☐ | Preliminary Proxy Statement |
☐ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
☒ | Definitive Proxy Statement |
☐ | Definitive Additional Materials |
☐ | Soliciting Material under §240.14a-12 |
Deluxe Corporation
|
(Name of Registrant as Specified In Its Charter)
|
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
|
☒ | No fee required. |
☐ | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
(1) | Title of each class of securities to which transaction applies: |
(2) | Aggregate number of securities to which transaction applies: |
(3) | 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): |
(4) | Proposed maximum aggregate value of transaction: |
(5) | Total fee paid: |
☐ | Fee paid previously with preliminary materials. |
☐ | 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. |
(1) | Amount Previously Paid: |
(2) | Form, Schedule or Registration Statement No.: |
(3) | Filing Party: |
(4) | Date Filed: |
|
Deluxe Corporation
3680 Victoria Street N.
Shoreview, MN 55126-2966
P.O. Box 64235
St. Paul, MN 55164-0235
www.deluxe.com
|
1. |
To elect ten directors to hold office until the 2018 annual meeting of shareholders.
|
2. |
To cast an advisory (non-binding) vote on the compensation of our Named Executive Officers (a “Say-on-Pay” vote).
|
3. |
To cast an advisory (non-binding) vote on the frequency with which our shareholders will consider approving the compensation for our Named Executive Officers (the “Say-When-on-Pay” vote).
|
4. |
To approve the Deluxe Corporation 2017 Annual Incentive Plan.
|
5. |
To approve the Deluxe Corporation 2017 Long-Term Incentive Plan.
|
6. |
To ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2017.
|
7. |
To take action on any other business that may properly come before the meeting and any adjournment thereof.
|
BY ORDER OF THE BOARD OF DIRECTORS
|
|
|
|
J. Michael Schroeder
|
|
Corporate Secretary
|
|
March 15, 2017
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3
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3
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3
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3
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3
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4
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5
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6
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6
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6
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6
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7
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7
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7
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7
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10
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11
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11
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19
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19
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19
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20
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20
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20
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20
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21
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21
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22
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23
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24
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24
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25
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25
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25
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25
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26
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26
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27
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27
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29
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30
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30
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30
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45
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46
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48
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49
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53
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54
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55
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55
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56
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58
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59
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62
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62
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63
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65
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66
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69
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77
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77
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77
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78
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79
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87
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Proposals
|
Votes required
|
Voting options
|
Board
recommen-
dation
|
Broker
discretionary
voting
allowed
1
|
Effect of
withhold vote /
abstention
|
Effect of broker
non-vote
1
|
|||||||
Item 1.
Election of the ten directors listed in this Proxy Statement
|
Plurality of the votes cast
2
|
“FOR”
“WITHHOLD”
|
“FOR” each director nominee
|
No
|
None
|
None
|
|||||||
Item 2.
Non-binding advisory vote to approve director compensation (“Say-on-Pay”)
|
We will consider the Say-on-Pay vote approved if more shares are voted “FOR” than“AGAINST” the proposal
|
“FOR”
“AGAINST”
“ABSTAIN”
|
“FOR”
|
No
|
None
|
None
|
|||||||
Item 3.
Non-binding advisory vote to approve frequency of advisory vote on executive compensation
|
The frequency option receiving the most votes will be considered the option selected by our shareholders
|
“ONE YEAR”
“TWO YEARS”
“THREE YEARS”
“ABSTAIN”
|
“ONE YEAR”
|
No
|
None
|
None
|
|||||||
Item 4.
Approval of the 2017 Deluxe Corporation Annual Incentive Plan
|
Majority of votes present and entitled to vote on these items
3
|
“FOR”
“AGAINST”
“ABSTAIN”
|
“FOR”
|
No
|
Against
|
None
|
|||||||
Item 5.
Approval of the 2017 Deluxe Corporation Long-Term Incentive Plan
|
Majority of votes present and entitled to vote on these items
3
|
“FOR”
“AGAINST”
“ABSTAIN”
|
“FOR”
|
No
|
Against
|
None
|
|||||||
Item 6.
Ratification of the appointment of PricewaterhouseCoopers LLP as Deluxe’s independent registered public accounting firm for the fiscal year ending December 31, 2017
|
Majority of votes present and entitled to vote on these items
3
|
“FOR”
“AGAINST”
“ABSTAIN”
|
“FOR”
|
Yes
|
Not applicable
|
Not applicable
|
1 |
If you are a beneficial owner, you generally cannot vote your shares directly and must instead instruct your broker, trustee, bank or nominee how to vote your shares using the voting instruction form provided by that intermediary. If you do not provide voting instructions, whether your shares can be voted by your broker, trustee, bank or nominee depends on the type of matter being considered. If your broker, trustee, bank or nominee does not have discretion to vote your shares, your shares will not be voted unless you provide instructions to your broker, trustee, bank or nominee. Broker non-votes will generally have no effect in determining whether any proposals to be voted on at the meeting are approved, although if a quorum for the meeting could not be established without including broker non-votes, then the broker non-votes required to establish the minimum quorum would have the same effect as votes against Proposals 4, 5 and 6.
|
2 |
A plurality means that a nominee must receive more “FOR” the nominee’s election than votes “AGAINST” the nominee’s election. In an uncontested election of directors, our “Corporate Governance Guidelines” require that if an incumbent director receives more “WITHHOLD” votes than “FOR” votes in this type of an election, that director nominee must tender his or her resignation to the Board following the certification of the shareholder vote. The Corporate Governance Committee must then make recommendations to the Board as to whether to accept the letter of resignation and the Board must take action with respect to this recommendation and disclose its decision-making process.
|
3 |
This amount must be a least a majority of the minimum number of shares entitled to vote that would constitute a quorum. “Shares present” includes shares represented in person or by proxy at the Annual Meeting.
|
· |
by sending a written notice of revocation to Deluxe’s Corporate Secretary;
|
· |
by submitting another properly signed proxy card at a later date to Deluxe’s Corporate Secretary;
|
· |
by submitting another proxy by telephone or the Internet at a later date; or
|
· |
by delivering a written notice of revocation to Deluxe’s Corporate Secretary and voting in person at the meeting.
|
Name of Beneficial Owner
|
Amount and Nature of
Beneficial Ownership
|
Percent of Class
|
5% Beneficial Owners
|
||
BlackRock, Inc.
1
55 East 52
nd
Street
New York, NY 10055
|
5,014,104
|
10.3
|
The Vanguard Group, Inc.
2
100 Vanguard Blvd.
Malvern, PA 19355
|
3,978,671
|
8.2
|
FMR LLC
3
245 Summer Street
Boston, MA 02210
|
3,598,555
|
7.4
|
Named Executive Officers
|
||
Lee J. Schram
4
|
684,260
|
1.4
|
John D. Filby
5
|
98,009
|
*
|
Peter J. Godich
6
|
25,378
|
*
|
Malcolm J. McRoberts
7
|
82,917
|
*
|
Edward A. Merritt
8
|
14,100
|
*
|
Terry D. Peterson
9
|
70,917
|
*
|
Directors and Nominees
|
||
Ronald C. Baldwin
10
|
15,524
|
*
|
Charles A. Haggerty
11
|
42,543
|
*
|
Don J. McGrath
12
|
27,764
|
*
|
Cheryl E. Mayberry McKissack
13
|
29,465
|
*
|
Neil J. Metviner
14
|
12,333
|
*
|
Stephen P. Nachtsheim
15
|
34,784
|
*
|
Thomas J. Reddin
16
|
6,975
|
*
|
Martyn R. Redgrave
17
|
52,183
|
*
|
John L. Stauch
18
|
1,661
|
*
|
Victoria A. Treyger
|
-0-
|
*
|
All directors, director nominees and executive officers as a group (20 persons)
19
|
1,192,218
|
2.4
|
1 |
Based on a Schedule 13G/A filed with the Securities and Exchange Commission on January 12, 2017, reporting beneficial ownership as of December 31, 2016.
The power to vote or direct the vote of these shares generally resides within funds managed or advised by the reporting person and/or its subsidiaries.
|
2 |
Based on a Schedule 13G filed with the Securities and Exchange Commission
on February 9, 2017
reporting beneficial ownership as of December 31, 2016. The power to vote or direct the vote of these shares generally resides within funds managed or advised by the reporting person and/or its subsidiaries.
|
3 |
Based on a Schedule 13G filed with the SEC
on February 14, 2017,
reporting beneficial ownership as of December 31, 2016. The power to vote or direct the vote of these shares generally resides within funds managed or advised by the reporting person and/or its subsidiaries.
|
4 |
Includes 405,621 shares receivable upon the exercise of options that are currently exercisable or will become exercisable within 60 days, and 52,228 shares of restricted stock.
|
5 |
Includes 78,346 shares receivable upon the exercise of options that are currently exercisable or will become exercisable within 60 days, and 8,916 shares of restricted stock.
|
6 |
Includes 11,709 shares receivable upon the exercise of options that are currently exercisable or will become exercisable within 60 days, and 4,371 shares of restricted stock.
|
7 |
Includes 51,611 shares receivable upon the exercise of options that are currently exercisable or will become exercisable within 60 days, and 10,302 shares of restricted stock.
|
8 |
Includes 8,642 shares receivable upon the exercise of options that are currently exercisable or will become exercisable within 60 days, and 1,173 shares of restricted stock.
|
9 |
Mr. Peterson resigned as Senior Vice President and Chief Financial Officer effective September 9, 2016. His ownership interests are presented as of that date. Includes 38,486 shares receivable upon the exercise of options that were exercisable and 10,630 shares of restricted stock that were forfeited upon termination date.
|
10 |
Includes 2,183 shares of restricted stock and 4,424 restricted stock units received in lieu of director’s fees pursuant to the Deluxe Corporation Non-Employee Director Stock and Deferral Plan (the “Director Plan”), which is a part of Deluxe’s shareholder-approved 2012 Long-Term Incentive Plan.
|
11 |
Includes 2,183 shares of restricted stock units received in lieu of an annual restricted stock grant, 12,334 shares held by the Haggerty Family Trust, and 28,026 restricted stock units received in lieu of director’s fees pursuant to the deferral option under the Director Plan (excludes annual grant).
|
12 |
Includes 2,183 shares of restricted stock, 2,000 shares held in trust and 22,431 restricted stock units received in lieu of director’s fees pursuant to the deferral option under the Director Plan.
|
13 |
Includes 2,183 shares of restricted stock.
|
14 |
Includes 2,183 shares of restricted stock.
|
15 |
Includes 2,183 shares of restricted stock units received in lieu of an annual restricted stock grant, 3,582 shares held by the Nachtsheim Family Trust, and 29,019 restricted stock units received in lieu of director’s fees pursuant to the deferral option under the Director Plan (excludes annual grant).
|
16 |
Includes 2,183 shares of restricted stock units received in lieu of an annual restricted stock grant and 4,148 restricted stock units received in lieu of director’s fees pursuant to the deferral option under the Director Plan (excludes annual grant).
|
17 |
Includes 2,183 shares of restricted stock, and 9,360 restricted stock units received in lieu of director’s fees pursuant to the deferral option under the Director Plan.
|
18 |
Includes 1,661 shares of restricted stock.
|
19 |
Includes 584,986 shares receivable upon the exercise of options that are currently exercisable or will become exercisable within 60 days, 106,055 shares of restricted stock, and 103,957 restricted stock units received in lieu of annual restricted stock grants and directors’ fees pursuant to the deferral option under the Director Plan.
|
· |
A majority of the Board must be comprised of independent directors, the current standards for which are discussed above under “Board Oversight and Director Independence.”
|
· |
As a general rule, non-employees should not be nominated for re-election to the Board after their 75th birthday, although the Board retains the ability to grant exemptions to that age limit where it determines that such an exemption will serve the interests of Deluxe and its shareholders.
|
· |
A non-employee director who ceases to hold the employment position held at the time of election to the Board, or who has a significant change in position, must offer to resign. The Corporate Governance Committee will then consider whether the change of status is likely to impact the director’s qualifications and make a recommendation to the Board as to whether the resignation should be accepted.
|
· |
Management directors who terminate employment with Deluxe must offer to resign. The Board will then decide whether to accept the director’s resignation, provided that no more than one former CEO of the Company should serve on the Board at any one time.
|
· |
Audit Committee;
|
· |
Compensation Committee;
|
· |
Corporate Governance Committee; and
|
· |
Finance Committee.
|
Principal Responsibilities
·
Appoints and replaces the independent registered public accounting firm, subject to ratification by our shareholders, and oversees the work of the independent registered public accounting firm.
·
Pre-approves all auditing services and permitted non-audit services to be performed by the independent registered public accounting firm, including related fees.
·
Reviews and discusses with management and the independent registered public accounting firm our annual audited financial statements and recommends to the Board whether the audited financial statements should be included in Deluxe’s Annual Report on Form 10-K.
·
Reviews and discusses with management and the independent registered public accounting firm our quarterly financial statements.
·
Reviews and discusses with management and the independent registered public accounting firm significant reporting issues and judgments relating to the preparation of our financial statements, including the adequacy of internal controls.
·
Reviews and discusses with the independent registered public accounting firm our critical accounting policies and practices, alternative treatments of financial information within generally accepted accounting principles that have been discussed with management, and other material written communications between the independent registered public accounting firm and management.
·
Reviews and discusses with management our earnings press releases, including the use of any “pro forma” or “adjusted” information outside of generally accepted accounting principles, as well as financial information and earnings guidance.
·
Oversees the work of our internal auditors.
·
Reviews the effectiveness of Deluxe’s legal and ethical compliance programs and maintains procedures for receiving, retaining and handling complaints by employees regarding accounting, internal controls and auditing matters.
·
Reviews and discusses, with management and the Board, Deluxe’s risk assessment and risk management practices.
·
Receives, reviews, and oversees management responses to certain regulatory and other compliance audits.
|
Number of meetings in 2016: 8
Directors who serve on the committee:
Charles A. Haggerty, Chair (outgoing)
Neil J. Metviner
Stephen P. Nachtsheim
John L. Stauch
|
Principal Responsibilities
·
Develops our executive compensation philosophy.
·
Evaluates and recommends incentive compensation plans for executive officers and other key managers, and all equity-based compensation plans, and oversees the administration of these and other employee compensation and benefit plans.
·
Reviews and approves corporate goals and objectives relating to the CEO’s compensation, leads an annual evaluation of the CEO’s performance in light of those goals and objectives, and recommends to the Board the CEO’s compensation based on this evaluation.
·
Reviews and approves other executive officers’ compensation.
·
Establishes and certifies attainment of incentive compensation goals and performance measurements applicable to our executive officers.
·
Considers shareholder advisory votes related to executive compensation and considers risk related to the design of the Company’s compensation programs.
·
Retains and, in accordance with SEC requirements, determines the independence of consultants that assist in its activities.
|
Number of meetings in 2016: 5
Directors who serve on the committee:
Thomas J. Reddin, Chair
Ronald C. Baldwin
Cheryl E. Mayberry McKissack
Don J. McGrath
Martyn R. Redgrave
|
Principal Responsibilities
·
Reviews and recommends the size and composition of the Board, including the mix of management and independent directors.
·
Establishes criteria and procedures for identifying and evaluating potential Board candidates.
·
Reviews nominations received from the Board or shareholders, and recommends candidates for election to the Board.
·
Establishes policies and procedures to ensure the effectiveness of the Board, including policies regarding term limits and retirement, review of qualifications of incumbent directors, and conflicts of interest.
·
Establishes guidelines for conducting Board meetings.
·
Oversees the annual assessment of the Board’s performance.
·
In consultation with the Compensation Committee, reviews and recommends to the Board the amount and form of all compensation paid to directors.
·
Recommends to the Board the size, composition and responsibilities of all Board committees.
·
Reviews and makes recommendations to the Board regarding candidates for key executive officer positions and monitors management succession plans.
·
Develops and recommends corporate governance guidelines, policies and procedures.
|
Number of meetings in 2016: 4
Directors who serve on the committee:
Stephen P. Nachtsheim, Chair
Charles A. Haggerty (outgoing)
Neil J. Metviner
Martyn R. Redgrave
|
Principal Responsibilities
·
Evaluates acquisitions, divestitures and capital projects in excess of $10 million, and reviews other material financial transactions outside the scope of normal on-going business activity.
·
Reviews and approves the Company’s annual financing plans, as well as credit facilities maintained by the Company.
·
Reviews and recommends policies concerning corporate finance matters, including capitalization, investment of assets and debt/equity guidelines.
·
Reviews and recommends dividend policy and approves declarations of regular shareholder dividends.
·
Reviews and makes recommendations to the Board regarding financial strategy and proposals concerning the sale, repurchase or split of Company-issued securities.
|
Number of meetings in 2016: 4
Directors who serve on the committee:
Ronald C. Baldwin, Chair
Cheryl E. Mayberry McKissack
Don J. McGrath
Thomas J. Reddin
John L. Stauch
|
Audit
Committee
($)
|
Compensation
Committee
($)
|
Corporate
Governance
Committee
($)
|
Finance
Committee
($)
|
|
Chair Retainer
|
28,000
|
20,000
|
15,000
|
15,000
|
Other Member Retainer
|
13,000
|
9,000
|
7,000
|
7,000
|
Name
|
Fees Earned or
Paid in Cash
1
($)
|
Stock
Awards
2
($)
|
Total
($)
|
Ronald C. Baldwin
|
95,500
|
135,019
|
230,519
|
Charles A. Haggerty
|
100,000
|
135,019
|
235,019
|
Cheryl E. Mayberry McKissack
|
86,000
|
135,019
|
221,019
|
Don J. McGrath
|
94,250
|
135,019
|
229,269
|
Neil J. Metviner
|
93,000
|
135,019
|
228,019
|
Stephen P. Nachtsheim
|
97,000
|
135,019
|
232,019
|
Mary Ann O’Dwyer
3
|
78,750
|
135,019
|
213,769
|
Thomas J. Reddin
|
91,750
|
135,019
|
226,769
|
Martyn R. Redgrave
|
187,500
|
135,019
|
322,519
|
John L. Stauch
|
45,000
|
110,623
|
155,623
|
1 |
Under the Director Plan, directors may elect to receive their fees in the form of stock, including the right to defer such stock into restricted stock units. Any stock or stock units issued under the Director Plan are equal in value to the cash fees foregone by the director. As a result, amounts reflected are the total fees earned by the directors, including amounts elected to be received in the form of stock or restricted stock units.
|
2 |
Amounts in this column reflect the aggregate grant date fair value of stock awards granted during the fiscal ended December 31, 2016 computed in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718. All directors received 2,183
shares of restricted stock or restricted stock units upon their re-election to the Board on May 4, 2016, other than Mr. Stauch who was appointed to the Board on July 7, 2016 and received 1,661 shares of restricted stock on July 7, 2016. These shares will vest one year from the date of grant. As of December 31, 2016 the aggregate number of shares of unvested restricted stock or restricted stock units for each director was 2,183, with the exception of Mr. Stauch who had a total of 1,661. The aggregate number of restricted stock units held by each director was as follows (2016 annual grant excluded)
:
Mr. Baldwin, 4,424;
Mr. Haggerty, 28,026;
Mr. McGrath, 22,431; Mr. Nachtsheim, 29,019; Mr. Reddin, 4,148; Mr. Redgrave, 9,360.
|
3 |
Ms. O’Dwyer resigned from the Board effective July 5, 2016.
|
RESOLVED, that the shareholders approve, on an advisory basis, the compensation of Deluxe’s Named Executive Officers, as described in the Compensation Discussion and Analysis section, the compensation tables and the narrative disclosures that accompany the compensation tables
set forth in this Proxy Statement.
|
· |
Our consolidated revenue increased 4.3%, including Small Business Services segment revenue growth of 3.8% and Financial Services segment revenue growth of 9.8%;
|
· |
Our marketing solutions and other services revenue, an area of focus for growth, increased 15.9% and represented 33.4% of consolidated revenue;
|
· |
We delivered strong diluted earnings per share of $4.65, which was an increase of 6.7% over 2015;
|
· |
Our cash flow from operations increased 3.1%; and
|
· |
We continued to attract, develop and retain the leadership talent necessary to execute our strategy, and delivered positive performance against the strategic growth initiatives established under our annual incentive program.
|
· |
Focusing the executive officers on consistently achieving both revenue and earnings growth;
|
· |
Annually evaluating the competitiveness and structure of our executive compensation programs relative to comparable companies;
|
· |
Targeting compensation at or near the median (50th percentile) of our peer group of companies, both for total compensation and separately for each element of compensation, but with Compensation Committee discretion to target compensation above or below median taking into account factors such as time in position, criticality of retention, and sustained performance;
|
· |
Providing performance-based pay through annual and long-term incentive opportunities that are based on the achievement of specific business objectives (i.e., pay-for-performance);
|
· |
Providing equity-based multi-year incentives that promote the creation of long-term shareholder value;
|
· |
Rewarding outstanding performance, without encouraging excessive risk-taking;
|
· |
Maintaining stock ownership requirements to ensure that our executive officers hold meaningful equity stakes in Deluxe, together with policies prohibiting transactions intended to hedge these ownership positions;
|
· |
Incorporating double-trigger vesting provisions in stock option and other equity-based awards upon a change in control;
|
· |
Implementing clawback provisions with respect to executive officers’ incentive awards;
|
· |
Engaging an independent compensation consultant;
|
· |
Prohibiting the pledging or hedging of Company stock by our directors and executive officers;
|
· |
Maintaining non-competition and non-solicitation agreements with certain key employees; and
|
· |
Providing limited perquisites and no tax gross-up on perquisites.
|
2016
|
2015
|
2014
|
3-Year Compound Annual Growth Rate
|
|
Deluxe TSR
|
33.9%
|
(10.7%)
|
21.8%
|
13.4%
|
S&P MidCap 400 TSR
|
20.7%
|
(2.1%)
|
9.7%
|
9.0%
|
Deluxe Peer Group
Average
|
17.0%
|
15.9%
|
4.9%
|
10.3%
|
• |
base salary;
|
• |
annual incentive plan;
|
• |
long-term incentives in the form of stock options, restricted stock and a multi-year performance share plan;
|
• |
non-qualified deferred compensation plan;
|
• |
broad-based defined-contribution retirement plan; and
|
• |
cash allowance program in lieu of perquisites.
|
Measures
(Dollars in Millions)
|
Target
($)
|
Actual
($)
|
Weighting
(%)
|
Payout (% of
target)
|
Adjusted Operating Income
|
$389.8
|
$385.3
|
35%
|
86.8%
|
Adjusted Revenue
|
$1,880.0
|
$1,844.3
|
45%
|
91.7%
|
Enterprise Factors / Initiatives
|
--
|
--
|
20%
|
110.0%
|
Blended Payout Percentage
|
--
|
--
|
--
|
93.6%
|
· |
Supporting and rewarding the achievement of our long-term business strategy and objectives;
|
· |
Encouraging decisions and behavior that will increase shareholder value;
|
· |
Reinforcing the pay-for-performance orientation of the overall executive compensation program;
|
· |
Enabling us to attract and retain high-quality key executive talent by providing competitive incentive and total compensation opportunities; and
|
· |
Promoting share ownership and facilitating achievement of the ownership guidelines.
|
2016 Marketing and Other Services Revenue
|
|||
Threshold
|
Target
|
Maximum
|
|
$535M
|
$600M
|
> $650M
|
|
Performance Results
|
$617M
|
||
Payout Modifier: Deluxe Adj. Operating Margin = 20.7% OI
|
75 - 100%
|
100 - 150%
|
150 - 200%
|
Payout Percentage (Interpolated)
|
117%
|
TSR Performance Period: January 1, 2014- December 31,2016
|
|||||
Deluxe TSR
Ranking in Peer
Group
|
<25 Peer
Group
Percentile
|
25 - 50 Peer
Group
Percentile
|
>50 - 75 Peer
Group
Percentile
|
>75 - <100 Peer
Group
Percentile
|
Ranked 1st 100
Peer Group
Percentile
|
Relative TSR Performance
|
44%
|
||||
Payout Range
|
0%
|
25% - 100%
|
>100% - 150%
|
>150% - <200%
|
200%
|
Payout %
|
100%
1
|
MEMBERS OF THE COMPENSATION COMMITTEE
|
||
Thomas J. Reddin, Chair
|
||
Cheryl E. Mayberry McKissack
|
||
Martyn R. Redgrave
|
||
Don J. McGrath
|
||
Ronald C. Baldwin
|
Name and Principal
Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock
Awards
1
($)
|
Option
Awards
2
($)
|
Non-Equity
Incentive Plan
Compensation
3
($)
|
All Other
Compensation
4
($)
|
Total
($)
|
Lee J. Schram
|
2016
2015
2014
|
925,833
900,500
871,000
|
0
0
0
|
2,295,332
2,001,370
3,224,825
|
1,165,500
999,002
833,789
|
1,083,745
2,514,063
2,064,532
|
21,287
29,821
28,209
|
5,491,698
6,444,756
7,022,355
|
Chief Executive Officer
|
||||||||
Edward A. Merritt
|
2016
|
243,579
|
0
|
45,909
|
23,312
|
87,521
|
32,725
|
433,046
|
VP – Investor Relations, Treasurer and interim Chief Financial Officer
|
||||||||
Malcolm J. McRoberts
|
2016
2015
2014
|
465,167
454,167
441,667
|
0
0
0
|
534,178
514,690
445,813
|
241,421
199,794
160,094
|
91,606
464,347
408,527
|
39,275
43,953
43,075
|
1,371,647
1,676,951
1,499,176
|
Senior Vice President, Small Business Services
|
||||||||
John D. Filby
|
2016
2015
2014
|
471,000
469,167
460,000
|
0
0
0
|
380,393
386,923
331,143
|
193,139
193,146
160,094
|
235,870
544,533
497,644
|
39,275
44,108
43,240
|
1,319,677
1,637,877
1,492,121
|
Senior Vice President, Financial Services
|
||||||||
Peter J. Godich
|
2016
|
313,333
|
0
|
196,733
|
99,899
|
146,710
|
39,275
|
795,951
|
Senior Vice President, Fulfillment
|
||||||||
Terry D. Peterson
5
|
2016
2015
2014
|
294,602
423,333
413,667
|
0
0
0
|
393,522
827,408
842,165
|
199,798
199,794
200,104
|
0
313,041
273,009
|
42,978
43,636
42,823
|
930,900
1,807,212
1,771,768
|
Former Senior Vice President & Chief Financial Officer
|
||||||||
1 |
The amounts in this column reflect the aggregate grant date fair value computed in accordance with ASC Topic 718 for awards of stock during the fiscal years ended December 31, 2016, 2015 and 2014. Assumptions used in the calculation of these amounts are included in Note 10 to the Company’s Consolidated Financial Statements filed as part of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016. These amounts reflect an accounting expense and do not necessarily correspond to the actual value that may be realized by the NEOs. Stock awards included in this column are comprised of awards from two sources: restricted stock units received in lieu of cash under the Annual Incentive Plan (AIP), and equity-based awards under the LTIP.
|
2 |
The amounts in this column reflect the aggregate grant date fair value computed in accordance with ASC Topic 718 for awards of stock options during the fiscal year ended December 31, 2016, 2015, and 2014. Assumptions used in the calculation of these amounts are included in Note 10 to the Company’s Consolidated Financial Statements in our Annual Reports on Form 10-K for the fiscal years ended December 31, 2016, 2015, and 2014, as applicable. These amounts reflect an accounting expense and do not necessarily correspond to the actual value that may be realized by the NEOs.
|
3 |
Amounts listed in this column reflect cash amounts paid to the Named Executive Officers under the AIP and CPP. As explained earlier in this Proxy Statement, CPP payouts (if any) appear in this column upon completion of the multi-year performance period associated with such award. Payouts were made under the CPP for 2014 and 2015. As described in the Compensation Discussion and Analysis section of this Proxy Statement and footnote 2 to this table, recipients of awards under the AIP may elect to receive all or a portion of their incentive compensation in the form of restricted stock units. If an election is made to receive restricted stock units, the amount of the cash foregone is increased (or matched) at a rate established by the Compensation Committee in determining the number of units awarded. The ASC Topic 718 aggregate grant date fair value attributable to awards taken as restricted stock units is listed in the “Stock Awards” column, while the portion of AIP compensation paid in cash is included in this column. The estimated possible threshold, target and maximum values for the 2016 AIP, including the 50 percent match based on the individual elections made by each Named Executive Officer prior to the start of the plan period, are included in the Grants of Plan-Based Awards In 2016 Table. For 2016, the amounts reported relate entirely to the AIP. For 2016, Mr. McRoberts had an AIP payment of ($91,606), this included a ($80.77) residual stock calculation amount. For 2014 and 2015, the amounts include cash received under the AIP and CPP as follows: Mr. Schram, 2015 AIP ($1,261,938) CPP ($1,252,125), 2014 AIP ($1,202,032) CPP ($862,500); Mr. Peterson, 2015 AIP ($5 – a residual stock calculation amount or "true-up", representing the remaining cash value after the restricted stock calculation) CPP ($313,031), 2014 AIP ($9 true-up) CPP ($273,000); Mr. McRoberts, 2015 AIP ($178,100) CPP ($286,200), 2014 AIP ($178,527) CPP ($230,000); Mr. Filby, 2015 AIP ($258,333) CPP ($286,200), 2014 AIP ($257,644) CPP ($240,000).
|
4 |
A detailed description of the 2016 amounts listed in this column is contained in the “2016 All Other Compensation Table” immediately following this table. Note that the values for 2014 and 2015 have been restated to exclude dividends and dividend equivalents received on unvested restricted stock and restricted stock units, respectively, which are factored into grant date fair value calculations and are not disclosed when paid.
|
5 |
Mr. Peterson resigned from Deluxe on September 9, 2016. As a result of his resignation, Mr. Peterson became ineligible to receive any non-equity incentive plan payout and also forfeited all unvested restricted stock awards and unvested stock options.
|
Name
|
Perks and
Other
Personal
Benefits
1
($)
|
Tax
Reimburse-
ments
($)
|
Company
Contributions
to Defined
Contribution
Plans
($)
|
Other
2
($)
|
Total
($)
|
Lee J. Schram
|
12,012
|
0
|
9,275
|
0
|
21,287
|
Edward A. Merritt
|
23,450
|
0
|
9,275
|
0
|
32,725
|
Malcolm J. McRoberts
|
30,000
|
0
|
9,275
|
0
|
39,725
|
John D. Filby
|
30,000
|
0
|
9,275
|
0
|
39,725
|
Peter J. Godich
|
30,000
|
0
|
9,275
|
0
|
39,725
|
Terry D. Peterson
|
22,500
|
0
|
9,275
|
11,203
|
42,978
|
1 |
Amount for Mr. Schram reflects the premium paid by the Company for a supplemental long-term disability insurance policy to provide him with coverage equal to two-thirds of his base salary in the event of a disability meeting the requirements of the policy. Amounts for all other Named Executive Officers except Mr. Merritt reflect a Personal Choice Program cash allowance. There is no tax gross-up for the supplemental coverage or the Personal Choice Program. Amount for Mr. Merritt reflects a temporary increase in cash compensation associated with his interim appointment as Chief Financial Officer.
|
2 |
Amounts listed are ERISA excess, benefit plan equivalent, and Paid Time Off (PTO) payout amounts. The amount for Mr. Peterson reflects a PTO payout as a result of his resignation.
|
Estimated Future Payouts Under Non-
Equity Incentive Plan
Awards
|
Estimated Future Payouts Under
Equity Incentive Plan
Awards
2
|
All Other
Stock
Awards:
Number of
Share
of Stock
3
|
All Other
Option
Awards:
Number of
Securities
Under-
lying
Options
4
|
Exercise
or Base
Price of
Option
Awards
|
Grant
Date Fair
Value of
Stock
and
Option
Awards
5
|
||||||
Executive
Name
|
Grant Date
|
Threshold
|
Target
|
Maximum
|
Threshold
|
Target
|
Maximum
|
||||
Plan Name
|
|||||||||||
($)
|
($)
|
($)
|
(#)
|
(#)
|
(#)
|
(#)
|
(#)
|
($/Sh)
|
($)
|
||
Lee J. Schram
|
|||||||||||
LTIP – Restricted Stock
|
2/17/2016
|
21,464
|
1,165,495
|
||||||||
LTIP – Options
|
2/17/2016
|
127,238
|
54.30
|
1,165,500
|
|||||||
LTIP – PS – Performance Metrics
|
2/17/2016
|
3,552
|
10,765
|
21,530
|
508,539
|
||||||
LTIP – PS – TSR
|
2/17/2016
|
2,691
|
10,764
|
21,528
|
621,298
|
||||||
AIP
1
|
578,646
|
1,157,291
|
2,314,583
|
||||||||
Deferred Stock Units
6
|
1 |
The amounts listed in the designated row for each Named Executive Officer reflect the estimated future cash payouts under the AIP for 2016 at the time the performance targets were established, based on each Named Executive Officer’s advance election to receive any such payouts in cash (i.e., non-equity), restricted stock units (i.e., equity), or a combination of the two. The actual payouts under the AIP for 2016 are reflected in the Summary Compensation Table and a more complete explanation of the AIP appears in the Compensation Discussion and Analysis portion of this Proxy Statement.
|
2 |
The amounts listed in the designated rows for each Named Executive Officer derive from the performance shares granted under the Company’s Long-Term Incentive Plan, as further explained below.
|
3 |
Reflects grants of restricted stock. Restricted stock vests all at once, on the third anniversary of the grant date. For more information, refer to the “Long-Term Incentive Compensation” section in Compensation Discussion and Analysis.
|
4 |
This column includes stock options awarded as a part of the Company’s LTIP. Stock options have seven-year terms; one-third vest each year over three years, on the first, second and third anniversaries of the grant date. The exercise price of all options is the closing price of the Company’s common stock on the NYSE on the grant date. For more information, refer to the “Long-Term Incentive Compensation” section in Compensation Discussion and Analysis.
|
5 |
The grant date fair value of options is based on the stock price at the time of grant multiplied by the Black-Scholes value. The Black-Scholes value on February 17, 2016 was 16.9% percent, or approximately $9.16 per option. Dollar values represent the accounting grant date fair value of performance share units, restricted stock units and, if applicable, stock options under ASC Topic 718. These amounts reflect an accounting expense and do not necessarily correspond to the actual value that may be realized by the NEOs.
|
6 |
The amounts for Mr. McRoberts include 798
shares, respectively, of deferred stock units granted in lieu of a portion of their Annual Incentive Plan payouts. The amounts listed have their value displayed in cash and reflect the estimated equity payout under the AIP for 2016 based on the executive’s election to receive all, or a portion, of his payout in restricted stock units, which includes the 50% match provided on portions of the AIP payout elected to be received by the executive in the form of restricted stock units. The number of restricted stock units granted was determined using the close price of the Company’s common stock on the grant date ($73.63 on January 24, 2017). Restricted stock units vest on the second anniversary of the grant date. In the event an executive’s employment is terminated for reasons other than cause prior to the expiration of the restriction period, the executive would receive the base amount allocated to restricted stock units prior to the 50% match (“Base Amount”). If the executive resigns or is terminated for cause prior to expiration of the restriction period, he would receive the lesser of the Base Amount or the then current value of the units originally attributable to the Base Amount.
|
7 |
Mr. Peterson resigned on September 9, 2016 and, as a result, forfeited all unvested grants.
|
OPTION AWARDS
|
STOCK AWARDS
|
|||||||
Name
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
|
Option
Exercise
Price
|
Option
Expiration
|
Number of Shares or Units of Stock Held That Have Not Vested
|
Market Value of Shares or Units of Stock That Have Not Vested
1
|
Equity Incentive Plan Awards:
Number of Unearned Shares, Units, or Other Rights That Have Not Vested
|
Equity Incentive Plan Awards:
Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested
1
|
($)
|
Date
|
(#)
|
($)
|
(#)
|
($)
|
|||
Lee J. Schram
|
54,200
|
25.59
|
2/16/2018
|
46,353
5
|
3,319,338
|
2,738
10
|
196,069
|
|
106,000
|
25.45
|
2/16/2019
|
14,893
6
|
1,066,488
|
2,074
11
|
148,519
|
||
95,800
|
38.80
|
2/20/2020
|
21,464
7
|
1,537,037
|
2,465
12
|
176,519
|
||
42,956
|
21,479
2
|
50.32
|
2/27/2021
|
1,867
13
|
133,696
|
|||
21,387
|
42,775
3
|
67.08
|
2/12/2022
|
3,552
14
|
254,359
|
|||
127,238
4
|
54.30
|
2/17/2023
|
2,691
15
|
192,703
|
||||
Edward A. Merritt
|
4,992
|
42.52
|
8/14/2020
|
2,275
8
|
162,913
|
77
10
|
5,514
|
|
1,202
|
602
2
|
50.32
|
2/27/2021
|
2,688
9
|
192,488
|
58
11
|
4,153
|
|
499
|
998
3
|
67.08
|
2/12/2022
|
463
5
|
33,155
|
58
12
|
4,153
|
|
2,545
4
|
54.30
|
2/17/2023
|
347
6
|
24,849
|
44
13
|
3,151
|
||
429
7
|
30,721
|
71
14
|
5,084
|
|||||
54
15
|
3,867
|
|||||||
Malcolm J. McRoberts
|
21,900
|
38.80
|
2/20/2020
|
1,882
8
|
134,770
|
526
10
|
37,667
|
|
8,248
|
4,124
2
|
50.32
|
2/27/2021
|
2,226
9
|
159,404
|
398
11
|
28,501
|
|
4,277
|
8,555
3
|
67.08
|
2/12/2022
|
3,176
5
|
227,433
|
493
12
|
35,304
|
|
26,356
4
|
54.30
|
2/17/2023
|
2,979
6
|
213,326
|
373
13
|
26,711
|
||
4,446
7
|
318,378
|
736
14
|
52,705
|
|||||
557
15
|
39,887
|
|||||||
John D. Filby
|
28,776
|
23.81
|
4/30/2019
|
3,176
5
|
227,433
|
526
10
|
37,667
|
|
21,900
|
38.80
|
2/20/2020
|
2,879
6
|
206,165
|
398
11
|
28,501
|
||
8,248
|
4,124
2
|
50.32
|
2/27/2021
|
3,557
7
|
254,717
|
477
12
|
34,158
|
|
4,135
|
8,270
3
|
67.08
|
2/12/2022
|
361
13
|
25,851
|
|||
21,085
4
|
54.30
|
2/17/2023
|
589
14
|
42,178
|
||||
446
15
|
31,938
|
|||||||
Peter J. Godich
|
3,006
|
1,504
2
|
50.32
|
2/27/2021
|
1,158
5
|
82,924
|
192
10
|
13,749
|
1,782
|
3,565
3
|
67.08
|
2/12/2022
|
1,241
6
|
88,868
|
145
11
|
10,383
|
|
10,906
4
|
54.30
|
2/17/2023
|
1,840
7
|
131,762
|
206
12
|
14,752
|
||
156
13
|
11,171
|
|||||||
305
14
|
21,841
|
|||||||
231
15
|
16,542
|
1 |
Based on the closing price of Deluxe common stock on the NYSE on December 30, 2016 ($71.61 per share).
|
2 |
Unvested portion of stock options granted on February 27, 2014, which fully vested on February 27, 2017.
|
3 |
Unvested portion of stock options granted on February 12, 2015, which will vest in two equal installments on February 12, 2017 and February 12, 2018.
|
4 |
Unvested portion of stock options granted on February 17, 2016, which will vest in three equal installments on February 17, 2017, February 17, 2018 and February 17, 2019.
|
5 |
Unvested restricted stock granted on February 27, 2014, which will vest on February 27, 2017.
|
6 |
Unvested restricted stock granted on February 12, 2015, which will vest on February 12, 2018.
|
7 |
Unvested restricted stock granted on February 17, 2016, which will vest on February 12, 2019.
|
8 |
Unvested restricted stock units granted on January 20, 2015, which will vest on January 20, 2017.
|
9 |
Unvested restricted stock units granted on January 25, 2016, which will vest on January 25, 2018.
|
10 |
Performance share units based upon Marketing Solutions and Other Services Revenue threshold of 33% granted on February 27, 2014. A more detailed discussion can be found in the “Long-Term Incentive Compensation” section in
Compensation Discussion and Analysis
.
|
11 |
Performance share units based upon total shareholder return threshold of 25% granted on February 27, 2014. A more detailed discussion can be found in the “Long-Term Incentive Compensation” section in
Compensation Discussion and Analysis
.
|
12 |
Performance share units based upon Marketing Solutions and Other Services Revenue threshold of 33% granted on February 12, 2015. A more detailed discussion can be found in the “Long-Term Incentive Compensation” section in
Compensation Discussion and Analysis
.
|
13 |
Performance share units based upon total shareholder return threshold of 25% granted on February 12, 2015. A more detailed discussion can be found in the “Long-Term Incentive Compensation” section in
Compensation Discussion and Analysis
.
|
14 |
Performance share units based upon Marketing Solutions and Other Services Revenue threshold of 33% granted on February 17, 2016. A more detailed discussion can be found in the “Long-Term Incentive Compensation” section in
Compensation Discussion and Analysis
.
|
15 |
Performance share units based upon total shareholder return threshold of 25% granted on February 17, 2016. A more detailed discussion can be found in the “Long-Term Incentive Compensation” section in
Compensation Discussion and Analysis
.
|
Option Awards
|
Stock Awards
|
|||
Name
|
Number of Shares
Acquired on
Exercise
(#)
|
Value
Realized on
Exercise
($)
|
Number of
Shares
Acquired on
Vesting
(#)
|
Value
Realized on
Vesting
($)
|
Lee J. Schram
1
|
120,800
|
5,414,278
|
0
|
0
|
Edward A. Merritt
2
|
0
|
0
|
1,999
|
134,173
|
Malcolm J. McRoberts
3
|
28,200
|
1,171,992
|
2,128
|
108,847
|
John D. Filby
|
0
|
0
|
0
|
0
|
Peter J. Godich
4
|
7,900
|
202,319
|
0
|
0
|
Terry D. Peterson
5
|
73,735
|
2,209,022
|
8,056
|
412,064
|
1 |
Mr. Schram exercised 66,600 stock options (exercise price of $18.28 per share) and 54,200 stock options (exercise price of $25.59 per share) on November 11, 2016 at a value of $66.38 per share.
|
2 |
Mr. Merritt had 1,999 shares of restricted stock vest at a value of $67.12 per share on August 14, 2016.
|
3 |
Mr. McRoberts exercised 28,200 stock options (exercise price of $25.45 per share) on June 2, 2016 at a value of $67.01 per share. He also had 2,128 units of restricted stock vest at a value of $51.15 per share on January 21, 2016.
|
4 |
Mr. Godich exercised 7,900 stock options (exercise price of $38.80 per share) on May 10, 2016 at a value of $64.41 per share.
|
5 |
Mr. Peterson exercised 11,434 stock options (exercise price of $25.59 per share) and 20,752 stock options (exercise price of $25.45 per share) on May 10, 2016 at a value of $64.41 per share. He also exercised 3,063 stock options (exercise price of $25.45) on May 11, 2016 at a value of $63.27 per shares. He exercised 12,770 stock options (exercise price of $38.80) on October 4, 2016 at a value of $66.78 per share. He exercised 11,130 stock options (exercise price of $38.80) and 4,632 stock options (exercise price of $50.32 per share) on October 6, 2016 at a value of $66.60 per share. He exercised 5,677 stock options (exercise price of $50.32 per share) on October 7, 2016 at a value of $66.17 per share. He exercised 4,277 stock options (exercise price of $67.08 per share) on December 6, 2016 at a value of $69.12 per share. He also had 8,056 units of restricted stock vest at a value of $51.15 per share on January 21, 2016.
|
Name
|
Company
Contributions in Last
FY
1
|
Aggregate Earnings in
Last FY
2
|
Aggregate Balance at
Last FYE
3
|
($)
|
($)
|
($)
|
|
Lee J. Schram
|
6,545
|
11,227
|
135,285
|
Edward A. Merritt
|
0
|
0
|
0
|
Malcolm J. McRoberts
|
1,948
|
30
|
7,940
|
John D. Filby
|
2,103
|
17
|
4,693
|
Peter J. Godich
|
395
|
29
|
7,586
|
Terry D. Peterson
|
1,631
|
2,003
|
28,611
|
1 |
Company contributions in the form of ERISA excess payments and benefit plan equivalents are made after the end of the year to which they relate. Contributions made in 2016 are reflected in this column. No amounts were deferred by the Named Executive Officers in 2016.
|
2 |
Amounts represent earnings on contributions and deferrals made in prior years. Participants in this plan allocate their deferrals into phantom funds similar to the funds available under the Company’s qualified retirement plans. Amounts reported reflect the performance of these phantom funds.
|
3 |
The aggregate amounts reported in previous years’ Summary Compensation Tables and deferred into this Plan were $102,629 for Mr. Schram; $0 for Mr. Merritt; $7,694 for Mr. McRoberts; $5,665 for Mr. Filby; $0 for Mr. Godich and $26,707 for Mr. Peterson.
|
Name
|
Salary
Continuation
1
($)
|
Outplacement
2
($)
|
Stock Option
Acceleration
3
($)
|
Restricted
Stock
Acceleration
4
($)
|
Other
5
($)
|
Total
($)
|
Lee J. Schram
|
1,860,000
|
38,500
|
1,480,154
|
4,255,138
|
13,000
|
7,646,791
|
Edward A. Merritt
6
|
183,431
|
5,445
|
40,591
|
65,093
|
0
|
294,560
|
Malcolm J. McRoberts
|
700,500
|
38,500
|
19,749
|
441,261
|
13,000
|
1,213,010
|
John D. Filby
|
706,500
|
38,500
|
284,446
|
418,326
|
13,000
|
1,460,792
|
Peter J. Godich
|
472,500
|
38,500
|
106,029
|
172,437
|
13,000
|
802,466
|
1 |
Except for Mr. Merritt, salary continuation benefits include twelve months of full salary, plus the difference in compensation otherwise earned by the individual after termination and their base salary at termination from Deluxe for an additional (a) twelve months for the CEO, and (b) six months for the other executives. Amounts shown assume no employment is secured after the initial twelve months, and therefore reflect maximum amounts payable.
|
2 |
Estimated cost of outplacement services for twelve months.
|
3 |
Accelerated vesting on stock options at the time of termination, with three months to exercise. The value is based on the closing price of Deluxe common stock on the NYSE on December 30, 2016 ($71.61 per share).
|
4 |
Pro-rata acceleration of vesting on restricted stock based on the date of termination. Value based on the closing price of Deluxe common stock on the NYSE on December 30, 2016 ($71.61 per share).
|
5 |
Lump-sum payment to assist with transition expenses.
|
6 |
The amount for Mr. Merritt reflects the standard Deluxe employee severance amounts, as Mr. Merritt is not subject to the executive severance arrangement due to his interim position.
|
Name*
|
Type of Compensation
|
Due on Change of
Control followed by
termination by Company
without Cause or by
Executive for Good
Reason ($)
|
Due on
Change of
Control
($)
|
Severance
1
|
6,282,997
|
0
|
|
Pro-Rata Bonus
2
|
1,162,500
|
0
|
|
Long-Term Cash Performance Plan
3
|
2,853,548
|
0
|
|
Vesting of Options
4
|
713,092
|
0
|
|
Vesting of Restricted Stock
5
|
5,922,863
|
0
|
|
Lee J. Schram
|
Benefit Continuation
6
|
128,296
|
0
|
Outplacement
7
|
25,000
|
0
|
|
Total Payments Before Excise Tax
|
17,088,297
|
0
|
|
Excise Tax Gross-Up
8
|
0
|
0
|
|
Total
|
17,088,297
|
0
|
Severance
1
|
244,574
|
0
|
|
Pro-Rata Bonus
2
|
0
|
0
|
|
Long-Term Cash Performance Plan
3
|
61,391
|
0
|
|
Vesting of Options
4
|
16,804
|
0
|
|
Vesting of Restricted Stock
5
|
444,125
|
0
|
|
Edward A. Merritt
|
Benefit Continuation
6
|
13,000
|
0
|
Outplacement
7
|
38,500
|
0
|
|
Total Payments Before Excise Tax
|
818,395
|
0
|
|
Excise Tax Gross-Up
8
|
0
|
0
|
|
Total
|
818,395
|
0
|
Name
|
Type of Compensation
|
Due on Change of
Control followed by
termination by Company
without Cause or by
Executive for Good
Reason ($)
|
Due on
Change of
Control
($)
|
Severance
1
|
1,494,400
|
0
|
|
Pro-Rata Bonus
2
|
280,200
|
0
|
|
Long-Term Cash Performance Plan
3
|
582,776
|
0
|
|
Vesting of Options
4
|
142,599
|
0
|
|
Vesting of Restricted Stock
5
|
1,053,311
|
0
|
|
Malcolm J. McRoberts
|
Benefit Continuation
6
|
49,560
|
0
|
Outplacement
7
|
25,000
|
0
|
|
Total Payments Before Excise Tax
|
3,627,847
|
0
|
|
Excise Tax Gross-Up
8
|
0
|
0
|
|
Total
|
3,627,847
|
0
|
Severance
1
|
472,500
|
0
|
|
Pro-Rata Bonus
2
|
0
|
0
|
|
Long-Term Cash Performance Plan
3
|
236,952
|
0
|
|
Vesting of Options
4
|
59,580
|
0
|
|
Vesting of Restricted Stock
5
|
303,555
|
0
|
|
Peter J. Godich
|
Benefit Continuation
6
|
13,000
|
0
|
Outplacement
7
|
38,500
|
0
|
|
Total Payments Before Excise Tax
|
1,124,087
|
0
|
|
Excise Tax Gross-Up
8
|
0
|
0
|
|
Total
|
1,124,087
|
0
|
1 |
Severance applicable under the Retention Agreements is equal to three times for Mr. Schram and two times for Mr. McRoberts, the total of (a) current base salary, plus (b) the greater of the individual's target annual bonus or the average actual bonus earned for each of the prior three years. For Messrs. Filby and Godich, severance benefits would be provided under the severance arrangements previously described, and are equal to twelve months of base salary plus the difference in compensation that would have been earned after severance and the base salary at termination from Deluxe for up to an additional six months. For Mr. Merritt, severance benefits are governed by the Severance Support Plan and are equal to nine months of base salary plus the difference in compensation that would have been earned after severance and the base salary at termination from Deluxe for up to an additional three months.
|
2 |
Pro-rata bonus applicable under the Retention Agreements is equal to the greater of target or actual performance for Messrs. Schram and McRoberts (amounts represent target bonus for both executives). Messrs. Merritt, Filby, and Godich are not eligible to receive this compensation.
|
3 |
Currently outstanding stock options do not vest upon a Change of Control unless the surviving entity fails to honor award agreements with comparable equity (i.e., a double trigger). Therefore, no accelerated vesting is assumed in the column titled "Due on Change of Control". The amount listed in the column titled "Due on Change of Control followed by termination by the Company without Cause or by Executive for Good Reason" reflects full acceleration of options. Intrinsic value of options was determined assuming a change of control price of $71.61, the closing stock price on the final day of the fiscal year.
|
4 |
No payout of the long-term share based performance plan award prior to the first year of performance; termination following the first year of performance but prior to the end of the performance period results in a pro-rata payout assuming target-level payout for share based performance plans. As a result, and reflected above, the 2016 award does not payout, the 2015 award pays out at target assuming two-thirds of the performance period has completed, and the 2014 award is assumed to be earned and not contingent upon a Change in Control. Performance share awards were valued assuming a change of control price of $71.61, the closing stock price on the final day of the fiscal year.
|
5 |
Currently outstanding restricted stock awards do not vest upon a Change of Control unless the surviving entity fails to honor award agreements with comparable equity (i.e., a double trigger). Therefore, no accelerated vesting is assumed in the column titled "Due on Change of Control". In addition to restricted stock held by each executive, the amount listed for Mr. McRoberts reflects accelerated vesting of restricted stock units elected to be received in lieu of a portion of his cash bonus under the Annual Incentive Plan. Restricted stock awards were valued assuming a change of control price of $71.61, the closing stock price on the final day of the fiscal year.
|
6 |
Assumes additional retirement benefit and annual medical, dental and vison (and disability for Mr. Schram) for three years for Mr. Schram and two years for Mr. McRoberts. Amounts include lump sum transitional payment for Messrs. Filby and Godich, and additional 18 months COBRA insurance for Messrs. Filby and Merritt.
|
7 |
Assumes full use of the 12-month executive outplacement program at an amount not to exceed $38,500 ($25,000 for Messrs. Schram and McRoberts).
|
8 |
The excise tax imposed by the Internal Revenue Code ("Code") on excess "parachute payments" is 20 percent. This excise tax, together with any corresponding tax gross-up, applies only if the total value of change of control payments calculated under Section 280G of the Code equals or exceeds three times the average annual compensation attributable to the executive's employment with Deluxe over the prior five-year period. As a result, the gross-up amount shown reflects the executive's unique earnings history with Deluxe and can vary significantly from year to year.
|
MEMBERS OF THE AUDIT COMMITTEE
|
|
Charles A. Haggerty, Chair
|
|
Neil J. Metviner
|
|
Stephen P. Nachtsheim
|
|
John L. Stauch
|
2016
($)
|
2015
($)
|
|
Audit Fees
|
2,168,450
|
1,781,000
|
Audit-Related Fees
|
437,999
|
211,023
|
Tax Fees
|
70,000
|
10,000
|
All Other Fees
|
1,800
|
1,800
|
Total Fees
|
2,678,249
|
2,003,823
|
· |
The Plan is administered by our independent Compensation Committee
|
· |
The Plan utilizes a fungible share pool design under which each shared covered by Full Value Awards counts as 2.23 shares against the share reserve
|
· |
The Plan prohibits the grant of discounted stock options and stock appreciation rights
|
· |
Repricing of stock options and stock appreciation rights, including any cash buyout, is prohibited without shareholder approval
|
· |
No liberal share recycling of stock option or stock appreciation right awards
|
· |
Minimum one year vesting requirement for awards, except in limited circumstances – a one-year minimum vesting requirement was added to the 2017 Long-Term Incentive Plan
|
· |
No automatic acceleration of awards upon a change of control
|
· |
Any dividends and dividend equivalents are paid only when and to the extent that the underlying awards vest, and no dividends or dividend equivalents are paid with respect to stock options or stock appreciation rights
|
· |
Awards subject to clawback in connection with certain financial restatements
|
· |
No excise tax gross-ups
|
Current
|
After Approval of the Plan
|
|||||||||||||||
Shares
Reserved for
Issuance of
Outstanding
Awards
1
|
Shares
Available for
Future
Awards
|
Shares
Reserved for
Issuance of
Outstanding
Awards
|
Shares
Available for
Future
Awards
|
|||||||||||||
2000 Stock Incentive Plan (Terminated)
|
25,956
|
-0-
|
25,956
|
-0-
|
||||||||||||
2008 Stock Incentive Plan (Terminated)
|
32,037
|
-0-
|
32,037
|
-0-
|
||||||||||||
2012 Long-Term Incentive Plan
|
521,089
|
1,159,187
|
521,089
|
-0-
|
||||||||||||
2017 Plan
|
-0-
|
-0-
|
-0-
|
6,159,187
|
2
|
1 |
Shares reserved for issuance of outstanding awards at March 1, 2017 consist of the following:
|
Types of Awards
|
||||||||||||||||
Options/SARs
|
Full Value
Awards
|
Weighted
Average
Exercise
Price of
Options/SARS
|
Weighted
Average Term
to Expiration
(years)
|
|||||||||||||
2000 Stock Incentive Plan (Terminated)
|
-0-
|
25,956
|
N/A
|
N/A
|
||||||||||||
2008 Stock Incentive Plan (Terminated)
|
227,745
|
32,087
|
$
|
25.29
|
1.69
|
|||||||||||
2012 Long-Term Incentive Plan
|
1,164,974
|
521,089
|
$
|
57.93
|
5.29
|
|||||||||||
2017 Plan
|
-0-
|
-0-
|
N/A
|
N/A
|
2 |
This count includes 1,159,187 shares remaining from the 2012 Long-Term Incentive Plan
|
Plan category
|
Number of securities
to be issued upon
exercise of
outstanding options,
warrants and rights
|
Weighted-average
exercise price of
outstanding options,
warrants and rights
|
Number of securities
remaining available for future
issuance under equity
compensation plans
(excluding securities
reflected in the first column)
|
Equity compensation plans approved by shareholders
|
1,625,823
1
|
$47.68
1
|
5,454,755
2
|
Equity compensation plans not approved by shareholders
|
None
|
None
|
None
|
Total
|
1,625,823
|
$47.68
|
5,454,755
|
1 |
Includes awards granted under our 2012 Long-Term Incentive Plan and our previous stock incentive plans. The number of securities to be issued upon exercise of outstanding options, warrants and rights includes outstanding stock options of 1,250,625, restricted stock unit awards of 139,439 and 235,759 shares subject to outstanding performance share awards. The number of performance shares reflects the target amount for awards outstanding as of December 31, 2016. The actual number of shares issued under our performance share awards will range between 0% and 200% of the target amount based on our performance relative to the applicable performance goals as determined by our Compensation Committee following the end of the performance period. The performance share and restricted stock unit awards are not included in the weighted-average exercise price of outstanding options, warrants and rights because they require no consideration upon vesting.
|
2 |
Includes 3,575,090 shares reserved for issuance under our Amended and Restated 2000 Employee Stock Purchase Plan and 1,879,665 shares available for issuance under our 2012 Long-Term Incentive Plan. Under the 2012 Long-Term Incentive Plan, full value awards such as restricted stock, restricted stock units and share-based performance awards reduce the number of shares available for issuance by a factor of 2.23, or if such an award were forfeited or terminated without delivery of the shares, the number of shares that again become eligible for issuance would be multiplied by a factor of 2.23.
|
By order of the Board of Directors
|
|
|
|
J. Michael Schroeder
|
|
Corporate Secretary
|
(a) |
sales;
|
(b) |
margins;
|
(c) |
volume;
|
(d) |
cash flow;
|
(e) |
market share;
|
(f) |
revenue;
|
(g) |
earnings per share;
|
(h) |
share price;
|
(i) |
profits;
|
(j) |
earnings before interest expense and taxes;
|
(k) |
earnings before interest expense, interest income and taxes;
|
(l) |
earnings before interest expense, taxes, and depreciation and/or amortization;
|
(m) |
earnings before interest expense, interest income, taxes, and depreciation and/or amortization;
|
(n) |
return on equity, assets or costs;
|
(o) |
return on invested or average capital employed;
|
(p) |
economic value; or
|
(q) |
cumulative total return to shareholders.
|
( i ) |
If Deluxe is required to issue a restatement of any financial statement filed with the Securities and Exchange Commission (other than a restatement due to a change in accounting policy) within twelve (12) months after the end of any Performance Period, and the Committee determines that the misconduct by a Participant was a significant contributing factor to such restatement, then all, or such portion as the Committee in its reasonable discretion determines to be appropriate, of any incentive payment payable to the Participant with respect to the Performance Period, or any portion thereof which was covered by such financial statement, shall be an Excess Award.
|
( ii) |
If the Participant has elected to receive any incentive payment which is subsequently determined to be an Excess Award in the form of shares or Units and to receive matching shares or Units pursuant to Section 6.1, then, in addition to the portion of the incentive payment determined to be an Excess Award, the portion of the matching shares or Units that is attributable to the Excess Award shall also constitute an Excess Award. For purposes of reducing any incentive payment pursuant to this Plan, the Committee may treat any amount determined to be an Excess Award under Section 6(h) of the Long-Term Incentive Plan as an Excess Award.
|
SECTION 1. |
Purpose; Shareholder Approval; Termination of 2012 Plan.
|
SECTION 2. |
Definitions.
|
SECTION 3. |
Administration.
|
SECTION 4. |
Shares Available For Awards.
|
(i) |
Section 162(m) Limitation for Certain Types of Awards
. No Participant may be granted Options, Stock Appreciation Rights or any other Award or Awards under the Plan, the value of which Award or Awards is based solely on an increase in the value of the Shares after the date of grant of such Award or Awards, for more than 500,000 Shares (subject to adjustment as provided in Section 4(c) of the Plan) in the aggregate in any calendar year. The foregoing limitation shall not include any Shares acquired pursuant to the Annual Incentive Plan.
|
(ii) |
Section 162(m) Limitation for Performance Share Awards
. The maximum amount payable pursuant to all Performance Share Awards to any Participant in the aggregate in any calendar year shall be $5.0 million in value, whether payable in cash, Shares, Share equivalents or other property, and provided that any Shares or Share equivalents shall be valued based on their grant date fair value. This limitation does not apply to any Award subject to the limitation contained in Section 4(e)(i) of the Plan and shall not include any Shares acquired pursuant to the Annual Incentive Plan.
|
(iii) |
The maximum number of Shares that may be issued upon the exercise of Incentive Stock Option Awards under the Plan shall be 5,000,000, subject to adjustment as provided in Section 4(c).
|
SECTION 5. |
Eligibility.
|
SECTION 6. |
Awards.
|
(i) |
Exercise Price
. The purchase price per Share purchasable under an Option shall be determined by the Committee; provided, however, that such purchase price shall not be less than 100 percent of the Fair Market Value of a Share on the date of grant of such Option. In the case of an Incentive Stock Option granted to a Participant who owns stock possessing more than 10 percent of the combined voting power of all classes of stock of the Company (or any parent or subsidiary), the purchase price shall not be less than 110 percent of the Fair Market Value.
|
(ii) |
Option Term.
The term of each Option shall be fixed by the Committee but shall not be longer than 10 years from the date of grant. In the case of an Incentive Stock Option granted to a Participant who owns stock possessing more than 10 percent of the combined voting power of all classes of stock of the Company (or any parent or subsidiary), the term shall not be longer than five years from the date of grant.
|
(iii) |
Time and Method of Exercise.
The Committee shall determine the time or times at which an Option may be exercised in whole or in part and the method or methods by which, and the form or forms (including, without limitation, cash, Shares, promissory notes, other securities, other Awards or other property, or any combination thereof, having a Fair Market Value on the exercise date equal to the relevant exercise price) in which, payment of the exercise price with respect thereto may be made or deemed to have been made.
|
(iv) |
No Reload Option Features
. Options shall not include a reload feature, or any comparable feature that provides for the automatic grant of additional Options to a Participant upon exercise of the Option.
|
(v) |
Designation as Incentive Stock Option
. Each Option that is intended to qualify as an Incentive Stock Option shall so provide in the Award Agreement, and any Option that is not specifically designated an Incentive Stock Option shall be a Non-Qualified Stock Option. The maximum Fair Market Value (measured at the date of grant) of Shares subject to Incentive Stock Options granted to any one Participant that may vest in any year shall not exceed $100,000. An Option may be designated as an Incentive Stock Option in part, and if an Option that was designated an Incentive Stock Option vests prematurely, so that the number of Shares vesting in a year exceeds the limitation set forth in the prior sentence, such Option shall be considered an Incentive Stock Option with respect to the number of Shares that do not exceed such limit and a Non-Qualified Stock Option with respect to the balance of the Shares subject to the Option.
|
(i) |
Restrictions
. Shares of Restricted Stock and Restricted Stock Units shall be subject to such restrictions as the Committee may impose (including, without limitation, any limitation on the right to vote a Share of Restricted Stock or the right to receive any dividend or other right or property with respect thereto or with respect to a Restricted Stock Unit), which restrictions may lapse separately or in combination at such time or times, in such installments or otherwise as the Committee may deem appropriate. Dividends shall be paid when, and only to the extent that, the underlying Restricted Stock vests and the restrictions thereon lapse.
|
(ii) |
Stock Certificates
. Any Restricted Stock granted under the Plan may be evidenced by issuance of a stock certificate or certificates or by the creation of a book entry at the Company’s transfer agent. Any such certificate or certificates shall be held by the Company. Such certificate or certificates or book entry shall be registered in the name of the Participant and any such certificate or certificates shall bear an appropriate legend referring to the terms, conditions and restrictions applicable to such Restricted Stock. A similar notation shall be made in the records of the transfer agent with respect to any Shares evidenced by a book entry. In the case of Restricted Stock Units, no Shares shall be issued at the time such Awards are granted.
|
(iii) |
Forfeiture; Delivery of Shares
. Except as otherwise determined by the Committee or provided in an Award Agreement governed by this Plan, upon termination of employment (as determined under criteria established by the Committee) or, in the case of a director, service as a director during the applicable restriction period, all Shares of Restricted Stock and all Restricted Stock Units at such time subject to restriction shall be forfeited and reacquired by the Company; provided, however, that the Committee may, when it finds that a waiver would be in the best interest of the Company, waive in whole or in part any or all remaining restrictions with respect to Shares of Restricted Stock or Restricted Stock Units. Any Share representing Restricted Stock that is no longer subject to restrictions shall be delivered to the holder thereof promptly after the applicable restrictions lapse or are waived. Upon the lapse or waiver of restrictions and the restricted period relating to Restricted Stock Units evidencing the right to receive Shares, such Shares shall be issued and delivered to the holders of the Restricted Stock Units as soon as practical, but not more than 75 days, following the date of the lapse or waiver, subject to the provisions of the Plan and any applicable Award Agreement.
|
(i) |
Business Criteria
. Unless and until the Committee proposes for shareholder approval and the Company’s shareholders approve a change in the general business criteria set forth in this section, the attainment of which may determine the amount and/or vesting with respect to Performance Share Awards, the business criteria to be used for purposes of establishing performance goals for such Performance Share Awards
shall be selected from among the following alternatives, each of which may be based on absolute standards or comparisons versus specified companies or groups of companies and may be applied at individual or various organizational levels (
e.g.
, the Company as a whole or identified business units, segments or the like), unless such Award is otherwise governed by Section 6(d)(vii) below:
|
(A) |
sales;
|
(B) |
margins;
|
(C) |
volume;
|
(D) |
cash flow;
|
(E) |
market share;
|
(F) |
revenue;
|
(G) |
earnings per Share;
|
(H) |
Share price;
|
(I) |
profits;
|
(J) |
earnings before interest expense and taxes;
|
(K) |
earnings before interest expense, interest income and taxes;
|
(L) |
earnings before interest expense, taxes, and depreciation and/or amortization;
|
(M) |
earnings before interest expense, interest income, taxes, and depreciation and/or amortization;
|
(N) |
return on equity, assets or costs;
|
(O) |
return on invested or average capital employed;
|
(P) |
economic value; or
|
(Q) |
cumulative total return to shareholders.
|
(ii) |
Target Award; Maximum Amount Payable
. The target Award shall be a dollar amount or a percentage of a Participant’s annualized base salary (or Share equivalent thereof), which may be greater or less than 100%, as determined by the Committee with respect to each Participant for each performance period. The maximum amount payable pursuant to all Performance Share Awards to any Participant in the aggregate in any calendar year is specified in Section 4(e)(ii) of the Plan.
|
(iii) |
Settlement of Performance Share Awards
. Performance Share Awards shall be settled no later than the fifteenth day of the third month following the conclusion of the applicable performance period
.
|
(iv) |
Certain Events
. If a Participant dies, becomes permanently and totally disabled or otherwise terminates employment with the approval of the Committee before the end of a performance period or after the performance period and before a Performance Share Award is issued, the Committee may, in its discretion, determine that the Participant shall be issued all or a portion of the Award that the Participant would have received but for such death, disability or other approved termination of employment; provided that no payout should be made under circumstances that would cause a Performance Share Award intended to constitute “qualified performance-based compensation” to fail to so qualify.
|
(v) |
Designations
. For a Performance
Share
Award, the Committee shall, not later than 90 days after the beginning of each performance period (or the first 25% of a performance period of less than a year), (A) designate all Participants for such performance period, (B) establish the objective performance goals for each Participant for that performance period on the basis of one or more of the criteria set forth in (i) above and (C) determine target Awards for each Participant.
|
(vi) |
Certification
. Following the close of each performance period and prior to issuance of any Shares, cash or other Awards to a Participant with respect to a Performance Share Award, the Committee shall certify in writing as to the attainment of all goals (including the performance goals for a Participant) upon which any payments to a Participant for that performance period are to be based. Such certification shall be made in sufficient time to permit the Award to be settled by the fifteenth day of
the third month following the end of the performance period.
|
(vii) |
Awards Not Intended to be Qualified Performance-Based Compensation
. The Committee may also grant Performance Share Awards that are not intended to constitute “qualified performance-based compensation” under Section 162(m) of the Code that may be based on performance goals that are not objective and may be based on such business criteria as the Committee may determine to be appropriate, which may include financial and nonfinancial performance goals that are linked to such individual’s business unit or the Company as a whole or to such individual’s areas of responsibility. Such Awards shall be administered as set forth above, but need not comply with the provisions above required by Section 162(m) of the Code.
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(i) |
Consideration for Awards
. The consideration for Awards shall be services rendered or to be rendered to the Company, and for no cash consideration (or only such minimal cash consideration as may be required by applicable law) shall be required for the grant of Awards; provided that the foregoing shall not apply to the purchase price for Shares to be issued upon the exercise of an Option, Stock Appreciation Right, or other Award requiring payment (including foregoing receipt of cash compensation) for Shares.
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(ii) |
Awards May Be Granted Separately or Together
. Awards may, in the discretion of the Committee, be granted either alone or in addition to, in tandem with, or in substitution for any other Award or any Award granted under any Plan of the Company or any Affiliate other than the Plan. Awards granted in addition to or in tandem with other Awards or in addition to or in tandem with Awards granted under any such other Plan of the Company or any Affiliate, may be granted either at the same time as or at a different time from the grant of such other Award or Awards.
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(iii) |
Forms of Payments Under Awards
. Subject to the terms of the Plan and of any applicable Award Agreement, payments or transfers to be made by the Company or an Affiliate upon the grant, exercise or payment of an Award may be made in such form or forms as the Committee shall determine (including, without limitation, cash, Shares, promissory notes, other securities, other Awards or other property or any combination thereof), and may be made in a single payment or transfer, in installments or on a deferred basis, in each case in accordance with rules and procedures established by the Committee. Such rules and procedures may include, without limitation, provisions for the payment or crediting of reasonable interest on installment or deferred payments or the grant or crediting of Dividend Equivalents with respect to installment or deferred payments. Notwithstanding the foregoing, if any Award, or portion of an Award (including any right to Dividend Equivalents), by its terms is or may be payable after the fifteenth day of the third month following the year in which the Participant’s right to the Award is no longer subject to a substantial risk of forfeiture, as defined in Section 409A of the Code, the time and form of payment of the Award shall be specified in the Award Agreement, and shall not thereafter be subject to change unless the Committee determines that the change is permissible under Section 409A of the Code.
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(iv) |
Limits on Transfer of Awards
. No Award and no right under any such Award shall be transferable by a Participant otherwise than by will or by the laws of descent and distribution; provided, however, that if so determined by the Committee, a Participant may, in the manner established by the Committee, (x) designate a beneficiary or beneficiaries to exercise the rights of the Participant and receive any property distributable with respect to any Award upon the death of the Participant, or (y) transfer an Award (other than an Incentive Stock Option) to any member of such Participant’s “immediate family” (as such term is defined in Rule 16a-1(e) promulgated by the Securities and Exchange Commission under the 1934 Act) or to a trust whose beneficiaries are members of such Participant’s “immediate family.” Each Award or right under any Award shall be exercisable during the Participant’s lifetime only by the Participant, or by a member of such Participant’s immediate family or a trust for members of such immediate family pursuant to a transfer as described above, or if permissible under applicable law, by the Participant’s guardian or legal representative. No Award or right under any such Award may be pledged, alienated, attached or otherwise encumbered, and any purported pledge, alienation, attachment or encumbrance thereof shall be void and unenforceable against the Company or any Affiliate. No Awards may be transferred for value.
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(v) |
Term of Awards
. The term of each Award shall be for such period, not longer than 10 years from the date of grant, as may be determined by the Committee.
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(vi) |
Restrictions; Securities Exchange Listing
. All certificates for Shares or other securities delivered under the Plan pursuant to any Award or the exercise thereof shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the Plan or the rules, regulations and other requirements of the Securities and Exchange Commission and any applicable federal or state securities laws, and the Committee may cause a legend or legends to be placed on any such certificates to make appropriate reference to such restrictions. If the Shares or other securities are traded on a securities exchange, the Company shall not be required to deliver any Shares or other securities covered by an Award unless and until such Shares or other securities have been admitted for trading on such securities exchange.
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(vii) |
Attestation
. Where the Plan or any applicable Award Agreement provides for or permits delivery of Shares by a Participant in payment with respect to any Award or grant under this Plan or for taxes, such payment may be made constructively through attestation in the discretion of and in accordance with rules established by the Committee.
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(viii) |
Sarbanes-Oxley Act
. The Committee shall not permit any Participant who is an executive officer or director of the Company to pay the exercise price for any Award, or any other amount owed to the Company, by a promissory note if such promissory note would constitute a personal loan prohibited by Section 13(k) of the 1934 Act.
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(i) |
If the Committee determines that any portion of an Award is an “Excess Award”, as hereinafter defined, then, if such determination is made while the Award is still outstanding, it shall be reduced by the portion thereof that constitutes an Excess Award. If such determination is made after the Award has been exercised or settled, then all future payments (including deferred payments) to the Participant with respect to other Awards shall be offset until the amount of the Excess Award has been recouped, and the Committee may, in its reasonable discretion, arrange for the recoupment of such Excess Award by pursuing legal action against the Participant, by entering into an agreement with the Participant for the repayment of the Excess Award (or in the case of an Award settled by a transfer of Shares the return of such Shares and repayment to the Participant of any exercise price paid), or, to the extent permitted by applicable law, by offsetting any other amount owed to the Participant by the Company or any of its subsidiaries, or by any combination of the foregoing. For purposes of this Section 6(h), the term “Excess Award” shall mean the following, as determined by the Committee in its sole discretion:
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(A) |
In the case of a Performance Share Award, if the Company is required to issue a restatement of any financial statement filed with the Securities and Exchange Commission (other than a restatement due to a change in accounting policy) within twelve (12) months after the end of the performance period with respect to such Performance Share Award, and the Committee determines that the misconduct by a Participant was a significant contributing factor to such restatement, then all, or such portion as the Committee in its reasonable discretion determines to be appropriate, of any Award the value of which was affected by such financial statement, shall be an Excess Award. Without limiting the generality of the foregoing, in the case of an Award that is an Option, Stock Appreciation Right, Restricted Stock, or Restricted Stock Unit the Committee may determine the portion of such Award that constitutes an Excess Award on the basis of its estimate of the effect on the value of the Shares resulting from such restatement, or the amount realized by the Participant from the sale of such Shares, or on any other basis that it determines to be appropriate.
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( B) |
If any portion of an Option, Stock Appreciation Right, Restricted Stock, or Restricted Stock Unit is determined to be an Excess Award, then the portion of any Dividend Equivalent that is attributable to the Excess Award shall also be an Excess Award. If the Participant has received any Restricted Stock or Restricted Stock Units as a matching grant of a payment in restricted equity pursuant to Section 6.1 of the Annual Incentive Plan and such incentive payment is subsequently determined to be an Excess Award under the Annual Incentive Plan, then the portion of the Restricted Stock or Restricted Units that is attributable to the Excess Award shall also constitute an Excess Award. For purposes of reducing any Award pursuant to this Plan, the Committee may treat any amount determined to be an Excess Award under Section 6.4 of the Annual Incentive Plan as an Excess Award.
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(ii) |
Upon the adoption by the Company of a policy providing for the recovery of certain incentive-based compensation as required by Section 10D of the 1934 Act, as enacted by Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the repayment requirements of such policy shall be deemed to be incorporated into each Award issued under the Plan including, to the extent determined by the Committee, Awards issued, exercised, or paid prior to the adoption of such policy.
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SECTION 7. |
Awards To Non-Employee Directors.
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SECTION 8. |
Amendment And Termination; Adjustments.
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(i) |
would amend section 4(a), 4(b), 4(d) or 4(e) of the Plan;
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(ii) |
would permit Options or Stock Appreciation Rights to be granted with an exercise price that is less than Fair Market Value on the date of grant;
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(iii) |
absent such approval, would violate the rules or regulations of the New York Stock Exchange or any other securities exchange that are applicable to the Company; or
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(iv) |
absent such approval, would cause the Company to be unable, under the Code, to grant Incentive Stock Options under the Plan.
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SECTION 9. |
Income Tax Withholding.
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SECTION 10. |
General Provisions.
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SECTION 11. |
Effective Date Of The Plan.
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SECTION 12. |
Term Of The Plan.
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