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☐ | Soliciting Material Pursuant to §240.14a-12 |
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1275 Peachtree Street, Sixth FloorAtlanta, GA 30309_________________
April 29, 2020
We intend to hold
At the Annual Meeting you will be asked to consider and vote on the proposals described in the accompanying notice of annual meeting and Proxy Statement,proxy statement, as well as such other business as may properly come before the annual meeting.
Notice of Annual Meeting of Stockholders | |||||||||||||||||
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To our Stockholders: Notice is hereby given that the 2023 Annual Meeting of Stockholders (the “Annual Meeting”) of ModivCare Inc., a Delaware corporation (the “Company”), will be held at 6900 Layton Avenue, 12th Floor, Denver, CO 80237, at 10:00 a.m. Mountain Daylight Time on Tuesday, June 13, 2023. The Annual Meeting is being held for the following purposes: |
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1275 Peachtree Street, Sixth FloorAtlanta, GA 30309
_________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 16, 2020
_________________
TO OUR STOCKHOLDERS:
Notice is hereby given that the 2020 Annual Meeting of Stockholders (the “Annual Meeting”) of The Providence Service Corporation (the “Company”) will be held at 4700 South Syracuse Street, Fourth Floor, Denver, CO 80237, at 10:00 a.m. Mountain Daylight Time on Tuesday, June 16, 2020. The Annual Meeting is being held for the following purposes:
| To elect | Meeting Time ____ 10:00 a.m. Mountain Daylight Time |
3 |
| To hold a non-binding advisory vote to approve named executive officer compensation; |
4 |
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5 | To ratify the appointment of KPMG LLP as the independent registered public accounting firm of the Company | Meeting Place ____ 6900 Layton Avenue, 12th Floor Denver, CO 80237 |
6 |
| To transact such other business as may properly come before the Annual Meeting or any adjournment, postponement or rescheduling thereof. | |||||||
Only stockholders of record of the Company’s common stock, $0.001 par value per share, as shown by the transfer books of the Company, at the close of business on April 18, 2023, are entitled to notice of, and to vote at, the Annual Meeting or any adjournment, postponement or rescheduling thereof. |
Only stockholders of record of the Company’s common stock, $0.001 par value per share, and Series A Convertible Preferred Stock, $0.001 par value per share, as shown by the transfer books of the Company, at the close of business on April 22, 2020, are entitled to notice of, and to vote at, the Annual Meeting or any adjournment, postponement or rescheduling thereof.
All stockholders are cordially invited to attend the Annual Meeting in person. However, to ensure your representation at the Annual Meeting, you are urged to vote your shares in advance using one of the methods outlined in the accompanying Proxy Statement and proxy card.
We intend to hold the annual meeting in person. However, we are actively monitoring the coronavirus (COVID-19); we are sensitive to the public health and travel concerns our stockholders may have and the protocols that federal, state, and local governments may impose. In the event it is not possible or advisable to hold the annual meeting in person, we will announce alternative arrangements for the meeting as promptly as practicable, which may include holding the meeting solely by means of remote communication. Please monitor our website at www.prscholdings.com for updated information. If you are planning to attend our meeting, please check the website one week prior to the meeting date.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders to be held on Tuesday, June 16, 2020. We have elected to provide access to our proxy materials over the Internet under the Securities and Exchange Commission’s “notice and access” rules. Consequently, the majority of stockholders will not receive paper copies of our proxy materials. We will instead mail stockholders a Notice of Internet Availability of Proxy Materials (the “Notice”) with instructions for accessing proxy materials and voting via the Internet. The Notice will also provide information on how stockholders may obtain paper copies of our proxy materials if they so choose. The Proxy Statement, form of proxy card and our Annual Report on Form 10-K for the fiscal year ended December 31, 2019 are available free of charge at www.proxyvote.com. The Notice or our proxy materials, as applicable, are first being mailed to stockholders on or about April 29, 2020.
All stockholders are cordially invited to attend the Annual Meeting in person. To ensure your representation at the Annual Meeting, however, you are urged to vote your shares in advance of the Annual Meeting by using one of the methods outlined in the proxy statement. By Order of the Board of Directors, |
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| Jonathan Bush Senior Vice President, General Counsel & Corporate Secretary — Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders to be held on Tuesday, June 13, 2023. The Proxy Statement, form of proxy card and our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 are available free of charge at www.proxyvote.com. We have elected to provide access to you to our proxy materials over the Internet, and we have mailed to you a Notice of Internet Availability of Proxy Materials with instructions for accessing our proxy materials and voting via the Internet and for how you may obtain paper copies of our proxy materials if you so choose. | Your vote is important. ____ In order to ensure your representation at the meeting, please vote your shares using one of the methods outlined in the accompanying proxy statement as promptly as possible. See “Voting Procedures” in the proxy statement for further details. If you do attend the meeting, you may, if you prefer, revoke your proxy and vote your shares in person. | |||||||||||
IN ORDER TO ENSURE YOUR REPRESENTATION AT THE MEETING, PLEASE VOTE YOUR SHARES USING ONE OF THE METHODS OUTLINED IN THE PROXY STATEMENT AS PROMPTLY AS POSSIBLE. SEE “VOTING PROCEDURES” IN THE ACCOMPANYING PROXY STATEMENT FOR FURTHER DETAILS. IF YOU DO ATTEND THE MEETING, YOU MAY, IF YOU PREFER, REVOKE YOUR PROXY AND VOTE YOUR SHARES IN PERSON.
Proxy Statement for 2023 Annual Meeting of Stockholders | |||||
Proxy Statement Summary | |||||
Voting Procedures | |||||
Voting Securities of Certain Beneficial Owners and Management | |||||
Proposal 1 Amendment to our Certificate of Incorporation to Declassify our Board | |||||
Proposal 2 Election of Directors | |||||
Corporate Governance | |||||
Executive Compensation | |||||
Proposal 3 Advisory vote to approve named executive officer compensation | |||||
Proposal 4 Advisory vote on the frequency of future advisory votes on named executive officer compensation | |||||
Proposal 5 Ratification of appointment of independent registered public accounting firm | |||||
Audit Committee Report | |||||
Independent Registered Public Accountants | |||||
Stockholder Proposals for 2024 Annual Meeting | |||||
Other Matters | |||||
Additional Information | |||||
Householding |
THE PROVIDENCE SERVICE CORPORATION
1275 Peachtree Street, Sixth FloorAtlanta, GA 30309
PROXY STATEMENT
2020 ANNUAL MEETING OF STOCKHOLDERS
This
We intend to hold the annual meeting in person. However, we are actively monitoring the coronavirus (COVID-19); we are sensitive to the public health and travel concerns our stockholders may have and the protocols that federal, state, and local governments may impose. In the event it is not possible or advisable to hold the annual meeting in person, we will announce alternative arrangements for the meeting as promptly as practicable, which may include holding the meeting solely by means of remote communication. Please monitor our website at www.prscholdings.com for updated information. If you are planning to attend our meeting, please check the website one week prior to the meeting date.
the notice they received.
Sending in a signed proxy will not affect a stockholder’s right to attendbe considered at the Annual Meeting and vote in person since the proxy is revocable. All proxies which are properly completed, signed and returned to the Company prior to the Annual Meeting or voted by Internet or telephone, and which have not been revoked, will, unless otherwise directed by the stockholder, and other than with respect to broker non-votes, as discussed below, be voted in accordance with the recommendations of the Board set forth in this Proxy Statement. A stockholder may revoke his or her proxy at any time before it is voted by following the instructions under “Voting Procedures—Changing or Revoking Your Vote.”
Meeting.
VOTING PROCEDURES
ModivCare Inc.
Modivcare 2023 Proxy Statement | 1 |
Proxy Statement Summary | TABLE OF CONTENTS |
Proxy Statement Summary | Corporate Governance Highlights We have structured our corporate governance program to promote the long-term interests of stockholders, strengthen the accountability of our Board and management, and help build public trust in the Company. Highlights of our efforts include: | |||||||||||||||||||||||||
Proposals to Be Voted Upon at the Annual Meeting | ||||||||||||||||||||||||||
Proposal Description | Board Recommendation | Where to Find More Information | Separation of the Chair of the Board and Chief Executive Officer roles | |||||||||||||||||||||||
1 | Approval of an amendment to our Certificate of Incorporation to declassify our Board | FOR | Pages X to X | |||||||||||||||||||||||
All Board committees chaired by independent directors, and all directors are independent other than our CEO director | ||||||||||||||||||||||||||
2 | Election of four Directors | FOR all nominees | Pages X to X | |||||||||||||||||||||||
Active Board and Board committee role in overseeing management of the Company’s risks | ||||||||||||||||||||||||||
3 | Approval of non-binding advisory vote to approve named executive officer compensation | FOR | Pages X to X | |||||||||||||||||||||||
Annual Board and Board committee self-evaluations | ||||||||||||||||||||||||||
Equity ownership guidelines for directors and executive officers | ||||||||||||||||||||||||||
4 | Approval of non-binding advisory vote on the frequency of future advisory votes on named executive officer compensation | FOR every one year | Pages X to X | |||||||||||||||||||||||
Cash and equity award plans with clawback provisions | ||||||||||||||||||||||||||
5 | Ratification of appointment of KPMG LLP as the independent registered public accounting firm of the Company for 2023 | FOR | Pages X to X | Anti-hedging and anti-pledging policies for directors and executive officers | ||||||||||||||||||||||
Reasonable director tenure, with an average of six years of service | ||||||||||||||||||||||||||
About the Company ModivCare Inc. is a technology-enabled healthcare services company that provides a suite of integrated supportive care solutions for payors and their members. Our value-based solutions address the social determinants of health, or SDoH, connect members to care, help health plans manage risks, reduce costs, and improve health outcomes. ModivCare is a provider of non-emergency medical transportation, or NEMT, personal care, and remote patient monitoring, or RPM, solutions, which serve | ||||||||||||||||||||||||||
Regular executive sessions of non-employee directors | ||||||||||||||||||||||||||
No poison pill | ||||||||||||||||||||||||||
2 | Modivcare 2023 Proxy Statement |
TABLE OF CONTENTS | Proxy Statement Summary |
similar, highly vulnerable patient populations. The technology-enabled operating model includes NEMT core competencies in risk underwriting, contact center management, network credentialing, claims management and non-emergency medical transportation management. Additionally, our personal care services include placements of non-medical personal care assistants, home health aides and nurses primarily to Medicaid patient populations in need of care monitoring and assistance performing daily living activities in the home setting, including senior citizens and disabled adults. ModivCare’s remote patient monitoring services include personal emergency response systems, vitals monitoring and data-driven patient engagement solutions. ModivCare is further expanding its offerings to include meal delivery and working with communities to provide meals to food-insecure individuals. Business Highlights During 2022, the Company continued the evolution of its business and technology that had positive impacts on our clients, transportation providers and members. We also enhanced our senior leadership, resulting in an experienced team with a track record of operational excellence, including veteran leaders for our Mobility and Home businesses. The Board promoted L. Heath Sampson to President and Chief Executive Officer, Rebecca Orcutt to Chief Accounting Officer, and Kenneth Shepard to Chief Financial Officer of our Mobility business. We made progress building for scale through our integration efforts in 2022 which continue into 2023. We grew our membership from 30 to 35 million monthly members in our Mobility segment and we grew our Personal Care provider base. We reintroduced benefits to caregivers in 2022 which contributed to an increase in our caregiver satisfaction score, resulting in an increase in the number of caregivers. Performance Highlights The efforts of this talented leadership team during 2022 resulted in the Company continuing to produce strong financial results despite continuing COVID headwinds and a challenging macroeconomic environment. This strong financial performance is evidenced by the Company reporting substantial revenue growth in the last two years as compared to the two years prior, as well as sustained growth in Adjusted EBITDA* with a CAGR of 58% over the last four years, as demonstrated below. | Executive Compensation Highlights ModivCare’s executive compensation philosophy is designed to attract, motivate and retain highly talented individuals by: | |||||||||||||||||||||||||
Designing aggregate total direct compensation to be competitive while allowing Company and/or individual performance to drive actual compensation up or down | ||||||||||||||||||||||||||
Ensuring that there is a strong link between pay and performance against our business strategy, the metrics in our incentive programs, and the business results driving stockholder value | ||||||||||||||||||||||||||
Aligning performance-driven compensation with stockholder interests, with a percentage of total pay tied to stock performance | ||||||||||||||||||||||||||
Mitigating financial risk through sound plan design and decision-making, and with ongoing oversight | ||||||||||||||||||||||||||
*Adjusted EBITDA is a financial measure that is not presented in accordance with accounting principles generally accepted in the United States of America, or GAAP. A reconciliation of Adjusted EBITDA to net income (loss), its most directly comparable GAAP financial measure, is provided in Appendix A to this Proxy Statement. | ||||||||||||||||||||||||||
Our Compensation Committee uses balanced compensation practices to ensure that there is alignment in pay for performance for our executives. | ||||||||||||||||||||||||||
Modivcare 2023 Proxy Statement | 3 |
Proxy Statement Summary | TABLE OF CONTENTS |
Responsible Business Practice | Human Capital | Social Responsibility | Environment | |||||||||||||||||
We are committed to upholding ethical business practices, routinely conducting team member training and implementing safeguards to identify and manage potential risks. | We Care Big for our team, our greatest asset, by fostering a diverse, inclusive and safe workplace where our employees can learn, develop, contribute and thrive. | We are committed to providing vulnerable populations access to care services in a safe and ethical way, and to helping our local communities thrive with our support. | We work to reduce the environmental impact from our operational footprint, vendors and partners, aligning with the core values of our environmental stewardship. | |||||||||||||||||
4 | Modivcare 2023 Proxy Statement |
TABLE OF CONTENTS | Voting Procedures |
A holder of Common Stock is entitled to cast one vote for each share of Common Stock held of record on the Record Date on all matters to be considered at the Annual Meeting. A holder of Preferred Stock is entitled to that number of votes equal to the whole number of shares of Common Stock into which such holder’s aggregate number of shares of Preferred Stock are convertible as of the close of business on the Record Date. As of the Record Date, each share of outstanding Preferred Stock was convertible into approximately 2.51 shares of Common Stock.
If you hold your shares in “street name” (that is, your shares are held in an account at and registered in the name of a brokerage firm, bank, broker-dealer or similar organization), your broker or other organization may exercise discretion to vote your shares under certain limited circumstances if you do not provide voting instructions before the Annual Meeting, in accordance with the rules of the New York Stock Exchange that are applicable to the Nasdaq Stock Market (“NASDAQ”) that govern the banks and brokers.Meeting. These circumstances include voting your shares on so-called “routine matters,” such as the ratification of the appointment of our independent registered public accountants.accounting firm. With respect to routine matters, if you do not vote your shares, your bank, broker or brokerother organization may vote your shares on your behalf or leave your shares unvoted. The approval of the amendment to the Company’s Second Amended and Restated Certificate of Incorporation, as amended (our “Certificate of Incorporation”), the election of directors, the non-binding advisory vote approving executive compensation and the non-binding advisory vote approvingon the frequency of future advisory votes on executive compensation, however, are not considered routine matters. When a proposal is not a routine matter and the brokerage firm or other organization has not received specific voting instructions from the beneficial owner of the shares with respect to that proposal, the brokerage firm cannot vote the shares on that proposal. In circumstances when there are both routine matters and non-routine matters being considered at the same meeting, such as at our upcoming Annual Meeting, the record owner brokers or other organizations that do not receive specific voting instructions from their beneficial owners are “entitled to vote” on the routine matter but not “entitled to vote” on the non-routine matters. This is calledcircumstance results in a “broker non-vote.”non-vote” on each of the non-routine matters. Accordingly, it is particularly important that beneficial owners instruct their brokers or other organizations how they wish to vote their shares.
shares on all matters to ensure their votes are counted as intended.
Approval of Proposal 3 requires the affirmative vote of the majority of shares present in person or represented by proxy and entitled to vote at the Annual Meeting. Abstentions are considered present and entitled to vote on Proposal 35 and will have the same legal effect as votes against such proposal. There willare not expected to be noany broker non-votes associated with this proposal, as the ratification of the appointment of our independent registered public accounting firm is a routine matter.matter upon which record holder brokers and other organizations are entitled to vote the shares without specific instructions from their beneficial owners. As a result, if your shares
Modivcare 2023 Proxy Statement | 5 |
Voting Procedures | TABLE OF CONTENTS |
The Company’s proxy materials are also available at www.proxyvote.com.
• In Person. You may vote in person at the Annual Meeting by requesting a ballot from a Company representative when you arrive.
• Internet. You may vote by Internet at www.proxyvote.com. You will be prompted to enter your Control Numbers which are located on the Notice and then follow the instructions on the Notice to vote.
• Telephone. You may vote by telephone at (800) 690-6903. You will be prompted to enter your Control Numbers which are located on the Notice and then follow the instructions on the Notice to vote.
• Mail. If you requested printed copies of the proxy materials by mail, you may vote by proxy by filling out the voting instruction form included with your proxy materials and returning it in the envelope provided.
In Person. You may vote in person at the Annual Meeting by requesting a ballot from a Company representative when you arrive. | ||||||||
Internet. You may vote by Internet at www.proxyvote.com. You will be prompted to enter your Control Number located on the Notice or proxy card and then follow the instructions provided to vote. | ||||||||
Telephone. You may vote by telephone at (800) 690-6903. You will be prompted to enter your Control Number located on the Notice or proxy card and then follow the instructions provided to vote. | ||||||||
Mail. If you requested printed copies of the proxy materials by mail, you may vote by proxy at the Annual Meeting by filling out the proxy card and following the voting instruction form included with your proxy materials and returning the properly completed proxy card in the envelope provided. |
12, 2023.
• In Person. You must obtain a “legal proxy” from the organization that holds your shares. A legal proxy is a written document that authorizes you to vote your shares held in street name at the Annual Meeting. Please contact the organization that holds your shares for instructions regarding obtaining a legal proxy.
In Person. You must obtain a “legal proxy” from the organization that holds your shares. A legal proxy is a written document that authorizes you to vote your shares held in street name at the Annual Meeting. Please contact the organization that holds your shares for instructions regarding obtaining a legal proxy. You must bring a copy of the legal proxy to the Annual Meeting and ask for a ballot from a Company representative when you arrive. In order for your vote to be counted, you must hand both the copy of the legal proxy and your completed ballot to a Company representative to be provided to the inspector of elections. | ||||||||
Internet and Telephone. See the materials you received from your broker or other record holder organization to determine your ability to instruct your broker or other organization how you wish to cast your vote by Internet or telephone. | ||||||||
Mail. If you requested printed copies of the proxy materials by mail, you may vote by following the instructions of your bank, broker or other organization about how you wish to cast or instruct your organization how to cast your vote. |
You must bring a copy of the legal proxy to the Annual Meeting and ask for a ballot from a Company representative when you arrive. In order for your vote to be counted, you must hand both the copy of the legal proxy and your completed ballot to a Company representative to be provided to the inspector of election.
• Internet and Telephone. Please check your proxy card or contact your respective organization to determine your availability to vote by Internet or telephone.
• Mail. If you requested printed copies of the proxy materials by mail, you may vote by proxy by filling out the voting instruction form included with your proxy materials and returning it in the envelope provided.
Changing or Revoking Your Vote. AfterVote
6 | Modivcare 2023 Proxy Statement |
TABLE OF CONTENTS | Voting Procedures |
12, 2023.
• “FOR” the election of the nominees, David A. Coulter, Leslie V. Norwalk and Daniel E. Greenleaf, as Class 2 directors;
• “FOR” the non-binding advisory vote to approve named executive officer compensation;
• “FOR” the ratification of the appointment of KPMG as the independent registered public accounting firm of the Company to serve for the 2020 fiscal year; and
• withStock:
“FOR” the approval of the amendment to our Certificate of Incorporation to declassify our Board; | “FOR” the election of the director nominees, David A. Coulter, Leslie V. Norwalk, Rahul Samant, and L. Heath Sampson; | “FOR” the non-binding advisory vote to approve named executive officer compensation; | “FOR One Year” for the frequency of future advisory votes on named executive officer compensation; and | “FOR” the ratification of the appointment of KPMG LLP as the independent registered public accounting firm of the Company for the 2023 fiscal year. | ||||||||||||||||||||||||||||||||||||||||
Company and its stockholders.
The
Modivcare 2023 Proxy Statement | 7 |
Voting Securities of Certain Beneficial Owners and Management | TABLE OF CONTENTS |
VOTING SECURITIES OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Name and Address |
| No. of Shares of Common Stock Beneficially Owned (1) |
| No. of Shares of Preferred Stock Beneficially Owned (1) |
| Percent of Total Voting Power (1) | ||
BlackRock, Inc. (2) |
| 1,858,404 |
|
| — |
|
| 12.4% |
Coliseum Capital Management, LLC (3) |
| 869,091 |
|
| 765,916 |
|
| 18.6% |
Dimensional Fund Advisors LP (4) |
| 843,324 |
|
| — |
|
| 5.6% |
Renaissance Technologies LLC (5) |
| 930,699 |
|
| — |
|
| 6.2% |
American Century Investment Management, Inc.(6) | 701,230 | 4.7% | ||||||
The Vanguard Group (7) | 744,093 | 5.0% | ||||||
Directors | ||||||||
Todd J. Carter (8) |
| 10,857 |
|
| — |
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| * |
David A. Coulter (8) |
| 20,466 |
|
| — |
|
| * |
Richard A. Kerley (8) |
| 34,978 |
|
| — |
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| * |
Leslie V. Norwalk (8) |
| 12,910 |
|
| — |
|
| * |
Christopher S. Shackelton (9) |
| 869,091 |
|
| 765,916 |
|
| 18.6% |
Frank J. Wright (8) |
| 12,780 |
|
| — |
|
| * |
Daniel E. Greenleaf (10) | — | * | ||||||
Named Executive Officers | ||||||||
R. Carter Pate (11) |
| 258,563 |
|
| — |
|
| 1.7% |
Kevin M. Dotts (12) |
| 3,493 |
|
| — |
|
| * |
Kathryn Stalmack (13) |
| 5,842 |
|
| — |
|
| * |
Suzanne G. Smith (14) |
| 1,816 |
|
| — |
|
| * |
William Severance | 1,960 |
| — | * | ||||
Laurence Orton | — | — | * | |||||
All current directors and executive officers as a group (10 persons) (15) |
| 971,873 |
|
| 765,916 |
|
| 19.3% |
Name of Beneficial Owner | No. of Shares of Common Stock Beneficially Owned(1) | Percent of Class(1) | ||||||
5% or greater security holders | ||||||||
BlackRock, Inc.(2) | 2,105,387 | 14.9 | % | |||||
Coliseum Capital Management, LLC(3) | 1,399,195 | 9.9 | % | |||||
T. Rowe Price Investment Management, Inc.(4) | 1,134,756 | 8.0 | % | |||||
Fuller & Thaler Asset Management, Inc. (5) | 920,828 | 6.5 | % | |||||
The Vanguard Group (6) | 913,180 | 6.5 | % | |||||
Directors | ||||||||
Todd J. Carter(7) | 12,805 | * | ||||||
David A. Coulter(7) | 25,036 | * | ||||||
Garth Graham(7) | 1,872 | * | ||||||
Richard A. Kerley(7) | 36,926 | * | ||||||
Leslie V. Norwalk(7) | 14,858 | * | ||||||
Stacy Saal(7) | 3,485 | * | ||||||
Rahul Samant(7) | 3,376 | * | ||||||
L. Heath Sampson(8) | 10,232 | * | ||||||
Christopher S. Shackelton(9) | 1,399,195 | 9.9 | % | |||||
Frank J. Wright(7) | 16,190 | * | ||||||
Non-Director Named Executive Officers | ||||||||
Ilias Simpson(10) | 1,357 | * | ||||||
Jason Anderson | — | — | ||||||
Daniel E. Greenleaf | — | — | ||||||
Brett Hickman | — | — | ||||||
Grover N. Wray(11) | 2,430 | * | ||||||
All current directors and executive officers as a group (15 persons) | 1,543,666 | 10.9 | % |
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8 | Modivcare 2023 Proxy Statement |
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TABLE OF CONTENTS | Voting Securities of Certain Beneficial Owners and Management |
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Modivcare 2023 Proxy Statement | 9 |
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Proposal One | TABLE OF CONTENTS |
PROPOSAL 1 – ELECTION OF DIRECTORS
The Company’s Second Amended and Restated
10 | Modivcare 2023 Proxy Statement |
TABLE OF CONTENTS | Proposal One |
Under the Company’s Bylaws, to be elected in an uncontested election, a director nominee must receive a majority of the votes cast for each director nominee. In an uncontested election, an incumbent director nominee must submit an irrevocable resignation that is subject to (i) that director receiving less than a majority of the votes cast in the uncontested election, and (ii) acceptance of the resignation by the Board in accordance with the policies and procedures adopted by the Board for such purpose. In the event an incumbent director doesthis proposal is not receive a majority ofapproved, the votes cast in an uncontested election, the NominatingCertificate Amendment will not be filed and Governance Committeestockholders will make a recommendationbe asked to the Board as to whether to accept or reject the resignation or whether other action should be taken. The Board is required to act on the Nominating and Governance Committee’s recommendation no later than 90 days following certification of the stockholder vote. If any incumbent director does not receive a majority of the votes cast, the Board will publicly disclose its decision regarding accepting or not accepting a resignation withinelect four business days of reaching its decision.
The Board proposes the election of David A. Coulter, Leslie V. Norwalk and Daniel E. Greenleafdirectors as Class 2 directors. The director nominees were nominated by the Nominating and Governance Committee of our Board, which nomination was confirmed by the Board. Each nominee has consenteddirectors to serve asfor three-year terms. The foregoing description of the Certificate Amendment is a nominee for electionsummary only and is qualified by reference to the Board,full text of the proposed Certificate Amendment, which is attached to be named in thethis Proxy Statement and to serve as a member of the Board if elected by the Company’s stockholders. Information regarding each nominee is set forth below.
Appendix B.
ü | |||||||||||
The Board unanimously recommends that you vote “FOR” the Certificate Amendment as disclosed in this Proxy Statement. | |||||||||||
Modivcare 2023 Proxy Statement | 11 |
Proposal Two | TABLE OF CONTENTS |
Proposal Two: Election of Directors | Board Recommendation ____ The Board unanimously recommends that the stockholders vote “FOR” the election of David A. Coulter, Leslie V. Norwalk, Rahul Samant, and L. Heath Sampson as directors of the Company for the ensuing term. | |||||||||||||
The Company’s Certificate of Incorporation provides that the number of directors be between four and eleven, as determined by the Board. The Board currently has established the total number of directors to be ten directors divided into three classes, serving staggered three-year terms. Each class is to be as nearly equal in size as possible. At each annual meeting of stockholders, the successors to the directors whose terms will then expire will be elected to serve from the time of their election and qualification until the third annual meeting following their election or until their successors have been duly elected and qualified, or until the earlier of their death, resignation or removal. If our stockholders approve Proposal 1 to declassify the Board, however, the Company intends to file the Certificate Amendment with the Delaware Secretary of State such that it is effective before taking a vote on this proposal, which will eliminate the classified Board over three years as discussed under Proposal 1, and directors will begin to be elected for one-year terms beginning with this Annual Meeting. Under the Company’s Bylaws, to be elected in an uncontested election such as the election at this year’s Annual Meeting, a director nominee must receive more votes cast for such director nominee than cast against such director nominee. In an uncontested election, an incumbent director nominee must submit an irrevocable resignation that will be given effect only if (i) that director receives fewer votes cast for the director than against the director, and (ii) the resignation is accepted by the Board in accordance with the policies and procedures adopted by the Board for such purpose. In the event an incumbent director does not receive more votes cast for the director than against in an uncontested election, the Nominating and Governance Committee will make a recommendation to the Board as to whether to accept or reject the resignation or whether other action should be taken. The Board is required to act on the Nominating and Governance Committee’s recommendation no later than 90 days following certification of the stockholder vote. If any incumbent director does not receive more votes cast for the director’s election than against, the Board will publicly disclose its decision regarding accepting or not accepting a resignation within four business days of reaching its decision. The Board proposes the election of David A. Coulter, Leslie V. Norwalk, Rahul Samant, and L. Heath Sampson for the ensuing term. If our stockholders approve Proposal 1, our Board will no longer be classified and the four nominees, if elected, will hold office for one-year terms expiring at the 2024 annual meeting of stockholders. If our stockholders do not approve Proposal 1, the Board will remain classified, the four nominees will remain as Class 2 directors and, if elected, the four nominees will hold office for three-year terms expiring at the 2026 annual meeting of stockholders. The director nominees were nominated by the Nominating and Governance Committee of our Board, which nomination was confirmed by the Board. Each nominee has consented to serve as a nominee for election to the Board, to be named in the Proxy Statement and to serve as a member of the Board if elected by the Company’s stockholders. Information regarding each nominee is set forth below. | 1 Class 1 Directors •Richard A. Kerley •Stacy Staal •Christopher S. Shackleton | |||||||||||||
2 Class 2 Directors •David A. Coulter •Leslie V. Norwalk •Rahul Samant •L. Heath Sampson | ||||||||||||||
3 Class 3 Directors •Todd J. Coulter •Garth Graham •Frank J. Wright | ||||||||||||||
12 | Modivcare 2023 Proxy Statement |
TABLE OF CONTENTS | Proposal Two |
If elected, David A. Coulter, Leslie V. Norwalk and Daniel E. Greenleaf are each expected to serve until the 2023 annual meeting of stockholders or until his or her successor is duly elected and qualified. Mr. Coulter, Ms. Norwalk and Mr. Greenleaf are presentlyincumbent directors of the Company.
Mr. Coulter and Ms. Norwalk were previously elected by the stockholders, while Messrs. Samant and Sampson are standing for election by the stockholders for the first time. Mr. Samant was identified as a potential candidate as a director by a third-party recruiter. Messrs. Samant and Sampson were appointed to the Board by the remaining directors on the Board to fill then available vacancies on the Board, with Mr. Sampson being appointed in connection with his appointment by the Board to be the Company’s Chief Executive Officer.
Name |
| Age |
| Class |
| Term Expires |
Todd J. Carter |
| 56 |
| 3 |
| 2021 |
David A. Coulter† |
| 72 |
| 2 |
| 2020 |
Richard A. Kerley |
| 70 |
| 1 |
| 2022 |
Leslie V. Norwalk† |
| 54 |
| 2 |
| 2020 |
Christopher S. Shackelton |
| 40 |
| 1 |
| 2022 |
Frank J. Wright |
| 72 |
| 3 |
| 2021 |
Daniel E. Greenleaf† | 55 | 2 | 2020 |
Name | Age | Class | Term Expires | ||||||||
Todd J. Carter | 59 | 3 | 2024 | ||||||||
David A. Coulter† | 75 | 2 | 2023 | ||||||||
Garth Graham | 49 | 3 | 2024 | ||||||||
Richard A. Kerley | 73 | 1 | 2025 | ||||||||
Leslie V. Norwalk† | 57 | 2 | 2023 | ||||||||
Stacy Saal | 49 | 1 | 2025 | ||||||||
Rahul Samant† | 57 | 2 | 2023 | ||||||||
Christopher S. Shackelton | 43 | 1 | 2025 | ||||||||
Frank J. Wright | 75 | 3 | 2024 | ||||||||
L. Heath Sampson† | 52 | 2 | 2023 |
Modivcare 2023 Proxy Statement | 13 |
Proposal Two | TABLE OF CONTENTS |
David A. Coulter ____ Mr. Coulter is a Special Limited Partner of Warburg Pincus LLC, a global private equity firm focused on growth investing. During the past 12 years, he served in various roles at Warburg Pincus, including Vice Chairman as well as Managing Director and senior advisor focused on the firm’s financial services investment activities. Prior to that, Mr. Coulter held a series of positions at J.P. Morgan Chase and was a member of its Office of the Chairman. He also served as Chairman and Chief Executive Officer of Bank of America Corporation. Mr. Coulter is currently a director of Warburg Pincus Capital Corporation I-B (NYSE:WPCB), a publicly traded special purpose acquisition corporation, and Varo, Inc., a digital bank and financial services company. He is also a board member of Innovu, American Prairie Reserve, Carnegie Mellon University, Third Way, the Northern California Asia Society, and a board member Emeritus at Lincoln Center. He previously served as a director of Triton International Ltd. (NYSE:TRTN), a publicly traded global intermodal container leasing company, from 2015 until 2021. Mr. Coulter received a bachelor’s degree and master’s degree from Carnegie Mellon University, and currently serves as Chair of the Board of Trustees. Mr. Coulter’s experiences as both a senior executive of publicly traded financial services corporations, and as a director of public and private companies, provides the Board with extensive executive experience with regard to matters of interest to financial institutions, including risk, compensation, corporate governance and mergers and acquisitions. | ||||||||
Board Committees: Nominating and Governance Committee member | ||||||||
Director Since: 2016 | ||||||||
Leslie V. Norwalk ____ Since September 2007, Ms. Norwalk has served as Strategic Counsel to Epstein Becker & Green, P.C. From 2001 to 2007, Ms. Norwalk served the Bush Administration in the Centers for Medicare & Medicaid Services (CMS). From 2006 to 2007, she was the Acting Administrator, where she managed the operations of federal health care programs, including Medicare and Medicaid. For the four years prior to that position, she was the agency’s Deputy Administrator. Prior to serving the Bush Administration, Ms. Norwalk practiced law with Epstein Becker & Green, P.C. where she advised clients on a variety of healthcare policy matters. She also served the first Bush administration in the White House Office of Presidential Personnel and the Office of the U.S. Trade Representative. Ms. Norwalk is currently a director on the public company boards of NuVasive Inc., a medical device company, Neurocrine Biosciences, Inc., a biopharmaceutical company, and Arvinas Inc., a clinical-stage biopharmaceutical company. She also serves as an Advisor to several private equity funds. She received a bachelor's degree from Wellesley College and a juris doctor degree from George Mason University School of Law. Ms. Norwalk’s significant healthcare regulatory and policy expertise, including her experiences with the Bush Administration on Medicare and Medicaid matters, provides healthcare industry expertise to the Board. Ms. Norwalk will be able to help guide the Company’s strategy, particularly as the healthcare regulatory environment continues to evolve. | ||||||||
Board Committees: Chairperson of the Nominating and Governance Committee, Audit Committee member | ||||||||
Director Since: 2015 | ||||||||
Director Nominees
David A. Coulter
Director Since: 2016
Board Committees: Compensation Committee and Nominating and Governance Committee member
Mr. Coulter is a Special Limited Partner of Warburg Pincus. During the past 11 years, he served in roles at Warburg Pincus, including Vice Chairman as well as Managing Director and senior advisor focused on the firm’s financial services investment activities. Prior to that, Mr. Coulter held a series of positions at J.P. Morgan Chase and was a member of its Office of the Chairman. He also served as Chairman and Chief Executive Officer of Bank of America Corporation. Mr. Coulter is a director of Triton International Ltd. and Varo Money, Inc. He is also a board member of Lincoln Center, Carnegie Mellon University, Third Way and the Northern California Asia Society. Mr. Coulter received a bachelor’s degree and master’s degree from Carnegie Mellon University.
Mr. Coulter’s experiences as both a senior executive of publicly traded financial services corporations, and as a director of public and private companies, provides the Board with extensive executive experience with regard to matters of interest to financial institutions, including risk, compensation, corporate governance and mergers and acquisitions.
Leslie V. Norwalk
Director Since: 2015
Board Committees: Chairperson of the Nominating and Governance Committee, Audit Committee member
Since September 2007, Ms. Norwalk has served as Strategic Counsel to Epstein Becker & Green, P.C. From 2001 to 2007, Ms. Norwalk served the Bush Administration in the Centers for Medicare & Medicaid Services (CMS). From 2006 to 2007, she was the Acting Administrator, where she managed the operations of federal health care programs, including Medicare and Medicaid. For the four years prior to that position, she was the agency’s Deputy Administrator. Prior to serving the Bush Administration, Ms. Norwalk practiced law with Epstein Becker & Green, P.C. where she advised clients on a variety of healthcare policy matters. She also served the first Bush administration in the White House Office of Presidential Personnel and the Office of the U.S. Trade Representative. Ms. Norwalk is currently a director on the public company boards of Magellan Health Inc., NuVasive Inc., Neurocrine Biosciences, Inc., and Arvinas Inc. She also serves as an Advisor to several private equity funds. She received a bachelor's degree from Wellesley College and a juris doctor degree from George Mason University School of Law.
Ms. Norwalk’s significant healthcare regulatory and policy expertise, including her experiences with the Bush Administration on Medicare and Medicaid matters, provides healthcare industry expertise to the Board. Ms. Norwalk will be able to help guide the Company’s strategy, particularly as the healthcare regulatory environment continues to evolve.
Daniel E. Greenleaf
Director Since: 2019
Daniel E. Greenleaf has been a director since December 2019. Mr. Greenleaf currently serves as the President and Chief Executive Officer of the Company. Prior to joining the Company, from September 2016 through August 2019, Mr. Greenleaf served as President and Chief Executive Officer of BioScrip, Inc., the largest independent provider of infusion and home care management solutions, where he spearheaded the turnaround and successful merger of BioScrip with Option Care Health (Nasdaq: OPCH). Prior to BioScrip, from December 2013 through September 2016, he served as Chairman and Chief Executive Officer of Home Solutions Infusion Services, where he led the turnaround and eventual sale to BioScrip. Prior to joining Home Solutions Infusion Services, from April 2008 through November 2012, Mr. Greenleaf was the President and Chief Executive Officer of Coram Specialty Services, where he was instrumental in growing Coram to become the top-performing home infusion company in the country prior to its sale to CVS. Before joining Coram, Mr. Greenleaf served as President and Chief Operating Officer of VioQuest Pharmaceuticals, a publicly traded pharmaceutical company and as President of U.S. Operations for Celltech Biopharmaceuticals. Mr. Greenleaf holds a Bachelor of Arts in Economics from Dennison University and a Master of Business Administration from the University of Miami. Mr. Greenleaf is a military veteran, having served as a captain and navigator in the United States Air Force.
Mr. Greenleaf’s significant experience in the healthcare industry, and in particular his experience as Chief Executive Officer of BioScrip, Home Solutions and Coram, are particularly relevant to Mr. Greenleaf’s service on the Board. Further, as the only Board member who is also a member of the Company’s management team, Mr. Greenleaf provides management’s perspective in Board discussions about the operations and strategic direction of the Company.
14 | Modivcare 2023 Proxy Statement |
TABLE OF CONTENTS | Proposal Two |
Rahul Samant ____ Rahul Samant currently serves as Chief Information Officer of Delta Air Lines, Inc., a position he has held since 2016. Mr. Samant also serves as Executive Vice President of Delta Air Lines, Inc., a position he has held since 2018, and previously served as Senior Vice President from 2016 until 2018. Prior to that, he was Chief Digital Officer and Global Head of Application Development and Management at American International Group, Inc. and held various technology leadership roles at Bank of America Corporation, including: Chief Information Officer; Head of Technology and Operations for Global Wealth and Investment Management; and Manager and Director of Fixed Income Securities Technology. Mr. Samant commenced his career at Unisys Ltd. He graduated with a Bachelor of Science in Electronics Engineering from University of Mumbai and a Master of Business Administration from Wake Forest University. Mr. Samant’s extensive leadership experience, which spans over 30 years, provides the Board with important technological and operational expertise. | ||||||||
Board Committees: Audit Committee | ||||||||
Director Since: 2021 |
L. Heath Sampson ____ L. Heath Sampson has served as the Company’s President and Chief Executive Officer since July 27, 2022 and as the Company’s Chief Financial Officer since February 26, 2021. Mr. Sampson has nearly three decades of executive and financial leadership experience across a range of private and publicly traded companies. Most recently he served, beginning in April 2015, as Chief Executive Officer of Advanced Emissions Solutions, Inc., an environmental solutions provider to companies in coal-fired power generation, municipal water and other industries primarily through air and water purification control technologies, where he orchestrated a successful company turnaround and transformation, after having served there from August of 2014 as Chief Financial Officer and Treasurer. Prior to that, he held Chief Financial Officer roles at private equity-owned Square Two Financial and within key business units at First Data Corporation. He began his career in auditing and business consulting at Arthur Andersen. Mr. Sampson graduated from the University of Denver with a Bachelor of Business Administration degree in Accounting and a Master of Accountancy degree. Mr. Sampson’s significant leadership experience across a variety of industries coupled with his background in auditing and business consulting are particularly relevant to Mr. Sampson’s service on the Board. Further, as the only Board member who is also a member of the Company’s management team, Mr. Sampson provides management’s perspective in Board discussions about the operations and strategic direction of the Company. | ||||||||
Director Since: 2022 | ||||||||
Directors
Christopher S. Shackelton
Director Since: 2012
Chairman of the Board
Christopher S. Shackelton was appointed Chairman in 2012 and served as Interim CEO in 2015. Mr. Shackelton is managing partner and co-founder of Coliseum Capital Management, a private investment firm that invests with a long-term orientation in undervalued companies. Previously, Mr. Shackelton worked at Watershed Asset Management and Morgan Stanley & Co. Mr. Shackelton also serves on the boards of Lazydays Holdings, Inc., an operator of recreational vehicle dealerships, and Universal Technical Institute, a technical training school for the transportation industry, as well, from time to time, private companies. Mr. Shackelton was previously Chairman of Rural/Metro Corp, an emergency ambulance company, from December 2010 to June 2011 and served on the boards of BioScrip Inc., an infusion services company from March 2015 to August 2019, LHC Group Inc., a nursing care company from November 2012 through August 2017, Advanced Emissions Solutions Inc., a clean energy technology company, from August 2014 through May 2016, and Interstate Hotels Inc., a global hotel management company, from February 2009 through March 2010. Mr. Shackelton is actively involved in multiple charitable organizations. Mr. Shackelton received a bachelor's degree in Economics from Yale College in 2001.
Christopher Shackelton's experience creating stockholder value for a wide range of companies provides the Board with valuable business leadership and strategic focus. Mr. Shackelton brings financial, investing and accounting experience from other public company boards on which he led mergers and acquisitions, financings, restructurings and other initiatives. Furthermore, Christopher Shackelton's in-depth knowledge of the healthcare industry is particularly beneficial to the Board.
Richard A. Kerley
Director Since: 2010
Board Committees: Chairperson of the Compensation Committee and Chairperson of the Audit Committee
Mr. Kerley served as the Senior Vice President, Chief Financial Officer and member of the board of directors of Peter Piper, Inc., a privately held pizza and entertainment restaurant chain, from November 2008 to December 2014, when he retired. From July 2005 to October 2008, Mr. Kerley served as the Chief Financial Officer of Fender Musical Instruments Corporation. From June 1981 to July 2005, Mr. Kerley was an audit partner with Deloitte & Touche LLP. Prior to becoming a partner at Deloitte & Touche, Mr. Kerley served as an audit manager and staff accountant from August 1971 to June 1981. Mr. Kerley also serves on the board of Cavco Industries, Inc., one of the largest producers of manufactured homes in the United States, and served on the board of The Joint Corp., a publicly traded operator, manager and franchisor of chiropractic clinics from September 2015 until June 2019. He received a bachelor’s degree in accounting from Marshall University in 1971.
Mr. Kerley served as a senior financial executive with experience in a variety of operational issues, financial budgeting, planning and analysis, capital investment decisions, mergers and acquisitions, operational and financial controls, internal and external reporting, financings and public offerings and filings with the SEC. This strong financial background provides the Board with financial expertise, including an understanding of financial statements, finance, capital investing strategies and accounting.
Todd J. Carter
Director Since: 2016
Board Committees: Compensation Committee member
Todd J. Carter is Co-President and Chief Executive Officer of GCA Global, a global independent investment banking firm, and serves on the firm’s board of directors. He has served in these roles since 2008, and is a co-founder of the firm. Previously, Mr. Carter served as Chairman, President and Chief Executive Officer of Savvian Inc. and Perseus Group. Prior to 2003, he was President of Robertson Stephens & Company Inc., a global investment banking and asset management firm, and served on the firm’s board of directors. Earlier in his career, Mr. Carter was employed by McKinsey & Company and Smith Barney Inc. Additionally, Mr. Carter has served on a number of company, advisory and non-profit boards of directors. Mr. Carter received a bachelor’s degree from the University of Texas and a master of business administration degree from Harvard University.
Mr. Carter brings to the Board global investment banking experience, including his service as founder and chief executive officer of a large independent global investment bank, and his extensive financial expertise and experience in the transaction advisory industry, as well as a broad span of expertise in the financial advisory and mergers & acquisitions sectors.
Frank J. Wright
Director Since: 2016
Board Committees: Audit Committee and Nominating and Governance Committee member
Mr. Wright is founder of the PharmaTrust, a firm that provides advisory services to companies and investors engaged in healthcare services and pharmaceutical development and manufacturing. Mr. Wright has almost 40 years of experience in the chemical and pharmaceutical industries. He served as a senior executive of Alexion Pharmaceuticals LLC from 2012 to 2014, as President of European operations, and is a co-founder of Aptuit, an integrated drug development services company. Prior to that, Mr. Wright held a variety of executive positions in multiple pharmaceutical companies, including Glaxo Wellcome (now GlaxoSmithKline). He is a director of Exela Pharma Sciences and ZenQMS LLC, and retired in 2017 as a Director of Laurus Labs Private, Limited and Laurus Synthesis Inc. where he served for 10 years. Mr. Wright received a mechanical engineering degree from the University of Strathclyde, Glasgow.
Modivcare 2023 Proxy Statement | 15 |
Proposal Two | TABLE OF CONTENTS |
Todd J. Carter ____ Todd J. Carter is Chairman of Global Technology at Houlihan Lokey. Prior to assuming his role at Houlihan Lokey in October 2021, Mr. Carter served as Chief Executive Officer and Co-Founder of GCA Advisors, LLC (“GCA”), a global independent investment banking firm, since 2008 until GCA was acquired by Houlihan Lokey in October 2021. Mr. Carter also served on the board of directors of GCA. Prior to that, Mr. Carter served as Chairman, President and Chief Executive Officer of Savvian Inc., a global investment banking firm, and Perseus Group, a global asset management and investment banking firm. Prior to 2003, he was President of Robertson Stephens & Company Inc., a global investment banking and asset management firm, and served on the firm’s board of directors. Earlier in his career, Mr. Carter was employed by McKinsey & Company and Smith Barney Inc. Over the past two decades, Mr. Carter has advised on over 1,500 mergers and acquisitions, financings, takeover defenses, leveraged buyouts, divestures, leveraged recapitalizations, joint ventures, stock buybacks, and restructurings and has been actively involved as an early-stage and growth investor, primarily focused on the technology industry. He has invested in more than 100 companies, several of which he co-founded. Mr. Carter has also served on a number of public and private company boards as well as advisory and nonprofit boards. In the nonprofit area, he currently serves on UCSF’s Board of Overseers and the boards of Education SuperHighway and The Conservation Fund. Other selected involvement includes serving as Chairman of OneD Battery Science, a nanowire-material, high-performance battery company, and on advisory boards such as Foresite Capital and Victory Park Capital. Mr. Carter received a bachelor’s degree from the University of Texas and a master of business administration degree from Harvard Business School. Mr. Carter brings to the Board global investment banking experience, including his service as founder and chief executive officer of a large independent global investment bank, and his extensive financial expertise and experience in the transaction advisory industry, as well as a broad span of expertise in the financial advisory and mergers and acquisitions sectors. | ||||||||
Board Committees: Compensation Committee member | ||||||||
Director Since: 2016 | ||||||||
16 | Modivcare 2023 Proxy Statement |
Mr. Wright has almost 40 years of operational experience in the chemical and pharmaceutical industries, including as the founder of an advisory services firm engaged in healthcare services, pharmaceutical development and manufacturing adding value to the Board. Mr. Wright’s executive leadership and experience provides the Board with operational expertise.
Non-director
TABLE OF CONTENTS | Proposal Two |
Garth Graham, MD ____ Garth Graham, MD, currently serves as Director and Global Head of Healthcare and Public Health for Google and YouTube at Alphabet, Inc. Previously, he was Chief Community Health Officer at CVS Health Corporation from 2018 until 2020. Dr. Graham was also President of the Aetna Foundation from 2013 until 2019, as well as Vice President of Community Health at Aetna, Inc. from 2017 until its acquisition by CVS Health Corporation in 2018. Prior to that, he served as Assistant Dean of Health Policy and Chief of Health Services Research at University of Florida’s Department of Medicine, and as Attending Physician at The Massachusetts General Hospital. Dr. Graham started his career serving in two U.S. administrations as U.S. Deputy Assistant Secretary for Health, where he led the development of the federal government’s first national health disparities plan. He is an elected member of the National Academy of Medicine and serves on several boards, including: the National Heart, Lung, and Blood Institute Advisory Council; the Institute of Medicine Board on Population Health; and the Board of the National Quality Forum. Dr. Graham is currently a director on the board of Science Applications International Corp. (NYSE: SAIC), a technology-driven company focused on digital transformation across multiple markets. He graduated with a Bachelor of Science in Biology from Florida International University, a Master of Public Health from Yale School of Public Health, and a Doctor of Medicine from Yale University’s School of Medicine. Dr. Graham has approximately two decades of extensive healthcare experience, with an emphasis on community and public health, which provides the Board with deep insight into healthcare administration and policy. Dr. Graham helps guide the Company’s strategy, particularly in the area of social determinants of health. | ||||||||
Board Committees: Nominating and Governance Committee | ||||||||
Director Since: 2021 | ||||||||
Modivcare 2023 Proxy Statement | 17 |
Proposal Two | TABLE OF CONTENTS |
Richard A. Kerley ____ Mr. Kerley served as the Senior Vice President, Chief Financial Officer and member of the board of directors of Peter Piper, Inc., a privately held pizza and entertainment restaurant chain, from November 2008 to December 2014, when he retired. From July 2005 to October 2008, Mr. Kerley served as the Chief Financial Officer of Fender Musical Instruments Corporation. From June 1981 to July 2005, Mr. Kerley was an audit partner with Deloitte & Touche LLP. Prior to becoming a partner at Deloitte & Touche, Mr. Kerley served as an audit manager and staff accountant from August 1971 to June 1981. Mr. Kerley also serves on the board of Cavco Industries, Inc., one of the largest producers of manufactured homes in the United States, and served on the board of The Joint Corp., a publicly traded operator, manager and franchisor of chiropractic clinics from September 2015 until June 2019. He received a bachelor’s degree in accounting from Marshall University in 1971. Mr. Kerley served as a senior financial executive with experience in a variety of operational issues, financial budgeting, planning and analysis, capital investment decisions, mergers and acquisitions, operational and financial controls, internal and external reporting, financings and public offerings and filings with the SEC. This strong financial background provides the Board with financial expertise, including an understanding of financial statements, finance, capital investing strategies and accounting. | ||||||||
Board Committees: Chairperson of the Compensation Committee and Chairperson of the Audit Committee | ||||||||
Director Since: 2010 | ||||||||
Stacy Saal ____ Stacy Saal most recently served as the Chief Executive Officer of Glydways, a transportation technology and clean energy company until March 2023. Ms. Saal served as Chief Operating Officer of Fabric Inc., a commerce platform software company to the retail industry, from February 2022 until her move to Glydways in December 2022. Ms. Saal previously served as Chief Operating Officer of Babylon Inc, a technology-driven digital health company from February 2021 until February 2022. Previously, she was the General Manager and Chief Operating Officer of the Prime Air division of Amazon.com, Inc. from 2018 until 2021. Prior to that, she held various executive leadership roles in marketing, operations, and general management at Amazon from 2008 until 2018, including as Global Program Leader and Head of Global Marketing, Membership and Customer Experience of Amazon Fresh from 2016 until 2018 and General Manager of Prime Now from 2015 until 2016. Before joining Amazon, Ms. Saal was Vice President of Operations at GlobalWine, Chief Executive Officer of Tom’s Cookies, and Director of Demand Planning for the Dockers Brand at Levi Strauss & Co. At the start of her career, Ms. Saal held merchandising, operational and supply chain optimization roles at Williams-Sonoma, Inc. She graduated with a Bachelor of Art in Economics from Sonoma State University. Ms. Saal has nearly twenty-five years of broad leadership experience in strategy, team building, marketing, operations, and product management all unified by a strong focus on the customer experience, which provides the Board with valuable business and operating expertise. | ||||||||
Board Committees: Compensation Committee | ||||||||
Director Since: 2021 | ||||||||
18 | Modivcare 2023 Proxy Statement |
TABLE OF CONTENTS | Proposal Two |
Christopher S. Shackelton ____ Mr. Shackelton was appointed Chairman in 2012 and served as Interim CEO in 2015. Mr. Shackelton is managing partner and co-founder of Coliseum Capital Management, a private investment firm that invests with a long-term orientation in undervalued companies. Previously, Mr. Shackelton worked at Watershed Asset Management, an employee-owned, alternative investment firm, and Morgan Stanley & Co., an investment bank and financial services company. Mr. Shackelton also serves on the boards of Lazydays Holdings, Inc., an operator of recreational vehicle dealerships, and Universal Technical Institute, a technical training school for the transportation industry, and as Chairman of the Board of Medalogix, LLC, a heathcare data analytics company, as well as, from time to time, private companies. Mr. Shackelton was previously Chairman of Rural/Metro Corp, an emergency ambulance company, from December 2010 to June 2011 and served on the boards of BioScrip Inc., an infusion services company from March 2015 to August 2019, LHC Group Inc., a nursing care company from November 2012 through August 2017, Advanced Emissions Solutions Inc., a clean energy technology company, from August 2014 through May 2016, and Interstate Hotels Inc., a global hotel management company, from February 2009 through March 2010. Mr. Shackelton is actively involved in multiple charitable organizations. Mr. Shackelton received a bachelor's degree in Economics from Yale College in 2001. Mr. Shackelton's experience creating stockholder value for a wide range of companies provides the Board with valuable business leadership and strategic focus. Mr. Shackelton brings financial, investing and accounting experience from other public company boards on which he led mergers and acquisitions, financings, restructurings and other initiatives. Furthermore, Mr. Shackelton's in-depth knowledge of the healthcare industry is particularly beneficial to the Board. | ||||||||
Chairman of the Board | ||||||||
Director Since: 2012 | ||||||||
Frank J. Wright ____ Mr. Wright is founder of PharmaTrust, a firm that provides advisory services to companies and investors engaged in healthcare services and pharmaceutical development and manufacturing. Mr. Wright has almost 40 years of experience in the chemical and pharmaceutical industries. He served as a senior executive of Alexion Pharmaceuticals LLC from 2012 to 2014, as President of European operations, and is a co-founder of Aptuit, an integrated drug development services company. Prior to that, Mr. Wright held a variety of executive positions in multiple pharmaceutical companies, including Glaxo Wellcome (now GlaxoSmithKline). He is a director of Exela Pharma Sciences and ZenQMS LLC, and retired in 2017 as a Director of Laurus Labs Private, Limited and Laurus Synthesis Inc. where he served for 10 years. Mr. Wright received a mechanical engineering degree from the University of Strathclyde, Glasgow. Mr. Wright’s almost 40 years of operational experience in the chemical and pharmaceutical industries, including as the founder of an advisory services firm engaged in healthcare services, pharmaceutical development and manufacturing, adds significant value to the Board. Mr. Wright’s executive leadership and experience provides the Board with operational expertise. | ||||||||
Board Committees: Audit Committee and Nominating and Governance Committee member | ||||||||
Director Since: 2016 |
Modivcare 2023 Proxy Statement | 19 |
Proposal Two | TABLE OF CONTENTS |
Kevin M. Dotts, 56, has served as Chief Financial Officer since August 2018. Mr. Dotts has over 30 years of experience as a finance and accounting executive at multiple technology companies, serving 14 of those years in the position of chief financial officer. Before joining Providence, Mr. Dotts served as Executive Vice President and Chief Financial Officer of Birch Communications, Inc. and its successor, Fusion Connect, Inc. since February 2017. Prior to that Mr. Dotts held the CFO role at Internap from August 2012 to December 2016, Culligan International from May 2011 to August 2012 and EarthLink from July 2009 to September 2009. In 2010, he served as Interim Chief Financial Officer and Director of Gas Turbine Efficiency Plc. Mr. Dotts began his career at General Electric Company (“GE”) and served in increasingly senior financial roles during his 15 years of tenure at GE. Mr. Dotts received a bachelor’s degree in finance and computer systems management from Drexel University.
Kathryn Stalmack, 43, joined the Company is August 2019. Ms. Stalmack has extensive experience as a corporate transactional and healthcare regulatory attorney. From August 2015 to July 2019, Ms. Stalmack served as Senior Vice President, General Counsel and Corporate Secretary at BioScrip, Inc. From January 2008 to August 2015, Ms. Stalmack served as a Shareholder at Polsinelli, PC working in the Healthcare Practice group. From April 2003 to December 2007, Ms. Stalmack worked at Donohue Brown Mathewson & Smith as a healthcare litigator primarily defending physicians and hospitals. Ms. Stalmack also worked as a litigator at Cassiday Schade & Gloor from 2001 to 2003. Ms. Stalmack holds a Bachelor of Science degree from Miami University in Oxford, Ohio, and Juris Doctor from Loyola University Chicago School of Law. Ms. Stalmack is admitted to practice law in Illinois, Colorado and Georgia.
Suzanne G. Smith, 52, has more than two decades of accounting and finance experience in a variety of industries. Prior to joining the Company in February 2019, she most recently served as Chief Accounting Officer of Cumulus Media from May 2017 until February 2019. Previous appointments include Vice President and Corporate Controller of staffing firm, EmployBridge from September 2015 through April 2017, interim Chief Financial Officer for Acuity from June 2015 through August 2015, and Senior Vice President and Corporate Controller of Serta Simmons Bedding from June 2014 through May 2015. Ms. Smith was also previously Treasurer at WestRock Company. Ms. Smith graduated from The Ohio State University with a Bachelor of Science in Human Ecology and received a Master in Business Administration with a concentration in Finance from Georgia State University. She is a CPA licensed in Georgia.
Anne Bailey ____ Anne Bailey was appointed President of ModivCare’s Home division in March 2023. She brings over 25 years of executive leadership experience in the healthcare industry, including payor and revenue strategy, insurance, and communications. Ms. Bailey was most recently a senior executive and Group Vice President at DaVita, a fortune 250 healthcare company from 2014 through March 2023. Prior to that she was a Vice President at DaVita where she was also a founding member of DaVita’s Power of Women group and led DaVita’s community giving for many years. Ms. Bailey also has experience working with lawmakers to advance healthcare policies. Prior to DaVita, Ms. Bailey was at Bain & Company, where she led consulting teams focused on domestic and international growth strategies. Ms. Bailey has served as President of the Chronic Disease Coalition and sits on the boards of CU Denver Business School, City Year Denver (emeritus), Amp the Cause, and OI Infusion. Ms. Bailey holds a bachelor’s degree from the University of California, San Diego, a Master of Science degree in information systems from the University of Colorado, and a Master of Business Administration degree from the Wharton School of the University of Pennsylvania. | ||||||||
Title: President, ModivCare Home | ||||||||
Age: 50 |
Jonathan B. Bush ____ Jonathan Bush has served as Senior Vice President, General Counsel and Secretary since July 2021. Prior to his promotion, Mr. Bush served as the Company’s Vice President, Deputy General Counsel and Assistant Secretary since November 2019. Previously, from August 2018 to October 2019, he was Vice President, Corporate Development and Deputy General Counsel at BioSrip, Inc., an independent provider of infusion and home care management solutions, and prior to then he held a variety of corporate transaction-oriented roles at the private law firms of PilieroMazza PLLC, Dechert LLP, Schulte Roth & Zabel LLP, and Cravath, Swaine & Moore LLP, and in-house at Goldman, Sachs & Co., a global financial institution that delivers a broad range of financial services across investment banking, securities, investment management and consumer banking to its clients. Mr. Bush graduated with an A.B. in Economics from Harvard University and a J.D. from the University of Texas School of Law. | ||||||||
Title: Senior Vice President, General Counsel and Secretary | ||||||||
Age: 54 |
20 | Modivcare 2023 Proxy Statement |
TABLE OF CONTENTS | Proposal Two |
Rebecca Orcutt ____ Rebecca Orcutt has served as the Senior Vice President, Chief Accounting Officer since August 2022. Ms. Orcutt has more than 12 years of financial experience in healthcare, financial services, and public accounting, with expertise in Securities and Exchange Commission reporting and policy, technical accounting, Sarbanes-Oxley Act compliance, merger and acquisition (M&A) activities, and business combination integrations. Prior to her promotion to her current position, Ms. Orcutt had served as the Company’s Vice President, Financial Reporting and Accounting since January 2021. Previously, she worked for over a decade in audit and assurance at KPMG LLP. Ms. Orcutt, a certified public accountant, graduated with a B.S. and a Master of Accountancy from the University of Denver. | ||||||||
Title: Senior Vice President, Chief Accounting Officer | ||||||||
Age: 37 |
Kenneth Shepard ____ Kenneth Shepard has served as the Chief Financial Officer of ModivCare Mobility, which comprises the Company’s non-emergency medical transportation (“NEMT”) division, since August 2022. Prior to that, he served as the Company’s Vice President, Chief Accounting Officer since July 2021 until August 2022, as the Company’s Vice President, Finance and Controller, since May 2016 until July 2021, and as Director of Accounting from June 2015 through April 2016. Previously, he worked for ten years in assurance at BDO USA, LLP, a professional services firm which delivers assurance, tax, and financial advisory services to its clients around the globe. Mr. Shepard, a Certified Public Accountant, graduated with a B.S. in Accountancy from Southern Illinois University Edwardsville and a Master of Accountancy from University of Alabama, Tuscaloosa. | ||||||||
Title: Chief Financial Officer, ModivCare Mobility | ||||||||
Age: 42 |
Modivcare 2023 Proxy Statement | 21 |
CORPORATE GOVERNANCE
Proposal Two | TABLE OF CONTENTS |
Ilias Simpson ____ Ilias Simpson has served as President of ModivCare Mobility since April 2022. Mr. Simpson has more than fifteen years of executive leadership experience, with a focus on logistics and transportation, including most recently at Radial Inc., a subsidiary of Bpost Group – Parcels and Logistics, where he served as President and CEO, from 2017 until December 2021. Mr. Simpson has also served in leadership positions at Ryder System, Inc., Pentair, Cintas, and Halliburton. Additionally, he is a decorated veteran of the United States Air Force. He graduated with a Master of Business Administration from the University of Dayton and a Bachelor of Arts in Sociology from the University of North Texas | ||||||||
Title: President, ModivCare Mobility | ||||||||
Age: 40 |
22 | Modivcare 2023 Proxy Statement |
TABLE OF CONTENTS | Corporate Governance |
Daniel Greenleaf, who served as our Chief Executive Officer and as a Class 2 director until his departure from the Company in July 2022, was not considered independent due to his service as an executive officer of the Company.
•our program’s emphasis on long-term, equity-based compensation discourages risk-taking that produces short-term results at the expense of building long-term stockholder value;
•the maximum payout levels for bonuses and equity-based compensation are capped by the Compensation Committee;
we cap the payment amounts under our annual cash incentive compensation plan, and •the Compensation Committee can exercise negative discretion to reduce annual cash incentive compensation payments;
•the Compensation Committee uses an independent compensation consultant that performs no other services for the Company, except at the direction of the Compensation Committee;
•the Compensation Committee has the authority to make retroactive adjustments to incentive compensation pursuant to the Company’s clawback policy; and
Modivcare 2023 Proxy Statement | 23 |
Corporate Governance | TABLE OF CONTENTS |
Communication with the Board
they respectively served.
Audit Committee. The Audit, CommitteeCompensation, and Nominating and Governance Committees are each governed by a written charter approved by the Board. A copy of each committee’s charter is currently composedavailable on our website at www.ModivCare.com/governance. ModivCare intends to disclose any amendments to these charters required by the SEC or listing standards of Mr. Kerley (Chairperson), Ms. NorwalkNASDAQ at the same location on our website. The information contained on our website is not part of, and Mr. Wright. is not incorporated by reference in, this Proxy Statement or any other report we file with or furnish to the SEC.
Audit Committee | The Audit Committee currently consists of Mr. Kerley (Chairperson), Ms. Norwalk, Mr. Samant and Mr. Wright. |
In addition, our Audit Committee provides oversight to the Company’s information security programs.
24 | Modivcare 2023 Proxy Statement |
TABLE OF CONTENTS | Corporate Governance |
Compensation Committee. The Compensation Committee currently consists of Mr. Kerley (Chairperson), Mr. Carter and Mr. Coulter.
Compensation Committee | The Compensation Committee currently consists of Mr. Kerley (Chairperson), Mr. Carter and Ms. Saal. |
Since 2015In 2022, the Compensation Committee has engagedcontinued the engagement of an independent compensation consultant, ClearBridgeMeridian Compensation GroupPartners, LLC (“ClearBridge”Meridian”), a nationally recognized consulting firm, to review the executive compensation programs (including executive pay levels) and assist in structuring short-term and long-term incentive programs for executive and operational management. ClearBridgeMeridian reports directly and solely to the Compensation Committee. ClearBridgeMeridian does not provide any other services to the Company, except at the direction of the Compensation Committee. The Compensation Committee assessed the independence of ClearBridgeMeridian pursuant to the applicable rules and concluded that ClearBridge’sMeridian’s work did not raise any conflict of interest that would prevent it from independently representing the Compensation Committee.
Nominating and Governance Committee. The Nominating and Governance Committee currently consists of Ms. Norwalk (Chairperson), Mr. Coulter and Mr. Wright.
Nominating and Governance Committee | The Nominating and Governance Committee currently consists of Ms. Norwalk (Chairperson), Mr. Coulter, Dr. Graham and Mr. Wright. |
Modivcare 2023 Proxy Statement | 25 |
Corporate Governance | TABLE OF CONTENTS |
May 1, 2023)
Board Size: | ||||||||||||||
Total Number of Directors: 10 | ||||||||||||||
Gender Identity: | Female | Male | Non-Binary | Gender Undisclosed | ||||||||||
Number of directors based on gender identity | 2 | 7 | — | 1 | ||||||||||
Number of Directors who identify in any of the categories below: | ||||||||||||||
African American or Black | — | 1 | — | — | ||||||||||
Alaskan Native or American Indian | — | — | — | — | ||||||||||
Asian | — | 1 | — | — | ||||||||||
Hispanic or Latinx | — | — | — | — | ||||||||||
Native Hawaiian or Pacific Islander | — | — | — | — | ||||||||||
White | 2 | 5 | — | — | ||||||||||
Two or More Races or Ethnicities | — | — | — | — | ||||||||||
LGBTQ+ | — | — | — | — | ||||||||||
Undisclosed | — | — | — | 1 |
26 | Modivcare 2023 Proxy Statement |
TABLE OF CONTENTS | Corporate Governance |
The Director/Prospective Director Agreement requires directors and nominees to disclose certain types of voting commitments and compensation arrangements and represent that the director or nominee, if elected, would be in compliance with all applicable corporate governance, conflicts of interest, confidentiality, securities ownership and stock trading policies and guidelines of the Company, and also provides for the immediate resignation of a director if such person is found by a court of competent jurisdiction to have breached the Director/Prospective Director Agreement in any material respect.
According to Providence’s
Asforth, as to each person whom the stockholder proposes to nominate for election or reelection as a director:
•the name, age, business address and residence address of such person;
•the principal occupation and employment of such person;
•the class and series and number of shares of each class and series of capital stock of the Company which are owned beneficially or of record by such person (which information shall be supplemented not later than ten (10) calendar days after the record date for the meeting to disclose such ownership as of the record date);
•such person’s executed written consent to being named in the proxy statement as a nominee and to serving as a director if
•all information relating to such person that would be required to be disclosed in a proxy statement or other filings required to be made with the SEC in connection with the solicitation of proxies for the election of directors in a contested election pursuant to Section 14 of the Exchange Act (or pursuant to any law or statute replacing such section), and the rules and regulations promulgated thereunder;
Modivcare 2023 Proxy Statement | 27 |
Corporate Governance | TABLE OF CONTENTS |
•a questionnaire regarding his or her background and an executed Director/Prospective Director Agreement.
•the name and record address, as they appear on the Company’s stock ledger, of such stockholder and the name and address of any Stockholder Associated Person;
•(a) the class, series and number of shares of each class and series of capital stock of the Company which are, directly or indirectly, owned beneficially and/or of record by such stockholder or any Stockholder Associated Person, documentary evidence of such record or beneficial ownership, and the date or dates such shares were acquired and the investment intent at the time such shares were acquired, (b) any derivative instrument (as defined in the amended and restated bylaws)Bylaws) directly or indirectly owned beneficially by such stockholder or any Stockholder Associated Person and any other direct or indirect right held by such stockholder or any Stockholder Associated Person to profit from, or share in any profit derived from, any increase or decrease in the value of shares of the Company, (c) any proxy, contract, arrangement, understanding, or relationship pursuant to which such stockholder or any Stockholder Associated Person has a right to vote any shares of any security of the Company, (d) any short interest (as defined in the amended and restated bylaws)Bylaws) indirectly or directly held by such stockholder or any Stockholder Associated Person in any security issued by the Company, (e) any rights to dividends on the shares of the Company owned beneficially by such stockholder or any Stockholder Associated Person that are separated or separable from the underlying shares of the Company, (f) any proportionate interest in shares of the Company or derivative instruments held, directly or indirectly, by a general or limited partnership in which such stockholder or any Stockholder Associated Person is a general partner or, directly or indirectly, beneficially owns an interest in a general partner, and (g) any performance-related fees (other than an asset-based fee) to which such stockholder or any Stockholder Associated Person is entitled based on any increase or decrease in the value of shares of the Company or derivative instruments, if any, as of the date of such notice, including without limitation, any such interests held by members of such stockholder’s or any Stockholder Associated Person’s immediate family sharing the same household (which information, in each case, must be supplemented by such stockholder and any Stockholder Associated Person not later than ten (10) calendar days after the record date for the meeting to disclose such ownership as of the record date);
•a description of all arrangements or understandings between such stockholder and/or any Stockholder Associated Person and each proposed nominee and any other person or persons (naming such person or persons) pursuant to which the nominations are to be made by such stockholder;
•any material interest of such stockholder or any Stockholder Associated Person in the election of such nominee, individually or in the aggregate, including any anticipated benefit to such stockholder or any Stockholder Associated Person therefrom;
•a representation from such stockholder as to whether the stockholder or any Stockholder Associated Person intends or is part of a group which intends (1) to deliver a proxy statement and/or form of proxy to holders of at least the percentage of the Company’s outstanding capital stock required to elect the person and/or (2) otherwise to solicit proxies in support of the election of such person;
•a representation that such stockholder is a holder of record of stock of the Company entitled to vote at such meeting, that such stockholder intends to appear in person, or by proxy, at the meeting to nominate the person or persons named in the notice;
•whether and the extent to which any agreement, arrangement or understanding has been made, the effect or intent of which is to increase or decrease the voting power of such stockholder or any Stockholder Associated Person with respect to any shares of the capital stock of the Company, without regard to whether such transaction is required to be reported on a Schedule 13D or other form in accordance with Section 13(d) of the Exchange Act or any successor provisions thereto and the rules and regulations promulgated thereunder; and
•any other information relating to such stockholder or any Stockholder Associated Person that would be required to be disclosed in a proxy statement or other filings required to be made with the SEC in connection with the solicitations of proxies for the election of directors in a contested election pursuant to Section 14 of the Exchange Act (or pursuant to any law or statute replacing such section) and the rules and regulations promulgated thereunder.
28 | Modivcare 2023 Proxy Statement |
TABLE OF CONTENTS | Corporate Governance |
Stock, which was granted on a quarterly basis.
On February 13, 2020, Mr. Carter, Mr. Coulter, Mr. Kerley, Ms. Norwalk and Mr. Wright were each awarded 1,952 restricted share awards under the Company’s 2006 Long-Term Incentive Plan (the “2006 Plan”) for their annual equity award. On February 13, 2020, Coliseum Capital Partners, L.P. was granted 1,952 stock equivalent units in lieu of an award to Christopher Shackelton. All awards vest on7, 2023, the first anniversary of the grant date. Because these grants were made in 2020, such grants are not included in the table below.
Modivcare 2023 Proxy Statement | 29 |
Corporate Governance | TABLE OF CONTENTS |
20192022 Director Compensation Table#
Name |
| Fees Earned Or Paid in Cash ($) (1) |
| Stock Awards ($) (2) |
|
| Total ($) |
Todd J. Carter |
| $ 92,500 |
| $ 133,611 |
|
| $ 226,111 |
David A. Coulter |
| $ 100,000 |
| $ 133,611 |
|
| $ 233,611 |
Richard A. Kerley* |
| $ 140,000 |
| $ 133,611 |
|
| $ 273,611 |
Leslie V. Norwalk* |
| $ 120,000 |
| $ 133,611 |
|
| $ 253,611 |
Christopher S. Shackelton† (3) |
| $ 120,000 |
| $ 133,611 |
|
| $ 253,611 |
Frank J. Wright |
| $ 107,500 |
| $ 133,611 |
|
| $ 241,111 |
Name | Fees Earned Or Paid in Cash ($) | Stock Awards ($)(1) | Total ($) | ||||||||
Todd J. Carter | 92,500 | 129,980 | 222,480 | ||||||||
David A. Coulter | 92,500 | 129,980 | 222,480 | ||||||||
Garth Graham | 92,500 | 129,980 | 222,480 | ||||||||
Richard A. Kerley* | 140,000 | 129,980 | 269,980 | ||||||||
Leslie V. Norwalk* | 120,000 | 129,980 | 249,980 | ||||||||
Stacy Saal | 92,500 | 129,980 | 222,480 | ||||||||
Rahul Samant | 100,000 | 129,980 | 229,980 | ||||||||
Christopher S. Shackelton†(2) | 120,000 | 129,980 | 249,980 | ||||||||
Frank J. Wright | 107,500 | 129,980 | 237,480 |
| |||||
|
|
|
|
|
| Unvested Restricted | ||||
Todd J. Carter |
| ||||
David A. Coulter |
| ||||
Garth Graham | 1,223 | ||||
Richard A. Kerley |
| ||||
Leslie V. Norwalk |
| ||||
Stacy Saal | 1,223 | ||||
Rahul Samant | 1,223 | ||||
Frank J. Wright |
|
|
| ||||
Name | Unvested Stock Equivalent Units | ||||
Christopher S. Shackelton |
|
|
| ||||
30 | Modivcare 2023 Proxy Statement |
TABLE OF CONTENTS | Corporate Governance |
•shares held directly or indirectly;
•shares underlying any vested restricted shares or RSUs held under our annual equity-based director compensation program;
•any unvested time-based restricted shares or RSUs held under our annual equity-based director compensation program (calculated on an assumed net after-tax basis); and
•shares owned jointly with or in trust for, immediate family members residing in the same household.
2022, with the exception of Dr. Graham, Ms. Saal, and Mr. Samant, who joined the Company in 2021 and are still subject to a grace period for compliance. The Company expects, however, that these directors will meet the guidelines over the next two to four years.
ModivCare.
tax withholding events upon the vesting of previously reported restricted stock and restricted stock unit awards; (ii) a Form 4 for Jonathan Bush filed late on May 20, 2022 to report two tax withholding events upon the vesting of previously reported restricted stock and restricted stock unit awards; (iii) a Form 4 for L. Heath Sampson filed late on May 20, 2022 to report one tax withholding event upon the vesting of a previously reported restricted stock unit award and (iv) a Form 4 for Rebecca Orcutt filed late on October 27, 2022 to report a single grant of restricted stock units and employee stock options.
Modivcare 2023 Proxy Statement | 31 |
Corporate Governance | TABLE OF CONTENTS |
Retention of Advisors
In 2018 the Company retained Epstein, Becker & Green, P.C. (“EBG”) to provide healthcare regulatory advice in respect of disclosures being made in our periodic SEC filings and EBG Advisors, Inc. (“EBG Advisors”), an affiliated entity, to provide healthcare advisory services to the Company, both for customary fees. The Company made the decision to retain EBG and EBG Advisors after reviewing several potential healthcare regulatory advisors, and engaging in interviews with four potential firms and determined EBG and EBG Advisors were best positioned to meet the Company’s needs. In 2019 and 2018, respectively, the Company paid $108,339 and $15,740 to EBG and in 2018, the Company paid $50,000 to EBG Advisors for such services. The amounts represent less than 1% of total revenue for both EBG and EBG Advisors, respectively. Leslie Norwalk, a member of our Board, is Counsel at EBG.
Ms. Norwalk receives a fixed base salary for her employment at EBG and no additional variable compensation.
Indemnification Agreement
On May 9, 2018, the Company entered into a registration indemnification agreement with each of the Coliseum Stockholders, pursuant to which the Company agreed to indemnify the Coliseum Stockholders, and the Coliseum Stockholders agreed to indemnify the Company, against certain matters relating to the registration of the Coliseum Stockholders’ securities for resale under the Securities Act.
Additional information with respect to related party transactions with the Coliseum Stockholders is provided in our Annual Report on Form 10-K for the year ended December 31, 2022 (Note 20,
Transactions with Related Parties).Equity Compensation Plan Information
The following table provides certain information as of December 31, 2019 with respect to our equity-based compensation plans.
Plan category |
| Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (1) |
|
| Weighted- Average Exercise Price of Outstanding Options, Warrants and Rights |
|
| Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (excluding securities reflected in the first column) |
| |||
Equity compensation plans approved by security holders |
|
| 729,601 |
|
| $ | 64.72 |
|
|
| 1,306,243 |
|
Equity compensation plans not approved by security holders |
|
| — | �� |
|
| — |
|
|
| — |
|
Total |
|
| 729,601 |
|
| $ | 64.72 |
|
|
| 1,306,243 |
|
(1) The number of shares shown in this column represents the number of shares available for issuance pursuant to stock options and other stock-based awards that were previously granted and were outstanding as of December 31, 2019 under the 2006 Plan.
32 | Modivcare 2023 Proxy Statement |
TABLE OF CONTENTS | Executive Compensation |
EXECUTIVE COMPENSATION
L. Heath Sampson – President, Chief Executive Officer, and Chief Financial Officer*
Kevin M. Dotts – ceased in July 2022. Mr. Hickman’s service as Chief FinancialCommercial Officer
Kathryn Stalmack – Senior Vice President, General Counsel & Corporate Secretary*
Suzanne G. Smith – began in April 2022 and ceased in March 2023. Mr. Wray’s service as Chief Accounting Officer*
|
|
William Severance – Former Executive Vice President, OfficeSummary
|
| ||||
We strengthened our senior leadership, and | |||||
We advanced key technology and center of excellence optimization initiatives | |||||
2022 | We realigned our service offerings under two units: Mobility, consisting of our NEMT business, and Home, which includes our Personal Care, Monitoring, and Meals businesses |
*Mr. Pate served
Executive Summary
Overview and 2019 Business Highlights
The Providence Service Corporationdemonstrated below.
Modivcare 2023 Proxy Statement | 33 |
Executive Compensation | TABLE OF CONTENTS |
1 | Market competitiveness | ||||
2 | Pay-for-Performance | ||||
3 | Align with Stockholder Interests | ||||
4 | Risk Mitigation |
34 | Modivcare 2023 Proxy Statement |
TABLE OF CONTENTS | Executive Compensation |
What we do: | “Double-trigger” change of control provisions | |||||||
Emphasize pay for performance | ||||||||
Maintain a clawback policy that covers both cash and equity compensation and addresses reputational and financial risk as well as risk management failures | ||||||||
Use an independent compensation consultant | ||||||||
Limit executive perquisites | ||||||||
Maintain robust stock ownership guidelines applicable to all of our executive officers and directors | ||||||||
Provide a significant portion of officer compensation in variable at-risk pay elements | ||||||||
Conduct competitive benchmarking to understand market-typical officer pay levels and practices |
What we do not do: | “Single-trigger” accelerated vesting of equity-based compensation | |||||||
Provide tax gross-ups on executive perquisites | ||||||||
Short-sell, hedge or pledge Company securities | ||||||||
Excessive perquisites | ||||||||
Trade in Company securities during black-out periods, except under limited circumstances, including Rule 10b5-1 trading plans | ||||||||
Reprice stock options without stockholder approval | ||||||||
Excise tax “gross ups” upon change in control |
Modivcare 2023 Proxy Statement | 35 |
Executive Compensation | TABLE OF CONTENTS |
Component of Performance-Based Compensation | Description of Program | ||||
Short-Term Incentive Plan (the “STI”) | The STI is designed to provide financial incentive to the executives for achieving in-year goals that are aligned to stockholder value creation. As further described below under “2022 Executive Compensation Program Decisions—Short-Term Incentive Plan,” cash and discretionary equity awards were granted under the STI to certain of our NEOs based on 2022 performance. | ||||
Long-Term Incentive Program (the “LTI”) | The LTI is designed to align the eligible executives’ incentives with our stockholders’ interests to achieve increases in our stock value. As further described below under “2022 Executive Compensation Program Decisions—Long-Term Incentive Program,” equity awards were granted under the LTI to each of our NEOs in 2022. |
Providence also owns a minority investment in CCHN Group Holdings, Inc. and its subsidiaries (“Matrix”). Matrix is a nationwide provider of a broad array of assessment and care management services that improve health outcomes for individuals and financial performance for health plans. Matrix’s national network of community-based clinicians deliver in-home services while its fleet of mobile health clinics provide community-based care with advance diagnostic capabilities. These solutions combined with Matrix’s advanced engagement approach, helps health plans2022 STI. The Compensation Committee chose to use Compensation Adjusted EBITDA, among other reasons, to motivate the executives to manage, risks, close care gaps and connect members to care.
Fiscal year 2019 was a year of challenging headwinds impacting our financial results as well as one of positive and important transitions for the Company. As described in our Annual Report on Form 10-K,extent reasonably practicable, the Company’s operating resultsexpenses to the amounts that were included in 2019 were impacted by increasing utilization under at risk contracts and increased transportation costs on a per trip basis. These factors caused Adjusted EBITDA to be lower for fiscal 2019 thanthe Company’s Board approved 2022 operating budget. The Compensation Committee then, in fiscal 2018. These negative factors were partially offset by contracts renegotiated during 2019 and by top-line revenue growth. The resultconnection with its determination of this challenging environment was that the Compensation Adjusted EBITDA (as defined below) target for the payment of amountspayouts under the Company’s annual incentive plan (described below) was not achieved and as2022 STI based on 2022 executive performance, exercised discretion to award a result, the portion of the annual bonus tiedearned payouts in newly structured PRSUs.
Fiscal year 2019 was also oneeach of transition in our business having completed the Organizational ConsolidationMessrs. Sampson, Hickman, Simpson, Anderson, Greenleaf and with certain non-NET businesses having been divested, the Company focused on growing its NET services segment, integrating Circulation’s technology into the Company’s technology offering, and renegotiating pricing for certain contracts. In addition to the transition of the Company’s operations, there was also a transition in the executive leadership. In March 2019, Suzanne G. Smith was named Chief Accounting Officer. In August 2019, Kathryn Stalmack was hired as the Company’s General Counsel and Corporate Secretary, replacing M. Chinta Gaston, LogistiCare’s long serving General Counsel, who had become General Counsel of Providence on January 1, 2019. In December 2019, Daniel Greenleaf replaced Carter Pate as the Chief Executive Officer of the Company. Mr. Pate had been serving as the Interim Chief Executive Officer until a permanent CEO was retained. Mr. Greenleaf brings to the Company over 25 years of experience successfully transforming healthcare companies through periods of growth, most recently having served as President and CEO of BioScrip, Inc., where he spearheaded the turnaround and successful merger with Option Care Health (Nasdaq: OPCH).
Wray.
Detailed stockholders.
Providence has
attracting, retaining, and motivating high-performing leaders;
aligningalign the interests of NEOs and stockholders; and
36 | Modivcare 2023 Proxy Statement |
TABLE OF CONTENTS | Executive Compensation |
linking a meaningful portionEBITDA goals of the Company, in addition to time-based vesting restrictions. This structure is built toward the Company’s goal of achieving $3 billion in Revenue and $300 million in EBITDA in 3 years’ time and aligns executive compensation to achievementwith the attainment of key financial, operational, and capital allocation performance goals; and
maintaining a significant portion of compensation based on at-risk opportunities, including in equity awards tied to stock price and achievement of key transactions and projects.
2019
Modivcare 2023 Proxy Statement | 37 |
Executive Compensation | TABLE OF CONTENTS |
|
|
| ||||||
Component | Description | Purpose | ||||||
Base Salary | Fixed cash component established upon hire (and adjusted from | Provide competitive fixed compensation to attract and retain executive
| ||||||
| The | Provide financial incentive to the executives to reward them for achieving specific strategic, organizational, financial and individual |
|
|
| ||||||
|
|
| ||||||
Long-Term Incentive |
The LTI provides for the grant to the eligible NEOs Our stock options Our restricted Our performance restricted stock units provide NEOs with |
| ||||||
Benefits and Perquisites | We provide | Provide a competitive level of employee benefits; aids in attraction and retention of key executives. | ||||||
Post-Termination Compensation |
| Provide an appropriate level of payment in the event of a change in control or | ||||||
Other Policies | •Stock Ownership Guidelines •Clawback Policy •Anti-Hedging / Anti-Pledging Policy | Enhance alignment between executive and stockholder interests. |
Since 2015,
38 | Modivcare 2023 Proxy Statement |
TABLE OF CONTENTS | Executive Compensation |
We believe it is appropriate for NEO pay to be competitive with the market for comparable executives. To achieve this objective, we assess market data for a peer group of companies established by the Compensation Committee, with the assistance of its compensation consultant, from time to time.
We periodically review our peer group for competitive compensation benchmarking analysis. The peer group chosen for purposes of the 2022 compensation decisions is comprisedprovided below. The group is composed of 12 health services related-companiesrelated companies that arewere comparable to us in terms of business mix and size (e.g., revenue, EBITDA, and market capitalization). As part of Providence’s transition in 2019, we reviewed the peer group to determine if any adjustments were necessary. Based on that review, we added Hanger, Inc. and removed Civitas Solutions (acquired and no longer public), RadNet Inc., and Amedisys, Inc. The following is a list of our current 12 company peer group:
| ||||||||
2022 Peer Group | ||||||||
Addus HomeCare Corporation |
| LHC Group | ||||||
Allscripts Healthcare Solutions, Inc. |
| Option Care Health, Inc. | ||||||
American Renal Associates Holdings, Inc. |
| National HealthCare Corporation | ||||||
Capital Senior Living Corporation |
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HMS Holdings | ||||||||
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| Tivity Health |
(1) Option Care Health Inc. was formerly BioScrip, Inc.
2019
Name | 2019 Base Salary(1) | |||
Daniel E. Greenleaf | $ | 850,000 | ||
Kevin M. Dotts | $ | 450,000 | ||
Kathryn Stalmack | $ | 375,000 | ||
Suzanne G. Smith | $ | 285,000 | ||
R. Carter Pate | $ | 750,000 | ||
William Severance | $ | 450,000 | ||
Laurence Orton | $ | 300,000 |
(1)
Name | 2022(1) | 2021(1) | ||||||
L. Heath Sampson(2) | $750,000 | $475,000 | ||||||
Ilias Simpson(3) | $500,000 | $— | ||||||
Jason Anderson(4) | $510,000 | $300,000 | ||||||
Daniel E. Greenleaf | $1,000,000 | $850,000 | ||||||
Brett Hickman(3) | $500,000 | $— | ||||||
Grover N. Wray | $440,000 | $440,000 |
Modivcare 2023 Proxy Statement | 39 |
Executive Compensation | TABLE OF CONTENTS |
2019 Cash Bonus Awards
Annual Incentive Program
For fiscal year 2019, Mr. Dotts and Ms. Smith participated2022 STI plan, the Compensation Committee, in consultation with management, adopted Compensation Adjusted EBITDA targets that were tied to the Company’s Board approved 2022 operating budget. As shown in the AIP,reconciliation included in Appendix A to this Proxy Statement, Compensation Adjusted EBITDA is calculated by reducing the Company’s publicly disclosed Adjusted EBITDA by the amount by which the operating expenses identified in such reconciliation exceeded the Company’s Board approved 2022 operating budget. As was the case in 2020 and 2021, the 2022 STI plan provided for a bonus opportunity for each executive based 75%50% on consolidated financial performance, measured in 2022 by EBITDA, as adjusted by the Compensation Committee for the AIP (“Compensation Adjusted EBITDA”),EBITDA, and 25%50% on individual performance goals established by the Compensation Committee provided, however, thatin consultation with the AIP was self-fundedCEO.
Named Executive Officer | Target Incentive Plan Opportunity as a % of Salary | Target Incentive Plan Opportunity Value ($)(1) | ||||||
L. Heath Sampson | 100 | % | 750,000 | |||||
Ilias Simpson(2) | 100 | % | 500,000 | |||||
Jason Anderson | 125 | % | 637,500 | |||||
Daniel E. Greenleaf | 125 | % | 1,250,000 | |||||
Brett Hickman | 100 | % | 500,000 | |||||
Grover N. Wray | 75 | % | 330,000 |
40 | Modivcare 2023 Proxy Statement |
TABLE OF CONTENTS | Executive Compensation |
For Mr. Pate, the 2019 bonus opportunity under his short-term incentive plan was $750,000 or 100% of his 2019 base salary. As determined by the Compensation Committee, Mr. Pate received 75% of his bonus opportunity in 2019.
Named Executive Officer |
| Target Incentive Plan Opportunity as % of Salary |
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Kevin M. Dotts – AIP | 75% | 150% |
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Suzanne G. Smith –AIP | 50% | 100% | ||||||
R. Carter Pate - Short-term plan | 100% |
| 125% |
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William Severance – AIP | 75% | 75% | ||||||
Laurence Orton – AIP | 50% | 50% |
Our 2019 Compensation Adjusted EBITDA target was $100.3 million, as shown in the table below. In setting the target for fiscal year 2019, the Compensation Committee took into account, among other factors, the Company’s budget and projected performance for 2019. The Company achieved a 2019 Compensation Adjusted EBITDA of $64.4 million, resulting in no payouts under the AIP or Mr. Pate’s short-term incentive plan for this metric.
Compensation Adjusted EBITDA | Threshold | Target | Maximum | Actual |
Targets and FY2019 Actual | $95.3 million | $100.3 million | $110.3 million | $64.4 million |
Payout % | 50% | 100% | 200% | 0% |
Compensation Adjusted EBITDA under the AIP is calculated by modifying Adjusted EBITDA for LogistiCare and its subsidiaries to neutralize impact of changes in accounting rules, and exclude impact of acquisitions from actual results, earnings related to divested businesses after the date of divestment, one of the Company’s subsidiaries’ long-term incentive plans, unbudgeted severance of executive officers, losses and gains on unbudgeted sales of assets, the impact of “marking-to-market” of cash settled equity awards, and items of an “Unusual Nature” on a case by case basis. (For a complete discussion of the method of calculating Adjusted EBITDA, see the Form 8-K filed with the SEC on February 27, 2020.)
Retention Bonuses
Upon the conclusion of his employment with the Company on May 10, 2019, following the completion of his tenure under the Retention Plan (as defined below), Mr. Severance became entitled to a cash payment of $875,000, an AIP bonus of $122,343 and other benefits under the Retention Plan. Upon the conclusion of his employment with the Company on May 10, 2019, Mr. Orton became entitled to a cash payment of $300,000, an AIP bonus of $54,375, and other benefits under the Retention Plan (see “2019 Executive Compensation Program Decisions—Long-Term Incentives—Employee Retention Plan”).
Long-Term Incentives
Equity Grants
On March 31, 2019, options to purchase 73,875 shares of Common Stock granted to Mr. Pate in 2018 vested as a result of him meeting certain personal goals, including those relating to financial reporting, the Organizational Consolidation, and the mentorship of senior executives. Options to purchase 73,875 shares of Common Stock granted to Mr. Pate in 2018 were subject to vesting based on a budget goal as of March 31, 2019, of which the Compensation Committee determined that 36,938 of such options should vest based on performance in respect of this goal. Options to purchase an additional 147,750 shares of Common Stock granted to Mr. Pate in 2018 vested on June 30, 2019. All of these vested options have an exercise price of $71.67 and will remain exercisable until April 8, 2021.
In connection with his appointment as Interim Chief Financial Officer, on April 9, 2018, Mr. Severance received an option to purchase 13,710 shares of Company stock at a price of $71.67 per share, the closing price of the Company’s Common Stock on the grant date. This option became fully exercisable on May 10, 2019. Mr. Orton, Interim Chief Accounting Officer, received an option to purchase 23,313 shares of Company stock at a price of $56.42 per share on December 14, 2017 and an option to purchase 1,207 shares of Company stock at a price of $56.89 per share on December 16, 2017. These options became fully exercisable on December 31, 2018.
On February 18, 2019, in connection with her appointment as Chief Accounting Officer, Ms. Smith was granted options to purchase 4,600 shares of Common Stock at $73.09 per share, the closing price of the Company’s stock on the grant date. These options will vest if Ms. Smith remains continuously employed with the Company through October 31, 2020 and will expire on December 31, 2020.
Named Executive Officer | Grant Date | Exercise Price | Stock Options (# of underlying shares) |
Restricted Share Award or RSUs | ||||||||||
Daniel E. Greenleaf (1) | 12/11/2019 | $ | 59.25 | 67,090 | 20,104 | |||||||||
Daniel E. Greenleaf (1) | 12/11/2019 | $ | 68.14 | 40,432 | - | |||||||||
Kevin M. Dotts (2) | 9/20/2019 | $ | 58.84 | 25,175 | 2,629 | |||||||||
Kathryn Stalmack (3) | 9/20/2019 | $ | 58.84 | 15,257 | 5,842 | |||||||||
Suzanne G. Smith (4) | 2/18/2019 | $ | 73.09 | 4,600 | - | |||||||||
Suzanne G. Smith (2) | 9/20/2019 | $ | 58.84 | 5,798 | 1,816 | |||||||||
R. Carter Pate(5) | 2/1/2019 | $ | - | - | 23,317 |
Named Executive Officer | Grant Date | Exercise Price of Stock Options ($) | Stock Options (# of underlying shares) | Restricted Stock Units | Performance Restricted Stock Units | Grant Date Fair Value ($)(1) | ||||||||||||||||||||
L. Heath Sampson | 2/8/2022 | (2) | 110.07 | 6,733 | 2,200 | 4,401 | 1,142,947 | |||||||||||||||||||
11/21/2022 | (3) | 85.99 | 1,579 | 573 | 1,147 | 217,995 | ||||||||||||||||||||
Ilias Simpson | 4/11/2022 | (4) | 109.70 | 3,262 | 1,139 | 2,278 | 599,621 | |||||||||||||||||||
Jason Anderson | 2/8/2022 | (5) | 110.07 | 3,474 | 1,135 | 2,271 | 589,666 | |||||||||||||||||||
2/22/2022 | (6) | 101.51 | 2,743 | 903 | 1,807 | 453,717 | ||||||||||||||||||||
Daniel E. Greenleaf | 2/8/2022 | (7) | 110.07 | 26,136 | 9,170 | 18,340 | 4,762,378 | |||||||||||||||||||
Brett Hickman | 4/18/2022 | (8) | 114.24 | 5,013 | 1,750 | 3,501 | 981,405 | |||||||||||||||||||
Grover N. Wray | 2/8/2022 | (9) | 110.07 | 4,586 | 1,499 | 2,998 | 778,500 |
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Modivcare 2023 Proxy Statement | 41 |
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Executive Compensation | TABLE OF CONTENTS |
Deferred Compensation Plan.
42 | Modivcare 2023 Proxy Statement |
TABLE OF CONTENTS | Executive Compensation |
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Executive | Stock Ownership Guideline as aMultiple of Salary | ||||
CEO | 5x annual base salary | ||||
Other NEOs | 3x annual base salary | ||||
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•shares held directly or indirectly;
•shares underlying any vested restricted shareRSUs or RSUs heldPRSUs received under our annual equity-based compensation program;
•shares underlying any unvested time-based restricted shareshares or RSUs heldreceived under our annual equity-based compensation program (calculated on an assumed net after-tax basis);
•shares underlying any unvested PRSUs received under our equity-based compensation program to the extent that any volume-weighted average price performance-based vesting thresholds have been met (calculated on an assumed net after-tax basis);
•shares owned jointly with, or in trust for, immediate family members residing in the same household.
Since Messrs. Anderson, Greenleaf, Hickman, and Wray are no longer employees of the Company, this requirement is no longer applicable to them.
Anti-hedging / anti-pledging
Employee Retention Plan
On April 9, 2018, in connection with the Organizational Consolidation, we adopted an employee retention plan (the “Retention Plan”) covering the employees at the Company’s corporate holding company level, including Mr. Severance, Mr. Orton and certain other executive officers of the Company. The Retention Plan provided for certain payments and benefits to be provided to each such executive officer if they remain employed with the Company through a specified retention date, which was May 10, 2019, in the case of Mr. Severance and Mr. Orton (the “Retention Date”).
Under the terms of the Retention Plan, certain employees with termination dates in 2019 were eligible for ordinary course, merit-based salary increases in 2019 and would receive guaranteed 2019 short-term incentive bonuses on a pro-rata basis. Thus, if Mr. Severance remained employed with the Company through the Retention Date, or was terminated by the Company without “cause,” or by Mr. Severance as a result of a material reduction in base salary or target bonus, prior to the Retention Date, Mr. Severance would be entitled to (i) a retention bonus equal to 100% of his base salary, payable in two installments following the Retention Date, (ii) a pro rata annual bonus, (iii) accelerated vesting of all of Mr. Severance’s restricted share awards and option awards, (iv) an extension of option exercisability through December 31, 2020, and (v) reimbursement for the Company portion of health insurance premiums following termination for a period up to December 31, 2019. In recognition of the increased demands on his time, attention and work, particularly in light of his increased responsibilities in respect of certain transitional items and special projects, the Compensation Committee increased Mr. Severance’s retention bonus to $875,000. Such retention bonus increase was effected by the Company and Mr. Severance entering into an amendment to the applicable award agreement.
Under the terms of the Retention Plan, if Mr. Orton remained employed with the Company through the Retention Date, or was terminated by the Company without “cause,” or by Mr. Orton as a result of a material reduction in base salary or target bonus, prior to the Retention Date, Mr. Orton would be entitled to (i) a retention bonus equal to 100% of his base salary, payable in two installments following the Retention Date, (ii) a pro rata annual bonus, (iii) accelerated vesting of all of Mr. Orton’s restricted share awards and option awards, (iv) an extension of option exercisability through December 31, 2020, and (v) reimbursement for the Company portion of health insurance premiums following termination for a period up to December 31, 2019.
As a result of their participation in the Retention Plan, Mr. Severance and Mr. Orton were not entitled in 2019 to any other severance pay or benefits if their employment had been terminated during the retention period, including under the terms of any employment agreement. The terms of the Retention Plan required a release of claims against the Company as a condition to payment and provided for customary confidentiality, non-disparagement and non-solicitation restrictions.
Upon the conclusion of his employment with the Company on May 10, 2019, following the completion of his tenure under the Retention Plan, Mr. Severance received a $875,000 retention bonus and $122,344 as his pro rata AIP. Upon the conclusion of his employment on May 10, 2019, following the completion of his tenure under the Retention Plan, Mr. Orton received a $300,000 retention bonus and $54,375 as his pro rata AIP.
Modivcare 2023 Proxy Statement | 43 |
Executive Compensation | TABLE OF CONTENTS |
While the
Other provisions of the IRC can also affect compensation decisions. Section 409A of the IRC, which governs the form and timing of payment of deferred compensation, imposes sanctions, including a 20% additional tax and an interest penalty, on a recipient of deferred compensation that does not comply with Section 409A. The Compensation Committee takes into account the potential implications of Section 409A in determining the form and timing of compensation awarded to our executives and strives to structure its compensation plans to meet these requirements.
payment.
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44 | Modivcare 2023 Proxy Statement |
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Summary Compensation Table
Name | Year | Salary (1) ($) | Bonus (2) ($) | Stock Awards (3) ($) | Option Awards (4) ($) | Non- Equity Incentive Plan Compensation (5) ($) | All Other Compensation (6) ($) | Total ($) | |||||||||
Daniel E. Greenleaf President and Chief Executive Officer | 2019 | 32,692 | — | 1,191,162 | 1,955,559 | — | — | 3,179,413 | |||||||||
Kevin M. Dotts Chief Financial Officer | 2019 2018 | 456,346 118,462 |
| — 50,000 | 154,690 — | 364,204 372,445 |
| — 50,000 | 24,281 5,566 | 999,521 596,473 | |||||||
Kathryn Stalmack Senior Vice President, General Counsel & Corporate Secretary | 2019 | 132,692 |
| — | 343,743 | 220,721 |
| — | 8,399 | 705,556 | |||||||
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Suzanne G. Smith Chief Accounting Officer | 2019 | 243,346 |
| 15,000 | 106,853 | 140,602 |
| — | 12,420 | 518,221 | |||||||
R. Carter Pate Former Interim Chief Executive Officer | 2019 2018 2017 | 764,423 553,077 88,846 |
| — 450,000 — | 1,499,983 — — | — 5,091,724 — |
(7) |
| 562,500 — — | 4,126 3,645 137 | 2,831,031 6,098,446 88,983 | ||||||
William Severance Former Senior Vice President, Finance | 2019 2018 2017 | 173,077 414,028 309,000 | 875,000 240,900 231,750 |
— 149,583 | - 161,313 408,206 | 122,343 154,754 — | 8,145 13,637 15,048 | 1,178,565 984,632 1,113,587 | |||||||||
Laurence Orton Former Interim Chief Accounting Officer and Senior Vice President Finance | 2019 2018 | 115,385 297,269 | 300,000 31,800 | ——
| ——
| 54,375 112,500 | 7,979 13,360 | 477,739 454,929 |
Name | Year | Salary ($) | Stock Awards ($)(1) | Option Awards ($)(2) | Non-Equity Incentive Plan Compensation ($)(3) | All Other Compensation ($)(4) | Total ($) | ||||||||||||||||||||||
L. Heath Sampson(5) President, Chief Executive Officer, and Chief Financial Officer | 2022 | 602,481 | 1,069,368 | 291,573 | 271,116 | 32,247 | 2,266,785 | ||||||||||||||||||||||
2021 | 400,822 | 356,306 | 356,265 | 360,740 | 33,313 | 1,507,446 | |||||||||||||||||||||||
Ilias Simpson(6) President of Mobility | 2022 | 365,385 | 474,621 | 125,000 | 319,231 | 174,657 | (7) | 1,458,894 | |||||||||||||||||||||
Jason Anderson(8) Former President of Home | 2022 | 285,514 | 826,662 | 216,720 | — | 17,014 | 1,345,910 | ||||||||||||||||||||||
Daniel E. Greenleaf(9) Former President and Chief Executive Officer | 2022 | 592,500 | 3,753,006 | 1,009,372 | — | 18,455 | 5,373,333 | ||||||||||||||||||||||
2021 | 850,000 | 849,956 | 849,991 | 1,062,500 | 25,103 | 3,637,550 | |||||||||||||||||||||||
2020 | 850,000 | 850,015 | 849,630 | 2,125,000 | 16,494 | 4,691,139 | |||||||||||||||||||||||
Brett Hickman(10) Former Chief Commercial Officer | 2022 | 340,385 | 781,436 | 199,969 | 204,231 | 25,192 | 1,551,213 | ||||||||||||||||||||||
Grover N. Wray(11) Former Chief Human Resources Officer | 2022 | 440,000 | 613,496 | 165,004 | 198,000 | 130,360 | (12) | 1,546,860 | |||||||||||||||||||||
2021 | 345,019 | 70,514 | 70,515 | 70,521 | 4,470 | 561,039 |
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Name | Value of PRSUs Assuming Maximum Performance ($) | ||||
L. Heath Sampson | 1,555,585 | ||||
Ilias Simpson | 699,346 | ||||
Jason Anderson | 1,220,138 | ||||
Daniel E. Greenleaf | 5,487,328 | ||||
Brett Hickman | 1,163,032 | ||||
Grover N. Wray | 897,002 |
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Modivcare 2023 Proxy Statement | 45 |
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Executive Compensation | TABLE OF CONTENTS |
Name | Health, Dental, Life and Disability Insurance Premiums | Matching Contributions under Retirement Savings Plans | ||||||
L. Heath Sampson | 20,047 | 12,200 | ||||||
Ilias Simpson | 5,456 | 12,200 | ||||||
Jason Anderson | 6,578 | 10,436 | ||||||
Daniel E. Greenleaf | 6,255 | 12,200 | ||||||
Brett Hickman | 12,992 | 12,200 | ||||||
Grover N. Wray | 11,845 | 12,200 |
Name |
| Health, Dental, Life and Disability Insurance Premiums |
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Daniel E. Greenleaf | $ | — | $ | — | ||||
Kevin M. Dotts |
| $ | 23,881 |
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Kathryn Stalmack |
| $ | 8,226 |
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Suzanne G. Smith |
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R. Carter Pate |
| $ | 4,126 |
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William Severance | $ | 7,745 |
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Laurence Orton | $ | 7,579 |
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46 | Modivcare 2023 Proxy Statement |
TABLE OF CONTENTS | Executive Compensation |
Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | |||||||||||||||
Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | All Other Stock Awards: Number of Shares of Stock or Units (#) | All Other Option Awards; Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards ($)(2) | |||||||
Daniel E. Greenleaf | 12/11/2019 | — | — | — | 20,104 | 67,090 40,432 | 59.25 68.14 | 2,477,935 668,785 | |||||||
Kevin M. Dotts | N/A | — | 337,500 | 675,000 | — | — | — | — | |||||||
Kevin M. Dotts | 9/20/2019 | — | — | — | 2,629 | 25,175 | 58.84 | 518,894 | |||||||
Kathryn Stalmack | 9/20/2019 | — | — | — | 5,842 | 15,257 | 58.84 | 564,465 | |||||||
Suzanne G. Smith | N/A | — | 142,500 | 285,000 | — | — | — | — | |||||||
Suzanne G. Smith | 2/18/2019 | — | — | — | — | 4,600 | 73.09 | 56,723 | |||||||
Suzanne G. Smith | 9/20/2019 | — | — | — | 1,816 | 5,798 | 58.84 | 190,732 | |||||||
R. Carter Pate | N/A | — | 750,000 | 937,500 | — | — | — | — | |||||||
R. Carter Pate | 2/1/2019 | — | 23,317 | — | — | 1,499,983 | |||||||||
William Severance | N/A | — | 122,343 | 122,343 | — | — | — | — | |||||||
Laurence Orton | N/A | — | 54,375 | 54,375 | — | — | — | — |
* Columns that
Estimated Possible Payouts Under Non-Equity Incentive Plan Awards(1) | Estimated Possible Payouts Under Equity Incentive Plan Awards | All Other Stock Awards Number of Shares of Stock or Units (#) | All Other Option Awards; Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards ($)(5) | |||||||||||||||||||||||||||||||||||||||
Name | Award | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#)(2) | Target (#)(3) | Maximum (#)(4) | ||||||||||||||||||||||||||||||||||||
L. Heath Sampson | STI | N/A | 375,000 | 750,000 | 1,500,000 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
RSU | 2/8/2022 | — | — | — | — | — | — | 2,200 | — | — | 242,155 | |||||||||||||||||||||||||||||||||
Option | 2/8/2022 | — | — | — | — | — | — | — | 6,733 | 110.07 | 242,253 | |||||||||||||||||||||||||||||||||
PRSU | 2/8/2022 | — | — | — | 2,201 | 4,401 | 8,802 | — | — | — | 658,539 | |||||||||||||||||||||||||||||||||
RSU | 11/21/2022 | — | — | — | — | — | — | 573 | — | — | 49,272 | |||||||||||||||||||||||||||||||||
Option | 11/21/2022 | — | — | — | — | — | — | — | 1,579 | 85.99 | 49,320 | |||||||||||||||||||||||||||||||||
PRSU | 11/21/2022 | — | — | — | 574 | 1,147 | 2,294 | — | — | — | 119,403 | |||||||||||||||||||||||||||||||||
Ilias Simpson | STI | N/A | 250,000 | 500,000 | 1,000,000 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
RSU | 4/11/2022 | — | — | — | — | — | — | 1,139 | — | — | 124,948 | |||||||||||||||||||||||||||||||||
Option | 4/11/2022 | — | — | — | — | — | — | — | 3,262 | 109.70 | 125,000 | |||||||||||||||||||||||||||||||||
PRSU | 4/11/2022 | — | — | — | 1,139 | 2,278 | 4,556 | — | — | — | 349,673 | |||||||||||||||||||||||||||||||||
Jason Anderson | STI | N/A | 318,750 | 637,500 | 1,275,000 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
RSU | 2/8/2022 | — | — | — | — | — | — | 1,135 | — | — | 124,929 | |||||||||||||||||||||||||||||||||
Option | 2/8/2022 | — | — | — | — | — | — | — | 3,474 | 110.07 | 124,995 | |||||||||||||||||||||||||||||||||
PRSU | 2/8/2022 | — | — | — | 1,136 | 2,271 | 4,542 | — | — | — | 339,742 | |||||||||||||||||||||||||||||||||
RSU | 2/22/2022 | — | — | — | — | — | — | 903 | — | — | 91,664 | |||||||||||||||||||||||||||||||||
Option | 2/22/2022 | — | — | — | — | — | — | — | 2,743 | 101.51 | 91,726 | |||||||||||||||||||||||||||||||||
PRSU | 2/22/2022 | — | — | — | 904 | 1,807 | 3,614 | — | — | — | 270,327 | |||||||||||||||||||||||||||||||||
Daniel E. Greenleaf | STI | N/A | 625,000 | 1,250,000 | 2,500,000 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
RSU | 2/8/2022 | — | — | — | — | — | — | 9,170 | — | — | 1,009,342 | |||||||||||||||||||||||||||||||||
Option | 2/8/2022 | — | — | — | — | — | — | — | 26,136 | 110.07 | 1,009,372 | |||||||||||||||||||||||||||||||||
PRSU | 2/8/2022 | — | — | — | 9,170 | 18,340 | 36,680 | — | — | — | 2,743,664 |
Modivcare 2023 Proxy Statement | 47 |
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Brett Hickman | STI | N/A | 250,000 | 500,000 | 1,000,000 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
RSU | 4/18/2022 | — | — | — | — | — | — | 1,750 | — | — | 199,920 | |||||||||||||||||||||||||||||||||
Option | 4/18/2022 | — | — | — | — | — | — | — | 5,013 | 114.24 | 199,969 | |||||||||||||||||||||||||||||||||
PRSU | 4/18/2022 | — | — | — | 1,751 | 3,501 | 7,002 | — | — | — | 581,516 | |||||||||||||||||||||||||||||||||
Grover N. Wray | STI | N/A | 165,000 | 330,000 | 660,000 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
RSU | 2/8/2022 | — | — | — | — | — | — | 1,499 | — | — | 164,995 | |||||||||||||||||||||||||||||||||
Option | 2/8/2022 | — | — | — | — | — | — | — | 4,586 | 110.07 | 165,004 | |||||||||||||||||||||||||||||||||
PRSU | 2/8/2022 | — | — | — | 1,499 | 2,998 | 5,996 | — | — | — | 448,501 |
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Employment Agreements and Offer Letters with the Named Executive Officers
executive, which may be more or less than the amount shown or zero.
Daniel E. Greenleaf
non-solicitation covenants, as well as non-disclosure and non-disparagement covenants.
48 | Modivcare 2023 Proxy Statement |
TABLE OF CONTENTS | Executive Compensation |
Company ended.
Due to Mr. Greenleaf’s departure, only the first two installments of the RSUs and options vested.
certain circumstances. The Greenleaf Employment Agreement includesincluded restrictive covenants providing for Mr. Greenleaf’s non-competition, non-solicitation, non-piracy, non-disclosure and non-disparagement. The term of the non-competition, non-solicitation and non-piracy covenants is the period that includes the term of Mr. Greenleaf’s employment and two years thereafter.
Kevin M. Dotts
Effective August 27, 2018, Kevin Dotts, was appointed to serveafter the date of termination.
Modivcare 2023 Proxy Statement | 49 |
Executive Compensation | TABLE OF CONTENTS |
Under the terms of the Dotts Employment Agreement, Mr. Dotts’s annualinitial base salary of $500,000 and was $400,000, which was increasedeligible to $450,000 effective March 1, 2019. Mr. Dotts is eligiblereceive a short-term incentive bonus for an annual bonus equal to 75%2022 at a target of 100% of his base salary, based upon achievement of 100% of theon performance targets establishedset by the Compensation Committee.Committee of the Board of Directors. In addition, Mr. Dotts is eligible to participate in the Company’s 2006 Plan, under the terms approved by the Compensation Committee.
In addition, Mr. DottsHickman was granted an option to purchase 24,685 shares of Company common stock,a long-term incentive equity grant on April 18, 2022 with the exercise price of each optiona target grant date value equal to the closing price160% of a sharehis base salary, comprised of the Company’s common50% PRSUs, 25% RSUs and 25% stock on August 27, 2018. These options will vest only if Mr. Dotts remains continuously employed with the Company through October 31, 2020, and will expire on December 31, 2021.
options.
The Dotts Employment Agreement includes
Kathryn Stalmack
Effective August 19, 2019, Kathryn Stalmack, was appointed50% stock options. Pursuant to serve as Senior Vice President. General Counsel & Corporate Secretary of the Company. The Company, LogistiCare and Ms. Stalmack entered into an employment agreement (the “Stalmack Employment Agreement”), dated August 8, 2019, in connection with Ms. Stalmack’s appointment. The Stalmack Employment Agreement provides for a term commencing as of August 19, 2019 and ending on December 31, 2021 (the “Term”).
Under the terms of his employment letter, Mr. Wray was also reimbursed $106,315 in expenses for relocating to the Stalmack Employment Agreement, Ms. Stalmack’s annual base salary was $375,000. Beginning in 2020, Ms. Stalmack is eligible for an annual bonus equal to 75% of her base salary, based upon achievement of 100% of the performance targets established by the Compensation Committee. Ms. Stalmack’s annual bonus is subject to a maximum performance of up to 150% of her base salary. Ms. Stalmack is eligible to participate in the Company’s 2006 Plan, under the terms approved by the Compensation Committee.
In addition, the Company granted Ms. Stalmack restricted share awards valued at $250,000. The restricted share awards vest ratably in equal installments on each of March 15, 2021, March 15, 2022 and March 15, 2023, in each case subject to her continued employment through the applicable anniversary date.
Denver area.
The Stalmack Employment Agreement includes
Suzanne G. Smith
Effective February 18, 2019, Suzanne G. Smith was named Chief Accounting Officer of the Company. Under the terms of Ms. Smith’s employment letter dated January 14, 2019, (the “Smith Employment Letter”) her initial base salary was set at $285,000. Ms. Smith is eligible to participate in the Company’s short-term incentive bonus plan with her 2019 bonus equal to up to 50% of her base salary, based upon achievement of 100% of the performance targets established by the Compensation Committee. In addition, Ms. Smith is eligible to participate in the Company’s 2006 Plan, under the terms approved by the Compensation Committee. The Smith Employment Letter provides that Ms. Smith will be granted an option to purchase at least 4,600 shares of common stock on terms as determined by Compensation Committee. In addition, Ms. Smith was paid a one-time signing bonus of $15,000.
Ms. Smith is also eligible to receive severance benefits in the event her employment is terminated by the Company without cause or by her for good reason. Details with respect to the severance and change in control provisions under the Smith Employment Letter are set forth below under “Potential Payments Upon Termination or Change in Control.”
R. Carter Pate
Effective November 15, 2017, Mr. Pate became Interim CEO and the Company and Mr. Pate entered into an employment agreement (the “Pate Employment Agreement”). The Pate Employment Agreement provides for a term ending upon the date a permanent successor CEO is hired and commences employment with the Company. The Company agreed to reimburse Mr. Pate for all reasonable and necessary expenses incurred by Mr. Pate in connection with his performance of services as Interim CEO.
Under the terms of the Pate Employment Agreement, Mr. Pate’s annual base salary was $700,000. On April 9, 2018, in connection with the Organizational Consolidation, the Company granted Mr. Pate an award of unvested options to purchase up to 394,000 shares of our Common Stock at a price of $71.67 per share, which was the closing price of the Company’s Common Stock on the grant date. The grant agreement (the “Pate Option Agreement”) also amended the terms of the Pate Employment Agreement by extending the term of his employment as the Interim CEO through June 30, 2019, and providing for a reduced base salary of $500,000 per year plus a monthly amount of $1,177.04 for health coverage premiums. Subsequently in 2018, Mr. Pate volunteered to forego 98,500 of the options in order to fund other incentive awards to key employees in amounts and values determined by the Compensation Committee.
On March 31, 2019, 25% of the options granted under the Pate Option Agreement vested as a result of Mr. Pate meeting certain personal goals, including those relating to financial reporting, the Organizational Consolidation, and the mentorship of senior executives. 25% of the options were subject to vesting based on a budget goal as of March 31, 2019, of which 50% vested based on performance in respect of this goal. The remaining options vested on June 30, 2019. The options will remain exercisable until April 8, 2021.
The Pate Option Agreement also includes restrictive covenants in favor of the Company, including acontains one-year post-employment non-competition and non-solicitation restriction following Mr. Pate’s employment with the Company.
The 2018 option grant represented a substantial portion of Mr. Pate’s overall compensation for 2018. For 2019, the Compensation Committee approved target cash and equity compensation totaling $3,000,000 for Mr. Pate, comprised of a base salary of $750,000, a target bonus of $750,000 and a grant of 23,317 restricted share awards representing a value of $1,500,000 based on the closing price per share of the Company’s stock on the grant date. See our current report on Form 8-K filed with the SEC on February 11, 2019.
William Severance
The Company entered into an offer letter with Mr. Severance on November 23, 2015 (the “Prior Severance Offer Letter”) pursuant to which Mr. Severance was appointed as Chief Accounting Officer of the Company reporting directly to the CFO of the Company, effective February 1, 2016. Effective January 10, 2018, the Company and Mr. Severance entered into a new offer letter (the “Amended Severance Offer Letter”), which superseded and replaced the Prior Severance Offer Letter.
Under the terms of the Prior Severance Offer Letter, Mr. Severance’s annual base salary was $300,000. The Amended Severance Offer Letter provided for an increase of annual base salary to $318,270. Under the Amended Severance Offer Letter, in addition to his annual base salary, Mr. Severance was entitled to payment of a short-term incentive bonus in an amount targeted to equal 50% of his annual base salary upon the achievement of certain financial goalscovenants, as well as certain personal performance targets, in each case consistent with other senior executives of the Companynon-disclosure and to be determined by the Board. Mr. Severance received an award on his hire date of the number of restricted shares of the Company equal to 70% of his annual base salary divided by the closing price of the Company’s Common Stock on the date of the grant. As long as Mr. Severance remained employed by the Company, he would also be entitled to an award on each anniversary of his hire date of the number of restricted shares of the Company equal to 35% of his annual base salary divided by the closing price of the Company’s Common Stock on the date of the grant.
Effective April 11, 2018, in connection with the Organizational Consolidation, the Company appointed Mr. Severance Interim CFO. In connection with this appointment, Mr. Severance’s base salary was increased from $318,270 to $450,000 and his annual target bonus was increased from 50% to 75% of his base salary. Also in connection with this appointment, on April 9, 2018, Mr. Severance received options to purchase 13,710 shares of our Common Stock at a price of $71.67 per share, the closing price of the Company’s Common Stock on the grant date. The options will become fully exercisable on May 10, 2019, subject to Mr. Severance’s continued employment with the Company, and if not exercised will expire on December 31, 2020.
Neither the Prior Severance Offer Letter nor the Amended Severance Offer Letter provided for a term of employment. Details with respect to the severance provisions under the Amended Severance Offer Letter are set forth below under “Potential Payments Upon Termination or Change in Control.”
In addition, Mr. Severance was covered by the Retention Plan, which became effective on April 9, 2018 (see “Change in Control, Severance Arrangements and Severance Payments - Employee Retention Plan”), pursuant to which he was paid.
Laurence Orton
The Company entered into an offer letter with Mr. Orton on December 28, 2017 (the “Orton Offer Letter”) pursuant to which Mr. Orton continued to be employed as Vice President and Corporate Controller of the Company reporting to the Chief Accounting Officer of the Company. The Orton Offer Letter does not provide a term of employment.
Under the terms of the Orton Offer Letter, Mr. Orton’s annual base salary was $290,000. In addition to his annual base salary, Mr. Orton was entitled to payment of a short-term incentive bonus in an amount targeted to equal 50% of his annual base salary upon the achievement of certain goals determined by the Board or Compensation Committee. Mr. Orton was also eligible to participate in the Company’s 2006 Plan, under the terms approved by the Compensation Committee, and the Company’s fringe benefit programs as may be in effect from time to time.
In addition, Mr. Orton is covered by the Retention Plan, which became effective on April 9, 2018 (see “Change in Control, Severance Arrangements and Severance Payments - Employee Retention Plan”), pursuant to which he was paid.
50 | Modivcare 2023 Proxy Statement |
TABLE OF CONTENTS | Executive Compensation |
Outstanding Equity Awards at December
2022
|
| Option Awards |
| Stock Awards | ||||||||||||||||||||
Name and Grant Date |
| Number of Securities Underlying Unexercised Options (#) Exercisable (1) |
| Number of Securities Underlying Unexercised Options (#) Unexercisable (2) |
| Option Exercise Price ($) |
| Option Expiration Date |
| Number of Shares or Units of Stock That Have Not Vested (#) (3) |
| Market Value of Shares or Units of Stock That Have Not Vested ($) (4) |
| Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that have not Vested (#) |
| Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights that have not Vested ($) | ||||||||
Daniel E. Greenleaf | ||||||||||||||||||||||||
12/11/2019 |
| — | — | — | — | 20,104 | 1,189,755 | — |
|
| — | |||||||||||||
12/11/2019 | — | 67,090 | 59.25 | 12/11/2026 | — |
|
| — |
|
| — |
|
| — | ||||||||||
12/11/2019 | — | 40,432 | 68.14 | 12/11/2026 | — |
|
| — |
|
| — |
|
| — | ||||||||||
Kevin M. Dotts |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
| ||
8/27/2018 |
| — |
|
| 24,865 |
|
| 67.00 |
|
| 12/31/2021 |
|
| — |
|
| — |
|
| — |
|
| — |
|
9/20/2019 | — | — | — | — | 2,629 |
|
| 155,584 | ||||||||||||||||
9/20/2019 | — | 25,175 | 58.84 | 9/20/2024 | — | — |
|
| — |
|
| — | ||||||||||||
Kathryn Stalmack | ||||||||||||||||||||||||
9/20/2019 | — | — | — | — | 5,842 |
|
| 345,730 | — | — | ||||||||||||||
9/20/2019 | — | 15,257 | 58.84 | 9/20/2024 | — | — |
|
| — |
|
| — | ||||||||||||
Suzanne G. Smith | ||||||||||||||||||||||||
2/18/2019 | — | 4,600 | 73.09 | 12/31/2020 | — | — | — | — | ||||||||||||||||
9/20/2019 | — | — | — | — | 1,816 |
|
| 107,471 | — | — | ||||||||||||||
9/20/2019 | — | 5,798 | 58.84 | 9/20/2024 | — | — |
|
| — |
|
| — | ||||||||||||
R. Carter Pate |
|
|
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|
|
|
|
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|
|
|
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|
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|
|
|
|
|
|
|
|
4/9/2018 |
| 258,563 |
|
| — |
|
| 71.67 |
|
| 4/8/2021 |
|
| — |
|
| — |
|
| — |
|
| — |
|
William Severance | ||||||||||||||||||||||||
12/14/2017 | 34,004 | — | 56.42 | 12/31/2020 | — | — | — | — | ||||||||||||||||
12/16/2017 | 1,786 | — | 56.89 | 12/31/2020 | — | — | — | — | ||||||||||||||||
4/9/2018 | 13,710 | — | 71.67 | 12/31/2020 | — | — | — | — | ||||||||||||||||
Laurence Orton | — | — | — | — | — | — | — | — |
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||
Name and Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable(1) | Number of Securities Underlying Unexercised Options (#) Unexercisable(2) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#)(3) | Market Value of Shares or Units of Stock That Have Not Vested ($)(4) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that have not Vested (#)(5) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights that have not Vested ($)(6) | ||||||||||||||||||||||||
L. Heath Sampson | ||||||||||||||||||||||||||||||||
2/26/2021 | 3,123 | 6,245 | 128.26 | 2/26/2026 | 1,852 | 166,180 | — | — | ||||||||||||||||||||||||
2/8/2022 | — | 6,733 | 110.07 | 2/8/2027 | 2,200 | 197,406 | 2,201 | 197,451 | ||||||||||||||||||||||||
11/21/2022 | — | 1,579 | 85.99 | 11/21/2027 | 573 | 51,415 | 574 | 51,460 | ||||||||||||||||||||||||
Ilias Simpson | ||||||||||||||||||||||||||||||||
4/11/2022 | — | 3,262 | 109.70 | 4/11/2027 | 1,139 | 102,202 | 1,139 | 102,202 | ||||||||||||||||||||||||
Brett Hickman | ||||||||||||||||||||||||||||||||
4/18/2022 | — | 5,013 | 114.24 | 4/18/2027 | 1,750 | 157,028 | 1,751 | 157,072 | ||||||||||||||||||||||||
Grover N. Wray | ||||||||||||||||||||||||||||||||
10/27/2021 | 468 | 935 | 160.26 | 10/27/2026 | 293 | 26,291 | — | — | ||||||||||||||||||||||||
2/8/2022 | — | 4,586 | 110.07 | 2/8/2027 | 1,499 | 134,505 | 1,499 | 134,505 |
|
| ||||
Modivcare 2023 Proxy Statement | 51 |
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|
|
| ||||
Executive Compensation | TABLE OF CONTENTS |
|
|
|
| Option Awards |
| Stock Awards | ||||||||
Name |
| Number of Shares Acquired on Exercise (#) |
| Value Realized on Exercise ($) |
| Number of Shares Acquired on Vesting (#) |
| Value Realized on Vesting ($) | ||||
Daniel E. Greenleaf |
| — | — | — | — |
| ||||||
Kevin M. Dotts | — | — | — | — | ||||||||
Kathryn Stalmack | — | — | — | — | ||||||||
Suzanne G. Smith | — | — | — | — | ||||||||
R. Carter Pate |
| — | — | 23,317 | 1,375,237 |
| ||||||
William Severance | 2,115 | 37,139 | 3,730 | 238,069 | ||||||||
Laurence Orton | 24,520 | 324,677 | 1,422 | 90,432 |
2022.
Option Awards | Stock Awards | ||||||||||||||||
Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($)(1) | Number of Shares Acquired on Vesting (#)(2) | Value Realized on Vesting ($)(3) | |||||||||||||
L. Heath Sampson | — | — | 926 | 105,573 | |||||||||||||
Ilias Simpson | — | — | — | — | |||||||||||||
Jason Anderson | — | — | — | — | |||||||||||||
Daniel E. Greenleaf | 83,842 | 877,943 | 5,677 | 621,472 | |||||||||||||
Brett Hickman | — | — | — | — | |||||||||||||
Grover N. Wray | — | — | 147 | 14,015 |
None
2022.
Plan category | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights(1) | Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (excluding securities reflected in the first column) | ||||||||||||||
Equity compensation plans | 250,077 | 115.33 | 1,177,991 | ||||||||||||||
Equity compensation plans not approved by security holders | — | — | — | ||||||||||||||
Total | 250,077 | 115.33 | 1,177,991 |
52 | Modivcare 2023 Proxy Statement |
TABLE OF CONTENTS | Executive Compensation |
Year | SCT Total | CAP(2) | Average SCT Total for non PEO NEOs ($) | Average CAP(2) to non PEO NEOs ($) | Value of Initial Fixed $100 Investment Based On: | Net Income (Loss) ($) | Adjusted EBITDA ($) | Comp. Adjusted EBITDA ($)(3) | ||||||||||||||||||||||||||||||
First PEO ($)(1) | Second PEO ($)(1) | First PEO ($)(1) | Second PEO ($)(1) | TSR | Peer Group TSR (Russell Index) | |||||||||||||||||||||||||||||||||
2022(4) | 5,373,333 | 2,266,785 | (9,416,369) | 1,256,475 | 1,475,719 | 955,828 | 151.62 | 105.56 | (31,806,000) | 221,902,000 | 192,969,000 | |||||||||||||||||||||||||||
2021(5) | 3,637,550 | N/A | 4,708,503 | N/A | 1,092,956 | 802,089 | 250.57 | 134.57 | (6,585,000) | 205,008,000 | 205,008,000 | |||||||||||||||||||||||||||
2020(6) | 4,691,139 | N/A | 16,436,594 | N/A | 925,246 | 2,192,785 | 234.25 | 118.36 | 88,836,000 | 189,190,000 | 189,190,000 |
Modivcare 2023 Proxy Statement | 53 |
Executive Compensation | TABLE OF CONTENTS |
First PEO(1) | Second PEO(1) | Average non-PEO NEOs(2) | ||||||||||||||||||||||||||||||
2020 ($) | 2021 ($) | 2022 ($) | 2022 ($) | 2020 ($) | 2021 ($) | 2022 ($) | ||||||||||||||||||||||||||
Summary Compensation Total | 4,691,139 | 3,637,550 | 5,373,333 | 2,266,785 | 925,246 | 1,092,956 | 1,475,719 | |||||||||||||||||||||||||
(-) Grant Date Fair Value of Option Awards and Stock Awards Granted in Fiscal Year(3) | (1,699,645) | (1,699,947) | (4,762,378) | (1,360,941) | (149,701) | (420,720) | (850,727) | |||||||||||||||||||||||||
(+) Fair Value at Fiscal Year-End of Outstanding and Unvested Option Awards and Stock Awards Granted in Fiscal Year(4) | 5,066,337 | 1,291,121 | — | 936,226 | 516,965 | 390,666 | 356,906 | |||||||||||||||||||||||||
(+/-) Change in Fair Value of Outstanding and Unvested Option Awards and Stock Awards Granted in Prior Fiscal Years(5) | 6,271,922 | 858,909 | — | (347,599) | 668,570 | 40,318 | (11,584) | |||||||||||||||||||||||||
(+) Fair Value at Vesting of Option Awards and Stock Awards Granted in Fiscal Year That Vested During Fiscal Year(6) | — | — | — | — | — | — | — | |||||||||||||||||||||||||
(+/-) Change in Fair Value as of Vesting Date of Option Awards and Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year(7) | 2,106,841 | 620,870 | (825,821) | (237,996) | 269,160 | 24,657 | (14,486) | |||||||||||||||||||||||||
(-) Fair Value as of Prior Fiscal Year-End of Option Awards and Stock Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year(8) | — | — | (9,201,503) | — | (37,455) | (325,788) | — | |||||||||||||||||||||||||
Compensation Actually Paid | 16,436,594 | 4,708,503 | (9,416,369) | 1,256,475 | 2,192,785 | 802,089 | 955,828 |
54 | Modivcare 2023 Proxy Statement |
TABLE OF CONTENTS | Executive Compensation |
Modivcare 2023 Proxy Statement | 55 |
Executive Compensation | TABLE OF CONTENTS |
56 | Modivcare 2023 Proxy Statement |
TABLE OF CONTENTS | Executive Compensation |
The receipt of the payments and benefits to these NEOs under the employment agreements, letters and policies are generally conditioned upon their complying with non-competition, non-solicitation/non-piracy and non-disclosure provisions. By the terms of such agreements, letters and policies, the executives acknowledge that a breach of some or all of the restrictive covenants described therein will entitle us to injunctive relief restraining the commission or continuance of any such breach, in addition to any other available remedies.
Severance Payments
For
Under the employment agreements and offer letters, as applicable, with Mr. Greenleaf, Mr. Dotts, Ms. Stalmack, and Ms. Smith, “Cause” is defined as:
fraud or theft committed by the employee against us or any of our subsidiaries, affiliates, joint ventures and related organizations, including any entity managed by us (collectively referred to as “Affiliates”), or commission•conviction of a felony or anya crime involving fraud or moral turpitude;
•theft, material act of dishonesty or fraud, intentional falsification of any employment or Company records, or commission of any criminal act which impairs Participant’s ability to perform appropriate employment duties for the Company;
breachperformance of any provision by the employee of the employment agreement or breach of any fiduciary duty or duty of loyalty owed to us or our Affiliates;
conduct of the employee tending to bring us or our Affiliates into public disgrace or embarrassment, or which is reasonably likely to cause one or more of its customers or clients to cease doing business with, or reduce the amount of business with, the Company or its Affiliates;
neglect or refusal by the employee to perform duties or responsibilities as directed by us, the Board or any executive committee established by the Board, or violation by the employee of any express direction of any lawful rule or regulation established by us or the Board or any committee established by the Board which is consistent with the scope of the employee’s duties under the employment agreement, if such failure, refusal, or violation continues uncured for a period 10 days after written notice from us to the employee specifying the failure, refusal, or violation and our intention to terminate the employment agreement for Cause;
commission of any acts or omissions by the employee resulting in or intended to result in direct material personal gain to the employee at our or our Affiliates’ expense; or
employee materially compromises our or our Affiliates’ trade secrets or other confidential and proprietary information.
Action or inaction by the employee isConduct shall not be considered “willful” unless done, or omitted by him or her intentionallyto be done, not in good faith and without his or hera reasonable belief that his or her action or inactionthe conduct (or lack thereof) was in our or our Affiliates’the best interests of the Company.
Underestate would receive the life insurance proceeds.
Modivcare 2023 Proxy Statement | 57 |
Executive Compensation | TABLE OF CONTENTS |
The amount of estimated payments and benefits that would be provided by us (or our successor) tothe Company’s 30-day cure period.
Under their employment agreements, in the event of a termination of employment by the Company without cause (or termination by the executive for good reason with respect to Mr. Greenleaf, Mr. Dotts and Ms. Stalmack), Mr. Greenleaf would have received cash severance payments totaling $1,736,000 and an acceleration of stock-based compensation valued at $594,877, Mr. Dotts would have received $450,000, Ms. Stalmack would have received $375,000, and Ms. Smith would have received $142,500. With the exception of the terms of Mr. Greenleaf’s employment, the Company does not provide NEOs with continuation of benefits or accelerated vesting of equity awards upon a termination of employment, and no NEO is entitled to payments or benefits in connection with a termination other than by the Company without cause or by the executive for good reason.
Change in Control Payments
Employment Agreements
Certain payment provisions of the employment agreements are also triggered by a “Change in Control.” Under the employment agreements with Mr. Greenleaf, Mr. Dotts, and Ms. Stalmack, a “Change in Control” is defined as an event or events, in which:
any “person” as defined in Sections 13(d) and 14(d) of the Exchange Act (other than (i) us or our subsidiaries, (ii) any fiduciary holding securities under our employee benefit plan or our subsidiaries, or (iii) any company owned by our stockholders), is or becomes the “beneficial owner” of 50% or more of our voting outstanding securities; or
we consummate (i) mergers or consolidations as more specifically described in the employment agreements, (ii) a liquidation or (iii) the sale or disposition of all or substantially all of our assets.
For fiscal year 2019,Simpson, had a Change in Control occurred during the term of Mr. Greenleaf’s employment agreement and he was either terminated or resigned for Good Reason within 12 months following such Change in Control, Mr. Greenleaf’s employment agreementeach would have been entitled him to receive from the Company (i) thirtya lump sum payment of 12 months’ base salary, and 2.5 times the target bonus for the full fiscal year 2019, (ii) continued healthcare coverage for eighteensix months following the date of termination, and (iii) accelerated vesting of all unvested RSU and option awards.
Equity Awards
Upon a Change in Control, each of the NEOs are entitled to accelerated vesting of stock options and accelerated vesting and payment of restricted share awards granted to that executive officer, as applicable.
control arrangement.
Name |
| Change in Control Payment ($) (1) |
| Value of Accelerated Vesting of Equity Awards ($)(2) |
| Total Termination Benefits ($)(3) | |||
Daniel E. Greenleaf | 2,161,000 | 1,189,755 | 3,350,755 | ||||||
Kevin M. Dotts |
| 500,000 |
|
| 164,144 |
|
| 664,144 |
|
Kathryn Stalmack | 375,000 | 350,917 | 725,917 | ||||||
Suzanne G. Smith | — |
|
| 109,442 |
|
| 109,442 |
|
| ||||
58 | Modivcare 2023 Proxy Statement |
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TABLE OF CONTENTS | Executive Compensation |
|
|
Name | Event Triggering Payment | Cash Payment(s) ($) | Value of Accelerated Vesting of Stock Awards ($)(1) | Value of Accelerated Vesting of Option Awards ($)(1) | Value of Health Insurance Payments ($) | Life or Disability Insurance Proceeds ($)(2) | Total ($)(3) | |||||||||||||||||||
L. Heath Sampson | Resignation for Good Reason(4) | 750,000 | — | — | 15,537 | — | 765,537 | |||||||||||||||||||
Termination without Cause(5) | 750,000 | — | — | 15,537 | — | 765,537 | ||||||||||||||||||||
Death | — | — | — | — | 100,000 | 100,000 | ||||||||||||||||||||
Disability | — | — | — | — | 10,000 | — | ||||||||||||||||||||
Termination Upon Change in Control(6) | 750,000 | 902,916 | 283,791 | 15,537 | — | 1,952,244 | ||||||||||||||||||||
Ilias Simpson | Resignation for Good Reason(4) | 500,000 | — | — | 3,901 | — | 503,901 | |||||||||||||||||||
Termination without Cause(5) | 500,000 | — | — | 3,901 | — | 503,901 | ||||||||||||||||||||
Death | — | — | — | — | 100,000 | 100,000 | ||||||||||||||||||||
Disability | — | — | — | — | 10,000 | — | ||||||||||||||||||||
Termination Upon Change in Control(6) | 500,000 | 297,883 | 74,608 | 3,901 | — | 876,392 |
The CEO pay used for purposes of calculating the Pay Ratio is $2,831,031,$2,625,000, the SCT total compensation paid toof our Interim CEO, R. Carter Pate,L. Heath Sampson, assuming he had been paid from January 1, 20192022 through December 31, 2019.
2022 in his role as CEO. In accordance with Instruction 10 to Item 402(u), we looked only to the CEO serving in that position on the date we identified our median employee for fiscal year 2022, which was Mr. Sampson, and then annualized the compensation Mr. Sampson received as CEO. Under this approach, the compensation that Mr. Sampson received as Chief Financial Officer prior to his appointment as CEO was not included. As such, the CEO pay used for purposes of calculating the Pay Ratio does not represent the actual compensation Mr. Sampson received during fiscal year 2022.
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Executive Compensation | TABLE OF CONTENTS |
PROPOSAL 2 – ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION
The Dodd-Frank Wall Street Reform
The Compensation Committee has considered thatemployee population sampled, the holderselements of approximately 82%pay and 80%benefits used, any assumptions made and the use of the votes cast at our 2019 and 2018 annual meeting of stockholders, respectively, approved, on an advisory basis the compensation of our NEOs as disclosed in the Proxy Statement for those annual meetings.
As described in detail under the heading “Executive Compensation—Compensation Discussion and Analysis,” above, our executivestatistical sampling. In addition, no two companies have identical employee populations or compensation programs, are designedand pay, benefits and retirement plans differ by country even within the same company. As such, our pay ratio may not be comparable to attract, motivate, and retain our NEOs, who are critical to our success. Under these programs, our NEOs are rewarded for the achievement of specific annual, long-term and strategic goals, corporate goals, and the realization of increased stockholder value. Please read the “Compensation Discussion and Analysis” beginning on page 19 for additional details about our executive compensation programs, including information about the fiscal year 2019 compensation of our NEOs.
We believe that the compensation programs offered to our NEOs should support the creation of stockholder value and
achievement of our financial goals. Accordingly, our guiding compensation principles focus on:
attracting, retaining, and motivating high-performing leaders;
aligning the interests of our executives with those of our stockholders, and incentivizing stockholder value creation;
linking a meaningful portion of executive compensation to achievement of key financial, operational, and capital allocation performance goals; and
maintaining a significant portion of compensation based on at-risk opportunities including equity awards tied to stock price.
Our Compensation Committee has a long history of performance-based pay practices and considers numerous factors when setting compensation for our NEOs including:
actual and adjusted EBITDA, earnings per share, return on equity performance, and stockholder value created;
goals and objectives set for each executive officer at the beginning of the year; and
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recommendations of an independent third-party executive compensation consultant.
TABLE OF CONTENTS | Proposal Three |
Proposal Three: Advisory vote to approve named executive officer compensation | ||||||||||||||
Section 14A of the Exchange Act provides stockholders an opportunity to cast a non-binding advisory vote to approve the compensation of the “named executive officers” identified in the Summary Compensation Table of this document. The Compensation Committee has considered that the holders of approximately 99% and 98% of the votes cast at each of our 2022 and 2021 annual meetings of stockholders, respectively, approved, on an advisory basis, the compensation of our NEOs as disclosed in the Proxy Statement for those annual meetings. As described in detail under the heading “Executive Compensation—Compensation Discussion and Analysis,” above, our executive compensation programs are designed to attract, motivate, and retain our NEOs, who are critical to our success. Under these programs, our NEOs are rewarded for the achievement of specific annual, long-term and strategic goals, corporate goals, and the realization of increased stockholder value. Please read the “Compensation Discussion and Analysis” beginning on page [•] for additional details about our executive compensation programs, including information about the fiscal year 2022 compensation of our NEOs. We believe that the compensation programs offered to our NEOs should support the creation of stockholder value and achievement of our financial goals. Accordingly, our guiding compensation principles focus on: •attracting, retaining, and motivating high-performing leaders; •aligning the interests of our executives with those of our stockholders, and incentivizing stockholder value creation; •linking a meaningful portion of executive compensation to achievement of key financial, operational, and capital allocation performance goals; and •maintaining a significant portion of compensation based on at-risk opportunities including equity awards tied to stock price Our Compensation Committee has a long history of performance-based pay practices and considers numerous factors when setting compensation for our NEOs including: •actual and adjusted EBITDA, earnings per share, return on equity performance, and stockholder value created; •goals and objectives set for each executive officer at the beginning of the year; and •recommendations of an independent third-party executive compensation consultant | Board Recommendation ____ The Board unanimously recommends that you vote “FOR” the compensation of our named executive officers, as disclosed in this Proxy Statement. | |||||||||||||
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Proposal Three | TABLE OF CONTENTS |
Performance based portions of our executive compensation for any given year are awarded primarily based on the respective prior year financial performance.
Our Compensation Committee continually reviews the compensation programs for our NEOs to ensure they achieve the desired goals of aligning our executive compensation structure with our stockholders’ interests and current market practices.
ü | |||||||||||
The Board unanimously recommends that you vote “FOR”the compensation of our named executive officers, as disclosed in this Proxy Statement. | |||||||||||
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TABLE OF CONTENTS | Proposal Four |
PROPOSAL 3 – RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
2017. The Company’s independent registered public accounting firmBoard believes that an annual Say on Pay vote continues to be appropriate for the fiscal year ended December 31, 2019 was KPMG. The Auditfollowing reasons:
Although we are not required to do so, we believestockholders, and therefore will take into account the outcome of the votes when considering the frequency of future advisory votes on executive compensation. Nevertheless, the Board may decide that it is appropriate for us to request stockholder ratification of the appointment of KPMG as our independent registered public accounting firm. If stockholders do not ratify the appointment, though it may nevertheless retain KPMG, the Audit Committee will investigate the reasons for the stockholders’ rejection and reconsider the appointment. In addition, even if the stockholders ratify the selection of KPMG, the Audit Committee may in its discretion appoint a different independent registered public accounting firm at any time during the year if the Audit Committee determines that a change is in the best interestinterests of the Company.
Company and its stockholders to hold an advisory vote on executive compensation on a different frequency than the frequency receiving the most votes cast by its stockholders or recommended by the Board, and may vary its practice based on factors such as discussions with stockholders and the adoption of material changes to compensation programs.
The Board unanimously recommends that you vote “FOR” the ratificationoccur at our 2029 annual meeting of the appointment of KPMG as our independent registered public accounting firm for the fiscal year ending December 31, 2020.
ü | |||||||||||
The Board unanimously recommends that you vote “ONE YEAR” for the frequency of future advisory votes on named executive officer compensation. | |||||||||||
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Proposal Five | TABLE OF CONTENTS |
Proposal Five: Ratification of Appointment of Independent Registered Public Accounting Firm | ||||||||||||||
The Company’s independent registered public accounting firm for the fiscal year ended December 31, 2022 was KPMG LLP. The Audit Committee of the Board has selected KPMG as its independent registered public accounting firm to audit the Company’s consolidated financial statements for the fiscal year ending December 31, 2023. Although we are not required to do so, we believe that it is appropriate for us to request stockholder ratification of the appointment of KPMG as our independent registered public accounting firm. If stockholders do not ratify the appointment, though it may nevertheless retain KPMG, the Audit Committee will investigate the reasons for the stockholders’ rejection and reconsider the appointment. In addition, even if the stockholders ratify the selection of KPMG, the Audit Committee may in its discretion appoint a different independent registered public accounting firm at any time during the year if the Audit Committee determines that a change is in the best interest of the Company. The Company has been advised that representatives of KPMG will be present at the Annual Meeting with the opportunity to make a statement if the representatives desire to do so. It is expected that the representatives will be available to respond to appropriate questions. | Board Recommendation ____ The Board unanimously recommends that you vote “FOR” the ratification of the appointment of KPMG as our independent registered public accounting firm for the fiscal year ending December 31, 2023. | |||||||||||||
ü | |||||||||||
The Board unanimously recommends that you vote “FOR” the ratification of the appointment of KPMG as our independent registered public accounting firm for the fiscal year ending December 31, 2023. | |||||||||||
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AUDIT COMMITTEE REPORT
TABLE OF CONTENTS | Audit Committee Report |
www.ModivCare.com/governance.
ModivCare.
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INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS
Fiscal Year Ended December 31, | ||||||||
2019 | 2018 | |||||||
Audit fees | $ | 1,532,083 | $ | 2,289,800 | ||||
Audit related fees | - | 15,000 | ||||||
Tax fees | 453,805 | 1,971,768 | ||||||
All other fees | - | 472,862 | ||||||
Total | $ | 1,985,888 | $ | 4,749,430 |
Fiscal Year Ended December 31, | ||||||||
2022 ($) | 2021 ($) | |||||||
Audit fees | 3,291,912 | 2,870,512 | ||||||
Audit related fees | 275,000 | — | ||||||
Tax fees | 246,733 | 262,873 | ||||||
All other fees | — | — | ||||||
Total | 3,813,645 | 3,133,385 |
engagements, as well as comfort letters rendered in connection with debt offerings.
a real time IT system assessment related to the WorkDay IT system implementation.
The Audit Committee has considered and determined that the services provided by KPMG were compatible with KPMG maintaining their independence.
STOCKHOLDER PROPOSALS FOR 2021 ANNUAL MEETING
2021.
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TABLE OF CONTENTS | Stockholder Proposals for Annual Meeting |
January 2, 2024.
OTHER MATTERS
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Other Matters | TABLE OF CONTENTS |
ADDITIONAL INFORMATION
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TABLE OF CONTENTS | Additional Information |
HOUSEHOLDING
Denver, CO 80237.
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Householding | TABLE OF CONTENTS |
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TABLE OF CONTENTS | Appendix A |
Daniel E. Greenleaf
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Appendix A | TABLE OF CONTENTS |
(dollars in thousands) | FY 2019 | FY 2020 | FY 2021 | FY 2022 | ||||||||||
Net income (loss) | (4,953) | 88,836 | (6,585) | (31,806) | ||||||||||
Provision (benefit) for income taxes | (573) | 22,018 | 8,617 | (3,035) | ||||||||||
Interest expense, net | 850 | 17,599 | 49,081 | 61,961 | ||||||||||
Depreciation and amortization | 16,816 | 26,183 | 56,998 | 100,415 | ||||||||||
Reported EBITDA | 12,140 | 154,636 | 108,111 | 127,535 | ||||||||||
Stock-based compensation (1) | 5,414 | 3,776 | 4,793 | 5,960 | ||||||||||
Cash settled equity (2) | — | 16,071 | 9,165 | 108 | ||||||||||
Equity in net (gain) loss of investee, net of tax (3) | 29,685 | (6,411) | 38,250 | 29,964 | ||||||||||
Restructuring and related costs (4) | 6,691 | 7,295 | 21,593 | 26,998 | ||||||||||
Transaction and integration costs (5) | 2,693 | 12,619 | 25,588 | 23,971 | ||||||||||
Settlement related costs (6) | — | — | — | 9,564 | ||||||||||
COVID-19 related costs, net of grant income (7) | — | 1,204 | (2,492) | (2,198) | ||||||||||
Total adjustments | 44,483 | 34,554 | 96,897 | 94,367 | ||||||||||
Adj. EBITDA | 56,623 | 189,190 | 205,008 | 221,902 | ||||||||||
Less: Restructuring and related costs in excess of approved budget | N/A | N/A | N/A | (13,898) | ||||||||||
Less: Transaction and integration costs in excess of approved budget | N/A | N/A | N/A | (13,600) | ||||||||||
Less: Settlement related costs in excess of approved budget | N/A | N/A | N/A | (1,435) | ||||||||||
Compensation Adj. EBITDA (8) | 56,623 | 189,190 | 205,008 | 192,969 |
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TABLE OF CONTENTS | Appendix A |
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MODIVCARE INC. | ||||||||
Date: [●], 2023 | ||||||||
By: | ||||||||
Name: | Jonathan Bush | |||||||
Title: | Senior Vice President, General Counsel and |
April 29, 2020
Atlanta, Georgia
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