Compensation Committee Report
The Committee has reviewed and discussed the foregoing Compensation Discussion and Analysis with management. Based on our review and discussions with management, the Committee recommended to the Board of Directors that the CD&A be included in this proxy statement and incorporated by reference into our Annual Report on Form 10-K for the year ended December 31, 2020.
THE LEADERSHIP DEVELOPMENT AND COMPENSATION COMMITTEE
Daniel Callahan (Chair)
James Neary
Susan Sobbott
Jack VanWoerkom
Executive Compensation Tables
2020 Summary Compensation Table
This 2020 Summary Compensation Table reflects the compensation of our NEOs in accordance with SEC reporting rules, which require the incremental fair value of an equity award modification to be included in the Summary Compensation Table for the year in which the modification occurs.
•As a result, 2020 Stock Awards for our NEOs in the Summary Compensation Table below include the incremental fair value associated with modification of their 2020 annual PSUs, which occurred in 2020, as well as the original grant date value for their 2020 annual PSUs (see footnote (3) to this Summary Compensation Table, and the 2020 Grants of Plan Based Awards Table below).
•Also as a result, 2020 Stock Awards for our NEOs in the Summary Compensation Table below include the incremental fair value associated with the modifications of their 2019 annual PSU awards, which occurred in 2020, while the full original grant date value for their 2019 annual PSUs remains reflected in the 2019 Stock Awards for our NEOs in the Summary Compensation Table below.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name and
Principal
Position
|
Year
|
Salary
($)(1)
|
Bonus
($)(2)
|
Stock
Awards
($)(3)(4)
|
Option
Awards
($)(5)
|
Non-Equity
Incentive Plan
Compensation
($)(6)
|
Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($)(7)
|
All Other
Compensation
($)(8)
|
Total
($)
|
Melissa Smith
Chair and CEO
|
2020
|
$
|
725,577
|
|
$
|
—
|
|
$
|
16,523,075
|
|
$
|
1,499,996
|
|
$
|
1,242,780
|
|
$
|
25,825
|
|
$
|
93,400
|
|
$
|
20,110,653
|
|
2019
|
$
|
763,269
|
|
$
|
—
|
|
$
|
3,450,218
|
|
$
|
1,150,020
|
|
$
|
1,006,172
|
|
$
|
35,545
|
|
$
|
77,170
|
|
$
|
6,482,394
|
|
2018
|
$
|
729,615
|
|
$
|
—
|
|
$
|
2,699,878
|
|
$
|
899,992
|
|
$
|
1,212,474
|
|
$
|
—
|
|
$
|
88,758
|
|
$
|
5,630,717
|
|
Roberto Simon
Chief Financial
Officer
|
2020
|
$
|
491,539
|
|
$
|
—
|
|
$
|
5,827,425
|
|
$
|
400,013
|
|
$
|
612,466
|
|
$
|
—
|
|
$
|
68,293
|
|
$
|
7,399,736
|
|
2019
|
$
|
500,000
|
|
$
|
—
|
|
$
|
1,200,156
|
|
$
|
300,020
|
|
$
|
390,336
|
|
$
|
—
|
|
$
|
40,258
|
|
$
|
2,430,770
|
|
2018
|
$
|
500,000
|
|
$
|
—
|
|
$
|
999,697
|
|
$
|
249,978
|
|
$
|
445,125
|
|
$
|
—
|
|
$
|
37,822
|
|
$
|
2,232,622
|
|
Scott Phillips
President,
Global Fleet
|
2020
|
$
|
461,298
|
|
$
|
—
|
|
$
|
4,959,480
|
|
$
|
340,007
|
|
$
|
465,975
|
|
$
|
—
|
|
$
|
57,059
|
|
$
|
6,283,819
|
|
2019
|
$
|
475,000
|
|
$
|
—
|
|
$
|
1,120,318
|
|
$
|
280,031
|
|
$
|
369,636
|
|
$
|
—
|
|
$
|
38,978
|
|
$
|
2,283,963
|
|
2018
|
$
|
475,000
|
|
$
|
—
|
|
$
|
999,697
|
|
$
|
249,978
|
|
$
|
359,100
|
|
$
|
—
|
|
$
|
35,580
|
|
$
|
2,119,355
|
|
Robert Deshaies
President, Health
|
2020
|
$
|
412,740
|
|
$
|
—
|
|
$
|
3,482,563
|
|
$
|
240,022
|
|
$
|
346,800
|
|
$
|
—
|
|
$
|
29,100
|
|
$
|
4,511,225
|
|
2019
|
$
|
412,535
|
|
$
|
50,000
|
|
$
|
740,592
|
|
$
|
35,026
|
|
$
|
363,531
|
|
$
|
—
|
|
$
|
18,141
|
|
$
|
1,619,825
|
|
Joel Dearborn
President,
Corporate
Payments
|
2020
|
$
|
388,462
|
|
$
|
—
|
|
$
|
3,357,734
|
|
$
|
260,012
|
|
$
|
291,000
|
|
$
|
—
|
|
$
|
35,429
|
|
$
|
4,332,637
|
|
2019
|
$
|
380,769
|
|
$
|
—
|
|
$
|
1,040,111
|
|
$
|
260,041
|
|
$
|
283,744
|
|
$
|
—
|
|
$
|
33,825
|
|
$
|
1,998,490
|
|
In addition – while not a substitute for this Summary Compensation Table or any other compensation disclosure required by the SEC – we encourage you to reference the 2020 Awarded Compensation section and table on page 66 within the Compensation Discussion and Analysis above, that summarizes how the Committee viewed its 2020 annual target compensation decisions for the NEOs, including target values for their 2020 equity awards.
(1)This column shows the actual amount of base salary earned by the NEOs during 2020, which amounts are reflective of the temporary salary reductions instituted during 2020 as a result of COVID-19. For further information about these salary reductions, see Compensation Discussion & Analysis - Executive Summary - Impact of COVID-19 on Compensation. The amounts shown in this column include any amounts that may be contributed by each named executive officer on a pre-tax basis to the Company’s 401(k) plan and 2017 EDCP.
(2)This was a one-time cash award associated with Mr. Deshaies' promotion to President, Health that was earned in 2019 but paid in 2020.
(3)The amounts shown in this column represent the (i) aggregate grant date fair value of PSUs and RSUs granted during 2020, 2019, and 2018, respectively, calculated in accordance with FASB ASC Topic 718 and (ii) for 2020 only, the aggregate incremental fair value related to the modifications made on June 23, 2020 to the PSUs granted on March 20, 2019, September 16, 2019 (Mr. Deshaies' promotion related PSU more fully described under 2020 Total Direct Compensation - 2019 LTIP Grant Payout) and March 16, 2020. The aggregate incremental fair value was calculated as of the modification date in accordance with FASB ASC Topic 718 and does not represent new PSU awards to our NEOs.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregate Incremental Fair Value for PSU Modifications Included in 2020 Stock Awards
(does not represent new PSU awards)
|
Melissa Smith
|
Roberto Simon
|
Scott Phillips
|
Robert Deshaies
|
Joel Dearborn
|
$3,763,231
|
$1,252,779
|
$1,071,033
|
$737,487
|
$830,207
|
A portion of the amounts shown in this column represents the value of PSUs and RSUs granted in June 2020, referred to collectively as the Business Continuity and Outperformance Grant. The value reported in this column for the Business Continuity and Outperformance Grant for each NEO reflects the grant date fair value reported in accordance with FASB ASC Topic 718, which is significantly greater than the corresponding target grant values approved by the Committee, as shown in the table below, which is not a substitute for this Summary Compensation Table or any other compensation disclosure required by the SEC. The Committee approved a methodology where the target grant values were to be divided by the grant date closing stock price to determine the number of shares subject to the applicable PSU at target performance.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 2020 Business Continuity and Outperformance Grant
Incremental Fair Value for Equity Grant Included in 2020 Stock Awards vs. Target Grant Value Approved by the Committee
|
|
Melissa Smith
|
Roberto Simon
|
Scott Phillips
|
Robert Deshaies
|
Joel Dearborn
|
Difference
(Reported vs. Target)
|
$2,259,727
|
$974,597
|
$828,334
|
$585,002
|
$487,511
|
The significantly higher reported value required to be included in the Summary Compensation Table for the Business Continuity and Outperformance Grant for each NEO is primarily the result of our use of a market-based performance metric (i.e., relative TSR) and the related requirements for the grant date fair value calculation for PSU awards with such a performance metric under FASB ASC Topic 718. The Committee was aware that the Summary Compensation Table would require the Company to report a higher value, but did not believe it was appropriate to change the Committee’s standard PSU award denomination approach, as used in prior years, solely due to the reporting requirements of the Summary Compensation Table.
Assumptions used in the calculation of the amounts in this column are included in the Company’s audited financial statements for the fiscal years ended December 31, 2020, 2019, and 2018 included in the Company’s Annual Reports on Form 10-K filed with the Securities and Exchange Commission on March 1, 2021, February 28, 2020, and March 18, 2019, respectively.
(4)For PSUs reported in this column, the amounts in the table reflect the grant date fair value of such awards based upon the probable outcome of the performance conditions at the grant date calculated in accordance with FASB ASC Topic 718 or the incremental fair value of modifications at the time of modification, also calculated in accordance with FASB ASC Topic 718. Assuming the highest level of performance conditions were achieved, the value for PSUs granted in 2020 included in the “Stock Awards” column would be $24,099,295 for Ms. Smith; $8,586,352 for Mr. Simon; $7,298,418 for Mr. Phillips; $5,152,436 for Mr. Deshaies; and $4,653,454 for Mr. Dearborn. The corresponding amounts for fiscal years 2019 and 2018 are described in the similar sections of our fiscal year 2019 and 2018 proxy statements.
(5)The amounts shown in this column represent the aggregate grant date fair value of option awards made during 2020, 2019, and 2018, respectively, calculated in accordance with FASB ASC Topic 718. Assumptions used in the calculation of these amounts are included in the Company’s audited financial statements for the fiscal years ended December 31, 2020, 2019, and 2018, included in the Company’s Annual Reports on Form 10-K filed with the Securities and Exchange Commission on March 1, 2021, February 28, 2020, and March 18, 2019, respectively.
(6)The amounts shown in this column reflect the cash incentive award made in March 2021 for 2020 STIP results, March 2020 for 2019 STIP results, and March 2019 for 2018 STIP results, respectively, and include amounts contributed by each named executive officer on a pre-tax basis to the Company’s 2017 EDCP (for 2020, 2019 and 2018 STIP results).
(7)The amounts shown reflect SERP above-market earnings.
(8)The following table describes the elements that are represented in the “All Other Compensation” column above:
ALL OTHER COMPENSATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
401(k) or
Other Retirement
Plan Employer
Match
($)
|
2017 EDCP
Employer
Match
($)(1)
|
Other
($)(2)
|
Total
($)
|
Melissa Smith
|
$
|
17,100
|
|
$
|
74,567
|
|
$
|
1,733
|
|
$
|
93,400
|
|
Roberto Simon
|
$
|
17,100
|
|
$
|
36,748
|
|
$
|
14,445
|
|
$
|
68,293
|
|
Scott Phillips
|
$
|
17,100
|
|
$
|
27,959
|
|
$
|
12,000
|
|
$
|
57,059
|
|
Robert Deshaies
|
$
|
17,100
|
|
$
|
—
|
|
$
|
12,000
|
|
$
|
29,100
|
|
Joel Dearborn
|
$
|
17,100
|
|
$
|
17,460
|
|
$
|
869
|
|
$
|
35,429
|
|
(1)The amounts reflect the Company’s contributions to the executive officer under the 2017 EDCP which were earned in 2020 and made in 2021.
(2)The amounts reflect the value received as part of our Financial Wellness Program, including (i) reimbursement of $12,000 for external financial advising services for Mr. Simon, Mr. Phillips and Mr. Deshaies and (ii) reimbursement of physical exams for Ms. Smith of $1,733, Mr. Simon of $2,445, and Mr. Dearborn of $869.
2020 Grants of Plan-Based Awards Table
The following table represents all plan-based awards granted to the named executive officers in 2020:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Date of
Committee
Action
|
Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards (2)
|
|
Estimated Future Payouts
Under Equity Incentive
Plan Awards
|
All
Other
Stock
Awards:
Number
of Shares
of Stock
or Units
(#)
|
All Other
Option
Awards:
Number of
Securities
Underlying
Options (#)
|
Exercise
or Base
Price of
Option
Awards
($/Sh)
|
Grant Date
Fair Value of
Stock
and Option
Awards
($)(3)
|
Name
|
Type of
Award(1)
|
Grant
Date
|
Threshold
($)
|
Target
($)
|
Maximum
($)
|
|
Threshold
(#)
|
Target
(#)
|
Maximum
(#)
|
Melissa
Smith
|
STIP
|
|
|
577,500
|
|
1,155,000
|
|
1,732,500
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
RSU(4)
|
3/16/2020
|
3/2/2020
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
8,208
|
—
|
|
—
|
|
900,089
|
|
RSU(5)
|
6/24/2020
|
6/23/2020
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
9,367
|
|
—
|
|
—
|
|
1,500,031
|
|
PSU(6)
|
3/16/2020
|
3/2/2020
|
—
|
|
—
|
|
—
|
|
|
16,415
|
|
32,829
|
|
65,658
|
|
—
|
|
—
|
|
—
|
|
3,600,028
|
|
PSU(7)(8)
|
6/24/2020
|
6/23/2020
|
—
|
|
—
|
|
—
|
|
|
14,051
|
|
28,101
|
|
70,253
|
|
—
|
|
—
|
|
—
|
|
6,759,696
|
|
Mod.
PSU(9)
|
6/23/2020
|
6/23/2020
|
—
|
|
—
|
|
—
|
|
|
16,415
|
|
32,829
|
|
65,658
|
|
—
|
|
—
|
|
—
|
|
3,538,310
|
|
Mod. PSU(10)
|
6/23/2020
|
6/23/2020
|
—
|
|
—
|
|
—
|
|
|
7,468
|
|
14,935
|
|
29,870
|
|
—
|
|
—
|
|
—
|
|
224,921
|
|
NQ(11)
|
3/16/2020
|
3/2/2020
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
42,696
|
$
|
109.66
|
|
1,499,996
|
|
Roberto Simon
|
STIP
|
|
|
252,981
|
|
505,962
|
|
887,700
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
RSU(4)
|
3/16/2020
|
3/2/2020
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
3,648
|
—
|
|
—
|
|
400,040
|
|
RSU(5)
|
6/24/2020
|
6/23/2020
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
3,123
|
|
—
|
|
—
|
|
500,117
|
|
PSU(6)
|
3/16/2020
|
3/2/2020
|
—
|
|
—
|
|
—
|
|
|
5,472
|
|
10,943
|
|
21,886
|
|
—
|
|
—
|
|
—
|
|
1,200,009
|
|
PSU(7)(8)
|
6/24/2020
|
6/23/2020
|
—
|
|
—
|
|
—
|
|
|
4,684
|
|
9,367
|
|
23,418
|
|
—
|
|
—
|
|
—
|
|
2,474,480
|
|
Mod. PSU(9)
|
6/23/2020
|
6/23/2020
|
—
|
|
—
|
|
—
|
|
|
5,472
|
|
10,943
|
|
21,886
|
|
—
|
|
—
|
|
—
|
|
1,179,437
|
|
Mod. PSU(10)
|
6/23/2020
|
6/23/2020
|
—
|
|
—
|
|
—
|
|
|
2,435
|
|
4,870
|
|
9,740
|
|
—
|
|
—
|
|
—
|
|
73,342
|
|
NQ(11)
|
3/16/2020
|
3/2/2020
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
11,386
|
$
|
109.66
|
|
400,013
|
|
Scott Phillips
|
STIP
|
|
|
213,750
|
|
427,500
|
|
641,250
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
RSU(4)
|
3/16/2020
|
3/2/2020
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
3,101
|
|
—
|
|
—
|
|
340,056
|
|
RSU(5)
|
6/24/2020
|
6/23/2020
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
2,654
|
|
—
|
|
—
|
|
425,012
|
|
PSU(6)
|
3/16/2020
|
3/2/2020
|
—
|
|
—
|
|
—
|
|
|
4,651
|
|
9,302
|
|
18,604
|
|
—
|
|
—
|
|
—
|
|
1,020,057
|
|
PSU(7)(8)
|
6/24/2020
|
6/23/2020
|
—
|
|
—
|
|
—
|
|
|
3,981
|
|
7,962
|
|
19,905
|
|
—
|
|
—
|
|
—
|
|
2,103,322
|
|
Mod. PSU(9)
|
6/23/2020
|
6/23/2020
|
—
|
|
—
|
|
—
|
|
|
4,651
|
|
9,302
|
|
18,604
|
|
—
|
|
—
|
|
—
|
|
1,002,570
|
|
Mod. PSU(10)
|
6/23/2020
|
6/23/2020
|
—
|
|
—
|
|
—
|
|
|
2,273
|
|
4,546
|
|
9,092
|
|
—
|
|
—
|
|
—
|
|
68,463
|
|
NQ(11)
|
3/16/2020
|
3/2/2020
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
9,678
|
$
|
109.66
|
|
340,007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Date of
Committee
Action
|
Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards (2)
|
|
Estimated Future Payouts
Under Equity Incentive
Plan Awards
|
All
Other
Stock
Awards:
Number
of Shares
of Stock
or Units
(#)
|
All Other
Option
Awards:
Number of
Securities
Underlying
Options (#)
|
Exercise
or Base
Price of
Option
Awards
($/Sh)
|
Grant Date
Fair Value of
Stock
and Option
Awards
($)(3)
|
Name
|
Type of
Award(1)
|
Grant
Date
|
Threshold
($)
|
Target
($)
|
Maximum
($)
|
|
Threshold
(#)
|
Target
(#)
|
Maximum
(#)
|
Robert Deshaies
|
STIP
|
|
|
159,375
|
|
318,750
|
|
478,125
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
RSU(4)
|
3/16/2020
|
3/2/2020
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
2,189
|
—
|
|
—
|
|
240,046
|
|
RSU(5)
|
6/24/2020
|
6/23/2020
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
1,874
|
—
|
|
—
|
|
300,102
|
|
PSU(6)
|
3/16/2020
|
3/2/2020
|
—
|
|
—
|
|
—
|
|
|
3,283
|
6,566
|
13,132
|
—
|
|
—
|
|
—
|
|
720,028
|
|
PSU(7)(8)
|
6/24/2020
|
6/23/2020
|
—
|
|
—
|
|
—
|
|
|
2,811
|
5,621
|
14,053
|
—
|
|
—
|
|
—
|
|
1,484,900
|
|
Mod. PSU(9)
|
6/23/2020
|
6/23/2020
|
—
|
|
—
|
|
—
|
|
|
3,283
|
6,566
|
13,132
|
—
|
|
—
|
|
—
|
|
707,683
|
|
Mod. PSU(10)
|
6/23/2020
|
6/23/2020
|
—
|
|
—
|
|
—
|
|
|
285
|
|
569
|
|
1,138
|
|
—
|
|
—
|
|
—
|
|
8,569
|
|
Mod. PSU(12)
|
6/23/2020
|
6/23/2020
|
—
|
|
—
|
|
—
|
|
|
705
|
1,410
|
2,820
|
—
|
|
—
|
|
—
|
|
21,235
|
|
NQ(11)
|
3/16/2020
|
3/2/2020
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
6,832
|
$
|
109.66
|
|
240,022
|
|
Joel Dearborn
|
STIP
|
|
|
150,000
|
|
300,000
|
|
450,000
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
RSU(4)
|
3/16/2020
|
3/2/2020
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
2,371
|
—
|
|
—
|
|
260,004
|
|
RSU(5)
|
6/24/2020
|
6/23/2020
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
1,562
|
|
—
|
|
—
|
|
250,139
|
|
PSU(6)
|
3/16/2020
|
3/2/2020
|
—
|
|
—
|
|
—
|
|
|
3,557
|
|
7,113
|
|
14,226
|
|
—
|
|
—
|
|
—
|
|
780,012
|
|
PSU(7)(8)
|
6/24/2020
|
6/23/2020
|
—
|
|
—
|
|
—
|
|
|
2,342
|
|
4,684
|
|
11,710
|
|
—
|
|
—
|
|
—
|
|
1,237,372
|
|
Mod. PSU(9)
|
6/23/2020
|
6/23/2020
|
—
|
|
—
|
|
—
|
|
|
3,557
|
|
7,113
|
|
14,226
|
|
—
|
|
—
|
|
—
|
|
766,639
|
|
Mod. PSU(10)
|
6/23/2020
|
6/23/2020
|
—
|
|
—
|
|
—
|
|
|
2,111
|
|
4,221
|
|
8,442
|
|
—
|
|
—
|
|
—
|
|
63,568
|
|
NQ(11)
|
3/16/2020
|
3/2/2020
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
7,401
|
$
|
109.66
|
|
260,012
|
|
(1)All equity awards are granted under the 2019 Equity and Incentive Plan, except that the modification of outstanding PSU awards granted on March 20, 2019 was made under the 2010 Equity and Incentive Plan.
(2)These columns reflect the threshold, target and maximum cash awards payable to our NEOs under the 2020 STIP. The final award is determined based on both corporate and business unit performance, as well as individual performance achievement, each evaluated against pre-defined goals, as determined by the Leadership Development and Compensation Committee. If performance falls below the pre-established thresholds, the payout is $0. The actual STIP payout for fiscal year 2020, for each NEO, is reported in the Summary Compensation Table. For further details, please see the Compensation Discussion and Analysis section titled Short-Term Incentive Plan.
(3)Represents the grant date fair value of RSU, PSU and stock option awards determined in accordance with FASB ASC Topic 718.
(4)RSUs granted on March16, 2020 vest over 3 years at a rate of one third of the total award per year beginning on the first anniversary of the grant date. The grant date fair value is calculated using the closing price of WEX common stock on the date of grant on the New York Stock Exchange.
(5)RSUs granted on June 24, 2020 vest over 3 years at a rate of one half of the total award on the second anniversary of the grant date and one half of the total award on the third anniversary of the grant date. The grant date fair value is calculated using the closing price of WEX common stock on the date of grant on the New York Stock Exchange.
(6)PSUs granted on March 16, 2020 under the 2020 LTIP to our NEOs could have been earned, prior to the modification of the PSU award in June 2020 described in footnote 9 below, based on the achievement of predetermined performance goals for the Company’s Adjusted Net Income Earnings Per Share and Compensation Revenue over 2020, 2021 and 2022. If earned such units would vest in full on the third anniversary of the grant date. The grant date fair value shown reflects the target outcome of the performance conditions, based on the probable outcome of performance goals at grant, excluding the effect of estimated forfeitures.
(7)PSUs granted on June 24, 2020 under the 2020 LTIP to our NEOs may be earned and cliff vest on the third anniversary of the grant date based on the payout factor that corresponds with the Company’s relative total shareholder return percentile rank relative to the other companies in the S&P 400 index. The maximum payout opportunity is 250% of the target award units if the Company's percentile rank is at least in the 90th percentile. The threshold payout opportunity is 50% of the target award units if the Company's percentile rank at least exceeds the 30th percentile. The target payout opportunity is 100% of the target award units if the Company's percentile ranks between the 51st and 60th percentile.
(8)The grant date fair value for the relative total shareholder return PSUs was determined using a Monte Carlo simulation and was based on a price of $240.55 per share for Ms. Smith, and $264.17 for other NEOs, which compares to a grant date closing WEX stock price on the New York Stock Exchange of $160.14. For Ms. Smith only, earned and vested PSUs are subject to a restriction on transfer (post-vest holding requirement) for a period of 12 months following issuance, as further described in the related award agreement.
(9)This does not reflect a new equity grant made in 2020. The amount in the Grant Date Fair Value of Stock and Option Awards column represents the incremental fair value related to the modification in June 2020 of the outstanding PSU awards granted on March 16, 2020. Such incremental fair value
was determined using a Monte Carlo simulation, given the new relative total shareholder return performance metric, and was based on a price of $280.93 per share, which compares to a modification date closing WEX stock price on the New York Stock Exchange of $173.15. For more details on the modification of the March 2020 PSU awards, see Compensation Discussion and Analysis above, section 2020 LTIP.
(10)This does not reflect a new equity grant made in 2020. The amount in the Grant Date Fair Value of Stock and Option Awards column represents the incremental fair value related to the modification in June 2020 of the outstanding PSU awards granted on March 20, 2019 under the 2010 Equity and Incentive Plan. The incremental fair value was determined using a Monte Carlo simulation, given the new relative total shareholder return performance metric (modifier), and was based on a price of $188.21 per share, which compares to a modification date closing WEX stock price on the New York Stock Exchange of $173.15. For more details on the modification of the 2019 PSU awards, see Compensation Discussion and Analysis above, section 2019 LTIP.
(11)Non-qualified stock options granted to NEOs on March 16, 2020 vest over 3 years at a rate of one third of the total award per year beginning on the first anniversary of the grant date. The number of such stock options received by each NEO, and the grant date fair value, was calculated using the Black-Scholes value as of the grant date, calculated in accordance with FASB ASC Topic 718. The weighted average assumptions used in calculating the grant date fair value of these awards are described in a footnote to the Summary Compensation Table.
(12)This does not reflect a new equity grant made in 2020. The amount in the Grant Date Fair Value of Stock and Option Awards column represents the incremental fair value related to the modification in June 2020 of the outstanding PSU awards granted to Mr. Deshaies on September 16, 2019 related to his promotion to President, Health. The incremental fair value was determined using a Monte Carlo simulation, given the new relative total shareholder return performance metric (modifier), and was based on a price of $188.21 per share, which compares to a modification date closing WEX stock price on the New York Stock Exchange of $173.15. For more details on the modification of the 2019 PSU awards, see Compensation Discussion and Analysis above, section 2019 LTIP.
Outstanding Equity Awards at 2020 Fiscal Year-End
The following table represents stock options and unvested stock units held by each of the named executive officers as of December 31, 2020.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Stock Awards
|
Name
|
Option
Grant Date
|
Number of
Securities
Underlying
Unexercised
Options - (#)
Exercisable
|
Number of
Securities
Underlying
Unexercised
Options - (#)
Unexercisable(1)
|
Equity
Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#)(2)
|
Option
Exercise
Price
($)
|
Option
Expiration
Date
|
|
Number
of Shares
or Units
of Stock
That Have
Not
Vested
(#)(3)
|
Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
($)(4)
|
Equity
Incentive
Plan Awards:
Number of
Unearned
Shares,
Units or
Other
Rights That
Have Not
Vested
(#)(5)
|
Equity
Incentive
Plan Awards
Market or
Payout
Value of
Unearned
Shares, Units
or Other
Rights That
Have Not
Vested
($)(6)
|
Melissa Smith
|
3/15/2015
|
13,000
|
—
|
|
—
|
|
103.75
|
3/15/2025
|
|
21,206
|
4,316,057
|
|
193,083
|
39,298,081
|
3/20/2017
|
23,187
|
—
|
|
—
|
|
104.95
|
3/20/2027
|
|
—
|
|
—
|
|
—
|
|
—
|
|
5/10/2017
|
130,704
|
|
43,568
|
|
99.69
|
5/10/2027
|
|
—
|
|
—
|
|
—
|
|
—
|
|
3/15/2018
|
11,691
|
5,864
|
—
|
|
158.23
|
3/15/2028
|
|
—
|
|
—
|
|
—
|
|
—
|
|
3/20/2019
|
6,571
|
13,162
|
—
|
|
184.81
|
3/20/2029
|
|
—
|
|
—
|
|
—
|
|
—
|
|
3/16/2020
|
—
|
|
42,696
|
—
|
|
109.66
|
3/16/2030
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Roberto Simon
|
3/20/2017
|
7,869
|
—
|
|
—
|
|
104.95
|
3/20/2027
|
|
8,383
|
1,706,192
|
|
64,522
|
13,132,061
|
5/10/2017
|
21,784
|
|
|
21,784
|
|
99.69
|
5/10/2027
|
|
—
|
|
—
|
|
—
|
|
—
|
|
3/15/2018
|
3,247
|
1,629
|
—
|
|
158.23
|
3/15/2028
|
|
—
|
|
—
|
|
—
|
|
—
|
|
3/20/2019
|
1,714
|
|
3,434
|
—
|
|
184.81
|
3/20/2029
|
|
—
|
|
—
|
|
—
|
|
—
|
|
3/16/2020
|
—
|
|
11,386
|
—
|
|
109.66
|
3/16/2030
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Scott Phillips
|
3/20/2017
|
5,621
|
—
|
|
—
|
|
104.95
|
3/20/2027
|
|
7,295
|
1,484,751
|
|
57,079
|
11,617,289
|
5/10/2017
|
52,281
|
|
|
17,427
|
|
99.69
|
5/10/2027
|
|
—
|
|
—
|
|
—
|
|
—
|
|
3/15/2018
|
3,247
|
1,629
|
—
|
|
158.23
|
3/15/2028
|
|
—
|
|
—
|
|
—
|
|
—
|
|
3/20/2019
|
1,600
|
|
3,205
|
—
|
|
184.81
|
3/20/2029
|
|
—
|
|
—
|
|
—
|
|
—
|
|
3/16/2020
|
—
|
|
9,678
|
—
|
|
109.66
|
3/16/2030
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Robert Deshaies
|
3/15/2016
|
1,032
|
—
|
|
—
|
|
77.20
|
3/15/2026
|
|
5,664
|
1,152,794
|
|
36,511
|
7,430,982
|
3/20/2017
|
843
|
—
|
|
—
|
|
104.95
|
3/20/2027
|
|
—
|
|
—
|
|
—
|
|
—
|
|
3/15/2018
|
389
|
196
|
—
|
|
158.23
|
3/15/2028
|
|
—
|
|
—
|
|
—
|
|
—
|
|
3/20/2019
|
200
|
|
401
|
—
|
|
184.81
|
3/20/2029
|
|
—
|
|
—
|
|
—
|
|
—
|
|
3/16/2020
|
—
|
|
6,832
|
—
|
|
109.66
|
3/16/2030
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Joel Dearborn
|
3/20/2017
|
843
|
—
|
|
—
|
|
104.95
|
3/20/2027
|
|
5,105
|
1,039,021
|
|
38,548
|
7,845,674
|
3/15/2018
|
1,428
|
717
|
—
|
|
158.23
|
3/15/2028
|
|
—
|
|
—
|
|
—
|
|
—
|
|
3/20/2019
|
1,485
|
|
2,977
|
—
|
|
184.81
|
3/20/2029
|
|
—
|
|
—
|
|
—
|
|
—
|
|
3/16/2020
|
—
|
|
7,401
|
—
|
|
109.66
|
3/16/2030
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(1)Vests at a rate of one third of the total award on each of the first, second and third anniversary of the grant date.
(2)Vests upon the attainment of specified stock price hurdles beginning on the third anniversary of the grant, being May 10, 2020, and ending on the fifth anniversary of the grant, being May 10, 2022. The stock price hurdles are as follows: (a) 50% of the total award vests if the closing stock price is at least $149.53 for 20 consecutive trading days during the two year period beginning May 10, 2020; (b) additional 25% of the total award vests if the closing stock price is at least $174.45 for 20 consecutive trading days during the two year period beginning May 10, 2020; and, (c) the final 25% of the total award vests if the closing stock price is at least $199.38 for 20 consecutive trading days during the two year period beginning May 10, 2020, in each instance so long as the recipient remains employed with the Company.
(3)The following table shows the number of RSUs, by grant date, which had not yet vested as of December 31, 2020:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
Annual Grant
RSUs
March 15, 2018
(#)
|
|
Annual Grant
RSUs March 20,
2019 (#)
|
Promotion
Related RSUs
September 16,
2019 (#)
|
Annual Grant
RSUs March
16, 2020 (#)
|
RSU portion of
Business
Continuity and
Outperformance
Grant June 24,
2020 (#)
|
Total
(#)
|
Melissa Smith
|
1,140
|
|
2,491
|
—
|
|
8,208
|
|
9,367
|
|
21,206
|
Roberto Simon
|
528
|
|
1,084
|
—
|
|
3,648
|
|
3,123
|
|
8,383
|
Scott Phillips
|
528
|
|
1,012
|
—
|
|
3,101
|
|
2,654
|
|
7,295
|
Robert Deshaies
|
64
|
|
127
|
1,410
|
2,189
|
1,874
|
5,664
|
Joel Dearborn
|
233
|
|
939
|
—
|
|
2,371
|
|
1,562
|
|
5,105
|
|
|
|
|
|
|
Grant Date
|
Stock Award Vesting Schedule
|
March 15, 2018
|
Annual Grant RSUs vests at a rate of one third of the total award per year beginning on the first anniversary of the grant date.
|
|
|
March 20, 2019
|
Annual Grant RSUs vests at a rate of one third of the total award per year beginning on the first anniversary of the grant date.
|
September 16, 2019
|
Mr. Deshaies' promotion related RSUs vest in full on the third anniversary of the grant date.
|
March 16, 2020
|
Annual Grant RSUs vests at a rate of one third of the total award per year beginning on the first anniversary of the grant date.
|
June 24, 2020
|
The Business Continuity and Outperformance Grant vests 50% on the second anniversary of the grant date and 50% on the third anniversary of the grant date.
|
(4)Reflects the value as calculated based on the closing price of the Company’s common stock ($203.53) on December 31, 2020.
(5)These amounts represent the number of PSUs granted assuming maximum performance conditions are met. The following table shows the PSUs, by grant date, where achievement of the performance conditions have not yet been determined as of December 31, 2020:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Annual
Grant PSUs
March 15, 2018
(#)
|
|
Special
Incentive
PSU Grant
December 17,
2018
(#)
|
Annual
Grant PSUs
March 20,
2019 , as
modified on
June 23, 2020
(#)
|
Promotion
Related
PSUs
September 16,
2019, as modified on June 23, 2020
(#)
|
Annual Grant
PSUs March 16,
2020, as
modified on
June 23, 2020
(#) (a)
|
PSU portion of
Business
Continuity and
Outperformance
Grant
June 24, 2020
(#)
|
Total
(#)
|
Melissa Smith
|
|
27,302
|
|
—
|
|
29,870
|
—
|
|
65,658
|
70,253
|
193,083
|
Roberto Simon
|
|
9,478
|
|
—
|
|
9,740
|
—
|
|
21,886
|
23,418
|
64,522
|
Scott Phillips
|
|
9,478
|
|
—
|
|
9,092
|
—
|
|
18,604
|
19,905
|
57,079
|
Robert Deshaies
|
|
1,136
|
|
4,232
|
1,138
|
2,820
|
13,132
|
14,053
|
36,511
|
Joel Dearborn
|
|
4,170
|
|
—
|
|
8,442
|
—
|
|
14,226
|
11,710
|
38,548
|
|
|
|
|
|
|
Grant Date
|
Stock Award Vesting Schedule (Assuming Performance Conditions are Met)
|
|
|
March 15, 2018
|
Vests in full on the third anniversary of the grant date.
|
|
|
December 17, 2018
|
Vests in full on March 15, 2022.
|
March 20, 2019
|
Vests in full on the third anniversary of the grant date.
|
September 16, 2019
|
Vests in full on March 20, 2022.
|
March 16, 2020
|
Vests in full on March 16, 2023
|
June 24, 2020
|
Vests in full on June 23, 2023
|
(6)Value as calculated based on the closing price of the Company’s common stock ($203.53) on December 31, 2020 assuming maximum performance conditions are met.
2020 Option Exercises and Stock Vested
The following table represents stock options exercised and shares of our common stock received upon vesting of RSUs and PSUs in 2020 by each of the named executive officers.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Stock Awards
|
Name
|
Number of Shares
Acquired on
Exercise
(#)
|
Value
Realized Upon
Exercise
($)
|
|
Number of Shares
Acquired on
Vesting
(#)
|
Value
Realized
on Vesting
($)
|
Melissa Smith
|
16,112
|
2,286,132
|
|
41,687
|
4,225,832
|
Roberto Simon
|
43,568
|
3,497,760
|
|
17,963
|
1,822,191
|
Scott Phillips
|
—
|
|
—
|
|
13,101
|
1,333,949
|
Robert Deshaies
|
—
|
|
—
|
|
1,936
|
196,611
|
Joel Dearborn
|
—
|
|
—
|
|
2,509
|
260,011
|
2020 Non-Qualified Deferred Compensation
The following table represents the amounts deferred by each of the named executive officers in the: 2005 EDCP; 2017 EDCP; and the SERP. The SERP, which was frozen to new contributions on December 31, 2004, the 2005 EDCP, which was frozen to new contributions on December 31, 2017, and the 2017 EDCP are described in the Nonqualified Deferred Compensation section of the CD&A.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
Plan
|
Executive
Contributions
in Last FY
($)(1)
|
Registrant
Contributions
in Last FY
($)(2)
|
Aggregate
Earnings
in Last FY
($)(3)
|
Aggregate
Withdrawals/
Distributions
($)
|
Aggregate
Balance
at Last FYE
($)(5)
|
Melissa Smith
|
SERP
|
—
|
|
—
|
|
25,825
|
—
|
|
172,322(4)
|
2005 EDCP
|
—
|
|
—
|
|
142,409
|
—
|
|
865,160
|
2017 EDCP
|
124,278
|
74,567
|
142,170
|
—
|
|
808,344
|
Roberto Simon
|
2005 EDCP
|
—
|
|
—
|
|
-17,302
|
—
|
|
430,041
|
2017 EDCP
|
153,117
|
36,748
|
-8,575
|
—
|
|
444,490
|
Scott Phillips
|
2005 EDCP
|
—
|
|
—
|
|
31,899
|
—
|
|
82,920
|
2017 EDCP
|
69,896
|
27,959
|
40,548
|
—
|
|
257,914
|
Robert Deshaies
|
2005 EDCP
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2017 EDCP
|
—
|
|
—
|
|
2,846
|
—
|
|
54,183
|
Joel Dearborn
|
2005 EDCP
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2017 EDCP
|
17,460
|
17,460
|
34,079
|
—
|
|
150,831
|
(1)The amounts shown in this column have been reported in Salary and/or Non-Equity Incentive Plan Compensation of the Summary Compensation Table for 2020.
(2)Participant contributions to the 2017 EDCP are matched on annual short term incentive program payments only. WEX matches the executives’ short-term incentive deferral up to a maximum of 6% of their total short term incentive program award. The amounts shown in this column have been reported in the All Other Compensation column of the Summary Compensation Table for 2020.
(3)Earnings on the SERP are included in the Summary Compensation Table. The Company does not pay above-market interest rates on the 2005 EDCP and 2017 EDCP, and thus earnings on the 2005 EDCP and 2017 EDCP are not included in the Summary Compensation Table.
(4)Includes the earnings and balance on December 31, 2020 of the SERP, which is explained in the Nonqualified Deferred Compensation Section of the CD&A.
(5)Portions of the amounts shown in this column have been reported in the Salary, Non-Equity Incentive Plan Compensation and All Other Compensation columns of the Summary Compensation Table in previous years, to the extent these officers were NEOs in previous years, as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
Salary
|
Non-Equity
Incentive Plan
Compensation
|
All Other
Compensation
|
Total
|
Melissa Smith
|
$
|
36,481
|
|
$
|
776,445
|
|
$
|
502,309
|
|
$
|
1,315,235
|
|
Roberto Simon
|
$
|
—
|
|
$
|
722,871
|
|
$
|
142,430
|
|
$
|
865,301
|
|
Scott Phillips
|
$
|
—
|
|
$
|
169,194
|
|
$
|
87,537
|
|
$
|
256,731
|
|
Robert Deshaies
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
Joel Dearborn
|
$
|
—
|
|
$
|
56,434
|
|
$
|
34,485
|
|
$
|
90,919
|
|
During the year ended December 31, 2020, participants were given the opportunity to select among various funds in the SERP, 2005 EDCP and 2017 EDCP. The table below shows the funds available to participants and their annual rate of return for the year ended December 31, 2020. The investment alternatives in the 2005 and 2017 EDCPs are the same as those available under our 401(k) plan with the exception of the iShares S&P 500 Index Fund, Vanguard Extended Market Index Fund and Retirement Services Money Fund. The comparable funds used in the 401(k) are the Northern Trust S&P 500, Northern Trust Extended Equity Market Index Fund and Wells Fargo Stable Return Fund, respectively.
|
|
|
|
|
|
SERP
|
2020 Rate of Return
|
Fidelity VIP Government Money Market
|
-0.10
|
%
|
Principal Global Investors Core Plus Bond
|
9.09
|
%
|
Principal Global Investors Diversified Balanced
|
12.48
|
%
|
Principal Global Investors Diversified International
|
|
Principal Global Investors MidCap
|
17.84
|
%
|
Principal Government & High Quality Bond
|
2.44
|
%
|
Principal Global Investors Equity Income Account
|
5.99
|
%
|
T. Rowe Price LargeCap Growth
|
35.63
|
%
|
|
|
|
|
|
|
2005 EDCP and 2017 EDCP
|
|
MFS Mid Cap Value Fund R6
|
4.40
|
%
|
Deutsche Real Estate Securities Fund (A)
|
-4.74
|
%
|
American EuroPacific Growth Fund (R-4)
|
25.27
|
%
|
Fidelity 500 Index Fund
|
18.40
|
%
|
MFS Value Fund CL R4
|
3.91
|
%
|
Invesco Developing Markets Fund R6
|
17.66
|
%
|
PRIMECAP Odyssey Stock Fund
|
9.97
|
%
|
Principal High Yield Fund CL R6
|
6.49
|
%
|
MainStay Winslow Large Cap Growth Fund R6
|
37.44
|
%
|
AllianceBernstein Discovery Value Fund
|
3.45
|
%
|
Fidelity Total International Index Fund
|
11.07
|
%
|
Fidelity Extended Market Index Fund
|
32.16
|
%
|
Wells Fargo Discovery Fund
|
62.52
|
%
|
Metropolitan West Total Return Bond Fund
|
9.17
|
%
|
T. Rowe Price Retirement Balance Inv
|
11.66
|
%
|
T. Rowe Price 2005 Retirement
|
11.51
|
%
|
T. Rowe Price 2010 Retirement
|
12.06
|
%
|
T. Rowe Price 2015 Retirement
|
12.81
|
%
|
T. Rowe Price 2020 Retirement
|
13.31
|
%
|
T. Rowe Price 2025 Retirement
|
14.62
|
%
|
T. Rowe Price 2030 Retirement
|
15.92
|
%
|
T. Rowe Price 2035 Retirement
|
17.04
|
%
|
T. Rowe Price 2040 Retirement
|
18.16
|
%
|
T. Rowe Price 2045 Retirement
|
18.72
|
%
|
T. Rowe Price 2050 Retirement
|
18.72
|
%
|
T. Rowe Price 2055 Retirement
|
18.68
|
%
|
T. Rowe Price 2060 Retirement
|
18.79
|
%
|
Fidelity US Bond Index Fund
|
7.80
|
%
|
Vanguard Federal Money Mkt Inv
|
0.45
|
%
|
Employment Agreements, Severance and Change in Control Benefits
The Company provides employment agreements, severance benefits and change of control benefits to attract and retain key executive officers. In the event, or threat, of a change in control transaction, these agreements and the WEX Inc. Executive Severance Pay and Change in Control Plan are intended to reduce uncertainty and provide compensation for the significant levels of executive engagement and support required during an ownership transition that results in the termination of a key executive officer's employment. These provisions represent competitive severance and change in control benefits based upon the review by the Committee.
The Committee reviews these agreements and the WEX Inc. Executive Severance Pay and Change in Control Plan periodically to assess whether the total value to an executive remains at the level needed to attract and retain executives without being considered excessive in the opinion of the Committee.
The following provisions are in effect as of December 31, 2020:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Melissa Smith
|
Roberto Simon
|
Joel Dearborn
|
Robert Deshaies
|
Scott Phillips
|
Basic Severance Benefit(1)
|
Severance Payment
|
1.5x base salary plus 1x target bonus each paid in a lump sum or over 12 months at the Company’s election
|
1.5x base salary paid over an 18-month period plus pro rata portion of bonus in a lump sum
|
1.5x base salary paid over an 18-month period
|
1.5x base salary paid over an 18-month period plus pro rata portion of bonus payable in a lump sum
|
|
Accelerated Vesting of Equity
|
1 year
|
None
|
|
Health Benefit Continuation
|
One-time lump-sum cash payment equal to 12 x the value of the Company’s monthly share of the cost of coverage (i.e., premiums) for participant’s group health coverage benefits.
|
Payment of 100% of the premium, including any additional administration fee, until the shorter of 12 months following termination date or the day COBRA eligibility ends.
|
Change in Control (CiC)(2) Severance Benefit
Double Trigger: (requires CiC and loss of comparable position)
|
Severance Payment
|
2x base salary and 2x target bonus paid over a 24 month period
|
|
Accelerated Vesting of Equity
|
100% (other than performance options which vest only if CiC price exceeds performance thresholds)
|
100%(3)
|
Health Benefit Continuation
|
One-time lump-sum cash payment equal to 24 times the value of the Company’s monthly share of the cost of coverage (i.e., premiums) for Participant’s group health coverage benefits.
|
Other Agreements(4)
|
Non-Compete(5)
|
2 years for without cause termination and constructive discharge with CiC; 1 year otherwise
|
1 year
|
2 years
|
Non-Solicitation(6)
|
Non-Disparagement(7)
|
Non-Disclosure(8)
|
Indefinitely
|
(1)Basic severance benefit is payable in the case of the executive officer resigning for “good reason” or if the executive officer is terminated “without cause,” each as defined in the WEX Inc. Executive Severance Pay and Change in Control Plan.
(2)“Change in Control” means, in summary: (i) an acquisition of 50 percent or more of either the then-outstanding shares of common stock or the combined voting power of the then-outstanding voting securities of the Company excluding certain specified acquisitions; (ii) a change in the composition of the Board such that the individuals who constitute the Board at that point in time cease to constitute a majority of the Board; (iii) consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company or the acquisition of shares or assets of another company excluding certain specified transactions; or (iv) the approval by the stockholders of the Company of a complete liquidation or dissolution of the Company. If an executive terminates and receives benefits under the 2010 Equity and Incentive Plan or the 2019 Equity and Incentive Plan, and then is rehired, subsequent benefits may not be paid and/or reimbursement of a portion of benefits already paid can be required.
(3)Upon a “Change in Control” of the Company, if the surviving entity does not agree to assume the obligations set forth in the equity award agreement, then the equity award shall become immediately and fully vested, subject to any terms and conditions set forth in the 2010 Equity and Incentive Plan or the 2019 Equity and Incentive Plan or imposed by the Committee.
(4)In connection with any separation of employment by an executive officer, the officer shall execute and not timely revoke a separation agreement and release, in a form acceptable to the Company, in order to receive the basic severance and/or change in control severance benefits described. Each separation agreement shall include terms relating to non-competition, non-solicitation, non-disparagement and non-disclosure, as well as a release of claims. To the extent there is a violation of the restrictions or obligations in the separation agreement, the Company may cease future payments, obtain injunctive or other equitable relief or seek reimbursement of previously paid amounts, as well as any other remedies available to the Company under the WEX Inc. Executive Severance Pay and Change in Control Plan or applicable law.
(5)Each of the executive officers has agreed to provisions which restrict the executive officer from performing any acts which advance the interests of any existing or prospective competitors of WEX during the period specified above.
(6)Each of the executive officers has agreed to provisions which restrict the executive officer from soliciting customers or employees to terminate their relationship with the Company.
(7)Each of the executive officers has agreed to provisions which restrict the executive officer from making any statements or performing any acts intended or reasonably calculated to advance the interest of any existing or prospective competitor or in any way to injure the interests of or disparage the Company.
(8)Each of the executive officers has agreed to provisions which restrict the executive from disclosing confidential information as defined in the agreement.
Potential Payments upon Termination of Employment
The following chart shows the payments to each named executive officer which would be made as a result of possible termination scenarios assuming each had occurred on December 31, 2020.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Named Executive Officer
|
Voluntary
Termination
or Involuntary
Termination
For Cause
($)
|
Involuntary
Termination
Without Cause or
Resignation
for Good Reason
($)
|
Change in
Control With
Termination
($)
|
Disability
($)(1)
|
Death
($)(1)
|
Melissa Smith
|
|
|
|
|
|
Acceleration of Equity Awards(2)
|
—
|
$10,066,947
|
|
$31,579,255
|
|
—
|
$31,579,255
|
|
Salary and Benefits Continuation
|
—
|
$1,180,556
|
|
$1,591,113
|
|
—
|
—
|
Short Term Incentive Program
|
—
|
$1,155,000
|
|
$2,310,000
|
|
$1,155,000
|
|
$1,155,000
|
|
Non-Qualified Plan Payout(3)
|
$1,845,826
|
|
$1,845,826
|
|
$1,845,826
|
|
$1,845,826
|
|
$1,845,826
|
|
Total
|
$1,845,826
|
|
$14,248,329
|
|
$37,326,194
|
|
$3,000,826
|
|
$34,580,081
|
|
Roberto Simon
|
|
|
|
|
|
Acceleration of Equity Awards(2)
|
—
|
—
|
$11,264,539
|
|
—
|
$11,264,539
|
|
Salary and Benefits Continuation
|
—
|
$848,596
|
|
$1,147,193
|
|
—
|
—
|
Short Term Incentive Program
|
—
|
$550,000
|
|
$1,100,000
|
|
$550,000
|
|
$550,000
|
|
Non-Qualified Plan Payout(3)
|
$874,531
|
|
$874,531
|
|
$874,531
|
|
$874,531
|
|
$874,531
|
|
Total
|
$874,531
|
|
$2,273,127
|
|
$14,386,263
|
|
$1,424,531
|
|
$12,689,070
|
|
Scott Phillips
|
|
|
|
|
|
Acceleration of Equity Awards(2)
|
—
|
—
|
$9,740,154
|
|
—
|
$9,740,154
|
|
Salary and Benefits Continuation
|
—
|
$738,742
|
|
$1,002,485
|
|
—
|
—
|
Short Term Incentive Program
|
—
|
$427,500
|
|
$855,000
|
|
$427,500
|
|
$427,500
|
|
Non-Qualified Plan Payout(3)
|
$340,833
|
|
$340,833
|
|
$340,833
|
|
$340,833
|
|
$340,833
|
|
Total
|
$340,833
|
|
$1,507,075
|
|
$11,938,472
|
|
$768,333
|
|
$10,508,487
|
|
Robert Deshaies
|
|
|
|
|
|
Acceleration of Equity Awards(2)
|
—
|
—
|
$5,239,980
|
|
—
|
$5,239,980
|
|
Salary and Benefits Continuation
|
—
|
$657,150
|
|
$889,300
|
|
—
|
—
|
Short Term Incentive Program
|
—
|
—
|
$637,500
|
|
$318,750
|
|
$318,750
|
|
Non-Qualified Plan Payout(3)
|
$54,183
|
|
$54,183
|
|
$54,183
|
|
$54,183
|
|
$54,183
|
|
Total
|
$54,183
|
|
$711,333
|
|
$6,820,963
|
|
$372,933
|
|
$5,612,913
|
|
Joel Dearborn
|
|
|
|
|
|
Acceleration of Equity Awards(2)
|
—
|
—
|
$5,506,466
|
|
—
|
$5,506,466
|
|
Salary and Benefits Continuation
|
—
|
$616,954
|
|
$833,909
|
|
—
|
—
|
Short Term Incentive Program
|
—
|
—
|
$600,000
|
|
$300,000
|
|
$300,000
|
|
Non-Qualified Plan Payout(3)
|
$150,831
|
|
$150,831
|
|
$150,831
|
|
$150,831
|
|
$150,831
|
|
Total
|
$150,831
|
|
$767,785
|
|
$7,091,206
|
|
$450,831
|
|
$5,957,297
|
|
(1)The Company's STIP provides for a pro-rated lump sum payment at target in the event of death or disability and the Company's LTIP provides for 100% acceleration of unvested equity similar to a Change in Control with Termination in the event of death.
(2)For purposes of these calculations, the stock price used to calculate potential payments was the closing price of the Company's common stock on December 31, 2020, which was $203.53. The officers identified above hold unvested employee stock options that feature an exercise price of $99.69, $158.23, $184.81 and $109.66.
(3)As used in this table, Non-Qualified Plan Payout consists solely of the participants’ balances in their 2005 EDCP, 2017 EDCP and SERP accounts, as applicable.
Pay Ratio Disclosure
In accordance with SEC rules, we are providing the ratio of the annual total compensation of our CEO to the annual total compensation of our median employee. For 2020, the median annual total compensation of all employees, excluding our CEO, was $57,484 and the annual total compensation of our CEO was $20,110,653. The ratio of these amounts is 350:1.
Supplemental Pay Ratio
We are also presenting a supplemental pay ratio that we believe facilitates a fulsome understanding of our CEO’s annual total compensation. The pay ratio provided above is based on our CEO’s 2020 annual total compensation, as reported in the 2020 Summary Compensation Table, which contains a special equity award (the 2020 Business Continuity and Outperformance Grant) and incremental fair value for modified 2019 and 2020 PSU awards calculated in accordance with FASB ASC Topic 718, which does not represent new PSU grants and is included to comply with SEC reporting rules.
As included in our 2020 Summary Compensation Table, the grant date fair value of the special one-time equity award for our CEO was $8,259,727 and the incremental fair value for the PSU modifications calculated in accordance with FASB ASC Topic 718 – not representative of new PSU grants – for modified 2019 and 2020 PSU awards for our CEO was $3,763,231. The cumulative value of these two amounts is approximately $12.0 million. This compares to a grant date fair value of approximately $6.0 million for Ms. Smith’s 2020 annual equity awards (i.e., PSUs, options and RSUs granted in March 2020) prior to modification, which is used in the supplemental pay ratio below.
The supplemental pay ratio presented below excludes the special equity award and the incremental fair value for the modifications. For purposes of this supplemental ratio, our CEO’s 2020 annual total compensation is $8,087,695 which, when compared to the annual total compensation of our median compensated employee of $57,484, results in a ratio of 140:1.
|
|
|
|
|
|
|
|
|
|
|
|
|
CEO Annual Total
Compensation
|
Median Employee
Annual Total
Compensation
|
Pay Ratio
|
SEC Required Calculation
|
$
|
20,110,653
|
|
$
|
57,484
|
|
350:1
|
Supplemental Pay Ratio
|
$
|
8,087,695
|
|
$
|
57,484
|
|
140:1
|
The information disclosed in this section was developed and is provided to comply with specific legal requirements. We do not use this information in managing our company. We do not believe this information provides stockholders with a useful mechanism for evaluating our management’s effectiveness, operating results, or business prospects, nor for comparing our company with any other company in any meaningful respect. For discussion of annual CEO compensation in the manner in which it was primarily considered by the Committee, please refer to the “Awarded Compensation” section of the CD&A above, which can be found on page 66 of this proxy statement.
Methodology – SEC Required Calculation
This calculation of our median employee reflects analysis of our global workforce of 4,887 employees as of October 1, 2020. We used salary compensation to determine the median employee. Our estimate of salary for our full 2020 fiscal year included: (i) annual base salary and (ii) hourly salary rate times annual standard hours. For the 2020 calculation, our employee population data described above does not include 358 employees of eNett and Optal which we acquired in December 2020, which is after the determination date.
Our estimates were based on an analysis of the pay components and payrolls in each of the countries in which we operate. Cash compensation rates of employees paid in foreign currencies were converted into US dollars using foreign exchange conversion rates in effect on October 1, 2020.
Once the median employee was identified, actual total compensation was determined in accordance with Item 402(c) (2)(x) of Regulation S-K.
|
|
|
|
|
|
|
|
|
|
|
|
Proposal 3
|
|
|
Approval of the WEX Inc. Amended and Restated 2019 Equity and Incentive Plan to Increase the Number of Shares Issuable Thereunder
|
|
|
|
|
We are asking stockholders to approve the WEX Inc. Amended and Restated 2019 Equity and Incentive Plan (the “Amended 2019 Plan”), which is an amendment and restatement of our 2019 Equity and Incentive Plan (the “Original 2019 Plan”). On March 31, 2021, upon the recommendation of the Leadership Development and Compensation Committee, and subject to stockholder approval, our Board of Directors adopted the Amended 2019 Plan as an amendment and restatement of the Original 2019 Plan in order to increase the number of shares issuable thereunder.
|
|
|
|
WEX is requesting the amendment and restatement of the Original 2019 Plan solely to increase the number of shares of our common stock available for issuance of new awards under the plan to 4.5 million shares, subject to the fungible ratio described below, pursuant to which the available share reserve is depleted by 1.7 shares for each full-value stock award granted under the plan. The share increase is intended to meet our anticipated equity compensation needs for the next four to five years.
|
|
We believe that our stock-based compensation programs have been integral to our success in the past and will be important to our ability to succeed in the future. If the Amended 2019 Plan is not approved, our ability to make long-term equity incentive awards will be impaired. Therefore, we consider approval of the Amended 2019 Plan vital to our future success.
Our Board of Directors believes adoption of the Amended 2019 Plan is in the best interests of the Company and its stockholders and unanimously recommends that you vote “FOR” the approval of the Amended 2019 Plan.
Vote Required
WEX stockholders are being asked to approve the Amended 2019 Plan at the Annual Meeting. The Approval of the Amended 2019 Plan requires the affirmative vote of a majority of the votes cast at the meeting (either in person or by proxy) on this Proposal 3.
Summary
We are asking stockholders to approve the Amended 2019 Plan. If stockholders approve the Amended 2019 Plan, subject to adjustment in the event of stock splits and other similar events and the share counting rules set forth below: (i) 4,500,000 shares of the Company’s common stock, reduced by the number of shares of the Company’s common stock subject to awards granted under the Original 2019 Plan between March 21, 2021 and the date of the Annual Meeting, will be available for the issuance of new awards under the Amended 2019 Plan after the date of the Annual Meeting, (ii) 1,235,669 shares of the Company’s common stock will be reserved for issuance in respect of awards granted under the Original 2019 Plan between May 9, 2019 and March 21, 2021, and (iii) the number of shares of the Company’s common stock as is equal to the number of shares of the Company’s common stock subject to awards granted under the Company’s 2010 Equity and Incentive Plan (the “Prior Plan”), which awards expire, terminate or are otherwise surrendered, cancelled, forfeited or repurchased by the Company pursuant to a contractual repurchase right will be made available for the issuance of awards under the Amended 2019 Plan. Our Board of Directors believes that our success depends, in large part, on our ability to attract, retain and motivate key employees. We believe that our stock-based compensation programs are central to this objective.
As of March 21, 2021, options to purchase 573,275 shares of the Company’s common stock were outstanding under the Prior Plan with a weighted-average remaining term of 6.46 years and a weighted-average exercise price of $123.33 per share, 105,595 shares of the Company’s common stock were subject to outstanding restricted stock units granted under the Prior Plan, 97,907 shares of the Company’s common stock were subject to outstanding performance restricted stock units granted under the Prior Plan (assuming target performance), and no shares of restricted stock were outstanding under the Prior Plan. As of March 21, 2021, options to purchase 366,775 shares of the Company’s common stock were outstanding under the Original 2019 Plan with a weighted-average remaining term of 9.31 years and a weighted-average exercise price of $147.34 per share, 387,019 shares of the Company’s common stock were subject to outstanding restricted stock units granted under the Original 2019 Plan, 481,875 shares of the Company’s common stock were subject to outstanding performance restricted stock units granted under the Original 2019 Plan (assuming target performance), and no shares of restricted stock were outstanding under the Original 2019 Plan.
The Amended 2019 Plan, as implemented through our equity compensation program, incorporates many current best practices that are intended to protect stockholder interests:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
What We Do
|
|
What We Don’t Do
|
•Fixed maximum share limit
•Double-trigger equity acceleration upon a change-in-control
•Equity ownership guidelines for non-employee directors and NEOs
•Separate annual compensation limit for non-employee directors
•Minimum vesting requirements
•Executive officer awards – includes NEOs – subject to clawback policy
•Administered by an independent committee comprised of non-employee directors
|
|
•No “evergreen” share reserve
•No dividends on unvested awards
•No liberal “change-in-control” definition
•No repricing of underwater stock options or stock appreciation rights (SARs) without stockholder approval
•No discounted stock options or SARs
•No liberal share recycling or counting
•No material amendments without stockholder approval
|
|
|
|
Potential Compensation Needs
We expect that the proposed share pool under the Amended 2019 Plan will allow us to continue to grant equity awards at our historic rates for approximately four to five years, but may vary based on changes in participation, potential future acquisitions by the Company and the Company’s stock price.
We believe that our stock-based compensation program has been integral to our success in the past and will be important to our ability to succeed in the future.
•If the Amended 2019 Plan is not approved, our ability to make equity incentive awards under a stockholder-approved equity incentive plan will be impaired. Therefore, we consider approval of the Amended 2019 Plan vital to our future success.
In addition, stockholder approval of the Amended 2019 Plan is necessary in order for us to continue our practice of broadly granting equity compensation throughout our organization, thereby incentivizing and retaining important employees, including our many employees beyond the executive officers.
•In fiscal year 2020, more than 70% percent of the Company’s equity awards were granted to employees other than our NEOs.
A material reduction in compensation would impair our ability to recruit, retain and motivate key employees, and would therefore threaten our business.
•We seek to deliver compensation at competitive levels, and utilizing long-term equity incentives to align the interests of our key employees to the outcomes achieved by our stockholders has been a hallmark of our compensation philosophy and supports our objective to attract and retain best-in-class talent in our industry.
Our executive compensation program and related decision-making has been strongly supported by our stockholders.
•In 2020, our advisory vote on executive compensation received 98% stockholder support.
Information Regarding Overhang and Potential Dilution
In developing our share request for the Amended 2019 Plan and analyzing the impact of utilizing equity as a means of compensation on our stockholders, we considered both our “overhang” and our “burn rate”.
Overhang is a measure of potential dilution which we define as the sum of (i) the total number of shares of the Company’s common stock underlying all equity awards outstanding and (ii) the total number of shares of the Company’s common stock available for future award grants, divided by (iii) the number of shares of the Company’s common stock outstanding. As of March 21, 2021, there were 2,012,446 shares underlying all equity awards outstanding, 1,847,162 shares available for future awards, and 43,355,663 common shares outstanding. Accordingly, our overhang at March 21, 2021 was 8.9%, which was between 25th percentile and median of our peer group. For purposes of this calculation, we counted the shares subject to our performance restricted stock units based on the target number of shares of common stock issuable under such awards. If the Amended 2019 Plan had been approved as of March 21, 2021, our overhang on such date would have been 15.0%. Historically, however, WEX has granted approximately 70% of equity awards in the form of full-value awards and approximately 30% of equity awards in the form of stock options. Applying the fungible share ratio applicable to full-value awards under the Original 2019 Plan and the Amended 2019 Plan pursuant to which each full-value equity award reduces the shares available under the plan by 1.7 shares, and, assuming our historic grant practices continue, the Amended 2019 Plan would have resulted in an overhang on March 21, 2021 of 12.0% which would place us, approximately, in the 75th percentile of our peer group.
Burn rate provides a measure of the potential dilutive impact of our equity awards program, which we calculate by dividing the number of shares subject to equity awards granted during the year by the basic weighted average number of shares outstanding. Set forth below is a table that reflects our burn rate for the 2020, 2019 and 2018 calendar years as well as an average over those years.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calendar Year
|
|
Awards Granted
(000s)
|
|
Basic Weighted Average Number of
Common Shares Outstanding (000s)
|
|
Gross Burn
Rate(1)
|
2020
|
|
914
|
|
43,842
|
|
2.1%
|
2019
|
|
397
|
|
43,316
|
|
0.9%
|
2018
|
|
317
|
|
43,156
|
|
0.7%
|
Three-Year Average
|
|
|
|
|
|
1.2%
|
(1)We define "Gross burn rate" as the number of equity awards granted in the year divided by the basic weighted average number of common shares outstanding. For purposes of this calculation, we counted the shares subject to our performance restricted stock units based on the target number of shares of common stock issuable under such awards.
As shown in the following table, the Company’s three-year average burn rate was 2.1% on an adjusted basis, which is significantly below the Institutional Shareholder Services, or ISS, benchmark applied to our industry. This alternative burn rate calculation converts full-value awards to option equivalents using a conversion factor of 2.0, per ISS methodology.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calendar Year
|
|
Awards Granted
(000s)(1)
|
|
Basic Weighted Average Number of
Common Shares Outstanding (000s)
|
|
Adjusted Burn
Rate(2)
|
2020
|
|
1,566
|
|
43,842
|
|
3.6%
|
2019
|
|
670
|
|
43,316
|
|
1.5%
|
2018
|
|
533
|
|
43,156
|
|
1.2%
|
Three-Year Average
|
|
|
|
|
|
2.1%
|
(1)Full-value awards were converted to option equivalents using a conversion factor of 2.0, per ISS methodology.
(2)Calculated by dividing the basic weighted average number of common shares outstanding by the total granted on an adjusted basis, as described above.
Description of the Amended 2019 Plan
The following is a brief summary of the Amended 2019 Plan, a copy of which is attached as Appendix B to this proxy statement. References to our Board of Directors in this summary shall include the Leadership Development and Compensation Committee or any similar committee appointed by our Board of Directors to administer the Amended 2019 Plan.
Types of Awards; Shares Available for Awards; Share Counting Rules
The Amended 2019 Plan provides for the grant of stock options intended to qualify as incentive stock options under Section 422 of the Internal Revenue Code of 1986, as amended, or the Code, as well as nonstatutory stock options, SARs, restricted stock, restricted stock units, other stock-based awards and cash awards as described below, which we collectively refer to as awards.
Subject to adjustment in the event of stock splits, stock dividends or similar events and the share counting rules set forth below, the following number of shares of Company common stock are available for issuance under the Amended 2019 Plan: (i) 4,500,000 shares of our common stock, reduced by the number of shares of our common stock subject to awards granted under the Original 2019 Plan between March 21, 2021 and the date of the Annual Meeting, are available for the issuance of new awards under the Amended 2019 Plan after June 4, 2021, (ii) 1,235,669 shares of our common stock are reserved for issuance in respect of awards granted under the Original 2019 Plan between May 9, 2019 and March 21, 2021, and (iii) the number of shares of the Company’s common stock (up to 776,777 shares) as is equal to the number of shares of the Company’s common stock subject to awards granted under the Prior Plan, which awards expire, terminate or are otherwise surrendered, cancelled, forfeited or repurchased by the Company pursuant to a contractual repurchase right. In the case of incentive stock options, the foregoing is subject to any limitations under the Code. Any or all of the awards made under the Amended 2019 Plan may be in the form of incentive stock options. The Amended 2019 Plan provides that to the extent a share that is subject to an award granted under the Prior Plan that counted as 1.53 shares against the Prior Plan’s share reserve is made available for the award of future grants under the Amended 2019 Plan, the share reserve of the Amended 2019 Plan will be credited with 1.53 shares. Otherwise, each share of common stock subject to an award under the Prior Plan that becomes available for grant under the Amended 2019 Plan will increase the Amended 2019 Plan’s share reserve by one share.
The Amended 2019 Plan includes “fungible share” counting rules pursuant to which each share of the Company’s common stock subject to awards granted as options and SARs causes one share of the Company’s common stock per share under the award to be removed from the available share pool, while each share of the Company’s common stock subject to awards granted as restricted stock, restricted stock units, or other stock-based awards where the per share purchase price for the award is less than 100% of the fair market value of the Company’s common stock on the date of grant of the award will cause 1.7 shares of the Company’s common stock per share under the award to be removed from the available share pool. Shares of the Company’s common stock covered by awards under the Amended 2019 Plan that are returned to the Amended 2019 Plan as described below and become available for issuance pursuant to a new award will be credited back to the pool at the same rates described above.
The maximum number of shares with respect to which awards may be granted to any participant under the Amended 2019 Plan may not exceed 1,000,000 shares per calendar year for awards issued in the form of options or SARs and 1,000,000 shares per calendar year for awards granted in the form of restricted stock awards, restricted stock unit awards or other stock-based awards. For purposes of this limit, the combination of an option in tandem with an SAR is treated as a single award. Performance awards in the form of cash-based awards may also provide for cash payments of up to $10,000,000 per calendar year per participant.
The Amended 2019 Plan provides that the maximum amount of cash and equity compensation (calculated based on grant date fair value for financial reporting purposes) granted to any individual non-employee director in any calendar year may not exceed $750,000. Exceptions to these limitations may only be made by the Leadership Development and Compensation Committee in extraordinary circumstances provided that any non-employee director receiving additional compensation does not participate in the decision to award such compensation.
For purposes of counting the number of shares available for the grant of awards under the Amended 2019 Plan and the sublimits of the Amended 2019 Plan, all shares of our common stock covered by SARs will be counted against the number of shares of our common stock available for the grant of awards and against the sublimits of the Amended 2019 Plan. However, SARs that may be settled only in cash will not be so counted. Similarly, to the extent that a restricted stock unit award may be settled only in cash, no shares will be counted against the shares available for the grant of awards under the Amended 2019 Plan. In addition, if we grant an SAR in tandem with an option for the same number of shares of our common stock and provide that only one such award may be exercised, which we refer to as a tandem SAR, only the shares covered by the option, and not the shares covered by the tandem SAR, will be so counted, and the expiration of one in connection with the other’s exercise will not restore shares to the Amended 2019 Plan.
Shares covered by awards that expire or are terminated, surrendered, or cancelled without having been fully exercised or are forfeited in whole or in part (including as the result of shares subject to such award being repurchased by us at the original issuance price pursuant to a contractual repurchase right) or that result in any shares of our common stock not being issued (including as a result of an SAR that was settleable either in cash or in stock actually being settled in cash) will again be available for the grant of awards under the Amended 2019 Plan (subject, in the case of incentive stock options, to any limitations under the Code). In the case of the exercise of an SAR, the number of shares of our common stock counted against the shares available for the grant of awards and against the sublimits of the Amended 2019 Plan will be the full number of shares of our common stock subject to the SAR multiplied by the percentage of the SAR actually exercised, regardless of the number of shares of our common stock actually used to settle the SAR upon exercise, and the shares covered by a tandem SAR will not again become available for grant upon the expiration or termination of the tandem SAR.
Shares of our common stock that are delivered (by actual delivery, attestation, or net exercise) to us by a participant to purchase shares of our common stock upon exercise of an award or to satisfy tax withholding obligations (including shares of our common stock retained from the award creating the tax obligation) will not be added back to the number of shares available for the future grant of awards under the Amended 2019 Plan. Shares of our common stock purchased by us on the open market using proceeds from the exercise of an award will not increase the number of shares available for future grant of awards.
In connection with a merger or consolidation of an entity with us or our acquisition of property or stock of an entity, our Board of Directors may grant awards under the Amended 2019 Plan in substitution for any options or other stock or stock-based awards granted by such entity or an affiliate thereof on such terms as our Board of Directors determines appropriate in the circumstances, notwithstanding any limitation on awards contained in the Amended 2019 Plan. Any such substitute awards shall not count against the overall share limits or the sublimits of the Amended 2019 Plan, except as required by reason of Section 422 and related provisions of the Code.
Descriptions of Awards
Options. Optionees receive the right to purchase a specified number of shares of common stock at a specified exercise price and subject to the other terms and conditions that are specified in connection with the option grant. An option that is not intended to be an “incentive stock option” is a “nonstatutory stock option.” Options may not be granted at an exercise price that is less than 100% of the fair market value of our common stock on the date of grant. If our Board of Directors approves the grant of an option with an exercise price to be determined on a future date, the exercise price may not be less than 100% of the fair market value of our common stock on that future date. Under present law, incentive stock options may not be granted at an exercise price less than 110% of the fair market value in the case of stock options granted to optionees holding more than 10% of the total combined voting power of all classes of our stock or any of our subsidiaries. Under the terms of the Amended 2019 Plan, options may not be granted for a term in excess of ten years (and, under present law, five years in the case of incentive stock options granted to optionees holding greater than 10% of the total combined voting power of all classes of our stock or any of our subsidiaries). The Amended 2019 Plan permits participants to pay the exercise price of options using one or more of the following manners of payment: (i) payment by cash or by check, (ii) except as may otherwise be provided in the applicable option agreement or approved by our Board of Directors, in connection with a “cashless exercise” through a broker, (iii) to the extent provided in the applicable option agreement or approved by our Board of Directors, and subject to certain conditions, by delivery of shares of common stock to us owned by the participant valued at their fair market value, (iv) to the extent provided in an applicable nonstatutory stock option agreement or approved by our Board of Directors, by delivery of a notice of “net exercise” as a result of which we will retain a number of shares of common stock otherwise issuable pursuant to the stock option equal to the aggregate exercise price for the portion of the option being exercised divided by the fair market value of our common stock on the date of exercise, (v) to the extent permitted by applicable law and provided for in the applicable option agreement or approved by our Board of Directors, by any other lawful means (but not by a promissory note of the participant), or (vi) by any combination of these forms of payment. No option granted under the Amended 2019 Plan may contain a provision entitling the participant to the automatic grant of additional options in connection with any exercise of the original option. No options granted under the Amended 2019 Plan may provide for the payment or accrual of dividend equivalents.
Stock Appreciation Rights. An SAR is an award entitling the holder, upon exercise, to receive a number of shares of our common stock or cash (or a combination of shares of our common stock and cash) determined by reference to appreciation, from and after the date of grant, in the fair market value of a share of our common stock over the measurement price. The Amended 2019 Plan provides that the measurement price of an SAR may not be less than the fair market value of our common stock on the date the SAR is granted (provided, however, that if our Board of Directors approves the grant of an SAR effective as of a future date, the measurement price shall not be less than 100% of the fair market value on such future date) and that SARs may not be granted with a term in excess of 10 years. No SARs granted under the Amended 2019 Plan may contain a provision entitling the participant to the automatic grant of additional SARs in connection with any exercise of the original SAR. No SARs granted under the Amended 2019 Plan may provide for the payment or accrual of dividend equivalents.
Limitation on Repricing of Options or SARs. With respect to options and SARs, unless such action is approved by stockholders or otherwise permitted under the terms of the Amended 2019 Plan in connection with certain changes in capitalization and reorganization events, we may not (i) amend any outstanding option or SAR granted under the Amended 2019 Plan to provide an exercise price or measurement price per share that is lower than the then-current exercise price or measurement price per share of such outstanding option or SAR, (ii) cancel any outstanding option or SAR (whether or not granted under the Amended 2019 Plan) and grant in substitution therefor new awards under the Amended 2019 Plan (other than certain substitute awards issued in connection with an acquisition by us, described above) covering the same or a different number of shares of our common stock and having an exercise price or measurement price per share lower than the then-current exercise price or measurement price per share of the canceled option or SAR, (iii) cancel in exchange for a cash payment any outstanding option or SAR with an exercise price or measurement price per share above the then-current fair market value of our common stock, or (iv) take any other action under the Amended 2019 Plan that constitutes a “repricing” within the meaning of the rules of the New York Stock Exchange, or NYSE.
Restricted Stock Awards. Restricted stock awards entitle recipients to acquire shares of our common stock, subject to our right to repurchase all or part of such shares at their issue price or other stated or formula price (or to require forfeiture of such shares if issued at no cost) in the event that the conditions specified in the applicable award are not satisfied prior to the end of the applicable restriction period established for such award. Any dividends (whether paid in cash, stock or property) declared and paid by us with respect to shares of restricted stock will be paid to the participant only if and when such shares become free from the restrictions on transferability and forfeitability that apply to such shares.
Restricted Stock Unit Awards. Restricted stock units, or RSUs, entitle the recipient to receive shares of our common stock, or cash equal to the fair market value of such shares, to be delivered at the time such award vests pursuant to the terms and conditions established by our Board of Directors. Our Board of Directors may provide that settlement of RSUs will be deferred, on a mandatory basis or at the election of the participant in a manner that complies with Section 409A of the Code. A participant has no voting rights with respect to any RSU. Our Board of Directors may provide that a grant of RSUs may provide the participant with the right to receive an amount equal to any dividends or other distributions declared and paid on an equal number of outstanding shares of our common stock. Any such dividend equivalents may be settled in cash and/or shares of our common stock and will be subject to the same restrictions on transfer and forfeitability as the RSUs with respect to which such dividend equivalents are awarded.
Other Stock-Based Awards. Under the Amended 2019 Plan, our Board of Directors may grant other awards of shares of our common stock, and other awards that are valued in whole or in part by reference to, or are otherwise based on, shares of our common stock or other property, having such terms and conditions as our Board of Directors may determine. We refer to these types of awards as other stock-based awards. Other stock-based awards may be available as a form of payment in settlement of other awards granted under the Amended 2019 Plan or as payment in lieu of compensation to which a participant is otherwise entitled. Other stock-based awards may be paid in shares of our common stock or in cash, as our Board of Directors may determine. The award agreement of an other stock-based award may provide the holder of an other stock-based award with the right to receive dividend equivalents. Dividend equivalents may be settled in cash and/or shares of our common stock and will be subject to the same restrictions on transfer and forfeitability as the other stock-based award with respect to which they are awarded.
Cash Awards. Under the Amended 2019 Plan, the Board of Directors has the right to grant cash-based awards, including awards subject to performance conditions.
Performance Conditions. Our Board of Directors may specify that the degree of granting, vesting and/or payout of any award subject to performance-based vesting conditions will be subject to the achievement of one or more of the following performance measures established by the Board of Directors, which may be based on the relative or absolute attainment of specified levels of one or any combination of the following measures (and which may be determined pursuant to generally accepted accounting principles (“GAAP”) or on a non-GAAP basis, as determined by the Board of Directors): (i) pre-tax income or after-tax income, (ii) income or earnings, including operating income, earnings before or after taxes, earnings before or after interest, depreciation, amortization or extraordinary or special items, (iii) net income excluding amortization of intangible assets, depreciation and impairment of goodwill and intangible assets and/or excluding charges attributable to the adoption of new accounting pronouncements, (iv) earnings or book value per share (basic or diluted), (v) return on assets (gross or net), return on investment, return on capital, or return on equity, (vi) return on revenues, (vii) cash flow, free cash flow, cash flow return on investment (discounted or otherwise), net cash provided by operations, or cash flow in excess of cost of capital, (viii) economic value created, (ix) operating margin or profit margin, (x) stock price or total stockholder return, (xi) income or earnings from continuing operations, (xii) sales, sales growth, earnings growth or market share, (xiii) achievement of balance sheet objectives, (xiv) cost targets, reductions and savings, expense management, productivity and efficiencies, improvement of financial ratings; (xv) strategic business criteria, consisting of one or more measures based on meeting specified employee satisfaction, human resource management, supervision of litigation, information technology, customer satisfaction, goals relating to divestitures, joint ventures and similar transactions, and any corporate or business objectives or strategic initiatives and (xvi) any other measure selected by the Board of Directors. These goals may reflect absolute entity or business unit performance or a relative comparison to the performance of a peer group of entities or other external measure of the selected performance criteria and may be absolute in their terms or measured against or in relationship to other companies comparably, similarly or otherwise situated. The Board of Directors may specify that such performance measures will be adjusted to exclude any one or more of (A) extraordinary items, (B) gains or losses on the dispositions of discontinued operations, (C) the cumulative effects of changes in accounting principles, (D) the writedown of any asset, (E) fluctuation in foreign currency exchange rates, (F) charges for restructuring and rationalization programs, (G) non-cash, mark-to-market adjustments on derivative instruments, (H) amortization of purchased intangibles, (I) the net
impact of tax rate changes, (J) non-cash asset impairment charges, (K) gains on extinguishment of the tax receivable agreement and (L) any other factors as the Board of Directors may determine. Such performance measures: (x) may vary by participant and may be different for different awards, (y) may be particular to a participant or the department, branch, line of business, subsidiary or other unit in which the participant works and (z) may cover such period as may be specified by the Board of Directors. The Board of Directors will have the authority to make equitable adjustments to the performance goals in recognition of unusual or non-recurring events affecting the Company or the financial statements of the Company, in response to changes in applicable laws or regulations or to account for items of gain, loss or expense determined to be extraordinary or unusual in nature or infrequent in occurrence or related to the disposal of a segment of a business or related to a change in accounting principles. Our Board of Directors may adjust the cash or number of shares payable pursuant to a performance award, and the Board of Directors may, at any time, waive the achievement of the applicable performance measures, including in the case of the death or disability of the participant or a change in control of the Company.
Eligibility to Receive Awards
All of our employees, officers, and directors, as well as our consultants and advisors, are eligible to receive awards under the Amended 2019 Plan. However, incentive stock options may only be granted to our employees, employees of our present or future parent or subsidiary corporations, and employees of any other entities the employees of which are eligible to receive incentive stock options under the Code.
Minimum Vesting
The Amended 2019 Plan generally requires that no award granted under the Amended 2019 Plan may vest earlier than the first anniversary of its date of grant, unless the award is granted in lieu of salary, bonus or other compensation otherwise earned by or payable to the participant. This minimum vesting requirement does not apply to awards granted, in the aggregate, for up to 5% of the maximum number of authorized shares available for the grant of awards under the Amended 2019 Plan.
Transferability of Awards
Awards may not be sold, assigned, transferred, pledged or otherwise encumbered by a participant, either voluntarily or by operation of law, except by will or the laws of descent and distribution or, other than in the case of an incentive stock option, pursuant to a qualified domestic relations order. During the life of the participant, awards are exercisable only by the participant. However, except with respect to awards that are subject to Section 409A of the Code, our Board of Directors may permit or provide in an award for the gratuitous transfer of the award by the participant to or for the benefit of any immediate family member, family trust or other entity established for the benefit of the participant and/ or an immediate family member thereof if we would be eligible to use a Form S-8 under the Securities Act of 1933, as amended, for the registration of the sale of the common stock subject to such award to the proposed transferee. Further, we are not required to recognize any transfer until such time as the participant and the permitted transferee have, as a condition to the transfer, delivered to us a written instrument in form and substance satisfactory to us confirming that such transferee will be bound by all of the terms and conditions of the award. None of the restrictions described in this paragraph prohibit a transfer from the participant to the Company.
No Rights as a Stockholder; Clawback
No participant shall have any rights as a stockholder with respect to any shares of common stock to be issued with respect to an award granted under the Amended 2019 Plan until becoming a record holder of such shares, subject to the terms of an award agreement. In accepting an award under the Amended 2019 Plan, a participant agrees to be bound by any clawback policy that the Company has in effect or may adopt in the future.
Plan Benefits
As of March 29, 2021, the Company had 5,335 employees, (including 9 Executive Officers), 9 directors (excluding the CEO, who is an Executive Officer), and 9 consultants or advisors, eligible to receive awards under the Amended 2019 Plan.
On March 30, 2021 the last reported sale price of our common stock on the NYSE was $212.93.
New Plan Benefits Table
The granting of awards under the Amended 2019 Plan is discretionary, and the Company cannot now determine the number or type of awards to be granted in the future to any particular person or group, other than as set forth below.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name and Position
|
|
Dollar
Value ($)
|
|
Number of Shares of Common
Stock Underlying Restricted
Stock Units
|
Melissa Smith, Chair and Chief Executive Officer
|
|
—
|
|
—
|
Roberto Simon, Chief Financial Officer
|
|
—
|
|
—
|
Scott Phillips, President, Global Fleet
|
|
—
|
|
—
|
Robert Deshaies, President, Health
|
|
—
|
|
—
|
Joel Dearborn, President, Corporate Payments
|
|
—
|
|
—
|
All current executive officers as a group
|
|
—
|
|
—
|
All current directors who are not executive officers as a group
|
|
1,240,000(1)
|
|
(2)
|
All employees, including all current officers who are not executive officers, as a group
|
|
—
|
|
—
|
(1)Under the Company’s non-employee director compensation plan, each non-employee director then serving at the time of 2021 Annual Meeting of Stockholders will be granted a number of restricted stock units worth $155,000 at the then-current closing price of the Company’s common stock on the NYSE. The amount set forth in the Dollar Value column above equals $155,000 multiplied by the 8 current non-employee directors then expected to be serving at the time of the 2021 Annual Meeting of Stockholders. In addition, if new director nominees, Nancy Altobello, Bhavana Bartholf and Derrick Roman, are elected at the 2021 Annual Meeting of Stockholders, they will each receive restricted stock units worth a total of $255,000 at the then current closing price of the Company’s common stock on the NYSE, for an aggregate of restricted stock units worth $765,000.
(2)The number of shares of the Company’s common stock underlying restricted stock units to be granted to each then-serving non-employee director on the date of the 2021 Annual Meeting of Stockholders equals $155,000 divided by the closing stock price of the Company’s common stock on the NYSE on the date of grant.
Awards Granted under the Original 2019 Plan
Since the initial approval of the Original 2019 Plan in 2019 through March 21, 2021, the following number of equity awards have been granted to the individuals and groups described in the table below. No other equity awards have been granted to any other individuals or groups under the Original 2019 Plan as of such date.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name of
Beneficial Owner
|
|
Number of Shares of
Common Stock Underlying
Options Granted
|
|
Number of Shares of Common
Stock Underlying Restricted
Stock Units Granted
|
|
Number of Shares of Common
Stock Underlying Performance
Restricted Stock Units Granted(3)
|
|
Number of Shares of
Common Stock Underlying
Deferred Stock Units Granted
|
Named Executive Officers:
|
Melissa Smith Chair and Chief Executive Officer
|
|
59,530
|
|
|
21,723
|
|
|
77,522
|
|
|
—
|
|
Roberto Simon
Chief Financial Officer
|
|
17,635
|
|
|
9,338
|
|
|
28,009
|
|
|
—
|
|
Scott Phillips
President, Global Fleet
|
|
14,850
|
|
|
7,879
|
|
|
23,636
|
|
|
—
|
|
Robert Deshaies
President, Health
|
|
10,210
|
|
|
6,861
|
|
|
17,759
|
|
|
—
|
|
Joel Dearborn President, Corporate Payments
|
|
10,203
|
|
|
5,084
|
|
|
15,249
|
|
|
—
|
|
All current executive officers as a group
|
|
134,705
|
|
|
67,490
|
|
|
199,271
|
|
|
—
|
|
All current directors who are not executive officers as a group
|
|
—
|
|
|
15,518(1)
|
|
—
|
|
|
4,736
|
|
Each nominee for election as a director:
|
Regina O. Sommer
|
|
—
|
|
|
1,923(1)
|
|
—
|
|
|
—
|
|
Jack VanWoerkom
|
|
—
|
|
|
1,923(1)
|
|
—
|
|
|
—
|
|
Nancy Altobello
|
|
—
|
|
0
|
—(2)
|
0
|
—
|
|
0
|
—
|
|
Bhavana Bartholf
|
|
—
|
|
0
|
—(2)
|
0
|
—
|
|
0
|
—
|
|
Derrick Roman
|
|
—
|
|
0
|
—(2)
|
0
|
—
|
|
0
|
—
|
|
Each associate of our executive officers, directors and nominees for director:
|
Each other person who received or is to receive 5 percent of such options,
warrants or rights
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
All employees, including all current officers who are not executive officers, as a group
|
|
247,608
|
|
|
420,313
|
|
|
296,714
|
|
|
—
|
|
(1)Represents the number of restricted stock units that have been granted under the Original 2019 Plan through March 21, 2021. In addition and as further described in the New Plan Benefits table set forth above, under the Company’s non-employee director compensation plan, each current non-employee director then serving at the time of the 2021 Annual Meeting of Stockholders will be granted a number of restricted stock units worth $155,000 at the then-current closing price of the Company’s common stock on the NYSE on the date of grant.
(2)No restricted stock units have been granted to such nominee. If such nominee is elected at the 2021 Annual Meeting of Stockholders, then under the Company’s non-employee director compensation plan, such nominee will be granted (i) a number of restricted stock units worth $100,000 at the then-current closing price of the Company’s common stock on the NYSE on the date of grant (their new director grant) and (ii) a number of restricted stock units worth $155,000 at the then-current closing price of the Company’s common stock on the NYSE on the date of grant (their annual equity retainer).
(3)Reflects actual number of shares issuable in respect of vested performance restricted stock units, if determinable; otherwise reflects target number of shares issuable under performance restricted stock units.
Administration
The Amended 2019 Plan will be administered by our Board of Directors. Our Board of Directors has the authority to grant awards and to adopt, amend and repeal the administrative rules, guidelines and practices relating to the Amended 2019 Plan that it deems advisable and to construe and interpret the provisions of the Amended 2019 Plan and any award agreements entered into under the Amended 2019 Plan. Our Board of Directors may correct any defect, supply any omission or reconcile any inconsistency in the Amended 2019 Plan or any award. All actions and decisions by our Board of Directors with respect to the Amended 2019 Plan and any awards made under the Amended 2019 Plan will be made in our Board of Directors’ discretion and will be final and binding on all persons having or claiming any interest in the Amended 2019 Plan or in any award.
Pursuant to the terms of the Amended 2019 Plan, our Board of Directors may delegate any or all of its powers under the Amended 2019 Plan to one or more committees or subcommittees of our Board of Directors. The Board of Directors has authorized the Compensation Committee to administer certain aspects of the Amended 2019 Plan, including the granting of awards to executive officers. Awards granted to non-employee directors must be granted and administered by a committee of the Board of Directors, all of the members of which committee are independent directors as defined by Section 303A.02 or any successor provision of the NYSE Listed Company Manual.
Subject to any applicable limitations contained in the Amended 2019 Plan, the Board of Directors, the Leadership Development and Compensation Committee, or any other committee or officer to whom the Board of Directors delegates authority, as the case may be, selects the recipients of awards and determines (i) the number of shares of common stock, cash or other consideration covered by awards and the terms and conditions of such awards, including the dates upon which such awards become exercisable or otherwise vest, (ii) the exercise or measurement price of awards, if any, and (iii) the duration of awards.
Each award under the Amended 2019 Plan may be made alone or in addition or in relation to any other award. The terms of each award need not be identical, and our Board of Directors need not treat participants uniformly. Our Board of Directors will determine the effect on an award of the disability, death, termination or other cessation of employment, authorized leave of absence or other change in the employment or other status of a participant, and the extent to which, and the period during which, the participant (or the participant’s legal representative, conservator, guardian or designated beneficiary) may exercise rights or receive any benefits under an award. The Board of Directors may at any time provide that any award shall become immediately exercisable in whole or in part, free from some or all restrictions or conditions or otherwise realizable in whole or in part, as the case may be.
In the event of any stock split, reverse stock split, stock dividend, recapitalization, combination of shares, reclassification of shares, spin-off or other similar change in capitalization or event, or any dividend or distribution to holders of our common stock, other than an ordinary cash dividend, we are required to make equitable adjustments (or make substituted awards, as applicable), in the manner determined by our Board of Directors, to (i) the number and class of securities available under the Amended 2019 Plan, (ii) the share counting rules set forth in the Amended 2019 Plan, (iii) the sublimits contained in the Amended 2019 Plan, (iv) the number and class of securities and exercise price per share of each outstanding option, (v) the share- and per-share provisions and the measurement price of each outstanding SAR, (vi) the number of shares subject to and the repurchase price per share subject to each outstanding award of restricted stock, and (vi) the share and per-share-related provisions and the purchase price, if any, of each outstanding RSU award and each outstanding other stock-based award.
We will indemnify and hold harmless each director, officer, employee or agent to whom any duty or power relating to the administration or interpretation of the Amended 2019 Plan has been or will be delegated against any cost or expense (including attorneys’ fees) or liability (including any sum paid in settlement of a claim with our Board of Directors’ approval) arising out of any act or omission to act concerning the Amended 2019 Plan unless arising out of such person’s own fraud or bad faith.
Amendment of awards. Except as otherwise provided under the Amended 2019 Plan with respect to repricing outstanding stock options or SARs, our Board of Directors may amend, modify or terminate any outstanding award, including but not limited to, substituting therefor another award of the same or a different type, changing the date of exercise or realization, and converting an incentive stock option to a nonstatutory stock option, provided that the participant’s consent to any such action will be required unless our Board of Directors determines that the action, taking into account any related action, does not materially and adversely affect the participant’s rights under the Amended 2019 Plan or the change is otherwise permitted under the terms of the Amended 2019 Plan in connection with a change in capitalization or reorganization event.
Reorganization Events
The Amended 2019 Plan contains provisions addressing the consequences of any reorganization event. A reorganization event is defined under the Amended 2019 Plan as (a) any merger or consolidation of us with or into another entity as a result of which all of our common stock is converted into or exchanged for the right to receive cash, securities or other property, or is canceled, (b) any transfer or disposition of all of our common stock for cash, securities or other property pursuant to a share exchange or other transaction or (c) our liquidation or dissolution.
Provisions Applicable to Awards Other than Restricted Stock. Under the Amended 2019 Plan, if a reorganization event occurs, our Board of Directors may take any one or more of the following actions as to all or any (or any portion of) outstanding awards other than restricted stock on such terms as our Board of Directors determines (except to the extent specifically provided otherwise in an applicable award agreement or another agreement between a participant and us): (i) provide that such awards shall be assumed, or substantially equivalent awards shall be substituted, by the acquiring or succeeding corporation (or an affiliate thereof), (ii) upon written notice to a participant, provide that all of the participant’s unvested awards will be forfeited immediately before the reorganization event and/or that all of the participant’s unexercised awards will terminate immediately prior to the consummation of such reorganization event unless exercised by the participant (to the extent then exercisable) within a specified period following the date of such notice, (iii) provide that outstanding awards shall become exercisable, realizable, or deliverable, or restrictions applicable to an award shall lapse, in whole or in part prior to or upon such reorganization event, (iv) in the event of a reorganization event under the terms of which holders of our common stock will receive upon consummation thereof a cash payment for each share surrendered in the reorganization event, which we refer to as the Acquisition Price, make or provide for a cash payment to participants with respect to each award held by a participant equal to (A) the number of shares of our common stock subject to the vested portion of the award (after giving effect to any acceleration of vesting that occurs upon or immediately prior to such reorganization event) multiplied by (B) the excess, if any, of (I) the Acquisition Price over (II) the exercise, measurement or purchase price of such award and any applicable tax withholdings, in exchange for the termination of such award, (v) provide that, in connection with our liquidation or dissolution, awards shall convert into the right to receive liquidation proceeds (if applicable, net of the exercise, measurement or purchase price thereof and any applicable tax withholdings) and (vi) any combination of the foregoing. Our Board of Directors is not obligated to treat all awards, all awards held by a participant, or all awards of the same type, identically. Certain restricted stock unit awards that are subject to Section 409A of the Code will be settled in accordance with the terms of the applicable award agreement.
Provisions Applicable to Restricted Stock. Upon the occurrence of a reorganization event other than our liquidation or dissolution, our repurchase and other rights with respect to outstanding restricted stock will inure to the benefit of our successor and will, unless our Board of Directors determines otherwise, apply to the cash, securities or other property which our common stock was converted into or exchanged for pursuant to such reorganization event in the same manner and to the same extent as they applied to such restricted stock. However, our Board of Directors may either provide for termination or deemed satisfaction of such repurchase or other rights under the instrument evidencing any restricted stock or any other agreement between a participant and us, either initially or by amendment or provide for forfeiture of such restricted stock if issued at no cost. Upon the occurrence of a reorganization event involving our liquidation or dissolution, except to the extent specifically provided to the contrary in the instrument evidencing any award of restricted stock or any other agreement between the participant and us, all restrictions and conditions on all restricted stock then outstanding shall automatically be deemed terminated or satisfied.
Change in Control
The Amended 2019 Plan also contains provisions addressing the consequences of any Change in Control (as defined in the Amended 2019 Plan). Except to the extent otherwise provided in the instrument evidencing an award or in any other agreement, in the event that the participant’s employment is terminated by the Company or its successor without cause (as defined in the Amended 2019 Plan) or by the participant for good reason (as defined in the Amended 2019 Plan), in each case on or before the first anniversary of the date of the Change in Control, then:
•all awards other than restricted stock awards held by such participant shall automatically become exercisable, realizable or deliverable in full or restrictions applicable to such awards will lapse in full; and
•the restrictions and conditions on all restricted stock awards then held by the participant will be deemed waived in full.
Provisions for Foreign Participants
The Board of Directors may establish one or more sub-plans under the Amended 2019 Plan to satisfy applicable securities, tax or other laws of various jurisdictions. The Board of Directors will establish such sub-plans by adopting supplements to the Amended 2019 Plan containing any limitations on the Board of Director’s discretion under the Amended 2019 Plan and any additional terms and conditions not otherwise inconsistent with the Amended 2019 Plan as the Board of Directors deems necessary or desirable. All supplements adopted by the Board of Directors will be deemed to be part of the Amended 2019 Plan, but each supplement will only apply to participants within the affected jurisdiction.
Amendment or Termination
If we receive stockholder approval of the Amended 2019 Plan, no award may be granted under the Amended 2019 Plan after May 8, 2029, but awards previously granted may extend beyond that date. Our Board of Directors may amend, suspend or terminate the Amended 2019 Plan or any portion of the Amended 2019 Plan at any time, except that (i) no amendment may be made to the plan to permit an option or SAR to be repriced without stockholder approval and (ii) no amendment that would require stockholder approval under the rules of the national securities exchange on which the Company then maintains its primary listing may be made effective unless and until such amendment has been approved by our stockholders. If the national securities exchange on which the Company then maintains its primary listing does not have rules regarding when stockholder approval of amendments to equity compensation plans is required (or if our common stock is not then listed on any national securities exchange), no amendment of the Amended 2019 Plan materially increasing the number of shares authorized under the plan, expanding the types of awards that may be granted under the plan or materially expanding the class of participants eligible to participate in the plan will be effective unless and until the Company’s stockholders approve such amendment. If at any time the approval of our stockholders is required as to any other modification or amendment under Section 422 of the Code or any successor provision with respect to incentive stock options, our Board of Directors may not effect such modification or amendment without such approval. Unless otherwise specified in the amendment, any amendment to the Amended 2019 Plan adopted in accordance with the procedures described above will apply to, and be binding on the holders of, all awards outstanding under the Amended 2019 Plan at the time the amendment is adopted, provided that our Board of Directors determines that such amendment, taking into account any related action, does not materially and adversely affect the rights of participants under the Amended 2019 Plan. No award will be made that is conditioned on stockholder approval of any amendment to the Amended 2019 Plan unless the award provides that (i) it will terminate or be forfeited if stockholder approval of such amendment is not obtained within no more than 12 months from the date the award was granted and (ii) it may not be exercised or settled (or otherwise result in the issuance of shares of our common stock) prior to the receipt of such stockholder approval.
If stockholders do not approve the adoption of the Amended 2019 Plan, the Amended 2019 Plan will not go into effect, and the Company may only grant awards subject to the original share limitations under the Original 2019 Plan. In this event, the Board of Directors will consider whether to adopt alternative arrangements based on its assessment of the needs of the Company.
Federal Income Tax Consequences
The following is a summary of the United States federal income tax consequences that generally will arise with respect to awards granted under the Amended 2019 Plan. This summary is based on the federal tax laws in effect as of the date of this proxy statement. In addition, this summary assumes that all awards are exempt from, or comply with, the rules under Section 409A of the Code regarding nonqualified deferred compensation. Changes to these laws could alter the tax consequences described below.
Incentive Stock Options. A participant will not have income upon the grant of an incentive stock option. Also, except as described below, a participant will not have income upon exercise of an incentive stock option if the participant has been employed by the Company or its corporate parent or 50% or majority-owned corporate subsidiary at all times beginning with the option grant date and ending three months before the date the participant exercises the option. If the participant has not been so employed during that time, then the participant will be taxed as described below under “Nonstatutory Stock Options.” The exercise of an incentive stock option may subject the participant to the alternative minimum tax.
A participant will have income upon the sale of the stock acquired under an incentive stock option at a profit (if sales proceeds exceed the exercise price). The type of income will depend on when the participant sells the stock. If a participant sells the stock more than two years after the option was granted and more than one year after the option was exercised, then all of the profit will be long-term capital gain. If a participant sells the stock prior to satisfying these waiting periods, then the participant will have engaged in a disqualifying disposition and a portion of the profit will be ordinary income and a portion may be capital gain. This capital gain will be long-term if the participant has held the stock for more than one year and otherwise will be short-term. If a participant sells the stock at a loss (sales proceeds are less than the exercise price), then the loss will be a capital loss. This capital loss will be long-term if the participant held the stock for more than one year and otherwise will be short-term.
Nonstatutory Stock Options. A participant will not have income upon the grant of a nonstatutory stock option. A participant will have compensation income upon the exercise of a nonstatutory stock option equal to the value of the stock on the day the participant exercised the option less the exercise price. Upon sale of the stock, the participant will have capital gain or loss equal to the difference between the sales proceeds and the value of the stock on the day the option was exercised. This capital gain or loss will be long-term if the participant has held the stock for more than one year and otherwise will be short-term.
Stock Appreciation Rights. A participant will not have income upon the grant of an SAR. A participant generally will recognize compensation income upon the exercise of an SAR equal to the amount of the cash and the fair market value of any stock received. Upon the sale of the stock, the participant will have capital gain or loss equal to the difference between the sales proceeds and the value of the stock on the day the SAR was exercised. This capital gain or loss will be long-term if the participant held the stock for more than one year and otherwise will be short-term.
Restricted Stock Awards. A participant will not have income upon the grant of restricted stock unless an election under Section 83(b) of the Code is made within 30 days of the date of grant. If a timely 83(b) election is made, then a participant will have compensation income equal to the value of the stock less the purchase price. When the stock is sold, the participant will have capital gain or loss equal to the difference between the sales proceeds and the value of the stock on the date of grant. If the participant does not make an 83(b) election, then when the stock vests the participant will have compensation income equal to the value of the stock on the vesting date less the purchase price. When the stock is sold, the participant will have capital gain or loss equal to the sales proceeds less the value of the stock on the vesting date. Any capital gain or loss will be long-term if the participant held the stock for more than one year and otherwise will be short-term.
Restricted Stock Units. A participant will not have income upon the grant of a restricted stock unit. A participant is not permitted to make a Section 83(b) election with respect to a restricted stock unit award. When the restricted stock unit vests, the participant will have income on the vesting date in an amount equal to the fair market value of the stock on the vesting date less the purchase price, if any. When the stock is sold, the participant will have capital gain or loss equal to the sales proceeds less the value of the stock on the vesting date. Any capital gain or loss will be long-term if the participant held the stock for more than one year and otherwise will be short-term.
Other Stock-Based Awards. The tax consequences associated with any other stock-based award granted under the Amended 2019 Plan will vary depending on the specific terms of such award. Among the relevant factors are whether or not the award has a readily ascertainable fair market value, whether or not the award is subject to forfeiture provisions or restrictions on transfer, the nature of the property to be received by the participant under the award, and the participant’s holding period and tax basis for the award or underlying common stock.
Tax Consequences to the Company. There will be no tax consequences to the Company except that the Company will be entitled to a deduction when a participant has compensation income, subject to the limitations of Section 162(m) of the Code.
|
|
|
|
Our Board of Directors recommends that you vote FOR the approval of the WEX Inc.
Amended and Restated 2019 Equity and Incentive Plan.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proposal 4
|
|
|
Approval of our Amended and Restated Certificate of Incorporation to Declassify our Board of Directors
|
|
|
|
|
Under our current Certificate of Incorporation, our Board of Directors has a "classified" structure, which means that the Board is divided into three classes, with members of each class holding office for staggered three-year terms. Therefore, approximately one-third of our directors stand for election each year. We are asking you to adopt and approve an amendment and restatement of our Certificate of Incorporation, which we refer to below as our Amended and Restated Certificate of Incorporation, to declassify the Board and to make the other changes described below.
The Board of Directors and the Corporate Governance Committee regularly review our corporate governance policies and practices. As part of the Corporate Governance Committee’s continuing review, it discussed the potential declassification of the Board and moving to annual elections of all directors. In deciding whether to recommend that stockholders vote in favor of such a management proposal, the Corporate Governance Committee, as well as the full Board, considered the advantages of both a classified and declassified board structure. A classified board can promote continuity and enhance the stability of the Board, enhance long-term planning and reduce a company’s vulnerability to coercive takeover tactics. A classified board also ensures that, at any given time, there are experienced directors on the Board, which can be important because of the unique demands of overseeing the Company, including the need to understand the complexities of our business and our long-term strategy for profitable growth. The Board is aware that the current trend in corporate governance is leading away from classified boards in favor of electing all directors annually. The directors also considered that many investors believe that a classified board structure has the effect of reducing the accountability of directors to stockholders because the directors do not face an annual election. Moreover, many investors believe that the election of directors is the primary means for stockholders to influence corporate governance policies and to increase accountability for implementing those policies. After weighing these and other considerations, the Corporate Governance Committee determined that moving to annual elections of directors is in the best interests of the Company and our stockholders and recommended to the Board that it support the proposal to declassify the Board, by phasing out the present three-year staggered terms of our directors and instead providing for one-year terms that expire at the next annual meeting. After deliberation, in the belief that these changes are advisable and in the best interests of our stockholders, the Board unanimously accepted that recommendation, has unanimously approved the proposed Amended and Restated Certificate of Incorporation and declared it to be advisable, and recommends that the Company's stockholders adopt and approve the proposed Amended and Restated Certificate of Incorporation. The following description of the proposed amendments to our Certificate of Incorporation is a summary and is qualified by the full text of the proposed Amended and Restated Certificate of Incorporation, which is attached to this proxy statement as Appendix C.
If our proposed Amended and Restated Certificate of Incorporation is adopted and approved by the stockholders, the declassification of the Board would be phased in commencing with the 2022 annual meeting of stockholders and would result in the classified structure of the Board of Directors being fully phased-out (and therefore all Board members standing for annual elections) commencing with the 2024 annual meeting of stockholders. If our proposed Amended and Restated Certificate of Incorporation is not adopted, no changes will be made to our Certificate of Incorporation. The Board reserves the right to abandon the proposed amendments at any time prior to the effectiveness of the Amended and Restated Certificate of Incorporation.
The proposed amendment and restatement of our Certificate of Incorporation would not change the unexpired three-year terms of directors elected prior to the effectiveness of the amendment and restatement (including those directors elected at this Annual Meeting). Accordingly, the three-year term for directors elected at the 2019 annual meeting of stockholders, the current Class II directors, would expire at the 2022 annual meeting of stockholders, the three-year term for directors elected at the 2020 annual meeting of stockholders, the current Class III directors, would expire at the 2023 annual meeting of stockholders, and the three-year term for directors elected at this Annual Meeting, the Class I directors, would expire at the 2024 annual meeting of stockholders. The implementation of the declassification of the Board pursuant to the proposed Amended and Restated Certificate of Incorporation would commence at the 2022 annual meeting of stockholders. Director nominees standing for election at the 2022 annual meeting of stockholders and each annual meeting thereafter would be elected to serve a one-year term. Beginning with the 2024 annual meeting of stockholders, all directors would stand for annual elections and the Board would be fully declassified. The table below summarizes the proposed implementation of the declassification of the Board:
|
|
|
|
|
|
|
|
|
Annual Meeting Year
|
Length of Term
for Directors Elected
|
Year that
Term Would Expire
|
2021
|
Three Years
|
2024
|
2022
|
One Year
|
2023
|
2023
|
One Year
|
2024
|
2024 and thereafter
|
Annual Election
|
One year later
|
Approval of this Proposal 4 will also constitute stockholder approval of (i) an amendment to Section (E) of Article V of our Certificate of Incorporation to provide that, effective immediately after the 2024 annual meeting of stockholders, when the Board is no longer classified, directors may be removed with or without cause by the affirmative vote of a majority of the shares of capital stock outstanding and then entitled to vote at an election of directors as required by the Delaware General Corporation Law when a board of directors is not classified, as set forth in Appendix C, (ii) an amendment to delete Article XIII of our Certificate of Incorporation to remove an inoperative provision, as set forth in Appendix C, (iii) amendments to Sections (C), (D) and (E) of Article IV of our Certificate of Incorporation and the deletion of Exhibits A and B thereto to remove inoperative provisions related to certain classes of our preferred stock that are now obsolete, and (iv) amendments to Sections (G) and (I) of Article X to conform provisions related to regulatory ownership restrictions to current law, each as set forth in Appendix C. If our stockholders approve and adopt the proposed amendments to our Certificate of Incorporation, our board of directors will approve conforming changes to our By-Laws.
|
|
|
|
The Board recommends a vote FOR approval of the proposed amendment and restatement of our certificate of incorporation.
|
|
AUDIT MATTERS
Principal Stockholders
This table shows common stock that is beneficially owned by our directors, our director nominees, our named executive officers, our current directors and executive officers as a group and all persons known to us to own 5 percent or more of the Company’s outstanding common stock, as of March 21, 2021. The percent of outstanding shares reported below is based on 44,561,971 shares outstanding on March 21, 2021.
Amount and Nature of Shares Beneficially Owned
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name and Address(1)
|
Common
Stock
Owned(2)
|
Right To
Acquire(3)
|
Total Securities
Beneficially
Owned(3)
|
Percent of
Outstanding
Shares
|
Principal Stockholders:
|
|
|
|
|
Wellington Management Group, LLP(4)
280 Congress Street
Boston, MA 02210
|
4,228,634
|
—
|
|
4,228,634
|
9.5
|
%
|
The Vanguard Group, Inc.(5)
100 Vanguard Blvd
Malvern, PA 19355
|
4,070,234
|
—
|
|
4,070,234
|
9.1
|
%
|
BlackRock, Inc.(6)
55 East 52nd Street
New York NY 10055
|
3,839,153
|
—
|
|
3,839,153
|
8.6
|
%
|
Janus Henderson Group plc(7)
201 Bishopsgate
London EC2M 3AE, United Kingdom
|
3,175,914
|
—
|
|
3,175,914
|
7.1
|
%
|
Eaton Vance Management(8)
2 International Place
Boston, MA 02110
|
2,946,995
|
—
|
|
2,946,995
|
6.6
|
%
|
JPMorgan Chase & Co. (9)
383 Madison Avenue
New York, NY 10179
|
2,446,041
|
|
2,446,041
|
5.5
|
%
|
Named Executive Officers, Directors, and Nominees:
|
|
|
|
|
Melissa Smith
|
89,518
|
|
255,373
|
|
344,891
|
|
*
|
Roberto Simon(10)
|
17,421
|
|
33,879
|
|
51,300
|
|
*
|
Scott Phillips
|
7,358
|
|
28,725
|
|
36,083
|
|
*
|
Joel Dearborn
|
7,065
|
|
8,423
|
|
15,488
|
|
*
|
Robert Deshaies
|
8,522
|
|
5,135
|
|
13,657
|
|
*
|
John E. Bachman
|
3,025
|
1,261
|
|
4,286
|
|
*
|
Daniel Callahan
|
—
|
|
1,261
|
|
1,261
|
|
*
|
Shikhar Ghosh
|
4,374
|
|
1,261
|
|
5,635
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name and Address(1)
|
Common
Stock
Owned(2)
|
Right To
Acquire(3)
|
Total Securities
Beneficially
Owned(3)
|
Percent of
Outstanding
Shares
|
James Groch
|
328
|
|
2,074
|
|
2,402
|
|
*
|
James Neary
|
3,025
|
1,261
|
|
4,286
|
*
|
Stephen Smith
|
—
|
|
2,074
|
|
2,074
|
*
|
Susan Sobbott
|
1156
|
|
1,261
|
|
2,417
|
*
|
Regina O. Sommer
|
6,948
|
1,261
|
|
8,209
|
*
|
Jack VanWoerkom
|
662
|
|
1,261
|
|
1,923
|
*
|
Nancy Altobello
|
—
|
|
—
|
|
—
|
|
*
|
Bhavana Bartholf
|
—
|
|
—
|
|
—
|
|
*
|
Derrick Roman
|
—
|
|
—
|
|
—
|
|
*
|
Directors and Executive Officers as a Group (18 Persons)(11)
|
188,387
|
|
374,655
|
|
563,042
|
|
*
|
*Less than 1%
(1)Unless otherwise noted, the business address for the individual is care of WEX Inc., 97 Darling Avenue, South Portland, ME 04106.
(2)Unless otherwise noted, includes shares for which the named person or entity has sole voting and investment power or has shared voting and investment power, including with his or her spouse. Excludes shares that may be acquired through stock option exercises or through the vesting of restricted stock units, which are accounted for in the column "Right To Acquire". This table does not include the following number of shares that will be acquired by our non-employee directors 200 days after their separation from our Board: 40,195 shares by Mr. Ghosh; 6,564 shares by Ms. Sommer; 6,606 shares by Mr. VanWoerkom; 328 shares by Mr. Groch; and, 2,117 shares by Mr. Callahan.
(3)Includes shares that can be acquired through stock option exercises or the vesting of restricted stock units through May 20, 2021. Excludes shares that may not be acquired until on or after May 21, 2021.
(4)This information was reported on a Schedule 13G/A filed with the SEC on February 4, 2021. Each of Wellington Management Group, LLP, Wellington Group Holdings LLP and Wellington Investment Advisors Holdings LLP has shared voting power with respect to 3,702,976 shares and shared dispositive power with respect to 4,228,634 shares. Wellington Management Company LLP has shared voting power with respect to 3,556,101 shares and shared dispositive power with respect to 3,982,787 shares. The securities reported are owned of record by clients of one or more investment advisors directly or indirectly owned by Wellington Management Group LLP (the “Investment Advisors”), including: Wellington Management Company LLP, Wellington Management Canada LLC, Wellington Management Singapore Pte Ltd, Wellington Management Hong Kong Ltd, Wellington Management International Ltd, Wellington Management Japan Pte Ltd and Wellington Management Australia Pty Ltd. Wellington Investment Advisors Holdings LLP controls directly, or indirectly through Wellington Management Global Holdings, Ltd., the Investment Advisors. Wellington Investment Advisors Holdings LLP is owned by Wellington Group Holdings LLP. Wellington Group Holdings LLP is owned by Wellington Management Group LLP. The percentage reported in the table above is based on the assumption that Wellington Management Group LLP has beneficial ownership of 4,228,634 shares of common stock on March 21, 2021.
(5)This information was reported on a Schedule 13G/A filed by The Vanguard Group, Inc. (“Vanguard”) with the SEC on February 10, 2021. The Schedule 13G/A reported that Vanguard has shared voting power over 29,839 shares, sole dispositive power over 4,004,912 shares and shared dispositive power over 65,322 shares. The percentage reported is based on the assumption that Vanguard has beneficial ownership of 4,070,234 shares of common stock on March 21, 2021.
(6)This information was reported on a Schedule 13G/A filed by BlackRock, Inc. (“BlackRock”) with the SEC on February 1, 2021. The Schedule 13G/A reported that BlackRock has sole voting power over 3,685,363 shares and has sole dispositive power over 3,839,153 shares. The percentage reported is based on the assumption that BlackRock had beneficial ownership of 3,839,153 shares of common stock on March 21, 2021.
(7)This information was reported on a Schedule 13G/A filed by Janus Henderson Group plc (“Janus Henderson”) with the SEC on February 11, 2021. The Schedule 13G/A reported that Janus Henderson has shared voting power and shared dispositive power over 3,175,914 shares. The percentage reported is based on the assumption that Janus Henderson has beneficial ownership of 3,175,914 shares of common stock on March 21, 2021.
(8)This information was reported on a Schedule 13G/A filed by Eaton Vance Management (“Eaton Vance”) with the SEC on February 12, 2021. The Schedule 13G/A reported that Eaton Vance has sole voting power and sole dispositive power over 2,946,995 shares. The percentage reported is based on the assumption that Eaton Vance has beneficial ownership of 2,946,995 shares of common stock on March 21, 2021.
(9)This information was reported on a Schedule 13G filed by JPMorgan Chase & Co. (“JPMorgan Chase”) with the SEC on January 9, 2021. The Schedule 13G reported that JPMorgan Chase has sole voting power over 2,308,244 shares, shared voting power over 13,766 shares, sole dispositive power over 2,387,604 shares, and shared dispositive power over 53,515 shares. The percentage reported is based on the assumption that JPMorgan Chase has beneficial ownership of 2,446,041 shares of common stock on March 21, 2021.
(10)Includes 104 shares held indirectly in the WEX Inc. 401(k) Plan. Mr. Simon disclaims beneficial ownership of those shares except to the extent of his pecuniary interest in them.
(11)In addition to the named executive officers and directors included in this table, four other executive officers were members of this group as of March 21, 2021. This line item does not include Ms. Altobello, Ms. Bartholf and Mr. Roman, who are director nominees not currently serving on our Board.
INFORMATION ABOUT STOCK OWNERSHIP
Securities Authorized for Issuance under Equity Compensation Plans
The following table provides information about shares of common stock that may be issued under the Company’s equity compensation plans as of December 31, 2020. The Company’s equity plans include the 2010 Equity and Incentive Plan and the 2019 Equity and Incentive Plan, each of which were approved by our stockholders.
|
|
|
|
|
|
|
|
|
|
|
|
Plan Category
|
Number of
Securities to
be Issued
Upon Exercise
of Outstanding
Options, Warrants
and Rights
(#)
|
Weighted-Average
Exercise Price of
Outstanding
Options, Warrants and
Rights (Excludes
Restricted and
Deferred Stock
Units and
Performance
Stock Units)
($)
|
Number of Securities
Remaining Available
for Future Issuance
Under Equity
Compensation Plans
(Excluding
Securities Reflected
in First Column)
(#)
|
Equity compensation plans approved by Company stockholders
|
2,761,922(1)
|
115.72(2)
|
2,344,030(3)
|
(1)Includes 847,065 shares of common stock under the 2010 Equity and Incentive Plan and the 2019 Equity and Incentive Plans subject to PSUs assuming that the target level of performance conditions were achieved. If the highest level of performance conditions were assumed for such PSUs, the total number of shares of common stock to be issued upon settlement of such awards as of December 31, 2020 would be 1,757,828.
(2)Weighted average exercise price does not take into account the 788,484 shares of common stock subject to outstanding RSUs, the 83,205 shares of common stock subject to outstanding DSUs or the 847,065 shares of common stock, at target, subject to outstanding PSUs. Such shares of common stock will be issued at the time such awards vest, without any cash consideration payable for those shares.
(3)The 2019 Equity and Incentive Plan permits the award of incentive stock options and nonstatutory stock options, stock appreciation rights, restricted stock awards, RSUs, director awards, other stock-based and cash-based awards and performance awards. The 2019 Equity and Incentive Plan authorizes a number of shares for issuance equal to the sum of (i) 3,700,000 shares of common stock and (ii) the number of shares of common stock subject to awards granted under the Prior Plan, which awards expire, terminate or are otherwise surrendered, canceled, forfeited or repurchased by the Company at their original issuance price pursuant to a contractual repurchase right. To the extent a share that is subject to an award granted under the 2010 Equity and Incentive Plan (the "Prior Plan") that counted as 1.53 shares against such plan’s share reserve is made available for the award of future grants under the 2019 Equity and Incentive Plan, the share reserve of the 2019 Plan will be credited with 1.53 shares. Otherwise, each share of common stock subject to an award under the Prior Plan that becomes available for grant under the 2019 Equity and Incentive Plan will increase the plan’s share reserve by one share. Under the 2019 Equity and Incentive Plan, any award of restricted stock, RSU, or other stock-based award with a per share price or per unit purchase price lower than 100% of the fair market value per share of common stock on the date of grant shall be counted against share limits as 1.7 shares for each one share of applicable award. The Board may not make new awards under the Prior Plan.
Delinquent Section 16(a) Reports
Based solely on a review of the reports and written representations submitted to us, we believe that during 2020 all filings with the SEC by our officers, directors and 10 percent stockholders timely complied with requirements for reporting ownership and changes in ownership of our common stock under Section 16(a) of the Securities Exchange Act of 1934 except: one deferred stock unit vesting event for Mr. Callahan. Such transaction was subsequently reported on a Form 4 and the transaction is reflected in this proxy statement.
INFORMATION ABOUT STOCK OWNERSHIP
GENERAL INFORMATION ABOUT THE ANNUAL MEETING AND VOTING YOUR SHARES
This proxy statement is being furnished in connection with the solicitation of proxies by the Board of WEX Inc. for use at our annual meeting of stockholders to be held on Friday, June 4, 2021 via the Internet as a virtual web conference at https://web.lumiagm.com/289188153. The password for the meeting is wex2021. The proxy statement describes the proposals on which you may vote as a stockholder and contains important information to consider when voting.
We are making this proxy statement, our annual report to stockholders and our proxy card available to stockholders on or about April 21, 2021.
Your vote is important. Please submit your vote as soon as possible even if you plan to virtually attend the annual meeting online.
Why is the 2021 annual meeting of stockholders a virtual, online meeting?
To support the health and well-being of our stockholders and employees in light of the ongoing coronavirus (COVID-19) pandemic, our 2021 annual meeting of stockholders will be a virtual meeting of stockholders where stockholders will participate by accessing a website using the Internet. There will not be a physical meeting location. In light of the public health and safety concerns related to COVID-19, we believe that hosting a virtual meeting will facilitate stockholder attendance and participation at our 2021 annual meeting of stockholders by enabling stockholders to participate remotely from any location around the world. We have designed the virtual annual meeting to provide the same rights and opportunities to participate as stockholders would have at an in-person meeting, including the right to vote and ask questions through the virtual meeting platform.
How do I virtually attend the annual meeting?
We will host the annual meeting live online via a virtual web conference at https://web.lumiagm.com/289188153. You may attend the annual meeting by visiting https://web.lumiagm.com/289188153. The password for the meeting is wex2021. The audio webcast will start at 8:00 a.m., ET, on Friday, June 4, 2021. You will need the digit control number included on your proxy card or Notice of Internet Availability of Proxy Materials in order to be able to enter the annual meeting online and vote. Instructions on how to attend and participate online are posted at https://go.lumiglobal.com/faq.
Online check in will begin at 7:00 a.m., ET on Friday, June 4, 2021, and you should allow ample time for the online check-in proceedings. Please refer to https://go.lumiglobal.com/faq or e-mail support@lumiglobal.com if you require any assistance attending the virtual web conference.
Who can attend and participate in the annual meeting?
Stockholders who owned the Company’s common stock at the close of business on April 5, 2021, the record date, may attend the annual meeting online and vote at the annual meeting of stockholders. Each share is entitled to one vote. There were 44,582,610 shares of common stock outstanding on the record date.
Why did I receive a notice in the mail regarding the Internet availability of proxy materials instead of a full set of proxy materials?
In accordance with the rules of the Securities and Exchange Commission, or SEC, we have elected to provide access to our proxy materials, including this proxy statement and our annual report, over the Internet. Accordingly, we have sent a Notice Regarding the Availability of Proxy Materials, referred to in this proxy statement as the Notice, to our stockholders entitled to vote at the annual meeting with instructions for accessing the proxy materials and voting over the Internet. We mailed the Notice on or about April 21, 2021 to all stockholders entitled to vote at the annual meeting.
All stockholders entitled to vote at the annual meeting will have the ability to access the proxy materials by visiting the website referred to in the Notice, https://ir.wexinc.com/financials/proxy-statement. The Notice also contains instructions on how to request to receive a printed set of the proxy materials. You may request the printed proxy materials over the Internet at https://us.astfinancial.com/OnlineProxyVoting/ProxyVoting/RequestMaterials, by emailing info@astfinancial.com or by calling 888-776-9962 (domestic) or 718-921-8562 (international).
Can I vote my shares by filling out and returning the Notice?
No. The Notice identifies the items to be voted on at the annual meeting, but you cannot vote by marking the Notice and returning it. The Notice provides instructions on how to vote over the Internet or by telephone prior to the annual meeting, by requesting and returning a printed proxy card prior to the annual meeting or by voting online during the annual meeting.
May I see a list of stockholders entitled to vote as of the record date?
A list of registered stockholders as of the close of business on the record date will be available upon request for examination by the stockholders through https://web.lumiagm.com/289188153 during the whole time of the annual meeting.
How do I vote?
If the shares are registered directly in your name, you may vote in the following ways:
•Vote over the Internet prior to the Annual Meeting: To vote over the Internet, please go to the following website: www.voteproxy.com and follow the instructions at that site for submitting your proxy electronically. You must submit your Internet proxy before 11:59 p.m., Eastern Time, on Thursday, June 3, 2021, the day before the annual meeting , for your vote to count.
•Vote by Telephone prior to the Annual Meeting: To vote by telephone, please call 1-800-776-9437 (domestic) or 1-718-921-8500 (international) and follow the recorded instructions. You must submit your telephonic vote before 11:59 p.m., Eastern Time, on Thursday, June 3, 2021, the day before the annual meeting, for your vote to count.
•Vote by Mail prior to the Annual Meeting: If you have requested and received a printed copy of the proxy materials, you may vote by mail by completing, signing and dating your proxy card and mailing it in the enclosed prepaid and addressed envelope. Your proxy card must be received and tabulated no later than the closing of the polls for your proxy to be valid and your vote to count.
•Vote Online while Virtually Attending the Annual Meeting: If you attend the annual meeting, you may vote your shares online while virtually attending the annual meeting by visiting https://web.lumiagm.com/289188153. The password for the meeting is wex2021. You will need your control number included on your proxy card or Notice in order to be able to vote during the annual meeting.
If you hold your shares in “street name,” you should follow the instructions provided by your bank, broker or other nominee, which may include instructions regarding your ability to vote by mail, by telephone or through the Internet. Holding shares in street name means you hold them through a bank, broker or other nominee, and as a result, the shares are not held in your individual name but through someone else. To vote in person at the virtual Annual Meeting, you must first obtain a valid legal proxy from your broker, bank or other agent and then register in advance to attend the Annual Meeting. Please follow the instructions from your broker or bank included with these proxy materials, or contact your broker or bank to request a legal proxy form.
GENERAL INFORMATION ABOUT THE ANNUAL MEETING AND VOTING YOUR SHARES
After obtaining a valid legal proxy from your broker, bank or other agent, to then register to attend the Annual Meeting, you must submit proof of your legal proxy reflecting the number of your shares along with your name and email address to American Stock Transfer & Trust Company, LLC. Requests for registration should be directed to proxy@astfinancial.com or to facsimile number 718-765-8730. Written requests can be mailed to:
American Stock Transfer & Trust Company LLC
Attn: Proxy Tabulation Department
6201 15th Avenue
Brooklyn, NY 11219
Requests for registration must be labeled as “Legal Proxy” and be received no later than 11:59 p.m., ET on May 28, 2021, You will receive a confirmation of your registration by email after we receive your registration materials. Follow the instructions provided to vote. We encourage you to access the meeting prior to the start time leaving ample time for the check in.
|
|
|
|
Given the impact of the COVID-19 pandemic, we strongly encourage you to vote Over the Internet or by Telephone as described above in advance of the meeting.
|
|
How do I vote my shares held in the WEX Inc. Employee Savings Plan?
If you participate in our WEX Inc. Employee Savings Plan, commonly referred to as the “401(k) Plan,” shares of our common stock equivalent to the value of the common stock interest credited to your account under the plan will be voted by the trustee in accordance with your instructions, if they are received before 11:59 PM ET on June 1, 2021. Otherwise, if you do not provide instruction by such date, the share equivalents credited to your account will not be voted by the trustee. The shares held in the 401(k) Plan cannot be voted electronically during the annual meeting. Please refer to the “Information about Voting Procedures” section.
How do I submit a question at the annual meeting?
If you wish to submit a question, on the day of the annual meeting, beginning at 8:00 a.m., ET, you may log into the virtual meeting platform at https://web.lumiagm.com/289188153, type your question into the “Ask a Question” field, and click “Submit.” We will try to answer as many germane stockholder-submitted questions as time permits. However, we reserve the right to exclude questions that are irrelevant to the business of the Company or of the Annual Meeting, related to material, nonpublic information, derogatory in nature, related to personal matters or personal grievances, or otherwise out-of-order or not otherwise suitable for the conduct of the Annual Meeting. Questions from multiple stockholders on the same topic or that are otherwise related may be grouped, summarized and answered together. Germane questions received from stockholders during the virtual annual meeting, and their related responses, will be posted on the Company’s investor relations website at https://ir.wexinc.com/financials/proxy-statement as soon as practicable following the annual meeting.
GENERAL INFORMATION ABOUT THE ANNUAL MEETING AND VOTING YOUR SHARES
Information about Voting Procedures
How is my vote counted?
You may vote “for” or “against” or “abstain” from voting for each director nominee. If you abstain from voting on the nomination of any director nominee, it will not count as a vote “for” or “against” the nominee. Broker non-votes will not count as a vote “for” or “against” the nominee.
You may vote “for” or “against” or “abstain” from voting on the proposals regarding the advisory vote on executive compensation, the approval of the Amended and Restated 2019 Equity and Incentive Plan, the approval of the Amended and Restated Certificate of Incorporation and ratification of the independent registered public accounting firm. If you abstain from voting on these proposals, it will have the same effect as a vote “against” the proposal.
If you provide your voting instructions on your proxy, your shares will be voted:
•as you instruct, and
•according to the best judgment of the persons named in the proxy if a proposal comes up for a vote at the meeting that is not on the proxy.
If you do not indicate a specific choice on the proxy you sign and submit, your shares will be voted:
•for the five named nominees for director for three-year terms,
•for the approval of an advisory (non-binding) vote on the compensation of our named executive officers,
•for the approval of the WEX Inc. Amended and Restated 2019 Equity and Incentive Plan to increase the number of shares issuable thereunder,
•for the approval of the Company's Amended and Restated Certificate of Incorporation to declassify the Board of Directors,
•for the ratification of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2021, and
•according to the best judgment of the persons named in the proxy if a proposal comes up for a vote at the meeting that is not on the proxy.
How many votes are required for the election of directors?
Under our By-Laws, in an uncontested election, a nominee will be elected to the Board of Directors if the votes cast “for” the nominee’s election exceed the votes cast “against” the nominee’s election, with abstentions and “broker non-votes” not counting as votes “for” or “against.” If an uncontested incumbent director nominee receives a majority of votes “against” his or her election, the director must tender a resignation from the Board of Directors. The Board of Directors will then decide whether to accept the resignation within 90 days following certification of the stockholder vote (based on the recommendation of a committee of independent directors). We will publicly disclose the Board of Directors’ decision and its reasoning with regard to the offered resignation.
How many votes are needed to approve the advisory (non-binding) vote on the compensation of our named executive officers, to approve the Amended and Restated 2019 Equity and Incentive Plan to increase the number of shares issuable thereunder and to ratify the selection of the independent registered public accounting firm?
The affirmative vote of the holders of a majority of the shares present at the meeting in person, or by proxy, and entitled to vote on the proposal is required for the approval of the advisory (non-binding) vote on the compensation of the named executive officers, the approval of the Amended and Restated 2019 Equity and Incentive Plan to increase the number of shares issuable thereunder and the approval of the ratification of the selection of the independent registered public accounting firm. An abstention will be included in the denominator for purposes of determining the number of affirmative votes required for approval. A broker non-vote will be treated as not being entitled to vote on the proposal and will not be counted for purposes of determining whether the proposal has been approved.
GENERAL INFORMATION ABOUT THE ANNUAL MEETING AND VOTING YOUR SHARES
How many votes are needed to approve the Company’s Amended and Restated Certificate of Incorporation to declassify the Board of Directors?
The affirmative vote of the holders of at least 60% of the voting power of the shares entitled to vote at an election of directors is required for the approval of the Amended and Restated Certificate of Incorporation, with abstentions and “broker non-votes” having the same effect as votes “against”.
What is the difference between a “stockholder of record” and a “beneficial owner”?
These terms describe the manner in which your shares are held. If your shares are registered directly in your name through American Stock Transfer & Trust Company, LLC, our transfer agent, you are a “stockholder of record” or registered stockholder. If your shares are held in an account at a brokerage firm, bank, broker-dealer, or other similar organization, then you are the “beneficial owner” of shares held in “street name.”
What is a Broker Non-Vote?
A broker is entitled to vote shares held for a stockholder on “discretionary” matters without instructions from the beneficial owner of those shares. However, if a beneficial owner does not provide timely instructions, the broker does not have the authority to vote on any “non-discretionary” proposals at the Annual Meeting and a “broker non-vote” would occur. The only matter at the 2021 annual meeting that is “discretionary” is the ratification of our independent registered public accounting firm. The other matters are “non-discretionary.” Please instruct your broker how to vote your shares using the voting instruction form provided by your broker or following any instructions provided by your broker regarding your ability to vote by telephone or through the Internet.
What if I do not vote?
The effect of not voting will depend on how your share ownership is registered. If you own shares as a “stockholder of record” or registered holder and you do not vote, then your unvoted shares will not be represented at the meeting and will not count toward the quorum requirement. If a quorum is obtained, then your unvoted shares will not affect whether a proposal is approved or rejected.
If you are a stockholder whose shares are not registered in your name and you do not vote, then your bank, broker or other nominee, who is the holder of record, may still represent your shares at the meeting for purposes of obtaining a quorum. In the absence of your voting instructions, under stock exchange rules, if applicable, your bank, broker or other nominee will be able to vote your shares in its discretion regarding the ratification of the Company’s independent auditors. However, under stock exchange rules, if applicable, your bank, broker or other nominee will not be able to vote your shares in its discretion in the election of directors, for the approval of the 2019 Equity and Incentive Plan, for the approval of the Amended and Restated Certificate of Incorporation or, the advisory (non-binding) vote on the compensation of our named executive officers. Therefore, you must vote your shares if you want them to be counted for purposes of these votes.
What if I change my mind after I submit my proxy?
If your stock is registered directly in your name, you may revoke your proxy and change your vote by:
•voting over the Internet or by telephone prior to the annual meeting as instructed above under “How do I vote?” Only your last Internet or telephone vote submitted prior to the annual meeting is counted. You may not change your vote over the Internet or by telephone after 11:59 p.m., ET, on Thursday, June 3, 2021, the day before the annual meeting,
•casting another vote with a later date and returning it before the polls close at the meeting as instructed above under “How do I vote?”. Only the last dated, valid proxy will be counted, or
•voting online while virtually attending the annual meeting as instructed above under “How do I vote?”
GENERAL INFORMATION ABOUT THE ANNUAL MEETING AND VOTING YOUR SHARES
If you hold your stock in “street name” and have instructed your bank, broker or nominee to vote the shares, you should follow the instructions provided by your bank, broker or other nominee to revoke your proxy and change your vote. You may also revoke your proxy and change your vote by participating in the meeting online and voting your shares electronically during the meeting, if you have a legal proxy from your bank, broker or other nominee and have followed the instructions above.
Any change to your voting instructions provided to the trustee with respect to voting the shares held in the WEX Employee Savings Plan must be provided to the trustee by 11:59 PM ET on June 1, 2021.
Your virtual attendance at the meeting alone, without voting electronically, will not automatically revoke your proxy.
What happens if a director nominee is unable to stand for election?
The Board may reduce the number of directors or select a substitute nominee. In the latter case, if you have submitted your proxy, the persons named in the proxy can vote your shares for a substitute nominee. The person you authorize to vote on your behalf cannot vote for more than three nominees.
What constitutes a quorum?
In order for business to be conducted at the meeting, a quorum must be present. A quorum consists of the holders of one-third of the shares of common stock issued and outstanding on the record date and entitled to vote.
Shares of common stock represented in person or by proxy (including shares that abstain or do not vote with respect to one or more of the matters to be voted upon) will be counted for purposes of determining whether a quorum exists. Shares of common stock that are present virtually during the annual meeting constitute shares of common stock represented “in person”. If a quorum is not present, the meeting will be adjourned until a quorum is obtained.
What is the effect of not submitting my proxy if my shares are held in the WEX Inc. Employee Savings Plan?
The trustee for the WEX Inc. Employee Savings Plan, which is often referred to as the 401(k) plan, will not vote the shares of participants who do not give specific instructions as to how those shares should be voted. As a result, your unvoted shares will not be represented at the meeting and will not count toward the quorum requirement. If a quorum is obtained, then your unvoted shares will not affect whether a proposal is approved or rejected.
What does it mean if I receive more than one proxy card or Notice?
It means that you hold your shares in multiple accounts. Please follow the voting instructions on the proxy cards and Notices to be sure that all of your shares are voted.
Where do I find voting results of the meeting?
We will announce preliminary voting results during the annual meeting. We will also publish the preliminary or, if available, the final results in a current report on Form 8-K within four business days of the end of the meeting. You may access a copy of the current report on Form 8-K electronically on our website or through the SEC’s website at www.sec.gov. Voting results will be tabulated and certified by our transfer agent, American Stock Transfer & Trust Company.
Who pays the cost for proxy solicitation?
The Company pays for distributing and soliciting proxies. As a part of this process, the Company reimburses brokers, nominees, fiduciaries and other custodians for reasonable fees and expenses in forwarding proxy materials to stockholders. The Company has engaged a proxy solicitor, D.F. King & Co., Inc., to assist in connection with soliciting votes for the annual meeting at a cost of approximately $12,500. The Company will bear the entire cost of the proxy solicitor. The proxy solicitor will solicit proxies through mail, telephone, the Internet or other means. Employees of the Company or its subsidiaries may solicit proxies through mail, telephone, the Internet or other means. Employees do not receive additional compensation for soliciting proxies.
GENERAL INFORMATION ABOUT THE ANNUAL MEETING AND VOTING YOUR SHARES
How do I submit a stockholder proposal or director nominee for next year’s annual meeting or suggest a candidate for nomination as a director to the Corporate Governance Committee?
Any proposal that a stockholder wishes to be considered for inclusion in our proxy statement and proxy card for the 2022 annual meeting of stockholders must comply with the requirements of Rule 14a-8 under the Exchange Act and must be submitted to the Corporate Secretary, 97 Darling Avenue, South Portland, ME 04106, no later than December 22, 2021. However, in the event that the annual meeting is called for a date that is not within thirty days before or after June 4, 2022, notice by the stockholder must be received a reasonable time before we begin to print and mail our proxy materials for the 2022 annual meeting of stockholders.
If a stockholder wishes to present a proposal before the 2022 annual meeting but does not wish to have a proposal considered for inclusion in our proxy statement and proxy in accordance with Rule 14a-8 or to nominate someone for election as a director, the stockholder must give written notice to our Corporate Secretary at the address noted above. To be timely, a stockholder’s notice to the Corporate Secretary must be delivered to or mailed and received no earlier than February 4, 2022, nor later than March 6, 2022. However, in the event that the annual meeting is called for a date that is not within twenty-five days before or after June 4, 2022, notice by the stockholder must be received no earlier than 120 days prior to the annual meeting and no later than the later of the 90th day prior to the annual meeting or the tenth day following the day on which notice of the date of the annual meeting is first mailed or publicly disclosed.
Alternatively, under our "proxy access” provision in our By-Laws, a stockholder, or group of no more than 20 stockholders, owning at least 3% of the Company’s outstanding shares of capital stock continuously for at least three years, may nominate and include in our proxy materials for an annual meeting director nominees constituting up to two individuals or 20% of the Board, whichever is greater, provided the stockholder(s) and nominee(s) satisfy the requirements in our By-Laws. For a proxy access nomination to be considered timely for the 2022 annual meeting, it must be received in writing by the Secretary no earlier than January 5, 2022 nor later than February 4, 2022. However, in the event that the date of the annual meeting is advanced by more than 30 days, or delayed (other than as a result of adjournment) by more than 60 days, from the first anniversary of the preceding year’s annual meeting, or if no annual meeting was held in the preceding year, notice must be received no earlier than the 150th day prior to such annual meeting and no later than the close of business on the later of (i) the 120th day prior to such annual meeting and (ii) the tenth day following the day on which notice of the date of such annual meeting was mailed or public disclosure of the date of such annual meeting was made, whichever first occurs.
The Company’s By-Laws contain specific procedural requirements regarding a stockholder’s ability to nominate a director or submit a proposal to be considered at a meeting of stockholders. The By-Laws are available on our website at www.wexinc.com, under the Corporate Governance tab.
What is “householding”?
“Householding” means that we deliver a single set of proxy materials, annual report or Notice, as applicable, to households with multiple stockholders, provided such stockholders give their consent and certain other conditions are met.
Some households with multiple stockholders already may have provided the Company with their consent to householding. We will provide only one set of proxy materials or Notice, as applicable, to each such household, unless we receive contrary instructions.
GENERAL INFORMATION ABOUT THE ANNUAL MEETING AND VOTING YOUR SHARES
We will promptly deliver separate copies of our proxy statement and annual report, or Notice, if applicable, or deliver multiple copies in the future, at the request of any stockholder who is in a household that participates in the householding of the Company’s proxy materials. You may call our Investor Relations department at (866) 668-6550 or send your request to:
|
|
|
|
|
|
|
WEX Inc.
Attention: Investor Relations — Annual Meeting
97 Darling Avenue
South Portland, ME 04106
Email: investors@wexinc.com
|
If you currently receive multiple copies of the Company’s proxy materials or Notice, as applicable, and would like to participate in householding, please contact the Investor Relations department at the above phone number or address.
What is meant by “incorporation by reference”?
“Incorporation by reference” means that we refer to information that previously has been filed with the SEC, so the information should be considered as part of the filing you are reading. Information on the websites referred to in this proxy statement, including our website, is not incorporated into this proxy statement. Based on SEC rules, the sections entitled “Audit Committee Report” and the “Compensation Committee Report,” of this proxy statement and the information regarding the Audit Committee Charter and the independence of the Audit Committee members specifically are not incorporated by reference into any other filings with the SEC.
You receive this proxy statement as part of the proxy materials for the annual meeting of stockholders. You may not consider this proxy statement as material for soliciting the purchase or sale of our Company’s common stock.
How do I request future copies of your proxy materials?
The Notice contains instructions on how to request to receive a printed set of the proxy materials. You may request the printed proxy materials over the Internet at https://us.astfinancial.com/OnlineProxyVoting/ProxyVoting/RequestMaterials, by emailing info@astfinancial.com or by calling 888-776-9962 (domestic) or 718-921-8562 (international). If you require additional copies of these or any future proxy materials, please refer to the Investor Relations page of our website at www.wexinc.com or contact our Investor Relations office.
How do I request a copy of your annual report on Form 10-K?
We will provide you with a copy, without charge, of our Form 10-K, including the financial statements, for our most recently ended fiscal year, upon request to our Investor Relations department at the above phone number or address.
GENERAL INFORMATION ABOUT THE ANNUAL MEETING AND VOTING YOUR SHARES
OTHER BUSINESS
We know of no other business to be considered at the meeting, and the deadline for stockholders to submit proposals or nominations has passed. However, if:
•other matters are properly presented at the meeting, or at any adjournment or postponement of the meeting, and
•you have properly submitted your proxy, then, Melissa Smith or Roberto Simon will vote your shares on those matters according to her or his best judgment.
|
|
|
|
|
|
|
By Order of the Board of Directors,
|
|
Hilary A. Rapkin
Chief Legal Officer
|
April 20, 2021
Portland, Maine
APPENDIX A
The following pages in this Appendix A contain descriptions of the performance measures used for executive incentive compensation under our Short-Term Incentive Plan ("STIP") and our Long-Term Incentive Plan ("LTIP"). They were developed uniquely for incentive compensation purposes, are non-GAAP measures, and are not reported in our financial statements. The Leadership Development and Compensation Committee (the "Committee") has approved use of non-GAAP measures when appropriate to drive executive focus on particular strategic, operational, or financial factors, or to exclude factors over which our executives have little influence or control.
STIP
After the original 2020 STIP targets were initially established in March 2020, the COVID-19 pandemic led to significant economic uncertainty and business disruption. Accordingly, the Committee, on June 23, 2020, changed the shared 2020 STIP corporate performance goals to the following defined metrics:
Satisfying a Reduced Capital Expenditures Amount: This measure is calculated by the actual amount of capital expenditures over the course of the fiscal year 2020, on an accrual basis and adjusted by the items indicated in the table below.
Cost Containment: This measure is calculated by the cost savings in areas such as headcount, travel and entertainment expenditures, reduced outside professional services and vendors expenditures, and project delays, over the course of the fiscal year 2020, adjusted by the items indicated in the table below.
US Health Revenue: This measure is calculated by the fiscal year 2020 revenue attributed to our US Health business.
US Health Adjusted Operating Income: This measure is calculated by the 2020 operating income attributed to our US Health business adjusted for: acquisition-related intangible amortization, other acquisition related items, stock-based compensation, and other costs.
The method of calculation of each STIP metric is shown in the table below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands)
|
2020 WEX Satisfying a Reduced Capital Expenditures Amount (Accrual Basis)
|
2020 WEX Cost Containment
|
2020 US Health Revenue
|
2020 US Health Adjusted Operating Income
|
2020 Actual reported per definition of metric
|
$
|
82,696
|
|
$
|
69,349
|
|
$
|
357,317
|
|
$
|
96,322
|
|
Adjustment for Exchange Rates
|
ü
|
ü
|
$
|
—
|
|
$
|
—
|
|
Adjustment for divestiture of the Company's Brazil business
|
ü
|
ü
|
$
|
—
|
|
$
|
—
|
|
2020 Actual reported per definition of metric, adjusted for Exchange rates and Brazil Divestiture
|
$
|
83,137
|
|
$
|
71,663
|
|
$
|
357,317
|
|
$
|
96,322
|
|
LTIP
The following table provides an explanation as to how actual performance results were calculated on a non-GAAP basis, including the existence of adjustments, for LTIP payout determination for PSU awards where the full performance period was completed as of December 31, 2020, and was used to calculate and determine the final payout factor for such PSU awards.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands - other
than earnings per share)
|
LTIP Adjusted Net Income -
Earnings Per Share
Reconciliation
|
|
2018 LTIP Non Fuel Sensitive
Revenue Reconciliation (000s)
|
2018
|
2019
|
2020
|
Total
|
|
2018
|
2019
|
2020
|
Total
|
Results as reported on a US GAAP Basis
|
$
|
3.86
|
|
$
|
2.26
|
|
$
|
(5.56)
|
|
$
|
0.56
|
|
|
$
|
1,492,639
|
|
$
|
1,723,691
|
|
$
|
1,559,869
|
|
$
|
4,776,199
|
|
Unrealized (gains) losses on financial instruments
|
$
|
(0.06)
|
|
$
|
0.79
|
|
$
|
0.62
|
|
$
|
1.35
|
|
|
|
|
|
|
Net foreign currency remeasurement (gain) loss
|
$
|
0.89
|
|
$
|
0.02
|
|
$
|
0.59
|
|
$
|
1.50
|
|
|
|
|
|
|
Acquisition-related intangible amortization
|
$
|
3.17
|
|
$
|
3.64
|
|
$
|
3.90
|
|
$
|
10.71
|
|
|
|
|
|
|
Other acquisition and divestiture related items
|
$
|
0.10
|
|
$
|
0.86
|
|
$
|
1.32
|
|
$
|
2.28
|
|
|
|
|
|
|
Legal settlement
|
$
|
—
|
|
$
|
—
|
|
$
|
3.71
|
|
$
|
3.71
|
|
|
|
|
|
|
Debt restructuring and debt issuance cost
amortization
|
$
|
0.32
|
|
$
|
0.48
|
|
$
|
0.91
|
|
$
|
1.71
|
|
|
|
|
|
|
Stock-based compensation
|
$
|
0.81
|
|
$
|
1.09
|
|
$
|
1.50
|
|
$
|
3.40
|
|
|
|
|
|
|
Other costs
|
$
|
0.31
|
|
$
|
0.57
|
|
$
|
0.31
|
|
$
|
1.19
|
|
|
|
|
|
|
Loss on sale of subsidiary
|
$
|
—
|
|
$
|
—
|
|
$
|
1.06
|
|
$
|
1.06
|
|
|
|
|
|
|
Impairment charges
|
$
|
0.13
|
|
$
|
—
|
|
$
|
1.22
|
|
$
|
1.35
|
|
|
|
|
|
|
Non-cash adjustments related to tax receivable agreement
|
$
|
0.02
|
|
$
|
(0.02)
|
|
$
|
(0.01)
|
|
$
|
(0.01)
|
|
|
|
|
|
|
ANI adjustments attributable to non-
controlling interests
|
$
|
(0.03)
|
|
$
|
1.21
|
|
$
|
(0.98)
|
|
$
|
0.20
|
|
|
|
|
|
|
Tax related items
|
$
|
(1.24)
|
|
$
|
(1.71)
|
|
$
|
(2.47)
|
|
$
|
(5.42)
|
|
|
|
|
|
|
Dilutive impact of stock awards
|
$
|
—
|
|
$
|
—
|
|
$
|
(0.06)
|
|
$
|
(0.06)
|
|
|
|
|
|
|
Results per adjusted reporting basis; total Company adjusted
|
$
|
8.28
|
|
$
|
9.20
|
|
$
|
6.06
|
|
$
|
23.54
|
|
|
$
|
1,492,639
|
|
$
|
1,723,691
|
|
$
|
1,559,869
|
|
$
|
4,776,199
|
|
Adjustment for fuel prices (adjusted for PPG impact to late fees which are not included in the Fuel Sensitive Revenue adjustment below)
|
ü
|
ü
|
ü
|
ü
|
|
ü
|
ü
|
ü
|
ü
|
Adjustments for Fuel Sensitive Revenue
|
—
|
|
—
|
|
—
|
|
—
|
|
|
ü
|
ü
|
ü
|
ü
|
Adjustments for foreign exchange rates
|
ü
|
ü
|
ü
|
ü
|
|
|
|
|
|
Adjustments due to the impact of certain items related to COVID-19 on specific lines of business
|
—
|
|
—
|
|
ü
|
ü
|
|
—
|
|
—
|
|
ü
|
ü
|
Adjustments due to the impact of certain items related to COVID-19 that did not have an impact on specific lines of businesses only (Cost Containment, Credit Loss, PIPE, LIBOR, PPG)
|
—
|
|
—
|
|
ü
|
ü
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Results adjusted for compensation attainment purposes
|
$
|
8.28
|
|
$
|
9.25
|
|
$
|
10.34
|
|
$
|
27.87
|
|
|
$
|
1,028,278
|
|
$
|
1,271,418
|
|
$
|
1,409,353
|
|
$
|
3,709,049
|
|
The following table reflects the reconciliation of the non-GAAP financial performance metric presented in the "2020 Performance Snapshot" section within the Proxy Statement Summary and within the Compensation Discussion & Analysis included herein.
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands)
|
2020
|
2019
|
2018
|
Net (loss) income attributable to stockholders
|
$
|
(243,638)
|
|
$99,006
|
|
$168,295
|
|
Unrealized loss (gain) on financial instruments
|
27,036
|
34,654
|
(2,579)
|
Net foreign currency remeasurement loss (gain)
|
25,783
|
926
|
38,800
|
Acquisition-related intangible amortization
|
171,144
|
159,431
|
138,186
|
Other acquisition and divestiture related items
|
57,787
|
37,675
|
4,143
|
Legal settlement
|
162,500
|
|
—
|
|
—
|
|
Loss on sale of subsidiary
|
46,362
|
|
—
|
|
—
|
|
Stock-based compensation
|
65,841
|
47,511
|
35,103
|
Other costs
|
13,555
|
25,106
|
13,717
|
Impairment charges
|
53,378
|
|
—
|
|
5,649
|
Debt restructuring and debt issuance cost amortization
|
40,063
|
|
21,004
|
|
14,101
|
Non-cash adjustments related to tax receivable agreement
|
(491)
|
|
(932)
|
|
775
|
ANI adjustments attributable to non-controlling interests
|
(42,910)
|
|
53,035
|
|
(1,370)
|
Tax related items
|
(108,086)
|
|
(74,743)
|
|
(53,918)
|
|
|
|
|
|
Adjusted net income attributable to shareholders
|
$268,324
|
|
$402,673
|
|
$360,902
|
|
APPENDIX B
WEX Inc.
AMENDED AND RESTATED
2019 EQUITY AND INCENTIVE PLAN
The purpose of this Amended and Restated 2019 Equity and Incentive Plan (the “Plan”) of WEX Inc., a Delaware corporation (the “Company”), is to advance the interests of the Company’s stockholders by enhancing the Company’s ability to attract, retain and motivate persons who are expected to make important contributions to the Company and by providing such persons with equity ownership opportunities and cash and equity performance-based incentives that are intended to better align the interests of such persons with those of the Company’s stockholders. Except where the context otherwise requires, the term “Company” shall include any of the Company’s present or future parent or subsidiary corporations as defined in Sections 424(e) or (f) of the Internal Revenue Code of 1986, as amended, and any regulations thereunder (the “Code”) and any other business venture (including, without limitation, joint venture or limited liability company) in which the Company has a controlling interest, as determined by the Board of Directors of the Company (the “Board”). The Plan amends and restates in its entirety the 2019 Equity and Incentive Plan that was originally adopted by the Board on April 16, 2019 and approved by the Company’s stockholders on May 9, 2019, and shall become effective on the date the Plan is approved by the Company’s stockholders.
All of the Company’s employees, officers and directors, as well as consultants and advisors to the Company (as the terms consultants and advisors are defined and interpreted for purposes of Form S-8 under the Securities Act of 1933, as amended (the “Securities Act”), or any successor form) are eligible to be granted Awards (as defined below) under the Plan. Each person who is granted an Award under the Plan is deemed a “Participant.” The Plan provides for the following types of awards, each of which is referred to as an “Award”: Options (as defined in Section 5), SARs (as defined in Section 6), Restricted Stock (as defined in Section 7), RSUs (as defined in Section 7), Other Stock-Based Awards (as defined in Section 8) and Cash-Based Awards (as defined in Section 8). Except as otherwise provided by the Plan, each Award may be made alone or in addition or in relation to any other Award. The terms of each Award need not be identical, and the Board need not treat Participants uniformly.
|
|
|
|
|
|
|
|
3.
|
Administration and Delegation
|
(a) Administration by Board of Directors. The Plan will be administered by the Board. The Board shall have authority to grant Awards and to adopt, amend and repeal such administrative rules, guidelines and practices relating to the Plan as it shall deem advisable. The Board may construe and interpret the terms of the Plan and any Award agreements entered into under the Plan. The Board may correct any defect, supply any omission or reconcile any inconsistency in the Plan or any Award. All actions and decisions by the Board with respect to the Plan and any Awards shall be made in the Board’s discretion and shall be final and binding on all persons having or claiming any interest in the Plan or in any Award.
(b) Appointment of Committees. To the extent permitted by applicable law, the Board may delegate any or all of its powers under the Plan to one or more committees or subcommittees of the Board (a “Committee”). All references in the Plan to the “Board” shall mean the Board or a Committee of the Board or the officers referred to in Section 3(c) to the extent that the Board’s powers or authority under the Plan have been delegated to such Committee or officers.
(c) Delegation to Officers. Subject to any requirements of applicable law (including as applicable Sections 152 and 157(c) of the General Corporation Law of the State of Delaware), the Board may delegate to one or more officers of the Company the power to grant Awards (subject to any limitations under the Plan) to employees or officers of the Company and to exercise such other powers under the Plan as the Board may determine, provided that the Board shall fix the terms of Awards to be granted by such officers, the maximum number of shares subject to Awards that the officers may grant, and the time period in which such Awards may be granted; and provided further, that no officer shall be authorized to grant Awards to any “executive officer” of the Company (as defined by Rule 3b-7 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) or to any “officer” of the Company (as defined by Rule 16a-1(f) under the Exchange Act).
(d) Awards to Non-Employee Directors. Awards to non-employee directors will be granted and administered by a Committee, all of the members of which are independent directors as defined by Section 303A.02 of the New York Stock Exchange Listed Company Manual.
|
|
|
|
|
|
|
|
4.
|
Stock Available for Awards
|
(a) Number of Shares; Share Counting.
(1) Authorized Number of Shares. Subject to adjustment under Section 10:
(A) 4,500,000 shares of common stock, $0.01 par value per share, of the Company (the “Common Stock”), reduced by the number of shares of Common Stock subject to Awards granted under the Plan between March 21, 2021 and the date of the Company’s 2021 annual meeting of stockholders, shall be available for Awards made under the Plan after June 4, 2021;
(B) 1,235,669 shares of Common Stock shall be reserved for issuance in respect of Awards granted under the Plan on or prior to March 21, 2021; and
(C) such additional number of shares of Common Stock (up to 776,777 shares) as is equal to the number of shares of Common Stock subject to awards granted under the Company’s 2010 Equity and Incentive Plan (the “Existing Plan”) which awards expire, terminate or are otherwise surrendered, cancelled, forfeited or repurchased by the Company at their original issuance price pursuant to a contractual repurchase right shall be available for Awards made under the Plan (subject, however, in the case of Incentive Stock Options to any limitations under the Code). For the avoidance of doubt, (i) to the extent a share that was subject to an award granted under the Existing Plan that counted as one share is returned to the Plan pursuant to this Section 4(a)(1)(C), each applicable share reserve will be credited with one share and (ii) to the extent that a share that was subject to an award granted under the Existing Plan that counted as 1.53 shares is returned to the Plan pursuant to this Section 4(a)(1)(C), each applicable share reserve will be credited with 1.53 shares. Any or all of which Awards may be in the form of Incentive Stock Options (as defined in Section 5(b)). Shares of Common Stock issued under the Plan may consist in whole or in part of authorized but unissued shares or treasury shares.
(2) Fungible Share Pool. Subject to adjustment under Section 10, any Award that is not a Full-Value Award (as defined below) shall be counted against the share limits specified in Sections 4(a)(1) as one share for each share of Common Stock subject to such Award and any Award that is a Full-Value Award shall be counted against the share limits specified in Sections 4(a)(1) as 1.7 shares for each one share of Common Stock subject to such Full-Value Award. “Full-Value Award” means any award of Restricted Stock, RSUs or Other Stock-Based Award with a per share price or per unit purchase price lower than 100% of the fair market value per share of Common Stock (valued in the manner determined or approved by the Board) on the date of grant. To the extent a share that was subject to an Award that counted as one share is returned to the Plan pursuant to Section 4(a)(3), each applicable share reserve will be credited with one share. To the extent that a share that was subject to an Award that counts as 1.7 shares is returned to the Plan pursuant to Section 4(a)(3), each applicable share reserve will be credited with 1.7 shares.
(3) Share Counting. For purposes of counting the number of shares available for the grant of Awards under the Plan under this Section 4(a) and under the sublimits contained in Section 4(b)(1):
(A) all shares of Common Stock covered by SARs shall be counted against the number of shares available for the grant of Awards under the Plan and against the sublimits contained in Section 4(b)(1); provided, however, that (i) SARs that may be settled only in cash shall not be so counted and (ii) if the Company grants a SAR in tandem with an Option for the same number of shares of Common Stock and provides that only one such Award may be exercised (a “Tandem SAR”), only the shares covered by the Option, and not the shares covered by the Tandem SAR, shall be so counted, and the expiration of one in connection with the other’s exercise will not restore shares to the Plan;
(B) to the extent that an RSU may be settled only in cash, no shares shall be counted against the shares available for the grant of Awards under the Plan;
(C) if any Award (i) expires or is terminated, surrendered or cancelled without having been fully exercised or is forfeited in whole or in part (including as the result of shares of Common Stock subject to such Award being repurchased by the Company at the original issuance price pursuant to a contractual repurchase right) or (ii) results in any Common Stock not being issued (including as a result of a SAR that was settleable either in cash or in stock actually being settled in cash), the unused Common Stock covered by such Award shall again be available for the grant of Awards; provided, however, that (1) in the case of Incentive Stock Options, the foregoing shall be subject to any limitations under the Code, (2) in the case of the exercise of a SAR, the number of shares counted against the shares available under the Plan and against the sublimits contained in Section 4(b)(1) shall be the full number of shares subject to the SAR multiplied by the percentage of the SAR actually exercised, regardless of the number of shares actually used to settle such SAR upon exercise and (3) the shares covered by a Tandem SAR shall not again become available for grant upon the expiration or termination of such Tandem SAR;
(D) shares of Common Stock delivered (either by actual delivery, attestation, or net exercise) to the Company by a Participant to (i) purchase shares of Common Stock upon the exercise of an Award or (ii) satisfy tax withholding obligations with respect to Awards (including shares retained from the Award creating the tax obligation) shall not be added back to the number of shares available for the future grant of Awards; and
(E) shares of Common Stock repurchased by the Company on the open market using the proceeds from the exercise of an Award shall not increase the number of shares available for future grant of Awards.
(b) Sublimits. The following sublimits on the number of shares subject to Awards shall apply:
(1) Per-Participant Limit. The maximum number of shares of Common Stock with respect to which Awards may be granted to any Participant under the Plan in the form of Options or SARs shall be 1,000,000 per calendar year. The maximum number of shares of Common Stock with respect to which Awards may be granted to any Participant under the Plan in the form of Restricted Stock, RSUs, or Other Stock-Based Awards shall be 1,000,000 per calendar year. For purposes of the foregoing limit, the combination of an Option in tandem with a SAR shall be treated as a single Award. In addition to Awards settleable in Common Stock, Performance Awards (as defined in Section 9) in the form of Cash-Based Awards may also provide for cash payments of up to $10,000,000 per calendar year per Participant. The per participant limits set forth in this Section 4(b)(1) shall be subject to adjustment under Section 10.
(2) Limits on Awards to Non-Employee Directors. The maximum amount of cash and equity compensation (calculated based on grant date fair value for financial reporting purposes) granted in any calendar year to any individual non-employee director shall not exceed $750,000. The Compensation Committee may make exceptions to this limit for individual non-employee directors in extraordinary circumstances, as the Committee may determine in its discretion, provided that the non-employee director receiving such additional compensation may not participate in the decision to award such compensation.
(c) Substitute Awards. In connection with a merger or consolidation of an entity with the Company or the acquisition by the Company of property or stock of an entity, the Board may grant Awards in substitution for any options or other stock or stock-based awards granted by such entity or an affiliate thereof. Substitute Awards may be granted on such terms as the Board deems appropriate in the circumstances, notwithstanding any limitations on Awards contained in the Plan. Substitute Awards shall not count against the overall share limit set forth in Section 4(a)(1) or any sublimits contained in the Plan, except as may be required by reason of Section 422 and related provisions of the Code.
(a) General. The Board may grant options to purchase Common Stock (each, an “Option”) and determine the number of shares of Common Stock to be covered by each Option, the exercise price of each Option and the conditions and limitations applicable to the exercise of each Option, including conditions relating to applicable federal or state securities laws, as the Board considers necessary or advisable.
(b) Incentive Stock Options. An Option that the Board intends to be an “incentive stock option” as defined in Section 422 of the Code (an “Incentive Stock Option”) shall only be granted to employees of WEX Inc., any of WEX Inc.’s present or future parent or subsidiary corporations as defined in Sections 424(e) or (f) of the Code, and any other entities the employees of which are eligible to receive Incentive Stock Options under the Code, and shall be subject to and shall be construed consistently with the requirements of Section 422 of the Code. An Option that is not intended to be an Incentive Stock Option shall be designated a “Nonstatutory Stock Option.” The Company shall have no liability to a Participant, or any other person, if an Option (or any part thereof) that is intended to be an Incentive Stock Option is not an Incentive Stock Option or if the Company converts an Incentive Stock Option to a Nonstatutory Stock Option.
(c) Exercise Price. The Board shall establish the exercise price of each Option or the formula by which such exercise price will be determined. The exercise price shall be specified in the applicable Option agreement. The exercise price shall be not less than 100% of the Grant Date Fair Market Value (as defined below) of the Common Stock on the date the Option is granted; provided that if the Board approves the grant of an Option with an exercise price to be determined on a future date, the exercise price shall be not less than 100% of the Grant Date Fair Market Value on such future date. “Grant Date Fair Market Value” of a share of Common Stock for purposes of the Plan will be determined as follows:
(1) if the Common Stock trades on a national securities exchange, the closing sale price (for the primary trading session) on the applicable date; or
(2) if the Common Stock does not trade on any such exchange, the average of the closing bid and asked prices on the applicable date as reported by an over-the-counter marketplace designated by the Board; or
(3) if the Common Stock is not publicly traded, the Board will determine the Grant Date Fair Market Value for purposes of the Plan using any measure of value it determines to be appropriate (including, as it considers appropriate, relying on appraisals) in a manner consistent with the valuation principles under Code Section 409A, except as the Board may expressly determine otherwise.
For any date that is not a trading day, the Grant Date Fair Market Value of a share of Common Stock for such date will be determined by using the closing sale price or average of the bid and asked prices, as appropriate, for the immediately preceding trading day and with the timing in the formulas above adjusted accordingly. The Board can substitute a particular time of day or other measure of “closing sale price” or “bid and asked prices” if appropriate because of exchange or market procedures or can, in its sole discretion, use weighted averages either on a daily basis or such longer period as complies with Code Section 409A.
The Board has sole discretion to determine the Grant Date Fair Market Value for purposes of the Plan, and all Awards are conditioned on the Participant’s agreement that the Administrator’s determination is conclusive and binding even though others might make a different determination.
(d) Duration of Options. Each Option shall be exercisable at such times and subject to such terms and conditions as the Board may specify in the applicable Option agreement; provided, however, that no Option will be granted with a term in excess of 10 years.
(e) Exercise of Options. Options may be exercised by delivery to the Company of a notice of exercise in a form (which may be electronic) approved by the Company, together with payment in full (in the manner specified in Section 5(f)) of the exercise price for the number of shares for which the Option is exercised. Shares of Common Stock subject to the Option will be delivered by the Company as soon as practicable following exercise.
(f) Payment Upon Exercise. Common Stock purchased upon the exercise of an Option granted under the Plan shall be paid for as follows:
(1) in cash or by check, payable to the order of the Company;
(2) except as may otherwise be provided in the applicable Option agreement or approved by the Board, by (i) delivery of an irrevocable and unconditional undertaking by a creditworthy broker to deliver promptly to the Company sufficient funds to pay the exercise price and any required tax withholding or (ii) delivery by the Participant to the Company of a copy of irrevocable and unconditional instructions to a creditworthy broker to deliver promptly to the Company cash or a check sufficient to pay the exercise price and any required tax withholding;
(3) to the extent provided for in the applicable Option agreement or approved by the Board, by delivery (either by actual delivery or attestation) of shares of Common Stock owned by the Participant valued at their fair market value (valued in the manner determined by (or in a manner approved by) the Board), provided (i) such method of payment is then permitted under applicable law, (ii) such Common Stock, if acquired directly from the Company, was owned by the Participant for such minimum period of time, if any, as may be established by the Board and (iii) such Common Stock is not subject to any repurchase, forfeiture, unfulfilled vesting or other similar requirements;
(4) to the extent provided for in the applicable Nonstatutory Stock Option agreement or approved by the Board, by delivery of a notice of “net exercise” to the Company, as a result of which the Participant would receive (i) the number of shares underlying the portion of the Option being exercised, less (ii) such number of shares as is equal to (A) the aggregate exercise price for the portion of the Option being exercised divided by (B) the fair market value of the Common Stock (valued in the manner determined by (or in a manner approved by) the Board) on the date of exercise;
(5) to the extent permitted by applicable law and provided for in the applicable Option agreement or approved by the Board, by payment of such other lawful consideration as the Board may determine; provided, however, that in no event may a promissory note of the Participant be used to pay the Option exercise price; or
(6) by any combination of the above permitted forms of payment.
(g) Limitation on Repricing. Unless such action is approved by the Company’s stockholders, the Company may not (except as provided for under Section 10): (1) amend any outstanding Option granted under the Plan to provide an exercise price per share that is lower than the then-current exercise price per share of such outstanding Option, (2) cancel any outstanding option (whether or not granted under the Plan) and grant in substitution therefor new Awards under the Plan (other than Awards granted pursuant to Section 4(c)) covering the same or a different number of shares of Common Stock and having an exercise price per share lower than the then-current exercise price per share of the cancelled option, (3) cancel in exchange for a cash payment any outstanding Option with an exercise price per share above the then-current fair market value of the Common Stock (valued in the manner determined by (or in a manner approved by) the Board), or (4) take any other action under the Plan that constitutes a “repricing” within the meaning of the rules of the New York Stock Exchange (“NYSE”).
(h) No Reload Options. No Option granted under the Plan shall contain any provision entitling the Participant to the automatic grant of additional Options in connection with any exercise of the original Option.
(i) No Dividend Equivalents. No Option shall provide for the payment or accrual of dividend equivalents.
|
|
|
|
|
|
|
|
6.
|
Stock Appreciation Rights
|
(a) General. The Board may grant Awards consisting of stock appreciation rights (“SARs”) entitling the holder, upon exercise, to receive an amount of Common Stock or cash or a combination thereof (such form to be determined by the Board) determined by reference to appreciation, from and after the date of grant, in the fair market value of a share of Common Stock (valued in the manner determined by (or in a manner approved by) the Board) over the measurement price established pursuant to Section 6(b). The date as of which such appreciation is determined shall be the exercise date.
(b) Measurement Price. The Board shall establish the measurement price of each SAR and specify it in the applicable SAR agreement. The measurement price shall not be less than 100% of the Grant Date Fair Market Value of the Common Stock on the date the SAR is granted; provided that if the Board approves the grant of a SAR effective as of a future date, the measurement price shall be not less than 100% of the Grant Date Fair Market Value on such future date.
(c) Duration of SARs. Each SAR shall be exercisable at such times and subject to such terms and conditions as the Board may specify in the applicable SAR agreement; provided, however, that no SAR will be granted with a term in excess of 10 years.
(d) Exercise of SARs. SARs may be exercised by delivery to the Company of a notice of exercise in a form (which may be electronic) approved by the Company, together with any other documents required by the Board.
(e) Limitation on Repricing. Unless such action is approved by the Company’s stockholders, the Company may not (except as provided for under Section 10): (1) amend any outstanding SAR granted under the Plan to provide a measurement price per share that is lower than the then-current measurement price per share of such outstanding SAR, (2) cancel any outstanding SAR (whether or not granted under the Plan) and grant in substitution therefor new Awards under the Plan (other than Awards granted pursuant to Section 4(c)) covering the same or a different number of shares of Common Stock and having a measurement price per share lower than the then-current measurement price per share of the cancelled SAR, (3) cancel in exchange for a cash payment any outstanding SAR with a measurement price per share above the then-current fair market value of the Common Stock (valued in the manner determined by (or in a manner approved by) the Board), or (4) take any other action under the Plan that constitutes a “repricing” within the meaning of the rules of the NYSE.
(f) No Reload SARs. No SAR granted under the Plan shall contain any provision entitling the Participant to the automatic grant of additional SARs in connection with any exercise of the original SAR.
(g) No Dividend Equivalents. No SAR shall provide for the payment or accrual of dividend equivalents.
|
|
|
|
|
|
|
|
7.
|
Restricted Stock; RSUs
|
(a) General. The Board may grant Awards entitling recipients to acquire shares of Common Stock (“Restricted Stock”), subject to the right of the Company to repurchase all or part of such shares at their issue price or other stated or formula price (or to require forfeiture of such shares if issued at no cost) from the recipient in the event that conditions specified by the Board in the applicable Award are not satisfied prior to the end of the applicable restriction period or periods established by the Board for such Award. The Board may also grant Awards entitling the recipient to receive shares of Common Stock or cash to be delivered at the time such Award vests (“RSUs”).
(b) Terms and Conditions for Restricted Stock and RSUs. The Board shall determine the terms and conditions of Restricted Stock and RSUs, including the conditions for vesting and repurchase (or forfeiture) and the issue price, if any.
(c) Additional Provisions Relating to Restricted Stock.
(1) Dividends. Any dividends (whether paid in cash, stock or property) declared and paid by the Company with respect to shares of Restricted Stock (“Unvested Dividends”) shall be paid to the Participant only if and when such shares become free from the restrictions on transferability and forfeitability that apply to such shares. Each payment of Unvested Dividends will be made no later than the end of the calendar year in which the dividends are paid to stockholders of that class of stock or, if later, the 15th day of the third month following the lapsing of the restrictions on transferability and the forfeitability provisions applicable to the underlying shares of Restricted Stock. No interest will be paid on Unvested Dividends.
(2) Stock Certificates. The Company may require that any stock certificates issued in respect of shares of Restricted Stock, as well as dividends or distributions paid on such Restricted Stock, shall be deposited in escrow by the Participant, together with a stock power endorsed in blank, with the Company (or its designee). At the expiration of the applicable restriction periods, the Company (or such designee) shall deliver the certificates no longer subject to such restrictions to the Participant or if the Participant has died, to his or her Designated Beneficiary. “Designated Beneficiary” means (i) the beneficiary designated, in a manner determined by the Board, by a Participant to receive amounts due or exercise rights of the Participant in the event of the Participant’s death or (ii) in the absence of an effective designation by a Participant, the Participant’s estate.
(d) Additional Provisions Relating to RSUs.
(1) Settlement. Upon the vesting of and/or lapsing of any other restrictions (i.e., settlement) with respect to each RSU, the Participant shall be entitled to receive from the Company the number of shares of Common Stock specified in the Award agreement or (if so provided in the applicable Award agreement or otherwise determined by the Board) an amount of cash equal to the fair market value (valued in the manner determined by (or in a manner approved by) the Board) of such number of shares or a combination thereof. The Board may provide that settlement of RSUs shall be deferred, on a mandatory basis or at the election of the Participant, in a manner that complies with Section 409A of the Code or any successor provision thereto, and the regulations thereunder (“Section 409A”).
(2) Voting Rights. A Participant shall have no voting rights with respect to any RSUs.
(3) Dividend Equivalents. The Award agreement for RSUs may provide Participants with the right to receive an amount equal to any dividends or other distributions declared and paid on an equal number of outstanding shares of Common Stock (“Dividend Equivalents”). Dividend Equivalents will be credited to an account for the Participant, may be settled in cash and/or shares of Common Stock as set forth in the Award agreement and shall be subject to the same restrictions on transfer and forfeitability as the RSUs with respect to which paid. No interest will be paid on Dividend Equivalents.
|
|
|
|
|
|
|
|
8.
|
Other Stock-Based and Cash-Based Awards
|
(a) General. The Board may grant other Awards of shares of Common Stock, and other Awards that are valued in whole or in part by reference to, or are otherwise based on, shares of Common Stock or other property (“Other Stock-Based Awards”). Such Other Stock-Based Awards shall also be available as a form of payment in the settlement of other Awards granted under the Plan or as payment in lieu of compensation to which a Participant is otherwise entitled. Other Stock-Based Awards may be paid in shares of Common Stock or cash, as the Board shall determine. The Company may also grant Awards denominated in cash rather than shares of Common Stock (“Cash-Based Awards”).
(b) Terms and Conditions. Subject to the provisions of the Plan, the Board shall determine the terms and conditions of each Other Stock-Based Award or Cash-Based Award, including any purchase price applicable thereto.
(c) Dividend Equivalents. The Award agreement for an Other Stock-Based Award may provide Participants with the right to receive Dividend Equivalents. Dividend Equivalents will be credited to an account for the Participant, may be settled in cash and/or shares of Common Stock as set forth in the Award agreement and shall be subject to the same restrictions on transfer and forfeitability as the Other Stock-Based Award with respect to which paid. No interest will be paid on Dividend Equivalents.
(a) Grants. Awards under the Plan may be made subject to the achievement of performance goals pursuant to this Section 9 (“Performance Awards”).
(b) Performance Measures. The Board may specify that the degree of granting, vesting and/or payout of any Performance Award shall be subject to the achievement of one or more performance measures established by the Board, which may be based on the relative or absolute attainment of specified levels of one or any combination of the following, which may be determined pursuant to generally accepted accounting principles (“GAAP”) or on a non-GAAP basis, as determined by the Board: (i) pre-tax income or after-tax income, (ii) income or earnings, including operating income, earnings before or after taxes, earnings before or after interest, depreciation, amortization or extraordinary or special items, (iii) net income excluding amortization of intangible assets, depreciation and impairment of goodwill and intangible assets and/or excluding charges attributable to the adoption of new accounting pronouncements, (iv) earnings or book value per share (basic or diluted), (v) return on assets (gross or net), return on investment, return on capital, or return on equity, (vi) return on revenues, (vii) cash flow, free cash flow, cash flow return on investment (discounted or otherwise), net cash provided by operations, or cash flow in excess of cost of capital, (viii) economic value created, (ix) operating margin or profit margin, (x) stock price or total stockholder return, (xi) income or earnings from continuing operations, (xii) sales, sales growth, earnings growth or market share, (xiii) achievement of balance sheet objectives, (xiv) cost targets, reductions and savings, expense management, productivity and efficiencies, improvement of financial ratings; (xv) strategic business criteria, consisting of one or more measures based on meeting specified employee satisfaction, human resource management, supervision of litigation, information technology, customer satisfaction, goals relating to divestitures, joint ventures and similar transactions, and any corporate or business objectives or strategic initiatives and (xvi) any other measure selected by the Board. Such goals may reflect absolute entity or business unit performance or a relative comparison to the performance of a peer group of entities or other external measure of the selected performance criteria and may be absolute in their terms or measured against or in relationship to other companies comparably, similarly or otherwise situated. The Board may specify that such performance measures shall be adjusted to exclude any one or more of (A) extraordinary items, (B) gains or losses on the dispositions of discontinued operations, (C) the cumulative effects of changes in accounting principles, (D) the writedown of any asset, (E) fluctuation in foreign currency exchange rates, (F) charges for restructuring and rationalization programs, (G) non-cash, mark-to-market adjustments on derivative instruments, (H) amortization of purchased intangibles, (I) the net impact of tax rate changes, (J) non-cash asset impairment charges, (K) gains on extinguishment of the tax receivable agreement and (L) any other factors as the Board may determine. Such performance measures: (x) may vary by Participant and may be different for different Awards; (y) may be particular to a Participant or the department, branch, line of business, subsidiary or other unit in which the Participant works and (z) may cover such period as may be specified by the Board. The Board shall have the authority to make equitable adjustments to the performance goals in recognition of unusual or non-recurring events affecting the Company or the financial statements of the Company, in response to changes in applicable laws or regulations or to account for items of gain, loss or expense determined to be extraordinary or unusual in nature or infrequent in occurrence or related to the disposal of a segment of a business or related to a change in accounting principles.
(c) Adjustments. The Board may adjust the cash or number of shares payable pursuant to such Performance Award, and the Board may, at any time, waive the achievement of the applicable performance measures, including in the case of the death or disability of the Participant or a change in control of the Company.
|
|
|
|
|
|
|
|
10.
|
Adjustments for Changes in Common Stock and Certain Other Events
|
(a) Changes in Capitalization. In the event of any stock split, reverse stock split, stock dividend, recapitalization, combination of shares, reclassification of shares, spin-off or other similar change in capitalization or event, or any dividend or distribution to holders of Common Stock other than an ordinary cash dividend, (i) the number and class of securities available under the Plan, (ii) the share counting rules and sublimits set forth in Sections 4(a) and 4(b)(1), (iii) the number and class of securities and exercise price per share of each outstanding Option, (iv) the share and per-share provisions and the measurement price of each outstanding SAR, (v) the number of shares subject to and the repurchase price per share subject to each outstanding award of Restricted Stock and (vi) the share and per-share-related provisions and the purchase price, if any, of each outstanding RSU and each Other Stock-Based Award, shall be equitably adjusted by the Company (or substituted Awards may be made, if applicable) in the manner determined by the Board. Without limiting the generality of the foregoing, in the event the Company effects a split of the Common Stock by means of a stock dividend and the exercise price of and the number of shares subject to an outstanding Option are adjusted as of the date of the distribution of the dividend (rather than as of the record date for such dividend), then an optionee who exercises an Option between the record date and the distribution date for such stock dividend shall be entitled to receive, on the distribution date, the stock dividend with respect to the shares of Common Stock acquired upon such Option exercise, notwithstanding the fact that such shares were not outstanding as of the close of business on the record date for such stock dividend.
(b) Reorganization Events.
(1) Definition. A “Reorganization Event” shall mean: (a) any merger or consolidation of the Company with or into another entity as a result of which all of the Common Stock of the Company is converted into or exchanged for the right to receive cash, securities or other property or is canceled, (b) any transfer or disposition of all of the Common Stock of the Company for cash, securities or other property pursuant to a share exchange or other transaction or (c) any liquidation or dissolution of the Company.
(2) Consequences of a Reorganization Event on Awards Other than Restricted Stock.
(A) In connection with a Reorganization Event, the Board may take any one or more of the following actions as to all or any (or any portion of) outstanding Awards other than Restricted Stock on such terms as the Board determines (except to the extent specifically provided otherwise in an applicable Award agreement or another agreement between the Company and the Participant): (i) provide that such Awards shall be assumed, or substantially equivalent Awards shall be substituted, by the acquiring or succeeding corporation (or an affiliate thereof), (ii) upon written notice to a Participant, provide that all of the Participant’s unvested Awards will be forfeited immediately prior to the consummation of such Reorganization Event and/ or that all of the Participant’s unexercised Awards will terminate immediately prior to the consummation of such Reorganization Event unless exercised by the Participant (to the extent then exercisable) within a specified period following the date of such notice, (iii) provide that outstanding Awards shall become exercisable, realizable or deliverable, or restrictions applicable to an Award shall lapse, in whole or in part prior to or upon such Reorganization Event, (iv) in the event of a Reorganization Event under the terms of which holders of Common Stock will receive upon consummation thereof a cash payment for each share surrendered in the Reorganization Event (the “Acquisition Price”), make or provide for a cash payment to Participants with respect to each Award held by a Participant equal to (A) the number of shares of Common Stock subject to the vested portion of the Award (after giving effect to any acceleration of vesting that occurs upon or immediately prior to such Reorganization Event) multiplied by (B) the excess, if any, of (I) the Acquisition Price over (II) the exercise, measurement or purchase price of such Award and any applicable tax withholdings, in exchange for the termination of such Award, (v) provide that, in connection with a liquidation or dissolution of the Company, Awards shall convert into the right to receive liquidation proceeds (if applicable, net of the exercise, measurement or purchase price thereof and any applicable tax withholdings) and (vi) any combination of the foregoing. In taking any of the actions permitted under this Section 10(b)(2)(A), the Board shall not be obligated by the Plan to treat all Awards, all Awards held by a Participant, or all Awards of the same type, identically.
(B) Notwithstanding the terms of Section 10(b)(2)(A)(i), in the case of outstanding RSUs that are subject to Section 409A: (i) if the applicable RSU agreement provides that the RSUs shall be settled upon a “change in control event” within the meaning of Treasury Regulation Section 1.409A-3(i)(5)(i), and the Reorganization Event constitutes such a “change in control event”, then no assumption or substitution shall be permitted pursuant to Section 10(b)(2)(A)(i) and the RSUs shall instead be settled in accordance with the terms of the applicable RSU agreement; and (ii) the Board may only undertake the actions set forth in clauses (iii), (iv) or (v) of Section 10(b)(2)(A) if the Reorganization Event constitutes a “change in control event” as defined under Treasury Regulation Section 1.409A-3(i)(5)(i) and such action is permitted or required by Section 409A; if the Reorganization Event is not a “change in control event” as so defined or such action is not permitted or required by Section 409A, and the acquiring or succeeding corporation does not assume or substitute the RSUs pursuant to clause (i) of Section 10(b)(2)(A), then the unvested RSUs shall terminate immediately prior to the consummation of the Reorganization Event without any payment in exchange therefor.
(C) For purposes of Section 10(b)(2)(A)(i), an Award (other than Restricted Stock) shall be considered assumed if, following consummation of the Reorganization Event, such Award confers the right to purchase or receive pursuant to the terms of such Award, for each share of Common Stock subject to the Award immediately prior to the consummation of the Reorganization Event, the consideration (whether cash, securities or other property) received as a result of the Reorganization Event by holders of Common Stock for each share of Common Stock held immediately prior to the consummation of the Reorganization Event (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding shares of Common Stock); provided, however, that if the consideration received as a result of the Reorganization Event is not solely common stock of the acquiring or succeeding corporation (or an affiliate thereof), the Company may, with the consent of the acquiring or succeeding corporation, provide for the consideration to be received upon the exercise or settlement of the Award to consist solely of such number of shares of common stock of the acquiring or succeeding corporation (or an affiliate thereof) that the Board determined to be equivalent in value (as of the date of such determination or another date specified by the Board) to the per share consideration received by holders of outstanding shares of Common Stock as a result of the Reorganization Event.
(3) Consequences of a Reorganization Event on Restricted Stock. Upon the occurrence of a Reorganization Event other than a liquidation or dissolution of the Company, the repurchase and other rights of the Company with respect to outstanding Restricted Stock shall inure to the benefit of the Company’s successor and shall, unless the Board determines otherwise, apply to the cash, securities or other property which the Common Stock was converted into or exchanged for pursuant to such Reorganization Event in the same manner and to the same extent as they applied to such Restricted Stock; provided, however, that the Board may either provide for termination or deemed satisfaction of such repurchase or other rights under the instrument evidencing any Restricted Stock or any other agreement between a Participant and the Company, either initially or by amendment, or provide for forfeiture of such Restricted Stock if issued at no cost. Upon the occurrence of a Reorganization Event involving the liquidation or dissolution of the Company, except to the extent specifically provided to the contrary in the instrument evidencing any Restricted Stock or any other agreement between a Participant and the Company, all restrictions and conditions on all Restricted Stock then outstanding shall automatically be deemed terminated or satisfied.
(c) Change in Control Events.
(1) Definitions.
(A) “Change in Control” shall mean:
(i) any “person”, as such term is used in Sections 13(d) and 14(d) of the Exchange Act (other than (x) the Company, (y) any trustee or other fiduciary holding securities under an employee benefit plan of the Company and (z) any corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of the Common Stock), is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 30% or more of the combined voting power of the Company’s then outstanding voting securities (excluding any person who becomes such a beneficial owner in connection with a transaction immediately following which the individuals who comprise the Board immediately prior thereto constitute at least a majority of the Board, the board of the entity surviving such transaction or, if the Company or the entity surviving the transaction is then a subsidiary, the board of the ultimate parent thereof);
(ii) the following individuals cease for any reason to constitute a majority of the number of directors then serving: individuals who, on the Effective Date, constitute the Board or 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 stockholders was approved or recommended by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors on the Effective Date or whose appointment, election or nomination for election was previously so approved or recommended;
(iii) 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 a merger or consolidation immediately following which the individuals who comprise the Board immediately prior thereto constitute at least a majority of the Board, the board of the entity surviving such merger or consolidation or, if the Company or the entity surviving such merger is then a subsidiary, the board of the ultimate parent thereof; or
(iv) the stockholders of the Company approve a plan of complete liquidation of the Company or there is consummated an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets (or any transaction having similar effect), other than a sale or disposition by the Company of all or substantially all of the Company’s assets to an entity, immediately following which the individuals who comprise the Board immediately prior thereto constitute at least a majority of the board of directors of the entity to which such assets are sold or disposed of or, if such entity is a subsidiary, the board of the ultimate parent thereof.
(B) “Cause” shall mean willful misconduct by the Participant or willful failure by the Participant to perform his or her responsibilities to the Company (including, without limitation, breach by the Participant of any provision of any employment, consulting, advisory, nondisclosure, non-competition or other similar agreement between the Participant and the Company), as determined by the Company, which determination shall be conclusive. The Participant’s employment shall be considered to have been terminated for Cause if the Company determines, within 30 days of the Participant’s termination, that termination for Cause was warranted.
(C) “Good Reason” shall mean any significant diminution in the duties, authority or responsibilities of the Participant from and after the Change in Control, any material reduction in the base compensation payable to the Participant from and after the Change in Control, or any relocation of the place of business at which the Participant is principally located to a location that is greater than 50 miles from its location immediately prior to the Change in Control. Notwithstanding the occurrence of any such event or circumstance, such occurrence shall not be deemed to constitute Good Reason unless (x) the Participant gives the Company notice of termination no more than 90 days after the initial existence of such event or circumstance, (y) such event or circumstance has not been fully corrected and the Participant has not been reasonably compensated for any losses or damages resulting therefore within 30 days of the Company’s receipt of the notice and (z) the Participant’s termination of employment actually occurs within six months following the Company’s receipt of such notice.
(2) Consequences of a Change in Control on Awards other than Restricted Stock. Notwithstanding the provisions of Section 10(b), except to the extent specifically provided otherwise in an applicable Award agreement or another agreement between the Company and the Participant, each Award other than Restricted Stock shall become immediately exercisable, realizable, or deliverable in full or restrictions applicable to such Awards shall lapse in full if, on or prior to the first anniversary of the date of the Change in Control, the Participant’s employment with the Company or an acquiring or succeeding corporation is terminated for Good Reason by the Participant or is terminated without Cause by the Company or the acquiring or succeeding corporation.
(3) Consequences of a Change in Control on Restricted Stock. Notwithstanding the provisions of Section 10(b), except to the extent specifically provided otherwise in an applicable Award agreement or another agreement between the Company and the Participant, each Award of Restricted Stock shall become immediately free from all conditions and restrictions if, on or prior to the first anniversary of the date of the Change in Control, the Participant’s employment with the Company or an acquiring or succeeding corporation is terminated for Good Reason by the Participant or is terminated without Cause by the Company or the acquiring or succeeding corporation.
|
|
|
|
|
|
|
|
11.
|
General Provisions Applicable to Awards
|
(a) Transferability of Awards. Awards shall not be sold, assigned, transferred, pledged or otherwise encumbered by a Participant, either voluntarily or by operation of law, except by will or the laws of descent and distribution or, other than in the case of an Incentive Stock Option, pursuant to a qualified domestic relations order, and, during the life of the Participant, shall be exercisable only by the Participant; provided, however, that, except with respect to Awards subject to Section 409A, the Board may permit or provide in an Award for the gratuitous transfer of the Award by the Participant to or for the benefit of any immediate family member, family trust or other entity established for the benefit of the Participant and/or an immediate family member thereof if the Company would be eligible to use a Form S-8 under the Securities Act for the registration of the sale of the Common Stock subject to such Award to such proposed transferee; provided further, that the Company shall not be required to recognize any such permitted transfer until such time as such permitted transferee shall, as a condition to such transfer, deliver to the Company a written instrument in form and substance satisfactory to the Company confirming that such transferee shall be bound by all of the terms and conditions of the Award. References to a Participant, to the extent relevant in the context, shall include references to authorized transferees. For the avoidance of doubt, nothing contained in this Section 11(a) shall be deemed to restrict a transfer to the Company.
(b) Documentation. Each Award shall be evidenced in such form (written, electronic or otherwise) as the Board shall determine. Each Award may contain terms and conditions in addition to those set forth in the Plan.
(c) Termination of Status. The Board shall determine the effect on an Award of the disability, death, termination or other cessation of employment, authorized leave of absence or other change in the employment or other status of a Participant and the extent to which, and the period during which, the Participant, or the Participant’s legal representative, conservator, guardian or Designated Beneficiary, may exercise rights, or receive any benefits, under an Award.
(d) Withholding. The Participant must satisfy all applicable federal, state, and local or other income and employment tax withholding obligations before the Company will deliver stock certificates or otherwise recognize ownership of Common Stock under an Award. The Company may elect to satisfy the withholding obligations through additional withholding on salary or wages. If the Company elects not to or cannot withhold from other compensation, the Participant must pay the Company the full amount, if any, required for withholding or have a broker tender to the Company cash equal to the withholding obligations. Payment of withholding obligations is due before the Company will issue any shares on exercise, vesting or release from forfeiture of an Award or at the same time as payment of the exercise or purchase price, unless the Company determines otherwise. If provided for in an Award or approved by the Board, a Participant may satisfy the tax obligations in whole or in part by delivery (either by actual delivery or attestation) of shares of Common Stock, including shares retained from the Award creating the tax obligation, valued at their fair market value (valued in the manner determined by (or in a manner approved by) the Company); provided, however, except as otherwise provided by the Board, that the total tax withholding where stock is being used to satisfy such tax obligations cannot exceed the Company’s minimum statutory withholding obligations (based on minimum statutory withholding rates for federal and state tax purposes, including payroll taxes, that are applicable to such supplemental taxable income), except that, to the extent that the Company is able to retain shares of Common Stock having a fair market value (determined by, or in a manner approved by, the Company) that exceeds the statutory minimum applicable withholding tax without financial accounting implications or the Company is withholding in a jurisdiction that does not have a statutory minimum withholding tax, the Company may retain such number of shares of Common Stock (up to the number of shares having a fair market value equal to the maximum individual statutory rate of tax (determined by, or in a manner approved by, the Company)) as the Company shall determine in its sole discretion to satisfy the tax liability associated with any Award. Shares used to satisfy tax withholding requirements cannot be subject to any repurchase, forfeiture, unfulfilled vesting or other similar requirements.
(e) Amendment of Award. Except as otherwise provided in Sections 5(g) and 6(e) related to repricings, the Board may amend, modify or terminate any outstanding Award, including but not limited to, substituting therefor another Award of the same or a different type, changing the date of exercise or realization, and converting an Incentive Stock Option to a Nonstatutory Stock Option. The Participant’s consent to such action shall be required unless (i) the Board determines that the action, taking into account any related action, does not materially and adversely affect the Participant’s rights under the Plan or (ii) the change is permitted under Section 10.
(f) Conditions on Delivery of Stock. The Company will not be obligated to deliver any shares of Common Stock pursuant to the Plan or to remove restrictions from shares previously issued or delivered under the Plan until (i) all conditions of the Award have been met or removed to the satisfaction of the Company, (ii) in the opinion of the Company’s counsel, all other legal matters in connection with the issuance and delivery of such shares have been satisfied, including any applicable securities laws and regulations and any applicable stock exchange or stock market rules and regulations, and (iii) the Participant has executed and delivered to the Company such representations or agreements as the Company may consider appropriate to satisfy the requirements of any applicable laws, rules or regulations.
(g) Limitations on Vesting. Subject to Section 11(h), no Award shall vest earlier than the first anniversary of its date of grant, unless such Award is granted in lieu of salary, bonus or other compensation otherwise earned by or payable to the Participant. The foregoing sentence shall not apply to Awards granted, in the aggregate, for up to 5% of the maximum number of authorized shares set forth in Section 4(a).
(h) Acceleration. The Board may at any time provide that any Award shall become immediately exercisable in whole or in part, free from some or all restrictions or conditions or otherwise realizable in whole or in part, as the case may be.
(a) No Right To Employment or Other Status. No person shall have any claim or right to be granted an Award by virtue of the adoption of the Plan, and the grant of an Award shall not be construed as giving a Participant the right to continued employment or any other relationship with the Company. The Company expressly reserves the right at any time to dismiss or otherwise terminate its relationship with a Participant free from any liability or claim under the Plan, except as expressly provided in the applicable Award.
(b) No Rights As Stockholder; Clawback. Subject to the provisions of the applicable Award, no Participant or Designated Beneficiary shall have any rights as a stockholder with respect to any shares of Common Stock to be issued with respect to an Award until becoming the record holder of such shares. In accepting an Award under the Plan, the Participant agrees to be bound by any clawback policy that the Company has in effect or may adopt in the future.
(c) Effective Date and Term of Plan. The Plan shall become effective on the date that the Company’s stockholders approve the Plan. No Awards shall be granted under the Plan after May 8, 2029, which is the date that is 10 years from the date that the Company’s stockholders approved the 2019 Equity and Incentive Plan (the “Effective Date”), but Awards previously granted may extend beyond that date.
(d) Amendment of Plan. The Board may amend, suspend or terminate the Plan or any portion thereof at any time provided that (i) neither Section 5(g) nor 6(e) requiring stockholder approval of any option or SAR repricing may be amended without stockholder approval; (ii) no amendment that would require stockholder approval under the rules of the national securities exchange on which the Company then maintains its primary listing may be made effective unless and until the Company’s stockholders approve such amendment; and (iii) if the national securities exchange on which the Company then maintains its primary listing does not have rules regarding when stockholder approval of amendments to equity compensation plans is required (or if the Company’s Common Stock is not then listed on any national securities exchange), then no amendment to the Plan (A) materially increasing the number of shares authorized under the Plan (other than pursuant to Section 4(c) or 10), (B) expanding the types of Awards that may be granted under the Plan, or (C) materially expanding the class of participants eligible to participate in the Plan shall be effective unless and until the Company’s stockholders approve such amendment. In addition, if at any time the approval of the Company’s stockholders is required as to any other modification or amendment under Section 422 of the Code or any successor provision with respect to Incentive Stock Options, the Board may not effect such modification or amendment without such approval. Unless otherwise specified in the amendment, any amendment to the Plan adopted in accordance with this Section 12(d) shall apply to, and be binding on the holders of, all Awards outstanding under the Plan at the time the amendment is adopted, provided the Board determines that such amendment, taking into account any related action, does not materially and adversely affect the rights of Participants under the Plan. No Award shall be made that is conditioned upon stockholder approval of any amendment to the Plan unless the Award provides that (i) it will terminate or be forfeited if stockholder approval of such amendment is not obtained within no more than 12 months from the date of grant and (2) it may not be exercised or settled (or otherwise result in the issuance of Common Stock) prior to such stockholder approval.
(e) Authorization of Sub-Plans (including for Grants to non-U.S. Employees). The Board may from time to time establish one or more sub-plans under the Plan for purposes of satisfying applicable securities, tax or other laws of various jurisdictions. The Board shall establish such sub-plans by adopting supplements to the Plan containing (i) such limitations on the Board’s discretion under the Plan as the Board deems necessary or desirable or (ii) such additional terms and conditions not otherwise inconsistent with the Plan as the Board shall deem necessary or desirable. All supplements adopted by the Board shall be deemed to be part of the Plan, but each supplement shall apply only to Participants within the affected jurisdiction and the Company shall not be required to provide copies of any supplement to Participants in any jurisdiction which is not the subject of such supplement.
(f) Compliance with Section 409A of the Code. If and to the extent (i) any portion of any payment, compensation or other benefit provided to a Participant pursuant to the Plan in connection with his or her employment termination constitutes “nonqualified deferred compensation” within the meaning of Section 409A and (ii) the Participant is a specified employee as defined in Section 409A(a)(2)(B)(i) of the Code, in each case as determined by the Company in accordance with its procedures, by which determinations the Participant (through accepting the Award) agrees that he or she is bound, such portion of the payment, compensation or other benefit shall not be paid before the day that is six months plus one day after the date of “separation from service” (as determined under Section 409A) (the “New Payment Date”), except as Section 409A may then permit. The aggregate of any payments that otherwise would have been paid to the Participant during the period between the date of separation from service and the New Payment Date shall be paid to the Participant in a lump sum on such New Payment Date, and any remaining payments will be paid on their original schedule.
The Company makes no representations or warranty and shall have no liability to the Participant or any other person if any provisions of or payments, compensation or other benefits under the Plan are determined to constitute nonqualified deferred compensation subject to Section 409A but do not satisfy the conditions of that section.
(g) Limitations on Liability. Notwithstanding any other provisions of the Plan, no individual acting as a director, officer, employee or agent of the Company will be liable to any Participant, former Participant, spouse, beneficiary, or any other person for any claim, loss, liability, or expense incurred in connection with the Plan, nor will such individual be personally liable with respect to the Plan because of any contract or other instrument he or she executes in his or her capacity as a director, officer, employee or agent of the Company. The Company will indemnify and hold harmless each director, officer, employee or agent of the Company to whom any duty or power relating to the administration or interpretation of the Plan has been or will be delegated, against any cost or expense (including attorneys’ fees) or liability (including any sum paid in settlement of a claim with the Board’s approval) arising out of any act or omission to act concerning the Plan unless arising out of such person’s own fraud or bad faith.
(h) Governing Law. The provisions of the Plan and all Awards made hereunder shall be governed by and interpreted in accordance with the laws of the State of Delaware, excluding choice-of-law principles of the law of such state that would require the application of the laws of a jurisdiction other than the State of Delaware.
APPENDIX C
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
WEX INC.
WEX Inc., a corporation organized and existing under the General Corporation Law of the State of Delaware, does hereby certify that the name of the corporation is WEX Inc. and the original certificate of incorporation of the corporation was filed with the Secretary of State of the State of Delaware on February 16, 2005 under the name Wright Express Corporation. This Amended and Restated Certificate of Incorporation, having been duly adopted in accordance with Sections 242 and 245 of the General Corporation Law of the State of Delaware (the “DGCL”), restates, integrates and amends the certificate of incorporation of the Corporation as follows:
ARTICLE I
The name of the Corporation is WEX Inc.
ARTICLE II
The address of the registered office of the Corporation in the State of Delaware is 2711 Centerville Road, Suite 400, in the City of Wilmington, County of New Castle. The name of its registered agent at that address is CORPORATION SERVICE COMPANY.
ARTICLE III
The purpose of the Corporation is to engage in any lawful act or activity for which a corporation may be organized under the DGCL.
ARTICLE IV
(A) Authorized Capital Stock. The total number of shares of stock which the Corporation shall have authority to issue is 185,000,000 shares of capital stock, consisting of (i) 175,000,000 shares of common stock, par value $0.01 per share (the “Common Stock”) and (ii) 10,000,000 shares of preferred stock, par value $0.01 per share (the “Preferred Stock”).
(B) Common Stock. The shares of Common Stock of the Corporation shall be of one and the same class. Except as may be limited by Article X hereof, the holders of Common stock shall have one vote per share of Common Stock on all matters on which holders of Common Stock are entitled to vote.
(C) Preferred Stock. The Board of Directors is hereby expressly authorized to provide for the issuance of all or any shares of the Preferred Stock in one or more classes or series, and to fix for each such class or series such voting powers, full or limited, or no voting powers, and such designations, preferences and relative, participating, optional or other special rights and such qualifications, limitations or restrictions thereof, as shall be stated and expressed in the resolution or resolutions adopted by the Board of Directors providing for the issuance of such class or series, including, without limitation, the authority to provide that any such class or series may be (i) subject to redemption at such time or times and at such price or prices; (ii) entitled to receive dividends (which may be cumulative or non-cumulative) at such rates, on such conditions, and at such times, and payable in preference to, or in such relation to, the dividends payable on any other class or classes or any other series; (iii) entitled to such rights upon the dissolution of, or upon any distribution of the assets of, the Corporation; or (iv) convertible into, or exchangeable for, shares of any other class or classes of stock, or of any other series of the same or any other class or classes of stock, of the Corporation at such price or prices or at such rates of exchange and with such adjustments; all as may be stated in such resolution or resolutions.
(D) Power to Sell and Purchase Shares. Subject to the requirements of applicable law, the Corporation shall have the power to issue and sell all or any part of any shares of any class of stock herein or hereafter authorized to such persons, and for such consideration, as the Board of Directors shall from time to time, in its discretion, determine, whether or not greater consideration could be received upon the issue or sale of the same number of shares of another class, and as otherwise permitted by law. Subject to the requirements of applicable law, the Corporation shall have the power to purchase any shares of any class of stock herein or hereafter authorized from such persons, and for such consideration, as the Board of Directors shall from time to time, in its discretion, determine, whether or not less consideration could be paid upon the purchase of the same number of shares of another class, and as otherwise permitted by law.
ARTICLE V
The following provisions are inserted for the management of the business and the conduct of the affairs of the Corporation, and for further definition, limitation and regulation of the powers of the Corporation and of its directors and stockholders:
(A) The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors.
(B) The Board of Directors shall consist of one or more members, the exact number of which shall be determined in the manner set forth in the By-Laws.
(C) Until the election of directors at the annual meeting scheduled to be held in 2024, the Board of Directors shall be divided into classes with directors in each class having the term of office specified in this Article V(C). The term of the initial Class I directors shall terminate at the election of directors at the 2006 annual meeting; the term of the initial Class II directors shall terminate at the election of directors at the 2007 annual meeting; and the term of the initial Class III directors shall terminate at the election of directors at the 2008 annual meeting. At each succeeding annual meeting of stockholders beginning in 2006, successors to the class of directors whose term expires at that annual meeting shall be elected for a three-year term. Notwithstanding the foregoing, commencing with the election of directors at the annual meeting scheduled to be held in 2022, the successor of each director whose term expires at such meeting shall be elected for a term expiring at the annual meeting scheduled to be held in 2023; for the election of directors at the annual meeting scheduled to be held in 2023, the successor of each director whose term expires at such meeting shall be elected for a term expiring at the annual meeting scheduled to be held in 2024; and for the election of directors at the annual meeting scheduled to be held in 2024, each director shall be elected for a term expiring at the next succeeding annual meeting. Commencing with the election of directors at the annual meeting scheduled to be held in 2024 and for the election of directors at each annual meeting thereafter, the classification of the Board of Directors shall cease, and directors shall thereupon be elected for a term expiring at the next annual meeting of stockholders. Until the election of directors at the annual meeting scheduled to be held in 2024, if the authorized number of directors is increased or decreased, any newly created or eliminated directorships resulting from such increase or decrease shall be apportioned by the Board of Directors among the classes of directors, but in no case will a decrease in the authorized number of directors shorten the term of any incumbent director.
(D) The term of each director shall continue until his or her successor shall be elected and shall qualify, subject, however, to prior death, resignation, retirement, disqualification or removal from office.
(E) Subject to the terms of any one or more classes or series of Preferred Stock, any newly created directorship that results from an increase in the authorized number of directors shall be filled by a majority of the Board of Directors then in office, provided that a quorum is present, and any vacancy occurring on the Board of Directors shall be filled by a majority of the Board of Directors then in office, even if less than a quorum, or by a sole remaining director. Until the election of directors at the annual meeting scheduled to be held in 2024, a director elected to fill a newly created directorship resulting from an increase in the authorized number of directors shall hold office until the next election of the class for which such director shall have been chosen. Any director elected to fill a vacancy shall be elected for the unexpired term of his or her predecessor. Subject to the rights, if any, of the holders of shares of Preferred Stock then outstanding, until the election of directors at the annual meeting scheduled to be held in 2024, any or all of the directors of the Corporation may be removed from office at any time, but only for cause and only by the affirmative vote of the holders of at least 60% of the voting power of the Corporation’s then issued and outstanding capital stock entitled to vote at the election of directors. Thereafter, any director of the Corporation may be removed from office at any time, with or without cause, by the affirmative vote of the holders of a majority of the shares of capital stock then entitled to vote at an election of directors. Notwithstanding the foregoing, whenever the holders of any one or more classes or series of Preferred Stock issued by the Corporation shall have the right, voting separately by class or series, to elect directors at an annual or special meeting of stockholders, the election, term of office, filling of vacancies and other features of such directorships shall be governed by the terms of this Certificate of Incorporation applicable thereto, and such directors so elected shall not be divided into classes pursuant to this Article V unless expressly provided by such terms.
(F) In addition to the powers and authority hereinbefore or by statute expressly conferred upon them, the directors are hereby empowered to exercise all such powers and do all such acts and things as may be exercised or done by the Corporation, subject, nevertheless, to the provisions of the DGCL, this Certificate of Incorporation, and any By-Laws adopted by the stockholders; provided, however, that no By-Laws hereafter adopted by the stockholders shall invalidate any prior act of the directors which would have been valid if such By-Laws had not been adopted.
ARTICLE VI
No director shall be personally liable to the Corporation or any of its stockholders for monetary damages for breach of fiduciary duty as a director, except to the extent such exemption from liability or limitation thereof is not permitted under the DGCL as the same exists or may hereafter be amended. If the DGCL is amended hereafter to authorize the further elimination or limitation of the liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent authorized by the DGCL, as so amended. Any repeal or modification of this Article VI shall not adversely affect any right or protection of a director of the Corporation existing at the time of such repeal or modification with respect to acts or omissions occurring prior to such repeal or modification.
ARTICLE VII
The Corporation shall indemnify its directors and officers to the fullest extent authorized or permitted by law, as now or hereafter in effect, and such right to indemnification shall continue as to a person who has ceased to be a director or officer of the Corporation and shall inure to the benefit of his or her heirs, executors and personal and legal representatives; provided, however, that, except for proceedings to enforce rights to indemnification, the Corporation shall not be obligated to indemnify any director or officer (or his or her heirs, executors or personal or legal representatives) in connection with a proceeding (or part thereof) initiated by such person unless such proceeding (or part thereof) was authorized or consented to by the Board of Directors. The right to indemnification conferred by this Article VII shall include the right to be paid by the Corporation the expenses incurred in defending or otherwise participating in any proceeding in advance of its final disposition upon receipt by the Corporation of an undertaking by or on behalf of the director or officer receiving advancement to repay the amount advanced if it shall ultimately be determined that such person is not entitled to be indemnified by the Corporation under this Article VII.
The Corporation may, to the extent authorized from time to time by the Board of Directors, provide rights to indemnification and to the advancement of expenses to employees and agents of the Corporation similar to those conferred in this Article VII to directors and officers of the Corporation.
The rights to indemnification and to the advancement of expenses conferred in this Article VII shall not be exclusive of any other right which any person may have or hereafter acquire under this Certificate of Incorporation, the By-Laws of the Corporation, any statute, agreement, vote of stockholders or disinterested directors or otherwise.
Any repeal or modification of this Article VII shall not adversely affect any rights to indemnification and to the advancement of expenses of a director or officer of the Corporation existing at the time of such repeal or modification with respect to any acts or omissions occurring prior to such repeal or modification.
ARTICLE VIII
Any action required or permitted to be taken by the stockholders of the Corporation after February 22, 2005 must be effected at a duly called annual or special meeting of stockholders of the Corporation, and the ability of the stockholders to consent in writing to the taking of any action is hereby specifically denied.
ARTICLE IX
(A) Meetings of stockholders may be held within or without the State of Delaware, as the By-Laws may provide. The books of the Corporation may be kept (subject to any provision contained in the DGCL) outside the State of Delaware at such place or places as may be designated from time to time by the Board of Directors or in the By-Laws of the Corporation.
(B) Unless otherwise required by law, Special Meetings of Stockholders, for any purpose or purposes, may be called by either (i) the Non-Executive Chairman of the Board of Directors or the Chairman of the Board of Directors, if there be one, (ii) the President or (iii) the Board of Directors. The ability of the stockholders to call a Special Meeting of Stockholders after February 22, 2005 is hereby specifically denied.
ARTICLE X
(A) If, prior to the close of business on the business day immediately preceding the date of any stockholders’ meeting at which any Control Holder, as of the Record Date for such meeting, would be entitled (without regard to this Article X) to vote with respect to any matter, any such Control Holder has not provided the Corporation with written evidence satisfactory to the Corporation, in its sole discretion, that such Control Holder has obtained all Approval(s) that may be required by statute, regulation, or interpretation of the appropriate banking regulatory agency, or that such approvals are not so required, or, if prior to such meeting the Utah Department of Financial Institutions (“UDFI”) or the Federal Deposit Insurance Corporation (“FDIC”) shall have so requested, none of the shares of capital stock over which such Control Holder exercises voting power or control shall be deemed to be present at such meeting, including, without limitation, for purposes of determining whether or not a quorum exists, and none of such shares of capital stock shall be entitled to vote at such meeting on any matter. Every reference in this Certificate of Incorporation to a majority or other proportion of stock or voting stock (or the holders thereof) for any purpose, shall be deemed to refer to such majority or other proportion of the stock or voting stock (or the holders thereof) after giving effect to this Article X.
(B) The Board of Directors shall have the right to demand that any person it reasonably believes may be a Control Holder, supply the Corporation with complete information as to (i) all shares beneficially owned by such person, (ii) any correspondence or discussions between such person (or any person acting on such person’s behalf) and the UDFI and/or the FDIC pertaining to such person’s ownership of securities of the Corporation, or (iii) any other factual matter relating to the applicability of this Article X, as may be reasonably requested by the Board of Directors within 10 days after making such demand.
(C) “Control Holder” means any Federal Control Holder and/or any Utah Control Holder.
(D) “Federal Control Holder” means, as of any date of determination, any natural person or entity that beneficially owns 10% or more of any class of the Corporation’s voting securities outstanding as of such date (determined, with respect to such natural person or entity, without regard to this Article X) outstanding as of such date, provided, that if two or more classes of securities vote together on all matters (except with respect to differences in voting rights that arise by operation of law or by virtue of a default), such classes of securities shall be deemed to be one class of securities for purposes of this paragraph, and a holder’s beneficial ownership percentage shall be determined with respect to such aggregate class of securities.
(E) “Record Date” means, with respect to any vote of stockholders of the Corporation, the date fixed for the determination of those stockholders entitled to vote.
(F) “Approval(s)” means (i) in the case of any Utah Control Holder, the approval or consent of the UDFI for the beneficial ownership of the Corporation’s voting securities by such Utah Control Holder, in an amount not less than the amount beneficially owned by such Utah Control Holder as of the applicable Record Date, and/or (ii) in the case of any Federal Control Holder, the approval or consent of the FDIC for the beneficial ownership of the Corporation’s voting securities by such Federal Control Holder, in an amount not less than the amount beneficially owned by such Federal Control Holder as of the applicable Record Date.
(G) “Utah Control Holder” means, as of any date of determination, any natural person that beneficially owns 20% or more, or any entity that beneficially owns 10% or more, of any class of the Corporation’s voting securities (determined, with respect to such natural person or entity, without regard to this Article X) outstanding as of such date, provided, that if two or more classes of securities vote together on all matters (except with respect to differences in voting rights that arise by operation of law or by virtue of a default), such classes of securities shall be deemed to be one class of securities for purposes of this paragraph, and a holder’s beneficial ownership percentage shall be determined with respect to such aggregate class of securities.
(H) For purposes of this Article X, beneficial ownership shall be determined in accordance with Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended.
(I) Any percentage set forth in Article X(D) and Article X (G) shall be automatically adjusted if and to the extent that (i) the definition of “Control” set forth in Section 7-1-103(5) of the Utah Financial Institutions Act, and/or (ii) the presumption of control set forth in 12 CFR 303.82(B)(2), is amended after the date hereof to provide for a different percentage.
(J) This Article X shall not affect the validity of any vote of the stockholders that is otherwise valid and the Corporation shall not be deemed to have the authority under this Article X to alter or amend the results of any vote that has otherwise been validly taken and certified by the inspector of elections. Any determination made by a majority of the Board of Directors pursuant to this Article X in good faith and on the basis of such information as was actually known by the Board of Directors at such time shall be conclusive and binding upon the Corporation and the stockholders, including any Control Holder.
(K) If (x) neither the Corporation nor any subsidiary thereof is subject to regulation by either the UDFI or the FDIC, or (y) the Board of Directors so determines by resolution and there is no pending request from the UDFI or the FDIC to deny any stockholder(s) the right to vote at the time such resolution is adopted, the provisions of this Article X shall be of no further force and effect.
ARTICLE XI
In furtherance and not in limitation of the powers conferred upon it by the laws of the State of Delaware, the Board of Directors shall have the power to adopt, amend, alter or repeal the Corporation’s By-Laws. The affirmative vote of at least a majority of the entire Board of Directors shall be required to adopt, amend, alter, change or repeal the Corporation’s By-Laws. The Corporation’s By-Laws also may be adopted, amended, altered, changed or repealed by the affirmative vote of the holders of at least 60% of the voting power of the shares entitled to vote at an election of directors.
ARTICLE XII
The Corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate of Incorporation in the manner now or hereafter prescribed in this Certificate of Incorporation, the Corporation’s By-Laws or the DGCL, and all rights herein conferred upon stockholders are granted subject to such reservation; provided, however, that, notwithstanding any other provision of this Certificate of Incorporation (and in addition to any other vote that may be required by law), the affirmative vote of the holders of at least 60% of the voting power of the shares entitled to vote at an election of directors shall be required to amend, alter, change or repeal, or to adopt any provision as part of this Certificate of Incorporation inconsistent with the purpose and intent of Articles V, VII, IX and X of this Certificate of Incorporation or this Article XII.
IN WITNESS WHEREOF, the Corporation has caused this Amended and Restated Certificate of Incorporation to be executed on its behalf this [___] day of [_______], 2021.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WEX INC.
|
|
|
By:
|
|
|
Name:
|
|
|
|
Title:
|
|
|