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Item 9A. Controls and Procedures

2022-02-23 compared with 2021-02-19 · 64 added, 56 removed, 84 unchanged (59% of the section changed)

1 unchanged sentence

Evaluation of Disclosure Controls and Procedures

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)) or our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) will prevent all errors and all fraud.

A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met.

Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of the controls must be considered relative to their costs.

Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error and mistake.

Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls.

The design of any system of controls is based in part on certain assumptions about the likelihood of future events.

Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

Also, projections of any evaluation of effectiveness of controls and procedures to future periods are subject to the risk that the controls and procedures may become inadequate because of changes in conditions, or that the degree of compliance with the controls and procedures may have deteriorated.

As of December 31, 2020, our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act).

Our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Our Chief Executive Officer and Chief Financial Officer have concluded based upon the evaluation described above that, as of December 31, 2020, our disclosure controls and procedures were effective at the reasonable assurance level.

We maintain disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (“Exchange Act”) that are designed to provide reasonable assurance that information required to be disclosed by us in reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms;

and (ii) accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding disclosure.

Our management, including our Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of December 31, 2021.

Based upon that assessment, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of December 31, 2021.

Changes in Internal Control Over Financial Reporting

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Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act.

Our internal control over financial reporting is a process designed under the supervision of our Chief Executive Officer and Chief Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our financial statements for external purposes in accordance with generally accepted accounting principles.

Management evaluated the effectiveness of our internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework (the 2013 Framework) .

Management, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of our internal control over financial reporting as of December 31, 2020, and concluded that it was effective based on those criteria.

The effectiveness of our internal control over financial reporting as of December 31, 2020, has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report, which is included in Item 8.

The Company’s internal control over financial reporting is a process designed under the supervision of our Chief Executive Officer and Chief Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our financial statements for external purposes in accordance with generally accepted accounting principles.

The Company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company;

and (iii) provide reasonable assurance regarding the prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the consolidated financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2021, using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework (2013).

Based on that assessment and the COSO criteria, we concluded that, as of December 31, 2021, the Company maintained effective internal control over financial reporting.

The Company acquired Combinex in May 2021, which was accounted for as a business combination.

Management excluded Combinex from its assessment of the effectiveness of our internal control over financial reporting as of and for the year ended December 31, 2021.

Combinex represented $19.3 million of the Company's total assets and contributed $37.0 million of total revenues in the consolidated financial statements of the Company as of and for the year ended December 31, 2021.

This exclusion is in accordance with the SEC’s guidance, which permits companies to omit an acquired business’s internal control over financial reporting from management’s assessment for up to one year after the date of acquisition.

The Company’s independent registered public accounting firm, Deloitte & Touche LLP, has audited the Company’s internal control over financial reporting as of December 31, 2021, and has issued a report that is included in Item 8 of this Annual Report on Form 10-K.

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OTHER INFORMATION

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DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE

Information with respect to our Board of Directors contained under the heading “Proposal One:

Election of Directors,” in the Proxy Statement, are incorporated in this Form 10-K by reference.

Election of Directors,” in the Proxy Statement, is incorporated in this Form 10-K by reference.

Information with respect to our executive officers is provided in Part I, Item 1 of this Form 10-K.

We have adopted a code of ethics that applies to our principal executive officer, principal financial officer, principal accounting officer, directors, and all other company employees performing similar functions.

This code of ethics, which is part of our corporate compliance program, is posted on the Investors page of our website at www.chrobinson.com under the caption “Code of Ethics.”

This code of ethics, which is part of our corporate compliance program, is posted on the Investors page of our website at www.chrobinson.com in the Governance Documents section under the caption “Code of Ethics.”

We intend to satisfy the disclosure requirement under Item 10 of Form 8-K regarding an amendment to, or waiver from, a provision of this code of ethics by posting such information on our website, at the web address specified above.

EXECUTIVE COMPENSATION

The information contained under the headings or subheadings “Compensation of Directors,” “Compensation Committee Interlocks and Insider Participation,” “2020 Executive Compensation,” and “Compensation Committee Report” is incorporated in this Form 10-K by reference.

The information contained under the headings or subheadings “Compensation of Directors,” “Talent and Compensation Committee Interlocks and Insider Participation,” “2021 Executive Compensation,” and “Talent and Compensation Committee Report” in the Proxy Statement is incorporated in this Form 10-K by reference.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

(a) Equity Compensation Plans

The following table summarizes share and exercise price information about our equity compensation plans as of December 31, 2020:

Plan Category Number of Securities to Be Issued Upon Exercise of Outstanding Options, Warrants, and Rights Weighted Average Exercise Price of Outstanding Options, Warrants, and Rights Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in the First Column)

Equity compensation plans approved by security holders (1)

7,260,840 $ 76.37 5,551,246

Equity compensation plans not approved by security holders — — —

Total 7,260,840 $ 76.37 5,551,246

________________________________

(1) Includes stock available for issuance under our Employee Stock Purchase Plan, as well as options, restricted stock granted, and shares that may become subject to future awards under our 2013 Equity Incentive Plan.

Specifically, 2,565,651 shares remain available under our Employee Stock Purchase Plan, and 7,260,840 options remain outstanding for future exercise.

Under our 2013 Equity Incentive Plan, 2,985,595 shares may become subject to future awards.

Information with respect to our equity incentive compensation plan contained under the heading “Proposal Four:

Approval of the C.H.

Robinson Worldwide, Inc.

2022 Equity Incentive Plan,” in the Proxy Statement, is incorporated in this Form 10-K by reference.

(b) Security Ownership

2 unchanged sentences

The information contained under the heading “Related Party Transactions” in the Proxy Statement is incorporated in this Form 10-K by reference.

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PRINCIPAL ACCOUNTING FEES AND SERVICES

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Ratification of the Selection of Independent Auditors” in the Proxy Statement is incorporated in this Form 10-K by reference.

EXHIBITS, FINANCIAL STATEMENT SCHEDULES

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EXHIBITS, AND FINANCIAL STATEMENT SCHEDULES

(a) The following documents are filed as part of this report:

1 unchanged sentence

Financial Statements and Supplementary Data.

Deloitte & Touche LLP (PCAOB ID No.

Minneapolis, Minnesota

(2) All financial statement schedules are omitted as the required information is inapplicable or the information is presented in the consolidated financial statements or related notes.

1 unchanged sentence

We will furnish a copy of any Exhibit at no cost to a security holder upon request.

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INDEX TO EXHIBITS

2 unchanged sentences

3.2 Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed on January 24, 2022)

4.1 Description of Capital Stock (incorp or ated by refer e nce to Exhibit 4.1 to the Co mpany's Annual Rep ort on Form 10 -K filed on February 19, 2020)

4.1 Description of Capital Stock (incorporated by reference to Exhibit 4.1 to the Company's Annual Report on Form 10-K filed on February 19, 2020)

4.2 Indenture, dated April 11, 2018, between C.H.

Robinson Worldwide, Inc.

Robinson Worldwide, Inc., and U.S.

Bank National Association, as Trustee (incorporated by reference to Exhibit 4.1 in the Company’s Current Report on Form 8-K filed on April 11, 2018)

4.3 First Supplemental Indenture, dated April 11, 2018, between C.H.

Robinson Worldwide, Inc.

Robinson Worldwide, Inc., and U.S.

Bank National Association, as Trustee, relating to the 4.200% Notes due 2028 (incorporated by reference to Exhibit 4.2 in the Company’s Current Report on Form 8-K filed on April 11, 2018)

2 unchanged sentences

†10.2 Amended and restated C.H.

Robinson Worldwide, Inc.

2013 Equity Incentive Plan (incorporated by reference to Appendix A to the Proxy Statement on Form DEF 14A filed on March 29, 2019 )

10.3 Second Omnibus Amendment, dated October 24, 2018, among C.H.

Robinson Worldwide, Inc., the guarantors and lenders party thereto, and U.S.

Bank National Association, as LC Issuer, Swing Line Lender and Administrative Agent for the lenders to that certain Credit Agreement dated as of October 29, 2012, among C.H.

Robinson Worldwide, Inc., the lenders party thereto, and U.S.

Bank National Association, as LC Issuer, Swing Line Lender and Administrative Agent for the Lenders (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on October 25, 2018)

Robinson Worldwide, Inc., 2013 Equity Incentive Plan (incorporated by reference to Appendix A to the Proxy Statement on Form DEF 14A filed on March 29, 2019)

10.3 Note Purchase Agreement dated as of August 23, 2013, by and among the Company and the Purchasers (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on August 26, 2013)

10.4 First Amendment to Note Purchase Agreement dated February 20, 2015, by and among the Company and the Purchasers (incorporated by reference to Exhibit 10.8 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2014)

10.5 Second Amendment to Note Purchase Agreement dated as of November 19, 2021, by and among C.H.

Robinson Worldwide, Inc., the noteholders party thereto and the guarantors party thereto (incorporated by reference to Exhibit 10.5 to the Company's Current Report on Form 8-K filed on November 23, 2021)

10.6 Receivables Purchase Agreement, dated November 19, 2021, by and among C.H.

Robinson Worldwide, Inc., C.H.

Robinson Receiva b les, LLC, the various conduit purchasers, committed purchasers and purchaser agents from time to time party thereto, and Bank of America, N.A., as administrative agent (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on November 23, 2021)

10.7 Receivables Sale Agreement, dated November 19, 2021, by and among C.H.

Robinson, Company Inc., and the other originators from time to time party thereto, C.H.

Robinson Receivables, LLC, and C.H.

Robinson Worldwide, Inc.

2015 Non-Equity Incentive Plan (incorporated by reference to Appendix A to the Proxy Statement on Form DEF 14A, filed on March 27, 2015 )

†10.7 Robinson Companies Nonqualified Deferred Compensation Plan (incorporated by reference to Exhibit 10.8 to the Company’s Annual Report on 10-K for the year ended December 31, 2012)

(incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K on November 23, 2021)

10.8 Performance Guaranty, dated November 19, 2021, made by C.H.

Robinson Worldwide, Inc.

,for the benefit of Bank of America, N.A, as administrative agent (incorporated by reference to Exhibit 10.3 to the Company's Current Report on Form 8-K on November 23, 2021)

*10.9 First Amendment to the Receivables Purchase Agreement, dated February 1, 2022 by and among C.H.

Robinson Worldwide, Inc., C.H.

Robinson Receivables, LLC, and the various conduit purchasers, committed purchasers and purchaser agents, and administrative agent.

10.10 Third Omnibus Amendment to Credit Agreement dated as of November 19, 2021 by and among C.H.

Robinson Worldwide, Inc., the lenders party thereto and U.S.

Bank National Association, as LC issuer and administrative agent (incorpor a ted by reference to Exhibit 10.4 to the Company's Current Report on Form 8-K filed on November 23, 2021)

Robinson Worldwide, Inc., 2015 Non-Equity Incentive Plan (incorporated by reference to Appendix A to the Proxy Statement on Form DEF 14A, filed on March 27, 2015)

†10.12 2012 Form of Incentive Stock Option Agreement (incorporated by reference to Exhibit 10.13 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2011)

†10.9 2012 Form of Restricted Stock Award for U.S.

Managerial Employees (incorporated by reference to Exhibit 10.14 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2011)

†10.10 2012 Form of Restricted Stock Award for Officers (incorporated by reference to Exhibit 10.15 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2011)

†10.11 2012 Form of Time-Based Restricted Stock Unit Award (incorporated by reference to Exhibit 10.15 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2012)

†10.13 Form of Incentive Stock Option Agreement (incorporated by reference to Exhibit 10.20 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2014)

2 unchanged sentences

Managerial Employees (incorporated by reference to Exhibit 10.22 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2014)

†10.15 Form of Time-Based Restricted Stock Unit Award (incorporated by reference to Exhibit 10.23 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2014)

†10.16 Form of Incentive Stock Option (Time-Based U.S.) Agreement (incorporated by reference to Exhibit 10.24 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2015)

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†10.17 Form of Key Employee Agreement (incorporated by reference to Exhibit 10.22 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2013)

†10.18 Form of Employee Confidentiality and Protection of Business Agreement (incorporated by reference to Exhibit 10.23 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2013)

†10.19 Form of Performance Share Award Agreement ( inco r porated by reference to Exhibit 10.24 to the Comp any's Annual Report on Form 10- K for the year ended December 31, 2019)

†10.20 Form of Incentive Stock Option Award Agreement ( incorporated by refe rence to Exhibit 10.25 to the Company's Ann ual Report on Form 10-K for th e year ended December 31, 2019 )

†10.21 Form of Key Employee Agreement (incorporated by refer e nce to Exhibit 10.27 to the Comp any's Annual Report on Form 10-K for the year ended December 31, 2019 )

†10.22 Form of Employee Confidentiality and Protection of Business Agreement (incor porated by refer ence to Exhibit 10.28 to the Company's Annual Report on Form 10 -K for the year ended December 31, 2019)

†10.18 Form of Performance Share Award Agreement (incorporated by reference to Exhibit 10.24 to the Company's Annual Report on Form 10-K for the year ended December 31, 2019)

†10.19 Form of Incentive Stock Option Award Agreement (incorporated by reference to Exhibit 10.25 to the Company's Annual Report on Form 10-K for the year ended December 31, 2019)

†10.20 Form of Key Employee Agreement (incorporated by reference to Exhibit 10.27 to the Company's Annual Report on Form 10-K for the year ended December 31, 2019)

†10.21 Form of Restricted Stock Unit Award Agreement – U.S.

Senior Leaders (incorporated by reference to Exhibit 10.23 to the Company's Annual Report on Form 10-K for the year ended December 31, 2020)

†10.22 Form of Performance Stock Unit Award (EPS) Agreement – U.S.

Senior Leaders (incorporated by reference to Exhibit 10.24 to the Company's Annual Report on Form 10-K for the year ended December 31, 2020)

†10.23 Form of Performance Stock Unit Award (AGP) Agreement – U.S.

Senior Leaders (incorporated by reference to Exhibit 10.25 to the Company's Annual Report on Form 10-K for the year ended December 31, 2020)

*†10.24 Form of Restricted Stock Unit Award Agreement - U.S.

Senior Leaders

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures