Based on the 2017 Mercer Report, TrueBlue’s
size relative to the selected peer group is shown below:
(1) The awards made to Mr.
Beharelle in early 2018 while he was serving as COO were based on the COO target percentages shown in this table. Future
awards will be based on his CEO role.
Compensation Discussion and Analysis
Change-in-Control
Agreements
The Company has
entered into change-in-control agreements with certain executive officers, including all NEOs, which were approved by all the independent
directors. These agreements are described in greater detail under “Post-Employment Payments” below. The change-in-control
agreements are intended to protect the interests of our shareholders by providing short-term security for the executives in the
event management and the Board are presented with a business combination or other opportunity that is determined to be in the best
interest of our shareholders. The Compensation Committee designed the change-in-control agreements to achieve a balance between
the benefits of providing executives with security and the potential impact on the shareholders. The major provisions intended
to achieve this balance include:
·
The
change-in-control agreements require a “double trigger,” i.e., both a change-in-control and either a termination
without cause by the Company or a termination for good reason by the executive.
·
The
basic benefit is limited to an amount equal to two (2) times (three (3) times in the case of the CEO) the sum of (i) the
executive’s annual base salary rate in effect for the year in which the termination occurs, and (ii) the
executive’s short-term incentive target award, in addition to the immediate vesting of outstanding, unvested equity
awards.
·
If
the “parachute” amount payable would trigger an excise tax under Section 4999 of the Internal Revenue Code, then payments
will be cut back so as not to trigger the excise tax if doing so will result in a greater net after the payment to the executive
(sometimes called a “best-net” cutback).
|
|
|
·
The
agreements do not include an obligation to pay a “gross up” in the event excise taxes are payable.
·
The
agreements include restrictive covenants covering non-competition, non-solicitation, non-disparagement, and confidentiality.
Retirement Provision for
Short- and Long-Term Incentives
We
expect our NEOs to supplement their retirement income through our Short- and Long-Term Incentive Plans. Consistent
with this policy, the Compensation Committee approved the following retirement provisions for the treatment of
short-term incentive and outstanding long-term awards:
·
Retirement
treatment will apply if the NEO has achieved: (a) at least ten (10) years of service; and (b) at least age fifty-five
(55).
·
Awards
will be prorated and paid as follows:
·
Short-Term
Incentive:
the current year’s award will be prorated based
on the days worked during the fiscal year and be paid after the end of the year based on actual performance results;
·
Restricted
Stock:
at time of retirement, a prorated number of shares that would normally vest at
the next scheduled vesting date will be vested based on days worked since the last vesting date; and
·
Performance
Share Units:
awards will be prorated based on the number of days
worked during the performance period and become vested after the end of the performance period based on actual performance
results.
|
Additional Policies
Stock Ownership Guidelines
During 2018, the following stock ownership
guidelines applied to the NEOs based on a multiple of annual restricted share grants.
NEO
|
Multiple
of Annual
Restricted Stock Grant
|
Effective
Multiple
of 2018 Salary
|
A.
Patrick Beharelle, CEO
(1)
|
4x
|
6.00
|
Steven
C. Cooper, CEO
(1)
|
4x
|
6.00
|
Derrek
L. Gafford
|
3x
|
2.25
|
James
E. Defebaugh
|
3x
|
1.50
|
Sean
A. Ebner
|
3x
|
1.80
|
Taryn
R. Owen
|
3x
|
1.50
|
(1) The table shows the guidelines for
Mr. Beharelle and Mr. Cooper in their roles as CEO.
TrueBlue, Inc. 2019 Proxy Statement P.
40
|
Compensation Discussion and Analysis
The
Compensation Committee has established stock ownership guidelines for executive officers as follows: a multiple of four (4)
times the annual restricted stock grant for the CEO and chief operating officer and a multiple of three (3) times the annual
restricted stock grant for executive vice presidents.
NEOs are expected
to achieve their targets within five (5) years of becoming subject to the ownership guidelines. As of the 2018 fiscal year end,
all NEOs met these guidelines or were within the five (5) year period and on track to meet these guidelines.
The ownership guidelines
recognize the significant range of equity awards each NEO is eligible to receive annually, while continuing to require a substantial
personal commitment to the Company’s long-term financial performance. The guidelines may be satisfied by shares owned outright
(regardless of whether acquired through a Company plan or other acquisition), unvested restricted shares, or shares held in the
NEO’s account under our employee stock purchase plan. Unvested performance share units may not be used to satisfy the stock
ownership guidelines. Compliance with the guidelines is reviewed on an ongoing basis. NEOs who have not satisfied the applicable
guidelines after becoming subject to them are encouraged to retain 50% of the net amount of their shares (after applicable taxes)
on each vesting date for their restricted stock awards.
Clawback
Policy
Our Clawback Policy
applies to all current and former NEOs and certain other executives (including the chief accounting officer) who receive incentive-based
compensation. Under this policy, the Company may seek to recover the incentive compensation awarded or paid where: (i) the incentive
compensation was calculated based wholly or in part upon the achievement of certain financial results that were subsequently the
subject of a restatement; (ii) in the Compensation Committee’s view, the executive engaged in fraud or illegal conduct that
materially contributed to or caused the restatement; and (iii) a lower payment would have been made to the executive based upon
the restated financial results. The Compensation Committee retains discretion regarding the application of the policy and may determine
not to seek recovery from an executive if it determines that to do so would be unreasonable or that it is not in the best interest
of the Company and its shareholders.
Insider Trading
and Anti-Hedging Policy
Under
the Company’s Insider Trading Policy, all directors and NEOs are prohibited from hedging the economic interest in
|
|
|
our securities that
they hold. In addition, we prohibit Company personnel, including the NEOs, from engaging in any short-term, speculative securities
transactions, including purchasing Company securities on margin, engaging in short sales, buying or selling put or call options,
and trading in options (other than those granted by the Company).
Tax Considerations
As
one of the factors in the review of compensation matters, the Committee considers the anticipated tax treatment to the
Company. Section 162(m) of the Internal Revenue Code limits our ability to deduct compensation over $1 million paid to
certain NEOs. Under the tax rules in effect before 2018, compensation that qualified as “performance-based” under
Section 162(m) was deductible without regard to this $1 million limit. In 2017 and prior years, the Compensation Committee
designated short-term incentive awards and performance share awards that were intended to qualify for this exception.
However, the Tax Cuts and Jobs Act of 2017 (“Tax Act”), which became effective on January 1, 2018, eliminated
this performance-based compensation exception beginning January 1, 2018, subject to a special rule that
“grandfathers” certain awards and arrangements that were in effect on or before November 2, 2017. As a result,
compensation structured by the Compensation Committee in 2017 and prior years with the intent of qualifying as
performance-based under Section 162(m) that is paid on or after January 1, 2018 may not be fully deductible, depending on the
application of the special grandfathering rule. Also, from and after January 1, 2018, compensation awards in excess of $1
million to our NEOs, generally, will not be deductible.
While the 2017 Tax
Act will likely limit the deductibility of compensation paid to our NEOs, the Compensation Committee, consistent with its past
practice, will continue to design compensation programs that are intended to be in the best long-term interest of the Company and
our shareholders, with deductibility of compensation being one of a variety of factors considered.
No Pension
Benefits
The Company does
not maintain a defined benefit pension plan or supplemental pension plan.
|
TrueBlue, Inc. 2019 Proxy Statement P.
41
|
Executive Compensation Tables
Summary Compensation
Table
The following
table shows all compensation paid by the Company in fiscal 2016, 2017, and 2018 to our Chief Executive Officer, retired Chief
Executive Officer (“CEO”), Chief Financial Officer (“CFO”), and the other three most highly paid executive
officers, with the exception of Mr. Ebner and Ms. Owen. Mr. Ebner and Ms. Owen were first determined to be one of the three
most highly paid executive officers in 2018. The individuals listed in the following tables are the “named executive officers”
or “NEOs” referred to in the proxy statement.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
and Principal Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock
Awards
($)
(1)
|
Non-Equity
Incentive Plan
Compensation
($)
(2)
|
All
Other
Compensation
($)
|
Total
($)
|
|
|
A.
Patrick Beharelle
Chief Executive Officer
|
2016
|
$
525,000
|
|
—
|
|
$
721,426
|
|
$131,250
|
|
$
73,088
|
(3)
|
$1,450,764
|
|
2017
|
$
525,000
|
|
—
|
|
$ 952,460
|
|
$118,125
|
|
$
71,555
|
(4)
|
$1,667,140
|
|
2018
|
$
628,846
|
(5)
|
—
|
|
$
1,415,268
|
(6)
|
$380,467
|
(7)
|
$
70,960
|
(8)
|
$2,495,541
|
|
Steven
C. Cooper
Board member,
Retired Chief Executive
Officer
|
2016
|
$
750,000
|
|
—
|
|
$
1,545,911
|
|
$308,000
|
|
$
2,935
|
|
$2,606,846
|
|
2017
|
$
750,000
|
|
—
|
|
$
2,040,973
|
|
$280,000
|
|
$
3,037
|
|
$3,074,010
|
|
2018
|
$
800,000
|
|
—
|
|
$
2,614,035
|
|
$586,000
|
|
$
2,588
|
(9)
|
$4,002,623
|
|
Derrek
L. Gafford
Executive Vice President and
Chief Financial Officer
|
2016
|
$
450,000
|
|
—
|
|
$
494,703
|
|
$112,500
|
|
$
9,000
|
|
$1,066,203
|
|
2017
|
$
450,000
|
|
—
|
|
$
653,109
|
|
$101,250
|
|
$
10,376
|
|
$1,214,735
|
|
2018
|
$
475,000
|
|
—
|
|
$
1,467,225
|
(10)
|
$241,100
|
|
$
9,250
|
(11)
|
$2,192,575
|
|
James
E. Defebaugh
Executive Vice President,
Secretary, and Chief Legal
Officer
|
2016
|
$
380,000
|
|
—
|
|
$
348,111
|
|
$
95,000
|
|
$
9,000
|
|
$
832,111
|
|
2017
|
$
380,000
|
|
—
|
|
$
459,598
|
|
$
76,000
|
|
$
9,000
|
|
$
924,598
|
|
2018
|
$
400,000
|
|
—
|
|
$
435,695
|
|
$188,400
|
|
$
9,250
|
(11)
|
$1,033,345
|
|
Sean
A. Ebner
Executive Vice President,
President, PeopleReady
|
2018
|
$ 425,000
|
|
$50,000
|
(12)
|
$
555,500
|
|
$276,675
|
|
$
14,662
|
(13)
|
$1,321,837
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taryn
R. Owen
Executive Vice President,
President, PeopleScout
|
2018
|
$
400,000
|
|
|
|
$
435,695
|
|
$354,600
|
|
$
16,262
|
(14)
|
$1,206,557
|
|
(1) The
value in this column represents the aggregate amount of both restricted shares and performance share units granted to NEOs
and calculated according to FASB ASC 718. These amounts do not necessarily correspond to the actual value that will be
realized by the NEO, or the manner of calculating the restricted share or performance share unit award used by the
Compensation Committee. For example, in 2018, Mr. Cooper received a target value of $1,200,000 in restricted shares with the
actual number of shares granted being calculated using the average closing price of our stock during the 60 trading days
preceding the grant date, which was approximately $27.73. In 2018, Mr. Cooper also received a target value of $1,200,000 in
performance share units with the actual number of performance shares being calculated using 80% of the average closing price
of our stock during the 60 trading days preceding the grant date, which was approximately $22.18. The FASB ASC 718 grant date
fair value of Mr. Cooper’s restricted shares was $1,161,800 and the FASB ASC 718 grant date fair target value of Mr.
Cooper’s performance share units was $1,452,236, which is included in the table above. Performance share units will
vest three (3) years after the grant date if certain long-term Company performance goals are met, as discussed in more detail
in the Compensation Discussion and Analysis section of this proxy statement. Equity awards are described in more detail in
the Compensation Discussion and Analysis section of this proxy statement and in the Grants of Plan-Based Awards table. For
additional information, refer to Note 12 to the Consolidated Financial Statements found in Item 8 of Part II of our 2018 Form
10-K (listed under Stock-Based Compensation). The value of the performance share units granted in 2018 is based upon the
target outcome of the performance conditions at the grant date. The maximum value of the 2018 performance share units
assuming that the highest level of performance conditions is achieved, based on the grant date share price of $26.85, is
approximately $953,041 for Mr. Beharelle, $2,178,367 for Mr. Cooper, $646,709 for Mr. Gafford, $363,093 for Mr.
Defebaugh, $462,921 for Mr. Ebner, and $363,093 for Ms. Owen.
TrueBlue, Inc. 2019 Proxy Statement P.
42
|
Executive Compensation Tables
(2)
The amounts set forth in this column for the respective fiscal year were earned during such fiscal year and paid in the early
part of the following fiscal year to each of the NEOs under our Short-Term Incentive Plan. For additional information on the determination
of the amounts related to Non-Equity Incentive Plan Compensation, see the discussion in the Compensation Discussion and Analysis
entitled “Short-Term Incentive Plan.”
(3)
This amount includes the aggregate incremental cost to the Company of personal benefits provided to Mr. Beharelle for certain
housing, automobile, and travel costs in 2016 in the amount of $70,790 and the cash value of the Company’s annual circle
of excellence trip in the amount of $2,298. These personal benefits include $52,317 for housing, $12,968 for travel to our Chicago
office, $4,777 for an auto allowance, and $728 for tax gross-ups. The amount reported for 2016 increased compared to the amounts
reported last year by $12,967 due to a redetermination of certain travel and housing costs as being classified as perquisites
related to Mr. Beharelle’s commuting to our Chicago office.
(4)
This amount includes the aggregate incremental cost to the Company of personal benefits provided to Mr. Beharelle for certain
housing, automobile, and travel costs in 2017 in the amount of $66,914, and the cash value of the Company’s annual circle
of excellence trip in the amount of $4,641. These personal benefits include $51,470 for housing, $11,571 for travel to our Chicago
office, $3,361 for an auto allowance, and $512 for tax gross-ups provided in respect to certain business travel expenses. The
amount reported for 2017 increased compared to the amounts reported last year by $63,030 due to a redetermination of certain travel
and housing costs as being classified as perquisites related to Mr. Beharelle’s commuting to our Chicago office.
(5)
This amount includes approximately two-thirds of $600,000, Mr. Beharelle’s salary as COO, and approximately one-third of
$700,000, Mr. Beharelle’s salary as CEO effective September 1, 2018.
(6)
This amount represents the FASB ASC 718 grant date fair value of Mr. Beharelle’s restricted stock award of 18,931 shares
and his target performance share unit award of 23,663 units on February 9, 2018, and his promotional grant of 9,986 shares on
September 14, 2018.
(7)
This amount includes two-thirds of Mr. Beharelle’s non-equity short-term incentive award as COO, $213,000, and one-third
of his short-term incentive award as CEO, $167,467. For additional information on the determination of the amounts related to
Non-Equity Incentive Plan Compensation, see the discussion in the Compensation Discussion and Analysis entitled “Short-Term
Incentive Plan.”
(8)
This amount includes the aggregate incremental cost to the Company of personal benefits provided to Mr. Beharelle for certain
housing, automobile, and travel costs in 2018 in the amount of $66,473 and the cash value of the Company’s annual circle
of excellence trip in the amount of $4,487. These personal benefits include $50,335 for housing, $12,265 for travel to our Chicago
office, $3,361 for an auto allowance, and $512 for tax gross-ups provided in respect to certain business travel expenses.
(9)
This amount represents the cash value of the Company’s annual circle of excellence trip.
(10)
This amount represents the FASB ASC 718 grant date fair value of Mr. Gafford’s restricted stock award of 12,846 shares and
his target performance share unit award of 16,057 units on February 9, 2018, and his restricted stock award of 25,411 shares granted
on September 14, 2018.
(11)
These amounts represent matching funds paid by the Company to participants in the Nonqualified Deferred Compensation Plan.
(12)
This amount includes a special incentive bonus to Mr. Ebner for the performance of his primary business unit during a period
ending in September 2018, but was paid in early 2019.
(13)
This amount represents matching funds paid by the Company to participants in the Nonqualified Deferred Compensation Plan in the
amount of $9,250 and the cash value of the Company’s annual circle of excellence trip in the amount of $5,412.
(14)
This amount represents matching funds paid by the Company to participants in the Nonqualified Deferred Compensation Plan in the
amount of $9,250, the cash value of the Company’s annual circle of excellence trip in the amount of $2,831, and the value
of a housing benefit which was $4,181.
TrueBlue, Inc. 2019 Proxy Statement P.
43
|
Executive Compensation Tables
Grants of Plan-Based Awards
Name/
Type of Award
|
Grant
Date
|
Action
Date
(1)
|
Estimated
Possible Payouts Under
Non-Equity Incentive
Plan Awards
(2)
|
Estimated
Future
Payouts Under Equity
Incentive
Plan Awards
(3)
|
All
other stock
awards:
number of
shares of
stock or units
(#)
(4)
|
Grant
Date
Fair Value
of Equity
Based
Awards
(5)
|
Threshold
($)
|
Target
($)
|
Maximum
($)
|
Threshold
(#)
|
Target
(#)
|
Maximum
(#)
|
|
A.
Patrick Beharelle, CEO
|
Cash
Incentive
|
—
|
12/12/2017
|
$295,833
|
$533,333
|
$850,000
|
—
|
—
|
—
|
—
|
—
|
Restricted
Stock
|
2/9/2018
|
12/12/2017
|
—
|
—
|
—
|
—
|
—
|
—
|
18,931
|
$508,297
|
Restricted
Stock
|
9/14/2018
|
9/13/2018
|
—
|
—
|
—
|
—
|
—
|
—
|
9,986
|
$271,619
|
Performance
Share Units
|
2/9/2018
|
12/12/2017
|
—
|
—
|
—
|
11,832
|
23,663
|
35,495
|
—
|
$635,352
|
|
Steven
C. Cooper
|
Cash
Incentive
|
—
|
12/12/2017
|
$500,000
|
$800,000
|
$1,200,000
|
—
|
—
|
—
|
—
|
—
|
Restricted
Stock
|
2/9/2018
|
12/12/2017
|
—
|
—
|
—
|
—
|
—
|
—
|
43,270
|
$1,161,800
|
Performance
Share Units
|
2/9/2018
|
12/12/2017
|
—
|
—
|
—
|
27,044
|
54,087
|
81,131
|
—
|
$1,452,236
|
|
Derrek
L. Gafford
|
Cash
Incentive
|
—
|
12/12/2017
|
$178,125
|
$356,250
|
$593,750
|
—
|
—
|
—
|
—
|
—
|
Restricted
Stock
|
2/9/2018
|
12/12/2017
|
—
|
—
|
—
|
—
|
—
|
—
|
12,846
|
$344,915
|
Restricted
Stock
|
9/14/2018
|
8/30/2018
|
—
|
—
|
—
|
—
|
—
|
—
|
25,411
|
$691,179
|
Performance
Share Units
|
2/9/2018
|
12/12/2017
|
—
|
—
|
—
|
8,029
|
16,057
|
24,086
|
—
|
$431,130
|
|
James
E. Defebaugh
|
Cash
Incentive
|
—
|
12/12/2017
|
$140,000
|
$260,000
|
$420,000
|
—
|
—
|
—
|
—
|
—
|
Restricted
Stock
|
2/9/2018
|
12/12/2017
|
—
|
—
|
—
|
—
|
—
|
—
|
7,212
|
$193,642
|
Performance
Share Units
|
2/9/2018
|
12/12/2017
|
—
|
—
|
—
|
4,508
|
9,015
|
13,523
|
—
|
$242,053
|
|
Sean
A. Ebner
|
Cash
Incentive
|
—
|
12/12/2017
|
$148,750
|
$276,250
|
$446,250
|
—
|
—
|
—
|
—
|
—
|
Restricted
Stock
|
2/9/2018
|
12/12/2017
|
—
|
—
|
—
|
—
|
—
|
—
|
9,195
|
$246,886
|
Performance
Share Units
|
2/9/2018
|
12/12/2017
|
—
|
—
|
—
|
5,747
|
11,494
|
17,241
|
—
|
$308,614
|
|
Taryn
R. Owen
|
Cash
Incentive
|
|
12/12/2017
|
$140,000
|
$260,000
|
$420,000
|
—
|
—
|
—
|
—
|
—
|
Restricted
Stock
|
2/9/2018
|
12/12/2017
|
—
|
—
|
—
|
—
|
—
|
—
|
7,212
|
$193,642
|
Performance
Share Units
|
2/9/2018
|
12/12/2017
|
—
|
—
|
—
|
4,508
|
9,015
|
13,523
|
—
|
$242,053
|
TrueBlue, Inc. 2019 Proxy Statement P.
44
|
Executive Compensation Tables
(1) This
column reflects the date that the Compensation Committee approved the Company performance targets, business unit performance
targets, and individual performance targets and awards pursuant to the Short-Term Incentive Plan, and also set the Company
performance targets for the performance share unit awards under the Long-Term Equity Incentive Plan.
(2) These columns
show what the potential payout for each NEO would have been under the Short-Term Incentive Plan in 2018, if the threshold, target,
or maximum goals were satisfied for all Company performance measures. The amount also reflects the individual performance goals
component of the Short-Term Incentive Plan. The potential payouts were performance-driven and therefore completely at risk. For
actual payouts under the Short-Term Incentive Plan for 2018, please see the Summary Compensation Table. The business measurements,
performance goals, and salary multipliers for determining the payout are described in the Compensation Discussion and Analysis
section. The amounts shown for Mr. Beharelle reflect one-third of his non-equity short-term incentive plan opportunity as CEO
and two-thirds of his non-equity short-term incentive plan opportunity as COO.
(3) These columns
show the number of performance share units granted in 2018 to the NEOs under the Long-Term Equity Incentive Plan. The target number
of restricted shares and performance share units granted was calculated using the target value for the award which is based on
a percentage of the NEO’s salary. The 2018 performance share units vest three (3) years after the date of grant, if at all.
The amounts shown reflect the potential payout for performance share units for each NEO under the Long-Term Equity Incentive Plan
if the threshold, target, or maximum Company performance goals are satisfied. The performance goals and award multipliers for determining
the potential vesting amounts are described in the Compensation Discussion and Analysis section. The number of performance share
units granted was calculated using the target value for the award (a percentage of the NEO’s salary) divided by 80% of the
average closing price of Company shares during the 60 trading days preceding the grant date, which was $22.18.
(4) This column
shows the number of restricted stock awards granted in 2018 to the NEOs under the Long-Term Equity Incentive Plan. The number of
restricted shares granted on February 9, 2018, was calculated using the average closing price of Company shares during the 60 trading
days preceding the grant date, which was $27.73. For these restricted stock awards, 33.33% of each award vests annually over a
three (3) year period. This column also show the number of restricted stock awards granted in 2018 to Mr. Beharelle and Mr. Gafford
on September 14, 2018, which were calculated using the average closing price of Company shares during the 60 trading days preceding
the grant date, which was $28.04. Mr. Beharelle’s September 14, 2018, grant will vest ratably over four years, and Mr. Gafford’s
will vest on the second anniversary of the grant date.
(5) This column
shows the grant date fair value of equity awards in accordance with FASB ASC Topic 718. For restricted stock, grant date fair value
was calculated using the closing price of the Company stock on the date of grant. The closing price of Company stock on February
9, 2018 was $26.85. For performance share units, the February 9, 2018, grant date fair value was calculated using the closing price
of Company stock on the date of grant and the target number of performance share units. The performance goals and award multipliers
for determining the potential vesting amounts are described in the Compensation Discussion and Analysis section. The amounts shown
are consistent with the estimate of aggregate compensation cost to be recognized over the service period determined as of the grant
date under FASB ASC Topic 718, excluding the effect of estimated forfeitures. For additional information on the calculation and
valuation of equity awards, refer to the Compensation Discussion and Analysis section and refer to Note 12 to the Consolidated
Financial Statements found in Item 8 of Part II of our 2018 Form 10-K (listed under Stock-Based Compensation).
TrueBlue, Inc. 2019 Proxy Statement P.
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Executive Compensation Tables
Outstanding
Equity Awards at Fiscal Year-End
The following table
provides information on the holdings of stock options, restricted stock awards, and performance share units of the NEOs as of December
30, 2018. This table includes unvested shares of restricted stock and performance share units. The market value of the restricted
stock awards and performance share units is based on the closing market price that applied on December 30, 2018, which was $21.82.
For additional information about restricted stock awards and performance share units, see the description of equity incentive compensation
in the Compensation Discussion and Analysis section. Grants that are not listed in the vesting schedule are 100% vested.
Stock Awards
Name
|
Grant
Date
|
Number
of
Shares or Units of
Stock That Have
Not Vested (#)
(1)
|
Market
Value of
Shares or Units of
Stock That Have
Not Vested ($)
|
Equity
Incentive Plan
Awards: Number of
Unearned Shares, Units
or Other Rights That
Have Not Vested (#)
(2)
|
Equity
Incentive Plan:
Market Value of
Unearned Shares, Units
or Other Rights That
Have Not Vested ($)
|
A.
Patrick Beharelle
|
6/1/2015
|
1,899
|
$
41,436
|
—
|
—
|
2/5/2016
|
5,114
|
$111,587
|
—
|
—
|
2/10/2017
|
11,198
|
$244,340
|
20,998
|
$
|
458,176
|
2/9/2018
|
18,931
|
$413,074
|
23,663
|
$
|
516,327
|
9/14/2018
|
9,986
|
$217,895
|
—
|
—
|
Steven
C. Cooper
(3)
|
2/10/2017
|
—
|
—
|
44,995
|
$
|
981,791
|
2/9/2018
|
—
|
—
|
54,087
|
$
|
1,180,178
|
Derrek
L. Gafford
|
2/5/2016
|
3,507
|
$
76,523
|
—
|
—
|
2/10/2017
|
7,679
|
$167,556
|
14,398
|
$
|
314,164
|
2/9/2018
|
12,846
|
$280,300
|
16,057
|
$
|
350,364
|
9/14/2018
|
25,411
|
$554,468
|
—
|
—
|
James E. Defebaugh
|
2/5/2016
|
2,468
|
$
53,852
|
—
|
—
|
2/10/2017
|
5,404
|
$117,915
|
10,132
|
$
|
221,080
|
2/9/2018
|
7,212
|
$157,366
|
9,015
|
$
|
196,707
|
Sean
A. Ebner
|
7/3/2017
|
3,994
|
$
87,149
|
—
|
—
|
2/9/2018
|
9,195
|
$200,635
|
11,494
|
$
|
250,799
|
Taryn
R. Owen
|
2/9/2015
|
917
|
$
20,009
|
—
|
—
|
12/1/2015
|
1,243
|
$
27,122
|
—
|
—
|
2/5/2016
|
1,266
|
$
27,624
|
—
|
—
|
2/10/2017
|
2,986
|
$
65,155
|
5,599
|
$
|
122,170
|
2/9/2018
|
7,212
|
$157,366
|
9,015
|
$
|
196,707
|
(1) This column includes restricted stock
awards as of December 30, 2018, and performance share units that were granted in 2016 and that became determinable as of December
30, 2018, but which had not yet vested. The 2016 performance share unit grant resulted in zero shares being earned and, therefore,
TrueBlue, Inc. 2019 Proxy Statement P.
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Executive Compensation Tables
no portion
of this award is considered outstanding as of December 30, 2018. For restricted stock awards, 33.33% of each award vests
every year for three (3) years, except Mr. Beharelle’s June 1, 2015 and September 14, 2018 awards and Ms. Owen’s
February 9, 2015 and December 1, 2015 awards which vest at the rate of 25% each year for four (4) years, as well as Mr.
Gafford’s September 14, 2018 award of which 100% vests on September 14, 2020.
(2)
This column includes performance share unit awards. The awards vest on or about the third anniversary of the award, if at
all, according to predetermined targets. For additional information on the vesting schedule and Company performance goals for
performance share units granted in 2018, please see the Compensation Discussion and Analysis section. For performance share
unit awards granted in 2017 and 2018, additional information on performance goals can be found in our prior proxy statements.
The February 10, 2017 and February 9, 2018 grants all assume 100% of the award, or the target number of shares, will be
earned. The February 5, 2016 grant became determinable as of December 30, 2018, and is not included in this column.
(3)
Due to
Mr. Cooper’s retirement as of December 30, 2018, and in accordance with his employment agreements, all of his restricted
shares vested on December 30, 2018. Mr. Cooper’s previously awarded performance shares remain outstanding and will vest at
the end of the applicable performance period, if pre-established performance criteria are met.
Stock Vested
The following table
provides information for the NEOs regarding: (i) stock option exercises during 2018, to the extent any occurred, including the
number of shares acquired upon exercise and the value realized; and (ii) the number of shares acquired upon the vesting of restricted
stock awards and performance share units and the value realized before payment of applicable withholding tax and broker commissions.
The value realized represents long-term gain over several years, which is not part of the compensation awarded in 2018 as reported
in the Summary Compensation Table.
Name
|
Stock
Awards
|
Number
of Shares
Acquired on Vesting (#)
|
Value
Realized
on Vesting ($)
(1)
|
A.
Patrick Beharelle
|
12,612
|
$ 331,606
|
Steven
C. Cooper
|
111,018
|
$2,573,116
|
Derrek
L. Gafford
|
10,978
|
$ 290,202
|
James
E. Defebaugh
|
7,348
|
$ 194,087
|
Sean
A. Ebner
|
1,997
|
$ 54,019
|
Taryn
R. Owen
|
4,918
|
$ 128,415
|
(1) The dollar amount realized upon vesting
was calculated by multiplying the number of shares of stock by the market value of the underlying shares on the vesting date.
Pension Benefits
The Company does not maintain a defined
benefit pension plan or supplemental pension plan.
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Executive Compensation Tables
Nonqualified
Deferred Compensation
The Company maintains
a Nonqualified Deferred Compensation Plan that allows certain highly compensated employees, including the NEOs, to defer portions
of their base salary and annual non-equity incentive and thereby defer taxes. The following table provides additional information
about the amounts deferred by our NEOs:
Name
|
Executive
Contributions
in Last FY ($)
(1)
|
Registrant
Contributions
in Last FY ($)
(2)
|
Aggregate
Earnings (Loss)
in Last FY ($)
(3)
|
Aggregate
Withdrawals/
Distributions ($)
|
Aggregate
Balance at Last
FYE ($)
|
A.
Patrick Beharelle
|
—
|
—
|
—
|
—
|
—
|
Steven
C. Cooper
|
—
|
—
|
—
|
—
|
—
|
Derrek
L. Gafford
|
$ 50,240
|
$9,250
|
$(29,131)
|
—
|
$493,257
|
James
E. Defebaugh
|
$ 20,769
|
$9,250
|
$ (2,417)
|
—
|
$169,242
|
Sean
A. Ebner
|
$121,203
|
$9,250
|
$(21,486)
|
—
|
$250,447
|
Taryn
R. Owen
|
$ 20,615
|
$9,250
|
$(10,475)
|
—
|
$116,604
|
(1) The
amounts contributed to this plan by the Company’s NEOs are set forth in this table and are included in the amounts
shown as “Salary” in the Summary Compensation Table above.
(2) These amounts
were earned as a match to contributions made by the NEO to the Company Nonqualified Deferred Compensation Plan in 2018, but paid
in early 2019. The Company contribution is included in the columns “Registrant Contributions in Last FY” and “Aggregate
Balance at Last FYE.” These amounts are included in the amounts shown as “All Other Compensation” in the Summary
Compensation Table above.
(3) These amounts
were earned, or lost, by the NEO according to investment gains and losses based on the performance of certain investment choices
selected by the participants in the Nonqualified Deferred Compensation Plan. Participants may change their investment elections
at any time under the same rules that apply under the 401(k) plan.
The
participants in the Nonqualified Deferred Compensation Plan may annually elect to defer up to 75% of their salary and up to 100%
of their annual non-equity incentive. Participants are always 100% vested in the elective deferral contributions to the plan.
The amounts deferred into this plan and all earnings remain subject to the claims of the Company’s general creditors until
distributed to the participant. Participants may receive their funds after the termination of their employment or during employment
in the case of an unforeseen emergency, the disability of the participant, or a change-in-control. Participants also have the
option to receive a distribution of deferred funds during employment if such a distribution was established prior to the deferral.
Any Company matching contributions are
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discretionary. Whether
a matching contribution will be made for a plan year and the amount of any such match will be determined each year by the Company.
Matching funds are immediately vested.
The deemed rates
of return for the earnings options may be positive or negative and thus may result in gains or losses to a participant’s
plan balance. No assets are required to actually be invested in such funds. The deemed investment options may be changed by the
participant periodically throughout the year. For certain key employees, the distribution election must be made at least six (6)
months before the actual payment of the participant’s account balance.
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Post-Employment Payments
Post-Employment
Payments
The Company has
entered into employment agreements and change-in-control agreements with each of the NEOs pursuant to which each NEO may be entitled
to payments upon termination of employment under the circumstances described below. The payments are subject to the fulfillment
of certain conditions, including compliance with a non-competition agreement, which are described below. The information below
is a summary of certain material provisions of these agreements and does not attempt to describe all aspects of the agreements.
The rights of the parties are governed by the actual agreements and are in no way modified by the abbreviated summary set forth
in this proxy statement.
Following the description
of the agreements, there is a table showing the potential payments the NEOs could have received under these agreements, assuming
their employment with the Company was terminated without cause by the Company or for good reason by the NEO on December 30, 2018.
Post-Employment
Payment for Steven C. Cooper
As previously announced,
Mr. Cooper resigned from his position as Chief Executive Officer (CEO) effective September 1, 2018, and retired as an executive
of the Company as of December 30, 2018. Mr. Cooper successfully completed a transition period during which, among other things,
he developed a transition plan for the CEO position, assisted the Company in identifying and recruiting a successor CEO, transitioned
his duties and responsibilities to the named successor, and provided additional assistance as requested by the Board to effect
an orderly transition. As a result Mr. Cooper received the following benefits upon his retirement from the Company:
·
payment
of Mr. Cooper’s applicable short-term incentive award subject to performance conditions set by the Board;
·
immediate
vesting in all previously awarded but unvested restricted share units;
·
continued
vesting of outstanding performance share units at the end of the applicable performance period and subject to each grant’s
performance criteria; and
·
continued
group health plan coverage for Mr. Cooper and his spouse until the later of: (i) Mr. Cooper and his spouse both reaching aged sixty-five
(65); or (ii) the date Mr. Cooper and his spouse are both eligible for Medicare.
The value of the
immediate vesting in Mr. Cooper’s previously awarded but unvested restricted share units was $1,706,869, which was calculated
by the closing price of a share of common stock on the date of vesting, which on December 30, 2018 was $21.82. Finally, Mr. Cooper
and his spouse will continue to receive group health plan coverage as explained above, the value of which is estimated to be $140,359.
|
|
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Employment
Agreement for A. Patrick Beharelle
Mr. Beharelle’s
employment agreement provides that if the Company terminates his employment without cause, or if Mr. Beharelle terminates his employment
with good reason other than death or disability, and successfully completes a transition period during which, among other things,
he develops a transition plan for the CEO position and assists the Company in identifying and recruiting a successor CEO, then
he will be entitled to the following:
·
separation
payments at a rate equal to his base salary at the time of termination for a period of eighteen (18) months;
·
payment
of Mr. Beharelle’s then applicable short-term incentive award subject to performance conditions set by the Board and prorated
for the portion of the short-term incentive for the period Mr. Beharelle is actually employed by the Company;
·
if
Mr. Beharelle elects to continue group health plan coverage for him and his family under the Consolidated Omnibus Budget
Reconciliation Act of 1985 (COBRA), Mr. Beharelle will receive reimbursements for up to eighteen (18) months for the portion
of his COBRA premiums that exceed the amount that he would have incurred in premiums for coverage as an active employee under
the company’s group health plan; and
·
additional
equity vesting as follows: (a) all of Mr. Beharelle’s unvested equity awards that are scheduled to vest based solely on his
continued employment within eighteen (18) months following such termination will become fully vested on the termination date; and
(b) all of Mr. Beharelle’s unvested equity awards scheduled to vest based on upon attainment of specified performance goals
shall vest after the end of the applicable performance period based on actual performance results, prorated for the portion of
the performance period employed (for which purpose Mr. Beharelle will be deemed to have continued employment for a period of eighteen
(18) months following termination).
The foregoing separation
benefits are conditioned upon the execution by Mr. Beharelle of a release of claims against the Company and continued compliance
by Mr. Beharelle with all covenants with the Company. Pursuant to his employment agreement, Mr. Beharelle’s covenants with
the Company include, without limitation, covenants requiring a duty of loyalty, non-disclosure of confidential information, assignment
of inventions, non-competition, and non-solicitation. Mr. Beharelle is also party to a non-competition agreement with the Company.
Mr. Beharelle’s
employment agreement, through reference to Mr. Beharelle’s change-in-control agreement, also provides that if he is deemed
to receive an “excess parachute payment” as defined in Section 280G of the Internal Revenue Code (the “Code”)
by reason of his vesting of the unvested equity awards (taking into account any other compensation paid or deemed paid to him),
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TrueBlue, Inc. 2019 Proxy Statement P.
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Post-Employment Payments
the amount of such
payments or deemed payments shall be reduced or, alternatively, the provisions of the employment agreement shall not act to
vest unvested equity incentive awards to Mr. Beharelle, so that no such payments or deemed payments shall constitute excess parachute
payments. The determination of whether a payment or deemed payment constitutes an excess parachute payment shall be in the sole
discretion of the Board.
Employment
Agreements for Messrs. Defebaugh, Gafford, Ebner, and Ms. Owen
Messrs. Defebaugh,
Gafford, Ebner and Ms. Owen are parties to employment agreements and plan documents, which provide that if the Company terminates
the NEO’s employment without cause, or if the NEO terminates his or her employment with good reason other than death or
disability, then the NEO will be entitled to the following:
·
separation
payments at a rate equal to the NEO’s base salary at the time of termination for a period of twelve (12) months;
·
payment
of the NEO’s then applicable short-term incentive award subject to performance conditions set by the Board and prorated for
the portion of the period the NEO is actually employed by the Company;
·
additional
equity vesting as follows: (a) all of the NEO’s unvested equity awards that are scheduled to vest based solely on his or
her continued employment within twelve (12) months following such termination will become fully vested; and (b) all of the NEO’s
unvested equity awards scheduled to vest based on attainment of specified performance goals shall vest after the end of the applicable
performance period based on actual performance results, prorated for the portion of the performance period employed (for which
purpose of such NEO will be deemed to have continued employment for a period of twelve (12) months following termination).
As a condition
precedent to being entitled to receive the benefits set forth above, the NEO must sign and deliver, and thereafter not revoke a
release of claims against our Company, remain in full compliance with all provisions of the sections of the employment agreement
relating to non-disclosure of confidential information and assignment of inventions, and be and remain in full compliance with
the non-competition agreement and any other covenants with the Company entered into by the NEO. Each NEO is also party to a non-competition
agreement with the Company.
In addition to
the provisions described above, the employment agreement for each NEO also provides that, if at the time of termination of employment
the NEO is considered a “specified employee” subject to the required six-month delay in benefit payments under Section
409A(a)(2)(B)(i) of the Code, then any separation payments that would otherwise have been paid within the first six (6) months
after termination of employment shall instead be paid in a single lump sum on (or within fifteen
|
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(15) days after)
the six-month anniversary of such termination of employment and any remaining severance payments shall be made monthly after such
six-month anniversary.
Change-in-Control
Agreements
The Company has
entered into change-in-control agreements with various executive officers, including each of the NEOs. Each change-in-control agreement
by its terms expires each year on December 31st, provided that beginning on January 1st of each subsequent year, the change-in-control
agreements will automatically extend for an additional year, unless either party gives notice of termination not later than September
30th of the immediately preceding year. Because no such notices of termination were provided, the change-in-control agreements
were in effect through December 31, 2018, and were extended through December 31, 2019. If a change-in-control occurs during the
term, the term will expire on the earlier of the third anniversary of the change-in-control or the date of the executive’s
death (such period is referred to as the “Severance Period”). If the executive ceases to be employed prior to a change-in-control,
the agreement will expire on the date of termination of employment. The change-in-control agreements are effective on the date
executed, but do not become operative unless a change-in-control occurs.
Change-in-control
means that during the term of the agreements any of the following events occur:
·
any
individual, entity, or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) is or becomes the beneficial
owner (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of more than 33.33% of the combined voting power
of the then-outstanding voting stock of the Company;
·
a
majority of the Board ceases to be comprised of incumbent directors; or
·
the
consummation of a reorganization, merger, consolidation, plan of liquidation or dissolution, recapitalization or sale, or other
disposition of all or substantially all of the assets of the Company or the acquisition of the stock or assets of another corporation,
or other transaction (each, a “Business Transaction”), and as a result of which less than 50% of the outstanding voting
interests or securities of the surviving or resulting entity immediately after the Business Transaction are owned in the aggregate
by the former shareholders of the Company, as the same shall have existed immediately prior to such Business Transaction, in
substantially the same proportions as their ownership before such Business Transaction.
The Company will
be required to pay the amounts described in the table below, if following the occurrence of a change-in-control (or within ninety
(90) days prior to the date of a change-in-control, if at the request of a third party who has taken steps reasonably calculated
to effect a change-in-control): (i) the
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Post-Employment Payments
Company terminates
the executive’s employment during the Severance Period other than for cause, or as a result of the executive’s death
or permanent disability; or (ii) the executive terminates the executive’s employment for good reason during the Severance
Period. Each of (i) and (ii) is referred to in the change-in-control agreement as a “Triggering Termination.” As a
condition precedent to receiving any payments and benefits under the change-in-control agreement, the executive must execute
and not later revoke a waiver and release agreement and be in compliance with the restrictive covenants and terms of the change-in-control
agreement. The material covenants of each executive in the change-in-control agreements include a duty of loyalty, non-disclosure,
non-use, and protection of confidential information, non-disparagement, non-competition, and non-solicitation of employees
and customers. The non-competition and non-solicitation provisions apply during the term of the change-in-control agreement and
for a period of two (2) years following the termination of employment.
In
the event of a Triggering Termination, subject to the terms of the agreement, the Company is required to pay to the
executive an amount equal to two (2) times (except in the case of Mr. Beharelle, in which case it shall be three (3)
times) the sum of (i) the executive’s annual base salary rate in effect for the year in which the termination date
occurs, plus (ii) the executive’s target non-equity incentive (in an amount equal to the target non-equity incentive
immediately prior to the change-in-control or, if such target shall not have been established or shall be reduced after a
change-in-control, the highest aggregate incentive pay earned in any of the three (3) fiscal years immediately preceding the
year in which the change-in-control occurred), and (iii) provide eighteen (18) months of benefits. Such amounts shall be
payable as follows: 50% shall be payable within five (5) business days after the termination date and 50% shall be payable
in equal monthly installments over the twenty-four (24) months following the termination date, nevertheless the
agreement provides that the timing of payments may be adjusted if necessary to comply with Section 409A of the Code.
The Company will also provide employee benefits to the executive comparable to the benefits that the executive was
receiving or entitled to receive immediately prior to the termination date or will pay a lump sum payment in lieu of
the continuation of such benefits, as described in the change-in-control agreement.
In addition to the
amounts described above, if there is a Triggering Termination, the Company will pay in cash to the executive a lump sum amount
equal to the sum of (i) any unpaid incentive compensation that has been earned, accrued, allocated, or awarded to the executive
for any performance period ending prior to a Triggering Termination, plus (ii) the value of any annual non-equity incentive or
long-term incentive pay earned, accrued, allocated, or awarded with respect to the executive’s service during the performance
period or periods that include the date on which the change-in-control occurred. Furthermore, if there is a Triggering Termination,
all stock options,
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|
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restricted stock,
performance share units, and any other equity award shall become fully vested as of the date of termination.
For NEOs other than
Mr. Beharelle, notwithstanding any provision of the change-in-control agreement or any other agreement between the executive
and the Company to the contrary, if any amount or benefit to be paid or provided under the change-in-control agreement or any
other agreement would be a payment that creates an obligation for the executive to pay excise taxes under Section 280G of the Code
(an “excess parachute payment”), then the payments and benefits to be paid or provided under the change-in-control
agreement and any other agreement will be reduced to the minimum extent necessary (but in no event to less than zero) so that no
portion of any such payment or benefit, as so reduced, constitutes an excess parachute payment; provided that the foregoing reduction
will not be made if such reduction would result in the NEO receiving an after-tax amount less than 90% of the after-tax amount
of the severance payments the NEO would have received under the change-in-control agreement or under any other agreement. In the
event that any payment or benefit intended to be provided is required to be reduced pursuant to this provision, the executive will
be entitled to designate the payments and/or benefits to be so reduced. For Mr. Beharelle, any excess parachute payment will
be cut back so as not to trigger the excise tax if doing so will result in a greater net after tax payment to Mr. Beharelle (sometimes
called a “best-net” cutback).
In addition to the
foregoing limitation, the change-in-control agreements provide that to the extent that the executive receives payments by reason
of the executive’s termination of employment pursuant to any other employment or severance agreement or employee plan (collectively,
“Other Employment Agreements”), the amounts otherwise receivable under the change-in-control agreement will be reduced
by the amounts actually paid pursuant to the Other Employment Agreements, but not below zero, to avoid duplication of payments
so that the total amount payable or value of benefits receivable under the change-in-control agreement, and under the Other Employment
Agreements, is not less than the amounts payable or value of benefits receivable had such benefits been paid in full under the
change-in-control agreement.
Non-Competition
Agreements
Each
of the NEOs have entered into a non-competition agreement with the Company. Each non-competition agreement provides, among
other things, that during the executive’s employment with the Company and for a period of twenty-four (24) months
following the termination of such employment for any reason, the executive shall not, directly or indirectly:
·
employ
or solicit for employment any Company employee who has been employed by the Company during the six (6) months prior to the termination
of the executive’s employment or urge any such person to discontinue employment with the Company;
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Post-Employment Payments
·
seek
to employ any individual who has applied for and/or accepted placement in a job by the Company with a customer, and about whom
the executive obtained information or with whom the executive interacted on behalf of the Company;
·
solicit
any customer of the Company for the purpose of providing temporary and/or permanent staffing services on behalf of a competing
business;
·
engage
in any conduct intended to induce or urge any customer to discontinue its business relationship with the Company; or
·
do
any business with any Company customer in connection with the provision of temporary and/or permanent staffing services.
The non-competition
agreement also provides that during the executive’s employment with the Company and for a period of twelve (12) months for
Messrs. Defebaugh, Gafford, Ebner and Ms. Owen, and eighteen (18) months for Mr. Beharelle, following the termination of such employment,
the executive shall not, directly or indirectly, in any location in which the Company conducts or plans to conduct business, work
for or participate in a business similar to, or that competes with, the business of the Company. The non-competition agreement
also contains, among other things, provisions covering duty of loyalty and non-disclosure, non-use and protection of confidential
information.
Restricted
Stock and Performance Share Unit Agreements
The award agreements
that govern the restricted stock and performance share unit grants to the NEOs also provide that the restricted stock and performance
share units, as applicable, will become fully vested if after a change of control, the NEO is
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terminated without
cause or terminates employment for good reason. Performance share units vest in such an event at the target level, provided that
the Compensation Committee shall have the discretion to determine whether the performance goals shall be deemed to have been performed
at the maximum level. For purposes of the restricted stock and performance share unit agreements, “change of control”
means the first day that any one or more of the following conditions shall have been satisfied:
·
the
sale, liquidation, or other disposition of all or substantially all of the Company’s assets in one or a series of related
transactions;
·
an
acquisition (other than directly from the Company) of any outstanding voting securities by any person, after which such person
has beneficial ownership of 25% or more of the then outstanding voting securities of the Company, other than a Board approved transaction;
·
during
any consecutive twenty-four (24) month period, the individuals who, at the beginning of such period, constitute the Board cease
for any reason other than death to constitute at least a majority of the members of the Board, subject to certain exceptions;
or
·
a
merger, consolidation, or reorganization of the Company, as a result of which the shareholders of the Company immediately prior
to such merger, consolidation, or reorganization own, directly or indirectly, immediately following such merger, consolidation,
or reorganization less than 50% of the combined voting power of the outstanding voting securities of the entity resulting from
such merger, consolidation, or reorganization.
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TrueBlue, Inc. 2019 Proxy Statement P.
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Post-Employment Payments
Potential Payout Upon an Involuntary
Termination Without Cause or for Good Reason
The table below quantifies the potential
payouts to each of the NEOs. The table shows two alternative scenarios: (i) termination before a change-in-control; and (ii) termination
after a change-in-control.
Name
(7)
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Potential
Payouts upon Involuntary Termination
by Company without Cause or by Executive for
Good Reason after a Change-in-Control
(1)
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Potential
Payouts upon Involuntary Termination
by Company without Cause or by Executive for
Good Reason before a Change-in-Control
(2)
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Cash
Payment
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Restricted
Stock &
Performance
Share Vesting
(3)
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Continuation
of Health &
Welfare Benefits
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Cash
Payment
(4)
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Restricted
Stock
& Performance
Share Vesting
(3)(5)(6)
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Continuation
of Health &
Welfare Benefits
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A.
Patrick Beharelle
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$4,200,000
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$2,002,836
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$37,250
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$1,430,467
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$1,616,331
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$37,250
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Derrek
L. Gafford
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$1,662,500
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$1,743,374
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$28,227
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$ 716,100
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$ 801,689
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$ 0
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James
E. Defebaugh
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$1,320,000
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$
746,920
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$37,763
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$ 588,400
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$ 517,614
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$ 0
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Sean
A. Ebner
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$1,402,500
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$
538,583
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$13,019
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$ 701,676
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$ 277,812
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$ 0
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Taryn
R. Owen
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$1,320,000
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$
616,153
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$37,763
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$ 754,600
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$ 413,227
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$ 0
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(1)
Assumes that (a) the change-in-control agreement was effective as of December 30, 2018, (b) a change-in-control occurred on
or before such date, and (c) the NEO was terminated by the Company without cause on such date or the NEO terminated
NEO’s employment for good reason on such date.
(2) Assumes that
(a) the employment agreement was effective as of December 30, 2018 (b) no change-in-control occurred on or before such date, and
(c) the NEO was terminated by the Company without cause on such date or the NEO terminated NEO’s employment for good reason
on such date. These amounts reflect actual 2018 non-equity short-term incentive payments.
(3) The amounts
shown are calculated by multiplying the number of unvested restricted stock awards and unvested performance share awards (which
are at the actual amount earned for the 2016 award (which was $0) and at the target for the 2017 and 2018 awards) for such NEO
with respect to which the vesting would accelerate as a result of termination under the circumstances noted by the closing price
of a share of common stock on December 30, 2018, which was $21.82. Unvested restricted stock and performance share units are set
forth in the Outstanding Equity Awards at Fiscal Year-End table.
(4) These amounts
include the amount earned under the 2018 Short-Term Incentive Plan, which according to the terms of the plan were payable upon
each NEO’s termination of employment under the conditions noted in footnote (2) above.
(5) Mr. Beharelle’s
employment agreement provides for the accelerated vesting of all equity awards upon termination of employment under the conditions
noted in footnote (2) above. Under the employment agreements for the NEOs (other than Mr. Beharelle), however, vesting is only
accelerated for those equity awards which would have vested in the twelve-month period following a termination of employment under
the conditions noted in footnote (2) above.
(6) The performance
share unit grant agreements provide that, upon termination of employment under the conditions noted in footnote (2) above, a pro-rata
portion of the performance shares vest and are paid out at the end of the performance period based on actual performance. The amounts
shown reflect the actual amount earned for the 2016 award, (which was $0), and assumes vesting at the target level over the performance
period for the 2017 and 2018 awards.
(7) As discussed
above, the amounts actually payable to the NEOs pursuant to the change-in-control agreement may be subject to reduction if any
amount or benefit to be paid under such agreement or any other agreement would be a payment that creates an obligation for the
NEO to pay excise taxes under Section 280G of the Code. For purposes of Section 280G, the value of the acceleration of stock options,
performance shares, and restricted stock is based on a time-based formula and is different than the method described in footnote
(3) above.
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CEO Pay Ratio
This section sets
forth information concerning the ratio between the annual total compensation of the Company’s median employee and the total
annual compensation of our CEO, Patrick Beharelle.
For the 2018 calendar
year, the annual total compensation of the employee identified as our Company’s median employee was $7,489. Patrick Beharelle
became CEO on September 1, 2018. For purposes of determining the ratio, we calculated the amount that Mr. Beharelle would have
received if he had been CEO the entire twelve (12) months of 2018 (i.e. we annualized Mr. Beharelle’s CEO compensation).
Our CEO’s annualized total compensation in 2018 was $2,688,629 (This amount was calculated by adding together the following:
Mr. Beharelle’s $700,000 annual salary as described in footnote (5) of the Summary Compensation Table; his stock awards of
$1,415,268; his annualized non-equity incentive compensation of $502,401, which represents three times the amount of Mr. Beharelle’s
incentive award of $167,467 that was paid for the one third of the year in which he served as CEO as described in footnote (7)
of the Summary Compensation Table; and all other compensation of $70,960 as described in footnote (8) of the Summary Compensation
Table.) Accordingly, for 2018, the CEO pay ratio was estimated to be 359 to 1. As permitted by SEC rules, we used the same median
employees as identified for 2017, because there have been no significant changes to our workforce or employee compensation arrangements
for 2018 that we believe would significantly change our CEO pay ratio results. The median employee identified for 2017 left the
company during 2018, and in accordance with SEC rules we substituted for 2018 another employee identified in the 2017 population
who had substantially similar compensation (based on the compensation measure used to identify the median employee in 2017 as described
below). The following briefly describes the process we used to identify our median employees for 2017, based on our employee population
as of October 8, 2017:
The pay ratio
identified for our Company reflects the fact that the significant majority of our employees are temporary employees who work at
our customers’ job sites, generally on a short-term project basis, and are not typically employed for a full year. The wages
of temporary employees cannot be annualized for the calculation of the CEO Pay Ratio.
To identify the
employee with the median total annual compensation, as well as to determine the annual total compensation of the median employee,
we adopted a variety of methodologies, applied certain exclusions, and made reasonable estimates based on our payroll and employment
records, in a manner consistent with SEC rules.
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Our “Measurement
Date” was the second Sunday of October, which was October 8, 2017. On the Measurement Date, our active U. S. employees, excluding
the CEO, consisted of 85,969 individuals. Our employee population was comprised primarily of temporary employees. For our temporary
employees, the definition of who was an active employee on the Measurement Date was anyone who worked during the workweek ending
on the Measurement Date. For our staff employees, anyone who was denoted as active within our human resources systems on the Measurement
Date was included in our employee population.
To identify the
“median employee” from our employee population, we used taxable wages for the full 2017 calendar year. We did not
annualize the salary of any of our staff employees who were employed with the Company for part of the year.
Our employee population,
from which the median employee was identified, did not include any of our non-U.S. employees as our employee count for those non-U.S.
employees was less than 5% of all employees.
The Company’s
total U.S. employee count in 2017 was 85,970. The combined total of U.S. and non-U.S. employees for 2017 was 88,827.
The non-U.S. employees
for 2017 were located in the following jurisdictions:
Country
|
Approximate
Number of
Employees
Excluded in 2017
|
Canada
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2,239
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India
|
433
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Poland
|
65
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Australia
|
95
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China
|
9
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United Kingdom
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7
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New Zealand
|
3
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Mexico
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2
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Singapore
|
2
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Panama
|
1
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Spain
|
1
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Equity Compensation Plan Information
Equity Compensation Plan Table
The following table presents information
on the Company’s equity compensation plans at December 30, 2018:
Plan
category
|
Number
of securities to
be issued upon exercise of
outstanding options
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Weighted-average
exercise price of
outstanding options
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Number
of securities
remaining available for
future issuance under
equity compensation plans
(excluding securities
reflected in the
first column)
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Equity
compensation plans approved by security holders
(1)
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27,931
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$23.29
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2,366,163
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Employee
stock purchase plans approved by security holders
(2)
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—
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—
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358,800
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(1) Equity
compensation plans approved by security holders include the following:
TrueBlue,
Inc. 2005 Long-Term Equity Incentive Plan (the “2005 Plan”). The 2005 Plan applies to directors, officers, employees,
and consultants of the Company and permits the granting of nonqualified and incentive stock options, restricted stock, performance
share units, restricted stock units, and stock appreciation rights. The total number of shares authorized under this plan was
7,950,000. No further awards were made pursuant to this plan upon the shareholder approval of the 2016 TrueBlue Omnibus Incentive
Plan. Under this 2005 Plan and as of December 30, 2018, there remains 332,962 restricted shares and performance share units outstanding.
Outstanding stock options as of the fiscal year end were 27,931 and are included in the table above.
2016
TrueBlue Omnibus Incentive Plan (the “2016 Plan”). This 2016 Plan applies to directors, officers, employees and consultants
of the Company and permits the granting of nonqualified and incentive stock options, restricted stock, performance share units,
restricted stock units, and stock appreciation rights. Upon adoption, there were 1,542,944 shares authorized for issuance under
this plan, reflecting the number of shares that remained available for issuance under the 2005 Plan. Additionally, the shares
underlying outstanding awards under the 2005 Plan that expire or are terminated, surrendered, or forfeited become available for
grant under the 2016 Plan. At the Annual Meeting of Shareholders on May 9, 2018, an additional 1,800,000 shares were authorized
under the 2016 Plan. As of December 30, 2018, there were a total of 2,366,163 shares available for future issuance under the 2016
Plan. There were 1,043,779 restricted shares and performance share units outstanding as of December 30, 2018. Outstanding stock
options as of the fiscal year end under this plan were zero (0). All future stock compensation awards will be awarded from this
plan.
(2)
Employee stock purchase plan approved by security holders include the following:
2010
TrueBlue Employee Stock Purchase Plan. On May 12, 2010, shareholders approved the Company’s 2010 Employee Stock Purchase
Plan. This plan provides an opportunity for regular employees who have met certain service qualifications to purchase shares of
our common stock through payroll deductions of up to 10% of eligible after-tax compensation. These deductions are used to purchase
shares of our common stock at 85% of the fair market value of our common stock as of either the first day or last day of each
month, whichever is less. As of December 30, 2018, there were 358,800 shares available for future issuance under this plan.
TrueBlue, Inc. 2019 Proxy Statement P.
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