| Item 1.01 | Entry Into a Material Definitive Agreement. |
On February 28, 2022, C.H. Robinson Worldwide, Inc. (the “Company”) entered into a Cooperation Agreement (the “Cooperation Agreement”) with Ancora Catalyst Institutional, LP, Pacific Point Wealth Management LLC, and the other entities and natural persons party thereto (collectively, the “Investor Group”) pursuant to which the Company (i) increased the size of the board of directors of the Company (the “Board”) to twelve (12) directors, until the opening of the polls of the 2022 Annual Meeting, at which time current directors Wayne M. Fortun and Brian P. Short, who previously announced their decision not to stand for reelection, will no longer serve as directors on the Board, the size of the Board shall be reduced to a total of ten (10) or eleven (11) directors, as determined by the Board in its sole discretion and (ii) appointed to the Board Henry W. Winship and Henry J. Maier (the “Investor Group Appointees”) to serve as directors of the Company effective immediately upon execution of the Cooperation Agreement. With respect to the Company’s 2022 annual meeting of shareholders (the “2022 Annual Meeting”), the Company may also include an additional nominee identified by the Governance Committee of the Board in the Company’s slate of nominees for election as directors of the Company at the 2022 Annual Meeting.
Prior to the expiration of the Standstill Period (as defined below), the Board and all applicable committees of the Board will not increase the size of the Board above eleven (11) directors without the prior written consent of the Investor Group. If, during the Standstill Period, any Investor Group Appointee resigns from the Board or is unable (due to death or disability) or refuses to serve on the Board for any reason, so long as Ancora Catalyst Institutional, LP and its affiliates who are parties to the Cooperation Agreement (the “Ancora Investors”) at that time and at all times since the date of the Cooperation Agreement beneficially own in the aggregate at least one percent (1%) of the Company’s then-outstanding Common Stock, then the Ancora Investors shall identify a replacement director, subject to reasonable approval by the Governance Committee and the Board, on the terms set forth in the Cooperation Agreement.
The Company has also agreed to (i) appoint Mr. Winship to the Compensation Committee and Mr. Maier to the Governance Committee, (ii) consider each Investor Group Appointee for membership on one or more of the other committees of the Board in the same manner as other independent members of the Board, and (iii) immediately form a Capital Allocation and Planning Committee to objectively assess value creation opportunities and to support and make recommendations to the Board and support management’s review of the Company’s capital allocation, operations and strategy and enhanced transparency and disclosures to shareholders. The Capital Allocation and Planning Committee will be chaired by Mr. Winship and the other initial members are Scott P. Anderson, Robert C. Biesterfeld Jr. and Mr. Maier.
Pursuant to the Cooperation Agreement, the Investor Group has agreed to not to make director nominations to the Company and to support the Board’s full slate of directors at the 2022 Annual Meeting of the Company’s shareholders.
During the Standstill Period, the Investor Group has agreed to vote all of their shares of common stock of the Company in favor of recommendations of the Board with respect to (i) the election, removal and/or replacement of directors (a “Director Proposal”), (ii) the ratification of the appointment of the Company’s independent registered public accounting firm and (iii) any other proposal submitted to the Company’s shareholders at a meeting of the Company’s shareholders, in each case as such recommendation of the Board is set forth in the applicable definitive proxy statement filed in respect thereof. Notwithstanding the foregoing, in the event both Institutional Shareholder Services Inc. (“ISS”) and Glass Lewis & Co., LLC (“Glass Lewis”) make a recommendation that differs from the recommendation of the Board with respect to any proposal submitted to the shareholders at any meeting of the Company’s shareholders (other than Director Proposal), the Investor Group is permitted to vote in accordance with the ISS and Glass Lewis recommendation. The Investor Group is also entitled to vote in its sole discretion with respect to any publicly announced proposal relating to a merger, acquisition, disposition of all or substantially all of the assets of the Company and its subsidiaries or other business combination involving the Company, in each case, that requires a vote of the Company’s shareholders.
The Company is not required to include any Investor Group Appointee (or any replacement thereof) or any of the other directors on its slate of director nominees at any annual meeting following the 2022 Annual Meeting.
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