☐
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Preliminary Proxy Statement
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☐
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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☒
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Definitive Proxy Statement
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☐
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Definitive Additional Materials
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☐
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Soliciting Material under §240.14a-12
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VISTEON CORPORATION
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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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DATE:
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WEDNESDAY, JUNE 3, 2020
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TIME:
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11:00 AM EASTERN DAYLIGHT TIME
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LOCATION:
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GRACE LAKE LODGE
40300 TYLER ROAD VAN BUREN TOWNSHIP, MICHIGAN |
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1.
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Elect nine directors to the Board of Directors. The Board has nominated for election James J. Barrese, Naomi M. Bergman, Jeffrey D. Jones, Sachin S. Lawande, Joanne M. Maguire, Robert J. Manzo, Francis M. Scricco, David L. Treadwell, and Rouzbeh Yassini-Fard, all current directors.
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2.
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Ratify the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for fiscal year 2020.
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3.
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Provide advisory approval of the Company’s executive compensation.
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4.
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Approve the Company’s 2020 Incentive Plan.
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2020 Proxy Statement
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2020 Proxy Statement i
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ii
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2020 Proxy Statement
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Date:
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June 3, 2020
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Place:
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Grace Lake Lodge
40300 Tyler Rd Van Buren Township, Michigan |
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Time:
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11 a.m. ET
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Visit the website listed on your proxy card/voting instruction form to vote via the Internet.
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Call the telephone number on your proxy card/voting instruction form to vote by telephone.
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Sign, date and return your proxy card/voting instruction form to vote by mail.
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Vote in person at the annual meeting. Owners with shares held through a bank or broker may vote in person at the meeting if they have a legal proxy from the bank or broker and bring it to the meeting.
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ITEM
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VOTES REQUIRED
FOR APPROVAL |
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BOARD’S VOTING
RECOMMENDATION |
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PAGE
REFERENCE |
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Item 1
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Elect directors
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Majority of votes cast
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FOR
each nominee |
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Item 2
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Ratify the appointment of Ernst & Young LLP as our independent auditor for the year ending December 31, 2020
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Majority of votes present
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FOR
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Item 3
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Advisory approval of the Company’s executive compensation
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Majority of votes present
The vote on this item is nonbinding, but the Board will consider the results of the vote in making future decisions. |
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FOR
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Item 4
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Approve 2020 Incentive Plan
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Majority of votes present
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FOR
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This Proxy Statement and our 2019 Annual Report are available electronically on our hosted website at www.proxyvote.com and accessible via the QR code at the right. The Notice and proxy materials are first being made available to our shareholders on or about April 23, 2020.
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2020 Proxy Statement 1
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NAME
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AGE
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DIRECTOR
SINCE |
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INDEPENDENT
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PRIMARY OCCUPATION
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James J. Barrese
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51
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2017
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X
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Former CTO and SVP Payment Services Business of PayPal, Inc.
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Naomi M. Bergman
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56
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2016
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X
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President of Advance/Newhouse companies
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Jeffrey D. Jones
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67
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2010
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X
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Attorney, Kim & Chang
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Sachin S. Lawande
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52
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2015
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CEO and President of Visteon Corporation
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Joanne M. Maguire
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66
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2015
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X
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Former EVP of Lockheed Martin Corporation
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Robert J. Manzo
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62
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2012
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X
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Managing Member of RJM, LLC
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Francis M. Scricco
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70
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2012
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X
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Former SVP, Avaya, Inc. and former President and CEO of Arrow Electronics, Inc.
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David L. Treadwell
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65
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2012
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X
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Former CEO and President of EaglePicher Corporation
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Rouzbeh Yassini-Fard
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61
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2015
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X
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Founder of YAS Foundation
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2
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2020 Proxy Statement
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2020 Proxy Statement 3
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4
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2020 Proxy Statement
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2020 Proxy Statement 5
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6
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2020 Proxy Statement
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Barrese
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Bergman
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Jones
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Lawande
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Maguire
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Manzo
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Scricco
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Treadwell
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Yassini
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Skills & Experience
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Public Company Board Experience
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X
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X
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X
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X
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X
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X
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X
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X
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X
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Automotive Industry Experience
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X
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X
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X
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X
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X
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Senior Leadership Experience
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X
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X
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X
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X
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X
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X
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X
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X
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X
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International Business Experience
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X
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X
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X
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X
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X
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X
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X
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Financial Literacy
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X
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X
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X
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X
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X
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X
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X
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Technology/Systems Expertise
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X
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X
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X
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X
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X
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Marketing/Sales Experience
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X
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X
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X
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X
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X
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Academic/Research Experience
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X
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X
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X
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Military Service
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X
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Government/Public Policy Expertise
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X
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X
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Demographic Background
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Visteon Board Tenure (Years)
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3
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3
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9
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4
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5
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7
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7
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7
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5
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Male (M)/ Female (F)
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M
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F
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M
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M
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F
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M
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M
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M
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M
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Age
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51
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56
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67
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52
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66
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62
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70
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65
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61
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2020 Proxy Statement 7
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8
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2020 Proxy Statement
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2020 Proxy Statement 9
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✓
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Annual election of all directors
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✓
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Majority voting for directors
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✓
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89% of Board is independent
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✓
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Independent Board Chair
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✓
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Board Chair and Chief Executive Officer roles separated
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✓
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All Board Committees composed entirely of independent directors
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✓
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Proxy access right granted to shareholders
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✓
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Annual Board and committee evaluations
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✓
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Executive sessions of independent directors held at each regularly scheduled in-person Board meeting
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✓
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Commitment to corporate social responsibility
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✓
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Share ownership guidelines for directors and executives
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•
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To preside at all meetings of shareholders;
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To convene and preside at all meetings of the Board, including executive sessions of the independent directors;
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Develop, with the assistance of the Chief Executive Officer (the “CEO”), the agenda for all Board meetings;
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Collaborate with the CEO, committee Chairs, and other directors to establish meeting schedules, agendas, and materials in order to ensure that all directors can perform their duties responsibly and that there is sufficient time for discussion of all agenda items;
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Advise the CEO on the quantity, quality, and timeliness of information delivered by management to the Board and provide input so that directors can effectively and responsibly perform their duties;
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Counsel the CEO on issues of interest or concern to directors and encourage all directors to engage the CEO with their interests and concerns;
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Serve as a liaison on Board-related issues between directors and the CEO and management although directors maintain the right to communicate directly with the CEO or any member of management on any matter;
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Assist the Board and the Company’s officers in assuring compliance with and implementation of the Company’s Corporate Governance Guidelines;
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Work in conjunction with the Corporate Governance and Nominating Committee to recommend revisions, as appropriate, to the Corporate Governance Guidelines;
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Make recommendations to the Board concerning the retention of counsel and consultants who report directly to the Board on board matters (as opposed to committee counsel or consultants);
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Work with the Chair of each committee during the annual review of committee charters and work with the Chair of the Corporate Governance and Nominating Committee with respect to committee assignments and the recruitment and selection of new Board members;
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10
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2020 Proxy Statement
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•
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Represent the Board in shareholder engagement meetings and similar activities with other stakeholders, serve as a focal point for shareholder communications addressed to directors, and advise the CEO of the timing and substance of such communications; in each case as approved by the Board;
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Convene special meetings of the Company’s shareholders consistent with the terms of the Company’s Bylaws from time to time in effect; and
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Help set the tone for the highest standards of ethics and integrity.
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The Audit Committee oversees risks associated with financial and accounting matters, including compliance with legal and regulatory requirements, cybersecurity, and the Company’s financial reporting and internal control systems.
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•
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The Corporate Governance and Nominating Committee oversees risks associated with corporate governance, including Board structure and director succession planning.
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The Organization and Compensation Committee helps ensure that the Company’s compensation policies and practices support the retention and development of executive talent with the experience required to manage risks inherent to the business and do not encourage or reward excessive risk-taking by our executives.
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The Finance and Corporate Strategy Committee oversees risks associated with financial instruments, financial policies and strategies, and capital structure.
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2020 Proxy Statement 11
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•
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to select and evaluate the independent registered public accounting firm;
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•
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to approve all audit and non-audit engagement fees and terms;
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•
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to review the activities and the reports of the Company’s independent registered public accounting firm including the critical audit matters described in their annual report;
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to review internal controls, accounting practices, financial structure and financial reporting, including the results of the annual audit and review of interim financial statements;
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to review and monitor compliance procedures; and
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to report the results of its review to the Board.
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•
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to review and approve corporate goals and objectives relative to the compensation of the Chief Executive Officer, evaluate the Chief Executive Officer’s performance and set the Chief Executive Officer’s compensation level based on this evaluation;
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to review and approve executive compensation and incentive plans;
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to approve the payment of cash performance bonuses and the granting of stock-based awards to the Company’s employees, including officers; and
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to review and recommend management development and succession planning.
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12
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2020 Proxy Statement
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•
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to develop corporate governance principles and monitor compliance therewith;
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•
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to review the performance of the Board as a whole;
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•
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to review and recommend to the Board compensation for outside directors;
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•
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to develop criteria for Board membership;
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•
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to identify, review and recommend director candidates; and
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•
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to review and monitor certain environmental, safety and health matters.
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to review and make recommendations to the Board regarding the Company’s cash flow, capital expenditures and financing requirements;
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to review the Company’s policies with respect to financial risk assessment and management including investment strategies and guidelines;
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2020 Proxy Statement 13
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•
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to review and make recommendations on mergers, acquisitions and other major financial transactions requiring Board approval;
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•
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to consider and recommend to the Board stock sales, repurchases or splits, as appropriate, and any changes in dividend policy; and
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to evaluate bona fide proposals in respect of major acquisitions, dispositions, mergers and other transactions for recommendation to the Board.
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to review and comment on new product technology strategies as developed by the Company;
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•
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to review and make recommendations to the Board regarding the technology budget, assess major investments in new technology platforms, partnerships and alliances; and
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•
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to monitor and evaluate existing and future trends in technology that may affect the Company’s strategic plans, including overall trends in the automotive industry.
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14
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2020 Proxy Statement
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Name
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Fees Earned or
Paid in Cash ($)(1) |
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Stock Awards
($)(2) |
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All Other
Compensation ($) |
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Total
($) |
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James J. Barrese
|
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95,000
|
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105,000
|
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—
|
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200,000
|
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Naomi M. Bergman
|
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105,000
|
| |
105,000
|
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—
|
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210,000
|
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Jeffrey D. Jones
|
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95,000
|
| |
105,000
|
| |
—
|
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200,000
|
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Joanne M. Maguire
|
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95,000
|
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105,000
|
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—
|
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200,000
|
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Robert J. Manzo
|
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130,000
|
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105,000
|
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—
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235,000
|
|
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Francis M. Scricco
|
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95,000
|
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255,000
|
| |
—
|
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350,000
|
|
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David L. Treadwell
|
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115,000
|
| |
105,000
|
| |
—
|
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220,000
|
|
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Harry J. Wilson
|
| |
105,000
|
| |
105,000
|
| |
—
|
| |
210,000
|
|
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Rouzbeh Yassini-Fard
|
| |
105,000
|
| |
105,000
|
| |
—
|
| |
210,000
|
|
(1)
|
The following directors deferred 2019 cash compensation into their deferred unit account under the Deferred Compensation Plan for Non-Employee Directors (further described below):
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Name
|
| |
2019 Cash
Deferred ($) |
|
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Ms. Bergman
|
| |
105,000
|
|
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Mr. Yassini-Fard
|
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105,000
|
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Mr. Wilson
|
| |
105,000
|
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(2)
|
As of December 31, 2019, and pursuant to the Visteon Corporation Non-Employee Director Stock Unit Plan (described further below), Mr. Barrese owned 4,583 stock units, Ms. Bergman owned 5,031 stock units, Ms. Maguire and Messrs. Jones, Manzo, Scricco, Treadwell, Wilson and Yassini-Fard each owned 7,048 stock units. Mr. Scricco also owned 11,549 stock units, and Messrs. Jones and Manzo each owned 1,481 stock units granted pursuant to the 2010 Incentive Plan.
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2020 Proxy Statement 15
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Common Stock
Beneficially Owned |
| |
Stock
Units(2)(3) |
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|
Name
|
| |
Number(1)
|
| |
Percent of
Outstanding |
| |||
|
Sachin S. Lawande
|
| |
253,241
|
| |
*
|
| |
35,477
|
|
|
James J. Barrese
|
| |
—
|
| |
*
|
| |
4,853
|
|
|
Naomi M. Bergman
|
| |
1,000
|
| |
*
|
| |
9,684
|
|
|
Jeffery D. Jones
|
| |
—
|
| |
*
|
| |
8,529
|
|
|
Joanne M. Maguire
|
| |
—
|
| |
*
|
| |
7,048
|
|
|
Robert J. Manzo
|
| |
12,000
|
| |
*
|
| |
8,529
|
|
|
Francis M. Scricco
|
| |
7,150
|
| |
*
|
| |
18,597
|
|
|
David L. Treadwell
|
| |
4,000
|
| |
*
|
| |
7,048
|
|
|
Harry J. Wilson
|
| |
12,000
|
| |
*
|
| |
8,535
|
|
|
Rouzbeh Yassini-Fard
|
| |
2,000
|
| |
*
|
| |
11,328
|
|
|
William M. Robertson
|
| |
6,929
|
| |
*
|
| |
2,355
|
|
|
Sunil K. Bilolikar
|
| |
13,205
|
| |
*
|
| |
3,797
|
|
|
Brett D. Pynnonen
|
| |
11,900
|
| |
*
|
| |
4,314
|
|
|
Robert R. Vallance
|
| |
18,265
|
| |
*
|
| |
12,995
|
|
|
Christian A. Garcia
|
| |
—
|
| |
*
|
| |
—
|
|
|
All executive officers and directors as a group (20 persons)
|
| |
368,050
|
| |
1.3%
|
| |
185,418
|
|
*
|
Less than 1%.
|
(1)
|
Includes shares of common stock which the following executive officers had a right to acquire ownership of pursuant to stock options or stock appreciation rights granted by the Company and exercisable on or within 60 days after April 9, 2020: Mr. Lawande (132,824 shares), Mr. Bilolikar (9,420 shares), Mr. Pynnonen (7,364 shares), Mr. Vallance (9,736 shares) and Mr. Robertson (3,410 shares).
|
(2)
|
For non-employee directors, the amounts shown include stock units credited under the Deferred Compensation Plan for Non-Employee Directors, the Non-Employee Director Stock Unit Plan and the Visteon Corporation 2010 Incentive Plan, and are payable following termination of Board service in cash oshares of common stock at the election of the Company, or in cash upon a change in control.
|
(3)
|
Includes restricted stock units granted to executive officers under the Visteon Corporation 2010 Incentive Plan, which are payable upon vesting in shares of common stock or cash at the election of the Company.
|
|
|
| |
|
| |
|
|
|
16
|
| |
|
| |
2020 Proxy Statement
|
|
|
Title of Class
|
| |
Name and Address of Beneficial Owner
|
| |
Amount and Nature of
Ownership |
| |
Percent
of Class |
|
|
Common Stock
|
| |
T. Rowe Price Associates, Inc.
100 E. Pratt Street Baltimore, Maryland 21202 |
| |
4,408,623 total aggregate shares
(1,423,906 shares held with sole voting power and 4,408,623 shares held with sole dispositive power) |
| |
15.7%
|
|
|
Common Stock
|
| |
Blackrock, Inc.
55 East 52nd Street New York, New York 10055 |
| |
3,379,782 total aggregate shares
(3,285,963 shares held with sole voting power and 3,379,782 shares held with sole dispositive power) |
| |
12.1%
|
|
|
Common Stock
|
| |
Janus Henderson Group plc
201 Bishopsgate United Kingdom EC2M 3AE |
| |
2,886,332 total aggregate shares
(2,886,332 shares held with shared voting and dispositive power) |
| |
10.3%
|
|
|
Common Stock
|
| |
The Vanguard Group
100 Vanguard Boulevard Malvern, Pennsylvania 19355 |
| |
2,656,664 total aggregate shares
(27,234 shares held with sole voting power, 4,764 shares with shared voting power; 2,628,499 shares held with sole dispositive power, and 28,165 shares held with shared dispositive power) |
| |
9.49%
|
|
|
Common Stock
|
| |
Invesco Ltd.
1555 Peachtreet Street NE, Ste. 1800 Atlanta, Georgia 30309 |
| |
2,107,565 total aggregate shares
(2,085,518 shares held with sole voting power and 2,107,565 shares held with sole dispositive power) |
| |
7.5%
|
|
|
|
| |
|
|
|
|
| |
2020 Proxy Statement 17
|
|
•
|
Sachin S. Lawande, President and Chief Executive Officer (CEO);
|
•
|
William M. Robertson, Vice President and Interim Chief Financial Officer (CFO);
|
•
|
Sunil K. Bilolikar, Senior Vice President, Manufacturing Operations and Supply Chain;
|
•
|
Brett D. Pynnonen, Senior Vice President and General Counsel;
|
•
|
Robert R. Vallance, Senior Vice President, Customer Business Groups; and
|
•
|
Christian A. Garcia, Former Executive Vice President and Chief Financial Officer (CFO).
|
|
|
| |
|
| |
|
|
|
18
|
| |
|
| |
2020 Proxy Statement
|
|
•
|
2019 Sales of $2,945 million, Adjusted EBITDA(1) of $234 million, and Adjusted Free Cash Flow(2) of $56 million;
|
•
|
Winning $6.1 billion in new business in 2019, adding new customers and expanding business with top global OEMs;
|
•
|
Balance sheet remains strong with Cash of $469 million, Debt of $385 million and -0.4x Net Debt/Adjusted EBITDA;
|
•
|
Sales growth, excluding currency and acquisitions, as compared to 2018, outperformed the market by 5 percentage points;
|
•
|
Increased OEM programs under development with modest increase in engineering cost by leveraging a platform strategy; and
|
•
|
Strengthened cockpit technology portfolio, launching key innovations in display, infotainment and SmartCoreTM domains.
|
(1)
|
Please see the reconciliation of Adjusted EBITDA to net income attributable to Visteon for the year ended December 31, 2019, in Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019 (the “2019 10-K”).
|
(2)
|
Please see the reconciliation of Adjusted Free Cash Flow to Cash provided from operating activities for the year ended December 31, 2019, in Item 9.01 “Financial Statements and Exhibits” of the Company’s Current Report on Form 8-K dated February 20, 2020.
|
|
|
| |
|
|
|
|
| |
2020 Proxy Statement 19
|
|
•
|
Annual Incentive actual payouts relative to target levels
|
•
|
The difference between the grant-based value of Performance Stock Unit (“PSU”) awards and the relative performance as of December 31, 2019
|
•
|
The value of Restricted Stock Unit (“RSU”) awards at the grant date as compared to the value as of December 31, 2019
|
•
|
The value of options at the grant date as compared to value realized through and “in-the-money” value as of December 31, 2019
|
|
|
| |
|
| |
|
|
|
20
|
| |
|
| |
2020 Proxy Statement
|
|
|
Year Granted
|
| |
Applicable NEOs
|
| |
Performance Period
|
| |
Metric
|
| |
Actual or Estimated
Weighted Average Payout Percentage |
|
|
2019
|
| |
All NEOs
|
| |
Jan 2019-Dec 2021
|
| |
Relative TSR
|
| |
Estimated: 199%
|
|
|
2018
|
| |
All NEOs
|
| |
Jan 2018-Dec 2020
|
| |
Relative TSR
|
| |
Estimated: 75%
|
|
|
2017
|
| |
All NEOs
|
| |
Jan 2017-Dec 2019
|
| |
Relative TSR
|
| |
Actual: 117%
|
|
|
|
| |
|
|
|
|
| |
2020 Proxy Statement 21
|
|
|
What We Do
|
| |
✓
|
| |
The Organization and Compensation Committee of the Board of Directors (hereafter referred to as the “Committee”) approves all aspects of officer pay
|
|
|
✓
|
| |
Target pay levels, on average, are within a competitive range of the median of comparable companies, considering an individual’s responsibilities, business impact, performance and other factors
|
| |||
|
✓
|
| |
Provide the majority of pay through performance-based annual and long-term programs
|
| |||
|
✓
|
| |
Balance short- and long-term incentives using multiple performance metrics, covering individual, financial and total shareholder return (“TSR”) performance
|
| |||
|
✓
|
| |
Cap incentive awards that are based on performance goals
|
| |||
|
✓
|
| |
Have “double trigger” (qualified termination of employment following a change in control) equity acceleration for all of the NEOs’ outstanding awards
|
| |||
|
✓
|
| |
Have change in control agreements with a “double trigger” for cash severance payments to be made
|
| |||
|
✓
|
| |
Maintain guidelines for significant stock ownership by our NEOs to ensure ongoing and meaningful alignment with shareholders
|
| |||
|
✓
|
| |
Have a compensation recoupment (“clawback”) policy for executive officers in the event of a financial restatement
|
| |||
|
✓
|
| |
Prohibit hedging transactions, purchasing the Company’s common stock on margin or pledging such shares
|
| |||
|
✓
|
| |
Review key elements of the officer pay program annually, as conducted by the Committee, which also considers our business and talent needs, and market trends
|
| |||
|
✓
|
| |
Use an independent compensation consultant
|
| |||
|
|
| |
|
| |
|
|
|
What We Don’t Do
|
| |
×
|
| |
Do not provide excise tax gross-ups
|
|
|
×
|
| |
Do not have compensation practices that encourage unnecessary and excessive risk taking
|
| |||
|
×
|
| |
Do not grant stock options or stock appreciation rights with an exercise price less than the fair market value on the grant date
|
| |||
|
×
|
| |
Do not provide dividends or dividend equivalents on unearned PSUs
|
| |||
|
×
|
| |
Do not provide car allowances, club memberships or similar perquisites
|
|
|
|
| |
|
| |
|
|
|
22
|
| |
|
| |
2020 Proxy Statement
|
|
|
Party:
|
| |
Primary Roles:
|
| |||
|
Organization and Compensation Committee (composed solely of independent directors)
|
| |
•
|
| |
Oversee all aspects of the executive compensation program
|
|
|
•
|
| |
Approve officer compensation levels, incentive plan goals, and award payouts
|
| |||
|
•
|
| |
Approve specific goals and objectives, as well as corresponding compensation, for the CEO
|
| |||
|
•
|
| |
Ensure the executive compensation program best achieves the Company’s objectives, considering the business strategy, talent needs, and market trends
|
| |||
|
Senior Management
(CEO, CFO, CHRO, and General Counsel) |
| |
•
|
| |
Make recommendations regarding the potential structure of the executive compensation program, including input on key business strategies and objectives
|
|
|
•
|
| |
Make recommendations regarding the pay levels of the officer team (excluding the CEO)
|
| |||
|
•
|
| |
Provide any other information requested by the Committee
|
| |||
|
Compensation Consultant
(FW Cook) |
| |
•
|
| |
Advise the Committee on competitive market practices and trends
|
|
|
•
|
| |
Provide proxy pay data for our compensation peer group
|
| |||
|
•
|
| |
Present information and benchmarking regarding specific executive compensation matters, as requested by the Committee
|
| |||
|
•
|
| |
Review management proposals and provide recommendations regarding CEO pay
|
|
•
|
Drive achievement of the Company’s strategic plans and objectives;
|
•
|
Create strong alignment of the interests of executives with the creation of shareholder value, particularly as measured by total shareholder return/stock price appreciation;
|
•
|
Provide a market competitive total compensation package customized to fit our business and talent needs; and
|
•
|
Be cost-effective and straightforward to understand and communicate.
|
|
|
| |
|
|
|
|
| |
2020 Proxy Statement 23
|
|
|
American Axle & Manufacturing
|
| |
Garmin Ltd.
|
| |
Rockwell Automation Inc.
|
|
|
Ametek Inc.
|
| |
Gentex Corporation
|
| |
Sensata Technologies
|
|
|
Cooper-Standard Holdings Inc.
|
| |
Harris Corporation
|
| |
Spirit AeroSystems
|
|
|
Dana Inc.
|
| |
Motorola Solutions Inc.
|
| |
Trimble Inc.
|
|
|
FLIR Systems Inc.
|
| |
Nuance Communications Inc.
|
| |
|
|
|
|
| |
|
| |
|
|
|
24
|
| |
|
| |
2020 Proxy Statement
|
|
|
Measure ($ in millions)
|
| |
2019
Threshold |
| |
2019
Target |
| |
2019
Maximum |
| |
2019 Actual% of
Target Awarded |
|
|
Adjusted EBITDA(1)
|
| |
$220
|
| |
$269.5-280.5
|
| |
$343.8
|
| |
$234
|
|
|
Payout as a % of Target
|
| |
25%
|
| |
100%
|
| |
200%
|
| |
36%
|
|
|
Modifiers ($ in millions)
|
| |
Metric Range
|
| |
Modifier
Range Possible |
| |
Modifier
Achieved |
| |
Modifier
Applied |
|
|
Adjusted Free Cash Flow
|
| |
Less than $66 to $116+
|
| |
-/+ 5%
|
| |
- 5%
|
| |
- 5%
|
|
|
Written Quality Concerns
|
| |
Greater than 461 to less than 360
|
| |
-/+ 5%
|
| |
- 5%
|
| |
- 5%
|
|
|
AI Earned from Adjusted EBITDA with modifiers
|
| |
|
| |
|
| |
|
| |
26%
|
|
|
Management Business Objectives
|
| |||||||||||||||
|
•
|
| |
New Business Wins
|
| |
•
|
| |
New Product Development
|
| |
•
|
| |
Program Management
|
|
|
•
|
| |
Technology Roadmap
|
| |
•
|
| |
Workforce Planning
|
| |
|
| |
|
|
(1)
|
Adjusted EBITDA was defined as net income attributable to the Company, adjusted to eliminate the impact of depreciation and amortization, restructuring expense, net interest expense, equity in net income of non-consolidated affiliates, loss on divestiture, provision for income taxes, discontinued operations, net income attributable to non-controlling interests, non-cash stock-based compensation expense, and other gains and losses not reflective of the Company’s ongoing operations.
|
|
|
| |
|
|
|
|
| |
2020 Proxy Statement 25
|
|
|
Award Type and
Weighting |
| |
Primary Role
|
| |
Design Features
|
| |||
|
Performance Stock Units
(50% of the total LTI value) |
| |
Reward the achievement of TSR results from 2019 through 2021 relative to returns of 16 similar companies
|
| |
•
|
| |
PSUs provide executives the opportunity to earn shares based on the Company’s three-year TSR relative to 16 automotive sector peer companies (listed below)
|
|
|
•
|
| |
The awards are divided among three periods with all earned awards paid at the end of the three-year cycle (paid in early 2022)
|
| ||||||
|
•
|
| |
2019 TSR performance (25% of award opportunity) which was earned at 199% based on the Company’s 75th percentile rank
|
| ||||||
|
•
|
| |
2019 through 2020 TSR performance (25% of award opportunity)
|
| ||||||
|
•
|
| |
2019 through 2021 TSR performance (50% of award opportunity)
|
| ||||||
|
•
|
| |
The awards for the first and second performance periods will be increased to reflect the performance over the entire three-year cycle, if greater. If the Company’s actual TSR is negative during a performance period, the award earned for that period cannot exceed 100% of target (regardless of percentile rank within the peer group).
|
| ||||||
|
•
|
| |
Awards can be earned up to 200% of the target award opportunity based on the Company’s TSR performance percentile ranking within the comparator group (Visteon plus the 16 TSR peer companies)
|
| ||||||
|
•
|
| |
No award earned if Visteon’s performance is below the 25th percentile
|
| ||||||
|
•
|
| |
35% of target award earned at the 25th percentile, 100% at 55th percentile and 200% at 80th percentile
|
| ||||||
|
•
|
| |
Award payouts for performance between the percentiles specified above is determined based on interpolation
|
| ||||||
|
•
|
| |
TSR is calculated using the 20-trading day average closing price at the start and end of the performance period, adjusted for dividends
|
| ||||||
|
Stock Options (25% of
the total LTI value) |
| |
Reward for appreciation in the Company’s stock price
|
| |
•
|
| |
Exercise price equal to the average of the high and low trading prices on the date of grant
|
|
|
•
|
| |
Vest one-third per year beginning one year after the date of grant
|
| ||||||
|
•
|
| |
Seven-year term, upon which any unexercised options would expire
|
| ||||||
|
Restricted Stock Units
(25% of the total LTI value) |
| |
Facilitate retention and provide an ownership stake
|
| |
•
|
| |
Vest one-third per year beginning one year after the date of grant
|
|
|
Adient, Inc.
|
| |
Cooper Standard
|
| |
Magna International, Inc.
|
|
|
American Axle & Mfg Holdings
|
| |
Dana Incorporated
|
| |
Meritor Inc.
|
|
|
Aptiv PLC
|
| |
Delphi Technologies
|
| |
Tenneco Inc.
|
|
|
Autoliv, Inc.
|
| |
Denso
|
| |
Valeo
|
|
|
BorgWarner Inc.
|
| |
Faurecia
|
| |
|
|
|
Continental
|
| |
Lear Corporation
|
| |
|
|
|
|
| |
|
| |
|
|
|
26
|
| |
|
| |
2020 Proxy Statement
|
|
•
|
Chief Executive Officer — six times (6x) base salary; and
|
•
|
Executive and Senior Vice Presidents — three times (3x) base salary.
|
|
|
| |
|
|
|
|
| |
2020 Proxy Statement 27
|
|
|
|
| |
|
| |
|
|
|
28
|
| |
|
| |
2020 Proxy Statement
|
|
•
|
the payment, grant, or vesting of such compensation was based on the achievement of financial results that were subsequently the subject of a restatement of the Company’s financial statements filed with the Securities and Exchange Commission;
|
•
|
the amount of the compensation that would have been received by the executive officer, had the financial results been properly reported, would have been lower than the amount actually received; and
|
•
|
the Board determines in its sole discretion that it is in the best interests of the Company and its shareholders for the executive officer to repay or forfeit all or any portion of the compensation.
|
|
|
| |
|
|
|
|
| |
2020 Proxy Statement 29
|
|
|
Name and Principal
Position |
| |
Year
|
| |
Salary
($) |
| |
Bonus
($)(1) |
| |
Stock
Awards ($)(2) |
| |
Options
Awards ($)(3) |
| |
Non-Equity
Incentive Plan Compensation ($)(4) |
| |
Change in
Pension Value & Nonqualified Deferred Compensation Earnings ($)(5) |
| |
All Other
Compensation ($)(6) |
| |
Total
($) |
|
|
Sachin S. Lawande
|
| |
2019
|
| |
$1,030,000
|
| |
$—
|
| |
$4,470,046
|
| |
$1,499,990
|
| |
$721,000
|
| |
$—
|
| |
$287,109
|
| |
$8,008,145
|
|
|
President and Chief
|
| |
2018
|
| |
$1,030,000
|
| |
$—
|
| |
$4,504,035
|
| |
$1,499,978
|
| |
$298,700
|
| |
$—
|
| |
$526,207
|
| |
$7,858,920
|
|
|
Executive Officer(7)
|
| |
2017
|
| |
$1,030,000
|
| |
$—
|
| |
$3,785,854
|
| |
$1,249,984
|
| |
$1,416,250
|
| |
$—
|
| |
$562,355
|
| |
$8,044,443
|
|
|
William M. Robertson
|
| |
2019
|
| |
$248,010
|
| |
$—
|
| |
$220,711
|
| |
$—
|
| |
$—
|
| |
$168,520
|
| |
$202,717
|
| |
$839,958
|
|
|
Vice President and Interim
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Chief Financial Officer(8)
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Sunil K. Bilolikar
|
| |
2019
|
| |
$405,020
|
| |
$—
|
| |
$271,912
|
| |
$91,249
|
| |
$117,942
|
| |
$177,818
|
| |
$491,377
|
| |
$1,555,318
|
|
|
Senior Vice President,
|
| |
2018
|
| |
$400,198
|
| |
$—
|
| |
$273,523
|
| |
$91,110
|
| |
$61,077
|
| |
$—
|
| |
$1,268,886
|
| |
$2,094,794
|
|
|
Operations and Supply Chain(9)
|
| |
2017
|
| |
$385,733
|
| |
$—
|
| |
$767,233
|
| |
$86,781
|
| |
$313,408
|
| |
$126,720
|
| |
$977,387
|
| |
$2,657,262
|
|
|
Brett D. Pynnonen
|
| |
2019
|
| |
$440,000
|
| |
$—
|
| |
$327,785
|
| |
$110,003
|
| |
$160,160
|
| |
$—
|
| |
$77,630
|
| |
$1,115,578
|
|
|
Senior Vice President
|
| |
2018
|
| |
$440,000
|
| |
$—
|
| |
$497,774
|
| |
$98,987
|
| |
$66,352
|
| |
$—
|
| |
$108,578
|
| |
$1,211,691
|
|
|
and General Counsel(10)
|
| |
2017
|
| |
$440,000
|
| |
$100,000
|
| |
$299,754
|
| |
$98,993
|
| |
$275,000
|
| |
$—
|
| |
$111,087
|
| |
$1,324,834
|
|
|
Robert R. Vallance
|
| |
2019
|
| |
$404,884
|
| |
$—
|
| |
$342,730
|
| |
$114,991
|
| |
$147,378
|
| |
$—
|
| |
$71,723
|
| |
$1,081,706
|
|
|
Senior Vice President,
|
| |
2018
|
| |
$400,064
|
| |
$—
|
| |
$273,392
|
| |
$91,078
|
| |
$61,057
|
| |
$—
|
| |
$109,581
|
| |
$935,172
|
|
|
Customer Business Groups(11)
|
| |
2017
|
| |
$385,604
|
| |
$—
|
| |
$1,180,590
|
| |
$86,755
|
| |
$313,304
|
| |
$—
|
| |
$99,040
|
| |
$2,065,293
|
|
|
Christian A. Garcia
|
| |
2019
|
| |
$491,667
|
| |
$—
|
| |
$1,210,675
|
| |
$406,245
|
| |
$—
|
| |
$—
|
| |
$99,046
|
| |
$2,207,633
|
|
|
Former Executive Vice President
|
| |
2018
|
| |
$590,000
|
| |
$—
|
| |
$1,217,955
|
| |
$405,609
|
| |
$109,504
|
| |
$—
|
| |
$182,913
|
| |
$2,505,981
|
|
|
and Chief Financial Officer(12)
|
| |
2017
|
| |
$590,000
|
| |
$—
|
| |
$1,135,657
|
| |
$374,992
|
| |
$590,000
|
| |
$—
|
| |
$113,368
|
| |
$2,804,017
|
|
(1)
|
This column is composed of a sign-on bonus payment to Mr. Pynnonen.
|
(2)
|
The amounts shown in this column represent the grant date fair values for PSU and RSU awards in 2019, 2018 and 2017. Messrs. Bilolikar and Vallance received special retention RSU grants in 2017 valued at approximately $500,000 and $900,000, respectively, which cliff vest four years from the grant date. The grant date fair values have been determined based on the assumptions and methodologies set forth in Note 17 “Stock-Based Compensation” to the consolidated financial statements included in Item 8 “Financial Statements and Supplementary Data” of the Company’s 2019 10-K. Assuming the maximum performance levels are achieved for the NEOs’ PSUs granted in 2019 and based on the grant date share price, the values in the “Stock Awards” column would be $5,614,917 for Mr. Lawande; $220,711 for Mr. Robertson; $341,565 for Mr. Bilolikar; $417,562 for Mr. Pynnonen; $430,510 for Mr. Vallance and $1,520,758 for Mr. Garcia. These amounts may not reflect the actual value realized upon vesting or settlement, if any.
|
(3)
|
The amounts shown in this column represent the grant date fair values for stock options granted in 2019, 2018 and 2017. The grant date fair values have been determined based on the assumptions and methodologies set forth in Note 17 “Stock-Based Compensation” to the consolidated financial statements included in Item 8 “Financial Statements and Supplementary Data” of the Company’s 2019 10-K.
|
|
|
| |
|
| |
|
|
|
30
|
| |
|
| |
2020 Proxy Statement
|
|
(4)
|
For 2019, this column is composed of the amounts payable to each of the Named Executive Officers under the 2019 annual incentive performance program, as further described in the “Compensation Discussion and Analysis,” above. There were no earnings on non-equity incentive plan compensation earned or paid to the Named Executive Officers in or for 2019.
|
(5)
|
This column reflects an estimate of the aggregate change in actuarial present value of each Named Executive Officers’ accumulated benefit under all defined benefit pension plans from the measurement dates for such plans used for financial statement purposes. See “Retirement Benefits — Defined Benefit Plans,” below. None of the Named Executive Officers received or earned any above-market or preferential earnings on deferred compensation.
|
(6)
|
For 2019, this column includes the following benefits paid to, or on behalf of, the Named Executive Officers:
|
•
|
Life insurance premiums paid by the Company on behalf of all of the Named Executive Officers;
|
•
|
Company-contributions to the Company’s 401(k) defined contribution plan, DC SERP and Savings Parity Plan on behalf of Mr. Lawande ($272,383), Mr. Robertson ($29,160), Mr. Bilolikar ($69,915), Mr. Pynnonen ($75,953), Mr. Vallance ($69,891) and Mr. Garcia ($70,905);
|
•
|
Disability insurance premiums paid by the Company on behalf of Mr. Lawande ($12,021) and Mr. Garcia ($3,126);
|
•
|
Voluntary separation incentive payment made to Mr. Robertson ($172,375) at the time of his separation from the Company in June 2019 prior to becoming an NEO; this program was offered to most U.S. employees as an enticement to exit the Company;
|
•
|
Payment of unused vacation to Mr. Garcia ($22,692);
|
•
|
Tax payments and reimbursements on behalf of Mr. Bilolikar ($90,046) in connection with his international service assignment; and
|
•
|
The payment of expenses to or on behalf of Mr. Bilolikar ($327,784) under the Company’s international service employee program, which provides allowances and payments to address the incremental costs of housing, education, cost of living, taxes and other costs associated with international assignments. As Mr. Bilolikar’s assignment ended in 2019, costs also include those associated with repatriation.
|
(7)
|
Mr. Lawande joined Visteon as Chief Executive Officer and President effective June 29, 2015.
|
(8)
|
Mr. Robertson rejoined Visteon as Vice President and interim Chief Financial Officer effective November 1, 2019 after retiring in June 2019.
|
(9)
|
Mr. Bilolikar served as Senior Vice President, Operations and Supply Chain until his separation from Visteon effective March 13, 2020.
|
(10)
|
Mr. Pynnonen joined Visteon on March 14, 2016.
|
(11)
|
Mr. Vallance has been Senior Vice President, Customer Business Groups since December 2016. Prior to that, he was Vice President, Customer Business Groups upon rejoining the Company in July 2014.
|
(12)
|
Mr. Garcia joined Visteon as Executive Vice President and Chief Financial Officer effective October 1, 2016 and resigned effective October 31, 2019.
|
|
|
| |
|
|
|
|
| |
2020 Proxy Statement 31
|
|
|
|
| |
|
| |
|
|
|
32
|
| |
|
| |
2020 Proxy Statement
|
|
|
Name
|
| |
Grant
Date |
| |
Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) |
| |
Estimated Future Payouts
Under Equity Incentive Plan Awards(2) |
| |
All
Other Stock Awards: Number of Shares of Stock or Units (#)(3) |
| |
All
Other Option Awards: Number of Securities Underlying Options (#)(3) |
| |
Exercise
or Base Price of Option Awards ($ /Sh) |
| |
Grant
Date Fair Value of Stock and Option Awards ($)(4) |
| ||||||||||||
|
Threshold
($) |
| |
Target
($) |
| |
Maximum
($) |
| |
Threshold
(#) |
| |
Target
(#) |
| |
Maximum
(#) |
| ||||||||||||||||||
|
Sachin S. Lawande
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Annual Cash Incentive(1)
|
| |
—
|
| |
$135,188
|
| |
$1,287,500
|
| |
$2,575,000
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
Stock Options
|
| |
03/07/2019
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
63,748
|
| |
$80.97
|
| |
$1,499,990
|
|
|
Restricted Stock Units
|
| |
03/07/2019
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
18,155
|
| |
—
|
| |
—
|
| |
$1,470,010
|
|
|
Performance Stock Units
|
| |
03/07/2019
|
| |
—
|
| |
—
|
| |
—
|
| |
2,282
|
| |
26,085
|
| |
52,170
|
| |
—
|
| |
—
|
| |
—
|
| |
$3,000,036
|
|
|
William M. Robertson
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Restricted Stock Units
|
| |
11/01/2019
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
2,355
|
| |
—
|
| |
—
|
| |
$220,711
|
|
|
Sunil K. Bilolikar
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Annual Cash Incentive(1)
|
| |
—
|
| |
$27,643
|
| |
$263,263
|
| |
$526,526
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
Stock Options
|
| |
03/07/2019
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
3,878
|
| |
$80.97
|
| |
$91,249
|
|
|
Restricted Stock Units
|
| |
03/07/2019
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
1,104
|
| |
—
|
| |
—
|
| |
$89,391
|
|
|
Performance Stock Units
|
| |
03/07/2019
|
| |
—
|
| |
—
|
| |
—
|
| |
139
|
| |
1,587
|
| |
3,174
|
| |
—
|
| |
—
|
| |
—
|
| |
$182,521
|
|
|
Brett D. Pynnonen
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Annual Cash Incentive(1)
|
| |
—
|
| |
$30,030
|
| |
$286,000
|
| |
$572,000
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
Stock Options
|
| |
03/07/2019
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
4,675
|
| |
$80.97
|
| |
$110,003
|
|
|
Restricted Stock Units
|
| |
03/07/2019
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
1,331
|
| |
—
|
| |
—
|
| |
$107,771
|
|
|
Performance Stock Units
|
| |
03/07/2019
|
| |
—
|
| |
—
|
| |
—
|
| |
167
|
| |
1,913
|
| |
3,826
|
| |
—
|
| |
—
|
| |
—
|
| |
$220,014
|
|
|
Robert R. Vallance
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Annual Cash Incentive(1)
|
| |
—
|
| |
$27,633
|
| |
$263,175
|
| |
$526,349
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
Stock Options
|
| |
03/07/2019
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
4,887
|
| |
$80.97
|
| |
$114,991
|
|
|
Restricted Stock Units
|
| |
03/07/2019
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
1,392
|
| |
—
|
| |
—
|
| |
$112,710
|
|
|
Performance Stock Units
|
| |
03/07/2019
|
| |
—
|
| |
—
|
| |
—
|
| |
175
|
| |
2,000
|
| |
4,000
|
| |
—
|
| |
—
|
| |
—
|
| |
$230,020
|
|
|
Christian A. Garcia
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Annual Cash Incentive(1)
|
| |
—
|
| |
$49,560
|
| |
$472,000
|
| |
$944,000
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
Stock Options
|
| |
03/07/2019
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
17,265
|
| |
$80.97
|
| |
$406,245
|
|
|
Restricted Stock Units
|
| |
03/07/2019
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
4,917
|
| |
—
|
| |
—
|
| |
$398,129
|
|
|
Performance Stock Units
|
| |
03/07/2019
|
| |
—
|
| |
—
|
| |
—
|
| |
618
|
| |
7,065
|
| |
14,130
|
| |
—
|
| |
—
|
| |
—
|
| |
$812,546
|
|
(1)
|
Represents the performance-based cash bonus opportunity under the 2019 annual incentive program, as further described in the “Compensation Discussion and Analysis,” above. The amounts actually paid under this program are set forth in the “Non-Equity Incentive Plan Compensation” column of the above “Summary Compensation Table.”
|
(2)
|
Represents performance stock unit grants made under the 2019 long-term incentive program, as further described in the “Compensation Discussion and Analysis,” above.
|
(3)
|
Represents restricted stock units and stock options granted under the 2019 long-term incentive program, as further described in the “Compensation Discussion and Analysis,” above.
|
(4)
|
A discussion of assumptions used in calculating grant date fair values in accordance with FASB ASC Topic 718 may be found in Note 17 “Stock Based Compensation” to the consolidated financial statements included in Item 8 “Financial Statements and Supplementary Data” of the Company’s 2019 Form 10-K. The closing price of the Company’s shares on March 7, 2019 was $79.45. The grant date fair value for the PSUs was determined using a Monte Carlo simulation and was based on a price of $115.01 per target unit. The grant date fair value for the RSUs was based on price of $80.97, the average high and low market price of the Company’s stock on the grant date. The grant date fair value for the Options was determined using the Black-Scholes option pricing model and was based on a price of $23.53 per option. The ultimate value of stock-based awards, if any, will depend on the future value of the common stock and the holder’s investment decisions, neither of which can be accurately predicted.
|
|
|
| |
|
|
|
|
| |
2020 Proxy Statement 33
|
|
|
|
| |
|
| |
Option Awards
|
| |
Stock Awards
|
| |||||||||||||||||||||
|
Name
|
| |
Grant Date
|
| |
Number
of Securities Underlying Unexercised Options (#) Exercisable |
| |
Number
of Securities Underlying Unexercised Options (#) Unexercisable(1) |
| |
Equity
Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) |
| |
Option
Exercise Price ($)(2) |
| |
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 ($)(3) |
| |
Equity
Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) |
| |
Equity
Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(3) |
|
|
Sachin S. Lawande
|
| |
06/29/2015
|
| |
770
|
| |
—
|
| |
—
|
| |
$62.76
|
| |
06/28/2022
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
|
| |
03/04/2016
|
| |
32,261
|
| |
—
|
| |
—
|
| |
$72.98
|
| |
03/03/2023
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
|
| |
03/03/2017
|
| |
31,458
|
| |
15,729
|
| |
—
|
| |
$94.77
|
| |
03/02/2024
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
|
| |
03/03/2017
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
4,523(4)
|
| |
$391,647
|
| |
—
|
| |
—
|
|
|
|
| |
03/03/2017
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
26,429(18)
|
| |
$2,288,487
|
|
|
|
| |
03/01/2018
|
| |
15,678
|
| |
31,358
|
| |
—
|
| |
$124.34
|
| |
02/28/2025
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
|
| |
03/01/2018
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
8,065(5)
|
| |
$698,348
|
| |
—
|
| |
—
|
|
|
|
| |
03/01/2018
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
20,134(19)
|
| |
$1,743,403
|
|
|
|
| |
03/07/2019
|
| |
—
|
| |
63,748
|
| |
—
|
| |
$80.97
|
| |
03/06/2026
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
|
| |
03/07/2019
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
18,155(6)
|
| |
$1,572,041
|
| |
—
|
| |
—
|
|
|
|
| |
03/07/2019
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
52,170(20)
|
| |
$4,517,400
|
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
William M. Robertson
|
| |
03/04/2016
|
| |
1,132
|
| |
—
|
| |
—
|
| |
$72.98
|
| |
03/03/2023
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
|
| |
03/03/2017
|
| |
1,139
|
| |
1,139
|
| |
—
|
| |
$94.77
|
| |
03/02/2024
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
|
| |
03/03/2017
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
1,723(18)
|
| |
$149,195
|
|
|
|
| |
03/01/2018
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
1,098(19)
|
| |
$95,076
|
|
|
|
| |
11/01/2019
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
2,355(7)
|
| |
$203,919
|
| |
—
|
| |
—
|
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Sunil K. Bilolikar
|
| |
03/05/2015
|
| |
735
|
| |
—
|
| |
—
|
| |
$59.59
|
| |
03/04/2022
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
|
| |
03/04/2016
|
| |
2,213
|
| |
—
|
| |
—
|
| |
$72.98
|
| |
03/03/2023
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
|
| |
03/03/2017
|
| |
2,184
|
| |
1,092
|
| |
—
|
| |
$94.77
|
| |
03/02/2024
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
|
| |
03/03/2017
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
314(8)
|
| |
$27,189
|
| |
—
|
| |
—
|
|
|
|
| |
03/03/2017
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
1,834(18)
|
| |
$158,806
|
|
|
|
| |
04/20/2017
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
5,222(9)
|
| |
$452,173
|
| |
—
|
| |
—
|
|
|
|
| |
03/01/2018
|
| |
952
|
| |
1,905
|
| |
—
|
| |
$124.34
|
| |
02/28/2025
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
|
| |
03/01/2018
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
490(10)
|
| |
$42,429
|
| |
—
|
| |
—
|
|
|
|
| |
03/01/2018
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
1,223(19)
|
| |
$105,900
|
|
|
|
| |
03/07/2019
|
| |
—
|
| |
3,878
|
| |
—
|
| |
$80.97
|
| |
03/06/2026
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
|
| |
03/07/2019
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
1,104(11)
|
| |
$95,595
|
| |
—
|
| |
—
|
|
|
|
| |
03/07/2019
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
3,174(20)
|
| |
$274,837
|
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Brett D. Pynnonen
|
| |
03/03/2017
|
| |
2,491
|
| |
1,246
|
| |
—
|
| |
$94.77
|
| |
03/02/2024
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
|
| |
03/03/2017
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
358(12)
|
| |
$30,999
|
| |
—
|
| |
—
|
|
|
|
| |
03/03/2017
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
2,091(18)
|
| |
$181,060
|
|
|
|
| |
03/01/2018
|
| |
1,034
|
| |
2,070
|
| |
—
|
| |
$124.34
|
| |
02/28/2025
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
|
| |
03/01/2018
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
1,613(13)
|
| |
$139,670
|
| |
—
|
| |
—
|
|
|
|
| |
03/01/2018
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
532(14)
|
| |
$46,066
|
| |
—
|
| |
—
|
|
|
|
| |
03/01/2018
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
1,329(19)
|
| |
$115,078
|
|
|
|
| |
|
| |
|
|
|
34
|
| |
|
| |
2020 Proxy Statement
|
|
|
|
| |
|
| |
Option Awards
|
| |
Stock Awards
|
| |||||||||||||||||||||
|
Name
|
| |
Grant Date
|
| |
Number
of Securities Underlying Unexercised Options (#) Exercisable |
| |
Number
of Securities Underlying Unexercised Options (#) Unexercisable(1) |
| |
Equity
Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) |
| |
Option
Exercise Price ($)(2) |
| |
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 ($)(3) |
| |
Equity
Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) |
| |
Equity
Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(3) |
|
|
Brett D. Pynnonen
|
| |
03/07/2019
|
| |
—
|
| |
4,675
|
| |
—
|
| |
$80.97
|
| |
03/06/2026
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
(continued)
|
| |
03/07/2019
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
1,331(15)
|
| |
$115,251
|
| |
—
|
| |
—
|
|
|
|
| |
03/07/2019
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
3,826(20)
|
| |
$331,293
|
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Robert R. Vallance
|
| |
03/05/2015
|
| |
716
|
| |
—
|
| |
—
|
| |
$59.59
|
| |
03/04/2022
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
|
| |
03/04/2016
|
| |
2,212
|
| |
—
|
| |
—
|
| |
$72.98
|
| |
03/03/2023
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
|
| |
01/11/2017
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
10,339(16)
|
| |
$895,254
|
| |
—
|
| |
—
|
|
|
|
| |
03/03/2017
|
| |
2,183
|
| |
1,092
|
| |
—
|
| |
$94.77
|
| |
03/02/2024
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
|
| |
03/03/2017
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
314(8)
|
| |
$27,189
|
| |
—
|
| |
—
|
|
|
|
| |
03/03/2017
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
1,834(18)
|
| |
$158,806
|
|
|
|
| |
03/01/2018
|
| |
952
|
| |
1,904
|
| |
—
|
| |
$124.34
|
| |
02/28/2025
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
|
| |
03/01/2018
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
490(10)
|
| |
$42,429
|
| |
—
|
| |
—
|
|
|
|
| |
03/01/2018
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
1,222(19)
|
| |
$105,813
|
|
|
|
| |
03/07/2019
|
| |
—
|
| |
4,887
|
| |
—
|
| |
$80.97
|
| |
03/06/2026
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
|
| |
03/07/2019
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
1,392(17)
|
| |
$120,533
|
| |
—
|
| |
—
|
|
|
|
| |
03/07/2019
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
4,000(20)
|
| |
$346,360
|
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Christian A. Garcia
|
| |
10/01/2016
|
| |
4,047
|
| |
—
|
| |
—
|
| |
$71.37
|
| |
01/29/2020
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
|
| |
03/03/2017
|
| |
9,437
|
| |
—
|
| |
—
|
| |
$94.77
|
| |
01/29/2020
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
|
| |
03/01/2018
|
| |
4,239
|
| |
—
|
| |
—
|
| |
$124.34
|
| |
01/29/2020
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
(1)
|
Stock options vest in one-third increments annually from date of grant.
|
(2)
|
For options granted on March 5 and June 29, 2015, the exercise price shown reflects the reduction which resulted from the January 2016 Special Distribution.
|
(3)
|
The market value of unvested restricted stock units and performance stock units was determined using a per share price of $86.59, the closing price of our common stock as reported on The Nasdaq Global Select Market as of December 31, 2019.
|
(4)
|
4,523 restricted stock units that vest on March 3, 2020.
|
(5)
|
4,032 restricted stock units that vest on March 1, 2020 and 4,033 units that vest on March 1, 2021.
|
(6)
|
6,051 restricted stock units that vest on March 7, 2020 and 6,052 units that vest on each of March 7, 2021 and 2022.
|
(7)
|
2,355 restricted stock units that vest on November 1, 2020.
|
(8)
|
314 restricted stock units that vest on March 3, 2020.
|
(9)
|
5,222 restricted stock units that vest on April 20, 2021.
|
(10)
|
245 restricted stock units that vest on each of March 1, 2020 and 2021.
|
(11)
|
368 restricted stock units that vest on each of March 7, 2020, 2021 and 2022.
|
(12)
|
358 restricted stock units that vest on March 3, 2020.
|
(13)
|
1,613 restricted stock units that vest on March 1, 2022.
|
(14)
|
266 restricted stock units that vest on each of March 1, 2020 and 2021.
|
(15)
|
443 restricted stock units that vest on March 7, 2020 and 444 units that vest on each of March 7, 2021 and 2022.
|
(16)
|
10,339 restricted stock units that vest on January 11, 2021.
|
(17)
|
464 restricted stock units that vest on each of March 7, 2020, 2021 and 2022.
|
(18)
|
PSUs granted in 2017 with a performance period which concluded on December 31, 2019 and vesting which occurred on January 31, 2020 as adjusted for the actual aggregate relative TSR performance achieved of 117%, certified by the Committee on January 28, 2020.
|
(19)
|
PSUs granted in 2018 with a performance period which concludes on December 31, 2020 and vesting on January 31, 2021 as adjusted to 88% relative TSR performance.
|
(20)
|
PSUs granted in 2019 with a performance period which concludes on December 31, 2021 and vesting on January 31, 2022 as adjusted for maximum (200%) relative TSR performance.
|
|
|
| |
|
|
|
|
| |
2020 Proxy Statement 35
|
|
|
|
| |
Option Awards
|
| |
Stock Awards
|
| ||||||
|
Name
|
| |
Number of Shares
Acquired on Exercise (#) |
| |
Value Realized
on Exercise ($)(1) |
| |
Number of Shares
Acquired on Vesting (#)(2) |
| |
Value Realized
on Vesting ($)(2) |
|
|
Sachin S. Lawande
|
| |
—
|
| |
$—
|
| |
46,293
|
| |
$3,857,850
|
|
|
William M. Robertson
|
| |
—
|
| |
$—
|
| |
3,369
|
| |
$275,438
|
|
|
Sunil K. Bilolikar
|
| |
—
|
| |
$—
|
| |
3,073
|
| |
$256,057
|
|
|
Brett D. Pynnonen
|
| |
2,951
|
| |
$58,612
|
| |
2,854
|
| |
$234,139
|
|
|
Robert R. Vallance
|
| |
—
|
| |
$—
|
| |
3,073
|
| |
$256,057
|
|
|
Christian A. Garcia
|
| |
—
|
| |
$—
|
| |
15,243
|
| |
$1,266,351
|
|
(1)
|
These values were determined by using the market value of our common stock on Nasdaq at the time of exercise less the option exercise price, without regard to cash or shares withheld for income tax purposes.
|
(2)
|
These values were determined by using the average of the high and low prices of our common stock on Nasdaq on such vesting dates, without regard to cash or shares withheld for income tax purposes.
|
|
Name
|
| |
Plan Name
|
| |
Number of
Years of Credited Service (#) |
| |
Present Value of
Accumulated Benefit ($)(1) |
| |
Payments
During Last Fiscal Year ($) |
|
|
William M. Robertson
|
| |
Visteon Pension Plan
|
| |
21.5
|
| |
$736,277
|
| |
$—
|
|
|
|
| |
Pension Parity Plan
|
| |
21.5
|
| |
$18,578
|
| |
$—
|
|
|
|
| |
Supplemental Executive Retirement Plan
|
| |
21.5
|
| |
$333,649
|
| |
$—
|
|
|
Sunil K. Bilolikar
|
| |
Visteon Pension Plan
|
| |
17.0
|
| |
$603,278
|
| |
$—
|
|
|
|
| |
Pension Parity Plan
|
| |
17.0
|
| |
$65,258
|
| |
$—
|
|
|
|
| |
Supplemental Executive Retirement Plan
|
| |
17.0
|
| |
$487,109
|
| |
$—
|
|
(1)
|
The present value of the accumulated benefits was determined using the discount rate, mortality assumptions, interest crediting rate and measurement date (December 31, 2019) used by the Company for financial reporting purposes as further described in Note 14 “Employee Benefit Plans” to the consolidated financial statements included in Item 8 “Financial Statements and Supplementary Data” of the Company’s 2019 Form 10-K. The benefits were assumed to be payable at normal retirement ages or such earlier ages at which the executives could commence an unreduced retirement benefit. The present value of Messrs. Robertson and Bilolikar’s pension benefits assuming an early retirement as of December 31, 2019 is approximately $1,330,000 and $1,369,000, respectively.
|
|
|
| |
|
| |
|
|
|
36
|
| |
|
| |
2020 Proxy Statement
|
|
|
|
| |
|
|
|
|
| |
2020 Proxy Statement 37
|
|
|
Name
|
| |
Executive
Contributions in Last FY ($) |
| |
Registrant
Contributions in Last FY ($)(3) |
| |
Aggregate
Earnings in Last FY ($) |
| |
Aggregate
Withdrawals/ Distributions ($) |
| |
Aggregate
Balance at Last FYE ($) |
|
|
Sachin S. Lawande
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Savings Parity Plan(1)
|
| |
$—
|
| |
$62,922
|
| |
$69,646
|
| |
$—
|
| |
$512,342
|
|
|
DC SERP(2)
|
| |
$—
|
| |
$192,661
|
| |
$268,137
|
| |
$—
|
| |
$1,620,513
|
|
|
William M. Robertson
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Savings Parity Plan(1)
|
| |
$—
|
| |
$480
|
| |
$44,118
|
| |
$—
|
| |
$187,801
|
|
|
DC SERP(2)
|
| |
$—
|
| |
$11,880
|
| |
$77,247
|
| |
$—
|
| |
$356,964
|
|
|
Sunil K. Bilolikar
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Savings Parity Plan(1)
|
| |
$—
|
| |
$11,166
|
| |
$36,323
|
| |
$—
|
| |
$242,824
|
|
|
DC SERP(2)
|
| |
$—
|
| |
$41,949
|
| |
$83,207
|
| |
$—
|
| |
$515,509
|
|
|
Brett D. Pynnonen
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Savings Parity Plan(1)
|
| |
$—
|
| |
$13,581
|
| |
$10,875
|
| |
$—
|
| |
$84,229
|
|
|
DC SERP(2)
|
| |
$—
|
| |
$45,572
|
| |
$38,412
|
| |
$—
|
| |
$234,813
|
|
|
Robert R. Vallance
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Savings Parity Plan(1)
|
| |
$—
|
| |
$11,156
|
| |
$26,263
|
| |
$—
|
| |
$132,767
|
|
|
DC SERP(2)
|
| |
$—
|
| |
$41,935
|
| |
$54,329
|
| |
$—
|
| |
$227,047
|
|
|
Christian A. Garcia
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Savings Parity Plan(1)
|
| |
$—
|
| |
$—
|
| |
$12,435
|
| |
$—
|
| |
$94,244
|
|
|
DC SERP(2)
|
| |
$—
|
| |
$54,105
|
| |
$44,556
|
| |
$—
|
| |
$280,513
|
|
(1)
|
The Savings Parity Plan was adopted effective January 1, 2012. The Company contributions noted in this Table represent accrued contributions to be credited to each participant’s account for the fiscal year reported in this Proxy as well as well as the aggregate earnings and aggregate withdrawals/distributions made to the participants’ accounts during fiscal year 2019.
|
(2)
|
The Defined Contribution SERP (“DC SERP”) was adopted effective January 1, 2012. This Table reflects Company contributions, aggregate earnings, aggregate gains/losses, and aggregate withdrawals/distributions made to the participants’ accounts during fiscal year 2019.
|
(3)
|
These amounts are included in the All Other Compensation column of the Summary Compensation Table.
|
|
|
| |
|
| |
|
|
|
38
|
| |
|
| |
2020 Proxy Statement
|
|
|
Named Executive Officer
|
| |
Involuntary
Termination (w/o cause or for Good Reason) |
| |
Change
in Control |
| |
Qualifying
Termination after Change in Control |
|
|
Sachin S. Lawande
|
| |
|
| |
|
| |
|
|
|
• Severance Payments
|
| |
$3,476,250
|
| |
N/A
|
| |
$4,635,000
|
|
|
• Accelerated Stock Option Vesting(1)
|
| |
$—
|
| |
$—
|
| |
$358,264
|
|
|
• Accelerated Stock/Unit Awards Vesting(2)
|
| |
$6,786,114
|
| |
$—
|
| |
$10,950,122
|
|
|
• Deferred Compensation(3)
|
| |
$—
|
| |
$—
|
| |
$2,132,855
|
|
|
• Continuation of Health & Welfare Benefits(4)
|
| |
$22,961
|
| |
N/A
|
| |
$27,318
|
|
|
• Outplacement Services(5)
|
| |
$50,000
|
| |
N/A
|
| |
$50,000
|
|
|
• Tax Gross-Up
|
| |
N/A
|
| |
N/A
|
| |
N/A
|
|
|
Totals
|
| |
$10,335,325
|
| |
$—
|
| |
$18,153,559
|
|
|
William M. Robertson
|
| |
|
| |
|
| |
|
|
|
• Severance Payments(6)
|
| |
$—
|
| |
N/A
|
| |
$—
|
|
|
• Accelerated Stock Option Vesting(1)
|
| |
$—
|
| |
$—
|
| |
$—
|
|
|
• Accelerated Stock/Unit Awards Vesting(6)
|
| |
$203,919
|
| |
$—
|
| |
$433,922
|
|
|
• Deferred Compensation(3)
|
| |
$—
|
| |
$—
|
| |
$—
|
|
|
• Continuation of Health & Welfare Benefits(4)
|
| |
$—
|
| |
N/A
|
| |
$2,284
|
|
|
• Outplacement Services(5)
|
| |
$50,000
|
| |
N/A
|
| |
$50,000
|
|
|
• Tax Gross-Up
|
| |
N/A
|
| |
N/A
|
| |
N/A
|
|
|
Totals
|
| |
$253,919
|
| |
$—
|
| |
$486,206
|
|
|
Sunil K. Bilolikar(7)
|
| |
|
| |
|
| |
|
|
|
• Severance Payments
|
| |
$1,002,425
|
| |
N/A
|
| |
$1,002,425
|
|
|
• Accelerated Stock Option Vesting(1)
|
| |
$—
|
| |
$—
|
| |
$21,794
|
|
|
• Accelerated Stock/Unit Awards Vesting(8)
|
| |
$739,133
|
| |
$—
|
| |
$1,141,080
|
|
|
• Deferred Compensation(3)
|
| |
$—
|
| |
$—
|
| |
$—
|
|
|
• Continuation of Health & Welfare Benefits(4)
|
| |
$22,961
|
| |
N/A
|
| |
$24,675
|
|
|
• Outplacement Services(5)
|
| |
$50,000
|
| |
N/A
|
| |
$50,000
|
|
|
• Tax Gross-Up
|
| |
N/A
|
| |
N/A
|
| |
N/A
|
|
|
Totals
|
| |
$1,814,519
|
| |
$—
|
| |
$2,239,974
|
|
|
Brett D. Pynnonen
|
| |
|
| |
|
| |
|
|
|
• Severance Payments
|
| |
$1,089,000
|
| |
N/A
|
| |
$1,089,000
|
|
|
• Accelerated Stock Option Vesting(1)
|
| |
$—
|
| |
$—
|
| |
$26,274
|
|
|
• Accelerated Stock/Unit Awards Vesting(8)
|
| |
$565,312
|
| |
$—
|
| |
$942,169
|
|
|
• Deferred Compensation(3)
|
| |
$—
|
| |
$—
|
| |
$319,042
|
|
|
• Continuation of Health & Welfare Benefits(4)
|
| |
$—
|
| |
N/A
|
| |
$1,861
|
|
|
• Outplacement Services(5)
|
| |
$50,000
|
| |
N/A
|
| |
$50,000
|
|
|
• Tax Gross-Up
|
| |
N/A
|
| |
N/A
|
| |
N/A
|
|
|
Totals
|
| |
$1,704,312
|
| |
$—
|
| |
$2,428,346
|
|
|
|
| |
|
|
|
|
| |
2020 Proxy Statement 39
|
|
|
Named Executive Officer
|
| |
Involuntary
Termination (w/o cause or for Good Reason) |
| |
Change
in Control |
| |
Qualifying
Termination after Change in Control |
|
|
Robert R. Vallance
|
| |
|
| |
|
| |
|
|
|
• Severance Payments
|
| |
$1,002,088
|
| |
N/A
|
| |
$1,002,088
|
|
|
• Accelerated Stock Option Vesting(1)
|
| |
$—
|
| |
$—
|
| |
$27,465
|
|
|
• Accelerated Stock/Unit Awards Vesting(8)
|
| |
$1,141,545
|
| |
$—
|
| |
$1,680,569
|
|
|
• Deferred Compensation(3)
|
| |
$—
|
| |
$—
|
| |
$—
|
|
|
• Continuation of Health & Welfare Benefits(4)
|
| |
$22,961
|
| |
N/A
|
| |
$24,674
|
|
|
• Outplacement Services(5)
|
| |
$50,000
|
| |
N/A
|
| |
$50,000
|
|
|
• Tax Gross-Up
|
| |
N/A
|
| |
N/A
|
| |
N/A
|
|
|
Totals
|
| |
$2,216,594
|
| |
$—
|
| |
$2,784,796
|
|
(1)
|
Vesting for all unvested stock options would be accelerated in the event of a change in control followed by a qualifying termination, as defined by the terms and conditions of the relevant awards; the amount included in the table above is the excess of the market price of Visteon common stock as of December 31, 2019 over the exercise prices of the unvested stock options.
|
(2)
|
Mr. Lawande’s RSU and PSU awards are prorated based on service under an involuntary termination without cause or for Good Reason and fully vest under a qualifying termination after a change in control. The value of the units under each scenario is based upon the market price of Visteon common stock on December 31, 2019 and for PSUs, estimated performance through that date. Additionally, it is assumed that all units are converted or assumed by an acquirer in the event of a change in control, and, thus, such awards do not accelerate upon a change in control with continuing employment.
|
(3)
|
Represents the unvested values as of December 31, 2019 payable under each scenario for the participant’s accounts in the DC SERP and Savings Parity Plan, nonqualified deferred compensation plans.
|
(4)
|
The estimated cost of continuing health and welfare benefits is based on current insurance premiums.
|
(5)
|
The amount of covered or reimbursed services was assumed to be the maximum amount allowable under change in control agreements and the severance plan, as described further below. The amounts to be reimbursed will be only for those expenses actually incurred by the executive, and may be significantly less than the amount presented in the table.
|
(6)
|
Mr. Robertson previously retired from Visteon and rejoined in November 2019 as interim CFO and served in this role through February 2020. In the event of an involuntary termination without cause or change in control with qualifying event, he would not receive any severance payment and the RSUs granted to him in November 2019 would fully vest. At his retirement in June 2019, the RSUs granted to him previously were prorated based on his retirement date and were distributed, while PSUs were prorated and are deferred pending the completion of the performance periods under each of the grants. Therefore value of PSUs are not included in the involuntary termination without cause scenario but are included in the change in control with qualifying event as the PSU distribution would be accelerated. The value of the units under each scenario is based upon the market price of Visteon common stock on December 31, 2019 and for the PSUs, estimated performance through that date. Additionally, it is assumed that all units are converted or assumed by an acquirer in the event of a change in control, and, thus, such awards do not accelerate upon a change in control with continuing employment.
|
(7)
|
Mr. Bilolikar’s employment with the Company was terminated effective March 13, 2020 and he will receive the involuntary termination benefits described above.
|
(8)
|
Messrs. Bilolikar, Pynnonen and Vallance’s RSU and PSU awards are prorated based on service under an involuntary termination without cause and fully vest under a qualifying termination after a change in control as defined under the terms and conditions of the relevant awards. The value of the units under each scenario is based upon the market price of Visteon common stock on December 31, 2019 and for the PSUs, estimated performance through that date. Additionally, it is assumed that all units are converted or assumed by an acquirer in the event of a change in control, and, thus, such awards do not accelerate upon a change in control with continuing employment.
|
|
|
| |
|
| |
|
|
|
40
|
| |
|
| |
2020 Proxy Statement
|
|
•
|
the payment of any unpaid salary or incentive compensation, together with all other compensation and benefits payable to the executive under the terms of the Company’s compensation and benefits plans, earned through the date of termination;
|
•
|
a severance payment in the amount of one and a half times (other than Mr. Lawande, which is two times) base salary plus the executive’s target annual bonus;
|
•
|
the continuation for 18 months following termination of life, accident and health insurance benefits for the executive and his or her dependents;
|
•
|
all contingent annual bonus awards under the 2010 Incentive Plan (or other plans) for periods that have not been completed become payable on a pro-rated basis assuming the achievement at target levels of any individual or corporate performance goals;
|
•
|
the benefits then accrued by or payable to the executive under the SERP, the Pension Parity Plan and the Savings Parity Plan, as applicable, or any other nonqualified plan providing supplemental retirement or deferred compensation benefits, become fully vested; and
|
•
|
reimbursement for the cost of outplacement services for up to 12 months following termination, not to exceed $50,000;
|
•
|
plan awards will become immediately fully vested if the holder’s employment is terminated without cause or for good reason (each as defined in the applicable change in control or employment agreement) within 24 months following the change in control; or
|
•
|
for plan awards that relate to performance periods that have not been completed as of the date of the change in control and that are not then vested, the awards will become immediately vested to the extent that the performance metrics have been achieved as of the date of such change in control (with any remainder being forfeited) if the holder’s employment is terminated without cause or for good reason (each as defined in the applicable change in control or employment agreement) within 24 months following the change in control.
|
•
|
a negative material alteration is made in the executive’s duties and responsibilities;
|
•
|
the executive’s annual base salary is decreased (except for certain across-the-board reductions);
|
•
|
the executive is required to relocate his or her residence or principal office location by more than 50 miles;
|
•
|
the executive’s incentive compensation or other benefits are decreased by ten percent or more (except for certain across-the-board reductions); or
|
•
|
the executive is not paid any portion of his or her then current compensation or an installment under any deferred compensation program.
|
•
|
the Company’s assignment of duties (including titles and reporting relationships) inconsistent in any material respect with the duties or responsibilities as contemplated by Mr. Lawande’s employment agreement, any failure to re-nominate Mr. Lawande for election by the Company’s stockholders as a member of the Board, or any other action by the Company that results in a significant diminution in Mr. Lawande’s position, authority, duties or responsibilities (provided that any sale or other disposition of
|
|
|
| |
|
|
|
|
| |
2020 Proxy Statement 41
|
|
•
|
the Company’s material breach of any provision of Mr. Lawande’s employment agreement.
|
|
|
| |
|
| |
|
|
|
42
|
| |
|
| |
2020 Proxy Statement
|
|
•
|
the outstanding RSUs will vest on a pro rata basis if the holder’s employment is involuntary terminated generally without cause or for good reason (each as defined in the applicable terms and conditions), provided that the holder had remained in the employ of the Company for at least 180 days following the grant date; and
|
•
|
the outstanding PSUs will not be forfeited and will vest on the scheduled vesting date on a pro rata basis if the holder’s employment is involuntary terminated without cause or for good reason (each as defined in the applicable terms and conditions), provided that the holder had remained in the employ of the Company for at least 180 days following the grant date (and the termination is either before any change in control or more than 24 months after any change in control, as defined in the applicable terms and conditions).
|
|
|
| |
|
|
|
|
| |
2020 Proxy Statement 43
|
|
|
|
| |
|
| |
|
|
|
44
|
| |
|
| |
2020 Proxy Statement
|
|
|
|
| |
|
|
|
|
| |
2020 Proxy Statement 45
|
|
|
Year Ended December 31
|
| |
Audit
Services Fees |
| |
Audit
Related Fees |
| |
Tax Fees
|
| |
All Other
Fees |
|
|
2019
|
| |
$4,000,000
|
| |
$5,000
|
| |
$1,500,000
|
| |
$—
|
|
|
2018
|
| |
$4,200,000
|
| |
$100,000
|
| |
$1,100,000
|
| |
$—
|
|
|
|
| |
|
| |
|
|
|
46
|
| |
|
| |
2020 Proxy Statement
|
|
|
|
| |
|
|
|
|
| |
2020 Proxy Statement 47
|
|
✔
|
Minimum vesting period of one year from the date of grant for all equity-based awards, except under certain limited circumstances and with permitted exceptions as discussed below.
|
✔
|
No “liberal share recycling” of any awards.
|
✔
|
No dividends or dividend equivalent payments with respect to unvested awards.
|
✔
|
Minimum 100% fair market value exercise price as of the date of grant for options and stock appreciation rights, except for substitute awards granted through the assumption or substitution of awards from an acquired or merged company.
|
✔
|
No “liberal” change in control definition.
|
✔
|
No repricing of options or stock appreciation rights and no cash buyout of underwater options or stock appreciation rights without shareholder approval, except for adjustments with respect to a change in control or an equitable adjustment in connection with certain corporate transactions.
|
✔
|
No excise tax gross-ups or award reloads.
|
|
|
| |
|
| |
|
|
|
48
|
| |
|
| |
2020 Proxy Statement
|
|
|
|
| |
2019
|
| |
2018
|
| |
2017
|
| |
3-Year
Average |
|
|
Stock Options/Stock Appreciation Rights (SARs) Granted
|
| |
106,000
|
| |
78,000
|
| |
86,000
|
| |||
|
Stock-Settled Time-Vested Restricted Shares/Units Granted*
|
| |
141,000
|
| |
70,000
|
| |
99,000
|
| |||
|
Stock-Settled Performance-Based Shares/Units Granted
|
| |
71,000
|
| |
87,000
|
| |
78,000
|
| |||
|
Weighted-Average Basic Common Shares Outstanding
|
| |
28,100,000
|
| |
29,500,000
|
| |
31,600,000
|
| |||
|
Share Usage Rate
|
| |
1.13%
|
| |
0.80%
|
| |
0.83%
|
| |
0.92%
|
|
*
|
With respect to restricted shares/units in the table above, the figures exclude non-employee director units granted during the foregoing 3-year period as follows: 27,000 shares in 2019, 10,000 shares in 2018 and 16,000 shares in 2017.
|
|
Stock Options/SARs Outstanding
|
| |
290,000
|
|
|
Weighted-Average Exercise Price of Outstanding Stock Options/SARs
|
| |
$93.03
|
|
|
Weighted-Average Remaining Term of Outstanding Stock Options/SARS
|
| |
4.89 years
|
|
|
Total Stock-Settled Full-Value Awards Outstanding
|
| |
468,000
|
|
|
Proposed share reserve under the 2020 Incentive Plan*
|
| |
1,535,000
|
|
|
Basic common shares outstanding as of the record date (April 9, 2020)
|
| |
27,824,952
|
|
*
|
The proposed share reserve is subject to reduction for any awards granted under the Prior Plan after December 31, 2019. Upon stockholder approval of the 2020 Incentive Plan, no further awards will be made under the Prior Plan.
|
|
|
| |
|
|
|
|
| |
2020 Proxy Statement 49
|
|
|
|
| |
|
| |
|
|
|
50
|
| |
|
| |
2020 Proxy Statement
|
|
|
|
| |
|
|
|
|
| |
2020 Proxy Statement 51
|
|
|
|
| |
|
| |
|
|
|
52
|
| |
|
| |
2020 Proxy Statement
|
|
|
|
| |
|
|
|
|
| |
2020 Proxy Statement 53
|
|
|
|
| |
|
| |
|
|
|
54
|
| |
|
| |
2020 Proxy Statement
|
|
|
Plan Category
|
| |
Number of Securities
to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (a)(1) |
| |
Weighted-Average
Exercise Price of Outstanding Options, Warrants and Rights (b)(1) |
| |
Number of Securities
Remaining Available for Future Issuance Under Equity Compensation Plans (excluding securities reflected in column(a))(c) |
|
|
Equity compensation plans approved by security holders
|
| |
757,642
|
| |
$93.03
|
| |
1,390,829
|
|
|
Equity compensation plans not approved by security holders
|
| |
—
|
| |
$—
|
| |
—
|
|
|
Total
|
| |
757,642
|
| |
$93.03
|
| |
1,390,829
|
|
(1)
|
Comprised of stock options and stock appreciation rights, which may be settled in stock or cash at the election of the Company, and outstanding restricted stock and performance stock units, which may be settled in stock or cash at the election of the Company without further payment by the holder, granted pursuant to the Visteon Corporation 2010 Incentive Plan, the Non-Employee Director Stock Unit Plan, and the Deferred Compensation Plan for Non-Employee Directors. The weighted-average exercise price of outstanding options, warrants and rights does not take into account restricted stock or performance stock units that will be settled without any further payment by the holder.
|
|
|
| |
|
|
|
|
| |
2020 Proxy Statement 55
|
|
|
|
| |
|
| |
|
|
|
56
|
| |
|
| |
2020 Proxy Statement
|
|
|
|
| |
|
|
|
|
| |
2020 Proxy Statement 57
|
|
1
|
Has not been an employee of Visteon or its subsidiaries within the last three years.
|
2
|
Is not currently a partner or employee of Visteon’s internal or external auditor or a former partner or employee of Visteon’s internal or external auditor or was within the last three years (but is no longer) a partner or employee of Visteon’s internal or external auditor who personally worked on Visteon’s audit within that time.
|
3
|
Has not been employed by a company in which, concurrently with such employment, an executive officer of Visteon served on the compensation committee of such company within the last three years.
|
4
|
Has not received more than $100,000 per year in direct compensation from Visteon or its subsidiaries within the last three years, other than director or committee fees and pensions or other forms of deferred compensation for prior service (and not contingent on continued service).
|
5
|
Is not currently an executive officer or employee of a company that, within the past three years, has made payments to, or received payments from, Visteon or its subsidiaries for property or services in an amount which, in any single fiscal year, exceeded the greater of $200,000 or 5% of such other company’s consolidated gross revenues for such year.
|
6
|
Has no immediate family member(1) who (i) has been employed by Visteon as an officer, (ii) is a current partner of Visteon’s internal or external auditor or a current employee of Visteon’s internal or external auditor who participates in the audit, assurance or tax compliance (but not tax planning) practice, (iii) is a former partner or employee of Visteon’s internal or external auditor who personally worked on Visteon’s audit within the last three years, (iv) has been employed as an officer of another company where a Visteon executive officer served on the compensation committee of that company within the last three years, (v) received more than $100,000 per year in direct compensation from Visteon or its subsidiaries other than pensions or other forms of deferred compensation for prior service (and not contingent on continued service), or (vi) is currently an officer of a company that has made payments to, or received payments from, Visteon or its subsidiaries for property or services in an amount which, during any twelve month period, exceeded the greater of $200,000 or 5% of such other company’s consolidated gross revenues for such year, in each case, within the last three years.
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7
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Is not currently an executive officer of a tax-exempt organization that has received, within the preceding three years, contributions from Visteon or its subsidiaries in any single fiscal year in excess of the greater of $200,000 or 5% of such charitable organization’s consolidated gross revenues for such year.
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8
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Does not have any other relationships with the Company or with members of senior management that the Board determines to be material.
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(1)
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A director’s immediate family shall include his or her spouse, parents, children, siblings, mothers and fathers-in-law, sons and daughters-in-law and brothers and sisters-in-law and anyone (other than domestic employees) who shares such director’s home.
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2020 Proxy Statement A-1
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•
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Take I-275 North
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•
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Exit at Ecorse Rd. (Exit 20). The exit is north of I-94 and south of Michigan Ave.
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•
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Turn right (east) at Ecorse Rd.
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•
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Grace Lake Corporate Center is on the right, approx.1/4 mile from the exit
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•
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Exit at Haggerty Rd. (north)
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•
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Take Haggerty Rd., approx. 2 miles, to Ecorse Rd. and turn right (east)
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•
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Grace Lake Corporate Center is on the right, approx. 1 mile
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•
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Exit at Ecorse Rd. (Exit 20). The exit is north of I-94 and south of Michigan Ave.
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•
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From the North: turn left (east) at Ecorse Rd.
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•
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From the South: turn right (east) at Ecorse Rd.
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•
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Grace Lake Corporate Center is on the right, approx.1/4 mile from the exit
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•
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Follow the signs to Grace Lake Lodge located on South side of campus
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2020 Proxy Statement B-1
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(a)
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Purpose. This Plan, known as the “Visteon Corporation 2020 Incentive Plan” is intended to provide an incentive to certain employees and to certain directors or other non-employees who provide services to Visteon Corporation and its subsidiaries, in order to encourage them to remain in the employ or service of the Company and its subsidiaries and to increase their interest in the Company’s success. It is intended that this purpose be effected through awards or grants of stock options, stock appreciation rights, restricted stock awards, restricted stock units and other stock-based awards and cash awards, as provided herein, to such eligible persons.
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(b)
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Definitions. The following terms shall have the following respective meanings unless the context requires otherwise:
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(1)
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The term “10% Shareholder” means an Employee who, as of the date on which an ISO is granted to such Employee, owns more than 10% of the total combined voting power of all classes of Stock then issued by the Company or any of its subsidiaries.
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(2)
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The term “Affiliate” or “Affiliates” shall have the meaning set forth in Rule 12b-2 promulgated under Section 12 of the Exchange Act.
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(3)
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The term “Awards” shall mean awards of cash or grants of Restricted Stock, Restricted Stock Units, Options, Stock Appreciation Rights and Other Stock-Based Awards.
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(4)
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The term “Beneficial Owner” shall mean beneficial owner as set forth in Rule 13d-3 under the Exchange Act.
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(5)
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The term “Board” shall mean the Board of Directors of Visteon Corporation.
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(6)
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The term “Change in Control” shall mean the occurrence of any one of the following:
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(A)
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any Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such Person any securities acquired directly from the Company or its Affiliates) representing 40% or more of the combined voting power of the Company’s then outstanding securities, excluding any Person who becomes such a Beneficial Owner in connection with a transaction described in clause (i) of paragraph (C) below;
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(B)
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within any twelve month period, the following individuals cease for any reason to constitute a majority of the number of directors then serving: individuals who, at the beginning of the twelve month period, constitute the Board and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of the Company) whose appointment or election by the Board or nomination for election by the Company’s shareholders was approved or recommended by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of the twelve month period or whose appointment, election or nomination for election was previously so approved or recommended (for these purposes, (x) a threatened election contest will be deemed to have occurred only if any person or entity publicly announces a bona fide intention to engage in an election contest, including but not limited to a consent solicitation, relating to the election of directors of the Company, and (y) a withhold vote campaign with respect to any director will not by itself constitute an actual or threatened election contest);
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(C)
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there is consummated a merger or consolidation of the Company or any direct or indirect subsidiary of the Company with any other corporation, other than (i) a merger or
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2020 Proxy Statement C-1
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(D)
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the stockholders of the Company approve a plan of complete liquidation or dissolution of the Company or there is consummated an agreement for the sale or disposition by the Company of more than 50% of the Company’s assets, other than a sale or disposition by the Company of more than 50% of the Company’s assets to an entity, at least 50% of the combined voting power of the voting securities of which are owned by stockholders of the Company in substantially the same proportions as their ownership of the Company immediately prior to such sale.
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(7)
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The term “Code” shall mean the Internal Revenue Code of 1986, or any successor thereto, as the same may be amended and in effect from time to time.
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(8)
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The term “Committee” shall mean the committee appointed pursuant to Section 2 to administer the Plan.
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(9)
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The term “Company” shall mean Visteon Corporation, including any successor thereto.
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(10)
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The term “Disability” shall mean, unless otherwise set forth in an agreement pursuant to which an Award is granted, for U.S. employees, a Participant’s becoming disabled within the meaning of the Company’s long-term disability plan applicable to the Participant, and for employee’s outside of the U.S., as determined by the applicable employer’s long-term disability policy or by the Committee or its delegate in its sole discretion.
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(11)
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The term “Effective Date” shall mean the date on which this Plan is initially approved by the stockholders of the Company.
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(12)
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The term “Employee” shall mean an employee of the Company or any Subsidiary (including an officer or director who is also an employee).
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(13)
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The term “Exchange Act” shall mean the Securities Exchange Act of 1934, or any successor thereto, as the same may be amended and in effect from time to time.
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(14)
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The term “Fair Market Value” shall mean (A) if the Stock is traded on a stock exchange, the closing sales price per share of the Stock on such exchange, or in the absence of reported sales on such date, the closing sales price on the immediately preceding date on which sales were reported, (B) if the Stock is not traded on a stock exchange but is traded in the over-the-counter market, the average between the high bid and low asked prices as reported in such over-the-counter market,
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C-2
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2020 Proxy Statement
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(15)
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The term “Final Award” shall mean the amount of compensation to be awarded finally to a Participant who holds a Performance Cash award pursuant to Section 10, as determined by the Committee taking into account the extent to which the Performance Goals have been satisfied.
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(16)
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The term “Key Advisor” shall mean a consultant or advisor of the Company.
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(17)
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The term “Market Price” shall mean the sale price at which a share of Stock shall have been sold regular way on the principal securities exchange on which the Stock is traded, or, if not traded on an exchange, on the over-the counter-market, at the time an Option or Stock Appreciation Right is exercised if exercised during market hours; otherwise it shall mean the next available price upon the market reopening.
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(18)
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The term “Non-Employee Director” shall mean a member of the Board who is not an Employee.
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(19)
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The term “Option” or “Options” shall mean the option to purchase Stock in accordance with Section 7 and such other terms and conditions as may be prescribed by the Committee. An Option may be either an “incentive stock option”, as such term is defined in the Code, or shall otherwise be designated as an option entitled to favorable treatment under the Code (“ISO”) or a “nonqualified stock option” (“NQO”). ISOs and NQOs are individually called an “Option” and collectively called “Options”.
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(20)
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The term “Other Stock-Based Awards” shall mean awards of Stock or other rights made in accordance with Section 9.
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(21)
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The term “Participant” shall mean an Employee, Key Advisor or Non-Employee Director who has been designated for participation in the Plan.
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(22)
|
The term “Performance Cash” shall mean the opportunity to receive, pursuant to Section 10, a cash payment as described in the Participant’s award agreement or other document describing the program, taking into account the Target Award and the Performance Formula, upon the attainment of one or more specified Performance Goals, subject to the terms and provisions of the award agreement and the Plan.
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(23)
|
The term “Performance Formula” shall mean a formula to be applied in relation to the Performance Goals in determining the amount of cash earned under a Performance Cash award granted pursuant to Section 10, the number of shares of performance-based Restricted Stock granted pursuant to Section 5 or the amount of cash or shares of Stock earned under performance-based Restricted Stock Units granted pursuant to Section 6, in each case expressed as a percentage of the Target Award.
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(24)
|
The term “Performance Goal” shall mean, with respect to any Performance Cash, performance-based Restricted Stock or performance-based Restricted Stock Unit, a performance measure that is based upon one or more objective business criteria established by the Committee with respect to the Company and/or any Subsidiary, division, business unit or component thereof, which may include, but are not limited to, any of the following: asset charge, asset turnover, capacity utilization, capital employed in the business, capital spending, cash flow (including operating cash flow, free cash flow, cash flow return on equity, and cash flow return on investment), cost structure improvements, cost reductions, restructuring plans, complexity reductions, customer loyalty, customer value, diversity, debt (or the ratio of debt to equity or to another financial measure that appears on the Company’s financial statements), dividend payouts, earnings (before or after one or more of interest, taxes, depreciation, amortization or special items), earnings growth, earnings per share, economic value added (or similar measure of productivity that considers the cost of capital employed), employee wellness, environmental health and/or safety, expense targets or reductions, facilities and tooling spending, gross profit, hours per component, increase in customer base, inventory turnover, market price appreciation, market share, net cash balance, net earnings
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2020 Proxy Statement C-3
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(25)
|
The term “Performance Period” shall mean the period of time for which performance with respect to one or more Performance Goals with respect to any Performance Cash, performance-based Restricted Stock or performance-based Restricted Stock Unit award is to be measured.
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(26)
|
The term “Person” shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except that such term shall not include (A) the Company or any of its subsidiaries, (B) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its Affiliates, (C) an underwriter temporarily holding securities pursuant to an offering of such securities, or (D) a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of Stock of the Company.
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(27)
|
The term “Plan” shall mean this Visteon Corporation 2020 Incentive Plan as the same may be amended and in effect from time to time.
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(28)
|
The term “Plan Awards” shall mean awards of cash or grants of Restricted Stock, Restricted Stock Units, Options, Stock Appreciation Rights and various other rights with respect to shares of Stock.
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(29)
|
The term “Prior Plan” shall mean the Visteon Corporation 2010 Incentive Plan as Amended.
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(30)
|
The term “Restriction Period” means the period of time determined by the Committee during which an Award is subject to restrictions or, as applicable, the period of time within which performance is measured for purposes of determining whether an Award has been earned.
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(31)
|
The term “Restricted Stock” means Stock issued to a Participant pursuant to Section 5 that is subject to forfeiture if one or more specified Performance Goals or minimum periods of service are not attained.
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(32)
|
The term “Restricted Stock Unit” means an award granted pursuant to Section 6 consisting of a unit credited to a hypothetical account, valued based on the Fair Market Value of Visteon Stock, and is subject to forfeiture if one or more specified Performance Goals or minimum periods of service are not attained.
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(33)
|
The term “Right” shall mean a Performance Cash award, Restricted Stock award, or a Restricted Stock Unit, as required by the context.
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C-4
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2020 Proxy Statement
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(34)
|
The term “Stock Appreciation Right” shall mean the right to receive, without payment to the Company, an amount of cash or Stock as determined in accordance with Section 8, based on the amount by which the Market Price of a share of Stock on the relevant valuation date exceeds the grant price.
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(35)
|
The term “Subsidiary” shall mean (A) any corporation a majority of the voting stock of which is owned directly or indirectly by the Company or (B) any limited liability company or entity a majority of the membership interest of which is owned, directly or indirectly, by the Company. In addition, solely for purposes of determining those individuals to whom an Option (other than an Option that is designated as an incentive stock option for purposes of the Code) or a Stock Appreciation Right may be granted, the term “Subsidiary” includes an entity that would be a Subsidiary if the preceding sentence were applied by substituting “at least twenty 20%” in lieu of “a majority” if the Committee determines that there are legitimate business reasons for extending Options or Stock Appreciation Rights to individuals employed by such an entity.
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(36)
|
The term “Substitute Award” shall have the meaning set forth in Section 3(f).
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(37)
|
The term “Stock” shall mean shares of the Company’s common stock, par value $0.01 per share.
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(38)
|
The term “Target Award” shall mean the amount of compensation to be earned by a Participant under a Performance Cash award or the amount of cash or number of shares of Stock to be earned by a Participant under a performance-based Restricted Stock or Restricted Stock Unit award, if all of the Performance Goals with respect to such to Right are achieved at the targeted level of performance.
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(a)
|
Committee. The Plan shall be administered by the Organization & Compensation Committee of the Board consisting of not less than two members of the Board who meet the independence requirements of any stock exchange on which the Company’s Stock is listed, and the “non-employee director” requirements under Rule 16b-3(b)(3) of the Exchange Act, or by any other committee appointed by the Board, provided the members of such committee meet such requirements.
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(b)
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Committee Authority. The Committee is authorized, subject to the provisions of the Plan, from time to time, to establish such rules and regulations as it may deem appropriate for the proper administration of the Plan, and to make such determinations under, and such interpretations of, and to take such steps in connection with, the Plan and the Awards as it may deem necessary or advisable, in each case in its sole discretion. In this regard, the Committee shall have the sole and plenary authority, in addition to other express powers and authorizations conferred on the Committee by the Plan, to: (i) designate Participants; (ii) determine the types of the Awards to be granted to a Participant; (iii) determine the number of shares of Stock to be covered by, or with respect to which payments, rights or other matters are calculated in connection with Awards; (iv) determine the terms and conditions of any Award; (v) determine whether, and to what extent, and under what circumstances Awards may be settled or exercised in cash, Stock, other securities, other Awards or other property, or 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 that delivery of cash, Stock, other securities, other Awards or other property and other amounts payable with respect to an Award shall be deferred, either automatically or at the election of the Participant or of the Committee; (vii) compute the number of Deferred Stock Units to be credited to Accounts of Participants; (viii) interpret, administer, reconcile any inconsistency in, correct any defect in and/or supply any omission in the Plan or any agreement evidencing an Award; (ix) establish, amend, suspend or waive any rules and regulations and appoint such agents as the Committee shall deem appropriate for the proper administration of the Plan; (x) accelerate the vesting or exercisability of, payment for or lapse of restrictions on, Awards, and accelerate and determine payouts, if any, in respect of Awards upon a Change in Control, death, Disability or retirement (or on any termination of employment) of a Participant; and (xi) make any other determination and take any other action that the Committee deems necessary or desirable for the administration of the Plan.
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(c)
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Committee Determinations. The Committee’s decisions and determinations under the Plan need not be uniform and may be made selectively among Participants, whether or not they are similarly situated. Unless otherwise expressly provided in the Plan, all designations, determinations, interpretations, and other
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2020 Proxy Statement C-5
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(d)
|
Board Authority. Any authority granted to the Committee may also be exercised by the Board. To the extent that any permitted action taken by the Board conflicts with any action taken by the Committee, the Board action shall control.
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(e)
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Delegation of Authority. To the extent permitted by law, the Committee may delegate any or all of its powers and duties under the Plan, including, but not limited to, its authority to make awards under the Plan or to grant waivers pursuant to Section 11, to one or more other committees (including a committee consisting of two or more corporate officers) as it shall appoint, pursuant to such conditions or limitations as the Committee may establish; provided, however, that the Committee shall not delegate its authority to (1) act on non-ministerial matters affecting any Participant who is subject to the reporting requirements of Section 16(a) of the Exchange Act, or the liability provisions of Section 16(b) of the Exchange Act (any such Participant being called a “Section 16 Person”) or (2) amend or modify the Plan pursuant to the provisions of Section 16(b). To the extent of any such delegation, the term “Committee” when used herein shall mean and include any such delegate.
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(a)
|
Stock Subject to Plan. The Stock that may be issued under the Plan may be either authorized and unissued or held in the treasury of the Company. The maximum number of shares of Stock that may be issued with respect to Awards, subject to adjustment as described in this Section 3, shall be 1.535 million shares less one share for every one share granted under the Prior Plan after December 31, 2019.
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(b)
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Limits. Notwithstanding the foregoing, subject to adjustment in accordance with the provisions of this Section 3; (1) the aggregate number of shares that may be issued upon exercise of ISOs shall not exceed 1.535 million shares, (2) the maximum number of shares subject to Awards to any Employee or Key Advisor in any calendar year shall not exceed 1 million shares of Stock in the aggregate; and (3) the maximum number of shares subject to Awards granted to any Non-Employee Director during a single fiscal year shall be limited so that the Awards, when taken together with any cash fees paid to such Non-Employee Director in respect of his or her services as a non-employee director during such year (including service as a member or chair of any committees of the Board), do not exceed $500,000 in total value (calculating the value of any such Awards based on the grant date fair market value of such Awards for financial accounting purposes). The independent members of the Board may make exceptions to this limit for a non-executive chair of the Board, provided that the Non-Employee Director receiving such additional compensation may not participate in the decision to award such compensation.
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(c)
|
Prior Plan Awards. The Plan shall serve as the successor to the Prior Plan, and no further grants shall be made under the Prior Plan on or after the Effective Date. Each outstanding award as of the Effective Date shall continue to be governed solely by the terms of the Prior Plan and the documents evidencing such award, and no provision of the Plan shall be deemed to affect or otherwise modify the rights or obligations of the holders of such transferred awards with respect to their acquisition of Stock thereunder.
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(d)
|
Terminated, Expired or Forfeited Awards. If, after the Effective Date, any shares covered by an Award granted under the Plan (or any shares covered by an award granted under the Prior Plan) are forfeited, or the applicable Award (or portion thereof) otherwise terminates or is canceled without the delivery of shares, then the shares covered by such Award (or Prior Plan award), or to which such Award (or Prior Plan award) relates, or the number of shares otherwise counted against the aggregate number of shares with respect to which Awards may be granted, to the extent of any such forfeiture, termination or cancellation, shall again become shares with respect to which Awards may be granted under the Plan; provided, however, that shares: (i) delivered in payment of the exercise price of an Option or Stock Appreciation Right, (ii) not issued upon the stock settlement of Stock Appreciation Rights, (iii) repurchased by the Company using proceeds from Option exercises or (iv) delivered to or withheld by the Company to pay federal, state or local withholding taxes with respect to any Award, shall not become available again for issuance under this Plan.
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C-6
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2020 Proxy Statement
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(e)
|
Rights Settled in Cash. The shares involved in any Award (or Prior Plan award) that is settled in cash shall be reinstated to the pool of available shares, and any applicable limit against which such shares are counted, and shall be made available for further Awards. Notwithstanding the foregoing, in the event any Award is settled in cash, the number of shares of Stock subject to such Award shall continue to count against the individual limit specified in subsection (a).
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(f)
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Substitute Awards. Shares issued or transferred under Awards made pursuant to an assumption, substitution or exchange for previously granted awards of a company acquired by the Company in a transaction (“Substitute Awards”) shall not reduce the number of shares of Stock available under the Plan and available shares under a stockholder approved plan of an acquired company (as appropriately adjusted to reflect the transaction) may be used for Awards under the Plan and shall not reduce the Plan’s share reserve (subject to applicable stock exchange listing and Code requirements).
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(g)
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Adjustments. In the event of any merger, share exchange, consolidation, reorganization, recapitalization, stock split, stock dividend, extraordinary cash dividend or other event affecting Stock, an appropriate adjustment shall be made in the total number of shares available for Awards and in all other provisions of the Plan that include a reference to a number of shares or units, and in the numbers of shares or units covered by, and other terms and provisions (including but not limited to the grant or exercise price of any Award) of outstanding Awards. In addition, in the event of a Change in Control, the provisions of Section 13 of the Plan shall apply. Any adjustments to outstanding Awards shall be consistent with Section 409A and 424 of the Code, to the extent applicable. The foregoing adjustments and the manner of application of the foregoing provisions shall be determined by the Committee in its sole discretion. Any such adjustment may provide for the elimination of any fractional share which might otherwise become subject to an Award.
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(h)
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Minimum Vesting Requirements. Notwithstanding any other provision of the Plan to the contrary, Awards granted under the Plan (other than cash-based awards) shall vest no earlier than the first anniversary of the date on which the Award is granted; provided, that the following Awards shall not be subject to the foregoing minimum vesting requirement: any (i) substitute Awards granted in connection with awards that are assumed, converted or substituted pursuant to a merger, acquisition or similar transaction entered into by the Company or any of its Subsidiaries, (ii) Shares delivered in lieu of fully vested cash obligations, (iii) Awards to Non-Employee Directors that vest on the earlier of the one-year anniversary of the date of grant or the next annual meeting of stockholders which is at least 50 weeks after the immediately preceding year’s annual meeting, (iv) deferred stock units granted to eligible directors pursuant to elective deferrals of vested cash fees and cash retainers, and (v) any additional Awards that the Committee may grant, up to a maximum of five percent (5%) of the available share reserve authorized for issuance under the Plan pursuant to Section 3(a) (subject to adjustment under Section 3(g)); and, provided, further, that the foregoing restriction does not apply to the Committee’s discretion to provide for accelerated exercisability or vesting of any Award, including in cases of retirement, death, Disability or a Change in Control, in the terms of the Award Agreement or otherwise.
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(a)
|
Grant of Restricted Stock Awards. The Committee may grant an Award of Restricted Stock to any Participant, subject to the provisions of the Plan and such other terms and conditions as it may determine. Awards of Restricted Stock may be awarded in such number and at such times during the term of the Plan as the Committee shall determine. Each Award of Restricted Stock may be evidenced in such manner as the Committee deems appropriate, including, without limitation, a book-entry registration or issuance of a stock certificate or certificates, and by an agreement setting forth the terms of such Award of Restricted Stock.
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2020 Proxy Statement C-7
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(b)
|
Restriction Period. The Committee shall determine the Restriction Period(s) that apply to the shares of Stock covered by each Award of Restricted Stock or portion thereof. At the end of the Restriction Period, the restrictions imposed by the Committee shall lapse with respect to the shares of Stock covered by the Award of Restricted Stock or portion thereof.
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(c)
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Restriction on Transfer. The holder of an Award of Restricted Stock may not sell, transfer, pledge, exchange, hypothecate, or otherwise dispose of the shares of Stock represented by the Award during the applicable Restriction Period. The Committee shall impose such other restrictions and conditions on any shares of Stock covered by an Award of Restricted Stock as it may deem advisable including, without limitation, restrictions under applicable Federal or state securities laws, and may legend the certificates representing shares of Stock covered by an Award of Restricted Stock to give appropriate notice of such restrictions.
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(d)
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Performance-based Restricted Stock. In the case of performance-based Restricted Stock, the Committee shall establish one or more Performance Goals to be used to measure performance with respect to such Restricted Stock and the Performance Period applicable to any such performance-based award. The Committee may establish a minimum threshold objective for any Performance Goal for such Performance Period which, if not met, would result in no Final Award being made to any Participant with respect to such Performance Goal for such Performance Period. During and after the Performance Period, but prior to the Committee’s final determination of the Participant’s Final Award, the Committee may adjust the Performance Goals and otherwise modify the terms and provisions of the Restricted Stock grant to a Participant, subject to the terms and conditions of the Plan. As soon as practicable following the completion of the Performance Period relating to any performance-based Restricted Stock, but not later than 12 months following such completion, the Committee shall determine (1) the extent to which the Participant achieved the applicable Performance Goals, (2) the number of shares of Restricted Stock to be retained as a Final Award by the Participant and (3) the number of shares of Restricted Stock to be forfeited by the Participant. Each Final Award shall represent only full shares of Stock and any fractional share that would otherwise result from such Final Award calculation shall be forfeited. In making such determination, the Committee shall apply the applicable Performance Goals that the Committee had established. The Committee may, in its sole discretion, increase the amount of the Final Award that otherwise would be awarded to any Participant by determining that the Participant should be allowed to retain some or all of the Restricted Stock that would otherwise be forfeited, notwithstanding the fact that the Performance Goals were not satisfied in full. Any such determination shall take into account (A) the extent to which the Performance Goals that relate to such Restricted Stock were, in the Committee’s sole opinion, achieved, (B) the individual performance of such Participant during the Performance Period and (C) such other factors as the Committee may deem relevant, including, without limitation, any change in circumstances or unforeseen events, relating to the Company, the economy or otherwise, since the date of grant of such Restricted Stock. The Committee shall notify such Participant of such Participant’s Final Award as soon as practicable following such determination.
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(e)
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Stockholder Rights. During any Restriction Period, the Committee may, in its discretion, grant to the holder of an Award of Restricted Stock all or any of the rights of a stockholder with respect to the shares, including, but not by way of limitation, the right to vote such shares. At the discretion of the Committee, dividends or other distributions with respect to an unvested Award of Restricted Stock may be withheld by the Company and credited to a bookkeeping account established for the Participant; provided that any such dividends or other distributions shall vest only if and to the extent that the underlying Award of Restricted Stock vests, as determined by the Committee. Any dividends or distributions so withheld by the Committee and attributable to any particular share of an Award of Restricted Stock shall be subject to the same restrictions on transferability as the shares of the Award with respect to which they were paid, and, if such shares are forfeited, the Participant shall have no right to such dividends or distributions. For the avoidance of doubt, in no event shall dividends or other distributions with respect to an Award of Restricted Stock be paid to a Participant unless and until the underlying Award vests.
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(f)
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Section 83(b) Election. If a Participant makes an election pursuant to Section 83(b) of the Code with respect to the Award of Restricted Stock, such Participant shall file, within 30 days following the Date of Grant, a copy of such election with the Company and with the Internal Revenue Service in accordance with the regulations under Section 83(b) of the Code. The Committee may, in its discretion, provide in an agreement relating to the Award that the Award is conditioned upon the Participant’s making or refraining from making an election with respect to such Award under Section 83(b) of the Code.
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C-8
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2020 Proxy Statement
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(a)
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Grant of Restricted Stock Units. The Committee may grant Restricted Stock Units to any Participant, subject to the provisions of the Plan and such other terms and conditions as it may determine. Restricted Stock Units are generally similar to Awards of Restricted Stock except that no shares of Stock are actually awarded to the Participant on the grant date. Restricted Stock Units shall be awarded in such number and at such times during the term of the Plan as the Committee shall determine.
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(b)
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Conditions of Restricted Stock Units. The grant of a Restricted Stock Unit shall be subject to the following:
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(1)
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Restriction Period. The Committee shall determine the Restriction Period(s) that apply to the shares of Stock covered by each Award of Restricted Stock Units or portion thereof. At the end of the Restriction Period, the restrictions imposed by the Committee shall lapse and the Award shall be paid as specified in Section 6(b)(3) below.
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(2)
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Restriction on Transfer. Restricted Stock Units granted herein may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated until the end of the applicable Restriction Period established by the Committee, or upon earlier satisfaction of any other conditions, as specified by the Committee, in its sole discretion, and set forth in any agreement relating to the Award or otherwise.
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(3)
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Time and Form of Payment. Each grant of a Restricted Stock Unit will specify the time and manner of payment of Restricted Stock Units. Restricted Stock Units shall be paid in cash, shares of Stock, or a combination of cash and shares as established by the Committee in the agreement relating to the Award.
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(4)
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Stockholder Rights. During the Restriction Period, Participants shall not have any rights as a stockholder of the Company with respect to an Award of Restricted Stock Units and shall have no right to vote such Restricted Stock Units, but the Committee may at the grant date, authorize the payment of dividend equivalents on such Restricted Stock Units, either in cash or in additional shares of Common Stock. Any such dividend equivalent on Restricted Stock Units shall be subject to the same restrictions on transferability as the shares underlying the Restricted Stock Units, and, if such shares are forfeited, the Participant shall have no right to such dividend equivalents. For the avoidance of doubt, in no event shall dividend equivalents with respect to a Restricted Stock Unit Award be paid to a Participant unless and until the underlying Restricted Stock Unit Award vests.
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(c)
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Performance-based Restricted Stock Units. In the case of performance-based Restricted Stock Units, the Committee shall establish one or more Performance Goals to be used to measure performance with respect to such Restricted Stock Units and the Performance Period applicable to any such performance-based award. The Committee may establish a minimum threshold objective for any Performance Goal for such Performance Period which, if not met, would result in no Final Award being made to any Participant with respect to such Performance Goal for such Performance Period. During and after the Performance Period, but prior to the Committee’s final determination of the Participant’s Final Award, the Committee may adjust the Performance Goals and otherwise modify the terms and provisions of the Restricted Stock Unit grant to a Participant, subject to the terms and conditions of the Plan. As soon as practicable following the completion of the Performance Period relating to any performance-based Restricted Stock Unit, but not later than 12 months following such completion, the Committee shall determine (1) the extent to which the Participant achieved the applicable Performance Goals, (2) the number of shares of Stock or amount of other compensation to be retained as a Final Award by the Participant and (3) the number of Restricted Stock Units to be forfeited by the Participant. Each Final Award shall represent only full shares of Stock and any fractional share that would otherwise result from such Final Award calculation shall be forfeited. In making such determination, the Committee shall apply the applicable Performance Goals that the Committee had established. The Committee may, in its sole discretion, increase the amount of the Final Award that otherwise would be awarded to any Participant by determining that the Participant should receive Stock or other consideration for Restricted Stock Units that would otherwise be forfeited, notwithstanding the fact that the Performance Goals were not satisfied in full. Any such determination shall take into account (A) the extent to which the Performance Goals that relate to such Restricted Stock Units were, in the Committee’s sole opinion, achieved, (B) the individual performance of such Participant during the Performance Period and (C) such other factors as the Committee may deem relevant, including, without
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2020 Proxy Statement C-9
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(a)
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Grant of Options. Options may be granted hereunder to Participants either alone or in addition to other Awards granted under the Plan. Any Option granted under the Plan may be evidenced by an agreement in such form as the Committee from time to time approves. Any such Option shall be subject to the terms and conditions required by this Section 7 and to such additional terms and conditions, not inconsistent with the provisions of the Plan, as the Committee may deem appropriate in each case. ISOs must be designated by the Committee at the time of grant as an ISO and may only be granted to Participants who meet the definition of “employees” under Section 3401(c) of the Code. The terms of any ISO shall be subject in all respects to the provisions of Section 422 of the Code, or any successor provision thereto, and any regulations promulgated thereunder.
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(b)
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Option Price. Except as otherwise provided by the Committee in the case of Substitute Awards, the purchase price (or Option price) per share of Stock purchasable under an Option shall be determined by the Committee in its sole discretion; provided that such purchase price shall not be less than the Fair Market Value of one share of Stock on the date of the grant of the Option (or less than 110% of the Fair Market Value of one Share on such date in the case of an ISO granted to a 10% Stockholder).
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(c)
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Option Period. The term of each Option granted hereunder shall not exceed ten years from the date the Option is granted (or five years in the case of an ISO granted to a 10% Stockholder).
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(d)
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Exercisability. Options shall be exercisable at such time or times as determined by the Committee at or subsequent to grant, subject to the terms of the Plan; provided, however, that no Option shall be exercisable beyond ten years from the date of grant. Notwithstanding the foregoing, in the event that on the last business day of the term of an Option (x) the exercise of the Option is prohibited by applicable law or (y) Shares may not be purchased or sold by certain employees or directors of the Company due to the “black-out period” of a Company policy or a “lock-up” agreement undertaken in connection with an issuance of securities by the Company, the Committee may provide that the terms of the Option shall be extended, but not beyond a period of seven (7) days following the end of the legal prohibition, black-out period or lock-up agreement and provided further that no extension will be made if the Fair Market Value of the Stock at the date the initial term would otherwise expire is less than the exercise price of the Option.
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(e)
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Method of Exercise. Subject to the other provisions of the Plan, any Option may be exercised by the Participant in whole or in part at such time or times, and the Participant may make payment of the Option price in such form or forms, including, without limitation, payment by delivery of cash, shares of Stock or other consideration having a fair market value on the exercise date equal to the total Option price, or by any combination of cash, Shares and other consideration as the Committee may specify.
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(f)
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Award Agreement. Each Option shall be evidenced by an award agreement or notification in such form and containing such provisions not inconsistent with the provisions of the Plan as the Committee from time to time shall approve.
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(g)
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Stockholder Rights. Prior to the exercise of an Option, Participants shall not have any rights as a stockholder of the Company with respect to an Option and shall have no right to vote the Stock underlying such Option, or the right to the payment of any dividends or dividend equivalents on such Options.
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(a)
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Grant of Stock Appreciation Rights.
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(1)
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The Committee, at any time and from time to time while the Plan is in effect, may authorize the granting of Stock Appreciation Rights to such Participants, as it may select, and for such numbers of shares as it shall designate, subject to the provisions of this Section 8 and Section 3. Each Stock Appreciation Right may relate to all or a portion of a specific Option granted under the Plan and may be granted concurrently with the Option to which it relates or at any time prior to the exercise, termination or expiration of such Option (a “Tandem SAR”), or may be granted independently of
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C-10
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2020 Proxy Statement
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(2)
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Upon exercise of a Stock Appreciation Right, the Participant shall be entitled to receive, without payment to the Company, either (A) that number of shares of Stock determined by dividing (i) the total number of shares of Stock subject to the Stock Appreciation Right being exercised by the Participant, multiplied by the amount by which the Market Price of a share of Stock at the time the right is exercised exceeds the grant price (such amount being hereinafter referred to as the “Spread”), by (ii) the Market Price of a share of Stock on the exercise date; or (B) cash in an amount determined by multiplying (i) the total number of shares of Stock subject to the Stock Appreciation Right being exercised by the Participant, by (ii) the amount of the Spread; or (C) a combination of shares of Stock and cash, in amounts determined as set forth in clauses (A) and (B) above, as determined by the Committee in its sole discretion; provided, however, that, in the case of a Tandem SAR, the total number of shares which may be received upon exercise of a Stock Appreciation Right for Stock shall not exceed the total number of shares subject to the related Option or portion thereof, and the total amount of cash which may be received upon exercise of a Stock Appreciation Right for cash shall not exceed the Market Price on the date of exercise of the total number of shares subject to the related Option or portion thereof.
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(b)
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Terms and Conditions.
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(1)
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Each Stock Appreciation Right granted under the Plan shall be exercisable on such date or dates, during such period, for such number of shares and subject to such further conditions as shall be determined pursuant to the provisions of the award agreement with respect to such Stock Appreciation Right; provided, however, that a Tandem SAR shall not be exercisable prior to or later than the time the related Option could be exercised; and provided, further, that in any event no Stock Appreciation Right shall be exercised beyond ten years from the date of grant. Notwithstanding the foregoing, in the event that on the last business day of the term of a Stock Appreciation Right (x) the exercise of the Stock Appreciation Right is prohibited by applicable law or (y) Shares may not be purchased or sold by certain employees or directors of the Company due to the “black-out period” of a Company policy or a “lock-up” agreement undertaken in connection with an issuance of securities by the Company, the Committee may provide that the terms of the Stock Appreciation Right shall be extended, but not beyond a period of seven (7) days following the end of the legal prohibition, black-out period or lock-up agreement and provided further that no extension will be made if the Fair Market Value of the Stock at the date the initial term would otherwise expire is less than the exercise price of the Stock Appreciation Right.
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(2)
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The Committee may impose such conditions as it may deem appropriate upon the exercise of a Stock Appreciation Right, including, without limitation, a condition that the Stock Appreciation Right may be exercised only in accordance with rules and regulations adopted by the Committee from time to time.
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(3)
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With respect to Options issued with Tandem SARs, the right of a Participant to exercise the Tandem SAR shall be cancelled if and to the extent the related Option is exercised, and the right of a Participant to exercise an Option shall be cancelled if and to the extent that shares covered by such Option are used to calculate shares or cash received upon exercise of the Tandem SAR.
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(c)
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Award Agreement. Each Stock Appreciation Right shall be evidenced by an award agreement or notification in such form and containing such provisions not inconsistent with the provisions of the Plan as the Committee from time to time shall approve.
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(d)
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Stockholder Rights. Participants shall not have any rights as a stockholder of the Company with respect to a Stock Appreciation Right and shall have no right to vote the Stock underlying such Stock Appreciation Right, or the right to the payment of any dividends or dividend equivalents on such Stock Appreciation Rights.
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2020 Proxy Statement C-11
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(a)
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Generally. The Committee may grant Other Stock-Based Awards, which are awards (other than those described in Sections 5, 6, 7 and 8 of the Plan) that are based on or measured by shares of Stock, to any Employee, Non-Employee Director or Key Advisor, on such terms and conditions as the Committee shall determine. Other Stock-Based Awards may be awarded subject to the achievement of performance objectives or other criteria or other conditions and may be payable in cash, Shares or any combination of the foregoing, as the Committee shall determine. The Committee may grant dividend equivalents in connection with Other Stock-Based Awards. Dividend equivalents may be payable in cash or shares of Stock, and upon such terms and conditions as the Committee shall determine; provided that dividend equivalents shall vest and be paid only if and to the extent the underlying Other Stock-Based Awards vest and are paid.
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(b)
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Non-Employee Director Deferrals.
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(1)
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Generally. Non-Employee Directors may be granted Other Stock-Based Awards in the form of deferred stock units (“Deferred Stock Units”) in accordance with the provisions of this Section 9, and references to “Participant” in this Section 9(b) shall be deemed to refer only to Non-Employee Directors. Pursuant to this Section 9(b), Participants (A) shall receive non-elective payment of the Mandatory Deferral Dollar Amount in the form of Deferred Stock Units that entitle the Participants to receive, under the terms and conditions described herein, shares of Common Stock, and (B) may defer receipt of all or part of their cash remuneration.
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(2)
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Voluntary Deferrals. A Participant who wishes to have any part of their cash remuneration for any given calendar year paid as Deferred Stock Units on his or her Distribution Date shall irrevocably elect such medium of payment prior to the commencement of the calendar year during which the Elective Amount is to be earned, provided that to the extent permitted under Code Section 409A, a Non-Employee Director may elect within 30 days of first becoming a Participant to have an election take effect with respect to any compensation for services to be performed after the date of the election. Such election shall be made in accordance with procedures and rules promulgated by the Board or its delegee for such purpose. Any election made under this Section 9(b)(2) shall apply to the Participant’s cash remuneration earned in future calendar years unless and until the Participant makes a later election in accordance with the terms of this Section 9(b)(2).
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(3)
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Crediting of Deferred Stock Units. The Account of each Participant shall be credited with that number of Deferred Stock Units (rounded down to the nearest whole share) in respect of a number of shares of Stock with a Fair Market Value equal to (A) the Participant’s Mandatory Deferral Dollar Amount on each Payment Date and (B) the portion of the Participant’s Voluntary Deferral Amount payable in Deferred Stock Units determined as of the last day of each month.
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(4)
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Vesting. The interest of each Participant in any benefit payable with respect to any Voluntary Deferral Amount shall be at all times fully vested and non-forfeitable. The interest of each Participant in any benefit payable with respect to any Mandatory Deferral Dollar Amount shall be vested pursuant to the vesting schedule established by the Committee with respect thereto. Notwithstanding the foregoing, a Participant’s interest in his Account constitutes an unsecured promise of the Company, and a Participant shall have only the rights of a general unsecured creditor of the Company with respect to his Account.
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(5)
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Dividend Equivalents. Each Account shall be credited with Dividend Equivalents on each date on which a dividend is paid on Common Stock, in respect of the Deferred Stock Units credited to such Account as of the record date for such dividend. Any such Dividend Equivalent on Deferred Stock Units shall be subject to the same restrictions on transferability as the shares underlying the Deferred Stock Units, and, if such shares are forfeited, the Participant shall have no right to such Dividend Equivalents. For the avoidance of doubt, in no event shall Dividend Equivalents with respect to a Deferred Stock Unit be paid to a Participant unless and until the underlying Deferred Stock Unit vests.
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(6)
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Distributions. Except as otherwise provided in this Section 9(b)(6), on a Participant’s Distribution Date, such Participant shall receive a number of shares of Stock equal to the number of Deferred Stock Units in such Participant’s Account, or a cash payment equal to the accrued value of the Participant’s Account. Any distribution to any Participant or beneficiary in accordance with the
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C-12
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2020 Proxy Statement
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(7)
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Definitions. For purposes of this Section 9(b), the following terms have the following meanings:
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(A)
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“Account” means the bookkeeping account established and maintained by the Company for each Participant of this Section 9(b) of the Plan.
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(B)
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“Annual Retainer” means the annual retainer for Non-Employee Directors, as set from time to time by the Board.
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(C)
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“Mandatory Deferral Dollar Amount” means a dollar amount established by the Board from time to time as the amount of the Annual Retainer that shall be paid in the form of Deferred Stock Units.
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(D)
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“Deferred Stock Unit” shall mean a right, granted to a Non-Employee Director in accordance with this Section 9(b), to acquire Stock for no consideration or some other amount determined by the Committee.
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(E)
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“Committee Retainer” means the retainer paid to Non-Employee Directors in respect of service on a committee of the Board.
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(F)
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“Distribution Date” means, with respect to each Participant (or his or her beneficiary, if the Participant dies before distribution of his or her Account), the later of (1) January 15 of the calendar year following the Participant’s “separation from service” (as defined in Code Section 409A) or (2) the first day of the seventh month following such separation from service.
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(G)
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“Voluntary Deferral Amount” means the portion or portions of the cash remuneration in respect of services for any particular year that may be paid to the Non-Employee Directors.
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(H)
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“Payment Date” means an annual date established by the Board from time to time for the crediting of the Mandatory Deferral.
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(a)
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Grant of Performance Cash. The Committee, at any time and from time to time while the Plan is in effect, may grant or authorize the granting of Performance Cash to such officers of the Company and any Subsidiary and other Employees, whether or not members of the Board, as it may select and in such amount as it shall designate, subject to the provisions of this Section 10.
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(b)
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Maximum Awards. The maximum amount granted to a Participant as a Final Award with respect to all Performance Cash granted during a calendar year shall be $10 million.
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(c)
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Terms and Provisions of Performance Cash. Prior to the grant of any Performance Cash, the Committee shall determine the terms and provisions of such Right, including, without limitation, (1) the Target Award; (2) one or more Performance Goals to be used to measure performance under such Right, and the Performance Formula to be applied against the Performance Goals in determining the amount of compensation earned under such Right as a percentage of the Target Award; (3) the Performance Period; and (4) the effect of the Participant’s termination of employment, death or disability. The Committee may establish a minimum threshold objective for any Performance Goal for such Performance Period which, if not met, would result in no Final Award being made to any Participant with respect to such Performance Period. During and after the Performance Period, but prior to the Committee’s final determination of the Participant’s Final Award as provided in subsection (d), the Committee may adjust the Performance Goals, Performance Formula and Target Award and otherwise modify the terms and provisions of a Right granted to a Participant, subject to the terms and conditions of the Plan. Each Right shall be evidenced by an award agreement or notification in such form as the Committee may determine.
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2020 Proxy Statement C-13
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(d)
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Final Awards. As soon as practicable following the completion of the Performance Period relating to any Performance Cash, but not later than 12 months following such completion, the Committee shall determine the extent to which the Performance Goals have been achieved and the amount of compensation to be awarded as a Final Award to the Participant who holds such Right. In making such determination, the Committee shall apply the applicable Performance Formula for the Participant for the Performance Period against the accomplishment of the related Performance Goals. The Committee may, in its sole discretion, reduce the amount of any Final Award that otherwise would be awarded to any Participant for any Performance Period. In addition, the Committee may, in its sole discretion, increase the amount of any Final Award that otherwise would be awarded to any Participant. Any such determination shall take into account (A) the extent to which the Performance Goals provided in such Right were, in the Committee’s sole opinion, achieved, (B) the individual performance of such Participant during the related Performance Period and (C) such other factors as the Committee may deem relevant, including, without limitation, any change in circumstances or unforeseen events, relating to the Company, the economy or otherwise, since the date of grant of such Right. The Committee shall notify such Participant of such Participant’s Final Award as soon as practicable following such determination.
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(e)
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Payment. Following the determination of each Final Award, unless the Participant is eligible and has elected to defer payment of all or a portion of the Final Award, the Final Award will be payable to the Participant in cash.
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(a)
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Effect of Competitive Activity. Anything contained in the Plan to the contrary notwithstanding, unless otherwise set forth in the terms of an Award granted to a Participant, if the employment of any Participant shall terminate, for any reason other than death, while any Award granted to such Participant is outstanding hereunder, and such Participant has not yet received the Stock or cash covered by such Award or otherwise received the full benefit of such Award, such Participant, if otherwise entitled thereto, shall receive such Stock, cash or benefit only if, during the entire period from the date of such Participant’s termination to the date of such receipt, such Participant shall have (1) made himself or herself available, upon request, at reasonable times and upon a reasonable basis, to consult with, supply information to and otherwise cooperate with the Company or any Subsidiary with respect to any matter that shall have been handled by him or her or under his or her supervision while he or she was in the employ of the Company or of any Subsidiary, and (2) refrained from engaging in any activity that is directly or indirectly in competition with any activity of the Company or any Subsidiary.
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(b)
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Nonfulfillment of Competitive Activity Conditions: Waivers Under the Plan. In the event of a Participant’s nonfulfillment of any condition set forth in subsection (a) of this Section 11, such Participant’s rights under any Award shall be forfeited and cancelled forthwith; provided, however, that the nonfulfillment of such condition may at any time (whether before, at the time of or subsequent to termination of employment) be waived in the following manner:
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(1)
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with respect to any such Participant who at any time shall have been a Section 16 Person, such waiver may be granted by the Committee upon its determination that in its sole judgment there shall not have been and will not be any substantial adverse effect upon the Company or any Subsidiary by reason of the nonfulfillment of such condition; and
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(2)
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with respect to any other such Participant, such waiver may be granted by the Committee (or any delegate thereof) upon its determination that in its sole judgment there shall not have been and will not be any such substantial adverse effect.
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(c)
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Effect of Detrimental Conduct. Anything contained in the Plan to the contrary notwithstanding, unless otherwise set forth in the terms of an Award granted to a Participant, all rights of a Participant under any Award shall cease on and as of the date on which it has been determined by the Committee that such Participant at any time (whether before or subsequent to termination of such Participant’s employment) acted in a manner detrimental to the best interests of the Company or any Subsidiary.
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(d)
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Taxes and Tax Withholding. All Awards under the Plan shall be subject to applicable United States federal (including FICA), state and local, foreign country or other tax withholding requirements. The Company may require that the Participant or other person receiving Awards or exercising Awards pay to the Company an amount sufficient to satisfy such tax withholding requirements with respect to such Awards, or the Company
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C-14
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2020 Proxy Statement
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(e)
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Substitution. The Committee, in its sole discretion, may substitute an Award (except ISOs) for another Award or Awards of the same or different type; provided, however, that the Committee shall not, without shareholder approval, substitute Options or any other Award for outstanding Options with a higher exercise price than the substitute Option or other Award.
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(a)
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Restrictions on Transfer. Except as described in subsection (b) below, only the Participant may exercise rights under an Award during the Participant’s lifetime. A Participant may not transfer those rights except (i) by will or by the laws of descent and distribution or (ii) with respect to Awards other than ISOs, pursuant to a domestic relations order. When a Participant dies, the personal representative or other person entitled to succeed to the rights of the Participant may exercise such rights. Any such successor must furnish proof satisfactory to the Company of his or her right to receive the Award under the Participant’s will or under the applicable laws of descent and distribution.
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(b)
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Restrictions on Transfer of Options or Stock Appreciation Rights. Unless the Committee determines otherwise, no Option or Stock Appreciation Right shall be transferable by a Participant otherwise than by will or the laws of descent and distribution, and during the lifetime of a Participant the Option or Stock Appreciation Right shall be exercisable only by such Participant or such Participant’s guardian or legal representative; provided, however, that no Option or Stock Appreciation Right shall be transferred for consideration.
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(c)
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Restrictions on Transfer of Certain Other Stock-Based Awards. Unless the Committee determines otherwise, no Other Stock-Based Award shall be transferable by a Participant otherwise than by will or the laws of descent and distribution, and during the lifetime of a Participant any such Other Stock-Based Award shall be exercisable only by such Participant or such Participant’s guardian or legal representative.
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(d)
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Attachment and Levy. No Award shall be subject, in whole or in part, to attachment, execution or levy of any kind, and any purported transfer in violation hereof shall be null and void. Without limiting the generality of the foregoing, no domestic relations order purporting to authorize a transfer of an Award, or to grant to any person other than the Participant the authority to exercise or otherwise act with respect to an Award, shall be recognized as valid.
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(e)
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Requirements for Issuance or Transfer of Shares. No shares of Stock shall be issued or transferred in connection with any Award hereunder unless and until all legal requirements applicable to the issuance or transfer of such shares of Stock have been complied with to the satisfaction of the Committee. The Committee shall have the right to condition any Award on the Participant’s undertaking in writing to comply with such restrictions on his or her subsequent disposition of the shares of Stock as the Committee shall deem necessary or advisable, and certificates representing such shares may be legended to reflect any such restrictions. Certificates representing shares of Stock issued or transferred under the Plan may be subject to such stop-transfer orders and other restrictions as the Committee deems appropriate to comply with applicable laws, regulations and interpretations, including any requirement that a legend be placed thereon.
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2020 Proxy Statement C-15
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(a)
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Change in Control. Notwithstanding any other provision of the Plan, unless the Committee determines otherwise at the time of grant, upon the occurrence of a Change in Control, any outstanding Plan Awards that have not previously vested will become fully vested immediately before the Change in Control if (1) such Plan Awards are not assumed, converted or replaced by the acquirer or other continuing entity, or (2) the Participant’s employment is terminated by the Company without Cause (as defined in the applicable Plan Award) other than by reason of death or disability within 24 months following the Change in Control and such Plan Awards have been assumed, converted or replaced by the acquirer or other continuing entity. For Plan Awards that relate to Performance Periods that have not been completed as of the date of the Change in Control, and that are not then vested, (x) the Performance Period will be deemed to have been terminated immediately before the Change in Control, and (y) the award subject to such Performance Period shall be adjusted for the performance achieved as of the date of the Change in Control, will be converted into a time vesting award and will be subject to the provisions (1) and (2) above. For any Non-Employee Director Deferrals pursuant to Section 9(b), upon the occurrence of a Change in Control, the value of the Participant’s account shall be immediately paid to the Participant in a single sum cash payment, notwithstanding any prior distribution election made by the Participant to the contrary. The foregoing provisions are subject to the terms of any Plan Award or employment contract governing the employment of a Participant to the extent that such contract provides greater rights to the Participant in the event of a Change in Control. Notwithstanding the foregoing provisions of Section 13(a), unless determined otherwise by the Committee, Section 13(a) shall be applied in a manner that will enable a Plan Award that is intended to be exempt from Code Section 409A to continue to be so exempt, or to enable a Plan Award that is intended to comply with Code Section 409A to continue to so comply.
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(b)
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Maximum Payment Limitation. If any portion of the payments or benefits described in this Plan or under any other agreement with or plan of the Company (in the aggregate, “Total Payments”), would constitute an “excess parachute payment”, then the Total Payments to be made to the Participant shall be reduced such that the value of the aggregate Total Payments that the Participant is entitled to receive shall be one dollar ($1) less than the maximum amount which the Participant may receive without becoming subject to the tax imposed by Section 4999 of the Code or which the Company may pay without loss of deduction under Section 280G(a) of the Code but only if (A) the net amount of such Total Payments, as so reduced (and after subtracting the net amount of federal, state and local income taxes on such reduced Total Payments) is greater than or equal to (B) the net amount of such Total Payments without such reduction (but after subtracting the net amount of federal, state and local income taxes on such Total Payments and the amount of excise tax to which the Participant would be subject in respect of such unreduced Total Payments. This Section shall not apply in the case of a Participant who has in effect a valid employment contract providing that the Total Payments to the Participant shall be determined without regard to the maximum amount allowable under Section 280G of the Code. The terms “excess parachute payment” and “parachute payment” shall have the meanings assigned to them in Section 280G of the Code, and such “parachute payments” shall be valued as provided therein. Present value shall be calculated in accordance with Section 280G(d)(4) of the Code. Within forty (40) days following delivery of notice by the Company to the Participant of its belief that there is a payment or benefit due the Participant which will result in an excess parachute payment as defined in Section 280G of the Code, the Participant and the Company, at the Company’s expense, shall obtain the opinion (which need not be unqualified) of nationally recognized tax counsel reasonably selected by the Company’s independent auditors (which may be regular outside counsel to the Company), which opinion sets forth (A) the amount of the Base Period Income, (B) the amount and present value of Total Payments and (C) the amount and present value of any excess parachute payments determined without regard to the limitations of this Section. As used in this Section, the term “Base Period Income” means an amount equal to the Participant’s “annualized includible compensation for the base period” as defined in Section 280G(d)(1) of the Code. For purposes of such opinion, the value of any noncash benefits or any deferred payment or benefit shall be determined by the Company’s tax counsel in accordance with the principles of Sections 280G(d)(3) and (4) of the Code, which determination shall be evidenced in a certificate of such counsel addressed to the Company and the Participant. Such opinion shall be addressed to the Company and the Participant and shall be binding upon the Company and the Participant. If such opinion determines that there would be an excess parachute payment, the payments hereunder that are includible in Total Payments or any other payment or benefit determined by such counsel to be includible in Total Payments shall be reduced or eliminated, so that under the bases of calculations set forth in such opinion there will be no excess parachute payment. Such reduction will be achieved by reducing or eliminating payments or benefits in the manner that produces the highest economic value to the
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C-16
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2020 Proxy Statement
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(a)
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Term. Unless terminated earlier pursuant to subsection (b), the Plan shall terminate on the date immediately prior to the 10 year anniversary of the Effective Date, unless the Plan is terminated earlier by the Board.
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(b)
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Amendment, Modification and Termination of Plan. The Board may amend or terminate the Plan at any time; provided, however, that the Board shall not amend the Plan without stockholder approval if such approval is required in order to comply with the Code or other applicable law, or to comply with applicable stock exchange requirements. Notwithstanding the foregoing, except in connection with a corporate transaction involving the Company (including, without limitation, any stock dividend, distribution (whether in the form of cash, Stock, other securities or property), stock split, extraordinary cash dividend, recapitalization, Change in Control, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of shares of Stock or other securities, or similar transactions), the Company may not, without obtaining stockholder approval, (i) amend the terms of outstanding Options or SARs to reduce the exercise price of such outstanding Options or SARs, (ii) cancel outstanding Options or SARs in exchange for Options or SARs with an exercise price that is less than the exercise price of the original Options or SARs or (iii) cancel outstanding Options or SARs with an exercise price above the current stock price in exchange for cash or other securities.
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(c)
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Limitation and Survival. Except as provided herein, no amendment to or termination of the Plan or any provision hereof, and no amendment or cancellation of any outstanding Award, by the Board or the stockholders of the Company, shall, without the written consent of the affected Participant, materially adversely affect any outstanding Award. The Committee’s authority to act and to apply the terms of the Plan with respect to any outstanding Award, and a Participant’s ability to exercise any rights that the Participant may have with respect to an outstanding Award, shall survive termination of the Plan.
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(d)
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Amendments for Changes in Law. Notwithstanding anything to the contrary herein, the Board shall have the authority to amend outstanding Awards and the Plan to take into account changes in law and tax and accounting rules as well as other developments, and to grant Awards that qualify for beneficial treatment under such rules, without stockholder approval. Further, the provisions of Code Section 409A are incorporated into the Plan by reference to the extent necessary for any Award that is subject to Code Section 409A to comply with such requirements, and except as otherwise determined by the Committee, the Plan shall be administered in accordance with Section 409A as if the requirements of Code Section 409A were set forth herein.
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(e)
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Amendment of Outstanding Awards. An outstanding Award may be amended by agreement of the Company and the Participant consistent with the Plan, provided that the Participant’s consent is not required if any amendment to the Participant’s outstanding Award does not materially impair the rights or materially increase the obligations of the Participant.
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(a)
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Indemnification. Each person who is or shall have been a member of the Board, the Committee, or of any other committee of the Board administering the Plan or of any committee appointed by the foregoing committees, shall be indemnified and held harmless by the Company against and from any and all loss, cost, liability or expense that may be imposed upon or reasonably incurred by such person in connection with or resulting from any claim, action, suit or proceeding to which such person may be or become a party or in which such person may be or become involved by reason of any action taken or failure to act under the Plan and against and from any and all amounts paid by such person in settlement thereof (with the Company’s written approval) or paid by such person in satisfaction of a judgment in any such action, suit or proceeding, except a judgment in favor of the Company based upon a finding of such person’s lack of good faith; subject, however, to the condition that, upon the institution of any claim, action, suit or proceeding against such person, such person shall in writing give the Company an opportunity, at its own expense, to
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2020 Proxy Statement C-17
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(b)
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Exculpation. Each member of the Board, the Committee, or of any other committee of the Board administering the Plan or any committee appointed by the foregoing committees, and each officer and employee of the Company, shall be fully justified in relying or acting in good faith upon any information furnished in connection with the administration of the Plan by any appropriate person or persons other than such person. In no event shall any person who is or shall have been a member of the Board, the Committee, or of any other committee of the Board administering the Plan or of any committee appointed by the foregoing committees, or an officer or employee of the Company, be held liable for any determination made or other action taken or any omission to act in reliance upon any such information, or for any action (including the furnishing of information) taken or any failure to act, if in good faith.
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(a)
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Governing Document. The Plan shall be the controlling document. No other statements, representations, explanatory materials or examples, oral or written, may amend the Plan in any manner. The Plan shall be binding upon and enforceable against the Company and its successors and assigns.
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(b)
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Funding of the Plan. The Plan shall be unfunded. The Company shall not be required to establish any special or separate fund or to make any other segregation of assets to assure the payment of any Awards under the Plan. 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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(c)
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Rights of Participants. Nothing in the Plan shall entitle any Employee, Non-Employee Director, Key Advisor or other person to any claim or right to receive an Award under the Plan. Neither the Plan nor any action taken hereunder shall be construed as giving any individual any rights to be retained by or in the employ of the Employer or any other employment rights. There is no obligation for uniformity of treatment of Participants or beneficiaries of Awards under the Plan and the terms and conditions of Awards need not be the same with respect to each recipient.
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(d)
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No Fractional Shares. No fractional shares of Stock shall be issued or delivered pursuant to the Plan or any Award. Except as otherwise provided under the Plan, the Committee shall determine whether cash, other awards or other property shall be issued or paid in lieu of such fractional shares or whether such fractional shares or any rights thereto shall be forfeited or otherwise eliminated.
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(e)
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Compliance with Law. The Plan, the exercise of Options and SARs and the obligations of the Company to issue or transfer shares of Stock under Awards shall be subject to all applicable laws and regulations, and to approvals by any governmental or regulatory agency as may be required. The Board may refuse to issue or transfer any shares of Stock or other consideration under an Award if, acting in its sole discretion, it determines that the issuance or transfer of such shares of Stock or such other consideration might violate any applicable law or regulation or entitle the Company to recover the same under Section 16(b), and any payment tendered to the Company by a Participant, other holder or beneficiary in connection with the exercise of such Award shall be promptly refunded to the relevant Participant, holder, or beneficiary. Without limiting the generality of the foregoing, no Award granted hereunder shall be construed as an offer to sell securities of the Company, and no such offer shall be outstanding, unless and until the Board in its sole discretion has determined that any such offer, if made, would be in compliance with all applicable requirements of the U.S. federal securities laws and any other laws to which such offer, if made, would be subject. With respect to persons subject to section 16 of the Exchange Act, it is the intent of the Company that the Plan and all transactions under the Plan comply with all applicable provisions of Rule 16b-3 or its successors under the Exchange Act. In addition, it is the intent of the Company that ISOs comply with the applicable provisions of Section 422 of the Code, and that, to the extent applicable, Awards comply with the requirements of Section 409A of the Code. To the extent that any legal requirement of section 16 of the Exchange Act or Section 422, or 409A of the Code as set forth in the Plan ceases to be required under
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C-18
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2020 Proxy Statement
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(f)
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Establishment of Subplans. The Board may from time to time establish one or more sub-plans under the Plan including, but not limited to, for purposes of satisfying applicable blue sky, securities or tax laws of various jurisdictions in which the Company intends to grant Awards. The Board shall establish such sub-plans by adopting supplements to the Plan setting forth (i) such limitations on the Committee’s discretion under the Plan as the Board deems necessary or desirable and (ii) such additional terms and conditions not otherwise inconsistent with the Plan as the Board shall deem necessary or desirable. All sub-plans shall be deemed a part of this Plan, but, if applicable, each sub-plan shall apply only to the Participants in the jurisdiction for which the sub-plan was designed.
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(g)
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Clawback. Notwithstanding any other provisions in this Plan, any Award which is subject to recovery under any law, government regulation, stock exchange listing requirement, or Company policy, shall be subject to such deductions, recoupment and clawback as may be required to be made pursuant to such law, government regulation, stock exchange listing requirement or Company policy, as may be in effect from time to time, and which may operate to create additional rights for the Company with respect to Awards and recovery of amounts relating thereto. By accepting Awards under the Plan, Participants agree and acknowledge that they are obligated to cooperate with, and provide any and all assistance necessary to, the Company to recover or recoup any Award or amounts paid under the Plan subject to clawback pursuant to such law, government regulation, stock exchange listing requirement or Company policy. Such cooperation and assistance shall include, but is not limited to, executing, completing and submitting any documentation necessary to recover or recoup any Award or amounts paid under the Plan from a Participant’s accounts, or pending or future compensation or Awards.
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(h)
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Governing Law. The validity, construction, interpretation and effect of the Plan and Award Agreements issued under the Plan shall be governed and construed by and determined in accordance with the laws of the State of Delaware, without giving effect to the conflict of laws provisions thereof.
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(i)
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Award Agreements. Unless otherwise determined by the Board, each Award hereunder shall be evidenced by an agreement that shall be delivered to the Participant and shall specify the terms and conditions of the Award and any rules applicable thereto.
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(j)
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No Limit on Other Compensation Arrangements. Nothing contained in the Plan shall prevent the Company or any Affiliate from adopting or continuing in effect other compensation arrangements, which may, but need not, provide for the grant of any types of Awards provided for hereunder (subject to shareholder approval if such approval is required), and such arrangements may be either generally applicable or applicable only in specific cases.
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(k)
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No Rights as Shareholder. Subject to the provisions of the applicable Award, no Participant or holder or beneficiary of any Award shall have any rights as a shareholder with respect to any shares of Stock to be
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2020 Proxy Statement C-19
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(l)
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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 Board, such provision shall be construed or deemed amended to conform to the applicable laws, or if it cannot be construed or deemed amended without, in the determination of the Board, 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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(m)
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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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(n)
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Section 409A. Notwithstanding any provision of the Plan or an Award agreement to the contrary, if any Award or benefit provided under this Plan is subject to the provisions of Section 409A of the Code, the provisions of the Plan and any applicable Award agreement shall be administered, interpreted and construed in a manner necessary to comply with Section 409A of the Code or an exception thereto (or disregarded to the extent such provision cannot be so administered, interpreted or construed). The following provisions shall apply, as applicable:
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(1)
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If a Participant is a Specified Employee and a payment subject to Section 409A of the Code (and not excepted therefrom) to the Participant is due upon “separation from service” (as defined in Section 409A of the Code), such payment shall be delayed for a period of six months after the date the Participant separates from service (or, if earlier, the death of the Participant). Any payment that would otherwise have been due or owing during such six-month period will be paid immediately following the end of the six-month period in the month following the month containing the 6-month anniversary of the date of termination unless another compliant date is specified in the applicable agreement.
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(2)
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For purposes of Section 409A of the Code, and to the extent applicable to any Award or benefit under the Plan, it is intended that distribution events qualify as permissible distribution events for purposes of Section 409A of the Code and shall be interpreted and construed accordingly. With respect to payments subject to Section 409A of the Code, the Company reserves the right to accelerate and/or defer any payment to the extent permitted and consistent with Section 409A of the Code. Whether a Participant has separated from service or employment will be determined based on all of the facts and circumstances and, to the extent applicable to any Award or benefit, in accordance with the guidance issued under Section 409A of the Code. For this purpose, a Participant will be presumed to have experienced a separation from service when the level of bona fide services performed permanently decreases to a level less than 20% of the average level of bona fide services performed during the immediately preceding 36 month period or such other applicable period as provided by Section 409A of the Code.
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(3)
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The Board, in its discretion, may specify the conditions under which the payment of all or any portion of any Award may be deferred until a later date. Deferrals shall be for such periods or until the occurrence of such events, and upon such terms and conditions, as the Board shall determine in its discretion, in accordance with the provisions of Section 409A of the Code, the regulations and other binding guidance promulgated thereunder; provided, however, that no deferral shall be permitted with respect to Options, Stock Appreciation Rights and other stock rights subject to Section 409A of the Code. An election shall be made by filing an election with the Company (on a form provided by the Company) on or prior to December 31st of the calendar year immediately preceding the beginning of the calendar year (or other applicable service period) to which such election relates (or at such other date as may be specified by the Board to the extent consistent with Section 409A of the Code) and shall be irrevocable for such applicable calendar year (or other applicable service period). To the extent authorized, a Participant who first becomes eligible to participate in the Plan may file an election (“Initial Election”) at any time prior to the 30-day period
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C-20
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2020 Proxy Statement
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(4)
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The grant of NQSOs, Stock Appreciation Rights and other stock rights subject to Section 409 of the Code shall be granted under terms and conditions consistent with Treas. Reg. § 1.409A-1(b)(5) such that any such Award does not constitute a deferral of compensation under Section 409A. Accordingly, any such Award may be granted to Employees and Non-Employee Directors of the Company and its subsidiaries and affiliates in which the Company has a controlling interest. In determining whether the Company has a controlling interest, the rules of Treas. Reg. § 1.414(c)-2(b)(2)(i) shall apply; provided that the language “at least 50 percent” shall be used instead of “at least 80 percent” in each place it appears; provided, further, where legitimate business reasons exist (within the meaning of Treas. Reg. § 1.409A-1(b)(5)(iii)(E)(i)), the language “at least 20 percent” shall be used instead of “at least 80 percent” in each place it appears. The rules of Treas. Reg. §§ 1.414(c)-3 and 1.414(c)-4 shall apply for purposes of determining ownership interests.
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2020 Proxy Statement C-21
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