The Board affirmatively determines the independence of each director and nominee for election as a director in accordance with criteria set forth in the Company's Corporate Governance Guidelines (the “Guidelines”), which include all elements of independence set forth in the New York Stock Exchange (“NYSE”) listing standards and related U.S. Securities and Exchange Commission (“SEC”) Rules and Regulations. At a regularly scheduled portion of each Board meeting or as part of the Governance Committee meetings, the independent directors meet in executive session without management or any non-independent directors present. Independent directors have no material relationship with the Company, except as directors and shareholders of the Company.

Based on these standards, at its meeting held on March 10, 2022, the Board made the independence determinations for each of our directors:

Enterprise risk management is an integral part of our business processes and the Company has an enterprise risk management (“ERM”) program to integrate risk responsibilities within the current management structure. Specific risks are assigned to the Board's committees and business area experts. The most significant risks are regularly discussed with the Board as part of its active oversight of risks that could affect the Company. Risks are delegated among the committees based on the expertise of each committee. Each committee and the Board discuss specific risks with management throughout the year, as appropriate. The Board believes the administration of this risk oversight function does not negatively affect the Board's leadership structure.

The Board exercises an oversight role with respect to the most significant risks facing our Company and maintains responsibility for certain risks, while designating the Audit Committee with the primary responsibility for overseeing the Company's ERM program and process. Management provides the Board with periodic reports on the Company’s risk and ERM program findings. The Audit Committee has responsibility to periodically review the Company's guidelines, policies, and procedures to assess and manage risk exposure.

The individual committees also consider risk within their areas of responsibility as highlighted below. The committee chairs provide reports of their activities to the Board at each regular Board meeting including apprising the Board of any significant risks within their areas of responsibility and management's response to those risks.

Each director is expected to devote sufficient time, energy, and attention to ensure diligent performance of his or her duties and to attend all Board, committee, and shareholders' meetings. The Board met seven (7) times during 2021. All directors attended all the meetings of the Board and of the committees on which they served during the fiscal year ended December 26, 2021. Our Guidelines provide that each of our directors is expected to attend our annual meeting of shareholders and all directors participated in the 2021 Annual Meeting of Shareholders on May 12, 2021.

The Board has four standing committees to facilitate and assist the Board in the execution of its responsibilities. These committees are the Audit Committee, the Compensation Committee, the Governance

Committee, and the Innovation and Technology Committee (“I&T Committee”). All the committees are comprised solely of non-employee, independent directors. Charters for each committee are available on the Company's website at investor.trueblue.com/corporate-governance/governance-documents-and-committee-composition/default.aspx. The charter of each committee is also available in print to any shareholder upon request. The table below shows membership for each of the standing Board committees as of December 26, 2021, the number of times each committee met in 2021, and outlines each committee's key responsibilities and functions. During 2021, Ms. Soodik served on the Compensation, Governance, and I&T Committees until her retirement on December 8, 2021.

The Audit Committee is comprised solely of non-employee directors, all of whom the Board determined are independent pursuant to the NYSE rules and the independence standards set forth in Rule 10A-3 of the Exchange Act. The Governance Committee and the Board have determined that all the members of the Audit Committee are “financially literate” pursuant to the NYSE rules. The Board has affirmatively determined that Ms. Harris Jones and Messrs. Kreidler and Sakaguchi are “audit committee financial experts,” as such term is defined in Item 407 of Regulation S-K. The Board has adopted a charter for the Audit Committee, which is available at investor.trueblue.com/corporate-governance/governance-documents-and-committee-composition/default.aspx. The charter is also available in print to any shareholder upon request.

The Compensation Committee is comprised solely of non-employee directors, all of whom the Board determined are independent pursuant to the NYSE rules. The Board has adopted a charter for the Compensation Committee, which is available on the Company's website at investor.trueblue.com/corporate-governance/governance-documents-and-committee-composition/default.aspx. The charter is also available in print to any shareholder upon request. Additional information regarding the Compensation Committee and its procedures and processes for the consideration and determination of executive and director compensation are included under the Compensation Discussion and Analysis section of this proxy statement.

The Governance Committee is comprised solely of non-employee directors, all of whom the Board determined are independent pursuant to the NYSE rules. The Board has adopted a charter for the Governance Committee, which is available on the Company's website at investor.trueblue.com/corporate-governance/governance-documents-and-committee-composition/default.aspx. The charter is also available in print to any shareholder upon request.

The I&T Committee's primary functions are to oversee the Company's information risks, technology strategy, and programs and to consider emerging innovation and business trends and their alignment with the Company's business strategies and objectives. The Board has adopted a charter for the I&T Committee, which is available on the Company's website at investor.trueblue.com/corporate-governance/governance-documents-and-committee-composition/default.aspx. The charter is also available in print to any shareholder upon request.

The Company sees environmental, social, and governance (“ESG”) matters as an essential component of sustainable Company performance and integral to the successful implementation of our long-term business strategy. ESG considerations inform how we manage the Company, including our risk management framework and our governance mechanisms for Board oversight and how we deliver sustainable growth that positively impacts our employees, clients, shareholders, and the communities in which we operate.

As the Company seeks to meet evolving stakeholder needs, the Board views ESG issues as increasingly essential to the Board’s oversight of our business strategy. The Governance Committee is responsible for overseeing our ESG efforts and receives regular updates from management on our sustainability strategy and activities. The Company's ESG efforts are lead by the chief legal officer, who chairs, leads, and manages our response to ESG issues for the Company, and engages stakeholders on our ESG initiatives. Other senior leaders provide input through corporate organizations such as the Diversity and Inclusion Council. The Company implements day-to-day ESG programs with support from senior managers and relevant corporate functions.

Our approach to ESG strategy and corporate sustainability begins with understanding and acting on the ESG issues that most impact our business performance and strategy. Since 2018, we have conducted assessments of significant ESG risks, based on input from across the Company and alignment with leading external reporting frameworks. In assessing key material topics for our business and industry, we referenced the Sustainability Accounting Standards' Board and added components most important to management and the Governance Committee. We also work with stakeholders across the Company, including Human Resources, Legal, Compliance, and Audit to identify key priorities based on likelihood and impact at the Company.

After considering the various ESG related risks, the Company found the following risks to be material or significant enough to warrant specific ESG reporting efforts:

Board and corporate governance have been a focus of the Company for over a decade, exemplified by the Company's early adoption of a practice separating the CEO and Board Chair roles. The Governance Committee also receives frequent updates on evolving corporate governance best practices and implements those practices most impactful or useful to the Company.

A nominee for director in an uncontested election who does not receive the majority vote required by our Amended and Restated Bylaws (the “Bylaws”) but who was a director at the time of the election shall not be elected, but shall continue to serve as a holdover director until the earliest of: (i) ninety (90) days after the date on which an inspector determines the voting results as to that director pursuant to Section 23B.07 of the Washington Business Corporation Act; (ii) the date on which the Board appoints an individual to fill the office held by such director, which appointment shall constitute the filling of a vacancy by the Board; or (iii) the date of the director’s resignation. Any vacancy resulting from the nonelection of a director under these circumstances may be filled by the Board as provided in

Article II, Section 2.11 of the Company's Bylaws. The Governance Committee will promptly consider whether to fill the position of a nominee failing to receive a majority vote and make a recommendation to the Board to fill the position. The Board will act on the Governance Committee’s recommendation and, within ninety (90) days after the certification of the shareholder vote, will publicly disclose its decision. Except as provided in the next sentence, a director who fails to receive a majority vote for election will not participate in the Governance Committee's recommendation or the Board's decision about filling his or her office. If no director receives a majority vote in an uncontested election, then the incumbent directors: (i) will nominate a slate of nominee directors and hold a special meeting for the purpose of electing those nominees as soon as practicable; and (ii) may in the interim fill one or more director positions with the same director(s) who will continue in office until their successors are elected.

The Board has emphasized diversity, equity, and inclusion (“DE&I”) as a key aspect of corporate sustainability for many years and ensures it leads the Company by example. The Board has been recognized by the National Association of Corporate Directors (“NACD”) and other national and regional organizations for its efforts and success in becoming a diverse and inclusive board. The Board continues to foster and promote a diverse, talented, and well-trained workforce and a performance-driven workplace culture.

Management has also emphasized DE&I throughout the Company and in 2021 hired a vice president of Diversity, Equity, and Inclusion who reports directly to the CEO. We also have a Diversity, Equity & Inclusion Council (the “Council”) which designs and launches initiatives that advance acceptance and inclusion. The Council reports regularly to executive leadership, who brief our Board periodically through the year. The Council also sponsors training to build diversity and inclusion awareness, and supports Employee Resource Groups (“ERGs”), which are employee-led groups that create opportunities for employees to collaborate based on shared characteristics or life experiences to support each other for enhanced career and personal development. ERGs seek to maximize employee engagement and contribute to our overall business objectives by offering diverse perspectives, networking opportunities, and increased cultural awareness. We currently have eight (8) ERGs for employees sharing similar ethnicity, nationality, gender, lifestyle choice, or life experience and their respective allies. Through these initiatives, we learn how our differences build stronger teams and how our histories reveal similarities.

We believe a strong corporate culture and employee engagement is key to attracting and retaining talented employees. To assess and improve our culture, we routinely utilize an independent third party to measure how favorably our employees view our organizational culture and engagement. These surveys include corporate culture assessments, as well as real-time feedback on employee engagement and employee-management relations. The results of these surveys are reported and distributed throughout management and the Board, and are used to create actionable plans to improve employee engagement and retention. Our October 2021 survey achieved an all-time high engagement score of 78, which exceeds the benchmark set by the independent survey provider of 67, and is an improvement of 4 points from our September 2020 survey.

Professional ethics are monitored at the Board level by the Audit Committee. The chief ethics and compliance officer oversees risks related to professional integrity and ethics, ensuring regular training for Company employees on our Code of Conduct and Business Ethics (“Code of Conduct”), anti-fraud, bribery and corruption efforts, third-party risk program, and provides regular reports to the Audit Committee of these efforts and any breaches of ethical conduct by Company employees. Our Code of Conduct covers topics including avoiding conflicts of interest, maintaining confidentiality, anti-harassment and discrimination, among others.

Our human capital strategy is centered on our values and our employees. Ensuring a diverse and inclusive performance-driven culture is one of the key components of this corporate strategy and a corporate priority led by the Board. We invest in emerging talent through our DE&I program, recruitment strategies, talent management, and development programs for critical roles. Recent highlights of human capital initiatives that strengthen our commitment to people and talent development include adding human capital management ("HCM") to the chartered responsibilities of the Compensation Committee and implementing a number of HCM metrics which are reported on a regular basis to the Compensation Committee. Our online training platforms provide our employees with access to a multitude of training courses, videos, reference material, and other tools.

We also emphasize the health, safety, and wellness of our employees. We provide our employees and their families with flexible health and wellness programs, including competitive benefits. Our benefits include health, dental, and vision insurance, health savings and flexible spending accounts, paid time off, family leave, and family care resources.

Throughout the COVID-19 pandemic, we implemented changes to safety and operating procedures to ensure the health and safety of our employees. These changes included an investment in the technology necessary to allow the majority of our support center employees to work from home and a reimbursement for certain expenses associated with moving to home-based work. Through the distribution of necessary personal protective equipment and the continuing education and awareness of changes to our operating processes, we were able to ensure our branch offices remained open and a safe place for our employees.

The Board takes its oversight of cyber security seriously and in 2011 designated a separate Board-level committee to oversee the risks related to cyber security and the Company's digital strategy and initiatives. This focus has led to additional emphasis on digital security matters at the Company, including quarterly updates to the I&T Committee about security risks, threats, and efforts focused on mitigating those risks. These presentations are provided by our chief technology officer and our chief information security officer, and include updates on recent developments in cyber security, the Company's actual experience with cyber security issues, and the systems and processes in place to defend against cyber attacks.

We are committed to promoting environmental sustainability both internally, by minimizing our corporate environmental footprint, and externally by developing digital tools that modernize how people are connected with work and reducing our employees' need for daily transportation to our branches or to face-to-face interviews.

We strive to reduce our corporate environmental footprint by seeking opportunities for increased efficiency and resource conservation. Recent examples of our commitment to workplace sustainability and environmental stewardship include: replacing hot-water tanks in our branch offices with tankless, on-demand hot water systems, and using only low Volatile Organic Compound (“VOC”) paint throughout the Company. Throughout 2022 we will continue to refer to the Financial Stability Board's Task Force on Climate-Related Financial Disclosures framework to develop measurable environmental goals for the Company.

A more detailed disclosure of more of our ESG efforts as a Company can be found in our Corporate Citizenship Report on our website at trueblue.com/corporate-citizenship/. This report is updated from time to time and contains a description of our ESG efforts more broadly, as well as disclosure of some of the metrics we use to measure and improve our performance in these important areas for the Company. The Corporate Citizenship Report on our website does not form a part of this proxy statement.

The Corporate Governance Guidelines (the “Guidelines”) are

available at investor.trueblue.com/corporate-governance/

governance-documents-and-committee-composition/default.aspx. Shareholders may request a free printed copy by contacting TrueBlue, Inc., Investor Relations, 1015 A Street, Tacoma, Washington 98402. The Guidelines were adopted by the Board to best ensure that the Board is independent from management, that the Board adequately performs its function as the overseer of management, and that the interests of the Board and management align with the interests of the shareholders.

On an annual basis, each director and executive officer is obligated to complete a director or officer questionnaire which, among other things, requires disclosure of any transactions with the Company in which the director or executive officer, or any member of his or her immediate family, has a direct or indirect material interest.

We value our shareholders’ feedback and are committed to engaging in constructive and meaningful dialogue with shareholders regarding our strategic focus, operating results, capital allocation priorities, governance practices, executive compensation program, and other areas of shareholder focus throughout the year. As part of our ongoing outreach, members of senior management and investor relations routinely engage with investors in many different ways, including:

These activities allow our senior management and investor relations teams to share and discuss our business strategy and achievements with investors, solicit investor feedback on our performance, and seek insight into our investor's priorities.

Any shareholder or interested party who wishes to communicate with our Board or any specific director, including non-employee directors, may write to Board of Directors, TrueBlue, Inc. c/o Corporate Secretary, 1015 A Street, Tacoma, Washington 98402. The mailing envelope must contain a clear notation indicating that the enclosed letter is a “Board Communication” or “Director Communication.” All such letters must indicate whether or not the author is a shareholder and clearly state whether the intended recipients are all members of the Board or specific individual directors. The Corporate Secretary will make copies of all such letters and circulate them to the appropriate director(s). If the Company develops any other procedures, they will be posted on the Company's website at www.trueblue.com. Procedures addressing the reporting of other concerns by shareholders, employees, or other third parties are set forth in our Code of Conduct.

The Board annually assesses the performance and effectiveness of the Board, the Audit, Compensation, and I&T Committees, these committee chairs, the Board Chair, and each director through an annual self-evaluation, discusses the results of each annual self-evaluation and, as appropriate, implements enhancements and other modifications identified during the self-evaluation process.

The Board and the committees noted in the prior paragraph conduct annual self-evaluations by written questionnaire to provide feedback on performance and effectiveness of the Board and committees.

Directors provide ongoing, real-time feedback to management, committees, and the chairs of each committee, including the Board Chair, outside the formal annual self-assessment process, and specifically reserve time after each Board meeting to consider the effectiveness of that meeting and discuss potential improvements to various Board practices.

Independent legal counsel aggregates and summarizes the annual director questionnaire responses to promote candor and ensure feedback is not attributed to individual directors and provides guidance on material issues. The Governance Committee reviews the evaluation results for the Board and each committee and presents the results and findings to the full Board and each committee for further consideration and discussion.

The Governance Committee annually reviews the self-evaluation process to ensure that actionable and constructive feedback is solicited on the operations and performance of individual committees and the Board as a whole.

As an outcome of these discussions, the Board and its committees identify key substantive and procedural areas for increased Board effectiveness. Changes to the Board's policies and practices are also considered and implemented based on self-evaluation results and ongoing feedback. Some of the actions taken recently in response to suggestions for improvement include:

Our Code of Conduct and Business Ethics (“Code of Conduct”) is applicable to all directors, officers, and employees of the Company. Our Code of Conduct is available at www.trueblue.com/code-of-conduct. Shareholders may also request a free printed copy from TrueBlue, Inc., Investor Relations, 1015 A Street, Tacoma, Washington 98402.

The Company intends to disclose any amendments to the Code of Conduct (other than technical, administrative, or non-substantive amendments) and any waivers of a provision of the Code of Conduct for directors or executive officers on the Company's website at www.trueblue.com. Information on the Company's website, however, does not form a part of this proxy statement.

The Board has adopted a Director and Officer Related Person Policy, which sets forth the policies and procedures for the review and approval or ratification of “Related Person Transaction(s).” A Related Person Transaction is defined to include transactions, arrangements, or relationships in which the Company is a participant, the amount involved exceeds $120,000, and a Related Person has or will have a direct or indirect material interest. “Related Person” is defined to include directors, executive officers, director nominees, beneficial owners of more than 5% of the Common Stock, and members of their immediate families sharing the same household. A Related Person Transaction must be reported to the Company's chief legal officer and reviewed and approved by the Governance Committee. Under certain circumstances, a transaction may be approved by the Chair of the Governance Committee subject

to ratification by the full Governance Committee at its next meeting. In determining whether to approve or ratify a Related Person Transaction, the Governance Committee, as appropriate, shall review and consider:

After reviewing all facts and circumstances, the Governance Committee may approve or ratify the Related Person Transaction only if it determines that the transaction is in, or is not inconsistent with, the best interests of the Company.

There were no Related Person Transactions in 2021.

The Guidelines include the criteria our Board believes are important in the selection of director nominees. While the Board has not established any minimum qualifications for nominees, the Board does consider the composition of the Board as a whole, the requisite characteristics (including independence, diversity, and experience in industry, finance, administration, and operations) of each candidate, and the skills and expertise of its current members while taking into account the overall operating efficiency of the Board and its committees. With respect to diversity, we broadly construe diversity to mean not only diversity of race, gender, and ethnicity, but also diversity of opinions, perspectives, and professional and personal experiences. Nominees are not discriminated against on the basis of race, gender, religion, national origin, sexual orientation, disability, or any other basis proscribed by law. Service on other boards of directors and other commitments by directors will be considered by the Governance Committee and the Board when reviewing director candidates and in connection with the Board's annual self-assessment process for current members of the Board.

The Governance Committee may employ a variety of methods for identifying and evaluating nominees for director. The Governance Committee regularly assesses the size of the Board, the need for

particular expertise on the Board, the need for diversity on the Board,

and whether any vacancies on the Board are expected due to retirement or otherwise. In the event that vacancies are anticipated or arise, the Governance Committee considers potential candidates for director which may come to the Governance Committee's attention through current Board members, professional search firms, shareholders, or other persons. These candidates will be evaluated at regular or special meetings of the Governance Committee and may be considered at any time during the year.

Under the Guidelines, the Governance Committee is responsible for reviewing with the Board the requisite skills and characteristics of new Board nominees in the context of the current Board composition. This assessment will include experience in industry, finance, administration, operations, marketing, and technology, as well as diversity.

Although the Board does not have a formal policy specifying how diversity of background and personal experience should be applied in identifying or evaluating director nominees, to help ensure that the Board remains aware of and responsive to the needs and interests of our shareholders, employees, clients, and other stakeholders, the Board believes it is important to identify qualified director candidates that would increase the diversity of experience, profession, expertise, skill, background, gender, racial, ethnic, cultural, and other diversity characteristics (“Diversity Characteristics”) of the Board. Accordingly, the Governance Committee has made an effort when nominating new directors to ensure that the composition of the Board reflects broad Diversity Characteristics.

In recent years, the Governance Committee has directed its third-party search firm to present a slate of possible candidates which includes qualified potential nominees with broad Diversity Characteristics in considering nominees for the Board.

The Governance Committee considers the entirety of each candidate’s credentials, in addition to diversity, as they fit with the current composition and skills and experience of the Board. The Company considers the Board to be a valuable strategic asset of the Company. To maintain the integrity of this asset, the membership of the Board has been carefully crafted to ensure that its expertise covers broad Diversity Characteristics, and these Diversity Characteristics will continue to be considered when nominating individuals to serve on the Board.

The Governance Committee will consider candidates recommended by shareholders. The Governance Committee will make an initial analysis of the qualifications of any candidate recommended by shareholders or others pursuant to the criteria summarized in this section to determine whether the candidate is qualified for service on the Board before deciding to undertake a complete evaluation of the candidate. If a shareholder or professional search firm provides any materials in connection with the nomination of a director candidate, such materials will be forwarded to the Governance Committee as part of its review. If the Governance Committee determines that additional consideration is warranted, it may engage a third-party search firm to gather additional information about the prospective nominee's background and experience and report its findings to the Governance Committee. Other than the verification of compliance with procedures, shareholder status, and the initial analysis performed by the Governance Committee, the Governance Committee will treat a potential candidate nominated by a shareholder like any other potential candidate during the review process. In connection with this evaluation, the Governance Committee will determine whether to interview the prospective nominee. One or more members of the Governance Committee, and others as appropriate, will interview the prospective nominees in person or by telephone. After completing this evaluation and interview, the Governance Committee will make a recommendation to the full Board as to the persons who should be nominated by the Board, and the Board will determine the nominees after considering the recommendation and report of the Governance Committee.

Section 16(a) of the Exchange Act requires the Company's officers, directors, and certain other persons to timely file certain reports regarding ownership of, and transactions in, the Company's securities with the SEC. Based solely on the Company's review of forms received by it, or representations from certain reporting persons, the Company believes that during 2021 all applicable Section 16(a) filing requirements were met and that all such filings were timely, except for those described in this paragraph. One transaction on November 9, 2021, was reported for Mr. Carl R. Schweihs on a Form 4 on January 26, 2022, due to an administrative error.

Periodically, the Corporate Governance and Nominating Committee (“Governance Committee”) engages a third party consultant to review the retainer and committee fees paid to our Board. This consultant provides information related to the retainer and fee levels of our peer companies, as well as information regarding best practices and emerging trends in the payments to Board members. In 2021, the Governance Committee retained Willis Towers Watson, who recommended to the Governance Committee certain changes in the amount and process for these fees to better align with the market. The information provided by the consultant is considered by the Governance Committee but does not directly determine any of the Company's actual retainer or fee arrangements. The Governance Committee applies its informed judgment when establishing the levels and payments of retainers and fees. After considering the information provided by the Willis Towers Watson and the Governance Committee's internal discussions, in October 2021, the Governance Committee approved changes to the retainer and committee fees paid to our non-employee directors starting in 2022 as outlined below.

In 2021, non-employee directors received (a) an annual cash Board retainer, (b) an annual cash committee retainer, and, if applicable (c) an annual cash committee chair supplement. The schedule of payments for 2021 and 2022 are as set forth in the table below.

Each non-employee director receives an annual grant of restricted stock units (“RSUs”) that are typically granted on the second day after the release of our annual earnings. The TrueBlue shares of common stock (“Common Stock”) underlying these RSUs fully vest on the first day of the Company's fourth quarter in the year in which they are granted. Non-employee directors appointed during the year are entitled to receive a pro rata grant, on their first day of service to the Board, as follows: 100% if appointed on or prior to the first quarterly meeting, 75% if appointed on or prior to the second quarterly meeting, 50% if appointed on or prior to the third quarterly meeting, and 25% if appointed on or prior to the last quarterly meeting of the year.

In 2021, the Board Chair and Lead Independent Director each received an award of RSUs with a target value of $145,000. All other non-employee directors received an award of RSUs with a target value of $110,000. The Audit Committee Chair received an additional award of RSUs with a value of $10,000 while all other committee chairs received an additional award of RSUs with a target value of $7,500. The Company determined the number of RSUs of each such award based on the average closing price of Common Stock during the sixty (60) trading days prior to and including the second full trading day after the announcement of the Company’s fourth quarter and year-end financial results, which was approximately $19.23 per share. Ms. Lontoh's RSUs were calculated based on the average closing price of Common Stock during the sixty (60) trading days prior to and including her grant date, which was approximately $28.16 per share.

In light of the Willis Towers Watson review in October 2021, the Governance Committee also approved increased compensation levels for some components of the equity awards in 2022. As a result, in 2022, the Board Chair received an award of RSUs with a target value of $175,000 and the Lead Independent Director received an award of RSUs with a target value of $165,000. All other non-employee directors received an award of RSUs with a target value of $135,000. The Audit Committee and Compensation Committee Chairs received an additional award of RSUs with a value of $10,000 while all other committee chairs received an additional award of RSUs with a target value of $7,500.

Each non-employee director is able to participate in the Equity Retainer and Deferred Compensation Plan for Non-Employee Directors (“Director Equity Plan”). Under this plan, a director may elect to modify the manner in which he or she receives the annual retainer from the Company. Directors are given the option to make an irrevocable election to convert up to 100% of his or her cash retainer to an equity retainer, and then further elect to receive up to 50% of the equity retainer in the form of stock options, rather than Common Stock. In addition, a director may make an irrevocable election to defer settlement of all or part of his or her annual RSU grant to a time after he or she leaves the Board.

Each non-employee director is expected to hold shares of Common Stock having a value of not less than four (4) times the director’s base annual cash retainer. Both directly and indirectly held RSUs and deferred shares are included in this calculation, but options for purchasing Common Stock in the future are not included in the

calculation. New directors are allowed four (4) years in which to reach the ownership guidelines. For the purpose of determining compliance, the Company determines the number of shares required on an annual basis with the value of the shares to be determined on a trailing 12-month average daily stock price. As of the end of the 2021 fiscal year, all non-employee directors either met these guidelines or were within the first four (4) years and on track to meet these guidelines.

This section describes the business experience of our executive officers. No family relationships exist among any of the directors or executive officers of the Company.

A. Patrick Beharelle, 52, has served as a Director and the Company’s Chief Executive Officer since September 2018, after serving as President and Chief Operating Officer of the Company since May 2015. Mr. Beharelle served as Executive Vice President and Chief Operating Officer of the workforce management group, which included PeopleScout, Staff Management | SMX, Centerline, PlaneTechs, and the Australian-based RPO provider, PeopleScout Pty, from June 2014 to May 2015. Prior to its acquisition by TrueBlue in June 2014, Mr. Beharelle served as the Chief Executive Officer of Staffing Solutions Holdings, Inc. (“Seaton”). Mr. Beharelle has participated in advisory meetings at the White House focused on reducing long-term unemployment. Prior to joining Seaton, Mr. Beharelle held senior level positions at Spherion and Accenture. He currently serves as a Director of a nonprofit, Skills For Chicagoland’s Future.

Derrek L. Gafford, 51, has served as the Company’s Executive Vice President and Chief Financial Officer since 2006, after serving as Vice President and Chief Financial Officer since 2005. Mr. Gafford is a Certified Public Accountant (inactive) and joined the Company in 2002. Mr. Gafford is a Director of Heritage Distilling Co. Prior to joining the Company, Mr. Gafford served as Chief Financial Officer for Metropolitan Market, a grocery retailer, and held various management positions with Deloitte & Touche LLP and Albertsons, Inc.

Taryn R. Owen, 43, has served as Executive Vice President of the Company and President of PeopleReady, TrueBlue's general, industrial and skilled trade staffing business, and PeopleScout, TrueBlue's recruitment process outsourcing (“RPO”) and managed service provider (“MSP”) solutions business, since October 2021, after serving as Executive Vice President of the Company and President of PeopleReady since December 2019. Ms. Owen previously served as Executive Vice President of the Company and President of PeopleScout since November 2014. Prior to these roles, she served as Senior Vice President since June 2014 and as President of PeopleScout since August 2013. Prior to that, she was Senior Vice President of Global Operations for PeopleScout since December 2011, after joining PeopleScout in 2010 as Vice President of Client Delivery. Prior to joining PeopleScout, Ms. Owen was an Operations Director at Randstad SourceRight Solutions where she led global RPO engagements. Ms. Owen has more than 20 years of talent acquisition experience. Ms. Owen formerly served as a member of the Board of Advisors of HRO Today and as a member of the Human Capital Industry Advisory Board for Wharton’s Center for Human Resources. She is also a volunteer and avid supporter of the Special Olympics.

Carl R. Schweihs, 37, has served as Executive Vice President of the Company and President of PeopleManagement, TrueBlue’s staffing business that is made up of Staff Management | SMX, SIMOS Insourcing Solutions, and Centerline Drivers, since June 2019, after serving as Senior Vice President of the Company for Strategic Accounts since June 2017. Prior to that, he served as Vice President of Finance for the Company since November 2015, after serving as Controller since June 2014. Mr. Schweihs joined the Company following its acquisition of Seaton in 2014. Prior to joining the Company, he served in a variety of financial leadership roles at Seaton and Grant Thornton.

Garrett R. Ferencz, 45, has served as Executive Vice President and Chief Legal Officer of the Company since July 2020, after serving as Senior Vice President, General Counsel and Chief Ethics and Compliance Officer since December 2019. Prior to these roles, he served as Vice President, Deputy General Counsel and Chief Compliance Officer since April 2018, and served as Vice President, Deputy General Counsel, Litigation since July 2014. Mr. Ferencz joined the Company in January 2007 as Senior Director of Litigation, Assistant General Counsel. Prior to joining the Company, Mr. Ferencz practiced litigation at The Blankenship Law Firm, P.S. and Perkins Coie LLP. Mr. Ferencz has served as a Director on the American Cancer Society’s Board for Washington State since 2017.

As of December 26, 2021, our Named Executive Officers (“NEOs”) were:

Our Compensation Committee established our 2021 compensation program during the continued uncertainty of the ongoing COVID-19 pandemic and its developing supply chain constraints and labor supply shortages. Despite the many challenges at the outset of 2021, our NEOs managed to lead the Company to close the year with financial performance levels generally returning to pre-pandemic levels. Many of the decisions made by our executives during the 2020 recession proved valuable during the economic recovery of 2021, and the Company generated over $2.2 billion of revenue, $103.8 million of Adjusted EBITDA, and returned $16.7 million to shareholders in stock repurchases during the year. The Company also continued to make progress on its digital strategies by investing in our JobStack^TM and Affinix^TM technologies.

For a definition of non-generally accepted accounting principles (“non-GAAP”) financial measures, such as Adjusted EBITDA, please see the Executive Compensation Process, Governance, and Philosophy section below, or the Appendix to this proxy statement for a detailed definition and reconciliation of the non-GAAP financial measure to the most directly comparable GAAP financial measure.

The Company's strong financial outcomes resulted in our NEOs successfully achieving or exceeding compensation targets established by our Compensation Committee early in 2021. The key metrics under our Short-Term Incentive (“STI”) plan resulted in maximum payouts for the Company's financial performance components of the plan.

The long-term component of our NEO compensation program also contributed to our NEOs’ 2021 compensation. However, given the long-term nature of this component of pay, payouts were negatively impacted by the Company's business results during the first year of the COVID-19 pandemic. Accordingly, NEOs received a below target payout for the performance share unit (“PSU”) awards granted under our Long-Term Incentive (“LTI”) plan for the 2019-2021 performance period. Messrs. Beharelle and Gafford and Ms. Owen, who were NEOs when these awards were granted in 2019, received 84.9% of the target award of PSUs after the Compensation Committee used its positive discretion to adjust the payout upward from 62.4%, as discussed in more detail below under “2019 PSU Award Determination (2019-2021 Performance Period)”.

The Compensation Committee designs our executive compensation program to appropriately align the interests of the Company’s management team with shareholders. We expect executive compensation to reflect Company and individual performance. Key pay-for-performance features of our 2021 compensation program included:

The Company has made environmental, social, and governance (“ESG”) best practices a part of its corporate practices and initiatives, with a specific focus on human capital management (“HCM”). The Company also incorporates ESG and HCM goals in its executive compensation program. During 2021, the CEO's STI plan included individual objectives tied to achieving ESG and HCM goals, including leadership development and succession planning for management positions, diversity, equity, and inclusion, employee and associate safety, and a continuing focus on building the culture of the Company and increasing the engagement levels of the employees. Goals for other NEOs tied to ESG included building a positive culture in individual business units, leadership development and succession planning, and strengthening our ethics programs across the Company.

As seen in the charts below, a significant portion of each NEO’s compensation is at risk and dependent on the achievement of annual and long-term performance targets. These charts reflect the percentages of our 2021 CEO and other NEO compensation that

represent base salary, STI (at target), PSUs (at target), and RSU awards. These charts show Mr. Beharelle's compensation plan as CEO and the average of the other NEOs' compensation plans.

 

 

The Company provides shareholders an annual “say-on-pay” advisory vote on its executive compensation program. At our 2021 Annual Meeting of Shareholders, shareholders expressed substantial support for the compensation of our NEOs, with 96% of the votes cast for approval of the “say-on-pay” advisory vote. The Compensation Committee discussed and considered shareholder feedback provided directly to management during shareholder engagement activities. The Compensation Committee considered this shareholder feedback and the results of the 2021 advisory vote in evaluating the Company's executive compensation programs and, given the strong level of support expressed by our shareholders, took no specific actions based on that vote.

As part of its oversight of our compensation program, the Compensation Committee regularly reviews our various compensation plans. The Compensation Committee concluded that the plans do not create risks reasonably likely to have a material adverse effect on the Company and the plans encourage appropriate, but not excessive, levels of risk-taking.

The 2021 STI plan focused on multiple goals such as Adjusted EBITDA, revenue growth measured against our Revenue Peer Group, resource management, leadership development, HCM, long-term strategic operational goals, and Company profitability, and provided appropriate payouts for achieving these goals. Another component of the Company's balanced compensation approach is the LTI plan, which provides a significant portion of the NEOs' compensation, and includes time-based RSU awards and performance-based PSU awards. The vesting and performance requirements of these awards provide meaningful alignment with shareholder interests.

The Compensation Committee designs our executive compensation program with the goal of achieving the following objectives:

Compensation for our executives is determined by the Compensation Committee. The Compensation Committee’s purpose is setting the compensation of our CEO and other executive officers of the Company, developing and reviewing corporate goals and objectives relevant to the compensation of the CEO and executive officers, evaluating the executives' performance in light of those goals and objectives, approving the executives' compensation levels accordingly, and overseeing the Company's HCM program. The Compensation Committee oversees, regularly reviews, and approves compensation programs for our CEO and other NEOs. The Compensation Committee also reviews and approves corporate goals and objectives relevant to the compensation plans applicable to the NEOs and, together with the Governance Committee, evaluates the performance of the CEO in light of the corporate goals and objectives established for the CEO.

The Compensation Committee has regularly scheduled meetings each quarter and has additional meetings as appropriate. During 2021, the Compensation Committee met five (5) times. The agenda for each meeting is set by the Chair of the Compensation Committee. The Compensation Committee has full authority to directly retain the services of outside counsel and compensation consultants and has done so on a regular basis. Our CEO and other NEOs may also attend portions of the Compensation Committee meetings in order to provide information and help explain data relating to matters under consideration by the Compensation Committee but are not present during deliberations or determinations of their respective compensation or during executive sessions that occur in connection with each meeting. Outside counsel also regularly attends Compensation Committee meetings.

In determining executive compensation plans and setting incentive targets, the Compensation Committee considers its compensation objectives, compensation practices of our peers in the marketplace, the roles and responsibilities of each NEO, and internal pay equity. The Compensation Committee seeks to align compensation with our current and long-term business strategy and goals. There is no formal weighting of any of these factors; the Compensation Committee uses its informed judgment in determining pay targets and amounts. The Compensation Committee reviews and discusses annual pay elements each year. The Compensation Committee uses the target amounts of these key elements to determine the annual at-target total direct compensation of our NEOs, which is a useful measure of pay because it reflects the intended aggregate value of those key elements of pay at the time the pay decision is made. It evaluates other programs as needed based on changes in compensation objectives, alignment with overall Company direction and business strategy, competitive trends, accounting rules, and changes in tax and other laws and regulations.

The Compensation Committee engages an independent compensation consultant. In 2021, this consultant was Mercer (US), Inc. (“Mercer”). The Compensation Committee evaluates the independence of Mercer to ensure that no conflicts of interest of any kind exist between Mercer and the Company, including personal or business relationships between Mercer and the Company, Company directors, Company executive officers, Company stock ownership by Mercer, or engagement of Mercer by the Company for other material services. However, the Company's senior vice president of human resources may engage Mercer, on occasion, to provide compensation market expertise for non-NEO positions. Mercer attends key meetings of the Compensation Committee and is available to the Compensation Committee as necessary.

Information provided by Mercer is considered by the Compensation Committee but does not directly determine any of the Company's actual compensation arrangements. The Compensation Committee applies its informed judgment when establishing the compensation elements, targets, and final awards.

Our executive compensation program is customarily reviewed every two (2) years so that the Compensation Committee can remain informed of changes in the compensation programs maintained by similarly-situated peer companies. For executive compensation during 2020 and 2021, this review occurred in late 2019. For this review, the Compensation Committee retained Mercer to provide an in-depth external review of our executive compensation programs as compared to a peer group (“Compensation Peer Group”). The Compensation Committee selects the Compensation Peer Group from similarly-sized companies engaged in staffing, outsourced human resources services, or companies that operated in industries with multi-unit branches on a national basis.

The Compensation Committee received a report from Mercer (“2019 Mercer Report”) of external Compensation Peer Group pay practices relating to base salaries, actual and target STI, LTI, and total direct compensation. The 2019 Mercer Report was based on information compiled from both Compensation Peer Group proxy data and published salary surveys compiled by Mercer. The data from the Compensation Peer Group was combined with national published surveys compiled by Mercer (U.S. Global Premium Executive Remuneration Suite and U.S. Compensation Planning Survey) and Willis Towers Watson (Survey Report on Top Management Compensation). For 2020 and 2021, the Compensation Peer Group included the 16 companies set forth in the table below:

The 2019 Mercer Report found the following with respect to the Company's executive compensation:

The Company strives for total direct compensation to be approximately the median of the Compensation Peer Group, and recognized that compensation, on average or by particular element, was generally below this level for the NEOs. In response, for each of the 2020 and 2021 compensation programs, the Compensation Committee increased compensation targets to approximate a target pay position more closely in line with the median of our Compensation Peer Group and the relative value of each role within the organization.

The Compensation Committee set targets for Company and business unit performance under the 2021 STI plan based on the year-over-year growth in Adjusted EBITDA, a non-GAAP measure defined below. For purposes of the 2021 STI plan, consistent with the adjusted EBITDA measure used in our investor presentations, the Compensation Committee excluded from EBITDA costs related to workforce reduction, intangible assets of acquired businesses, software as a service assets, COVID-19 government subsidies, and other adjustments (“Adjusted EBITDA”). The Compensation Committee decided that excluding such items in assessing management performance more closely aligned management incentives with shareholder interests. Adjusted EBITDA is a key metric reviewed by, and considered important to, our investors in measuring our performance. In addition, Adjusted EBITDA incentivizes management to appropriately control costs while increasing revenue. In 2021, business-unit-specific Adjusted EBITDA was equivalent to segment profit. For additional information, refer to Note 14 to the Consolidated Financial Statements found in Item 8 of Part II of our 2021 Form 10-K under “Segment Information.”

In 2021, the Compensation Committee temporarily changed the PSU award metric from 3-year average ROE to Adjusted EBITDA Compound Annual Growth Rate (“Adjusted EBITDA CAGR”). This change in metric applied only to the 2021 grant of PSUs while the Company recovered from the financial impacts of the 2020 COVID-19 related recession. By the end of 2021, the Company's business had generally returned to pre-pandemic levels and the Compensation Committee returned to ROE as the PSU performance metric for future PSU awards. The Compensation Committee selected Adjusted EBITDA CAGR for the 2021 PSUs after considering a number of other potential targets and metrics, including stock price, total shareholder return, earnings per share, and other relative and absolute metrics. The Compensation Committee believed Adjusted EBITDA CAGR was an appropriate performance metric for aligning the NEOs' interests with the Company’s long-term goals and shareholder interests as the Company emerged from a recession. Among other benefits, a focus on Adjusted EBITDA CAGR encourages our NEOs to make business decisions with a view of quickly returning the Company to target profitability levels.

The LTI plan was designed to align the interests of the NEOs with those of the shareholders. The combination of vesting requirements and stock ownership guidelines is intended to promote retention and a long-term commitment to the Company. The Compensation Committee has determined that PSUs provide the most direct link between executive compensation and specific long-term performance goals that are aligned with the Company's business objectives and shareholder interests.

Our pay-for-performance philosophy and the meaningful goals we apply to our executive compensation program are evidenced by our payouts over the past seven (7) years for our PSU awards as shown below. Participants in this plan have not received a PSU payout for two (2) of the last seven (7) years. As disclosed in prior proxy statements, PSU awards spanning 2015-2017 and 2016-2018 were not earned since the Company did not meet the minimum performance conditions under the plan approved by the Compensation Committee.

 

We provide base salary to give NEOs a stable amount of cash compensation. In alignment with our pay-for-performance philosophy, salary represents only a portion (20% for our CEO) of each NEO's compensation. In late 2020, changes to the CEO's salary were approved by the Compensation Committee to take effect in 2021; all other NEOs remained at their then-current salary due to the continued cost-saving measures related to the pandemic. In the case of Ms. Owen, the Compensation Committee approved a base salary increase of $185,000 effective on October 4, 2021, to reflect the significant change in her role upon becoming President of our PeopleScout operating segment in addition to continuing as President of our PeopleReady operating segment.

The 2021 STI plan for Messrs. Beharelle, Gafford, and Ferencz measured and rewarded performance against three components, weighted as follows: (1) individual performance (50%); (2) the Company's Adjusted EBITDA performance (25%); and (3) the Company's relative revenue growth as compared to the Revenue Peer Group (25%), defined in the Executive Summary section above. Ms. Owen's and Mr. Schweihs' 2021 STI plan measured and rewarded performance against three components: (1) individual performance (40%); (2) Adjusted EBITDA of the business unit directly under their respective control (PeopleReady and PeopleManagement, respectively) (30%); and (3) the Company's relative revenue growth as compared to the Revenue Peer Group (30%). Upon assuming the role of President of PeopleScout in addition to President of PeopleReady, the Compensation Committee changed the weighting of Ms. Owen's STI components to 50%, 25%, and 25%, respectively. The table on the next page shows the performance components (Individual, Company/Business Unit, and Relative Revenue Growth) and threshold, target, and maximum payout levels for the 2021 STI plan. Consistent with the objective that potential compensation reflects the role and responsibilities of each NEO, the STI potential varies by NEO to reflect the individual’s market value and role within the Company.

The individual performance component of the STI Plan allows individual NEOs to earn up to 120% of their target award. The Compensation Committee considers this exercise of discretion appropriate in order to have the ability to acknowledge and reward possible extraordinary achievement in some portions of the individual performance goals. The Committee also approved threshold, target, and maximum potential payouts according to potential Adjusted EBITDA and relative revenue growth results for the Company. Award levels are interpolated between levels beginning at the threshold level where 25% of the target is awarded, up to the maximum level where 200% of the target is awarded. The STI is completely at risk, and no cash award will be made unless the individual, Company/business unit, or relative revenue growth thresholds are met.

As previously noted, Ms. Owen assumed the additional role as President of PeopleScout effective October 4, 2021. As such, the Compensation Committee increased her STI target award from $356,250 to $660,000, to be prorated between her prior role as President of PeopleReady (for three-fourths of the year) and President of PeopleReady and PeopleScout (for one-fourth of the year), respectively.

Mr. Beharelle's individual performance incentive for 2021 was based on specific performance goals involving his areas of responsibility including driving consistent organic growth, leadership development, HCM, reducing the impact of economic cycles, driving shareholder value, leading industry disruption, and risk management leadership. At the end of the year, each director, except Mr. Beharelle, independently evaluated each area of Mr. Beharelle's performance. The evaluations were aggregated and discussed at the December 2021 meeting of the Governance Committee. All members of the Compensation Committee were present and participated in this evaluation discussion. The Governance Committee made its performance evaluation recommendations. The Compensation Committee considered this recommendation and determined the amount of compensation that was appropriate to reward for this performance, concluding that Mr. Beharelle performed at a level that entitled him to receive 120% of his target for the individual performance component of the STI plan, or $526,050.

The individual performance goals for other NEOs focused on categories such as growth, HCM, profit and loss responsibilities, strategic planning, change leadership, and our ethics program. Based on Mr. Beharelle's recommendations, as reviewed and approved by the Compensation Committee, Mr. Gafford received 112%, Ms. Owen received 116%, Mr. Schweihs received 110%, and Mr. Ferencz received 110% of his or her respective target for the individual performance component of the STI plan.

The Company's Adjusted EBITDA target for the STI plan in 2021 was $45 million, with the threshold set at $40 million and maximum set at $50 million. As a result of the NEOs' management efforts through the COVID-19 pandemic and the Company's significant recovery, Adjusted EBITDA was $103.8 million, and as a result, Messrs. Beharelle, Gafford, and Ferencz earned the maximum payout for this component of the STI plan.

The 2021 STI opportunity for Ms. Owen included a component focused on the performance for PeopleReady, the specific business unit under her management for the entirety of 2021; since Ms. Owen did not assume the role as President of PeopleScout until October 4, 2021, no portion of her 2021 STI award was based on the performance of PeopleScout's business unit. Ms. Owen's performance for this component was solely measured on PeopleReady's Adjusted EBITDA. The 2021 Adjusted EBITDA target for Ms. Owen's business unit was $47.5 million, with the threshold at $42.5 million and the maximum at $52.5 million. PeopleReady's actual Adjusted EBITDA was $82.4 million, resulting in the maximum payout to Ms. Owen for business unit performance.

The 2021 STI opportunity for Mr. Schweihs included a component focused on the performance for PeopleManagement, the specific business unit under his management. Mr. Schweihs' performance for this component was measured on PeopleManagement's Adjusted EBITDA. The 2021 Adjusted EBITDA target for Mr. Schweihs' business unit was $11.5 million, with the threshold at $10.5 million and the maximum at $13.0 million. PeopleManagement's actual Adjusted EBITDA was $13.2 million, resulting in the maximum payout to Mr. Schweihs for business unit performance.

The Compensation Committee selected the following Revenue Peer Group (as measured by specific revenue segments) for the relative revenue growth component of the 2021 STI plan: Manpower Group, Inc. (U.S. Manpower brand), Randstad N.V. (U.S. Staffing/In-House), Volt Information Sciences, Inc. (North American Staffing), Kelly Services, Inc. (Professionals & Industrial - Americas Staffing), and Adecco Group (North America General Staffing). In each case, the Compensation Committee selected the reporting segment most comparable to the Company's business, adjusted for organic results, consistent billing days, constant currency, and similar factors. The Company's relative revenue growth target as compared to the Revenue Peer Group for the 2021 STI plan was 0%, or the same revenue growth as the average revenue growth for the Revenue Peer Group, with the threshold set at -3% and maximum set at the Company's revenue growth being 3% greater than the average revenue growth of the Revenue Peer Group. As a result of the NEOs' management efforts through the COVID-19 pandemic and the Company's significant recovery, the Company achieved revenue growth that was 12% greater than the average revenue growth of the Revenue Peer Group during 2021. As a result, the NEOs earned the maximum payout for this component of the STI plan.

Similar to previous years, the 2021 annual equity awards for NEOs were comprised of a combination of RSU and PSU awards. The Compensation Committee chose these two forms of equity after considering a number of other forms of long-term equity. The value

of the annual long-term equity awards are allocated equally between annual PSU grants (“Annual PSUs”) and RSU grants to provide an appropriate balance between long-term performance incentives and retention goals. RSUs granted in 2021 vest in equal annual installments over three years.

The number of RSUs granted was calculated by dividing the target dollar value of the award by the average closing price of the Common Stock during the sixty (60) trading days preceding and including the grant date. The annual grant date is the second trading day after the announcement of fourth quarter and year-end results, which, for the 2021 grant, was February 5, 2021.

In December 2020, the Compensation Committee reviewed the annual and long-term performance-based incentive program for alignment with the Company's strategic business direction. The Compensation Committee considered the impact of the COVID-19 economic downturn on the ability of the Company to achieve high levels of ROE in the near future and the length of time it would take the Company to return to pre-COVID-19 levels of financial performance. After considering a number of potential appropriate metrics for the 2021 PSUs, the Compensation Committee determined that it would incorporate Adjusted EBITDA CAGR over a three-year performance period rather than ROE as the long-term performance metric for PSUs. The Compensation Committee considered continuing the use of ROE but decided that Adjusted EBITDA CAGR will better align executives with the Company's goal of rapidly returning to growth after the significant negative impact of the COVID-19 pandemic.

The PSUs awarded in 2021 are earned and have the potential to vest depending on the Company’s achievement of Adjusted EBITDA CAGR targets over a three-year performance period. The PSU awards are completely at risk and the underlying shares of Common Stock will be issued only if the established targets are met at the completion of the three-year performance period.

The Compensation Committee calculated the target number of PSUs awarded by dividing the target dollar value of the award by 80% of the average closing price of Common Stock during the sixty (60) trading days preceding and including the grant date. Mercer recommended this 20% discount to take into account the contingent nature of the PSUs and the risk of forfeiture.

The Compensation Committee established and approved threshold, target, and maximum vesting rates of PSUs according to potential Adjusted EBITDA CAGR results for the Company. Award levels will be interpolated between levels beginning at the 50% threshold level up to the 150% maximum level. The number of PSUs earned and vested at the end of the three-year award period will be determined by the Adjusted EBITDA CAGR during the performance period as shown in the table below.

Additionally, the Compensation Committee considered the need to ensure the retention and engagement of the experienced and tenured leadership of the Company during the Company's recovery from the pandemic-related recession and in light of the increasingly competitive market for talent in the industry, and made certain one-time additions to the compensation packages of three NEOs. The Compensation Committee considered retention of these individuals in light of the modest payouts under the Company's incentive plans over the past few years. For example, the Company's annual PSU awards, which are a significant part of our incentive program, had delivered significantly fewer shares than targeted over the past few years, and the Company performance component in the STI plan had only paid out in one (1) of the past five (5) years. This meant that the compensation of some NEOs was well below the median of our Compensation Peer Group. The Compensation Committee intends target compensation to be near the median level of our Compensation Peer Group. The Compensation Committee's general practice of reviewing executive compensation every two years has the potential of making the executive compensation program less responsive to quickly changing market considerations. These awards of Retention PSUs (defined below) provided the Committee with another tool to adjust NEO compensation in response to the market conditions during the COVID-19 pandemic.

Ms. Owen, and Messrs. Gafford and Schweihs received one-time retention grants of PSUs (“Retention PSUs”) with a grant date of February 5, 2021. The Compensation Committee does not intend to repeat these grants or for these grants to become consistent components of any NEO's compensation plan.

The Retention PSU grants, discussed above, were based on a target value of $700,000 for Ms. Owen, $600,000 for Mr. Schweihs, and $400,000 for Mr. Gafford. Up to one-half of these awards may vest on the second anniversary of the grant, and the remaining portion of these shares may vest on the third anniversary of the grant, in each case, only if certain individual performance criteria are met. In no event will more than 100% of the award be earned by the NEOs. These Retention PSUs are completely at risk and will not vest in any amount if the individual performance goals are not met. The individual performance goals are oriented to the long-term strategic growth plans of each individual's business unit or support function.

The Compensation Committee calculated the target number of PSUs awarded by dividing the target dollar value of the award by the average closing price of the Common Stock during the sixty (60) trading days preceding and including the grant date.

Messrs. Beharelle and Gafford and Ms. Owen each received Annual PSUs as a component of their total long-term equity awards in 2019, a portion of which vested based on the Company's average ROE over the three-year performance period. During the first year of the performance period, 2019, the Company achieved an ROE of 13.1%. This level of performance continued during early 2020. Had similar performance continued during all of 2020, the payout for this 2019 PSU award would have been over the target payout. During 2020, however, the COVID-19 impact on the general economy and our business operations caused ROE to drop significantly. This COVID-

19-related financial decline caused the Company's average ROE over the full three-year performance period to be 11.0%, which was above threshold performance and would have resulted in a payout of 62.4% of the target award.

Given the unanticipated and extraordinary events of 2020, and the key role that NEOs played in managing the Company through the economic conditions, including the planning and implementation of significant cost savings and re-orienting the business to respond to the new economic conditions, the Compensation Committee exercised its positive discretion and adjusted the payout for the 2019 PSU awards. The Compensation Committee's practice of reviewing

executive compensation every two years could make the executive

compensation program less responsive to quickly changing market considerations. These adjustments to the PSU award payout provided the Committee with another tool to adjust NEO compensation in response to market conditions during the COVID-19 pandemic. As such, following a series of discussions and information exchanges, and considering a number of alternative adjustments, in December 2021, the Compensation Committee modified the 2019 PSU award to be paid out as if the Company had achieved threshold ROE performance during 2020. The Compensation Committee decided to calculate the payout using the actual ROE achieved for the first and third years (2019 and 2021) of the performance period, which were each over target at 13.1% and 14.9%, respectively, and assume threshold ROE (10%) performance level for 2020, the second year of the performance period. Using positive discretion to make this

change, the 2019 PSU award was paid out at 84.9%, rather than 62.4%, of target. The Compensation Committee carefully considered this exercise of discretion and made the adjustment to provide a meaningful, yet modest, increase that better reflected the Company's performance and appropriately rewarded these NEOs for their performance during the entire performance period, including the challenging period of the pandemic. Retention considerations were also part of the Compensation Committee's deliberations, as the Compensation Committee was also aware that the majority of the intended STI awards provided no payout in 2020.

The chart below provides a summary of the 2019 PSU awards and the modifications to the vesting of these awards made by the Compensation Committee on December 3, 2021.

The NEOs, on the same basis as our other highly compensated employees, as defined in Internal Revenue Service (“IRS”) regulations, are entitled to participate in the Deferred Compensation Plan. The NEOs are not entitled to participate in the Company's 401(k) plan. The Company's Deferred Compensation Plan allows participants to maintain their balances in the Deferred Compensation Plan upon termination of employment if a participant has attained the age of sixty-five (65) years or attained the age of forty (40) years and achieved five (5) years of credited service.

Under the Deferred Compensation Plan, eligible employees may defer up to 75% of base salary and up to 100% of amounts received under the STI plan. The Deferred Compensation Plan also includes in-service accounts that allow distribution of contributions during employment and installment payments for distributions (up to ten (10) years) for additional flexibility for tax purposes and retirement planning. Under the Deferred Compensation Plan, the Company can match employee contributions at double the rate matched under the Company's 401(k) plan and such matching funds will be immediately vested. In 2021, the match was 50% of contributions to the plan up to $19,500. Details of amounts contributed to each NEO 2021 deferrals are provided in the Nonqualified Deferred Compensation Table in the Executive Compensation Tables section. Under the Deferred Compensation Plan, the Company can also make contributions with different vesting schedules for retention purposes, but no contributions were made during 2021.

Although we currently invest deferred amounts in separate investment funds managed by third parties, we are not required to do so. All deferred amounts are subject to the risk of loss in the event we become insolvent. The Deferred Compensation Plan is administered by a benefits committee consisting of employees, including NEOs, who are eligible to participate on the same basis as other eligible employees.

The Compensation Committee believes the Deferred Compensation Plan is necessary as a competitive, meaningful retirement benefit for those employees who are eligible to participate, which includes the NEOs, and does not impose any significant risk to or burden on the Company.

The NEOs, on the same basis as other employees, are entitled to participate in the Company Employee Stock Purchase Plan. This plan allows NEOs to contribute up to 10% of their earnings toward the monthly purchase of Common Stock. The employees' purchase price is 85% of the lesser of the fair market value of the shares on either the first day or the last day of each month.

The Company has entered into employment agreements with each of the NEOs, under which each NEO may be entitled to payments upon termination of employment under the circumstances described in the Post-Employment Payments section below. The Compensation Committee believes that the termination payments under the employment agreements are necessary to attract and retain high caliber executives in a competitive labor market and to motivate them to contribute to our short- and long-term success for the benefit of our shareholders. The Compensation Committee designed the termination payments, which are competitive with our Compensation Peer Group

and general industry practices, to achieve a balance between these objectives and the potential impact on shareholders. The major provisions intended to achieve this balance generally include the following:

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 in the Post-Employment Payments section 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 Compensation Committee has established stock ownership guidelines for executive officers as follows: a multiple of four (4) times the annual RSU grant for the CEO and a multiple of three (3) times the annual RSU 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 date of this proxy, 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 RSUs, or shares held in the NEO's account under our employee stock purchase plan. Unvested PSUs 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 RSU awards.

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.

Under the Company's Insider Trading Policy, all directors, NEOs, and all other employees are prohibited from hedging the economic interest in our securities that they hold. In addition, we prohibit Company employees, 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).

The Compensation Committee is comprised entirely of independent directors. During 2021, none of the Company’s executive officers served as a member of a compensation committee or board of directors of any other entity that had an executive officer serving as a member of the Company’s Board.

The Compensation Committee has reviewed and discussed with management this Compensation Discussion and Analysis as required by Item 402(b) of Regulation S-K. Based on such review and discussions, the Compensation Committee recommended to the Board, and the Board agreed, that the Compensation Discussion and Analysis be included in this proxy statement and our Annual Report on Form 10-K for the year ended December 26, 2021.

William C. Goings, Chair

Colleen B. Brown

Kristi A. Savacool