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attend.
Confident in the directioncompany’s expertise and future of Xerox, directors Keith Cozza and Cheryl G. Krongard have decided not to standofferings. We are grateful for reelection to the Board. We thank them for theirJohn’s many significant contributions in helping to guide the transformation of our Company.
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We intendlook forward to hold our Annual Meeting of Shareholders in person. However, we are actively monitoring the coronavirus (COVID-19) situation and we are sensitive to the public health and travel concernsmeeting our shareholders may have and the protocols that federal, state and local government and health authorities may impose. In the event that it is not possible or advisablewho are able to hold our Annual Meeting in person, we will announce alternative arrangements for the meeting by press release as promptly as practicable, which may include holding the meeting solely by means of remote communication. If we decide to modify the structure of our Annual Meeting of Shareholders, we will announce alternative arrangements for the meeting in additional proxy materials filed with the SEC and included on our investor website www.news.xerox.com/investors).
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(We note that the Company has already amended its By-Laws to permit shareholders holding a combined 20% of the Company’s votingeightdirectors named in the enclosed Proxy Statement;
October 21, 2021, to increase the total number of shares of common stock authorized and available for issuance under the Plan; and
provide shareholders with the right to ratify termination pay, if properly presented at the Annual Meeting.
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Louis J. Pastor
Executive Vice President, Chief
Secretary
NOTICE OF 20222023 ANNUAL MEETING OF SHAREHOLDERS1 1 1 1 2 2 3 4 5 1312 1413 Alignment with the United Nations Sustainable Development Goals (SDGs)141413 1413 14 16161714 1918 1918 2018 2018 2019 2119 2119 2119 2220 2220 2321 2322 2322 2625 25 2625 26292927 29 30 323030 32 32 39 42 48 49 54 55 56 57
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termination pay, if properly presented at the Annual Meeting.6, 2022,10, 2023, for more information about these topics.20222023 Annual Meeting of Shareholders (Annual Meeting) of Xerox Holdings Corporation (Xerox or the Company), will be held beginning at 9:8:00 a.m., local time,Eastern Time, at 401501 Merritt 7 in Norwalk, Connecticut, on Thursday, May 19, 2022. We intend to hold our Annual Meeting in person, however, we are actively monitoring the coronavirus (COVID-19) situation and we are sensitive to the public health and travel concerns our shareholders may have and the protocols that federal, state and local government and health authorities may impose. In the event that it is not possible or advisable to hold our Annual Meeting in person, we will announce alternative arrangements for the meeting in additional proxy materials filed with the SEC and included on our investor website www.news.xerox.com/investors as promptly as practicable, which may include holding the meeting solely by means of remote communication. Please monitor the www.news.xerox.com/investors website for updated information. As always, we encourage you to vote your shares prior to the Annual Meeting.1. of the eight nominees named in this Proxy Statement to our Board of Directors (Board), each for a term of one year;2.Ratification of the appointment of PricewaterhouseCoopers LLP (PwC) as our independent registered public accounting firm for the fiscal year ending December 31, 2022;3.Approval, on an advisory basis, of the 2021 compensation of our named executive officers;4.Approval of an amendment to the Company’s amended and restated Certificate of Incorporation to permit shareholders to act by written consent; and5.Consider a shareholder proposal for shareholder right to call a special shareholder meeting, if properly presented at the Annual Meeting.(We note that the Company has already amended its By-Laws to permit shareholders holding a combined 20% of the eight nominees named in this Proxy Statement to our Board of Directors (Board), each for a term of one year;votingPerformance Incentive Plan, as amended through October 21, 2021, to increase the total number of shares of common stock authorized and available for issuance under the Plan; andcall a special meetingrequire shareholder ratification of shareholders.)
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If you have Internet access, you may vote your shares by following the “Vote by Internet” instructions included in the Notice or on the proxy card you may have received. If you vote via the Internet, do not return your proxy card. | If you received written materials, you may vote your shares by following the “Vote by Telephone” instructions on the enclosed proxy card. If you vote by telephone, do not return your proxy card. | |||||
BY MAIL | AT THE ANNUAL MEETING | |||||
| If you received written materials, you may vote by completing and signing the proxy card enclosed with this Proxy Statement and promptly mailing it in the enclosed postage-prepaid envelope. The shares you own will be voted according to your instructions on the proxy card you mail. If you sign and return your proxy card but do not indicate your voting instructions on one or more of the matters listed, the shares you own will be voted by the named proxies in accordance with the recommendations of our Board. | We will distribute written ballots to any shareholder of record or authorized representative of a shareholder of record who wants to vote in person at the Annual Meeting instead of by proxy. If you submit a proxy or voting instructions via the Internet, telephone or mail, you do not need to vote at the Annual Meeting. Voting in person will revoke any proxy previously given. If you hold your shares through a broker, bank, or other nominee, you must obtain a legal proxy from your broker, bank, or nominee for you to vote at the Annual Meeting. See below under “How can I attend the Annual Meeting?” | |||||
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(We note that the Company has already amended its By-Laws to permit shareholders holding a combined 20% of the eight directors named in this Proxy Statement;
termination pay, if properly presented at the Annual Meeting.
Beneficialownerswill be admitted to the Annual Meeting upon providing your most recent brokerage statement, along with a valid form of government-issued photo identification, such as a driver’s license or passport, and an
In addition, we may need to institute special precautions in light of the COVID-19 pandemic to protect the health and safety of our directors, employees and shareholders seeking to attend the Annual Meeting. We may require precautions including, among other protocols, temperature checks and symptom and exposure screening, social distancing, masks, and other safety protocols in accordance with any then-required federal, state and local guidelines or our own protocols. We will require all attendees to comply with such protocols, which we expect to be communicated to registered attendees in advance of the Annual Meeting. If you cannot comply with the special health and safety precautions in effect at the time of the Annual Meeting, you will not be admitted to the meeting. Attendees who disrupt or impede the meeting, do not comply with the special health and safety protocols or other precautions or breach the rules of conduct may be removed from the meeting.
Six of the director nominees currently serve on the Board. There are two new director nominees, Mr. Bandrowczak who was appointed to the Board in August 2022, and Mr. Giordano who was recommended as a director candidate by Steven D. Miller and ultimately appointed to the Board in July 2022.
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Options/Rights means unvested DSUs and restricted stock units (RSUs) issued under the 2004 Directors Plan and unvested RSUs, earned performance share units (PSUs), and stock options awarded under the 2019 Amendment and Restatement of the Xerox Holdings Corporation Performance Incentive Plan, as amended (2004 Performance Incentive Plan) and/or Xerox Holdings Corporation Performance Incentive Plan, as amended (2020 Performance Incentive Plan), as applicable.
 | Bandrowczak 2022 214,272 shares of Common Stock 41,990 stock options; 486,916 RSUs Xerox Holdings Corporation | |||||
Mr. Echevarria brings to the Board significant experience in finance, accounting, international business, leadership, and risk management skills relevant to Xerox acquired through his leadershipmentor at Deloitte. Mr. Echevarria’s financial acumen, including his significant previous audit experience, expertise in accounting issues and service on the audit committee on the boards of other publicly traded companies is an asset to the Board and the Audit Committee. He also brings public policy perspectives from his government service, which includes his public service on the President’s Private Export Council.
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Philip V. Giordano Age: 2022 Xerox securities owned: 0 Vested Options/Rights: 16,225unvested DSUs Occupation: Founder and Chief Investment Officer, Livello Capital Management Education: B.S. in Finance and Accounting, New York University Board Committees: Finance, Technology | |||||
 | Scott Letier Age: 62 Director since: 2018 Xerox securities owned: 4,384 shares of Common Stock, Options/Rights: Occupation: Managing Director of Deason Capital Services, LLC Education:B.B.A. with a concentration in accounting, Southern Methodist University — Cox School of Business Board Committees: | |||||||
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Other Directorships (past 5 years): Presidio, Inc., Chairman of the Board of Directors (February 2015 to November 2017).
Other Background: Mr. Visentin joined Xerox as Vice Chairman and CEO in May 2018. Prior to joining Xerox, Mr. Visentin served as a senior advisor to the chairman of Exela Technologies from August 2017 to May 2018, an operating partner for Advent International from September 2017 to May 2018 and a consultant to Icahn Capital in connection with a proxy contest at Xerox from March 2018 to May 2018. From 2013 to 2017, he served as the executive chairman and chief executive officer of Novitex Enterprise Solutions and as an advisor with Apollo Global Management. Mr. Visentin was also a director and chairman of the board of Presidio, Inc. from 2015 to 2017. From 2011 to 2012, he served as executive vice president and general manager of Hewlett Packard Company’s enterprise services business. From 2007 to 2011, Mr. Visentin served as general manager of integrated technology services for IBM. Mr. Visentin graduated from Concordia University in Montreal, Canada, with a Bachelor of Commerce degree.
With his significant experience in leading and transforming multibillion-dollar business units in the IT services industry during his time at both Hewlett-Packard and IBM, Mr. Visentin brings to the Board expertise relevant to Xerox. Mr. Visentin also brings to the Board significant strategic planning, company transformation, and financial expertise gained through his experience serving as chairman and chief executive officer at other companies.
Alignment with the United Nations Sustainable Development Goals (SDGs)
Our corporate values, established more than half a century ago by founder Joseph C. Wilson, align with the United Nations Sustainable Development Goals (SDGs). The SDGs provide a framework to end poverty, protect the planet and improve the lives and prospects of everyone, everywhere. As a technology company, Xerox leads by example in our own operations and provides solutions to support achievement of the SDGs globally.
We have included the relevant United Nations SDG icons beside section titles throughout this portion of the Proxy Statement to highlight the alignment of our work with the SDGs.
Climate
Given the urgency,time, we fast-tracked our net zero goal by 10 years to establish2040, and integrated climate change-related risks and opportunities into our Enterprise Risk Management. We shared our roadmap to reach net zero in our 2022 Corporate Social Responsibility Report (CSR). Our roadmap covers our full value chain, and focuses on improving processes and energy efficiency as well as designing environmentally responsible products and clean technologies that extend beyond print. Our interim goal is to reduce our Scope 1 and Scope 2 Green House Gas (GHG) emissions at least 60% by 2030, against the Company’s 2016 baseline. This is in line with the ambitious science-based global warming target, validated and approved by the Science Based Targets initiative (SBTi). Our GHG emissions are third-party assured in accordance with ISO 14064-3:2019, and are updated in our progress summary as new data becomes available. In 2022, Xerox was named to CDP’s Annual "A List” for climate change transparency and performance. CDP is a new goal of 2040.nonprofit organization that runs the global disclosure system for investors, companies, and regions to manage their environmental impacts.
make progress towards increasing the post-consumer recycled content in our eco-label eligible devices.
Below is a summary of some of
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% of woman managers — Asia Pacific and Japan | 19.6% | 27.6 | % | |||
Veterans — U.S. | 3.8% | 3.4 | % | |||
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Throughout the pandemic, our priority has been the health
Since the beginning of the pandemic, we have:
Tracked 6.3 million daily health status updates logged by Xerox employees and contractors through the Xerox Team Availability App;
Distributed 128,000 reusable masks to employees and contractors;
Distributed 1.4 million surgical masks to employees and contractors;
Distributed 78,000 N95/KN95 masks to employees and contractors;
Responded to 30,000 COVD-19-related employee emails; and
Held more than 60 forums to provide up-to-date information and engage in open dialogue and answer questions from people managers and safety monitors.
The Xerox COVID-19 Response Team — comprised of representatives from our Environmental, Health, Safety & Sustainability, Human Resources, Security, Facilities, Legal, and Communications functions, among others — meets up to several times a week. We closely follow government and public health organizations’ guidance. Our business continuity and pandemic preparedness plans incorporate the latest standards from industry best practices and our own experience to define requirements. Our response plan includes, but is not limited to:
Encouraging employees to get vaccinated as soon as they are able per eligibility in their jurisdiction;
Establishing strict Personal Protective Equipment (PPE) protocols for employees, contractors and visitors engaging in on-site work;
Sharing resources and guidance on how to contain the illness;
Increasing and expanding the cleaning of facilities;
Establishing a comprehensive visitor screening process;
Requiring employees who exhibit any symptoms to stay at home;
Conducting thorough contact tracing;
Enforcing a stringent return-to-work policy if an employee becomes ill; and
Monitoring developments around the clock and using a 24/7 email inbox.
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We know the power of having a global and diverse team. It’sIt is one of the reasons Xerox has enduredbeen successful for more than 115 years. By having a diverse workforce, we gain the benefit of different ways of looking at our business, leading to innovative breakthroughs for our customers and more engaging work for our people. Research shows diverse companies have more engaged, productive, and innovative workforces and in turn perform better financially.
In 2020,2022, women made up 27approximately 26 percent of the Xerox workforce and 4338 percent of our Executive Committee – a reflection of our commitment to gender diversity and inclusion at the highest level. We have increasedcontinue to focus on improving the percentagerepresentation of women in professional roles and creating more opportunities in leadership for women across Xerox and within our BoardBoard.
In 2021, we reaffirmed our commitment to Diversity, Inclusion, and Belonging (DIB) withroadmap, which reflects the foundation set by our first modern-day Chief Executive Officer (CEO), Joseph Wilson. Thanks to his vision, social responsibility, diversity, and inclusion became a part of our value system and helped forge who we are today – a workplace where everyone can thrive and reach full potential.
Diverse Pipeline: Having a diverse and inclusive workforce starts with a diverse candidate pipeline. For 2022, we are focused on building a diverse pipeline and acceleratingis governed by Xerox's diversity policy known as the careers of women and underrepresented people of color.
Partnerships:•Partnership: We continue to build relationships with external organizations to help ensure that our incoming talent better reflectspools reflect the markets and communities we serve. For example, we are partneringworking with AI vendors using their unique algorithms to increase the pool of women and diverseunderrepresented candidates for our job openingsopenings.
Culture Change: The Company’shosting organization-wide DIB learning events and listening sessions and expanding the number of Employee Resource Groups (ERGs) are critical in helping us reinforceto 10, welcoming a Company-wide culturedisability-focused ERG called Enable All. In 2022, we held our third annual All of belongingUs Together DIB event. This global event is planned by members of our ERGs and helping us achieve gender equality. The Women’s Alliance,is open to all Xerox employees.
Community Outreach: We believe our DIB efforts must extend into the wider community. For example, inmore successful career outcomes. In the U.K., we support Blueprint for Allpartner with the Black Young Professionals Network to further their workmentor black professionals and honor their mission of working with young people and local communitiesprovide career opportunities.
Accountability: Transparency and reporting are key components to ensure we upholdDIB progress. We measure progress against our commitments. We will publish our progress annually. To hold our leaders accountable across the Company, we added an Environmental, Social, &and Governance (ESG) modifiermetrics and leverage our Corporate Social Responsibility Report to inform the public about our executives’ annual incentive compensation plan for 2021,strategy and broadened this component to a strategic metric (weighted 20%) forprogress. In 2022, we completed an assurance audit against Social Key Performance Indicators that confirmed the 2022 plan.
Building a more diverse and inclusive workforce starts with a diverse candidate pipeline. Attracting early career talent from different racial, ethnic, and cultural backgrounds increasesaccuracy our ability to fill roles at all levels and ensure creative and revolutionary ideas within our Company for years to come.
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We continue this legacy by turning investments in innovation intocreating products and services that help our customers to be more productive, profitable, and sustainable. By making smart investments in technologiesWe deliver solutions that afford our customers improved agility, personalization, automation,drive customer success and workflow, we reinforce our corporate social responsibility efforts. enable a new, better world.
We are focused on how we can simplify work, deliver more personalized experiences, and improve productivity through new technologies. We strive to connect the physical and digital worlds without adversely affecting the environment or human health and safety.
Environmental Initiatives
Pioneeringapproximately 10,200 employees were located outside the U.S. We had approximately 11,900 employees or approximately 60% of our employees engaged in providing services to customers (direct service and managed services), and approximately 3,000 engaged in direct sales.
Equipment Takeback and Recycling: Xerox is committed to collecting and reusing equipment after the end of its useful life. In geographies wherebusiness evolves, we exercise direct control over the end-of-life management of equipment, return rates are high. In 2020, 6,030 metric tons of equipment and parts-related waste were diverted from landfills to recycling at our U.S. Reverse Logistics Center. Globally, that volume was 13,020 metric tons. We also participate in several European Union member states’ Waste Electrical and Electronic Equipment (WEEE) programs; the equipment collected and recycled through these programs is not included in our recycling data.
Responsible Operations: To further the Company’s commitment to reducing energy use and protecting the planet, our long-term strategy is to continue to develop and invest in technologies that reduce the carbon footprint of our own operations and help our clients reduce the energy usage and environmental impact of their businesses. We will continue to pursue energy reduction throughleverage technology to identify new skills or capabilities required to ensure we remain competitive in the global market. Our L&D function partners with Xerox business leaders to design capability-building programs, and the Xerox senior leadership champions a long-term vision to continually develop the skills of our employees.
Manufacturing process changes;
Improved product reliabilitybusiness strategy and field support strategies;
Building consolidations•Align with performance: incentivize the right behaviors - when the Company wins, our employees win.
Product innovation (e.g.Our compensation offerings include base pay and short-term and long-term incentive programs. Our short-term programs include: a Management Incentive Plan (MIP), toners that require less energydesigned to manufacturedrive Xerox’s pay for performance culture and less materialincentivize our leaders to help Xerox achieve print quality).
Given that energy sources account forsustainable growth; sales compensation programs to tightly align our sales force with business goals; and a majorityProfit Share Plan (PSP), designed to give a broad population of our GHG emissions, our focus is on reducing energy consumption, whether in our own operations oremployees an opportunity to share in the impact we have onorganization’s success. A Long-Term Incentive (LTI) equity-based program reinforces alignment of our customers’ consumption. In 2020,leaders and key talent with shareholders.
help them reach their health and financial goals. Our focus now isofferings include the following core programs: health care, wellness, retirement, paid time off, life and disability insurance, and access to reducevoluntary benefits.
Other environmental achievementscompensation criteria for 2021 include:
Fast-tracked•Investor Day: Xerox hosted an Investor Day Event in February 2022 - Now & Next - with our net zero goalinvestors and analysts. During this event, Xerox executives provided an overview of the Company's strategic priorities, which included a discussion of ESG priorities such as our Roadmap to Net Zero, as well as discussed business solutions and financial services that make everyday work better for clients.
Created a roadmap encompassing our entire value chain and beyondKeyPoint Intelligence with the goalBuyers Lab (BLI) 2021-2022 PaceSetter Awards for Worldwide Document Imaging Security for Production and Office solutions, as well as for the Education Market in North America.
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Achieved 98% landfill avoidance for equipment and supplies, supporting the circular economy created by Xerox; and
Named 2021 ENERGY STAR Partner of the Year.
Social Initiatives and Achievements
Established and started executing on our new Diversity, Inclusion and Belonging (DIB) roadmap, which focuses on building a diverse pipeline, partnerships, cultural changes, community outreach and accountability;
Aided in the COVID-19 response, including by supporting frontline workers; manufacturing and donating single-use, low-cost ventilators; and producing facemasks;
Closely monitored COVID-19 developments and developed best practices and protocolssuch as the National Institute of Technology (NIST) Cybersecurity Framework, ISO 27001. Xerox Privacy Policy notice ensures that adhered to guidelines, including requiring U.S. employees to attest to their vaccination status;
Launched a new program that allows employees to redeem $10 per volunteer hour, up to $500 per year, to donate to a non-profitthe processing of their choice;
Received the EcoVadis 2020 Platinum Rating; and
Named to the 2022 “Best Places to Work for LGBTQ+ Equality” by the Human Rights Campaign, and earned a perfect scorepersonal data is based on the Human Rights Campaign’s Corporate Equality Indexsubject’s consent, as individuals have a right to withdraw or alter consent at any time for the 20th consecutive year.
Governance Initiatives and Achievements
Nominated highly qualified director candidates, whose election in 2021 significantly increased the diversity
Enhanced disclosure of Board diversity data (see page 5) as required under new Nasdaq rules;
Expanded the criteria for executives’ compensation to include environmental, socialtechnical and governance factors;
Integrated climate change-related risksmanual safeguards over our systems and opportunities intofacilities, disciplinary actions against employees, audit rights, and other contractual rights against our Enterprise Risk Management process; and
Recognized by Newsweek as one of America’s Most Responsible Companies 2021.
finance-code-of- conduct,finance-code-of-conduct, and xerox.com/governance (under Code of Business Conduct), respectively. Our Corporate Governance Guidelines and the charters of our Audit, Compensation, Corporate Governance, and Finance Committees can be accessed through our website at xerox.com/governance. They
are also available to any shareholder who requests them in writing addressed to Xerox Holdings Corporation, 201 Merritt 7, Norwalk, CT 06851-1056,06851, Attention: Corporate Secretary. We will disclose any future amendments to, or waivers from, provisions of our Code of Business Conduct and Ethics for members of the Board, and our Code of Business Conduct, and our Finance Code of Conduct for our officers, on our website as promptly as practicable and in accordance with applicable U.S. Securities and Exchange Commission (SEC) and Nasdaq rules. The Corporate Governance Committee of the Board periodically reviews and reassesses the adequacy of our overall corporate governance, Corporate Governance Guidelines, and committee charters.
In addition, in July 2022, after considering multiple candidates over the course of several weeks, Philip V. Giordano was appointed to the Board with the recommendation of the Corporate Governance Committee. Mr. Bandrowczak was appointed to the Board in August 2022, following his appointment as Chief Executive Officer of the Company.
owning three percent (3%) or more of the Company’s outstanding Common Stock continuously for at least three (3) years, to nominate and include in the Company’s proxy materials director candidates constituting up to the greater of two (2) directors or twenty percent (20%) of the Board, provided that the shareholder(s) and the nominee(s) satisfy the requirements specified in the By-Laws, including the requirement to provide timely notice of the processproxy access nomination to the Company. For the 20232024 Annual Meeting of Shareholders, to be considered timely, such notice of proxy access nomination must be received by the Company no earlier than November 7, 202212, 2023, and no later than December 7, 2022.12, 2023. The By-Laws are available on our website at: xerox.com/at www.xerox.com/governance (under By-Laws).
Meeting
The Board has approved, subject to approval of shareholders at this
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of view of both the director and the persons or organizations with which the director has relationships, including with respect to those directors covered by the 20212022 Nomination Agreements discussed above. See Certain Relationships and Related Person Transactions.
•Oversee the integrity of the Company’s financial statements;
•Oversee the Company’s compliance with legal and regulatory requirements;
•Oversee the Company’s risk assessment policies and practices, including the ERM process, and preview the ERM assessment and process for subsequent review by the Board;
•Assess qualifications and independence of the Company’s independent registered public accounting firm;
•Assess performance of the Company’s independent registered public accounting firm and the internal audit function;
•Review the Company’s audited financial statements, including the Company’s “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and recommend to the Board their inclusion in the Company’s Annual Report on Form 10-K;
•Review changes in working capital policies and procedures with management; and
•Review and approve the Company’s Code of Business Conduct.
•Oversee development and administration of the Company’s executive compensation plans;
•Set the compensation of the CEO and other executive officers;
•Review and approve the performance goals and objectives with respect to the compensation of the CEO and other executive officers;
•Oversee the evaluation of the CEO and other executive officers;
•Have sole authority to retain and terminate the consulting firms engaged to assist the Compensation Committee in the evaluation of the compensation of the CEO and other executive officers;
•Be directly responsible for oversight of the work of the compensation consultants, including determination of compensation to be paid to any such consultant by the Company;
|
•Conduct an independence assessment of any compensation consultants to the Compensation Committee, including consideration of the six independence factors required under SEC rules and Nasdaq listing standards; and
|
The Compensation Committee has not delegated its authority for compensation for executive officers. The Compensation Committee has, however, delegated authority to the Vice Chairman & CEO authority under the Company’s equity plan to grant equity awards to employees who are not executive officers or officers directly reporting to the Vice Chairman & CEO. The Vice Chairman & CEO is also responsible for reviewing goals, evaluating performance, and setting the compensation for officers who are not executive officers or officers directly reporting to the Vice Chairman & CEO.
Maynard-Elliott
•Identify and recommend to the Board individuals to serve as directors of the Company and on Board committees;
•Advise the Board regarding Board composition, procedures, and committees;
•Develop, recommend to the Board, and annually review the Corporate Governance Guidelines applicable to the Company;
•Review significant environmental and corporate social responsibility matters;
•Administer the Company’s Related Person Transactions Policy;
•Evaluate and recommend director compensation to the Board; and
•Oversee the annual Board and committee evaluation processes.
Nelson
Finance Committee (36 meetings)
•Review the Company’s cash position, capital structure and strategies, financing strategies, insurance coverage, and dividend policy;
•Review the adequacy of funding of the Company’s funded retirement plans and welfare benefit plans in terms of the Company’s purposes; and
•Review the Company’s policy on derivatives, and annually determine whether the Company and its subsidiaries shall enter into swap and security-based swap transactions that are not cleared with a Commodity Exchange Act registered clearing organization.
Letier
•Review, and advise the Board with respect to, the strategic direction of the Company’s Innovation business unit (“PARC”)(PARC) and the Company’s software business (“CareAR”)(CareAR) in matters of technology, innovation and capital allocation, including investments in research and development, and commercial initiatives; and
Attendance: 12
2022.
Committee received an additional $25,000; Compensation Committee members each received an additional $12,500; the chair of the Corporate Governance Committee received an additional $20,000; the chairs of the Finance Committee and Technology Committee received an additional $15,000; and the Corporate Governance Committee, Finance Committee and Technology Committee members each received an additional $10,000. The additional fee for the independent (non-executive) Chairman of the Board was $100,000 per year. In addition, there is an annual total compensation cap of $750,000 for each non-employee director. Because we have an independent Chairman of the Board, we do not have a Lead Independent Director. Although the 2021 Amendment and Restatement of the Equity Compensation Plan for Non-Employee Directors (“2004 Directors Plan”) would permit it, the Board has determined that directors currently do not have an option to receive additional equity in lieu of cash fees. Directors also receive reimbursement for out-of-pocket expenses incurred in connection with their service on the Board.
Individually, the compensation for each non-employee director for the year 2021,2022, which under our director compensation program covers the period May 20212022 to May 2022,2023, was as follows:
Name of Director
| Fees Earned $ (1)(2) | Stock Awards $ (2) | Option Awards $ | Non-Equity $ |
Change in Non-Qualified Deferred $ | All Other Compensation | Total $ | |||||||||||||
Keith Cozza |
| $200,000 |
|
| $200,000 |
| - | - | - | - |
| $400,000 |
| |||||||
Joseph J. Echevarria |
| $125,000 |
|
| $200,000 |
| - | - | - | - |
| $325,000 |
| |||||||
Cheryl Gordon Krongard |
| $120,000 |
|
| $200,000 |
| - | - | - | - |
| $320,000 |
| |||||||
Scott Letier |
| $120,836 |
|
| $200,000 |
| - | - | - | - |
| $320,836 |
| |||||||
Jesse A. Lynn(4) |
| $55,417 |
|
| $116,667 |
| - | - | - | - |
| $172,084 |
| |||||||
Nichelle Maynard-Elliott |
| $100,000 |
|
| $200,000 |
| - | - | - | - |
| $300,000 |
| |||||||
Steven D. Miller |
| $100.000 |
|
| $200,000 |
| - | - | - | - |
| $300,000 |
| |||||||
James L. Nelson |
| $103,336 |
|
| $200,000 |
| - | - | - | - |
| $303,336 |
| |||||||
Margarita Palàu-Hernàndez |
| $107,500 |
|
| $200,000 |
| - | - | - | - |
| $307,500 |
| |||||||
|
|
|
|
|
|
| Name of Director | Fees Earned or Paid in Cash $ (1)(2) | Stock Awards $ (2) | Option Awards $ | Non-Equity Incentive Plan Compensation $ | Change in Pension Value and Non-Qualified Deferred $ | All Other Compensation $ (3) | Total $ | ||||||||||||||||
| Joseph J. Echevarria | 125,000 | 200,000 | — | — | — | — | 325,000 | ||||||||||||||||
Philip Giordano (4) | 87,500 | 166,667 | 254,167 | ||||||||||||||||||||
| Scott Letier | 110,000 | 200,000 | — | — | — | — | 310,000 | ||||||||||||||||
| Jesse A. Lynn | 107,500 | 200,000 | — | — | — | — | 307,500 | ||||||||||||||||
| Nichelle Maynard-Elliott | 125,000 | 200,000 | — | — | — | — | 325,000 | ||||||||||||||||
| Steven D. Miller | 110,000 | 200,000 | — | — | — | — | 310,000 | ||||||||||||||||
| James L. Nelson | 230,000 | 200,000 | — | — | — | — | 430,000 | ||||||||||||||||
| Margarita Palàu-Hernàndez | 107,500 | 200,000 | — | — | — | — | 307,500 | ||||||||||||||||
2022 Compensation of Directors
For 2022, the annual equity retainer for directors will remain at $200,000. As of May 20, 2021, and until otherwise changed by the Board, the annual cash fee of $85,000, the cash fee for serving as independent (non-executive) Chairman of the Board and the various committee cash fees will no longer be paid in cash but will instead be paid in the form of additional RSUs or additional new DSUs, as elected by the individual directors, and will be for service from annual meeting to annual meeting instead of on a calendar year basis. Directors will continue to receive cash reimbursement for out-of-pocket expenses incurred in connection with their service on the Board.
We are not aware
| Common Stock | Series A Preferred Stock | Percent of Total Current Voting Power (3) | |||||||||||||||
Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percent of Class | Amount and Nature of Beneficial Ownership | Percent of Class (2) | |||||||||||||
| Mr. Carl C. Icahn c/o Icahn Capital LP 16690 Collins Avenue, PH-1 Sunny Isles Beach, FL 33160 | 34,245,314 (4) | 21.82% | — | — | 21.73% | ||||||||||||
| Darwin Deason 5956 Sherry Ln., Suite 800 Dallas, TX 75225 | 15,283,657 (5) | 9.74% | 180,000 | 100% | 10.12% | ||||||||||||
| BlackRock, Inc. 55 East 52nd Street New York, NY 10055 | 14,336,874 (6) | 9.13% | — | — | 9.10% | ||||||||||||
| The Vanguard Group, Inc. 100 Vanguard Blvd. Malvern, PA 19355 | 13,116,464 (7) | 8.36% | — | — | 8.32% | ||||||||||||
| Dimensional Fund Advisors LP 6300 Bee Cave Road, Building One, Austin, TX 78746 | 9,426,609 (8) | 6.00% | — | — | 5.98% | ||||||||||||
Name and Address of Beneficial Owner | Common Stock | Series A Preferred Stock | Percent of Total Current Voting Power (3) | |||||||
| Amount and Nature of Beneficial Ownership | Percent of Class | Amount and Nature of Beneficial Ownership | Percent of Class (2) | |||||||
Mr. Carl C. Icahn c/o Icahn Capital LP 16690 Collins Avenue, PH-1 Sunny Isles Beach, FL 33160 | 31,142,681 (4) | 20.11% | - | - | 20.02% | |||||
Darwin Deason 5956 Sherry Ln., Suite 800 Dallas, TX 75225 | 15,283,657 (5) | 9.87% | 180,000 | 100% | 10.26% | |||||
BlackRock, Inc. 55 East 52nd Street New York, NY 10055 | 14,183,558 (6) | 9.16% | - | - | 9.12% | |||||
The Vanguard Group, Inc. 100 Vanguard Blvd. Malvern, PA 19355 | 13,617,636 (7) | 8.79% | 8.76% | |||||||
|
|
|
|
|
|
|
|
| Name of Beneficial Owner | Amount Beneficially Owned | Total Stock Interest | ||||||||
Steven J. Bandrowczak | 193,891 | 596,460 | ||||||||
Keith Cozza | 50,000 | 88,179 | ||||||||
Joseph J. Echevarria | 0 | 51,354 | ||||||||
Michael D. Feldman | 229,803 | 389,433 | ||||||||
Xavier Heiss | 86,000 | 292,545 | ||||||||
Cheryl Gordon Krongard | 25,000 | 76,136 | ||||||||
A. Scott Letier | 4,384 | 46,024 | ||||||||
Jesse A. Lynn | 0 | 8,779 | ||||||||
Nichelle Maynard-Elliott | 0 | 13,063 | ||||||||
Steven D. Miller | 0 | 13,069 | ||||||||
James L. Nelson | 0 | 12,778 | ||||||||
Louis J. Pastor | 62,881 | 239,144 | ||||||||
Margarita Paláu-Hernández | 5,500 | 18,891 | ||||||||
Giovanni (John) Visentin | 845,040 | 1,958,068 | ||||||||
All directors and executive officers as a group (19) | 1,755,591 | 4,590,977 | ||||||||
| Name of Beneficial Owner | Amount Beneficially Owned | Total Stock Interest | ||||||
| Steven J. Bandrowczak | 214,272 | 743,178 | ||||||
| John Bruno | 0 | 301,886 | ||||||
| Joseph J. Echevarria | 0 | 74,622 | ||||||
| Philip Giordano | 0 | 16,225 | ||||||
| Xavier Heiss | 86,000 | 292,545 | ||||||
| A. Scott Letier | 4,384 | 67,731 | ||||||
| Jesse A. Lynn | 0 | 28,134 | ||||||
| Nichelle Maynard-Elliott | 0 | 33,772 | ||||||
| Steven D. Miller | 0 | 32,862 | ||||||
| James L. Nelson | 12,778 | 37,667 | ||||||
| Louis J. Pastor | 62,881 | 239,144 | ||||||
| Margarita Paláu-Hernández | 15,500 | 48,553 | ||||||
| All directors and executive officers as a group (17) | 593,266 | 2,392,255 | ||||||
2023.
On behalfXerox Shareholders:
First,the issues being considered, shareholder input received in the past, changes we fully acknowledgemade in response to that feedback, and the changes we were still discussing.
I would also likedisclosure to provide some context for the Company’s 2021 executive compensation programs described ingreater detail and clarity around this report. Our expectation entering 2021 was that in-office work would normalize following the global rolloutunique program aimed at providing equity incentives to create new lines of effective COVID-19 vaccines. However, the emergence of new variants of COVID-19 in 2021 caused customers to delay plans to return employees to the workplace. In the second half of the year, we experienced an unprecedented level of supply chain disruption, inhibiting our ability to install ordered equipment. The confluence of these developments caused revenuebusiness with characteristics and profits to fall below our expectations for the year. Despite these challenges, Xerox continued to execute on our strategic priorities: We grew free cash flow while continuing to invest in innovation; we began monetizing investments in innovation; and we returned almost double the amount of free cash flow generated to shareholders through share buybacks and the consistent payment of quarterly dividends.
As we head into 2022, we have reasons to be optimistic. Demand for our equipment remains strong, as evidenced by our elevated backlog. We continue to see a strong correlation between return-to-work trends, page volumes, and post-sale revenue. As a result, we expect revenue and profits to improve as supply chain conditions ease and employees return to workplaces – both of which are expected to begin benefiting our Print & Services business in the second half of 2022.
Standing up new businesses is a key component of Xerox’s strategic plan and directly supports our goal of monetizing innovation. In 2021, we stood up three new businesses: CareAR, FITTLE (formerly Xerox Financial Services), and Innovation (PARC). We also made progress toward our goal of monetizing and strategically diversifying our investments in innovation and will continue these efforts in 2022.
Project Own It, Xerox’s enterprise-wide initiative to simplify operations, enables the Company to drive continuous improvement and free up capital to reinvest in the business. In 2021, we exceeded our targeted Project Own It gross cost savings of $375 million. We will continue to streamline and optimize our operations in 2022. Savings generated by Project Own It allow us to invest in our operations, targeted adjacencies and innovation focus areas and ultimately help improve our long-term revenue trajectory.
At our core is a deep and long-lasting commitment to corporate social responsibility, a pledge to inspire and support our people, conduct business ethically across the value chain and preserve our planet. This commitment stemspropositions distinct from our corporate values established over sixty years ago: succeeding through satisfied customers; delivering qualityprimary business of Print and excellence in all we do; requiring a premium return on assets; using technology to develop market leaders; valuing and empowering our employees; and behaving responsibly as a corporate citizen.
Today, we continue this legacy by turning investments in innovation into products and services that help our customers be more productive, profitable and sustainable. We do this in our own operations, as well as in workplaces, communities and cities around the world. We recognize the world’s challenges in the areas of climate change and human rights and the role we play in tackling those challenges. We fast-tracked our roadmap to net zero to 2040, 10 years earlier than initially planned. Additionally, we continued to leverage our CSR Council, which includes all executive management and stakeholders, to govern and oversee our progress. We shared our roadmap to net zero for the first time in our 2021 CSR Report. Our roadmap covers our full value chain and focuses on improving processes and energy efficiency as well as designing environmentally responsible products and clean technologies that extend far beyond print.
From our earliest days as a company, Xerox has demonstrated a steadfast commitment to corporate social responsibility, including through employee-driven philanthropy. Together, Xerox and our employees are creating real impact and sustainable change for the greater good.
Our efforts are focused on four strategic areas to maximize change:
Strong and vibrant communities
Education and workforce preparedness
Science and technology
Disaster relief
Diversity, Inclusion and Belonging (DIB) are essential to our culture and value system. For over half a century, Xerox has been a leader in this space and continues to be at the forefront of driving change within our Company and our communities. To support this, our DIB roadmap and our actions during 2021 focused on:
Diverse Pipeline
Partnership
Culture Change
Community Outreach
Accountability
We are confident that the significant changes to our executive compensation programsprogram last year and this year will support our strategies and initiatives, secure our talent, and drive shareholder value creation. The Compensation Committee knows that our work is never done, and we remain committed to aligning Xerox’s compensation program to the core principles outlined above.
(CD&A) of this Proxy Statement. Our “Say-on-Pay” proposal is(Proposal 4) can be found on page 88
Cheryl Gordon Krongard
Fiscal 2021 Strategy
Our strategyto understand shareholders’ perspectives on our executive compensation programs and policies, as well as shareholders' views on our pay structure and organization.
| Shareholder Outreach - 2022 | |||||
| Percent Contacted 74.45% | Percent Engaged 49.65% | ||||
Looking ahead, our strategy is to maintain overall market share leadership in our traditional print and services markets and grow our position in strategic adjacencies such as IT and Digital Services.the Board of Directors. We alsowill continue to invest in innovationreach out to our shareholders and scale new businesses targeting significant growth markets.
Our four strategic initiatives remain at the centerconsider how best to align our executive compensation programs with shareholder interests. The following table summarizes key points we have heard from shareholders and how we have responded.
| Our Perspective / Actions Taken | ||||||||
Concern about the use of positive discretion for 2020 retention awards. | •In 2020, the Compensation Committee determined that granting special awards, in the form of cash and RSUs, was a necessary and reasonable response to the challenges posed by the global COVID-19 pandemic and was the most effective tool to secure the retention of key employees needed to continue to move the Company forward through its transformation. •With the benefit of shareholder outreach, management and the Board of Directors believe some shareholders that withheld support in 2022 did so in response to a concern about the application of upward discretion in 2020. •The Compensation Committee views the use of discretion in the 2020 retention awards as extraordinary action taken in response to unprecedented and completely unforeseen circumstances, and not a routine feature of executive compensation at Xerox. Any similar use of discretion in the future by the Compensation Committee will only be in response to extraordinary and unprecedented circumstances. | |||||||
Confusion regarding the Transaction Bonus Framework. | •We have enhanced disclosure language related to the Transaction Bonus Framework to highlight: (i) the potential need to incentivize leaders to develop and execute strategies for individual business units that may not necessarily be accretive to the financial metrics used in the Xerox annual and long-term incentive programs; (ii) the direct link between any potential payout and realized shareholder value; and (iii) the fact that no named executive officers or Section 16 officers have been granted any awards under this framework. | |||||||
Changes to the compensation plans to support business turnaround strategy, including a preference for use of relative metrics in the LTI plan. | •Based on shareholder feedback for the preference of relative metrics, we redesigned the 2023 annual cash incentive plan (Management Incentive Plan or MIP) to remove past metrics relating to Absolute Revenue(1) Adjusted(1) Operating Margin and Free Cash Flow(1) in favor of Adjusted(1) EBITDA in an effort to enhance line of sight with profitability and shareholder value creation associated with our redefined business strategy. | |||||||
•We also redesigned our 2023 E-LTIP to remove 2022 E-LTIP metrics relating to Absolute Share Price(1) hurdles and Cumulative Adjusted(1) EPS in favor of a relative TSR design to improve alignment with market practices as well as strengthen the relationship between executive pay and shareholder value creation. | ||||||||
Interest in Xerox’s executive succession plan. | •We have enhanced disclosure around the Board’s succession planning. | |||||||
Interest in the CEO compensation plan. | •We have enhanced disclosure regarding the new CEO compensation plan. | |||||||
Interest in Human Capital Management. | •We have enhanced disclosure regarding our ESG metric in the annual cash management incentive plan (MIP), included our EEO-1 data in the Proxy and will be including shareholder engagement data in our future CSR reports. | |||||||
| Interest in incentive metrics. | •Eliminated overlapping metrics. •Adopting relative LTI. •Converting ERG metrics from modifier to a weighted metric. | |||||||
| 2023 Strategic Initiatives | ||||||||||||||||
| Customer Success | Focus on
| Shareholder Returns | ||||||||||||||
| Employ a holistic, client-centric approach to delivering essential products and
|
services. Invest in |
Focus our sales efforts on providing solutions closely aligned to | Implement a more flexible cost base and
Continue to prioritize behaviors and processes instilled by Project Own It. Invest in processes that drive incremental organizational efficiencies and enable the types of collaboration required to offer holistic solutions for our clients. |
Optimize free cash flow
Generate more cash flow per profit dollar through improvements in working capital
| |||||||||||
|
•Achieved gross cost savings ahead of our targeted $375$450 million in 2022 under Project Own It.It, helping offset an unprecedented level of product and service cost inflation. Since its initiationinception in the second half of 2018, Project Own It has generated approximately $1.8$2.2 billion in gross cost savings, freeing up cash to reinvest in our operations, targeted adjacencies, and new markets. We also began commercializing certain efficiencies developed internally, such as RPARobotic Process Automation (RPA) and advanced security solutions.
|
|
Expanded•Returned approximately 200% ($287 million) of adjusted(1) free cash flow, to shareholders through share repurchases and dividends in 2022, while lowering our top market-share spot in totaldebt balance by $520 million, including the prepayment of $700 million of long-term notes.
•Delivered double-digit growth in our IT services business, (despite an increaseincluding further commercialization of advanced services such as RPA and Master Data Management, and in IT hardware backlog) and our Digital Services business, which includesincluding incremental customer engagement services such as Digital Mailroom and Digital Cloud and Hub Print.
Announced the formationthrough our acquisition of CareAR, an augmented reality-driven service experience management platform, alongGo Inspire.
Grew originations for our global financing solutions business (rebranded asaffiliate of HPS Investment Partners to sell pools of future lease receivables, primarily covering U.S. direct leases (including leases originated through XBS) through January 2024. The Receivables Funding Agreement, which anticipates FITTLE receivables sales of approximately $600 million in 2022) by 14%, including an expanded penetration within XBS, despite lower originations of Xerox equipment due to supply chain challenges.
Formed Eloque,2023, represents a joint venture with the Victorian Government (AU) (VicGov) to commercialize IoT sensor-based technology that will remotely monitor the structural health of critical infrastructure assets, such as roads and railway bridges. Eloque’s bridge monitoring solution was deployed in Australia during the year and Eloque is working with multiple state departments of transportationstrategic shift in the U.S. Company’s approach
Launched the commercial version of ElemX’s liquid metal 3D printer. Multiple units were sold in the first year of operation, and the pipeline of new customers spans a range of industries, including heavy manufacturing, aerospace and defense and automotive industries.
In cleantech, completed the alpha prototype testing of a next-gen air conditioner and signed an agreement with a leading HVAC manufactureropportunity to inform requirements for a beta prototype, which is expected to be completed by the end of 2022.
Reaffirmed•Utilizing our commitment to diversity, inclusion and belonging (DIB) by developing a new roadmap, which enables us to identify areas where we can have a biggeramplify our impact on employees and society. To support this, our roadmap and our actions during 2021society, we continued to execute on key priorities in five focus on:areas: building a diverse pipeline,pipeline; strengthening relationships with external organizations,organizations; reinforcing a Company-wide culture of belonging,belonging; extending our reach into the communities that we serveserve; and fostering accountability by measuring our progress against our ESG metrics.
In 2021, •Xerox employees volunteered for approximately 10,90024,400 hours and we have set our 2022 goal at 15,000 Xerox employeein 2022. Our company-wide volunteer hours. Our efforts are focused on four strategic areas to maximize change: building strong and vibrant communities,communities; investing in education and workforce preparedness,preparedness; supporting scientific research and technology for our Company and the world,world; and providing aid to our employees and neighbors in crises.
2021
| Name | Annual Base Salary $ | Annual Bonus Target Rate | Annual Bonus Target Amount $ | LTI Target $ | Total Direct Compensation $ | ||||||||||||
| Giovanni (John) Visentin, Former Vice Chairman and Chief Executive Officer | 1,200,000 | 150 | % | 1,800,000 | 10,000,000 | 13,000,000 | |||||||||||
| Steven J. Bandrowczak, Chief Executive Officer (Effective 08/02/2022) | 1,000,000 | 150 | % | 1,500,000 | 7,500,000 | 10,000,000 | |||||||||||
| Executive | Current Title | |||||
| ||||||
John Bruno(1) | ||||||
| President and Chief | |||||
Xavier Heiss | Executive Vice President, Chief Financial Officer | |||||
| ||||||
Louis J. Pastor | Executive Vice President, Chief Corporate Development Officer and Chief Legal Officer | |||||
| |||||
Giovanni (John) Visentin(2) | Former Vice Chairman and Chief |
________
•Reward our senior executives for attaining financial performance targets;
•Hold our senior executives accountable for the performance of the business units, divisions or functions for which they are responsible; and
•Motivate our senior executives to collectively make decisions about the Company that will deliver enhanced value to our shareholders over the long term.
| Executive Compensation Guiding Principles | ||
| ||
| ||
| ||
What We Do | What We Don’t Do | |||||
control. |
| |||||
|
Reference the Summary Compensation Table on page 65.
| Type of Pay | Purpose | Key Characteristics | ||||||||
| Base Salary | ||||||||||
| Fixed | • Fixed cash compensation based on the individual’s experience, skills and competencies, relative to competitive market value of the | • Reflects competitive market conditions and individual performance. • Commensurate with scope of responsibility, internal value of the position, and impact to the Company, reflecting internal pay | ||||||||
| Annual Cash Incentive (MIP) | ||||||||||
| Performance-Based | • Variable cash compensation motivates achievement of annual strategic goals, as measured by objective, pre-established financial and strategic | • Target opportunities are based on market data and reflect impact to the Company. • Metrics are intended to drive consistent growth and shareholder value creation by measuring successful execution of our current strategy. • Inclusion of ESG way. • Actual awards are based on achievement of measurable performance | ||||||||
| Long-Term Incentives (E-LTIP) | ||||||||||
| Restricted Stock Units (RSUs) | • Aligns with market practice. • Promotes retention in a highly competitive | • Comprises 40% of LTI grant. • Graded service-based vesting schedule (33%, 33% and 34%, on the first, second, and third anniversaries of the grant date). | ||||||||
| Performance-Based Restricted Stock Units (PSUs) | • Aligns compensation with key indicators of success of our strategy. • Encourages focus on long-term shareholder value creation through profitable growth and increase in stock price over time. • Promotes retention through long-term performance achievement and vesting requirements. •Aligns with succession planning | • Comprises 60% of LTI grant. • Cliff vesting three-years from grant date. • Payouts based on achieving performance metrics reflecting creation of shareholder | ||||||||
•Pay for performance
•Attract and retain first-class talent
•Reward past performance
•Motivate future performance
Vice Chairman and CEO Pay for Performance
To illustrate the pay and performance alignment of our executive compensation program, the chart below presents the target total direct compensation provided to Mr. Visentin in 2021 and the realizable target total direct compensation value as of March 1, 2022. Realizable pay includes i) base salary, ii) actual 2021 annual cash incentive payout (MIP), and iii) projected value of 2021 PSU and RSU grants at target, revalued using a March 1,
|
SAY-ON-PAY VOTES AND SHAREHOLDER ENGAGEMENT
At the Company’s 2021 Annual Shareholders Meeting last May, our Say-on-Pay advisory vote on the 2020 compensation of our named executive officers received the support of shareholders representing only 31% of the votes cast. Xerox management and the Board of Directors did not take this result lightly. As detailed below, the Company has taken significant and thoughtful actions in direct response to last year’s vote, including the following:
Comprehensive review of incentive plan design, resulting in changes for 2022;
Focused shareholder outreach on executive compensation, led by the Chair of the Compensation Committee of the Board of Directors; and
Enhanced disclosure of shareholder feedback and Xerox responses in this year’s proxy statement.
We believe that our approach to engaging openly with our shareholders increases corporate accountability, improves decision making, and ultimately creates long-term value. We are committed to:
Accountability: Drive and support leading corporate governance and board practices to promote oversight, accountability, and good decision making.
Transparency: Maintain high levels of transparency on a range of financial, governance, and corporate responsibility issues to build trust and sustain two-way dialogue that supports our business success.
Robust Engagement: Proactively engage with shareholders and stakeholder groups, in dialogue on a range of topics to identify emerging trends and issues to inform our thinking and approach.
Incorporating Feedback: As a result of our engagement with shareholders, we receive valuable commentary and insights regarding our governance and compensation practices. We refine our programs to balance feedback from our shareholders and what we believe is needed to effectively motivate our executive officers and achieve our goals.
2021 / 2022 Shareholder Engagement Cycle
Our Board of Directors and leadership team maintain a robust and continuous shareholder engagement program. Our program calls for proactive engagement throughout the year with a significant and diverse portion of our institutional shareholders, on any topics they wish to discuss. Topics include matters related not only to executive compensation, but also business results and initiatives; human capital management; and environmental, social and governance (ESG) matters. This year however, we knew it was important to focus our efforts on making meaningful changes in response to the 2021 Say-on-Pay vote. We used what would have been our Fall outreach period to instead review and redesign our annual and long-term incentive programs in response to shareholder feedback. We began proactive outreach in Winter 2022 to communicate program changes and solicit shareholder feedback.
While our Board and management team have regular contact with investors regarding business performance and operations, this year we focused our compensation, governance and corporate responsibility related outreach efforts in the early winter months of 2022. This timing better enabled us to communicate important new design changes to our annual and long-term incentive plans and respond to previous shareholder feedback in a more meaningful way.
| Executive | Annual Base Salary ($) | ||||
Steven J. Bandrowczak(1) | 1,000,000 | ||||
John Bruno(2) | 750,000 | ||||
Xavier Heiss(3) | 511,733 | ||||
| Louis J. Pastor | |||||
Joanne Collins Smee(4) | 575,000 | ||||
| Giovanni (John) Visentin | 1,200,000 | ||||
We pursued multiple avenues for shareholder engagement, including video
The Chair ofPerformance Metrics, Results and Payout: 2022 MIP
The shareholders we heard from were pleased with our thoughtful responses to their questions and in particular with the recent changes to our annual and long-term incentive plan designs. The following table summarizes key points we have heard from shareholders and how we have responded.
Commitment to Investor Engagement
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We will continue to reach out to our shareholders and consider how best to align our executive compensation programs withbest practices and institutional shareholder interests.
and proxy advisor guidelines. We also introduced ESG as a weighted metric after introducing it as a modifier in 2021, COMPENSATION ACTIONS
Base Salary
Givento further reinforce the business challenges, most base salaries remained unchanged in 2021.
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Performance Metrics, Resultssignificance and Payout: 2021 MIP
criticality of these objectives. The 20212022 MIP goals were aligned with our 2021 operating2022 strategic plan and financial forecasting at the time they were established; they were designed to be challenging, yet achievable and were established prior to the prolonged effects of the pandemic and global supply chain disruptions.
established.
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The Company introduced ESG objectives into the annual incentive plan, acknowledging direct feedback obtained from our extensive shareholder outreach efforts. Since this was our first year incorporating ESG objectives, we chose to do so as a modifier, with the payout based on achievementportion of the financial metrics to be increased or decreased by up to 10% ofMIP, the target incentive opportunity based on the Company’s achievement of key ESG objectives, with the resulting payout not to exceed 200% of the target incentive opportunity.
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TheCompensation Committee evaluated performance relative to the following established sustainability, safety and diversity and inclusion objectives:
Quantitativeobjectives (weightings):
•Environmental (5%) — Develop a comprehensive Greenhouse Gas (GHG) reduction plan
•Safety (5%) — Improve Days Away From Work (DAFW) case rate worldwide (DAFW)
•Social (10%) — Increase representation of women and diverse employees at professional level roles
Qualitative Objectives:
Social — Execute against the 2021 Diversity, Inclusion & Belonging (DIB) roadmap initiatives
Quantitative and qualitativeTotal performance against the stated ESG objectives was above target, andwhich when weighted, resulted in an overall payout of 26.5% of target.
Overall, 2021achieve threshold for Free Cash Flow
2021
Performance Measure
| Weight
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Threshold payout)
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Target
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Maximum (200% payout)
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Actual 2021
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Payout Range
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Weighted
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| Absolute Revenue1 | 33.3% | $7,200 | $7,400 | $7,600 | $7,038 | Below Threshold (0.00)% | 0.0% | |||||||||
| Adjusted Operating Margin1 | 33.3% | 6.6% | 7.6% | 8.6% | 5.3% | Below Threshold (0.00)% | 0.0% | |||||||||
| Free Cash Flow1 | 33.3% | $475 | $525 | $575 | $561 | Between Target and Maximum (172)% | 57.3% | |||||||||
| ESG Modifier | +/- 10% |
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| Above Target | +7.5% | |||||||||
2021 MIP Factor | 64.8% | |||||||||||||||
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2021
| Performance Measure | Weight | Threshold (50% payout) | Target (100% payout) | Maximum (200% payout) | Actual 2022 Performance Results | Payout Range (Payout Factor) | Weighted Payout Factor | ||||||||||||||||
Free Cash Flow(1) | 40.0% | $320 | $425 | $520 | $102 | Below Threshold (0)% | 0% | ||||||||||||||||
Absolute Revenue (1) | 20.0% | $5,400 | $7,200 | $7,800 | $7,469 | Between Target and Max 144.8% | 29.0% | ||||||||||||||||
Adjusted(1) Operating Margin | 20.0% | 4.5% | 6.0% | 7.0% | 4.6% | Between Threshold and Target 53.3% | 10.7% | ||||||||||||||||
| ESG | 20.0% | Above Target | 26.5% | ||||||||||||||||||||
| 66.2% | |||||||||||||||||||||||
Executive
| Annual
| Target MIP
| Target MIP Incentive ($)
| Payout Factor
| Actual 2021 MIP ($)
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Giovanni (John) Visentin | 1,200,000 | 150% | 1,800,000 | 64.8% | 1,166,400 | ||||||||||||||||||||
Steven J. Bandrowczak | 525,000 | 100% | 525,000 | 64.8% | 340,200 | ||||||||||||||||||||
Xavier Heiss1 | 499,312 | 100% | 499,312 | 64.8% | 323,554 | ||||||||||||||||||||
Michael D. Feldman | 575,000 | 100% | 575,000 | 64.8% | 372,600 | ||||||||||||||||||||
Louis J. Pastor | 500,000 | 100% | 500,000 | 64.8% | 324,000 | ||||||||||||||||||||
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Executive Annual
Base Salary ($)Target MIP
Incentive
(% of Salary)Target
MIP
Incentive
($)Payout
FactorActual 2022
MIP
Payout
($)1,000,000 125% / 150% 1,500,000 66.2% 679,929 750,000 125% 937,500 —% — 511,733 100% 511,733 66.2% 372,144 Louis J. Pastor 550,000 100% 550,000 66.2% 355,825 575,000 100% 575,000 66.2% 365,480 Giovanni (John) Visentin 1,200,000 150% 1,800,000 66.2% 595,800
2021
Vehicle
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Performance
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Mix
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Weighting
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Performance
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Vesting
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Rationale
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Performance Share Units (PSUs) | Absolute Revenue1 | 25% | January 2021—December 2023 (cumulative) | Cliff vesting on the third anniversary of the grant date (subject to performance results) | Focuses on improving the top line and is aligned with business strategy | |||||||||
| Free Cash Flow1 | 60% | 25% | January 2021—December 2023 (cumulative) | Focuses on reducing costs, improving productivity and profitable revenue | ||||||||||
| Absolute Share Price1 | 50% | Last 20-trading-day average closing price at the end of the performance period (December 2023), plus the value of accumulated dividends during the 3-year performance period | Focuses on stock price appreciation and achieving goals to maximize shareholder returns (inclusive of accumulated dividends), which is appropriate during the organization’s transformational period | |||||||||||
| Restricted Stock Units (RSUs) | Service-based | 40% | — | January 2021—December 2023 | Vesting schedule of 33%, 33% and 34%, on the first, second and third anniversaries of the grant date | Aligns with market practice and promotes retention in a highly competitive marketplace | ||||||||
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2021 were:
| Vehicle | Performance Measure | Mix | Weighting | Performance Period | Vesting | Rationale | ||||||||||||||
| Performance Share Units (PSUs) | Adjusted(1) Earnings per Share | 60% | 50% | January 2022—December 2024 (cumulative) | Cliff vesting on the third anniversary of the grant date (subject to performance results) | Focuses on profitability while eliminating overlapping metrics (Absolute Revenue and Free Cash Flow(1) with the MIP | ||||||||||||||
Absolute Share Price(1) | 50% | Last 20-trading-day average closing price at the end of the performance period (December 2024), plus the value of accumulated dividends during the 3-year performance period | Focuses on stock price appreciation and achieving goals to maximize shareholder returns (inclusive of accumulated dividends), which is appropriate during the organization’s transformational period | |||||||||||||||||
| Restricted Stock Units (RSUs) | Service-based | 40% | NA | January 2022—December 2024 | Vesting schedule of 33%, 33%, and 34%, on the first, second, and third anniversaries of the grant date, respectively | Aligns with market practice and promotes retention in a highly competitive marketplace | ||||||||||||||
Executive
| 2021 E-LTIP ($)
| PSUs (60%) ($)
| RSUs (40%) ($)
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Giovanni (John) Visentin | 10,000,000 | 6,000,000 | 4,000,000 | |||
Steven J. Bandrowczak | 3,650,000 | 2,190,000 | 1,460,000 | |||
Xavier Heiss | 2,000,000 | 1,200,000 | 800,000 | |||
Michael D. Feldman | 1,350,000 | 810,000 | 540,000 | |||
Louis J. Pastor | 1,550,000 | 930,000 | 620,000 |
Executive 2022 E-LTIP ($) PSUs (60%) ($) RSUs (40%) ($) Steven J. Bandrowczak 4,100,000 2,460,000 1,640,000 John Bruno — — — Xavier Heiss 2,500,000 1,500,000 1,000,000 Louis J. Pastor 1,900,000 1,140,000 760,000 Joanne Collins Smee 1,400,000 840,000 560,000 Giovanni (John) Visentin 10,000,000 6,000,000 4,000,000
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2019
Performance
| Weight
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Threshold (50% payout)
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Target (100% payout)
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Maximum (200% payout)
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Actual 2019 PSU Award Performance Results
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Performance Results
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Weighted
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| Absolute Share Price1 | 50 | % | $30.00 | $35.00 | $40.00 | $24.39 | Below Threshold (0.00)% | 0.00 | % | |||||||||||||||||
| Absolute Revenue1 | 25 | % | $27,613 | $27,913 | $28,513 | $23,144 | Below Threshold (0.00)% | 0.00 | % | |||||||||||||||||
| Free Cash Flow1 | 25 | % | $3,135 | $3,435 | $3,735 | $2,367 | Below Threshold (0.00)% | 0.00 | % | |||||||||||||||||
Actual 2019 E-LTIP PSU Award Performance Factor | 0.00 | % | ||||||||||||||||||||||||
________ (1)Refer | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Performance Results and Payout: 2018 E-LTIP
The 2018 E-LTIP was based on one year of actual performance results (2018) and two years at target (2019 and 2020), as determined by our Board in December 2018. For additional information, refer to the Company’s Proxy Statement“Non-GAAP Financial Measures” section for the fiscal year ended December 31, 2018 filed with the SEC on April 18, 2019. For additional information on the 2018 E-LTIP performance measures and definitions, refer to Exhibit 10(e)(31)a reconciliation of the non-GAAP financial measure or an explanation of the performance measure.
The E-LTIP PSU performance measures approved bybusiness. Recognizing the importance of creating value for shareholders, Xerox is actively pursuing the development and monetization of new business units. These efforts require Xerox leaders to develop and execute business strategies that may not necessarily be reflected in, or accretive to, the financial metrics used in our annual and long-term incentive programs. On January 12, 2022, after six months of deliberation and discussion, the Compensation Committee approved the Transaction Bonus Framework for 2018 were as follows: CAGR Revenue Growth at constant currency1new business unit monetization. The purpose of the Transaction Bonus Framework is to create a program to incentivize executives to successfully monetize a new business unit concept through any number of potential liquidity events (e.g., Free Cash Flow1 and Relative Total Shareholder Return1spin-out to Xerox shareholders, sale to strategic buyer, or sale to financial buyer). Performance results against these measures are shown
2018 PSUs Results Based on One Year (2018)fair market value of Performance Resultsthe designated business unit between (i) the time the Grant Instrument was awarded, and Two Years (2019(ii) the time of the liquidity event, with the result adjusted for relevant changes in capital structure. Entitlement to payment will be subject to additional conditions relating to continued employment and 2020)non-engagement in certain activity. Payment will generally be in a lump sum, with the form of payout, whether cash or securities, to be determined in advance of payment.
Performance | Percentage Earned by Performance Period2 | |||||||||||||||||||||||||||||||
2018
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2018
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2018
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Actual 2018
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2018 Payout
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2018
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2019
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2020
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| CAGR Revenue Growth at constant currency1 | (3.8 | )% | (2.8 | )% | (0.8 | )% | (4.9 | )% | Below Threshold | 0 | % | 100 | % | 100 | % | |||||||||||||||||
| Free Cash Flow1 | $822 | $850 | $1,000 | $1,160 | Maximum | 200 | % | 100 | % | 100 | % | |||||||||||||||||||||
| Relative Total Shareholder Return1 | 25.0 | % | 50.0 | % | 80.0 | % | 76.5 | % | | Between Target and Maximum | | 188.2 | % | 100 | % | 100 | % | |||||||||||||||
| Weighting | 33.3 | % | 33.3 | % | 33.3 | % | ||||||||||||||||||||||||||
| Actual Performance Results (cumulative % earned x weighting) | 129.4 | % | 100.0 | % | 100.0 | % | ||||||||||||||||||||||||||
Actual 2018 E-LTIP PSU Award Performance Factor (three-year average) |
| 109.8 | % | |||||||||||||||||||||||||||||
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some point in the future to award incentives related to the successful monetization of a business unit.
2023
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1.Evolving the MIP:In 2023, the Company will be embarking upon a reinvention program which will require tremendous focus and energy. We recognize it is important to have the right management team, and the right incentive structure for this journey. Accordingly, the 2023 MIP was redesigned to align with our new strategic plan. The new design will drive a pay for performance culture on an annual basis with the achievement of strategic and functional objectives. The 2023 MIP will utilize Adjusted(1) EBITDA as its primary metric (80% weighting for the CEO and 60% weighting for other NEOs). We believe that Adjusted(1) EBITDA makes for an excellent financial metric as it strongly correlates with TSR and reflects the Company's operational profitability.
Role of Independent Compensation Consultant
•Regularly updated the Compensation Committee on trends in executive compensation and proactively advised on emerging trends and best practices, including in connection with the prolonged impact of the global COVID-19 pandemic on performance and compensation design;
•Reviewed officer compensation levels and the Company’s overall performance compared to a peer group made up of organizations with which the Company is likely to compete for executive expertise and/or which share with the Company a similar business model in one or more areas;
•Reviewed incentive compensation designs for MIP and E-LTIP programs;
•Advised the Compensation Committee on peer group companies for pay and performance comparisons;
•Reviewed the Compensation Discussion and Analysis and related compensation tables for this Proxy Statement;
•Reviewed Compensation Committee meeting materials with management and the Committee Chair before distribution;
•Attended Compensation Committee meetings and, as requested, meetings in executive session;
•Offered independent analysis and input on Vice Chairman & CEO compensation;
•Advised on other compensation matters as requested.
•Base salary
•Performance-based annual Management Incentive Plan (MIP)
•Total cash compensation (base salary plus MIP)
•Performance-based Executive Long-Term Incentive Program (E-LTIP)
•Total compensation (total cash compensation plus E-LTIP)
The Compensation Committee has determined that these peer group companies on the whole are:
•Appropriate in size (considering revenue, market capitalization, EBIT, enterprise value, and assets);
•Comparable in terms of business complexity and industry focus;
•Companies with which Xerox is likely to compete for executive talent; and/or
•Companies that share a similar business model and/or similar business content in one or more areas to our traditional business.
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Applied Materials, Inc. | Juniper Networks, Inc. | Western Digital Corporation | ||||||||
CGI Group Inc. | Keysight Technologies | Zebra Technologies | ||||||||
DXC Technology Company | Motorola Solutions, Inc. | |||||||||
Flex Ltd. | NCR Corporation | |||||||||
Hewlett Packard Enterprise Company | NetApp, Inc. | |||||||||
HP, Inc. | Seagate Technology plc | |||||||||
Jabil Inc. | TE Connectivity Ltd. | |||||||||
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Compensation | Compensation Committee | Final Steps | ||||||||||||||||
• Overall Company performance • Past contributions • Expected future contributions • Succession planning objectives • Retention objectives • Internal pay equity • Peer group data | • Evaluation of • • • Competitive executive pay practices • Financial feasibility • | • Input from the Compensation Committee’s independent consultant • Review of evolving market practices, regulatory developments, the market for executive talent, and compensation philosophy from the Compensation Committee’s independent consultant • After receiving input from the | ||||||||||||||||
Annual Base Salary ($)1
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Target MIP (% of Salary)1
| Target MIP ($)1
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E-LTIP (RSUs and Target PSUs) ($)
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Total Target Compensation (Base + Target MIP + E-LTIP) ($)
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Giovanni (John) Visentin | 1,200,000 | 150% | 1,800,000 | 10,000,000 | 13,000,000 | |||||
Steven J. Bandrowczak | 525,000 | 100% | 525,000 | 3,650,000 | 4,700,000 | |||||
Xavier Heiss2 | 499,312 | 100% | 499,312 | 2,000,000 | 2,998,624 | |||||
Michael D. Feldman | 575,000 | 100% | 575,000 | 1,350,000 | 2,500,000 | |||||
Louis J. Pastor | 500,000 | 100% | 500,000 | 1,550,000 | 2,550,000 | |||||
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E-LTIP
(RSUs and
Target PSUs)
($)Total Target
Compensation
(Base + Target
MIP + E-LTIP) ($)1,000,000 150% 1,500,000 7,500,000 10,000,000 750,000 125% 937,500 4,500,000 6,187,500 511,733 100% 511,733 2,500,000 3,523,466 Louis J. Pastor 550,000 100% 550,000 1,900,000 3,000,000 575,000 100% 575,000 1,400,000 2,550,000 Giovanni (John) Visentin 1,200,000 150% 1,800,000 10,000,000 13,000,000
91%•89% of pay for our Vice Chairman & CEO is at risk and creates alignment with shareholders
83%•84% of our pay for our other NEOs is at risk and creates alignment with shareholders
| Role | Responsibility | |||||||||
Board of Directors | • Reviews Company results for prior year • Considers annual operating plan for the current year | |||||||||
CEO |
| • With the Chief Financial Officer (CFO), assesses prior year performance • Recommends actions related to payment of awards based on prior year performance • Recommends to the Compensation Committee performance measures for the current year • Recommends establishment of MIP incentive target awards for the current year for the other NEOs | ||||||||
Compensation Committee |
| • With the input of the • With the input of the • Sets performance measures and weightings for the current year, including the threshold, target and maximum goals for each | ||||||||
| E-LTIP Planning Process | ||||||||||||
Actions the Compensation Committee takes annually with respect to E-LTIP awards | • For completed performance periods, determines the number of PSUs, if any, earned by each NEO based on the results for the performance period. • For the new PSU cycle, establishes overall design, performance measures and weightings; threshold, target, and maximum achievement levels for each measure with associated payout | |||||||||||
Specific actions taken for
2022 E-LTIP Grants | • Approved new E-LTIP grant values and grant dates for NEOs. • Approved program design, performance measures and | |||||||||||
•Each performance measure is assessed and calculated independently. The weighted results of each measure, if achieved at least at the threshold level, are added together to determine the overall payout factor, subject to application of the ESG modifier.
•Subject to the Compensation Committee’s review and approval, any material unusual or infrequent charges or gains/(losses) may be excluded from the MIP incentive calculations in order to obtain normalized operational results of the business.
•Even if pre-established performance measures are achieved, the Compensation Committee retains the discretion to adjust the calculated incentive payout, as it deems appropriate, based on overall Xerox performance. The Compensation Committee may use its discretion to adjust a payout based on individual performance, provided that an individual executive’s award never exceeds 2 times the executive’s target award opportunity.
•Performance results for each PSU performance metric, subject to that metric’s weighting, are combined to determine the number of PSUs earned, as a percentage of the target number of PSUs awarded, as follows: (i) achieving threshold performance equates to 50% of target; (ii) achieving target performance equates to 100% of target; (iii) achieving maximum performance equates to 200% of target; and (iv) if performance results for the metric are below the threshold level, zero achievement is used for that metric when calculating the percentage of PSUs earned. •Payouts are made proportionately for achievement between threshold and target, and between target and maximum. No PSUs are earned if performance is below the threshold level for all of the performance metrics established by the Compensation Committee. Payout of PSUs is conditioned on actual achievement of the pre-established performance measures and satisfaction of the service-based vesting requirements.
•The target numbers of PSUs and RSUs granted to our NEOs were determined by dividing the approved E-LTIP grant-date values (dollar amount) by the fair value on the grant date (or last trading day prior to the grant date if the market was closed on the grant date).
•For RSUs, fair value is the closing price of Xerox Common Stock on the date of grant.
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Giovanni (John) Visentin
In May 2018, the Company entered into a letter agreement in connection with hiring Mr. Visentin as the Company’s Vice Chairman & CEO. The agreement provides for $1,200,000 base salary, 150% annual incentive target and $10,000,000 long-term incentive target annually.
Under Mr. Visentin’s amended letter agreement (April 17, 2019), equity awards granted on or after May 15, 2020 become fully vested due to a Change in Control only if followed by an involuntary terminationTable of employment (other than for Cause) or a voluntary termination for Good Reason (i.e., “double-trigger” vesting).1 Following a Change in Control, in the event of Mr. Visentin’s involuntary termination without Cause or voluntary termination for Good Reason, he also would be entitled to:
Cash payments equal to 2.99 times the sum of his base salary and his target annual incentive;
His annual incentive for the year of termination, based on actual results; and
Continuation of specified welfare benefits at active employee rates for a period of 24 months.
Mr. Visentin’s amended letter agreement also provides that, in the event of an involuntary termination without Cause or voluntary termination for Good Reason prior to a Change in Control, he would be entitled to:
Cash payments equal to two times the sum of his base salary and his target annual incentive;
A prorated annual incentive for the year of termination, based on actual results;
Full vesting of outstanding equity awards that would have become vested during the two-year period following his termination date; and
Continuation of specified welfare benefits at active employee rates for a period of 24 months.
Under Mr. Visentin’s amended letter agreement, Good Reason generally means any of the following circumstances, provided he has not consented in writing to the circumstances, has notified the Company in writing within 90 days of the first occurrence, and the Company has not remedied such circumstance within 30 days of such notice:
Diminution of authority, duties, or responsibilities;
Change in title or reporting relationship;
Reduction in annual base salary, annual target incentive, and/or long-term incentive opportunity;
Change in principal place of employment of more than 25 miles;
Failure by the Company to continue any compensation or benefit plan or vacation policy unless an alternative is provided that is no less favorable; or
Failure of the Company to comply with its obligations under the agreement.
For additional information, please see the section entitled Potential Payments Upon Termination or Change In Control.
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provisions.
•Defined Contribution Pension Plan for Directors of Xerox SAS, France
•Contributions to the plan are based on earnings up to an annual cap of €205,680
•Payments are managed by AXA, the program administrator, and are payable upon retirement (but not before age 62)
•Earnings are credited to a participant’s account based on market investments selected by the participant
•Retirement Indemnities Plan
•French pension plan required under the Convention Collective d’Enterprise Xerox S.A.S. du 10(10 December 2015,2015) (XF-CBA), a collective bargaining agreement between the Company’s French subsidiary and certain French trade unions
•Benefits are forfeited if an employee terminates before age 62
•Financial Planning: All NEOs are eligible to receive Company-paid financial planning assistance (up to $10,000 every two years). Solid financial planning by experts reduces the amount of time and attention that NEOs devote to their finances and maximizes the value of their compensation.
•Chartered Aircraft: For purposes of security, productivity, and efficiency, the Board of Directors requires Mr. Visentinthe CEO to use chartered aircraft for business travel. Employees are permitted to accompany Mr. Visentinthe CEO on the Company chartered aircraft solely for business purposes with prior authorization by Mr. Visentin.
Mr. Visentin•The CEO was also mayeligible to use the Company chartered aircraft for personal travel and he maypermitted to be accompanied by family members and guests. The CEO (formerly Mr. Visentin, isand currently Mr. Bandrowczak) was wholly responsible for the tax consequences related to hisany personal use of Company chartered aircraft. The Company doesdid not provide gross-ups or other tax protection related to histhe personal use of chartered aircraft.
•Home Security: Until his death in June 2022, Mr. Visentin receivesreceived home security services to address safety concerns resulting from his position as our Vice Chairman & CEO.
•International Assignment Allowances: Mr. Heiss, a citizen of France, was on international assignment and received an international assignment allowance in 2021 consistent with Company polices, whichduring 2022. As is customary for Xerox employees on international assignment.
•Two times the sum of their annual base salary and target annual incentive award;
•Continuation of specified welfare benefits at active employee rates for a period of 24 months; and
•Accelerated vesting of outstanding equity awards.
Under Mr. Visentin’s offer letter as originally negotiated in 2018, in the event of a Change in Control (as defined therein), any outstanding equity awards would have become vested. As amended during 2019, the letter agreement provides that awards granted on or after May 15, 2020 become fully vested due to a Change in Control only if followed by an involuntary termination of employment (other than for cause) or a voluntary termination for Good Reason (i.e., “double- trigger” vesting).
In addition, if Mr. Visentin’s employment terminates involuntarily (other than for cause, death, or disability) or voluntarily for Good Reason following a Change in Control, he would be entitled to:
A lump-sum cash payment equal to 2.99 times the sum of his annual base salary and target annual incentive award;
His annual incentive award for the year of termination, based on actual results; and
Continuation of specified welfare benefits at active employee rates for a period of 24 months.
Mr. Visentin’s change in control payments and benefits are subject to his execution of a release of claims against the Company and a two-year non-compete/non-solicitation agreement. Good Reason is defined in the letter agreement. See the Named Executive Officer with Unique Compensation Arrangement section for further information.
Xerox does not provide any of the NEOs with excise tax reimbursement on severance payments.
•One year (two years for Mr. Bandrowczak) of salary continuance and continuation of specified health and welfare benefits at active employee rates;
•Prorated annual incentive award for the year of termination; and
•At the Compensation Committee’s discretion, continued vesting of outstanding equity awards during the one-year (two-year for Mr. Bandrowczak) salary continuance period.
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Level | Ownership Requirement | ||||||||
| CEO | |||||||||
| 5 times base salary | ||||||||
Other NEOs | 3 times base salary | ||||||||
•Under the 2004 Performance Incentive Plan and the Xerox Holdings Corporation Performance Incentive Plan (as amended and restated to date), if the Compensation Committee determines that aan NEO has engaged in activity that is detrimental to the Company, it may cancel any awards granted to that individual. In addition, if such a determination is made before any change in control of Xerox, the Compensation Committee may rescind any payment or delivery of an equity or annual cash incentive
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•A violation of a non-compete agreement with the Company;
•Disclosing confidential information (except for reporting and other communications protected by “whistle blower” provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd Frank));
•Soliciting an employee to terminate employment with the Company;
•Soliciting a customer to reduce its level of business with the Company; and
•Engaging in any other conduct or act that is determined to be injurious, detrimental, or prejudicial to any interest of the Company.
•Our E-LTIP equity award agreements, under the 2004 Performance Incentive Plan and Xerox Holdings Corporation Performance Incentive Plan (as amended and restated to date), include a clawback provision that applies if an accounting restatement is required to correct any material non-compliance with financial reporting requirements as required under Dodd Frank. Under this provision, the Company can recover, for the three prior years, any excess incentive-based compensation (over what would have been paid under the accounting restatement) from executive officers or former executive officers.
•Annual incentive awards to NEOs under the MIP are also subject to the above clawback provisions.
•Under the Xerox Corporation Supplemental Savings Plan, if a participant, including aan NEO, is found to have engaged in detrimental activity, the Plan Administrator may reduce or rescind the matching contribution account balance and not pay such amounts to that individual.
Vice Chairman & CEO and other NEOs, as well as certain former NEOs. As a result, compensation paid in excess of $1 million to each of our NEOs will generally not be deductible.20212022, and be included in the Proxy Statement for the 20222023 Annual Meeting of Shareholders.Cheryl Gordon Krongard,Scott Letier
31.
| Name & Principal Position | Year | Salary ($) (A) | Bonus ($) (B) | Stock Awards ($) (C) | Option Awards ($) (D) | Non-Equity Incentive Plan Compensation ($) (E) | Change in Pension Value and NQDC Earnings ($) (F) | All Other Compensation ($) (G) | Total ($) | ||||||||||||||||||||
| Steven J. Bandrowczak Chief Executive Officer | 2022 | 763,315 | — | 7,100,017 | — | 679,929 | — | 18,006 | 8,561,267 | ||||||||||||||||||||
| 2021 | 525,000 | — | 3,650,020 | — | 340,200 | — | 159 | 4,515,379 | |||||||||||||||||||||
| 2020 | 525,000 | 262,500 | 5,105,099 | — | — | — | 6,899 | 5,899,498 | |||||||||||||||||||||
| John Bruno President and Chief Operating Officer | 2022 | 99,432 | — | 3,000,003 | — | — | — | 938 | 3,100,373 | ||||||||||||||||||||
| Xavier Heiss Executive Vice President, Chief Financial Officer | 2022 | 500,997 | — | 2,500,033 | — | 372,144 | — | 156,133 | 3,529,307 | ||||||||||||||||||||
| 2021 | 499,312 | — | 2,000,014 | — | 323,554 | — | 562,799 | 3,385,679 | |||||||||||||||||||||
| 2020 | 468,619 | 222,148 | 1,610,141 | — | — | 447,575 | 358,526 | 3,107,009 | |||||||||||||||||||||
| Louis J. Pastor Executive Vice President, Chief Corporate Development Officers and Chief Legal Officer | 2022 | 537,500 | — | 1,900,044 | — | 355,825 | — | 95 | 2,793,464 | ||||||||||||||||||||
| 2021 | 500,000 | 1,550,021 | — | 324,000 | — | — | 2,374,021 | ||||||||||||||||||||||
| 2020 | 500,000 | 250,000 | 2,120,090 | — | — | — | 116,057 | 2,986,147 | |||||||||||||||||||||
| Joanne Collins Smee Executive Vice President and President, Americas | 2022 | 551,894 | — | 1,400,028 | — | 365,480 | — | 9,150 | 2,326,552 | ||||||||||||||||||||
| Giovanni (John) Visentin Former Vice Chairman and Chief Executive Officer | 2022 | 590,090 | — | 10,000,047 | — | 595,800 | — | 6,399 | 11,192,336 | ||||||||||||||||||||
| 2021 | 1,200,000 | — | 10,000,023 | — | 1,166,400 | — | 52,454 | 12,418,877 | |||||||||||||||||||||
| 2020 | 1,200,000 | 16,000,092 | — | — | — | 44,268 | 18,144,360 | ||||||||||||||||||||||
1.1348USD per EUR(D)Stock options were not granted in 2020, 2021, or 2022.
1.2295USD per EUR to December 31, 2022 (but if the change in the present value of the benefit is negative then it is not shown). The present value is computed using the FASB ASC Topic 715 assumptions in effect for 2020
1.1197USD per EURthe corresponding fiscal year end and assuming the benefit is paid at the earliest retirement date at which unreduced benefits are payable (age 62). See the Pension Benefits for 2019
Name & Principal Position | Year | Salary | Bonus | Stock | Option | Non-Equity | Change in Earnings | All Other | Total ($) | |||||||||||||||||||||||
Giovanni (John) Visentin Vice Chairman and | 2021 | 1,200,000 | - | 10,000,023 | - | 1,166,400 | - | 52,454 | 12,418,877 | |||||||||||||||||||||||
| 2020 | 1,200,000 | 900,000 | 16,000,092 | - | - | - | 44,268 | 18,144,360 | ||||||||||||||||||||||||
| 2019 | 1,200,000 | - | 10,000,029 | - | 1,760,400 | - | 177,005 | 13,137,434 | ||||||||||||||||||||||||
Steven J. Bandrowczak President and Chief | 2021 | 525,000 | - | 3,650,020 | - | 340,200 | - | 159 | 4,515,379 | |||||||||||||||||||||||
| 2020 | 525,000 | 262,500 | 5,105,099 | - | - | - | 6,899 | 5,899,498 | ||||||||||||||||||||||||
| 2019 | 525,000 | - | 2,500,038 | - | 513,450 | - | 8,139 | 3,546,627 | ||||||||||||||||||||||||
Xavier Heiss Executive Vice President, | 2021 | 499,312 | - | 2,000,014 | - | 323,554 | - | 562,800 | 3,385,680 | |||||||||||||||||||||||
| 2020 | 468,619 | 222,148 | 1,610,141 | - | - | 447,575 | 358,526 | 3,107,009 | ||||||||||||||||||||||||
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Michael D. Feldman Executive Vice President, | 2021 | 575,000 | - | 1,350,027 | - | 372,600 | - | 159 | 2,297,786 | |||||||||||||||||||||||
| 2020 | 575,000 | 287,500 | 2,415,069 | - | - | - | 159 | 3,277,728 | ||||||||||||||||||||||||
| 2019 | 575,000 | - | 2,200,012 | - | 562,350 | - | 8,559 | 3,345,921 | ||||||||||||||||||||||||
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Louis J. Pastor Executive Vice President, | 2021 | 500,000 | - | 1,550,021 | - | 324,000 | - | - | 2,374,021 | |||||||||||||||||||||||
| 2020 | 500,000 | 250,000 | 2,120,090 | - | - | - | 116,057 | 2,986,147 | ||||||||||||||||||||||||
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•For Mr. Heiss in 20212022 — these assumptions include a discount rate of 0.75% for the Retirement Indemnities Plan, social charge rate of 46.5%. The Retirement Indemnities Plan does not pay any benefits to a participant who terminates employment before age 62.
•For Mr. Heiss in 20202021 — these assumptions include a discount rate of 0.35% for the Retirement Indemnities Plan, social charge rate of 46.5%.
|
All Other Compensation Table
| Name | Year | Personal Use of Aircraft ($) (A) | International Assignment Allowances ($) (B) | Relocation Expenses ($) (C) | Tax Related Reimbursements ($) (D) | 401(k), SSP, & DC | Mobility Stipend ($) | Miscellaneous ($) (F) | Total All Other Compensation ($) (G) | |||||||||||||||||||
| Giovanni (John) Visentin |
| 2021 |
|
| 50,333 |
| - | - | - |
| - |
| - |
| 2,121 |
|
| 52,454 |
| |||||||||
| 2020 |
|
| 42,278 |
| - | - | - |
| - |
| - |
| 1,990 |
|
| 44,268 |
| ||||||||||
| 2019 |
|
| 166,466 |
| - | - | - |
| 8,400 |
| - |
| 2,139 |
|
| 177,005 |
| ||||||||||
| Steven J. Bandrowczak |
| 2021 |
|
| - |
| - | - | - |
| - |
| - |
| 159 |
|
| 159 |
| |||||||||
| 2020 |
|
| - |
| - | - | - |
| - |
| - |
| 6,899 |
|
| 6,899 |
| ||||||||||
| 2019 |
|
| - |
| - | - | - |
| 7,980 |
| - |
| 159 |
|
| 8,139 |
| ||||||||||
| Xavier Heiss |
| 2021 |
|
| - |
| 147,156 | 28,307 | 373,226 |
| 7,002 |
| - |
| 7,108 |
|
| 562,799 |
| |||||||||
| 2020 |
|
| - |
| 170,769 | 22,042 | 151,184 |
| 7,587 |
| - |
| 6,944 |
|
| 358,526 |
| ||||||||||
| Michael D. Feldman |
| 2021 |
|
| - |
| - | - | - |
| - |
| - |
| 159 |
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| 159 |
| |||||||||
| 2020 |
|
| - |
| - | - | - |
| - |
| - |
| 159 |
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| 159 |
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| 2019 |
|
| - |
| - | - | - |
| 8,400 |
| - |
| 159 |
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| 8,559 |
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| Louie J. Pastor |
| 2021 |
|
| - |
| - | - | - |
| - |
| - |
| - |
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| - |
| |||||||||
| 2020 |
|
| - |
| - | 48,861 | 42,196 |
| - |
| 25,000 |
| - |
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| 116,057 |
| ||||||||||
| Name | Year | Personal Use of Aircraft ($) (A) | International Assignment Allowances ($) (B) | Relocation Expenses ($) (C) | Tax Related Reimbursements ($) (D) | 401(k), SSP, & DC Employer Contribution ($) (E) | Mobility Stipend ($) | Miscellaneous ($) (F) | Total All Other Compensation ($) (G) | ||||||||||||||||||||
| Steven J. Bandrowczak | 2022 | — | — | — | — | 9,150 | — | 8,856 | 18,006 | ||||||||||||||||||||
| 2021 | — | — | — | — | — | — | 159 | 159 | |||||||||||||||||||||
| 2020 | — | — | — | — | — | — | 6,899 | 6,899 | |||||||||||||||||||||
| John Bruno | 2022 | — | — | — | — | 938 | — | — | 938 | ||||||||||||||||||||
| Xavier Heiss | 2022 | — | 83,598 | — | 58,738 | 6,524 | — | 7,273 | 156,133 | ||||||||||||||||||||
| 2021 | — | 147,156 | 28,307 | 373,226 | 7,002 | — | 7,108 | 562,799 | |||||||||||||||||||||
| 2020 | — | 170,769 | 22,042 | 151,184 | 7,587 | — | 6,944 | 358,526 | |||||||||||||||||||||
| Louis J. Pastor | 2022 | — | — | — | — | — | — | 95 | 95 | ||||||||||||||||||||
| 2021 | — | — | — | — | — | — | — | — | |||||||||||||||||||||
| 2020 | — | — | 48,861 | 42,196 | — | 25,000 | — | 116,057 | |||||||||||||||||||||
| Joanne Collins Smee | 2022 | — | — | — | — | 9,150 | — | — | 9,150 | ||||||||||||||||||||
| Giovanni (John) Visentin | 2022 | 4,814 | — | — | — | — | — | 1,585 | 6,399 | ||||||||||||||||||||
| 2021 | 50,333 | — | — | — | — | — | 2,121 | 52,454 | |||||||||||||||||||||
| 2020 | 42,278 | — | — | — | — | — | 1,990 | 44,268 | |||||||||||||||||||||
•1.0573USD per EUR for 2022
•1.2295USD per EUR for 2020
1.1197USD per EUR(A)For reasons of productivity, security and efficiency, the Company requires the CEO (formerly Mr. Visentin, and currently Mr. Bandrowczak) to use Company chartered aircraft for 2019
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(C)For 2022, there are no relocation costs.
2022
Grant Date (A) | Date of Action (A) | Estimated Future Payout Under Non-Equity Incentive Awards (B) |
Estimated Future Payout |
All Other Stock (#) (D) | Grant Date Fair Value of Stock ($) (E) | |||||||||||||||||
| Name | Award | Thresh. ($) | Target ($) | Max ($) | Thresh. (#) | Target (#) | Max (#) | |||||||||||||||
| Giovanni (John) Visentin | 2021 MIP | 299,700 | 1,800,000 | 3,600,000 | ||||||||||||||||||
2021 E-LTIP | 1/11/2021 | 12/9/2020 | 30,864 | 246,914 | 493,828 | 6,000,010 | ||||||||||||||||
2021 E-LTIP | 1/11/2021 | 12/9/2020 | 170,649 | 4,000,013 | ||||||||||||||||||
| Steven J. Bandrowczak | 2021 MIP | 87,413 | 525,000 | 1,050,000 | ||||||||||||||||||
2021 E-LTIP | 1/11/2021 | 12/9/2020 | 11,266 | 90,124 | 180,248 | 2,190,013 | ||||||||||||||||
2021 E-LTIP | 1/11/2021 | 12/9/2020 | 62,287 | 1,460,007 | ||||||||||||||||||
| Xavier Heiss | 2021 MIP | 83,135 | 499,312 | 998,624 | ||||||||||||||||||
2021 E-LTIP | 1/11/2021 | 12/9/2020 | 6,173 | 49,383 | 98,766 | 1,200,007 | ||||||||||||||||
2021 E-LTIP | 1/11/2021 | 12/9/2020 | 34,130 | 800,007 | ||||||||||||||||||
| Michael D. Feldman | 2021 MIP | 95,738 | 575,000 | 1,150,000 | ||||||||||||||||||
2021 E-LTIP | 1/11/2021 | 12/9/2020 | 4,167 | 33,334 | 66,668 | 810,016 | ||||||||||||||||
2021 E-LTIP | 1/11/2021 | 12/9/2020 | 23,038 | 540,011 | ||||||||||||||||||
| Louis J. Pastor | 2021 MIP | 83,250 | 500,000 | 1,000,000 | ||||||||||||||||||
2021 E-LTIP | 1/11/2021 | 12/9/2020 | 4,784 | 38,272 | 76,544 | 930,010 | ||||||||||||||||
2021 E-LTIP | 1/11/2021 | 12/9/2020 | 26,451 | 620,011 | ||||||||||||||||||
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| Estimated Future Payout Under Non-Equity Incentive Awards (B) | Estimated Future Payout Under Equity Incentive Awards (C) | All Other Stock Awards: Number of Shares or Stock Units (#) (D) | Grant Date Fair Value of Stock Awards ($) (E) | ||||||||||||||||||||||||||||||||
| Name | Award | Grant Date (A) | Date of Action (A) | Thresh. ($) | Target ($) | Max ($) | Thresh. (#) | Target (#) | Max (#) | ||||||||||||||||||||||||||
| Steven J. Bandrowczak | 2022 MIP | 513,542 | 1,027,083 | 2,054,166 | |||||||||||||||||||||||||||||||
| 2022 E-LTIP (PSU) | 1/12/2022 | 1/12/2022 | 46,875 | 93,750 | 187,500 | 2,460,000 | |||||||||||||||||||||||||||||
| 2022 E-LTIP (RSU) | 1/12/2022 | 1/12/2022 | 69,433 | 1,640,007 | |||||||||||||||||||||||||||||||
| 2022 E-LTIP (RSU) | 8/2/2022 | 8/2/2022 | 176,679 | 3,000,009 | |||||||||||||||||||||||||||||||
| John Bruno | 2022 MIP | ||||||||||||||||||||||||||||||||||
| 2022 E-LTIP (RSU) | 11/14/2022 | 10/27/2022 | 194,679 | 3,000,003 | |||||||||||||||||||||||||||||||
| Xavier Heiss | 2022 MIP | 255,867 | 511,733 | 1,023,466 | |||||||||||||||||||||||||||||||
| 2022 E-LTIP (PSU) | 1/12/2022 | 1/12/2022 | 28,583 | 57,165 | 114,330 | 1,500,010 | |||||||||||||||||||||||||||||
| 2022 E-LTIP (RSU) | 1/12/2022 | 1/12/2022 | 42,338 | 1,000,024 | |||||||||||||||||||||||||||||||
| Louis J. Pastor | 2022 MIP | 275,000 | 550,000 | 1,100,000 | |||||||||||||||||||||||||||||||
| 2022 E-LTIP (PSU) | 1/12/2022 | 1/12/2022 | 21,723 | 43,446 | 86,892 | 1,140,023 | |||||||||||||||||||||||||||||
| 2022 E-LTIP (RSU) | 1/12/2022 | 1/12/2022 | 32,177 | 760,021 | |||||||||||||||||||||||||||||||
| Joanne Collins Smee | 2022 MIP | 267,042 | 552,084 | 1,104,168 | |||||||||||||||||||||||||||||||
| 2022 E-LTIP (PSU) | 1/12/2022 | 1/12/2022 | 16,007 | 32,013 | 64,026 | 840,021 | |||||||||||||||||||||||||||||
| 2022 E-LTIP (RSU) | 1/12/2022 | 1/12/2022 | 23,709 | 560,007 | |||||||||||||||||||||||||||||||
| Giovanni (John) Visentin | 2022 MIP | 900,000 | 1,800,000 | 3,600,000 | |||||||||||||||||||||||||||||||
| 2022 E-LTIP (PSU) | 1/12/2022 | 1/12/2022 | 122,400 | 244,799 | 489,598 | 6,000,023 | |||||||||||||||||||||||||||||
| 2022 E-LTIP (RSU) | 1/12/2022 | 1/12/2022 | 169,349 | 4,000,023 | |||||||||||||||||||||||||||||||
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(C)The threshold, target, and maximum payout opportunities for the 2022 E-LTIP PSU awards, as well as the design and methodology for determining the 2022 E-LTIP PSU awards, were approved by the
E-LTIP Awards
in the CD&A for additional information. The target column reflects the number of PSUs that could be earned if target performance is achieved on all performance measures. The maximum column reflects the greatest number of PSUs that could be earned if maximum or higher performance is achieved on all three performance measures. The number of PSUs earned is interpolated if the Company’s performance is between threshold and target or between target and maximum, as determined by the Compensation Committee.
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(D)This column includes the E-LTIP RSU awards granted to our NEOs in 2022. 2022 E-LTIP RSUs will vest 33% on the first anniversary of the grant date, 33% on the second anniversary of the grant date, and 34% on the third anniversary of the grant date. The number of RSUs granted was determined by dividing the approved award value by the closing market price on the grant date (or the last trading day before the grant date if the stock market was closed on the grant date) and rounding up to the nearest whole share.
| Name | Option Awards | Stock Awards | ||||||||||||||||||||||||||||||||||||||
Number of Securities Underlying Unexercised Options Exercisable (#) (A) | Number of Securities Underlying Unexercised Options Unexercisable (#) (B) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) (C) | Market Value of Shares or Units of Stock That Have Not Vested ($) (C) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) (D) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (D) | |||||||||||||||||||||||||||||||||
Giovanni (John) Visentin |
| 269,314 |
| - |
| 28.51 |
| 5/15/2028 |
| 472,564 |
| 10,698,849 |
| 712,468 |
| 16,130,276 | ||||||||||||||||||||||||
Steven J. Bandrowczak |
| 41,990 |
| - |
| 24.00 |
| 7/1/2028 |
| 150,229 |
| 3,401,185 |
| 219,468 |
| 4,968,756 | ||||||||||||||||||||||||
Xavier Heiss |
| 12,349 |
| - |
| 27.98 |
| 4/5/2028 |
| 59,944 |
| 1,357,132 |
| 85,625 |
| 1,938,550 | ||||||||||||||||||||||||
Michael D. Feldman |
| 68,604 |
| - |
| 27.98 |
| 4/5/2028 |
| 76,998 |
| 1,743,235 |
| 122,803 |
| 2,780,260 | ||||||||||||||||||||||||
Louis J. Pastor |
| 14,177 |
| - |
| 27.08 |
| 10/1/2028 |
| 62,509 |
| 1,415,204 |
| 90,925 |
| 2,058,542 | ||||||||||||||||||||||||
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20212022.
| Option Awards | Stock Awards | |||||||||||||||||||||||||
| Name | Number of Securities Underlying Unexercised Options Exercisable (#) (A) | Number of Securities Underlying Unexercised Options Unexercisable (#) (B) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) (C) | Market Value of Shares or Units of Stock That Have Not Vested ($) (C) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) (D) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (D) | ||||||||||||||||||
| Steven J. Bandrowczak | 41,990 | — | 24.00 | 7/1/2028 | 305,933 | 4,466,622 | 234,929 | 3,429,963 | ||||||||||||||||||
| John Bruno | — | — | — | — | 194,679 | 2,842,313 | — | — | ||||||||||||||||||
| Xavier Heiss | 12,349 | — | 27.98 | 4/5/2028 | 71,389 | 1,042,279 | 124,000 | 1,810,400 | ||||||||||||||||||
| Louis J. Pastor | 14,177 | — | 27.08 | 10/1/2028 | 57,459 | 838,901 | 103,055 | 1,504,603 | ||||||||||||||||||
| Joanne Collins Smee | 11,058 | — | 27.08 | 10/1/2028 | 43,950 | 641,670 | 80,047 | 1,168,686 | ||||||||||||||||||
| Giovanni (John) Visentin | 269,314 | — | 28.51 | 6/28/2023 | — | — | — | — | ||||||||||||||||||
Remaining unvested RSUs granted
2019 RSUs:
Remaining unvested RSUs granted onapplicable performance metrics. The performance period is January 14, 2019 as part of the 2019 E-LTIP, as follows: Mr. Visentin — 89,687; Mr. Bandrowczak — 22,422; Mr. Heiss — 5,382; Feldman — 19,731 and Pastor — 8,969. The vesting schedule for the January 14, 2019 grant of RSUs is 25% on the first anniversary, 25% on the second anniversary and 50% on the third anniversary of the grant date.
|
2021 PSU Awards:
These PSU awards resulted in zero payout because none of the three performance metrics was achieved at the threshold level. See
Performance Results and Payout: 2020 E-LTIP in the CD&A.2019
PSU awardsaward granted on February 3, 2020 as part of the 2019 E-LTIPMs. Collins Smee promotion on January 14, 2019 to Mr. VisentinFebruary 3, 2020, — 313,153; Mr. Bandrowczak — 78,289; Mr. Heiss — 18,790; Mr. Feldman — 68,894 and Mr. Pastor — 31,316,5,678, which vestvests three years from the grant date, with the number of shares to be earned, if any, based on achievement of the applicable performance metrics. The performance period is January 1, 20192020 through December 31, 2021. These PSU awards resulted in zero payout because none of the three performance metrics was achieved at the threshold level. See Performance Results and Payout: 2019 E-LTIP in the CD&A.
2022.
2022
| Name | Stock Awards | |||
Number of Shares Acquired on Vesting (#) (A) | Value Realized on Vesting ($) (B) | |||
Giovanni (John) Visentin | 430,467 | 9,921,462 | ||
Steven J. Bandrowczak | 94,096 | 2,118,715 | ||
Xavier Heiss | 27,365 | 631,415 | ||
Michael D. Feldman | 94,730 | 2,252,520 | ||
Louis J. Pastor | 35,983 | 773,069 | ||
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|
| Stock Awards | ||||||||
| Name | Number of Shares Acquired on Vesting (#) (A) | Value Realized on Vesting ($) (B) | ||||||
| Steven J. Bandrowczak | 90,408 | 1,844,738 | ||||||
| John Bruno | — | — | ||||||
| Xavier Heiss | 30,893 | 642,249 | ||||||
| Louis J. Pastor | 37,227 | 760,069 | ||||||
| Joanne Collins Smee | 30,318 | 614,621 | ||||||
| Giovanni (John) Visentin | 1,286,027 | 21,731,909 | ||||||
| Name | Plan Name | Number of Years of Credited Service (#) | Present Value of Accumulated Benefit ($) | Payments During Last Fiscal Year ($) | ||||||||||||||||
Giovanni (John) Visentin | - | - | - | - | ||||||||||||||||
Steven J. Bandrowczak | - | - | - | - | ||||||||||||||||
Xavier Heiss (A) | Retirement | 33 | 459,942 | - | ||||||||||||||||
Michael D. Feldman | - | - | - | - | ||||||||||||||||
Louis J. Pastor | - | - | - | - | ||||||||||||||||
|
Name Plan Name Number of
Years of
Credited
Service
(#)Present Value of
Accumulated Benefit
($)Payments During
Last Fiscal Year
($)Steven J. Bandrowczak — — — — John Bruno — — — — Xavier Heiss (A) Retirement Indemnities Plan 34 536,433 — Louis J. Pastor — — — — Joanne Collins Smee — — — — Giovanni (John) Visentin — — — —
| Name | Plan Name | Executive Contributions in Last FY ($) | Registrant Contributions in Last FY ($) | Aggregate Earnings in Last FY ($)(A) | Aggregate Withdrawals/ Distributions | Aggregate Balance at Last FYE ($) | ||||||||||||||||||||||||
Giovanni (John) Visentin | SSP | - | - | 348 | - | 31,112 | ||||||||||||||||||||||||
Steven J. Bandrowczak | SSP | - | - | - | - | - | ||||||||||||||||||||||||
Xavier Heiss | DC France(B) | 2,334 | 7,002 | 19,659 | - | 270,602 | ||||||||||||||||||||||||
Michael D. Feldman | SSP | - | - | 1,718 | - | 153,655 | ||||||||||||||||||||||||
Louis J. Pastor | SSP | - | - | - | - | - | ||||||||||||||||||||||||
|
|
| Name | Plan Name | Executive Contributions in Last FY ($) | Registrant Contributions in Last FY ($) | Aggregate Earnings in Last FY ($)(A) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at Last FYE ($) | ||||||||||||||
| Steven J. Bandrowczak | SSP | — | — | — | — | — | ||||||||||||||
| John Bruno | SSP | — | — | — | — | — | ||||||||||||||
| Xavier Heiss | DC France(B) | 2,175 | 6,524 | — | — | 233,126 | ||||||||||||||
| Louis J. Pastor | SSP | — | — | — | — | — | ||||||||||||||
| Joanne Collins Smee | SSP | — | — | — | — | — | ||||||||||||||
| Giovanni (John) Visentin | SSP | — | — | 282 | — | 31,394 | ||||||||||||||
Section 229.402.
| Name | Lump Payments ($) | Non- Equity Incentive Awards ($) | Equity Incentive Awards ($) | Healthcare/ Life Insurance / Other Benefits ($) | Total ($) | |||||||||||||||
Giovanni (John) Visentin | ||||||||||||||||||||
• Voluntary Termination for Good Reason (A) |
| 6,000,000 |
|
| 1,166,400 |
|
| 19,307,234 |
|
| 25,990 |
|
| 26,499,624 |
| |||||
• Involuntary Termination not for Cause (B) |
| 6,000,000 |
|
| 1,166,400 |
|
| 26,620,180 |
|
| 25,990 |
|
| 33,812,570 |
| |||||
• Involuntary or Good Reason Termination after Change in Control (C) |
| 8,970,000 |
|
| 1,166,400 |
|
| 26,829,124 |
|
| 25,990 |
|
| 36,991,515 |
| |||||
• Death (D) |
| - |
|
| 1,166,400 |
|
| 26,829,124 |
|
| - |
|
| 27,995,524 |
| |||||
Steven J. Bandrowczak | ||||||||||||||||||||
• Voluntary Termination/Retirement (A) |
| - |
|
| - |
|
| - |
|
| - |
|
| - |
| |||||
• Involuntary Termination not for Cause (B) |
| 525,000 |
|
| 340,200 |
|
| 7,320,350 |
|
| 7,941 |
|
| 8,193,491 |
| |||||
• Involuntary or Good Reason Termination after Change in Control (C) |
| 2,100,000 |
|
| - |
|
| 8,369,940 |
|
| 15,882 |
|
| 10,485,822 |
| |||||
• Death (D) |
| - |
|
| 340,200 |
|
| 8,369,940 |
|
| - |
|
| 8,710,140 |
| |||||
Xavier Heiss | ||||||||||||||||||||
• Voluntary Termination/Retirement (A) |
| - |
|
| - |
|
| 1,787,224 |
|
| - |
|
| 1,787,224 |
| |||||
• Involuntary Termination not for Cause (B) |
| 675,578 |
|
| 323,554 |
|
| 2,877,816 |
|
| 152,734 |
|
| 4,029,682 |
| |||||
• Involuntary or Good Reason Termination after Change in Control (C) |
| 1,665,653 |
|
| 323,554 |
|
| 3,295,682 |
|
| 189,904 |
|
| 5,482,834 |
| |||||
• Death (D) |
| - |
|
| 323,554 |
|
| 3,295,682 |
|
| 3,361,042 |
|
| 6,980,278 |
| |||||
Michael D. Feldman | ||||||||||||||||||||
• Voluntary Termination/Retirement (A) |
| - |
|
| - |
|
| - |
|
| - |
|
| - |
| |||||
• Involuntary Termination not for Cause (B) |
| 575,000 |
|
| 372,600 |
|
| 4,133,838 |
|
| 8,639 |
|
| 5,090,076 |
| |||||
• Involuntary or Good Reason Termination after Change in Control (C) |
| 2,300,000 |
|
| - |
|
| 4,523,495 |
|
| 17,277 |
|
| 6,840,772 |
| |||||
• Death (D) |
| - |
|
| 372,600 |
|
| 4,523,495 |
|
| - |
|
| 4,896,095 |
| |||||
Louis J. Pastor | ||||||||||||||||||||
• Voluntary Termination/Retirement (A) |
| - |
|
| - |
|
| - |
|
| - |
|
| - |
| |||||
• Involuntary Termination not for Cause (B) |
| 500,000 |
|
| 324,000 |
|
| 3,028,304 |
|
| 8,250 |
|
| 3,860,553 |
| |||||
• Involuntary or Good Reason Termination after Change in Control (C) |
| 2,000,000 |
|
| - |
|
| 3,473,746 |
|
| 16,499 |
|
| 5,490,245 |
| |||||
• Death (D) |
| - |
|
| 324,000 |
|
| 3,473,746 |
|
| - |
|
| 3,797,746 |
| |||||
Name Lump
Payments
($)Non-
Equity
Incentive
Awards
($)Equity
Incentive
Awards
($)Healthcare/
Life
Insurance
/ Other
Benefits
($)Total
Termination
Benefit
($)Steven J. Bandrowczak Voluntary Termination/Retirement (A) — — — — — Involuntary Termination not for Cause (B) 2,000,000 976,500 7,654,094 20,512 10,651,105 Involuntary or Good Reason Termination after Change in Control (C) 5,000,000 — 7,896,585 20,512 12,917,097 Death (D) — 976,500 7,896,585 — 8,873,085 John Bruno Voluntary Termination/Retirement (A) — — — — — Involuntary Termination not for Cause (B) 750,000 — 2,190,949 2,172 2,943,121 Involuntary or Good Reason Termination after Change in Control (C) 3,375,000 — 2,842,313 4,344 6,221,657 Death (D) — — 2,842,313 — 2,842,313 Xavier Heiss Voluntary Termination/Retirement (A) — — 1,658,794 — 1,658,794 Involuntary Termination not for Cause (B) 906,735 374,325 2,562,475 149,747 3,993,282 Involuntary or Good Reason Termination after Change in Control (C) 1,925,675 374,325 2,852,679 188,844 5,341,524 Death (D) — 374,325 2,852,679 1,437,500 4,664,504 Louis J. Pastor Voluntary Termination/Retirement (A) — — — — — Involuntary Termination not for Cause (B) 550,000 358,050 2,031,152 5,459 2,944,661 Involuntary or Good Reason Termination after Change in Control (C) 2,200,000 — 2,343,504 10,918 4,554,422 Death (D) — 358,050 2,343,504 — 2,701,554 Joanne Collins Smee Voluntary Termination/Retirement (A) — — — — — Involuntary Termination not for Cause (B) 575,000 374,325 1,579,486 9,800 2,538,611 Involuntary or Good Reason Termination after Change in Control (C) 2,300,000 — 1,810,356 19,599 4,129,955 Death (D) — 374,325 1,810,356 — 2,184,681
________ (A)As of December 31, 2022, Messrs. Bandrowczak, Bruno, Pastor, and Ms. Collins Smee were not retirement eligible, and would not receive any |
The payments shown for Mr. Visentin reflect ain the event of voluntary termination for Good Reason under his agreement (see the Named Executive Officer With Unique Compensation Arrangement section of the CD&A); if Mr. Visentin voluntarily terminated his employment for Good Reason, he would receive:
Cash payments equal to twice the sum of his base salary and target annual incentive award, which would be paid over 24 months (the Severance Period) but are reported above as if paid in a lump sum;
|
Full vesting of all outstanding equity awards that otherwise would have become vested during the Severance Period; and
Continuation of welfare benefits at active employee rates during the Severance Period.
These payments and benefits would be conditioned upon Mr. Visentin’s execution of a release of claims against the Company and a two-year non-competition/non-solicitation agreement.
Mr. Heiss is retirement eligible under the terms of our equity award agreements and, in the event of his retirement on December 31, 2021,2022, would receive prorated vesting of outstanding equity awards (based on the number of full months of service as an employee during the vesting period commencing on the grant
|
|
•Under the terms of the Officer Severance Program, the NEO’s annual incentive (Non-Equity Incentive Award) for 2022, based on actual achievement against performance goals (as described in the 2022 Compensation Actions section of the CD&A);
|
•Continuation of specified welfare benefits at active employee rates during the one-year salary continuance period.
|
•Annual incentive (Non-Equity Incentive Award) for 2022, based on actual achievement against performance goals (as described in the 2022 Compensation Actions section of the CD&A);
•Continuation of specified welfare benefits for up to a one-year period following the end of the 3-month notice period.
|
(C)Change in control (CIC) severance agreements for Messrs. Bandrowczak, Bruno, Heiss, Pastor, and Ms. Collins Smee provide the following severance benefits in the event of an involuntary termination (other than for cause, disability, or death) or a voluntary termination for Good Reason within two years following a CIC (in either case, a “qualifying termination”):
•Continuation of specified welfare benefits at active employee rates for 24 months;
•Payment of reasonable legal fees and expenses incurred if the NEO, in good faith, is involved in a dispute while seeking to enforce the benefits and rights provided by the CIC severance agreement.
•In addition, pursuant to the terms of the 2004 Performance Incentive Plan and Xerox Holdings Corporation Performance Incentive Plan, in the event of a change in control as defined therein, these NEOs would be entitled to full vesting of outstanding equity awards.
Pursuant to Mr. Visentin’s agreement (see the Named Executive Officer With Unique Compensation Arrangement section of the CD&A), in the event of a CIC (as defined therein), any outstanding equity awards granted before May 15, 2020 would become vested. In the event of Mr. Visentin’s voluntary
termination for Good Reason or involuntary termination without Cause following a CIC, he would also be entitled to:
Lump-sum cash payment equal to 2.99 times the sum of his annual base salary and annual incentive award target;
|
Full vesting of all outstanding equity awards;
Continuation of welfare benefits at active employee rates for a period of 24 months; and
Payment of reasonable legal fees and expenses incurred if Mr. Visentin, in good faith, is involved in a dispute while seeking to enforce the benefits and rights provided under his agreement.
Mr. Visentin’s entitlement to any of the CIC payments and benefits described above is subject to his execution of a release of claims against the Company and a two-year non-compete/non-solicitation agreement.
For all of the NEOs, if excise tax under Code Sections 280G and 4999 would be payable, the Company will reduce the NEO’s CIC payment to a level that will not trigger such excise tax, if it is determined that doing so will result in a greater net after-tax amount for the NEO.
|
•Any person beneficially acquires 20 percent20% or more of the combined voting power of our outstanding securities.
•A majority of our directors are replaced under specific circumstances.
•There is a merger or consolidation involving the Company unless (i) the directors of the Company who were members of the boardBoard immediately before the merger/consolidation continue to
•All or substantially all of the Company’s assets are sold, or the Company’s shareholders approve a plan of complete liquidation or dissolution.
•The material diminution of authority, duties, or responsibilities, including being an executive officer of the Company before a change in control and ceasing to be an executive officer of the surviving company. However, change in control benefits will be triggered by this provision only if the executive officer has not voluntarily terminated his employment and the “material diminution” has not been remedied, in either case, before the second anniversary of a change in control.
•A material reduction in annual base salary or annual target short-term incentive, except to the extent such reduction is consistent with an across-the-board reduction for employees.
•A material change in the geographic location where the executive is required to be based.
•Failure by the Company to continue any material compensation or benefit plan, vacation policy, or any material perquisites unless an alternative plan is provided, or failure to continue the executive’s participation in these plans.
•Failure of the Company to obtain a satisfactory agreement from any successor to assume and agree to perform in a manner consistent with the CIC severance agreement.
The definition of Good Reason under Mr. Visentin’s agreement is discussed in the Named Executive Officer with Unique Compensation Arrangement section of the CD&A.
| Plan Category | Number of Securities to be Issued upon Exercise of Rights, RSUs, PSUs, and DSUs (#) (A)1 3 | Weighted-Average Exercise Price of Outstanding Options and Rights ($) (B) | Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (Excluding Securities Reflected in Column A) (#) (C)2 | ||||||||||||
| Equity Compensation Plans Approved by Shareholders3 | 6,593,867 | $27.77 | 7,971,591 | ||||||||||||
| Equity Compensation Plans Not Approved by Shareholders | - | - | - | ||||||||||||
Total | 6,593,867 | $27.77 | 7,971,591 | ||||||||||||
|
|
|
Plan Category Weighted-Average
Exercise Price
of Outstanding
Options and Rights
($) (B)5,446,978 $27.72 6,464,461 Equity Compensation Plans Not Approved by Shareholders — — — Total 5,446,978 $27.72 6,464,461
Due to
2022.
| Value of Initial Fixed $100 Investment Based on: | ||||||||||||||||||||||||||||||||
Year(1) | Summary Compensation Table Total for Mr. Bandrowczak PEO(2) | Summary Compensation Table Total for Mr. Visentin PEO(2) | Compensation Actually Paid to Mr. Bandrowczak PEO (3) | Compensation Actually Paid Mr. Visentin PEO (3) | Average Summary Compensation Table Total for Non-PEO NEOs(2) | Average Compensation Actually Paid to Other NEOs(3) | Total Shareholder Return(4) | Peer Group Total Shareholder Return(5) | GAAP Net Income ($mil.) | Absolute Revenue ($mil.) (6) | ||||||||||||||||||||||
| 2022 | $8,561,267 | $11,192,336 | $4,746,408 | $5,216,828 | $2,937,424 | $1,781,553 | $46.50 | $139.00 | $(322) | $7,469 | ||||||||||||||||||||||
| 2021 | — | $12,418,877 | — | $5,930,335 | $3,143,217 | $1,917,400 | $67.70 | $193.58 | $(455) | $7,038 | ||||||||||||||||||||||
| 2020 | — | $18,144,360 | — | $(1,775,843) | $3,499,776 | $(2,071,276) | $66.39 | $143.89 | $192 | $7,022 | ||||||||||||||||||||||
| 2022 | 2021 | 2020 | |||||||||||||||||||||
| Bandrowczak PEO | Visentin PEO | Average Non-PEO NEOs | Visentin PEO | Average Non-PEO NEOs | Visentin PEO | Average Non-PEO NEOs | |||||||||||||||||
| Summary Compensation Table Total | $8,561,267 | $11,192,336 | $2,937,424 | $12,418,877 | $3,143,217 | $18,144,360 | $3,499,776 | ||||||||||||||||
| Minus Change in Pension Value Reported in SCT for the Covered Year | — | — | — | — | — | — | $74,596 | ||||||||||||||||
| Plus Pension Value Service Cost for the Covered Year | — | — | — | — | — | — | — | ||||||||||||||||
| Minus Stock Award Value & Option Award Value Reported in SCT for the Covered Year | $7,100,017 | $10,000,047 | $2,200,027 | $10,000,023 | $2,137,521 | $16,000,092 | $2,250,079 | ||||||||||||||||
| Plus Year End Fair Value of Equity Awards Granted During the Covered Year that Remain Outstanding and Unvested as of Last Day of the Covered Year | $4,792,045 | — | $1,510,502 | $6,706,965 | $1,433,632 | $9,872,235 | $1,141,356 | ||||||||||||||||
| Plus Year over Year Change in Fair Value as of the Last Day of the Covered Year of Outstanding and Unvested Equity Awards Granted in Prior Years | ($1,333,578) | ($2,532,613) | ($421,610) | ($3,286,339) | ($533,269) | ($12,680,978) | ($1,338,652) | ||||||||||||||||
| Plus Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Covered Year | — | 7,350,594 | — | — | — | — | — | ||||||||||||||||
| Plus Year over Year Change in Fair Value as of the Vesting Date of Equity Awards Granted in Prior Years that Vested During the Covered Year | ($173,309) | ($793,442) | ($44,736) | $90,855 | $11,341 | ($1,111,368) | ($1,570,788) | ||||||||||||||||
| Minus Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Covered Year | — | — | — | — | — | — | $1,478,293 | ||||||||||||||||
| Plus Value of Dividends or other Earnings Paid on Stock or Option Awards Not Otherwise Reflected in Fair Value or Total Compensation for the Covered Year | — | — | — | — | — | — | — | ||||||||||||||||
| Compensation Actually Paid | $4,746,408 | $5,216,828 | $1,781,553 | $5,930,335 | $1,917,400 | $(1,775,843) | $(2,071,276) | ||||||||||||||||
Absolute Revenue (CSM) (1) | ||
Free Cash Flow(1) | ||
Absolute Share Price(1) | ||
restructuring actions, exiting from a business or other strategic business changes. Additional costs for our transformation programs are primarily related to the implementation of strategic actions and initiatives, and include third-party professional service costs as well as one-time incremental costs. All of these costs can vary significantly in terms of amount and frequency based on the nature of the actions as well as the changing needs of the business. Accordingly, due to that significant variability, we will exclude these charges since we do not believe they provide meaningful insight into our current or past operating performance, nor do we believe they are reflective of our expected future operating expenses as such charges are expected to yield future benefits and savings with respect to our operational performance.
Transaction and related
Non-service retirement-related costs:
current period activity in local currency using the comparable prior year period’s currency translation rate and is calculated for all countries where the functional currency is the local country currency. We do not hedge the translation effect of revenues or expenses denominated in currencies where the local currency is the functional currency. Management believes the constant currency measure provides investors an additional perspective on revenue trends. Currency impact can be determined as the difference between actual growth rates and constant currency growth rates.
2021
2021 MIP Performance Measurespreviously approved by the Compensation Committee were as follows: Absolute Revenue (unadjusted for currency). Adjusted Operating Margin, PERFORMANCE MEASURES
| (in millions) | Year Ended December 31, 2022 | ||||
Reported(1) | $159 | ||||
| Less: capital expenditures | 57 | ||||
| Free Cash Flow | $102 | ||||
| Add: one-time contract termination charge - product supply | $41 | ||||
| Free Cash Flow - Adjusted | $143 | ||||
Absolute Revenue:
GAAP revenue from continuing operations (unadjusted for currency) as reported in the Company’s 20212022 Annual Report on Form 10-K.
| (in millions) | Year Ended December 31, 2022 | ||||
Reported(1) | $7,107 | ||||
| Adjustments: | |||||
| Currency impact | 265 | ||||
Russia(2) | 97 | ||||
| Adjusted | $7,469 | ||||
|
| Year Ended December 31, 2021 | ||||||||||||||
(in millions) | (Loss) | Revenue | Margin | ||||||||||||
Reported 1 |
| $(475 | ) |
| $7,038 |
| (6.7 | )% | |||||||
Adjustments: |
|
|
|
|
|
|
|
|
| ||||||
Goodwill impairment |
| 781 |
|
|
|
|
|
| |||||||
Restructuring and related costs, net |
| 38 |
|
|
|
|
|
| |||||||
Amortization of intangible assets |
| 55 |
|
|
|
|
|
| |||||||
Other expenses, net 2 |
| (24 | ) |
|
|
|
|
|
| ||||||
Adjusted |
| $375 |
| $7,038 |
| 5.3 | % | ||||||||
|
|
Free Cash Flow reconciliation:
| ||
|
| |
|
| |
|
| |
|
| |
|
reconciliation
| Year Ended December 31, 2022 | |||||||||||
| (in millions) | (Loss) Profit | Revenue | Margin | ||||||||
Reported(1) | ($328) | $7,107 | (4.6) | % | |||||||
| Adjustments: | |||||||||||
| Goodwill impairment | 412 | ||||||||||
| Restructuring and related costs, net | 65 | ||||||||||
| Accelerated share vesting | 21 | ||||||||||
| Amortization of intangible assets | 42 | ||||||||||
Other expenses, net(2) | 63 | ||||||||||
| Currency impact - Gross Profit/Revenue | 67 | 265 | |||||||||
Russia(3) | — | 97 | |||||||||
| Adjusted | $342 | $7,469 | 4.6 | % | |||||||
2019 E-LTIP Performance Measures
2019 E-LTIP Performance Measures previously approved by the Compensation Committee were as follows: Absolute Revenue, Free Cash Flow and Absolute Share Price. Three-year cumulative results for the 2019 E-LTIP performance measures are presented in the following tables:
Absolute Revenue
|
| Year Ended December 31, | |||||||||||
(in millions) | 2021 | 2020 | 2019 | |||||||||
Reported 1 |
| $7,038 |
|
| $7,022 |
|
| $9,066 |
| |||
Adjustments: |
|
|
|
|
|
|
|
|
| |||
Impacts of a divestiture with revenue equal to or greater than $100 million 2 |
|
|
|
|
|
|
|
|
| |||
OEM License Revenue |
| - |
|
| - |
|
| (77 | ) | |||
XIP Operations |
| - |
|
| - |
|
| 95 |
| |||
Adjusted |
| $7,038 |
|
| $7,022 |
|
| $9,084 |
| |||
|
|
Free Cash Flow
|
| Year Ended December 31, | |||||||||||
| (in millions) | 2021 | 2020 | 2019 | |||||||||
Reported 1 |
| $561 |
|
| $474 |
|
| $1,179 |
| |||
Adjustments: |
|
|
|
|
|
|
|
|
| |||
Transaction and related costs, net |
| - |
|
| 23 |
|
| (2 | ) | |||
Divestitures 2 |
| - |
|
| - |
|
| 35 |
| |||
Restructuring payments in excess of or less than current reserve reported in prior year’s Annual Report |
| (18 | ) |
| 37 |
|
| 65 |
| |||
Pension contributions in excess of or less than planned amounts |
| 1 |
|
| 5 |
|
| 7 |
| |||
Adjusted |
| $544 |
|
| $539 |
|
| $1,284 |
| |||
|
|
2018 E-LTIP Performance Measures
2018 E-LTIP Performance Measures previously approved by the Compensation Committee were as follows: CAGR Revenue Growth at constant currency, Free Cash Flow and Relative Total Shareholder Return. A description of the 2018 E-LTIP metrics and results for the one-year performance period under the 2018 E-LTIP is presented below:
Compound Annual Growth Rate (CAGR) Revenue growth at constant currency
Revenue adjusted to exclude the impact of changes in the translation of foreign currencies into U.S. dollars as reported in the Company’s Annual Reports on Form 10-K, excluding the impact of restatements.
Free Cash Flow
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Relative Total Shareholder Return
Total Shareholder Return (TSR) is stock price appreciation plus dividends paid over the performance period. Relative TSR will be determined by ranking Xerox and Peer Companies from highest to lowest according to their respective TSRs. Payout for this portion of the Performance Share Units will be determined based on Xerox’s percentile relative to the Peer Group performance. Xerox’s TSR for the April 2018 award was based on the measurement period of April 6, 2018 to April 6, 2019. For additional information on the 2018 E-LTIP performance measures and definitions, refer to Exhibit 10(e)(31) of the Annual Report on Form 10-K for the fiscal year ended December 31, 2017, filed with the SEC on February 23, 2018.
| Year Ended December 31, | |||||||||||
| (in millions) | 2022 | 2021 | 2020 | ||||||||
Reported(1) | $102 | $561 | $474 | ||||||||
| Adjustments: | |||||||||||
| Transaction and related costs, net | — | — | 23 | ||||||||
| Restructuring payments in excess of or less than the current reserve reported in prior year's Annual Report | 17 | (18) | 37 | ||||||||
| Pension contributions in excess of or less than planned amounts | (7) | 4 | 8 | ||||||||
Other expenses, net (2) | 25 | — | — | ||||||||
| Adjusted | $137 | $547 | $542 | ||||||||
|
| 2021 | 2020 | ||||||||
Audit Fees |
| $12 |
| $11 | ||||||
Audit Related Fees |
| 1 |
| 2 | ||||||
Tax Fees |
| 2 |
| 3 | ||||||
All Other Fees |
| - |
| - | ||||||
Total Fees |
| $15 |
| $16 | ||||||
as follows:
| (in millions) | 2022 | 2021 | ||||||
| Audit Fees | $12 | $12 | ||||||
| Audit Related Fees | 1 | 1 | ||||||
| Tax Fees | 2 | 2 | ||||||
| Total Fees | $15 | $15 | ||||||
•Reviewed and discussed the audited consolidated financial statements of the Company for the year ended December 31, 2021,2022, including the specific disclosure under “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” with the management of the Company and PwC including the Company’s key accounting policies and use of estimates;
•Discussed with PwC the matters required to be communicated in PCAOB Auditing Standards Nos. 1301 (Communication with Audit Committees) and 2410 (Related Parties); and
•Received the written disclosures and the letters from PwC required by the applicable PCAOB independence rules and has discussed with PwC the firm’s independence and quality control procedures.
Joseph J. Echevarria, Chair
•The Company’s executive compensation program is designed to attract, retain, and motivate top executive talent, drive performance without encouraging unnecessary or excessive risk-taking, and support both short-term and long-term growth for shareholders.
|
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AtFUTURE ADVISORY VOTES ON THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS
An affirmative voteproxy statement in the form in which it would be effective upon approval of the holders of a majority of all ofshare increase amendment by shareholders.
The Amendment provides that a shareholder or shareholders(s) holding 20% or more of the voting power of the shares entitled to vote on a given matter may initiate the written consent process by requesting that the Board establish a record date for the purpose of soliciting a written consent. The 20% threshold is consistent with the threshold adopted by the Company in the recent amendment of its By-Laws to permit shareholders to call a special meeting of shareholders.
The Board recognizes that a shareholder right to call a special meeting or initiate a written consent at an appropriate threshold serves as an effective balance between ensuring the Board’s accountability to shareholdersequity-based compensation arrangements and enabling the Board and management to operate in an effective manner. Our Board concluded that a 20% ownership requirement is the appropriate threshold that strikes the balance between ensuring that shareholders have a meaningful right to call a special meeting or initiate the written consent process, while also recognizing that one or a small number of shareholders that are not presently subject to standstill restrictions could use special meetings or written consents as a means to pursue matters that may not reflect the interests of our shareholder base generally. This concern, while presentshareholders. The Committee engages in many companies, is more acute for Xerox. In that regard, our Board considered that Xerox currently has one shareholder who alone holds greater than 20%an ongoing review and implementation of Xerox’s voting stock and, in recent years, Xerox has had more than one greater than 10% shareholder and several shareholders holding greater than 5% of our voting stock. Our Board believes that the power to call a special meeting or initiate the written consent process should not rest in the hands of one or two shareholders that are not presently subject to standstill restrictions. Accordingly, our Board unanimously concluded that the 20% threshold appropriately balances all interests.
Adopting the Amendment to permit shareholders to act by written consent compliments“best practices,” consistent with the Company’s corporate governance practices, which demonstrate accountability, responsivenesspolicies and a focus on shareholder rights.
Manypractices. As such, the Plan includes numerous “best practice” provisions, including:
Special Meeting Right. Xerox implemented the right of shareholders to call a special meetingPlan was determined based on feedback we received from shareholdersfactors including the number of shares available under the Plan, the Company’s past share usage (burn rate), the number of shares needed for future awards, and in recognitionthe stated policies of shareholder advisory firms.
| Number of Stock Options Outstanding under the Plan and the 2004 Plan | 473,992 | ||||
| Weighted Average Exercise Price | $27.87 | ||||
| Weighted Average Remaining Term (in years) | 4.17 years | ||||
| Number of Full-Value Awards Outstanding (stock units and performance share) | 7,890,871 | ||||
| Total number of shares remaining available for grant under the Plan, the 2004 Plan and the Directors Plan | 5,254,973 | ||||
| Common Shares Outstanding (as of January 31, 2023) | 156,434,437 | ||||
| Year | Options Granted | RSUs Granted | PSUs Vested | Total | Weighted Average Common Shares Outstanding | Burn Rate | ||||||||||||||
| 2022 | — | 2,444,000 | 644,114 | 3,088,114 | 156,006,000 | 2.0% | ||||||||||||||
| 2021 | — | 1,513,000 | 732,686 | 2,245,686 | 183,168,000 | 1.2% | ||||||||||||||
| 2020 | — | 2,028,000 | 891,178 | 2,919,178 | 208,983,000 | 1.4% | ||||||||||||||
| Three-Year Average | 1.5% | |||||||||||||||||||
Proxy Access for Director Nominations. Xerox has a proxy access bylaw that allows any shareholder (or group of up to 20 shareholders) owning 3% or more of our common stock continuously for at least three years, to nominate and include in our proxy statement director nominees constituting up to 20%material provisions of the Board (or at least two director nominees).
Annual Election of Board of Directors. All of Xerox’s directors are elected annually by shareholders, and shareholders can remove directors with or without cause.
Majority Voting Standard. Xerox has adopted a majority voting standard with resignation policy for the election of directors in uncontested elections.
No Supermajority Voting. Xerox’s Certificate of Incorporation and By-Laws do not have supermajority voting provisions — shareholders can approve binding Certificate of Incorporation and Bylaw amendments with a majority vote.
Annual Say on Pay. Our shareholders vote annually on our compensation practices.
No Shareholder Rights Plan. Xerox does not have a shareholder rights plan or poison pill.
Independent Board Leadership. Xerox has separated the roles of Chair of the Board and Chief Executive Officer. The Chair of the Board, as well as the Chairs and all of the members of all of the Board committees, are independent directors.
Board Refreshment and Diversity. Five new independent directors joined the Board in 2021, adding complementary and relevant skillsets, leadership and diversity.
Shareholder Engagement. We regularly engage with our investors to solicit their views on important issues, and incorporate those views in the Board’s consideration of these issues. Recent changes to our By-Laws and the proposed Amendment are the product of active shareholder engagement.
Summary of the Amendment
The full text of the Amendment is attached to this Proxy Statement as Annex A, and this summary is qualified in its entirety by reference to the terms of the Amendment. Because this is a summary, it may not contain all of the information that a shareholder may consider to be important. Therefore, we recommend that each shareholder review the fullcomplete text of the AmendmentPlan in the form, including the share increase amendment to Plan section 5(a), which would be effective upon the approval of this proposal. The text of the Plan is attached as Annex A before you decide how to vote onthis proxy statement and incorporated by reference into this proposal.
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All actions required You are urged to read this proposal and the text of the Plan in their entireties.
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benefits under the Plan and outstanding awards.
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Any required notice to the Company (i) must be delivered by a shareholder or shareholders holding 20% more of the voting power of the shares entitled to vote on the matter, (ii) must describe the action proposed to be taken by written consent of shareholders and (iii) must contain (A) such information and representations, to the extent applicable, then required by the applicable sections of the Company’s By-Laws as though such shareholder was intending to make a nomination or to bring any other matter before a meeting of shareholders and (B) the text of the proposal(s) (including the text of any resolutions to be adopted by written consent of shareholders and the language of any proposed amendment to the By-Laws of the Company). The Company may require the shareholder(s) submitting such notice to furnish such other information as may be requested
by the Company to determine the validity of the request for a record date and to determine whether the request relates to an action that may be effected by written consent.
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Shareholders may take action by written consent only if consents are solicited by the shareholder or group of shareholders seeking to take action by written consent of shareholders from all holders of capital stockCommon Stock of the Company entitledis listed. The Committee has full and exclusive power, within the limitations set forth in the Plan, to vote onmake all decisions and determinations regarding the matter pursuantselection of participants and the granting of awards, establishing the terms and conditions relating to a consent solicitation conducted pursuanteach award, adopting rules, regulations, and guidelines for carrying out the Plan’s purposes, and interpreting and otherwise construing the Plan. Except for the power to Regulation 14Aamend and except as may otherwise be required under applicable Nasdaq rules, the Committee may delegate to one or more officers of the Company all of its powers under the Plan other than determinations regarding awards made to employees who are subject to Section 16 of the Exchange Act, without reliance uponsubject to such conditions and restrictions as the exemption contained in Rule 14a-2(b)(2) ofCommittee may establish from time to time. In addition, the Exchange Act and applicable law.
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Every written consent purporting to take or authorize the taking of corporate action must bear the date of signature of each shareholder who signs the consent, and no consent shall be effective to take the corporate action referred to therein unless, within 60 days of the earliest dated consent delivered and not later than 60 days after the record date, consents signed by a sufficient number of shareholders to take such action are so delivered to the Company.
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No consents may be dated or delivered to the Company or its registered office in the State of New York until 50 days after the record date. Consents must be delivered to the Company by delivery to its registered office in the State of New York or its principal place of business. Delivery must be made by hand or by certified or registered mail, return receipt requested. In the event of the delivery to the Company of consents, the secretaryChief Human Resources Officer of the Company, or such other officer ofhis or her delegate, may amend the CompanyPlan as the Board of Directors may designate, shall promptly conduct such ministerial review of the sufficiency of all consents and any related revocations and of the validity of the action to be taken by written consent as the secretary of the Company,he or such other officer of the Company as the Board of Directors may designate, as the case may be,she deems necessary or appropriate including, without limitation, whether the shareholders of a number of shares having the requisite voting power to authorize or take the action specified in consents have given consent. If after such investigation the secretaryavoid any amount becoming subject to an additional tax under Section 409A of the Company, such other officer ofCode.
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Notwithstanding anything inPlan not to comply with the Company’s Amended and Restated Certificate of IncorporationCode rules relating to ISOs or the New York Business Corporation LawLaw. No such amendments may materially adversely affect any outstanding awards under the Plan without the consent of the holders thereof. Notwithstanding the foregoing, an amendment that constitutes a “material amendment” as defined by the Nasdaq rules must be submitted to the contrary,Company’s shareholders for approval, including any revision that deletes or limits the scope of the Plan provision prohibiting repricing of stock options.
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The Boardamounts determined to be deferred payments for purposes of DirectorsSection 409A of the Code.
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Notwithstanding anything
other sections of this proxy statement, particularly the Compensation Discussion and Analysis, as well as the Summary Compensation Table and related tables, footnotes, and narratives.
the
Shareholders ask our boardsenior executive's termination for any reason. Payments include those provided under employment agreements, severance plans, and change-in-control clauses in long-term equity plans, but not life insurance, pension benefits, or deferred compensation earned and vested prior to taketermination.
One of the main purposes of this proposal is to give shareholders the right to formally participate in callingbe protected from such lavish management termination packages for a special shareholder meeting regardless of their length of stock ownership to the fullest extent possible.
one person.
In response to the 2021 written consent shareholder proposal with outstanding 79% support Xerox management may be tempted, like some companies, to give shareholders a useless right to act by written consent.
Some companies have required that, to initiate written consent, 25% of shares must petition management for the ministerial baby step of obtaining a record date. The 2021 proposal that received 79% support did not call for a percentage of shares to be required to petition for a record date for written consent.
Once a record date is obtained then shareholders are on a tight schedule to obtaining the consent of 51% of shares outstanding which is equal to 60% of the shares that vote at the annual meeting.
This turns into a classic Catch-22 dilemma for shareholders. In order to get a record date, 25% of shares must surrender their contact information to management. This makes it is easier than shooting fish in a barrel for management to use professional proxy solicitors to pester the 25% of shares to change their mind and revoke their support for written consent.
Thus while the base of 25% of shares is easily venerable to management attack by deep pockets company money, shareholders must double their number to 51%30% of shares in a limited time period with money out2022.
We need a real right to call a special shareholder meeting and a real right to act by written consent.
Xerox.
The Board has
In 2022,double-trigger change-in-control transaction (i.e., a termination without cause by Xerox or termination for “good reason” by the employee (each a “qualifying termination”) within two years following a change-in-control).
The Company’s current 20% ownership threshold is in line with market practice, and continuesinvariably the case particularly with regard to be lower thanhighly recruited employees, that employment agreements or other severance arrangements provide for at least partial vesting of many other companies. In 2021, according toequity awards upon certain types of severance events, such as double trigger change-in-control scenarios, death, and disability. An arrangement that provides for accelerated vesting of stock awards upon an executive’s termination, even if permitted only on a survey from Deal Point Data,partial, prorated basis, would have a higher probability of exceeding the U.S. companiesrestriction in the S&P 500proposal, and therefore, a higher probability of requiring a special shareholder meeting before being effective.
Our Board believes that the 20% threshold in our newly-adopted By-Law amendment is consistent with market practice and specifically tailored to Xerox’s unique circumstances.
The Board has approved an amendment to our certificate of incorporation which, if approved by the shareholders, would allow shareholders to act by written consent.
In its consideration of the Proposal, our Board also evaluated the amendment to Xerox’s certificate of incorporation that has been approved by the Board and submitted to the vote of shareholders at the Annual Meeting. The Board unanimously approved this Certificate of Incorporation amendment and unanimously recommended that shareholders approve it. The amendment allows shareholders to act by written consent, thus providing a powerful tool for shareholder action absent the expense and distraction for all partiesevent of a shareholder meeting. The amendment allows shareholders holding 20% or more of Xerox’s voting stock to initiatechange in control, a purpose that further aligns the written consent process by requesting a record date. As such, our Board concluded that the legitimateexecutives’ interests of shareholders were not harmed by adopting a 20% threshold with respect to calling a special meeting.
Special meetings require substantial resources.
A special meeting of shareholders, regardless of whether the meeting is held in person or virtually, is a significant undertaking which should occur only when fiduciary obligations or strategic concerns require that matters be addressed expeditiously. Preparing and conducting a special meeting creates significant distraction for the Board and the management team from their focus on maximizing long-term value and executing the Company’s strategic objectives. Special meetings should be limited to circumstances where a meaningful representationthose of our shareholders believes thatwhen evaluating any such potential transaction.
addressed between annual meetings. Therefore, impaired. If the Board believes thatProposal were approved, the 20% ownership threshold preservesrisk of job loss following a reasonable and appropriate balance between providing shareholderschange in control, coupled with a right to call a special meeting while protecting against distraction andlimit on the value that may be realized from previously granted equity awards, may present an unnecessary utilization of corporate resources, and the disruption associated with convening a special meeting, that would be implicated if a 10% ownership threshold were adopted.
Current strong corporate governance practices demonstrate accountability, responsiveness and a focus on shareholder rights.
The Board further believes that Xerox’s strong corporate governance practices make adoption of the Proposal unnecessary. Many of our current shareholder rights, including our special meeting right, were informed by shareholder input. Xerox’s corporate governance practices provide transparency and accountability of the Board to all Xerox shareholders, and ensure that Xerox is responsive to shareholder concerns, without the additional expense and risk associated with a special meeting threshold that would allow one shareholder, or a small group of shareholders that are not presently subject to standstill restrictions, to call a special meeting:
Special Meeting Right. Xerox implemented the right of shareholders to call a special meeting based on feedback we received from shareholders and in recognition of the importance of shareholder ability to convene a special meeting. We believe that a 20% ownership threshold is consistent with market practices for similar companies and tailored to Xerox’s specific circumstances.
Action by Written Consent. Our Board has approved and submitted to shareholders an amendment to Xerox’s Certificate of Incorporation to allow shareholders to act by written consent. Here, the Board has approved a 20% threshold to initiate the consent process, thus allowing shareholders with a reasonable and customary ownership percentage the ability to initiate action, while limiting the expense and distraction for our senior executives, and could lead to them seeking new employment while such a transaction is being negotiated or is pending.
Proxy Access for Director Nominations. Xerox has a proxy access by-law that allows anyremain focused on protecting shareholder (or group of up to 20 shareholders) owning 3% or more of our common stock continuously for at least three years, to nominateinterests and include in our proxy statement director nominees constituting up to 20% ofmaximizing shareholder value. If the Board (or at least two director nominees).
Annual Election of Board of Directors. All of Xerox’s directors are elected annually by shareholders, and shareholders can remove directors with or without cause.
Majority Voting Standard. Xerox has adopted a majority voting standard with resignation policy for the election of directors in uncontested elections.
No Supermajority Voting. Xerox’s Certificate of Incorporation and By-Laws do not have supermajority voting provisions — shareholders can approve binding Certificate of Incorporation and By-Law amendments with a majority vote.
Annual Say on Pay. Our shareholders vote annually on our compensation practices.
No Shareholder Rights Plan. Xerox does not have a shareholder rights plan or poison pill.
Independent Board Leadership. Xerox has separated the roles of Chair of the Board and Chief Executive Officer. The Chair of the Board, as well as the Chairs and all of the members of all of the Board committees, are independent directors.
Board Refreshment and Diversity. Five new independent directors joined the Board in 2021, adding complementary and relevant skillsets, leadership and diversity.
Shareholder Engagement. We regularly engage with our investors to solicit their views on important issues, and incorporate those views in the Board’s consideration of these issues. Recent changes to our By-Law and the proposed amendment to our Certificate of Incorporation are the product of active shareholder engagement
In light of Xerox’s strong corporate governance practices, the Board believes that adoption of the Proposalpotential change-in-control transaction is unnecessary and is not in the best interests of Xeroxour shareholders, our executives should be motivated to focus their full energy on pursuing this
Adoption of this proposal could create a misalignment between those interests and prevent us from effectively recruiting, motivating, and retaining critical talent, and therefore would not be in the best interests of our shareholders.
Louis J. Pastor
Executive Vice President, Chief
Secretary
and these proxy materials are being forwarded to you by your broker, bank, or other nominee, which is considered the shareholder of record with respect to those shares. As a beneficial owner, you have the right to direct your broker, bank, or other nominee on how to vote the shares in your account. However, because you are not the shareholder of record, you may not vote these shares in person at the Annual Meeting, unless you request and provide at the Annual Meeting a valid proxy from your broker, bank, or other nominee. Your broker, bank, or other nominee has included a voting instruction form for you to use to direct them how to vote your shares. Please instruct your broker, bank, or other nominee how to vote your shares using the voting instruction form you received from them.
It
By submitting your proxy (either by voting electronically on the Internet or by telephone or by signing and returning a proxy card), you authorize the persons named in the accompanying proxy card to represent you and vote your shares at the meeting in accordance with your instructions. They also may vote your shares to adjourn the meeting and will be authorized to vote your shares at any postponements or adjournments of the meeting.
24, 2023.
•Ratification of PwC as our independent registered public accounting firm for the fiscal year ending December 31, 2022;
•Approval, on an advisory basis, of the 20212022 compensation of our named executive officers;
•Consideration of a shareholder proposal forto require shareholder right to call a special shareholder meeting,ratification of termination pay, if properly presented at the Annual Meeting.
(We note that
The affirmative vote of the holders of a majority of all outstanding shares of our voting stock entitled to vote thereon is required to adopt the amendment to the Company’s amended and restated Certificate of Incorporation to permit shareholders to act by written consent.
Abstentions, broker non-votes or the failure to submit a proxy vote or to vote in person on this proposal at the Annual Meeting will have the same effect as a vote against this proposal.
If you hold your Xerox shares through a bank, broker, or other holder of record, such intermediary may not be able to vote your shares. For additional information, see below under What is a broker non-vote and how will it affect voting?
without having received timely voting instructions from you.
12, 2023.
Broadridge, Householding Department, 51 Mercedes Way, Edgewood, NY 11717.
Norwalk, CT 06851-1056,Connecticut 06851, Attention: Corporate Secretary, or by contacting Harkins KovlerHKL & Co., LLC, our proxy solicitor, by mail at 3 Columbus Circle, 15th Floor, New York, NY 10019, or by telephone toll-free at (844) 218-8384 (from the U.S. and Canada) or at (212) 468-5380 (from other locations) (Banks and Brokerage firms may call collect at (212) 468-5380). The Notice also provides you with instructions on how to request paper copies of the proxy materials. There is no charge to receive the materials by mail. You may request paper copies of the materials until one year after the date of the Annual Meeting.
CERTIFICATE OF AMENDMENT
OF
THE CERTIFICATE OF INCORPORATION
OF
XEROX HOLDINGS CORPORATION
Under Section 805 of the Business Corporation Law
The undersigned, , Corporate Secretary of
FIRST: and approved by shareholders effective as of May 21, 2020. The name of the Corporation is XEROX HOLDINGS CORPORATION.
SECOND: The original Certificate of Incorporation of the Corporation was filed in the Office of the Secretary of State of the State of New York on March 11, 2019, andPlan was amended by a Certificate of Amendment thereto filed in the Office of the Secretary of State of the State of New York on July 31, 2019.
THIRD: The amendment effected by this Certificate of Amendment isthrough October 21, 2021, to add a new “Article TENTH”update references to the Restated Certificate of Incorporation of the Corporation, which shall read in its entirety as follows:
“TENTH
(a) Action by Written Consent. All actions required or permitted to be taken by shareholders at an annual or special meeting of shareholders of the Corporation may be taken without a meeting by the written consent of the holders of capital stock of the Corporation entitled to vote provided that no such action may be effected except in accordance with the provisions of this Article TENTH, the Bylaws of the Corporation, and applicable law.
(b) Request for Record Date. The record date for determining shareholders entitled to consent to corporate action in writing without a meeting shall be as fixed by the Board of Directors or as otherwise established under this Article TENTH. Any shareholder seeking to have the shareholders authorize or take corporate action by written consent without a meeting shall request that a record date be fixed for such purpose by written notice addressed to the secretary of the Corporation and delivered to the Corporation and signed by a shareholder or shareholders holding twenty percent (20%) or more of the voting power of the shares entitled to vote on the matter. The written notice must contain the information set forth in paragraph (c) of this Article TENTH. Following delivery of the notice, the Board of Directors shall, by the later of (i) ten (10) days after delivery of a valid request to set a record date and (ii) five (5) days after delivery of any information requested by the Corporation to determine the validity of the request for a record date or to determine whether the action to which the request relates may be effected by written consent, determine the validity of the request and whether the request relates to an action that may be taken by written consent pursuant to this Article TENTH and, if appropriate, adopt a resolution fixing the record date for such purpose. The record date for such purpose shall be no more than ten (10) days after the date upon which the resolution fixing the record date is adopted by the Board of Directors and shall not precede the date such resolution is adopted. If the request has been determined to be valid and to relate to an action that may be effected by written consent pursuant to this Article TENTH or if no such determination shall have been made by the date required by this Article TENTH, and in either event no record date has been fixed by the Board of Directors, the record date shall be the first date on which a signed written consent relating to the action taken or proposed to
be taken by written consent is delivered to the Corporation in the manner described in paragraph (f) of this Article TENTH; provided, that if prior action by the Board of Directors is required under the provisions of New York law, the record date shall be at the close of business on the dayexchange on which the Board of Directors adoptsCompany’s Common Stock (as defined herein) is listed. Subject to shareholder approval, the resolution taking such prior action.
(c) Notice Requirements. Any notice required by paragraph (b) of this Article TENTH (i) must be delivered by a shareholder or shareholders holding twenty percent (20%) or more ofPlan was further amended on March 20, 2023, effective May 25, 2023, to increase the voting power of the shares entitled to vote on the matter, (ii) must describe the action proposed to be taken by written consent of shareholders and (iii) must contain (A) such information and representations, to the extent applicable, then required by Section 6 of Article I or any other applicable sections of the Corporation’s Bylaws as though such shareholder was intending to make a nomination or to bring any other matter before a meeting of shareholders and (B) the text of the proposal(s) (including the text of any resolutions to be adopted by written consent of shareholders and the language of any proposed amendment to the Bylaws of the Corporation). The Corporation may require the shareholder(s) submitting such notice to furnish such other information as may be requested by the Corporation to determine the validity of the request for a record date and to determine whether the request relates to an action that may be effected by written consent under this Article TENTH. In connection with an action or actions proposed to be taken by written consent in accordance with this Article TENTH, the shareholders seeking such action or actions shall further update and supplement the information previously provided to the Corporation in connection therewith, if necessary, as required by Section 6 of Article I or any other applicable section of the Corporation’s Bylaws.
(d) Manner of Consent Solicitation. Shareholders may take action by written consent only if consents are solicited by the shareholder or group of shareholders seeking to take action by written consent of shareholders from all holders of capital stock of the Corporation entitled to vote on the matter pursuant to a consent solicitation conducted pursuant to Regulation 14A of the Exchange Act, without reliance upon the exemption contained in Rule 14a-2(b)(2) of the Exchange Act and in accordance with this Article TENTH and applicable law.
(e) Date of Consent. Every written consent purporting to take or authorize the taking of corporate action (each such written consent is referred to in this paragraph and in paragraph (f) immediately below as a “Consent”) must bear the date of signature of each shareholder who signs the Consent, and no Consent shall be effective to take the corporate action referred to therein unless, within sixty (60) days of the earliest dated Consent delivered in the manner required by paragraph (f) of this Article TENTH and not later than sixty (60) days after the record date, Consents signed by a sufficient number of shareholders to take such action are so delivered to the Corporation.
(f) Delivery of Consents. No Consents may be dated or delivered to the Corporation or its registered office in the State of New York until fifty (50) days after the record date. Consents must be delivered to the Corporation by delivery to its registered office in the State of New York or its principal place of business. Delivery must be made by hand or by certified or registered mail, return receipt requested. In the event of the delivery to the Corporation of Consents, the secretary of the Corporation, or such other officer of the Corporation as the Board of Directors may designate, shall provide for the safe-keeping of such Consents and any related revocations and shall promptly conduct such ministerial review of the sufficiency of all Consents and any related revocations and of the validity of the action to be taken by written consent as the secretary of the Corporation, or such other officer of the Corporation as the Board of Directors may designate, as the case may be, deems necessary or appropriate, including, without limitation, whether the shareholders of a number of shares havingauthorized under the requisite voting power to authorize or takePlan. On March 29, 2023, the action specified in Consents have given consent. If after such investigation the secretaryCompensation Committee of the Corporation, such other officer of the Corporation as the Board of Directors may designate, as the case may be, shall determine that the action purported to have been taken is duly authorized by the Consents, that fact shall be certified on the records of the Corporation kept for the purpose of recording the proceedings of meetings of shareholders and the Consents shall be filed in such records. In conducting the investigation required by this section, the secretary of the Corporation, such other officer of the Corporation as the Board of Directors may designate, as the case may be, may, at the expense of the Corporation, retain special legal counsel and any other necessary or appropriate professional advisors as
such person or persons may deem necessary or appropriate and, to the fullest extent permitted by law, shall be fully protected in relying in good faith upon the opinion of such counsel or advisors.
(g) Effectiveness of Consent. Notwithstanding anything in this Restated Certificate of Incorporation or the Business Corporation Law of the State of New York to the contrary, no action may be taken by the shareholders by written consent except in accordance with this Article TENTH. If the Board of Directors shall determine that any request to fix a record date or to take shareholder action by written consent was not properly made in accordance with, or relates to an action that may not be effected by written consent pursuant to, this Article TENTH, or the shareholder or shareholders seeking to take such action do not otherwise comply with this Article TENTH, then the Board of Directors shall not be required to fix a record date and any such purported action by written consent shall be null and void to the fullest extent permitted by applicable law. No action by written consent without a meeting shall be effective until such date as the secretary of the Corporation or such other officer of the Corporation as the Board of Directors may designate, as applicable, certify to the Corporation that the Consents delivered to the Corporation in accordance with paragraph (f) of this Article TENTH, represent at least the minimum number of votes that would be necessary to take the corporate action at a meeting at which all shares entitled to vote thereon were present and voted, in accordance with the Business Corporation Law of the State of New York and this Restated Certificate of Incorporation.
(h) Challenge to Validity of Consent. Nothing contained in this Article TENTH shall in any way be construed to suggest or imply that the Board of Directors of the Company ("Committee") further amended the Plan to modify the Change in Control definition by increasing the voting power threshold from 35% to 50%.
(i) Board-solicitedissuance and the receipt of any dividends or dividend equivalents. The Company and the Employer do not commit to and are under no obligation to structure the terms of the grant or any aspect of the awards to reduce or eliminate employee’s liability for Tax-Related Items or achieve any particular tax result. The Company, the Employer, and their respective agents, at their discretion, are authorized to satisfy the obligations with regard to all Tax-Related Items by one or a combination of the following: withholding from employee’s wages or other cash compensation paid to employee by the Company or the Employer; withholding from the proceeds of the sale of shares of Common Stock acquired upon vesting/settlement of the awards through Stock Option exercise either through a voluntary sale or through a mandatory sale arranged by the Company (on employee’s behalf pursuant to this authorization); or withholding in shares of Common Stock to be issued upon vesting/settlement of the awards and Stock Option exercises.
FOURTH: The foregoing amendment to the Restated Certificate of IncorporationCompany’s shareholders was authorized by a resolution of the Board of Directors at a meeting thereof duly held on [•], 2022 followedapproved or recommended by a vote of a majorityat least two-thirds of the voting powerdirectors then still in office who were directors on the date hereof or whose appointment, election or nomination for election was previously so approved or recommended.
* * * * * * * * *
IN WITNESS WHEREOF, XEROX HOLDINGS CORPORATION has caused this Certificate of Amendment to be signed by its authorized corporate officer this [●] day of [●], 2022.
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C123456789 000000000.000000 ext 000000000.000000 ext 000004 000000000.000000 ext 000000000.000000 ext ENDORSEMENT_LINE SACKPACK 000000000.000000 ext 000000000.000000 ext MR A SAMPLE DESIGNATION (IF ANY) ADD 1 Your vote matters – here’s how to vote! ADD 2 ADD ADD 3 4 You may vote online or by phone instead of mailing this card. ADD 5 Online ADD 6 Go to www.envisionreports.com/XRX or scan the QR code — login details are locatedCompany’s Common Stock in the shaded bar below. Phone Call toll free 1-800-652-VOTE (8683) within the USA, US territories and Canada Save paper, time and money! Usingtransaction or series of transactions pursuant to which a black ink pen, mark your votes with an X as shownChange in this example. Sign up for electronic delivery at Please do not write outside the designated areas. www.envisionreports.com/XRX Xerox Holdings Corporation Annual Meeting of Shareholders Proxy Card 1234 5678 9012 345 IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. A Proposals — The Board of Directors recommends a vote FOR all nominees and FOR Proposals 2, 3, 4 and AGAINST Proposal 5. 1. Election of Directors: For Against Abstain For Against Abstain For Against Abstain 01—Joseph J. Echevarria 02—Scott Letier 03—Jesse A. Lynn 04—Nichelle Maynard-Elliott 05—Steven D. Miller 06—James L. Nelson 07—Margarita Paláu- 08—Giovanni (“John”) Hernández Visentin For Against Abstain For Against Abstain 2. Ratify the appointment of PricewaterhouseCoopers LLP (PwC) as our 3. Approval, on an advisory basis,Control of the 2021 compensation independent registered public accounting firmCompany shall have occurred, or (B) if the Change in Control occurs without such a transaction or series of transactions, the closing price for a share of the fiscal year ending of our named executive officers. December 31, 2022. 4. Approve an amendmentCompany’s Common Stock on the date immediately preceding the date upon which the event constituting a Change in Control shall have occurred as reported in The Wall Street Journal in the Nasdaq Composite Index or similar successor consolidated transactions reports.
2022 Annual Meeting of Xerox Holdings Corporation Shareholders Thursday, May 19, 2022, at 9:00 A.M. EDT 401 Merritt 7, Norwalk, CT 06851 If you wish to attend the Annual Meeting in person, please present this admission ticket and photo identification at the registration desk. Receive Proxy Materials Electronically Your e-mail address can now help save the environment. Vote online and register for electronic communications with the eTree ® program and we’ll have a tree planted on your behalf. Electronic delivery saves Xerox a significantsubstantial portion of the costs associated with printing and mailing annual meeting materials, and Xerox encourages shareholders to take advantageassets of the 24/7 access, quick deliveryCompany, as such definition is set forth in Treasury guidance.
C 1234567890 000004 ENDORSEMENT_LINE SACKPACK MR A SAMPLE DESIGNATION (IF ANY) Online ADD 1 Gorequirements of Code Section 409A, or as a result of the Plan’s failure to www.envisionreports.com/XRX or scansatisfy any other applicable requirements for the ADD 2 QR code — login details are locateddeferral of tax.
Xerox Holdings Corporation Annual Meeting of Shareholders Notice Xerox Holdings Corporation Annual Meeting of Shareholders will be held on Thursday, May 19, 2022 at 9:00 A.M., EDT, 401 Merritt 7, Norwalk, CT 06851. Proposals to be voted on at the meeting are listed below along with the Board of Directors’ recommendations. The Board of Directors recommends a vote FOR all nominees and FOR Proposals 2, 3, 4 and AGAINST Proposal 5. 1.Election of Directors 01—Joseph J. Echevarria 02—Scott Letier 03—Jesse A. Lynn 04—Nichelle Maynard-Elliott 05—Steven D. Miller 06—James L. Nelson 07—Margarita Paláu-Hernández 08—Giovanni (“John”) Visentin 2.Ratify the appointment of PricewaterhouseCoopers LLP (PwC) as our independent registered public accounting firm for the fiscal year ending December 31, 2022. 3.Approval, on an advisory basis, of the 2021 compensation of our named executive officers. 4.Approve an amendment to the Company’s amended and restated Certificate of Incorporation to permit shareholders to act by written consent. 5.Consideration of a shareholder proposal for shareholder right to call a special shareholder meeting,ERISA Section 413, if properly presented at the Annual Meeting. PLEASE NOTE – YOU CANNOT VOTE BY RETURNING THIS NOTICE. To vote your shares you must go online or request a paper copy of the proxy materials to receive a proxy card. If you wish to attend the Annual Meeting in person, please present this admission ticket and photo identification at the registration desk. Here’s how to order a copy of the proxy materials and select delivery preferences: Current and future delivery requests can be submitted using the options below. If you request an email copy, you will receive an email with a link to the current meeting materials. PLEASE NOTE: You must use the number in the shaded bar on the reverse side when requesting a copy of the proxy materials. —Internet – Go to www.envisionreports.com/XRX. Click Cast Your Vote or Request Materials. —Phone – Call us free of charge at 1-866-641-4276. —Email – Send an email to investorvote@computershare.com with “Proxy Materials Xerox Holdings Corporation” in the subject line. Include your full name and address, plus the number located in the shaded bar on the reverse side, and state that you want a paper copy of the meeting materials. To facilitate timely delivery, all requests for a paper copy of proxy materialsapplicable) must be received by May 9, 2022.
