TrueBlue, Inc. 10-K

Item 9A. CONTROLS AND PROCEDURES Disclosure controls and procedures Under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures as required by Rule 13a-15(b) of the Securities Exchange Act of 1934, as amended as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that these disclosure controls and procedures are effective as of December 25, 2022. Report of management on internal control over financial reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is a process to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America. Internal control over financial reporting includes maintaining records that in reasonable detail accurately and fairly reflect our transactions and disposition of assets; providing reasonable assurance that transactions are recorded as necessary to permit preparation of our financial statements in accordance with accounting principles generally accepted in the United States of America; providing reasonable assurance that receipts and expenditures are made only in accordance with management and director authorization; and providing reasonable assurance that unauthorized acquisition, use or disposition of company assets that could have a material effect on our financial statements would be prevented or detected on a timely basis. Because of its inherent limitations, internal control over financial reporting is not intended to provide absolute assurance that a misstatement of our financial statements would be prevented or detected. Management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework and criteria established in Internal Control - Integrated Framework (2013), issued by the Committee of Sponsoring Organizations of the Treadway Commission. This evaluation included review of the documentation of controls, evaluation of the design effectiveness of controls, testing of the operating effectiveness of controls and a conclusion on this evaluation. Based on this evaluation, management concluded that our internal control over financial reporting was effective as of December 25, 2022. Our internal control over financial reporting as of December 25, 2022 has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report which is included herein. There were no material changes in our internal control over financial reporting during the quarter ended December 25, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Page - 67 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareholders and the Board of Directors of TrueBlue, Inc. Opinion on Internal Control over Financial Reporting We have audited the internal control over financial reporting of TrueBlue, Inc . , and subsidiaries (the “Company”) as of December 25, 2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 25, 2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements as of and for the year ended December 25, 2022, of the Company and our report dated February 15, 2023, expressed an unqualified opinion on those financial statements. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Report of Management on Internal Control over Financial Reporting . Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of 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 (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the 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. /s/ Deloitte & Touche, LLP Seattle, Washington February 15, 2023 Page - 68 Table of Contents Item 9B. OTHER INFORMATION On February 13, 2023, the Company entered into a First Amendment to Executive Employment Agreement (“Amendment”) to amend the Executive Employment Agreement with Mr. Gafford previously signed on December 31, 2006 (“Employment Agreement”). Under the Amendment, the Company and Mr. Gafford extended the severance payments and vesting of equity from 12 to 18 months in the event the Company terminates Mr. Gafford’s employment without cause or if Mr. Gafford terminates his employment with good reason (as those terms are defined in the Employment Agreement). In addition, the Amendment provides that for any equity award that is scheduled to vest based on attainment of specified performance goals over a performance period, the award will vest and be paid after the end of the applicable performance period based on actual performance results, and will be prorated for the portion of the performance period employed, for which purpose Mr. Gafford will be deemed to have continued employment with the Company for a period of 18 months following the date of termination of employment. All other terms and conditions of the Employment Agreement remained unchanged. The foregoing description of the Amendment is qualified in its entirety by reference to the full text of the Amendment, which is filed as an Exhibit to this Annual Report on Form 10-K and is incorporated by reference herein. Item 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS Not applicable. Page - 69 Table of Contents PART III Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE Information regarding our directors and nominees for directorship is presented under the heading “Proposal 1. Election of Directors” in our definitive proxy statement for use in connection with the 2023 Annual Meeting of Shareholders (the “Proxy Statement”) to be filed within 120 days after our fiscal year ended December 25, 2022, and is incorporated herein by this reference thereto. Information concerning our executive officers is set forth under the heading “Executive Officers” in our Proxy Statement, and is incorporated herein by reference thereto. Information regarding compliance with Section 16(a) of the Securities Exchange Act of 1934, as amended, our Code of Conduct and Business Ethics and certain information related to the company’s Audit Committee and Corporate Governance and Nominating Committee is set forth under the heading “Corporate Governance” in our Proxy Statement, and is incorporated herein by reference thereto. Item 11. EXECUTIVE COMPENSATION Information regarding the compensation of our directors and executive officers and certain information related to the company’s Compensation Committee is set forth under the headings “Executive Compensation Tables,” “Compensation of Directors,” “Compensation Discussion and Analysis,” “CEO Pay Ratio,” “Pay Versus Performance,” “Compensation Committee Report” and “Compensation Committee Interlocks and Insider Participation” in our Proxy Statement, and is incorporated herein by this reference thereto. Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS Information with respect to security ownership of certain beneficial owners and management is set forth under the headings “Security Ownership of Certain Beneficial Owners and Management” and “Equity Compensation Plan Information” in our Proxy Statement, and is incorporated herein by this reference thereto. Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE Information regarding certain relationships and related transactions and director independence is presented under the heading “Corporate Governance” in our Proxy Statement, and is incorporated herein by this reference thereto. Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES Information concerning principal accounting fees billed to us by our principal accountant, Deloitte & Touche LLP (PCAOB ID No. 34 ), is presented under the heading “Fees Paid to Independent Registered Public Accountant for Fiscal Years 2021 and 2022” in our Proxy Statement, and is incorporated herein by this reference thereto. Page - 70 Table of Contents PART IV Item 15. EXHIBITS a) The following documents are filed as a part of this 10-K: 1. Financial statements Financial statements can be found under Item 8 of Part II of this Form 10-K. 2. Financial statement schedules All schedules have been omitted because the required information is presented in the financial statements or notes thereto, the amounts involved are not significant or the schedules are not applicable. 3. Exhibits The exhibits are listed in the Index to Exhibits, which can be found on the following page. Page - 71 Table of Contents INDEX TO EXHIBITS Incorporated by reference Exhibit number Exhibit description Filed herewith Form File no. Date of first filing 3.1 Amended and Restated Articles of Incorporation. 8-K 001-14543 05/12/2016 3.2 Amended and Restated Bylaws. 10-Q 001-14543 10/30/2017 4.1 Description of Securities . X 10.1 Assumption and Novation Agreement among TrueBlue, Inc. and Lumbermen’s Mutual Casualty Company, American Motorist Insurance Company, American Protection Insurance Company and American Manufacturers Mutual Insurance Company and National Union Fire Insurance Company of Pittsburgh, PA, dated December 29, 2004. 10-K 001-14543 03/11/2005 10.2 Indemnification Agreement between TrueBlue, Inc. and National Union Fire Insurance Company of Pittsburgh, PA dated December 29, 2004. 10-K 001-14543 03/11/2005 10.3* Executive Employment Agreement between TrueBlue, Inc and Steven C. Cooper, effective July 8, 2022. 8-K/A 001-14543 07/14/2022 10.4* Executive Change in Control Agreement between TrueBlue, Inc and Steven C. Cooper effective July 8, 2022. 8-K/A 001-14543 07/14/2022 10.5* Non-Competition Agreement between TrueBlue, Inc. and Steven C. Cooper, effective July 8, 2022. 8-K/A 001-14543 07/14/2022 10.6* Employment Agreement between TrueBlue, Inc. and Taryn Owen, effective September 22, 2022. 8-K 001-14543 09/27/2022 10.7* Non-Competition Agreement between TrueBlue, Inc. and Taryn Owen, effective September 27, 2022. 8-K 001-14543 09/27/2022 10.8* Executive Employment Agreement between TrueBlue, Inc. and Derrek L. Gafford, dated December 31, 2006. 10-Q 001-14543 05/04/2007 10.9* First Amendment to Executive Employment Agreement between TrueBlue, Inc. and Derrek L. Gafford, dated February 13, 2023. X 10.10* Executive Non-Competition Agreement between TrueBlue, Inc. and Derrek L. Gafford . 10-Q 001-14543 05/04/2007 10.11* Executive Change in Control Agreement between TrueBlue, Inc. and Derrek L. Gafford, Taryn R. Owen, Carl Schweihs, and Garrett Ferencz. 10-Q 001-14543 05/04/2007 10.12* 2005 Long-Term Equity Incentive Plan S-8 333-125206 05/25/2005 10.13* Equity Retainer and Deferred Compensation Plan For Non- Employee Directors, effective January 1, 2010. S-8 333-164614 02/01/2010 10.14 2010 Employee Stock Purchase Plan. S-8 333-167770 06/25/2010 10.15* TrueBlue, Inc. Nonqualified Deferred Compensation Plan. 10-K 001-14543 02/22/2012 10.16* Amended and Restated 2005 Long-Term Equity Incentive Plan. S-8 333-190220 07/29/2013 10.17* 2016 TrueBlue Omnibus Incentive Plan S-8 333-211737 06/01/2016 10.18* Amended and Restated 2016 TrueBlue Omnibus Incentive Plan S-8 333-238093 05/08/2020 10.19 Credit agreement by and among Bank of America, N.A., Wells Fargo Bank, N.A., PNC Bank, N.A., Key Bank, HSBC and TrueBlue, Inc. dated as of July 13, 2018. 8-K 001-14543 07/16/2018 10.20* Executive Indemnification Agreement between TrueBlue, Inc. and Steven C. Cooper , Derrek L. Gafford, Taryn R. Owen, Carl Schweihs, and Garrett Ferencz. 10-K 001-14543 02/24/2020 10.21* Non-Competition Agreement between TrueBlue, Inc. and Carl Schweihs, and Garrett Ferencz. 10-K 001-14543 02/24/2020 Page - 72 Table of Contents Incorporated by reference Exhibit number Exhibit description Filed herewith Form File no. Date of first filing 10.22* Executive Employment Agreement, effective June 3, 2019, between TrueBlue, Inc. and Carl Schweihs. 10-K 001-14543 02/24/2020 10.23* Restricted Stock Grant Notice between TrueBlue, Inc. and Derrek L. Gafford, Taryn R. Owen, Carl Schweihs, and Garrett Ferencz. 10-K 001-14543 02/24/2020 10.24* Performance Share Unit Grant Notice between TrueBlue, Inc. and Derrek L. Gafford, Taryn R. Owen and Carl Schweihs. 10-K 001-14543 02/24/2020 10.25 First Amendment to Credit Agreement dated as of March 16, 2020 by and among Bank of America, N.A., Wells Fargo Bank, N.A., PNC Bank, National Association, Key Bank, HSBC and TrueBlue, Inc. 8-K 001-14543 03/17/2020 10.26 Second Amendment to Credit Agreement dated as of June 24, 2020 by and among Bank of America, N.A., Wells Fargo Bank, N.A., PNC Bank, National Association, Key Bank, HSBC and TrueBlue, Inc. 10-Q 001-14543 07/27/2020 10.27* Executive Employment Agreement between TrueBlue, Inc. and Garrett Ferencz, as amended July 1, 2020. 10-Q 001-14543 07/27/2020 10.28 Third Amendment to Credit Agreement dated as of January 28, 2021 by and among Bank of America, N.A., Wells Fargo Bank, N.A., PNC Bank, National Association, Key Bank, HSBC and TrueBlue, Inc. 10-K 001-14543 02/22/2021 10.29* Form Restricted Share Unit Award Notice between TrueBlue, Inc. and Steven C. Cooper, Derrek L. Gafford, Taryn R. Owen, Carl Schweihs, and Garrett Ferencz. 10-K 001-14543 02/22/2021 10.30* Revised Form Performance Share Unit Award Notice between TrueBlue, Inc. and Derrek L. Gafford, Taryn R. Owen, Carl Schweihs, and Garrett Ferencz. 10-K 001-14543 02/22/2021 21.1 Subsidiaries of TrueBlue, Inc. X 0 — — 23.1 Consent of Deloitte & Touche LLP - Independent Registered Public Accounting Firm. X 0 — — 31.1 Certification of Steven C. Cooper, Chief Executive Officer of TrueBlue, Inc., Pursuant to Rule 13a-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. X 0 — — 31.2 Certification of Derrek L. Gafford, Chief Financial Officer of TrueBlue, Inc., Pursuant to Rule 13a-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. X 0 — — 32.1 Certification of Steven C. Cooper, Chief Executive Officer of TrueBlue, Inc. and Derrek L. Gafford, Chief Financial Officer of TrueBlue, Inc., Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. X 0 — — 101 The following financial statements from the Company’s 10-K, formatted as Inline XBRL: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations and Comprehensive Income (Loss), (iii) Consolidated Statements of Shareholders’ Equity, (iv) Consolidated Statements of Cash Flows, and (v) Notes to consolidated financial statements. X 0 — — 104 Cover page interactive data file - The cover page from this Annual Report on Form 10-K is formatted as Inline XBRL X 0 — — * Indicates a management contract or compensatory plan or arrangement Copies of Exhibits may be obtained upon request directed to Mr. Garrett Ferencz, TrueBlue, Inc., PO Box 2910, Tacoma, Washington, 98401 and many are available at the SEC’s website found at www.sec.gov. Page - 73 Table of Contents Item 16. FORM 10-K SUMMARY None. Page - 74 Table of Contents SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. TrueBlue, Inc. /s/ Steven C. Cooper 2/15/2023 Signature Date By: Steven C. Cooper, Director, President, and Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated. /s/ Steven C. Cooper 2/15/2023 /s/ Derrek L. Gafford 2/15/2023 Signature Date Signature Date Steven C. Cooper, Director, President and Chief Executive Officer Derrek L. Gafford, Chief Financial Officer and Executive Vice President /s/ Richard B. Christensen 2/15/2023 /s/ Jeffrey B. Sakaguchi 2/15/2023 Signature Date Signature Date Richard B. Christensen, Chief Accounting Officer, Treasurer and Senior Vice President Jeffrey B. Sakaguchi, Chairman of the Board /s/ Colleen B. Brown 2/15/2023 /s/ William C. Goings 2/15/2023 Signature Date Signature Date Colleen B. Brown, Director William C. Goings, Director /s/ Kim Harris Jones 2/15/2023 /s/ Robert C. Kreidler 2/15/2023 Signature Date Signature Date Kim Harris Jones, Director Robert C. Kreidler, Director /s/ Sonita F. Lontoh 2/15/2023 /s/ Kristi A. Savacool 2/15/2023 Signature Date Signature Date Sonita F. Lontoh, Director Kristi A. Savacool, Director Page - 75