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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Covenant Transportation Group Inc | NASDAQ:CVTI | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 13.95 | 8.50 | 14.25 | 0 | 01:00:00 |
[ ]
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Preliminary Proxy Statement
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[ ]
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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[X]
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Definitive Proxy Statement
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[ ]
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Definitive Additional Materials
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[ ]
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Soliciting Material Pursuant to § 240.14a-12
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[X]
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No fee required
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[ ]
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11
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[ ]
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Fee paid previously with preliminary materials.
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N/A
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[ ]
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
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(1)
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Amount previously paid:
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N/A
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(2)
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Form, Schedule or Registration Statement No.:
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N/A
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(3)
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Filing Party:
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N/A
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(4)
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Date Filed:
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N/A
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1.
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To consider and act upon a proposal to elect eight (8) directors;
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2.
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To consider and act upon an advisory and non-binding vote on executive compensation;
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3.
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To ratify the appointment of Grant Thornton LLP as the Company’s independent registered public accounting firm for 2022; and
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4.
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To consider and act upon such other matters as may properly come before the meeting and any adjournment thereof.
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Important Notice Regarding the Availability of Proxy Materials for the
Meeting of Stockholders to Be Held on May 18, 2022
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By Order of the Board of Directors,
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David R. Parker
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Chairman of the Board
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Letter To
Stockholders
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Governance
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Executive Compensation
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Environmental
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Social
|
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LETTER FROM OUR LEAD INDEPENDENT DIRECTOR |
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Dear Fellow Stockholders:
It is my privilege to address you for the first time as Covenant’s Lead Independent Director. I took over this role last year from Bob
Bosworth, who had served in this capacity since the position was established in 2017. I hope to follow Bob’s sterling example and continue leading the Board in its commitment to independent oversight, risk management, strategic planning,
capital allocation, and environmental and social stewardship.
We have sought to cultivate a group of independent directors with a balanced and varied composition of skills, backgrounds, and perspectives
that enrich our dialogue, as part of our commitment to rigorous independent oversight. In furtherance of this commitment, the Board unanimously voted to add Dr. Benjamin Carson as an independent director in July 2021. Ben previously served
as Secretary of the U.S. Department of Housing and Urban Development and is a world-renowned neurosurgeon and experienced public company board member. With the addition of Ben to our already talented and accomplished Board, our directors
have expertise in various subject matters, including financial reporting, the transportation industry, risk management, cybersecurity, governance, environment, and technology, as well as experience with non-profit and community
organizations. We are pleased to nominate all members of the Board for re-election at this year’s Annual Meeting.
The Board believes strongly in proactively managing enterprise risk. Throughout 2021, the Board engaged in extensive research and discussion
regarding the best tools to timely identify and mitigate risks to the Company. To that end, in 2022 the Board established a Risk Committee focused on identification, evaluation, and mitigation of operational, strategic, and environment
risks, as well as monitoring and approving risk policies and associated practices for the Company. The Board believes an actively engaged Risk Committee will be vital in recognizing and managing key risks facing the Company.
The Board has been focused on refining its capital allocation strategies to generate value for our stockholders. As we see the results of
executing our strategic plan – increased profitability and deleveraging our balance sheet – the Board was able to return approximately $10.3 million to stockholders in 2021 through open market share repurchases and a modified Dutch auction
tender offer. We are continuing to return value to stockholders in 2022. In the first quarter of 2022, we implemented a quarterly cash dividend program of $0.0625 per share, subject to quarterly Board approval, and adopted a 10b5-1 plan for
the purchase of up to $30 million in shares, subject to defined trading parameters.
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"The Board, which is composed of entirely independent committees and features
more than two-thirds independent members, is actively involved in oversight of the Company’s strategy and risks. The last two additions to our Board have been excellent directors and we look
forward to further expanding our diversity moving forward. As Lead Independent Director, I preside over all executive sessions of the independent directors and facilitate active, effective communication between the independent directors and management."
W. Miller Welborn
Lead Independent Director
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Letter To
Stockholders
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Governance
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Executive Compensation
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Environmental
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Social
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As a leader in the transportation industry, we believe we have a responsibility to our community, our environment, and our team members. We are
focused on enhancing sustainability, improving the health and well-being of our team members, and reducing the environmental impact of our operations. As described in our 2020 Corporate Social Responsibility report, we are implementing
initiatives to decrease emissions and our environmental footprint, make investments in the health, safety, diversity, and inclusion of our team members, and leverage the involvement of our Company for the betterment of our community. Across
the organization, we actively recruit from a diverse, qualified group of candidates to increase the diversity of thinking and perspective. We are committed to serving the communities where we do business, including company-sponsored
“Volunteer Time Off” programs, participation in blood donation drives, and providing charitable donations to local and global groups.
Given the nature of our business, the Company has been especially mindful of opportunities to invest in green technologies and find ways to
minimize our effect on the environment. We were an early adopter of the Environmental Protection Agency’s SmartWay program, and we participate in a number of recycling programs, including tire recycling, battery recycling, metal recycling,
and other maintenance parts recycling. We have been involved in product testing for lower-resistance tires, autonomous vehicles, and alternative fuels, and we have been outfitting our fleet with aerodynamic enhancements and idle reduction
technology, as well as use of bio-diesel fuel. At our offices, we have reduced paper and plastic dishware, upgraded to LED lighting, installed solar panels, implemented cloud computing, and embraced a hybrid work model that reduces our
consumption of office and commuting resources.
As we move forward after a record 2021, the Board thanks you for your continued support, welcomes your feedback, and reaffirms our commitment to
creating long-term value for our stockholders, upholding our duty of independent oversight, and fulfilling our responsibilities to our stockholders, our community, our team members, and our environment.
Sincerely,
W. Miller Welborn
Lead Independent Director
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Letter To
Stockholders
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Governance
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Executive Compensation
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Environmental
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Social
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WHAT WE DO
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The following summarizes our key governance features:
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✔
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Lead Independent Director appointed
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Independent Nominating and Corporate Governance Committee oversees information security
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Proxy access |
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Stock ownership guidelines for senior executive officers, with CEO at six times annual base salary |
✔
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Corporate governance guidelines
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✔
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Anti-hedging and anti-pledging guidelines for senior executive officers, with no hardship exception
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✔
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Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee comprised solely of
independent directors
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✔
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Majority vote policy for uncontested elections
Annual Board and committee written self-assessment through outside counsel
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✔
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Over two-thirds of the Board comprised of independent directors
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Annual Lead Independent Director written assessment through outside counsel |
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Limitation on number of outside public boards
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Annual CEO written assessment through outside counsel |
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Three members of our Audit Committee qualify as audit committee financial experts
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✔
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Annual enterprise risk assessment
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✔
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Regular sessions of independent directors
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✔
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Director orientation
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✔
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Stock ownership guidelines for non-employee directors of five times annual cash retainer
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Letter To
Stockholders
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Governance
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Executive Compensation
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Environmental
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Social
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Letter To
Stockholders
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Governance
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Executive Compensation
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Environmental
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Social
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ENVIRONMENTAL FOCUS
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We believe the future of transportation will involve a blend of fuel options
– from battery electric to hydrogen to compressed natural gas to diesel. For the foreseeable future we expect much of our transportation needs to continue to be on diesel as other options mature and become reliably available at scale.
Covenant will continue to evaluate all available options and pursue the larger goal of decarbonization.
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✔ Investing in a current fleet – with the average age of our trucks are 2.1 years we are lower than the industry average, which provides the latest fuel saving technologies available
✔ Working
with a leading tire manufacturer on a nationwide test of a new low-rolling resistance tire made from recycled carbon black (RcB)
✔ Testing
battery electric tractors where the length of haul permits use of such technology
✔ Installing
heaters on our tractors that runs on diesel from the fuel tank and can run up to 10 hours on a gallon of diesel, which is significantly more fuel efficient than running the truck engine and produces much less CO2
✔ Adopting
the EPA's Smartway certification program - Covenant has consistently maintained full Smartway certification - Receiving the 2019 Smartway Excellence Award - which is only given to the top 2% of all carriers
✔ Exploring
processes and solutions to assist in carbon accounting
✔ Optimizing
all recycling programs involving tires, batteries, water, scrap metal, cleaning solvents, and diesel particulate filters
✔ Equipping
our tractors and trailers with technology designed to increase aerodynamics and reduce emissions, including maximum length cab extenders, chassis side fairings, aerodynamic bumpers, and trailer aero skirts
✔ Utilizing
direct drive automated transmissions and down sped rear axle ratios, which allow the engine to operate at lower RPMs while at cruise speeds
✔ Implementing
Corporate Social Responsibility (CSR) reports
✔ Continuing
to learn from our Vice President of Sustainability about new developments, emerging technologies, and vendors that will help us move forward and stay abreast of current trends
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" I believe being environmentally conscious and fiscally conscious are not exclusive ideas. At Covenant, we work diligently to decrease our impact on the environment and partner
with our suppliers to bring technology to market that supports that goal.”
Dan Porterfield
SVP Maintenance
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Letter To
Stockholders
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Governance
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Executive Compensation
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Environmental
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Social
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SOCIAL AND DIVERSITY FOCUS
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We are a group and culture made up of many different individuals. Therefore, we believe in having respect for multiple
views and beliefs. The Company strives to create an inclusive workplace where everyone is treated in an ethical manner regardless of any legally protected characteristic. We want every team member to feel they can be themselves so they
can reach their potential and help us all achieve our business and strategic goals. We encourage all team members to embrace the value that comes through the variety of individuals and perspectives employed in our organization.
• One-third of our leadership team is diverse
• Three Veteran Hiring Initiatives
• New Diversity and Inclusion Initiatives for 2021
• Revised Human Trafficking Initiatives
• Human Rights Statement adopted in 2022 – emphasizing our
commitment to equal opportunity, an inclusive, respectful, and safe workplace, and the health and wellness of our team members
• Additional participation in our Employee Benevolence Fund
- a 100% employee funded program designed to help our employees during times of emergency
• More options for our Volunteer Time Off (VTO) program -
Company paid volunteer hours
• Active participation in Chattanooga's Thrive Regional
Partnership program - a public / private partnership to better facilitate the movement of both freight and people within a tri-state region
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“FOR” Proposal 1:
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The election of the eight (8) director nominees named below.
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“FOR” Proposal 2:
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Advisory and non-binding vote to approve the compensation of our Named Executive Officers as disclosed in this Proxy Statement.
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“FOR” Proposal 3:
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Ratification of the appointment of Grant Thornton LLP as our independent registered public accounting firm for the year ending December 31, 2022.
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Proposal Number
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Description
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Board Recommendation
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Vote Required for Approval
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Effect of Abstentions(2)
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Effect of Broker Non-Vote(3)
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1
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Election of directors
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FOR
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Plurality of votes cast(1)
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No effect
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No effect
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2
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Advisory and non-binding vote to approve Named Executive Officer compensation
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FOR
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Majority of the voting power of the shares of Class A and Class B common stock represented at the meeting and entitled to vote, voting together as a single class
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Same effect as a vote “Against”
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No effect
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3
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Ratification of the appointment of Grant Thornton LLP as our independent registered public accounting firm for 2022
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FOR
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Majority of the voting power of the shares of Class A and Class B common stock represented at the meeting and entitled to vote, voting together as a single class
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Same effect as a vote “Against”
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Discretionary vote of broker
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(1)
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The eight director nominees receiving the highest number of votes for their election will be elected. Any incumbent director who receives a
greater number of votes “withheld” from or voted “against” his or her election than are voted “for” such election (excluding abstentions and broker non-votes) shall be subject to the majority vote policy described under “Corporate
Governance – The Board of Directors and Its Committees – Board of Directors – Majority Vote Policy.”
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(2)
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“Abstentions” (or “withhold votes” in the case of the election of directors) are shares that are entitled to vote but that are not voted at
the direction of the holder.
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(3)
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“Broker non-votes” are shares that are not voted by a broker or other record holder due to the absence of instructions from the beneficial owner.
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Mr. Bosworth
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Dr. Carson
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Mr. Kramer
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Mr. Moline
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Mr. Parker
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Ms. Parker-Hatchett
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Mr. Schmidt
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Mr. Welborn
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Public Company Officer or Key Employee
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✔
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✔
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✔
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✔
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✔
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✔
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✔
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Financial Reporting
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✔
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✔
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✔
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✔
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✔
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✔
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✔
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Industry
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✔
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✔
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✔
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✔
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✔
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✔
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||
Environmental
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✔
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✔
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✔
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|||||
Risk Management
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✔
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✔
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✔
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✔
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✔
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✔
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✔
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Information Security
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✔
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✔
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✔
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|||||
Governance
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✔
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✔
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✔
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✔
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✔
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✔
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Total Number of Directors
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8
|
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Female
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Male
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Non-Binary
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Did Not Disclose Gender
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Part I: Gender Identity
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Directors
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1
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7
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-
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-
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Part II: Demographic Background
|
||||
African American or Black
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-
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1
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-
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-
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Alaskan Native or Native American
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-
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-
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-
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-
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Asian
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-
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-
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-
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-
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Hispanic or Latinx
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-
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-
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-
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-
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Native Hawaiian or Pacific Islander
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-
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-
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-
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-
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White
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1
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6
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-
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-
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Two or More Races or Ethnicities
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-
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-
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-
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-
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LGBTQ+
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-
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Did Not Disclose Demographic Background
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-
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What We Do
|
|
✔
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Lead Independent Director appointed
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✔
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Proxy access
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✔
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Corporate governance guidelines
|
✔
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All committees comprised solely of independent directors
|
✔
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Over two-thirds of the Board comprised of independent directors
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✔
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Limitation on number of outside public boards
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✔
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Three members of our Audit Committee qualify as audit committee financial experts
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✔
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Regular sessions of independent directors
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✔
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Stock ownership guidelines for non-employee directors of five times annual cash retainer
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✔
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Stock ownership guidelines for senior executive officers, with CEO at six times annual base salary
|
✔
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Anti-hedging and anti-pledging guidelines for senior executive officers, with no hardship exception
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✔
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Majority vote policy for uncontested elections
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✔
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Annual Board and committee written self-assessment through outside counsel
|
✔
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Annual Lead Independent Director written assessment through outside counsel
|
✔
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Annual CEO written assessment through outside counsel
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✔
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Annual enterprise risk assessment
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✔
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Director orientation
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✔
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Independent Nominating Committee oversees information security
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●
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is independent under NASDAQ Rule 5605(a)(2);
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●
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meets the criteria for independence set forth in Rule 10A‑3(b)(1) under the Exchange Act;
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●
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did not participate in the preparation of our financial statements or the financial statements of any of our current subsidiaries at any time during the past three
years; and
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●
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is able to read and understand fundamental financial statements, including our balance sheet, statement of operations, and statement of cash flows.
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Audit Committee:
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D. Michael Kramer, Chair
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Robert E. Bosworth
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W. Miller Welborn
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●
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was independent under NASDAQ Rule 5605(a)(2);
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●
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met the criteria for independence set forth in Rule 10C-1(b)(1) under the Exchange Act;
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●
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did not directly or indirectly accept any consulting, advisory or other compensatory fee from the Company; and
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●
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as determined by our Board, was not affiliated with the Company, any Company subsidiary, or any affiliate of a Company subsidiary, and did not have any other relationship,
which would impair each respective member’s judgment as a member of the Compensation Committee.
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Compensation Committee:
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W. Miller Welborn, Chair
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Robert E. Bosworth
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D. Michael Kramer
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●
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the proposed director nominee’s name and qualifications and the reason for such recommendation;
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●
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the name and record address of the stockholder(s) proposing such nominee;
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●
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the number of shares of our Class A and/or Class B common stock that are beneficially owned by such stockholder(s) and the dates
indicating how long such stock has been held by such stockholder(s);
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●
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a description of any financial or other relationship between the stockholder(s) and such director nominee or between the director nominee and us or any of our
subsidiaries;
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●
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appropriate biographical and other information equivalent to that required of all other director nominee candidates; and
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●
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any other information such stockholder(s) must provide pursuant to and as required under Rule 14a-8 of the Exchange Act or any other applicable rules.
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●
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we follow the CIS20 standard for information security and utilize security platforms to scan and monitor our systems;
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●
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we perform penetration testing every 12 to 18 months;
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●
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we maintain an information security risk insurance policy in the amount of $30.0 million;
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●
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we have not experienced any information security breaches in the past three years; and
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●
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we have not incurred any expenses, penalties, or settlements related to information security breaches in the last three years.
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✔
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Conservative pay policy with total Named Executive Officer and director compensation positioned below the median
|
✔
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Annual say-on-pay votes
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✔
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Stock ownership guidelines for senior executive officers, with CEO at six times annual base salary
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✔
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Anti-hedging and anti-pledging guidelines for senior executive officers, with no hardship exception
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✔
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Independent compensation consultant retained by the Compensation Committee to advise on executive compensation matters
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✔
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No tax gross-ups
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✔
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No excessive perquisites for executives
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✔
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Direct link between pay and performance that aligns business strategies with stockholder value creation
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✔
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No re-pricing or back-dating of stock options or similar awards
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✔
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No equity vesting periods of less than twelve months (except for the 5% of the share reserve as of the adoption of the Second Amendment to the Incentive Plan in July 2020 that are available for issuance under
the Incentive Plan with no minimum vesting requirements)
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✔
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No payment of dividends on unvested equity awards granted after the adoption of the First Amendment to the Incentive Plan in May 2019
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✔
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No voting on unvested equity awards granted after the adoption of the First Amendment to the Incentive Plan in May 2019
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✔
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Double trigger change in control for severance benefits. Additionally, equity awards granted under the Incentive Plan after adoption of the Second Amendment to the Incentive Plan in July 2020 are required to
have a double trigger change in control
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✔
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No discretion under the Incentive Plan for the Compensation Committee to accelerate vesting, except in cases involving death or disability
|
✔
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No cash vehicle allowances or company-provided cars
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✔
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Clawback policy
|
(1)
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Between January 21, 2021 and April 6, 2021, Mr. Hogan served as our Co-President and CAO, Mr. Bunn served as our EVP, CFO, and Secretary, and Mr. Tweed served as our
Co-President and COO. On April 6, 2021, Mr. Tweed was named Advisor to the CEO and performed such role through July 3, 2021, at which time he became a consultant to the Company. Between January 1, 2021 and March 10, 2021, Ms. Doster
served as our SVP – Dedicated Operations.
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●
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base salary;
|
●
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annual incentive compensation, which may include performance-based annual cash and/or equity awards;
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●
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long-term equity incentive awards;
|
●
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other compensation, including specified perquisites; and
|
●
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employee benefits, which are generally available to all of our employees.
|
●
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is fair and reasonable to us;
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●
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is internally appropriate based upon our culture, goals, initiatives, and the compensation of our other employees; and
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●
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is within a reasonable range of the compensation afforded by other opportunities.
|
●
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overall economic conditions;
|
●
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changes in responsibility;
|
●
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our recent and expected financial performances;
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●
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the Compensation Committee’s assessment of the executive officer’s leadership, integrity, individual performance, prospect for future
performance, years of experience, skill set, level of commitment, contributions to our financial results and the creation of stockholder value; and
|
●
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current and past compensation.
|
●
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the executive officer’s current base salary;
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●
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recent economic conditions and our financial results; and
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●
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the executive officer’s qualifications and experience, including but not limited to, the executive’s length of service with us, the executive’s industry knowledge, and the
quality and effectiveness of the executive’s leadership, integrity, scope of responsibilities, dedication to us and our stockholders, past performance, and current and future potential for providing value to our stockholders.
|
●
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provide incentives to executive officers in a manner designed to reinforce our performance goals;
|
●
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attract, motivate, and retain qualified executive officers by providing them with long-term incentives; and
|
●
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align our executive officers’ and stockholders’ long-term interests by creating a strong, direct link between executive compensation and stockholder return (in this Proxy
Statement, the terms “stockholder return” and “stockholder value” generally refer to the percentage increase in the value of our stockholders’ Company shares).
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●
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the recommendations of our CEO and our President;
|
●
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how the achievement of certain performance goals will help us improve our financial and operating performance and add long-term value to our
stockholders;
|
●
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the value of the award in relation to other elements of total compensation, including the number of options or restricted stock currently held
by the executive officer, and the number of stock options or restricted stock granted to the executive officer in prior years;
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●
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the executive officer’s position, scope of responsibility, ability to affect our financial and operating performance, ability to create
stockholder value, and historical and recent performance;
|
●
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the expected impact of awards on executive officer retention;
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●
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the tax deductibility of certain awards; and
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●
|
the impact of the awards on our earnings, cash flows, and diluted share count.
|
●
|
an annualized base salary of $708,600, which was increased to $729,872, effective July 1, 2021;
|
●
|
participation in the 2021 Senior Executive Bonus Program, as described in more detail under the heading 2021
Bonus Programs below;
|
●
|
a grant of 400,000 performance-based Class A common stock options to further align his compensation with Company performance, as described in
more detail under the heading April 2021 Option Grants below. Mr. Parker did not receive an equity award during 2020. Absent extraordinary circumstances, the
Committee does not expect to make additional equity awards to Mr. Parker for 2022 or 2023;
|
●
|
use of our corporate travel agency to arrange personal travel, use of our administrative personnel for personal services, certain of his club
fees and dues and Company contributions to his 401(k) account;
|
●
|
use of a corporate aircraft for personal use, subject to reimbursement at the higher of two times fuel expense or the Standard Industry Fare
Level rate, and an allowance of 50 aggregate hours for personal use of the aircraft by Messrs. Parker, Hogan, Bunn, and Tweed (“Corporate Aircraft Use”); and
|
●
|
medical, dental, and group life insurance.
|
●
|
an annualized base salary of $513,219;
|
●
|
participation in the 2021 Senior Executive Bonus Program, as described in more detail under the heading 2021 Bonus Programs
below;
|
●
|
a grant of 150,000 shares of Class A restricted stock, to vest in installments of 50,000 shares on each of April 6, 2022, December 31, 2022,
and December 31, 2023, subject to certain continued employment, acceleration, and forfeiture provisions. Mr. Hogan did not receive an equity award during 2020. Absent extraordinary circumstances, the Committee does not expect to make
additional equity awards to Mr. Hogan for 2022 or 2023;
|
●
|
use of our corporate travel agency to arrange personal travel, Corporate Aircraft Use, disability insurance, and Company contributions to his 401(k) account; and
|
●
|
medical, dental, and group life insurance.
|
●
|
an annualized base salary of $337,000, which was increased to $400,005 in connection with his appointment as our Senior EVP, COO, and
Secretary, effective April 6, 2021;
|
●
|
participation in the 2021 Senior Executive Bonus Program, as described in more detail under the heading 2021
Bonus Programs below;
|
●
|
a grant of 16,667 shares of Class A restricted stock in recognition of his promotion, scheduled to vest on January 1, 2025, subject to certain
continued employment, acceleration, and forfeiture provisions;
|
●
|
a grant of 50,000 performance-based Class A common stock options to further align his compensation with Company performance and in recognition
of his promotion, as described in more detail under the heading April 2021 Option Grants below;
|
●
|
use of our corporate travel agency to arrange personal travel, Corporate Aircraft Use, disability insurance, and Company contributions to his
401(k) account; and
|
●
|
medical, dental, and group life insurance.
|
●
|
an annualized base salary of $299,998, which was increased to $309,005, effective July 1, 2021;
|
●
|
participation in the 2021 Doster Bonus Program, as described in more detail under the heading 2021 Bonus
Programs below;
|
●
|
use of our corporate travel agency to arrange personal travel, disability insurance, and Company contributions to his 401(k) account; and
|
●
|
medical, dental, and group life insurance.
|
●
|
an annualized base salary $199,014, which was increased to $218,920, effective July 1, 2021;
|
●
|
participation in the 2021 Grant Bonus Program, as described in more detail under the heading 2021 Bonus
Programs below;
|
●
|
use of our corporate travel agency to arrange personal travel, disability insurance, and Company contributions to his 401(k) account; and
|
●
|
medical, dental, and group life insurance.
|
●
|
an annualized base salary $344,800, which was increased to $355,160, effective July 1, 2021;
|
●
|
participation in the 2021 Hough Bonus Program, as described in more detail under the heading 2021 Bonus
Programs below;
|
●
|
a grant of 5,384 shares of Class A restricted stock in recognition of his role in the wind-down of certain of the Company’s terminal operations
throughout 2020, which were scheduled to vest on February 17, 2022, subject to certain continued employment, acceleration, and forfeiture provisions (these restricted shares vested on February 17, 2022);
|
●
|
use of our corporate travel agency to arrange personal travel, disability insurance, and Company contributions to his 401(k) account; and
|
●
|
medical, dental, and group life insurance.
|
●
|
an annualized base salary of $512,000 until his transition to a consultant effective July 3, 2021;
|
●
|
use of our corporate travel agency to arrange personal travel, Corporate Aircraft Use, disability insurance, and Company contributions to his
401(k) account; and
|
●
|
medical, dental, and group life insurance.
|
●
|
Leadership Structure (32% of bonus target) - Effective definition, communication, and implementation of job descriptions, compensation
structure (including base and variable compensation), and succession plan related to new executive leadership structure on or before December 31, 2021;
|
●
|
Safety (34% of bonus target) - (i) 15% improvement in 2021 DOT reportable accident rate per million miles compared to 2020 DOT reportable
accident rate per million miles (.80) or (i) 20% improvement in 2021 average driver turn-over compared to 2020 average driver turn-over (153%); and
|
●
|
Productivity (17% of bonus target for achievement of part (i) and (ii)(a) or 34% of bonus target for achievement of part (i) and (ii)(b)) - (i) development of a detailed
long-term profit improvement plan with firm timelines and accountabilities, which is finalized and approved by the Board by May 31, 2021 and (ii)(a) Dedicated adjusted operating ratio (operating expenses, net of fuel surcharge revenue and
intangibles amortization, expressed as a percentage of revenue, net of fuel surcharge revenue, each for the Dedicated segment) for the last four months of 2021 average 97% or less after corporate overhead allocation or (b) Dedicated
adjusted operating ratio for the last four months of 2021 average 95% or less after corporate overhead allocations.
|
Named Executive Officer
|
Target Bonus
|
|
David R. Parker
|
100.0%
|
|
Joey B. Hogan
|
100.0%
|
|
M. Paul Bunn
|
80.0%
|
Named Executive Officer
|
Payout
|
|
David R. Parker
|
$1,087,509
|
|
Joey B. Hogan
|
$764,697
|
|
M. Paul Bunn
|
$476,806
|
Adjusted EPS
|
Achievement Potential as a
Percentage of Target Bonus
|
|
$1.40
|
25.00%
|
|
$1.61
|
31.25%
|
|
$1.71
|
37.50%
|
|
$1.81
|
43.75%
|
|
$1.91
|
50.00%
|
Corporate Accounting Department Expenses as a Percentage of Budget
|
Achievement Potential as a
Percentage of Target Bonus
|
|
100%
|
25.00%
|
|
98%
|
31.25%
|
|
97%
|
37.50%
|
|
96%
|
43.75%
|
|
95%
|
50.00%
|
Adjusted EPS
|
Achievement Potential as a
Percentage of Target Bonus
|
|
$1.40
|
75.00%
|
|
$1.61
|
93.75%
|
|
$1.71
|
112.50%
|
|
$1.81
|
131.25%
|
|
$1.91
|
150.00%
|
Expedited Gross Margin
|
Achievement Potential as a
Percentage of Target Bonus |
|
$50,290,000
|
75.00%
|
|
$52,448,000
|
93.75%
|
|
$53,549,000
|
112.50%
|
|
$54,674,000
|
131.25%
|
|
$55,822,000
|
150.00%
|
Adjusted EPS
|
Achievement Potential as a
Percentage of Target Bonus
|
|
$1.40
|
25.00%
|
|
$1.61
|
31.25%
|
|
$1.71
|
37.50%
|
|
$1.81
|
43.75%
|
|
$1.91
|
50.00%
|
Named Executive Officer
|
2021 Market Condition Options
|
2021 Performance Condition Options
|
||
David R. Parker
|
100,000
|
300,000
|
||
M. Paul Bunn
|
12,500
|
37,500
|
●
|
One-third if the Company achieves at least $900 million of freight revenue for the year ended December 31, 2023;
|
●
|
One-third if the Company achieves a cumulative three-year Adjusted EPS of $4.00 per share for the three-year period ended December 31, 2023,
provided that the Adjusted EPS for the year ended December 31, 2023 cannot be less than $1.00 per share; and
|
●
|
One-third if the Company achieves a cumulative three-year Adjusted EPS of $4.75 per share for the three-year period ended December 31, 2023.
|
●
|
Our general compensation structure utilizes a combination of short-term (such as base salary and performance-based annual bonuses) and
long-term (equity awards) elements. This balanced mix aligns our compensation with the achievement of short- and long-term Company goals, promotes short- and long-term executive decision-making, and does not encourage or incentivize
excessive or unreasonable risk-taking by employees in pursuit of short-term benefits.
|
●
|
Equity awards are limited by the terms of our Incentive Plan to a fixed maximum and are subject to staggered or long-term vesting schedules,
which aligns the interests of our executive officers and employees with those of our stockholders.
|
●
|
Variable compensation elements for our Named Executive Officers were based on performance metrics for the consolidated group, not individual or
departmental goals, which reflects an alignment of Company performance with incentive compensation.
|
●
|
The Compensation Committee is comprised of only independent directors who review and make compensation decisions based on objective
measurements and payment methodologies.
|
●
|
Base salaries for our employees are competitive and generally consistent with salaries paid for comparable positions in our industry. The
Compensation Committee also from time to time reviews trucking and general industry compensation data compiled and provided by a compensation consultant to help determine salary compensation.
|
●
|
Our internal controls over financial reporting, audit practices and corporate codes of ethics and business conduct were implemented to
reinforce the balanced compensation objectives established by our Compensation Committee.
|
●
|
Our Clawback Policy, which provides that in the event of a material financial misstatement after the effective date of the Clawback Policy, we will require, to the fullest
extent permitted by applicable law, that an employee who was subject to the reporting requirements of Section 16 of the Exchange Act forfeit or reimburse us for the amount by which incentive-based compensation (including cash- and
equity-based incentive compensation) paid or granted to such employee at any time during the performance period relating to the applicable incentive-based compensation exceeds the amount of such incentive-based compensation that would have
been paid or granted if it had been determined based on the material misstatement, in the sole and absolute discretion of the Board. The Clawback Policy has a three-year look-back period.
|
Named Executive Officer
|
Salary Continuation
|
Management Incentive Cash Bonus
|
COBRA Reimbursement
|
|||
Messrs. Parker, Hogan, and Bunn
|
24 Months
|
If earned at or above minimum, then the target cash bonus for the year of termination, prorated for partial year of service
|
24 Months
|
|||
Ms. Doster and Mr. Hough
|
18 Months(1)
|
If earned at or above minimum, then the target cash bonus for the year of termination, prorated for partial year of service
|
18 Months
|
|||
Mr. Grant
|
12 Months(2)
|
If earned at or above minimum, then the target cash bonus for the year of termination, prorated for partial year of service
|
12 Months
|
(1)
|
Ms. Doster and Mr. Hough are eligible for 9 months guaranteed salary continuation, plus an additional 9 months of salary continuation so long
as they have not secured employment consistent with their professional experience and/or skillset and paying an annualized base salary at least equal to their annualized base salary at the time of termination.
|
(2)
|
Mr. Grant is eligible for 6 months guaranteed salary continuation, plus an additional 6 months of salary continuation so long as he has not secured employment consistent
with his professional experience and/or skillset and paying an annualized base salary at least equal to his annualized base salary at the time of termination.
|
Named Executive Officer
|
Aggregate Payments
|
|
David R. Parker
|
$2,217,318
|
|
Joey B. Hogan
|
$1,583,011
|
|
M. Paul Bunn
|
$1,161,952
|
|
Lynn Doster
|
$650,525
|
|
Tripp Grant
|
$327,457
|
|
Samuel F. Hough
|
$731,097
|
Named Executive Officer
|
Lump Sum Severance Payment
(as a % of Annualized Base Salary)
|
Management Incentive Cash Bonus
|
COBRA Reimbursement
|
|||
Messrs. Parker, Hogan, and Bunn
|
300%
|
Target cash bonus for the year of termination
|
36 Months
|
|||
Ms. Doster and Mr. Hough
|
200%
|
Target cash bonus for the year of termination
|
24 Months
|
|||
Mr. Grant
|
100%
|
Target cash bonus for the year of termination
|
12 Months
|
Named Executive Officer
|
Aggregate Payments
|
|
David R. Parker
|
$2,961,041
|
|
Joey B. Hogan
|
$2,117,907
|
|
M. Paul Bunn
|
$1,582,926
|
|
Lynn Doster
|
$815,866
|
|
Tripp Grant
|
$327,457
|
|
Samuel F. Hough
|
$915,602
|
Named Executive Officer
|
Value of Accelerated Restricted Stock
|
Value of Accelerated Options
|
||
David R. Parker
|
$1,969,590
|
$2,076,000
|
||
Joey B. Hogan
|
$5,600,173
|
—
|
||
M. Paul Bunn
|
$905,148
|
$2,181,370
|
||
Lynn Doster
|
$189,688
|
$640,623
|
||
Tripp Grant
|
$229,333
|
$384,378
|
||
Samuel F. Hough
|
$837,302
|
$640,623
|
Name and
Principal Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock
Awards(2)
($)
|
Option Awards
($)(3)
|
Non-Equity
Incentive Plan
Compensation ($)(4)
|
All Other
Compensation(5)
($)
|
Total
($)
|
David R. Parker,
CEO and Chairman of the Board
|
2021
|
717,168
|
-
|
-
|
3,939,000
|
1,087,509
|
90,256
|
5,833,933
|
2020
|
626,970
|
-
|
-
|
-
|
337,500
|
106,495
|
1,070,965
|
|
2019
|
675,002
|
-
|
224,230
|
-
|
-
|
54,310
|
953,542
|
|
Joey B. Hogan,
President and PFO(1)
|
2021
|
511,535
|
-
|
3,186,000
|
-
|
764,697
|
13,407
|
4,475,639
|
2020
|
441,831
|
-
|
-
|
-
|
250,000
|
24,093
|
715,924
|
|
2019
|
475,010
|
-
|
180,624
|
-
|
-
|
23,697
|
679,331
|
|
M. Paul Bunn,
Senior EVP, COO, and Secretary(1)
|
2021
|
382,116
|
-
|
354,007
|
492,375
|
476,806
|
11,543
|
1,716,847
|
2020
|
294,996
|
-
|
133,400
|
1,309,342
|
97,500
|
19,172
|
1,854,410
|
|
Lynn Doster,
EVP- Dedicated Operations(1)
|
2021
|
297,075
|
-
|
-
|
-
|
135,190
|
4,895
|
437,160
|
Tripp Grant,
Chief Accounting Officer
|
2021
|
208,682
|
-
|
-
|
-
|
153,244
|
6,673
|
368,599
|
Samuel F. Hough,
EVP- Expedited Operations(1)
|
2021
|
349,284
|
-
|
96,427
|
-
|
355,160
|
13,194
|
814,065
|
2020
|
321,280
|
-
|
-
|
436,448
|
91,520
|
20,894
|
870,142
|
|
2019
|
328,600
|
-
|
84,710
|
-
|
-
|
25,198
|
438,508
|
|
John A. Tweed,
Former Co-President and COO (1)
|
2021
|
300,548
|
-
|
798,500
|
-
|
-
|
312,462
|
1,411,510
|
2020
|
397,697
|
-
|
1,334,000
|
-
|
250,000
|
109,376
|
2,091,073
|
|
2019
|
348,118
|
-
|
99,653
|
-
|
203,500
|
20,668
|
671,939
|
(1)
|
Between January 1, 2021 and April 6, 2021, Mr. Hogan served as our Co-President and CAO, Mr. Bunn served as our EVP, CFO, and Secretary, and Mr. Tweed served as our Co-President and COO. On April 6, 2021,
Mr. Tweed was named Advisor to the CEO and performed such role through July 3, 2021, at which time he became a consultant to the Company. Between January 1, 2021 and March 10, 2021, Ms. Doster served as our SVP – Dedicated Operations.
|
(2)
|
For 2021, represents the grant date fair value of restricted stock computed in accordance with FASB ASC Topic 718, as set forth in the “Grants of Plan-Based Awards Table” below.
|
(3)
|
For 2021, represents the grant date fair value of options to purchase Class A common stock computed in accordance with FASB ASC Topic 718, as set forth in the “Grants of Plan-Based
Awards Table” below.
|
(4)
|
For 2021, represents the cash payouts under the 2021 Bonus Programs. See Executive Compensation – Compensation Discussion and Analysis for additional detail with respect to the 2021
Bonus Programs.
|
(5)
|
See the All Other Compensation Table for additional information.
|
Name
|
Year
|
Perquisites and Other Personal
Benefits
($)
|
Total
($)
|
David R. Parker
|
2021
|
90,256(1)
|
90,256
|
Joey B. Hogan
|
2021
|
13,407 (2)
|
13,407
|
M. Paul Bunn
|
2021
|
11,543(2)
|
11,543
|
Lynn Doster
|
2021
|
4,895 (2)
|
4,895
|
Tripp Grant
|
2021
|
6,673(2)
|
6,673
|
Samuel F. Hough
|
2021
|
13,194 (2)
|
13,194
|
John A. Tweed
|
2021
|
312,462 (3)
|
312,462
|
(1)
|
During 2021, we provided Mr. Parker with certain other benefits in addition to his salary, including $67,725 value related to personal use of a private aircraft, use of our corporate
travel agency to arrange personal travel, use of our administrative personnel for personal services, certain club fees and dues, and Company contribution to his 401(k) account.
|
(2)
|
During 2021, we provided each of Messrs. Hogan, Bunn, Hough, and Grant, and Ms. Doster with certain other benefits in addition to his/her base salary, use of our corporate travel agency
to arrange personal travel, and Company contributions to his or her 401(k). None of the personal benefits provided to the Named Executive Officer exceeded the greater of $25,000 or 10% of the total amount of the personal benefits he/she
received during 2021.
|
(3)
|
During 2021, we provided Mr. Tweed with certain other benefits in addition to his salary, including a $27,777 value related to personal use of a private aircraft, use of our corporate travel agency to arrange personal travel, use of our
administrative personnel for personal services, certain club fees and dues, and Company contribution to his 401(k) account. This amount also includes $256,000 paid under the Consulting Agreement with respect to services performed during
2021.
|
Name
|
Grant Date
|
Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards(7)
|
Estimated Future Payouts Under Equity Incentive
Plan Awards
|
All Other Stock Awards: Number of Shares of Stock or Units
(#)
|
Exercise or Base Price of Option Awards ($/Sh)
|
Grant
Date Fair
Value of
Stock and
Option
Awards
($)
|
|||||
Threshold
($)
|
Target
($)
|
Maximum
($)
|
Threshold
(#)
|
Target
(#)
|
Maximum
(#)
|
||||||
David R. Parker
|
04/06/21 (1)
|
-
|
-
|
-
|
-
|
100,000
|
-
|
-
|
21.24
|
621,000 (1)
|
|
04/06/21 (2)
|
-
|
-
|
-
|
100,000
|
200,000
|
300,000
|
-
|
21.24
|
3,318,000 (2)
|
||
-
|
-
|
729,872
|
1,459,744
|
-
|
-
|
-
|
-
|
-
|
-
|
||
Joey B. Hogan
|
04/06/21 (3)
|
-
|
-
|
-
|
-
|
-
|
-
|
150,000
|
-
|
3,186,000 (8)
|
|
-
|
-
|
513,219
|
1,026,438
|
-
|
-
|
-
|
-
|
-
|
-
|
||
M. Paul Bunn
|
04/06/21 (4)
|
-
|
-
|
-
|
-
|
-
|
-
|
16,667
|
-
|
354,007 (8)
|
|
04/06/21 (1)
|
-
|
-
|
-
|
-
|
12,500
|
-
|
-
|
21.24
|
77,625 (1)
|
||
04/06/21 (2)
|
-
|
-
|
-
|
12,500
|
25,000
|
37,500
|
-
|
21.24
|
414,750 (2)
|
||
-
|
-
|
320,004
|
640,008
|
-
|
-
|
-
|
-
|
-
|
-
|
||
Lynn Doster
|
-
|
38,626
|
154,503
|
193,128
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Tripp Grant
|
-
|
21,892
|
87,568
|
175,136
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Samuel F. Hough
|
02/17/21(5)
|
-
|
-
|
-
|
-
|
-
|
-
|
5,384
|
-
|
96,427 (8)
|
|
-
|
44,395
|
177,580
|
355,160
|
-
|
-
|
-
|
-
|
-
|
-
|
||
John A. Tweed
|
01/25/21(6)
|
-
|
-
|
-
|
-
|
-
|
-
|
50,000
|
-
|
798,500 (8)
|
(1)
|
Represents the 2021 Market Condition Options. The FASB ASC Topic 718 grant date fair value of the 2021 Market Condition Options of $6.21 per share was calculated using a Monte Carlo simulation, which
considered the likelihood of achieving the vesting condition, with the following assumptions: risk-free interest rate of 1.3%, expected life of 6.5 years, expected volatility of 52.9%, and dividend yield of 0%. The material terms of the
2021 Market Condition Options are discussed in more detail under the heading “April 2021 Option Grants” in the Compensation Discussion and Analysis. For additional information on the valuation
assumptions with respect to the grants, refer to Note 4, Stock-Based Compensation, of our consolidated financial statements as provided in our Form 10-K for the year ended December 31, 2021.
|
(2)
|
Represents the 2021 Performance Condition Options. The FASB ASC Topic 718 grant date fair value of the 2021 Performance Condition Options of $11.06 per share was calculated using the Black-Scholes model, with
the following assumptions: risk-free interest rate of 1.3%, expected life of 6.5 years, expected volatility of 52.9%, and dividend yield of 0%. The FASB ASC Topic 718 grant date fair value of the 2021 Performance Condition Options reported
in this table assumes achievement at maximum. The material terms of the 2021 Performance Condition Options are discussed in more detail under the heading “April 2021 Option Grants” in the Compensation
Discussion and Analysis. For additional information on the valuation assumptions with respect to the grants, refer to Note 4, Stock-Based Compensation, of our consolidated financial statements as provided in our Form 10-K for the
year ended December 31, 2021.
|
(3)
|
Represents a grant of restricted stock, of which one-third will vest automatically on each of April 6, 2022, December 31, 2022, and December 31, 2023, subject to the terms of the award notice.
|
(4)
|
Represents a grant of restricted stock, which will vest automatically on January 1, 2025, subject to the terms of the award notice.
|
(5)
|
Represents a grant of restricted stock that vested automatically on February 17, 2022.
|
(6)
|
Represents a grant of restricted stock that vested automatically on January 25, 2022.
|
(7)
|
These columns represent potential payouts under the 2021 Bonus Programs. The material terms of the 2021 Bonus Programs, along with the payouts under the 2021 Bonus Programs, are discussed in more detail
under the heading “2021 Bonus Programs” in the Compensation Discussion and Analysis.
|
(8)
|
The dollar amount represents the grant date fair value of the time-vesting restricted stock granted to the Named Executive Officer in 2021, using the closing price of our Class A common stock on the grant
date.
|
2021 STOCK VESTED TABLE
|
||
Name
|
Number of Shares Acquired on Vesting
(#)
|
Value Realized on Vesting(1)
($)
|
David R. Parker
|
26,612
|
599,023
|
Joey B. Hogan
|
21,535
|
485,121
|
M. Paul Bunn
|
12,295
|
274,174
|
Lynn Doster
|
4,569
|
97,462
|
Tripp Grant
|
4,069
|
85,897
|
Samuel F. Hough
|
10,363
|
234,479
|
John A. Tweed
|
60,600
|
1,315,346
|
(1)
|
Determined by multiplying the number of shares acquired upon vesting on March 5, 2021 by $19.66 (the closing price on March 5, 2021), June 5, 2021 by $22.07 (the closing price on June 4, 2021, the next
preceding trading day), July 3, 2021 by $20.58 (the closing price on July 2, 2021, the next preceding trading day), July 15, 2021 by $19.73 (the closing price on July 15, 2021), and December 31, 2021 by $26.43 (the closing price on December
31, 2021).
|
Stock Options
|
Stock Awards
|
||||||||
Name
|
Grant Date
|
Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)
|
Option Exercise Price ($)
|
Option Expiration Date
|
Number of Shares or Units of Stock That Have Not Vested
(#)
|
Market Value of Shares or Units of Stock That Have Not Vested(12)
($)
|
Equity Incentive
Plan Awards:
Number of
Unearned Shares,
Units or Other Rights That
Have Not Vested
(#)
|
Equity Incentive Plan
Awards: Market or
Payout Value of
Unearned Shares,
Units or Other
Rights That
Have Not Vested(12)
($)
|
|
David R. Parker
|
07/14/17
|
-
|
-
|
-
|
-
|
-
|
66,816(13)
|
1,765,947
|
|
07/08/19
|
-
|
-
|
-
|
7,705(5)
|
203,643
|
-
|
-
|
||
04/06/21
|
100,000(1)
|
21.24
|
04/06/31
|
-
|
-
|
-
|
-
|
||
04/06/21
|
300,000(2)
|
21.24
|
04/06/31
|
-
|
-
|
-
|
-
|
||
Joey B. Hogan
|
07/14/17
|
-
|
-
|
-
|
-
|
-
|
55,680(13)
|
1,471,622
|
|
07/08/19
|
-
|
-
|
-
|
6,207(5)
|
164,051
|
-
|
-
|
||
04/06/21
|
-
|
-
|
-
|
150,000(6)
|
3,964,500
|
-
|
-
|
||
M. Paul Bunn
|
07/14/17
|
-
|
-
|
-
|
-
|
-
|
10,440(13)
|
275,929
|
|
07/08/19
|
-
|
-
|
-
|
2,140(5)
|
56,560
|
-
|
-
|
||
06/05/20
|
-
|
-
|
-
|
5,000(7)
|
132,150
|
-
|
-
|
||
11/11/20
|
45,072(3)
|
15.77
|
11/11/30
|
-
|
-
|
-
|
-
|
||
11/11/20
|
135,216(4)
|
15.77
|
11/11/30
|
-
|
-
|
-
|
-
|
||
04/06/21
|
12,500(1)
|
21.24
|
04/06/31
|
-
|
-
|
-
|
-
|
||
04/06/21
|
37,500(2)
|
21.24
|
04/06/31
|
-
|
-
|
-
|
-
|
||
04/06/21
|
-
|
-
|
-
|
16,667(8)
|
440,509
|
-
|
-
|
||
Lynn Doster
|
07/08/19
|
-
|
-
|
-
|
856(5)
|
22,624
|
-
|
-
|
|
09/19/19
|
-
|
-
|
-
|
-
|
-
|
6,321(13)
|
167,064
|
||
11/11/20
|
15,024(3)
|
15.77
|
11/11/30
|
-
|
-
|
-
|
-
|
||
11/11/20
|
45,072(4)
|
15.77
|
11/11/30
|
-
|
-
|
-
|
-
|
||
Tripp Grant
|
07/15/19
|
-
|
-
|
-
|
856(5)
|
22,624
|
-
|
-
|
|
07/31/19
|
-
|
-
|
-
|
1,500(9)
|
39,645
|
-
|
-
|
||
09/19/19
|
-
|
-
|
-
|
-
|
-
|
6,321(13)
|
167,064
|
||
11/11/20
|
9,015(3)
|
15.77
|
11/11/30
|
-
|
-
|
-
|
-
|
||
11/11/20
|
27,043(4)
|
15.77
|
11/11/30
|
-
|
-
|
-
|
-
|
||
Samuel F. Hough
|
07/14/17
|
-
|
-
|
-
|
-
|
-
|
23,385(13)
|
618,066
|
|
07/08/19
|
-
|
-
|
-
|
2,911(5)
|
76,938
|
-
|
-
|
||
11/11/20
|
15,024(3)
|
15.77
|
11/11/30
|
-
|
-
|
-
|
-
|
||
11/11/20
|
45,072(4)
|
15.77
|
11/11/30
|
-
|
-
|
-
|
-
|
||
02/17/21
|
-
|
-
|
-
|
5,384(10)
|
142,299
|
-
|
-
|
||
John A. Tweed
|
01/25/21
|
-
|
-
|
-
|
50,000(11)
|
1,321,500
|
-
|
-
|
(1)
|
Represents the 2021 Market Condition Options. The material terms of the 2021 Market Condition Options are discussed in more detail under the heading “April 2021 Option Grants” in the Compensation Discussion and Analysis.
|
(2)
|
Represents the 2021 Performance Condition Options. The material terms of the 2021 Performance Condition Options are discussed in more detail under the heading “April 2021 Option Grants” in the Compensation Discussion and Analysis
|
(3)
|
Subject to the terms of the award notice, the options will vest if the closing price of the Company’s Class A common stock exceeds $30.00 for at least 20 consecutive trading days before December 31, 2023,
subject to the terms of the award notice.
|
(4)
|
Subject to the terms of the award notice, the options will vest as follows: (i) one-third if the Company achieves at least $900 million of freight revenue for the year ended December 31, 2023, (ii) one-third
if the Company achieves a cumulative three-year Adjusted EPS, of $4.00 per share for the three-year period ended December 31, 2023, provided that the Adjusted EPS for the year ended December 31, 2023 cannot be less than $1.00 per share; and
(iii) one-third if the Company achieves a cumulative three-year Adjusted EPS of $4.75 per share for the three-year period ended December 31, 2023
|
(5)
|
Subject to the terms of the award notice, the restricted shares will vest automatically on December 31, 2022.
|
(6)
|
Subject to the terms of the award notice, one-third of the restricted shares will vest automatically on each of April 30, 2022, December 31, 2022, and December 31, 2023.
|
(7)
|
Represents the June 2020 Restricted Stock Grants. The shares will vest on December 31, 2023, subject to continuous employment through December 31, 2023, provided that if Mr. Bunn is terminated for any reason
other than Cause (as defined in his Severance Agreement) after July 1, 2021, but before December 31, 2023, then 50% of his shares will vest on the date of such termination. The material terms of the June 2020 Restricted Stock Grants are
discussed in more detail under the heading “June 2020 Restricted Stock Grants” in the Compensation Discussion and Analysis.
|
(8)
|
Subject to the terms of the award notice, the restricted shares will vest automatically on January 1, 2025.
|
(9)
|
Subject to the terms of the award notice, the restricted shares will vest automatically on July 15, 2022.
|
(10)
|
The restricted shares vested automatically on February 17, 2022.
|
(11)
|
The restricted shares vested automatically on January 25, 2022.
|
(12)
|
The market value was calculated by multiplying the closing market price of our stock on December 31, 2021, which was $26.43, by the number of restricted shares that have not vested.
|
(13)
|
Subject to the terms of the award notice, all of the restricted shares are eligible for vesting upon achieving two
consecutive fiscal years during fiscal 2018 (or fiscal 2020 for Ms. Doster’s and Mr. Grant’s award) through fiscal 2022, inclusive, where (i) the Company’s consolidated annual freight revenue is at least $900
million and (ii) the Company’s consolidated net income margin is 4.0% or greater (the “Full Vesting Criteria”). Subject to the terms of the award notice, an incremental amount of shares is eligible for vesting upon achieving two consecutive
fiscal years during fiscal 2018 (or fiscal 2020 for Ms. Doster’s and Mr. Grant’s award) through fiscal 2022, inclusive, where the Company’s consolidated annual net income margin is 4.0% or greater (the “Incremental Vesting Criteria”). The
incremental number of shares eligible for vesting for each recipient is as follows: 50,112 for Mr. Parker, 41,760 for Mr. Hogan, 6,264 for Mr. Bunn, 15,590 for Mr. Hough, 3,792 for Ms. Doster, and 3,792 for Mr. Grant. Upon the Compensation
Committee certifying that the Full Vesting Criteria or Incremental Vesting Criteria, as applicable, have been achieved, 50% of the shares eligible for vesting will vest, subject to the recipient’s continued employment through the vesting
date. The remaining 50% of the shares eligible for vesting will vest on December 31 of the year in which the Compensation Committee’s certification occurs, subject to the recipient’s continued employment through such date.
|
●
|
The median of the annual total compensation of all of our employees (other than our CEO) was $65,878; and
|
●
|
The annual total compensation of our CEO, as reported in the Summary Compensation Table included in this Proxy Statement, was $5,833,933.
|
Name
|
Fees Earned or
Paid in Cash(1)
($)
|
Stock
Awards
($)
|
Total
($)
|
Robert E. Bosworth
|
66,207
|
74,990 (2)
|
141,197
|
Dr. Benjamin S. Carson, Sr.
|
26,035
|
64,928 (3)
|
90,963
|
D. Michael Kramer
|
66,396
|
74,990 (2)
|
141,386
|
Bradley A. Moline
|
57,500
|
74,990 (2)
|
132,490
|
Rachel Parker-Hatchett
|
50,000
|
74,990 (2)
|
124,990
|
Herbert J. Schmidt
|
55,000
|
74,990 (2)
|
129,990
|
W. Miller Welborn
|
76,142
|
74,990 (2)
|
151,132
|
(1)
|
This column represents the amount of cash compensation received for Board and committee service during 2021.
|
(2)
|
Each of our then-current non-employee directors received 3,259 shares of Class A restricted stock on May 19, 2021. The grant date fair value of the restricted stock was computed in accordance with FASB ASC
Topic 718. The restricted stock will vest on May 19, 2022, subject to acceleration for death, disability, retirement, and change-in-control (where the director’s service is terminated in connection with such change-in-control).
|
(3)
|
Upon Dr. Carson’s appointment to our Board on July 7, 2021, Dr. Carson received 3,352 Class A restricted stock, representing a pro-rated portion of the equity retainer. The grant date fair value of the
restricted stock was computed in accordance with FASB ASC Topic 718. The restricted stock will vest on July 7, 2022, subject to acceleration for death, disability, retirement, and change-in-control (where the director’s service is
terminated in connection with such change-in-control).
|
●
|
each of our directors, director nominees, and Named Executive Officers;
|
●
|
all of our executive officers and directors as a group; and
|
●
|
each person known to us to beneficially own 5% or more of any class of our common stock.
|
Title of Class
|
Name and Address of Beneficial Owner(1)
|
Amount and Nature of Beneficial
Ownership(2)
|
Percent of Class
|
Class A & Class B common
|
David R. Parker & Jacqueline F. Parker
|
3,913,451(3)
|
11.1% of Class A
100% of Class B
23.9% of Total(4)
|
Class A common
|
Joey B. Hogan
|
236,558(5)
|
1.7% of Class A
1.4% of Total
|
Class A common
|
M. Paul Bunn
|
67,276 (6)
|
*
|
Class A common
|
Lynn Doster
|
6,374(7)
|
*
|
Class A common
|
Tripp Grant
|
3,759(8)
|
*
|
Class A common
|
Samuel F. Hough
|
66,383(9)
|
*
|
Class A common
|
John A. Tweed
|
129,000(10)
|
*
|
Class A common
|
Robert E. Bosworth
|
104,253(11)
|
*
|
Class A common
|
Dr. Benjamin S. Carson, Sr.
|
-
|
*
|
Class A common
|
D. Michael Kramer
|
9,074(12)
|
*
|
Class A common
|
Bradley A. Moline
|
66,617(13)
|
*
|
Class A common
|
Rachel Parker-Hatchett
|
108,348(14)
|
*
|
Class A common
|
Herbert J. Schmidt
|
24,759(15)
|
*
|
Class A common
|
W. Miller Welborn
|
23,137(16)
|
*
|
Class A common
|
BlackRock, Inc.
|
1,432,498(17)
|
10.2% of Class A
8.7% of Total
|
Class A common
|
Dimensional Fund Advisors LP
|
1,128,909(18)
|
8.1% of Class A
6.9% of Total
|
Class A common
|
Gregory Willet, as Trust Protector and Investment Manager
|
1,000,000(19)
|
7.1% of Class A
6.1% of Total
|
Class A & Class B
common
|
All directors and executive officers as March 29, 2022 as a group (14 persons)
|
4,758,989
|
17.2% of Class A
100% of Class B
29.1% of Total
|
*
|
Less than one percent (1%).
|
|
(1)
|
The business address of Mr. and Mrs. Parker and the other directors, Named Executive Officers and the other executive officers is 400 Birmingham Highway, Chattanooga, Tennessee 37419. The business addresses
of the remaining entities listed in the table above are as follows: (i) BlackRock, Inc., 55 East 52nd Street, New York, NY 10055; (ii) Dimensional Fund Advisors LP, 6300 Bee Cave Road, Building One, Austin, Texas 78746; and (iii) Gregory
Willett, as Trust Protector and Investment Manager, 605 Chestnut Street, Suite 1700, Chattanooga, Tennessee 37450.
|
|
(2)
|
Beneficial ownership includes sole voting power and sole investment power with respect to such shares unless otherwise noted and subject to community property laws where applicable.
|
|
(3)
|
Comprised of 1,220,871 shares of Class A common stock and 2,350,000 shares of Class B common stock owned by Mr. and Mrs. Parker as joint tenants with rights of survivorship; 236,558 shares of Class A common
stock owned by Mr. Parker; 66,816 shares of restricted Class A common stock with voting rights; and 39,206 shares allocated to the account of Mr. Parker under our 401(k) plan (the number of shares reported as beneficially owned is equal to
Mr. Parker's March 29, 2022 account balance in the employer stock fund under the Company's 401(k) plan divided by the closing market price on such date. The restricted Class A common stock is subject to vesting and, in certain
circumstances, holding provisions.
|
|
(4)
|
Based on the aggregate number of shares of Class A and Class B common stock owned by Mr. and Mrs. Parker. Mr. and Mrs. Parker hold 11.1% of shares of Class A and 100% of shares of Class B common stock. The
Class A common stock is entitled to one vote per share, and the Class B common stock is entitled to two votes per share. Mr. and Mrs. Parker beneficially own shares of Class A and Class B common stock with 33.5% of the voting power of all
outstanding voting shares.
|
|
(5)
|
Comprised of 75,741 shares of Class A common stock owned by Mr. Hogan and Melinda J. Hogan as joint tenants, 55,680 shares of restricted Class A common stock with voting rights, 50,000 shares of restricted
Class A common stock that do not carry voting rights but are scheduled to vest within 60 days of the record date, and 55,137 shares owned by Mr. Hogan in our 401(k) plan (the number of shares reported as beneficially owned is equal to Mr.
Hogan's March 29, 2022 account balance in the employer stock fund under the Company's 401(k) plan divided by the closing market price on such date). The restricted Class A common stock is subject to vesting and, in certain circumstances,
holding provisions.
|
|
(6)
|
Comprised of 32,946 shares of Class A common stock owned directly, 10,440 shares of restricted Class A common stock with voting rights, 2,515 owned directly by Mr. Bunn’s spouse, and 21,375 shares owned by
Mr. Bunn in our 401(k) plan (the number of shares reported as beneficially owned is equal to Mr. Bunn’s' March 29, 2022 account balance in the employer stock fund under the Company's 401(k) plan divided by the closing market price on such
date). The restricted Class A common stock is subject to vesting and, in certain circumstances, holding provisions.
|
|
(7)
|
Comprised of 6,374 shares of Class A common stock owned directly by Ms. Doster.
|
|
(8)
|
Comprised of 3,759 shares of Class A common stock owned directly by Mr. Grant.
|
|
(9)
|
Comprised of 42,998 shares of Class A common stock owned directly by Mr. Hough and 23,385 shares of restricted Class A common stock with voting rights. The restricted Class A common stock is subject to
vesting and, in certain circumstances, holding provisions.
|
|
(10)
|
Comprised of 129,000 shares of Class A common stock.
|
|
(11)
|
Comprised of 72,826 shares of Class A common stock owned directly by Mr. Bosworth, 3,259 shares of restricted Class A common stock that do not carry voting rights but are scheduled to vest within 60 days of
the record date, and 28,168 shares of Class A common stock owned in Mr. Bosworth's IRA.
|
|
(12)
|
Comprised of 5,515 shares of Class A common stock owned directly by Mr. Kramer, 3,259 shares of restricted Class A common stock that do not carry voting rights but are scheduled to vest within 60 days of the
record date, and 300 shares owned as custodian for his minor grandchildren.
|
|
(13)
|
Comprised of 62,358 shares of Class A common stock owned directly by Mr. Moline, 3,259 shares of restricted Class A common stock that do not carry voting rights but are scheduled to vest within 60 days of the
record date, and 1,000 shares owned in Mr. Moline's IRA.
|
|
(14)
|
Comprised of 104,829 owned by Ms. Parker-Hatchett and her husband, Robert B. Hatchett, as joint tenants, 260 shares owned directly by Ms. Parker-Hatchett, and 3,259 shares of restricted Class A common stock
that do not carry voting rights but are scheduled to vest within 60 days of the record date.
|
|
(15)
|
Comprised of 21,500 shares of Class A common stock owned directly by Mr. Schmidt and 3,259 shares of restricted Class A common stock that do not carry voting rights but are scheduled to vest within 60 days of
the record date.
|
|
(16)
|
Comprised of 19,878 shares of Class A common stock owned directly by Mr. Welborn and 3,259 shares of restricted Class A common stock that do not carry voting rights but are scheduled to vest within 60 days of
the record date.
|
|
(17)
|
As reported on Schedule 13G/A filed with the SEC on February 1, 2022, which indicates that BlackRock, Inc. has sole voting power with respect to 1,310,854 shares, no shared voting power, sole dispositive
power with respect to 1,432,498 shares, and shared dispositive power with respect to no shares. Information is as of December 31, 2021.
|
|
(18)
|
As reported on Schedule 13G/A filed with the SEC on February 8, 2022, which indicates that Dimensional Fund Advisors LP has sole voting power with respect to 1,102,833 shares, no shared voting power, sole
dispositive power with respect to 1,128,909 shares, and shared dispositive power with respect to no shares. Represents aggregate beneficial ownership on a consolidated basis reported by Dimensional Fund Advisors LP. Information is as of
December 31, 2021.
|
|
(19)
|
As reported on Schedule 13G filed with the SEC on January 14, 2021 on behalf of Gregory Willett, as Trust Protector and Investment Manager. Mr. Willett has sole voting power with respect to 1,000,000 shares,
no shared voting power, sole dispositive power with respect to 1,000,000 shares, and no shared dispositive. Information is as of January 6, 2021.
|
Objective
|
How Our Executive Compensation Program Achieves This Objective
|
||
Attract and retain talented executives and motivate those executives to achieve superior results.
|
• |
We link compensation to achievement of specified performance goals, appreciation in the market price of our Class A common stock, and continued employment with the Company and utilize multi-year vesting
requirements to promote long-term ownership.
|
|
Align executives’ interests with our corporate strategies, our business objectives, and the performance of specific business units to the extent applicable.
|
• |
Annual management bonuses for each of our Named Executive Officers are based on certain strategic and financial goals critical to maintaining profitability and fostering long-term growth.
|
|
Enhance executives’ incentives to increase our stock price and focus on the long-term interests of our stockholders.
|
• |
We incorporate cash and equity compensation components into our plan to provide incentives for short-term and long-term objectives.
|
|
o | Annual cash incentives based on targets with objective, measurable criteria keep management focused on near-term results. Caps on cash awards are built into our plan design. | ||
o | The equity compensation component, which includes awards such as restricted stock grants and stock options, provides balance to our other elements of our compensation program and creates incentive for executives to increase stockholder value over an extended period of time. | ||
• |
We attempt to keep base salaries reasonable and weight overall compensation toward incentive and equity-based compensation. | ||
Control costs.
|
• |
We provide de minimis perquisites to our Named Executive Officers and make matching “discretionary” contributions to the Named Executive Officers’ 401(k) account. Contributions for our Named Executive
Officers for 2021 aggregated to approximately $46,000.
|
|
• |
We seek to ensure, to the extent possible, that incentive compensation paid by us is deductible for tax purposes. |
2021
|
2020
|
||
Audit Fees(1)
|
$591,042
|
$594,135
|
|
Audit-Related Fees(2)
|
-
|
-
|
|
Tax Fees(2)
|
-
|
-
|
|
All Other Fees(2)
|
-
|
-
|
|
Total
|
$591,042
|
$594,135
|
(1)
|
Represents the aggregate fees billed and expenses for professional services rendered by Grant Thornton for the audit of our annual financial statements and reviews of financial
statements included in our quarterly reports on Form 10-Q, and services that are normally provided by an independent registered public accounting firm in connection with statutory or regulatory filings or engagements for those years.
|
(2)
|
There were no such fees for 2021 or 2020.
|
Covenant Logistics Group, Inc.
|
|
David R. Parker
|
|
Chairman of the Board
|
|
April 19, 2022
|
1 Year Covenant Transportation Chart |
1 Month Covenant Transportation Chart |
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