Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Appointment of Christopher R. Armstrong, Executive Vice President, Chief
Operating Officer
On February 23, 2022, the Board of Directors (the "Board") of Ceridian HCM
Holding Inc. (the "Company") appointed Christopher R. Armstrong as Executive
Vice President, Chief Operating Officer of the Company. Mr. Armstrong will serve
as the Company's principal operating officer.
Mr. Armstrong, 53, joined the Company in 2004, and since then has held several
commercial and operational leadership roles, including Executive Vice President,
Chief Customer Officer of the Company from February 2020 until February 2022,
Executive Vice President, Chief Operating Officer from May 2019 until February
2020, Executive Vice President, Operations from March 2018 until May 2019, and
Executive Vice President, Customer Officer Support from April 2016 until March
2018.
Mr. Armstrong has no family relationships that are required to be disclosed
under Item 401(d) of Regulation S-K and is not a party to any transaction
requiring disclosure under Item 404(a) of Regulation S-K.
On February 24, 2022, the Company issued a press release announcing, among other
things, Mr. Armstrong's appointment as Executive Vice President, Chief Operating
Officer. A copy of the press release is attached hereto as Exhibit 99.1.
Amendment and Restatement of the Ceridian HCM Holding Inc. 2018 Equity Incentive
Plan
On February 23, 2022, the Compensation Committee of the Board of the Company
approved and recommended, and the Board of the Company approved the amendment
and restatement of the Ceridian HCM Holding Inc. 2018 Equity Incentive Plan (the
"2018 EIP"), to remove section 4.3 (Automatic Share Reserve Increase) effective
as of April 1, 2022 (the "Amended and Restated 2018 EIP").
The foregoing summary and description of the Amended and Restated 2018 EIP does
not purport to be complete and is qualified in its entirety by reference to the
full text of the Amended and Restated 2018 EIP, a copy of which is filed as
Exhibit 10.1 with this Current Report on Form 8-K and is incorporated herein by
reference.
Ceridian HCM Holding Inc. 2022 Management Incentive Plan
On February 23, 2022, the Compensation Committee of the Board of the Company
approved and recommended, and the Board of the Company approved the Ceridian HCM
Holding Inc. 2022 Management Incentive Plan (the "2022 MIP"). The 2022 MIP
covers the incentive period of January 1, 2022 through December 31, 2022. The
2022 MIP is designed to drive Company results related to key financial metrics
and to provide incentive compensation to active eligible employees who play a
key role in the Company accomplishing its objectives.
Receipt of performance based, incentive compensation under the 2022 MIP is based
on the Company's achievement of the Cloud revenue, excluding float revenue,
financial goal (the "Cloud Revenue Goal"), the adjusted EBITDA, excluding float
revenue, financial goal (the "Adjusted EBITDA Goal"), and the Sales per employee
per month ("PEPM") annual contract value ("ACV") financial goal (the "Sales PEPM
ACV Goal") for fiscal year 2022 (collectively, the "Performance Goals"). Both
the Cloud Revenue Goal and the Adjusted EBITDA Goal are calculated based on the
Company's operating results on a constant currency basis. The Sales PEPM ACV
Goal is calculated based on the sales of the Company's products on a constant
currency basis that contribute to its Cloud recurring revenue.
Target incentive compensation amounts are weighted 33 1/3% for the Cloud Revenue
Goal, 33 1/3% for the Adjusted EBITDA Goal, and 33 1/3% for the Sales PEPM ACV
Goal. Both the Cloud Revenue Goal and the Adjusted EBITDA Goal have a potential
threshold payout of 50%, a target payout of 100%, and a maximum payout of 150%.
The Sales PEPM ACV Goal has a potential threshold payout of 50%, a target payout
of 100%, and a maximum payout of 200%.
A participant's individual incentive target in the 2022 MIP is based on either
(i) a fixed dollar amount or (ii) a percentage of the participant's annual base
salary ("Individual MIP Target"). Under the 2022 MIP, the Individual MIP Target
for a participant will be split where 50% of the Individual MIP Target will be
in the form of cash and 50% of the Individual MIP Target will be in the form of
a performance stock unit ("PSU") award granted on February 24, 2022 (the "Grant
Date") under the 2018 EIP and pursuant to the terms of the 2018 EIP and the PSU
award agreement (the "PSU Award Agreement").
Any cash payment under the 2022 MIP will be determined using the participant's
base salary as of December 31, 2022. The number of PSUs granted to a participant
under the 2022 MIP is determined using 50% of the participant's Individual MIP
Target in effect on the Grant Date. Any cash payment and the vesting conditions
for the PSU award will be determined based on the Company's performance against
the achievement of the Performance Goals and the Performance Goals will be set
forth in the PSU Award Agreement. Participants can receive a payout between 0%
for not meeting the threshold of any of the Performance Goals, up to a maximum
total payout of 167% for achieving the maximum level of all of the Performance
Goals, with each goal measured independently to
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determine achievement and with intermediate cash payouts and PSU vesting being
linearly interpolated. Upon vesting of a PSU award, a participant will receive
shares of common stock of the Company ("Common Stock"). Based on the Company's
performance, a PSU will vest upon the later of (i) the one year anniversary of
the Grant Date or (ii) the date that the Compensation Committee or the Board
certifies the attainment of one or more of the Performance Goals under the 2022
MIP.
Individual MIP Target levels under the 2022 MIP for the Company's named
executive officers listed in the Company's proxy statement, dated March 17,
2021, for the Company's 2021 annual stockholders meeting (the "NEOs") are as
follows: (i) David D. Ossip, our Chair and Co-Chief Executive Officer, is 100%
of his base salary; (ii) Leagh E. Turner, Co-Chief Executive Officer, is 100% of
her base salary; (iii) Noemie C. Heuland, Executive Vice President, Chief
Financial Officer, is 60% of her base salary, and (iv) Christopher R. Armstrong,
Executive Vice President, Chief Operating Officer, is 60% of his base salary.
Pursuant to the 2022 MIP, the NEOs will be granted PSUs on the Grant Date with
the following values under the 2018 EIP and pursuant to the terms of the 2018
EIP and the PSU Award Agreement: (i) Mr. Ossip, $400,000; (ii) Ms. Turner,
$400,000; (iii) Ms. Heuland $180,000; and (iv) Mr. Armstrong, $196,500. The
number of units underlying the PSUs will be determined based upon the dollar
value for such individual noted above divided by the closing price of a share of
Common Stock on the New York Stock Exchange ("NYSE") on the Grant Date rounded
up to the next whole unit.
The foregoing summary of the 2022 MIP and the PSU Award Agreement do not purport
to be complete and is subject to, and qualified in its entirety by, the full
text of the 2022 MIP and PSU Award Agreement, copies of which are attached as
Exhibits 10.2, 10.3 and 10.4, to this Current Report on Form 8-K and
incorporated herein by reference.
Item 8.01 Other Events.
Forms of New Equity Award Agreements under the Ceridian HCM Holding Inc. 2018
Equity Incentive Plan
New PSU Award Agreements
On February 23, 2022, the Compensation Committee of the Board of the Company
approved and recommended, and the Board of the Company approved new forms of PSU
Award Agreement under the 2018 EIP. Copies of the new forms of the PSU Award
Agreement are attached as Exhibits 10.3 and 10.4 to this Current Report on Form
8-K and the terms of which are incorporated herein by reference. The new forms
of PSU Award Agreement will be effective for grants made on or after January 1,
2022 and reflect a change to the existing forms of PSU award agreements under
the 2018 EIP, consisting of rounding the awarded shares to the nearest whole
share in lieu of delivering fractional shares.
New Restricted Stock Unit Award Agreement
On February 23, 2022, the Compensation Committee of the Board of the Company
approved and recommended, and the Board of the Company approved a new form of
restricted stock unit ("RSU") award agreement under the 2018 EIP. A copy of the
new form of the RSU award agreement is attached as Exhibit 10.5 to this Current
Report on Form 8-K (the "RSU Award Agreement") and the terms of which are
incorporated herein by reference. The new form of RSU Award Agreement will be
effective for grants made on or after January 1, 2022 and reflect a change to
the existing forms of RSU award agreements under the 2018 EIP to permit full
vesting of RSU awards granted under the RSU Award Agreement upon the
participant's continued service through the applicable vesting date.
Grant of Equity Awards to Certain Members of Management
On February 23, 2022, the Compensation Committee of the Board of the Company
approved and recommended, and the Board of the Company approved the granting of
equity awards to management and key employees under the 2018 EIP, including the
following value of RSUs and PSU to be granted to the NEOs: (i) Mr. Ossip, $4.5
million RSUs and $4.5 million PSUs; (ii) Ms. Heuland, $1.25 million RSUs and
$1.25 million PSUs; (iii) Ms. Turner, $4.5 million RSUs and $4.5 million PSUs;
and (iv) Mr. Armstrong, $1.5 million RSUs and $1.5 million PSUs.
The number of units underlying the PSU awards and RSU awards to be granted under
the 2018 EIP pursuant to a PSU award agreement or RSU award agreement will equal
the dollar value of the award for an individual divided by the closing price of
a share of Common Stock on the NYSE on the Grant Date rounded down to the
nearest whole unit. The metrics to determine vesting of the PSUs are based on
the Cloud Revenue Goal, the Adjusted EBITDA Goal, and the Sales PEPM ACV Goal
with each goal measured independently to determine achievement and with
intermediate vesting being linearly interpolated. The PSUs will vest upon (i)
the Compensation Committee or the Board certifying that the Company has achieved
at least one of the Performance Goals, and (ii) upon certification of attainment
of the Performance Goals, one-third of the PSUs will vest annually on each of
the first three anniversaries of the Grant Date. The RSUs will vest as to
one-third of the RSU award on each of the first three anniversaries of the Grant
Date.
PSU vesting is weighted 33 1/3% for the Cloud Revenue Goal, 33 1/3% for the
Adjusted EBITDA Goal and 33 1/3% for the Sales PEPM ACV Goal. Both the Cloud
Revenue Goal and the Adjusted EBITDA Goal have a potential threshold payout of
50%, a target
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payout of 100%, and a maximum payout of 150%. The Sales PEPM ACV Goal has a
potential threshold payout of 50%, a target payout of 100%, and a maximum payout
of 200%.
On February 23, 2022, the Compensation Committee of the Board of the Company
approved and recommended, and the Board of the Company approved granting to
certain officers RSU awards pursuant to the terms and subject to the conditions
of the Company's 2018 EIP and the RSU Award Agreement on the Grant Date,
including the following RSU awards with the following values to the NEOs: (i)
Ms. Heuland $750,000 RSUs; and (ii) Mr. Armstrong $750,000 RSUs. The RSU awards
fully vest on June 30, 2023 contingent upon the recipient remaining employed at
the Company as of the vesting date.
The number of units underlying the RSU awards to be granted under the 2018 EIP
pursuant to a RSU Award Agreement will equal the dollar value of the award for
an individual divided by the closing price of a share of Common Stock on the
NYSE on the Grant Date rounded down to the nearest whole unit.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. Description of Exhibit
10.1 Ceridian HCM Holding Inc. 2018 Equity Incentive Plan (amended and
restated as of February 23, 2022).
10.2 Ceridian HCM Holding Inc. 2022 Management Incentive Plan.
10.3 Form of Performance Stock Unit Award Agreement (for awards made after
January 1, 2022).
10.4 Form of Performance Stock Unit Award Agreement (for Canadian
executive awards made after January 1, 2022).
10.5 Form of Restricted Stock Unit Award Agreement (for awards made after
January 1, 2022).
99.1 Press Release dated February 24, 2022.
104 Cover Page Interactive Data File (the cover page XBRL tags are embedded
within the inline XBRL document).
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