Tractor Supply (TSCO) DEF 14ADefinitive proxy

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.)

Filed by the Registrant  ☒

Filed by a Party other than the Registrant  ☐

Check the appropriate box:

Tractor Supply Company

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check all boxes that apply):

Notice of the 2022 Annual Meeting and

2022 Proxy Statement

Wednesday, May 11, 2022, at 8:00 a.m. CT

5401 Virginia Way

Brentwood, Tennessee 37027

TractorSupply.com

To Our Stockholders:

On behalf of the Board of Directors, it is my pleasure to invite you to attend the 2022 Annual Meeting of Stockholders of Tractor Supply Company (the “Company,” “Tractor Supply,” “we,” “our,” or “us”). The meeting will be held in a virtual format on Wednesday, May 11, 2022, beginning at 8:00 a.m. (Central Time). The meeting will be conducted via a live webcast at www.meetnow.global/MVCN95V, where you will be able to vote electronically and submit questions during the meeting.

After strong results in 2020, the Company began 2021 with optimism for a new year despite the numerous uncertainties surrounding the COVID-19 pandemic and its impact on the economy and our business. Throughout the year, the safety and well-being of our Team Members and customers remained our top priority. While we continued to navigate the challenging operating environment, we continued to gain market share and invest in the business to capture the significant opportunities ahead of us.

As a purpose-driven company, Tractor Supply Company is committed to effective and transparent corporate governance. Our Board of Directors has taken several actions in recent years to enhance our governance practices. We appreciate your support as we continue to implement initiatives that are positively impacting the performance and long-term value of the business for the benefit of all stakeholders.

The following pages contain the formal Notice of Annual Meeting of Stockholders and Proxy Statement, which describe the specific business to be considered and voted upon at the Annual Meeting. The meeting will include a report on the Company’s activities for the fiscal year ended December 25, 2021, and there will be an opportunity for comments and questions from stockholders. Whether or not you plan to attend the virtual meeting, it is important that you be represented and that your shares are voted. After reviewing the Proxy Statement, I ask you to vote as described in the Proxy Statement as soon as possible.

Thank you for your continued support. I look forward to your participation at the Annual Meeting.

Sincerely,

Harry A. Lawton III

President, Chief Executive Officer and Director

March 28, 2022

May 11, 2022

8:00 a.m. CT

The purpose of the annual meeting is to consider and take action on the following:

These matters are more fully described in the Proxy Statement accompanying this notice.

The Securities and Exchange Commission (“SEC”) rules allow us to furnish proxy materials to our stockholders on the Internet. We are pleased to take advantage of these rules and believe that they enable us to provide our stockholders with the information that they need, while lowering the cost of delivery and reducing the environmental impact of our Annual Meeting. This Proxy Statement and our fiscal 2021 Annual Report to Stockholders are available on our website at TractorSupply.com. Additionally, and in accordance with SEC rules, you may access our proxy materials at ir.tractorsupply.com, which does not utilize “cookies” that identify visitors to the site.

As stockholders of the Company, your vote is important. Whether or not you plan to attend the Annual Meeting, which is being held in a virtual format via a live webcast at www.meetnow.global/MVCN95V, it is important that you vote as soon as possible to ensure that your shares are represented.

By Order of the Board of Directors,

Noni L. Ellison

Senior Vice President, General Counsel and Corporate Secretary

Brentwood, Tennessee

March 28, 2022

 YOUR VOTE IS IMPORTANT. PLEASE VOTE BY TOLL-FREE TELEPHONE CALL, VIA THE INTERNET OR BY

 COMPLETING, SIGNING, DATING AND RETURNING A PROXY CARD.

Annual Meeting of Stockholders

To be Held May 11, 2022

Our Board of Directors (the “Board of Directors” or “Board”) has made these proxy materials available to you on the Internet, or, upon your request, has delivered printed versions of these materials to you by mail. We are furnishing this Proxy Statement in connection with the solicitation by our Board of proxies to be voted at our 2022 Annual Meeting of Stockholders (the “Meeting”), or at any adjournment thereof. The Meeting will be conducted in a virtual format via a live webcast at www.meetnow.global/MVCN95V, on Wednesday, May 11, 2022 at 8:00 a.m., Central Time.

We mailed our Notice of Internet Availability of Proxy Materials (the “Notice”) to each stockholder entitled to vote at the Meeting on or about March 28, 2022.

General Information About the Meeting and Voting

Who may vote at the Meeting?

The Board has set March 15, 2022 as the record date for the Meeting. If you were the owner of the Company’s common stock, par value $.008 per share (“Common Stock”), at the close of business on March 15, 2022, you may vote at the Meeting. You are entitled to one vote for each share of Common Stock you held on the record date.

A list of stockholders entitled to vote at the Meeting will be open to examination by any stockholder for any purpose germane to the Meeting during normal business hours for a period of ten days before the Meeting at our Store Support Center located at 5401 Virginia Way, Brentwood, TN, 37027, and in an electronic format at the live webcast.

How many shares must be present to hold the Meeting?

A majority of our shares of Common Stock issued and outstanding as of the record date must be present at the Meeting in order to hold the meeting and conduct business. This is called a quorum. On the record date, there were 112,146,307 shares of our Common Stock issued and outstanding. Your shares are counted as present at the Meeting if you are virtually present and vote electronically at the Meeting or properly submit your proxy prior to the Meeting.

How can I attend the Meeting?

The Meeting will be a completely virtual meeting of stockholders, which will be conducted exclusively by webcast. You are entitled to participate in the Meeting only if you were a stockholder of the Company as of the close of business on March 15, 2022, or if you hold a valid proxy for the Meeting. No physical meeting will be held.

You will be able to attend the Meeting online as well as vote and submit your questions during the Meeting by visiting www.meetnow.global/MVCN95V and entering the 16-digit control number included in the Notice, on your proxy card, or in the instructions that accompanied your proxy materials.

If you hold your shares through an intermediary, such as a bank or broker, you must register in advance using the instructions below.

The online Meeting will begin promptly at 8:00 a.m., Central Time. We encourage you to access the Meeting prior to the start time leaving ample time for the check-in process. Please follow the registration instructions as outlined in this Proxy Statement.

How do I register to attend the Meeting virtually on the Internet?

If you are a registered stockholder (i.e., you hold your shares through our transfer agent, Computershare Trust Company, N.A. (“Computershare”)), you do not need to register to attend the Meeting virtually on the Internet. Please follow the instructions on the Notice or proxy card that you received.

If you hold your shares through an intermediary, such as a bank or broker, you must register in advance to attend the Meeting virtually on the Internet.

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To register to attend the Meeting online by webcast you must submit proof of your proxy power (legal proxy) reflecting your Company holdings along with your name and email address to Computershare. Requests for registration must be labeled as “Legal Proxy” and be received no later than 4:00 p.m., Central Time, on May 6, 2022.

You will receive a confirmation of your registration by email after we receive your registration materials.

Requests for registration should be directed to the following:

By email

Forward the email from your broker, or attach an image of your legal proxy, to legalproxy@computershare.com

By mail

Computershare

Tractor Supply Company Legal Proxy

P.O. Box 43001

Providence, RI 02940-3001

What if I have trouble accessing the virtual Meeting?

The virtual meeting platform is fully supported across browsers (e.g., MS Edge, Firefox, Chrome, and Safari) and devices (including computers, tablets, and cellphones) running the most updated version of applicable software and plugins. Please note that Internet Explorer is not currently supported. Participants should ensure that they have a reliable Internet connection whenever they intend to participate in the Meeting. Participants should allow time to log in and ensure that they can hear streaming audio prior to the start of the Meeting. We encourage you to access the Meeting prior to the start time. A link on the Meeting page will provide further assistance should you need it.

The online Meeting will begin promptly at 8:00 a.m., Central Time. We encourage you to access the Meeting prior to the start time leaving ample time for the check-in process. Please follow the registration instructions as outlined in this Proxy Statement. If you have difficulty accessing the Meeting, or if any technical difficulties arise during the Meeting, please call 1-888-724-2416 (toll-free) and 1-781-575-2748 (international) or the technical support number that will be posted on the log in page for our Meeting. On May 11, 2022, there will be technicians available to assist you with any difficulties beginning at 7:30 a.m., Central Time.

Why am I being asked to review materials online?

Under rules adopted by the SEC, and in an effort to promote sustainability, we are furnishing proxy materials to our stockholders online rather than mailing printed copies of those materials to each stockholder. If you received a Notice by mail, you will not receive a printed copy of the proxy materials unless you request one. Instead, the Notice will instruct you as to how you may access and review the proxy materials online. If you received a Notice by mail and would like to receive a printed copy of our proxy materials, please follow the instructions included in the Notice.

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What am I voting on?

You will be voting on the following:

We are not currently aware of any other business to be acted upon at the Meeting. If any other matters are properly submitted for consideration at the Meeting, including any proposal to adjourn the Meeting, the persons named as proxies will vote the shares represented thereby in their discretion. Adjournment of the Meeting may be made for the purpose of, among other things, soliciting additional proxies. Any adjournment may be made from time to time by approval of the holders of Common Stock representing a majority of the shares present in attendance or by proxy at the Meeting, whether or not a quorum exists, without further notice other than by an announcement made at the Meeting.

How does the Board recommend that I vote?

The Board recommends that you vote:

How do I vote before the Meeting?

If your shares are registered directly in your name with our transfer agent, Computershare, you are considered a stockholder of record with respect to those shares and the Notice has been sent directly to you by Computershare. If, like most stockholders of the Company, you hold your shares in street name through a stockbroker, bank or other nominee, rather than directly in your own name, you are considered the beneficial owner of shares, and the Notice is being forwarded to you. In either case, please carefully consider the information contained in the Proxy Statement and, whether or not you plan to attend the Meeting, vote by one of the below methods so that we can be assured of having a quorum present at the Meeting and so that your shares may be voted in accordance with your wishes, even if you later decide not to attend the Meeting.

If you hold your shares through the Company’s 401(k) Plan, you will receive printed proxy materials by mail. You may vote at the Meeting or by completing and mailing the paper proxy card included with the mailed proxy materials, via the Internet or by phone.

We encourage you to register your vote via the Internet. If you virtually attend the Meeting, you may also submit your vote virtually at the Meeting and any votes that you previously submitted – whether via the Internet, by phone or by mail – will be superseded by the vote that you cast virtually at the Meeting. To vote virtually at the Meeting, beneficial owners will need to contact the broker, trustee or nominee that holds their shares to obtain a “legal proxy” as described above. Whether your proxy is submitted by the Internet, by phone or by mail, if it is properly completed and submitted and if you do not revoke it prior to the Meeting, your shares will be voted at the Meeting in the manner set forth in this Proxy Statement or as otherwise specified by you.

You may vote via the Internet or by phone until the polls close at the Meeting on May 11, 2022, otherwise Computershare must receive your paper proxy card before May 11, 2022. If you hold your shares through the Company’s 401(k) Plan or Employee Stock Purchase Plan, you may vote via the Internet or by phone until 1:00 a.m., Central Time, on May 9, 2022, otherwise Computershare must receive your paper proxy card before May 9, 2022. You may also vote electronically at the virtual Meeting via the live webcast.

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How do I vote at the Meeting?

If you are a registered stockholder as of the record date, you may vote your shares at the virtual Meeting using electronic voting options included as part of the live webcast. Registered stockholders may vote online during the Meeting by visiting www.meetnow.global/MVCN95V, entering the control number found in your Notice, and following the on-screen instructions. To vote virtually at the Meeting, beneficial owners will need to contact the broker, trustee or nominee that holds their shares to obtain a “legal proxy” as described above.

The online Meeting will begin promptly at 8:00 a.m., Central Time. We encourage you to access the Meeting prior to the start time leaving ample time for the check-in process. Please follow the registration instructions as outlined in this Proxy Statement. If you have difficulty accessing the Meeting, or if any technical difficulties arise during the Meeting, please call 1-888-724-2416 (toll-free), 1-781-575-2748 (international) or the technical support number that will be posted on the log in page for our Meeting. On May 11, 2022, there will be technicians available to assist you beginning at 7:30 a.m., Central Time, with any difficulties.

You are entitled to virtually participate in the Meeting only if you are a stockholder as of the close of business on March 15, 2022, the record date, or hold a valid proxy for the Meeting.

What vote is required to pass an item of business?

The holders of the majority of the issued and outstanding shares of Common Stock must be present in attendance, virtually, at the Meeting or represented by proxy for a quorum to be present at the Meeting.

A nominee will be elected to the Board at the Meeting if he or she receives the affirmative vote of a majority of the votes cast by the shares present at the Meeting or represented by proxy at the Meeting and entitled to vote. Pursuant to the Company’s Director Resignation Policy, each director nominee has submitted a conditional resignation to the Company which will be effective upon the director’s failure to receive the required majority vote at the Meeting. The Board will then consider the resignation and make a decision whether to accept or reject such resignation within sixty days of its receipt. See additional information regarding this policy and related process as further described under the heading “Director Resignation Policy” within “Item 1–Election of Directors”.

Each of the proposals with respect to ratification of the re-appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm, the approval of the executive compensation of our named executive officers, and the stockholder proposal titled “Report on Costs of Low Wages and Inequality” will be approved if it receives the affirmative vote of a majority of the shares present, either in attendance virtually or by proxy, at the Meeting and entitled to vote.

If you submit your proxy or attend the Meeting virtually, but choose to abstain from voting on any proposal, you will be considered present at the Meeting and not voting in favor of any proposal. The proposal to be voted on with respect to the election of directors requires the favorable vote from a majority of the votes cast by the shares present and entitled to vote at the Meeting; abstaining and not voting on this proposal will not affect the outcome of this proposal. Since each of the proposals to be voted on with respect to (i) ratification of the re-appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm, (ii) the advisory vote on executive compensation, and (iii) the vote on the stockholder proposal titled “Report on Costs of Low Wages and Inequality” will pass only if it receives a favorable vote from a majority of shares present and entitled to vote at the Meeting, abstaining and not voting in favor of these proposals will have the same effect as if you had voted against the proposals.

Brokers and nominees may exercise their voting discretion without receiving instructions from the beneficial owner of shares on proposals that are deemed to be routine matters. If a proposal is not a routine matter, the broker or nominee may not vote the shares with respect to the proposal without receiving instructions from the beneficial owner of the shares. If a broker turns in a proxy card expressly stating that the broker is not voting on a non-routine matter, such action is referred to as a “broker non-vote.” The election of directors, the approval of the compensation of the named executive officers, and the stockholder proposal titled “Report on Costs of Low Wages and Inequality” are not routine matters, and a broker may not vote on these matters without receiving instructions. The ratification of the re-appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm is a routine matter, and brokers and nominees may vote on this matter without receiving instructions, however, for all other proposals, broker non-votes are not considered “present and entitled to vote,” and as such, broker non-votes will not affect the outcome of any such other proposals.

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Unless you indicate otherwise, the persons named as your proxies will vote your shares (i) FOR all nominees for director, (ii) FOR the ratification of the re-appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm, (iii) FOR the approval of the compensation of the named executive officers of the Company, and (iv) AGAINST the stockholder proposal titled “Report on Costs of Low Wages and Inequality”, if properly presented at the Meeting.

Who counts the votes?

The Company has asked Computershare to judge voting, be responsible for determining whether or not a quorum is present and tabulate votes cast by proxy or present virtually at the Meeting.

Can I revoke my proxy?

Yes. You can revoke your proxy by:

Where can I find voting results of the Meeting?

We will publish final detailed voting results in a Form 8-K filed with the SEC at www.sec.gov within four business days following the Meeting.

Could developments regarding COVID-19 affect our Meeting?

We are sensitive to the public health and travel concerns our stockholders may have and the protocols that federal, state, and local governments may continue to impose as it relates to the current, ongoing COVID-19 pandemic. In the event that the logistics of our Meeting are impacted by developments related to or stemming from this pandemic, we will announce such information as promptly as practicable. If such event occurs, we intend to take all reasonable steps necessary to inform our stockholders, intermediaries, and other market participants of such changes, including but not limited to, the issuance of a press release announcing such changes and the filing of such announcement with the SEC as definitive additional soliciting material. Please additionally monitor our website at TractorSupply.com for updated information. As always, we encourage you to vote your shares prior to the Meeting.

Who will bear the cost for soliciting votes at the Meeting?

We will bear all expenses in conjunction with the solicitation of proxies, including the charges of brokerage houses and other custodians, nominees or fiduciaries for forwarding documents to security owners.

The Company has retained Innisfree M&A, Inc. (“Innisfree”) to assist in the solicitation of proxies from brokerage firms, fiduciaries, custodians, and other similar organizations representing beneficial owners of shares for the Meeting. We have agreed to pay Innisfree a fee of approximately $25,000 plus out-of-pocket expenses. In addition to solicitations by mail, the proxy solicitor and the Company’s directors, officers, and employees, without additional compensation, may solicit proxies on the Company’s behalf in person, by phone, or by electronic communication.

Whom should I call with other questions?

If you have additional questions about this Proxy Statement or the Meeting, please contact: Tractor Supply Company, 5401 Virginia Way, Brentwood, Tennessee 37027, Attention: Investor Relations Dept., Telephone: (615) 440-4000.

If you have difficulty accessing the Meeting, or if any technical difficulties arise during the Meeting, please call 1-888-724-2416 (toll-free), 1-781-575-2748 (international) or the technical support number that will be posted on the log in page for our Meeting. On May 11, 2022, there will be technicians available to assist you beginning at 7:30 a.m., Central Time, with any difficulties.

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Item 1 – Election of Directors

Our directors are elected at each annual meeting and hold office until the next annual meeting or the election of their respective successors. All nominees are presently directors of the Company, and all of our current directors were elected by the Company’s stockholders at the 2021 Annual Meeting. The Board has the authority under our Bylaws to fill vacancies and to increase or decrease its size between annual meetings. From time to time, the Corporate Governance Committee engages executive search firms to assist in identifying individuals qualified to be Board members.

Our Board nominees bring a variety of unique skills, qualifications, backgrounds and experiences that contribute to a well-balanced Board that we believe is uniquely positioned to effectively guide our strategy and oversee our operations in the rapidly-changing retail industry.

At Tractor Supply, we believe that an effective Board should be made up of individuals who collectively provide an appropriate balance of leadership and strategic skills, diverse perspectives and professional experiences which are relevant to our business and strategic goals. The Board, upon recommendation of its Corporate Governance and Nominating Committee (“Corporate Governance Committee”), selects potential candidates on the basis of their broad experience, outstanding achievement in their professional careers, wisdom, integrity, alignment with our values, understanding of the business environment, thorough appreciation for strong ethics and appropriate corporate governance. In addition, the Board takes into account their willingness to devote adequate time to Board duties and such other experience, attributes and skills that the Board deems essential for directors.

The Board also considers diversity, such as diversity of gender, race and national origin, education, professional experience and differences in viewpoints and skill sets. The Board and the Corporate Governance Committee believe that it is important that directors represent diverse viewpoints and individual perspectives. In considering candidates, the Board considers the entirety of each candidate’s credentials in the context of these standards.

The Board also considers whether a potential candidate satisfies the independence and other requirements for service on the Board and its committees, as required by the listing standards of the Nasdaq Global Select Market (“Nasdaq”) and the SEC.

A stockholder who wishes to recommend a prospective nominee for the Board should notify our Corporate Secretary in writing with the supporting materials required pursuant to the provisions of our Bylaws relating to stockholder proposals as described in “Stockholder Nominations of Candidates for Board Membership,” below.

Director Experience, Skills and Background

Tractor Supply is committed to growing our business by being an integral part of our customers’ lives as the dependable supplier of “Out Here” lifestyle solutions, creating customer loyalty through personalized experiences, and providing convenience that our customers expect at anytime, anywhere, and in any way they choose. In selecting nominees for our Board, the Corporate Governance Committee evaluates the current composition of the Board and its committees and determines the most relevant skills and experience to provide effective oversight, support the needs of our business and implement our strategy.

We generally seek director candidates with experience, skills or background in one or more of the following areas:

LEADERSHIP

		CEO / President Experience
		We strive to maintain a Board with a wide range of leadership experience including service as a current or former CEO or President.

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		Public Company Directorship
		We seek directors who hold either current or previous directorship positions with public companies.

STRATEGY

		Retail
		We seek directors who possess an understanding of operational and strategic issues facing large retail companies, including changing consumer behaviors.

		Technology / E-Commerce
		We seek directors who can provide guidance based on their experiences with e-commerce and digital technologies to integrate the customer experience in-store and online.

		Marketing / Brand Management
		We seek directors with relevant experience in consumer marketing or brand management and an understanding of shifting customer dynamics and consumer preferences.

		HR / Compensation
		We seek directors with relevant experience in human resources or executive compensation who can provide guidance and oversight of our compensation program.

GOVERNANCE

		Accounting / Finance
		We seek directors who have experience with finance and financial reporting processes due to the importance our company places on accurate financial reporting, controls and compliance.

		Regulatory / Legal
		Our business requires compliance with a variety of regulatory requirements across a number of jurisdictions. We seek directors who have legal and risk management expertise.

		Corporate Governance
		We seek directors who have experience with corporate governance and managing board strategies and practices that align with best practices and our strategic values.

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DIVERSITY

		Board Diversity
		Diversity and inclusion are values ingrained in our culture and essential to our business. We believe that a board comprised of directors with diverse backgrounds, unique skill sets and experiences, and individual perspectives improves the discussions and decision-making process, which contributes to overall Board effectiveness.

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The chart below identifies the balance of skills and qualifications each director nominee brings to the Board. We believe the combination of the skills and qualifications shown below demonstrates how our Board is well positioned to provide effective oversight and strategic advice to our management.

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Nominees for Directors

The Board, upon recommendation of its Corporate Governance Committee, has nominated each of the directors named below for election at the Meeting. Such individuals were selected based on their broad experience, wisdom, integrity, alignment with our values, understanding of the business environment, thorough appreciation for strong ethics and appropriate corporate governance, and their willingness to devote adequate time to Board duties. The experience, qualifications, attributes, and skills that led the Corporate Governance Committee to conclude that each person should be nominated to serve as a director are discussed in more detail below. The nominees included below are each standing for re-election for one of the nine positions on our Board.

If a nominee becomes unwilling or unable to serve, which is not expected, the proxies will be voted for a substitute person designated by the Board upon the recommendation of the Corporate Governance Committee.

The following sets forth certain information concerning the director nominees for the Board of Directors of the Company:

  Cynthia T. Jamison

    Chairman of the Board

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  Joy Brown

    Director

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  Ricardo Cardenas

    Director

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  Denise L. Jackson

    Director

13

  Thomas A. Kingsbury

    Director

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  Ramkumar Krishnan

    Director

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  Edna K. Morris

    Director

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  Mark J. Weikel

    Director

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  Harry A. Lawton III

    President, Chief Executive Officer, and Director

Director Resignation Policy

The Company has adopted a director resignation policy which provides that each director shall submit a conditional offer of resignation effective if, in an uncontested election, a director fails to receive a majority of shares voting in the election of directors. Should that occur, the Corporate Governance Committee, or in certain circumstances the Board or a special committee thereof, will consider the resignation and will recommend to the Board whether to accept or reject the tendered resignation, considering factors deemed relevant by the Corporate Governance Committee including the reasons why stockholders withheld votes for election of the director, the qualifications of the director, and his or her contributions to the Company. The Board will then consider the Corporate Governance Committee’s recommendation and all factors it deems relevant and make a decision whether to accept or reject such resignation effective within 60 days following receipt of the Corporate Governance Committee’s recommendation. The Company will disclose the Board’s decision in a Current Report on Form 8-K filed with the SEC within 90 days following certification of the stockholder vote.

Service on Other Boards

Our Corporate Governance Guidelines require directors to advise the Chairman of the Board and the Chair of the Corporate Governance Committee in advance of accepting an invitation to serve on another public company board or audit committee. In addition, our Corporate Governance Guidelines limit directors who are executive officers of the Company or of another public company to serving on no more than two total public company boards, including the Company’s Board, and outside directors to serving on no more than four total public company boards, including the Company’s Board. An outside director who is a member of the Company’s Audit Committee may not serve on more than three total public company audit committees. A director who fails to comply with these limitations has sixty (60) calendar days to comply with the limitations and, if such director is not in compliance, such director must immediately tender his or her

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offer of resignation to the Board for consideration by the Board. The Corporate Governance Committee will then make a recommendation to the Board on whether to accept or reject the offer of resignation, taking into consideration the time commitments related to the director’s other boards, the expected time commitment to the Company and other relevant factors. We do not believe that any of our current directors serves on an excessive number of boards.

Vote Required

A nominee will be elected to the Board of Directors at the Meeting if he or she receives the affirmative vote of a majority of the votes cast by the shares present at the Meeting or represented by proxy at the Meeting and entitled to vote. If you abstain from voting on this proposal, your abstention will not affect the outcome of this proposal. Broker non-votes are not considered “present and entitled to vote,” and as such, broker non-votes will not affect the outcome of this proposal.

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Compensation of Directors

The Compensation Committee has the responsibility to review compensation for the Company’s directors periodically and recommend changes, as appropriate, to the full Board. For the 2021-2022 term, the Board approved the following retainer fees for non-employee directors.

The annual retainers are due and paid quarterly in cash. In 2021, the Board adopted the Tractor Supply Company Directors Stock Election Plan to provide a mechanism for non-employee directors of the Company to elect to cause fifty-percent or all of the cash compensation otherwise payable by the Company to such non-employee directors to be paid in the form of shares of the Company’s Common Stock in lieu of cash, in accordance with the 2018 Omnibus Incentive Plan (the “2018 Plan”). Additionally, the Tractor Supply Company Directors Stock Election Plan allows for non-employee directors who elect to receive Common Stock in lieu of cash to irrevocably elect to defer the payment of the Common Stock to either (i) the date of the non-employee director’s termination of service from the Company’s Board; or (ii) a date specified by the non-employee director.

Each of the directors also receives a grant of restricted stock units (“RSUs”) pursuant to the 2018 Plan annually upon election or re-election. Directors who are also employees of the Company, like Mr. Lawton, receive no additional compensation for serving on the Board or any committee thereof. In 2021, grants of RSUs valued on the date of grant at approximately $155,000 were made to non-employee directors other than the independent chairman, and the independent chairman was granted RSUs valued on the grant date at approximately $225,000. All RSU awards granted to non-employee directors are made at the commencement of the new director term and vest on the one-year anniversary of the grant date. Except to the extent necessary to comply with our director stock ownership guidelines, there are no holding period requirements after the RSUs are issued. See “Corporate Governance - Director Stock Ownership Guidelines” for more information about this requirement. Receipt of RSUs can be irrevocably deferred until the end of such director’s service on the Board or such other date as the director elects.

The Company also reimburses all directors for out-of-pocket expenses incurred in connection with their attendance at Board and committee meetings.

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The following table provides compensation information for the fiscal year ended December 25, 2021, for each individual who served as a member of our Board during such period, other than Mr. Lawton, whose compensation is reflected in the “2021 Summary Compensation Table.”

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Board Meetings and Committees

The Board held four regular quarterly meetings and three additional meetings during 2021. A majority of the total number of directors constitutes a quorum for the transaction of business at a meeting. During fiscal 2021, each incumbent director attended at least 75% of the aggregate of (i) the total number of Board meetings (held during the period for which he or she has been a director) and (ii) the total number of meetings held by all Board committees on which he or she served (during the period that he or she served).

Standing Committees of the Board

The Board has determined that each member of the Company’s Audit Committee, Compensation Committee and Corporate Governance Committee is an independent director within the meaning of the listing standards of Nasdaq. Further, there are no transactions in which any director nominee has an interest requiring disclosure under Item 404(a) of Regulation S-K. In addition, the Board has determined that

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Mr. Cardenas, the chair of the Audit Committee, and Mr. Weikel are qualified as audit committee financial experts within the meaning of SEC regulations and the listing standards of Nasdaq. The Audit Committee has been established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

Responsibilities of the Compensation Committee

The Compensation Committee has been given the responsibility to assist the Board in the discharge of its fiduciary duties with respect to the compensation of the executives of the Company, including the executive officers named in the 2021 Summary Compensation Table in this Proxy Statement (the “Named Executive Officers”), as well as oversight of talent development and succession planning. The Compensation Committee is also responsible for overseeing all of the Company’s equity-based plans as well as its retirement and other benefit plans. It periodically reviews and approves compensation and equity-based plans and makes its recommendations to the Board with respect to these areas.

The Compensation Committee’s members are each (i) independent as defined under the listing standards of Nasdaq, and (ii) a non-employee director for purposes of Section 16b-3 of the Exchange Act.

As part of the duties set forth in its charter, the Compensation Committee, among other things, establishes compensation systems that support the Company’s business strategy. The Compensation Committee periodically reviews the Company’s philosophy regarding executive and director compensation. On an annual basis, the Compensation Committee reviews market data to assess the Company’s competitive position with respect to the elements of the Company’s compensation and policies relating to fair and equitable pay practices. The Compensation Committee reports to the Board on its activities.

To assist the Compensation Committee in establishing compensation for the Company’s executive management and directors for 2021, the Compensation Committee engaged Pearl Meyer & Partners (“Pearl Meyer”) as an independent third-party consultant. The Compensation Committee determined the scope of Pearl Meyer’s assignment and worked directly with Pearl Meyer. Pearl Meyer also worked with management on a limited basis under the Compensation Committee’s direction. Pearl Meyer did not recommend any compensation programs or payment amounts; rather, they were engaged to provide data and analysis with respect to compensation paid by the Company and the companies in its peer group as discussed in “Compensation Discussion and Analysis.” Pearl Meyer did not provide any services other than these executive and director compensation services for the Company in fiscal 2021.

The Compensation Committee sets performance goals and objectives for the Chief Executive Officer and the other executive officers. The Compensation Committee reviews the performance and compensation of the Chief Executive Officer and, with input from other advisors, if appropriate, establishes the Chief Executive Officer’s compensation level, including equity-based awards. For the remaining Named Executive Officers, the Human Resources leader, who serves as the management liaison to the Compensation Committee, consults with the Chief Executive Officer and, using the data provided by the consultant, makes recommendations to the Committee as to each individual’s base compensation and equity-based awards. All decisions with respect to executive and director compensation are approved by the Compensation Committee and reported to, or approved by, the full Board.

The agenda for meetings of the Compensation Committee is determined by its Chairperson with input from the Company’s General Counsel and Human Resources leadership. Compensation Committee meetings are regularly attended by the Company’s Chief Executive Officer, Chief Financial Officer, General Counsel and Human Resources leadership, but the Compensation Committee also meets in executive session at each meeting. Pearl Meyer and the Company’s human resources department support the Compensation Committee in its duties, and certain officers, including the Chief Executive Officer, Chief Financial Officer, General Counsel and Human Resources leadership, may be delegated authority to fulfill certain administrative duties regarding compensation programs.

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Corporate Governance

General

We believe that good corporate governance is important to ensure that the Company is managed for the long-term benefit of its stockholders. During the past year, we have continued to review our corporate governance policies and practices and compared them to those suggested by various authorities in corporate governance and the practices of other public companies. We also consider the rules of the SEC and the listing standards of Nasdaq.

Our Board has adopted Corporate Governance Guidelines, which outline the composition, operations and responsibilities of the Board. Our Board also conducts an annual review of its charters for the Company’s Audit Committee, Compensation Committee and Corporate Governance Committee. You may access our Corporate Governance Guidelines and current committee charters under the “Governance” tab of the Investor Relations section of our website at TractorSupply.com. Information provided on our website is not part of this Proxy Statement and is not intended to be incorporated by reference herein.

Director Independence and Board Operations

Our Corporate Governance Guidelines require that a majority of our Board consists of independent directors within the meaning of the listing standards of Nasdaq. The Board has determined that each of the following directors is an “independent director” within the meaning of the listing standards of Nasdaq:

Effective January 1, 2014, Cynthia T. Jamison became the Chairman of the Board. Prior to this appointment, Ms. Jamison had served as the Board’s Lead Independent Director since 2010, and she has served on the Company’s Board since 2002. The Board determined it was in the best interest of the Company to appoint Ms. Jamison, an independent director, as Chairman due to her financial and senior leadership experience, her governance experience and her financial expertise.

Our Chairman, in consultation with the Chief Executive Officer and each of the committee chairpersons, proposes the agenda for the Board meetings. Directors receive the agenda and supporting information in advance of the meetings. Directors may raise other matters to be included in the agenda or at the meetings. Our Chief Executive Officer and other members of executive management make presentations on a variety of operational and strategic topics to the Board at the meetings, and a substantial portion of the meeting time is devoted to the Board’s discussion of these presentations. Executive sessions for independent directors are scheduled at each regularly scheduled Board meeting.

Directors have regular access to executive management. They may also seek independent, outside advice and shall have authority to appropriate funds to retain such advisors as such committees may deem appropriate. The Board has established three standing committees so that certain areas can be addressed in more depth than might be possible at a full Board meeting. Committee assignments are reassessed annually.

Board, Committee and Individual Director Assessment Process

The Corporate Governance Committee has the responsibility for administering an annual performance review process for the Board. The Corporate Governance Committee has established a rigorous and thorough annual assessment process that includes the completion of written assessments and one-on-one interviews of all directors by the Chairman of the Board. All directors complete a written assessment of the performance of the full Board and its committees, as well as a self/peer assessment in which directors are assessed individually. The directors also complete written assessments of the performance of the Chairman of the Board and the Chief Executive Officer.

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Additionally, senior management completes an annual written assessment of the Board. To encourage directors and senior management to be candid in their assessments, results are aggregated so that assessments and comments are not attributed to individuals. Each director receives a personalized assessment report that shows his or her individual performance compared with his or her peers as well as the full Board assessment results. The Chairman of the Board also reviews the assessment results with the full Board and meets individually with the Chief Executive Officer to review his performance. In addition, each committee conducts a self-assessment on an annual basis by having committee members complete a written assessment of the committee’s performance. The chair of each committee shares the results of this process with committee members. The Board also provides an orientation program for new directors and education opportunities for continuing directors.

Director Candidates

The Corporate Governance Committee, which is comprised solely of independent directors, considers candidates for Board membership suggested by its members and other Board members, as well as management and stockholders. The Corporate Governance Committee may also utilize director search firms to identify potential director candidates. A stockholder who wishes to recommend a prospective nominee for the Board should notify our Corporate Secretary in writing with the supporting materials required pursuant to the provisions of our Bylaws relating to stockholder proposals as described in “Stockholder Nominations of Candidates for Board Membership,” below.

Once the Corporate Governance Committee has identified a prospective nominee, an initial determination is made as to whether to conduct a full evaluation of the candidate. This initial determination is based on whatever information is provided to the Corporate Governance Committee with the recommendation of the prospective candidate, as well as the Corporate Governance Committee’s own knowledge of the prospective candidate, which may be supplemented by inquiries to the person making the recommendation or others. The preliminary determination is based primarily on the need for additional Board members to fill vacancies or expand the size of the Board and the likelihood that the prospective nominee can satisfy the evaluation factors described below. The Corporate Governance Committee then evaluates the prospective nominee against the standards and qualifications set out in our Corporate Governance Guidelines, including:

The Corporate Governance Committee also considers diversity, such as diversity of gender, race and national origin, age, education, professional experience and differences in viewpoints and skills. The Corporate Governance Committee is committed to actively seeking highly qualified women and individuals from minority groups to include in the pool from which Board nominees are selected. The Board and the Corporate Governance Committee believe that it is important that the Board members represent diverse viewpoints. In considering candidates for the Board, the Corporate Governance Committee considers the entirety of each candidate’s credentials in the context of these standards. The Corporate Governance Committee implements these criteria, including diversity, by considering the information about the nominee provided by the proponent, the nominee, third parties and other sources. With respect to the nomination of continuing directors for re-election, the individual’s contributions to the Board are also considered. In addition, the Board assesses the diversity of its members and nominees as part of an annual performance evaluation by considering, among other factors, diversity in gender, race and national origin, age, education, professional experience and differences in viewpoints and skills.

The Corporate Governance Committee also considers such other relevant factors as it deems appropriate, including the current composition of the Board, the balance of management and independent directors, the need for specialized expertise and board leadership experience,

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and the evaluations of other prospective nominees. In connection with this evaluation, the Corporate Governance Committee determines whether to interview the prospective nominee, and if warranted, prospective nominees are interviewed by members of the Corporate Governance Committee and other members of the Board. All members of the Board are given the opportunity to interview prospective nominees. After completing this evaluation and interview, the Corporate Governance Committee makes a recommendation to the full Board regarding the persons who should be nominated by the Board, and the Board determines the nominees after considering the recommendation and report of the Corporate Governance Committee.

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Corporate Governance Practices

Our corporate governance practices are currently in line with the Investor Stewardship Group Corporate Governance Principles for U.S. Listed Companies.

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Risk Oversight and Management

The Board is actively engaged in overseeing the Company’s risk management process, which is designed to identify and assess strategic, financial and operational risks with the potential to have sustained impact on the Company. The Board exercises its oversight, both as a whole Board and through its standing committees. The Board, Board committees and management coordinate the risk oversight role in a manner that serves the long-term strategic interests of our Company and stockholders through periodic reporting and open lines of communication. Additionally, the Board reviews the Company’s long-term strategic initiatives and operating risks as a part of its regular discussion of the Company’s strategy and operating results.

The standing committees of the Board perform separate functions to support the overall risk oversight and assessment process of the Company. The Audit Committee focuses on financial and enterprise risk exposures, including internal controls and cybersecurity, and discusses with management, the internal auditors, and the independent registered public accounting firm, the Company’s policies with respect to risk assessment and risk management, including the risk of fraud. The Audit Committee also assists the Board in fulfilling its duties and oversight responsibilities relating to the Company’s compliance and ethics programs, including compliance with legal and regulatory requirements, and the Company’s Code of Ethics. The Corporate Governance Committee oversees the major risks and mitigation activities related to its area of responsibility, i.e., director elections and corporate governance practices, as well as corporate social responsibility including environmental stewardship and social issues. The Compensation Committee oversees executive compensation programs and policies, including the design, performance metrics and ranges in incentive plans and performs an annual risk assessment of existing compensation policies and programs. The Compensation Committee is also responsible for talent development and succession planning.

Company management is charged with adequately identifying material risks that the Company faces in a timely manner; implementing management strategies that are responsive to the Company’s risk profile and specific material risk exposures; evaluating risk and risk management with respect to business decision-making throughout the Company; and efficiently and promptly transmitting relevant risk-related information to the Board or appropriate committee, so as to enable them to conduct appropriate risk management oversight.

The Audit Committee maintains oversight of the Company’s data protection and cybersecurity program through quarterly updates from management about active and emerging threats and efforts to strengthen its defenses against cybersecurity events. The Company’s Executive Vice President, Chief Technology, Digital Commerce and Strategy Officer review with the Audit Committee at least quarterly, and more often if necessary, the Company’s data protection and cybersecurity risks and the new and existing controls that mitigate them.

The Company’s data protection and cybersecurity program reduces risk to the confidentiality of information, integrity of operations and availability of technology systems. This is accomplished by identifying and reducing technology and other risks, maintaining a proactive security posture against threats, detecting cybersecurity events when they occur, responding quickly and effectively to limit the impact of cybersecurity events, and building systems and processes to recover from a cyber event or other data breach. There have been no material information security breaches in the past three years.

An external managed security services provider uses artificial intelligence and data analytics to continuously monitor the Company’s network for cybersecurity events, and the Company maintains a security incident response plan to respond to events quickly and effectively. The plan, which is tested biannually, includes specific response procedures covering pervasive threats such as ransomware. Internal reporting and escalation protocols are in place to ensure executive committee, Audit Committee and full Board oversight, as appropriate.

The Company regularly engages third-party experts to assess the effectiveness of its data protection and cybersecurity program and ensure compliance with federal and state laws and regulations. Annually, the Company is assessed by an independent, third-party for compliance with the PCI-DSS standard, for which the Company most recently received an attestation of compliance in October 2021. Biennially, an external auditor conducts an independent comprehensive cybersecurity program audit. The most recently completed audit in April 2021 assessed the Company’s cybersecurity and privacy programs using the NIST Cybersecurity Framework.

The Company’s security awareness program seeks to create a culture of shared responsibility for the security of sensitive data and its network. This is accomplished through mandatory annual security training for employees with access to Company email as well as tailored

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training for Team Members in more sensitive roles. Periodic testing ensures the training is effective. In addition, all employees have access to a variety of training materials on security topics through the Company’s training management system.

Corporate Responsibility and Stewardship

Environmental, social and governance (“ESG”) issues are important to the Company and are of increasing importance to many investors. As discussed above, our Corporate Governance Committee has primary Board oversight of our ESG matters. Tractor Supply believes that a healthy environment, properly managed resources and vibrant communities are keys to a secure and prosperous future. Since launching our Stewardship Program in 2008, we have been focused on becoming more environmentally sustainable while simultaneously helping our neighbors in need. We view our Stewardship Program as a process of continuous improvement as we look for ways to become more efficient, eliminate waste and reduce our impact on the environment. We know that our customers, Team Members, shareholders and other stakeholders care deeply about what companies do for their communities, for their people and for the planet. At Tractor Supply, we prioritize the relationships we have with our Team Members, our customers and the communities we call home, and our Environmental, Safety and Sustainability Policy memorializes our commitment to Stewardship based on the following tenets:

As a rural lifestyle retailer, climate change impacts our business and our customers. The Company is committed to helping our customers live a more sustainable lifestyle, and we have made substantial investments in sustainable products and sourcing and expanded the number of energy efficient and environmentally friendly products that we carry. We have also expanded our recycling programs and provide our customers with the ability to recycle used oil and vehicle and household batteries. The Company is equally focused on reducing its own impact on the environment by, among other things, sourcing more products locally and regionally, building new energy efficient distribution centers and smaller mixing centers as well as adding energy efficient technologies to existing facilities, and increasing use of rail transportation. The Company participates in the SmartWay program of the United States Environmental Protection Agency (the “EPA”) which is focused on improving fuel efficiency and environmental performance of the supply chain. We are proud to have been recognized as a “SmartWay High Performer” based on the sustainable performance of our shipping and freight operations. In 2021, the Company also announced that it joined the EPA’s Green Power Partnership, a program that helps increase green power usage as a way to reduce air pollution and other environmental impacts of electricity use. While the Company currently uses 61 million kilowatt-hours of green power annually which is enough green power to meet 15% of the Company’s electricity use, we are continuing to source even more renewable energy as part of our Scope 2 strategy. Although the option to buy renewable energy remains limited in many parts of the country where our stores are located, we have secured more than 92 million kilowatt-hours of renewable energy annually in recent electric supply agreements, representing more than 20% of our current annual electricity usage and exceeding our initial goal of 80 million kilowatt-hours by 2022.

In December 2018, we announced a goal to reduce carbon emissions from our facilities by 25% by 2025 from our 2015 baseline as part of the Company’s Stewardship Program. In December 2020, we announced that we had reached this goal five years early. After exceeding our initial carbon reduction goals set in 2018, we adopted new absolute carbon reduction goals in 2021 to further reduce emissions from our operations by 20% by 2025 and by 50% by 2030 from a 2020 baseline. We are also committed to achieving net zero emissions across all operations by 2040. In the next phase of our sustainability journey, we are committed to increasing our level of renewable energy purchased for electric consumption, to continuing investments in energy efficiency and cleaner technologies and to avoiding future emissions through improved design of both stores and distribution centers. We also plan to enhance our Scope 3 focus with greater

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transparency and reduction efforts, including new vendor engagement to drive down value chain emissions. We intend to continue to review evolving practices, reporting and disclosure approaches to these matters. In December 2021, we released our 2020 Task Force on Climate-related Financial Disclosures Report. To view this report and more details about our Stewardship Program, please visit https://corporate.tractorsupply.com/ESG/default.aspx. Information provided on our website is not part of this Proxy Statement and is not intended to be incorporated by reference herein.

With the goal of continuous improvement, our historical commitment to sustainability has expanded over time to focus on broader ESG issues. While combating the continuing health and social crises that began in 2020, the Company increased transparency and disclosure on its commitment to racial equality, community giving and governance practices for long-term stockholder value creation. Our Corporate Governance Committee is empowered to oversee the Company’s stockholder engagement program as it relates to corporate social responsibility matters, including governance, environmental stewardship and social issues, and to consider related feedback and recommendations on these matters that may be provided to us.

Human Capital

We have determined that a primary function of the Board includes oversight of policies and practices related to talent recruitment, retention, engagement and succession as well as diversity, equity and inclusion initiatives (“DE&I”) and have empowered our Compensation Committee to support the Board on such matters, including as to overseeing the Company’s people programs related to its DE&I initiatives and other matters.

With respect to broader human capital management strategies and priorities, we believe that our Team Members are the foundation of our business and that their hard work drives our success. Our Mission and Values are included at the beginning of this Proxy Statement. As a result of our commitment to our Team Members, we were recognized by the Great Place to Work Institute as a “Great Place to Work-Certified” company and were included in Forbes’ 2021 “America’s Best Employers for New Graduates” list for the second year in a row. Our Board, including through its committees, oversees our corporate culture and Team Member-related matters, including our people programs, policies and practices as mentioned above. In addition to our DE&I initiatives, which are discussed under “Diversity, Equity and Inclusion” below, some of our key human capital management-related actions in 2021 included striving to provide a safe and healthy workplace for all Team Members; continuing a range of COVID-19 related actions and benefits and offering new COVID-19-related benefits in light of the developments of vaccines, including a vaccination incentive program, paid time off to receive vaccinations, and onsite vaccination clinics for our Team Members; and completing organizational effectiveness assessments to drive efficiencies and allow for investment in new capabilities.

Management and Team Members

As of December 25, 2021, we employed approximately 22,000 full-time and 24,000 part-time Tractor Supply Team Members. Our store operations are divided between east and west divisions, and each division is overseen by a senior vice president. The divisions are organized into regions, each of which is led by a regional vice president. The region is further organized into districts, each of which is led by a district manager. We have two internal advisory boards, one comprised of store managers and the other comprised of district managers. These groups bring a grassroots perspective to operational initiatives and generate chain-wide endorsement of proposed best-practice solutions.

Eligible Team Members can participate in one of our various bonus incentive programs, which provide the opportunity to receive additional compensation based upon individual, team, and/or Company performance. In addition to bonus incentive programs, we provide our eligible Team Members the opportunity to participate in an employee stock purchase plan and a 401(k) retirement savings plan and health insurance for which we share a significant portion of the cost of premiums. We additionally provide our eligible Team Members with paid time off and a six-week parental leave policy for new parents. Our Team Members also receive a discount on merchandise purchased from the Company.

We continue to make wage investments to offer our Team Members competitive compensation. On an annualized basis in 2021, we invested an additional $40 million in hourly store Team Members as a result of our increases in the minimum wage paid to Team Members.

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We encourage a promote-from-within environment when internal resources permit. We also provide internal leadership development programs designed to prepare our high-potential Team Members for greater responsibility. Our current team of district managers and store managers has an average tenure of approximately nine and six years, respectively. We believe internal promotions, coupled with the hiring of individuals with previous retail experience, provide the management structure necessary to support our long-term strategic growth initiatives.

Store Personnel and Training

We seek to hire store Team Members who live and appreciate the “Out Here” lifestyle, including those with farming and ranching backgrounds, with particular emphasis on general maintenance, equine and welding. We endeavor to staff our stores with courteous, highly motivated Team Members and devote considerable resources to training store Team Members, often in cooperation with our vendors. Our training programs include:

Workplace Health and Safety

The Company strives to provide a safe and healthy workplace for all Team Members and drives a culture of safe practices and continuous improvement. The Company provides role based safety training during the onboarding process and through other specific safety programs. In response to the COVID-19 pandemic, the Company implemented enhanced cleaning standards, adapted to the evolving public health guidance in our workplaces, and provided training and education to our Team Members. The Company implemented a vaccination incentive program, provided paid time off to receive vaccinations, and held onsite vaccination clinics for our Team Members among other COVID-19 mitigation practices. We continually monitor and adapt our safety practices as the COVID-19 pandemic continues.

COVID-19 Response

The Company has been and continues to closely monitor the impact of the COVID-19 pandemic on all facets of our business, including the impact on our Team Members, customers, suppliers, vendors, business partners and supply chain networks. The Company has also been monitoring the deployment of vaccines and recommendations of public health officials in response to developments in the COVID-19 pandemic. The health and safety of our Team Members and customers are the primary concerns of our management team. We have taken and continue to take numerous actions to promote health and safety, including, encouraging vaccination efforts, providing personal protective equipment to our Team Members, following local and federal guidance regarding the use of masks in our facilities, maintaining enhanced services for cleaning and sanitation, continuing to provide additional functionality to support contactless shopping experiences, promoting social distancing and cleaning actions in our stores, and continuing to offer remote work plans at our store support center.

Additionally, we continue to support our Team Members during this pandemic through offering COVID-19 paid medical leave, 100% coverage of COVID-19 testing and treatment under our medical plan.

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Diversity, Equity and Inclusion

The Company is committed to the principles of DE&I. We have built a strong and diverse team by purposefully seeking highly qualified diverse candidates with different backgrounds, perspectives, ideas and skill sets. As we move forward, we are working to implement new DE&I initiatives that will result in an even more diverse team across the entire company.

We are committed to providing a diverse and inclusive culture supported by our Mission and Values where we welcome diverse backgrounds and experiences and respectfully foster different perspectives, ideas and innovative thinking. We are stronger together, and we believe in the authenticity our Team Members bring to work every day. By focusing on our Team Members, we know that our customers, communities and suppliers will be well served. Diversity and inclusion play a key role in moving our business forward. Our workforce is approximately 51% male and 49% female. Minorities comprise approximately 17% of our workforce. Women serve in key leadership roles within the Company, including as Executive Vice President, Chief Human Resources Officer, Senior Vice President, General Counsel and Corporate Secretary, Senior Vice President of Investor Relations and Public Relations, Senior Vice President, Chief Marketing Officer and Senior Vice President of E-Commerce.

In addition, in 2021, we established comprehensive five-year DE&I goals to support and advance underrepresented groups across our workforce, vendors, suppliers and communities that include the following actions:

We have taken several steps over the past twelve months to further enhance our diversity and inclusion strategy, including publishing the foregoing external DE&I goals aligned with our ESG efforts, enhancing our DE&I strategy to include supplier diversity efforts, establishing our DE&I Customer Promise and continuing activation of our numerous Team Member engagement groups supporting the development, community involvement and allyship within our Company. We will continue to build on these initiatives to enhance our culture of respect and teamwork across our organization.

Communications with Members of the Board

Stockholders interested in communicating directly with members of our Board may do so by writing to our Corporate Secretary, c/o Tractor Supply Company, 5401 Virginia Way, Brentwood, Tennessee 37027, or by emailing board@tractorsupply.com. As set forth in our Corporate Governance Guidelines, our Corporate Secretary reviews all such correspondence and regularly forwards correspondence that deals with the functions of the Board or committees thereof or that the Corporate Secretary otherwise determines requires their attention. Directors may at any time review a log of all correspondence received by the Company that is addressed to members of the Board and request copies of any such correspondence. Concerns relating to accounting, internal controls, or auditing matters are immediately brought to the attention of our internal audit department and handled in accordance with procedures established by the Audit Committee with respect to such matters.

Board Member Attendance at Annual Meeting

We strongly encourage each member of the Board to attend our Annual Meeting of Stockholders. All of our then current directors attended the 2021 Annual Meeting.

Director Stock Ownership Guidelines

Each non-employee member of the Board is expected to acquire, within five years of joining the Board, and continue to hold, shares of the Company’s Common Stock having an aggregate market value which equals or exceeds a factor of 5x the director’s annual cash retainer. Once the target beneficial ownership level is achieved by a director, that director will not be required to acquire any additional shares in the event the stock price decreases, provided the underlying number of shares remain held by the director.

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The Compensation Committee evaluates compliance with this policy annually. The Compensation Committee and the Board, in their sole discretion, may waive or extend the time for compliance with this policy. Factors which may be considered include, but are not limited to, non-compliance due to limitations on ability to purchase resulting from blackout periods and the personal financial resources of the director. There is a five-year transition period to allow individuals to become compliant with the policy. All of the Company’s directors currently meet this standard or are within the period for initial compliance.

Director Retirement Policy

The Corporate Governance Committee reviews each director’s continuation on the Board as his or her term approaches expiration in making its recommendation to the Board concerning his or her nomination for re-election as a director. Pursuant to the Company’s director retirement policy, a director may not stand for re-election after his or her 75th birthday.

Compensation Committee Interlocks and Insider Participation

Ms. Morris, Mr. Kingsbury, Mr. Krishnan and Mr. Weikel served on the Compensation Committee of the Board during 2021. There are no, and during 2021 there were no, interlocking relationships between any officers of the Company and any entity whose directors or officers serve on the Compensation Committee, nor did any of our current or past officers or employees serve on the Compensation Committee during 2021.

Political Contributions and Trade Associations

The Board has adopted a policy prohibiting the use of corporate resources to make direct or indirect contributions to political candidates, political parties or political committees.

The Company, like many businesses, belongs to industry or trade associations that may engage in lobbying activities to support initiatives relevant to our business and the retail industry. The aggregate amount of membership dues paid to industry or trade associations in 2021 was approximately $1.5 million, of which approximately 44% was used for non-deductible lobbying and political expenditures based on information obtained from these organizations. The total payments to these organizations represented less than 1% of the Company’s fiscal 2021 net sales.

A report on the Company’s memberships in, and contributions to, industry and trade associations is prepared and presented to the Company’s Corporate Governance Committee. The report is updated semi-annually and is available on the Company’s website.

Proxy Access

The Company’s Bylaws include proxy access provisions. These provisions permit a stockholder, or a group of up to twenty stockholders, owning continuously for at least three years at least three percent of the Company’s outstanding Common Stock, to nominate and include in the Company’s proxy materials, director nominees constituting the greater of two individuals or 20% of the Board, provided that the stockholder(s) and nominee(s) meet the requirements specified in our Bylaws.

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Item 2 – Ratification of Re-Appointment of

Independent Registered Public Accounting Firm

General Information

The Audit Committee has re-appointed Ernst & Young LLP as the Company’s independent registered public accounting firm to audit the financial statements of the Company for fiscal 2022 and audit internal controls at December 31, 2022. Ernst & Young LLP has served as the Company’s independent registered public accounting firm since 2001 and served as such for fiscal 2021. At the Meeting, the stockholders are being asked to ratify the re-appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for fiscal 2022.

Stockholder ratification of the Audit Committee’s appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm is not required by the Bylaws or otherwise; however, the Board is submitting the re-appointment of Ernst & Young LLP to the stockholders for ratification. If the stockholders fail to ratify the Audit Committee’s re-appointment, the Audit Committee will reconsider whether to retain Ernst & Young LLP as the Company’s independent registered public accounting firm. In addition, even if the stockholders ratify the appointment of Ernst & Young LLP, the Audit Committee may, in its discretion, appoint a different independent registered public accounting firm at any time during the year if the Audit Committee determines that a change is in the best interests of the Company.

Representatives of Ernst & Young LLP are expected to attend the Meeting, will have the opportunity to make a statement if they so desire, and will be available to respond to appropriate questions from stockholders.

Fees Paid to Independent Registered Public Accounting Firm

Fees billed by the Company’s independent registered public accounting firm for the last two fiscal years were as follows:

All services were pre-approved by the Audit Committee, which concluded that the provision of such services by Ernst & Young LLP was compatible with the maintenance of that firm’s independence in the conduct of its auditing functions.

Pre-Approval Policies and Procedures

The Audit Committee has adopted policies and procedures relating to the approval of all audit and non-audit services that are to be performed by the Company’s independent registered public accounting firm. These policies provide that we will not engage the Company’s independent registered public accounting firm to render any services unless the service is specifically approved in advance by the Audit Committee.

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From time to time, the Audit Committee may pre-approve specific types of services that are expected to be provided by the Company’s independent registered public accounting firm during the next twelve months. Any such pre-approval is detailed as to the particular services to be provided and is also generally subject to a maximum dollar amount.

The Audit Committee’s practice is to consider for approval, at its regularly scheduled quarterly meetings, all audit and non-audit services proposed to be provided by the Company’s independent registered public accounting firm. In certain limited situations, the chairperson of the Audit Committee has been delegated authority to consider and, if appropriate, approve audit and non-audit services or, if in the chairperson’s judgment it is considered appropriate, to call a special meeting of the Audit Committee for that purpose.

Vote Required

The ratification of the re-appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm will be approved if it receives the affirmative vote of a majority of the shares present, either in attendance or by proxy, at the Meeting and entitled to vote. If you abstain from voting on this proposal, your abstention will have the same effect as a vote against the proposal. Brokers and nominees may exercise their voting discretion without receiving instructions from the beneficial owner of shares on this proposal.

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Report of the Audit Committee

The Company’s Audit Committee consists of four directors. The Board has adopted a charter that governs the Audit Committee. The Audit Committee charter can be found in the Investor Relations section of the Company’s website at TractorSupply.com. The members of the Audit Committee are Ricardo Cardenas (Chairperson), Joy Brown, Denise L. Jackson and Mark J. Weikel, and each is “independent” as defined by the listing standards of Nasdaq and applicable SEC regulations. In addition, the Board has determined that Mr. Cardenas and Mr. Weikel are qualified as audit committee financial experts within the meaning of SEC regulations and the listing standards of Nasdaq.

Company management is primarily responsible for the Company’s financial statements and financial reporting process, including assessing the effectiveness of the Company’s internal control over financial reporting. Ernst & Young LLP, the Company’s independent registered public accounting firm for fiscal 2021, is responsible for planning and carrying out annual audits and quarterly reviews of the Company’s financial statements in accordance with standards established by the Public Company Accounting Oversight Board (United States), expressing an opinion on the conformity of the Company’s audited financial statements with United States generally accepted accounting principles, and auditing and reporting on the effectiveness of the Company’s internal control over financial reporting. The Audit Committee monitors and oversees these processes and is responsible for the appointment, compensation and oversight of the Company’s independent registered public accounting firm. The Company also has an internal audit department that is actively involved in examining and evaluating internal controls and the effectiveness of the Company’s budgeting, financial, operational and information systems activities and reports functionally to the Chair of the Audit Committee and administratively to the Chief Financial Officer.

To fulfill our responsibilities, we did the following:

The Audit Committee meets with the Company’s independent registered public accounting firm, with and without management present, to discuss the results of the audit of the financial statements, the audit of the effectiveness of the Company’s internal control over financial reporting, management’s progress in assessing the effectiveness of the Company’s internal control over financial reporting as required by Section 404 of the Sarbanes-Oxley Act of 2002, and the overall quality of the Company’s financial reporting.

Based on the discussions we had with management and the independent registered public accounting firm, the independent registered public accounting firm’s disclosures and letter to us, the representations of management to us, the report of the independent registered public accounting firm, and our review of the Company’s audited consolidated financial statements for fiscal 2021, we recommended to the Board that such audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 25, 2021 for filing with the SEC.

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The Audit Committee submits this report:

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Item 3 – Non-Binding, Advisory Vote on Approval of Executive Compensation

Background of the Proposal

As required by Section 14A of the Exchange Act, the Company is holding a separate non-binding, advisory stockholder vote to approve the compensation of executive officers as described in the “Compensation Discussion and Analysis,” the executive compensation tables and any related information in the Company’s Proxy Statement (commonly known as a “Say on Pay” proposal).

Executive Compensation

As discussed in the “Compensation Discussion and Analysis” section of this Proxy Statement, the Board believes that our current executive compensation programs directly link executive compensation to our financial performance and align the interests of our executive officers with those of our stockholders. Our Board also believes that our executive compensation programs provide our executive officers with a balanced compensation package that includes a reasonable base salary along with annual and long-term incentive compensation programs that are based on the Company’s financial performance and the performance of the Company’s stock price. These incentive programs are designed to reward our executive officers on both an annual and long-term basis if they attain specified target goals, without unreasonable risk taking.

The “Compensation Discussion and Analysis” section includes additional details about our executive compensation programs. In light of this discussion, the Company believes that its compensation of the Named Executive Officers for fiscal 2021 was appropriate and reasonable, and that its compensation programs and practices are sound and in the best interests of the Company and its stockholders. The Say on Pay proposal is set forth in the following resolution:

RESOLVED, that the stockholders of Tractor Supply Company approve, on an advisory basis, the compensation of its Named Executive Officers, as disclosed in the Company’s Proxy Statement for the 2022 Annual Meeting of Stockholders, pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, the compensation tables, and any related information found in the Proxy Statement of Tractor Supply Company.

Because your vote on this proposal is advisory, it will not be binding on the Board or the Company. However, the Compensation Committee and the Board will take into account the outcome of the vote when considering future executive compensation arrangements.

Vote Required

Approval of the advisory vote on executive compensation requires the affirmative vote of a majority of the shares present, either in attendance or by proxy, at the Meeting and entitled to vote. If you abstain from voting on this proposal, your abstention will have the same effect as a vote against the proposal. Broker non-votes are not considered “present and entitled to vote,” and as such, broker non-votes will not affect the outcome this proposal.

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Executive Compensation

Compensation Committee Report

The Compensation Committee seeks to establish a compensation program that supports our business strategy, and that aligns with and promotes the growth of long-term stockholder value by attracting, retaining and motivating executive leadership. We strongly believe in linking pay to performance. All components of the compensation program other than base salary are at-risk and based upon the achievement of performance goals or the performance of our stock. In recent years, we believe we have enhanced the linkage between pay and performance through the introduction of performance-based restricted share units (“PSUs”) as an important component of our long-term incentive program. Additionally, in order to further enhance the linkage between pay and performance, in 2021 we included additional performance metrics in the annual cash incentive plan related to the achievement of strategic initiatives and we added a relative total stockholder return modifier to the PSUs.

Our Compensation Committee conducts a rigorous ongoing review of the executive compensation program. We generally seek to position the total target compensation of our executives within a competitive range of the market 50^th percentile. The Compensation Committee engages an independent third-party compensation consultant to review and update our peer group and other market data to ensure it consists of comparable organizations, to compare each of the executive positions to relevant positions in the peer group and to gather and analyze compensation data from the peer group to provide an analysis of pay trends for the Company’s executive officers.

Our committee deliberations over the years have been thorough, robust and at times intense, as we consider the business we are building for tomorrow, making changes only when we believe it is clear how it will better align with our long-term strategy and meet the objectives outlined above. Our metrics are relatively simple and are embedded and understood in our culture. Most importantly, we believe our compensation program is effective in incenting, retaining and rewarding the people whose job it is to continuously and sustainably create stockholder value.

The following “Compensation Discussion and Analysis” (the “CD&A”) should be read in conjunction with the Summary Compensation Table, related tables and narrative disclosures. We have reviewed and discussed the CD&A contained in this Proxy Statement with management and have recommended to the Board that the CD&A be included in the Proxy Statement and incorporated by reference into the Company’s Annual Report on Form 10-K.

By the Compensation Committee of the Board of Directors:

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Compensation Discussion and Analysis

This CD&A describes our executive compensation programs for our fiscal year 2021 Named Executive Officers, who were:

Strategy Overview

We believe we can grow our business by being an integral part of our customers’ lives as the dependable supplier of “Out Here” lifestyle solutions, creating customer loyalty through personalized experiences and our Neighbor’s Club loyalty program and providing convenience that our customers expect at anytime, anywhere, and in any way they choose. Our Team Members are empowered to do the right thing for each other, our customers and communities that we serve. We also believe our deep-rooted culture is not just unique; it is the bedrock of our success. Our ability to successfully grow from 300 stores to over 2,100 stores in just 20 years is a testament to the durability and resiliency of our business model. More than anything, it’s about succeeding by doing things and treating people the right way—including the neighbors we serve, the communities where we live and work and, of course, our invaluable Team Members.

Our long-term growth strategy is to: (1) expand and deepen our customer base by providing personal, localized and memorable customer engagements by leveraging content, social media and digital shopping experiences, attracting new customers and driving loyalty, (2) evolve customer experiences by digitizing our business processes and furthering our omni-channel capabilities, (3) offer relevant assortments and services across all channels through exclusive and national brands and continue to introduce new products and services through our test and learn strategy, (4) drive operational excellence and productivity through continuous improvement, increasing space utilization, and implementing advanced supply chain capabilities to support growth, scale and agility, and (5) expand through selective acquisitions, as such opportunities arise, to add complementary businesses and to enhance penetration into new and existing markets to supplement organic growth.

Achieving this strategy will require a foundational focus on: (1) connecting, empowering and growing our team to enhance their lives and the communities they live in, enabling them to provide legendary service to our customers, and (2) allocating resources in a disciplined and efficient manner to drive profitable growth and build stockholder value, including leveraging technology and automation, to align our cost structure to support new business capabilities for margin improvement and cost reductions.

The Company has developed compensation programs designed to encourage our executives to execute our growth strategy in line with our Mission and Values and without taking unreasonable risks. We believe these programs support and enable the achievement of the goals in the plan by holding our leaders accountable for building and maintaining a strong, performance-based culture.

Our Executive Compensation Philosophy and Framework

Our executive compensation programs are designed to support our business strategy and attract, retain and motivate the performance and continuity of the leadership team, with the ultimate goal of generating strong operating results and delivering solid, sustainable returns to our stockholders. On behalf of the Board, the Compensation Committee reviews our compensation philosophy and objectives on a regular basis to ensure that they are aligned with the Company’s strategic, organizational and cultural goals, and that the Company maintains a competitive position within the marketplace. At present, our compensation decisions are guided by the following principles and philosophies:

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We currently maintain the following pay practices that we believe enhance our pay-for-performance philosophy and further align our executives’ interests with those of our stockholders:

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Financial Performance

We delivered exceptional financial results again in fiscal 2021, as evidenced by the following highlights:

Total Compensation Program Elements and Targets

Our financial results and stock performance are reflected in the compensation earned by our executive officers in fiscal 2021, which is indicative of the linkage between the Company’s business strategy and pay philosophy – to be a best-in-class performer driven by best-in-class talent that has a vested interest in our collective, sustainable success. To accomplish our compensation objectives, we use a mix of base salary, short-term incentives and long-term incentives that reward outstanding Company and individual performance and the creation of stockholder value.

The following chart highlights the target pay mix for our Chief Executive Officer and the other Named Executive Officers as a group during fiscal 2021:

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Form of  Compensation		CEO		Other NEOs (Aggregate)		Description
Base Salary						Fixed cash compensation that serves as the platform for our pay-for-performance programs. Base salary amounts are reviewed annually and adjusted when appropriate, including to reflect material changes to an executive’s role and to maintain market competitiveness.
Annual Cash  Incentive						Our annual Cash Incentive Plan (“CIP”) is designed to motivate and reward our executives for successfully executing our short-term business plans and thereby achieving superior financial results.   CIP compensation consists of a cash bonus tied to the Company’s achievement of target net income and the achievement of certain strategic initiatives.
Long-Term  Incentives						Our long-term incentive (“LTI”) compensation program makes up the majority of our target pay mix and is designed to motivate and reward executives for successfully executing our long-term business plan and to further align executive and stockholder interests.   Grants are awarded in the form of stock options, RSUs and PSUs. Stock options and RSUs are subject to minimum vesting periods and the vesting of PSUs is subject to the achievement of targets for growth in net sales and earnings per diluted share, subject to adjustment based on relative total stockholder return. The value of all three forms of LTI compensation is based on the market value of our stock and, therefore, links our executive pay to our stock price performance.

We believe the relatively large proportion of long-term incentive compensation opportunities in our target pay mix serves to align our compensation program with our focus on long-term stockholder value creation.

Base Salary

Our base salaries are structured to provide a base-line level of fixed compensation necessary to recruit and retain top talent. Base salaries for fiscal 2021 for our Named Executive Officers were set by our Compensation Committee after reviewing and considering (i) the

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experience, skills and performance levels of individual executives, (ii) whether there were any material changes to the individual’s role and responsibilities during the year, (iii) each executive’s relative pay level against the market, (iv) internal equity among the team and with the entire Company (in terms of salary increase budgets for the Company), and (v) the Chief Executive Officer’s recommendations (for positions other than his or her own).

Annual Cash Incentive Compensation

In February 2021, the Compensation Committee approved the Company’s 2021 CIP, under which all executive officers were eligible to receive a cash bonus calculated as a specified percentage of the officer’s annual base salary dependent upon the Company’s net income for the year in comparison to a net income target set by the Board (75% weighting) and the achievement of certain strategic initiatives which are identified below (25% weighting), with an award based on the achievement of the strategic initiatives being conditioned upon attainment of the net income threshold.

Financial Performance Metric. The possible amounts payable as a percentage of base salary for the Named Executive Officers based on the attainment of target net income were as indicated in the following table. For attainment of a net income amount within the range of each percentage referenced below, the Company interpolates the actual bonus amount payable.

Strategic Performance Metric. The Company introduced strategic initiatives to the CIP in fiscal 2021 in order to further enhance the linkage between pay and performance. The five strategic initiatives, which are focused on driving overall business growth, include Digital Initiatives, FAST Teams, Fusion, Neighbor’s Club 2.0, and Side Lot Optimization. The strategic initiatives arise from initiatives that the Company has prioritized to advance its long-term strategy and achieve business objectives in its long-range plan, but that may not be adequately rewarded by the portion of the cash bonus calculated on current financial performance. Each strategic initiative is informed through a combination of bottom-up analysis of past performance (when available), top-down assessments of the annual progress required to meet the long-range plan objectives for such initiative and competitive research to benchmark the achievability of the initiative. All five initiatives were evenly weighted, with each representing 5% of the total weighting of 25% of the specified target percentage of the Named Executive Officer’s annual base salary. For attainment of an amount for each strategic initiative within the range of each level referenced below, the Company interpolates the actual bonus amount payable.

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2021 CIP Results

Under the terms of the CIP, target net income is defined as budgeted net income, which is intended to be a challenging but attainable target. In determining budgeted net income for fiscal 2021, the Board considered a number of factors, including general economic conditions, performance trends in our business, growth rates of comparable retailers and investor expectations.

The Company’s net income target for fiscal 2021 under the CIP was $796.3 million, which represented a 6.3% increase over fiscal 2020 net income.

For fiscal 2021, our sales performance continued to benefit from the shift of consumer behavior trends due to the COVID-19 pandemic as customers focused on the care of their homes, land and animals, targeted investments in marketing to increase our unaided brand awareness, and other key initiatives to enhance customers’ shopping experience, including the relaunch of the Neighbor’s Club loyalty program. These factors led to growth in new customer acquisition and increased spend from existing customers, which further resulted in an increase in comparable store sales across all major product categories, driven by robust growth for everyday merchandise, including C.U.E. products, and solid demand for seasonal categories. In addition, the Company’s e-commerce sales experienced double-digit percentage growth in fiscal 2021 as compared to fiscal 2020. During fiscal 2021, the Company also experienced increased costs primarily as a result of product cost inflation, rising transportation costs and higher operating costs. These cost increases were driven by contributing factors such as commodity price inflation, labor pressures, rising fuel prices, and global supply chain disruptions in both domestic freight and import freight.

Net sales increased 19.9% to $12.73 billion in fiscal 2021 from $10.62 billion in fiscal 2020. Comparable store sales increased 16.9% in fiscal 2021 versus a 23.1% increase in fiscal 2020. Gross profit increased 19.0% to $4.48 billion in fiscal 2021 from $3.76 billion in fiscal 2020. Operating income increased 31.1% to $1.31 million in fiscal 2021 from $996.9 million in fiscal 2020. For fiscal 2021, net income was $997.1 million, or $8.61 per diluted share, compared to $749.0 million, or $6.38 per diluted share, in fiscal 2020.

Based on the $997.1 million in net income earned by the Company in fiscal 2021, the actual net income was greater than 110% of the target net income amount of $796.3 million. Under the terms of the CIP, the Compensation Committee may exclude any extraordinary or unusual items when determining whether the net income target is met. However, the Compensation Committee did not make any such adjustments in determining the percentage of the net income target achieved in fiscal 2021.

The following table reflects the performance ranges for the strategic initiatives under the CIP for fiscal 2021 as well as the actual achievement by the Named Executive Officers in relation to the targets for such strategic initiatives.

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As shown above, the Named Executive Officers achieved maximum performance with respect to Digital Initiatives, FAST Teams and Neighbor’s Club 2.0 but did not achieve minimum performance with respect to Fusion and Side Lot Optimization.

With the performance metrics weighted at 75% for the performance metric based on net income and 25% for the strategic initiatives, the Compensation Committee determined that 180% of the target payout amount for each of the Named Executive Officers was achieved in fiscal 2021, resulting in payouts of the following percentages of base salary of the Chief Executive Officer and each of the other Named Executive Officers:

The Compensation Committee has the discretion to withhold all or a portion of the bonuses based upon subjective factors such as individual executive performance, unusual and non-recurring factors and strategic long-term decisions affecting Company performance during the year. The Compensation Committee did not make any such adjustments to the bonuses for fiscal 2021.

The range of possible fiscal year 2021 bonus payments for each Named Executive Officer is shown in the 2021 Grants of Plan-Based Awards Table in the columns titled “Threshold,��� “Target” and “Maximum” under the heading titled “Estimated Possible Payouts Under Non-Equity Incentive Plan Awards” and the actual amount of bonus payments for each Named Executive Officer is shown in the Summary Compensation Table in the column titled “Non-Equity Incentive Plan Compensation.”

Long-Term Incentive Compensation

LTI awards are issued under the 2018 Omnibus Incentive Plan (the “2018 Plan”), which was approved by the Company’s stockholders on May 10, 2018 and replaced the 2009 Stock Incentive Plan. The awards granted under our LTI program serve to balance our short-term incentives by encouraging executives to work toward the creation of stockholder value over the longer term. The program is designed to directly align executive and stockholder interests, promote executive stock ownership, and attract and retain top performers. The 2018 Plan requires that all awards granted under the plan have a minimum vesting period of at least one year from the grant date, except in limited circumstances. In addition, our executives are required to comply with the Company’s stock ownership requirements. See “Stock Ownership Guidelines.”

Fiscal 2021

The long-term incentive compensation opportunity (“Target LTI Opportunity”) for fiscal 2021 was composed of the following three components: (a) stock options constituting approximately 30% of the Target LTI Opportunity (which vest ratably each year over a three-year period beginning on the grant date), (b) RSUs constituting approximately 35% of the Target LTI Opportunity (which vest ratably each year over a three-year period beginning on the grant date), and (c) PSUs constituting approximately 35% of the Target LTI Opportunity (which, if performance targets are met, vest on the third anniversary of the grant date). The balanced structure of the Target LTI Opportunity is focused on retaining our senior executives and motivating them to create sustainable stockholder value by driving both superior financial results and stock price performance.

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The value of the 2021 Target LTI Opportunity provided to each executive (including the Named Executive Officers) was consistent with the prior year. In the future, the Compensation Committee will continue to review the appropriate percentage level of the components of the Target LTI Opportunity as part of the total equity value granted to senior executives.

Timing of Long-Term Incentive Grants

As in prior years, the Compensation Committee granted equity awards in February 2021 after we announced our financial results for fiscal 2020 and the Compensation Committee had the opportunity to consider our expectations and projections for fiscal 2021. The Compensation Committee’s fiscal 2021 regular meeting schedule was determined in the prior fiscal year and the proximity of any awards to other significant corporate events is coincidental. If executive officers are hired or promoted during the year, they generally receive a grant at the first scheduled Compensation Committee meeting following their hire date or promotion date for an aggregate number of stock options, RSUs and PSUs based on position.

Total Equity Grants in Fiscal 2021

Total fiscal year 2021 equity grants (stock options, RSUs and PSUs) to all employees were less than 1% of common shares outstanding, which is in line with historical peer group grant rates.

Stock Options

Philosophy

Our Target LTI Opportunity in fiscal 2021 included stock options, which were awarded under the 2018 Plan. Because options only have value to the executive if the price of the Company’s Common Stock increases after the grant date, we believe these awards closely align executives’ interests with those of other stockholders by encouraging growth in financial results and other key performance metrics that can positively impact the Company’s stock trading price.

All of the stock options granted in fiscal 2021 have minimum vesting periods. The options granted vest ratably each year over a three-year period that begins on the grant date.

Our executive officers are required to hold 50% of net after-tax shares acquired upon exercise of stock options until stock ownership requirements are met. See “Stock Ownership Guidelines” below.

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How Fiscal 2021 Option Grant Levels Were Determined

Approximately 30% of the Target LTI Opportunity for fiscal 2021 was composed of stock option grants. The Black-Scholes method was used to determine the value of the stock option portion of the Target LTI Opportunity. In February 2021, the Compensation Committee granted to each Named Executive Officer the number of options set forth in the 2021 Grants of Plan-Based Awards table under the heading “All Other Option Awards: Number of Securities Underlying Options” below.

Restricted Stock Units (RSUs)

Philosophy

Our Target LTI Opportunity in fiscal 2021 included RSUs, which were awarded under the 2018 Plan. We believe RSUs align stockholder and executive interest and serve as an effective retention tool. Like stock options, grants of RSUs are designed to reward our executive officers for creating long-term stockholder value. Unlike stock options, however, RSUs represent the full value of a share of the Company’s Common Stock and have value whether or not the price of the Company’s stock goes up. However, the value of RSUs can either increase or decrease based on the trading price of the Company’s stock.

All RSUs granted to the Named Executive Officers in fiscal 2021 vest ratably, subject to continued employment, each year over a three-year period that begins on the grant date.

Our executive officers are required to hold 50% of net after-tax shares acquired on vesting of RSUs until stock ownership requirements are met. See “Stock Ownership Guidelines” below.

How Fiscal 2021 Restricted Stock Unit Grant Levels Were Determined

Approximately 35% of the Target LTI Opportunity for fiscal 2021 was composed of RSU grants. The market value of our Common Stock was used to determine the RSU portion of the Target LTI Opportunity. In February 2021, the Compensation Committee granted to each Named Executive Officer the number of RSUs set forth in the 2021 Grants of Plan-Based Awards table under the heading “All Other Stock Awards: Number of Shares of Stock or Units” below.

Performance-Based Restricted Share Units (PSUs)

Philosophy

Our Target LTI Opportunity in fiscal 2021 included PSUs for senior executives, which were awarded under the 2018 Plan. The number of PSUs that vest, if any, is based upon the achievement of the targeted performance metrics. The performance metrics for the PSUs are growth in net sales and growth in earnings per diluted share, with each of the metrics weighted 50%. Like stock options, grants of PSUs are designed to reward our executive officers for creating long-term stockholder value. Unlike stock options, however, if the performance thresholds are not met, the PSUs do not vest and the executive does not receive compensation. If the performance thresholds and the service conditions are met, PSUs vest and a vested PSU represents the full value of a share of the Company’s Common Stock. The value of PSUs can either increase or decrease based on the trading price of the Company’s stock.

The achievement of the performance metrics for PSUs granted in fiscal 2021 is dependent upon the Company’s net sales and earnings per diluted share for the three-year performance period ending at the end of fiscal 2023 as compared to the target level of achievement set by the Board. The target level of achievement for PSUs is set by the Board in consideration of a number of factors, including general economic conditions, performance trends in our business, growth rates of comparable retailers and investor expectations. The earnings per diluted share target also includes an assumption of share repurchase activity over the performance period. In 2021, performance metrics for the annual PSU grants also include a relative total stockholder return (“TSR”) modifier. The TSR modifier was included in order to continue to enhance the linkage between pay and performance. Both the performance metrics and the TSR modifier of the PSUs granted in 2021 use a three-year performance period.

For grants in 2021, this TSR modifier may result in the number of shares earned from PSU awards being reduced or increased if TSR over the three-year performance period relative to the S&P 500 on the first day of the performance period (“comparator group”) falls outside of a defined range. Specifically, after the performance results are certified, the award will be modified up or down as follows, if applicable:

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The potential range of PSU achievement for PSUs granted during 2021 without applying any TSR modifier is indicated in the following table. For attainment of an achievement amount within the range of each percentage referenced below, the Company will interpolate the actual achievement obtained.

The potential range of PSU achievement for awards granted during 2020, with a 2022 achievement date, is also indicated in the table below. For attainment of an achievement amount within the range of each percentage referenced below, the Company will interpolate the actual achievement obtained. PSUs granted during 2020 are not subject to a TSR modifier.

The value of the PSU grants reflects the grant date fair value of the awards assuming target level achievement. The actual achievement may be higher or lower than the target and the actual number of shares awarded may be more or less. The actual number of shares awarded with respect to the 2021 grants may also be more or less as a result of the TSR modifier. Once the performance period ends, the Compensation Committee will consider all relevant factors, including the impact of share repurchases, in order to determine whether the targets were met and, if so, the corresponding level of achievement. If the performance targets are met, all PSUs granted to the Named Executive Officers in fiscal 2021 and 2020 vest 100% on the third anniversary of the grant date, subject to continued employment.

Our executive officers are required to hold 50% of net after-tax shares acquired on vesting of PSUs until stock ownership requirements are met. See “Stock Ownership Guidelines” below.

How Fiscal 2021 PSU Grant Levels Were Determined

Approximately 35% of the Target LTI Opportunity for fiscal 2021 was composed of PSU grants. The market value of our Common Stock was used to determine the PSU portion of the Target LTI Opportunity. The range of possible vesting of 2021 PSU grants for each Named Executive Officer is set forth under the headings “Threshold”, “Target” and “Maximum” in the 2021 Grants of Plan-Based Awards table under the heading “Estimated Possible Payouts Under Equity Incentive Plan Awards” below.

Achievement for 2019-2021 PSU Grants and Mr. Lawton’s 2020 PSU Grant

Each of our Named Executive Officers, other than Mr. Lawton who became an executive officer in 2020, was an executive officer of the Company when PSUs were granted in 2019 under the 2018 Plan. The performance metrics for the PSUs granted in fiscal 2019 were growth in net sales and growth in earnings per diluted share over a three-year performance period ending December 25, 2021 as compared to the target level of achievement set by the Board, with each of the metrics weighted at 50%. The earnings per diluted share target also included

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an assumption of share repurchase activity over the performance period. The potential range of achievement and actual achievement for the PSUs granted in 2019 are indicated in the following table:

Based on the maximum level of achievement for each performance metric as set forth above, the Compensation Committee approved the vesting and payment of the PSUs granted in 2019 at 200% of target, resulting in each of the Named Executive Officers, other than Mr. Lawton, receiving the following number of shares underlying these PSUs:

Additionally, Mr. Lawton was granted PSUs valued at approximately $2,500,000 in February 2020 at the first Compensation Committee meeting after his hire date, which vested on the second anniversary of the grant date based on achievement of the same performance metrics and targets underlying the PSUs granted in 2019. Similar to the 2019 PSUs, each of the performance metrics was weighted at 50% in determining achievement. Based on the maximum level of achievement of each performance metric underlying Mr. Lawton’s PSUs, the Compensation Committee approved the vesting and payment of such PSUs at 200% of target, resulting in the receipt by Mr. Lawton of 56,942 shares underlying these PSUs.

2022 Changes to Long-Term Incentive Compensation

Protective Agreements for PSU Grants in 2022

In connection with the grant to the Named Executive Officers of PSUs on February 9, 2022 covering a three-year performance period ending in fiscal 2024, each of the Named Executive Officers entered into a protective agreement with the Company, which provides that, during the course of such Named Executive Officer’s employment and for 24 months for the CEO or for 18 months for each of the other Named Executive Officers following termination of his employment for any reason, the Named Executive Officer will not perform the same or similar responsibilities that he performed for the Company for any competitor of the Company in connection with a competing product or service, will not solicit or employ current or former employees of the Company and will not directly or indirectly interfere with the Company’s relationships with its vendors or suppliers. The protective agreement further provides that the Named Executive Officer shall not disclose or use confidential or proprietary information or trade secrets of the Company so long as such information remains confidential and shall not disparage the Company or its affiliates at any time. In the event of a breach of the protective agreement by the Named Executive Officer, the PSUs granted in connection with the Named Executive Officer’s entry into the protective agreement will be automatically forfeited.

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2022 Long-Term Incentive Opportunity

On February 9, 2022, the Compensation Committee reviewed the LTI compensation program for the Named Executive Officers to determine whether any changes were necessary, including with respect to the award mix and values, for fiscal 2022. Following this review, the Compensation Committee approved the Target LTI Opportunity for the Named Executive Officers for fiscal 2022 to include: (a) stock options constituting approximately 25% of the Target LTI Opportunity (which vest ratably each year over a three-year period beginning on the grant date), (b) RSUs constituting approximately 25% of the Target LTI Opportunity (which vest ratably each year over a three-year period beginning on the grant date) and (c) PSUs constituting approximately 50% of the Target LTI Opportunity (which, if performance targets are met, cliff vest on the third anniversary of the grant date).

How the Company Makes Compensation Decisions

Stockholder Engagement and Advisory Vote on Executive Compensation

At our 2021 Annual Meeting of Stockholders, 85.9% of the shares represented at the meeting voted to approve, on an advisory basis, the compensation of our Named Executive Officers as described in our 2021 proxy statement. The Compensation Committee considered the results of the vote and concluded that the stockholders support the Company’s executive compensation policies and programs, which the Compensation Committee believes continue to provide a competitive pay-for-performance package that effectively incents our Named Executive Officers, encourages long-term retention and aligns the interests of our executives with our stockholders. The Company’s financial performance in fiscal year 2021 reinforces the Compensation Committee’s view that our executive compensation program is achieving its objectives. The Compensation Committee welcomes, and will continue to consider, stockholder views about our core compensation principles when determining executive compensation policies and programs.

Roles of the Compensation Committee, Executive Officers and Independent Consultant

The Compensation Committee works closely with key members of management and its independent compensation consultant to set the compensation for the Company’s executives. The roles played by each of these groups are as follows:

Compensation Committee – The Compensation Committee, in order to assist the Board in the discharge of its fiduciary responsibilities relating to the fair and competitive compensation of the executives of the Company:

Chief Executive Officer – The Chief Executive Officer regularly attends Compensation Committee meetings except as otherwise directed by the Compensation Committee. The Chief Executive Officer provides the Compensation Committee with his or her assessment of the performance of the executive management members. The Compensation Committee, with the Chief Executive Officer present, discusses this input, along with the market data provided by the Compensation Committee’s independent consultant. The Compensation Committee then approves or modifies the recommendations of the Chief Executive Officer with respect to compensation for the other executive management members. The Chief Executive Officer does not participate in the decision-making regarding his or her own compensation and is not present when his or her compensation is discussed.

Other Management – The Company’s Human Resources leader assists the Chief Executive Officer and acts as a liaison to the Compensation Committee and its independent consultant. The Company’s Chief Financial Officer and General Counsel also attend meetings, as requested. No other members of management are regularly involved in the executive compensation process or in executive compensation decisions.

Independent Consultant – Pearl Meyer was engaged by the Compensation Committee for an eleventh year to provide consulting services relating to executive compensation. Pearl Meyer reports directly to the Compensation Committee and provides no other services to the

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Company. An annual assessment of Pearl Meyer’s services is conducted and shared with them. In connection with its engagement of Pearl Meyer and in furtherance of maintaining the independence of the Compensation Committee’s compensation consultant, the Compensation Committee conducted an independence assessment and determined that Pearl Meyer is independent. In making such determination, the Compensation Committee considered several factors including, but not limited to, the amount of fees received by Pearl Meyer from the Company as a percentage of Pearl Meyer’s total revenue, Pearl Meyer’s policies and procedures designed to prevent conflicts of interest, and the existence of any business or personal relationship that could impact Pearl Meyer’s independence. The Compensation Committee is not aware of any, and has not had to address, any potential conflicts of interest that Pearl Meyer may have with Board members or Company management.

Each year, the Compensation Committee requests that its consultant provide an updated competitive market study. The market study focuses on a peer group that is reviewed and approved by the Compensation Committee and that is designed to (i) position Tractor Supply close to the median on key criteria such as revenue, growth, market value, enterprise value, price-to-earnings ratio and total stockholder return, (ii) reduce the overall size dispersion (high to low) within the group and (iii) focus on companies operating in similar retail categories and/or markets. Market data is also sourced from a variety of reputable compensation surveys that contain pay data for comparable executive positions at comparable companies. This data serves as a useful reference point and is used in conjunction with discussions regarding potential differences in the position at Tractor Supply, the performance and potential of the incumbent executive, and any internal equity considerations. Although market pay data is shown at the 25^th, 50^th and 75^th percentile market levels, the Committee generally focuses on positioning target pay opportunities within a competitive range of the market 50^th percentile, except in cases where experience, tenure, performance, or other relevant factors suggest that pay should be positioned above or below the 50^th percentile. The Compensation Committee generally considers a range of plus or minus 10% of the targeted compensation level to be competitive.

Peer Group

Pay data from the following peer group was used to make informed executive compensation decisions in fiscal 2021:

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Harry A. Lawton III

President and CEO

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The Compensation Committee based its assessment of each of the other named executive officers upon its evaluation of the Company’s performance and the individual performance of each named executive officer. Each of the named executive officers contributed to the Company’s performance as a member of the Executive Committee and as a leader of a business or a function.

Kurt D. Barton

Executive Vice President - Chief Financial Officer and Treasurer

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Robert D. Mills

Executive Vice President - Chief Technology, Digital Commerce and Strategy Officer

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J. Seth Estep

Executive Vice President - Chief Merchandising Officer

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John P. Ordus

Executive Vice President - Chief Stores Officer

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Stock Ownership Guidelines

Executives of the Company are expected to acquire and continue to hold shares of the Company’s Common Stock having an aggregate market value from time to time which equals or exceeds a multiple of base compensation as outlined below within five years of initial appointment.

If an executive holds multiple positions with different ownership requirements, the executive must comply with the highest applicable requirement. Each executive is required to retain 50% of net after-tax shares acquired on exercise of stock options or vesting of RSUs or PSUs until the stock ownership requirements are met. Once the target ownership level is achieved by an executive, that executive will not be required to acquire any additional shares in the event the stock price decreases, provided the underlying number of shares are held by the executive.

The Compensation Committee evaluates executive officer compliance with this policy annually. The Compensation Committee and the Board, in their sole discretion, may waive or extend the time for compliance with this policy. Factors which may be considered include, but are not limited to, limitations on ability to purchase resulting from blackout periods and the personal financial resources of the employee. The Compensation Committee has not granted any waivers or extended the time for compliance with this policy within the last five years. There is a five-year transition period to allow individuals to become compliant with the policy. All of the Company’s executive officers currently meet this standard or are within the period for initial compliance.

Additional Compensation Information

Deferred Compensation

The Company’s officers may elect to participate in the Executive Deferred Compensation Plan. The Executive Deferred Compensation Plan enhances the Company’s ability to attract and retain the services of qualified persons by providing highly compensated employees a vehicle to contribute additional amounts to tax-deferred savings above the amounts they can contribute to the Company’s 401(k) Plan, which are limited by the United States Internal Revenue Service (“IRS”). For additional information about the Executive Deferred Compensation Plan, please see the discussion under the heading “2021 Non-Qualified Deferred Compensation.”

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CEO Employment Agreement and Severance Benefits

On November 6, 2019, the Board adopted the Tractor Supply Company Severance Plan (the “Severance Plan”), which was designed to provide severance benefits in connection with an involuntary termination without cause to the President of Petsense, LLC and any person who qualified as a Senior Vice President or an Executive Vice President of the Company and was designated by the Board on the effective date of the Severance Plan as an eligible employee thereunder. The Severance Plan expired pursuant to its terms on June 13, 2021. Prior to its expiration, each of the Named Executive Officers, other than Mr. Lawton, was eligible to receive benefits under the Severance Plan. Upon an involuntary termination without cause (as defined in the Severance Plan), the Severance Plan provided for a cash severance payment, payment of a pro-rata portion of the employee’s annual bonus, limited acceleration of vesting for outstanding and unvested equity awards, and limited continuation of medical and dental insurance, among other benefits, subject to the eligible employee’s execution of a general release in favor of the Company and agreement to certain covenants regarding the confidentiality of the Company’s trade secrets, non-solicitation of Company employees and non-competition with the Company. Following expiration of the Severance Plan, the Named Executive Officers are not entitled to any severance payments or benefits other than those provided under their change in control agreements, as further described under the heading, “Potential Payments Upon Termination or Change in Control.”

The Company does not typically enter into employment agreements with employees, and no executive is party to an employment agreement with the Company with the exception of the Company’s Chief Executive Officer, Harry A. Lawton III.

Mr. Lawton’s employment agreement sets forth the obligations of the Company to Mr. Lawton and certain rights, responsibilities and duties of Mr. Lawton. The employment agreement has a term of three (3) years that began on January 13, 2020 (the “Effective Date”). Mr. Lawton is entitled to an initial base salary of $1,125,000 per year, is eligible to participate in such bonus plans as the Board may determine appropriate for executive officers of the Company (Mr. Lawton’s annual target bonus shall be no less than 125% of the Minimum Base Salary as defined in the employment agreement) and became eligible to participate in such equity incentive plans as the Company’s Compensation Committee may determine appropriate for executive officers of the Company beginning in 2021. At the first Board meeting following the Effective Date, Mr. Lawton was granted the following equity awards: (i) RSUs with a fair value, as determined by the Board, of $1,500,000 (such restricted stock unit award vested on the first anniversary of the grant date); (ii) PSUs having a fair value, as determined by the Board, of $2,500,000 (the performance targets for the PSUs are the same as the targets included in the Company’s PSU awards granted in 2019 and have the same performance period as those awards); (iii) RSUs, having a fair value, as determined by the Board, of $1,925,000; (iv) PSUs having a fair value, as determined by the Board, of $1,925,000; and (v) stock options having a fair value, as determined by the Board, of $1,650,000. Mr. Lawton was paid a signing bonus in cash in the amount of $1,000,000, which vested on January 13, 2022 (the second anniversary of the Effective Date). The Company also agreed to reimburse Mr. Lawton for reasonable relocation costs and temporary housing costs for a period not to exceed eight (8) months in accordance with Company policy.

The employment agreement with Mr. Lawton contains covenants regarding the confidentiality of the Company’s trade secrets and non-solicitation of Company employees and non-competition with the Company for a period of 24 months following any termination of employment. The severance pay that would be provided to Mr. Lawton by the agreement has been deemed by the Compensation Committee to be commensurate with the value to the Company of the restrictive covenants under which Mr. Lawton would operate after a separation of employment. Certain provisions of Mr. Lawton’s employment agreement and certain payments that would be due to Mr. Lawton upon termination of his employment are described in more detail under the heading, “Potential Payments Upon Termination or Change in Control.”

Change in Control Benefits

It is our belief that reasonable change in control protections are necessary for select positions in order to recruit and retain effective executive management. Furthermore, providing change in control benefits should increase the cooperation of executive management with respect to potential change in control transactions that would be in the best interests of stockholders. We also believe the requirement for each Named Executive Officer currently employed by the Company to continue employment for six months after a change in control should allow the Company sufficient time to find other qualified persons to serve in these positions, if desired, as well as provide an adequate transition period and allow for business continuity.

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For those reasons, each of the Named Executive Officers is party to an agreement with the Company whereby, in the event the employment of such executive officer is terminated during the term of the agreement following a change of control of the Company other than (i) by the Company for cause, (ii) by reason of death, disability or retirement or (iii) by the executive officer without good reason (as such terms are defined in the agreement), certain severance benefits will be paid to such executive officer. Each Named Executive Officer party to a change in control agreement must execute and not revoke a general waiver and release of claims. In addition, each Named Executive Officer party to a change in control agreement must commit to be employed with the Company for six months following such change in control. Each Named Executive Officer party to a change in control agreement has agreed not to compete with the Company during their employment and for an 18-month period (24-month period for Mr. Lawton) after termination of employment following a change in control.

Our agreements with Mr. Lawton and our executive officers do not allow for the gross-up of change in control payments and include double trigger change in control provisions for severance benefits and for acceleration of equity awards. The change in control benefits are described in more detail under the heading “Potential Payments Upon Termination or Change in Control.”

Other Benefits

Executive management participates in the Company’s other benefit plans on the same terms as other employees. These plans include medical, dental and vision benefits, extended sick pay, long-term disability, the Company’s Employee Stock Purchase Plan, 401(k) Plan and a 15% employee discount on merchandise purchased in the Company’s stores or website. Additionally, officers participate in the Executive Life Insurance Plan which provides for basic term life insurance coverage up to a maximum of $1,000,000, and the Company sponsored Executive Supplemental Individual Disability Insurance program, which provides for additional disability insurance coverage above the limits of the group long-term disability plan not to exceed 60% of monthly income. No other significant benefits are provided.

Compensation Risk Assessment

In November 2021, the Company completed an assessment of its compensation policies, programs and practices and the Compensation Committee’s independent consultant completed an assessment of the executive compensation program to determine whether there were any risks related to the design or operation of these plans and programs that were reasonably likely to have a material adverse effect on the Company. The Compensation Committee reviewed and discussed these assessments and concluded that the Company’s compensation practices and programs do not encourage excessive risk taking and are not reasonably likely to have a material adverse effect on the Company. In reaching this conclusion, the following mitigating factors were also identified and considered:

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Executive Compensation Recoupment Clawback Policy

The Compensation Committee has an executive compensation recovery policy that permits the Company to seek to require the return, repayment, or forfeiture of any cash or equity-based incentive compensation payment or award made or granted to any current or former executive officer of the Company during the three completed fiscal years immediately preceding the date on which the Company is required to prepare a restatement of its financial statements due to material noncompliance of the Company with any financial reporting requirement under the federal securities laws or similar revision of performance indicators on which cash or equity-based incentive compensation was based (a “Restatement”), if: (i) the payment or award was made or granted based wholly or in part upon the attainment of a Company financial reporting measure (including, without limitation, (a) any measure that is determined and presented in accordance with the accounting principles used in preparing the Company’s financial statements, (b) any measure that is derived wholly or in part from such measure and/or (c) any measure of stock price or total shareholder return); and (ii) a lower payment or award would have been made or granted to the executive officer based upon the restated financial results had there not been a Restatement. In each such instance, the amount required to be returned, repaid, or forfeited shall be the amount by which the executive officer’s payment or award for the relevant period exceeded the lower payment or award that would have been made or granted based on the restated results.

No Hedging/No Pledging Policy

In addition to insider trading restrictions, the Company has a policy that prohibits all employees and Board members from engaging in any of the following transactions in the Company’s securities:

Executive Compensation Tax Deductibility

Section 162(m) of the Internal Revenue Code limits the tax deductibility of compensation for certain executive officers that is more than $1 million. Prior to the enactment of the Tax Cuts and Jobs Act in December 2017, Section 162(m) provided an exemption from this deduction limitation for compensation that qualified as “performance-based compensation.” The exemption for performance-based compensation was repealed, however, effective for taxable years beginning after December 31, 2017 and subject to transition relief for certain arrangements in place as of November 2, 2017. These changes will cause more of the compensation paid by the Company to be non-deductible under Section 162(m) in the future and will eliminate the Company’s ability to structure performance-based awards to be exempt from Section 162(m).

In designing the Company’s executive compensation program and determining the compensation of its executive officers, including the named executive officers, the Compensation Committee considers a variety of factors, including the potential impact of the Section 162(m) deduction limit. The Compensation Committee will not necessarily limit executive compensation, however, to that which is or may be deductible under Section 162(m). Interpretations of and changes in the tax laws, and other factors beyond the Compensation Committee’s control can also affect the deductibility of compensation. The Compensation Committee will consider various alternatives to preserving the deductibility of compensation payments and benefits to the extent consistent with its compensation goals and will continue to monitor developments under Section 162(m). The Compensation Committee believes that the stockholders’ interests are best served if its discretion and flexibility in awarding compensation is not restricted, even though some compensation awards may result in non-deductible compensation expense.

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2021 Summary Compensation Table

The following table summarizes information concerning cash and non-cash compensation paid to or accrued for the benefit of the Company’s Chief Executive Officer, Chief Financial Officer and each of the three other most highly compensated executive officers of the Company who served as executive officers at the end of the fiscal year ended December 25, 2021 for all services rendered in all capacities to the Company for the fiscal year ended December 25, 2021. This table is presented as required by SEC rules. However, it includes amounts that were not realized by the executives in fiscal 2021 and may be realized in completely different amounts in the future depending on a variety of factors such as performance of the business, fluctuations in share price, etc. For example, the table is required to reflect the aggregate grant date fair value of equity awards according to accounting for share-based payments, rather than amounts realized by executives as a result of the exercise of stock options or the vesting of RSUs or PSUs.

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