | 211,012 | | | | | — | | | | | | | | | | | | | | | | | | | | | | Stock Options | | | | 03/20/2019 | | | | | | | | | | | | | | | | | | | | | | | | | 152,671 | | | | $ | 49.93 | | | | $ | 2,484,751 | | Stock Options | | | | 02/08/2019 | | | | | | | | | | | | | | | | | | | | | | | | | 2,229 | | | | $ | 44.91 | | | | $ | 32,740 | | Mr. Zimmer | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Short-Term Incentive | | | | — | | | | | — | | | | $ | 393,000 | | | | | — | | | | | | | | | | | | | | | | | | | | | | Stock Options | | | | 03/20/2019 | | | | | | | | | | | | | | | | | | | | | | | | | 50,000 | | | | $ | 49.93 | | | | $ | 813,760 | | Stock Options | | | | 05/15/2019 | | | | | | | | | | | | | | | | | | | | | | | | | 4,127 | | | | $ | 50.16 | | | | $ | 57,296 | | Restricted Stock Units | | | | 08/14/2019 | | | | | | | | | | | | | | | | | | | | 50,000 | | | | | | | | | | | | | | $ | 2,521,000 | |
| (1) | Amount reported represents the payout at target achievement of the annual short-term incentive award under our 2019 MIP. Actual payouts for fiscal year 2019 determined in February 2020 are included in the “Summary Compensation Table” beginning on page 33 of the Proxy Statement in the“Non-Equity Incentive Plan Compensation” column. |
| (2) | Amount reported represents RSUs granted in fiscal 2019 under the 2018 annual performance-based cash incentive plan.Equity Incentive Plan on various grant dates as outlined in the table. Twenty-five percent (25%) of the shares subject to the RSUs vest in equal installments over four years, beginning with the first anniversary of the grant date. As discussed below under “Nonqualified Deferred Compensation”, delivery of the underlying shares may be deferred to a date within 10 years of the grant date for our Canadian NEOs. Additional information on RSUs is set forth within the “Compensation Discussion and Analysis” under “2019 Long-Term Incentive Awards” on page 29 of the Proxy Statement. |
| (3) | Amounts reported represent stock options granted in fiscal year 2019 under the 2018 Equity Incentive Plan on various grant dates as outlined in the table. All option awards have a10-year term. During the option period, twenty-five percent (25%) of the shares subject to the option vest in equal installments over four years, beginning with the first anniversary of the grant date. Additional information on options is set forth within the “Compensation Discussion and Analysis” under “2019 Long-Term Incentive Awards” on page 29 of the Proxy Statement. |
| (4) | Amounts reported represent the exercise price of stock options granted during fiscal 2019, which equals the closing price of our Common Stock, as reported on the NYSE on the date of grant. |
| | | | | | | 34 | | 2020 PROXY STATEMENT |
| (5) | IncludesThe aggregate grant date fair value of the following compensation for 2018 and 2017:stock option award was computed in accordance with ASC Topic 718. These values have been determined based on the assumptions set forth in Note 2 to our consolidated financial statements included in the 2019 Annual Report.
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name | | Year | | | Retirement Plan
Contribution | | | Health
Benefits | | | Life Insurance
Benefits | | | Parking
Benefit | | | Executive
Physical | | | Recreational
Club Dues | | David D. Ossip | | | 2018 | | | $ | 19,432 | | | $ | 11,451 | | | $ | 1,027 | | | $ | 1,362 | | | $ | 2,486 | | | $ | 8,600 | | Chief Executive Officer | | | 2017 | | | $ | 20,682 | | | $ | 8,606 | | | $ | 1,190 | | | $ | 1,463 | | | $ | — | | | $ | 7,800 | | Paul D. Elliott | | | 2018 | | | $ | 13,933 | | | $ | 12,395 | | | $ | 1,027 | | | $ | 264 | | | $ | 1,864 | | | $ | 8,600 | | Chief Operating Officer | | | 2017 | | | $ | 14,716 | | | $ | 10,128 | | | $ | 1,190 | | | $ | 286 | | | $ | — | | | $ | 7,800 | | Leagh E. Turner | | | 2018 | | | $ | 8,243 | | | $ | 4,132 | | | $ | 342 | | | $ | 454 | | | $ | — | | | $ | — | | President | | | 2017 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
| (6) | Amounts represent the grant date fair value of the RSUs based on the closing price of our Common Stock as reported on the NYSE of $44.91 per share on February 8, 2019; $50.42 per share on August 14, 2019, and $52.70 per share on September 9, 2019, computed in accordance with ASC Topic 718. These values have been determined based on the assumptions set forth in Note 2 to our consolidated financial statements included in the 2019 Annual Report. |
Outstanding Equity Awards as of December 31, 20182019 The following table sets forth certain information about outstanding equity awards held by our NEOs as of December 31, 2018.2019. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Option Awards | | | Stock Awards | | Name | | Grant
Date | | | Number of
securities
underlying
unexercised
options
exercisable
(#) | | | Number of
securities
underlying
unexercised
options
unexercisable
(#) | | | Option
exercise
price
($) | | | Option
expiration
date | | | Equity incentive
plan awards:
Number of
share awards
that have not
vested
(#) | | | Equity incentive
plan awards:
Market value of
share awards
that have not
vested
($) | | David D. Ossip | | | 11/01/2013 | | | | 2,000,000 | | | | — | (1) | | $ | 16.80 | | | | 11/01/2023 | | | | | | | | | | Chief Executive Officer | | | 03/30/2016 | | | | 3,495 | | | | 3,496 | (2) | | $ | 17.88 | | | | 03/30/2026 | | | | | | | | | | | | | 03/20/2017 | | | | 312,500 | | | | 937,500 | (3) | | $ | 17.20 | | | | 03/20/2027 | | | | | | | | | | | | | 03/20/2017 | | | | | | | | | | | | | | | | | | | | 375,000 | (4) | | $ | 12,933,750 | (5) | | | | 04/25/2018 | | | | — | | | | 1,358,697 | (6) | | $ | 22.00 | | | | 04/25/2028 | | | | | | | | | | Paul D. Elliott | | | 06/01/2016 | | | | 214,866 | | | | 250,000 | (7) | | $ | 16.74 | | | | 06/01/2026 | | | | | | | | | | Chief Operating Officer | | | 04/25/2018 | | | | — | | | | 489,132 | (8) | | $ | 22.00 | | | | 04/25/2028 | | | | | | | | | | Leagh E. Turner | | | 09/04/2018 | | | | — | | | | 100,000 | (9) | | $ | 38.63 | | | | 09/04/2028 | | | | | | | | | | President | | | 09/04/2018 | | | | | | | | | | | | | | | | | | | | 50,000 | (10) | | $ | 1,724,500 | (5) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Stock Option Awards(1)(3) | | | | Stock Awards(2)(3) | | Name | | Grant
Date | | Number of
securities
underlying
unexercised
options
exercisable
(#) | | Number of
securities
underlying
unexercised
options
unexercisable
(#) | | Option
exercise
price
($) | | Option
expiration
date | | | | Number of
shares or units
of stock
that have not
vested
(#) | | Market value of
shares or
units of stock
that have not
vested
($) | Mr. Ossip | | | | 11/01/2013 | | | | | 1,000,000 | | | | | | | | | $ | 16.80 | | | | | 11/01/2023 | | | | | | | | | | | | | | | | | | | | 03/30/2016 | | | | | 5,243 | | | | | 1,748 | | | | $ | 17.88 | | | | | 03/30/2026 | | | | | | | | | | | | | | | | | | | | 03/20/2017 | | | | | 625,000 | | | | | 625,000 | | | | $ | 17.20 | | | | | 03/20/2027 | | | | | | | | | | | | | | | | | | | | 03/20/2017 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 250,000 | | | | $ | 16,970,000 | | | | | 04/25/2018 | | | | | 339,674 | | | | | 1,019,023 | | | | $ | 22.00 | | | | | 04/25/2028 | | | | | | | | | | | | | | | | | | | | 02/08/2019 | | | | | | | | | | 10,390 | | | | $ | 44.91 | | | | | 02/08/2029 | | | | | | | | | | | | | | | | | | | | 03/20/2019 | | | | | | | | | | 1,750,000 | | | | $ | 49.93 | | | | | 03/20/2029 | | | | | | | | | | | | | | | | | Mr. Gitajn | | | | 12/31/2016 | | | | | 112,500 | | | | | 112,500 | | | | $ | 16.82 | | | | | 12/31/2026 | | | | | | | | | | | | | | | | | | | | 04/25/2018 | | | | | 641 | | | | | 183,424 | | | | $ | 22.00 | | | | | 04/25/2028 | | | | | | | | | | | | | | | | | | | | 02/08/2019 | | | | | | | | | | 3,048 | | | | $ | 44.91 | | | | | 02/08/2029 | | | | | | | | | | | | | | | | | | | | 03/20/2019 | | | | | | | | | | 114,503 | | | | $ | 49.93 | | | | | 03/20/2029 | | | | | | | | | | | | | | | | | Ms. Turner | | | | 09/04/2018 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 37,500 | | | | $ | 2,545,500 | | | | | 09/04/2018 | | | | | 25,000 | | | | | 75,000 | | | | $ | 38.63 | | | | | 09/04/2028 | | | | | | | | | | | | | | | | | | | | 03/20/2019 | | | | | | | | | | 76,335 | | | | $ | 49.93 | | | | | 03/20/2029 | | | | | | | | | | | | | | | | | | | | 09/09/2019 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 50,000 | | | | $ | 3,394,000 | | Mr. Armstrong | | | | 06/01/2016 | | | | | 18,961 | | | | | 6,321 | | | | $ | 16.74 | | | | | 06/01/2026 | | | | | | | | | | | | | | | | | | | | | 04/27/2017 | (4) | | | | 11,627 | | | | | | | | | $ | 17.20 | | | | | 04/27/2027 | | | | | | | | | | | | | | | | | | | | | 04/25/2018 | | | | | 16,983 | | | | | 50,952 | | | | $ | 22.00 | | | | | 04/25/2028 | | | | | | | | | | | | | | | | | | | | | 02/08/2019 | | | | | | | | | | 2,301 | | | | $ | 44.91 | | | | | 02/08/2029 | | | | | | | | | | | | | | | | | | | | | 02/08/2019 | | | | | | | | | | 50,000 | | | | $ | 44.91 | | | | | 02/08/2029 | | | | | | | | | | | | | | | | | | | | | 02/08/2019 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 50,000 | | | | $ | 3,394,000 | | Mr. Goldschmied | | | | 06/01/2016 | | | | | | | | | | 6,250 | | | | $ | 16.74 | | | | | 06/01/2026 | | | | | | | | | | | | | | | | | | | | 04/25/2018 | | | | | 823 | | | | | 122,284 | | | | $ | 22.00 | | | | | 04/25/2028 | | | | | | | | | | | | | | | | | | | | 02/08/2019 | | | | | | | | | | 2,229 | | | | $ | 44.91 | | | | | 02/08/2029 | | | | | | | | | | | | | | | | | | | | 03/20/2019 | | | | | | | | | | 152,671 | | | | $ | 49.93 | | | | | 03/20/2029 | | | | | | | | | | | | | | | | | Mr. Zimmer | | | | 08/14/2018 | | | | | 25,000 | | | | | 75,000 | | | | $ | 34.53 | | | | | 08/14/2028 | | | | | | | | | | | | | | | | | | | | 08/14/2018 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 37,500 | | | | $ | 2,545,500 | | | | | 03/20/2019 | | | | | | | | | | 50,000 | | | | $ | 49.93 | | | | | 03/20/2029 | | | | | | | | | | | | | | | | | | | | 05/15/2019 | | | | | | | | | | 4,127 | | | | $ | 50.16 | | | | | 05/15/2029 | | | | | | | | | | | | | | | | | | | | 08/14/2019 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 50,000 | | | | $ | 3,394,000 | |
| (1) | RepresentsAll stock options have a10-year term. During the stock option period, twenty-five percent (25%) of the shares subject to purchase 2,000,000 shares of Common Stock, which have vestedthe stock option vest in equal installments over four years, beginning with 25% vesting each year beginning November 1, 2014.the first anniversary of the grant date.
|
| (2) | Represents optionsTwenty-five percent (25%) of the shares subject to purchase 6,991 shares of Common Stock, which 3,495 shares have vested and 3,496 shares will (i) vest over two years, with 50% vesting each year beginning March 30, 2019, provided that on each applicable vesting date, Mr. Ossip is still then employed by us, and (ii) immediatelythe RSUs vest in fullequal installments over four years, beginning with the first anniversary of the grant date. As discussed below under “Nonqualified Deferred Compensation” delivery of the underlying shares may be deferred to a date within 10 years of the grant date. There is no public market for the RSUs. For purposes of
|
| | | | | | | 35 | | 2020 PROXY STATEMENT |
| this disclosure, we have valued the RSUs as of December 31, 2019 based on the then fair market value of our common stock of $67.88 per share. |
| (3) | Stock options and RSUs include an acceleration of vesting provision; such that upon the occurrenceconsummation of a change of control of the Company, (the “Change of Control”),the options and RSUs shall fully vest, provided thatthe individual is providing service to Ceridian or any subsidiary at the time of the Changeconsummation of Control, Mr. Ossip is still then employed by us.such event. |
| (4) | Stock options includes an acceleration of vesting provision; such that upon the consummation of a change of control or IPO the option shall fully vest, provided the individual is providing service to Ceridian or any subsidiary at the time of consummation of such event. At the time of Ceridian’s IPO, this option fully vested. |
Stock Option Exercises and Stock Vested in Fiscal 2019 The following table shows the number of shares acquired and the value realized upon the exercise of stock options or the vesting of stock awards during fiscal 2019. | | | | | | | | | | | | | | | | | | | | | | | | | | Name | | Option Awards | | Stock Awards | | | Number of
shares acquired
on exercise (#) | | Value realized
on exercise(1) ($) | | Number of shares
acquired on vesting | | Value realized on vesting(2) ($) | Mr. Ossip | | | | 1,000,000 | | | | $ | 36,130,000 | | | | | 125,000 | (3) | | | $ | 6,241,250 | | Mr. Gitajn | | | | 173,000 | | | | $ | 5,247,081 | | | | | | | | | | | | Ms. Turner | | | | | | | | | | | | | | 12,500 | (4) | | | $ | 718,125 | | Mr. Armstrong | | | | 44,142 | | | | $ | 1,462,288 | | | | | | | | | | | | Mr. Goldschmied | | | | 108,000 | | | | $ | 3,180,719 | | | | | | | | | | | | Mr. Zimmer | | | | | | | | | | | | | | 12,500 | | | | $ | 630,250 | |
| (1) | Value realized equals the closing price of our Common Stock on the NYSE on the date of exercise, less the exercise price, multiplied by the number of shares exercised. |
| (2) | Value realized equals the closing price of our Common Stock on the NYSE on the vesting date multiplied by the number of shares vested. |
| (3) | Represents options to purchase 1,250,000125,000 RSUs which vested but where the issuance of the underlying shares of Common Stock was deferred, which 312,500 shares have vested and 937,500 shares will (i) vest over three years, withone-third vesting each year beginning March 20, 2019, provided that on each applicable vesting date, Mr. Ossip is still then employed by us, and (ii) immediately vest in full upon the occurrencecan convert to issued shares of the Change of Control, provided thatCommon Stock at theany time of, or in the 90 days prior to the Change of Control, Mr. Ossipdate that is still then employed by us.10 years after the applicable grant date. These are also reflected under the Nonqualified Deferred Compensation in Fiscal 2019 table below. |
| (4) | Represents 375,000 unvested restricted stock units,12,500 RSUs which will (i) vest over three years, with 125,000 units vesting each year beginning March 20, 2019, provided that on each applicable vesting date, Mr. Ossip is still then employed by us, and (ii) immediately vest in full uponvested but where the occurrenceissuance of the Changeunderlying shares of Control, provided thatCommon Stock was deferred, which Ms. Turner can convert to issued shares of Common Stock at theany time of, or in 90 days prior to the Change of Control, Mr. Ossipdate that is still then employed by us.10 years after the applicable grant date. These are also reflected under the Nonqualified Deferred Compensation in Fiscal 2019 table below. |
Nonqualified Deferred Compensation in Fiscal Year 2019 The following table sets forth certain information about vested RSUs in fiscal 2019 for which the issuance of the underlying shares of Common Stock has been deferred by the NEOs who are Canadian residents pursuant to the terms of the 2018 Equity Incentive Plan and the underlying restricted stock unit award agreement. All amounts reported below are deferrals of the issuance of shares of Common Stock from the vested restricted stock unit awards disclosed above and are not in addition to any restricted stock unit awards previously disclosed. | | | | | | | | | | | | | | | | | | | | | Name | | Executive
contributions
in last FY ($) | | Aggregate
earnings in
last FY ($)(1) | | Aggregate
withdrawals/distributions
($) | | Aggregate balance
at last FYE ($) | Mr. Ossip | | | | — | | | | $ | 8,485,000 | (2) | | | | — | | | | $ | 16,970,000 | (4) | Ms. Turner | | | | — | | | | $ | 848,500 | (3) | | | | — | | | | $ | 848,500 | |
(5)(1) | There is no public market for the restricted stock units.RSUs. For purposes of this disclosure, we have valued the restricted stock unitsRSUs as of December 31, 20182019 based on the then-fair market value of our Common Stock of $34.49$67.88 per share. |
(6)(2) | Represents options to purchase 1,358,697125,000 vested RSUs where the issuance of the underlying shares of Common Stock were deferred, which will (i) vest over four years, with 25% vesting each year beginning April 25, 2019, provided that on each applicable vesting date, Mr. Ossip is |
| still then employed by us, and (ii) immediately vest in full upon the occurrence of the Change of Control, provided that at the time of the Change of Control, Mr. Ossip is still then employed by us. |
(7) | Represents optionscan convert to purchase 500,000issued shares of Common Stock which 214,866 shares haveat any time prior to the date that is 10 years after the applicable grant date.
|
| (3) | Represents 12,500 vested and are exercisable and 250,000 shares will (i) vest over two years, with 50% vesting each year beginning June 1, 2019, provided that on each applicable vesting date, Mr. Elliott is still then employed by us, and (ii) immediately vest in full uponRSUs where the Change of Control, provided that at the timeissuance of the Change of Control, Mr. Elliott is still then employed by us. |
(8) | Represents options to purchase 489,132underlying shares of Common Stock were deferred, which will (i) vest over four years, with 25% vesting each year beginning April 25, 2019, provided that on each applicable vesting date, Mr. Elliott is still then employed by us, and (ii) immediately vest in full upon the Change of Control, provided that at the time of the Change of Control, Mr. Elliott is still then employed by us.
|
(9) | Represents optionsMs. Turner can convert to purchase 100,000issued shares of Common Stock at any time prior to the date that is 10 years after the applicable grant date.
|
| | | | | | | 36 | | 2020 PROXY STATEMENT |
| (4) | Represents an aggregate of 250,000 vested RSUs held by Mr. Ossip where the issuance of the underlying shares of Common Stock were deferred; which Mr. Ossip can convert to shares of Common Stock at any time prior to the date that is 10 year after the applicable grant date. |
Potential Payments Upon Termination or Change in Control Our NEOs are entitled to receive severance payments upon termination of employment, or a termination of employment in connection with a change in control as provided in their respective employment agreements, as further described below in “Employment Agreements.” In addition, certain equity awards may be accelerated upon a change of control, as further described above in “Outstanding Equity Awards as of December 31, 2019.” Unless otherwise noted below, all payments are to be made in a lump sum upon or shortly after the applicable termination. | | | | | | | | | | | | | | | | | | | | | | | | | | Name | | Severance Payment(1) | | Health/
Life(2) | | Outplacement Services(3) | | Accelerated Vesting of Equity
Awards(4) | | Totals | Mr. Ossip | | | | | | | | | | | | | | | | | | | | | | | | | | • Change in Control Without Termination | | | | — | | | | | — | | | | | — | | | | $ | 127,136,310 | | | | $ | 127,136,310 | | • Termination Without Cause or Resignation for Good Reason, After Change in Control | | | $ | 2,580,000 | | | | $ | 7,150 | | | | $ | 9,120 | | | | $ | 127,136,310 | | | | $ | 129,732,580 | | • Termination Without Cause or Resignation for Good Reason, with no Change in Control | | | $ | 2,580,000 | | | | $ | 7,150 | | | | $ | 9,120 | | | | | — | | | | $ | 2,596,270 | | • Termination for Cause or Resignation Without Good Reason | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | • Termination due to Death | | | $ | 1,500,000 | | | | | — | | | | | — | | | | $ | 78,403,922 | | | | $ | 79,903,922 | | • Termination due to Disability | | | $ | 800,000 | | | | | — | | | | | — | | | | | — | | | | $ | 800,000 | | | | | | | | Mr. Gitajn | | | | | | | | | | | | | | | | | | | | | | | | | | • Change in Control Without Termination | | | | — | | | | | — | | | | | — | | | | $ | 16,285,073 | | | | $ | 16,285,073 | | • Termination Without Cause or Resignation for Good Reason, After Change in Control | | | $ | 790,400 | | | | $ | 10,050 | | | | $ | 9,120 | | | | $ | 16,285,073 | | | | $ | 17,094,643 | | • Termination Without Cause or Resignation for Good Reason, with no Change in Control | | | $ | 790,400 | | | | $ | 10,050 | | | | $ | 9,120 | | | | | — | | | | $ | 809,570 | | • Termination for Cause or Resignation Without Good Reason | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | • Termination due to Death | | | $ | 547,200 | | | | | — | | | | | — | | | | $ | 10,540,823 | | | | $ | 11,088,023 | | • Termination due to Disability | | | $ | 243,200 | | | | | — | | | | | — | | | | | — | | | | $ | 243,200 | | | | | | | | Ms. Turner | | | | | | | | | | | | | | | | | | | | | | | | | | • Change in Control Without Termination | | | | — | | | | | — | | | | | — | | | | $ | 7,006,963 | | | | $ | 7,006,963 | | • Termination Without Cause or Resignation for Good Reason, After Change in Control | | | $ | 1,965,000 | | | | $ | 19,518 | | | | $ | 10,000 | | | | $ | 7,006,963 | | | | $ | 9,001,481 | | • Termination Without Cause or Resignation for Good Reason, with no Change in Control | | | $ | 1,965,000 | | | | $ | 19,518 | | | | $ | 10,000 | | | | | — | | | | $ | 1,994,518 | | • Termination for Cause or Resignation Without Good Reason | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | • Termination due to Death | | | $ | 393,000 | | | | | — | | | | | — | | | | $ | 7,006,963 | | | | $ | 7,399,963 | | • Termination due to Disability | | | $ | 393,000 | | | | | — | | | | | — | | | | | — | | | | $ | 393,000 | | | | | | | | Mr. Armstrong | | | | | | | | | | | | | | | | | | | | | | | | | | • Change in Control Without Termination | | | | — | | | | | — | | | | | — | | | | $ | 7,256,228 | | | | $ | 7,256,228 | | • Termination Without Cause or Resignation for Good Reason, After Change in Control | | | $ | 1,048,000 | | | | $ | 8,438 | | | | $ | 10,000 | | | | $ | 7,256,228 | | | | $ | 8,322,666 | | • Termination Without Cause or Resignation for Good Reason, with no Change in Control | | | $ | 1,048,000 | | | | $ | 8,438 | | | | $ | 10,000 | | | | | — | | | | $ | 1,066,438 | | • Termination for Cause or Resignation Without Good Reason | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | • Termination due to Death | | | $ | 393,000 | | | | | — | | | | | — | | | | $ | 6,932,997 | | | | $ | 7,325,997 | | • Termination due to Disability | | | $ | 393,000 | | | | | — | | | | | — | | | | | — | | | | $ | 393,000 | | | | | | | | Mr. Goldschmied | | | | | | | | | | | | | | | | | | | | | | | | | | • Change in Control Without Termination | | | | — | | | | | — | | | | | — | | | | $ | 8,721,648 | | | | $ | 8,721,648 | | • Termination Without Cause or Resignation for Good Reason, After Change in Control | | | $ | 555,517 | | | | $ | 39,012 | | | | | — | | | | $ | 8,721,648 | | | | $ | 9,316,178 | | • Termination Without Cause or Resignation for Good Reason, with no Change in Control | | | $ | 555,517 | | | | $ | 39,012 | | | | | — | | | | | — | | | | $ | 594,530 | | • Termination for Cause or Resignation Without Good Reason | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | • Termination due to Death | | | $ | 555,517 | | | | | — | | | | | — | | | | $ | 8,402,023 | | | | $ | 8,957,540 | | • Termination due to Disability | | | $ | 555,517 | | | | | — | | | | | — | | | | | — | | | | $ | 555,517 | | | | | | | | Mr. Zimmer | | | | | | | | | | | | | | | | | | | | | | | | | | • Change in Control Without Termination | | | | — | | | | | — | | | | | — | | | | $ | 9,411,380 | | | | $ | 9,411,380 | | • Termination Without Cause or Resignation for Good Reason, After Change in Control | | | $ | 1,048,000 | | | | $ | 8,036 | | | | $ | 10,000 | | | | $ | 9,411,380 | | | | $ | 10,477,416 | | • Termination Without Cause or Resignation for Good Reason, with no Change in Control | | | $ | 1,048,000 | | | | $ | 8,036 | | | | $ | 10,000 | | | | | — | | | | $ | 1,066,036 | | • Termination for Cause or Resignation Without Good Reason | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | • Termination due to Death | | | $ | 393,000 | | | | | — | | | | | — | | | | $ | 9,411,380 | | | | $ | 9,804,380 | | • Termination due to Disability | | | $ | 393,000 | | | | | — | | | | | — | | | | | — | | | | $ | 393,000 | |
| | | | | | | 37 | | 2020 PROXY STATEMENT |
| (1) | In the event of a termination without “cause” or a termination for “good reason”, each individual would receive the following lump sum payments: |
Mr. Ossip, 24 months of base salary plus two times the average short-term incentive payment paid to Mr. Ossip for the immediately preceding two years. Mr. Gitajn, 12 months of base salary, plus the target level of his most recent short-term incentive payment, plus a short-term incentive, if any, to which he would have become entitled for the fiscal year in which the termination occurs, based on actual performance. Ms. Turner, 18 months of base salary, plus the target level of her most recent short-term incentive payment, if her termination occurs on or before the seventh anniversary of her employment with Ceridian, or 24 months of base salary, plus the target level of her most recent short-term incentive payment, if her termination occurs after the seventh anniversary of her employment with Ceridian, plus apro-rated short-term incentive, if any, to which she would have become entitled for the fiscal year in which the termination occurs, based on actual performance. Mr. Goldschmied, 12 months of base salary, plus apro-rated short-term incentive, if any, to which he would have become entitled for the fiscal year in which the termination occurs, based on actual performance. Messrs. Armstrong and Zimmer, for zero to seven full years of employment, 12 months of base salary, for eight through 14 full years of employment, 15 months of base salary, and for more than 14 full years of employment, 18 months of base salary, plus apro-rata short-term incentive, if any, to which he would have become entitled for the fiscal year in which the termination occurs, based on actual performance. In the event of a termination due to death or disability, each of Messrs. Ossip, Gitajn, Goldschmied, Armstrong and Zimmer and Ms. Turner would receive apro-rated short-term incentive, if any, to which the individual would have become entitled for the fiscal year in which the termination occurs, based on actual performance. Additionally, in the event of a termination due to death (or disability, in the case of Mr. Goldschmied), the beneficiaries of each of Messrs. Ossip, Gitajn and Goldschmied would receive a lump sum payment equal to 12 months of the individual’s base salary. | (2) | Mr. Ossip and Mr. Goldschmied would receive continuation of certain employment related benefits for the period prescribed under the Employment Standards Act (Ontario). Mr. Goldschmied would also receive payment of an amount equal to 10% of his base salary payable in respect of the balance of the12-month period for which his benefits will (i) vest over four years, with 25% vesting each year beginning September 4, 2019, provided that on each applicable vesting date,not continue. Mr. Gitajn would receive a continuation of his medical, dental, and prescription healthcare coverage for up to a period of 12 months following termination. Ms. Turner would receive continuation of her healthcare coverage for 18 months, if her termination occurs on or before the seventh anniversary of her employment with Ceridian, or 24 months, if her termination occurs after the seventh anniversary of her employment with Ceridian. Ceridian will cover the cost of COBRA continuation for each of Messrs. Armstrong and Zimmer for a period of up to six months following the termination date or until either is still then employed by us,no longer eligible for COBRA continuation coverage, whichever is earlier. |
| (3) | Each of Messrs. Ossip, Gitajn, Armstrong and (ii)Zimmer and Ms. Turner are eligible to receive reasonable executive-level outplacement services, not to exceed $9,120 (or $12,000 CAD as of December 31, 2019, based on the then-current exchange rate), in the case of Messrs. Ossip and Gitajn, or $10,000 in the case of Messrs. Armstrong and Zimmer and Ms. Turner. Services are limited to a period of 12 months or, if earlier, the first acceptance of an offer of employment. |
| (4) | Pursuant to the 2013 Ceridian HCM Holding Inc. Stock Incentive Plan and the forms of agreement under such plan, stock options will fully vest upon consummation of a change of control at a time when the individual is providing services to Ceridian or any subsidiary. Pursuant to the 2018 Equity Incentive Plan and the forms of agreement under such plan, stock options will fully vest upon consummation of a change in control or upon an individual’s termination of service due to death. Upon an individual’s termination of service for any other reason, the unvested portion of the stock option immediately and automatically will be forfeited without further consideration. Pursuant to the 2018 Equity Incentive Plan and the forms of agreement under such plan, RSUs will fully vest in fullupon a change of control or upon the Change of Control, provided that at the timedeath of the Changeindividual, subject to the individual’s continued service through such date. The value reflects the fair market value of Control, Ms. Turner is still then employed by us. |
(10) | Represents 50,000 unvested restricted stock units, which will (i) vest over four years, with 12,500 units vesting each year beginning September 4,Ceridian’s Common Stock as of December 31, 2019 provided that on each applicable vesting date, Ms. Turner is still then employed by us, and (ii) immediately vest in full upon the occurrence of the Change of Control, provided that at the time of the Change of Control, Ms. Turner is still then employed by us.$67.88 per share.
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Employment and Separation Agreements General As of December 31, 2018,2019, we were party to employment agreements with each of our NEOs. Additionally, on August 7, 2018, we entered into a separation and consulting agreement with Mr. Elliott. The material provisions of each such agreement are described below. David D. Ossip In addition to the items discussed below, each of our NEOs participates in the employee health and welfare, retirement and other employee benefits programs offered generally from time to time by us to our senior executive employees.
In April 2012, we entered into an employment agreement with David D. Ossip, our Chief Executive Officer. The agreement provides for an indefinite term beginning on January 1, 2012. The agreement provides that Mr. Ossip would receive an annualized base salary, subject to annual compensation reviews by our Board. In 2018, Mr. Ossip’s base salary was $700,000 USD. The agreement also provides that Mr. Ossip is eligible to receive an annual performance-based cash bonus based on Mr. Ossip’s performance. In 2018, Mr. Ossip’s current base salary and incentive compensation arrangements are discussed in the CD&A above. | | | | | | | 38 | | 2020 PROXY STATEMENT |
In September 2016, we entered into an employment agreement with Arthur Gitajn, our Executive Vice President, Chief Financial Officer. The agreement provides for an indefinite term beginning on October 3, 2016. The agreement provides that Mr. Gitajn will receive an annualized base salary, subject to annual cash bonus at target was $800,000 USD. During the year ended December 31, 2018,compensation reviews by our Board. The agreement also provides that Mr. Ossip received $800,000 USD for his 2018Gitajn is eligible to receive an annual performance-based cash bonus which represented approximately 114%with a target amount of 80% of his annual base salary. On November 6, 2019, we entered into a separation and consulting agreement with Mr. Gitajn, in connection with his retirement as Chief Financial Officer of Ceridian. Pursuant to this agreement, Mr. Gitajn will continue in his current role as Executive Vice President, Chief Financial Officer until a new Chief Financial Officer is appointed and will then serve as a senior advisor to the Chief Executive Officer of Ceridian until December 31, 2020. While employed by Ceridian, Mr. Gitajn’s salary, benefits and bonus eligibility will all remain unchanged. Mr. Gitajn’s current base salary and incentive compensation arrangements are discussed in the CD&A above. In August 2018, we entered into an employment agreement with Leagh E. Turner in connection with her appointment as our President. The agreement provides for an indefinite term beginning on September 4, 2018. The agreement further provides that Ms. Turner will receive an annualized base salary of which forty percent (40%) was earned as a result of the achievement of a Company financial goal under the 2018$655,000, subject to annual performance-based cashcompensation reviews by our Board and that Ms. Turner is eligible to participate in Ceridian’s variable incentive plan on the same terms as similarly situated executives and sixtywith a target annual payout based upon 60% percent (60%)of her annual base salary. Ms. Turner’s employment agreement was amended effective February 3, 2020 when she obtained the additional title of “Chief Operating Officer”. Ms. Turner’s current base salary and incentive compensation arrangements are discussed in the CD&A above. In April 2012, we entered into an employment agreement with Ozzie J. Goldschmied, our Executive Vice President, Chief Technology Officer, which provides for an indefinite term of employment. Mr. Goldschmied’s current base salary and incentive compensation arrangements are discussed in the CD&A above. In May 2019, we entered into an employment agreement with Christopher R. Armstrong, in connection with his appointment as Executive Vice President, Chief Operating Officer. Pursuant to his employment agreement, Mr. Armstrong will be paid pursuantan annual base salary of $655,000. He will also be able to participate in Ceridian’s variable incentive plan on the compensation committee’s discretion in light of the many positive developments led by management in 2018, including the execution of one of the most successful initial public offerings in 2018same terms as similarly situated executives and new records in Dayforce and Cloud revenue. Further, in light of these positive developments, Mr. Ossip received an option to purchase 10,390 shares of Common Stock on February 8, 2019 representing the fair value of approximately 15%with a target annual payout based upon 60% percent of his 2018 annual performance-based cash bonus at target.base salary. Mr. Armstrong’s employment agreement was amended on November 5, 2019 to change his reporting relationship to Ms. Turner and effective February 3, 2020 when his title changed to “Executive Vice President, Chief Customer Officer”. Mr. Armstrong’s current base salary and incentive compensation arrangements are discussed in the CD&A above. In additionAugust 2018, we entered into an agreement with Erik J. Zimmer, upon his appointment as our Executive Vice President, Chief Strategy Officer. The agreement provides for an indefinite term beginning September 4, 2018. The agreement further provides that Mr. Zimmer will receive an annualized base salary of $655,000, subject to annual compensation reviews and will be eligible to participate in Ceridian’s variable incentive plan on the above,same terms as similarly situated executives and with a target annual payout based upon 60% percent of his annual base salary. Mr. Ossip participatesZimmer’s current base salary and incentive compensation arrangements are discussed in the employee health and welfare, retirement and other employee benefits programs offered generally from time to time by us to our senior executive employees.CD&A above. EitherTermination of Agreements
In general, either we or Mr. Ossipthe applicable NEO may terminate the employment agreement any time upon written noticeimmediately, or any time with 90 days’ prior written notice, respectively. WeMr. Goldschmied’s employment agreement does not contain limitations regarding prior written notice. Further, we may terminate Mr. Ossip’san NEO’s employment for death, “disability,” or with or without “cause,” as defined in the employment agreement, by written notice to Mr. Ossip. Mr.agreement. Messrs. Ossip, Gitajn, Armstrong and Zimmer may resign with prior written notice for “good reason.” If we terminate Mr. Ossip’s employment without “cause” or Mr. Ossip terminates his employment for “good reason,” then we must provide Mr. Ossip with (i) an amount equal to 24 months of his annual base salary, (ii) an amount equal to two times the average bonus payment The amounts that could be paid to Mr. Ossip for the immediately preceding two years, (iii) reasonable executive-level outplacement services for a period of up to 12 months, not to exceed $12,000 CAD (or $8,800 USD as of December 31, 2018)NEOs under various termination situations, and (iv) continuation of certain employment related benefits for the period prescribed under the Employment Standards Act (Ontario).
In the event that Mr. Ossip’s employment is terminated due to his death, we must provide Mr. Ossip’s beneficiaries with (i) an amount equal to 12 months of his annual base salary, and (ii) apro-rated bonus, if any, to which Mr. Ossip would have become entitled for the fiscal year in which his termination occurs based on actual performance. In the event that Mr. Ossip’s employment is terminated due to “disability,” we must provide Mr. Ossip with apro-rated bonus, if any, to which Mr. Ossip would have become entitled for the fiscal year in which his termination occurs based on actual performance.
For purposesexplanation of the agreement, “good reason” means any act,applicable calculations, are set forth under “Potential Payments Upon Termination or failureChange in Control” above.
Restrictive Covenants Pursuant to act, or omission by us that would constitute at law in the Province of Ontario constructive dismissal of Mr. Ossip, including without limitation the occurrence of one or more of the following conditions, without Mr. Ossip’s consent: (i) any material adverse change in his duties, roles and responsibilities, (ii) any adverse change to Mr. Ossip’s line of reporting or (iii) the relocation of his principal place of employment by more than 40 kilometers; provided that any such condition will only constitute good reason if Mr. Ossip provides us with a prior written notice of his intent to resign for good reason (which notice must reference the definition of good reason in his employmentseparate restrictive covenants agreement, and include a description of the factors constituting the alleged good reason) and we have not remedied the alleged violations within 30 days of such notice. For purposes of the agreement, “cause” means any event, act, or failure to act, or omission by Mr. Ossip which would constitute at law in the Province of Ontario cause for dismissal, including without limitation (i) conduct involving material theft or misappropriation of our assets and those of our affiliates, (ii) fraud or embezzlement of a material nature against us and our affiliates, (iii) any material act of dishonesty, financial or otherwise, against us and our affiliates or (iv) any conviction of an indictable offense under the Canadian Criminal Code.
The agreement includes perpetual confidentiality provisions, as well as provisions relating to assignment of inventions.
In addition, in March 2017, Mr. Ossip was granted options to purchase 1,250,000 shares of Common Stock and was granted restricted stock units relating to 500,000 shares of Common Stock (collectively, the “Equity Awards”). Such Equity Awards served as consideration for Mr. Ossip to enter into an Amended and Restated Restrictive Covenants Agreement with Ceridian Holding LLC, Ceridian LLC, Ceridian Canada Ltd. and Ceridian Dayforce Corporation, which became effective as of March 20, 2017 (the “Restrictive Covenants Agreement”). Under the Restrictive Covenants Agreement, Mr. Ossip has agreed, among other things, that subsequent to any termination, he will not engage in, consult for, or own more than 5% of any business that is similar to that of our business in any country in which we do business for a period of 24 months subsequent to such termination. We may elect to extend such restriction period by a total of either 12 months or 24 months, so long as we pay Mr. Ossip a lump sum equal to his prior year’s base salary, plus $800,000, USD, for each year the restriction period is extended.
Paul D. ElliottThe other employment agreements all containnon-competition andnon-solicitation provisions that apply during employment and for a certain period of time thereafter: for Mr. Gitajn, two years; for Ms. Turner, 18 months; for
Separation and Consulting Agreement
On August 7, 2018, we entered into a Separation and Consulting Agreement (the “Separation Agreement”) with Paul D. Elliott, our then President and Chief Operating Officer in connection with his mutually agreed
| | | | | | | 39 | | 2020 PROXY STATEMENT |
terminationMr. Goldschmied, 12 months; and for each of employment to be effective as of May 1, 2019 (the “Separation Date”). Mr. Elliott immediately resigned as our President but will continue to serve as our Chief Operating Officer through the Separation Date. Within ten business days following Mr. Elliott’s execution of a general release of claims after the Separation Date, Mr. Elliott will receive: (i) a lump sum payment of $950,000 CAD (or $696,634 USD as of December 31, 2018), (ii) apro-rated bonus for the 2019 fiscal year based on actual achievement of performance goalsMessrs. Armstrong and (iii) reasonable executive-level outplacement services for a period of up toZimmer, 12 months not(for zero to exceed $12,000 CAD (or $8,800 asseven full years of December 31, 2018). Pursuant to the Separation Agreement, Mr. Elliott reaffirmed the restrictive covenants contained in his employment agreement. The Separation Agreement supersedes all previous agreements between us and Mr. Elliott relating to his employment other than to the extent that Mr. Elliott’s employment agreement, as described below, is amended by the Separation Agreement and continues in force until the Separation Date, and eachemployment), 15 months (for eight through 14 full years of us and Mr. Elliott released and discharged the other in respect of such previous agreements.
Following the Separation Date, Mr. Elliott will be engaged without interruption as a consultant through June 30, 2020 (the “Consulting Period”). During the Consulting Period, Mr. Elliott will provide general business consultation services to us, including with respect to the operations and customer support areas of our business. The only consideration that Mr. Elliott will receive during the Consulting Period is continued vesting of his outstanding stock options in accordance with the terms of the applicable award agreements.
Employment Agreement
In April 2016, we entered into an employment agreement with Mr. Elliott. The agreement providesemployment) or 18 months (and for an indefinite term beginning on April 20, 2016. The agreement provides that Mr. Elliott would receive an annualized base salary, subject to annual compensation reviews by our Board. In 2018, Mr. Elliott’s base salary was $475,000 CAD (or $348,317 USD as of December 31, 2018). The agreement also provides that Mr. Elliott is eligible to receive an annual performance-based cash bonus with a target amount of 80% of his annual base salary. During the year ended December 31, 2018, Mr. Elliott received $380,000 CAD (or $278,654 USD as of December 31, 2018) for his 2018 annual performance-based cash bonus, which represented 80% of his base salary, of which forty percent (40%) was earned as a result of the achievement of a Company financial goal under the 2018 annual performance-based cash incentive plan and sixty percent (60%) was paid pursuant to the compensation committee’s discretion in light of the many positive developments led by management in 2018, including the execution of one of the most successful initial public offerings in 2018 and new records in Dayforce and Cloud revenue. Further, in light of these positive developments, Mr. Elliott received an option to purchase 3,619 shares of Common Stock on February 8, 2019 representing the fair value of approximately 15% of his 2018 annual performance-based cash bonus at target.
In addition, on November 18, 2013, we entered into a “Success Bonus Plan” with key employees as of that date, including Mr. Elliott. Under the terms of Mr. Elliott’s Success Bonus Plan, he is entitled to receive a cash bonus of $600,000 USD, fifty percent (50%) of which was paid upon signing his employment agreement in April 2016, twenty-five percent (25%) was paid on April 28, 2017, and the remaining twenty-five percent (25%) was paid on April 30, 2018.
In addition to the above, Mr. Elliott participated in the employee health and welfare, retirement and other employee benefits programs offered generally from time to time by us to our senior executive employees.
Either we or Mr. Elliott may terminate the agreement any time upon written notice or any time with 60 days’ prior written notice, respectively. We may terminate Mr. Elliott’s employment for death, “disability,” or “cause” by written notice to Mr. Elliott. Mr. Elliott may resign with prior written notice for “good reason.”
If we terminate Mr. Elliott’s employment without “cause” or Mr. Elliott terminates his employment for “good reason,” then we must provide Mr. Elliott with (i) an amount equal to 24 months of his annual base salary, (ii) apro-rated bonus (at target level) for the fiscal year in which his termination occurs, (iii) reasonable
executive-level outplacement services for a period of up to 12 months, not to exceed $12,000 CAD (or $8,800 USD as of December 31, 2018), and (iv) continuation of certain employment related benefits for the period prescribed under the Employment Standards Act (Ontario).
In the event that Mr. Elliott’s employment is terminated due to his death, we must provide Mr. Elliott’s beneficiaries with (i) an amount equal to 12 months of his annual base salary, and (ii) apro-rated bonus, if any, to which Mr. Elliott would have become entitled for the fiscal year in which his termination occurs based on actual performance. In the event that Mr. Elliott’s employment is terminated due to “disability,” we must provide Mr. Elliott with apro-rated bonus, if any, to which Mr. Elliott would have become entitled for the fiscal year in which his termination occurs based on actual performance.
For purposes of the agreement, “good reason” means any act, or failure to act, or omission by us that would constitute at law in the Province of Ontario constructive dismissal of Mr. Elliott, including without limitation the occurrence of one or more of the following conditions, without Mr. Elliott’s consent: (i) any material adverse change in his duties, roles and responsibilities, (ii) any adverse change to Mr. Elliott’s line of reporting or (iii) the relocation of his principal place of employment by more than 50 kilometers; provided that any such condition will only constitute good reason if Mr. Elliott provides us with a prior written notice14 full years of his intent to resign for good reason (which notice must reference the definition of good reason in hisemployment).
All employment agreement andagreements include a description of the factors constituting the alleged good reason) and we have not remedied the alleged violations within 30 days of such notice. For purposes of the agreement, “cause” means any event, act or failure to act, or omission by Mr. Elliott which would constitute at law in the Province of Ontario cause for dismissal, including without limitation (i) conduct involving theft or misappropriation of our assets and those of our affiliates, (ii) fraud, embezzlement or an indictable offense under the Canadian Criminal Code, (iii) any material act of dishonesty, financial or otherwise, against us and our affiliates, (iv) intentional violations of law involving moral turpitude, (v) any material violation of our Code of Conduct and ethics policies, (vi) breach of Mr. Elliott’s obligations under anynon-competition,non-solicitation or other similar agreement made with any of us and our affiliates, or (vii) the continued failure by Mr. Elliott to attempt in good faith to perform his duties after receiving a written notice and a demand to rectify such failure within 60 days.
The agreement includes perpetual confidentiality provisions, and anon-disparagement provision, as well as provisions relating to assignment of inventionsinventions. The employment agreements and Mr. Ossip’s restrictive covenants agreement also include anon-competitionnon-disparagement provision.
| | | | | | | 40 | | 2020 PROXY STATEMENT |
| PROPOSAL THREE Advisory Vote on the Compensation of Ceridian’s Named Executive Officers |
We are asking our stockholders to approve, on an advisory basis, the compensation of Ceridian’s NEOs as disclosed in the Compensation Discussion andnon-solicitation Analysis, the accompanying compensation tables and the related narrative disclosure on pages 20-40 of this Proxy Statement, pursuant to the following resolution: RESOLVED, that apply during employmentthe Company’s stockholders approve, on an advisory basis, the compensation of the NEOs, as disclosed in the Company’s Proxy Statement for the 2020 Annual Meeting of Stockholders pursuant to the compensation disclosure rules of the Securities and two years thereafter.Exchange Commission, including the Compensation Discussion and Analysis, the accompanying compensation tables and the related narrative disclosure. The Board recommends a vote “Leagh E. TurnerFOR” this resolution because it believes that the policies and practices described in the Compensation Discussion and Analysis are effective in achieving the Company’s goals of linking pay to executive performance and levels of responsibility, encouraging our executive officers to remain focused on both short-term and long-term financial and strategic goals of the Company and linking executive performance to the creation of stockholder value as reflected in the “Executive Summary” of the Compensation Discussion and Analysis section above. Recommendation of the Board: | | | | THE BOARD RECOMMENDS THAT YOU VOTE “FOR” THE APPROVAL OF NEO COMPENSATION. | |
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| PROPOSAL FOUR Ratification of the Appointment of KPMG LLP as our Independent Registered Public Accounting Firm for Fiscal Year 2020 |
Our Audit Committee is directly responsible for the appointment, compensation, retention, and oversight of our independent registered public accounting firm, and is involved in the selection of the firm’s lead engagement partner who is subject to a mandatory, regular rotation and who may provide services to our company for a maximum of five consecutive years. In August 2018, we entered into an employment agreementselecting and approving a lead engagement partner, the Audit Committee relies on relevant succession criteria established by management and the Audit Committee, interactions with Leagh E. Turner,prospective candidates, assessments of their professional experience, and input from our President.company’s independent registered public accounting firm. The agreement provides for an indefinite term beginning on September 4, 2018. The agreement provides that Ms. Turner will receive an annualized base salary of $655,000 USD, subject to annual compensation reviews by our Board. The agreementAudit Committee also provides that Ms. Turner is eligible to receiveengages in an annual performance-based cash bonus with a target amountevaluation of 60%the independent registered public accounting firm. It considers, in particular, whether the retention of her annual base salary. Pursuant to the agreement, she received a signing bonus of $200,000 USD on September 14, 2018, and a bonus of $393,000 USD since she was an employee on December 31, 2018. Also, Ms. Turner will receive additional considerationfirm is in the formbest interests of (i) up to $30,000 USD forour company and its stockholders, taking into account the servicesfirm’s quality of an executive coachservice, the firm’s institutional knowledge and experience, our company’s global operations and businesses, the firm’s sufficiency of her choosing,resources, the quality of the communication and (ii) up to $20,000 USD forinteraction with the costfirm, and the firm’s independence, objectivity, and professional skepticism. The Audit Committee also considers the advisability and potential impact of attendingselecting a different independent registered public accounting firm. After assessing the Institutequalifications, performance, and independence of Corporate Directors—Director Education Program (throughKPMG LLP (“KPMG”), which has served as our company’s independent registered public accounting firm since 1958, the Rotman School of Management). In addition to the above, Ms. Turner participatesCommittee believes that retaining KPMG is in the employee health and welfare, retirement and other employee benefits programs offered generally from timebest interests of Ceridian. The Audit Committee has appointed KPMG as our independent registered public accounting firm to time by us to our senior executive employees.
Either we or Ms. Turner may terminateaudit the agreement any time with 90 days’ prior written notice. We may terminate Ms. Turner’s employment for death, “disability,” or with or without “cause” by written notice to Ms. Turner.
Ms. Turner’s employment agreement also provides that if her employment is terminated without cause, she will receive a lump sum cash payment equal to (i) 18 monthsconsolidated financial statements of total compensation (base salary plus incentive payment at target) if the termination occurs on or before the seventh anniversary of her start date, or (ii) 24 months of total compensation if the termination occurs after the seventh anniversary of her start date. Further, Ms. Turner will also receive apro-rated portion of the variable incentive plan payment that she would have been entitled to receiveCeridian for the fiscal year ending December 31, 2020.
Although it is not required to do so, our Board is asking our stockholders to ratify KPMG’s appointment. If our stockholders do not ratify KPMG’s appointment, the Audit Committee will consider changing our independent registered public accounting firm for 2021. Whether or not stockholders ratify KPMG’s appointment, the Audit Committee may appoint a different independent registered public accounting firm at any time if it determines that such a change is appropriate. KPMG has advised the Audit Committee that it is an independent accounting firm with respect to Ceridian and its affiliates in which her termination occurs had she remained an employee of Ceridian Canada, executive outplacement service for a period of up to 12 months following termination in an amount not to exceed $10,000 USD, and continuation of healthcare coverage based on her termination date for up to 18 to 24 months following her termination of employment. Further, Ms. Turner’s employment agreement provides that if her employment is terminated due to death or Disability (as such term is defined in her employment agreement), that she would receive apro-rated portionaccordance with the requirements of the variable incentive plan payment that she wouldSEC and the Public Company Accounting Oversight Board. Representatives of KPMG are expected to be present at our Annual Meeting, will have been entitledan opportunity to receivemake a statement if they choose, and are expected to be available to respond to appropriate stockholder questions.
Audit Fees The following table sets forth the fees billed or expected to be billed by KPMG for audit, audit-related, tax and all other services rendered for fiscal years 2019 and 2018: | | | | | | | | | | | | | | | | | | | 2019 | | 2018 | | | Fee Category | | (In thousands) | | | | | | | Audit Fees | | | $ | 2,229 | | | | $ | 1,995 | | | | | | | | | | | Audit-Related Fees | | | $ | 1,162 | | | | $ | 1,077 | | | | | | | | | | | Tax Fees | | | $ | 163 | | | | $ | 130 | | | | | | | | | | | All Other Fees | | | | — | | | | | — | | | | | | | | | | | Total Fees | | | $ | 3,554 | | | | $ | 3,202 | | | | | | |
Audit Fees. Consist of fees for services rendered for the audit and/or review of our consolidated financial statements. Audit fees also include fees for services rendered in connection with the filing of registration statements and other documents with the SEC, and the issuance of accountant consents and comfort letters. Audit-Related Fees. Consist of aggregate fees for accounting consultations and other services that were reasonably related to the performance of audits or reviews of our consolidated financial statements and were not reported above under “Audit Fees.” Tax Fees. Consist of aggregate fees for tax compliance, tax advice and tax planning services, including the review and preparation of certain foreign income tax returns. All Other Fees. Consist of fees billed in the indicated year for other permissible work performed by KPMG that is not included within the above category descriptions. | | | | | | | 42 | | 2020 PROXY STATEMENT |
Policy on Audit CommitteePre-Approval of Audit and PermissibleNon-Audit Services of Independent Registered Public Accounting Firm We have adopted a policy under which the Audit Committee mustpre-approve all audit and permissiblenon-audit services to be provided by the independent registered public accounting firm. As part of its review, the Audit Committee also considers whether the categories ofpre-approved services are consistent with the rules on independence. The Audit Committeepre-approved all services performed by KPMG in fiscal year in which her death or Disability occurs had she remained continuously employed for2019. Recommendation of the full fiscal year.Board For purposes
| | | THE BOARD RECOMMENDS THAT YOU VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT
OF KPMG LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL
YEAR ENDING DECEMBER 31, 2020. | |
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Report of her employment agreement, “cause” means (i) conduct involving theft or misappropriationthe Audit Committee of our assets and thosethe Board of our affiliates, (ii) fraud, embezzlement or an indictable offense, (iii) any material act of dishonesty, financial or otherwise, against us and our affiliates, (iv) intentional violation of law involving moral turpitude, (v) any material violation of our Code of Conduct and ethics policies, (vi) breach of Ms. Turner’s obligations under anynon-competition,non-solicitation,Directors or other similar agreement made with any of us and our affiliates, or (vii) the continued failure by Ms. Turner to attempt in good faith to perform her duties after receiving a written notice and a demand to rectify such failure within 90 days. The agreement includes perpetual confidentiality provisionsAudit Committee’s general role is to assist the Board in monitoring our financial reporting process and anon-disparagement provision,related matters. Its specific responsibilities are set forth in its charter. The Audit Committee has reviewed our consolidated financial statements for fiscal year 2019 and met with management, as well as provisions relatingwith representatives of KPMG LLP, our independent registered public accounting firm, to assignmentdiscuss the consolidated financial statements. The Audit Committee also discussed with members of inventionsKPMG LLP the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board andnon-competition andnon-solicitation. the SEC. Potential Payments Upon Termination Of Employment Or Change Of Control
Our NEOs are entitled to receive severance payments upon termination of employment, or a termination of employment in connection with a change of control as provided in “—Employment and Separation Agreements.” In addition, certain equity awards maythe Audit Committee received the written disclosures and the letter from KPMG LLP required by applicable requirements of the PCAOB regarding the independent accountant’s communications with the Audit Committee concerning independence and discussed with members of KPMG LLP its independence.
Based on these discussions, the financial statement review and other matters it deemed relevant, the Audit Committee recommended to the Board that Ceridian’s audited consolidated financial statements for fiscal year 2019 be accelerated upon a change of control, as further describedincluded in “—Outstanding Equity Awards as ofits Annual Report onForm 10-K for fiscal year ended December 31, 2018”.2019. Director CompensationAudit Committee
We pay our independentnon-employee directors, who are not employees of our Sponsors, an annual retention fee of $200,000. The annual retention fee is comprised of restricted stock units valued at $150,000 and $50,000 in cash, which the independentnon-employee director may also elect to be paid in whole or in part in the form of additional restricted stock units. The chair of the audit committee receives an additional annual cash fee of $20,000, the chair of the compensation committee receives an additional annual cash fee of $12,500, and the chair of the corporate governance and nominating committee receives an additional annual cash fee of $7,500, unless they are employees of our Sponsors, in which case they do not receive such compensation. Any cash fees are paid in quarterly installments. In addition, all of our independentnon-employee directors may be reimbursed for approved director education courses. Directors may also be reimbursed for reasonableout-of-pocket travel expenses incurred in connection with attendance at Board and committee meetings and other Board-related activities.
The following table presents the total compensation for each person who served as a member of our Board during 2018, other than Mr. Ossip. Mr. Ossip received no additional compensation for his service as a member of our Board during 2018.Deborah A. Farrington
Director Compensation for Fiscal Year 2018Andrea S. Rosen
| | | | | | | | | | | | | Name | | Fees Earned or
Paid in Cash ($)(1)(2) | | | Stock Awards
($)(1)(2) | | | Total
($)(3) | | Brent B. Bickett | | | — | | | | — | | | | — | | Ronald F. Clarke | | | — | | | $ | 200,000 | | | $ | 200,000 | | William P. Foley, II | | | — | | | | — | | | | — | | Thomas M. Hagerty | | | — | | | | — | | | | — | | Soren L. Oberg | | | — | | | | — | | | | — | | Ganesh B. Rao | | | — | | | | — | | | | — | | Andrea S. Rosen | | | — | | | $ | 200,000 | | | $ | 200,000 | | Gerald C. Throop | | $ | 30,784 | | | $ | 175,000 | | | $ | 205,784 | |
(1) | Mr. Clarke and Ms. Rosen have served as directors since July 2018, and Mr. Throop has served as a director since April 2018. Mr. Clarke and Ms. Rosen elected to receive all of their $200,000 annual retention fee in the form of restricted stock units. Mr. Throop elected to receive $175,000 of his $200,000 annual retention fee in the form of restricted stock units, and the remaining $25,000 of his 2018 annual retention fee in cash. In 2018, Mr. Throop earned $17,102 representing a pro rata portion of the $25,000 elected cash portion of his 2018 annual retention fee. Further, Mr. Throop earned $13,682 representing a pro rata portion of the $20,000 annual cash fee for serving as chair of the audit committee.
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(2) | Represents the aggregate grant date fair value of the share awards granted in 2018, computed in accordance with FASB ASC Topic 718. These values have been determined based on the assumptions set forth in Note 2 to our consolidated financial statements included in the 2018 Annual Report.
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(3) | The aggregate number of restricted stock units held by each of the directors listed in the table above as of December 31, 2018 was as follows: Mr. Clarke, 5,684 restricted stock units; Ms. Rosen, 5,684 restricted stock units; and Mr. Throop, 7,955 restricted stock units. The aggregate number of stock options held by each of the directors listed in the table above as of December 31, 2018 was as follows: Mr. Foley, fully vested options to purchase 111,468 shares of Common Stock. The aggregate number of Exchangeable Shares held by each of the directors listed in the table above as of December 31, 2018 was as follows: Mr. Throop, 23,185 Exchangeable Shares.
43 | | 2020 PROXY STATEMENT |
EQUITY COMPENSATION PLAN INFORMATION
| EQUITY COMPENSATION PLAN INFORMATION |
The table below presents information as of December 31, 20182019 for our equity compensation plans approved by our stockholders. We do not have any equity compensation plans that have not been approved by our stockholders. We are submitting for stockholder approval the Ceridian HCM Holding Inc. Global Employee Stock Purchase Plan at this Annual Meeting. | Plan Category | | Number of shares of
common stock
to be issued upon exercise
of outstanding options,
warrants and rights | | | Weighted-average
exercise price of
outstanding options,
warrants and
rights | | Number of shares of
common stock remaining
available for future
issuance under equity
compensation plans
(excluding shares
reflected in column (a)) | | | Number of shares of
common stock
to be issued upon exercise
of outstanding options,
warrants and rights (a) | | Weighted-average
exercise price of
outstanding options,
warrants and
rights (b) | | Number of shares of
common stock remaining
available for future
issuance under equity
compensation plans
(excluding shares
reflected in column (a)) (c) | | | | (a) | | | (b) | | (c) | | | Equity compensation plans approved by stockholders | | | 14,580,219 | | | $ | 19.12 | (1) | | 10,781,685 | (2) | | | | 14,033,036 | | | | | $29.66 | (1) | | | 10,911,849 | (2) | Equity compensation plans not approved by stockholders | | | — | | | | — | | | | — | | | | | — | | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | | | Total | | | 14,580,219 | | | $ | 19.12 | | | 10,781,685 | | | | | 14,033,036 | | | | | $29.66 | (1) | | | 10,911,849 | (2) |
| (1) | The weighted-average exercise price does not reflect the shares that will be issued in connection with the settlement of restricted stock units,RSUs, since restricted stock unitsRSUs have no exercise price. |
| (2) | Includes securities available for future issuance under the 2018 Equity Incentive Plan other than those listed in the first column and approximately 2,500,0002,238,105 shares of Common Stock available for issuance under the GESPP.our Global Employee Stock Purchase Plan. |
Equity Compensation Plan Information Global Employee Stock Purchase Plan As discussed above,Our Board adopted, and our stockholders are being asked to consider and act upon a proposal to approveapproved, the Ceridian HCM Holding Inc. Global Employee Stock Purchase Plan (the “GESPP”).GESPP. The GESPP was approved unanimouslyauthorizes the issuance of up to 2,500,000 shares of Common Stock to eligible participants through purchases via payroll deductions. The purchase price is the lower of (i) 85% of the fair market value of a share of Common Stock on the offering date (the first trading day of the offering period commencing on January 1 and adopted byconcluding on December 31) or (ii) 85% of the Board at its meetingfair market value of a share of Common Stock on the purchase date. The GESPP continues for ten years, unless terminated sooner as provided under the GESPP. A total of 2,238,105 shares remain available for issuance under the GESPP as of December 31, 2019. We filed a registration statement on FormS-8 covering the shares issuable under the GESPP on November 9, 2018, at which time it became effective, subject to approval by our stockholders. The material terms of the GESPP are discussed above under Proposal 2—approval of the Ceridian HCM Holding Inc. Global Employee Stock Purchase Plan.28, 2018.
Equity Incentive Plans Our Board adopted, and our stockholders approved, the 2013 Ceridian HCM Holding Inc. Stock Incentive Plan (as amended, the “2013 Plan”), and the Ceridian HCM Holding Inc. 2018 Equity Incentive Plan (the(for purposes of this section, the “2018 Plan”). The 2018 Plan authorizes us to grant incentive awards to our employees, directors and consultants. AAs of December 31, 2019, a total of 13,500,00017,696,193 shares of our Common Stock arewere reserved for issuance under the 2018 Plan. We filed a registration statementstatements onForm S-8 covering the shares issuable under the 2013 Plan and the 2018 Plan on April 25, 2018. The following is a summary of the material features of the 2013 Plan and the 2018 Plan. 2013 Plan.The 2013 Plan provides for the grant of options, share awards and other share-based awards to our directors, employees, and consultants as well as to directors, employees, and consultants of any of our subsidiaries or affiliates. A total of 9,356,9045,008,087 shares of our Common Stock are subject to outstanding awards under the 2013 Plan as of December 31, 2018.2019. We do not intend to grant any further awards under the 2013 Plan. 2018 Plan.The 2018 Plan was adopted by our Board and approved by our stockholders in connection with our initial public offering.IPO. The purpose of the 2018 Plan is to further align the interests of eligible participants with those of our stockholders by providing long-term incentive compensation opportunities tied to both our performance and that of our Common Stock. The 2018 Plan is intended to advance our interests and to increase stockholder value by attracting, retaining, and motivating key personnel upon whose judgment, initiative, and effort the successful conduct of our business is largely dependent. Our Board and management believe that equity awards are necessary to remain competitive in our industry and are essential to recruiting and retaining the highly qualified employees who help us meet our goals. Any officer, employee,non-employee director, consultant or any natural person who is a consultant or advisor of ours or of any of our subsidiaries or affiliates is eligible to receive Awards (as defined below) under the 2018 Plan. The selection of participants is within the sole discretion of the Committee (as defined below). Incentive stock options may be granted only to our employees and employees of certain of our subsidiaries. As of the date of this Proxy Statement, there are approximately 4,5315,028 employees (including 85 executive officers and 7non-employee directors) who are eligible to participate in the 2018 Plan on the basis of their services provided to us. | | | | | | | 44 | | 2020 PROXY STATEMENT |
The 2018 Plan is administered by the compensation committeeCompensation Committee of our Board, such other committee of the Board appointed by our Board to administer the 2018 Plan, or the Board, as determined by our Board (in each case, the “Committee”). AAs of December 31, 2019, a total of 13,500,00017,696,193 shares of our Common Stock arewere reserved for issuance under the 2018 Plan (the “Share Reserve”), and a total of 5,218,3159,022,449 shares of our Common Stock are subject to outstanding awards under the 2018 Plan as of December 31, 2018.2019. The 2018 Plan permits the grant ofof: (a) nonqualified stock options, (b) incentive stock options, (c) stock appreciation rights, (d) restricted stock awards, (e) restricted stock units,RSUs, (f) cash incentive awards, and (g) stock awards (collectively, “Awards”). Awards may be granted singly or in combination. The Share Reserve will be increased on March 31 of each of the first ten calendar years during the term of the Plan, by the lesser of (i) three percent (3%) of the number of shares of our Common Stock outstanding on each January 31 immediately prior to the date of increase or (ii) such number of shares of our Common Stock determined by the Board or Committee. As of March 31, 2019,2020, the Share Reserve will increase by three percent (3%) of the number of shares of the Company’sCeridian’s Common Stock outstanding on January 31, 20192020 or 4,196,1934,335,286 shares.
Nonon-employee director may be granted, during any calendar year, Awards having a fair value (determined on the date of grant) that, when added to all other compensation paid to thenon-employee director during the same calendar year for service as a member of our Board, exceeds $600,000, or for thenon-executive chairman of the Board, if any, $750,000. | | | | | | | 45 | | 2020 PROXY STATEMENT |
SECURITY OWNERSHIP OF
| SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT |
Beneficial Ownership of Common Stock The following table shows information as of March 4, 2019the Record Date regarding the beneficial ownership of our Common Stock by: each person or group who is known by us to own beneficially more than 5% of our Common Stock; each member of our Board, each director nominee, and each of our NEOs; and all members of our Board, director nominees, and our executive officers as a group. Beneficial ownership of shares is determined under rules of the SEC and generally includes any shares over which a person exercises sole or shared voting or investment power. Except as noted by footnote, and subject to community property laws where applicable, we believe based on the information provided to us that the persons and entities named in the table below have sole voting and investment power with respect to all shares of our Common Stock shown as beneficially owned by them. Percentage of beneficial ownership is based on 140,534,254144,838,424 shares of Common Stock outstanding as of March 4, 2019.the Record Date. Shares of Common Stock (i) issued or issuable upon exchange of the Exchangeable Shares, and (ii) subject to stock options currently exercisable or exercisable within 60 days of the date of this Proxy StatementRecord Date are deemed to be outstanding and beneficially owned by the person holding the Exchangeable Shares or stock options for the purposes of computing the percentage of beneficial ownership of that person and any group of which that person is a member, but are not deemed outstanding for the purpose of computing the percentage of beneficial ownership for any other person. Unless otherwise indicated, the address for each stockholder listed below is c/o Ceridian HCM Holding Inc., 3311 East Old Shakopee Road, Minneapolis, Minnesota 55425. | | | | | | | | | Name and address of beneficial owner | | Number of
Shares | | | Percent of
Total | | 5% Stockholders: | | | | | | | | | Affiliates of Thomas H. Lee Partners, L.P. (1) | | | 61,456,833 | | | | 43.7 | % | Cannae Holdings, Inc. (2) | | | 32,739,227 | | | | 23.3 | % | Named executive officers and directors: | | | | | | | | | David D. Ossip (3) | | | 5,338,556 | | | | 3.7 | % | Paul D. Elliott (4) | | | 130,685 | | | | * | | Leagh E. Turner | | | — | | | | * | | Brent B. Bickett (5) | | | 32,826,601 | | | | 23.4 | % | Ronald F. Clarke | | | — | | | | * | | William P. Foley, II (6) | | | 32,850,695 | | | | 23.4 | % | Thomas M. Hagerty | | | — | | | | * | | Ganesh B. Rao | | | — | | | | * | | Andrea S. Rosen | | | — | | | | * | | Gerald C. Throop (7) | | | 34,572 | | | | * | | All current directors and executive officers as a group (15 persons) (3), (4), (5), (6), (7), (8) | | | 38,861,235 | | | | 26.9 | % |
| | | | | | | | | | | Name and address of beneficial owner | | Number of
Shares | | Percent of Total | | | | 5% Stockholders: | | | | | | | | | | | | | | T. Rowe Price Associates, Inc.(1) | | | | 21,157,759 | | | | | 14.6 | % | | | | Cannae Holdings, Inc.(2) | | | | 19,839,227 | | | | | 13.7 | % | | | | Capital Research Global Investors, a division of Capital Research and Management Company(3) | | | | 16,818,645 | | | | | 11.6 | % | | | | Affiliates of Thomas H. Lee Partners, L.P.(4) | | | | 12,434,691 | | | | | 8.6 | % | | | | Select Equity Group, L.P. and George S. Loening(5) | | | | 11,680,968 | | | | | 8.1 | % | | | | The Vanguard Group(6) | | | | 9,318,353 | | | | | 6.4 | % | | | | BlackRock, Inc.(7) | | | | 8,996,563 | | | | | 6.2 | % | | | | Artisan Partners Limited Partnership(8) | | | | 7,553,052 | | | | | 5.2 | % | | | | NEOs and Directors: | | | | | | | | | | | | | | Christopher R. Armstrong(9) | | | | 95,943 | | | | | | * | | | | Brent B. Bickett(10) | | | | 19,926,601 | | | | | 13.8 | % | | | | Ronald F. Clarke | | | | 1,894 | | | | | | * | | | | Deborah A. Farrington | | | | — | | | | | | * | | | | Arthur Gitajn(11) | | | | 128,796 | | | | | | * | | | | Ozzie J. Goldschmied(12) | | | | 106,261 | | | | | | * | | | | Thomas M. Hagerty(13) | | | | 243,891 | | | | | | * | | | | David D. Ossip(14) | | | | 5,559,518 | | | | | 3.7 | % | | | | Ganesh B. Rao | | | | 34,781 | | | | | | * | | | | Andrea S. Rosen | | | | 845 | | | | | | * | | | | Leagh E. Turner(15) | | | | 56,583 | | | | | | * | | | | Gerald C. Throop(16) | | | | 37,224 | | | | | | * | | | | Erik J. Zimmer(17) | | | | 46,469 | | | | | | * | | | | All current directors and executive officers as a group (12 persons)(18) | | | | 26,185,759 | | | | | 17.6 | % |
| * | Represents beneficial ownership of less than 1% of our outstanding Common Stock. |
| | | | | | | 46 | | 2020 PROXY STATEMENT |
| (1) | As reported on the owner’s most recent Schedule 13G Amendment filed with the SEC on February 14, 2020, to report ownership as of December 31, 2019. T. Rowe Price Associates, Inc. holds sole voting power with respect to 5,587,019 shares of Common Stock and sole dispositive power with respect to 21,157,759 shares of Common Stock. The address for T. Rowe Price Associates, Inc. is 100 E. Pratt Street, Baltimore, Maryland 21202. |
| (2) | The 19,839,227 shares of Common Stock are held by Cannae Ventures Holdco I, LLC, a wholly owned subsidiary of Cannae Holdings, Inc. The chairman and the president of Cannae Holdings, Inc. have voting and investment power over such shares. The address of Cannae Ventures Holdco I, LLC and Cannae Holdings, Inc. is 1701 Village Center Circle, Las Vegas, Nevada 89134. |
| (3) | As reported on the owner’s most recent Schedule 13G Amendment filed with the SEC on March 10, 2020, to report ownership as of February 28, 2020. Capital Research Global Investors, a division of Capital Research and Management Company, has sole voting power over 16,818,645 shares and sole dispositive power over 16,818,645 shares. The address for Capital Research Global Investors is 333 South Hope Street, Los Angeles, California 90071. |
| (4) | Includes 17,669,359(i) 3,575,077 shares of Common Stock held by Thomas H. Lee Equity Fund VI, L.P., 11,964,749(ii) 2,420,853 shares of Common Stock held by Thomas H. Lee Parallel Fund VI, L.P., 2,090,001(iii) 422,874 shares of Common Stock held by Thomas H. Lee Parallel (DT) Fund VI, L.P., 90,427(iv) 18,297 shares of Common Stock held by Great-West Investors LP, 90,352(v) 18,281 shares of Common Stock held by Putnam Investments Employees Securities Company III LLC, 119,969(vi) 24,274 shares of Common Stock held by THL Coinvestment Partners, L.P., 38,478(vii) 7,786 shares of Common Stock held by THL Operating Partners, L.P., 17,886,457(viii) 3,619,005 shares of Common Stock held by THL Equity Fund VI Investors (Ceridian), L.P., 8,000,628(ix) 1,618,784 shares of Common Stock held by THL Equity Fund VI Investors (Ceridian) II, L.P., 313,528(x) 63,437 shares of Common Stock held by THL Equity Fund |
| VI Investors (Ceridian) III, LLC, 447,857(xi) 90,616 shares of Common Stock held by THL Equity Fund VI Investors (Ceridian) IV, LLC, 95,493(xii) 19,321 shares of Common Stock held by THL Equity Fund VI Investors (Ceridian) V, LLC, and 2,649,535(xiii) 536,086 shares of Common Stock held by THL Equity Fund VI Investors (Ceridian) VI, L.P. |
THL Equity Advisors VI, LLC is the general partner of Thomas H. Lee Equity Fund VI, L.P., Thomas H. Lee Parallel Fund VI, L.P., and Thomas H. Lee Parallel (DT) Fund VI, L.P. Thomas H. Lee Partners, L.P. is the general partner of THL Coinvestment Partners, L.P. and THL Operating Partners, L.P. Thomas H. Lee Advisors, LLC is attorney in fact for Great-West Investors LP and Putnam Investments LLC, which is the managing member of Putnam Investments Employees’ Securities Company III LLC, with respect to the shares of Common Stock they hold. THL Equity Advisors VI, LLC is the general partner of THL Equity Fund VI Investors (Ceridian), L.P., THL Equity Fund VI Investors (Ceridian) II, L.P. and THL Equity Fund VI Investors (Ceridian) VI, L.P. THL Equity Advisors VI, LLC is the manager of THL Equity Fund VI Investors (Ceridian) III, LLC, THL Equity Fund VI Investors (Ceridian) IV, LLC and THL Equity Fund VI Investors (Ceridian) V, LLC. The address of Great-West Investors LP is 8515 East Orchard Road, Greenwood Village, Colorado 80111; the address of Putnam Investments Employees’ Securities Company III LLC is c/o Putnam Investment, Inc., 100 Federal Street, Boston, Massachusetts 02110; and the address of all other entities referred to above is c/o Thomas H. Lee Partners, L.P., 100 Federal Street, 35th Floor, Boston, Massachusetts 02110. | (5) | As reported on the owner’s most recent Schedule 13G filed with the SEC on February 14, 2020, to report ownership as of December 31, 2019. Select Equity Group, L.P. and George S. Loening, who is the majority owner of Select Equity Group, L.P., have shared voting power over 11,680,968 shares and shared dispositive power over 11,680,968 shares. The address for Select Equity Group, L.P. and George S. Loening is 380 Lafayette Street, 6th Floor, New York, New York 10003. |
| (6) | As reported on the owner’s most recent Schedule 13G filed with the SEC on February 11, 2020, to report ownership as of December 31, 2019. The Vanguard Group has sole voting power over 46,998 shares, shared voting power over 9,244 shares, sole dispositive power over 9,267,396 shares, and shared dispositive power over 50,957 shares. The address for The Vanguard Group is 100 Vanguard Blvd., Malvern, Pennsylvania 19355. |
| (7) | As reported on the owner’s most recent Schedule 13G filed with the SEC on February 7, 2020, to report ownership as of December 31, 2019. BlackRock, Inc. has sole voting power over 8,683,659 shares and sole dispositive power over 8,996,563 shares. The address for BlackRock, Inc. is 55 East 52nd Street, New York, New York 10055. |
| (8) | As reported on the owner’s most recent Schedule 13G filed with the SEC on February 12, 2020, to report ownership as of December 31, 2019. Artisan Partners Asset Management Inc., for itself and as the general partner of Thomas H. Lee Equity Fund VI, L.P., Thomas H. Lee Parallel Fund VI, L.P.,Artisan Partners Holdings LP and Thomas H. Lee Parallel (DT) Fund VI, L.P. Thomas H. Lee Partners, L.P. isArtisan Investments GP LLC, for itself and as the general partner of THL CoinvestmentArtisan Partners L.P.Limited Partnership have shared voting power over 6,836,432 shares and THL Operatingshared dispositive power over 7,553,052 shares. The address for Artisan Partners L.P. Thomas H. Lee Advisors, LLCLimited Partnership is attorney in fact for Great-West Investors LP and Putnam Investments LLC, which is the managing member875 East Wisconsin Avenue, Suite 800, Milwaukee, Wisconsin 53202. |
| (9) | Consists of Putnam Investments Employees’ Securities Company III LLC, with respect to the(i) 18,313 shares of Common Stock, they hold. THL Equity Advisors VI, LLC is the general partner of THL Equity Fund VI Investors (Ceridian), L.P., THL Equity Fund VI Investors (Ceridian) II, L.P. and THL Equity Fund VI Investors (Ceridian) VI, L.P. THL Equity Advisors VI, LLC is the manager of THL Equity Fund VI Investors (Ceridian) III, LLC, THL Equity Fund VI Investors (Ceridian) IV, LLC and THL Equity Fund VI Investors (Ceridian) V, LLC. The address of Great-West Investors LP is 8515 East Orchard Road, Greenwood Village, Colorado 80111; the address of Putnam Investments Employees’ Securities Company III LLC is c/o Putnam Investment, Inc., 100 Federal Street, Boston, Massachusetts 02110; and the address of all other entities referred to above is c/o Thomas H. Lee Partners, L.P., 100 Federal Street, 35th Floor, Boston, Massachusetts 02110. |
(2) | Includes 32,739,227 shares of Common Stock held by Cannae Holdings, LLC, formerly known as Fidelity National Financial Ventures, LLC. Cannae Holdings, LLC is a wholly-owned subsidiary of Cannae Holdings, Inc., a publicly traded company listed on the NYSE (“Cannae”). The chairman and the president of Cannae have voting and investment power over such shares. The address of Cannae Holdings, Inc. is 1701 Village Center Circle, Las Vegas, Nevada 89134. On November 7, 2018, Cannae announced that one of its subsidiaries had entered into a three year margin loan pursuant to which it could borrow up to $300.0 million. The margin loan is guaranteed by Cannae for a period of up to one year and is further secured by a pledge of 25.0 million shares of our Common Stock beneficially owned by Cannae. The loan requires that a certain loan to value ratio (based on the value of the shares of our Common Stock pledged to secure the loan) be maintained. In the event that the ratio is not maintained, the borrower must post additional cash collateral and/or elect to repay a portion of the loan. The loan also contains provisions that, subject to their terms, effectively require prepayment in the event of certain customary events of default, including Cannae’s failure to comply with specified financial ratios or the triggering of a requirement of prepayment under any other material indebtedness. In the event that Cannae borrows under the margin loan and there is an event of default, if Cannae fails to pledge additional cash collateral and/or repay a portion of the loan when it is required to do so or if Cannae otherwise fails to comply with the respective terms of the margin loan and the lender accelerates payment of all amounts outstanding under the loan as a result of thisnon-compliance, then the lender could foreclose on the pledged shares and sell the shares of Common Stock in the open market.
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(3) | Consists of 249,409 shares of Common Stock held by Mr. Ossip and OsFund Inc., of which Mr. Ossip is a beneficial owner, 2,969,917(ii) 77,630 shares of Common Stock that are issuable upon exercise of stock options that are currently exercisable or are exercisable within 60 days of March 4, 2019, 250,000 shares of Common Stock that are issuable pursuant to restricted stock units that are currently vested or will vest within 60 days of March 4, 2019, and 1,869,230 shares of Common Stock that are issuable upon the exchange of Exchangeable Shares held by Mr. Ossip and Osscer Inc., of which Mr. Ossip is a beneficial owner.2, 2020.
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(4)(10) | Consists of 8,402 shares of Common Stock held by Mr. Elliott and 122,283 shares of Common Stock held by Mr. Elliott that are issuable upon exercise of stock options that are currently exercisable or are exercisable within 60 days of March 4, 2019. |
(5) | Consists of(i) 87,374 shares of Common Stock held by Bickett of Ponte Vedra Beach Limited Partnership, of which Mr. Bickett is a beneficial owner, and 32,739,22719,839,227 shares of Common Stock held by Cannae Holdings, LLC, a wholly-owned subsidiary of Cannae Holdings, Inc.Ventures Holdco I, LLC. Mr. Bickett is president of Cannae Holdings, Inc., which is the sole shareholder of Cannae Ventures Holdco I, LLC and the total shares represented for Mr. Bickett includes 32,739,22719,839,227 shares of Common Stock held by Cannae Holdings,Ventures Holdco I, LLC.
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(6) | Consists of 111,468 shares of Common Stock held by Mr. Foley that are issuable upon exercise of stock options that are currently exercisable or are exercisable within 60 days of March 4, 2019 and
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| 32,739,227 shares of Common Stock held by Cannae Holdings, LLC, a wholly-owned subsidiary of Cannae Holdings, Inc. Mr. Foley is chairman of Cannae Holdings, Inc., and the total shares represented for Mr. Foley includes 32,739,227 shares of Common Stock held by Cannae Holdings, LLC. |
(7) | Consists of 8,736 shares of Common Stock held by Mr. Throop, 2,651 shares of Common Stock that are issuable pursuant to restricted stock units that are currently vested or will vest within 60 days of March 4, 2019, and 23,185 shares of Common Stock that are issuable upon the exchange of Exchangeable Shares.
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(8)(11) | Consists of (i) 11,627 shares of Common Stock, held by Arthur Gitajn and 87,141(ii) 117,169 shares of Common Stock that are issuable upon exercise of stock options that are currently exercisable or are exercisable within 60 days of March 4, 2019; (ii) 25,5012, 2020. |
| (12) | Consists of (i) 25,953 shares of Common Stock, that are held by Ozzie J. Goldschmied and 57,573(ii) 80,308 shares of Common Stock that are issuable upon exercise of stock options that are currently exercisable or are exercisable within 60 days of March 4, 2019; (iii) 11,2922, 2020. |
| | | | | | | 47 | | 2020 PROXY STATEMENT |
| (13) | Consists of (i) 129,656 shares of Common Stock that are held by Scott A. KitchingMr. Hagerty, and 156,039(ii) 114,235 shares of Common Stock held by Hagerty Family 2006 Trust, of which Mr. Hagerty is a trustee. |
| (14) | Consists of (i) 22,267 shares of Common Stock held by Mr. Ossip, (ii) 229,085 shares of Common Stock held by OsFund Inc., of which Mr. Ossip disclaims beneficial ownership, (iii) 3,063,936 shares of Common Stock that are issuable upon exercise of stock options that are currently exercisable or are exercisable within 60 days of March 4, 2019; and2, 2020, (iv) 5,232375,000 shares of Common Stock that are issuable pursuant to RSUs that are currently vested or will vest within 60 days of March 2, 2020, (v) 8,328 shares of Common Stock that are issuable upon the exchange of Exchangeable Shares held by Lisa M. SterlingMr. Ossip and 64,948(vi) 1,860,902 shares of Common Stock that are issuable upon the exchange of Exchangeable Shares held by Osscer Inc., of which Mr. Ossip disclaims beneficial ownership. |
| (15) | Consists of (i) 12,500 shares of Common Stock that are issuable pursuant to RSUs that are currently vested or will vest within 60 days of March 2, 2020, and (ii) 44,083 shares of Common Stock that are issuable upon exercise of stock options that are currently exercisable or are exercisable within 60 days of March 4, 2019.2, 2020. |
Section 16(a)
| (16) | Consists of (i) 8,736 shares of Common Stock, (ii) 5,303 shares of Common Stock that are issuable pursuant to RSUs that are currently vested or will vest within 60 days of March 2, 2020, and (iii) 23,185 shares of Common Stock that are issuable upon the exchange of Exchangeable Shares. |
| (17) | Consists of (i) 8,969 shares of Common Stock, and (ii) 37,500 shares of Common Stock that are issuable upon exercise of stock options that are currently exercisable or are exercisable within 60 days of March 2, 2020. |
| (18) | Consists of (i) the outstanding shares, RSUs and options described in the preceding footnotes (9) through (11) and (13) though (16), (ii) 11,750 shares of Common Stock that are held by other executive officers, and (iii) 87,933 shares of Common Stock that are held by other executive officers and that are issuable upon exercise of stock options that are currently exercisable or are exercisable within 60 days of March 2, 2020. |
Beneficial Ownership Reporting Complianceof Preferred Stock Section 16(a)As of the Exchange Act requires our directorsRecord Date, Ceridian has one Special Voting Share of preferred stock outstanding. The Trustee holds legal title to the Special Voting Share for the use and executive officers and persons who own more than ten percentbenefit of our Common Stock (the “Reporting Persons”) to filethe registered holders of Exchangeable Shares.
In connection with the SEC initial reports of beneficial ownershipVoting and reports of changes in beneficial ownership. The Reporting Persons are required by SEC regulations to furnish us with copies of all such reports. Based solely on our review ofExchange Trust Agreement dated April 25, 2018, among Ceridian, Ceridian Canada Ltd., Ceridian AcquisitionCo ULC and the copies of any Section 16(a) forms received by us or written representations fromTrustee, the Reporting Persons, we believe thatTrustee is entitled, with respect to the fiscal year ended December 31, 2018,any matter, question, proposal or proposition whatsoever that may properly come before Ceridian’s Annual Meeting and with respect to all Reporting Persons complied with all applicable filing requirements.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Set forth below is a description of certain relationships and related person transactions between us or our subsidiaries and our directors, executive officers orwritten consents sought from the holders of more than 5%Ceridian’s Common Stock, to cast the number of our voting securities.
Registration Rights Agreement
On April 30, 2018, in connection with our initial public offering, we entered into a registration rights agreement withvotes for each Exchangeable Share equal to the Sponsors, David D. Ossip, Alon Ossip, the brothernumber of David D. Ossip, and entities controlled by each of David D. Ossip and Alon Ossip in respect of the shares of Common Stock andissuable upon the exchange of each Exchangeable Share held by registered holders of such Exchangeable Shares on the Record Date and for which the Trustee has received voting instructions from such holders.
Except as specifically authorized, the Trustee has no power or authority to sell, transfer, vote or otherwise deal in or with the Special Voting Share. The Trustee is not entitled to receive any portion of any dividend or distribution at any time. Upon any liquidation, dissolution or winding up of Ceridian, the Trustee will not be entitled to any portion of any related distribution. At such time as (i) there are no Exchangeable Shares of Ceridian AcquisitionCo ULC issued and outstanding that are not owned by Ceridian or any subsidiary of Ceridian, and (ii) there is no share of stock, debt, option or other agreement, obligation or commitment of Ceridian AcquisitionCo ULC which could by its terms require Ceridian AcquisitionCo ULC to issue any Exchangeable Shares to any person other than Ceridian or any subsidiary of Ceridian, then the Special Voting Share will be retired and cancelled promptly for no consideration and will not be reissued. The Special Voting Share is held by such holder immediately following the initial public offering. This agreement provides these holders (and their permitted transferees) with the right to require us, at our expense, to register shares of our Common Stock that they hold.Barbara Ferreri. The agreement also provides that we will pay certain expenses of these electing holders relating to such registrations and indemnify them against certain liabilities that may arise under the Securities Act of 1933, as amended.address for Barbara Ferreri is c/o Ceridian HCM Holding Inc., 3311 East Old Shakopee Road, Minneapolis, Minnesota 55425. Voting Agreement
On April 30, 2018, in connection with our initial public offering, we entered into a voting agreement with the Sponsors, pursuant to which we are required to take all necessary action to cause the Board to include individuals designated by the Sponsors. These designation rights are described in this Proxy Statement in the section titled “Board of Directors and Corporate Governance—Board Membership.” The voting agreement also requires the Sponsors to consult with one another regarding the transfer of their equity securities in us.
Management Agreements
Prior to our initial public offering, Ceridian was party to management agreements with affiliates of our Sponsors, FNF and THL Managers VI, LLC (“THLM”). FNF assigned its management agreement to Cannae in November 2017. Pursuant to these management agreements, Cannae and THLM each, respectively, agreed to provide us with financial advisory, strategic, and general oversight services.
In April 2018, the management agreements terminated upon consummation of our initial public offering. Upon termination and pursuant to the terms of the management agreements, we paid a termination fee equal to the net present value of the management fee for a seven-year period, which was $11.3 million.
We recorded a management fee expense in selling, general, and administrative expense of $12.0 million, for the year ended December 31, 2018 related to these management agreements.
Indebtedness
Prior to its November 2017split-off from FNF, Cannae was an affiliate of FNF. We redeemed $24.0 million of our previously-outstanding $475.0 million principal amount senior notes due 2021 (the “Senior Notes”) from FNF and its subsidiaries on May 30, 2018. We had previously made $1.3 million in interest payments to FNF and its subsidiaries during the year ended December 31, 2018. FNF and its subsidiaries conducted the debt transactions through third parties in the ordinary course of their business and not directly with us. Following Cannae’ssplit-off from FNF, FNF retained ownership of the Senior Notes.
Service and Vendor Related Agreements
We are a party to a service agreement with CompuCom Systems, Inc. (“CompuCom”), an investment portfolio company of THLM. Pursuant to the service agreement, CompuCom agrees to provide us with service desk and desk side support services. Pursuant to this arrangement, we made payments to CompuCom totaling $1.8 million for the year ended December 31, 2018.
| | | | | | | 48 | | 2020 PROXY STATEMENT |
Other Transactions
On July 23, 2018, Ronald F. Clarke was appointed to our Board. Mr. Clarke has been the chief executive officer of FleetCor Technologies since August 2000 and chairman of its board of directors since March 2003. We provide services to FleetCor Technologies or one of its wholly owned affiliates through certain commercial arrangements entered into in the ordinary course of business, which include: provision of Dayforce HCM services; reseller / referral arrangements whereby we resell / refer FleetCor Technologies services to its customers; and other administrative services. For these services, we have recorded revenue of $2.3 million for the year ended December 31, 2018.
We provide Dayforce and related services to The Stronach Group, for which we recorded revenue of $0.3 million for the year ended December 31, 2018. Alon Ossip, the brother of David D. Ossip, was the chief executive officer, and is currently a minority shareholder, of The Stronach Group.
We provide Dayforce and payroll-related tax filing services to FNF, for which we recorded revenue of $0.4 million for the year ended December 31, 2018.
We provide Dayforce and related services to certain investment portfolio companies of THLM and Cannae. We recorded revenue of $1.8 million from American Blue Ribbon Holdings, LLC; $0.5 million from Essex Bargain Hunt Superstores; $0.5 million from Guaranteed Rate; $0.3 million from Phillips Feed Services; and $0.3 million from System One Holdings LLC for the year ended December 31, 2018.
Immediately subsequent to our initial public offering on April 30, 2018, THL / Cannae Investors LLC, one of our existing stockholders controlled by our Sponsors, purchased from us in a private placement $100.0 million of our Common Stock at a price per share equal to the initial public offering price. Based on the initial public offering price of $22.00 per share, 4,545,455 shares were issued in this private placement.
Policies for Approval of Related Person Transactions
Our Board has adopted a Code of Conduct that contains a written policy relating to the approval of related person transactions. A “related person transaction” is a transaction or arrangement or series of transactions or arrangements in which we participate (whether or not we are a party) and a related person has a direct or indirect material interest in such transaction. Our audit committee reviews and approves or ratifies all relationships and related person transactions between us and (i) our directors, director nominees, or executive officers, (ii) any 5% record or beneficial owner of our Common Stock, or (iii) any immediate family member of any person specified in (i) and (ii) above. The audit committee reviews all related person transactions and, where the audit committee determines that such transactions are in our best interests, approves such transactions in advance of such transaction being given effect or ratified.
TRANSACTION OF OTHER BUSINESS
| TRANSACTION OF OTHER BUSINESS AND ADDITIONAL INFORMATION |
The Board knows of no other matters that will be presented for consideration at the Annual Meeting. If any other matters are properly brought before the Annual Meeting, the persons appointed in the accompanying proxy intend to vote the shares represented thereby in accordance with their best judgment on such matters, under applicable laws. ADDITIONAL INFORMATION
Procedures for Submitting Stockholder Proposals Requirements for Stockholder Proposals to be Brought Before the Annual Meeting. Our amended and restated bylaws (the “Bylaws”) provide that nominations of persons for election to our Board and other proposals to be considered at an annual meeting of stockholders must comply with the requirements set forth in our Bylaws. Our Bylaws require that a stockholder give written notice to our Corporate Secretary, c/o Ceridian HCM Holding Inc., 3311 East Old Shakopee Road, Minneapolis, Minnesota 55425, not later than the close of business 120 days prior to the first anniversary of the date of the proxy statement for the preceding year’s annual meeting. Since our Proxy Statement for the 2020 Annual Meeting of Stockholders is dated March 22, 2019,19, 2020, stockholder proposals must be received by our Corporate Secretary at our principal executive offices no later than November 23, 201919, 2020 in order to be raised at our 20202021 Annual Meeting of Stockholders. However, our Bylaws also provide that in the event the date of the annual meeting is more than 30 days before or after May 1, 2020April 28, 2021 (theone-year anniversary of the 2020 Annual Meeting)Meeting of Stockholders), notice must be delivered not later than the close of business on the 10th day following the day on which public announcement of the date of such meeting is first made. Requirements for Stockholder Proposals to be Considered for Inclusion in Our Proxy MaterialsMaterials.. Any stockholder who wishes to submit a proposal for inclusion in our proxy materials must comply withRule 14a-8 promulgated under the Exchange Act. For such proposals to be included in our proxy materials relating to our 20202021 Annual Meeting of Stockholders, all applicable requirements ofRule 14a-8 must be satisfied and we must receive such proposals no later than November 23, 2019.19, 2020. Such proposals must be delivered to our Corporate Secretary, c/o Ceridian HCM Holding Inc., 3311 East Old Shakopee Road, Minneapolis, Minnesota 55425. If we hold our 2020 Annual Meeting of Stockholders more than 30 days before or after May 1, 2020April 28, 2021 (theone-year anniversary date of the 2020 Annual Meeting)Meeting of Stockholders), we will disclose the new deadline by which stockholders’ proposals must be received in our earliest possible Quarterly Report onForm 10-Q or, if that method is impracticable, by any means reasonably determined to inform stockholders. Exemption from Toronto Stock Exchange Rules The CompanyCeridian is an “Eligible International Interlisted Issuer”,Issuer,” as such term is defined in the TSX Company Manual (the “Manual”). As an Eligible International Interlisted Issuer, the CompanyCeridian has applied for and received an exemption pursuant to Section 401.1 of the Manual from Sections 461.1 to 461.4 and Section 464 of the Manual, the effect of which is that the CompanyCeridian will not have to comply with certain Canadian requirements relating to majority voting and the annual election of directors. As an “Eligible International Interlisted Issuer”, the CompanyIssuer,” Ceridian is also exempt from, among other things, Sections 604 (security holder approval) and 613 of the Manual.
The CompanyCeridian sought the exemption on the basis that (i) the Company’sCeridian’s primary listing is the NYSE; (ii) the CompanyCeridian is incorporated in the Statestate of Delaware; and (iii) less than 25% of trading volume in the Company’s shares was on Canadian market places. The Companymarket-places. Ceridian is required to notify the TSX of its continued reliance on the exemption before each successive annual meeting of stockholders.
ANNEX A
Ceridian HCM Holding Inc. Global Employee Stock Purchase Plan
CERIDIAN HCM HOLDING INC.
GLOBAL EMPLOYEE STOCK PURCHASE PLAN
CERIDIAN HCM HOLDING INC.
GLOBAL EMPLOYEE STOCK PURCHASE PLAN
SECTION 1
PURPOSE AND TERM
1.1 | Purpose. The Ceridian HCM Holding Inc. Global Employee Stock Purchase Plan (the “GESPP”) provides Eligible Employees an opportunity to become an owner of Ceridian HCM Holding Inc. (the “Company”) and play a role in our future. The Company intends for the GESPP to have two components: a component that is intended to qualify as an “employee stock purchase plan” under Code Section 423 (the “Code Section 423 Component”), and a component that is not intended to qualify as an “employee stock purchase plan” under Code Section 423 (the “Non-Code Section 423 Component”). The provisions of the Code Section 423 Component shall be construed so as to extend and limit participation in a uniform andnon-discriminatory basis consistent with the requirements of Code Section 423. A right to purchase shares of Common Stock under theNon-Code Section 423 Component shall be effectuated via separate offerings under one or moresub-plans of theNon-Code Section 423 Component of the GESPP for Employees of ParticipatingNon-423 Subsidiaries in countries outside of the United States in order to achieve tax, employment, securities law or other purposes and objectives, and to conform the terms of thesub-plans with the laws and requirements of such countries. Except as otherwise provided herein or in the applicablesub-plan, theNon-Code Section 423 Component of the GESPP shall be operated and administered in the same manner as the Code Section 423 Component.
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1.2 | Term of the GESPP; Stockholder Approval. The GESPP shall commence operation on the Effective Date and shall continue in effect through the tenth (10th) anniversary of the Effective Date, unless terminated sooner under Section 12.1. Notwithstanding anything to the contrary contained herein, an Offering Period may commence after the Board has adopted the GESPP but prior to the Company’s stockholders approving the GESPP; provided, that any Purchase Rights granted pursuant to such Offering Period shall be contingent upon receipt of the approval of the GESPP by Company stockholders within 12 months of the date the Board adopted the GESPP. If Company stockholders do not approve the GESPP, all Contributions made under the GESPP for the applicable Offering Period shall be refunded to Participants, without interest, as soon as reasonably practicable and no shares of Common Stock shall be issued under the GESPP.
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SECTION 2
DEFINITIONS
Any term not expressly defined in the GESPP shall have the same definition as set forth in Code Section 423. Whenever the following words and phrases are used in the GESPP, they shall have the respective meanings set forth below:
| (a) | “Acquiring Company” means, in the event of a Change of Control, the surviving, continuing, successor, or purchasing corporation or parent corporation thereof, as the case may be.
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| (b) | “Act” means the Securities Exchange Act of 1934, as amended from time to time.
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| (c) | “Affiliate” means each of the following: (i) any Subsidiary; (ii) any corporation, trade or business (including, without limitation, a partnership or limited liability company) that is directly or indirectly controlled fifty percent (50%) or more (whether by ownership of stock, assets or an equivalent ownership interest or voting interest) by the Company; (iii) any corporation, trade or business (including, without limitation, a partnership or limited liability company) that directly or indirectly controls fifty percent (50%) or more (whether by ownership of stock, assets or an equivalent
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| ownership interest or voting interest) of the Company; and (iv) any other entity in which the Company has, either directly or indirectly, a material equity interest and that is designated as an “Affiliate” by resolution of the Board. |
| (d) | “Board” means the Board of Directors of the Company.
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| (e) | “Change of Control” means “Change of Control” as defined in the Ceridian HCM Holding Inc. 2018 Equity Incentive Plan, or any successor plan that the Company may establish.
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| (f) | “Code” means the United States Internal Revenue Code of 1986, as amended, and any applicable regulations promulgated thereunder.
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| (g) | “CodeSection 423 Component” means the Offerings under the GESPP that are intended to meet the requirements of Code Section 423(b).
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| (h) | “Committee” means the Compensation Committee of the Board or another committee of the Board duly appointed to administer the GESPP and having such powers as shall be specified by the Board as described in Section 9.
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| (i) | “Common Stock” means the common stock, $0.01 par value per share, of the Company.
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| (j) | “Company” means Ceridian HCM Holding Inc., a Delaware corporation.
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| (k) | “Compensation” means, with respect to each payroll period in any Purchase Period, the actual gross wages or salary paid to a Participant for services at the Participant’s base rate of pay prior to any salary reductions, along with holiday pay and other eligible approved paid time away from work, but excluding overtime pay and any other amounts of pay or other allowances.
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| (l) | “Contributions” means the payroll deductions and such other amounts contributed to the GESPP via cash, check, wire transfer or other means for the purpose of purchasing shares of Common Stock under the GESPP, as determined by the Committee.
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| (m) | “EffectiveDate” means the earlier of (i) the date on which the Board approves and adopts the GESPP, and (ii) the date on which the Company’s stockholders approve the GESPP.
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| (n) | “EligibleEmployee” means a person who, prior to the start of the Enrollment Period for an applicable Purchase Period, is an Employee of the Company, a Participating Code Section 423 Subsidiary or a ParticipatingNon-Code Section 423 Subsidiary.
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| (o) | “Employee” means a person treated as an employee of the Company or a Participating Code Section 423 Subsidiary for purposes of the Code Section 423 Component of the GESPP or, for ParticipatingNon-Code Section 423 Subsidiaries offering participation in theNon-Code Section 423 Component of the GESPP, persons treated as an employee as determined under local laws, rules and regulations. For purposes of the GESPP, a Participant shall cease to be an Employee either upon an actual termination of employment or upon the company employing the employee ceasing to be a Participating Code Section 423 Subsidiary or a ParticipatingNon-Code Section 423 Subsidiary. For purposes of the GESPP, an individual shall not cease to be an Employee while such individual is on military leave, sick leave, statutory leave (as determined under local law) or another bona fide leave of absence approved by the Company. The Company shall determine in good faith and in the exercise of its discretion whether an individual has become or has ceased to be an Employee and the effective date of such individual’s employment or termination of employment, as the case may be. For purposes of an individual’s participation in or other rights, if any, under the GESPP as of the time of the Committee’s determination, all such determinations by the Committee shall be final, binding and conclusive, notwithstanding that the Company or any governmental agency subsequently makes a contrary determination.
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| (p) | “EnrollmentAgreement” means an agreement in such written or electronic form as specified by the Committee, stating an Eligible Employee’s election to participate in the GESPP and authorizing Contributions from the Eligible Employee’s Compensation.
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| (q) | “EnrollmentPeriod” means, unless otherwise specified by the Committee, the period commencing on the first (1st) day of the month preceding each Purchase Period, and ending on the fifteenth (15th) day of the month preceding each Purchase Period.
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| (r) | “Fair Market Value” means, unless otherwise required by any applicable provision of the Code or any regulations issued thereunder or by the rules of the TSX, the closing price for a share of Common Stock as reported on the NYSE for the applicable date, or, if no sales of Common Stock were reported on the NYSE for such date, the closing price for a share of Common Stock on the NYSE for the immediately preceding Trading Day on which sales of shares Common Stock were reported on the NYSE. If the shares of Common Stock are no longer listed or is no longer actively traded on the NYSE as of the applicable date, the Fair Market Value of the share of Common Stock shall be the value as reasonably determined by the Committee in its sole discretion for purposes of the GESPP.
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| (s) | “GESPP” means the Ceridian HCM Holding Inc. Global Employee Stock Purchase Plan, which includes both the Code Section 423 Component and theNon-Code Section 423 Component, as amended from time to time.
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| (t) | “GESPP Administrator” means each individual designated by the Committee to receive Enrollment Agreements, withdrawal notices and other communications from Eligible Employees. The GESPP Administrator shall also include any third-party vendor hired by the Company to assist with theday-to-day operation and administration of the GESPP.
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| (u) | “Non-Code Section 423 Component” means the Offerings under the GESPP that are not intended to meet the requirements of Code Section 423(b).
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| (v) | “NYSE” means the New York Stock Exchange.
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| (w) | “Offering” means the Company’s grant of a Purchase Right as described in Section 5.
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| (x) | “OfferingDate” means the first Trading Day of each Offering Period.
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| (y) | “OfferingPeriod” means, unless otherwise specified by the Committee, each calendar year commencing on January 1 and concluding on December 31.
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| (z) | “Participant” means an Eligible Employee who has elected to participate in the GESPP by submitting an Enrollment Agreement as provided in Section 3.2.
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| (aa) | “Participating Code Section 423 Subsidiary” means any Subsidiary designated by the Committee, in its sole and absolute discretion, as a company that may offer participation in the Code Section 423 Component of the GESPP to its Eligible Employees. The Committee shall have the sole and absolute discretion to determine from time to time when and if a Subsidiary shall be classified as a Participating Code Section 423 Subsidiary.
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| (bb) | “ParticipatingNon-Code Section 423 Subsidiary” means any Subsidiary or Affiliate designated by the Committee, in its sole and absolute discretion, as a company that may offer participation in theNon-Code Section 423 Component of the GESPP to its Eligible Employees. The Committee shall have the sole and absolute discretion to determine from time to time when and if a Subsidiary shall be classified as a ParticipatingNon-Code Section 423 Subsidiary.
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| (cc) | “PurchaseDate” means the last Trading Day of each Purchase Period.
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| (dd) | “PurchasePeriod” means, unless otherwise specified by the Committee, each calendar quarter during an Offering Period commencing on January 1, April 1, July 1 and October 1 of each year; provided, the initial Purchase Period under the GESPP shall commence on January 1, 2019 and conclude on June 30, 2019.
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| (ee) | “PurchasePrice” means the price at which a share of Common Stock may be purchased under the GESPP, as established from time to time by the Committee and subject to the rules of the NYSE and
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| the TSX, as applicable. For the first Offering Period and all subsequent Offering Periods unless otherwise established by the Committee, the “Purchase Price” shall mean the lower of (i) 85% of the Fair Market Value of a share of Common Stock on the Offering Date, and (ii) 85% of the Fair Market Value of a share of Common Stock on the Purchase Date, as adjusted from time to time in accordance with Section 8.1 and provided that the Purchase Price shall not be less than the par value of the shares of Common Stock. |
| (ff) | “PurchaseRight” means an option granted to a Participant pursuant to the GESPP to purchase shares of Common Stock as provided in Section 5, which the Participant may or may not exercise during the Offering Period.
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| (gg) | “Subsidiary” means a present or future subsidiary corporation of the Company within the meaning of Code Section 424(f).
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| (hh) | “Trading Day” means a day on which the NYSE or the TSX, as applicable, is open for trading.
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| (ii) | “TSX” means the Toronto Stock Exchange.
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2.2 | Construction.Captions and titles contained herein are for convenience only and shall not affect the meaning or interpretation of any provision of the GESPP. Except when otherwise indicated by the context, the singular shall include the plural and the plural shall include the singular. Use of the term “or” is not intended to be exclusive, unless the context clearly requires otherwise.
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SECTION 3
ELIGIBILITY AND PARTICIPATION
3.1 | Eligibility.An Employee may elect to participate in the GESPP as of the first Purchase Period on which such person becomes an Eligible Employee by complying with the enrollment procedures set forth in Section 3.2.
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| (a) | An Eligible Employee shall become a Participant by submitting a properly completed Enrollment Agreement to the GESPP Administrator. The Committee shall establish enrollment procedures for the submission of such Enrollment Agreements to the GESPP Administrator using written and/or electronic election forms and shall communicate such procedures to all Eligible Employees. An Eligible Employee who does not timely submit a properly completed Enrollment Agreement to the GESPP Administrator during an Enrollment Period for that Purchase Period shall not participate in the GESPP for that Purchase Period, but shall be eligible to elect to participate in the GESPP for any subsequent Purchase Period by timely submitting a properly completed Enrollment Agreement to the GESPP Administrator during an Enrollment Period for any future Purchase Period.
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| (b) | A Participant may deliver to the GESPP Administrator a new Enrollment Agreement for each Purchase Period in accordance with the procedures established in Section 4.
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| (c) | Subject to the limitation set forth in Section 5.3, a Participant who (i) has elected to participate in the GESPP pursuant to Section 3.2(a) for a Purchase Period, and (ii) takes no action to change or revoke such election (in accordance with such procedures as established by the Company) by the fifteenth (15th ) calendar day of the month preceding the start of the subsequent Purchase Period, shall be deemed to have made the same election to participate in the GESPP, including the same Contribution authorization, for each subsequent Purchase Period. A Participant who is automatically enrolled in the GESPP for a Purchase Period pursuant to the preceding sentence shall not be required to deliver an additional Enrollment Agreement to the GESPP Administrator for the subsequent Purchase Period.
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3.3 | Termination of Employment or Loss of Eligibility.
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| (a) | In the event that the employment of a Participant is terminated prior to a Purchase Date for any reason, including resignation, termination with or without case, or by way of retirement, disability or death, or in the event a Participant is no longer an Eligible Employee, the Participant’s participation in the GESPP shall terminate immediately and thereupon, automatically and without any further act on his or her part, such Participant’s Contribution authorization shall terminate. Contributions credited to the Participant’s Plan account since the last Purchase Date shall, as soon as practicable, be returned to the Participant or, in the case of the Participant’s death, to the Participant’s legal representative. For Participants employed in the United States by the Company or a Participating Code Section 423 Subsidiary; however, the Committee may, in its sole discretion, permit such Participants to make a beneficiary designation in relation to the Participant’s interests under the GESPP in such manner and at such times as determined by the Committee. Interest shall not be paid on Contributions returned unless otherwise required under applicable law. Further, all of the Participant’s rights under the GESPP shall terminate.
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| (b) | A Participant whose participation in the GESPP has been terminated may become eligible to participate in the GESPP for any subsequent Purchase Period by again satisfying the requirements of Sections 3.1 and 3.2.
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3.4 | Voluntary Withdrawal from the GESPP.
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A Participant may withdraw from the GESPP at any time and receive a refund of all Contributions credited to his or her Plan account that have not been applied toward the purchase of shares of Common Stock by submitting a withdrawal election to the GESPP Administrator in accordance with such procedures as established by the Company, provided such withdrawal election is submitted to the GESPP Administrator no later than the fifteenth (15th) day of the month in which the applicable Purchase Date falls. The Contributions of a Participant who has withdrawn from the GESPP shall be returned to the Participant, without interest, as soon as practicable after the withdrawal and may not be applied to the purchase of shares of Common Stock in any other Offering under the GESPP. A Participant who withdraws from the GESPP shall be prohibited from resuming participation in the GESPP for the same Offering Period, but may participate in any subsequent Offering Period by satisfying Sections 3.1 and 3.2. The Committee may from time to time establish or change limitations on the frequency of withdrawals permitted under this Section 3.4, establish a minimum amount that must be retained in the Participant’s Plan account, or terminate the withdrawal right provided by this Section 3.4.
SECTION 4
CONTRIBUTIONS AND PARTICIPANT ACCOUNTS
| (a) | An Eligible Employee who elects to enroll in the GESPP as a Participant shall designate in the Enrollment Agreement a whole percentage from one percent (1%) to ten percent (10%) of his or her Compensation to be deducted via payroll deductions each payroll period during the Purchase Period and paid into the GESPP for his or her Participant account not to exceed the maximum amount allowed under the terms of the GESPP. Notwithstanding the foregoing, the Committee may change the limits on payroll deductions effective as of any future Offering Date.
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| (b) | Shares of Common Stock acquired pursuant to the exercise of all or any portion of a Purchase Right may be paid for only from Participant’s Contributions accumulated during the Purchase Period for which such Purchase Right was granted. If payroll deductions are prohibited or otherwise problematic under applicable local law (as determined by the Committee in its discretion), the Committee may permit Participants to contribute to the GESPP by such other means as determined by the Committee.
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| (c) | The Committee may, in its sole discretion, permit additional lump sum contributions on a periodic basis during the Offering Period in a form and manner as determined by the Committee; provided, the amount of any additional lump sum contributions made by a Participant, when combined with other Participant Contributions, shall not exceed the maximum amount allowed under the terms of the GESPP.
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| (d) | The Committee shall establish such procedures, conditions and limitations for purposes of effectuating the foregoing, in its discretion; provided that for purposes of Participants participating in the Code Section 423 Component, such procedures, conditions and limitations will be applied in a uniform andnon-discriminatory basis.
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| (e) | Payroll deductions shall commence on the first payday following the Offering Date and shall continue through the end of each Offering Period, unless as otherwise provided herein.
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| (f) | Interest shall not be paid on a Participant’s Contributions unless required under applicable law.
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| (g) | A Participant may not increase, but may elect to decrease the rate of Contributions once during each Purchase Period by submitting an amended Enrollment Agreement authorizing such change to the GESPP Administrator in accordance with such procedures established by the Committee no later than the fifteenth (15th) day of the month in which the applicable Purchase Date falls, and such change shall become effective as soon as reasonably practicable. For the sake of clarity, a Participant who elects to decrease the rate of Contributions to zero percent (0%) during a Purchase Period shall not be treated as being withdrawn from the GESPP pursuant to the terms of Section 3.4.
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| (h) | The Committee may, in its sole discretion, suspend a Participant’s Contributions under the GESPP as the Committee deems advisable pursuant to the limitation described in Section 5.3. If the Committee suspends a Participant’s Contributions under this provision, the Participant may participate in future Offering Periods by satisfying the requirements of Sections 3.1 and 3.2.
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4.2 | Participant Accounts.Individual bookkeeping accounts shall be maintained for each Participant. All Contributions to the GESPP by or on behalf of a Participant shall be credited to such Participant’s Plan account and shall be deposited with the general funds of the Company. All Contributions to the GESPP by or on behalf of a Participant may be used by the Company for any corporate purpose.
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SECTION 5
GRANT OF PURCHASE RIGHT
5.1 | General.On each Offering Date, the Company shall grant to each Participant a Purchase Right under the GESPP to purchase shares of Common Stock. Each Purchase Right shall be treated as an option for purposes of Code Section 423.
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5.2 | Term of Purchase Right.Each Purchase Right shall have a term equal to the length of the Offering Period to which the Purchase Right relates.
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5.3 | Number of Shares of Common Stock Subject to Purchase Right.
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| (a) | On the Offering Date of each Offering Period, each Participant shall be granted a Purchase Right to purchase up to a maximum number of shares of Common Stock determined by dividing such Participant’s Contributions accumulated during the Offering Period by the applicable Fair Market Value of a share of Common Stock on the Offering Date;provided,however, that in no event will a Participant be permitted to purchase more than Twenty-Five Thousand U.S. Dollars ($25,000) worth of shares of Common Stock, subject to adjustment pursuant to Section 8, for each calendar year during which such Purchase Right is outstanding. The purchase of shares of Common Stock pursuant to the Purchase Right shall occur as provided in Section 6, unless the Participant has withdrawn pursuant to Section 3. Each Purchase Right shall expire on the last business day of the Offering Period.
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| (b) | In connection with each Offering Period made under the GESPP, no more than 500,000 (five hundred thousand) aggregate shares of Common Stock may be purchased by all Participants pursuant to such Offering Period. If the aggregate purchase of shares of Common Stock issuable upon exercise of Purchase Rights granted under the Offering Period exceeds 500,000 (five hundred thousand) shares, then, in the absence of any Committee action otherwise, a pro rata (based on each Participant’s accumulated Contributions for such Offering Period) allocation of the shares of Common Stock available will be made in as nearly a uniform manner as will be practicable and equitable. Thereafter, any cash balance remaining in each Participant’s Plan account shall be refunded, without interest, to each Participant as soon as practicable after such Offering ends.
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5.4 | Limitation under Code Section 423(b)(8).Notwithstanding any provision in the GESPP to the contrary, no Participant shall be granted a Purchase Right under the Code Section 423 Component of the GESPP to the extent that it permits his or her right to purchase shares of Common Stock under the GESPP to accrue at a rate which, when aggregated with such Participant’s rights to purchase shares under all other employee stock purchase plans of a Participating Code Section 423 Subsidiary intended to meet the requirements of Code Section 423, exceeds Twenty-Five Thousand U.S. Dollars ($25,000) in Fair Market Value of shares of Common Stock (or such other limit, if any, as may be imposed by the Code) for each calendar year in which such Purchase Right is outstanding at any time. Any Contributions in excess of the amount specified in the foregoing sentence shall be returned to the Participant as soon as administratively practicable following the next Purchase Date.
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5.5 | No Assignment.A Purchase Right granted under the GESPP shall not be transferable otherwise than by will or the laws of descent and distribution and shall be exercisable during the lifetime of the Participant only by the Participant. The Committee shall not recognize and shall be under no duty to recognize any assignment or purported assignment by a Participant of a Purchase Right or any rights granted under the GESPP.
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5.6 | Rights As Stockholder and Employee.With respect to shares of Common Stock subject to an Offering, a Participant shall not be deemed to be a stockholder and shall not have any rights or privileges of a stockholder by virtue of the Participant’s participation in the GESPP until such Purchase Right has been exercised and the Company either has issued a stock certificate for such shares, transferred the shares electronically or made a book entry in favor of the Participant representing such shares. No adjustment shall be made for dividends, distributions or other rights for which the record date is prior to the date such certificate is issued, except as provided in Section 8.1. Nothing herein shall confer upon a Participant any right to continue in the employ of a Participating Code Section 423 Subsidiary or a ParticipatingNon-Code Section 423 Subsidiary, or interfere in any way with any right of a Participating Code Section 423 Subsidiary or a ParticipatingNon-Code Section 423 Subsidiary to terminate the Participant’s employment at any time, except as otherwise provided under applicable law.
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5.7 | Notices.All notices or other communications by a Participant to the Board, the Committee and/or Company under or in connection with the GESPP shall be deemed to have been duly given when received by the respective party.
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SECTION 6
EXERCISE OF PURCHASE RIGHT
6.1 | Exercise of Purchase Right.The Purchase Right for each Participant automatically shall be exercised on each Purchase Date and such Participant automatically shall acquire the number of whole shares of Common Stock determined by dividing (i) the total amount of the Participant’s Contributions accumulated in his or her Plan account during the Purchase Period, by (ii) the Purchase Price, to the extent the issuance of Common Stock to such Participant upon such exercise is lawful. However, in no event shall the number
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| of shares of Common Stock purchased by the Participant during an Offering Period exceed the number of shares of Common Stock subject to the Participant’s Purchase Right, as determined under Section 5.3 above. No fractional shares of Common Stock shall be purchased under the GESPP. Any cash balance remaining in a Participant’s Plan account that is insufficient to purchase a whole share of Common Stock shall be retained in the Participant’s Plan account for the purchase of shares of Common Stock during the subsequent Purchase Period. Notwithstanding the foregoing, the Committee may establish alternative means for treating amounts remaining in Participant accounts following any Purchase Date to the extent consistent with applicable law. |
6.2 | Oversubscription.In the event, with respect to any Offering hereunder, that the number of whole shares of Common Stock that might be purchased by all Participants in the GESPP on a Purchase Date exceeds the number of shares of Common Stock available in the GESPP as provided in Section 7.1, the Committee shall make a pro rata allocation of the remaining shares in as uniform a manner as shall be practicable and as the Committee shall determine to be equitable. Thereafter, any cash balance remaining in each Participant’s Plan account shall be refunded, without interest, to each Participant as soon as practicable after such Offering ends.
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6.3 | Delivery of Shares of Common Stock.As soon as practicable after each Purchase Date, the Company shall arrange for the delivery of the shares of Common Stock acquired by the Participant on such Purchase Date in such manner as may be designated by the Company or the GESPP Administrator, including via (a) the issuance of stock certificates, (b) the transfer of such shares electronically to a broker that holds such shares in street name for the benefit of the Participant or the Company, or (c) the making of a book entry in favor of the Participant representing such shares of Common Stock. Shares of Common Stock to be delivered to a Participant under the GESPP shall be registered and/or recorded in the name of the Participant.
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6.4 | Tax Withholding.At the time a Participant’s Purchase Right is exercised, in whole or in part, or at the time a Participant disposes of some or all of the shares of Common Stock he or she acquires under the GESPP, the Participant shall make adequate provision for the federal, state, local andnon-U.S. tax withholding obligations of the Company, a Participating Code Section 423 Subsidiary or a ParticipatingNon-Code Section 423 Subsidiary that arise upon exercise of the Purchase Right or upon such disposition of shares, if any, in accordance with such procedures and withholding methods as may be established by the Committee or as may be otherwise required by applicable law, as determined by the Committee in its sole discretion. The Company, a Participating Code Section 423 Subsidiary or a ParticipatingNon-Code Section 423 Subsidiary may, but shall not be obligated to, withhold from any compensation or other amounts payable to the Participant the amount necessary to meet such withholding obligations. Notwithstanding the foregoing, the withholding obligations for anytax-related for Participants who are Section 16 officers of the Company under the U.S. Securities and Exchange Act of 1934, as amended, shall be satisfied by withholding in shares of Common Stock to be issued upon purchase under the GESPP.
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6.5 | Expiration of Purchase Right.Any portion of a Participant’s Purchase Right remaining unexercised at the end of the Purchase Period to which the Purchase Right relates shall expire immediately upon the end of such Purchase Period.
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6.6 | Reports to Participants.Each Participant who has exercised all or part of his or her Purchase Right shall receive, as soon as practicable after the Purchase Date, a report of such Participant’s Plan account setting forth the total Contributions accumulated prior to such exercise, the number of shares of Common Stock purchased, the Purchase Price for such shares of Common Stock, the Purchase Date and the cash balance, if any, remaining immediately after such purchase that is to be retained in the Participant’s Plan pursuant to Section 6.1. The report may be delivered in such form and manner, including by electronic means, as the Company may determine.
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6.7 | Notification of Sale of Shares of Common Stock.Each Participant shall give the Company, the Committee and/or the GESPP Administrator prompt notice of any disposition of Common Stock acquired pursuant to the Purchase Rights granted under the GESPP in accordance with such procedures as may be established by the Committee. The Committee may require that until such time as a Participant disposes of shares of Common Stock acquired pursuant to Purchase Rights granted under the GESPP, the Participant shall hold all such shares of Common Stock in the Participant’s name and with the GESPP Administrator until the lapse of any time period(s) established by the Committee. The Committee may direct that the certificates evidencing shares of Common Stock acquired by exercise of a Purchase Right refer to such requirement to give prompt notice of disposition.
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6.8 | Clawback/Recoupment Policy. Notwithstanding anything contained herein to the contrary, all shares of Common Stock acquired pursuant to the GESPP shall be and remain subject to any incentive compensation clawback or recoupment policy currently in effect or as may be adopted by the Board and, in each case, as may be amended from time to time. No such policy adoption or amendment shall in any event require the prior consent of any Participant.
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SECTION 7
SHARES OF COMMON STOCK SUBJECT TO PLAN
7.1 | Shares of Common Stock Subject to the GESPP.The maximum aggregate number of shares of Common Stock that may be issued under the GESPP shall be 2,500,000 (two million five hundred thousand) shares, subject to adjustment in accordance with Section 8. For the sake of clarity, the aggregate share limitation set forth herein may be used to satisfy the purchase of shares of Common Stock under either the Code Section 423 Component of the GESPP or theNon-Code Section 423 Component of the GESPP. Shares of Common Stock issued under the GESPP may consist of authorized but unissued shares, reacquired shares (treasury shares), or any combination thereof. If an outstanding Purchase Right for any reason expires or is terminated or canceled, the shares of Common Stock allocable to the unexercised portion of such Purchase Right shall again be available for issuance under the GESPP.
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7.2 | Legends.The Company may at any time place legends or other identifying symbols referencing any applicable federal, state or foreign securities law restrictions or any provision convenient in the administration of the GESPP on some or all of the certificates representing shares of Common Stock issued under the GESPP. The Participant shall, at the request of the Company, promptly present to the Company any and all certificates representing shares of Common Stock acquired pursuant to a Purchase Right in the possession of the Participant in order to carry out the provisions of this Section.
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7.3 | Securities Laws.The Company shall not be obligated to issue any shares of Common Stock pursuant to any offering under the GESPP at any time when the offer, issuance, or sale of shares covered by such Offering (i) has not been registered under the Securities Act of 1933, as amended, or does not comply with such other federal, state ornon-U.S. laws, rules or regulations, or the requirements of any stock exchange upon which the shares of Common Stock may then be listed, as the Company or the Board deems applicable, and (ii) in the opinion of legal counsel for the Company, there is no exemption from the requirements of such laws, rules, regulations, or requirements available for the offer, issuance, and sale of such shares of Common Stock. Further, all shares of Common Stock acquired pursuant to the GESPP shall be subject to the Company’s policies concerning compliance with securities laws and regulations, as such policies may be amended from time to time. The issuance of shares of Common Stock under the GESPP shall be subject to compliance with all applicable requirements of federal, state ornon-U.S. laws, rules or regulations or the requirements of any stock exchange upon which the shares of Common Stock may then be listed. The inability of the Company to obtain from any regulatory body having jurisdiction the authority, if any, deemed by the Company’s legal counsel to be necessary to the lawful issuance and sale of any shares of Common Stock under the GESPP shall relieve the Company of any liability in respect of the
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| failure to issue or sell such shares of Common Stock as to which such requisite authority shall not have been obtained. As a condition to the exercise of a Purchase Right, the Company may require the Participant to satisfy any qualifications that may be necessary or appropriate, to evidence compliance with any applicable law or regulation, and to make any representation or warranty with respect thereto as may be requested by the Company. |
SECTION 8
RECAPITALIZATION, REORGANIZATION AND CHANGE OF CONTROL
8.1 | Adjustments for Changes in Shares of Common Stock.In the event of any stock dividend, extraordinary cash dividend, stock split, reverse stock split, recapitalization, combination, reclassification, or similar change in the capital structure of the Company, or in the event of any merger (including a merger effected for the purpose of changing the Company’s domicile), sale of assets,spin-off or other reorganization in which the Company is a party, appropriate adjustments shall be made in the number and class of shares of Common Stock subject to the GESPP and each Purchase Right, and/or in the Purchase Price. If a majority of the shares of Common Stock which are of the same class as the shares of Common Stock that are subject to outstanding Purchase Rights are exchanged for, converted into, or otherwise become (whether or not pursuant to a Change of Control as described in Section 8.2) shares of another corporation, the Committee may unilaterally amend the outstanding Purchase Rights to provide that such Purchase Rights are exercisable for new shares of such other corporation. In the event of any such amendment, the number of shares of Common Stock subject to, and the Purchase Price of, the outstanding Purchase Rights shall be adjusted in a fair and equitable manner, as determined by the Committee, in its sole discretion. In no event may the Purchase Price be decreased to an amount less than the par value, if any, of the shares of Common Stock subject to the Purchase Right. Subject to applicable laws, rules or regulations or the requirements of any stock exchange upon which the shares of Common Stock may then be listed, the adjustments determined by the Committee pursuant to this Section 8.1 shall be final, binding and conclusive.
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8.2 | Change of Control.In the event of a Change of Control, the Acquiring Company may assume the Company’s rights and obligations under the GESPP. If the Acquiring Company elects not to assume the Company’s rights and obligations under outstanding Purchase Rights, the Purchase Date of the then current Offering Period shall be accelerated to a date before the date of the Change of Control specified by the Committee, but the number of shares of Common Stock subject to outstanding Purchase Rights shall not be adjusted. All Purchase Rights that are neither assumed by the Acquiring Company in connection with the Change of Control nor exercised as of the date of the Change of Control shall terminate and cease to be outstanding effective as of the date of the Change of Control.
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SECTION 9
PLAN ADMINISTRATION
9.1 | Administration by the Committee. The GESPP shall be administered by the Committee. All questions regarding the GESPP, including (but not limited to) (a) the interpretation of the GESPP, any form of agreement or other document employed by the Company in the administration of the GESPP, (b) any Purchase Right granted under the GESPP, and (c) the correction of any errors arising under the GESPP shall be determined by the Committee and shall be final and binding upon all persons having an interest in the GESPP or the Purchase Right. Subject to the provisions of the GESPP, the Committee shall determine all of the relevant terms and conditions of Purchase Rights granted pursuant to the GESPP; provided, however, that all Participants granted Purchase Rights pursuant to the Code Section 423 Component of the GESPP shall have the same rights and privileges within the meaning of Code Section 423(b)(5). The Committee may assign any of its administrative tasks set forth herein to the GESPP Administrator, except that the Committee may not delegate the task of designating Participating Code Section 423 Subsidiaries
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| under the Code Section 423 Component of the GESPP or ParticipatingNon-Code Section 423 Subsidiaries under theNon-Code Section 423 Component of the GESPP, or its authority to make adjustments pursuant to Section 8.1. All expenses incurred in connection with the administration of the GESPP shall be paid by the Company. |
9.2 | Authority of Officers.Any authorized officer of the Company at the level of Vice President or above shall have the authority to act on behalf of the Company with respect to any matter, right, obligation, determination or election that is the responsibility of or that is allocated to the Company herein. In addition, the Board and/or the Committee may delegate authority to any authorized officer of the Company at the level of Vice President or above to act on its behalf with respect to any matter, right, obligation, determination or election that is the responsibility of or that is allocated to the Board and/or the Committee, to the extent permitted under applicable law.
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9.3 | Policies and Procedures Established by the Committee.The Committee may, from time to time, consistent with the GESPP and the requirements of Code Section 423, establish, change or terminate such rules, guidelines, policies, procedures, limitations, or adjustments as deemed advisable by the Company, in its sole discretion, for the proper administration of the Code Section 423 Component of the GESPP, including, without limitation, (i) a minimum Contribution amount required for participation in an Offering, (ii) a limitation on the frequency or number of changes permitted in the rate of Contributions during an Offering, (iii) an exchange ratio applicable to amounts withheld in a currency other than United States dollars, (iv) a supplemental payment or Contributions greater than or less than the amount designated by a Participant in order to adjust for the Company’s delay or mistake in processing an Enrollment Agreement or in otherwise effecting a Participant’s election under the GESPP or as advisable to comply with the requirements of Code Section 423, and (v) a determination of the date and manner by which the Fair Market Value of a share of Common Stock is determined for purposes of administration of the GESPP. Similarly, the Company may, from time to time, establish, change or terminate rules, guidelines, policies, procedures, limitations, or adjustments as deemed advisable by the Company, in its sole discretion, for the proper administration of theNon-Code Section 423 Component of the GESPP.
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9.4 | Non-Code Section 423 Component for Participation Outside of the United States. Subject to applicable laws, rules or regulations or the requirements of any stock exchange upon which the shares of Common Stock may then be listed, the Committee may, in its sole discretion, establishsub-plans under theNon-Code Section 423 Component of the GESPP which do not satisfy the requirements of Code Section 423 for purposes of effectuating the participation of Eligible Employees employed by a ParticipatingNon-Code Section 423 Subsidiary located in countries outside of the United States. For purposes of theNon-Code Section 423 Component, the Committee may establish one or moresub-plans to: (a) amend or vary the terms of the Non-Code Section 423 Component of the GESPP in order to conform such terms with the laws, rules and regulations of each country outside of the United States where the ParticipatingNon-Code Section 423 Subsidiary is located; (b) amend or vary the terms of theNon-Code Section 423 Component of the GESPP in each country where the ParticipatingNon-Code Section 423 Subsidiary is located as it considers necessary or desirable to take into account or to mitigate or reduce the burden of taxation and social insurance contributions for Participants or the ParticipatingNon-Code Section 423 Subsidiary, or (c) amend or vary the terms of theNon-Code Section 423 Component of the GESPP in each country where the ParticipatingNon-Code Section 423 Subsidiary is located as it considers necessary or desirable to meet the goals and objectives of theNon-Code Section 423 Component of the GESPP. Eachsub-plan established pursuant to this Section 9.4 shall be reflected in a written appendix to theNon-Code Section 423 Component of the GESPP for each Participating Affiliate in such country, and shall be treated as being separate and independent from Code Section 423 Component of the GESPP; provided, the total number of shares of Common Stock authorized to be issued under the GESPP shall include any shares of Common Stock issued under theNon-Code Section 423 Component of the GESPP (including eachsub-plan). To the extent permitted under applicable law, the Committee may
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| delegate its authority and responsibilities under this Section 9.4 to an appropriatesub-committee consisting of one or more officers of the Company. |
SECTION 10
CODE SECTION 409A TAX QUALIFICATION
10.1 | Code Section 409A.Purchase Rights granted under the GESPP are exempt from the application of Code Section 409A. In furtherance of the foregoing and notwithstanding any provision in the GESPP to the contrary, if the Committee determines that a Purchase Right granted under the GESPP may be subject to Code Section 409A or that any provision in the GESPP would cause a Purchase Right under the GESPP to be subject to Code Section 409A, the Committee may amend the terms of the GESPP and/or of an outstanding Purchase Right granted under the GESPP, or take such other action the Committee determines is necessary or appropriate, in each case, without the Participant’s consent, to exempt any outstanding Purchase Rights that may be granted under the GESPP from or to allow any such Purchase Rights to comply with Code Section 409A, but only to the extent any such amendments or action by the Committee would not violate Code Section 409A. Notwithstanding the foregoing, the Company will have no liability to a Participant or any other party if the Purchase Right under the GESPP that is intended to be exempt from or compliant with Code Section 409A is not so exempt or compliant or for any action taken by the Committee with respect thereto. The Company makes no representation that the right to purchase shares of Common Stock under the GESPP is compliant with Code Section 409A.
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10.2 | Tax Qualification.Although the Company may endeavor to (i) qualify a Purchase Right for favorable tax treatment under the laws of the United States or jurisdictions outside of the United States or (ii) avoid adverse tax treatment (e.g., under Code Section 409A), the Company makes no representation to that effect and expressly disavows any covenant to maintain favorable or avoid unfavorable tax treatment, notwithstanding anything to the contrary in the GESPP. The Company shall be unconstrained in its corporate activities without regard to the potential negative tax impact on Participant’s under the GESPP.
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SECTION 11
INDEMNIFICATION
In addition to such other rights of indemnification as they may have as members of a committee or officers or employees of a Participating Code Section 423 Subsidiary or a ParticipatingNon-Code Section 423 Subsidiary, the Committee, the Board and any persons to whom authority to act for the Committee, the Board, or the Company is delegated shall be indemnified by the Company against all reasonable expenses, including attorneys’ fees, actually and necessarily incurred in connection with the defense of any action, suit or proceeding, or in connection with any appeal therein, to which they or any of them may be a party by reason of any action taken or failure to act under or in connection with the GESPP, or any right granted hereunder, and against all amounts paid by them in settlement thereof (provided such settlement is approved by independent legal counsel selected by the Company) or paid by them in satisfaction of a judgment in any such action, suit or proceeding, except in relation to matters as to which it shall be adjudged in such action, suit or proceeding that such person is liable for gross negligence, bad faith or intentional misconduct in duties; provided, however, that within sixty (60) calendar days after the institution of such action, suit or proceeding, such person shall offer to the Company, in writing, the opportunity at its own expense to handle and defend the same.
SECTION 12
PLAN AMENDMENT OR TERMINATION; MISCELLANEOUS
12.1 | Termination.The Committee may terminate the GESPP at any time, except that such termination shall not affect Purchase Rights previously granted under the GESPP.
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12.2 | Amendment.Subject to applicable laws, rules or regulations or the requirements of any stock exchange upon which the shares of Common Stock may then be listed, the Board or the Committee may make such modification or amendment to the GESPP as it shall deem advisable; provided, however, that no amendment may materially adversely affect a Purchase Right previously granted under the GESPP (except to the extent permitted by the GESPP or as may be necessary to qualify the GESPP as an employee stock purchase plan pursuant to Code Section 423 or to obtain qualification or registration of the shares of Common Stock under applicable federal, state ornon-U.S. securities laws).
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An amendment must be approved by the stockholders of the Company within twelve (12) months of the adoption of such amendment if (i) such amendment would authorize the sale of more shares of Common Stock than are authorized for issuance under the GESPP or (ii) would change the definition of the corporations or companies that may be designated by the Committee as Participating Code Section 423 Subsidiaries or ParticipatingNon-Code Section 423 Subsidiaries. In the event that the Board or the Committee approves an amendment to increase the number of shares of Common Stock authorized for issuance under the GESPP, the Board or Committee, as applicable and in its sole discretion, may specify that any such additional shares of Common Stock only may be issued pursuant to Purchase Rights granted after the date on which the stockholders of the Company approve such amendment, and such designation by the Board or Committee, as applicable, shall not be deemed to have adversely affected any Purchase Right granted prior to the date on which the stockholders approve the amendment.
12.3 | Death. Unless otherwise provided in an Enrollment Agreement or procedures established by the Committee from time to time, in the event of the Participant’s death, any accumulated Contributions not used to purchase shares of Common Stock shall be paid to and any shares of Common Stock credited to the deceased Participant’s brokerage or Plan account shall be transferred to the Participant’s heirs or estate as soon as reasonably practicable following the Participant’s death in accordance with applicable law; provided, for Participants employed in the United States by the Company or a Participating Code Section 423 Subsidiary, the Committee may, in its sole discretion, permit such Participants to make a beneficiary designation in relation to the Participant’s interests under the GESPP in such manner and at such times as determined by the Committee.
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12.4 | Transferability. Contributions credited to a Participant’s Plan account and any rights with regard to the purchase of shares of Common Stock pursuant to a Purchase Right or to receive shares of Common Stock under the GESPP may not be assigned, alienated, pledged, attached, sold or otherwise disposed of in any way (other than by will, the laws of descent and distribution or as otherwise provided in the GESPP) by the Participant. Any such attempt at assignment, transfer, pledge or other disposition shall be without effect, except that the Company may treat such act as an election to withdraw from the GESPP in accordance with Section 3
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12.5 | Use of Funds. All Contributions received or held by the Company under the GESPP may be used by the Company for any corporate purpose, and the Company shall not be obligated to segregate such Contributions except as may be required by applicable local law, as determined by the Committee, and if so required by the laws of a particular jurisdiction, shall apply to all Participants in the relevant Offering except to the extent otherwise permitted by U.S. Treasury RegulationSection 1.423-2(f). Until shares of Common Stock are issued, Participants shall only have the rights of an unsecured creditor, although Participants in specified Offerings may have additional rights where required under local law, as determined by the Committee.
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12.6 | Severability. If any particular provision of the GESPP is found to be invalid or otherwise unenforceable, such determination shall not affect the other provisions of the GESPP and the GESPP shall be construed in all respects as if such invalid provision were omitted.
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12.7 | Governing Law and Jurisdiction. Except to the extent that provisions of the GESPP are governed by applicable provisions of the Code or any other substantive provision of federal law, the GESPP shall be
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| construed in accordance with the laws of Delaware, without giving effect to the conflict of laws principles thereof. The jurisdiction and venue for any disputes arising under, or any action brought to enforce (or otherwise relating to) the GESPP shall be exclusively in the courts in the State of Minnesota, County of Hennepin, including the U.S. federal courts located therein (should federal jurisdiction exist). |
12.8 | Currency. Unless otherwise specified, all references to currency throughout the GESPP shall be to U.S. dollars.
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12.9 | Headings. Headings are given to the Sections and subsections of the GESPP solely as a convenience to facilitate reference. Such headings shall not be deemed in any way material or relevant to the construction or interpretation of the GESPP.
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Participating Code Section 423 andNon-Code 423 Subsidiaries
| | | | | Participating Code Section 423
Subsidiary / Participating Non-Code
Section 423 Subsidiary
| | Country
49 | | Code Section 423 Component /
Non-Code Section 423 Component
| Ceridian HCM, Inc. | | United States | | Code Section 423 Component | Ceridian Tax Service, Inc. | | United States | | Code Section 423 Component | Ceridian Dayforce LLC | | United States | | Code Section 423 Component | Dayforce Tax Services LLC | | United States | | Code Section 423 Component | Ceridian Canada Ltd. | | Canada | | Non-Code Section 423 Component | Ceridian Dayforce Inc. | | Canada | | Non-Code Section 423 Component | Dayforce Tax Services Ltd | | Canada | | Non-Code Section 423 Component | Ceridian (Mauritius) Ltd. | | Mauritius | | Non-Code Section 423 Component | Ceridian (Mauritius) Technology Ltd. | | Mauritius | | Non-Code Section 423 Component | Ceridian Europe Limited | | United Kingdom | | Non-Code Section 423 Component2020 PROXY STATEMENT |
Ceridian HCM Holding Inc. 3311 East Old Shakopee Road Minneapolis, Minnesota 55425
ANNUAL MEETING OF STOCKHOLDERS OF CERIDIAN HCM HOLDING INC. | | | Date: | | Wednesday, May 1, 2019Tuesday, April 28, 2020
| Time: | | 9:00 AM Central Time | Place: | | 3311 East Old Shakopee Road,200 South Sixth Street, Suite #4000, Minneapolis, MN 55425
Minnesota 55402 |
Please make your marks like this: ☒ Use dark black pencil or pen only The Board of Directors of Ceridian HCM Holding Inc. (“Ceridian”) Recommends a VoteFORall thedirector nominees listed in proposal 1,ONE YEAR for proposal 2 andFOR proposals 23 and 3.4. | | | | | 1. | | To elect threetwo Class III directors to hold office until the 20222023 Annual Meeting of Stockholders or until their successors are duly elected and qualified, subject to their earlier death, resignation or removal; |
Nominees: | | | | | (01) Deborah A. Farrington | | | | | | | | | Nominees:(02) Thomas M. Hagerty | | (01) | | Brent B. Bickett | | | | | (02) | | Ronald F. Clarke | | | | | (03) | | Ganesh B. Rao |
| | | | | Vote For All Nominees | | Withhold Vote From All Nominees | | Vote For All Except | | ☐ | | ☐ | | ☐ |
| | | INSTRUCTIONS:To withhold authority to vote for any nominee, mark the “Exception”“Vote For All Except” box and write the number(s) in the space provided to the right. | | |
| | | | | | | | | | | | | | | | ForOne
Year | | AgainstTwo
Years | | Three
Years | | Abstain | | | 2. | | To approve, on a non-binding, advisory basis, the Ceridian HCM Holding Inc. Global Employee Stock Purchase Plan; andfrequency of future advisory votes on the compensation of Ceridian’s named executive officers (commonly known as a “Say on Frequency” vote); | | ☐ | | ☐ | | ☐ | | ☐ | | | | | | | For | | Against | | Abstain | Abstain3.
| | To approve, on a non-binding, advisory basis, the compensation of Ceridian’s named executive officers (commonly known as a “Say on Pay” vote); and | | | | ☐ | | ☐ | | ☐ | | | | | | | For | | Against | | Abstain | | | | | | | 3.4.
| | To ratify the appointment of KPMG LLP as Ceridian’s independent registered public accounting firm for the fiscal year ending December 31, 2019. | | ☐
| | ☐
| | ☐
2020. | | | | | ☐ | | ☐ | | | | | | | | ☐ | | | | | | | | | To attend the meeting and vote your sharesin person, please mark this box. | | | | ☐ | | | | | | | | | | | | | Authorized Signatures - This section must becompleted for your Instructions to be executed. | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | Please Sign Here | | | | Please Date Above | | | | | | | | | | | | | | Please Sign Here | | | | Please Date Above | | | | | Please sign exactly as your name(s) appears on your stock certificate. If held in joint tenancy, all persons should sign. Trustees, administrators, etc., should include title and authority. Corporations should provide full name of corporation and title of authorized officer signing the proxy. |
|  Please separate carefully at the perforation and return just this portion in the envelope provided. |
Annual Meeting of Ceridian HCM Holding Inc. to be held on Wednesday, May 1, 2019Tuesday, April 28, 2020 for Holders as of March 4, 20192, 2020 This proxy is being solicited on behalf of the Board of Directors | | | | | | | | | | | | | | | VOTE BY: | | | | | | |  INTERNET | | | | | |  TELEPHONE |
| | | | | | | | | | | Go To | | | | | | | | Call855-668-4180 | www.proxypush.com/CDAY | | | | | | | | 855-668-4180 |
| | | | | | | | | | | | • | | Cast your vote online. | | | | OR | | • | | Use any touch-tone telephone. | • | | Have your Proxy Card/Voting Instructions Form ready. | | | |  MAIL
| | •
•
| | Have your Proxy Card/Voting Instruction Form ready. Follow the simple recorded instructions. | • | | View Meeting Documents. | | | | | | | | | | | | | | | | | | |  MAIL | | | | |
| | | | | | | | | | | OR | | • | | Mark, sign and date your Proxy Card/Voting Instruction Form. | | | | | | | • | | Detach your Proxy Card/Voting Instruction Form. | | | | | | | • | | Return your Proxy Card/Voting Instruction Form in the | | | | | | | | | postage-paid envelope provided. | | |
The undersigned hereby appoints Scott A. Kitching and William E. McDonald and each or any of them, as the true and lawful attorneys of the undersigned, with full power of substitution and revocation, and authorizes them, and each of them, to vote all the shares of capital stock of Ceridian HCM Holding Inc. which the undersigned is entitled to vote at said meeting and any adjournment thereof upon the matters specified and upon such other matters as may be properly brought before the meeting or any adjournment thereof, conferring authority upon such true and lawful attorneys to vote in their discretion on such other matters as may properly come before the meeting and revoking any proxy heretofore given.meeting. THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN, THE SHARES WILL BE VOTED FOR THE ELECTION OF THE DIRECTORS IN ITEMPROPOSAL 1, ONE YEAR FOR THE PROPOSALS IN ITEMSPROPOSAL 2 AND FOR PROPOSALS 3 AND 4. THE PROXIES WILL VOTE IN THETHEIR DISCRETION OF THE PROXYHOLDERS ON ANY OTHER MATTER THATBUSINESS AS MAY PROPERLY COMESCOME BEFORE THE MEETING. MEETING AND ANY ADJOURNMENT THEREOF. | | | | | | | | | | | | | | | | | | | | | | | | | PROXY TABULATOR FOR CERIDIAN HCM HOLDING INC. c/o MEDIANT COMMUNICATIONS P.O. BOX 8016 CARY, NC 27512-9903 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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