| Item 5.02. |
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
(d) On February 28, 2022, the Board of Directors (the “Board”) of Landstar System, Inc. (the “Company”) elected Teresa L. White as a Class I Director and James L. Liang as a Class III Director, effective as of March 1, 2022. The current term of the appointments of Ms. White and Mr. Liang will each expire at the Company’s 2022 annual meeting of stockholders. In connection with the appointments of Ms. White and Mr. Liang, the size of the Board was expanded to nine members.
The Board has determined that Ms. White and Mr. Liang each satisfy the independence requirements under the Securities and Exchange Act of 1934, as amended, and the rules and regulations promulgated by the Securities and Exchange Commission thereunder (the “Exchange Act Rules”) and the rules promulgated by The Nasdaq Stock Market, Inc. with respect to corporate governance matters (the “Nasdaq Rules”). In addition, the Board has determined that both Ms. White and Mr. Liang are “financially literate” within the meaning of the Nasdaq Rules and meet the applicable requirements under the Exchange Act Rules and the Nasdaq Rules for service on the Audit Committee, the Compensation Committee, and the Nominating and ESG Committee. The Board has appointed both Ms. White and Mr. Liang to the Audit Committee, the Compensation Committee, the Nominating and ESG Committee, the Safety and Risk Committee and the Strategic Planning Committee, in each case effective immediately upon joining the Board. The Board has also determined that Mr. Liang meets the requirements of an “audit committee financial expert” under the standards established by Item 407(d) of Regulation S-K under the Exchange Act Rules.
Under the Company’s 2013 Directors Stock Compensation Plan, as amended (the “Directors Stock Plan”), in the event that a non-employee director commences a term of Board service that is less than one year, such non-employee director shall be entitled to receive a restricted stock award equal to the quotient of (i) $110,000 multiplied by a fraction, the numerator of which is the number of days in such term and the denominator of which is 365, divided by (ii) the fair market value of a share of common stock of the Company, par value $.01 per share (the “Common Stock”), on the date of grant, rounded to the nearest whole number of shares. In connection with the appointments of Ms. White and Mr. Liang to the Board, the Board has determined each is entitled to receive a restricted stock award under the Directors Stock Plan in an amount equal to $21,699 divided by the fair market value of a share of Common Stock on March 1, 2022, which will be the date of grant, rounded to the nearest whole number of shares. In addition, the Board has previously determined that each non-employee director of the Company is entitled to receive an annual fee of $75,000, payable in quarterly installments. Accordingly, Ms. White and Mr. Liang will each receive such fee, effective as of March 1, 2022, with Ms. White and Mr. Liang each receiving a pro-rated payment for the 2022 first quarter based on the number of days served on the Board during such quarter. Ms. White and Mr. Liang will each also enter into an Indemnification Agreement with the Company, substantially in the form filed as Exhibit 10.2 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 27, 2003. This Indemnification Agreement is substantially identical to the Indemnification Agreements entered into by the Company with other members of the Board.