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Preliminary Proxy Statement
|
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Confidential, For Use of the Commission Only (as permitted by Rule 14a-6(e) (2))
|
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X
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Definitive Proxy Statement
|
|||
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Definitive Additional Materials
|
|||
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Soliciting Material Pursuant to §240.14a-12
|
|||
T. Rowe Price Group, Inc.
|
|||||
(Name of Registrant as Specified in Its Charter)
|
|||||
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
|
|||||
Payment of Filing Fee (Check the appropriate box):
|
|||||
X
|
|
No fee required.
|
|||
|
|
Fee computed on table below per Exchange Act Rules 14a-6(i) (1) and 0-11.
|
|||
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(1
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)
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Title of each class of securities to which transaction applies:
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(2
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)
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Aggregate number of securities to which transaction applies:
|
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(3
|
)
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
|
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(4
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)
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Proposed maximum aggregate value of transaction:
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(5
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)
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Total Fee Paid:
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Fee paid previously with preliminary materials:
|
|||
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
|
|||
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(1
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)
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Amount previously paid:
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(2
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)
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Form, Schedule or Registration Statement No:
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(3
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)
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Filing Party:
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(4
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)
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Date Filed:
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Please execute and return the enclosed proxy promptly whether or not you plan to attend the T. Rowe Price Group, Inc. 2017 Annual Meeting of Stockholders.
|
1)
|
elect a Board of
thirteen
directors;
|
2)
|
approve, by a non-binding advisory vote, the compensation paid by the Company to its Named Executive Officers;
|
3)
|
recommend, by a non-binding advisory vote, the frequency of voting by the stockholders on compensation paid by the Company to its Named Executive Officers;
|
4)
|
reapprove the material terms and performance criteria for grants of qualified performance-based awards under the 2012 Long-Term Incentive Plan;
|
5)
|
approve the 2017 Non-Employee Director Equity Plan;
|
6)
|
approve the restated 1986 Employee Stock Purchase Plan, which includes the establishment of a share pool of 3,000,000 shares available for purchase by employees;
|
7)
|
ratify the appointment of KPMG LLP as our independent registered public accounting firm for
2017
;
|
8)
|
consider a stockholder proposal for a report on voting by our funds and portfolios on matters related to climate change, if properly presented at the Annual Meeting;
|
9)
|
consider a stockholder proposal for a report on voting by our funds and portfolios on matters related to executive compensation, if properly presented at the Annual Meeting; and
|
10)
|
consider a stockholder proposal for a report on employee diversity and related policies and programs, if properly presented at the Annual Meeting.
|
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||
|
||
Questions and Answers About the Proxy Materials and the Annual Meeting
|
|
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||
|
||
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||
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24
|
|
|
|
||
|
||
Executive Summary
|
|
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Executive Compensation Philosophy and Objectives
|
30
|
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Process for Determining Executive Compensation
|
33
|
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2016 Compensation Decisions
|
35
|
|
Other Compensation Policies and Practices
|
39
|
|
Report of the Executive Compensation a
nd Management Development Committee
|
|
|
|
||
|
||
2016 Grants of Plan-Based Awards Table
|
|
|
Outstanding Equity Awards Table at December 31, 2016
|
|
|
2016 Option Exercises and Stock Vested Table
|
|
|
2016 Nonqualified Deferred Compensation Table
|
|
|
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||
|
||
|
||
Proposal 3: Advisory Vote on the Selection of Frequency for the Advisory Vote on the Compensation Paid to our Named Executive Officers
|
|
|
Proposal 4: Reapprove the Material Terms and Performance Criteria for Grants of Qualified Performance-Based Awards under the 2012 Long-Term Incentive Plan
|
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Proposal 5: Approve the 2017 Non-Employee Director Equity Plan
|
59
|
|
Proposal 6: Approve the Restated 1986 Employee Stock Purchase Plan to Increase its Available Share Pool
|
|
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Proposal 7: Ratification of the Appointment of KPMG LLP as our Independent Registered Public Accounting Firm for 2017
|
66
|
|
Disclosure of Fees Charged by the Independent Registered Public Accounting Firm
|
66
|
|
|
||
|
||
Proposal 8: Stockholder Proposal for a Report on Voting by our Funds and Portfolios on Matters Related to Climate Change
|
|
|
Proposal 9: Stockholder Proposal for a Report on Voting by our Funds and Portfolios on Matters Related to Executive Compensation
|
70
|
|
Proposal 10: Stockholder Proposal for a Report on Employee Diversity and Related Policies and Programs
|
|
|
Stockholder Proposals for the 2018 Annual Meeting
|
|
|
Stockholder Communications with the Board of Directors
|
|
|
Appendix: 2012 Long Term Incentive Plan
|
A-1
|
|
Appendix: 2017 Non-Employee Director Equity Plan
|
A-23
|
|
Appendix: Restated 1986 Employee Stock Purchase Plan
|
A-32
|
|
1)
|
elect a Board of
thirteen
directors;
|
2)
|
approve, by a non-binding advisory vote, the compensation paid by the Company to its Named Executive Officers;
|
3)
|
recommend, by a non-binding advisory vote, the frequency of voting by the stockholders on compensation paid by the Company to its Named Executive Officers;
|
4)
|
reapprove the material terms and performance criteria for grants of qualified performance-based awards under the 2012 Long-Term Incentive Plan;
|
5)
|
approve the 2017 Non-Employee Director Equity Plan;
|
6)
|
approve the restated 1986 Employee Stock Purchase Plan, which includes the establishment of a share pool of 3,000,000 shares available for purchase by employees;
|
7)
|
ratify the appointment of KPMG LLP as our independent registered public accounting firm for
2017
;
|
8)
|
consider a stockholder proposal for a report on voting by our funds and portfolios on matters related to climate change; if properly presented at the Annual Meeting;
|
9)
|
consider a stockholder proposal for a report on voting by our funds and portfolios on matters related to executive compensation, if properly presented at the Annual Meeting; and
|
10)
|
consider a stockholder proposal for a report on employee diversity and related policies and programs, if properly presented at the Annual Meeting.
|
Why did I receive in the mail a Notice of the Internet Availability of Proxy Materials?
|
Can I view the Proxy Materials on the Internet?
|
Who is entitled to vote at the Annual Meeting?
|
What am I voting on and what are the Board voting recommendations?
|
|
Proposal
|
Board Voting Recommendation
|
1
|
Election of Directors
|
FOR ALL DIRECTOR NOMINEES
|
2
|
Advisory vote on the compensation paid by the Company to its Named Executive Officers
|
FOR
|
3
|
Advisory vote on the frequency of voting by the stockholders on compensation paid by the Company to its Named Executive Officers
|
1 YEAR
|
4
|
Reapprove the material terms and performance criteria for grants of qualified performance-based awards under the 2012 Long-Term Incentive Plan
|
FOR
|
5
|
Approve the 2017 Non-Employee Director Equity Plan
|
FOR
|
6
|
Approve the Restated 1986 Employee Stock Purchase Plan, which includes the establishment of a share pool of 3,000,000 shares available for purchase by employees
|
FOR
|
7
|
Ratification of the appointment of KPMG LLP as our independent registered public accounting firm for 2017
|
FOR
|
8
|
Stockholder proposal for a report on voting by our funds and portfolios on matters related to climate change
|
AGAINST
|
9
|
Stockholder proposal for a report on voting by our funds and portfolios on matters related to executive compensation
|
AGAINST
|
10
|
Stockholder proposal for a report on employee diversity and related policies and programs.
|
NO RECOMMENDATION
|
Can other matters be decided at the Annual Meeting?
|
What is the procedure for voting?
|
|
|
▪
|
You can vote your shares via the Internet at
proxyvote.com
.
|
▪
|
You can vote your shares by telephone by calling toll free
1-800-690-6903
.
|
|
|
Do I need to bring anything in order to attend the Annual Meeting?
|
What is the difference between holding shares as a registered stockholder and as a beneficial owner?
|
Can I change my proxy vote?
|
▪
|
Authorizing a new vote electronically through the Internet or by telephone.
|
▪
|
Returning a signed proxy card with a later date.
|
▪
|
Delivering a written revocation of your proxy to the Chief Legal Officer and Corporate Secretary at T. Rowe Price Group, Inc., 100 East Pratt Street, Mail Code
BA-1360
, Baltimore, Maryland 21202 before your original proxy is voted at the Annual Meeting.
|
▪
|
Submitting a written ballot in person at the Annual Meeting.
|
What if I return my proxy card but do not provide voting instructions?
|
▪
|
FOR
the election of all director-nominees listed in Proposal 1.
|
▪
|
FOR
the advisory vote on the compensation paid by the Company to its Named Executive Officers (Proposal 2).
|
▪
|
ONE YEAR
for the proposal on the frequency of holding future votes on the compensation of our Named Executive Officers (Proposal 3).
|
▪
|
FOR
the reapproval of the material terms and performance criteria for grants of qualified performance-based awards under the 2012 Long-Term Incentive Plan (Proposal 4).
|
▪
|
FOR
the approval of the 2017 Non-Employee Director Equity Plan (Proposal 5).
|
▪
|
FOR
the approval of the restated 1986 Employee Stock Purchase Plan, which includes the establishment of a share pool of 3,000,000 shares available for purchase by employees (Proposal 6).
|
▪
|
FOR
the ratification of the appointment of KPMG LLP as our independent registered public accounting firm for
2017
(Proposal 7).
|
▪
|
AGAINST
the stockholder proposal for a report on voting by our funds and portfolios on matters related to climate change (Proposal 8).
|
▪
|
AGAINST
the stockholder proposal for a report on voting by our funds and portfolios on matters related to executive compensation (Proposal 9).
|
▪
|
ABSTAIN
from voting on the stockholder proposal for a report on employee diversity and related policies and programs (Proposal 10).
|
▪
|
In the best judgment of the named proxy holders if any other matters are properly brought before the Annual Meeting.
|
How many shares must be present to hold the Annual Meeting?
|
Will my shares be voted if I don't provide my proxy or instruction card?
|
What is the vote required for each proposal?
|
What is the effect of an abstention?
|
What is the effect of a broker non-vote?
|
▪
|
our ability to obtain a quorum (unless a broker does not cast a vote on Proposal 7 as described in the preceding paragraph),
|
▪
|
the outcome with respect to the election of directors (Proposal 1) or the frequency of holding future votes on the compensation of our Named Executive Officers (Proposal 3), and
|
▪
|
the outcome of the vote on a proposal that requires the affirmative vote of a majority of the votes cast on the proposal (Proposals 2 and 4 through 10).
|
Who will count the votes?
|
Where can I find the voting results of the Annual Meeting?
|
Is my vote confidential?
|
What is "householding" and how does it affect me?
|
Can I choose to receive the proxy statement and the 2016 Annual Report to Stockholders on the Internet instead of receiving them by mail?
|
Who pays the cost of this proxy solicitation?
|
Can I find additional information on the Company's website?
|
RECOMMENDATION OF THE BOARD OF
|
|||
DIRECTORS; VOTE REQUIRED
|
MAJORITY VOTING
|
NON-EMPLOYEE DIRECTOR INDEPENDENCE
|
|||
DETERMINATIONS
|
▪
|
relationships where a director or an immediate family member of a director purchases or acquires investment services, investment securities, or similar products and services from the Company or one of its sponsored mutual funds so long as the relationship is on terms consistent with those generally available to other persons doing business with the Company, its subsidiaries, or its sponsored investment products; and
|
▪
|
relationships where a corporation, partnership, or other entity with respect to which a director or an immediate family member of a director is an officer, director, employee, partner, or member purchases services from the Company, including investment management or defined contribution retirement plan services, on terms consistent with those generally available to other entities doing business with the Company or its subsidiaries.
|
THE NOMINEES AND THEIR QUALIFICATIONS,
|
||||
SKILLS, AND EXPERIENCE
|
|
Ms. Bush has been an independent director of Price Group since 2012, and serves on the Executive Compensation and Management Development Committee and the Nominating and Corporate Governance Committee. She has served as the chairman of Bush International, LLC, an advisor to U.S. corporations and foreign governments on international capital markets and strategic business and economic matters, since 1991. Earlier in her career, she managed global banking and corporate finance relationships at New York money center banks including Citibank, Banker's Trust, and Chase.
Ms. Bush holds a B.A. degree in economics and political science from Fisk University and an M.B.A. from the University of Chicago.
Ms. Bush is a member of the board of directors, risk oversight committee, and nominating and corporate governance committee of Discover Financial Services; a member of the board of directors, audit committee, and retirement plan committee of ManTech International Corporation; a member of the board of directors, audit committee, and compensation committee of Marriott International; and a member of the board of directors and chairman of the audit committee for Bloom Energy. Ms. Bush also was a director of the Pioneer Family of Mutual Funds from 1997 to 2012 and UAL Corporation from 2006 to 2010.
Ms. Bush brings to our Board extensive financial and governmental affairs experience, her knowledge of corporate governance and financial oversight gained from her membership on the boards of other public companies, knowledge of public policy matters, and her significant experience providing strategic advisory services in the financial and international arenas.
|
|
Mary K. Bush
Chairman
Bush International, LLC
Age 68
|
||
|
|
|
|
Mr. Culp has been an independent director of Price Group since 2015 and serves on the Executive Compensation and Management Development Committee and the Nominating and Corporate Governance Committee. Mr. Culp, who is now retired, joined Danaher Corporation in 1990 and subsequently served as president of multiple operating businesses prior to becoming chief operating officer in 2000; he served as president and chief executive officer of Danaher Corporation from 2001 to 2014.
Mr. Culp holds a B.A. from Washington College and an M.B.A. from Harvard Business School.
Mr. Culp currently serves as the chairman of the board of visitors and governors of Washington College and as a member of the board of trustees of Wake Forest University. Formerly, Mr. Culp served as the chairman of the board of trustees for Potomac School and he served as a non-executive director at GlaxoSmithKline PLC. He is a senior lecturer at Harvard Business School, focusing on leadership and general management.
Mr. Culp brings to the Board valuable leadership and management experience gained while serving as chief executive officer and president of Danaher Corporation, a publicly traded, multinational corporation. He also contributes substantial strategic leadership, operational and financial experience to the Board.
|
|
H. Lawrence Culp, Jr.
Senior Lecturer
Harvard Business School
Age 53
|
||
|
|
|
|
Dr. Hrabowski has been an independent director of Price Group since 2013, and serves on the Audit Committee and Executive Compensation and Management Development Committee. He has served as president of the University of Maryland, Baltimore County (UMBC) since 1992. His research and publications focus on science and math education, with special emphasis on minority participation and performance. He is also a leading advocate for greater diversity in higher education. He serves as a consultant to the National Science Foundation, the National Institutes of Health, the National Academies, and universities and school systems nationally.
Dr. Hrabowski holds a Ph.D. in higher education administration and statistics and an M.A. degree in mathematics from the University of Illinois at Urbana-Champaign. He also holds a B.A. degree in mathematics from Hampton Institute (now Hampton University).
Dr. Hrabowski serves as director and member of the corporate and governance committee of McCormick & Company, Inc. Dr. Hrabowski also served on the board of Constellation Energy Group, Inc. until 2012.
Dr. Hrabowski brings to our Board valuable strategic and management leadership experience from his role as president of UMBC, as well as his extensive knowledge and dedication to greater education and work-force development. He also contributes corporate governance oversight from his experience serving as a director on other public-company boards.
|
|
Dr. Freeman A. Hrabowski, III
President
University of Maryland, Baltimore County
Age 66
|
||
|
|
THE BOARD OF DIRECTORS AND COMMITTEES
|
▪
|
determining the compensation of the chief executive officer and other executive officers;
|
▪
|
reviewing and approving general salary and compensation policies for the rest of our senior officers;
|
▪
|
overseeing the administration of our Annual Incentive Compensation Pool, equity incentive plans, and Employee Stock Purchase Plan;
|
▪
|
assisting management in designing new compensation policies and plans; and
|
▪
|
reviewing and discussing the Compensation Discussion and Analysis and other compensation disclosures with management.
|
▪
|
Align the interests of our non-employee directors with those of our stockholders;
|
▪
|
Provide competitive compensation for service to the Board by our non-employee directors;
|
▪
|
Maintain appropriate consistency with our approach to compensation for our executive officers and senior employees; and
|
▪
|
Attract and retain a diverse mix of capable and highly qualified directors.
|
▪
|
An annual retainer of
$100,000
;
|
▪
|
A fee of
$1,500
for each committee meeting attended;
|
▪
|
A fee of
$15,000
for the Lead Director;
|
▪
|
A fee of
$20,000
and
$5,000
, for the chairperson of the Audit Committee and each Audit Committee member, respectively;
|
▪
|
A fee of
$10,000
for the chairperson of the Compensation Committee;
|
▪
|
A fee of
$10,000
for the chairperson of the Nominating and Corporate Governance Committee;
|
▪
|
Directors and all U.S. employees of Price Group and its subsidiaries are eligible to have our sponsored T. Rowe Price Foundation match personal gifts up to an annual limit to qualified charitable organizations. For
2016
, non-employee directors were eligible to have up to $10,000 matched;
|
▪
|
The reimbursement of reasonable out-of-pocket expenses incurred in connection with their travel to and from, and attendance at each meeting of the Board of Directors and its committees and related activities, including director education courses and materials; and
|
▪
|
The reimbursement of spousal travel to and from and participation in events held in connection with the annual joint Price Group and Price Funds' Board of Directors meeting.
|
Name
|
Fees Earned or Paid
in Cash
|
Stock Awards
2,3,4
|
Option Awards
2,3,4
|
All Other Compensation
5
|
Total
|
||||||||||
Mark S. Bartlett
|
$
|
136,500
|
|
$
|
180,843
|
|
$
|
—
|
|
$
|
10,000
|
|
$
|
327,343
|
|
Mary K. Bush
|
$
|
122,167
|
|
$
|
208,144
|
|
$
|
—
|
|
$
|
10,000
|
|
$
|
340,311
|
|
H. Lawrence Culp, Jr.
|
$
|
113,500
|
|
$
|
—
|
|
$
|
92,438
|
|
$
|
10,000
|
|
$
|
215,938
|
|
Donald B. Hebb, Jr
6
|
$
|
37,833
|
|
$
|
—
|
|
$
|
—
|
|
$
|
10,000
|
|
$
|
47,833
|
|
Dr. Freeman A. Hrabowski, III
|
$
|
121,500
|
|
$
|
10,071
|
|
$
|
92,438
|
|
$
|
10,000
|
|
$
|
234,009
|
|
Robert F. MacLellan
|
$
|
131,500
|
|
$
|
10,271
|
|
$
|
92,438
|
|
$
|
10,000
|
|
$
|
244,209
|
|
Olympia J. Snowe
|
$
|
129,500
|
|
$
|
183,667
|
|
$
|
—
|
|
$
|
10,000
|
|
$
|
323,167
|
|
Dr. Alfred Sommer
6
|
$
|
42,833
|
|
$
|
6,301
|
|
$
|
—
|
|
$
|
10,000
|
|
$
|
59,134
|
|
Dwight S. Taylor
|
$
|
121,500
|
|
$
|
238,614
|
|
$
|
—
|
|
$
|
10,000
|
|
$
|
370,114
|
|
Anne Marie Whittemore
|
$
|
130,750
|
|
$
|
201,176
|
|
$
|
—
|
|
$
|
10,000
|
|
$
|
341,926
|
|
Sandra S. Wijnberg
6
|
$
|
27,750
|
|
$
|
290,972
|
|
$
|
—
|
|
$
|
10,000
|
|
$
|
328,722
|
|
Alan D. Wilson
|
$
|
119,500
|
|
$
|
193,312
|
|
$
|
—
|
|
$
|
10,000
|
|
$
|
322,812
|
|
1
|
Includes only those columns relating to compensation awarded to, earned by, or paid to non-employee directors for their services in
2016
. All other columns have been omitted.
|
2
|
Represents the aggregate grant date fair value of equity awards granted to each non-employee director in
2016
. The grant date fair value of stock awards was measured using the grant-date market price per share of Price Group's common stock. The grant-date fair value of stock options was computed using the Black-Scholes option-pricing model and the following weighted average assumptions:
|
Expected life in years
|
|
6.8
|
Expected volatility
|
|
20.0%
|
Dividend yield
|
|
2.5%
|
Risk-free interest rate
|
|
1.6%
|
3
|
The following table represents the equity awards granted to each of the non-employee directors named above in
2016
and their corresponding grant date fair value as determined by the methodologies discussed in footnote two above. The holders of stock units also receive dividend equivalents in the form of additional vested stock units on each of the Company's dividend payment dates. Fractional shares earned as dividend equivalents have been rounded to the nearest whole share.
|
Director
|
Grant Date
|
Number of Restricted Shares
|
Number of Restricted Units
|
Number of Securities Underlying Options
|
Exercise Price of Option Awards per Share
|
Grant Date Fair Value of Stock and Option Awards
|
|||||||
Mark S. Bartlett
|
4/29/2016
|
1,300
|
|
|
|
|
$
|
97,877
|
|
||||
|
11/1/2016
|
1,300
|
|
|
|
|
$
|
82,966
|
|
||||
Mary K. Bush
|
3/30/2016
|
|
91
|
|
|
|
$
|
6,748
|
|
||||
|
4/29/2016
|
1,300
|
|
|
|
|
|
$
|
97,877
|
|
|||
|
6/29/2016
|
|
95
|
|
|
|
$
|
6,798
|
|
||||
|
9/29/2016
|
|
105
|
|
|
|
$
|
6,849
|
|
||||
|
11/1/2016
|
1,300
|
|
|
|
|
|
$
|
82,966
|
|
|||
|
12/29/2016
|
|
91
|
|
|
|
$
|
6,906
|
|
Director
|
Grant Date
|
Number of Restricted Shares
|
Number of Restricted Units
|
Number of Securities Underlying Options
|
Exercise Price of Option Awards per Share
|
Grant Date Fair Value of Stock and Option Awards
|
|||||||
H. Lawrence Culp, Jr.
|
4/29/2016
|
|
|
4,350
|
|
$
|
75.29
|
|
$
|
50,721
|
|
||
|
11/1/2016
|
|
|
4,350
|
|
$
|
63.82
|
|
$
|
41,717
|
|
||
Dr. Freeman A. Hrabowski, III
|
3/30/2016
|
|
34
|
|
|
|
$
|
2,489
|
|
||||
|
4/29/2016
|
|
|
4,350
|
|
$
|
75.29
|
|
$
|
50,721
|
|
||
|
6/29/2016
|
|
35
|
|
|
|
$
|
2,508
|
|
||||
|
9/29/2016
|
|
39
|
|
|
|
$
|
2,527
|
|
||||
|
11/1/2016
|
|
|
4,350
|
|
$
|
63.82
|
|
$
|
41,717
|
|
||
|
12/29/2016
|
|
34
|
|
|
|
$
|
2,547
|
|
||||
Robert F. MacLellan
|
3/30/2016
|
|
34
|
|
|
|
$
|
2,539
|
|
||||
|
4/29/2016
|
|
|
4,350
|
|
$
|
75.29
|
|
$
|
50,721
|
|
||
|
6/29/2016
|
|
36
|
|
|
|
$
|
2,557
|
|
||||
|
9/29/2016
|
|
39
|
|
|
|
$
|
2,577
|
|
||||
|
11/1/2016
|
|
|
4,350
|
|
$
|
63.82
|
|
$
|
41,717
|
|
||
|
12/29/2016
|
|
34
|
|
|
|
$
|
2,598
|
|
||||
Olympia J. Snowe
|
4/29/2016
|
|
1,300
|
|
|
|
$
|
97,877
|
|
||||
|
6/29/2016
|
|
10
|
|
|
|
$
|
702
|
|
||||
|
9/29/2016
|
|
11
|
|
|
|
$
|
707
|
|
||||
|
11/1/2016
|
|
1,300
|
|
|
|
$
|
82,966
|
|
||||
|
12/29/2016
|
|
18
|
|
|
|
$
|
1,415
|
|
||||
Dr. Alfred Sommer
|
3/30/2016
|
|
85
|
|
|
|
$
|
6,301
|
|
||||
Dwight S. Taylor
|
3/30/2016
|
|
184
|
|
|
|
$
|
13,582
|
|
||||
|
4/29/2016
|
|
1,300
|
|
|
|
$
|
97,877
|
|
||||
|
6/29/2016
|
|
202
|
|
|
|
$
|
14,383
|
|
||||
|
9/29/2016
|
|
221
|
|
|
|
$
|
14,492
|
|
||||
|
11/1/2016
|
|
1,300
|
|
|
|
$
|
82,966
|
|
||||
|
12/29/2016
|
|
203
|
|
|
|
$
|
15,314
|
|
||||
Anne Marie Whittemore
|
3/30/2016
|
|
59
|
|
|
|
$
|
4,328
|
|
||||
|
4/29/2016
|
|
1,300
|
|
|
|
$
|
97,877
|
|
||||
|
6/29/2016
|
|
71
|
|
|
|
$
|
5,061
|
|
||||
|
9/29/2016
|
|
78
|
|
|
|
$
|
5,100
|
|
||||
|
11/1/2016
|
|
1,300
|
|
|
|
$
|
82,966
|
|
||||
|
12/29/2016
|
|
77
|
|
|
|
$
|
5,844
|
|
||||
Sandra S. Wijnberg
|
10/26/2016
|
|
4,350
|
|
|
|
$
|
288,623
|
|
||||
|
12/29/2016
|
|
31
|
|
|
|
$
|
2,349
|
|
||||
Alan D. Wilson
|
3/30/2016
|
|
32
|
|
|
|
$
|
2,384
|
|
||||
|
4/29/2016
|
|
1,300
|
|
|
|
$
|
97,877
|
|
||||
|
6/29/2016
|
|
44
|
|
|
|
$
|
3,103
|
|
||||
|
9/29/2016
|
|
48
|
|
|
|
$
|
3,127
|
|
||||
|
11/1/2016
|
|
1,300
|
|
|
|
$
|
82,966
|
|
||||
|
12/29/2016
|
|
51
|
|
|
|
$
|
3,855
|
|
4
|
The following table represents the aggregate number of equity awards outstanding as of
December 31, 2016
.
|
Director
|
Unvested Stock Awards
|
Unvested Stock Units
|
Unexercised Option Awards
|
Total
|
|
Vested Stock Units
|
|||||
Mark S. Bartlett
|
2,600
|
|
|
|
|
|
2,600
|
|
|
|
|
Mary K. Bush
|
2,600
|
|
|
|
|
|
2,600
|
|
|
12,880
|
|
H. Lawrence Culp, Jr.
|
|
|
8,700
|
|
8,700
|
|
|
|
|
||
Dr. Freeman A. Hrabowski, III
|
|
|
|
|
26,008
|
|
26,008
|
|
|
4,751
|
|
Robert F. MacLellan
|
|
|
|
|
51,268
|
|
51,268
|
|
|
4,845
|
|
Olympia J. Snowe
|
|
|
2,600
|
|
|
|
2,600
|
|
|
39
|
|
Dwight S. Taylor
|
|
|
2,600
|
|
|
|
2,600
|
|
|
25,961
|
|
Anne Marie Whittemore
|
|
|
2,600
|
|
49,956
|
|
52,556
|
|
|
8,299
|
|
Sandra S. Wijnberg
|
|
|
4,350
|
|
|
|
4,350
|
|
|
31
|
|
Alan D. Wilson
|
|
|
2,600
|
|
|
|
2,600
|
|
|
4,589
|
|
5
|
Personal gifts matched by our sponsored T. Rowe Price Foundation to qualified charitable organizations.
|
6
|
Represents fees for a partial year as Mr. Hebb and Dr. Sommer retired from the Board at the 2016 annual meeting of stockholders and Ms. Wijnberg joined the Board in October 2016.
|
▪
|
lead the Board of Directors in collaboration with the lead director and preside at all meetings of the Board of Directors and stockholders;
|
▪
|
establish a schedule of and agenda for meetings of the Board in consultation with the lead director and after input from the president and chief executive officer;
|
▪
|
oversee the information provided to the Board at meetings and otherwise;
|
▪
|
chair any Executive Committee meetings of the Board;
|
▪
|
participate with the lead director in the recruitment of qualified directors;
|
▪
|
assist the Nominating and Corporate Governance Committee in the annual assessment of the performance of the Board and its members;
|
▪
|
be available for consultation with the president and chief executive officer and provide for appropriate management participation at Board meetings;
|
▪
|
respond on behalf of the Board to inquiries from stockholders in consultation with the lead director; and
|
▪
|
serve with the lead director as a public spokesman for the Board.
|
▪
|
chair Board meetings at which the chairperson is not present;
|
▪
|
organize, schedule, chair, and develop topics for discussion at the executive sessions of the independent directors;
|
▪
|
act as a liaison between the independent directors and the chairperson, president and chief executive officer, and other management;
|
▪
|
be available for consultation with management;
|
▪
|
be available to the chief legal officer and respond as necessary to stockholder communications to the Board;
|
▪
|
participate in senior officer succession planning;
|
▪
|
lead the independent directors in the annual setting of goals for the president and chief executive officer and the annual performance review of the president and chief executive officer;
|
▪
|
assist the chairperson in the identification and orientation of new independent directors;
|
▪
|
participate in the appointment of committee chairs and members;
|
▪
|
be available as needed for consultation and communication with major shareholders; and
|
▪
|
serve as liaison and provide direction to any advisors and consultants retained by the independent directors.
|
▪
|
demonstrate unimpeachable character and integrity;
|
▪
|
have sufficient time to carry out their duties;
|
▪
|
have experience at senior levels in areas of expertise helpful to the Company and consistent with the objective of having a diverse and well-rounded Board; and
|
▪
|
have the willingness and commitment to assume the responsibilities required of a director of the Company.
|
Olympia J. Snowe, Chair
|
Mary K. Bush
|
H. Lawrence Culp, Jr.
|
Anne Marie Whittemore
|
Alan D. Wilson
|
Name and Address
|
Amount and Nature of Beneficial Ownership
|
|
Percent of Class
|
|
BlackRock, Inc.
|
|
|
|
|
55 East 52nd Street
|
|
|
|
|
New York, NY 10055
|
15,990,019
|
shares
|
1
|
6.61%
|
|
|
|
|
|
State Street Corporation
|
|
|
|
|
State Street Financial Center
|
|
|
|
|
One Lincoln Street
|
|
|
|
|
Boston, MA 02111
|
14,735,542
|
shares
|
2
|
6.09%
|
|
|
|
|
|
The Vanguard Group
|
|
|
|
|
100 Vanguard Blvd.
|
|
|
|
|
Malvern, PA 19355
|
17,532,622
|
shares
|
3
|
7.25%
|
1
|
Based solely on information contained in a Schedule 13G/A filed with the SEC on
January 26, 2017
, by BlackRock, Inc. Of the
15,990,019
shares beneficially owned, BlackRock, Inc. has sole power to vote or direct the vote of
13,722,542
shares and sole power to dispose or to direct the disposition of
15,990,019
shares.
|
2
|
Based solely on information contained in a Schedule 13G filed with the SEC on
February 6, 2017
, by State Street Corporation. State Street Corporation has shared power to vote or direct the vote and shared power to dispose or direct the disposition of
14,735,542
shares.
|
3
|
Based solely on information contained in a Schedule 13G/A filed with the SEC on
February 9, 2017
, by The Vanguard Group. Of the
17,532,622
shares beneficially owned, The Vanguard Group has sole power to vote or direct the vote of
383,708
shares, sole power to dispose or to direct the disposition of
17,110,156
shares, shared power to vote or direct the vote of
43,239
shares, and shared power to dispose or to direct the disposition of
422,466
shares.
|
Name of Beneficial Owner
|
Amount of Beneficial Ownership
|
|
Percent of Class
1
|
|
Christopher D. Alderson
|
639,097
|
|
2
|
*
|
Mark S. Bartlett
|
16,400
|
|
3
|
*
|
Edward C. Bernard
|
1,966,235
|
|
4
|
*
|
Mary K. Bush
|
15,480
|
|
5
|
*
|
H. Lawrence Culp, Jr.
|
17,121
|
|
6
|
*
|
Dr. Freeman A. Hrabowski, III
|
67,907
|
|
7
|
*
|
Robert F. MacLellan
|
56,113
|
|
8
|
*
|
Kenneth V. Moreland
|
249,665
|
|
9
|
*
|
Brian C. Rogers
|
3,094,586
|
|
10
|
1.3%
|
Olympia J. Snowe
|
11,939
|
|
11
|
*
|
William J. Stromberg
|
1,271,032
|
|
12
|
*
|
Dwight S. Taylor
|
29,761
|
|
13
|
*
|
Eric L. Veiel
|
231,412
|
|
14
|
*
|
Anne Marie Whittemore
|
63,414
|
|
15
|
*
|
Sandra S. Wijnberg
|
31
|
|
16
|
*
|
Alan D. Wilson
|
7,189
|
|
17
|
*
|
|
|
|
|
|
Directors and All Executive Officers as a Group (20 persons)
|
8,753,810
|
|
18
|
3.6%
|
1
|
Beneficial ownership of less than one percent is represented by an asterisk (*).
|
2
|
Includes
298,898
shares that may be acquired by Mr. Alderson within 60 days upon the exercise of stock options and
262,000
shares held by a member of Mr. Alderson's family.
|
3
|
Includes
2,600
unvested restricted stock awards.
|
4
|
Includes (i)
133,196
shares that may be acquired by Mr. Bernard within 60 days upon the exercise of stock options, (ii)
279,463
shares held in a family trust, (iii)
60,500
shares held by a member of Mr. Bernard's family, and (iv)
858,842
shares held by trusts for which Mr. Bernard is a trustee and disclaims beneficial ownership. Neither he nor any member of his family has any economic interest in the trusts described in (iv).
|
5
|
Includes
2,600
unvested restricted stock awards and
12,880
vested stock units that will be settled in shares of the Company's common stock upon Ms. Bush's separation from the Board.
|
6
|
Includes (i)
8,700
shares that may be acquired by Mr. Culp within 60 days upon the exercise of stock options, (ii)
1,123
shares held in a family trust and foundation, (iii)
884
shares held by a family member's trust, and (iv)
2,064
shares held by a limited liability company in which Mr. Culp has an interest and disclaims beneficial ownership.
|
7
|
Includes (i)
26,008
shares that may be acquired by Dr. Hrabowski within 60 days upon the exercise of stock options, (ii)
4,751
vested stock units that will be settled in shares of the Company's common stock upon Dr. Hrabowski's separation from the Board, and (iii)
37,148
shares held by a member of Dr. Hrabowski's family.
|
8
|
Includes
51,268
shares that may be acquired by Mr. MacLellan within 60 days upon the exercise of stock options and
4,845
vested stock units that will be settled in shares of the Company's common stock upon Mr. MacLellan's separation from the Board.
|
9
|
Includes
153,897
shares that may be acquired by Mr. Moreland within 60 days upon the exercise of stock options.
|
10
|
Includes (i)
541,479
shares that may be acquired by Mr. Rogers within 60 days upon the exercise of stock options, (ii)
200,000
shares held by a member of Mr. Rogers' family, and (iii)
150,000
shares held in a family trust in which Mr. Rogers disclaims beneficial ownership.
|
11
|
Includes
2,639
stock units that are vested, or will vest within 60 days, and will be settled in shares of the Company's common stock upon Ms. Snowe's separation from the Board.
|
12
|
Includes (i)
312,372
shares that may be acquired by Mr. Stromberg within 60 days upon the exercise of stock options, (ii)
400,000
shares held by a limited liability company in which Mr. Stromberg has an interest, and (iii)
96,000
shares held in a family trust for which Mr. Stromberg disclaims beneficial ownership.
|
13
|
Includes
28,561
stock units that are vested, or will vest within 60 days, and will be settled in shares of the Company's common stock upon Mr. Taylor's separation from the Board.
|
14
|
Includes
187,761
shares that may be acquired by Mr. Veiel within 60 days upon the exercise of stock options and
9,120
unvested restricted stock awards.
|
15
|
Includes
41,630
shares that may be acquired by Ms. Whittemore within 60 days upon the exercise of stock options and
10,899
stock units that are vested, or will vest within 60 days, and will be settled in shares of the Company's common stock upon Ms. Whittemore's separation from the Board.
|
16
|
Includes
31
vested stock units that will be settled in shares of the Company's common stock upon Ms. Wijnberg's separation from the Board.
|
17
|
Includes
7,189
stock units that are vested, or will vest within 60 days, and will be settled in shares of the Company's common stock upon Mr. Wilson's separation from the Board.
|
18
|
Includes (i)
2,138,277
shares that may be acquired by all directors and executive officers as a group within 60 days upon the exercise of stock options, (ii)
63,346
unvested restricted stock awards held by certain directors and executive officers, (iii)
71,796
stock units held by
eight
of the non-employee directors that are vested and will be settled in shares of the Company's common stock upon their separation from the Board, and (iv)
2,512,305
shares held by family members, held in family trusts or limited liability companies of certain executive officers and held by trusts in which certain executive officers are trustees.
|
2016 PERFORMANCE HIGHLIGHTS
|
|
1 year
|
3 years
|
5 years
|
10 years
|
US Equity
|
51%
|
93%
|
100%
|
94%
|
International Equity
|
76%
|
81%
|
77%
|
90%
|
Fixed Income
|
46%
|
63%
|
46%
|
68%
|
Asset Allocation
|
49%
|
97%
|
95%
|
94%
|
All Price Funds (across their share classes)
|
53%
|
84%
|
80%
|
86%
|
|
|
|
|
|
Price Funds in Top Lipper Quartile
|
26%
|
39%
|
54%
|
55%
|
▪
|
Nearly
86%
of our rated Price Funds’ assets under management ended the year with an overall rating of four or five stars from Morningstar.
|
▪
|
The performance of our funds and institutional strategies against benchmarks weakened in 2016 in a challenging year for active investment management, but remains very competitive over longer periods.
|
▪
|
We continued to expand our investment offerings and capabilities in 2016 for individual and institutional investors with new equity and fixed income strategies, and the launch of new investment vehicles to support evolving client demand. We introduced four new equity funds, including three that use a quantitative management style and the Global Consumer Fund. We also added a new fixed income fund, the Total Return fund, and one new money market fund in 2016. We added an I-Class share to additional existing Price Funds and launched our suite of open ended investment company funds for distribution through UK intermediaries.
|
▪
|
Our client service ratings all across our distribution channels remain high and generally above industry benchmarks.
|
▪
|
We resolved the Dell appraisal rights matter in 2016. We paid certain of our clients $166.2 million to compensate them for the denial of their appraisal rights in connection with the 2013 leveraged buyout of Dell. We made claims with our insurance carriers, and on December 30, 2016, entered into an agreement to recover $100 million for coverage of this claim. As of Remaining insurance claims filed with respect to this matter that could result in an additional recovery of up to $50 million were pending as of December 31, 2016.
|
▪
|
We continued to strengthen and build more depth in our teams by hiring highly qualified professionals around the globe. We
|
▪
|
We completed the transition of William J. Stromberg to his current role as president and chief executive officer, broadened the management committee with several new appointments, and transitioned new leaders in our asset allocation, human resources and technology business units.
|
▪
|
We planned and announced Brian C. Rogers' retirement as Chief Investment Officer (CIO) and his continuation on our Board of Directors as the non-executive chair. We named the following six senior investment leaders as CIOs to represent the firm's broad investment platform: Henry M. Ellenbogen will be CIO, U.S. Equity Growth; David R. Giroux will be CIO, U.S. Equity Multi-Discipline; John D. Linehan will be CIO, U.S. Equity Value; Robert W. Sharps will be Group CIO, with responsibility for coordinating the activities of the team; Justin Thomson will be CIO, International Equity; and Mark J. Vaselkiv will be CIO, Fixed Income.
|
▪
|
We are nearing completion of the integration of our operations functions into the distribution teams which they support to enhance end-to-end accountability.
|
▪
|
We developed and began executing on strategic initiatives that are designed to strengthen our long-term competitive position and can be categorized into three broad areas: introducing new investment strategies and vehicles, enhancing client engagement capabilities in each of our distribution channels, and strengthening our technology platform to improve client experiences and achieve long-term cost efficiencies.
|
▪
|
We continue the build out of our sales and client service teams across channels and geographies. Despite the difficult sales environment for active investment managers, initial results showed good early progress.
|
▪
|
We continued the transition of certain fund accounting and portfolio recordkeeping systems to BNY Mellon while maintaining above-target quality rates over the first-year of the relationship.
|
▪
|
We continued to deepen and broaden our enterprise risk management infrastructure and governance in the face of increasing regulation and business complexity.
|
▪
|
Most of these initiatives required up-front investments and expense which impacted our net financial performance.
|
▪
|
In
2016
, headwinds from the industry trend towards passive investing and the impact from our own closed strategies due to investment capacity constraints, continued to limit our organic growth as we experienced net cash outflows of $2.8 billion. Market appreciation and income, net of distributions not reinvested, added $50.5 billion to our assets under management, which ended 2016 at $810.8 billion. Average assets under management increased 1.3%, as most of the equity market gains occurred late in the year. Accordingly, our 2016 net revenue increased just .5% over 2015. Our operating margin decreased as we continued to invest in strategic initiatives despite relatively flat net revenues. Our operating expenses also include a nonrecurring charge, net of insurance recovery, of $66.2 million associated with the resolution of the Dell appraisal rights matter. We returned a significant amount of cash to stockholders in the form of recurring dividends and share repurchases.
|
▪
|
Our operating results have increased significantly over the last five years. Results for 2016 in comparison to the prior two years, and in comparison to 2011, are as follows:
|
|
|
Assets Under Management
|
|
Net Revenue
|
|
Net Operating Income
|
|
Operating Margin
|
|
Net Income Attributable to TRPG
|
|
Diluted Earnings per Share
|
|
Cash Returned to Stockholders
|
|
|
(in billions)
|
|
(in billions)
|
|
(in billions)
|
|
|
|
(in billions)
|
|
|
|
(in billions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016
|
|
$810.8
|
|
$4.2
|
|
$1.7
|
|
41%
|
|
$1.2
|
|
$4.75
|
|
$1.2
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2015
|
|
$763.1
|
|
$4.2
|
|
$1.9
|
|
45%
|
|
$1.2
|
|
$4.63
|
|
$2.0
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014
|
|
$746.8
|
|
$4.0
|
|
$1.9
|
|
47%
|
|
$1.2
|
|
$4.55
|
|
$.9
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2011
|
|
$489.5
|
|
$2.7
|
|
$1.2
|
|
45%
|
|
$.8
|
|
$2.92
|
|
$.8
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
▪
|
Our retirement date portfolios continue to grow, and now represent
23.3%
of our total assets under management.
|
▪
|
Our overall financial condition remains very strong, as we finished the year with
$5.0 billion
of stockholders' equity,
$1.9 billion
of cash and discretionary sponsored portfolio fund holdings, and no debt. We also maintained redeemable seed capital investments in sponsored investment portfolios of
$1.3 billion
at December 31, 2016.
|
▪
|
We increased our annual recurring dividend for the
30th
consecutive year, by
3.8%
. The average increase in our annual recurring dividend has been
14.1%
over the last 10 years. We expended
$676.9 million
to repurchase
10 million
shares, or 4% of our outstanding common stock, in
2016
. Dividends and stock repurchases will vary from year to year depending upon our financial performance and liquidity, market conditions and other relevant factors.
|
EXECUTIVE COMPENSATION PRACTICES
|
|
Practices We Use
|
|
Practices We Don't Allow
|
ü
|
We have all independent directors serve on the Compensation Committee, promoting full engagement by the Board of Directors on executive compensation matters.
|
û
|
We do not allow executives or independent directors to short sell the Company stock or hedge to offset a possible decrease in the market value of Company stock held by them.
|
|
|
|
|
ü
|
We maintain significant stock ownership and retention requirements for our independent directors, NEOs, and other members of senior management. Our NEOs maintain stock ownership levels well in excess of requirements.
|
û
|
We do not have severance agreements or change-in-control agreements with any of our executive officers.
|
|
|
|
|
ü
|
We place primary emphasis on variable compensation, including long-term equity incentive compensation.
|
û
|
We generally do not provide tax gross-ups, other than in the case of certain relocation benefits, consistent with our relocation policy.
|
|
|
|
|
ü
|
We award restricted stock units that are subject to a performance-based vesting threshold with a twelve-month performance period.
|
û
|
We only use employment contracts for executive officers outside the United States where basic employment terms customarily are confirmed in writing.
|
|
|
|
|
|
Practices We Use
|
|
Practices We Don't Allow
|
ü
|
We have double-trigger vesting acceleration of awards granted under our 2012 Long-Term Incentive Plan (2012 Incentive Plan) in the event we are acquired or taken over by another company. See page 40
for additional detail on our post-employment payments.
|
û
|
We do not pay dividends on unearned performance-based restricted stock units.
|
|
|
|
|
ü
|
We engage an independent compensation consultant who only provides services to the Compensation Committee and has no other ties to the Company or its management.
|
û
|
We prohibit, through our equity incentive plans, the repricing or exchange of equity awards without stockholder approval.
|
|
|
|
|
ü
|
We have in place a comprehensive risk management program designed to identify, evaluate, and control risks, and our compensation and stock ownership programs work within this risk management system.
|
û
|
We do not have any supplemental retirement benefits and do not provide significant perquisites and other personal benefits to our executives officers.
|
|
|
|
|
ü
|
We have in place for executive officers a recoupment policy for incentive compensation in the event of a material restatement of our financial results within three years of the original reporting.
|
|
|
▪
|
attracting and retaining talented and highly skilled management professionals with deep experience in investments business leadership, and client service; and
|
▪
|
maintaining a close commonality of interests between our management professionals and our stockholders by fostering a prudent approach to corporate performance and the control of risk in the enterprise, and linking their total compensation to our long-term success.
|
KEY ELEMENTS OF 2016 NEO COMPENSATION
|
RISK MANAGEMENT AND THE ALIGNMENT OF MANAGEMENT WITH OUR STOCKHOLDERS
|
First Quarter
|
|
Second Quarter
|
▪
Discuss the Company's strategic imperatives and related goals and objectives for the year.
▪
Designate participants in AICP and set each NEO's maximum payout percentage.
▪
Approve the first half of the semi-annual equity grants, including performance-based restricted stock units.
▪
Define the performance metric and performance period for restricted stock units granted to our executive officers as part of the annual equity incentive program.
▪
Certify prior year financial results for payout of the AICP and determine whether performance thresholds on prior year restricted stock units have been met.
|
|
▪
Review our compensation governance practices.
▪
Assess progress against the Company's strategic imperatives and related goals and objectives for the year.
▪
Review the Company's current year-to-date performance, including financial, investment, and client service performance.
▪
Consider with members of the Management Compensation Committee the potential funding size of the overall annual bonus pool.
|
|
|
|
|
|
|
Third Quarter
|
|
Fourth Quarter
|
▪
Review with management and our independent compensation consultant the external trends in both the investment management industry and more broadly, regulatory and other developments affecting executive compensation.
▪
Assess progress against the Company's strategic imperatives and related goals and objectives for the year.
▪
Review the Company's current year-to-date performance, including financial, investment, and client service performance.
▪
Consider with members of the Management Compensation Committee the potential funding size of the overall annual bonus pool.
▪
Approve the second half of the semi-annual equity grants, including performance-based restricted stock units.
▪
Consider stockholder and proxy advisor feedback in connection with our say-on-pay vote results.
|
|
▪
Review peer group compensation data provided by the Management Compensation Committee and survey data provided by McLagan Partners.
▪
Evaluate the Company's performance against its goals and objectives.
▪
Evaluate executive officer performance against goals and objectives of their respective roles, with input from the president and chief executive officer for certain other executive officers.
▪
Approve the size of the Company's overall annual bonus pool and determine the annual incentive cash pool payout to each NEO and other AICP participants.
▪
Consider with the members of the Management Compensation Committee the size and parameters of the following year's equity incentive program.
|
ROLE OF INDEPENDENT COMPENSATION CONSULTANT
|
COMPETITIVE POSITIONING
|
Affiliated Managers Group, Inc.
|
|
Eaton Vance Corp.
|
|
Invesco Ltd.
|
AllianceBernstein L.P.
|
|
Federated Investors, Inc.
|
|
Janus Capital Group, Inc.
|
BlackRock, Inc.
|
|
Franklin Resources, Inc.
|
|
Legg Mason, Inc.
|
BASE SALARY
|
INCENTIVE COMPENSATION
|
▪
|
Sustain strong long-term investment results and competitiveness of our investment strategies.
|
▪
|
Expand and enhance our investment capabilities and products to meet evolving client demands, while managing investment capacity.
|
▪
|
Maintain our reputation for integrity, as well as our positive brand image and competitive name awareness.
|
▪
|
Attract, develop, and retain top senior leadership and investment talent, and plan for management succession.
|
▪
|
Continue to develop human talent capabilities, attract, and retain a collaborative and diverse workforce, and enhance internal communications.
|
▪
|
Create enterprise culture, environment, and organizational capabilities to position the firm for long-term success.
|
▪
|
Ensure that our global investment operating model, capabilities, and processes continue to evolve to be successful on a larger scale.
|
▪
|
Sustain and enhance our diversified distribution strategy and capabilities to support long-term organic growth.
|
▪
|
Continue appropriate investment to enhance our organizational, systems, and risk management capabilities to effectively manage the increasing scope and complexity of our business in a global context.
|
▪
|
Manage our financial position and financial performance to protect and benefit our clients, associates, and stockholders, striking a balance between short-term financial results and the need to continuously invest in long-term capabilities.
|
Name
|
|
Compensation Committee Considerations
|
William J. Stromberg
|
|
Role Considerations
▪
Leadership, responsibility, and performance in first year as chief executive officer, and chair of our Management Committee and Management Compensation Committee.
Individual Achievements
▪
Broadened the Management Committee with several new appointments, transitioned new leaders into the Equity, Asset Allocation, Human Resources and Technology functions, and also led the implementation of Brian Rogers’ retirement announcement, including the naming of six successor CIOs.
▪
Led the development and implementation of a new integrated enterprise strategy. This included changes to the firm’s operating model and organizational structure to more effectively execute on the new strategic initiatives and ongoing operations.
▪
Overall investment performance remained very strong for longer time periods against peers and benchmarks; for the one year period, investment performance was solid.
▪
Annual net revenues were up .5% and diluted earnings per share increased 2.6%. Operating expenses, excluding the non-recurring net charge related to the Dell appraisal rights matter, grew 5.3% as we continue to invest in our strategic priorities. Return on equity was 24.9% for 2016, compared with 24.1% from the prior year. We returned $1.2 billion to stockholders in 2016 through dividends and share repurchases.
|
President and Chief Executive Officer
|
|
Name
|
|
Compensation Committee Considerations
|
Kenneth V. Moreland
|
|
Role Considerations
▪
Leadership, responsibility, and performance as chief financial officer, treasurer, and as leader of other functions such as Risk Management, Internal Audit, Investor Relations, and Facilities.
Individual Achievements
▪
Ongoing excellence in the development of financial reporting and other regulatory disclosure requirements.
▪
Led the finance transformation effort that resulted in the successful integration of business unit finance teams into a consolidated enterprise corporate finance function.
▪
Continued to evolve the investor relations function to provide for an enhanced relationship with stockholders.
|
Chief Financial Officer and Treasurer
|
|
|
Edward C. Bernard
|
|
Role Considerations
▪
Leadership, responsibility, and performance as chair of the Fund Board and as leader of the marketing, distribution, operations, technology and legal functions.
Individual Achievements
▪
Lead support role to chief executive officer in development of a new integrated strategy. Led a team of senior leaders tasked with detailed analysis and integration across business lines. Responsible for implementation of new operating model aligning operations with its related distribution function, and re-organized distribution channels.
▪
Key leader in formation of the enterprise Product Group, through new hires and leveraging several existing functions within our business units. This group facilitated the continued expansion of our product suite, including the launch of I-Class shares for a number of funds, and new vehicles such as model accounts.
▪
Transitioned Nigel Faulkner into head of Technology role.
|
Vice Chairman
|
|
|
Christopher D. Alderson
|
|
Role Considerations
▪
Leadership, responsibility, and performance as head of International Equity and chair of the International Steering Committee.
Individual Achievements
▪
Investment performance for International Equity is strong for all time periods against peers and benchmarks.
▪
Played an active role in the development and implementation of the new integrated corporate strategy.
▪
Championed the development of a new three year product roadmap for international equity products; appointed new portfolio manager for next product to be opened in 2017.
|
Head of International Equity
|
|
|
Eric L. Veiel
|
|
Role Considerations
▪
Leadership, responsibility, and performance in first year as head of U.S. Equity and chair of the Equity Steering Committee.
Individual Achievements
▪
Investment performance for U.S. Equity remained outstanding for longer time periods against peers and benchmarks; for the one year period, investment performance was solid.
▪
Played an active role in the development and implementation of the new integrated corporate strategy.
▪
Executed several strategic portfolio manager transitions in response to executive realignment and retirements.
|
Head of U.S. Equity
|
|
Name
|
|
Maximum Payout Based on Total Pool
|
|
2016
Payout
|
|
2015
Payout
|
|
Percentage Change over 2015 Payout
|
William J. Stromberg
|
|
$19.3
|
|
$6.9
|
|
$6.6
|
|
3.8%
|
Kenneth V. Moreland
|
|
$4.8
|
|
$1.0
|
|
$.9
|
|
11.1%
|
Edward Bernard
|
|
$16.1
|
|
$5.3
|
|
$5.3
|
|
—%
|
Christopher D. Alderson
|
|
$16.1
|
|
$5.4
|
|
$5.7
|
|
(5.4)%
|
Eric L. Veiel
|
|
$16.1
|
|
$4.6
|
|
n/a
|
|
n/a
|
Name
|
|
Equity Incentive Value
|
|
Performance-Based Restricted Stock Units
|
William J. Stromberg
|
|
$1.8
|
|
25,884
|
Kenneth V. Moreland
|
|
0.5
|
|
6,975
|
Edward C. Bernard
|
|
1.5
|
|
20,851
|
Christopher D. Alderson
|
|
1.7
|
|
24,446
|
Eric L. Veiel
|
|
1.7
|
|
24,446
|
Total Granted to NEOs
|
|
$7.1
|
|
102,602
|
TROW Operating Margin as Percent of Industry Average Margin
|
>=100%
|
90%-99%
|
80%-89%
|
70%-79%
|
60%-69%
|
50%-59%
|
< 50%
|
|
|
|
|
|
|
|
|
Amount of Restricted Stock Units Eligible to be Earned
1
|
100%
|
90%
|
80%
|
70%
|
60%
|
50%
|
0%
|
1
|
Performance-based awards that are eligible to be earned are also subject to the standard time-based vesting schedule for
2016
awards granted under our annual award program.
|
DEFINED CONTRIBUTION PLAN
|
PERQUISITES AND OTHER PERSONAL BENEFITS
|
SUPPLEMENTAL SAVINGS PLAN
|
POST-EMPLOYMENT PAYMENTS
|
RECOUPMENT POLICY
|
STOCK OWNERSHIP GUIDELINES
|
TAX DEDUCTIBILITY OF COMPENSATION
|
ACCOUNTING FOR STOCK-BASED COMPENSATION
|
Robert F. MacLellan, Chairman
|
Mark S. Bartlett
|
Mary K. Bush
|
H. Lawrence Culp, Jr.
|
Dr. Freeman A. Hrabowski, III
|
Olympia J. Snowe
|
Dwight S. Taylor
|
Anne Marie Whittemore
|
Sandra S. Wijnberg
|
Alan D. Wilson
|
SUMMARY COMPENSATION TABLE
1
|
Name and Principal Position
|
Year
|
Salary
|
Stock Awards
3
|
Option Awards
4
|
Non-Equity Incentive Plan Compensation
5
|
All Other Compensation
6
|
Total
|
||||||||||||
William J. Stromberg
|
2016
|
$
|
350,000
|
|
$
|
1,800,045
|
|
$
|
—
|
|
$
|
6,850,000
|
|
$
|
82,350
|
|
$
|
9,082,395
|
|
President and Chief Executive Officer
|
2015
|
$
|
350,000
|
|
$
|
807,923
|
|
$
|
609,650
|
|
$
|
6,600,000
|
|
$
|
79,700
|
|
$
|
8,447,273
|
|
2014
|
$
|
350,000
|
|
$
|
841,523
|
|
$
|
739,935
|
|
$
|
6,100,000
|
|
$
|
79,301
|
|
$
|
8,110,759
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Kenneth V. Moreland
|
2016
|
$
|
350,000
|
|
$
|
485,061
|
|
$
|
—
|
|
$
|
1,000,000
|
|
$
|
80,742
|
|
$
|
1,915,803
|
|
Chief Financial Officer and Treasurer
|
2015
|
$
|
350,000
|
|
$
|
265,460
|
|
$
|
200,290
|
|
$
|
900,000
|
|
$
|
80,412
|
|
$
|
1,796,162
|
|
2014
|
$
|
350,000
|
|
$
|
276,500
|
|
$
|
243,122
|
|
$
|
900,000
|
|
$
|
78,194
|
|
$
|
1,847,816
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Edward C. Bernard
|
2016
|
$
|
350,000
|
|
$
|
1,450,036
|
|
$
|
—
|
|
$
|
5,300,000
|
|
$
|
79,836
|
|
$
|
7,179,872
|
|
Vice Chairman
|
2015
|
$
|
350,000
|
|
$
|
692,505
|
|
$
|
522,568
|
|
$
|
5,300,000
|
|
$
|
78,969
|
|
$
|
6,944,042
|
|
2014
|
$
|
350,000
|
|
$
|
781,223
|
|
$
|
689,575
|
|
$
|
6,000,000
|
|
$
|
79,682
|
|
$
|
7,900,480
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Christopher D. Alderson
2
|
2016
|
$
|
305,057
|
|
$
|
1,700,041
|
|
$
|
—
|
|
$
|
5,423,240
|
|
$
|
57,999
|
|
$
|
7,486,337
|
|
Head of International Equity
|
2015
|
$
|
343,970
|
|
$
|
923,340
|
|
$
|
696,762
|
|
$
|
5,732,835
|
|
$
|
65,405
|
|
$
|
7,762,312
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
|
|
|
|
|
|
||||||||||||
Eric L. Veiel
|
2016
|
$
|
350,000
|
|
$
|
1,700,041
|
|
$
|
—
|
|
$
|
4,600,000
|
|
$
|
80,672
|
|
$
|
6,730,713
|
|
Head of U.S. Equity
|
|
|
|
|
|
|
|
1
|
Includes only those columns relating to compensation awarded to, earned by, or paid to the NEOs in
2016
,
2015
, and
2014
. All other columns have been omitted. We have excluded Mr. Alderson's compensation for 2014, and Mr. Veiel's compensation for 2015 and 2014, as they were not named executive officers in these respective years.
|
2
|
Cash amounts received by Mr. Alderson pursuant to his employment agreement are paid in British pounds. In calculating the U.S. equivalent for amounts that are not denominated in U.S. dollars, the Company converts each payment to Mr. Alderson into U.S. dollars based on an average daily exchange rate during the applicable year. The average exchange rates for 2016 and 2015 were 1.35581 and 1.52876 U.S. dollars per British pound, respectively. Mr. Alderson's 2016 cash compensation was lower compared to 2015 in U.S. dollar terms as a result of the significant decline in British pounds against the U.S. dollar. In British pounds, Mr. Alderson's cash compensation was £4,225,000 in 2016 compared with £3,975,000 in 2015.
|
3
|
Represents the full grant date fair value of performance-based restricted stock units granted. The fair value was computed using the market price per share of T. Rowe Price common stock on the date of grant multiplied by the target number of units, as this was considered the probable outcome. See the Grants of Plan-Based Awards Table for the target number of units for
2016
.
|
4
|
As discussed in the Compensation Discussion and Analysis, we did not utilize options in our 2016 equity compensation program rather we granted all performance-based restricted stock units. For 2015 and 2014, the amounts represent the full grant date fair value computed using the Black-Scholes option-pricing model. A description of the assumptions used for volatility, risk-free interest rate, dividend yield, and expected life in the option-pricing model is included in the Significant Accounting Policies for Stock-Based Compensation on page
58
of the
2016
Annual Report to Stockholders.
|
5
|
Represents cash amounts awarded by the Compensation Committee and paid to NEOs under the
2016
Annual Incentive Compensation Pool. See our Compensation Discussion and Analysis and the Grants of Plan-Based Awards Table for more details regarding workings of this plan. The
2016
amounts include amounts elected to be deferred by all NEOs under our Supplemental Savings Plan. See the Nonqualified Deferred Compensation Table for further details.
|
6
|
The following types of compensation are included in the "All Other Compensation" column for
2016
:
|
Name
|
Contributions
to Retirement
Program
|
Retirement Program Limit Bonus
a
|
Matching Contributions to Stock Purchase Plan
b
|
Matching Gifts to Charitable Organizations
c
|
Perquisites and Other Personal Benefits
d
|
Total
|
||||||||||||
William J. Stromberg
|
$
|
35,000
|
|
$
|
4,718
|
|
$
|
4,000
|
|
$
|
25,000
|
|
$
|
13,632
|
|
$
|
82,350
|
|
Kenneth V. Moreland
|
$
|
35,000
|
|
$
|
4,718
|
|
$
|
4,000
|
|
$
|
25,000
|
|
$
|
12,024
|
|
$
|
80,742
|
|
Edward C. Bernard
|
$
|
35,000
|
|
$
|
4,718
|
|
$
|
4,000
|
|
$
|
25,000
|
|
$
|
11,118
|
|
$
|
79,836
|
|
Christopher D. Alderson
|
$
|
—
|
|
$
|
30,965
|
|
$
|
2,034
|
|
$
|
25,000
|
|
$
|
—
|
|
$
|
57,999
|
|
Eric L. Veiel
|
$
|
35,000
|
|
$
|
4,718
|
|
$
|
4,000
|
|
$
|
25,000
|
|
$
|
11,954
|
|
$
|
80,672
|
|
a
|
Cash compensation for the amount calculated under the U.S. Retirement Program that could not be credited to their retirement accounts in
2016
due to the contribution limits imposed under Section 415 of the Internal Revenue Code. For Mr. Alderson, the amount represents cash paid in lieu of a contribution to the U.K. pension program as result of a Fixed Protection election he made with the U.K. tax authorities which required him to opt out of the U.K. pension program. The amount is based on the contribution formula in the pension program and is equal to the amount he would have received had he stayed in the pension program.
|
b
|
Matching contributions paid under our Employee Stock Purchase Plan offered to all employees of Price Group and its subsidiaries.
|
c
|
NEOs, directors, and all employees of Price Group and its subsidiaries are eligible to have personal gifts up to an annual limit to qualified charitable organizations matched by our sponsored T. Rowe Price Foundation in the case of U.S. employees, and Price Group in the case of employees outside the U.S. For
2016
, all of the NEOs were eligible to have up to
$25,000
matched.
|
d
|
Costs incurred by Price Group under programs available to all senior officers, including the NEO's, for executive health benefits and parking, as well as certain costs covered by Price Group relating to certain travel upgrades and spousal participation in events held in connection with the Price Group and Price Funds annual joint Board of Directors meeting as well as other business-related functions.
|
2016 GRANTS OF PLAN-BASED AWARDS TABLE
1
|
|
Grant Date
|
|
Date of Compensation Committee Meeting at which Grant was Approved
|
Estimated Possible
Payouts under
Non-Equity Incentive
Plan Awards
2
|
Estimated Possible Payouts under Equity Incentive Plan Awards
|
Grant Date Fair Value of Stock Awards
4
|
||||||||
Name
|
|
Threshold ($)
|
Maximum ($)
|
Target (#)
|
Maximum (#)
|
|||||||||
William J. Stromberg
|
2/16/2016
|
2
|
|
$—
|
$
|
19,336,320
|
|
|
|
|
||||
|
2/17/2016
|
3
|
2/16/2016
|
|
|
12,810
|
|
12,810
|
|
$
|
900,031
|
|
||
|
9/8/2016
|
3
|
9/7/2016
|
|
|
13,074
|
|
13,074
|
|
$
|
900,014
|
|
||
Kenneth V. Moreland
|
2/16/2016
|
2
|
|
$—
|
$
|
4,834,080
|
|
|
|
|
||||
|
2/17/2016
|
3
|
2/16/2016
|
|
|
3,452
|
|
3,452
|
|
$
|
242,538
|
|
||
|
9/8/2016
|
3
|
9/7/2016
|
|
|
3,523
|
|
3,523
|
|
$
|
242,523
|
|
||
Edward C. Bernard
|
2/16/2016
|
2
|
|
$—
|
$
|
16,113,600
|
|
|
|
|
||||
|
2/17/2016
|
3
|
2/16/2016
|
|
|
10,319
|
|
10,319
|
|
$
|
725,013
|
|
||
|
9/8/2016
|
3
|
9/7/2016
|
|
|
10,532
|
|
10,532
|
|
$
|
725,023
|
|
||
Christopher D. Alderson
|
2/16/2016
|
2
|
|
$—
|
$
|
16,113,600
|
|
|
|
|
||||
|
2/17/2016
|
3
|
2/16/2016
|
|
|
12,098
|
|
12,098
|
|
$
|
850,005
|
|
||
|
9/8/2016
|
3
|
9/7/2016
|
|
|
12,348
|
|
12,348
|
|
$
|
850,036
|
|
||
Eric. L Veiel
|
2/16/2016
|
2
|
|
$—
|
$
|
16,113,600
|
|
|
|
|
||||
|
2/17/2016
|
3
|
2/16/2016
|
|
|
12,098
|
|
12,098
|
|
$
|
850,005
|
|
||
|
9/8/2016
|
3
|
9/7/2016
|
|
|
12,348
|
|
12,348
|
|
$
|
850,036
|
|
1
|
Includes only those columns relating to plan-based awards granted during
2016
. All other columns have been omitted.
|
2
|
The maximum represents the highest possible amount that could have been paid to each of these individuals under the
2016
Annual Incentive Compensation Pool based on our
2016
audited financial statements. The Compensation Committee has discretion to award no bonus under this program, or to award up to the maximum bonus. As a result, there is no minimum amount payable even if performance goals are met. For
2016
, the Compensation Committee awarded significantly less than the maximum amount to the NEOs and the actual amount awarded has been disclosed in the Summary Compensation Table under “Non-Equity Incentive Plan Compensation.” See our Compensation Discussion and Analysis for additional information regarding the Annual Incentive Compensation Pool.
|
3
|
Represents performance-based restricted stock units granted as part of the Company's annual equity incentive program from its 2012 Incentive Plan. These performance-based restricted stock units are subject to a performance-based vesting threshold with a twelve-month performance period. The performance period for the February
2016
grant ran from January 1,
2016
to December 31,
2016
, and the performance period for the September
2016
grant runs from July 1,
2016
to June 30,
2017
. For each grant, the target payout represents the number of restricted stock units to be earned by the NEO if the Company's operating margin for the performance period is at least 100% of the average operating margin of a designated peer group. The Company's operating margin performance below this target threshold results in forfeiture of some or all of the restricted stock units. The number of restricted stock units earned by the NEO following the performance period is also subject to time-based vesting before they are settled in shares of our common stock. Vesting occurs 20% on each of
12/08/2017
,
12/10/2018
,
12/10/2019
,
12/10/2020
, and
12/10/2021
. These grant agreements include a provision that allows for continued vesting for a period of 36 months from the date of separation if certain age and service criteria are met for the U.S.-based NEOs and a service criteria is met for Mr. Alderson. Dividends on these performance-based restricted stock units are accrued during the performance period and are only paid on those units earned. Additional information related to these performance-based restricted stock units, including a listing of companies in the designated peer group, are included in our Compensation Discussion and Analysis.
|
4
|
Represents the grant date fair value of the performance-based restricted stock units granted in 2016. The grant date fair value of the performance-based restricted stock units was measured using the market price per share of T. Rowe Price common stock on the date of grant multiplied by the target number of units noted in the table, as this was considered the probable outcome.
|
OUTSTANDING EQUITY AWARDS TABLE AT DECEMBER 31, 2016
1
|
|
|
Option Awards
|
|
Stock Awards
|
|
|||||||||||||||||||||
Name
|
Grant Date
|
Number of Securities Underlying Unexercised Options: Exercisable
|
|
Number of Securities Underlying Unexercised Options: Unexercisable
|
|
Option Exercise Price
|
Option Expiration Date
|
|
Number of Shares or Units of Stock That Have Not Vested (#)
|
|
Market Value of Shares or Units of Stock That Have Not Vested ($)
2
|
|
Equity Incentive Plan Awards: Number of Unearned Units That Have Not Vested (#)
|
|
Equity Incentive Plan Awards: Market Value of Unearned Units That Have Not Vested ($)
2
|
|
||||||||||
William J. Stromberg
|
9/10/2009
|
51,921
|
|
|
|
|
$
|
43.373
|
|
9/10/2019
|
|
|
|
|
|
|
|
|
|
|||||||
|
2/18/2010
|
44,744
|
|
|
|
|
$
|
47.647
|
|
2/18/2020
|
|
|
|
|
|
|
|
|
|
|||||||
|
9/8/2010
|
46,843
|
|
|
|
|
$
|
45.793
|
|
9/8/2020
|
|
|
|
|
|
|
|
|
|
|||||||
|
2/17/2011
|
44,240
|
|
|
|
|
$
|
67.561
|
|
2/17/2021
|
|
|
|
|
|
|
|
|
|
|||||||
|
9/8/2011
|
44,241
|
|
|
|
|
$
|
48.560
|
|
9/8/2021
|
|
|
|
|
|
|
|
|
|
|||||||
|
2/23/2012
|
17,695
|
|
|
4,424
|
|
3a
|
$
|
59.069
|
|
2/23/2022
|
|
1,275
|
|
4a
|
95,957
|
|
4a
|
|
|
|
|
||||
|
9/6/2012
|
16,655
|
|
|
4,164
|
|
3a
|
$
|
60.798
|
|
9/6/2022
|
|
1,200
|
|
4b
|
90,312
|
|
4b
|
|
|
|
|
||||
|
2/21/2013
|
12,299
|
|
|
8,199
|
|
3b
|
$
|
69.671
|
|
2/21/2023
|
|
2,400
|
|
4c
|
180,624
|
|
4c
|
|
|
|
|
||||
|
9/10/2013
|
12,299
|
|
|
8,200
|
|
3b
|
$
|
70.285
|
|
9/10/2023
|
|
2,400
|
|
4d
|
180,624
|
|
4d
|
|
|
|
|
||||
|
2/19/2014
|
7,174
|
|
|
10,762
|
|
3c
|
$
|
77.944
|
|
2/19/2024
|
|
3,150
|
|
4e
|
237,069
|
|
4e
|
|
|
|
|
||||
|
9/9/2014
|
7,174
|
|
|
10,762
|
|
3c
|
$
|
78.442
|
|
9/9/2024
|
|
3,150
|
|
4f
|
237,069
|
|
4f
|
|
|
|
|
||||
|
2/19/2015
|
3,587
|
|
|
14,349
|
|
3d
|
$
|
80.949
|
|
2/19/2025
|
|
4,200
|
|
4g
|
316,092
|
|
4g
|
|
|
|
|
||||
|
9/10/2015
|
3,500
|
|
|
14,000
|
|
3d
|
$
|
70.920
|
|
9/10/2025
|
|
4,200
|
|
4h
|
316,092
|
|
4h
|
|
|
|
|
||||
|
2/17/2016
|
|
|
|
|
|
|
|
|
|
|
|
12,810
|
|
4i
|
964,081
|
|
4i
|
||||||||
|
9/8/2016
|
|
|
|
|
|
|
|
|
|
|
|
13,074
|
|
5
|
983,949
|
|
5
|
|
|
Option Awards
|
|
Stock Awards
|
|
|||||||||||||||||||||
Name
|
Grant Date
|
Number of Securities Underlying Unexercised Options: Exercisable
|
|
Number of Securities Underlying Unexercised Options: Unexercisable
|
|
Option Exercise Price
|
Option Expiration Date
|
|
Number of Shares or Units of Stock That Have Not Vested (#)
|
|
Market Value of Shares or Units of Stock That Have Not Vested ($)
2
|
|
Equity Incentive Plan Awards: Number of Unearned Units That Have Not Vested (#)
|
|
Equity Incentive Plan Awards: Market Value of Unearned Units That Have Not Vested ($)
2
|
|
||||||||||
Kenneth V. Moreland
|
9/6/2007
|
41,637
|
|
|
|
|
$
|
48.051
|
|
9/6/2017
|
|
|
|
|
|
|
|
|
|
|||||||
|
9/4/2008
|
36,432
|
|
|
|
|
$
|
54.833
|
|
9/4/2018
|
|
|
|
|
|
|
|
|
|
|||||||
|
2/12/2009
|
18,735
|
|
|
|
|
$
|
26.389
|
|
2/12/2019
|
|
|
|
|
|
|
|
|
|
|||||||
|
9/10/2009
|
18,736
|
|
|
|
|
$
|
43.373
|
|
9/10/2019
|
|
|
|
|
|
|
|
|
|
|||||||
|
2/18/2010
|
14,572
|
|
|
|
|
$
|
47.647
|
|
2/18/2020
|
|
|
|
|
|
|
|
|
|
|||||||
|
9/8/2010
|
14,572
|
|
|
|
|
$
|
45.793
|
|
9/8/2020
|
|
|
|
|
|
|
|
|
|
|||||||
|
2/17/2011
|
13,011
|
|
|
|
|
$
|
67.561
|
|
2/17/2021
|
|
|
|
|
|
|
|
|
|
|||||||
|
9/8/2011
|
13,011
|
|
|
|
|
$
|
48.560
|
|
9/8/2021
|
|
|
|
|
|
|
|
|
|
|||||||
|
2/23/2012
|
5,204
|
|
|
1,300
|
|
3a
|
$
|
59.069
|
|
2/23/2022
|
|
375
|
|
4a
|
$
|
28,223
|
|
4a
|
|
|
|
|
|||
|
9/6/2012
|
5,204
|
|
|
1,300
|
|
3a
|
$
|
60.798
|
|
9/6/2022
|
|
375
|
|
4b
|
$
|
28,223
|
|
4b
|
|
|
|
|
|||
|
2/21/2013
|
3,689
|
|
|
2,459
|
|
3b
|
$
|
69.671
|
|
2/21/2023
|
|
720
|
|
4c
|
$
|
54,187
|
|
4c
|
|
|
|
|
|||
|
9/10/2013
|
3,689
|
|
|
2,459
|
|
3b
|
$
|
70.285
|
|
9/10/2023
|
|
720
|
|
4d
|
$
|
54,187
|
|
4d
|
|
|
|
|
|||
|
2/19/2014
|
2,357
|
|
|
3,535
|
|
3c
|
$
|
77.944
|
|
2/19/2024
|
|
1,035
|
|
4e
|
$
|
77,894
|
|
4e
|
|
|
|
|
|||
|
9/9/2014
|
2,357
|
|
|
3,536
|
|
3c
|
$
|
78.442
|
|
9/9/2024
|
|
1,035
|
|
4f
|
$
|
77,894
|
|
4f
|
|
|
|
|
|||
|
2/19/2015
|
1,178
|
|
|
4,714
|
|
3d
|
$
|
80.949
|
|
2/19/2025
|
|
1,380
|
|
4g
|
$
|
103,859
|
|
3g
|
|
|
|
|
|||
|
9/10/2015
|
1,150
|
|
|
4,600
|
|
3d
|
$
|
70.920
|
|
9/10/2025
|
|
1,380
|
|
4h
|
$
|
103,859
|
|
3h
|
|
|
|
|
|||
|
2/17/2016
|
|
|
|
|
|
|
|
|
|
|
|
3,452
|
|
4i
|
$
|
259,798
|
|
4i
|
|||||||
|
9/8/2016
|
|
|
|
|
|
|
|
|
|
|
|
3,523
|
|
5
|
$
|
265,141
|
|
5
|
|||||||
Edward C. Bernard
|
2/17/2011
|
50,569
|
|
|
|
|
$
|
67.561
|
|
2/17/2021
|
|
|
|
|
|
|
|
|
|
|||||||
|
2/23/2012
|
20,819
|
|
|
5,204
|
|
3a
|
$
|
59.069
|
|
2/23/2022
|
|
1,500
|
|
4a
|
$
|
112,890
|
|
4a
|
|
|
|
|
|||
|
9/6/2012
|
18,736
|
|
|
4,685
|
|
3a
|
$
|
60.798
|
|
9/6/2022
|
|
1,350
|
|
4b
|
$
|
101,601
|
|
4b
|
|
|
|
|
|||
|
2/21/2013
|
13,836
|
|
|
9,224
|
|
3b
|
$
|
69.671
|
|
2/21/2023
|
|
2,700
|
|
4c
|
$
|
203,202
|
|
4c
|
|
|
|
|
|||
|
9/10/2013
|
9,839
|
|
|
6,560
|
|
3b
|
$
|
70.285
|
|
9/10/2023
|
|
1,920
|
|
4d
|
$
|
144,499
|
|
4d
|
|
|
|
|
|||
|
2/19/2014
|
7,174
|
|
|
10,762
|
|
3c
|
$
|
77.944
|
|
2/19/2024
|
|
3,150
|
|
4e
|
$
|
237,069
|
|
4e
|
|
|
|
|
|||
|
9/9/2014
|
6,149
|
|
|
9,225
|
|
3c
|
$
|
78.442
|
|
9/9/2024
|
|
2,700
|
|
4f
|
$
|
203,202
|
|
4f
|
|
|
|
|
|||
|
2/19/2015
|
3,074
|
|
|
12,300
|
|
3d
|
$
|
80.949
|
|
2/19/2025
|
|
3,600
|
|
4g
|
$
|
270,936
|
|
4g
|
|
|
|
|
|||
|
9/10/2015
|
3,000
|
|
|
12,000
|
|
3d
|
$
|
70.920
|
|
9/10/2025
|
|
3,600
|
|
4h
|
$
|
270,936
|
|
4h
|
|
|
|
|
|||
|
2/17/2016
|
|
|
|
|
|
|
|
|
|
|
|
10,319
|
|
4i
|
$
|
776,608
|
|
4i
|
|||||||
|
9/8/2016
|
|
|
|
|
|
|
|
|
|
|
|
10,532
|
|
5
|
$
|
792,638
|
|
5
|
|||||||
Christopher D. Alderson
|
9/10/2009
|
49,966
|
|
|
|
|
$
|
43.373
|
|
9/10/2019
|
|
|
|
|
|
|
|
|
|
|||||||
|
2/18/2010
|
41,639
|
|
|
|
|
$
|
47.647
|
|
2/18/2020
|
|
|
|
|
|
|
|
|
|
|||||||
|
9/8/2010
|
41,639
|
|
|
|
|
$
|
45.793
|
|
9/8/2020
|
|
|
|
|
|
|
|
|
|
|||||||
|
2/17/2011
|
40,921
|
|
|
|
|
$
|
67.561
|
|
2/17/2021
|
|
|
|
|
|
|
|
|
|
|||||||
|
2/17/2011
|
689
|
|
|
|
|
$
|
70.330
|
|
2/17/2021
|
|
|
|
|
|
|
|
|
|
|||||||
|
9/8/2011
|
41,639
|
|
|
|
|
$
|
48.560
|
|
9/8/2021
|
|
|
|
|
|
|
|
|
|
|||||||
|
2/23/2012
|
16,655
|
|
|
4,164
|
|
3a
|
$
|
59.069
|
|
2/23/2022
|
|
1,200
|
|
4a
|
90,312
|
|
4a
|
|
|
|
|
||||
|
9/6/2012
|
16,655
|
|
|
4,164
|
|
3a
|
$
|
60.798
|
|
9/6/2022
|
|
1,200
|
|
4b
|
90,312
|
|
4b
|
|
|
|
|
||||
|
2/21/2013
|
12,299
|
|
|
8,200
|
|
3b
|
$
|
69.671
|
|
2/21/2023
|
|
2,400
|
|
4c
|
180,624
|
|
4c
|
|
|
|
|
||||
|
9/10/2013
|
12,299
|
|
|
8,200
|
|
3b
|
$
|
70.285
|
|
9/10/2023
|
|
2,400
|
|
4d
|
180,624
|
|
4d
|
|
|
|
|
||||
|
2/19/2014
|
8,199
|
|
|
12,300
|
|
3c
|
$
|
77.944
|
|
2/19/2024
|
|
3,600
|
|
4e
|
270,936
|
|
4e
|
|
|
|
|
||||
|
9/9/2014
|
8,199
|
|
|
12,300
|
|
3c
|
$
|
78.442
|
|
9/9/2024
|
|
3,600
|
|
4f
|
270,936
|
|
4f
|
|
|
|
|
||||
|
2/19/2015
|
4,099
|
|
|
16,400
|
|
3d
|
$
|
80.949
|
|
2/19/2025
|
|
4,800
|
|
4g
|
361,248
|
|
4g
|
|
|
|
|
||||
|
9/10/2015
|
4,000
|
|
|
16,000
|
|
3d
|
$
|
70.920
|
|
9/10/2025
|
|
4,800
|
|
4h
|
361,248
|
|
4h
|
|
|
|
|
||||
|
2/17/2016
|
|
|
|
|
|
|
|
|
|
|
|
12,098
|
|
4i
|
910,495
|
|
4i
|
||||||||
|
9/8/2016
|
|
|
|
|
|
|
|
|
|
|
|
12,348
|
|
5
|
929,310
|
|
5
|
|
|
Option Awards
|
|
Stock Awards
|
|
|||||||||||||||||||||
Name
|
Grant Date
|
Number of Securities Underlying Unexercised Options: Exercisable
|
|
Number of Securities Underlying Unexercised Options: Unexercisable
|
|
Option Exercise Price
|
Option Expiration Date
|
|
Number of Shares or Units of Stock That Have Not Vested (#)
|
|
Market Value of Shares or Units of Stock That Have Not Vested ($)
2
|
|
Equity Incentive Plan Awards: Number of Unearned Units That Have Not Vested (#)
|
|
Equity Incentive Plan Awards: Market Value of Unearned Units That Have Not Vested ($)
2
|
|
||||||||||
Eric L. Veiel
|
9/6/2007
|
8,731
|
|
|
|
|
$
|
48.051
|
|
9/6/2017
|
|
|
|
|
|
|
|
|
|
|||||||
|
9/4/2008
|
30,187
|
|
|
|
|
$
|
54.833
|
|
9/4/2018
|
|
|
|
|
|
|
|
|
|
|||||||
|
2/12/2009
|
7,389
|
|
|
|
|
$
|
26.389
|
|
2/12/2019
|
|
|
|
|
|
|
|
|
|
|||||||
|
9/10/2009
|
18,736
|
|
|
|
|
$
|
43.373
|
|
9/10/2019
|
|
|
|
|
|
|
|
|
|
|||||||
|
2/18/2010
|
20,818
|
|
|
|
|
$
|
47.647
|
|
2/18/2020
|
|
|
|
|
|
|
|
|
|
|||||||
|
9/8/2010
|
20,819
|
|
|
|
|
$
|
45.793
|
|
9/8/2020
|
|
|
|
|
|
|
|
|
|
|||||||
|
2/17/2011
|
20,819
|
|
|
|
|
$
|
67.561
|
|
2/17/2021
|
|
|
|
|
|
|
|
|
|
|||||||
|
9/8/2011
|
20,819
|
|
|
|
|
$
|
48.560
|
|
9/8/2021
|
|
|
|
|
|
|
|
|
|
|||||||
|
2/23/2012
|
8,327
|
|
|
2,081
|
|
3a
|
$
|
59.069
|
|
2/23/2022
|
|
600
|
|
6a
|
45,156
|
|
6a
|
|
|
|
|
||||
|
9/6/2012
|
8,327
|
|
|
2,082
|
|
3a
|
$
|
60.798
|
|
9/6/2022
|
|
600
|
|
6a
|
45,156
|
|
6a
|
|
|
|
|
||||
|
2/21/2013
|
6,764
|
|
|
4,509
|
|
3b
|
$
|
69.671
|
|
2/21/2023
|
|
1,320
|
|
6b
|
99,343
|
|
6b
|
|
|
|
|
||||
|
9/10/2013
|
7,994
|
|
|
5,330
|
|
3b
|
$
|
70.285
|
|
9/10/2023
|
|
1,560
|
|
6b
|
117,406
|
|
6b
|
|
|
|
|
||||
|
2/19/2014
|
5,739
|
|
|
8,610
|
|
3c
|
$
|
77.944
|
|
2/19/2024
|
|
2,520
|
|
6c
|
189,655
|
|
6c
|
|
|
|
|
||||
|
9/9/2014
|
5,739
|
|
|
8,610
|
|
3c
|
$
|
78.442
|
|
9/9/2024
|
|
2,520
|
|
6c
|
189,655
|
|
6c
|
|
|
|
|
||||
|
2/19/2015
|
3,587
|
|
|
14,349
|
|
3d
|
$
|
80.949
|
|
2/19/2025
|
|
4,200
|
|
6d
|
316,092
|
|
6d
|
|
|
|
|
||||
|
9/10/2015
|
3,500
|
|
|
14,000
|
|
3d
|
$
|
70.920
|
|
9/10/2025
|
|
4,200
|
|
6d
|
316,092
|
|
6d
|
|
|
|
|
||||
|
12/10/2015
|
|
|
|
|
|
|
|
|
|
|
|
27,271
|
|
4i
|
2,052,415
|
|
4i
|
||||||||
|
2/17/2016
|
|
|
|
|
|
|
|
|
|
|
|
12,098
|
|
4i
|
910,495
|
|
4i
|
||||||||
|
9/8/2016
|
|
|
|
|
|
|
|
|
|
|
|
12,348
|
|
5
|
929,310
|
|
5
|
1
|
Includes only those columns that related to outstanding equity awards at
2016
. All other columns have been omitted.
|
2
|
The market value of these stock awards was calculated using the closing market price per share of Price Group's common stock on
December 31, 2016
.
|
3
|
The following table represents the vesting schedules of the unexercisable outstanding option awards at December 31, 2016.
|
Footnote
|
Percentage of Outstanding
|
Vest Dates
|
|||
3a
|
100%
|
12/8/2017
|
|
|
|
3b
|
50%
|
12/8/2017
|
12/10/2018
|
|
|
3c
|
33%
|
12/8/2017
|
12/10/2018
|
12/10/2019
|
|
3d
|
25%
|
12/8/2017
|
12/10/2018
|
12/10/2019
|
12/10/2020
|
4
|
For each performance-based restricted stock unit award outstanding at
December 31, 2016
, the following table includes the date of the meeting or unanimous consent at which the Compensation Committee certified that the performance threshold was met, the award's performance period, and the award's remaining vesting schedule.
|
Footnote
|
Meeting/ Unanimous Written Consent
|
Performance Period Start Date
|
Performance Period End Date
|
Percentage of Outstanding
|
Vest Dates
|
||||
4a
|
Feb-2013
|
January 1, 2012
|
December 31, 2012
|
100%
|
12/8/2017
|
|
|
|
|
4b
|
Aug-2013
|
July 1, 2012
|
June 30, 2013
|
100%
|
12/8/2017
|
|
|
|
|
4c
|
Feb-2014
|
January 1, 2013
|
December 31, 2013
|
50%
|
12/8/2017
|
12/10/2018
|
|
|
|
4d
|
Sep-2014
|
July 1, 2013
|
June 30, 2014
|
50%
|
12/8/2017
|
12/10/2018
|
|
|
|
4e
|
Feb-2015
|
January 1, 2014
|
December 31, 2014
|
33%
|
12/8/2017
|
12/10/2018
|
12/10/2019
|
|
|
4f
|
Sep-2015
|
July 1, 2014
|
June 30, 2015
|
33%
|
12/8/2017
|
12/10/2018
|
12/10/2019
|
|
|
4g
|
Feb-2016
|
January 1, 2015
|
December 31, 2015
|
25%
|
12/8/2017
|
12/10/2018
|
12/10/2019
|
12/10/2020
|
|
4h
|
Sep-2016
|
July 1, 2015
|
June 30, 2016
|
25%
|
12/8/2017
|
12/10/2018
|
12/10/2019
|
12/10/2020
|
|
4i
|
Feb-2017
|
January 1, 2016
|
December 31, 2016
|
20%
|
12/8/2017
|
12/10/2018
|
12/10/2019
|
12/10/2020
|
12/10/2021
|
5
|
If the Company's operating margin for the twelve month performance period July 1, 2016 to June 30, 2017, is at least 100% of the average operating margin of a designated peer group, all of these restricted stock units will vest 20% on each of
12/8/2017
,
12/10/2018
,
12/10/2019
,
12/10/2020
, and
12/10/2021
.
|
6
|
Mr. Veiel received restricted stock awards and restricted stock unit awards through September 2015. The following table represents the vesting schedules of the outstanding stock awards at December 31, 2016.
|
Footnote
|
Remaining Percentage Vesting
|
Vest Dates
|
|||
6a
|
100%
|
12/8/2017
|
|
|
|
6b
|
50%
|
12/8/2017
|
12/10/2018
|
|
|
6c
|
33%
|
12/8/2017
|
12/10/2018
|
12/10/2019
|
|
6d
|
25%
|
12/8/2017
|
12/10/2018
|
12/10/2019
|
12/10/2020
|
2016 OPTION EXERCISES AND STOCK VESTED TABLE
|
|
Option Awards
|
|
Stock Awards
|
|
|||||||||
Name
|
Number of Shares Acquired on
Exercise
1, 5
|
Value Realized on
Exercise
2
|
|
Number of Shares Acquired on Vesting
5
|
|
Value Realized on Vesting
|
|
||||||
William J. Stromberg
|
140,246
|
|
$
|
4,359,529
|
|
|
9,075
|
|
3
|
$
|
695,145
|
|
3
|
Kenneth V. Moreland
|
41,637
|
|
$
|
1,155,001
|
|
|
2,850
|
|
3
|
$
|
218,310
|
|
3
|
Edward C. Bernard
|
469,908
|
|
$
|
13,679,211
|
|
|
8,910
|
|
3
|
$
|
682,506
|
|
3
|
Christopher D. Alderson
|
282,894
|
|
$
|
8,620,804
|
|
|
9,600
|
|
3
|
$
|
735,360
|
|
3
|
Eric L. Veiel
|
34,625
|
|
$
|
799,462
|
|
|
6,420
|
|
4
|
$
|
491,772
|
|
4
|
1
|
Represents the total number of shares underlying the exercised stock options.
|
2
|
Computed using the difference between the market price of Price Group's common stock on the date of exercise and the exercise price, multiplied by the number of shares acquired.
|
3
|
Reflects the number of shares underlying the performance-based restricted stock units earned and vested. The value realized on vesting is computed using the closing market price per share of Price Group's common stock on the vest date multiplied by the number of restricted stock units vesting. For Messrs. Stromberg, Moreland, Bernard, and Alderson, the following table shows the aggregate restricted stock units for the NEOs by date of award:
|
Date of Award
|
Performance Period Completion Date
|
Number of Shares Acquired on Vesting
|
|
Market Price on Vest Date
|
Value Realized on Vesting
|
||
2/23/2012
|
12/31/2012
|
4,350
|
|
$76.60
|
$
|
333,210
|
|
9/6/2012
|
6/30/2013
|
4,125
|
|
$76.60
|
$
|
315,975
|
|
2/21/2013
|
12/31/2013
|
4,110
|
|
$76.60
|
$
|
314,826
|
|
9/10/2013
|
6/30/2014
|
3,720
|
|
$76.60
|
$
|
284,952
|
|
2/19/2014
|
12/31/2014
|
3,645
|
|
$76.60
|
$
|
279,207
|
|
9/9/2014
|
6/30/2015
|
3,495
|
|
$76.60
|
$
|
267,717
|
|
2/19/2015
|
12/31/2015
|
3,495
|
|
$76.60
|
$
|
267,717
|
|
9/10/2015
|
6/30/2016
|
3,495
|
|
$76.60
|
$
|
267,717
|
|
4
|
Reflects the number of restricted stock awards earned and vested. The value realized on vesting was computed using the closing market price per share of Price Group's common stock on the vest date multiplied by the number of restricted stock awards vesting. For Mr. Veiel the following table shows the aggregate restricted stock awards by date of award:
|
Date of Award
|
Vesting Date
|
Number of Shares Acquired on Vesting
|
|
Market Price on Vest Date
|
Value Realized on Vesting
|
||
2/23/2012
|
12/9/2016
|
600
|
|
$76.60
|
$
|
45,960
|
|
9/6/2012
|
12/9/2016
|
600
|
|
$76.60
|
$
|
45,960
|
|
2/21/2013
|
12/9/2016
|
660
|
|
$76.60
|
$
|
50,556
|
|
9/10/2013
|
12/9/2016
|
780
|
|
$76.60
|
$
|
59,748
|
|
2/19/2014
|
12/9/2016
|
840
|
|
$76.60
|
$
|
64,344
|
|
9/9/2014
|
12/9/2016
|
840
|
|
$76.60
|
$
|
64,344
|
|
2/19/2015
|
12/9/2016
|
1,050
|
|
$76.60
|
$
|
80,430
|
|
9/10/2015
|
12/9/2016
|
1,050
|
|
$76.60
|
$
|
80,430
|
|
5
|
For some of the NEOs, the number of shares actually acquired was less than the number presented in the table above as a result of tendering shares for payment of the exercise price and the withholding of shares to pay taxes. The total net shares received by those NEOs is as follows:
|
Name
|
Net Shares Acquired on Exercise
|
Net Shares Acquired on Vesting
|
William J. Stromberg
|
28,398
|
4,485
|
Kenneth V. Moreland
|
11,951
|
1,396
|
Edward C. Bernard
|
98,975
|
4,403
|
Eric L. Veiel
|
7,600
|
3,570
|
2016 NONQUALIFIED DEFERRED COMPENSATION TABLE
|
Name
|
Executive's Contributions in Last FY
1
|
Registrants Contributions in Last FY
|
Aggregate Earnings (Losses) in Last FY
2
|
Aggregate Withdrawals/Distributions
|
Aggregate Balance at Last FYE
3
|
||||||||||
William J. Stromberg
|
$
|
1,600,000
|
|
$
|
—
|
|
$
|
32,577
|
|
$
|
—
|
|
$
|
4,652,579
|
|
Kenneth V. Moreland
|
$
|
500,000
|
|
$
|
—
|
|
$
|
(144
|
)
|
$
|
—
|
|
$
|
956,254
|
|
Edward C. Bernard
|
$
|
3,000,000
|
|
$
|
—
|
|
$
|
126,633
|
|
$
|
—
|
|
$
|
3,122,574
|
|
Christopher D. Alderson
(4)
|
$
|
1,859,475
|
|
$
|
—
|
|
$
|
(6,419
|
)
|
$
|
—
|
|
$
|
498,119
|
|
Eric L. Veiel
|
$
|
3,100,000
|
|
$
|
—
|
|
$
|
148,285
|
|
$
|
—
|
|
$
|
2,990,414
|
|
1
|
These amounts represent a portion of the bonus awarded to each NEO under the 2016 Annual Incentive Compensation Pool and are reported as Non-Equity Incentive Plan Compensation in the Summary Compensation Table. Under the Supplemental Savings Plan, certain senior officers, including the NEOs, have the opportunity to defer receipt of up to 100% of their cash incentive compensation earned for a respective calendar year during which services are provided.
|
2
|
Each participant has the ability to allocate their account balance across a number of Price Funds and the flexibility to rebalance their account as often as they would like. The amounts deferred are adjusted daily based on the investments chosen by the participant and, therefore, are not above market or preferential. As such, the earnings (losses) reported in this column are not included in the Summary Compensation Table.
|
3
|
These amounts represent the aggregate balances in each of the NEOs' account at December 31, 2016. A portion of each NEO's, except Mr. Moreland, 2016 deferral election was not contributed to their account until 2017, as the bonus awarded under the 2016 Annual Incentive Compensation Pool was not certified by the Compensation Committee until then. Additionally, the aggregate balance for Mr. Stromberg, Mr. Moreland, and Mr. Bernard include amounts previously reported as Non-Equity Incentive Plan Compensation in a prior year Summary Compensation Table.
|
4
|
Mr. Alderson elected to defer £1,500,000 of his annual bonus in 2016. The Company converted this deferral into U.S. dollars based on the exchange rate of 1.23965, which is the rate on the day all employee bonuses were paid.
|
POTENTIAL PAYMENTS ON TERMINATION OR CHANGE IN CONTROL
|
Plan Category
|
Number of Securities to be Issued Upon Exercise of Outstanding Options and Settlement of Restricted Stock Units (a)
|
|
Weighted-Average Exercise Price of Outstanding Options
|
|
Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (excluding securities reflected in column (a))
|
|
||||
Equity compensation plans approved by stockholders
|
29,060,180
|
|
1
|
$
|
61.90
|
|
1
|
15,052,433
|
|
2
|
Equity compensation plans not approved by stockholders
|
—
|
|
|
|
|
—
|
|
|
||
Total
|
29,060,180
|
|
|
$
|
61.90
|
|
|
15,052,433
|
|
|
1
|
Includes
4,695,858
shares that may be issued upon settlement of outstanding restricted stock units. The weighted-average exercise price pertains only to the
24,364,322
outstanding stock options.
|
2
|
Includes shares that may be issued under our 2007 Plan and 2012 Incentive Plan, and
561,646
shares that may be issued under our Employee Stock Purchase Plan. No shares have been issued under the Employee Stock Purchase Plan since its inception; all plan shares have been purchased in the open market
.
The number of shares available for future issuance under the 2012 Incentive Plan will increase under the terms of the plan as a result of all common stock repurchases that we make from proceeds generated by stock option exercises that occur after the inception of the 2012 Incentive Plan. The 2012 Incentive Plan allows for the grant of stock options, stock appreciation rights, and full-value awards.
|
INTRODUCTION
|
PROPOSAL
|
RECOMMENDATION OF THE BOARD OF DIRECTORS; VOTE REQUIRED
|
INTRODUCTION
|
RECOMMENDATION OF THE BOARD OF DIRECTORS; VOTE REQUIRED
|
INTRODUCTION
|
BACKGROUND
|
MATERIAL TERMS FOR QUALIFIED PERFORMANCE-BASED AWARDS
|
▪
|
Eligibility - the associates eligible to receive awards;
|
▪
|
Performance Metrics - the criteria upon which the performance goals may be based; and
|
▪
|
Participant Award Limits - the maximum amount of compensation that may be paid to an associate during a specified period if the performance goals are met.
|
Name and Principal Position
|
Aggregate number of shares
|
|
William J. Stromberg, President and Chief Executive Officer
|
198,008
|
|
Kenneth V. Moreland, Chief Financial Officer and Treasurer
|
61,577
|
|
Edward C. Bernard, Vice Chairman
|
184,465
|
|
Christopher D. Alderson, Head of International Equity
|
209,760
|
|
Eric L. Veiel, Head of Equity
|
179,957
|
|
|
|
|
All Current Executive Officers as a Group
|
1,578,533
|
|
|
|
|
All Current Non-Employee Directors as a Group
|
—
|
|
|
|
|
All Employees, excluding Current Executive Officers, as a Group
|
19,527,171
|
|
▪
|
Earnings or Profitability Metrics
: any derivative of investment advisory revenue; mutual fund servicing revenue; earnings/loss (gross, operating, net, or adjusted); earnings/loss before interest and taxes (“EBIT”); earnings/loss before interest, taxes, depreciation and amortization (“EBITDA”); profit margins; operating margins; expense levels or ratios; provided that any of the foregoing metrics may be adjusted to eliminate the effect of any one or more of the following: interest expense, asset impairments or investment losses, early extinguishment of debt or stock-based compensation expense;
|
▪
|
Return Metrics:
any derivative of return on investment, assets, equity or capital (total or invested);
|
▪
|
Investment Metrics:
relative risk-adjusted investment performance; investment performance of assets under management;
|
▪
|
Cash Flow Metrics
: any derivative of operating cash flow; cash flow sufficient to achieve financial ratios or a specified cash balance; free cash flow; cash flow return on capital; net cash provided by operating activities; cash flow per share; working capital;
|
▪
|
Liquidity Metrics
: any derivative of debt leverage (including debt to capital, net debt-to-capital, debt-to-EBITDA or other liquidity ratios); and/or
|
▪
|
Stock Price and Equity Metrics
: any derivative of return on stockholders’ equity; total stockholder return; stock price; stock price appreciation; market capitalization; earnings/loss per share (basic or diluted) (before or after taxes).
|
▪
|
Appreciation Awards
. The maximum number of shares of our common stock that may be made subject to awards granted under the 2012 Incentive Plan during a calendar year to any one person in the form of stock options or stock appreciation rights is, in the aggregate, 1,040,990 shares.
|
▪
|
Stock-Based Performance Awards
. The maximum number of shares of our common stock that may be made subject to awards granted under the 2012 Incentive Plan during a calendar year to any one person in the form of performance shares is, in the aggregate, 1,040,990 shares. If such performance shares will be settled in cash, the maximum cash amount payable thereunder is the amount equal to the number of performance shares to be settled in cash multiplied by the closing price of the shares, as determined as of the payment date. These limits are multiplied by the number of calendar years over which the applicable performance period spans (in whole or in part), if the performance period is longer than 12 months’ duration.
|
▪
|
Cash-Based Performance Units
. In connection with awards granted under the 2012 Incentive Plan during a calendar year to any one person in the form of cash-based performance units, the maximum cash amount payable under such performance units is $15 million.
|
▪
|
Adjustments to Limits during Initial Year of Service
. Each of the individual limits set forth above are multiplied by two when applied to awards granted to any individual during the calendar year in which such individual first commences service with us.
|
OTHER FEATURES OF THE 2012 INCENTIVE PLAN
|
▪
|
No Evergreen Feature.
The 2012 Incentive Plan does not contain an “evergreen” provision that automatically increases the number of shares authorized for issuance under the Plan.
|
▪
|
Repricing Prohibited.
The 2012 Incentive Plan requires that stockholder approval be obtained for any repricing, exchange or buyout of underwater awards.
|
▪
|
Reloading Prohibited.
The 2012 Incentive Plan prohibits granting stock options with replenishment features (also called reload options).
|
▪
|
No Discount Awards; Maximum Term Specified.
Stock options and stock appreciation rights must have an exercise price or base price no less than the closing price of our common stock on the date the award is granted and a term no longer than ten years.
|
▪
|
Minimum Vesting Standards.
The 2012 Incentive Plan includes minimum vesting standards for full value awards-no less than a three-year vesting period (in pro rata installments) for time-based awards and no shorter than a one-year performance period for performance-based awards. If the grant of a performance award is conditioned on satisfaction of performance goals, the performance period shall not be less than 12 months’ duration, but no additional minimum vesting period need apply to such award. Generally, the Administrator does not have discretionary authority to waive the minimum restriction period applicable to a full value award, except in the case of death, disability, retirement, or a Change in Control. Up to 5% of the initial share pool may be granted with less stringent or no vesting (e.g., merit stock awards).
|
▪
|
No Dividends on Performance-Based Awards unless and until Performance Goals are Met.
The 2012 Incentive Plan prohibits the payment of dividends or dividend equivalents on performance-based awards unless and until the applicable performance goals for such award have been met.
|
▪
|
No Liberal Definition of Change in Control.
The 2012 Incentive Plan’s definition of a change-in-control transaction provides that any award benefits triggered by such a transaction are contingent upon the actual consummation of the transaction, not merely its approval by our Board of Directors or stockholders.
|
▪
|
No Transfers for Value.
Participants are not permitted to transfer awards for value under the 2012 Incentive Plan.
|
▪
|
Awards Subject to Claw Back Policy.
Awards granted under the 2012 Incentive Plan to our executive officers are subject to our Policy for Recoupment of Incentive Compensation or any successor thereto. In addition, we may include provisions in award agreements under which we may recover from current and former participants any amounts paid or shares of common stock issued under an award and any proceeds therefrom under such circumstances as the plan administrator determines appropriate.
|
▪
|
the aggregate number and kind of shares of common stock or other securities on which awards under the 2012 Incentive Plan may be granted to eligible individuals;
|
▪
|
the maximum number of shares of common stock or other securities with respect to which awards may be granted during any one calendar year to any individual;
|
▪
|
the maximum number of shares of common stock or other securities that may be issued with respect to incentive stock options granted under the 2012 Incentive Plan;
|
▪
|
the number of shares of common stock or other securities covered by each outstanding award and the exercise price, base price or other price per share, if any, and other relevant terms of each outstanding award; and
|
▪
|
all other numerical limitations relating to awards, whether contained in the 2012 Incentive Plan or in award agreements.
|
▪
|
stock options and stock appreciation rights will become fully exercisable and vested;
|
▪
|
shares of restricted stock will become free of all restrictions and become fully vested and transferable;
|
▪
|
all restricted stock units, performance shares and performance units will be considered to be earned and payable at target level, any deferral or other restriction thereon will lapse, any restriction period thereon will terminate, and such restricted stock units, performance shares and performance units will be settled in cash or shares of common stock (consistent with the terms of the award agreement after taking into account the effect of the change-in-control transaction on the shares) as promptly as is practicable;
|
▪
|
each outstanding performance award will be deemed to satisfy any applicable performance goals as set forth in the applicable award agreement; and
|
▪
|
the administrator may also make additional adjustments and/or settlements of outstanding awards as it deems appropriate and consistent with the 2012 Incentive Plan’s purposes.
|
RECOMMENDATION OF THE BOARD OF DIRECTORS; VOTE REQUIRED
|
INTRODUCTION
|
BACKGROUND
|
PRINCIPAL FEATURES ON THE 2017 DIRECTOR PLAN
|
▪
|
restricted common shares of Price Group that are nontransferable and subject to forfeiture prior to becoming vested;
|
▪
|
stock units providing for deferred delivery of common shares of Price Group; and
|
▪
|
nonstatutory options for the purchase of common shares of Price Group.
|
▪
|
Upon grant, awards will be unvested and subject to a risk of forfeiture.
|
▪
|
If the non-employee director ceases to be a member of the Board for any reason other than death, becoming totally and permanently disabled, or the occurrence of a change in control of Price Group (Change in Control), all unvested awards and all accrued dividends and/or unvested dividend equivalents attributed to such awards will be forfeited upon such cessation.
|
▪
|
Provided that the non‑employee director to whom the award was granted is a member of the Board on the vesting date, restricted shares, stock units and options will become vested and no longer subject to risk of forfeiture on the earliest of the following dates:
|
▪
|
the first anniversary of the grant date of an Initial Director Award or, as applicable, the day immediately prior to the annual meeting of Price Group stockholders that occurs in the next calendar year following the year in which the grant date of an Equity Compensation Award occurs;
|
▪
|
the non-employee director’s date of death,
|
▪
|
the date on which the non-employee director becomes totally and permanently disabled, or
|
▪
|
the date on which a Change in Control occurs.
|
NEW PLAN BENEFITS
|
Name and Position
|
Dollar Value ($)
|
Number of Shares Underlying Stock Units or Restricted Share Awards
1
|
Named Executive Officers (not eligible under Plan)
|
n/a
|
n/a
|
Executive Group (not eligible under Plan)
|
n/a
|
n/a
|
Non‑Executive Director Group
2
|
$2,000,000
|
3
|
Non‑Executive Officer Employee Group (not eligible under Plan)
|
n/a
|
n/a
|
RECOMMENDATION OF THE BOARD OF DIRECTORS; VOTE REQUIRED
|
INTRODUCTION
|
BACKGROUND
|
PROPOSAL
|
NEW PLAN BENEFITS
|
Name and Principal Position
|
Aggregate number of shares purchased
|
|
William J. Stromberg, President and Chief Executive Officer
|
24,687
|
|
Kenneth V. Moreland, Chief Financial Officer and Treasurer
|
11,188
|
|
Edward C. Bernard, Vice Chairman
|
19,277
|
|
Christopher D. Alderson, Head of International Equity
|
15,287
|
|
Eric L. Veiel, Head of Equity
|
6,198
|
|
|
|
|
All Current Executive Officers as a Group
|
107,473
|
|
|
|
|
All Current Non-Employee Directors as a Group
|
—
|
|
|
|
|
All Employees, excluding Current Executive Officers, as a Group
|
16,022,355
|
|
RECOMMENDATION OF THE BOARD OF DIRECTORS; VOTE REQUIRED
|
INTRODUCTION
|
RECOMMENDATION OF THE BOARD OF DIRECTORS; VOTE REQUIRED
|
DISCLOSURE OF FEES CHARGED BY THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
|
Type of Fee
|
2015
|
2016
|
||||
Audit Fees
1
|
$
|
1,861,933
|
|
$
|
2,565,468
|
|
Audit-Related Fees
2
|
102,370
|
|
84,303
|
|
||
Tax Fees
3
|
868,371
|
|
920,662
|
|
||
All Other Fees
4
|
72,555
|
|
65,250
|
|
||
|
$
|
2,905,229
|
|
$
|
3,635,683
|
|
1
|
Aggregate fees charged for annual audits, quarterly reviews, and the reports of the independent registered public accounting firm on internal control over financial reporting as of December 31,
2015
and
2016
.
|
2
|
Aggregate fees charged for assurance and related services that are reasonably related to the performance of the audit and are not reported as Audit Fees. In
2015
and
2016
, these services included audits of several affiliated entities, including the corporate retirement plans, the T. Rowe Price Foundation, Inc., and fees for consultations concerning financial accounting and reporting matters. The
2016
fees also include fees associated with KPMG's consents related to registration filings.
|
3
|
Aggregate fees charged for tax compliance, planning, and consulting. Of the
$920,662
in
2016
,
$557,633
is related to tax compliance and preparation and
$363,029
is related to tax planning.
|
4
|
Both
2015
and
2016
include fees for KPMG's performance of attestation engagements related to our compliance with the Global Investment Performance Standards and fees related to executive education.
|
AUDIT COMMITTEE PRE-APPROVAL POLICIES
|
▪
|
Any audit or non-audit service to be provided to Price Group by the independent registered public accounting firm must be submitted to the Audit Committee for review and approval. The proposed services are submitted on the Audit Committee's “Independent Registered Public Accounting Firm Audit and Non-Audit Services Request Form” with a description of the services to be performed, fees to be charged, and affirmation that the services are not prohibited under Section 201 of the Sarbanes-Oxley Act of 2002. The form must be approved by Price Group's chief executive officer, chief financial officer, or director of internal audit prior to submission to the Audit Committee.
|
▪
|
The Audit Committee in its sole discretion then approves or disapproves the proposed services and documents such approval, if given, by signing the approval form. Pre-approval actions taken during Audit Committee meetings are recorded in the minutes of the meetings.
|
▪
|
Any audit or non-audit service to be provided to Price Group which is proposed between meetings of the Audit Committee will be submitted to the Audit Committee chairman on a properly completed “Independent Registered Public Accounting Firm Audit and Non-Audit Services Request Form” for the chairman's review and pre-approval and will be included as an agenda item at the next scheduled Audit Committee meeting.
|
Mark S. Bartlett, Chairman
|
Dr. Freeman A. Hrabowski, III
|
Robert F. MacLellan
|
Dwight S. Taylor
|
Sandra S. Wijnberg
|
INTRODUCTION
|
PROPOSAL
|
RECOMMENDATION OF THE BOARD OF DIRECTORS; VOTE REQUIRED
|
INTRODUCTION
|
PROPOSAL
|
RECOMMENDATION OF THE BOARD OF DIRECTORS; VOTE REQUIRED
|
INTRODUCTION
|
PROPOSAL
|
1.
|
A chart identifying employees according to gender and race in major EEOC-defined job categories, listing numbers or percentages in each category.
|
2.
|
A description of policies/programs focused on increasing gender and racial diversity in the workplace
.
|
RECOMMENDATION OF THE BOARD OF DIRECTORS; VOTE REQUIRED
|
▪
|
T. Rowe Price's Board of Directors is comprised of 30% women and 23% ethnic diversity.
|
▪
|
Our total workforce is made up of 45% women and 26% ethnically diverse.
|
▪
|
The firm's senior leadership is comprised of 31% women, and 17% are associates with ethnic diversity.
|
▪
|
We implemented a 30% interview slate diversity goal to ensure we have diverse candidates for all senior level roles.
|
▪
|
Diversity is embedded and monitored in our talent review and succession planning processes.
|
▪
|
We have working groups (women, ethnically diverse and LGBTQ) made up of leaders and associates from across the enterprise who provide insights and recommendations on how to attract, advance and retain diverse talent. They also help us understand issues and opportunities related to engagement and inclusion.
|
▪
|
We have been recognized for our efforts by the following organizations:
|
▪
|
Anita Borg Institute's 2015 Top Companies for Women Technologists Leadership Index
|
▪
|
Human Rights Campaign Foundation's Best Places to Work for LGBT Equality
|
▪
|
2020 Women on Boards Winning Company
|
▪
|
Through the performance management process, the firm's senior leadership is held accountable for driving diversity and inclusion.
|
▪
|
The firm's learning agenda focuses on building manager capability and skill to lead diverse teams:
|
▪
|
Unconscious bias training mandatory for all people leaders
|
▪
|
Diversity and Inclusion Summit held to build D&I champions across the firm
|
▪
|
Stockholders may send correspondence, which should indicate that the sender is a stockholder, to our Board of Directors or to any individual director by mail to T. Rowe Price Group, Inc., c/o Chief Legal Officer, P.O. Box 17134, Baltimore, MD 21297-1134, or by email to
contact_the_board@troweprice.com
or by Internet at trow.client.shareholder.com/contactBoard.cfm.
|
▪
|
Our chief legal officer will be responsible for the first review and logging of this correspondence. The officer will forward the communication to the director or directors to whom it is addressed unless it is a type of correspondence which the
|
▪
|
The Nominating and Corporate Governance Committee has authorized the chief legal officer to retain and not send to directors the following types of communications:
|
▪
|
Advertising or promotional in nature (offering goods or services);
|
▪
|
Complaints by clients with respect to ordinary course of business customer service and satisfaction issues; or
|
▪
|
Those clearly unrelated to our business, industry, management or Board or committee matters.
|
▪
|
The log of stockholder correspondence will be available to members of the Nominating and Corporate Governance Committee for inspection. At least once each year, the chief legal officer will provide to the Nominating and Corporate Governance Committee a summary of the communications received from stockholders, including the communications not sent to directors in accordance with screening procedures approved by the Nominating and Corporate Governance Committee.
|
1.
|
History; Effective Date A-4
|
2.
|
Purposes of the Plan A-4
|
3.
|
Terminology A-4
|
4.
|
Administration A-4
|
(b)
|
Powers of the Administrator A-4
|
(c)
|
Delegation of Administrative Authority A-5
|
(d)
|
Non-Uniform Determinations A-5
|
(e)
|
Limited Liability A-5
|
(f)
|
Indemnification A-5
|
(g)
|
Effect of Administrator’s Decision A-6
|
5.
|
Shares Issuable Pursuant to Awards A-6
|
(a)
|
Initial Share Pool A-6
|
(b)
|
Adjustments to Share Pool A-6
|
(c)
|
Code Section 162(m) Individual Limits A-6
|
(d)
|
ISO Limit A-7
|
(e)
|
Source of Shares A-7
|
6.
|
Participation A-7
|
7.
|
Awards A-7
|
(a)
|
Awards, In General A-7
|
(b)
|
Minimum Restriction Period for Full Value Awards A-7
|
(c)
|
Stock Options A-8
|
(d)
|
Limitation on Reload Options A-8
|
(e)
|
Stock Appreciation Rights A-8
|
(f)
|
Prohibition on Repricing A-9
|
(g)
|
Stock Awards A-9
|
(h)
|
Stock Units A-9
|
(i)
|
Performance Shares and Performance Units A-10
|
(j)
|
Other Stock-Based Awards A-11
|
(k)
|
Qualified Performance-Based Awards A-11
|
(l)
|
Awards to Participants Outside the United States A-12
|
(m)
|
Limitation on Dividend Reinvestment and Dividend Equivalents A-12
|
8.
|
Withholding of Taxes A-12
|
9.
|
Transferability of Awards A-12
|
10.
|
Adjustments for Corporate Transactions and Other Events A-13
|
(a)
|
Mandatory Adjustments A-13
|
(b)
|
Discretionary Adjustments A-13
|
(c)
|
Adjustments to Performance Goals A-13
|
(d)
|
Statutory Requirements Affecting Adjustments A-13
|
(e)
|
Dissolution or Liquidation A-13
|
11.
|
Change in Control Provisions A-14
|
(a)
|
Termination of Awards A-14
|
(b)
|
Continuation, Assumption or Substitution of Awards A-14
|
(c)
|
Section 409A Savings Clause A-14
|
12.
|
Substitution of Awards in Mergers and Acquisitions A-14
|
13.
|
Compliance with Securities Laws; Listing and Registration A-15
|
14.
|
Section 409A Compliance A-15
|
15.
|
Plan Duration; Amendment and Discontinuance A-16
|
(a)
|
Plan Duration A-16
|
(b)
|
Amendment and Discontinuance of the Plan A-16
|
(c)
|
Amendment of Awards A-16
|
16.
|
General Provisions A-16
|
(a)
|
Non-Guarantee of Employment or Service A-16
|
(b)
|
No Trust or Fund Created A-16
|
(c)
|
Status of Awards A-16
|
(d)
|
Affiliate Employees A-16
|
(e)
|
Governing Law and Interpretation A-17
|
(f)
|
Use of English Language A-17
|
(g)
|
Recovery of Amounts Paid A-17
|
17.
|
Glossary A-17
|
1.
|
History; Effective Date.
|
2.
|
Purposes of the Plan.
|
3.
|
Terminology.
|
4.
|
Administration.
|
(b)
|
Powers of the Administrator
.
|
(ii)
|
determine the types of Awards to be granted any Eligible Individual;
|
(xiv)
|
otherwise administer the Plan and all Awards granted under the Plan.
|
5.
|
Shares Issuable Pursuant to Awards.
|
6.
|
Participation.
|
7.
|
Awards.
|
(c)
|
Stock Options
.
|
(e)
|
Stock Appreciation Rights
.
|
(g)
|
Stock Awards
.
|
(h)
|
Stock Units
.
|
(i)
|
Performance Shares and Performance Units
.
|
(k)
|
Qualified Performance-Based Awards
.
|
8.
|
Withholding of Taxes.
|
9.
|
Transferability of Awards.
|
10.
|
Adjustments for Corporate Transactions and Other Events.
|
11.
|
Change in Control Provisions.
|
12.
|
Substitution of Awards in Mergers and Acquisitions.
|
13.
|
Compliance with Securities Laws; Listing and Registration.
|
14.
|
Section 409A Compliance.
|
15.
|
Plan Duration; Amendment and Discontinuance.
|
16.
|
General Provisions.
|
(ii)
|
the Participant, except as such plan or agreement shall otherwise expressly provide.
|
17.
|
Glossary.
|
(e)
|
“
Board
” means the Board of Directors of Price Group.
|
(g)
|
“
Change in Control
” means any of the following events:
|
(l)
|
“ECC”
means the Executive Compensation Committee of the Board.
|
(t)
|
“
Nonqualified Option
” means any stock option that is not an Incentive Stock Option.
|
(v)
|
“
Participant
” means an Eligible Individual to whom an Award is or has been granted.
|