LANDSTAR SYSTEM INC

Annual Incentive Compensation Program

For 2025, payouts under the ICP were limited to payments under the Strategic Goals Incentive portion of the ICP because, as further described below, while certain 2025 strategic goals were met, “threshold” levels of DEPS for 2025 were not attained. Had the ICP not been modified for 2025 to include the Strategic Goals Incentive portion, there would have been no bonus payouts generated for any Named Executives with respect to the Company’s 2025 fiscal year, as was the outcome with respect to each of 2023 and 2024, as “threshold” levels of DEPS were also not attained by the Company in either year, and as a result, no bonus payouts were generated for any Named Executives with respect to either the Company’s 2023 or 2024 fiscal year. The Compensation Committee believes that payments of bonuses to the Named Executives under the Strategic Goals Incentive portion of the ICP were appropriate in recognition of the significant number of the Company’s strategic goals achieved in 2025 and the potential impact of these efforts with respect to the positioning of the Company for future growth.

ICP – Strategic Goals Incentive Portion

The Company achieved approximately 90% of its 2025 strategic goals approved under the ICP. This performance, after taking into account incentive weighting based on the “Five Points of the Star” framework, resulted in the funding of 87.7% of the target strategic goals bonus pool. The initial allocation for each Named Executive with respect to this Strategic Goals bonus was determined based on 30% of the Named Executive’sone-time bonus payout amount multiplied by the 87.7% strategic goals bonus pool funding percentage. The Compensation Committee then reviewed each Named Executive’s strategic goals bonus allocation for potential adjustment, up or down, based on that Named Executive’s strategic contribution to the Company in 2025. As a result of this process, the strategic goals bonus of each of Mr. Coro and Mr. Miller were slightly increased, and Mr. Todd’s strategic goals bonus was slightly decreased, as reflected in the“Non-Equity Incentive Plan Compensation” column included in the Summary Compensation Table set forth below under “Compensation of Named Executives – Summary Compensation Table”.

ICP – DEPS Incentive Portion

The “threshold” amount of DEPS under the ICP with respect to the 2025 fiscal year was $5.61, and the “target” diluted earnings per share was set at $5.95. DEPS for the 2025 fiscal year was $3.31, lower than “threshold” DEPS by 41.0%, or $2.30 per share, and was lower than “target” DEPS by 44.4%, or $2.64 per share. As further described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations”in the Company’s Annual Report on Form 10-K for the 2025 fiscal year, filed with the SEC on February 23, 2026, basic and diluted earnings per share during fiscal year 2025 was unfavorably impacted by $0.71 related to impairment charges of intangible and other assets, as further described therein. As the threshold amount of DEPS under the ICP with respect to the 2025 fiscal year was not achieved, no payments were made to any of the Named Executives under the DEPS portion of the ICP for the 2025 fiscal year.

Inclusive of fiscal year 2025, the Company has achieved the “threshold” amount of DEPS in two of the five preceding fiscal years and four of the preceding ten fiscal years. Inclusive of fiscal year 2025, the Company has achieved the “target” amount of DEPS in two of the five preceding fiscal years and four of the preceding ten fiscal years.

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Stock-based Awards – Performance-Based Regular RSU Awards in Fiscal Years 2021, 2022, 2023, 2024 and 2025

During fiscal years 2021, 2022, 2023, 2024 and 2025, the Company granted Performance-Based Regular RSU Awards to Named Executives. The number of RSUs that vest under each Regular RSU Award is determined on the third, fourth and fifth anniversary from the date of grant. The following table sets forth the number of RSUs granted to each Named Executive by grant date.

The following chart sets forth the vesting of historical Performance-Based Regular RSU Awards through December 27, 2025, with vesting percentages presented as a percentage of Target.

Stock-based Awards – Regular Restricted Stock Awards

During fiscal years 2022, 2023, 2024 and 2025, the Company granted Regular Restricted Stock Awards to Named Executives. Shares granted under each Regular Restricted Stock Award vest in three equal annual installments on the first, second and third anniversary of the date of grant. The following table sets forth the number of shares of restricted stock granted to each Named Executive by grant date.

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The Compensation Committee believes that whereas the Performance-Based Regular RSU Awards are designed to incentivize the attainment of specific financial goals over a multi-year period (as well as rewarding for stock price appreciation), the Regular Restricted Stock Awards serve as a retention tool as they retain value during periods of adverse market volatility while also rewarding for stock price appreciation over time. The Compensation Committee believes that these two equity vehicles when used in conjunction with each other serve to reward long-term financial performance and stock price appreciation while also providing a retention-based benefit for the Named Executive in the event of market and/or economic turbulence. In determining the amount of the Performance-Based Regular RSU Awards and the Regular Restricted Stock Awards for each Named Executive, the Compensation Committee considered the full equity compensation component of each Named Executive’s annual compensation and allocated such component between Performance-Based Regular RSU Awards and Regular Restricted Stock Awards.

Stock-based Awards – Special Restricted Stock Awards

On January 29, 2021, the Compensation Committee awarded 1,773 shares of restricted stock to Mr. Todd that vest in three equal annual installments on January 31 of 2024, 2025 and 2026. The Compensation Committee awarded Mr. Todd thisnon-recurring grant as a special retention award and in connection with his appointment as principal accounting officer.

On March 15, 2022, the Compensation Committee awarded 1,639 shares of restricted stock to Mr. Miller that vest in three equal annual installments on March 15 of 2025, 2026 and 2027. The Compensation Committee awarded Mr. Miller thisnon-recurring grant as a special retention award.

On February 2, 2024, the Compensation Committee awarded 10,594 shares of restricted stock to Mr. Lonegro that vest in two equal annual installments on February 2 of 2025 and 2026. The Compensation Committee awarded Mr. Lonegro thisnon-recurring grant as asign-on bonus upon his hiring as President and Chief Executive Officer.

Stock-based Awards – Grants of TSR-based RSU Awards to Mr. Lonegro

On February 2, 2024, the Company and Mr. Lonegro entered into an agreement granting Mr. Lonegro 52,971 RSUs on an exceptional andnon-recurring basis that vest based on a market condition (the “2024 Sign-On TSR RSU Award”) and a separate agreement granting Mr. Lonegro 5,297 RSUs that vest based on a market condition (the “2024 Regular TSR RSU Award”) (together the “2024 TSR RSU Awards”). The smaller grant was in satisfaction of a provision of the Lonegro Letter Agreement providing for annual grants of such TSR RSU awards with a grant date fair value of $1 million (the “Annual TSR RSU Grant”). The fair value of these RSU awards was determined at the time of grant based on the expected achievement of the market condition.

On January 31, 2025, in satisfaction of the Annual TSR RSU Grant, the Company granted 6,050 RSUs to Mr. Lonegro that vest based on a market condition (collectively with the 2024 TSR RSU Awards, the “TSR RSU Awards”). The fair value of this RSU award was determined at the time of grant based on the expected achievement of the market condition.

The TSR RSU Awards may vest based on achievement in a measurement year, as applicable, of a TSR CAGR of 9% relative to the base year (the “Target TSR CAGR”), to be measured annually starting after the sixth anniversary of the grant date and concluding after the tenth anniversary of the grant date. The TSR CAGR over the applicable vesting period is determined by comparing TSR as of the date of the applicable grant with TSR as of the applicable measurement date, in each case using asixty-day measurement period, other than in the event of a change in control. In the event of a change in control of the Company occurring at any time, the RSUs will vest based on achievement of a stock price that equals 125% of the stock price that achieves the TSR CAGR of 9%. In addition, if any dividends are paid by the Company during the vesting period, dividend equivalents will be credited to Mr. Lonegro under the applicable award as additional RSUs that are eligible to vest based on the achievement of the TSR CAGR of the underlying RSUs to which such dividend equivalents relate. Any RSUs that vest will be settled in shares of Common Stock as soon as practicable after the applicable vesting date.

Mr. Lonegro’s right to receive shares underlying the TSR RSU Awards is generally conditioned upon his continued employment through the applicable vesting dates. In the event of the termination of employment of Mr. Lonegro due to death or “disability” prior to the third anniversary of the applicable grant date, no vesting would occur. In the event of the termination of employment of Mr. Lonegro due to death or “disability” after the third anniversary of the applicable grant date, a measurement date would occur on the date of termination of employment and RSUs would be eligible to vest at a pro rata amount if the applicable Target TSR CAGR was achieved.

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There are several reasons why the Compensation Committee believes the nature and terms of these grants of TSR RSU Awards to Mr. Lonegro, on the one hand, as opposed to the Performance-Based Regular RSU Awards (including those to Mr. Lonegro), on the other, are appropriate. The TSR RSU Awards, primarily consisting of the 2024 Sign-On TSR RSU Award to Mr. Lonegro made upon Mr. Lonegro’s hire as the Company’s new President and Chief Executive Officer, are intended to tie the amount of future vesting directly to the Company’s TSR over the vesting period, using growth in TSR over a longer term period from the date of grant, as compared to the vesting periods associated with the Performance-Based Regular RSU Awards, as an additional means to measure the performance of the Chief Executive Officer of the Company. For additional discussion relating to the TSR RSU Awards to Mr. Lonegro, see above under “Letter from the Chairman of Compensation Committee”,“CEO Transition Process and the Hiring of Mr. Lonegro”and “Letter Agreement with Mr. Lonegro”.

48 Landstar System, Inc. 2026 Proxy Statement