Meritor Acquisition and 2022 Financial Results
Table of Contents
ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
ITEM 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
As of the end of the period covered by this Annual Report on Form 10-K, our management evaluated, with the participation of our Chief Executive Officer and Chief Financial
Officer, the effectiveness of the design and operation of our disclosure controls and procedures as defined in Exchange Act Rules 13a-15(e) and 15d-15(e). Our evaluation did
not include an assessment of disclosure controls and procedures that are subsumed by and did not include an assessment of internal control over financial reporting as it relates
to Meritor, Inc. (Meritor), which was acquired on August 3, 2022. Based upon that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our
disclosure controls and procedures were effective as of the end of the period covered by this Annual Report on Form 10-K.
Changes in Internal Control over Financial Reporting
Except as described below, there has been no change in our internal control over financial reporting during the quarter ended December 31, 2022, that materially affected, or is
reasonably likely to materially affect, our internal control over financial reporting.
On August 3, 2022, we completed the acquisition of Meritor. As part of our ongoing integration of the Meritor business, we are continuing to incorporate our controls and
procedures into Meritor and to augment our company-wide controls to reflect the risks inherent in an acquisition of this type. As permitted by the SEC staff guidance for newly
acquired businesses, our report on our internal control over financial reporting for the year ending December 31, 2022, includes a scope exception that excludes the acquired
Meritor business in order for management to have sufficient time to evaluate and implement our internal control structure over the operations of the Meritor business.
Management's Report on Internal Control Over Financial Reporting
The information required by Item 9A relating to Management's Annual Report on Internal Control Over Financial Reporting and Attestation Report of the Registered Public
Accounting Firm is incorporated herein by reference to the information set forth under the captions "Management's Report on Internal Control Over Financial Reporting" and
"Report of Independent Registered Public Accounting Firm," respectively, under Item 8.
ITEM 9B. Other Information
On February 13, 2023, the Talent Management and Compensation Committee (TMCC) of the Company's Board of Directors adopted a Deposit Share Program (Program) under
which designated participants, including certain of the Company's named executive officers, will be eligible to receive matching grants of restricted stock units if they commit
newly acquired shares of the Company's common stock within a designated range to the Program and agree to hold those newly acquired shares for five years. The number of
newly acquired shares in the designated range will be based on percentages of the participants' base salaries approved by the TMCC, divided by the average closing price per
share of the Company's common stock over a 20 trading day period. The shares may be acquired in open market purchases or under certain equity compensation awards.
The matching grants of restricted stock units will cliff vest on the fifth anniversary of the participation deadline if the participant has remained continuously employed and has
satisfied the holding requirement for the newly acquired shares.
The purposes of the Program include encouraging long-term retention and continuity and alignment of interests with the Company's shareholders. The named executive officers
who are eligible to participate in the Program include Jennifer W. Rumsey, President and Chief Executive Officer, Mark Smith, Vice President and Chief Financial Officer, and
Srikanth Padmanabhan, Vice President and President - Engine Business, with designated ranges for newly acquired shares and matching restricted stock units of 100 percent-
200 percent, 65 percent-150 percent and 65 percent-150 percent, respectively, of base salary.
The preceding description is a summary only and is qualified in its entirety by the Program, which is filed as Exhibit 10(y) to this Annual Report on Form 10-K and
incorporated herein by reference.
ITEM 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not Applicable.
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