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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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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to §240.14a-12
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Pitney Bowes Inc.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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Title of each class of securities to which transaction applies:
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Aggregate number of securities to which transaction applies:
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11
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4)
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Proposed maximum aggregate value of transaction:
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Total fee paid:
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Fee previously paid 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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Amount Previously Paid:
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2)
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Form, Schedule or Registration Statement No.
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Filing Party:
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4)
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Date Filed:
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Annual Meeting Information
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Time and Date:
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Monday, May 4, 2020 at 9:00 a.m.
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Place:
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Hyatt Regency Hotel, 1800 East Putnam Avenue, Old Greenwich, Connecticut 06870
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Requirements for Attending the Meeting:
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Admission ticket, which is attached to your proxy card, or Notice of Internet Availability of Proxy
Materials, together with a form of valid, government-issued photo identification, such as a driver’s license. If your shares are held in the name of a bank, broker or nominee, you must present proof of your ownership as of the record
date (such as bank or brokerage account statement).
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Record Date:
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March 6, 2020
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Voting:
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Registered stockholders as of the record date (March 6, 2020) are entitled to submit proxies by
Internet at www.proxyvote.com; telephone at 1-800-690-6903; or completing your proxy card; or you may vote in person at the annual meeting. If you hold your shares through a broker, bank, trustee or other nominee, you are a beneficial
owner and should refer to instructions provided by that entity on voting methods.
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1.
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Election of Nine Directors Named in the proxy statement.
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Ratification of the Audit Committee’s Appointment of the Independent Accountants for 2020.
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3.
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Non-binding Advisory Vote to Approve Executive Compensation.
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Approval of the Amended and Restated Pitney Bowes Inc. 2018 Stock Plan.
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NOTICE: Your vote is important. Brokers are not permitted
to vote on any proposals to be considered at the meeting except on proposal 2, ratification of the Audit Committee’s appointment of the Independent Accountants for 2020, without instructions from the beneficial owner. Therefore, if your
shares are held through a broker, please instruct your broker, bank or other nominee on how to vote your shares. For your vote to be counted with respect to each of the proposals, you will need to communicate your voting decisions to
your broker, bank, financial institution or other nominee.
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Proxy Summary - Meeting Agenda Items
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Proposal 1: Election of Directors
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Proposal 2: Ratification of the Audit Committee’s Appointment of the Independent
Accountants for 2020
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Proposal 3: Non-binding Advisory Vote to Approve Executive Compensation
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Proposal 4: Approval of the Amended and Restated Pitney Bowes Inc. 2018 Stock Plan
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you may submit your proxy on-line via the Internet by accessing the following website and following the instructions provided: www.proxyvote.com;
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you may submit your proxy by telephone by calling 1-800-690-6903; or
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if you received your annual meeting material by mail, you also may choose to grant your proxy by completing and mailing the proxy card.
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you may send in a revised proxy dated later than the first proxy;
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you may vote in person at the meeting; or
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you may notify the Corporate Secretary in writing prior to the meeting that you have revoked your proxy.
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a Notice of Internet Availability of Proxy Materials or a full set of printed materials, including the proxy statement, annual report and proxy card; or
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an email with instructions for how to view the annual meeting materials and vote online.
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Key Corporate Governance Practices Enhancing the Board’s Independent
Leadership, Accountability and Oversight |
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Separate Chairman and CEO. Our
Governance Principles include well-defined responsibilities, qualifications and selection criteria with respect to the Chairman role. The board has appointed Michael I. Roth, an independent director, as Non-Executive Chairman. In addition to chairing the board and the Executive Committee, Mr. Roth is a member of the Audit and Finance Committees and
attends the meetings of the other two committees on which he is not a member.
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Independent Committees. The
board of directors has determined that all board committees, other than the Executive Committee, should consist entirely of independent directors.
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Executive Sessions. Our
independent directors meet without the CEO or other members of management to discuss issues, including matters concerning management. The Non-Executive Chairman presides at these executive sessions.
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Majority Voting in Director Elections. Our By-laws provide that in uncontested elections, director nominees must be elected by a majority of the votes cast.
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Annual Election of Directors. Our By-laws
provide that our stockholders elect all directors annually.
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Stock Holding Requirements. Within five years of becoming a director, each board member is expected to accumulate and hold company common stock having a minimum aggregate market value of five times the annual base cash retainer.
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No Hedging or Pledging. Directors
may not pledge or transfer for value Pitney Bowes securities, engage in short-term speculative (“in and out”) trading in Pitney Bowes securities, or participate in hedging and other derivative transactions, including short sales, “put” or “call” options, swaps, collars or similar derivative transactions, with respect to Pitney Bowes securities.
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Annual Assessments. Every
year, the full board, as well as each board committee, conducts a self-assessment to evaluate all aspects of the board or board committee, including the members of the board and the board’s leadership. Each committee as well as the full board reviews and discusses the self-assessments and implements any appropriate action. In some years, as part of the
assessment process, the board also engages a third party advisor to provide feedback in separate discussions with the full board and the Governance Committee
as well as in individual discussions with the Chairman and with the Chair of the Governance Committee.
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Board of Directors
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(i)
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Customer, vendor or employee complaints or concerns are investigated by management and copies are forwarded to the Chairman;
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(ii)
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If any complaints or similar communications regarding accounting, internal accounting controls or
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Other communications raising matters that require investigation will be shared with appropriate members of management in order
to permit the gathering of information relevant to the directors’ review, and will be forwarded to the director or directors to whom the communication was addressed.
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Board Committees and Meeting Attendance
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Name
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Audit
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Executive
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Executive
Compensation |
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Finance
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Governance
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Anne M. Busquet
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X
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X
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Chair
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Robert M. Dutkowsky
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X
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X
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Anne Sutherland Fuchs
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X
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X
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Mary J. Steele Guilfoile
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X
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X
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S. Douglas Hutcheson
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X
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X
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Chair
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Marc B. Lautenbach
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X
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Michael I. Roth
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X
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Chair
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X
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Linda S. Sanford
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X
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X
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Chair
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David L. Shedlarz
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Chair
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X
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X
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Number of meetings in 2019
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6
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0
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8
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4
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3
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Cash component paid as an annual retainer
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Leadership premiums paid to Committee Chairmen
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Leadership premium paid to Chairman of the board
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Annual equity grant in the form of restricted stock units, the number of which is
calculated by dividing $100,000 by the fair market value of a share of the company’s common stock as of the award date
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Each non-employee director is subject to a stock ownership requirement equal to five
times the annual cash retainer, $375,000, to be attained over a five-year period
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Relationships and Related-Person Transactions
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1.
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Any transaction with another company with which a related person’s only relationship is as an employee or beneficial owner of
less than ten percent of that company’s shares, if the aggregate amount invested does not exceed the greater of $1 million or two percent of that company’s consolidated gross revenues;
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A relationship with a firm, corporation or other entity that engages in a transaction with Pitney Bowes where the related
person’s interest in the transaction arises only from his or her position as a director or limited partner of the other entity that is party to the transaction;
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Any charitable contribution by Pitney Bowes to a charitable organization where a related person is an officer, director or
trustee, if the aggregate amount involved does not exceed the greater of $1 million or two percent of the charitable organization’s consolidated gross revenues;
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Any transaction involving a related person where the rates or charges involved are determined by competitive bids; and
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Any transaction with a related person involving services as a bank depositary of funds, transfer agent,
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Compensation Committee Interlocks and Insider Participation
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Title of
Class of Stock |
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Name of Beneficial Owner
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Shares
Deemed to be Beneficially Owned(1)(2)(3)(4) |
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Options
Exercisable Within 60 days(4) |
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% of Class
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Common
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Anne M. Busquet
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49,432
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9,888
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*
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Common
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Robert M. Dutkowsky
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19,105
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0
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*
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Common
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Anne Sutherland Fuchs
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54,389
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0
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*
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Common
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Mary J. Steele Guilfoile
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9,154
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0
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*
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Common
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S. Douglas Hutcheson
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45,620
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31,364
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*
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Common
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Michael I. Roth
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75,719
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0
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*
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Common
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Linda S. Sanford
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55,385
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0
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*
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Common
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David L. Shedlarz
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60,455
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4,403
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*
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Common
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Marc B. Lautenbach(5)
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3,080,002
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2,827,580
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1.8%
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Common
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Stanley J. Sutula III(6)
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784,643
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724,387
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*
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Common
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Jason Dies(7)
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224,360
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165,093
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*
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Common
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Daniel Goldstein
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406,745
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340,737
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*
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Common
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Lila Snyder
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453,837
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407,616
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*
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Common
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All executive officers and directors as a group (17)
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6,359,612
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5,384,720
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3.6%
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*
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Less than 1% of Pitney Bowes Inc. common stock.
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(1)
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These shares represent common stock beneficially owned as of March 1, 2020 and
shares for which such person has the right to acquire beneficial ownership within 60 days thereafter. To our knowledge, none of these shares are pledged as security. There were 171,354,806 shares of our common stock outstanding as of
March 1, 2020.
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(2)
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Other than with respect to ownership by family members, the reporting persons have
sole voting and investment power with respect to the shares listed.
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(3)
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Includes shares that are held indirectly through the Pitney Bowes 401(k) Plan.
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(4)
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The director or executive officer has the right to acquire beneficial ownership of
this number of shares within 60 days of March 1, 2020 by exercising outstanding stock options or through the conversion of restricted stock units into securities. Amounts in this column are also included in the column “Shares Deemed to be
Beneficially Owned.”
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(5)
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Mr. Lautenbach’s total includes four open market purchases of company stock using
his personal funds: (i) 11,100 shares (approximately $100,122) made in May 2018 (ii) 4,739 shares (approximately $70,015) made in November 2016 (iii) 12,007 shares (approximately $250,000) made in October 2015 and (iv) 66,000 shares
(approximately $1,000,000) made in May 2013.
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(6)
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Mr. Sutula’s total includes four open market purchases of company stock using his
personal funds (i) 3,000 shares (Approximately $9,600) made February 26, 2020, (ii) 10,000 Shares (approximately $39,949) made in February 5, 2020, (iii) 5,000 shares (approximately $26,714) made in May 2019 and (iv) 10,000 shares
(approximately $88,200) made in May 2018.
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(7)
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Mr. Dies’ total includes one open market purchase of company stock using his
personal funds: 3,600 shares (approximately $20,592) made in May 2019.
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Beneficial Ownership
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Name and Address of Beneficial Owner
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Amount and Nature of
Beneficial Ownership of Common Stock |
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Percent of
Common Stock(1) |
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BlackRock, Inc.
55 East 52nd Street New York, NY 10055 |
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25,012,083(2)
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14.6%
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The Vanguard Group, Inc.
100 Vanguard Blvd Malvern, PA 19355 |
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18,193,806(3)
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10.6%
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(1)
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There were 171,354,806 shares
of our common stock outstanding as of March 1, 2020.
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(2)
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As of December 31, 2019 BlackRock, Inc. disclosed sole voting power with respect to 24,605,110 shares
and sole dispositive power with respect to 25,012,083 shares. The Aggregate amount beneficially owned by each reporting person was 25,012,083 shares. The foregoing information is based on a Schedule 13G filed with the SEC on February 4, 2020.
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(3)
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As of December 31, 2019, The Vanguard Group, Inc. disclosed sole voting power of 257,986 shares,
shared voting power of 22,429 shares, sole dispositive power of 17,931,560 shares and shared dispositive power of 262,246 shares. The Aggregate amount beneficially owned by each reporting person was 18,193,806 shares. The foregoing information is based on a Schedule 13G filed with the SEC on February 12, 2020.
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Director Qualifications
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Financial and capital markets experience for evaluation of financial statements and capital structure.
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Financial services experience
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International experience and experience with emerging markets to evaluate our global operations.
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Experience in emerging technology, coupled with an in-depth understanding of our business and markets, to provide counsel and
oversight with regard to our strategy.
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Experience as a current or recent public company CEO to provide specific insight into developing, implementing
and assessing our operating plan and business strategy and to bring expertise in operating a public company.
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Other board experience at a publicly traded company to support the goals of transparency, accountability for management and the
board, and protection of stockholder interests.
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Experience in logistic/shipping to support our growth businesses.
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Experience in commercial banking to support our growth businesses.
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Retail and e-tail experience to bring to our Commerce Services business.
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Small and medium business experience to bring understanding to our significant base of small and medium business clients in our
SendTech Solutions business.
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Transformation experience to help us assess opportunities to reposition certain of our businesses.
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Diversity
to bring different perspectives and experience to the board.
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Product management/development experience to provide perspective on innovation. The Governance Committee has evaluated which
of these skills each independent director brings to the board.
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Nominees for Election
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Vote Required; Recommendation of the Board of Directors
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Director since: 2007 Committees: Executive Compensation; Governance; Executive |
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Anne M. Busquet
Principal, AMB Advisors, LLC, an independent consulting firm, since 2006; former chief executive officer, IAC Local & Media Services, a division of IAC/Interactive Corp., an Internet commerce conglomerate, 2004 – 2006. (Also a director of Medical Transcription Billing Corp. and InterContinental Hotels Group PLC and Elior Group. Formerly a director of Meetic S.A. and Blyth, Inc.) Ms. Busquet, age 70, has experience as a senior public company executive, including as American Express Company Division President, leading global interactive services initiatives. As former chief executive officer of the Local and Media Services unit of InterActiveCorp, she has experience in electronic media, communications and marketing. In addition, Ms. Busquet brings to the board of directors her substantial operational experience, including in international markets, marketing channels, emerging technologies and services, and product development. |
Director since: 2018 Committees: Executive Compensation; Governance |
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Robert M. (“Bob”) Dutkowsky
Executive Chairman, Tech Data, an American multinational distribution company specializing in IT products and services, since 2018. As executive chairman, Mr. Dutkowsky is not involved in the day to day operation of Tech Data and he is not a named executive officer of the company. The shareholders of Tech Data have approved the sale of the company to a private equity firm, which is expected to close in the first half of 2020. At that point, Mr. Dutkowsky will no longer be executive chairman. Mr. Dutkowsky previously served as CEO of Tech Data for over a decade. Mr. Dutkowsky serves on the board of United Way Suncoast and the Moffitt Research Committee, as well as the advisory board of the University of South Florida Business School. (Also a director of US Foods and Raymond James Financial). Mr. Dutkowsky, age 65, has broad global business, industry and operational experiences, as Mr. Dutkowsky is skilled at viewing the technology industry from a variety of perspectives. The experiences and skills Mr. Dutkowsky developed as a senior executive at one of the leading technology companies in the world and as the Chair and CEO of other technology and software businesses allow Mr. Dutkowsky to provide value related to finance, management, operations and risk. |
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Director since: 2005 Committees: Executive Compensation; Governance |
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Anne Sutherland Fuchs
Consultant to private equity firms. Formerly group president, Growth Brands Division, Digital Ventures, a division of J. C. Penney Company, Inc., a retailer, November 2010 – April 2012; former chair of the Commission on Women’s Issues for New York City, 2002 – 2013. (Also a director of Gartner, Inc.) Ms. Fuchs, age 72, has experience as a senior executive with operational responsibility within the media and marketing industries, as well as experience as global chief executive officer of a unit of LMVH Moet Hennessy Louis Vuitton. Her experience in the publishing industry includes senior level operational roles at Hearst, Conde Nast, Hachette and CBS. She possesses experience in product development, marketing and branding, international operations, as well as in human resources and executive compensation. Her experience in managing a number of well-known magazines contributes to her knowledge and understanding of businesses closely tied to the mailing industry. Her work for the City of New York has further informed her understanding of government operations and government partnerships with the private sector. |
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Director since: 2018 Committees: Audit; Finance |
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Mary J. Steele Guilfoile
Chairman, MG Advisors, Inc., a privately owned financial services merger and acquisitions advisory and consulting firm. From 2000 to 2002, Ms. Guilfoile was executive vice president and corporate treasurer at JPMorgan Chase & Co. and also served as chief administrative officer of its investment bank. Ms. Guilfoile is a former partner, CFO and COO of The Beacon Group, LLC, a private equity, strategic advisory and wealth management partnership, from 1996 through 2000. Ms. Guilfoile, a licensed CPA, continues as a partner of The Beacon Group, LP, a private investment group. (Also a director of The Interpublic Group of Companies, Inc., C.H. Robinson Worldwide and Hudson Ltd. Formerly a director of Valley National Bancorp.) Ms. Guilfoile, age 65, brings knowledge and expertise as a financial industry executive and her training as a certified public accountant. Ms. Guilfoile brings to the board valuable experience and expertise in corporate governance, accounting, risk management and auditing. |
Director since: 2012 Committees: Audit; Chair, Finance; Executive |
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S. Douglas Hutcheson
Executive Chairman, Kymeta Corporation, a privately held, world leading electronically steerable terminal manufacturer and provider of services for global connectivity since 2019. Mr. Hutcheson has served as a senior advisor of Technology, Media and Telecom for Searchlight Capital, a global private investment firm since 2015. Formerly chief executive officer of Laser, Inc., a privately held technology company (March 2014 – May 2017) and also former chief executive officer of Leap Wireless International, Inc., a provider of wireless services and devices through its subsidiary, Cricket Communications, Inc. (February 2005 – March 2014). (Also a director of InterDigital, Inc. Formerly a director of Leap Wireless International, Inc.) Mr. Hutcheson, age 63, brings to the board of directors significant operational and financial expertise as an experienced former chief executive officer of a wireless communications company. His broad business background includes strategic planning and product and business development and marketing. His expertise in developing and executing successful wireless strategies is an asset to Pitney Bowes as more products and services are transitioned to the cloud. In addition, his experience as a public company chief executive contributes to his knowledge of corporate governance and public company matters. |
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Director since: 2012 Committees: Executive |
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Marc B. Lautenbach
President and Chief Executive Officer of Pitney Bowes Inc. since December 3, 2012. Formerly, managing partner, North America, Global Business Services, International Business Machines Corporation (IBM), a global technology services company, 2010 – 2012, and General Manager, IBM North America, 2005 – 2010. (Also a director of Campbell Soup Company.) Mr. Lautenbach, age 58, as a former senior operating executive at a global technology services company, possesses substantial operational experience, including in technology services, software solutions, application development, and infrastructure management, as well as marketing, sales and product development. Mr. Lautenbach has extensive experience working with a breadth of client segments, including in the small and medium sized business segment and public and enterprise markets. He also has significant international experience. |
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Director since: 1995 Committees: Chair, Executive; Finance; Audit |
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Michael I. Roth
Chairman and Chief Executive Officer, The Interpublic Group of Companies, Inc., a global marketing communications and marketing services company, since 2005. (Also a director of Ryman Hospitality Properties, Inc. and The Interpublic Group of Companies, Inc.) Mr. Roth, age 74, has broad experience as the chief executive officer of a public company and as a member of other public company boards of directors, as well as previous experience as a certified public accountant and attorney. In addition to his experience as chief executive officer of The Interpublic Group of Companies, his experience includes service as the chief executive officer of The MONY Group Inc. prior to its acquisition by AXA Financial, Inc. He brings to the board of directors his deep financial expertise, and experience in business operations, capital markets, international markets, emerging technologies and services, marketing channels, corporate governance, and executive compensation. |
Director since: 2015 Committees: Audit; Chair, Executive Compensation; Executive |
| |
Linda S. Sanford
Retired Senior Vice President, Enterprise Transformation, International Business Machines Corporation (IBM), a global technology and services company, since December 31, 2014. Prior to her leadership role as senior vice president, enterprise transformation, which she held from January 2003 to December 31, 2014, Ms. Sanford was senior vice president & group executive, IBM Storage Systems Group. Ms. Sanford joined IBM in 1975. (Also a director of RELX Group, Consolidated Edison, Inc. and The Interpublic Group of Companies, Inc.). Ms. Sanford, age 67, with extensive experience as a senior executive in a public global technology company, possesses a broad range of experience, including in technology, innovation and global operations. Ms. Sanford has significant expertise in business transformation, information technology infrastructure, and global process integration. |
|
| |
|
Director since: 2001 Committees: Chair, Audit; Executive; Finance |
| |
David L. Shedlarz
Retired Vice Chairman of Pfizer Inc., a pharmaceutical company. Formerly vice chairman of Pfizer Inc., 2005 – 2007; executive vice president and chief financial officer, 1999 – 2005, Pfizer Inc. (Also a director of Teachers Insurance and Annuity Association, Teladoc, Inc., and The Hershey Company.) Mr. Shedlarz, age 71, has broad experience as a former senior executive of a public company, experience as a former chief financial officer and as a member of other public company boards of directors. He possesses financial expertise, knowledge of business operations and capital markets, international markets, emerging technologies and services, customer communications and marketing channels, human resources and executive compensation, regulatory and government affairs, product development, and corporate governance. |
| | |
|
|
|
|
The Audit Committee functions pursuant to a charter that is reviewed annually
and was last amended in November 2016. The committee represents and assists the board of directors in overseeing the financial reporting process and the integrity of the company’s financial statements. The committee is responsible for the
appointment, compensation and retention of the independent accountants, pre-approving the services they will perform, selecting the lead engagement partner, and for reviewing the performance of the independent accountants and the
company’s internal audit function. The board of directors, in its business judgment, has determined that all five of the members of the committee are “independent,” as required by applicable listing standards of the New York Stock
Exchange. Four of the five members of the committee have the requisite experience to be designated as an Audit Committee financial expert as defined by the rules of the Securities and Exchange Commission.
|
|
|
|
|
|
In the performance of its responsibilities, the committee has reviewed and
discussed the audited financial statements with management and the independent accountants. The committee has also discussed with the independent accountants the matters required to be discussed under the applicable rules of the Public
Company Accounting Oversight Board (“PCAOB”) and the Securities and Exchange Commission. Finally, the committee has received the written disclosures and the letter from the independent accountants required by applicable requirements of
the PCAOB regarding the independent accountant’s communications with the Audit Committee concerning independence, and has discussed with the independent accountants their independence.
|
|
|
|
|
|
In determining whether to recommend that the stockholders ratify the selection
of PricewaterhouseCoopers LLP (“PwC”) as Pitney Bowes’ independent accountants for 2020, management and the committee, as they have done in prior years, engaged in a review of PwC. In that review, the committee considers the current
historical performance and continued independence of PwC, its geographic presence compared to that of Pitney Bowes, its industry knowledge, the quality of the audit and its services, the audit approach and supporting technology, any
Securities and Exchange Commission actions and other legal issues as well as PCAOB inspection reports. The committee prohibits certain types of services that are otherwise permissible under SEC rules. Pitney Bowes management prepares an
annual assessment that includes an analysis of (1) the above criteria for PwC and the other “Big Four” accounting firms; (2) cost/benefit discussion on rotating auditors; (3) the incumbent firm’s tenure; (4) an assessment of whether firms
outside of the “Big Four” should be considered; and (5) a detailed analysis of the PwC fees. In addition, PwC reviews with the committee its analysis of its independence. Based on the results of the review this year, the committee
concluded that PwC is independent and that it is in the best interests of Pitney Bowes and its investors to appoint PwC, who have been independent accountants of the company since 1934, to serve as Pitney Bowes’ independent registered
accounting firm for 2020.
|
|
|
|
|
|
Based upon the review of information received and discussions as described in
this report, the committee recommended to the board of directors that the audited financial statements be included in the company’s Annual Report on Form 10-K for the year ended December 31, 2019 as filed with the Securities and Exchange
Commission on February 20, 2020.
|
|
|
|
|
|
By the Audit Committee of the board of directors,
|
|
|
|
|
|
David L. Shedlarz, Chair
Mary J. Steele Guilfoile |
|
|
S. Douglas Hutcheson
Michael I. Roth Linda S. Sanford |
|
Principal Accountant Fees and Services
|
|
| |
2019
|
| |
2018
|
|
Audit
|
| |
$7.3
|
| |
$6.0
|
|
Audit-Related
|
| |
1.9
|
| |
4.0
|
|
Tax
|
| |
.3
|
| |
.5
|
|
Total
|
| |
$9.5
|
| |
$10.5
|
|
Vote Required; Recommendation of the Board of Directors
|
(1)
|
Compensation should be tied to performance and long-term stockholder return and performance-based compensation should be a
greater part of total compensation for more senior positions;
|
(2)
|
Compensation should reflect leadership position and responsibility;
|
(3)
|
Incentive compensation should reward both short-term and long-term performance;
|
(4)
|
Compensation levels should be sufficiently competitive to attract and retain talent; and
|
(5)
|
Executives should own meaningful amounts of Pitney Bowes stock to align their interests with Pitney Bowes stockholders.
|
|
Strong Pay for Performance and Governance Practices
|
| |||
|
|
| |
|
|
|
•
|
| |
89% of our CEO’s target total direct compensation, and 71% of target total direct
compensation for the other NEOs, is variable, and is subject to financial performance metrics.
|
|
|
•
|
| |
100% of the annual incentive and long-term stock units grants are based on financial objectives;
|
|
|
•
|
| |
No employment agreements with our executive officers;
|
|
|
•
|
| |
One-year minimum vesting period for all awards;
|
|
|
•
|
| |
No tax gross-ups on Change-of-Control payments;
|
|
|
•
|
| |
No special arrangements whereby extra years of prior service are credited under our pension plans;
|
|
|
•
|
| |
No perquisites other than limited financial counseling and an executive physical examination benefit;
|
|
|
•
|
| |
“Double-trigger” vesting provisions in our Change-of-Control arrangements;
|
|
|
•
|
| |
A “clawback” policy that permits the company to recover incentives from senior
executives whose misrepresentation or misconduct resulted in a significant restatement of financial results;
|
|
|
•
|
| |
Prohibitions against pledging and hedging of our stock;
|
|
|
•
|
| |
Executive stock ownership policy that aligns executives’ and directors’ interests with those of
stockholders;
|
|
|
•
|
| |
Separate roles of CEO and Chairman of the board of directors;
|
|
|
•
|
| |
An annual risk assessment of our pay practices;
|
|
|
•
|
| |
An annual stockholder advisory vote on executive compensation;
|
|
|
•
|
| |
A direct line of communication between our stockholders and the board of directors;
|
|
|
•
|
| |
Use of tally sheets to review each component of executive officer compensation;
|
|
|
•
|
| |
Use of two independent third-party compensation surveys (Radford Global
Technology Survey and Willis Towers Watson Regressed Compensation Report) in determining the competitiveness of executive compensation;
|
|
|
•
|
| |
Use of an independent compensation consultant that advises the Committee directly
on the company’s compensation structure and actions and performs no other services for the company;
|
|
|
•
|
| |
Enhanced disclosure of performance targets; and
|
|
|
•
|
| |
Investor outreach regarding governance and executive compensation in spring and fall of each year.
|
|
Vote Required; Recommendation of the Board of Directors
|
| | |
|
The Executive Compensation Committee (“Committee”) of the board of directors
(1) has reviewed and discussed with management the section beginning on page 39 entitled “Compensation Discussion and Analysis” (CD&A) and (2) based on that review and discussion, the Committee has recommended to
the board of directors that the CD&A be included in the company’s Annual Report on Form 10-K for the year ended December 31, 2019 and this proxy statement.
|
|
|
|
|
|
By the Executive Compensation Committee of the board of directors,
|
|
|
|
|
|
Ms. Linda S. Sanford, Chair
|
|
|
Ms. Anne M. Busquet
|
|
|
Ms. Anne S. Fuchs
|
|
|
Mr. Robert M. Dutkowsky
|
|
Why we believe you should approve the Amended and Restated Pitney
Bowes Inc. 2018 Stock Plan
|
•
|
Limit on grants of full-value awards;
|
•
|
Prohibition on share recycling or “Liberal Share Counting” practices;
|
•
|
No re-pricing of stock options or SARs without prior stockholder approval;
|
•
|
Stock options and SARs cannot be granted below 100% of fair market value;
|
•
|
Maximum term for stock options and SARs is 10 years;
|
•
|
One-year minimum vesting period for all awards (no portion of awards may vest within one year from the date of grant and pro rata vesting will not occur prior to the first year anniversary from the grant date);
|
•
|
Minimum one-year performance period for performance-based awards;
|
•
|
Change-in-Control definition that requires either a 30% acquisition or a consummation of a transaction;
|
•
|
“Double-trigger” vesting provisions in connection with a Change-in-Control;
|
•
|
No “evergreen” provision to automatically increase the number of shares issuable under the Plan; and
|
•
|
Clawback policy applicable to awards under the Plan.
|
•
|
outstanding stock options, plus
|
•
|
outstanding full value awards, such as RSUs, plus
|
•
|
the number of shares available for future grants under our 2014 Directors’ Plan and the proposed amended and restated Plan. The 2014 Director Plan does not have its own share reserve, but rather shares granted from the 2014 Director Plan are being drawn from the 2018 Plan.
|
•
|
collectively divided by:
|
○
|
171,351,154 (the estimated total outstanding shares of
common stock as of February 20, 2020) plus
|
○
|
all shares in the numerator.
|
Fiscal Year
|
| |
Stock
Options granted |
| |
RSUs granted
|
| |
PSUs (Vested)
|
| |
Wtd. Avg. CSO
(Common Shares Outstanding) |
|
2017
|
| |
2,553,510
|
| |
1,995,473
|
| |
258,685
|
| |
186,332,010
|
|
2018
|
| |
4,932,467
|
| |
1,754,098
|
| |
91,493
|
| |
187,276,671
|
|
2019
|
| |
869,297
|
| |
3,113,886
|
| |
0
|
| |
176,250,550
|
|
Plan Terms and Conditions
|
Vote Required; Recommendation of the Board of Directors
|
Executive Summary
|
|
2019 Named Executive Officers
|
| |||
|
•
|
| |
Marc B. Lautenbach, President and Chief Executive Officer
|
|
|
•
|
| |
Stanley J. Sutula III, Executive Vice President and Chief Financial Officer
|
|
|
•
|
| |
Lila Snyder, Executive Vice President & President, Commerce Services
|
|
|
•
|
| |
Jason Dies, Executive Vice President & President, Sending Technology Solutions
|
|
|
•
|
| |
Daniel Goldstein, Executive Vice President, Chief Legal Officer and Corporate Secretary
|
|
•
|
Generated revenue of $3.2 billion, an increase of 2 percent when adjusted for both
the impact of currency and the January 2019 sale of direct operations in 6 smaller European markets in SendTech Solutions
|
•
|
Delivered free cash flow of $169 million, and generated $252 million in cash from
operations
|
•
|
Repurchased $105 million of our common shares
|
•
|
Paid $35 million in dividends to our common shareholders and $27 million in
restructuring payments
|
•
|
Held at year-end just over $1 billion in cash and short-term investments on the
Balance Sheet
|
•
|
Reported adjusted earnings per diluted share (Adjusted EPS) of $.68 which includes
an estimated $.08 related to the ransomware attack. GAAP EPS was $1.10
|
•
|
Reduced debt by $526 million, resulting in a reduction of over $1 billion since 2017
|
•
|
Our 2019 annual incentive plan paid 64.0% of target to the NEOs, reflecting the
company’s performance against 2019 goals.
|
•
|
The Performance Stock Units (PSUs) portion of our long-term plan paid 35% of
target for the 2017-2019 performance period, which vested in February 2020.
|
•
|
Annual Incentive Plan. In 2019, the company achieved between threshold and target for the Revenue Growth financial objective and for the Adjusted Free Cash Flow (Adjusted FCF)
objective, and did not achieve threshold for the Adjusted Earnings Before Interest and Taxes (Adjusted EBIT). In addition, the company made progress toward important strategic initiatives. Consequently, an annual incentive of 64.0% of target was paid to the NEOs, which includes the results of
the strategic modifier.
|
•
|
Long Term Incentive Plan. Throughout the three-year period ending with 2019, the company continued to invest in our long-term success. With the purpose of creating a streamlined and
focused global technology company, we have divested multiple businesses, and invested in our platforms, systems, products, brand, and talent to reduce the complexities of shipping and mailing for our clients, achieve operational excellence, and
leverage economies of scale and experience. In March 2017, the Committee approved the financial objectives for the first year of the 2017-2019 PSU cycle. PSU awards for the 2017-2019 cycle utilize annual financial targets set at the beginning of each calendar year, the results of which are
aggregated at the end of the three-year performance period to determine payouts. Additionally, final results are modified by a cumulative three-year Total Shareholder Return (TSR)
modifier of up to plus or minus 25% based on relative performance compared with proxy peers, linking pay-out to our stock price
performance. The three-year performance period resulted in a 35% of target PSU payout.
|
Annual Incentive
|
| |
2019 Actual Payout
Factor as a % of Target |
| |
2018 Actual Payout
Factor as a % of Target |
| |
Total Multiplier Change
2019 vs. 2018 |
|
Financial Objectives
|
| |
57.4%
|
| |
61.1%
|
| |
|
|
Strategic Modifier(1)
|
| |
6.6%
|
| |
3.3%
|
| |
|
|
Total Payout Factor
|
| |
64.0%
|
| |
64.4%
|
| |
-0.4
|
|
Long-Term Incentive
|
| |
2019 Actual Unit Multiplier
Value (2017 - 2019 PSU cycle) |
| |
2018 Actual Unit Multiplier
Value (2016 - 2018 PSU cycle) |
| |
Total Multiplier Change
2019 vs. 2018 |
|
Adjusted Earnings per Share
|
| |
0.22
|
| |
0.00
|
| |
|
|
Adjusted Free Cash Flow
|
| |
0.25
|
| |
0.00
|
| |
|
|
TSR Modifier(2)
|
| |
-0.12
|
| |
N/A
|
| |
|
|
Total Multiplier/Payout Value
|
| |
0.35
|
| |
0.00
|
| |
0.35
|
|
(1)
|
The strategic modifier objectives in 2019 included (i) Voice of the Client, measured as an overall
Net Promoter Score (NPS), for which the data is collected through client surveys and (ii) High Performance Culture,
measured through an annual employee survey. The strategic modifier of 6.6% was awarded by the Executive Compensation Committee in recognition of overall improvements in net promoter score and a
strong focus on employee engagement.
|
(2)
|
The TSR modifier is a cumulative three-year modifier, which modifies the final payout by up to +/-
25% based on the company’s TSR as compared to the company’s peer group (see page 49). The
2016-2018 PSU award did not incorporate a TSR modifier. The relative TSR modifier for the 2017 – 2019 PSU cycle was -25%.
|
|
|
|
|
|
| |
|
(1)
|
Target Compensation represents 2019 base salary, 2019 target annual incentive
paid in February, 2020, and: (i) the prorated grant date target value of the RSU awards which vested in February, 2020 (ii) the grant date target value of the 2017-2019 PSU award which vested in February, 2020, and (iii) the prorated
grant date target value of the 2017 and 2018 option awards which vested in February, 2020.
|
|
|
(2)
|
Actual Compensation represents 2019 base salary, 2019 actual annual incentive
paid in February, 2020, and: (i) the value realized upon vesting of the RSU awards in February, 2020, (ii) the value of the 2017-2019 PSU award based on the final performance factor of 0.35 and (iii) the value of the prorated vesting in
February 2020 of the option awards.
|
|
Executive Compensation Program Structure
|
|
Overall Objectives
|
| |
•
|
| |
Compensation levels should be sufficiently competitive to attract and retain talent;
|
|
|
|
| |
|
| |
|
|
|
|
| |
•
|
| |
Compensation should reflect leadership position and responsibility;
|
|
|
|
| |
|
| |
|
|
|
|
| |
•
|
| |
Executive compensation should be linked to the performance of the company as a whole; and
|
|
|
|
| |
|
| |
|
|
|
|
| |
•
|
| |
Compensation should motivate our executives to deliver our short and long-term business objectives
and strategy.
|
|
|
Pay Mix Principles
|
| |
•
|
| |
Compensation should be tied to short-term performance and creation of long-term stockholder value and
return;
|
|
|
|
| |
|
| |
|
|
|
|
| |
•
|
| |
Performance-based compensation should be a significant portion of total compensation for executives
with higher levels of responsibility and a greater ability to influence enterprise results; and
|
|
|
|
| |
|
| |
|
|
|
|
| |
•
|
| |
Executives should own meaningful amounts of Pitney Bowes stock to align their interests with Pitney
Bowes’ stockholders.
|
|
|
Pay for Performance
|
| |
•
|
| |
Incentive compensation should reward both short-term and long-term performance;
|
|
|
|
| |
|
| |
|
|
|
|
| |
•
|
| |
A significant portion of our compensation should be variable based on performance; and
|
|
|
|
| |
|
| |
|
|
|
|
| |
•
|
| |
The annual and long-term incentive components should be linked to operational outcomes, financial
results or stock price performance.
|
|
Stockholder Engagement — Executive Compensation
|
Strong Compensation and Pay Governance Practices
|
|
| |
100% of annual incentive is tied to financial
metrics |
|
| |
|
|
| |
100% of the long-term incentive is tied to financial metrics, growth in our
share price, and relative shareholder value
|
|
| |
|
|
| |
Double trigger vesting in our change of control provisions
|
|
| |
|
|
| |
Significant stock ownership guidelines for senior executives and directors
|
|
| |
|
|
| |
Enhanced disclosure of performance targets
|
|
| |
|
|
| |
Independent compensation consultant performing no other services for the
company
|
|
| |
|
|
| |
Clawback provisions in the event of financial restatement
|
|
| |
|
|
| |
Annual stockholder advisory vote on executive compensation
|
|
| |
|
|
| |
Significant portion of CEO pay at risk (89%)
|
|
| |
|
|
| |
Independent Chairman of board of directors
|
|
| |
|
|
| |
Annual risk-assessment of pay practices
|
|
| |
|
|
| |
Semi-annual stockholder outreach with direct line of communication with board
of directors
|
|
| |
|
|
| |
One-year minimum vesting period for all awards
|
|
| |
No individual supplemental executive retirement plans
|
|
| |
|
|
| |
No special arrangement crediting extra years of service in our benefit plans
|
|
| |
|
|
| |
No tax gross-up in change of control payments
|
|
| |
|
|
| |
No hedging, pledging, or short-term speculative trading of company stock
|
|
| |
|
|
| |
No employment agreements with our executive officers
|
|
| |
|
|
| |
No stock option repricing, reloads, or exchanges
|
|
| |
|
|
| |
No transferability of restricted securities
|
|
| |
|
|
| |
No dividends on unvested stock awards
|
(1)
|
Market median is the average of the median pay as reported in the Willis Towers Watson Regressed
Compensation Report and the Radford Global Technology Survey.
|
Pay Element
|
| |
Key Characteristics
|
| |
What it Rewards
|
|||||||||
Short-term Compensation
|
|||||||||||||||
Base Salary
|
| |
•
|
| |
Fixed cash compensation
|
| |
•
|
| |
Performance of daily job duties
|
|||
|
| |
•
|
| |
Increases influenced by an executive’s individual performance and/or competitiveness to the market
|
| |
•
|
| |
Highly developed skills and abilities critical to the success of the company
|
|||
Annual Incentive
|
| |
•
|
| |
Performance-based cash compensation primarily measured on achievement of enterprise-wide metrics
|
| |
•
|
| |
Achievement of pre-determined short-term objectives established in the first quarter of each year
|
|||
|
| |
•
|
| |
Individual performance may be considered in establishing an executive’s annual incentive opportunity
|
| ||||||||
Long-term Incentives
|
|||||||||||||||
Performance Stock Units
|
| |
•
|
| |
Performance-based equity compensation measured on enterprise-wide metrics
|
| |
•
|
| |
Achievement of pre-determined financial objectives:
|
|||
|
|
| |
•
|
| |
Established in the first quarter of each year within the three-year cycle for awards
|
||||||||
|
| |
|
| |
|
| |
|
| |
•
|
| |
Modified by a Total Shareholder Return (TSR) compared to our peer group
|
Performance-Based Restricted Stock Units
|
| |
•
|
| |
Performance-based equity compensation measured on a threshold financial target
|
| |
•
|
| |
Achievement of a pre-determined performance objective established at time of grant
|
|||
|
| |
|
| |
|
| |
•
|
| |
Company stock value
|
|||
Nonqualified Stock Options
|
| |
•
|
| |
Performance-based equity compensation measured by company stock value
|
| |
•
|
| |
Company stock value must increase for optionees to realize any benefit
|
|||
Periodic Off-cycle Long-term Awards
|
| |
•
|
| |
Depends on type of award granted
|
| |
•
|
| |
The Committee may also grant other long-term incentive awards in unique circumstances where needed
for attracting, retaining or motivating executive talent
|
•
|
Adjusted FCF - The ability to generate free cash flow on a short-term basis is important as it allows the company to manage its current financial needs and discretionary uses.
|
•
|
Adjusted EBIT - This is an appropriate measure for annual incentive compensation because it excludes one-time and other unusual charges and benefits and more accurately reflects current underlying profitability and performance.
|
•
|
Revenue growth - This is an appropriate measure because it indicates whether our business is expanding.
|
Financial Objectives(1)
|
| |
Target
Weighting |
| |
Threshold
|
| |
Target
|
| |
Maximum
|
| |
Actual
Result |
| |
Actual Payout as
a % of Target |
|
Adjusted Earnings Before Interest and Taxes(2)
|
| |
33.33%
|
| |
$332 million
|
| |
$361 million
|
| |
$385 million
|
| |
$292 million
|
| |
0%
|
|
Revenue Growth(2)
|
| |
33.33%
|
| |
(0.3)%
|
| |
1.9%
|
| |
3.8%
|
| |
1.0%
|
| |
26.5%
|
|
Adjusted Free Cash Flow(2)
|
| |
33.33%
|
| |
$127 million
|
| |
$161 million
|
| |
$189 million
|
| |
$156 million
|
| |
30.9%
|
|
(1)
|
We set financial objective targets at the beginning of 2019 relative to overall guidance provided
to stockholders and the financial community on a continuing operations basis excluding any nonrecurring items. Please see “Reconciliation of Reported Consolidated Results to Adjusted Measures” on page 60 of this proxy statement and “Treatment of Special Events” beginning on page 58 of this proxy statement. We believe that the 2019 financial objectives at each level (threshold, target and
maximum) accurately balance the difficulty of attainment of the level with the related payout.
|
(2)
|
For compensation purposes, Adjusted EBIT is translated at 2019 budget rates and presented on a
continuing operations basis excluding any nonrecurring items; and Revenue growth is presented on a continuing operations and constant currency basis. Adjusted EBIT, Revenue growth and Adjusted FCF are non-GAAP measures. For a reconciliation and additional information, please see “Reconciliation of Reported Consolidated Results to Adjusted
Measures” on page 60 of this proxy statement.
|
|
PBI rank vs. Peer Group
(percentile)
|
| |
Modifier
|
|
|
> 75th %
|
| |
+25%
|
|
|
> 70th to 75th %
|
| |
+20%
|
|
|
> 65th to 70th %
|
| |
+15%
|
|
|
> 60th to 65th %
|
| |
+10%
|
|
|
> 55th to 60th %
|
| |
+5%
|
|
|
> 45th to 55th %
|
| |
+0%
|
|
|
> 40th to 45th %
|
| |
–5%
|
|
|
> 35th to 40th %
|
| |
–10%
|
|
|
> 30th to 35th %
|
| |
–15%
|
|
|
25th to 30th %
|
| |
–20%
|
|
|
Below 25th %
|
| |
–25%
|
|
•
|
Adjusted EPS is an appropriate measure of profitability as it excludes one-time
and unusual charges and benefits.
|
•
|
Adjusted FCF provides resources to reposition and pursue new growth opportunities.
While this metric is also utilized in our short-term one-year goal, we believe Adjusted FCF is important as well to the company’s long-term success, measured over a three-year period.
|
2017 – 2019
Adjusted Earnings Per Share (Adjusted EPS)(1) |
| |
Threshold
|
| |
Target
|
| |
Maximum
|
| |
Actual
Result |
| |
Metric
Payout Value |
| |
TSR
Modifier |
| |
Performance
Multiplier |
|
2017
|
| |
1.65
|
| |
$1.78
|
| |
$1.85
|
| |
$1.41
|
| |
0.00
|
| |
|
| |
|
|
2018
|
| |
$1.10
|
| |
$1.20
|
| |
$1.30
|
| |
$1.16
|
| |
0.11
|
| |
|
| |
|
|
2019
|
| |
$0.69
|
| |
$0.81
|
| |
$0.91
|
| |
$0.76
|
| |
0.11
|
| |
|
| |
|
|
2017 – 2019
Adjusted Free Cash Flow (Adjusted FCF)(1) |
| |
Threshold
|
| |
Target
|
| |
Maximum
|
| |
Actual
Result |
| |
Metric
Payout Value |
| |
|
| |
|
|
2017
|
| |
$335 million
|
| |
$375 million
|
| |
$405 million
|
| |
$247 million
|
| |
0.00
|
| |
|
| |
|
|
2018
|
| |
$230 million
|
| |
$248 million
|
| |
$289 million
|
| |
$239 million
|
| |
0.10
|
| |
|
| |
|
|
2019
|
| |
$127 million
|
| |
$161 million
|
| |
$189 million
|
| |
$156 million
|
| |
0.15
|
| |
|
| |
|
|
Total
|
| |
|
| |
|
| |
|
| |
|
| |
0.47
|
| |
-25%
|
| |
0.35
|
|
(1)
|
Adjusted EPS and Adjusted FCF are non-GAAP measures. For a reconciliation and additional
information, please see “Reconciliation of Reported Consolidated Results to Adjusted Measures” on page 60 of this proxy statement and “Treatment of Special Events” beginning on page 58 of this proxy
statement. The 2018 and 2019 financial targets for the 2017-2019 PSU are the same ones used for the completed years in the 2018-2020 and 2019-2021 PSU/CIU performance periods.
|
Executive
|
| |
Target PSUs Awarded
|
| |
Performance Multiplier
|
| |
Units Vested
|
|
Marc B. Lautenbach
|
| |
250,760
|
| |
0.35
|
| |
87,766
|
|
Stanley J. Sutula III
|
| |
136,778
|
| |
0.35
|
| |
47,872
|
|
Lila Snyder
|
| |
31,915
|
| |
0.35
|
| |
11,170
|
|
Jason Dies
|
| |
7,124
|
| |
0.35
|
| |
2,493
|
|
Daniel Goldstein
|
| |
30,775
|
| |
0.35
|
| |
10,771
|
|
•
|
Qualified and nonqualified restoration 401(k) plans with company matching contributions up to 4% of eligible compensation and 2% company core contributions.
Participants become eligible for the company matching and company core contributions after one year of employment with the
company.
|
•
|
Qualified and nonqualified restoration pension plans for employees hired prior to January 1, 2005. Accruals under these plans were frozen at the end of 2014. Mr. Goldstein is the only NEO who qualifies for this benefit.
|
•
|
is adjusted on the basis of notional investment returns of publicly-available mutual fund investments offered under the qualified 401(k) plan; and
|
•
|
does not receive any above-market earnings.
|
•
|
Nonqualified Deferred Incentive Savings Plan (DISP) which provides certain executives the ability to voluntarily defer in a tax efficient manner pay-outs
of annual cash incentives and base pay into a nonqualified deferred compensation plan.
|
•
|
Certain executives with RSUs and PSUs who are subject to the executive stock ownership policy,
|
•
|
Relocation assistance for executives asked to move to a new work location facilitates the placement of the right person in the job and aids in developing
talent.
|
•
|
Limited perquisites, consisting of financial counseling (to assist with tax compliance, investments, legal and estate matters), executive physicals and spousal travel.
|
Process for Determining Named Executive Officer Compensation
|
•
|
the value of the total rewards package;
|
•
|
program design and strategic considerations;
|
•
|
affordability;
|
•
|
changing competitive conditions;
|
•
|
program transition considerations;
|
•
|
the definition and scope of the executive’s role;
|
•
|
the executive’s individual contributions to the company;
|
•
|
unique skill sets presented by the employee; and
|
•
|
succession or retention considerations.
|
•
|
NetApp, Inc.
|
•
|
Teradata Corp.
|
•
|
Unisys Corp.
|
•
|
EchoStar Corp.
|
•
|
ACCO Brands Corporation
|
•
|
Stamps.com Inc.
|
•
|
Echo Global Logistics, Inc.
|
•
|
Hub Group, Inc.
|
Company Name
|
| |
12/31/2019
Revenue ($ millions) |
| |
12/31/2019
Market Capitalization ($ millions) |
| |
Total Stockholder Return
|
| ||||||
|
1-Year
|
| |
3-Year
|
| |
5-Year
|
|
Alliance Data Systems Corporation
|
| |
$5,581
|
| |
$5,168
|
| |
-24%
|
| |
-20%
|
| |
-16%
|
|
Deluxe Corporation
|
| |
$2,009
|
| |
$2,102
|
| |
33%
|
| |
-9%
|
| |
-2%
|
|
Diebold, Incorporated
|
| |
$4,409
|
| |
$811
|
| |
324%
|
| |
-24%
|
| |
-20%
|
|
EchoStar Corp.
|
| |
$1,886
|
| |
$4,233
|
| |
18%
|
| |
-6%
|
| |
-4%
|
|
Fidelity National Information Services, Inc.
|
| |
$10,333
|
| |
$85,485
|
| |
37%
|
| |
24%
|
| |
19%
|
|
Fiserv, Inc.
|
| |
$10,187
|
| |
$78,616
|
| |
57%
|
| |
30%
|
| |
27%
|
|
NCR Corp.
|
| |
$6,915
|
| |
$4,486
|
| |
52%
|
| |
-5%
|
| |
4%
|
|
NetApp Inc.
|
| |
$6,146
|
| |
$14,207
|
| |
7%
|
| |
24%
|
| |
11%
|
|
R.R. Donnelley & Sons Company
|
| |
$6,413
|
| |
$280
|
| |
4%
|
| |
-35%
|
| |
-27%
|
|
Rockwell Automation Inc.
|
| |
$6,695
|
| |
$23,479
|
| |
38%
|
| |
17%
|
| |
15%
|
|
Teradata Corporation
|
| |
$1,899
|
| |
$3,012
|
| |
-30%
|
| |
-.5%
|
| |
-9%
|
|
Unisys Corporation
|
| |
$2,968
|
| |
$740
|
| |
2%
|
| |
-7%
|
| |
-17%
|
|
The Western Union Company
|
| |
$5,292
|
| |
$11,228
|
| |
63%
|
| |
11%
|
| |
12%
|
|
Xerox Corporation
|
| |
$9,066
|
| |
$7,971
|
| |
92%
|
| |
21%
|
| |
3%
|
|
25th Percentile
|
| |
$3,328
|
| |
$2,329
|
| |
5%
|
| |
-9%
|
| |
-15%
|
|
Median
|
| |
$5,864
|
| |
$4,827
|
| |
35%
|
| |
-3%
|
| |
1%
|
|
75th Percentile
|
| |
$6,860
|
| |
$13,462
|
| |
56%
|
| |
20%
|
| |
12%
|
|
Pitney Bowes Inc.
|
| |
$3,205
|
| |
$689
|
| |
-29%
|
| |
-32%
|
| |
-26%
|
|
PBI Percentile Rank
|
| |
24%
|
| |
7%
|
| |
2%
|
| |
2%
|
| |
0%
|
|
(1)
|
Peer group as of December 31, 2019 used for benchmarking NEO peer median pay levels, conducting pay
practice reviews and the calculation of the 2017-2019 3-Year TSR modifier.
|
•
|
to any executive officer, including NEOs, in the event of any financial
restatement due to a misrepresentation of the financial statements of the company. This applies to vesting or to payments made or paid during the 36-month period prior to the financial restatement; or
|
•
|
to any employee, including NEOs, whom the board of directors reasonably believes
engaged in gross misconduct or breached any provisions in their Proprietary Interest Protection Agreement, which generally provides for confidentiality, and non-competition and non-solicitation of employees and customers for one year following termination of employment.
|
Title
|
| |
Stock Ownership as a
Multiple of Base Salary |
|
Chief Executive Officer
|
| |
5X
|
|
Chief Operating Officer
|
| |
3X
|
|
Other Executive Officers
|
| |
2X
|
|
Unit Presidents and Staff Vice Presidents
|
| |
1X
|
|
| | |
|
The company’s financial results are reported in accordance with generally
accepted accounting principles (GAAP); however, in setting and measuring compensation targets, we use certain non-GAAP measures, such as adjusted income from continuing operations, adjusted earnings before interest and taxes, adjusted
earnings per share, revenue growth, and adjusted free cash flow.
|
|
|
|
|
|
Adjusted income from continuing operations, adjusted earnings before interest
and taxes, and adjusted earnings per share exclude the impact of items like discontinued operations, restructuring charges, income and expenses related to acquisitions and dispositions, asset impairment charges, unusual tax adjustments,
the loss on extinguishment of debt, and other unusual or one-time items. While these are actual company income or expenses, they can mask underlying trends associated with the business. Such items are often inconsistent in amount and
frequency and as such, the non-GAAP measures provide greater insight into the current underlying operating trends of the business.
|
|
|
|
|
|
Revenue growth is presented on a constant currency basis to exclude the
impact of changes in foreign currency exchange rates since the prior period under comparison. This comparison provides better insight into the underlying revenue performance of the business.
|
|
|
|
|
|
Free cash flow and adjusted free cash flow provides insight into the amount
of cash that management could have available for other discretionary uses. Free cash flow adjusts GAAP cash flow from operating activities for cash flows from discontinued operations, capital expenditures, restructuring payments,
changes in customer deposits held at the Pitney Bowes Bank, transaction costs and other special items. Adjusted free cash flow excludes from free cash flow the impact of customer deposits held at the Pitney Bowes Bank and finance
receivables.
|
|
|
|
|
|
Non-GAAP measures should not be construed as an alternative to our reported
results determined in accordance with GAAP. Further, our definitions of these non-GAAP measures may differ from similarly titled measures used by other companies.
|
|
(Dollars in thousands, except per share data)
|
| |
2019
|
| |
2018(1)
|
| |
2017(1)
|
|
GAAP diluted earnings per share
|
| |
$1.10
|
| |
$1.28
|
| |
$1.30
|
|
Income from discontinued operations, net of tax
|
| |
(0.87)
|
| |
(0.32)
|
| |
(0.34)
|
|
Restructuring charges and asset impairments, net
|
| |
0.30
|
| |
0.11
|
| |
0.16
|
|
Loss on disposition of businesses
|
| |
0.11
|
| |
—
|
| |
—
|
|
Pension settlement
|
| |
—
|
| |
0.12
|
| |
—
|
|
Tax adjustments, net
|
| |
—
|
| |
(0.18)
|
| |
(0.09)
|
|
Loss on extinguishment of debt
|
| |
0.03
|
| |
0.03
|
| |
0.01
|
|
Transaction costs
|
| |
0.01
|
| |
0.01
|
| |
0.02
|
|
Impact of ransomware attack(2)
|
| |
0.08
|
| |
—
|
| |
—
|
|
Adjusted diluted earnings per share(3)
|
| |
$0.76
|
| |
$1.05
|
| |
$1.06
|
|
GAAP net cash provided by operating activities
|
| |
$252,207
|
| |
$342,879
|
| |
$454,158
|
|
Net cash (provided by) used in operating activities - discontinued operations
|
| |
(9,272)
|
| |
7,916
|
| |
(52,758)
|
|
Capital expenditures
|
| |
(137,253)
|
| |
(137,810)
|
| |
(118,247)
|
|
Restructuring payments
|
| |
27,148
|
| |
52,730
|
| |
26,080
|
|
Reserve account deposits
|
| |
16,341
|
| |
21,008
|
| |
10,954
|
|
Transaction costs paid
|
| |
19,488
|
| |
14,203
|
| |
7,396
|
|
Free cash flow
|
| |
168,659
|
| |
300,926
|
| |
327,583
|
|
Reserve account deposits
|
| |
(16,341)
|
| |
(21,008)
|
| |
(10,954)
|
|
Net finance receivables
|
| |
(25,633)
|
| |
(53,280)
|
| |
(147,836)
|
|
Impact of ransomware attack(2)
|
| |
29,000
|
| |
—
|
| |
—
|
|
Acceleration of toll charge (4)
|
| |
—
|
| |
22,000
|
| |
—
|
|
Adjusted free cash flow
|
| |
$155,685
|
| |
$248,638
|
| |
$168,793
|
|
GAAP net income
|
| |
$194,609
|
| |
$241,811
|
| |
$243,528
|
|
Income from discontinued operations, net of tax
|
| |
(154,460)
|
| |
(60,106)
|
| |
(63,489)
|
|
Restructuring charges and asset impairments, net
|
| |
52,427
|
| |
20,071
|
| |
29,330
|
|
Loss on disposition of businesses
|
| |
20,280
|
| |
—
|
| |
—
|
|
Pension settlement
|
| |
—
|
| |
23,402
|
| |
—
|
|
Tax adjustments, net
|
| |
—
|
| |
(34,281)
|
| |
(17,512)
|
|
Loss on extinguishment of debt
|
| |
4,961
|
| |
5,933
|
| |
2,375
|
|
Transaction costs
|
| |
2,033
|
| |
1,012
|
| |
4,052
|
|
Adjusted income from continuing operations
|
| |
119,850
|
| |
197,842
|
| |
198,284
|
|
Provision for income taxes, as adjusted
|
| |
3,933
|
| |
56,831
|
| |
50,503
|
|
Interest expense, net
|
| |
155,558
|
| |
159,757
|
| |
164,162
|
|
Adjusted earnings before interest and taxes
|
| |
279,341
|
| |
414,430
|
| |
412,949
|
|
Impact of ransomware attack(2)
|
| |
19,400
|
| |
—
|
| |
—
|
|
Changes in variable compensation
|
| |
(7,000)
|
| |
—
|
| |
—
|
|
Impacts of foreign currency compared to budget(5)
|
| |
—
|
| |
4,000
|
| |
10,200
|
|
Adjusted earnings before interest and taxes for compensation purposes
|
| |
$291,741
|
| |
$418,430
|
| |
$423,149
|
|
Reported revenue (decline) growth
|
| |
(0.2%)
|
| |
12.8%
|
| |
4.2%
|
|
Impacts of foreign currency
|
| |
0.6%
|
| |
(0.3%)
|
| |
—
|
|
Impact of ransomware attack(2)
|
| |
0.6%
|
| |
—
|
| |
—
|
|
Impact of 2017 acquisition(6)
|
| |
—
|
| |
—
|
| |
(4.1%)
|
|
Adjusted revenue growth
|
| |
1.0%
|
| |
12.5%
|
| |
0.1%
|
|
(1)
|
Prior year amounts have been recast to reflect the sale of the Software Solutions business as
discontinued operations
|
(2)
|
Diluted earnings per share, free cash flow, earnings before interest and taxes and revenue growth
have been adjusted for the estimated impact of the October 2019 ransomware attack that temporarily disrupted operations.
|
(3)
|
The sum of the earnings per share amounts may not equal the totals due to rounding.
|
(4)
|
In 2018, a tax refund that would have been received was applied to accelerate the payment of the
Toll Charge related to the Tax Cuts and Jobs Act of 2017
|
(5)
|
Adjusted earnings before interest and taxes, as adjusted is translated at budget rates.
|
(6)
|
Adjusted revenue growth excludes the growth in revenue attributed to the acquisition of Newgistics in
October 2017.
|
Name and Principal Position
|
| |
Year
|
| |
Salary
($) |
| |
Bonus
($) |
| |
Stock
Awards ($)(1) |
| |
Option Awards ($)(2)
|
| |
Non-Equity Incentive
Plan Compensation ($)(3) |
| |
Change in
Pension Value and Nonqualified Deferred Compensation Earnings ($)(4) |
| |
All Other
Compensation ($)(5) |
| |
Total
($) |
|
Marc B. Lautenbach
|
| |
2019
|
| |
1,000,000
|
| |
—
|
| |
6,226,209
|
| |
—
|
| |
864,000
|
| |
—
|
| |
138,970
|
| |
8,229,179
|
|
President and Chief
Executive Officer |
| |
2018
|
| |
991,667
|
| |
—
|
| |
4,793,750
|
| |
1,300,000
|
| |
869,400
|
| |
—
|
| |
102,122
|
| |
8,056,938
|
|
| |
2017
|
| |
950,000
|
| |
—
|
| |
3,799,012
|
| |
1,100,000
|
| |
414,248
|
| |
—
|
| |
78,108
|
| |
6,341,368
|
| |
Stanley J. Sutula III
|
| |
2019
|
| |
643,667
|
| |
—
|
| |
1,538,786
|
| |
400,000
|
| |
332,800
|
| |
—
|
| |
72,024
|
| |
2,987,277
|
|
Executive Vice President
and Chief Financial Officer |
| |
2018
|
| |
610,000
|
| |
—
|
| |
1,106,250
|
| |
300,000
|
| |
315,302
|
| |
—
|
| |
59,506
|
| |
2,391,058
|
|
| |
2017
|
| |
547,727
|
| |
50,000
|
| |
4,494,301
|
| |
600,000
|
| |
155,040
|
| |
—
|
| |
13,214
|
| |
5,860,283
|
| |
Lila Snyder
|
| |
2019
|
| |
653,310
|
| |
—
|
| |
769,393
|
| |
200,001
|
| |
335,591
|
| |
—
|
| |
74,961
|
| |
2,033,257
|
|
Executive Vice President
and President, Commerce Services |
| |
2018
|
| |
640,500
|
| |
—
|
| |
737,500
|
| |
745,000
|
| |
331,068
|
| |
—
|
| |
51,692
|
| |
2,505,759
|
|
Jason Dies
|
| |
2019
|
| |
646,210
|
| |
—
|
| |
769,393
|
| |
200,001
|
| |
335,591
|
| |
—
|
| |
81,502
|
| |
2,032,698
|
|
Executive Vice President
and President, Sending Technology Solutions |
| |
2018
|
| |
571,023
|
| |
—
|
| |
737,500
|
| |
200,000
|
| |
309,120
|
| |
—
|
| |
42,434
|
| |
1,860,077
|
|
Daniel J. Goldstein
Executive Vice President, Chief Legal Officer and Corporate Secretary |
| |
2019
|
| |
549,285
|
| |
—
|
| |
577,045
|
| |
150,000
|
| |
281,617
|
| |
50,329
|
| |
46,087
|
| |
1,654,363
|
|
(1)
|
This column includes the value of stock awarded to NEOs during 2019, 2018 and 2017 based upon its
grant date fair value, as determined under SEC guidance. Performance Stock Units (PSUs) and performance-based Restricted Stock Units (RSUs) were granted to the NEOs in 2019. Details regarding the grants of PSUs and performance-based RSUs can be found in the “Grants of Plan-Based Awards in 2019” table and details regarding outstanding stock
awards can be found in the “Outstanding Equity Awards at 2019 Fiscal Year-End” table. See page 49 in
“Compensation Discussion and Analysis” for additional information on PSUs and RSUs. The value of the PSUs included in the 2019 amount represents the full value of the award based on a targeted
number of shares multiplied by the Monte-Carlo value on the date of the award. If performance conditions allow for PSUs granted in 2019 to reach the 200% maximum number of shares, based on the
Monte-Carlo simulated grant date value, the total value of stock awarded in 2019 inclusive of RSUs and PSUs would be $10,002,118 for Mr. Lautenbach; $2,700,603
for Mr. Sutula III; $1,350,302 for Ms. Snyder; $1,350,302 for Mr. Dies and $1,012,728 for Mr. Goldstein and subject to the 2018 Stock Plan and the 1,500,000 maximum number of Shares that may be the
subject of Awards made to a single Participant in any one calendar year. See Note 1 and 20 of the Consolidated Financial Statement included in the company’s Annual Report on Form 10-K for the year
ended December 31, 2019 regarding assumptions underlying valuation of equity awards.
|
(2)
|
This column includes the value of stock options awarded to NEOs during 2019, 2018 and 2017 based upon
its grant date fair value, as determined under SEC guidance. Nonqualified Stock Options (NSOs) were granted to the NEOs other than the CEO in 2019. Details regarding
the grants of NSOs can be found in the “Grants of Plan-Based Awards in 2019” table and details regarding outstanding stock awards can be found in the “Outstanding Equity Awards at 2019 Fiscal
Year-End” table. See page 51 in “Compensation Discussion and Analysis” for additional information on
NSOs. See Note 1 and 20 of the Consolidated Financial Statement included in the company’s Annual Report on Form 10-K for the year ended December 31, 2019 regarding assumptions underlying valuation
of equity awards.
|
(3)
|
This column includes annual incentive compensation earned in 2019, 2018 and 2017. When considering
all elements of the table above, the majority of compensation for the NEOs is at-risk and is earned based on company and executive performance against pre-determined financial objectives.
|
(4)
|
This column shows the change in the actuarial present value of the accumulated pension benefit
applicable to all eligible employees during 2019, 2018 and 2017. Mr. Daniel J. Goldstein is the only pension eligible NEO and is fully vested in his pension benefit. Both the qualified Pension Plan and nonqualified Pension Restoration Plan were frozen to all participants on December 31, 2014.
|
(5)
|
Amounts shown for 2019 include all other compensation received by the NEOs that is not reported
elsewhere.
|
|
| |
|
| |
Estimated Future
Payouts Under Non-Equity Incentive Plan Awards |
| |
Estimated Future
Payouts Under Equity Incentive Plan Awards |
| |
All Other
Stock Awards: Number of Shares of Stock or Units(#) |
| |
All Other
Option Awards: Number of Securities Underlying Options(#) |
| |
Exercise
or Base Price of Option Awards ($) |
| |
Grant
Date Fair Value of Stock and Option Awards(1) |
| ||||||||||||
Name
|
| |
Grant
Date |
| |
Threshold
($) |
| |
Target
($) |
| |
Maximum
($) |
| |
Threshold
($) |
| |
Target
($) |
| |
Maximum
($) |
| ||||||||||||
Marc B. Lautenbach
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
(Annual Incentive)(2)
|
| |
|
| |
225,000
|
| |
1,350,000
|
| |
5,000,000
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
(Performance Stock Units)(3)
|
| |
2/5/2019
|
| |
|
| |
|
| |
|
| |
39,000
|
| |
590,909
|
| |
1,181,818
|
| |
|
| |
|
| |
|
| |
3,775,909
|
|
(Performance-based RSUs)(4)
|
| |
2/5/2019
|
| |
|
| |
|
| |
|
| |
|
| |
393,939
|
| |
|
| |
|
| |
|
| |
|
| |
2,450,301
|
|
Stanley J. Sutula III
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
(Annual Incentive)(2)
|
| |
|
| |
86,667
|
| |
520,000
|
| |
5,000,000
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
(Performance Stock Units)(3)
|
| |
2/5/2019
|
| |
|
| |
|
| |
|
| |
12,000
|
| |
181,818
|
| |
363,636
|
| |
|
| |
|
| |
|
| |
1,161,817
|
|
(Performance-based RSUs)(4)
|
| |
2/5/2019
|
| |
|
| |
|
| |
|
| |
|
| |
60,606
|
| |
|
| |
|
| |
|
| |
|
| |
376,969
|
|
(Nonqualified Stock Options)(5)
|
| |
2/5/2019
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
201,005
|
| |
$ 6.60
|
| |
400,000
|
|
Lila Snyder
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
(Annual Incentive)(2)
|
| |
|
| |
87,394
|
| |
524,362
|
| |
5,000,000
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
(Performance Stock Units)(3)
|
| |
2/5/2019
|
| |
|
| |
|
| |
|
| |
6,000
|
| |
90,909
|
| |
181,818
|
| |
|
| |
|
| |
|
| |
580,909
|
|
(Performance-based RSUs)(4)
|
| |
2/5/2019
|
| |
|
| |
|
| |
|
| |
|
| |
30,303
|
| |
|
| |
|
| |
|
| |
|
| |
188,485
|
|
(Nonqualified Stock Options)(5)
|
| |
2/5/2019
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
100,503
|
| |
$ 6.60
|
| |
200,001
|
|
Jason Dies
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
(Annual Incentive)(2)
|
| |
|
| |
87,394
|
| |
524,362
|
| |
5,000,000
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
(Performance Stock Units)(3)
|
| |
2/5/2019
|
| |
|
| |
|
| |
|
| |
6,000
|
| |
90,909
|
| |
181,818
|
| |
|
| |
|
| |
|
| |
580,909
|
|
(Performance-based RSUs)(4)
|
| |
2/5/2019
|
| |
|
| |
|
| |
|
| |
|
| |
30,303
|
| |
|
| |
|
| |
|
| |
|
| |
188,485
|
|
(Nonqualified Stock Options)(5)
|
| |
2/5/2019
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
100,503
|
| |
$ 6.60
|
| |
200,001
|
|
Daniel J. Goldstein
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
(Annual Incentive)(2)
|
| |
|
| |
55,109
|
| |
330,652
|
| |
5,000,000
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
(Performance Stock Units)(3)
|
| |
2/5/2019
|
| |
|
| |
|
| |
|
| |
4,500
|
| |
68,182
|
| |
136,364
|
| |
|
| |
|
| |
|
| |
435,683
|
|
(Performance-based RSUs)(4)
|
| |
2/5/2019
|
| |
|
| |
|
| |
|
| |
|
| |
22,727
|
| |
|
| |
|
| |
|
| |
|
| |
141,362
|
|
(Nonqualified Stock Options)(5)
|
| |
2/5/2019
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
75,377
|
| |
$ 6.60
|
| |
150,000
|
|
(1)
|
The amounts in this column represent the grant date fair values of PSU, RSU and NSO awards. The fair
values are calculated in accordance with SEC guidance and reflect an adjustment for the exclusion of dividend equivalents during the vesting period. PSUs, which cliff vest after three years, have a grant date fair value of $6.39 and are calculated based on the Monte-Carlo simulation methodology. RSUs and NSOs, which vest pro-rata over three years,
have a fair value of $6.22 and $1.99, respectively.
|
(2)
|
Values in this row represent the range in payout for the 2019 annual incentive award. The maximum
payouts a NEO could receive for annual incentive awards under the KEIP is $5,000,000. The Committee may apply negative discretion to reduce the annual awards such that individual payments are in line with financial enterprise, business unit and/or individual performance.
|
(3)
|
PSUs were granted based on the actual closing price of $6.60 on the February 5, 2019 grant date. PSUs
represent a right to Pitney Bowes stock on the vesting date, with the number of shares determined after a specified performance period. This award is subject to achievement of the pre-determined annual performance metrics and a three-year cumulative Total Shareholder Return modifier. The Committee may apply negative discretion to reduce
long-term awards such that payments are in line with financial enterprise performance. Please see page 49 in “Performance Stock Units” for additional information on this performance award.
|
(4)
|
Performance-based RSUs were granted based on the actual closing price of $6.60 on the February 5,
2019 grant date. The closing price is utilized to determine the number of RSUs to be awarded to NEOs. The performance metric tied to income from continuing operations was met as of December 31, 2019, however, the award remains subject to forfeiture over the remaining vesting period. This award will vest on a pro-rata basis over a three-year period
ending February 8, 2022.
|
(5)
|
NSOs have an exercise price of $6.60 equal to the closing price of the company’s common stock on the
February 5, 2019 grant date. The Black-Scholes value for each option granted on February 5, 2019 was $1.99. See Note 1 and 20 of the Consolidated Financial Statement included in the company’s Annual Report on Form 10-K for the year ended December 31, 2019 regarding assumptions underlying valuation of equity awards.
|
|
| |
|
| |
Option Awards
|
| |
Stock Awards
|
| ||||||||||||||||||
Name
|
| |
Grant
Date |
| |
Number of
Securities Underlying Unexercised Options (#) Exercisable |
| |
Number of
Securities Underlying Unexercised Options (#) Unexercisable |
| |
Option
Exercise Price ($) |
| |
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 ($)(2) |
| |
Equity
Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) |
| |
Equity
Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(2) |
|
Marc B. Lautenbach
|
| |
12/3/2012
|
| |
100,000
|
| |
0
|
| |
13.3860
|
| |
12/3/2022
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
| |
12/3/2012
|
| |
200,000
|
| |
0
|
| |
15.1320
|
| |
12/3/2022
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
| |
12/3/2012
|
| |
300,000
|
| |
0
|
| |
16.8780
|
| |
12/3/2022
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
| |
2/11/2013
|
| |
400,000
|
| |
0
|
| |
22.1600
|
| |
12/2/2022
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
| |
2/8/2016
|
| |
388,693
|
| |
0
|
| |
16.8200
|
| |
2/7/2026
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
| |
2/6/2017
|
| |
366,667
|
| |
183,333
|
| |
13.1600
|
| |
2/5/2027
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
| |
2/6/2017
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
27,862
|
| |
112,284
|
| |
—
|
| |
—
|
|
|
| |
2/6/2017
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
87,766
|
| |
353,697
|
|
|
| |
2/5/2018
|
| |
175,439
|
| |
350,877
|
| |
12.6400
|
| |
2/4/2028
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
| |
2/5/2018
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
68,565
|
| |
276,317
|
| |
—
|
| |
—
|
|
|
| |
2/5/2018
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
197,468
|
| |
795,797
|
|
|
| |
2/5/2019
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
393,939
|
| |
1,587,574
|
| |
—
|
| |
—
|
|
|
| |
2/5/2019
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
413,636
|
| |
1,666,954
|
|
Stanley J. Sutula III
|
| |
2/6/2017
|
| |
100,000
|
| |
50,000
|
| |
13.1600
|
| |
2/5/2027
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
| |
2/6/2017
|
| |
100,000
|
| |
50,000
|
| |
13.1600
|
| |
2/5/2027
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
| |
2/6/2017
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
7,599
|
| |
30,624
|
| |
—
|
| |
—
|
|
|
| |
2/6/2017
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
7,599
|
| |
30,624
|
| |
—
|
| |
—
|
|
|
| |
2/6/2017
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
37,994
|
| |
153,116
|
| |
—
|
| |
—
|
|
|
| |
2/6/2017
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
23,936
|
| |
96,463
|
|
|
| |
2/6/2017
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
23,936
|
| |
96,463
|
|
|
| |
2/5/2018
|
| |
40,486
|
| |
80,971
|
| |
12.6400
|
| |
2/4/2028
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
| |
2/5/2018
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
15,823
|
| |
63,767
|
| |
—
|
| |
—
|
|
|
| |
2/5/2018
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
45,570
|
| |
183,647
|
|
|
| |
2/5/2019
|
| |
—
|
| |
201,005
|
| |
6.6000
|
| |
2/4/2029
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
| |
2/5/2019
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
60,606
|
| |
244,242
|
| |
—
|
| |
—
|
|
|
| |
2/5/2019
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
127,273
|
| |
512,909
|
|
Lila Snyder
|
| |
12/7/2015
|
| |
200,000
|
| |
—
|
| |
24.7900
|
| |
12/7/2025
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
| |
2/8/2016
|
| |
42,403
|
| |
—
|
| |
16.8200
|
| |
2/7/2026
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
| |
2/6/2017
|
| |
46,667
|
| |
23,333
|
| |
13.1600
|
| |
2/5/2027
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
| |
2/6/2017
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
3,546
|
| |
14,290
|
| |
—
|
| |
—
|
|
|
| |
2/6/2017
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
11,170
|
| |
45,016
|
|
|
| |
2/5/2018
|
| |
26,991
|
| |
53,981
|
| |
12.6400
|
| |
2/4/2028
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
| |
2/5/2018
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
10,549
|
| |
42,512
|
| |
—
|
| |
—
|
|
|
| |
2/5/2018
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
30,380
|
| |
122,429
|
|
|
| |
3/7/2018
|
| |
—
|
| |
250,000
|
| |
14.2600
|
| |
3/6/2028
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
| |
2/5/2019
|
| |
—
|
| |
100,503
|
| |
6.6000
|
| |
2/4/2029
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
| |
2/5/2019
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
30,303
|
| |
122,121
|
| |
—
|
| |
—
|
|
|
| |
2/5/2019
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
63,636
|
| |
256,454
|
|
Jason Dies
|
| |
2/8/2016
|
| |
17,668
|
| |
—
|
| |
16.8200
|
| |
2/7/2026
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
| |
2/6/2017
|
| |
36,459
|
| |
18,229
|
| |
13.1600
|
| |
2/5/2027
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
| |
2/6/2017
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
2,770
|
| |
11,163
|
| |
—
|
| |
—
|
|
|
| |
2/6/2017
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
37,994
|
| |
153,116
|
| |
—
|
| |
—
|
|
|
| |
2/6/2017
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
2,493
|
| |
10,048
|
|
|
| |
2/5/2018
|
| |
26,991
|
| |
53,981
|
| |
12.6400
|
| |
2/4/2028
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
| |
2/5/2018
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
10,549
|
| |
42,512
|
| |
—
|
| |
—
|
|
|
| |
2/5/2018
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
30,380
|
| |
122,429
|
|
|
| |
2/5/2019
|
| |
—
|
| |
100,503
|
| |
6.6000
|
| |
2/4/2029
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
| |
2/5/2019
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
30,303
|
| |
122,121
|
| |
—
|
| |
—
|
|
|
| |
2/5/2019
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
63,636
|
| |
256,454
|
|
Daniel J. Goldstein
|
| |
2/14/2011
|
| |
28,350
|
| |
—
|
| |
26.0700
|
| |
2/13/2021
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
| |
2/14/2011
|
| |
11,505
|
| |
—
|
| |
26.0700
|
| |
2/13/2021
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
| |
2/8/2016
|
| |
47,703
|
| |
—
|
| |
16.8200
|
| |
2/7/2026
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
| |
2/6/2017
|
| |
45,000
|
| |
22,500
|
| |
13.1600
|
| |
2/5/2027
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
| |
2/6/2017
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
3,419
|
| |
13,779
|
| |
—
|
| |
—
|
|
|
| |
|
| |
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 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 ($)(2) |
|
|
| |
2/6/2017
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
10,771
|
| |
43,408
|
|
|
| |
2/5/2018
|
| |
18,219
|
| |
36,437
|
| |
12.6400
|
| |
2/4/2028
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
| |
2/5/2018
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
7,120
|
| |
28,694
|
| |
—
|
| |
—
|
|
|
| |
2/5/2018
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
20,506
|
| |
82,640
|
|
|
| |
2/5/2019
|
| |
—
|
| |
75,377
|
| |
6.6000
|
| |
2/4/2029
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
| |
2/5/2019
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
22,727
|
| |
91,590
|
| |
—
|
| |
—
|
|
|
| |
2/5/2019
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
47,727
|
| |
192,341
|
|
(1)
|
Option and Stock Awards Vesting Schedule
|
|
Grant Date
|
| |
Award Type
|
| |
Name of Executive
|
| |
Vesting Schedule
|
|
|
2/6/2017
|
| |
NQSO
|
| |
Lautenbach, Sutula, Snyder, Dies, Goldstein
|
| |
Three year vesting; one-third remain unvested and vests on February 11, 2020
|
|
|
2/6/2017
|
| |
RSU
|
| |
Lautenbach, Sutula, Snyder, Dies, Goldstein
|
| |
Three year vesting; one-third remain unvested and vests on February 11, 2020
|
|
|
2/6/2017
|
| |
RSU
|
| |
Sutula
|
| |
Special Performance-based RSUs 20% remains unvested and vest on February 11, 2020
|
|
|
2/6/2017
|
| |
PSU
|
| |
Lautenbach, Sutula, Snyder, Dies, Goldstein
|
| |
Three year cliff vesting; 100% vests on February 11, 2020
|
|
|
2/5/2018
|
| |
NQSO
|
| |
Lautenbach, Sutula, Snyder, Dies, Goldstein
|
| |
Three year vesting; two-thirds remains unvested; one-third vests on February 11, 2020 and one-third
vests on February 9, 2021
|
|
|
2/5/2018
|
| |
RSU
|
| |
Lautenbach, Sutula, Snyder, Dies, Goldstein
|
| |
Three year vesting; two-thirds remains unvested; one-third vests on February 11, 2020 and one-third
vests on February 9, 2021
|
|
|
2/5/2018
|
| |
PSU
|
| |
Lautenbach, Sutula, Snyder, Dies, Goldstein
|
| |
Three year cliff vesting; 100% vests on February 9, 2021
|
|
|
3/7/2018
|
| |
NQSO
|
| |
Snyder
|
| |
Three year cliff vesting; 100% vests on February 9, 2021
|
|
|
2/5/2019
|
| |
NQSO
|
| |
Sutula, Snyder, Dies, Goldstein
|
| |
Three year vesting; 100% remains unvested; one-third vests on February 11, 2020; one-third vests on
February 9, 2021 and one-third vests on February 8, 2022
|
|
|
2/5/2019
|
| |
RSU
|
| |
Lautenbach, Sutula, Snyder, Dies, Goldstein
|
| |
Three year vesting; 100% remains unvested; one-third vests on February 11, 2020; one-third vests on
February 9, 2021 and one-third vests on February 8, 2022
|
|
|
2/5/2019
|
| |
PSU
|
| |
Lautenbach, Sutula, Snyder, Dies, Goldstein
|
| |
Three year cliff vesting; 100% vests on February 8, 2022
|
|
(2)
|
These amounts were calculated based on the closing price of the company’s common stock of $4.03 per
share as of December 31, 2019. Values shown for PSUs granted in 2017 are calculated as follows: (i) the target number of shares awarded, multiplied by (ii) the performance factor for the 2017-2019 cycle, 0.35, based on financial results in 2017, 2018 and 2019, further multiplied by (iii) a -25% TSR adjustment based on 2017-2019 relative
performance versus the company peer group, (iv) further multiplied by $4.03, the closing stock price as of December 31, 2019. Values shown for PSUs granted in 2018 are calculated as follows: (i) the
target number of shares awarded, multiplied by (ii) the estimated performance factor for the 2018-2020 cycle, 0.64, based on financial results in 2018, 2019 and estimated results for 2020, further multiplied by (iii) a -25% TSR adjustment based on 2019 relative performance versus the company peer group, (iv) further multiplied by $4.03, the closing stock price
as of December 31, 2019. Values shown for PSUs granted in 2019 are calculated as follows: (i) the target number of shares awarded, multiplied by (ii) the estimated performance factor for the
2019-2021 cycle, 0.70, based on financial results in 2019, and estimated results for 2020 & 2021, further multiplied by (iii) a -25% TSR adjustment based on 2019 relative performance versus the
company peer group, (iv) further multiplied by $4.03, the closing stock price as of December 31, 2019.The total number of PSUs that can vest is capped at 200% of
the number of PSUs granted.
|
|
| |
Option Awards
|
| |
Stock Awards
|
| ||||||
Name
|
| |
Number of
Shares Acquired on Exercise (#) |
| |
Value Realized
On Exercise ($) |
| |
Number of
Shares Acquired on Vesting (#)(1) |
| |
Value Realized
on Vesting ($)(2) |
|
Marc B. Lautenbach
|
| |
0
|
| |
0
|
| |
83,946(3)
|
| |
606,090
|
|
Stanley J. Sutula III
|
| |
0
|
| |
0
|
| |
99,095(4)
|
| |
715,466
|
|
Lila Snyder
|
| |
0
|
| |
0
|
| |
11,198(5)
|
| |
80,850
|
|
Jason Dies
|
| |
0
|
| |
0
|
| |
9,036(6)
|
| |
65,240
|
|
Daniel J. Goldstein
|
| |
0
|
| |
0
|
| |
9,656(7)
|
| |
69,716
|
|
(1)
|
Performance-based RSUs granted in 2016, 2017 and 2018 had a pro-rata vesting on February 12, 2019.
Figures reported include shares withheld to cover taxes.
|
(2)
|
These values were determined based on the average of the high and low trading price of $7.22 on the
February 12, 2019 vesting date.
|
(3)
|
The figures reported for Mr. Lautenbach also include 21,108 deferred shares from the 2016 RSU grant,
26,940 deferred shares from the 2017 RSU grant, and 33,148 deferred shares from the 2018 RSU grant. The receipt of these has been deferred until six months following termination or retirement from the company.
|
(4)
|
The figures reported for Mr. Sutula III also include 87,673 deferred shares from the 2017 RSU grant, and 7,649 deferred shares from the 2018 RSU grant. The receipt of these has been deferred until six months following termination or retirement from the company.
|
(5)
|
The figures reported for Ms. Snyder also include 2,327 deferred shares from the 2016 RSU grant the
receipt of which has been deferred until six months following termination or retirement from the company.
|
(6)
|
The figures reported for Mr. Dies also include 958 deferred shares from the 2016 RSU grant the
receipt of which has been deferred until six months following termination or retirement from the company.
|
(7)
|
The figures reported for Mr. Goldstein also include 2,376 deferred shares from the 2016 RSU grant,
3,037 deferred shares from the 2017 RSU grant, and 3,220 deferred shares from the 2018 RSU grant. The receipt of these has been deferred until six months following termination or retirement from the company.
|
Name
|
| |
Plan Name
|
| |
Number of Years
Credited Service (#) |
| |
Present Value of
Accumulated Benefit ($)(2) |
|
Daniel J. Goldstein
|
| |
Pitney Bowes Pension Plan
|
| |
8.9
|
| |
168,797
|
|
|
| |
Pitney Bowes Pension Restoration Plan
|
| |
8.9
|
| |
111,312
|
|
(1)
|
Mr. Goldstein is the only pension eligible NEO and is fully vested in his pension benefit.
|
(2)
|
Material assumptions used to calculate the present value of accumulated benefits under the Pitney
Bowes Pension Plan are detailed in note 14 to the financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2019. These lump sum values are expressed as the greater of the Pension Equity Account and the Present Value of the Age 65 Accrued benefit using the PPA 417(e) Unisex Mortality table.
|
•
|
The Pitney Bowes Pension and Pension Restoration Plans apply only to U.S. employees
hired prior to January 1, 2005 and were frozen for all participants effective December 31, 2014.
|
•
|
Normal retirement age is 65 with at least three years of service, while early
retirement is allowed at age 55 with at least ten years of service.
|
•
|
The vesting period is three years.
|
•
|
Earnings include base salary, vacation, severance, before-tax plan contributions,
annual incentives (paid and deferred), and certain bonuses. Earnings do not include CIU payments, stock options, restricted stock, RSUs, PSUs, hiring bonuses, company contributions to benefits, and expense reimbursements.
|
•
|
The formula to determine benefits is generally based on age, years of service, and
final average of the five highest consecutive calendar year earnings.
|
•
|
The maximum benefit accrual under the Pitney Bowes Pension Restoration Plan is an
amount equal to 16.5% multiplied by the participant’s final average earnings and further multiplied by the participant’s credited service.
|
•
|
Upon retirement, benefits are payable in a lump-sum or various annuity forms,
including life annuity and 50% joint and survivor annuity.
|
•
|
The distribution options under the Pitney Bowes Pension Restoration Plan are
designed to comply with the requirements of IRC 409A of the Code.
|
•
|
No extra years of credited service are provided and no above-market earnings are
credited under the plan.
|
Name
|
| |
Executive
Contributions in Last FY ($) |
| |
Registrant
Contributions in Last FY ($) |
| |
Aggregate
Earnings/(Loss) in Last FY ($) |
| |
Aggregate
Withdrawals/ Distributions ($) |
| |
Aggregate
Balance at Last FYE ($) |
|
Marc B. Lautenbach
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
401(k) Restoration Plan(1)
|
| |
—
|
| |
65,081
|
| |
94,539
|
| |
—
|
| |
570,735
|
|
Deferred Incentive Savings Plan(2)
|
| |
43,470
|
| |
—
|
| |
36,844
|
| |
—
|
| |
240,599
|
|
Deferred PSUs(3)
|
| |
—
|
| |
—
|
| |
(41,875)
|
| |
—
|
| |
89,764
|
|
Deferred RSUs(3)
|
| |
586,235
|
| |
—
|
| |
(509,027)
|
| |
—
|
| |
863,149
|
|
Dividend Equivalents(3)
|
| |
49,967
|
| |
—
|
| |
(44,126)
|
| |
—
|
| |
115,086
|
|
Stanley J. Sutula III
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
401(k) Restoration Plan(1)
|
| |
—
|
| |
29,402
|
| |
3,225
|
| |
—
|
| |
32,627
|
|
Deferred Incentive Savings Plan(2)
|
| |
15,765
|
| |
—
|
| |
4,118
|
| |
—
|
| |
26,362
|
|
Deferred PSUs(3)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
Deferred RSUs(3)
|
| |
688,225
|
| |
—
|
| |
(469,293)
|
| |
—
|
| |
738,308
|
|
Dividend Equivalents(3)
|
| |
37,406
|
| |
—
|
| |
(21,407)
|
| |
—
|
| |
61,231
|
|
Lila Snyder
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
401(k) Restoration Plan(1)
|
| |
—
|
| |
18,066
|
| |
16,614
|
| |
—
|
| |
95,190
|
|
Deferred Incentive Savings Plan(2)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
Deferred PSUs(3)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
Deferred RSUs(3)
|
| |
16,801
|
| |
—
|
| |
(16,169)
|
| |
—
|
| |
28,125
|
|
Dividend Equivalents(3)
|
| |
1,471
|
| |
—
|
| |
(1,302)
|
| |
—
|
| |
3,394
|
|
Jason Dies
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
401(k) Restoration Plan(1)
|
| |
—
|
| |
9,294
|
| |
2,456
|
| |
—
|
| |
17,561
|
|
Deferred Incentive Savings Plan(2)
|
| |
30,912
|
| |
—
|
| |
(23,031)
|
| |
—
|
| |
42,405
|
|
Deferred PSUs(3)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
Deferred RSUs(3)
|
| |
6,917
|
| |
—
|
| |
(6,370)
|
| |
—
|
| |
10,966
|
|
Dividend Equivalents(3)
|
| |
558
|
| |
—
|
| |
(487)
|
| |
—
|
| |
1,271
|
|
Daniel J. Goldstein
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
401(k) Restoration Plan(1)
|
| |
—
|
| |
21,970
|
| |
45,191
|
| |
—
|
| |
268,149
|
|
Deferred Incentive Savings Plan(2)
|
| |
—
|
| |
—
|
| |
72,888
|
| |
—
|
| |
414,403
|
|
Deferred PSUs(3)
|
| |
—
|
| |
—
|
| |
(5,649)
|
| |
—
|
| |
12,110
|
|
Deferred RSUs(3)
|
| |
62,330
|
| |
—
|
| |
(59,142)
|
| |
—
|
| |
102,535
|
|
Dividend Equivalents(3)
|
| |
6,034
|
| |
—
|
| |
(5,585)
|
| |
—
|
| |
14,449
|
|
(1)
|
In the Registrant Contributions in Last FY ($) column amounts shown are company contributions to the
Pitney Bowes 401(k) Restoration Plan earned in 2018 and credited under the 401(k) Restoration Plan in 2019.
|
(2)
|
In the Executive Contributions in Last FY ($) column amounts represent the portion of the annual
incentives earned in 2018 and paid in 2019 deferred under the Deferred Incentive Savings Plan. Ms. Snyder and Mr. Goldstein did not incur activity in the Deferred Incentive Savings Plan in 2019.
|
(3)
|
In the Executive Contributions in Last FY column the value of executive contributions is calculated
by multiplying the number of deferred PSUs and RSUs that vested in 2019 by the closing price of a share of common stock on the vesting date and deferred dividend equivalents (as converted into deferred units) by the closing price of a share of common stock on the dividend date.
|
•
|
The goal of this plan is generally to restore benefits that would have been provided
under the qualified 401(k) Plan but for certain IRC limitations placed on tax-qualified 401(k) plans.
|
•
|
The vesting period is three years.
|
•
|
For purposes of determining benefits under the 401(k) Restoration Plan, earnings are
defined in the same manner as the qualified 401(k) Plan.
|
•
|
Participants need to contribute the allowable maximum pre-tax contributions to the
401(k) Plan to be eligible for any company match in the 401(k) Restoration Plan. Once the pre-tax maximum is contributed by the participant into the qualified 401(k) Plan, the company will match the same percentage of eligible compensation that the Participant defers under the 401(k) Plan and the DISP
up to a maximum 4% of eligible compensation.
|
•
|
To the extent the participant has eligible earnings in excess of the IRC
compensation limitation, the 2% core contribution is made into the 401(k) Restoration Plan. See discussion under “Other Indirect Compensation” on page 51 of this proxy statement.
|
•
|
All NEOs other than Mr. Sutula are fully vested in their accounts.
|
•
|
No above-market earnings are credited under the plan.
|
•
|
Distributions from the 401(k) Restoration Plan are made based on elections submitted
by NEOs and are compliant with IRC 409A.
|
•
|
The DISP allows “highly-compensated employees” to defer up to 100% of annual
incentives and long-term cash incentives. Base salary deferral is permissible only for certain key employees.
|
•
|
No above-market earnings are credited under the plan.
|
•
|
Distributions from the DISP are made based on elections submitted by NEOs and are
compliant with IRC 409A.
|
•
|
Certain executives with RSUs and PSUs who are subject to the executive stock
ownership policy, may voluntarily elect to defer settlement of RSUs and PSUs until termination or retirement.
|
•
|
Executives who choose deferral receive dividend equivalents after the award vests which
are also deferred.
|
•
|
Distributions from the Executive Equity Deferral Plan are made based on elections
submitted by NEOs and are compliant with IRC 409A.
|
Name
|
| |
Type of Payment or Benefit
|
| |
Retirement
Eligible ($) |
| |
Involuntary Not for Cause
Termination ($) |
| |
Change of
Control with Termination (CIC) ($) |
| |
Death ($)
|
| |
Disability
($) |
|
Marc B. Lautenbach
|
| |
Severance
|
| |
—
|
| |
38,462 - 3,525,000
|
| |
4,700,000(8)
|
| |
—
|
| |
—
|
|
|
| |
Annual Incentive
|
| |
—
|
| |
0 - 864,000
|
| |
1,350,000
|
| |
864,000
|
| |
864,000
|
|
|
| |
Stock Options Accelerated(2)
|
| |
—
|
| |
0 - 0
|
| |
0
|
| |
0
|
| |
0
|
|
|
| |
Performance-based RSUs Accelerated(3)
|
| |
—
|
| |
0 - 388,601
|
| |
1,976,175
|
| |
1,976,175
|
| |
1,976,175
|
|
|
| |
Performance Stock Units(4)
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
| |
2017-2019 cycle
|
| |
—
|
| |
0 - 353,697
|
| |
1,010,563
|
| |
353,697
|
| |
353,697
|
|
|
| |
2018-2020 cycle
|
| |
—
|
| |
0 - 530,531
|
| |
1,243,432
|
| |
530,531
|
| |
530,531
|
|
|
| |
2019-2021 cycle
|
| |
—
|
| |
0
|
| |
2,381,363
|
| |
555,651
|
| |
555,651
|
|
|
| |
Financial Counseling (5)
|
| |
—
|
| |
0-20,828
|
| |
—
|
| |
—
|
| |
—
|
|
|
| |
Medical & other benefits (6)
|
| |
—
|
| |
—
|
| |
84,893
|
| |
—
|
| |
—
|
|
|
| |
Total(7)
|
| |
—
|
| |
38,462 - 5,682,656
|
| |
12,746,427
|
| |
4,280,055
|
| |
4,280,055
|
|
Stanley J. Sutula III
|
| |
Severance
|
| |
—
|
| |
25,000 - 1,755,000
|
| |
2,340,000(8)
|
| |
—
|
| |
—
|
|
|
| |
Annual Incentive
|
| |
—
|
| |
0 - 332,800
|
| |
520,000
|
| |
332,800
|
| |
332,800
|
|
|
| |
Stock Options Accelerated(2)
|
| |
—
|
| |
0 - 0
|
| |
0
|
| |
0
|
| |
0
|
|
|
| |
Performance-based RSUs Accelerated(3)
|
| |
—
|
| |
0 - 278,130
|
| |
522,373
|
| |
522,373
|
| |
522,373
|
|
|
| |
Performance Stock Units(4)
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
| |
2017-2019 cycle
|
| |
—
|
| |
0 - 192,925
|
| |
551,215
|
| |
192,925
|
| |
192,925
|
|
|
| |
2018-2020 cycle
|
| |
—
|
| |
0 - 122,431
|
| |
286,948
|
| |
122,431
|
| |
122,431
|
|
|
| |
2019-2021 cycle
|
| |
—
|
| |
0
|
| |
732,727
|
| |
170,970
|
| |
170,970
|
|
|
| |
Financial Counseling(5)
|
| |
—
|
| |
0 - 20,828
|
| |
—
|
| |
—
|
| |
—
|
|
|
| |
Medical & other benefits(6)
|
| |
—
|
| |
—
|
| |
83,860
|
| |
—
|
| |
—
|
|
|
| |
Total (7)
|
| |
—
|
| |
25,000 - 2,702,115
|
| |
5,037,123
|
| |
1,341,499
|
| |
1,341,499
|
|
Lila Snyder
|
| |
Severance
|
| |
—
|
| |
25,210 - 1,769,720
|
| |
2,359,627(8)
|
| |
—
|
| |
—
|
|
|
| |
Annual Incentive
|
| |
—
|
| |
0 - 335,591
|
| |
524,362
|
| |
335,591
|
| |
335,591
|
|
|
| |
Stock Options Accelerated(2)
|
| |
—
|
| |
0 - 0
|
| |
0
|
| |
0
|
| |
0
|
|
|
| |
Performance-based RSUs Accelerated(3)
|
| |
—
|
| |
0 - 56,803
|
| |
178,924
|
| |
178,924
|
| |
178,924
|
|
|
| |
Performance Stock Units(4)
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
| |
2017-2019 cycle
|
| |
—
|
| |
0 - 45,016
|
| |
128,617
|
| |
45,016
|
| |
45,016
|
|
|
| |
2018-2020 cycle
|
| |
—
|
| |
0 - 81,620
|
| |
191,296
|
| |
81,620
|
| |
81,620
|
|
|
| |
2019-2021 cycle
|
| |
—
|
| |
0
|
| |
366,363
|
| |
85,485
|
| |
85,485
|
|
|
| |
Financial Counseling(5)
|
| |
—
|
| |
0 - 20,828
|
| |
—
|
| |
—
|
| |
—
|
|
|
| |
Medical & other benefits(6)
|
| |
—
|
| |
—
|
| |
88,411
|
| |
—
|
| |
—
|
|
|
| |
Total(7)
|
| |
—
|
| |
25,210 - 2,309,578
|
| |
3,837,600
|
| |
726,636
|
| |
726,636
|
|
Jason Dies
|
| |
Severance
|
| |
—
|
| |
25,210 - 1,769,720
|
| |
2,359,627(8)
|
| |
—
|
| |
—
|
|
|
| |
Annual Incentive
|
| |
—
|
| |
0 - 335,591
|
| |
524,362
|
| |
335,591
|
| |
335,591
|
|
|
| |
Stock Options Accelerated (2)
|
| |
—
|
| |
0 - 0
|
| |
0
|
| |
0
|
| |
0
|
|
|
| |
Performance-based RSUs Accelerated (3)
|
| |
—
|
| |
0 - 206,791
|
| |
328,912
|
| |
328,912
|
| |
328,912
|
|
|
| |
Performance Stock Units (4)
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
| |
2017-2019 cycle
|
| |
—
|
| |
0 - 10,048
|
| |
28,710
|
| |
10,048
|
| |
10,048
|
|
|
| |
2018-2020 cycle
|
| |
—
|
| |
0 - 81,620
|
| |
191,296
|
| |
81,620
|
| |
81,620
|
|
|
| |
2019-2021 cycle
|
| |
—
|
| |
0
|
| |
366,363
|
| |
85,485
|
| |
85,485
|
|
|
| |
Financial Counseling (5)
|
| |
—
|
| |
0 - 20,828
|
| |
—
|
| |
—
|
| |
—
|
|
|
| |
Medical & other benefits (6)
|
| |
—
|
| |
—
|
| |
88,876
|
| |
—
|
| |
—
|
|
|
| |
Total (7)
|
| |
—
|
| |
25,210 - 2,424,599
|
| |
3,888,146
|
| |
841,657
|
| |
841,657
|
|
Daniel J. Goldstein
|
| |
Severance
|
| |
—
|
| |
21,196 - 1,322,606
|
| |
1,763,475(8)
|
| |
—
|
| |
—
|
|
|
| |
Annual Incentive
|
| |
281,617
|
| |
0 - 281,617
|
| |
330,652
|
| |
281,617
|
| |
281,617
|
|
|
| |
Stock Options Accelerated (2)
|
| |
—
|
| |
0 - 0
|
| |
0
|
| |
0
|
| |
0
|
|
|
| |
Performance-based RSUs Accelerated (3)
|
| |
42,472
|
| |
0 - 42,472
|
| |
134,062
|
| |
134,062
|
| |
134,062
|
|
|
| |
Performance Stock Units (4)
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
| |
2017-2019 cycle
|
| |
43,408
|
| |
43,408 - 43,408
|
| |
124,023
|
| |
43,408
|
| |
43,408
|
|
|
| |
2018-2020 cycle
|
| |
55,093
|
| |
55,093 - 55,093
|
| |
129,125
|
| |
55,093
|
| |
55,093
|
|
|
| |
2019-2021 cycle
|
| |
64,114
|
| |
64,114 - 64,114
|
| |
274,773
|
| |
64,114
|
| |
64,114
|
|
|
| |
Financial Counseling (5)
|
| |
—
|
| |
0 - 20,828
|
| |
—
|
| |
—
|
| |
—
|
|
|
| |
Medical & other benefits (6)
|
| |
—
|
| |
—
|
| |
51,000
|
| |
—
|
| |
—
|
|
|
| |
Total(7)
|
| |
486,705
|
| |
183,811 - 1,830,138
|
| |
2,807,110
|
| |
578,294
|
| |
578,294
|
|
(1)
|
All data is shown assuming termination on December 31, 2019. All amounts are further explained in the
section entitled “Explanation of Benefits Payable upon Various Termination Events” on page 73 of
this proxy statement.
|
(2)
|
Stock options are valued at zero because as of December 31, 2019 the company stock price was below the
stock option exercise price.
|
(3)
|
Performance based RSUs are valued at the closing price on December 31, 2019 and vesting rules are
applied as described in section entitled “Explanation of Benefits Payable upon Various Termination Events” on page 73 of this proxy statement.
|
(4)
|
For retirement, involuntary termination, and death and disability purposes: PSUs for the 2017-2019
cycle are valued at 0.35 per unit based upon actual achievement of performance metrics for the 2017-2019 cycle; PSUs for 2018-2020 are being accrued at 0.64 per unit (inclusive
|
(5)
|
Amount shown is the value of the company’s cost to provide financial counseling through the severance
period, which executive officers may receive for up to a maximum of 78 weeks.
|
(6)
|
Amount shown is the present value of the company’s cost to continue medical and other health &
welfare plans for two years plus the company’s cost for outplacement services.
|
(7)
|
Ranges under the involuntary not for cause termination column represent variance between the named
executive officer’s basic severance plan and conditional severance payment as explained in the section entitled “Involuntary/Not for Cause Termination – Severance Pay Plan” on page 73 of this proxy statement. Ranges also include applicability of retiree treatment where relevant.
|
The company does not apply a tax gross-up on any Change of Control payments. In paying Change of
Control Severance benefits the company utilizes a “best net” approach. Under this approach a determination is made as to whether paying the full change of control benefits or the value of a payment that is capped at the 280G limit provides the NEO with the higher net after-tax benefit.
|
•
|
A prorated annual incentive award;
|
•
|
Prorated PSU based on full months of active service during the three-year
performance cycle, vested and paid at the end of each three-year cycle;
|
•
|
Stock option awards and RSUs that have been outstanding for at least one year will
fully vest upon retirement and stock options will remain exercisable for the duration of the term. Awards outstanding less than one year forfeit.
|
•
|
Additional Severance that may be offered are based on years of service and level
within the company. All NEOs may be eligible for up to 78 weeks of base pay plus current target annual incentive, inclusive of severance payable under the Severance Pay Plan;
|
•
|
A prorated annual incentive award to the date of termination of employment;
|
•
|
PSUs outstanding for one year from the date of grant are prorated based on service
during the three-year performance cycle, vested and paid at the end of each three-year cycle;
|
•
|
For NEOs, stock options and RSUs outstanding for one year at the date of termination
will continue to vest up to 24 months following termination and will expire at the end of this period;
|
•
|
The board of directors has the discretion to accelerate vesting of restricted stock,
RSUs and PSUs that would otherwise be forfeited;
|
•
|
Financial counseling through the severance period; and
|
•
|
Outplacement services.
|
•
|
A prorated annual incentive award;
|
•
|
PSUs are prorated through the date of death and vested, valued and converted into
stock at the end of each three-year cycle;
|
•
|
All stock options will vest upon death. The NEO’s beneficiary can exercise stock
options during the remaining term of the grant;
|
•
|
Any unvested RSUs will vest;
|
•
|
A prorated annual incentive award;
|
•
|
PSU are prorated through the date of disability and vested, valued and converted
into stock at the end of each three-year cycle;
|
•
|
All stock options and RSUs will vest upon disability vesting date (two years after
the onset of LTD). Stock options can be exercised during the remaining term of the grant;
|
•
|
an acquisition of 30% or more of our common stock or 30% or more of the combined
voting power of our voting securities by an individual, entity or group;
|
•
|
the replacement of a majority of the board of directors other than by approval of the
incumbent board;
|
•
|
the consummation of a reorganization, merger, or consolidation where greater than
50% of our common stock and voting power changes hands; or
|
•
|
the approval by stockholders of the liquidation or dissolution of the company.
|
•
|
Two times the NEO’s annual base salary plus two times the target annual incentive;
|
•
|
A target incentive award for the calendar year of the change of control;
|
•
|
Health and welfare benefits for the executive and his or her dependents will be
provided for a two-year period; and outplacement services;
|
•
|
PSUs are vested and converted into either common stock or cash based on target
performance, on a NEO’s termination upon a change of control. If the NEO is not terminated upon a change of control or the acquirer does not assume the company’s Stock Plan or awards, PSUs will vest upon the Change of Control and are converted into either common stock or cash based on target
performance at the earlier of the NEO’s termination of employment within 2 years of the change of control or the end of the award’s three-year performance cycle;
|
•
|
RSUs and NSOs are vested on a NEO’s termination upon a Change of Control with RSUs
being converted into common stock or cash, and NSOs remain exercisable for the balance of the award term. If a NEO is not terminated upon a change of control or the acquirer does not assume the company’s Stock Plan or awards, (1) RSUs vest upon a Change of Control and will be converted into common stock or
cash upon the earlier of the NEO’s termination of employment within two years of the change of control or the normal award vesting dates; (2) options will either be cashed out upon the change of control or will vest and become exercisable upon the earlier of the NEOs termination of employment within 2 years
of the Change of Control or the normal vesting dates for the balance of the term;
|
•
|
The company does not apply a tax gross-up on any Change of Control payments. In
paying Change of Control Severance benefits the company utilizes a “best net” approach. Under this approach a determination is made as to whether paying the full change of control benefits or the value of a payment that is capped at the 280G limit provides the NEO with the higher net after-tax
benefit.
|
Solicitation of Proxies
|
Other Matters
|
(a)
|
“Affiliate” shall mean (i) any entity that, directly or through one or more intermediaries, is controlled by the Company or
(ii) any entity in which the Company has a significant equity interest, as determined by the Committee. Aggregation rules set forth in Code Sections 409A and 414(b) and (c) generally will be used in determining Affiliate status, except
that a 50% test, instead of an 80% test, shall be used to determine controlled group status, to the extent not inconsistent with rules of Code Section 409A.
|
(b)
|
“Award” shall mean any Restricted Stock, Stock Unit, Stock Option, Stock Appreciation Right, Other Stock-Based Award, Performance
Award or Substitute Award, granted under the Plan.
|
(c)
|
“Award Agreement” shall mean any written agreement, contract, or other instrument or document (including electronic communication)
specifying the terms and conditions of an Award granted under the Plan, as may from time to time be approved by the Company or the Board of Directors to evidence an Award granted under the Plan.
|
(d)
|
“Board of Directors” or “Board” shall mean the Board of Directors of the Company as it may be composed from time to time.
|
(e)
|
“Change of Control” shall be deemed to have occurred for purposes of this Plan, if:
|
(i)
|
there is an acquisition, in any one transaction or a series of transactions, other than from Pitney Bowes Inc., by any individual,
entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), of beneficial ownership (within the meaning of Rule 13(d)(3) promulgated under the Exchange Act)
of 30% or more of either the then outstanding shares of common stock or the combined voting power of the then outstanding voting securities of Pitney Bowes Inc. entitled to vote generally in the election of directors, but excluding, for
this purpose, any such acquisition by Pitney Bowes Inc. or any of its subsidiaries, or any employee benefit plan (or related trust) of Pitney Bowes Inc. or its subsidiaries, or any corporation with respect to which, following such
acquisition, more than 50% of the then outstanding shares of common stock of such corporation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of
directors is then beneficially owned, directly or indirectly, by the individuals and entities who were the beneficial owners, respectively, of the common stock and voting securities of Pitney Bowes Inc. immediately prior to such
acquisition in substantially the same proportion as their ownership, immediately prior to such acquisition, of the then outstanding shares of common stock or the combined voting power of the then outstanding voting securities of Pitney
Bowes Inc. entitled to vote generally in the election of directors, as the case may be; or
|
(ii)
|
individuals who, as of the Effective Date, constitute the Board (as of such date, the “Incumbent Board”) cease for any reason to
constitute at least a majority of the Board, provided that any individual becoming a director subsequent to the Effective Date, whose election, or nomination for election by Pitney Bowes’ shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office is
in connection with an actual or threatened election contest relating to the election of the directors of Pitney Bowes Inc. (as such terms are used in Rule 14(a)(11) or Regulation 14A promulgated under the Exchange Act); or
|
(iii)
|
there occurs either (A) the consummation of a reorganization, merger, consolidation, or sale or other disposition of all or
substantially all of the assets of the Company, in each case, with respect to which the individuals and entities who were the respective beneficial owners of the common stock and voting securities of Pitney Bowes Inc. immediately prior to
such reorganization, merger, consolidation or sale or other disposition do not, following such reorganization, merger, consolidation or sale or other disposition beneficially own, directly or indirectly, more than 50% of, respectively,
the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as
|
(f)
|
“Code” shall mean the Internal Revenue Code of 1986, as amended from time to time or any successor code thereto.
|
(g)
|
“Committee” shall mean the Executive Compensation Committee comprised solely of independent directors or any other committee
designated by the Board of Directors comprised solely of independent directors to administer the Plan pursuant to Section 3. The Board of Directors and the Committee shall each have the authority to delegate its duties under the Plan to
the fullest extent permitted by Delaware law. The Committee may also delegate certain administrative tasks under Section 3 to the Employee Benefits Committee.
|
(h)
|
“Company” shall mean Pitney Bowes Inc. or any successor thereto.
|
(i)
|
“Covered Award” means an Award, other than a Stock Option, Stock Appreciation Right or other Award with an exercise price per
Share not less than the Fair Market Value of a Share on the date of grant of such Award, to a Covered Employee, if it is designated as such by the Committee at the time it is granted. Covered Awards are subject to the provisions of
Section 15 of this Plan.
|
(j)
|
“Disability” shall have the meaning established by the Committee or, in the absence of Committee determination, shall mean a
Participant who is “disabled” for two years under the provisions and procedures of the Pitney Bowes Long Term Disability (LTD) Plan, irrespective of whether the Participant is eligible to receive benefits under the LTD Plan, or a
Participant entitled to receive benefits for two years under state worker’s compensation laws.
|
(k)
|
“Dividend Equivalent” shall mean an amount payable in cash, as determined by the Committee under Section 7(c) of the Plan, with
respect to a Restricted Stock or Stock Unit award equal to what would have been received if the shares underlying the Award had been owned by the Participant.
|
(l)
|
“Dividend Equivalent Shares” shall be Shares issued pursuant to the deemed reinvestment of dividends under Restricted Stock, Stock
Units or other Awards, provided that such Shares shall be subject to the same vesting, risk of forfeiture, deferral or other conditions or restrictions as apply to the Restricted Stock, Stock Units or other Awards as to which they accrue,
and to such further conditions or restrictions as the Committee may determine.
|
(m)
|
“Employee” shall mean any employee of the Company or of any Affiliate.
|
(n)
|
“Fair Market Value” shall mean, with respect to any property (including, without limitation, any Shares or other securities), the
fair market value of such property determined by such methods or procedures as shall be established from time to time by the Committee. The Fair Market Value of a Share of Company common stock on the date of grant shall be the closing
price of a Share of the Company’s common stock on the date of grant as reported in the New York Stock Exchange Composite Transactions Table published in the Wall Street Journal. If the New York Stock Exchange (NYSE) is closed on the date
of grant, then Fair Market Value shall be the closing price on the first trading day of the NYSE immediately following the grant date.
|
(o)
|
“Full Value Award” means an Award other than an Option or Stock Appreciation Right.
|
(p)
|
“Incentive Stock Option” or “ISO” shall mean a Stock Option that is intended to meet the requirements of Section 422 of the Code,
or any successor provision thereto.
|
(q)
|
“Non-Qualified Stock Option” or “NSO” shall mean an Option that is not intended to be an Incentive Stock Option.
|
(r)
|
“Option” or “Stock Option” shall mean the right, granted under Section 7(a) of the Plan, to purchase a number of shares of common
stock at such exercise price, at such times and on such terms and conditions as are specified by the Committee. An Option may be granted as an ISO or an NSO.
|
(s)
|
“Other Stock-Based Award” shall mean any Award granted under Section 7(d) of the Plan.
|
(t)
|
“Participant” shall mean an Employee who is granted an Award under the Plan.
|
(u)
|
“Performance Award” shall mean any Award granted hereunder that complies with Section 6(d) of the Plan.
|
(v)
|
“Performance Goals” means any Qualifying Performance Criteria or such other performance goals based on such corporate (including
any subsidiary, division, department or unit), individual or other performance measure as the Committee may from time to time establish.
|
(w)
|
“Person” shall mean any individual, corporation, partnership, association, joint-stock company, trust, unincorporated
organization, or government or political subdivision thereof.
|
(x)
|
“Prior Plan” shall mean the Pitney Bowes Stock Plan, as amended and restated as of January 1, 2002, the Pitney Bowes Inc. 2007
Stock Plan as amended and restated and the Pitney Bowes Inc. 2013 Stock Plan as amended and restated.
|
(y)
|
“Qualifying Performance Criteria” means one or more of the following performance criteria, either individually, alternatively or
in any combination, applied to either the Company as a whole or to a business unit, subsidiary, division or department, either individually, alternatively or in any combination, and measured either annually or cumulatively over a period
of years, on an absolute basis or relative to a pre-established target, to previous year’s results or to a designated comparison group, in each case established by the Committee: (i) achievement of cost control, (ii) earnings before
interest and taxes (“EBIT”), (iii) earnings before interest, taxes, depreciation and amortization (“EBITDA”), (iv) earnings per share, (v) economic value added, (vi) free cash flow, (vii) gross profit, (viii) growth of book or market
value of capital stock, (ix) income from continuing operations, (x) net income, (xi) operating income, (xii) operating profit, (xiii) organic revenue growth, (xiv) return on investment, (xv) return on operating assets, (xvi) return on
stockholder equity, (xvii) revenue, (xviii) revenue growth (xix) stock price, (xx) total earnings, or (xxi) total stockholder return.
|
(z)
|
“Released Securities” shall mean Shares issued or issuable under any Restricted Stock, Stock Unit or other Award as to which all
conditions for the vesting and issuance of such Shares have expired, lapsed, or been waived.
|
(aa)
|
“Restricted Stock” shall mean any Share granted under Section 7(b) of the Plan where the grant, issuance, retention, vesting
and/or transferability of which is subject during specified periods of time to such conditions (including continued employment or performance conditions) and terms as the Committee deems appropriate.
|
(bb)
|
“Retirement” shall mean a Participant who has terminated employment on or after attainment of age 55 with at least 10 years of
service with the Company or Affiliate. In certain jurisdictions outside the United States, as noted in the Award Agreement, “Retirement” shall mean eligibility to retire under the local pension plan or state retirement program with at
least 10 years of service with the Company or Affiliate. In determining Retirement, the Committee may in its discretion use similar rules as used under the Company’s pension plans where available and helpful.
|
(cc)
|
“Rule 16b-3” shall mean Rule 16b-3 promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934
as amended, or any successor rule and the regulation thereto.
|
(dd)
|
“Section 13G Institutional Investor” means any individual, entity or group who or that is entitled to file, and files, a statement
on Schedule 13G (or any comparable or successor report) pursuant to Rule 13d-1(b)(1) under the Exchange Act, as in effect on the Effective Date, with respect to the Shares that are beneficially owned by such individual, entity or group;
provided, however, that an individual, entity or group who or that was a Section 13G Institutional Investor shall no longer be a Section 13G Institutional Investor from and after the time that it first becomes subject to an obligation to
file (regardless of the due date of such filing) a statement on Schedule 13D (or any comparable or successor report) pursuant to Rule 13d-1(a), Rule 13d-1(e), Rule 13d-1(f) or Rule 13d-1(g) under the Exchange Act, as in effect on the
Effective Date, with respect to the Shares that are beneficially owned by such individual, entity or group, together with all Affiliates of such individual, entity or group.
|
(ee)
|
“Share” or “Shares” shall mean share(s) of the common stock of the Company, $1 par value, and such other securities or property as
may become the subject of Awards pursuant to the adjustment provisions of Section 4(c).
|
(ff)
|
“Stock Appreciation Rights” or “SARs” shall mean a right granted under Section 7(a) of the Plan that entitles the Participant to
receive, in cash or Shares or a combination thereof, as determined by the Committee, value equal to or otherwise based on the excess of (A) the Fair Market Value of a specified number of Shares at the time of exercise over (B) the
exercise price of the right, as established pursuant to Section 7(a)(i).
|
(gg)
|
“Stock Unit” means an award denominated in units of common stock under which the issuance of shares of common stock (or cash
payment in lieu thereof) is subject to such conditions (including continued employment or performance conditions) and terms as the Committee deems appropriate. Stock Unit includes a restricted stock unit
|
(hh)
|
“Substitute Award” shall mean an Award granted in assumption of, or in substitution or exchange for, an outstanding Award
previously granted by a Company acquired by the Company or with which the Company combines.
|
(ii)
|
“Termination of Employment” on Account of a Change of Control shall mean as follows:
|
(i)
|
Upon or within two years after a Change of Control, either (A) a termination of a Participant’s employment by the Company other
than as a result of (1) the willful and continued failure of the Participant to perform substantially the Participant’s duties with the Company or any of its affiliates (other than any such failure resulting from incapacity due to
physical or mental illness) or (2) the willful engaging by the Participant in illegal conduct or gross misconduct which is materially and demonstrably injurious to the Company, or (B) a termination of employment by the Participant for any
one of the following Good Reasons (each of which constituting a “Good Reason”), subject to Section 2(ii)(iii) below:
|
1.
|
The assignment following a Change of Control to a Participant of any duties inconsistent in any respect with the Participant’s
position, authority, duties and responsibilities as existed on the day immediately prior to the Change of Control, or any other action by the Company which results in a diminution in such position, authority, duties, or responsibilities,
excluding for this purpose an isolated, insubstantial, and inadvertent action not taken in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the Participant;
|
2.
|
Any failure by the Company following a Change of Control to continue to provide the Participant with annual salary, employee
benefits, or other compensation equal to or greater than that to which such Participant was entitled immediately prior to the occurrence of the Change of Control, other than an isolated, insubstantial, and inadvertent failure not
occurring in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the Participant;
|
3.
|
Any failure by the Company following a Change of Control to continue to provide the Participant with the opportunity to earn
either cash-based annual incentives or stock-based long-term incentive compensation on a basis at least equal to that provided to the Participant prior to the occurrence of the Change of Control, taking into account the level of
compensation that can be earned and the relative difficulty of any associated performance goals;
|
4.
|
The Company’s requiring the Participant, after a Change of Control, to be based, at any office or location more than 35 miles
farther from the Participant’s place of residence than the office or location at which the Participant is employed immediately prior to the occurrence of the Change of Control or the Company’s requiring the Participant to travel on
Company business to a substantially greater extent than required immediately before the Change of Control;
|
5.
|
Any failure by the Company, after a Change of Control, to require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) who acquired all or substantially all of the business and/or assets of the Company to expressly assume and agree to perform the Company’s obligations under the Plan in the same manner and to the same extent
that the Company would be required to perform it if no such succession had taken place.
|
(ii)
|
Any termination by the Company or by the Participant for reasons described above shall be communicated by a Notice of Termination
to the other party. Any Notice of Termination shall be by written instrument which (A) indicates the specific termination provision above relied upon, (B) sets forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Participant’s employment under the provision so indicated, and (C) if the Date of Termination is other than the date of receipt of such notice, specifies the Date of Termination (which date shall not be more
than 15 days after the giving of such notice). The failure by any Participant to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of entitlement to terminate under subparagraphs (1) through
(5) above shall not be deemed to be a waiver of any right of such Participant or preclude such Participant from asserting such fact or circumstance in enforcing his rights.
|
(iii)
|
Notwithstanding the foregoing, a Termination of Employment for Good Reason shall not occur if, within 30 days after the date the
Participant gives a Notice of Termination to the Company after a Change of Control, the Company corrects the action or failure to act that constitutes the grounds for termination for Good Reason and as set forth in the Participant’s
Notice of Termination. If the Company does not correct the action or failure to act, the Participant must terminate his or her employment for Good Reason within 60 days after the end of the cure period, in order for the termination to be
considered a Good Reason termination.
|
(a)
|
Committee. The Plan shall be administered by the Committee. Any power of the
Committee may also be exercised by the Board of Directors, except to the extent that the grant or exercise of such authority would cause any Award or transaction to become subject to (or lose an exemption under) the short-swing profit
recovery provisions of Section 16(b) of the Securities Exchange Act of 1934, as amended (“Section 16(b)”), unless the Board of Directors expressly determines not to obtain compliance with the provisions of Section 16(b). To the extent
that any permitted action taken by the Board of Directors conflicts with action taken by the Committee, the Board of Directors’ action shall control. Subject to the terms of the Plan and applicable law, the Committee shall have full power
and authority to:
|
(i)
|
designate Participants;
|
(ii)
|
determine the type or types of Awards to be granted to each Participant under the Plan;
|
(iii)
|
determine the number of Shares to be covered by (or with respect to which payments, rights, or other matters are to be calculated
in connection with) Awards;
|
(iv)
|
determine the terms and conditions of any Award and of Award Agreements, and verify the extent of satisfaction of any performance
goals or other conditions applicable to the grant, issuance, exercisability, vesting and/or ability to retain any Award;
|
(v)
|
determine whether, to what extent, and under what circumstances Awards may be settled or exercised in cash, Shares, other
securities, other Awards, or other property, or to what extent, and under what circumstances Awards may be canceled, forfeited, or suspended, and the method or methods by which Awards may be settled, exercised, canceled, forfeited, or
suspended;
|
(vi)
|
determine whether, to what extent, and under what circumstances cash, Shares, other securities, other Awards, other property, and
other amounts payable with respect to an Award under the Plan shall be deferred either automatically or at the election of the holder thereof or of the Committee;
|
(vii)
|
interpret and administer the Plan and any instrument or agreement relating to the Plan, or any Award made under the Plan,
including any Award Agreement;
|
(viii)
|
correct any defect or error, supply any omission, or reconcile any inconsistency in the administration of the Plan or in any Award
Agreement in the manner and to the extent it shall deem desirable to effectuate the purposes of the Plan and the related Award;
|
(ix)
|
establish, amend, suspend, rescind or reconcile such rules and regulations and appoint such agents as it shall deem appropriate
for the proper administration of the Plan;
|
(x)
|
determine the extent to which adjustments are required as a result of a merger, acquisition, consolidation, Change of Control,
reorganization, reclassification, combination of shares, stock split, reverse stock split, spin-off, dividend distribution of securities, property, cash or any other event or transaction affecting the number or kind of outstanding Shares
or equity; and
|
(xi)
|
make any other determination and take any other action that the Committee deems necessary or desirable for the administration of
the Plan.
|
(b)
|
Committee Decisions. Unless otherwise expressly provided in the Plan, all
designations, determinations, interpretations, and other decisions under or with respect to the Plan, any Award, or any Award Agreement, shall be within the sole discretion of the Committee or the Board as the case may be, may be made at
any time, and shall be final, conclusive, and binding upon all Persons, including the Company, any Affiliate, any Participant, any holder or beneficiary of any Award, and any Employee.
|
(c)
|
Delegation. The Board or the Committee may, from time to time, authorize one or
more officers of the Company to perform any or all things that the Committee is authorized and empowered to do or perform under the Plan consistent with Delaware and other applicable law. For all purposes under this Plan, such officer or
officers authorized by the Committee shall be treated as the Committee; provided, however, that the resolution so authorizing such officer or officers shall specify the total number of Awards (if any) such officer or officers may award
pursuant to such delegated authority and any such Award shall be subject to the form of Award Agreement theretofore approved by the Committee. No such officer shall designate himself or herself or any direct report as a recipient of any
Awards granted under authority delegated to such officer. In addition, the Board or the Committee may delegate any or all aspects of the day-to-day administration of the Plan to one or more officers or employees of the Company or any
subsidiary, and/or to one or more agents.
|
(a)
|
Maximum Shares Available. The maximum number of Shares that may be issued to
Participants pursuant to Awards under the Plan shall be 18,423,270 Shares plus any Shares subject to outstanding Awards under the Plan, or the Prior Plans as of May 4, 2020 (such outstanding Awards the “Prior Plan Awards”) that on or
after such date cease for any reason to be subject to such Awards (other than by reason of exercise or settlement of the Awards to the extent they are exercised for or settled in vested and non-forfeitable Shares) (collectively, the “Plan
Maximum”), subject to adjustment as provided in Section 4(c) below. Any Shares issued under Full Value Awards shall be counted against the Plan Maximum as 2.0 Shares for every one Share issued under such Awards. Shares that are issued
under Awards of Options or Stock Appreciation Rights shall be counted against the Plan Maximum as one Share for every one Share issued. Shares subject to Prior Plan Awards that are added back to the Plan Maximum pursuant to this Section
4(a) shall be added as one Share if such Shares were subject to options or stock appreciation rights, and as 2.0 Shares if such shares were subject to awards other than options or stock appreciation rights. Pursuant to any Awards, the
Company may in its discretion issue treasury Shares, authorized but previously unissued Shares or Shares purchased in the open market or otherwise pursuant to Awards hereunder. For the purpose of accounting for Shares available for Awards
under the Plan, the following shall apply:
|
(i)
|
Only Shares relating to Awards actually issued or granted hereunder shall be counted against the Plan Maximum. Shares
corresponding to Awards that by their terms expired, or that are forfeited, canceled or surrendered to the Company without consideration paid therefore and Shares subject to Awards, that are settled in cash shall not be counted against
the Plan Maximum.
|
(ii)
|
Shares that are forfeited by a Participant after issuance, or that are reacquired by the Company after issuance without
consideration paid therefore, shall be deemed to have never been issued under the Plan and accordingly shall not be counted against the Plan Maximum.
|
(iii)
|
Dividend Equivalent Shares shall be counted against the Plan Maximum, and clauses (i) and (ii) of this Section shall not apply to
such Awards.
|
(iv)
|
Notwithstanding anything herein to the contrary, Shares subject to an Award under the Plan may not again be made available for
issuance under the Plan if such Shares are: (A) Shares that were subject to an Option or a stock-settled Stock Appreciation Right and were not issued upon the net settlement or net exercise of such Option or Stock Appreciation Right, (B)
Shares delivered to or withheld by the Company to pay the exercise price of an Option or the withholding taxes related to an Award, or (C) Shares repurchased on the open market with the proceeds of an Option exercise.
|
(b)
|
Code and Plan Limitations. Subject to adjustment as provided in Section 4(c)
below, the maximum number of Shares for which ISOs may be granted under the Plan shall not exceed the Plan Maximum as defined in Section 4(a) above, and the maximum number of Shares that may be the subject of Awards made to a single
Participant in any one calendar year shall not exceed 2,000,000 not counting tandem SARs, which number is subject to adjustments as described in subsection (c) below.
|
(c)
|
Adjustments to Avoid Dilution. Notwithstanding paragraphs (a) and (b) above, in
the event of a stock dividend, extraordinary cash dividend, split-up or combination of Shares, merger, consolidation, reorganization, recapitalization, spin-off or other change in the corporate structure or capitalization affecting the
outstanding common stock of the Company, the Committee shall make equitable adjustments to (i) the number or kind of Shares subject to the Plan Maximum that remain subject to outstanding Awards or available for issuance under the Plan,
subject to the Plan Maximum as adjusted pursuant to Section 4, (ii) the number and type of Shares subject to the limitations set forth in Section 4(b), (iii) the number and type of Shares subject to outstanding Awards, and (iv) the grant,
purchase, or exercise price with respect to any Award. Such adjustment may include provision for cash payment to the holder of an outstanding Award. Any adjustment to the limitations set forth in Section 4(b) shall be made in such manner
as to preserve the ability to grant ISOs and Awards. Also, any other such adjustment (i) may be designed to comply with applicable provisions of the Code, including without limitation Section 409A, (ii) may be designed to treat the Shares
available under the Plan and subject to Awards as if they were all outstanding on the record date for such event or transaction, or (iii) may be designed to increase the number of such Shares available under the Plan and subject to Awards
to reflect a deemed reinvestment in Shares of the amount distributed to the Company’s security holders in connection with such event or transaction. The determination of the Committee as to the adjustments or payments, if any, to be made
shall be conclusive.
|
(d)
|
Substitute Awards. Substitute Awards shall not reduce the shares of common stock
authorized for issuance under the Plan or authorized for grant to a Participant in any calendar year. Additionally, in the event that a company acquired by the Company or any subsidiary of the Company (“Subsidiary”), or with which the
Company or any Subsidiary combines, has shares available under a pre-existing plan approved by shareholders and not adopted in contemplation of such acquisition or combination, the shares available for grant pursuant to the terms of such
pre-existing plan (as adjusted, to the extent appropriate, using the exchange ratio or other adjustment or valuation
|
(a)
|
Terms Set Forth in Award Agreement. Awards may be granted at any time and from
time to time prior to the termination of the Plan to an eligible Employee designated to be a Participant in the Plan as determined by the Committee. Awards may be granted for no cash consideration, or for such minimal cash consideration
as the Committee may specify, or as may be required by applicable law. Awards may, in the discretion of the Committee, be granted either alone or in addition to, in tandem with, or, subject to Section 4, in substitution for any other
Award or any award granted under any other plan of the Company or any Affiliate. The terms and conditions of each Award shall be set forth in an Award Agreement in a form approved by the Committee for such Award, which Award Agreement may
contain such terms and conditions as specified from time to time by the Committee, provided such terms and conditions do not conflict with the Plan. The Award Agreement for any Award (other than Restricted Stock awards) shall include the
time or times at or within which and the consideration for which any shares of common stock may be acquired from the Company. The terms of Awards may vary among Participants, and the Plan does not impose upon the Committee any requirement
to make Awards subject to uniform terms. The Participant shall be deemed to accept the Awards and the terms of the Awards unless the Participant affirmatively waives acceptance of the Award. If the Participant does not agree to all terms
of the Award, the Award is deemed null and void.
|
(b)
|
Separation from Service. Subject to the express provisions of the Plan, the
Committee shall specify at or after the time of grant of an Award the provisions governing the effect(s) upon an Award of a Participant’s separation from service not on account of a Change of Control. Termination from Employment on
account of a Change of Control is defined in Section 2.
|
(c)
|
Rights of a Stockholder. A Participant shall have no rights as a stockholder with
respect to shares of common stock covered by an Award (including voting rights) until the date the Participant becomes the holder of record of such shares of common stock. No adjustment shall be made for dividends or other rights for
which the record date is prior to such date, except as provided in Section 8 or as the Committee otherwise provides.
|
(d)
|
Performance Awards. Subject to the other terms of this Plan, the Committee may
condition the grant, retention, issuance, payment, release, vesting or exercisability of any Award, in whole or in part, upon the achievement of such performance criteria during a specified performance period(s).The performance criteria
may include Qualifying Performance Criteria or other standards of financial performance and/or personal performance. The Committee shall determine in a timely manner after the performance period ends whether all or part of the conditions
to payment of a Performance Award have been fulfilled and, if so, the amount, if any, of the payment to which the Participant is entitled.
|
(e)
|
Forms of Payment of 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, 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
in respect of installment or deferred payments. Notwithstanding the foregoing, unless the Committee expressly provides otherwise, with specific reference to this provision, the payment terms for any Award shall be implemented in a manner
consistent with the requirements of Section 409A of the Code, to the extent applicable.
|
(f)
|
Share Certificates. 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, any stock exchange upon which such Shares or other securities are then listed, 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. Unrestricted certificates representing Shares, evidenced in such manner as the Committee shall deem appropriate, which may include recording Shares on the stock
|
(g)
|
Limits on Transfer of Awards. Awards made under this Plan shall be subject to the
following limitations on transferability:
|
(i)
|
Unless determined otherwise by the Committee, no Award and no right under any such Award shall be assignable, alienable,
pledgeable, attachable, encumberable, saleable, or transferable by a Participant other than by will or by the laws of descent and distribution (or, in the case of Awards that are forfeited or canceled, to the Company). No Award and no
right under any such Award shall be the subject of short term speculative trading in Company securities, including hedging, short sales, “put” or “call” options, swaps, collars or any other derivative transactions. No Award and no right
under any such Award can be transferred for value or consideration. Any purported assignment, sale or transfer thereof shall be void and unenforceable against the Company or Affiliate. If the Committee so indicates in writing to a
Participant, he or she may designate one or more beneficiaries who may exercise the rights of the Participant and receive any property distributable with respect to any Award upon the death of the Participant. Each Award, and each right
under any Award, shall be exercisable, during the Participant’s lifetime only by the Participant or, if permissible under applicable law, by the Participant’s guardian or legal representative.
|
(ii)
|
Exceptions:
|
(A)
|
Gift Transfers. Notwithstanding Section 6(g)(i) above, the Committee may permit, subject
to establishment of appropriate administrative procedures, a Participant to transfer by gift an unexercised Stock Option or SAR and/or other unvested or unearned Awards, provided that all of the following conditions are met:
|
(1)
|
The donees of the gift transfer are limited to Family Members and Family Entities.
|
(2)
|
The Award is not further transferable by gift or otherwise by such Family Member or Family Entity.
|
(3)
|
All rights appurtenant to the Award, including any exercise rights, are irrevocably and unconditionally assigned to the donee.
|
(4)
|
Transfers under this Section 6(g) must meet all of the requirements under applicable provisions of the Code to be considered
“gift” transfers.
|
(5)
|
The donor and the donee have executed such form of agreement as the Committee may require pursuant to which each agree to be
subject to such terms and conditions with respect to the transferred Award as the Committee may specify.
|
(6)
|
The Employee has met any stock holding requirement imposed on such Employee by the Company, unless the requirement is waived by
the Company.
|
(7)
|
Except to the extent specified otherwise in the agreement all vesting, exercisability and forfeiture provisions that are
conditioned on the Participant’s continued employment or service shall continue to be determined with reference to the Participant’s employment or service (and not to the status of the transferee) after any transfer of an Award pursuant
to this Section 6(g), and the responsibility to pay any taxes in connection with an Award shall remain with the Participant, notwithstanding any transfer other than by will or intestate succession.
|
(8)
|
For purposes of the Plan, the following definitions shall apply:
|
(i)
|
Family Member means the Participant’s natural or adopted child, stepchild, grandchild, parent, stepparent, grandparent, spouse,
former spouse, domestic partner, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, sister-in-law, nephew, niece and any person sharing the Participant’s household (other than a tenant or employee); and
|
(ii)
|
Family Entity means any trust in which the Participant has more than a 50% beneficial interest and any entity in which the
Participant and/or a Family Member owns more than 50% of the voting interests.
|
(B)
|
Estate Transfers. In the case of death, Awards made hereunder may be transferred to the executor or personal representative of the
Participant’s estate or the Participant’s heirs by will or the laws of descent and distribution.
|
(h)
|
Registration. Any Shares granted under the Plan may be evidenced in such manner,
as the Committee may deem appropriate, including without limitation, book-entry registration or issuance of a stock certificate or certificates. In
|
(a)
|
Options and Stock Appreciation Rights. The Committee is hereby authorized to grant
Options and Stock Appreciation Rights to Participants with the following terms and conditions and with such additional terms and conditions, not inconsistent with the provisions of the Plan, as the Committee shall determine:
|
(i)
|
Exercise Price. The exercise price per Share under an Option shall be determined by the
Committee; provided, however, that except in the case of Substitute Awards, no Option or Stock Appreciation Right granted hereunder may have an exercise price of less than 100% of Fair Market Value of a Share on the date of grant.
|
(ii)
|
Times and Method of Exercise. The Committee shall determine the time or times at which an
Option or Stock Appreciation Right may be exercised in whole or in part; in no event, however, shall the period for exercising an Option or a Stock Appreciation Right extend more than 10 years from the date of grant. The Committee shall
also determine the method or methods by which Options and/or Stock Appreciation Rights may be exercised, and the form or forms (including without limitation, cash, Shares previously acquired and Shares otherwise issuable under the Option,
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 of an Option may be made or deemed to have been
made. The Committee may also allow cash and cashless exercise of an Option through a registered broker.
|
(iii)
|
Incentive Stock Options. Notwithstanding anything to the contrary in this Section 7(a),
in the case of the grant of an Option intending to qualify as an Incentive Stock Option: (A) if the Participant owns stock possessing more than 10 percent of the combined voting power of all classes of stock of the Company (a “10%
Stockholder”), the exercise price of such Incentive Stock Option must be at least 110 percent of the Fair Market Value of the Shares on the date of grant and the Option must expire within a period of not more than five (5) years from the
date of grant, and (B) “termination of employment” will occur when the person to whom an Award was granted ceases to be an employee (as determined in accordance with Section 3401(c) of the Code and the regulations promulgated thereunder)
of the Company and its subsidiaries. Notwithstanding anything in this Section 7(a) to the contrary, Options designated as Incentive Stock Options shall not be eligible for treatment under the Code as Incentive Stock Options (and instead
will be deemed to be Non-Qualified Stock Options) to the extent that either (1) the aggregate Fair Market Value of Shares (determined as of the time of grant) with respect to which such Options are exercisable for the first time by the
Participant during any calendar year (under all plans of the Company and any subsidiary) exceeds $100,000, taking Options into account in the order in which they were granted, or (2) such Options otherwise remain exercisable but are not
exercised within three months of termination of employment (or such other period of time provided in Section 422 of the Code).
|
(iv)
|
Stock Appreciation Rights (SARs). Stock Appreciation Rights may be granted to
Participants from time to time either in tandem with or as a component of other Awards granted under the Plan (“tandem SARs”) or not in conjunction with other Awards (“freestanding SARs”) and may, but need not, relate to a specific Option
granted under this Section 7(a). Any Stock Appreciation Right granted in tandem with an Award may be granted at the same time such Award is granted or at any time thereafter before exercise or expiration of such Award. Upon exercise of a
tandem SAR as to some or all of the shares covered by the grant, the related Option shall be canceled automatically to the extent of the number of shares covered by such exercise. Conversely, if the related Option is exercised as to some
or all of the shares covered by the grant, the related tandem SAR, if any, shall be canceled automatically to the extent of the number of shares covered by the Option exercise. All freestanding SARs shall be granted subject to the same
terms and conditions applicable to Options as set forth in this Section 7 and all tandem SARs shall have the same exercise price, vesting, exercisability, forfeiture and termination provisions as the Award to which they relate. Stock
Appreciation Rights may be settled in cash or stock at the discretion of the Committee.
|
(v)
|
No Repricing and Reload Without Stockholder Approval. Other than in connection with a
change in the Company’s capitalization (as described in Section 4(c) of the Plan), the Company shall not, without stockholder approval, (i) reduce the exercise price of an Option or Stock Appreciation Right, (ii) exchange an Option or
Stock Appreciation Right with an exercise price in excess of Fair Market Value for cash, another Award or a new Option or Stock Appreciation Right with a lower exercise price or (iii) otherwise reprice any Option or Stock Appreciation
Right. Options shall not be granted under the Plan in consideration for and shall not be conditioned upon the delivery of Shares to the Company in payment of the exercise price and/or tax withholding obligation under any other employee
stock option (No Reload).
|
(b)
|
Restricted Stock and Stock Units. Subject to Section 4 hereof, the Committee is
authorized to grant Awards of Restricted Stock and/or Stock Units to Participants with the following terms and conditions:
|
(c)
|
Dividend Equivalents. The Committee may, as a component of any other Award granted
under the Plan, grant to Participants Dividend Equivalents under which the holders thereof shall be entitled to receive payments equivalent to dividends with respect to a number of Shares determined by the Committee, and the Committee may
provide that such amounts shall be deemed to have been reinvested in Dividend Equivalent Shares or otherwise reinvested. Dividend equivalents may not be (i) granted in conjunction with options or SARs, or (ii) paid to a Participant on any
unvested and unearned performance shares until the performance criteria has been met and the Award has vested.
|
(d)
|
Other Stock-Based Awards. The Committee is hereby authorized to grant to
Participants such other Awards that are denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to Shares (including without limitation securities convertible into Shares), as are deemed by
the Committee to be consistent with the purposes of the Plan.
|
(i)
|
If applicable, Shares or other securities delivered pursuant to a purchase right granted under this Section 7(d) shall be
purchased for such consideration, which may be paid by such method or methods and in such form or forms, including without limitation cash, Shares, other securities, other Awards or other property, or any combination thereof, as the
Committee shall determine.
|
(iii)
|
In granting any Other Stock-Based Award pursuant to this Section 7(d), the Committee shall also determine what effect the
termination of employment of the Participant holding such Award shall have on the rights of the Participant pursuant to the Award.
|
(a)
|
General. The Award Agreement shall designate the terms under which the Award vests
and/or is exercisable according to terms and conditions authorized by the Committee and consistent with Plan provisions. There will be a one-year minimum vesting period for all awards under the Plan. Unless the Board provides otherwise,
vesting of Stock Option and SAR awards shall be pro rata over a three-year period following the award date (pro-rata vesting will not occur prior to the first year anniversary from the grant date). For purposes of the Plan, any reference
to the “vesting” of an Option or a SAR shall mean any events or conditions which, if satisfied, entitle a Participant to exercise an Option or a SAR with respect to all or a portion of the Shares covered by the Option or a SAR. Vesting of
a Restricted Stock Award or a Stock Unit shall mean any events or conditions which, if satisfied, entitle the Participant to the underlying stock certificate without restrictions (or cash as the case may be). Any awards of Restricted
Stock or Stock Units as to which the sole restriction relates to the passage of time and continued employment must have a restriction period of not less than three years, except that such Award may allow pro-rata vesting during the
restriction period (pro-rata vesting will not occur prior to the first year anniversary from the grant date). Any Award, other than an Award described in the immediately preceding sentence, must provide for the lapse of restrictions based
on performance criteria and level of achievement versus such criteria over a performance period of not less than one year, except in all cases, the Committee may provide for the satisfaction and/or lapse of all restrictions under any such
Award in the event of the Participant’s death, Disability or Retirement or a Change of Control and other similar events. Notwithstanding anything to the contrary herein, the Company reserves the right to make Awards representing up to 5%
of the total Shares issued under the Plan that are fully vested upon the making of the Award or that require vesting periods shorter than those described in this Section 8 (a). In addition, the Committee may in its sole discretion
accelerate vesting of an Award made hereunder on account of a “Termination with Conditions Imposed” as described under Section 8(b)(iii) in cases such as death, Disability and Retirement or following a Change of Control as discussed in
Section 10 herein. Except as otherwise permitted by Section 409A of the Code, an Award constituting nonqualified deferred compensation subject to the provisions of Section 409A of the Code shall not be accelerated.
|
(b)
|
Termination of Employment. Unless the Committee specifies otherwise, either at the
time of grant or thereafter, the following rules govern Awards upon a Participant’s termination of employment not on account of a Change of Control:
|
(i)
|
Death, Disability and Retirement. Unvested outstanding Awards (including without
limitation Stock Options, SARs, Restricted Stock or Stock Units), forfeit at death, Disability or Retirement unless the Committee, in its sole discretion, provides in the Award Agreement or otherwise for special vesting under those
circumstances. With respect to Stock Options and SARS any special vesting provided by the Committee may also include an additional exercise period beyond the Participant’s death, Disability or Retirement, however, that period may not be
longer than the original term of the Award. The Committee may also waive in whole or in part any or all remaining restrictions and vest the Awards upon the Participant’s death, Disability or Retirement. In addition, the Committee in its
sole discretion may set forth special vesting rules with respect to Dividend Equivalents and Other Stock-Based Awards and may determine that the Participant’s rights to Dividend Equivalents and Other Stock-Based Awards terminate at a date
later than death, Disability and Retirement.
|
(ii)
|
Sale of Business, Spin off Transactions. In the case of a sale of business or a spin off
transaction that does not constitute a Change of Control, the Committee shall determine the treatment of all outstanding Awards, including without limitation, determining the vesting terms, conversion of Shares and continued
exercisability. Unless otherwise provided for by the Committee, in the event the “business unit” (defined as a division, subsidiary, unit or other delineation that the Committee in its sole discretion may determine) for which the
Participant performs substantially all of his or her services is spun off by the Company or an Affiliate in a transaction that qualifies as a tax-free distribution of stock under Section 355 of the Code, or is assigned, sold, outsourced
or otherwise transferred, including an asset, stock or joint venture transaction, to an unrelated third party, such that after such transaction the Company owns or controls directly or indirectly less than 51% of the business unit, the
affected Participant shall become: 100% vested in all outstanding Awards as of the date of the closing of such transaction, whether or not fully or partially vested, and such Participant shall be entitled to exercise such Options and
Stock Appreciation Rights during the three (3) months following the closing of such transaction, unless the Committee has established an additional exercise period (but in any case not longer than the original option term). All Options
and Stock Appreciation Rights which are unexercised at the end of such three (3) months or such additional exercise period shall be automatically forfeited.
|
(iii)
|
Terminations with Conditions Imposed. Notwithstanding the foregoing provisions describing
the additional exercise and vesting periods for Awards upon termination of employment, the Committee may, in its sole discretion, condition the right of a Participant to vest or exercise any portion of a partially vested or exercisable
Award for which the Committee has established at the time of making the Award an additional vesting or exercise period on the Participant’s agreement to adhere to such conditions and stipulations which the Committee may impose, including,
but not limited to, restrictions on the solicitation of employees or independent contractors, disclosure of confidential information, covenants not to compete, refraining from denigrating through adverse or disparaging communication,
written or oral, whether or not true, the operations, business, management, products or services of the Company or its current or former employees and directors, including without limitation, the expression of personal views, opinions or
judgments. The unvested Awards of any Participant for whom the Committee at the time of making the Award has given an additional vesting and exercise period subject to such conditions subsequent as set forth in this Section
8(b)(iii) shall be forfeited immediately upon a breach of such conditions and, if specified in an Award Agreement, any rights, payments or benefits with respect to an Award that became vested in connection with a termination of employment
may be subject to recoupment upon a breach of such conditions.
|
(iv)
|
Termination for Other Reasons. If a Participant terminates employment for reasons other
than those enumerated above or in Section 10 below and the Committee has not created special rules surrounding the circumstances of the employment termination, the following rules shall apply.
|
(A)
|
Options and SARs. Any vested, unexercised portion of an Option or SAR at the time of the
termination shall be forfeited in its entirety if not exercised by the Participant within three (3) months of the date of termination of employment. Any portion of such partially vested Option or SAR that is not vested at the time of
termination shall be forfeited. Any outstanding Option or SAR granted to a Participant terminating employment other than for death, Disability or Retirement, for which no vesting has occurred at the time of the termination shall be
forfeited on the date of termination.
|
(B)
|
Restricted Stock and Stock Units. All unvested Restricted Stock and Stock Units, or any
unvested portion thereof, still subject to restrictions shall be forfeited upon termination of employment and reacquired by the Company.
|
(C)
|
Dividend Equivalents and Other Stock-Based Awards. Any Dividend Equivalents or unvested
portion of Other Stock-Based Awards made hereunder shall be forfeited upon termination of employment.
|
(c)
|
Forfeiture and Recoupment of Awards
|
(i)
|
Notwithstanding anything to the contrary herein, if at any time (including after a notice of exercise has been delivered) the
Committee, including any subcommittee or administrator authorized pursuant to Section 3(c) (any such person, an “Authorized Officer”), reasonably believes that a Participant has engaged in Gross Misconduct as defined in this Section, the
Authorized Officer may suspend the Participant’s right to exercise any Stock Option or SAR or receive Shares under any other Award pending a determination of whether the Participant has engaged in Gross Misconduct. If the Committee or an
Authorized Officer determines a Participant has engaged in Gross Misconduct, as defined herein, (including any Participant who may otherwise qualify for Disability or Retirement status), the Participant shall forfeit all outstanding
Awards, whether vested or unvested, as of the date such Gross Misconduct occurs. In addition, the Committee may specify in an Award Agreement that the Participant’s rights, payments, and benefits with respect to an Award shall be subject
to recoupment upon the occurrence of Gross Misconduct. For purposes of the Plan, Gross Misconduct shall be defined to mean (1) the Participant’s conviction of a felony (or crime of similar magnitude in non-U.S. jurisdictions) in
connection with the performance or nonperformance of the Participant’s duties or (2) the Participant’s willful act or failure to act in a way that results in material injury to the business or reputation of the Company or employees of the
Company. “Material injury” for this purpose means substantial and not inconsequential as determined by the Committee, or its delegate. For this purpose there is no intended similarity between “Material Injury” and the accounting or
securities standard of “materiality.”
|
(ii)
|
The Committee, in its sole discretion, may forfeit any outstanding Award on account of a Participant’s violation of the terms of
the Proprietary Interest Protection Agreement or similar agreement signed by the Participant which prohibits the Participant’s assignment of intellectual property, transmission of confidential information, competition or solicitation of
employees or business. In addition, the Committee may specify in an Award Agreement that the Participant’s rights, payments, and benefits with respect to an Award shall be subject to recoupment upon such a violation.
|
(iii)
|
In the event of a restatement of the Company’s financial results which consists of a misrepresentation of the financial state of
the Company for purposes of the Securities Exchange Act of 1934, the Board, or its delegate, may, upon review of the facts and circumstances, take necessary and appropriate actions including adjusting, recouping or forfeiting any awards
made or paid under this Plan to executive officers during the past 36 months where the payment or award was predicated upon the achievement of certain financial results that were subsequently subject of a restatement.
|
(d)
|
Deferral of Taxation. The Committee may establish rules allowing employees
receiving stock awards under this Plan to defer the incidence of taxation on the vesting of an award in accordance with the rules promulgated under the Code.
|
(a)
|
Amendments to Awards. Subject to Section 11, the Committee may waive any
conditions or rights under, amend any terms of, or amend, alter, suspend, discontinue, cancel or terminate, any Award heretofore granted without the consent of any relevant Participant or holder or beneficiary of an Award. No such
amendment, alteration, suspension, discontinuance, cancellation or termination may be made that would be adverse to the holder of such Award without such holder’s consent, provided that no such consent shall be required with respect to
any amendment, alteration, suspension, discontinuance, cancellation or termination if the Committee determines in its sole discretion that such amendment, alteration, suspension, discontinuance, cancellation or termination either (i) is
required or advisable in order for the Company, the Plan or the Award to satisfy or conform to any law or regulation or to meet the requirements of any accounting standard, or (ii) is not reasonably likely to significantly diminish the
benefits provided under such Award, or that any such diminishment has been adequately compensated. Subject to the foregoing, the Committee shall not waive any condition or rights under, amend any terms or alter, suspend, discontinue,
cancel or terminate any Award if such action would result in the imposition on the Award of the additional tax provided for under Section 409A of the Code.
|
(b)
|
Adjustments of Awards Upon Certain Acquisitions. In the event the Company or an
Affiliate shall issue Substitute Awards, the Committee may make such adjustments, not inconsistent with the terms of the Plan, in the terms of Awards as it shall deem appropriate in order to achieve reasonable comparability or other
equitable relationship between the assumed Awards and the Substitute Awards granted under the Plan.
|
(c)
|
Amendments. No amendment, modification or termination shall accelerate the payment
date of any Award constituting nonqualified deferred compensation subject to the provisions of Section 409A of the Code, except to the
|
(a)
|
Effect on Awards. If a Participant incurs a “Termination of Employment” on account
of a Change of Control (as defined in Section 2 (hh), as amended from time to time) upon or within two years after a Change of Control, or if a Participant is terminated before a Change of Control at the request of a third party who has
taken steps reasonably calculated to effect a Change of Control and a Change of Control subsequently occurs, then upon the later to occur of such Termination of Employment or Change of Control (such later event, the “Triggering Event”):
|
(i)
|
Options and SARs. All Options and SARs outstanding on the date of such Triggering Event
shall become immediately and fully exercisable without regard to any vesting schedule provided for in the Option or SAR and, to the extent the award is assumed by the acquirer, shall remain exercisable until the expiration of the option
term. If Termination of Employment occurs after the Change of Control, but within two years of the Change of Control, all Options and SARs are vested upon the Change of Control and will become exercisable upon the earlier of the normal
vesting date or upon Termination of Employment and will remain exercisable for the balance of the award term. If outstanding Option or SAR awards are not assumed by the acquirer, then the Options and SARs are exercisable upon the Change
of Control if the Fair Market Value exceeds the exercise price.
|
(ii)
|
Restricted Stock and Restricted Stock Units. On the date of such Triggering Event, all
restrictions applicable to any Restricted Stock or Restricted Stock Unit shall terminate and be deemed to be fully satisfied for the entire stated restricted period of any such Award, and the total number of underlying Shares shall become
Released Securities. If Termination of Employment occurs after the Change of Control, but within two years of the Change of Control, or if outstanding Restricted Stock or Restricted Stock Units are not assumed by the acquirer, they will
vest upon the Change of Control and will be converted into common stock at the earlier of normal vesting dates or Termination of Employment.
|
(iii)
|
Dividend Equivalents. On the date of such Triggering Event, the holder of any outstanding
Dividend Equivalent shall be entitled to surrender such Award to the Company and to receive payment of an amount equal to the amount that would have been paid over the remaining term of the Dividend Equivalent, as determined by the
Committee. If Termination of Employment occurs after the Change of Control, but within two years of the Change of Control, or if Dividend Equivalent Awards are not assumed by the acquirer, they will vest upon the Change of Control and
will be paid at the earlier of normal vesting dates or Termination of Employment.
|
(iv)
|
Other Stock-Based Awards. On the date of such Triggering Event, all outstanding Other
Stock-Based Awards of whatever type shall become immediately vested and payable in an amount that assumes that the Awards were outstanding for the entire period stated therein, as determined by the Committee. If Termination of Employment
occurs after the Change of Control, but within two years of the Change of Control, or if the Other Stock-Based Awards are not assumed by the acquirer, they will vest upon the Change of Control and will be paid at the earlier of normal
vesting dates or Termination of Employment
|
(v)
|
Performance Awards. On the date of such Triggering Event, Performance Awards conditioned
on Performance Goals, including without limitation Stock Units, subject to achievement of performance goals for all performance periods, including those not yet completed, shall immediately become fully vested and shall be immediately
payable or exercisable or released in common stock or cash, as the case may be, as if the Performance Goals had been fully achieved at target for the entire performance period. If Termination of Employment occurs after the Change of
Control, but within two years of the Change of Control, or if the Performance Awards are not assumed by the acquirer, they will vest upon the Change of Control as if target performance for the entire performance period had been achieved
and will be converted into common stock or paid in cash, as the case may be, at the earlier of normal vesting dates or Termination of Employment.
|
(vi)
|
The Committee’s determination of amounts payable under this Section 10 shall be final. Except as otherwise provided in Section 10,
any amounts due under this Section 10 shall be paid to Participants within 45 days after such Triggering Event.
|
(vii)
|
The provisions of this Section 10 shall not be applicable to any Award granted to a Participant if the Change of Control results
from such Participant’s beneficial ownership (within the meaning of Rule 13d-3 under the Securities and Exchange Act of 1934, as amended (the “Exchange Act”)) of Shares or other Company common stock or Company voting securities as a
Participant in a transaction described in (b) below.
|
(viii)
|
To the extent required to avoid any additional taxes or penalties under Section 409A of the Code, in the event of a resignation of
a Participant on account of Good Reason (as defined in Section 2(hh) above), if the period
|
(b)
|
Change of Control Defined. A “Change of Control” shall be deemed to have occurred
as described in Section 2(e) (as amended from time to time). However, that, as to any Award under the Plan that consists of deferred compensation subject to Section 409A, the definition of “Change of Control” shall be deemed modified to
the extent necessary to comply with Section 409A.
|
(a)
|
increase the total number of Shares available for Awards under the Plan, except as provided in Section 4 hereof;
|
(b)
|
reduce the price at which Options or Stock Appreciation Rights may be granted below the price provided for in Section 7(a)(i);
|
(c)
|
reduce the exercise price of outstanding Options or Stock Appreciation Rights;
|
(d)
|
extend the term of this Plan;
|
(e)
|
change the class of persons eligible to be Participants;
|
(f)
|
otherwise amend the Plan in any manner requiring stockholder approval by law or under the New York Stock Exchange listing
requirements; or
|
(g)
|
increase the individual maximum limits in Section 4.
|
(a)
|
Conditions and Restrictions Upon Securities Subject to Awards. The Committee may
provide that the Shares issued upon exercise of an Option or Stock Appreciation Right or otherwise subject to or issued under an Award shall be subject to such further agreements, restrictions, conditions or limitations as the Committee
in its discretion may specify prior to the exercise of such Option or Stock Appreciation Right or the grant, vesting or settlement of such Award, including without limitation, conditions on vesting or transferability, forfeiture or
repurchase provisions and method of payment for the Shares issued upon exercise, vesting or settlement of such Award (including the actual or constructive surrender of Shares already owned by the Participant) or payment of taxes arising
in connection with an Award. Without limiting the foregoing, such restrictions may address the timing and manner of any resales by the Participant or other subsequent transfers by the Participant of any Shares issued under an Award,
including without limitation, (i) restrictions under an insider trading policy or pursuant to applicable law, (ii) restrictions designed to delay and/or coordinate the timing and manner of sales by Participant and holders of other Company
equity compensation arrangements, (iii) restrictions as to the use of a specified brokerage firm for such resales or other transfers and (iv) provisions requiring Shares to be sold on the open market or to the Company in order to satisfy
tax withholding or other obligations.
|
(b)
|
Compliance with Laws and Regulations. This Plan, the grant, issuance, vesting,
exercise and settlement of Awards thereunder, and the obligation of the Company to sell, issue or deliver Shares under such Awards, shall be subject to all applicable Federal, state, local and foreign laws, rules and regulations, stock
exchange rules and regulations, and to such approvals by any governmental or regulatory agency as may be required. The Company shall not be required to register in a Participant’s name or deliver any Shares prior to the completion of any
registration or qualification of such shares under any Federal, state, local or foreign law or any ruling or regulation of any government body which the Committee shall determine to be necessary or advisable. To the extent the Company is
unable to or the Committee deems it not appropriate or infeasible to obtain authorization from any regulatory body having jurisdiction, which authorization is deemed by the Company’s counsel to be necessary to the lawful issuance and sale
of any Shares hereunder, or otherwise to satisfy the legal requirements in an applicable jurisdiction in a manner consistent with the intention of the Plan or any Award under the Plan, the Company and its Subsidiaries shall be relieved of
any liability with respect to the failure to issue or sell such Shares as to which such requisite authority shall not have been obtained. No Option or stock-settled Stock Appreciation Rights shall be exercisable and no Shares shall be
issued and/or transferable under any other Award unless a registration statement with respect to
|
(c)
|
No Rights to Awards. No Employee, Participant or other Person shall have any claim
to be granted any Award under the Plan, and there is no obligation for uniformity of treatment of Employees, Participants, or holders or beneficiaries of Awards under the Plan. The terms and conditions of Awards need not be the same with
respect to each Participant.
|
(d)
|
No Limit on Other Compensation Agreements. Nothing contained in the Plan shall
prevent the Company or any Affiliate from adopting or continuing in effect other or additional compensation arrangements and such arrangements may be either generally applicable or applicable only in specific cases.
|
(e)
|
No Right to Employment. The grant of an Award shall not be construed as giving a
Participant the right to be retained in the employ of the Company or any Affiliate. Further, the Company or an Affiliate may at any time dismiss a Participant from employment, free from any liability or any claim under the Plan, unless
otherwise expressly provided in the Plan or in any Award Agreement.
|
(f)
|
Withholding. To the extent required by applicable Federal, state, local or foreign
law, a Participant (including the Participant to whom an Award that has been transferred was originally granted) or in the case of the Participant’s death, the Participant’s estate or beneficiary, shall be required to satisfy, in a manner
satisfactory to the Company, any withholding tax obligations that arise by reason of an Option or Stock Appreciation Right exercise, disposition of Shares issued under an Incentive Stock Option, the vesting of or settlement of an Award,
an election pursuant to Section 83(b) of the Code or otherwise with respect to an Award. The Company and its Affiliates shall not be required to issue Shares, make any payment or to recognize the transfer or disposition of Shares until
such obligations are satisfied. The Company or any Affiliate may withhold from any Award granted or any payment due or transfer made under any Award or under the Plan the amount (in cash, Shares, other securities, other Awards, or other
property) of withholding Federal, state or local taxes due in respect of an Award, but no more than the minimum tax withholding required to comply with such law, its exercise, or any payment or transfer under such Award or under the Plan
and to take such other action as may be necessary in the opinion of the Company or Affiliate to satisfy all obligations for the payment of such taxes.
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(g)
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Governing Law. The validity, construction, and effect of the Plan and any rules
and regulations relating to the Plan shall be determined in accordance with the laws of the State of Delaware and applicable Federal law.
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(h)
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Severability. If any provision of the Plan or any Award is or becomes or is deemed
to be invalid, illegal, or unenforceable in any jurisdiction, or as to any Person or Award, or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to
conform to applicable laws, or if it cannot be so construed or deemed amended without, in the determination of the Committee, materially altering the intent of the Plan or the Award, such provision shall be stricken as to such
jurisdiction, Person, or Award and the remainder of the Plan and any such Award shall remain in full force and effect.
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(i)
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No Trust or Fund Created. Neither the Plan nor any Award shall create or be
construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company or any Affiliate and a Participant or any other Person. To the extent that any Person acquires a right to receive payments from the
Company or any Affiliate pursuant to an Award, such right shall be no greater than the right of any unsecured general creditor of the Company or any Affiliate.
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(j)
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No Fractional Shares. No fractional Share shall be issued or delivered pursuant to
the Plan or any Award, and the Committee shall determine whether cash, other securities, or other property shall be paid or transferred in lieu of any fractional Shares, or whether such fractional Shares or any rights thereto shall be
canceled, terminated, or otherwise eliminated.
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(k)
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Headings. Headings are given to the sections and subsections of the Plan solely as
a convenience to facilitate reference. Such headings shall not be deemed in any way material or relevant to the construction or interpretation of the Plan or any provision thereof.
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(a)
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The Committee may, in its sole discretion, reduce the number of Shares subject to Covered Awards or the amount which would
otherwise be payable pursuant to Covered Awards; provided, however, that the provisions of Section 9 shall override any contrary provision of this Section 15.
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(b)
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The Committee may appropriately adjust any evaluation of performance under a Performance Goal to eliminate the effects of charges
for restructurings, discontinued operations, extraordinary items and all items of gain, loss or expense determined to be extraordinary or unusual in nature or related to the disposal of a segment or a business or related to a change in
accounting principle all as determined in accordance with standards established by opinion No. 30 of the Accounting Principles Board (APB Opinion No. 30) or other applicable or successor accounting provisions, as well as the cumulative
effect of accounting changes, in each case as determined in accordance with generally accepted accounting principles or identified in the Company’s financial statements, including the notes thereto, and (B) may appropriately adjust any
evaluation of performance under a Performance Goal to exclude any of the following events that occurs during a performance period: (i) asset write-downs, (ii) litigation, claims, judgments or settlements, (iii) the effect of changes in
tax law or other such laws or provisions affecting reported results, (iv) accruals for reorganization and restructuring programs, and (v) accruals of any amounts for payment under this Plan or any other compensation arrangement maintained
by the Company. The Committee shall certify the extent to which any Qualifying Performance Criteria has been satisfied, and the amount payable as a result thereof, prior to payment, settlement or vesting of any Award.
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(c)
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Internal Revenue Code Compliance: The Committee intends to structure awards under
this Plan to be deductible under the Internal Revenue Code wherever possible. However, since corporate objectives may not always be consistent with the requirements for full deductibility, the Committee reserves the right, when
appropriate, to issue awards under this Plan which may not be deductible under the Internal Revenue Code. Specifically, Awards under the Plan are intended to comply with Section 409A of the Code and all Awards shall be interpreted in
accordance with such section and Department of Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued after the effective date of the
Plan. Notwithstanding any provision of the Plan or any Award Agreement to the contrary, in the event that the Committee determines that any Award may or does not comply with Section 409A of the Code, the Company may adopt such amendments
to the Plan and the affected Award (without Participant consent) or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, that the Committee determines are
necessary or appropriate to (i) exempt any Award from the application of Section 409A of the Code and/or preserve the intended tax treatment of the benefits provided with respect to such Award, or (ii) comply with the requirements of
Section 409A of the Code. The Committee may from time to time establish procedures pursuant to which Covered Employees will be permitted or required to defer receipt of amounts payable under Awards made under the Plan; provided, however,
that any such deferral shall be implemented in a manner consistent with the requirements of Section 409A of the Code, to the extent applicable.
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