Elements of the 2023 Executive Compensation Program
As noted above, the Company’s 2022 executive compensation program was significantly impacted by the Merger during 2022. WhileThe graphic below summarizes the material elements of the Company’s 2022 executive compensation program consisted of base salary, annual cash incentive awards and long-term equity incentive awards, each of the performance-based components were impacted by the consummation of the Merger. Specifically, the pre-Merger annual incentive programs for Neenah and SWM were terminated upon the Closing and participants became entitled to receive pro-rated payments based on their continued service through the payment date (except with respect to Mr. Hoek, Dr. Kramer and Ms. Peacock, as described below). The Committee also approved a new cash incentive program for the post-Merger portion of 2022 with goals tied to the Company’s post-Merger operating plan. In addition, outstanding performance-based equity awards with respect to the Company’s common stock were converted into time-based restricted stock units (“RSUs”) upon the closing of the Merger and Synergy PSUs were granted following the closing to incentivize the achievement of synergies relating to the Merger.
The Company’s 2023 executive compensation program includes the same principal elements the pre-Merger design offor the Company’s executive compensation program.Named Executive Officers. The Committee believes that this design balances fixed and variable compensation elements, provides alignment with the Company’s short and long-term financial and strategic priorities through the annualshort-term and long-term incentive programs, and provides alignment with stockholder interests. The graphic below summarizes the expected material elements of the Company’s 2023 executive compensation program for the Company’s continuing Named Executive Officers.
| | | Who Receives | | | All Named Executive Officers ![[MISSING IMAGE: ic_1arrow-bw.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-23-033842/ic_1arrow-bw.jpg) 
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| | | When Granted | | | Annually ![[MISSING IMAGE: ic_2arrow-bw.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-23-033842/ic_2arrow-bw.jpg) 
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| | | Form of Delivery | | | Cash ![[MISSING IMAGE: ic_3arrow-bw.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-23-033842/ic_3arrow-bw.jpg) | | | Equity ![[MISSING IMAGE: ic_4arrow-bw.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-23-033842/ic_4arrow-bw.jpg) 
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| | | Why We Pay | | | Establish a pay foundation at competitive levels to attract and retain talented executives | | | Motivate and reward executives for performance related to key financial performance metrics
Hold executives accountable, with payouts varying from target based on actual performance against pre-established and communicated performance goals | | | Align the interests of executives with those of the Company’s stockholders by subjecting payout to fluctuations in the Company’s stock price performance
Competitive with market practices in order to attract and retain top executive talent | | | Align the interests of executives with those of the Company’s stockholders by focusing the executives on the Company’s financial performance over the performance period and further subjecting payout to fluctuations in the Company’s stock price performance
Competitive with market practices in order to attract and retain top executive talent | |
| |
Vesting/Performance Period
| | | n/a | | | 1 year | | | 3 years pro-rata | | | 3 years cliff | |
TABLE OF CONTENTS | | | Vesting Period | | | 1 year | | | 1 year | | | 3 years pro-rata | | | 3 years cliff | | | | | How Target and Payout Are
Determined | | | Committee determines amounts and considers Chief Executive Officer recommendations for other Named Executive Officers
Factors considered include individual and Company performance, compensation paid to similarly situated executives at the Company, competitive market median, and input from the independent compensation consultant | | | Committee determines target amounts and considers Chief Executive Officer recommendations for other Named Executive Officers
Factors considered include individual and Company performance, compensation paid to similarly situated executives at the Company, competitive market median, and input from the independent compensation consultant
Committee determines performance objectives and evaluates performance against objectives | | | Committee determines target amounts and considers Chief Executive Officer recommendations for other Named Executive Officers
Factors considered include individual and Company performance, compensation paid to similarly situated executives at the Company, competitive market median, and input from the independent compensation consultant | | | Committee determines target amounts and considers Chief Executive Officer recommendations for other Named Executive Officers
Factors considered include individual and Company performance, compensation paid to similarly situated executives at the Company, competitive market median, and input from the independent compensation consultant
Committee determines performance objectives and evaluates performance against objectives | | | | | Performance
Measures | | | Individual | | | EBITDA, Synergies Achieved, Safety Scorecard | | | | | | | | | | | | | Performance
Measures | | | Individual | | | EBITDA Delivered, Synergy Achievement, Safety Scorecard | | | Change in Company stock price | | | Free Cash Flow as a Percent of Net Sales, Return on Invested Capital, Relative TSR | | |
*
| Excludes sign-on compensation awarded to Mr. Johnson in connection with the commencement of his employment, as described below under “Mark W. Johnson New Hire Compensation.” |
The following charts illustrateillustrates the mix of the targeted 2023 annual direct compensation for the Chief Executive Officer and the average mix of the targeted 2023 annual direct compensation for our other Named Executive Officers (other than Mr. Johnson, whose employment with the Company commenced on September 1, 2023), and the portion of that compensation that is at-risk, as approved byat-risk. TABLE OF CONTENTS Base Salary As previously disclosed, following the Committeeclosing of the Merger and in December 2022. Base Salary
In December 2021,consultation with Meridian Compensation Partners, LLC (“Meridian”), the Committee’s independent compensation consultant, based on the compensation analysis performedMeridian’s review of materials prepared by Meridian as well as individual performance,Aon plc (“Aon”), the Committee increased the base salaries for all of the then-serving Named Executive Officers for 2022. Following the closing of the Merger and the performance of an additional compensation analysis by Meridian, the Committee further increased the base salaries for the continuing Named Executive Officers in order to align with the competitive market based on a revised peer group to reflect the expanded scope and size of the Company post-Merger.
The following table shows the annual base salary for each Named Executive Officer for 2022 and 2021. In December 2022, the Committee diddetermined not adjustto increase the 2023 annual base salaries for our continuingthen-serving Named Executive Officers from the amounts reflected belowpreviously approved for the period beginning July 6,post-Merger portion of 2022, as shown in the table below. In connection with his promotion to Chief Financial Officer and ending December 31, 2022.
| Name | | | 2021 Annual
Base Salary | | | 2022 Annual Base
Salary
(January 1, 2022 −
July 5, 2022) | | | 2022 Annual
Base Salary
(July 6, 2022 −
December 31, 2022) | | Julie Schertell(1) | | | | | N/A | | | | | | N/A | | | | | $ | 925,000 | | | | R. Andrew Wamser, Jr. | | | | $ | 471,636 | | | | | $ | 500,000 | | | | | $ | 575,000 | | | | Ricardo Nuñez | | | | $ | 468,383 | | | | | $ | 482,500 | | | | | $ | 500,000 | | | Michael Rickheim(1) | | | | | N/A | | | | | | N/A | | | | | $ | 425,000 | | | Omar Hoek(2) | | | | $ | 429,431 | | | | | $ | 420,473 | | | | | $ | 482,670 | | | Jeffrey Kramer, PhD(3) | | | | $ | 850,000 | | | | | $ | 900,000 | | | | | | N/A | | | Tracey Peacock(3) | | | | $ | 460,000 | | | | | $ | 474,000 | | | | | | N/A | | |
(1)
Ms. Schertellafter consulting with Meridian and considering internal pay equity and a review of competitive market practices, Mr. RickheimWeitzel’s base salary was increased from $275,000 to $425,000. Mr. Johnson’s base salary was established when he joined the Company upon the closingafter consulting with Meridian and considering internal pay equity and a review of the Merger on July 6, 2022.competitive market practices.
(2)
Mr. Hoek’s compensation was paid in Euros, and his 2022 and 2021 base salary was converted at the December 31, 2022 and December 31, 2021 exchange rates of 0.9323 Euros and 0.8792 Euros to the U.S. dollar, respectively.
(3)
Dr. Kramer and Ms. Peacock ceased service as employees of the Company upon the Closing on July 6,
Julie Schertell | | | $925,000 | | | $925,000 | Greg Weitzel(1) | | | $275,000 | | | $425,000 | Mark W. Johnson(2) | | | N/A | | | $470,000 | Michael W. Rickheim | | | $425,000 | | | $425,000 | R. Andrew Wamser, Jr.(3) | | | $575,000 | | | $575,000 | Ricardo Nuñez(3) | | | $500,000 | | | $500,000 |
(1)
| Mr. Weitzel’s 2023 annual base salary represents his annual base salary, effective April 2, 2023. |
(2)
| Mr. Johnson’s 2023 annual base represents his annual base salary, effective September 1, 2023. |
(3)
| Messrs. Wamser and Nuñez ceased serving as employees of the Company, effective April 1, 2023 and September 1, 2023, respectively. The amounts reflected in the table above reflect their annualized base salary levels for 2023. Base salary amounts received by Messrs. Wamser and Nuñez accounted for time actually served in their respective roles during 2023. |
2022. Please see below for additional information regarding Dr. Kramer’s post-Merger consulting arrangement with the Company.
2022 Annual2023 Short-Term Incentive Program
SWM Pre-Merger Bonus
Prior to the Merger, each of SWM’s then-serving Named Executive Officer was provided with a cash-based award opportunity that could be earned if performance objectives were achieved over the fiscal year, with potential payout ranging from 0% to 200% depending on performance. Annual incentive compensation is intended to reward the performance of executive officers based on the attainment of the Company’s objectives. The 2022 target annual incentive opportunities (as a percentage of base salary) for the Named Executive Officers are set forth in the table below and remained at the same levels that were established for 2021, except for Dr. Kramer and Mr. Wamser. Dr. Kamer’s target annual incentive opportunity was increased from 100% to 110% of base salary and Mr. Wamser’s target annual incentive opportunity was increased from 65% to 70% of base salary, in each case, in order to further align his target annual incentive opportunity with the market median.
| Name | | | 2021 Target Bonus
(% of Base
Salary) | | | 2022 Pre-Merger Target Bonus
(% of Base
Salary) | | | R. Andrew Wamser, Jr. | | | | | 65% | | | | | | 70% | | | | Ricardo Nuñez | | | | | 60% | | | | | | 60% | | | | Omar Hoek | | | | | 60% | | | | | | 60% | | | | Jeffrey Kramer, PhD | | | | | 100% | | | | | | 110% | | | | Tracey Peacock | | | | | 60% | | | | | | 60% | | |
The Committee-approved corporate and business unit objectives, as applicable, for SWM’s pre-Merger Named Executive Officers are set out below, with the weighting of each component of the Named Executive Officers’ annual incentive opportunities reflecting their differing responsibilities and opportunities to affect business outcomes.
The 2022 performance objectives were selected because they were deemed by the Committee to be the primary drivers for delivering increased stockholder value. These performance objectives were established after considering economic conditions affecting the legacy combustible-related business, the Company’s prior year performance, and the Company’s internal long-term operating plan. The Committee believed at the time that the performance targets were rigorous yet achievable, and therefore established the targets so that they would be achieved, at the target performance level, if the Company successfully executed against its operating plan for 2022. In setting the target goals with respect to corporate and Engineered Papers, the Committee considered the forecasted decreases in overall sales volumes for our legacy combustible-related business and the anticipated continued effects of the COVID-19 pandemic, including on our supply chain.
| Name | | | Corporate | | | Business Unit | | | R. Andrew Wamser, Jr. | | | | | 100% | | | | | | — | | | | Ricardo Nuñez | | | | | 100% | | | | | | — | | | | Omar Hoek | | | | | 50% | | | | | | 50% | | | | Jeffrey Kramer, PhD | | | | | 100% | | | | | | — | | | | Tracey Peacock | | | | | 50% | | | | | | 50% | | |
The following table sets forth the financial performance metrics that were originally applicable under SWM’s pre-Merger annual incentive program for its Named Executive Officers. The Committee increased the weighting of the operating profit metrics for the Engineered Papers and Advanced Materials & Structures business units from 50% to 60%, and made corresponding decreases to the weighting of the net sales metrics, in order to drive greater focus on cost controls and cash flow generation while balancing profitable growth for both businesses:
| | | | Pre-Merger 2022 Objectives | | | MEASUREMENT METRICS | | | Threshold
(50%) | | | Target
(100%) | | | Outstanding
(150%) | | | Maximum
(200%) | | Corporate Metric 100% Adjusted Earnings Per Share(1) | | | | $ | 3.25 | | | | | $ | 3.69 | | | | | $ | 3.87 | | | | | $ | 4.06 | | | | Engineered Papers(2) | | | | | | | | | | | | | | | | | | | | | | | | | | | 40% Net Sales (in millions) | | | | $ | 456.0 | | | | | $ | 518.2 | | | | | $ | 544.1 | | | | | $ | 570.1 | | | | 60% Operating Profit (in millions) | | | | $ | 99.1 | | | | | $ | 112.6 | | | | | $ | 118.2 | | | | | $ | 123.8 | | | | Advanced Materials & Structures(2) | | | | | | | | | | | | | | | | | | | | | | | | | | | 40% Net Sales (in millions) | | | | $ | 1,009.9 | | | | | $ | 1,147.6 | | | | | $ | 1,205.0 | | | | | $ | 1,262.4 | | | | 60% Operating Profit (in millions) | | | | $ | 98.1 | | | | | $ | 111.5 | | | | | $ | 117.1 | | | | | $ | 122.6 | | |
(1)
Earnings per share is diluted earnings per share from continuing operations at the consolidated level, adjusted to reflect items included in the Company’s approved budget. To the extent not reflected in such budget, it excludes restructuring-related expenses and charges, purchase price accounting amortization, the impact of future stock buybacks, unusual and non-recurring items determined in accordance with U.S. generally accepted accounting principles, and other adjustments consistent with the Company’s past practice as approved by the Committee and calculated using budgeted foreign exchange rates as reflected in the Company’s financial records.
(2)
Excludes the impact of cross-border allocation of shared corporate services and was calculated using budgeted foreign exchange rates.
Plan
In connection with the Merger, the Committee approved the termination of the SWM pre-Merger annual incentive program, with pro-rated payouts under that program based on the Company’s performance extrapolated through the closing of the Merger (or target performance with respect to Dr. Kramer and Ms. Peacock, whose employment terminated upon the Closing, in accordance with the terms of the Company’s annual incentive program). Such pro-rated payouts were paid in early 2023 at the time that SWM normally paid out bonuses under SWM’s pre-Merger annual incentive program, except for Dr. Kramer and Ms. Peacock, who were paid their pro-rated payouts in connection with the termination of their employment upon the Closing. The following table sets forth the financial performance metrics applicable to the determination of pre-Merger 2022 annual incentive payouts for the Named Executive Officers, except the actual results for the Advanced Materials & Structures business unit metrics applicable to Ms. Peacock’s annual incentive are not included due to Ms. Peacock receiving a payout equal to her target annual incentive opportunity in connection with her termination: | | | | Pre-Merger 2022 Objectives (pro-rated) | | | Results | | | MEASUREMENT METRICS | | | Threshold
(50%) | | | Target
(100%) | | | Outstanding
(150%) | | | Maximum
(200%) | | | Actual
Performance | | | Attainment
Percentage | | | Corporate Metric | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 100% Adjusted Earnings Per Share | | | | $ | 1.43 | | | | | $ | 1.62 | | | | | $ | 1.70 | | | | | $ | 1.78 | | | | | $ | 1.75 | | | | | | 177.2%(1) | | | | Engineered Papers(2) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 50% Net Sales (in millions) | | | | $ | 226.8 | | | | | $ | 257.7 | | | | | $ | 270.6 | | | | | $ | 283.5 | | | | | $ | 283.9 | | | | | | 200% | | | | 50% Operating Profit (in millions) | | | | $ | 44.4 | | | | | $ | 50.5 | | | | | $ | 53 | | | | | $ | 55.5 | | | | | $ | 47.7 | | | | | | 76.7% | | | | Advanced Materials & Structures(2) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 50% Net Sales (in millions) | | | | $ | 413.4 | | | | | $ | 469.8 | | | | | $ | 493.2 | | | | | $ | 516.7 | | | | | | N/A | | | | | | N/A | | | | 50% Operating Profit (in millions) | | | | $ | 40.1 | | | | | $ | 45.6 | | | | | $ | 47.9 | | | | | $ | 50.2 | | | | | | N/A | | | | | | N/A | | |
(1)
Actual achievement percentage for Messrs. Wamser and Nuñez was reduced to 155.6% due to the exclusion of a favorable tax rate versus budget.
(2)
Excludes the impact of cross-border allocation of shared corporate services and was calculated using budgeted foreign exchange rates.
The following table summarizes the original 2022 target annual incentive opportunities for each of SWM’s pre-Merger Named Executive Officer (expressed as a percentage of the Named Executive Officers’ pre-Merger 2022 base salary and in dollars), the pro-rated target incentive opportunity and the 2022 annual incentive payouts received by each such Named Executive Officer with respect to the pre-Merger portion of 2022.
| Name | | | Target Bonus
(% of Base
Salary) | | | Target Bonus
Award
Opportunity ($) | | | Target Pro-Rated
Bonus
Award Opportunity
($) | | | Final Pre-Merger
Bonus
($) | | | Final Pre-Merger
Bonus
as a %
of Target | | | R. Andrew Wamser, Jr. | | | | | 70% | | | | | $ | 350,000 | | | | | $ | 175,000 | | | | | $ | 272,300 | | | | | | 155.6% | | | | Ricardo Nuñez | | | | | 60% | | | | | $ | 289,500 | | | | | $ | 144,750 | | | | | $ | 225,231 | | | | | | 155.6% | | | Omar Hoek(1) | | | | | 60% | | | | | $ | 253,284 | | | | | $ | 126,144 | | | | | $ | 191,336 | | | | | | 151.7% | | | Jeffrey Kramer, PhD(2) | | | | | 110% | | | | | $ | 990,000 | | | | | $ | 507,205 | | | | | $ | 507,205 | | | | | | 100.0%(2) | | | Tracey Peacock(2) | | | | | 60% | | | | | $ | 284,400 | | | | | $ | 145,706 | | | | | $ | 145,706 | | | | | | 100.0%(2) | | |
(1)
The amounts for Mr. Hoek were converted at the December 31, 2022 exchange rate of 0.9323 Euros to the U.S. dollar.
(2)
As their employment terminated upon the closing of the Merger, the Committee approved payouts at target for Dr. Kramer and Ms. Peacock.
Neenah Pre-Merger Bonus
Prior to the closing of the Merger, Neenah’s Compensation Committee approved payout amounts under Neenah’s short-term incentive plan based on actual performance through June 30, 2022 and continued service through the closing of the Merger. Following the closing of the Merger, based on the July 6, 2022 closing date of the Merger and to conform to the treatment of payouts under SWM’s pre-Merger annual incentive program, payouts were approved under Neenah’s short-term incentive plan based on actual performance through the July 6, 2022 closing date. Participants were required to remain employed through the payment date in the first quarter of 2023 in order to receive these payments. The amounts paid to Ms. Schertell and Mr. Rickheim under Neenah’s short-term incentive plan for the pre-Merger portion of 2022 are set forth in the table below.
| Name | | | Final Neenah
Pre-Merger Bonus
($) | | | Julie Schertell | | | | $ | 688,546(1) | | | | Michael Rickheim | | | | $ | 197,848 | | |
(1)
The amount shown for Ms. Schertell reflects a cutback of $12,176. In accordance with the terms of Neenah’s Executive Severance Plan (as described below), Ms. Schertell’s payment under Neenah’s short-term incentive plan was reduced to the minimum extent necessary that resulted in her retaining the largest after-tax amount of compensation payments under Section 4999 of the Internal Revenue Code. Absent this cutback, Ms. Schertell’s payout would have been $700,713.
Mativ Post-Merger Bonus
In September 2022, after consulting with Meridian, the Committee approved cash-based award opportunities for the continuingthen-serving Named Executive Officers for the post-Merger portion of 2022under our 2023 Short-Term Incentive Plan (“STIP”) as set forth in the table below in order to further align their compensation with the Company’s performance and to incentivize them to identify and pursue synergies resulting from the Merger. The performance objectives for 2023 were EBITDA Delivered, Synergies Achieved and Safety Scorecard. The Committee determined to replace the Synergy Run Rate Achievement metric used for the post-Merger portion of the 2022 STIP with Synergies Achieved in order to incentivize the Named Executive Officers to focus on achieving specified savings goals and to add a Safety Scorecard metric in order to emphasize safety as a top priority throughout the organization. These performance objectives were selected because they were deemed by the Committee to be the primary drivers for delivering increased stockholder value during this transformative period for the Company. Beginning with the 2024 STIP, we replaced the Synergies Achieved goal with goals relating to top-line revenue.
The Committee determined not to increase the target
incentive 2023 STIP opportunities, as a percentage of base salary, for Ms. Schertell and Messrs. Rickheim, Wamser and Nuñez, from the percentages approved for such Named Executive Officers for the post-Merger portion of 2022 for Messrs. Wamser, Hoek2022. In connection with his promotion to Chief Financial Officer, and Nuñez were increased from 65%, 60%after consulting with Meridian and 60% to 75%, 75% and 65%, respectively, in order to further align their total target direct compensation with the market median. The target award opportunities for Ms. Schertell and Mr. Rickheim were determined based on their pre-Merger compensation with Neenahconsidering internal pay equity and a review of competitive market practices.
| Name | | | 2022 Pre-Merger Bonus
(% of Base
Salary) | | | 2022 Post-Merger
Target Bonus
(% of Base
Salary)(1) | | | Julie Schertell | | | N/A | | | | | 115% | | | | R. Andrew Wamser, Jr. | | | | | 65% | | | | | | 75% | | | | Ricardo Nuñez | | | | | 60% | | | | | | 65% | | | | Omar Hoek | | | | | 60% | | | | | | 75% | | | | Michael Rickheim | | | N/A | | | | | 65% | | |
(1)
Amounts are based on thepractices, Mr. Weitzel’s target STIP opportunity, as a percentage of base salaries in effect beginning on July 6, 2022, as described above.
These performance objectives were establishedsalary, was increased from 40% to 65%. The target award opportunity for Mr. Johnson was determined after considering the impact of the Merger onmarket data and the Company’s internal long-term operating plan, economic conditions affecting SWM’s legacy combustible-related business, and the pre-Merger budgets of SWM and Neenah. historical compensation practices.
Julie Schertell | | | 115% | | | 115% | Greg Weitzel(1) | | | 40% | | | 65% | Mark W. Johnson | | | N/A | | | 65% | Michael W. Rickheim | | | 65% | | | 65% | R. Andrew Wamser, Jr.(2) | | | 75% | | | 75% | Ricardo Nuñez(2) | | | 65% | | | 65% |
(1)
| Mr. Weitzel’s 2023 target award opportunity was pro-rated to reflect his target award opportunities in effect both prior to and after his promotion. |
(2)
| Pursuant to the terms of the Schweitzer-Mauduit International, Inc. 2016 Executive Severance Plan (the “SWM Executive Severance Plan”), Messrs. Wamser and Nuñez were entitled to receive a pro-rated target bonus for 2023 in connection with their separations from the Company. Accordingly, Messrs. Wamser and Nuñez received payouts equal to $107,813 and $216,667, respectively, pursuant to the terms of the SWM Executive Severance Plan. |
The Committee believed at the time that the performance targets set for the 2023 STIP were rigorous yet achievable, and therefore established the targets so that they would be achieved, at the target performance level, TABLE OF CONTENTS if the Company successfully executed against its operating plan for the post-Merger portion of 2022. 2023. The following table sets forth the financial performance metrics applicablethat were approved in February 2023 under the 2023 STIP: 70% EBITDA Delivered(3)
($ in millions)
| | | $372.0 | | | $408.0 | | | $460.0 | 20% Synergies Achieved(4)
($ in millions)
| | | $20.0 | | | $25.0 | | | $40.0 | 10% Safety Scorecard(5) | | | 80% | | | 90% | | | 100% |
(1)
| For any actual performance which falls between two defined payout thresholds, the payout with respect to such performance criteria is determined using straight-line interpolation. |
(2)
| Achievement of the maximum performance level would result in a payout of 200% of target for the EBITDA Delivered and Synergies Achieved metrics and 125% of target for the Safety Scorecard metric. |
(3)
| EBITDA Delivered is determined on a consolidated basis for continuing operations and consists ofthe sum of (a) Net Income, (b) interest expense, (c) depreciation and amortization expense, and (d) taxes. For these purposes, “Net Income” does not include (a) any extraordinary gains or losses, (b) any nonrecurring gains or losses, (c) any gains or losses from asset sales, or (d) any facility/asset closure or restructuring costs. In accordance with the adjustment provisions included in the terms of the 2023 STIP related to the divestiture of our Engineered Paper business, EBITDA Delivered excludes the direct impact of (a) gain recognized from the sale, (b) acquisition, divestiture and/or restructuring costs, and (iii) realized synergies directly related to the Engineered Paper business. |
(4)
| Synergies Achieved is the year-over-year impact to EBITDA , resulting from cost synergy initiatives, excluding (i) any value creation resulting from Synergies Achieved below EBITDA other than the impact of any lower expenses incurred in respect of long-term incentive awards), and (ii) cash flow synergies. |
(5)
| Safety Scorecard is intended to focus the Named Executive Officers on the leading indicators of proactive risk reduction and is measured based on achievement with respect to certain goals relating to ergonomic risk assessments, job safety analysis, leader effectiveness in managing safety and pre-task risk assessments. |
In September 2023, in connection with the planned divestiture of our Engineered Paper business (which was completed in December 2023), the Committee determined to measure 2023 EBITDA Delivered performance in two separate periods, with the first period commencing January 1, 2023 and ending July 31, 2023 and the second period commencing August 1, 2023 and ending December 31, 2023. The Committee approved the use of two performance periods after considering the impact of the planned divestiture on the original performance goals, with the objective to properly measure and reflect performance prior to and following the announcement of the divestiture, consistent with the reporting of the Engineered Papers business as a discontinued operations following the August 1st announcement of the planned divestiture. In accordance with the adjustment provisions included in the terms of the 2023 STIP related to the determinationdivestiture of incentive payoutsour Engineered Paper business, the second half goals were automatically adjusted to reflect the fact that Engineered Papers would no longer contribute to the Company’s EBITDA performance as a result of the divestiture. The tables below set forth the revised target levels and our actual performance with respect to the EBITDA Delivered performance metric for each period in 2023: EBITDA Delivered
($ in millions)
| | | $221.0 | | | $242.0 | | | $273.0 | | | Below
Threshold | | | 0.0% |
EBITDA Delivered
($ in millions)
| | | $107.0 | | | $117.0 | | | $132.0 | | | Below
Threshold | | | 0.0% |
Based on performance during the performance period, the Company did not achieve threshold performance with respect to the EBITDA Delivered performance goal and achieved above maximum performance with respect to the Synergies Achieved performance goal. While the Company’s performance would have resulted TABLE OF CONTENTS in a target payout with respect to the Safety Scorecard performance goal, the Committee exercised negative discretion with respect to the Named Executive Officers forand the post-Merger portion of 2022: | | | | Post-Merger 2022 Objectives | | | Results | | | MEASUREMENT METRICS | | | Threshold
(50%) | | | Target
(100%) | | | Outstanding
(150%) | | | Maximum
(200%) | | | Actual
Performance | | | Attainment
Percentage | | 75% EBITDA Delivered(1)
($ in millions) | | | | $ | 184.8 | | | | | $ | 210.0 | | | | | $ | 225.0 | | | | | $ | 240.0 | | | | | $ | 188.5 | | | | | | 57% | | | 25% Synergy Run Rate Achievement(2)
($ in millions) | | | | $ | 15.0 | | | | | $ | 20.0 | | | | | $ | 30.0 | | | | | $ | 40.0 | | | | | $ | 31.3 | | | | | | 156.5% | | |
(1)
EBITDA Delivered isNamed Executive Officers did not receive a payout with respect to the sum of (a) Net Income, (b) interest expense, (c) depreciation and amortization expense, and (d) taxes on a consolidated basis for continuing operations. For these purposes, “Net Income” does not include (a) any extraordinary gains or losses, (b) any nonrecurring gains or losses, (c) any gains or losses from asset sales, or (d) any facility/asset closure or restructuring costs. ActualSafety Scorecard performance for the post-Merger performance period excludes realized synergies of $6.0 million.
(2)
Synergy Run Rate Achievement is the annualized impact of identified and validated cost reduction initiatives versus a 2022 budget baseline, as adjusted for inflation. Synergy Run Rate Achievement includes EBITDA run rate cost savings and equity compensation impacts. Actual performance for the post-Merger performance period excludes $4.5 million in net interest run rate savings.
goal.
The following table summarizes the target annual incentiveSTIP opportunities for each continuing Named Executive Officer (expressed as a percentage of 20222023 base salary and in dollars) for the post-Merger portion of 20222023 and the annual incentiveSTIP payouts received by each continuing Named Executive Officer for the post-Merger portion of 2022:2023: Julie Schertell | | | 115% | | | 1,063,750 | | | 425,500 | | | 40% | Greg Weitzel | | | 65% | | | 249,760(2) | | | 99,904 | | | 40% | Mark W. Johnson | | | 65% | | | 102,112(3) | | | 40,845 | | | 40% | Michael W. Rickheim | | | 65% | | | 276,250 | | | 110,500 | | | 40% |
(1)
| Amounts are based on the base salaries in effect as of December 31, 2023. |
(2)
| Mr. Weitzel’s target award opportunity was pro-rated based on his target award opportunities in effect both prior to and after his promotion. |
(3)
| Mr. Johnson’s target cash incentive award opportunity was pro-rated based on his commencement date of September 1, 2023. |
| Name | | | Post-Merger
Target Bonus
(% of Base
Salary)(1) | | | Post-Merger
Target Bonus
Award
Opportunity
($)(2) | | | Final Post-Merger
Bonus
($) | | | Final Post-Merger
Bonus
as a %
of Target | | | Julie Schertell | | | | | 115% | | | | | $ | 510,275 | | | | | $ | 418,425 | | | | | | 82% | | | | R. Andrew Wamser, Jr. | | | | | 75% | | | | | $ | 208,832 | | | | | $ | 171,243 | | | | | | 82% | | | | Ricardo Nuñez | | | | | 65% | | | | | $ | 157,143 | | | | | $ | 128,857 | | | | | | 82% | | | | Michael Rickheim | | | | | 65% | | | | | $ | 133,571 | | | | | $ | 109,529 | | | | | | 82% | | | Omar Hoek(3) | | | | | 75% | | | | | $ | 171,854 | | | | | $ | 140,921 | | | | | | 82% | | |
(1)
Amounts are based on the base salaries in effect beginning on December 31, 2022, as described above.
(2)
Amounts in this column have been pro-rated based on the portion of 2022 that followed the Closing.
(3)
The amounts for Mr. Hoek were converted at the December 31, 2022 exchange rate of 0.9323 Euros to the U.S. dollar.
20222023 Long-Term Incentive Compensation
In February 2022,2023, the Committee granted SWM’sour then-serving Named Executive Officers long-term incentive award opportunities for the 2022-20232023-2025 performance period under the Company’s 2015 LTIP. OnceLong Term Incentive Plan (the “2015 LTIP”), with the 2023 long-term incentive award opportunity was set for each such Named Executive Officer, the grant value was allocated 65% to performance shares and 35% to service-based restricted stock. Vesting could range from 0% to 200% of target based on the achievement of the underlying performance goals. as follows: The Committee believed that this design supported the Company’s pay-for-performance philosophy by tying a majority of the long-term incentive award opportunity to the achievement of a pre-established performance goal that supported the Company’s operating and strategic plan. TheIn February 2023, and after consulting with Meridian and considering internal pay equity and a review of competitive market practices, the Committee established the following 2023-2025 performance period target long-term incentive award opportunities for our then-serving Named Executive Officers (Mr. Weitzel's target opportunity forwas established in April 2023 in connection with his promotion to Chief Financial Officer):
Julie Schertell | | | 324% | | | 324% | Greg Weitzel | | | 40% | | | 125% | Michael W. Rickheim | | | 100% | | | 100% | R. Andrew Wamser, Jr. | | | 150% | | | 175% | Ricardo Nuñez | | | 100% | | | 125% |
TABLE OF CONTENTS After consulting with Meridian and considering internal pay equity and a review of competitive market practices, the 2022-2023 performance period wasCommittee established a target long-term incentive award opportunity equal to 360%125% of base salary for Dr. KramerMr. Weitzel in connection with his promotion to Chief Financial Officer in April 2023 and ranged from 100% – 150% for SWM’s otherapproved the grant of additional long-term incentive awards to Mr. Weitzel in order to align the value of his 2023 long-term incentive awards with his updated target opportunity, with his additional equity awards delivered in the same mix and with the same vesting terms as those granted to the then-serving Named Executive Officers. In 2022, the Committee increased Dr. Kramer’s target opportunity, as a percentage of base salary, to 360% (from 340%Officers in 2021), Mr. Wamser’s target opportunity, as a percentage of base salary, to 150% (from 140% in 2021), Mr. Hoek’s target opportunity, as a percentage of base salary, to 110% (from 95% in 2021), Mr. Nuñez’s target opportunity, as a percentage of base salary, to 100% (from 95% in 2021), and Ms. Peacock’s target opportunity, as a percentage of base salary, to 110% (from 95% in 2021), in each case based on individual performance and/or in order to further align their total direct compensation with the market median.February 2023. The table below sets forth the target award value, as of the date of grant, of the long-term incentive award received by each of SWM’s pre-Mergerthe Company’s Named Executive OfficerOfficers other than Mr. Johnson under its 20222023 long-term incentive program, expressed (i) as a percentage of pre-Merger 20222023 base salary and (ii) in dollars. In connection with his appointment in September 2023, Mr. Johnson was granted service-based restricted stock units (“RSUs”) with a grant date fair value equal to $300,000, as described in more detail below. Julie Schertell | | | 324% | | | 2,997,000 | | | 72,171 | | | 48,114 | Greg Weitzel | | | 125% | | | 531,250(1) | | | 12,790 | | | 8,527 | Michael W. Rickheim | | | 100% | | | 425,000 | | | 10,234 | | | 19,330 | R. Andrew Wamser, Jr.(2) | | | 175% | | | 1,006,250 | | | 24,231 | | | 16,154 | Ricardo Nuñez(2) | | | 125% | | | 625,000 | | | 15,050 | | | 10,033 |
(1)
| Mr. Weitzel was granted long-term incentive awards with a target value of $110,000 in February 2023 and was granted additional long-term incentive awards in April 2023 with a target value of $421,250 in connection with his promotion to Chief Financial Officer. |
(2)
| Mr. Wamser and Mr. Nuñez forfeited their 2023 long-term incentive awards upon their separations from the Company. |
2023 Performance-Based Restricted Stock Unit Awards As noted above, in 2023 the Company granted performance-based restricted stock units (“PSUs”) awards that are subject to a three-year performance period, with vesting based 50% on each of the Company’s Free Cash Flow as a Percent of Net Sales and Return on Invested Capital (“ROIC”) performance, subject to a TSR modifier based on performance relative to the S&P 600 Materials Index. These goals were selected because they were viewed as core indicators of the Company’s success in executing its long-term operating plan and delivering value to its stockholders. The Free Cash Flow as a Percent of Net Sales and ROIC targets will be established annually and payout percentages will be calculated based on the straight average of the payout percentages for each of the three individual calendar years in the performance period. The Free Cash Flow as a Percent of Net Sales and ROIC targets for 2023 are set forth in the table below and were established based on the Company’s prior year performance and the Company’s internal operating and strategic plan.The number of PSUs earned based on the Company’s Free Cash Flow as a Percent of Net Sales and ROIC performance reduced by 20% if the Company’s TSR falls below the 25th percentile of the S&P 600 Materials Index during the three-year performance period and increased by 20% if the Company’s TSR exceeds the 75th percentile during the three-year performance period.
| Name | | | Target LTIP (% of
Pre-Merger Base Salary) | | | Target LTIP
Award Opportunity ($) | | | R. Andrew Wamser, Jr. | | | | | 150% | | | | | $ | 750,000 | | | | Ricardo Nuñez | | | | | 100% | | | | | $ | 482,500 | | | Omar Hoek(1) | | | | | 110% | | | | | $ | 489,561 | | | | Jeffrey Kramer, PhD | | | | | 360% | | | | | $ | 3,240,000 | | | | Tracey Peacock | | | | | 110% | | | | | $ | 521,400 | | |
(1)
Mr. Hoek’s target opportunity under our 2022 long-term incentive program was established based upon his salary atThe table below sets forth the December 31, 2021 exchange rate of 0.8792 Eurosperformance goals applicable to the U.S. dollar.PSU awards for the 2023-2025 performance period that were approved in early 2023, which were adjusted in accordance with the terms of the PSU awards to reflect the impact of the divestiture of our Engineered Papers business, in a manner consistent with the adjustments to the 2023 STIP described above:
Free Cash Flow as a Percent of Net Sales | | | 3.0% | | | 5.0% | | | 7.0% | | | Below
Threshold | | | * | | | * | | | * | | | * | | | * | | | * | | | * | | | * | ROIC | | | 6.0% | | | 7.5% | | | 9.0% | | | Below
Threshold | | | * | | | * | | | * | | | * | | | * | | | * | | | * | | | * | Payout Result | | | | | | | | | | | | 0% | | | | | | | | | | | | * | | | | | | | | | | | | * | Relative TSR Result
| | | |
*
| Performance goals for the 2024 performance year were established at the beginning of 2024 and will be disclosed in next year’s proxy statement. Performance goals for the 2025 performance year will be established at the beginning of 2025. |
20222023 Service-Based Restricted Stock Unit Awards
Pursuant to the service-based component of SWM’s 2022the Company’s 2023 long-term incentive award opportunity, in February 2022,2023 (April 2023 in the case of Mr. Weitzel), the then-serving Named Executive Officers of SWM were granted shares of restricted stock with respectRSUs, which are scheduled to 35% of the 2022 pre-Merger equity awards, as set forthvest in the table below. One-half of the shares vested in February 2023 and the remaining half will vestequal installments in February 2024, in each case,2025 and 2026, subject to continued employment through theeach applicable vesting date. The restricted stockUpon his commencement of employment in September 2023, Mr. Johnson was also granted RSUs that are scheduled to vest in equal installments on each of the first three anniversaries of the grant date, subject to his continued employment through each vesting date. Wamser and Nuñez Separation Agreements As previously disclosed, Messrs. Wamser and Nuñez were each deemed to have experienced a termination without “Cause” within two years following a “Change in Control” (each as defined in the SWM Executive Severance Plan) upon their separations from the Company in April 2023 and September 2023, respectively, which occurred within two years following the closing of the Merger. In connection with their separations, the Company entered into a Separation, Waiver and Release Agreement with each of Messrs. Wamser and Nuñez, memorializing their entitlements to the following payments and benefits in accordance with the terms of the SWM Executive Severance Plan: (i) a lump sum cash payment equal to three times the sum of (x) his highest base salary for the three-year period preceding his separation, plus (y) his highest short-term incentive bonus for the three-year period preceding his separation; (ii) a pro-rated STIP payment for 2023 based on target performance; and (iii) a cash payment equal to the cost of continued medical, dental, vision, life and supplemental long-term disability coverage for up to three years, at active employee rates. In addition, the outstanding equity awards granted to Dr. KramerMr. Wamser and Ms. PeacockMr. Nuñez prior to 2023 vested in full upon the termination of their employment in connection with the Closingseparations in accordance with the terms of the underlying award agreements. Name | | | 2022 Service-Based Restricted Stock
(Number of Shares) | | R. Andrew Wamser, Jr. | | | | | 8,868 | | | Ricardo Nuñez | | | | | 5,706 | | | Omar Hoek | | | | | 5,788 | | | Jeffrey Kramer, PhD | | | | | 38,310 | | | Tracey Peacock | | | | | 6,166 | | |
2022 Performance Share Awards
In February 2022, as in 2021, the Company granted performance share awards that were subject to a two-year performance period, with vesting based on the Company’s adjusted EBITDA performance during the performance period. The number of performance shares earned based on the Company’s adjusted EBITDA performance was to be reduced by 15% if the Company’s TSR fell below the twentieth percentile of the S&P 600 Materials Index during the two-year performance period and increased by 15% if the Company’s TSR exceeded the eightieth percentile during the two-year performance period. To encourage retention over a three-year period, any performance shares earned during the performance period were to vest on the one-year anniversary of Committee certification of the achievement of the performance objectives, rather than immediately at the end of the two-year performance period.Mark W. Johnson New Hire Compensation
In connection with Mr. Johnson’s appointment as Chief Legal Officer, General Counsel and Secretary, Mr. Johnson and the Merger and as permitted byCompany entered into an offer letter setting forth the initial terms of his employment, with the 2015 LTIP, the Committee approved the conversionprincipal compensation elements as described above. Beginning in 2024, Mr. Johnson will be eligible to receive annual long-term incentive awards with a target value equal to 125% of all outstanding performance-based equityhis base salary. In lieu of awards under the 2015 LTIP into RSUsCompany’s 2023 long-term incentive program, in September 2023, Mr. Johnson was granted service-based RSU awards with respect to the target number of shares of stock subject to the original performance-based awards and subject to the time-based vesting conditions of the original award. Accordingly, upon the closing of the Merger, the outstanding performance share awards granted to SWM’s Named Executive Officers in 2021 and 2022 were converted into time-based RSUs with respect to the number of shares set forth in the table below, with the RSUs granted in exchange for 2021 performance share awards to vest 100% in February 2024 and the RSUs granted in exchange for 2022 performance share awards to vest 100% in February 2025. Because the adjustment made to the performance-based awards in connection with the Merger was considered a modification under Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation-Stock Compensation (“FASB ASC Topic 718”), the 2022 Summary Compensation Table reflects the incrementalgrant date fair value associated with the modification charge incurred under FASB Topic ASC 718 for each impacted Named Executive Officer.
| Name | | | Number of Shares Subject to
RSUs Granted in Exchange for
2021 Performance Share
Awards | | | Number of Shares Subject to
RSUs Granted in Exchange for
2022 Performance Share
Awards | | | R. Andrew Wamser, Jr. | | | | | 11,107 | | | | | | 16,470 | | | | Ricardo Nuñez | | | | | 7,485 | | | | | | 10,595 | | | | Omar Hoek | | | | | 7,426 | | | | | | 10,751 | | | Jeffrey Kramer, PhD(1) | | | | | 48,615 | | | | | | 71,149 | | | Tracey Peacock(1) | | | | | 5,317 | | | | | | 11,450 | | |
(1)
equal to $300,000, as described above. Pursuant to the terms of the underlying award agreement, the RSUs granted to Dr. Kramer and Ms. Peacock vestedhis offer letter, Mr. Johnson was also awarded a sign-on bonus of $100,000, which Mr. Johnson must repay in full upon their separation fromin the Company.
2022 Retention Awards
As previously disclosed, in January 2022, in lightevent that he voluntarily terminates his employment within 12 months of the highly competitivepayment date. The terms of this sign-on bonus were determined after considering market data and the Company’s historical compensation practices.In addition, Mr. Johnson is eligible to participate in the Company’s flexible perquisites program, pursuant to which he will receive a cash allowance of up to $15,000 per year that can be used for income tax preparation services, financial planning services and other executive talent andperquisites.
TABLE OF CONTENTS Weitzel Bonuses In 2023, Mr. Weitzel was paid a retention bonus of $97,031 pursuant to a retention arrangement entered into at the time of the Merger. In addition, Mr. Weitzel was paid a one-time bonus of $85,000 in recognition of the potential disruptionhis efforts related to the executiondivestiture of the Company’s strategic roadmap that would be caused by the lossour Engineered Papers business. Severance Plans Each of critical personnel, the Committee determined itour continuing Named Executive Officers are eligible for payments and benefits in connection with certain qualifying terminations of employment pursuant to be in the best interest of the Company to grant retention awards to certain employees, including Messrs. Wamser, Hoek and Nuñez. The retention awards were granted in the form of performance shares and vest 100% on the third anniversary of the grant date, with the level of vesting subject to a relative TSR modifier. Under the terms of the award agreement,Amended and Restated Neenah Executive Severance Plan. See “Potential Payments Upon Termination or Change in Control” below for further information regarding the number of shares that could be earned would be increasedAmended and Restated Neenah Executive Severance Plan. Deferred Compensation Plans Prior to 150% of target if the Company’s TSR fell between the sixty-fifth percentile and the eighty-fourth percentile of the peer group set forth below during the three-year performance period, and to 200% of target if the Company’s TSR equals or exceeds the eighty-fifth percentile of the peer group. The retention awards granted to Messrs. Wamser, Hoek and Nuñez are with respect to a target number of 40,000, 32,000 and 25,000 shares of Company common stock, respectively. In connection with the Merger, the retention awards were converted to time-based RSU awards along with the rest of SWM’s performance-based equity awards. | | Peer Companies | | | | | AptarGroup, Inc. | | | Ferro Corporation | | | | | Ashland Global Holdings, Inc. | | | H.B. Fuller Company | | | | | Avient Corporation (f/k/a PolyOne Corporation) | | | Kraton Corporation | | | | | Axalta Coating Systems Ltd. | | | Mercer International Inc. | | | | | Balchem Corporation | | | Minerals Technologies Inc. | | | | | Cabot Corporation | | | Neenah, Inc.(1) | | | | | Clearwater Paper Corporation | | | Tredegar Corporation | | | | | Donaldson Company, Inc. | | | | | |
(1)
Removed upon the closing of the Merger.
In connection with the receipt of the one-time retention awards, each of the Named Executive Officer recipients domiciled in the United States (i.e., Mr. Wamser and Mr. Nuñez) entered into customary Restrictive Covenant Agreements, whereby they agreed to certain covenants, including confidentiality obligations, non-disparagement and certain non-competition and non-solicitation restrictions for a period of two years following any termination of employment from the Company. The Company also entered into a Restrictive Covenant Agreement with Dr. Kramer in connection with his ordinary course long-term incentive awards for 2022.
2022 Synergy PSUs
In September 2022, the Committee determined to grant Synergy PSUs certain employees, including each of the continuing Named Executive Officers, in order to incentivize them to identify and pursue synergies resulting from the Merger and to retain the recipients during this period of transformation for the Company.
The number of PSUs earned will be based on the Company’s Synergy Run Rate Achievement during the period beginning on July 6, 2022 and ending December 31, 2024. Synergy Run Rate Achievement is defined as the annualized impact of identified and validated cost reduction initiatives versus a 2022 budget baseline, as adjusted for inflation. Based on performance, participants are eligible to receive a payout ranging from 0% – 150% of target. The Committee believed at the time that the performance targets were rigorous yet achievable, and therefore established the targets so that they would be achieved at the threshold level only if the Company achieved results in excess of the publicly disclosed target levels of synergies post-Merger and at the target performance level if the Company successfully executed against its operating plan during the performance period. The table below sets forth the target number of PSUs subject to the Synergy PSU grant for each continuing Named Executive Officer.
Name | | | 2022 Special PSUs
(Target Number of Shares) | | Julie Schertell | | | | | 75,944 | | | R. Andrew Wamser, Jr. | | | | | 47,209 | | | Ricardo Nuñez | | | | | 41,051 | | | Michael Rickheim | | | | | 34,893 | | | Omar Hoek | | | | | 36,895 | | |
Deferred Compensation Plans
Legacy SWM Deferred Compensation Plan
Allall of SWM’s U.S.-based Named Executive Officers were eligible to participate in a deferred compensation plan maintained by SWM (the “Legacy SWM Deferred Compensation Plan”). Historically, Dr. Kramer and Messrs. Wamser and Nuñez wereMr. Rickheim is the only Named Executive OfficersOfficer who had elected to participatecurrently participates in such plan.the Legacy SWM Deferred Compensation Plan. Eligible employees couldmay elect to defer up to 25% of their annual salary and up to 50% of their incentive bonus to the Legacy SWM Deferred Compensation Plan and the Company could,may, with Committee approval, make cash contributions to a participant’s account in the Legacy SWM Deferred Compensation Plan. The Merger constituted a “change of control” for purposes of the Legacy SWM Deferred Compensation Plan. Pursuant to the terms of such plan, participants (including the participating Named Executive Officers) fully vested in the contributions the Company had made to such plan on their behalf upon the Closing and their vested balances were distributed to them in a lump sum within 30 days following the closing of the Merger.
Legacy Neenah Deferred Compensation Plan
Prior to the Merger, Neenah maintained the Neenah Deferred Compensation Plan (the “Legacy Neenah Deferred Compensation Plan”), which was a non-qualified deferred compensation plan for Neenah’s executive officers. The Legacy Neenah Deferred Compensation Plan is frozen to new participants. The Merger constituted a “change of control” for purposes of the Legacy Neenah Deferred Compensation Plan. Pursuant to the terms of such plan, each executive officer who previously elected to be paid a lump sum within 90 days following a “change of control” received a payout of his or her balance in the plan in accordance with its terms and the underlying deferral elections. Mr. Rickheim participated in the Legacy Neenah Deferred Compensation Plan prior to the Merger, in connection with which his balance under the plan was distributed to him.
Neenah Supplemental Retirement Contribution Plan
Prior to the Merger, Neenah maintained a supplemental retirement contribution plan (the “Supplemental RCP”), which is a non-qualified defined contribution plan which is intended to provide a tax-deferred retirement savings alternative for amounts exceeding Internal Revenue Code limitations on qualified plans. The Merger constituted a “change of control” for purposes ofMs. Schertell and Mr. Weitzel currently participate in the Supplemental RCP and, pursuant to the terms of such plan, each participant was required to be paid a lump sum within 30 days following such change of control. Accordingly, Ms. Schertell’s balance under the Supplemental RCP was distributed to her within 30 days following the closing of the Merger.RCP.
Please see the “2022“2023 Non-Qualified Deferred Compensation” table for further information regarding the Company’s deferred compensation arrangements. Hoek Consulting and Termination Agreements
In October 2022, Mr. Hoek tendered his resignation as the Company’s Chief Operating Officer, effective as of March 1, 2023. In connection with his resignation, Mr. Hoek and SWM Luxembourg SARL (“SLS”), a wholly owned subsidiary of the Company, entered into a consulting agreement, pursuant to which he will continue to provide consulting services to the Company for one-year following his resignation. Under the consulting agreement, Mr. Hoek will be paid an annual consulting fee of €250,000. In addition, Mr. Hoek and SLS entered into a Mutual Agreement for the Termination of Employment (the “Hoek Termination Agreement”), pursuant to which Mr. Hoek is entitled to receive an annual incentive amount based on the Company’s performance for fiscal year 2022. The Hoek Termination Agreement also provides that any equity awards previously granted by the Company to Mr. Hoek that are not vested on or before March 1, 2023 will be forfeited. In connection with his resignation, Mr. Hoek also received a payment of $32,411 in respect of his accrued but unused vacation.
Kramer Transition Services Agreement
As described above, Dr. Kramer was deemed to have experienced a “Good Reason” event in connection with the Merger and resigned from his role as our Chief Executive Officer in connection with the closing of the Merger and entered into a Transition Services Agreement with the Company, pursuant to which he will serve as an independent contractor and provide transition and consulting services to the Company until the 12-month anniversary of the closing of the Merger (the “Transition Period,” and such agreement, the “Kramer Transition Agreement”). The Kramer Transition Agreement may be terminated by Dr. Kramer for any reason on 30 days’ written notice or by the Company for Cause (as defined in the Company’s 2016 Executive Severance Plan). Under the Kramer Transition Agreement, Dr. Kramer will be paid a consulting fee of $166,666.67 each calendar month during the Transition Period, payable on the last day of each completed calendar month. In addition, the Kramer Transition Agreement provides for the following benefits: (i) severance benefits under the Company’s 2016 Executive Severance Plan, payable in connection with a termination without Cause or for Good Reason within two years following a Change of Control (each as defined in the Company’s 2016 Executive Severance Plan); (ii) a pro-rated annual incentive payment based on target performance, as described above; and (iii) equity vesting for a termination without Cause or for Good Reason within 24 months after the effective date of a Change in Control (each as defined in the 2015 LTIP). See “Potential Payments Upon Termination or Change in Control” below for a quantification of and additional information regarding the payments and benefits received by Dr. Kramer in connection with his resignation as our Chief Executive Officer.
Peacock Separation Agreement
As described above, Ms. Peacock was deemed to have experienced a “Good Reason” event in connection with the Merger and resigned from her role as our Executive Vice President, Advanced Materials & Structures upon the closing of the Merger on July 6, 2022. In connection with her separation, Ms. Peacock and the Company entered into a Separation, Waiver and Release Agreement (the “Peacock Separation Agreement”), pursuant to which Ms. Peacock became entitled to the following payments and benefits, payable in accordance with the terms of the Company’s 2016 Executive Severance Plan: (i) a lump sum cash payment equal to three times the sum of (x) her highest base salary for the three-year period preceding her separation, plus (y) her highest short-term incentive bonus for the three-year period preceding her separation; (ii) a pro-rated annual incentive payment based on target performance, as described above; and (iii) continued medical, dental, vision, life and supplemental long-term disability coverage for up to three years, at active employee rates. In addition, Ms. Peacock’s restricted stock awards and performance share awards vested in full (based on target performance with respect to the performance share awards) in accordance with the terms of the underlying award agreements, as described above.
Severance Plans
Following the closing of the Merger, Messrs. Wamser and Nuñez continued to be eligible for payments and benefits in connection with certain qualifying terminations of employment pursuant to the terms of the
Company’s 2016 Executive Severance Plan and Ms. Schertell and Mr. Rickheim continued to be eligible for payments and benefits pursuant to the terms of the Amended and Restated Neenah Executive Severance Plan. See “Potential Payments Upon Termination or Change in Control” below for further information regarding the Company’s 2016 Executive Severance Plan and the Amended and Restated Neenah Executive Severance Plan.
On March 15, 2023, the Company announced the departure of Mr. Wamser effective April 1, 2023. Following the Merger, Mr. Wamser helped transition and organize the finance function at the Company and, following such transition, Mr. Wamser is separating from the Company. For purposes of the Company’s 2016 Executive Severance Plan, Mr. Wamser’s departure was a termination without “cause” following a “change of control.” As a result, Mr. Wamser became entitled to receive compensation and benefits under the 2016 Executive Severance Plan.
Stock Ownership Guidelines The Company has adopted stock ownership guidelines (the “Guidelines”), which require the Company’s executive officers, including the continuing Named Executive Officers, to own shares of Company common stock with a fair market value equal to a multiple of base salary. The Guidelines are designed to align the interests of the Company’s executive officers with the long-term interests of the Company’s stockholders and to promote commitment to sound corporate governance. Under the Guidelines, the continuing Named Executive Officers must retain at least 50% of vested shares of Company common stock and shares acquired pursuant to the exercise of an option (except for shares sold to pay required tax withholding and the exercise price for options) until the required ownership guideline levels have been achieved (and thereafter if required to maintain the required ownership levels). Our Named Executive Officers must satisfy the Guidelines within five years after becoming subject to the Guidelines. Under the Guidelines, the Company’s Chief Executive Officer is required to hold stock equal to a multiple of five times her base salary, Messrs. Wamser, HoekWeitzel and NuñezJohnson are each required to hold stock equal to a multiple of three times his base salary and Mr. Rickheim is required to hold stock equal to a multiple of two times his base salary. As of the record date, each of our continuing Named Executive Officers has either met (and continues to meet)meets the Guidelines or is within the five-year period to become in compliance with the Guidelines. ✔ | | | | ✓
Shares owned outright (including through vesting of equity awards) | | | ✘
| | | ×
Performance shares and performance-based restricted stock units | ✔
| | | | ✓
Shares owned directly by a spouse, domestic partner, or minor child | | | ✘
| | | ×
Service-based restricted stock and restricted stock units | ✔
| | | | ✓
Shares owned indirectly through beneficial trust ownership | | | ✘
| | | ×
Stock options (whether vested or unvested) | ✔
| | | | ✓
Vested shares or stock units held in any Company equity plan, employee stock purchase plan, deferred compensation plan, retirement plan or similar Company plan | | |
| | | | |
Effective December 7, 2022, in-the-money value of vested but unexercised stock option awards no longer counts towards satisfaction
TABLE OF CONTENTS Clawback Policies During fiscal year 2023, the Company adopted a Dodd-Frank Clawback Policy to comply with SEC and NYSE listing rules. Under that policy, the Company is required in certain situations to recoup incentive compensation paid or payable to certain current or former executive officers of the ownership guidelines.Company, including the Named Executive Officers, in the event of an accounting restatement. In addition, the Company continues to maintain the SWM International, Inc. Executive Compensation Adjustment and Recovery Policy, pursuant to which the Compensation Committee has the discretion to seek to recover any annual or long-term incentive compensation (including time-based equity awards) awarded or paid to a covered officer (including each Named Executive Officer) during the previous three years if the result of a performance measure upon which the award was based or paid is subsequently restated or otherwise adjusted in a manner that would reduce the size of the award or payment.
How We Make Compensation Decisions Compensation Approval Process
The Committee is responsible for determiningAs illustrated in the table below, our Chief Executive Officer reviews annually the performance and pay level of each of our other executive officers, develops recommendations concerning the compensation of each of our other executive officers and presents those recommendations to the Committee. The Chief Executive Officer does not make any recommendation concerning her own compensation.
While the Committee considers the input of our Chief Executive Officer and each of our other executive officers. In settingmanagement in the compensation of our other executive officers,decision-making process, the Committee takes into accountis responsible for overseeing our executive compensation program, which includes the Chief Executive Officer’s reviewSTIP and long-term incentive awards as well as our retirement and other benefit programs and practices. The Committee considers all elements of each executive officer’sthe program in total, as well as individual performance, Company-wide performance and her recommendations with respect to their compensation. While annualinternal equity and market compensation decisions are generally made in the Committee’s fall and winter meetings, the Committee meets at other times throughout the year considerations, when making executive compensation-related decisions.• Performed by independent compensation consultant
• Considers peer pay practices
• Influences program design | | | • Chief Executive Officer evaluates performance
• Chief Executive Officer and management review market data and internal comparable roles
• Chief Executive Officer recommends to the Committee program changes and any pay adjustments | | | • Chief Executive Officer and management recommend to the Committee any program changes
• Chief Executive Officer recommends pay adjustments
• Committee carefully considers:
○ Historical and current market practices,
○ Internal pay equity, and
○ Established market trends
• Committee approves any program and pay changes |
as required to fulfill its oversight responsibility with respect to the Company’s executive compensation program. In August 2022, following the Closing, the Committee performed an additional evaluation of the Company’s executive compensation practices in order to align the post-Merger compensation of the Company’s executive officers with the Company’s post-Merger short and long-term financial and strategic priorities.
Independent Compensation Consultant The Committee engaged Meridian as its independent compensation consultant. In 2022,2023, Meridian provided executive compensation and governance-related services including review of 20222023 compensation adjustments, (both before and after the Merger), review of competitive market data provided by Aon, awards under our long-term incentive program, the setting of performance goals in our incentive plans including the payout leverage for results above and below the target performance levels, ana review of the analysis of the relationship between the Company’s total direct pay relative to the competitive market, a review of trends and regulatory developments with respect to executive compensation, a review of our compensation peer group, based on materials prepared by Aon plc, and assistance with this Compensation Discussion & Analysis. Meridian is retained by and reports to the Committee and, at the request of the Committee, participates in committee meetings. Meridian did not provide any other services to the Company in 2022.2023. The Committee reviewed the independence of Meridian under the New York Stock Exchange and SEC rules and concluded that the work of Meridian has not raised any conflict of interest. Market-Based Competitive Compensation Levels During 2022,With respect to 2023, the Committee continued its philosophy of setting compensation within a range of the market median for each position, which experience has shown is the level at which the Company has been able
TABLE OF CONTENTS to recruit and retain highly talented executives. Compensation paid to our Chief Executive Officer is determined and approved by the executive team is based onCommittee using competitive market data developedanalyzed annually by Meridian. The competitive compensation analysisMeridian, based on materials prepared by Aon. The Committee annually reviews, in consultation with Meridian, and approves the compensation for the Company’s other Named Executive Officers in October 2021 for evaluating 2022 compensation was intended to reflectconsultation with the scope of an executive’s responsibilities, experience in the position, andChief Executive Officer using competitive market conditions. The October 2021data, based on materials prepared by Aon. In establishing 2023 executive compensation, analysis relied on published survey data and proxy statement data from a peer group of companies.
Published Survey Data
The main basis used for comparison in the October 2021 compensation analysis was the following published survey data compiled by Meridian:
•
For U.S.-based Named Executive Officers: Willis Towers Watson’s 2020 General Industry Executive Compensation Survey Report
•
For the Named Executive Officer based in Luxembourg: Willis Towers Watsons’s 2020 Belgium Executive Compensation Database, Willis Towers Watson’s 2020 General Industry Executive Compensation Survey Report
The survey data is used for all Company executives as the primary tool for market comparisons as this source provides larger sample sizes and more direct matching between positions. All published survey data was aged to a common date of January 1, 2022 using an annual aging factor of 3% per year.
Proxy Statement Peer Group (Pre-Merger)
The October 2021 compensation analysis alsoCommittee relied on proxy statement data from a peer group of 15 companies to supplement the survey data discussed above.16 companies. The Committee believes that the Company’s peer group should reflect the industries in which the Company potentially competes for business, executive talent and capital, as well as the Company’s significant international operations.
The peer group used for evaluating pre-Merger 2022 compensation decisions consisted of the companies below. This is the same peer group that was used for evaluating 2021 compensation decisions, with the exception of the removal of Lydall, Inc. due to its acquisition by Uniprix; Myers Industries, Inc. due to its
smaller size relative to the Company and because Dr. Kramer serves on its board of directors and as a member of such board’s compensation committee; and Deluxe Corporation, Quaker Chemical Corp. and Innospec Inc. due to other peers being deemed more aligned with the Company from a business perspective; and the addition of Ashland Global Holdings, Inc., Axalta Coating Systems Ltd., Cabot Corporation, Donaldson Company, Inc. and Tredegar Corporation because their revenue and/or market capitalization satisfied the peer group’s “size” criteria.
| | Peer Companies | | | | | AptarGroup, Inc. | | | Ferro Corporation | | | | | Ashland Global Holdings, Inc. | | | H.B. Fuller Company | | ��� | | | Avient Corporation (f/k/a PolyOne Corporation) | | | Kraton Corporation | | | | | Axalta Coating Systems Ltd. | | | Mercer International Inc. | | | | | Balchem Corporation | | | Minerals Technologies Inc. | | | | | Cabot Corporation | | | Neenah, Inc. | | | | | Clearwater Paper Corporation | | | Tredegar Corporation | | | | | Donaldson Company, Inc. | | | | | |
Proxy Statement Peer Group (Post-Merger)
Following the closing of the Merger, in August 2022, the Committee engaged Aon plc to prepare an updated peer group for purposes of evaluating the Company’s post-Merger compensation decisions. The component companies of the updated peer group were selected from Aon’s Radford Global Compensation database for manufacturing companies with revenues between one-third and three times the Company’s revenue. | | AptarGroup, Inc. | | | Greif, Inc. | | | | | Ashland Global Holdings, Inc. | | | H.B. Fuller Company | | | | | Avient Corporation (f/k/a PolyOne Corporation) | | | Ingevity Corporation | | | | | Axalta Coating Systems Ltd. | | | Innospec Inc. | | | | | Cabot Corporation | | | Mercer International Inc. | | | | | Clearwater Paper Corporation | | | Minerals Technologies Inc. | | | | | Donaldson Company, Inc. | | | Rayonier Advanced Materials Inc. | | | | | Glatfelter Corporation | | | Trinseo PLC | | |
The Committee considers 20222023 target total direct compensation to be competitive if it falls with +/-20%-15% of the market median. The analysis evaluates the following components: •
base salary;
•
annual incentive bonus (assuming attainment of the target objective level, as a percentage of base salary);
•
target total cash compensation (base salary plus target level annual incentive);
•
long-term incentive compensation (assuming attainment of the target objective level); and
•
target total direct compensation, which is the sum of base salary plus annual incentive plus long-term incentive compensation at the target levels. In September 2023, the Committee reviewed the compensation peer group and determined not to make any changes to the peer group used for purposes of evaluating 2024 compensation decisions.
On an annual basis, the Committee reviews the risks associated with the Company’s executive compensation program and whether the program was reasonably likely to have a material adverse effect on the Company. The Committee concluded that the program design, metrics and objectives, taken as a whole and considered within the other financial control and approval processes in place at the Company, were not reasonably likely to have a material adverse effect on the Company.
COMPENSATION COMMITTEE REPORT The Committee has reviewed and discussed the “Compensation Discussion & Analysis” with management. Based on the review and discussions, the Committee recommended to the Board that the “Compensation Discussion & Analysis” be included in the Company’s 20232024 Proxy Statement and incorporated by reference into the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.2023. COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS Anderson D. Warlick (Chair)
Marco Levi
Tony R. Thene
20222023 SUMMARY COMPENSATION TABLE
The following table sets forth information concerning the compensation of our Named Executive Officers for 20222023 and, to the extent required by the SEC executive compensation disclosure rules, 20212022 and 2020.2021. For 2022,2023, our Named Executive Officers were our Chief Executive Officer, each of the individuals who served as our Chief ExecutiveFinancial Officer during the year, our Chief Financial Officer, our other three most highly compensated other executive officers as of December 31, 20222023 and one former executive officer. As noted above, fiscal 2022 represented a year of significant transformation for the Company as a result of the Merger, which also resulted a number of changes including at the executive team level. In accordance with SEC disclosure rules, the compensation reported below does not include compensation paid or earned by a Named Executive Officer for his or her service to Neenah and solely represents compensation earned following the consummation of the Mergers. Julie Schertell
President and Chief Executive Officer
| | | 2023 | | | 925,000 | | | — | | | 1,800,426 | | | — | | | 425,500 | | | — | | | 302,736 | | | 3,453,662 | | | 2022 | | | 436,290 | | | — | | | 1,790,000 | | | — | | | 1,106,971 | | | — | | | 142,782 | | | 3,476,043 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Gregory Weitzel
Chief Financial Officer
| | | 2023 | | | 387,500 | | | 182,031 | | | 283,712 | | | — | | | 99,904 | | | — | | | 47,052 | | | 1,000,199 | | | | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Michael W. Rickheim
Chief Human Resources Officer and Administrative Officer
| | | 2023 | | | 425,000 | | | — | | | 255,279 | | | — | | | 110,500 | | | — | | | 75,734 | | | 866,513 | | | 2022 | | | 201,882 | | | — | | | 822,428 | | | — | | | 307,377 | | | — | | | 45,943 | | | 1,377,630 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Mark W. Johnson
Chief Legal and Administrative Officer & Corporate Secretary
| | | 2023 | | | 155,462 | | | 100,000 | | | 300,002 | | | — | | | 40,845 | | | — | | | 11,463 | | | 607,772 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | R. Andrew Wamser, Jr.
Former Executive Vice President, Finance and Chief Financial Officer(5)
| | | 2023 | | | 143,750 | | | — | | | 603,837 | | | — | | | — | | | — | | | 3,497,333 | | | 4,244,920 | | | 2022 | | | 531,731 | | | — | | | 3,195,831 | | | — | | | 488,901 | | | — | | | 177,813 | | | 4,394,276 | | | 2021 | | | 471,636 | | | — | | | 751,999 | | | — | | | 227,957 | | | — | | | 101,514 | | | 1,553,106 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Ricardo Nuñez
Former Executive Vice President, General Counsel and Secretary(5)
| | | 2023 | | | 336,538 | | | — | | | 375,021 | | | — | | | — | | | — | | | 3,398,851 | | | 4,110,410 | | | 2022 | | | 489,904 | | | — | | | 2,261,378 | | | — | | | 391,605 | | | — | | | 131,805 | | | 3,274,692 | | | 2021 | | | 468,383 | | | — | | | 506,775 | | | — | | | 208,971 | | | — | | | 90,623 | | | 1,274,752 |
(1)
| For Mr. Weitzel, the amount reflected in this column for 2023 represents a retention bonus of $97,031 and a bonus of $85,000 paid to him in recognition of his efforts related to the divestiture of our Engineered Paper business. The amount reflected for Mr. Johnson for 2023 represents a sign-on bonus. See discussion above in the Compensation Discussion and Analysis. |
(2)
| The amounts reported in this column for 2023 represent the annual grants of PSUs and RSUs, valued in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation-Stock Compensation (“FASB ASC Topic 718”). The amounts included in this column for the PSU awards granted in 2023 are calculated based on the probable satisfaction of the performance conditions for such awards at the time of grant. See Note 19 to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2023 for a discussion of the relevant assumptions used in calculating the amounts reported for the applicable year. As disclosed in the Compensation Discussion and Analysis, for the 2023 PSUs, the Compensation Committee established the performance goals for the first year of the three-year performance period with the annual goals for the subsequent years in the three-year performance period to be set at the beginning of each applicable year during the performance period. In accordance with FASB ASC Topic 718, the value of the 2023 PSUs is based on one-third of the full number of shares subject to the 2023 PSUs for which the performance goals were established in 2023. The remaining portion of the 2023 PSUs that will be linked to goals for subsequent years will be reported in the Summary Compensation Table for those years in which the goals are established. Assuming the highest level of performance is achieved for the 2023 PSUs, the maximum value for the one-third portion of the 2023 PSUs granted in 2023 under FASB ASC Topic 718 would be as follows: |
Name and principal position
(a) | | | Year
(b) | | | Salary
($)
(c)(1) | | | Bonus
($)
(d) | | | Stock
Awards
($)
(e)(1) | | | Option
Awards
($)
(f) | | | Non-Equity
Incentive Plan
Compensation
($)
(g)(2) | | | Change in
Pension Value and
Non-qualified
Deferred
Compensation
Earnings
($)
(h)(3) | | | All Other
Compensation
($)
(i)(4) | | | Total
($)
(j) | | Julie Schertell
President and Chief Executive Officer | | | 2022 | | | | $ | 436,290 | | | | | | — | | | | | $ | 1,790,000 | | | | | | — | | | | | $ | 1,106,971 | | | | | | — | | | | | $ | 142,782 | | | | | $ | 3,476,043 | | | R. Andrew Wamser, Jr.
Chief Financial Officer | | | 2022 | | | | $ | 531,731 | | | | | | — | | | | | $ | 3,195,832 | | | | | | — | | | | | $ | 443,543 | | | | | | — | | | | | $ | 177,813 | | | | | $ | 4,348,919 | | | | | 2021 | | | | $ | 471,636 | | | | | | — | | | | | $ | 751,999 | | | | | | — | | | | | $ | 227,957 | | | | | | — | | | | | $ | 101,514 | | | | | $ | 1,553,106 | | | | | 2020 | | | | $ | 462,338 | | | | | | — | | | | | $ | 779,060 | | | | | | — | | | | | $ | 497,793 | | | | | | — | | | | | $ | 93,183 | | | | | $ | 1,832,374 | | | Ricardo Nuñez
Chief Legal Officer, Secretary and Chief Compliance Officer | | | 2022 | | | | $ | 489,904 | | | | | | | | | | | $ | 2,261,378 | | | | | | — | | | | | $ | 354,088 | | | | | | — | | | | | $ | 131,805 | | | | | $ | 3,237,175 | | | | | 2021 | | | | $ | 468,383 | | | | | | — | | | | | $ | 506,775 | | | | | | — | | | | | $ | 208,971 | | | | | | — | | | | | $ | 90,623 | | | | | $ | 1,274,752 | | | | | 2020 | | | | $ | 459,199 | | | | | | — | | | | | $ | 505,934 | | | | | | — | | | | | $ | 494,360 | | | | | | — | | | | | $ | 79,274 | | | | | $ | 1,538,767 | | | Michael Rickheim
Chief Human Resources
Officer and
Administrative Officer | | | 2022 | | | | $ | 201,882 | | | | | | — | | | | | $ | 822,428 | | | | | | — | | | | | $ | 307,377 | | | | | | — | | | | | $ | 45,943 | | | | | $ | 1,377,630 | | | Omar Hoek
Former Chief Operating
Officer | | | 2022 | | | | $ | 454,606 | | | | | | — | | | | | $ | 2,382,462 | | | | | | — | | | | | $ | 329,042 | | | | | $ | 27,506 | | | | | $ | 38,019 | | | | | $ | 3,231,635 | | | | | 2021 | | | | $ | 429,431 | | | | | | — | | | | | $ | 502,770 | | | | | | — | | | | | $ | 185,590 | | | | | $ | 12,099 | | | | | $ | 50,648 | | | | | $ | 1,180,538 | | | | | 2020 | | | | $ | 441,720 | | | | | $ | 61,350 | | | | | $ | 641,899 | | | | | | — | | | | | $ | 433,694 | | | | | $ | 41,645 | | | | | $ | 36,401 | | | | | $ | 1,656,709 | | | Jeffrey Kramer, PhD
Former Chief Executive Officer | | | 2022 | | | | $ | 460,385 | | | | | | — | | | | | $ | 4,879,284 | | | | | | — | | | | | | — | | | | | | — | | | | | $ | 8,934,577 | | | | | $ | 14,274,246 | | | | | 2021 | | | | $ | 850,000 | | | | | | — | | | | | $ | 3,291,640 | | | | | | — | | | | | $ | 632,051 | | | | | | — | | | | | $ | 376,981 | | | | | $ | 5,150,672 | | | | | 2020 | | | | $ | 800,000 | | | | | | — | | | | | $ | 3,110,928 | | | | | | — | | | | | $ | 1,435,427 | | | | | | — | | | | | $ | 411,519 | | | | | $ | 5,757,874 | | | Tracey Peacock
Former EVP, Advanced Materials & Structures | | | 2022 | | | | $ | 242,469 | | | | | | — | | | | | $ | 771,202 | | | | | | — | | | | | | — | | | | | | — | | | | | $ | 2,206,787 | | | | | $ | 3,220,458 | | | | | 2021 | | | | $ | 332,712 | | | | | | — | | | | | $ | 630,815 | | | | | | — | | | | | $ | 160,359 | | | | | | — | | | | | $ | 30,563 | | | | | $ | 1,154,449 | | |
(1)
The amounts reported in this column for 2022 represent the annual grants of performance share awards, PSU awards and service-based restricted stock awards, valued in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation-Stock Compensation (“FASB ASC Topic 718”). The amounts reported for Messrs. Wamser, Nuñez and Hoek, Dr. Kramer and Ms. Peacock also include $82,707, $54,602, $54,711, $1,468,213 and $222,234, respectively, which represent the incremental fair value associated with the modification of their equity awards in connection with the Merger, calculated in accordance with FASB ASC Topic 718. See
Ms. Schertell | | | 1,443,420 | Mr. Weitzel | | | 226,915 | Mr. Rickheim | | | 204,660 | Mr. Wamser, Jr. | | | 483,069 | Mr. Nuñez | | | 299,997 |
(3)
| The amounts reported in this column for 2023 represent annual incentive awards earned based on 2023 performance for each Named Executive Officer. |
(4)
| The amounts reported in this column for 2023 for each Named Executive Officer includes the following: |
Julie Schertell | | | 149,571 | | | 138,165 | | | — | | | 15,000 | | | 302,736 | Gregory Weitzel | | | 23,320 | | | 12,193 | | | — | | | 11,539 | | | 47,052 | Michael W. Rickheim | | | 35,100 | | | 24,914 | | | — | | | 15,720 | | | 75,734 | Mark W. Johnson | | | 4,338 | | | 1,933 | | | — | | | 5,192 | | | 11,463 | R. Andrew Wamser, Jr. | | | 17,400 | | | 35,266 | | | 3,444,676 | | | — | | | 3,497,333 | Ricardo Nuñez | | | 17,400 | | | 50,369 | | | 3,331,082 | | | — | | | 3,398,851 |
(a)
| These amounts include the following: |
R. Andrew Wamser, Jr. | | | 3,326,192 | | | 24,880 | | | 93,595 | | | 3,444,876 | Ricardo Nuñez | | | 3,199,747 | | | 37,740 | | | 93,595 | | | 3,331,082 |
footnotes 9-12See the 2022 Grants“Potential Payments Upon Termination or Change of Plan-Based Awards TableControl” below for additional information regardingrelated to these modifications. The amounts included in this column for the performance share awards granted to Messrs. Wamser, Nuñez and Hoek in January 2022 as retention awards, the performance share awards granted to the then-serving Named Executive Officers of SWM in February 2022, and the Synergy PSUs granted to the continuing Named Executive Officers in October 2022 are calculated based on the probable satisfaction of the performance conditions for such awards at the time of grant. Assuming the highest level of performance would have been achieved for such awards, the maximum value of these awards at the grant date would be as follows:amounts.
| Name | | | Retention
Awards | | | Legacy SWM
Performance Shares | | | Synergy PSUs | | | Julie Schertell | | | | | N/A | | | | | | N/A | | | | | $ | 2,685,000 | | | | R. Andrew Wamser, Jr. | | | | $ | 2,421,600 | | | | | $ | 1,308,977 | | | | | $ | 1,669,074 | | | | Ricardo Nuñez | | | | $ | 1,513,500 | | | | | $ | 842,114 | | | | | $ | 1,451,358 | | | | Michael Rickheim | | | | | N/A | | | | | | N/A | | | | | $ | 1,233,642 | | | | Omar Hoek | | | | $ | 1,937,280 | | | | | $ | 854,450 | | | | | $ | 1,304,423 | | | | Jeffrey Kramer, PhD | | | | | N/A | | | | | $ | 5,654,836 | | | | | | N/A | | | | Tracey Peacock | | | | | N/A | | | | | $ | 910,025 | | | | | | N/A | | |
See Note 19 to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2022 for a discussion of the relevant assumptions used in calculating the amounts reported for the applicable year.
(2)
The amounts reported in this column for 2022 represent annual incentive awards earned under SWM’s annual incentive program for the pre-Merger portion of 2022, under Neenah’s annual incentive program established pre-Merger and without payout contingent on post-Merger service to the Company, and under the Company’s annual incentive program for the post-Merger portion of 2022, as indicated below:
| Name | | | Neenah Bonus | | | SWM Bonus | | | Company Bonus | | | Julie Schertell | | | | $ | 688,546(a) | | | | | | N/A | | | | | $ | 418,425 | | | | R. Andrew Wamser, Jr. | | | | | N/A | | | | | $ | 272,300 | | | | | $ | 171,243 | | | | Ricardo Nuñez | | | | | N/A | | | | | $ | 225,231 | | | | | $ | 128,857 | | | | Michael Rickheim | | | | $ | 197,848 | | | | | | N/A | | | | | $ | 109,529 | | | | Omar Hoek | | | | | N/A | | | | | $ | 188,121 | | | | | $ | 140,921 | | |
(a)
Ms. Schertell’s payment under Neenah’s short-term incentive plan was reduced to the minimum extent necessary that resulted in her retaining the largest after-tax amount of compensation payments under Section 4999 of the Internal Revenue Code. Absent this cutback, Ms. Schertell’s payout would have been $700,713.
(3)
The amount reported in this column for Mr. Hoek for 2022 represents the change in his accumulated benefits under the Luxembourg Pension Plan.
(b)
| The amounts reported in this column include monthly executive benefits allowance for Ms. Schertell, Mr. Weitzel, Mr. Rickheim, and Mr. Johnson for items such as tax services, executive physical, and financial planning and also includes health club dues for Mr. Rickheim. |
(5)
| The last dates of employment for Messrs. Wamser and Nunez were April 1, 2023 and September 1, 2023, respectively. |
(6)
| The amounts reported for 2022 have been updated for Messrs. Wamser and Nuñez to reflect $45,358 and $37,523, respectively, of additional annual incentive bonus that was paid in recognition of 2022 performance and which was excluded from the 2022 Summary Compensation Table. |
(4)
The amounts reported in this column for 2022 for each Named Executive Officer includes the following:
| Name | | | Company
contributions
to qualified
and
nonqualified
retirement plans | | | Dividends/
dividend
equivalents
on unvested
equity awards | | | Post-Merger
Consulting
Fees | | | Cash
Severance
and Benefits
Continuation | | | Other
Executive
Benefits(a) | | | Total | | | Julie Schertell | | | | $ | 37,125 | | | | | $ | 98,157 | | | | | | — | | | | | | — | | | | | $ | 7,500 | | | | | $ | 142,782 | | | | R. Andrew Wamser, Jr. | | | | $ | 47,924 | | | | | $ | 128,389 | | | | | | — | | | | | | — | | | | | $ | 1,500 | | | | | $ | 177,813 | | | | Ricardo Nuñez | | | | $ | 46,952 | | | | | $ | 84,853 | | | | | | — | | | | | | — | | | | | | — | | | | | $ | 131,805 | | | | Michael Rickheim | | | | $ | 12,625 | | | | | $ | 23,318 | | | | | | — | | | | | | — | | | | | $ | 10,000 | | | | | $ | 45,943 | | | | Omar Hoek | | | | | — | | | | | $ | 17,672 | | | | | | — | | | | | | — | | | | | $ | 20,347 | | | | | $ | 38,019 | | | | Jeffrey Kramer, PhD | | | | $ | 17,400 | | | | | $ | 67,833 | | | | | $ | 1,000,000 | | | | | $ | 7,838,644 | | | | | $ | 10,700 | | | | | $ | 8,934,577 | | | | Tracey Peacock | | | | $ | 17,400 | | | | | $ | 11,086 | | | | | | — | | | | | $ | 2,154,301 | | | | | $ | 24,000 | | | | | $ | 2,206,787 | | |
(a)
The amounts reported in this column include a travel allowance for Ms. Peacock, travel and parking for Mr. Kramer, automobile, lunch vouchers and disability insurance for Mr. Hoek, charitable matching contributions for Mr. Rickheim, and monthly executive benefits allowance for Ms. Schertell and Mr. Rickheim for items such as tax services, executive physical, and financial planning.
20222023 GRANTS OF PLAN-BASED AWARDS
The following table summarizes awards made to our Named Executive Officers in 2022.2023. Julie Schertell | | | N/A(2) | | | | | | 531,875 | | | 1,063,750 | | | 2,047,719 | | | — | | | — | | | — | | | — | | | — | | | 2/16/2023(3) | | | 2/13/2023 | | | — | | | — | | | — | | | — | | | — | | | — | | | 48,114 | | | 1,199,001 | | | 2/16/2023(4) | | | 2/13/2023 | | | — | | | — | | | — | | | 12,029 | | | 24,057 | | | 48,114 | | | — | | | 601,425 | Gregory Weitzel | | | N/A(2) | | | | | | 124,880 | | | 249,760 | | | 480,788 | | | — | | | — | | | — | | | — | | | — | | | 2/16/2023(3) | | | 2/13/2023 | | | — | | | — | | | — | | | — | | | — | | | — | | | 1,765(3) | | | 43,984 | | | 2/16/2023(4) | | | 2/13/2023 | | | — | | | — | | | — | | | 441 | | | 882 | | | 1,764 | | | — | | | 21,979 | | | 4/2/2023(3) | | | 3/13/2023(5) | | | — | | | — | | | — | | | — | | | — | | | — | | | 6,762 | | | 145,180 | | | 4/2/2023(3) | | | 3/13/2023(5) | | | — | | | — | | | — | | | 1,690 | | | 3,380 | | | 6,760 | | | — | | | 72,569 | Michael Rickheim | | | N/A(2) | | | | | | 138,125 | | | 276,250 | | | 531,781 | | | — | | | — | | | — | | | — | | | — | | | 2/16/2023(3) | | | 2/13/2023 | | | — | | | — | | | — | | | — | | | — | | | — | | | 6,822 | | | 170,004 | | | 2/16/2023(4) | | | 2/13/2023 | | | — | | | — | | | — | | | 1,706 | | | 3,411 | | | 6,822 | | | — | | | 85,275 | Mark Johnson | | | N/A(2) | | | | | | 51,056 | | | 102,112 | | | 196,566 | | | — | | | — | | | — | | | — | | | — | | | 9/1/2023(3) | | | 8/1/2023 | | | — | | | — | | | — | | | — | | | — | | | — | | | 19,330 | | | 300,002 | R. Andrew Wamser, Jr. | | | N/A(6) | | | | | | 215,625 | | | 431,250 | | | 830,156 | | | — | | | — | | | — | | | — | | | — | | | 2/16/2023(3) | | | 2/13/2023 | | | — | | | — | | | — | | | — | | | — | | | — | | | 16,154 | | | 402,558 | | | 2/16/2023(4) | | | 2/13/2023 | | | — | | | — | | | — | | | 4,039 | | | 8,077 | | | 16,154 | | | — | | | 201,279 | Ricardo Nuñez | | | N/A(6) | | | | | | 162,500 | | | 325,000 | | | 625,625 | | | — | | | — | | | — | | | — | | | — | | | 2/16/2023(3) | | | 2/13/2023 | | | — | | | — | | | — | | | — | | | — | | | — | | | 10,033 | | | 250,022 | | | 2/16/2023(4) | | | 2/13/2023 | | | — | | | — | | | — | | | 2,508 | | | 5,016 | | | 10,032 | | | — | | | 124,999 |
| Name | | | Grant
Date | | | Approval
Date | | | Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards | | | Estimated Future Payouts
Under Equity Incentive
Plan Awards | | | All Other
Stock Awards:
Number of
Shares of
Stocks or
Units | | | Grant
Date
Fair Value
of Stock
Awards(1) | | | | Threshold
($)(d) | | | Target
($)(e) | | | Maximum
($)(f) | | | Threshold
(#)(g) | | | Target
(#)(h) | | | Maximum
(#)(i) | | | (#)(j) | | | ($)(k) | | | Julie Schertell | | | N/A(2) | | | N/A | | | | | — | | | | | | 688,546 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | N/A(3) | | | N/A | | | | | 255,138 | | | | | | 510,275 | | | | | | 1,020,550 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | 10/4/2022(4) | | | 9/22/2022 | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 75,944 | | | | | | 113,916 | | | | | | — | | | | | | 1,790,000 | | | | R. Andrew Wamser, Jr. | | | N/A(5) | | | N/A | | | | | 87,500 | | | | | | 175,000 | | | | | | 350,000 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | N/A(3) | | | N/A | | | | | 104,416 | | | | | | 208,832 | | | | | | 417,664 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | 1/31/2022(6) | | | 1/31/2022 | | | | | — | | | | | | | | | | | | — | | | | | | — | | | | | | 40,000 | | | | | | 80,000 | | | | | | — | | | | | | 1,210,800 | | | | | 2/16/2022(7) | | | 2/16/2022 | | | | | — | | | | | | — | | | | | | — | | | | | | 8,235 | | | | | | 16,470 | | | | | | 41,807 | | | | | | — | | | | | | 515,676 | | | | | 2/16/2022(8) | | | 2/16/2022 | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 8,868 | | | | | | 273,932 | | | | | 8/8/2022(9) | | | 8/8/2022 | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 11,107 | | | | | | 45,650 | | | | | 8/11/2022(10) | | | 8/11/2022 | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 16,470 | | | | | | 37,058 | | | | | 10/4/2022(4) | | | 9/22/2022 | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 47,209 | | | | | | 70,814 | | | | | | — | | | | | | 1,112,716 | | | | Ricardo Nuñez | | | N/A(5) | | | N/A | | | | | 72,375 | | | | | | 144,750 | | | | | | 289,500 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | N/A(3) | | | N/A | | | | | 78,572 | | | | | | 157,143 | | | | | | 314,286 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | 1/31/2022(6) | | | 1/31/2022 | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 25,000 | | | | | | 50,000 | | | | | | — | | | | | | 756,750 | | | | | 2/16/2022(7) | | | 2/16/2022 | | | | | — | | | | | | — | | | | | | — | | | | | | 5,298 | | | | | | 10,595 | | | | | | 26,896 | | | | | | — | | | | | | 306,196 | | | | | 2/16/2022(8) | | | 2/16/2022 | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 5,706 | | | | | | 176,258 | | | | | 8/8/2022(9) | | | 8/8/2022 | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 7,485 | | | | | | 30,763 | | | | | 8/11/2022(10) | | | 8/11/2022 | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 10,595 | | | | | | 23,839 | | | | | 10/4/2022(4) | | | 9/22/2022 | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 41,051 | | | | | | 61,577 | | | | | | — | | | | | | 967,572 | | | | Michael Rickheim | | | N/A(2) | | | N/A | | | | | — | | | | | | 197,548 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | N/A(3) | | | N/A | | | | | 66,786 | | | | | | 133,571 | | | | | | 267,142 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | 10/4/2022(4) | | | 9/22/2022 | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 34,893 | | | | | | 52,340 | | | | | | — | | | | | | 822,428 | | | | Omar Hoek | | | N/A(5) | | | N/A | | | | | 63,072 | | | | | | 126,144 | | | | | | 252,288 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | N/A(3) | | | N/A | | | | | 85,927 | | | | | | 171,854 | | | | | | 343,708 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | 1/31/2022(6) | | | 1/31/2022 | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 32,000 | | | | | | 64,000 | | | | | | — | | | | | | 968,640 | | | | | 2/16/2022(7) | | | 2/16/2022 | | | | | — | | | | | | — | | | | | | — | | | | | | 5,375 | | | | | | 10,751 | | | | | | 27,290 | | | | | | — | | | | | | 310,704 | | | | | 2/16/2022(8) | | | 2/16/2022 | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 5,788 | | | | | | 178,792 | | | | | 8/8/2022(9) | | | 8/8/2022 | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 7,426 | | | | | | 30,521 | | | | | 8/11/2022(10) | | | 8/11/2022 | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 10,751 | | | | | | 24,190 | | | | | 10/4/2022(4) | | | 9/22/2022 | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 36,895 | | | | | | 55,343 | | | | | | — | | | | | | 869,615 | | | | Jeffrey Kramer, PhD | | | N/A(5) | | | N/A | | | | | 253,603 | | | | | | 507,205 | | | | | | 1,014,410 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | 2/16/2022(7) | | | 2/16/2022 | | | | | — | | | | | | — | | | | | | — | | | | | | 35,574 | | | | | | 71,149 | | | | | | 180,608 | | | | | | — | | | | | | 2,227,675 | | | | | 2/16/2022(8) | | | 2/16/2022 | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 38,310 | | | | | | 1,183,396 | | | | | 7/6/2022(11) | | | 7/6/2022 | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 12,154 | | | | | | 272,371 | | | | | 7/6/2022(12) | | | 7/6/2022 | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 53,362 | | | | | | 1,195,842 | | | | Tracey Peacock | | | N/A(5) | | | N/A | | | | | 72,853 | | | | | | 145,706 | | | | | | 291,412 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | 2/16/2022(7) | | | 2/16/2022 | | | | | — | | | | | | — | | | | | | — | | | | | | 5,725 | | | | | | 11,450 | | | | | | 29,065 | | | | | | — | | | | | | 358,500 | | | | | 2/16/2022(8) | | | 2/16/2022 | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 6,166 | | | | | | 190,468 | | | | | 7/6/2022(11) | | | 7/6/2022 | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,329 | | | | | | 29,788 | | | | | 7/6/2022(12) | | | 7/6/2022 | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 8,588 | | | | | | 192,446 | | |
(1)
| The amounts shown in this column are valued based on the aggregate grant date fair value computed in accordance with FASB ASC Topic 718 and, in the case of the PSUs, are based upon the probable outcome of the applicable performance conditions. See Note 19 to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2023, for a discussion of the relevant assumptions used in calculating the amounts. |
(2)
| The amounts in columns (d), (e) and (f) consist of the threshold, target and maximum cash award levels. The amount actually earned by each continuing Named Executive Officer is included in the Non-Equity Incentive Plan Compensation column in the 2023 Summary Compensation Table. |
(3)
| These amounts in column (j) represent shares of service-based RSUs which vest pro rata over three years on each anniversary of the date of grant except that Mr. Weitzel's April 2023 grant will vest on the same dates as his February 2023 grant. |
(4)
| The amounts in columns (g), (h) and (i) consist of the threshold, target and maximum PSUs that can be earned during the 2023-2025 performance period based on the Company’s free cash flow as a Percentage of Net Sales and ROIC, subject to a +/- 20% modifier based on the Company’s relative TSR performance. As noted above, the Compensation Committee established the performance goals for the first year of the three-year performance period with the annual goals for the subsequent years in the three-year performance period to be set at the beginning of each applicable year during the performance period. In accordance with FASB ASC Topic 718, reported in this table is one-third of the full number of shares subject to the 2023 PSUs for which performance goals were established in 2023. |
(5)
| These grants for Mr. Weitzel were approved by the Compensation Committee on March 13, 2023, to coincide with Mr. Weitzel’s promotion to the Chief Financial Officer position, effective April 2, 2023. |
(6)
| The amounts in columns (d), (e) and (f) consist of the threshold, target and maximum cash award levels for a full year of participation. Because the individuals terminated employment during the year they received a prorated amount of target in connection with their separations from the Company. |
(1)
The amounts shown in this column are valued based on the aggregate grant date fair value computed in accordance with FASB ASC Topic 718 and, in the case of the performance shares, are based upon the probable outcome of the applicable performance conditions. See Note 19 to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2022, for a discussion of the relevant assumptions used in calculating the amounts.
(2)
The amounts in column (e) represent the actual amounts paid to Ms. Schertell and Mr. Rickheim under Neenah’s pre-Merger annual incentive program that was determined based on performance prior to the consummation of the Merger and with payout subject to the executive’s continued employment with the Company post-Merger. This amount is included in the Non-Equity Incentive Plan Compensation column in the 2022 Summary Compensation Table.
(3)
The amounts in columns (d), (e) and (f) consist of the threshold, target and maximum cash award levels for the post-Merger portion of 2022. The amount actually earned by each continuing Named Executive Officer is included in the Non-Equity Incentive Plan Compensation column in the 2022 Summary Compensation Table.
(4)
The amounts in columns (h) and (i) represent the target and maximum number of PSUs that may be earned based on the Company’s Synergy Run Rate Achievement during the period beginning on July 6, 2022 and ending December 31, 2024, subject to the Named Executive Officer’s continued employment through such date.
(5)
The amounts in columns (d), (e) and (f) consist of the threshold, target and maximum cash award levels for the pre-Merger portion of 2022 under SWM’s 2022 annual incentive program, pro-rated for the portion of 2022 that occurred prior to the closing of the Merger. The amount actually earned by each Named Executive Officer is included in the Non-Equity Incentive Plan Compensation column in the 2022 Summary Compensation Table.
(6)
The amounts in columns (h) and (i) represent the target and maximum number of performance shares that could have been earned based on the Company’s TSR as compared to the applicable peer group during the three-year performance period. In connection with the Merger, these awards were converted into time-based RSUs that will cliff vest on January 30, 2025, subject to the Named Executive Officer’s continued employment through such date.
(7)
The amounts in columns (g), (h) and (i) consist of the threshold, target and maximum performance shares that could have been earned during the 2022-2023 performance period based on the Company’s adjusted EBITDA performance, subject to a +/- 15% modifier based on the Company’s TSR performance, and were scheduled to vest on the first anniversary of the date on which the Committee certified the adjusted EBITDA and TSR achievement levels. In connection with the Merger, these awards were converted to time-based RSUs that vest 100% on February 16, 2025, subject to the Named Executive Officer’s continued employment through such date.
(8)
These amounts represent shares of service-based restricted stock which vested 50% on February 16, 2023 and the remaining 50% will vest on February 16, 2024, subject to continued employment through each applicable vesting date.
(9)
Represents the incremental fair value, calculated in accordance with FASB ASC Topic 718, arising from the modification on August 8, 2022 of the performance share awards granted in 2021 to Messrs. Wamser, Hoek and Nuñez that was made in connection with the Merger, pursuant to which the performance share awards were converted into RSU awards that will vest 100% on February 16, 2024. This amount does not represent a new equity grant.
(10)
Represents the incremental fair value, calculated in accordance with FASB ASC Topic 718, arising from the modification on August 11, 2022 of the performance share awards granted in 2022 to Messrs. Wamser, Hoek and Nuñez that was made in connection with the Merger, pursuant to which the performance share awards were converted into RSU awards that will vest 100% on February 16, 2025. This amount does not represent a new equity grant.
(11)
Represents the incremental fair value, calculated in accordance with FASB ASC Topic 718, arising from the modification on July 6, 2022 of the equity awards granted in 2021 to Dr. Kramer and Ms. Peacock that was made in connection with the Merger, pursuant to which they received settlement
of the full target award rather than a pro-rata portion in connection with their termination of employment. This amount does not represent a new equity grant.
(12)
Represents the incremental fair value, calculated in accordance with FASB ASC Topic 718, arising from the modification on July 6, 2022 of the equity awards granted in 2022 to Dr. Kramer and Ms. Peacock that was made in connection with the Merger, pursuant to which they received settlement of the full target award rather than a pro-rata portion in connection with their termination of employment. This amount does not represent a new equity grant.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END 20222023 The following table provides information regarding unexercised stock options and unvested stock awards held by each of the continuing Named Executive Officers as of December 31, 2022. Dr. Kramer2023. As of December 31, 2023, Messrs. Wamser and Ms. PeacockNuñez did not hold any outstanding equity awards as of December 31, 2022.with respect to the Company. As permitted under the 2015 Plan, the full value awards were amended in 2024 to provide for cash-settlement rather than stock-settlement. Julie Schertell | | | 5,934 | | | — | | | — | | | 31.54 | | | 1/27/2024 | | | — | | | — | | | — | | | — | | | 5,948 | | | — | | | — | | | 43.98 | | | 1/26/2025 | | | — | | | — | | | — | | | — | | | 8,142 | | | — | | | — | | | 42.68 | | | 1/25/2026 | | | — | | | — | | | — | | | — | | | 9,621 | | | — | | | — | | | 60.50 | | | 1/29/2027 | | | — | | | — | | | — | | | — | | | 9,758 | | | — | | | — | | | 68.75 | | | 1/29/2028 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 4,613(2) | | | 70,625 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 32,285(2) | | | 494,283 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 11,812(3) | | | 180,842 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 41,341(4) | | | 632,931 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 75,944(5) | | | 1,162,703 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 24,057(6) | | | 368,313 | | | — | | | — | | | — | | | — | | | — | | | 48,114(7) | | | 736,625 | | | — | | | — | Gregory Weitzel | | | 382 | | | — | | | — | | | 43.98 | | | 1/26/2025 | | | — | | | — | | | — | | | — | | | 1,066 | | | — | | | — | | | 42.68 | | | 1/25/2026 | | | — | | | — | | | — | | | — | | | 1,116 | | | — | | | — | | | 60.50 | | | 1/29/2027 | | | — | | | — | | | — | | | — | | | 1,006 | | | — | | | — | | | 68.75 | | | 1/29/2028 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 210(2) | | | 3,215 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 1,472(2) | | | 22,536 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 584(3) | | | 8,941 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 2,039(4) | | | 31,217 | | | | | | | | | | | | | | | | | | | | | | | | 1,722(8) | | | 26,364 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 882(6) | | | 13,503 | | | | | | | | | | | | | | | | | | | | | | | | 3,380(6) | | | 51,748 | | | | | | | | | | | | | | | | | | 1,765(7) | | | 27,022 | | | | | | | | | | | | | | | | | | | | | | | | 6,762(7) | | | 103,526 | | | | | | | Michael Rickheim | | | — | | | — | | | — | | | — | | | — | | | 741(2) | | | 11,345 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 5,179(2) | | | 79,290 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 2,011(3) | | | 30,788 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 7,037(4) | | | 107,736 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 34,893(5) | | | 534,212 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 3,411(6) | | | 52,222 | | | — | | | — | | | — | | | — | | | — | | | 6,822(7) | | | 104,445 | | | — | | | — | Mark Johnson | | | — | | | — | | | — | | | — | | | — | | | 19,330(9) | | | 295,942 | | | — | | | — |
| | | | Option Awards | | | Stock Awards | | | Name | | | Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable | | | Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable | | | Equity
Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#) | | | Option
Exercise
Price
($) | | | Option
Expiration
Date | | | Number of
Shares or
Units of
Stock That
Have Not
Vested
(#) | | | Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
($)(1) | | | Equity
Incentive
Plan Awards:
Number of
Unearned
Shares,
Units or
Other Rights
That Have
Not Vested
(#) | | | Equity
Incentive
Plan Awards:
Market or
Payout
Value of
Unearned
Shares,
Units or
Other Rights
That Have
Not Vested
($)(1) | | | Julie Schertell | | | | | 6,654 | | | | | | — | | | | | | — | | | | | | 22.99 | | | | | | 1/28/2023 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | 5,934 | | | | | | — | | | | | | — | | | | | | 31.53 | | | | | | 1/27/2024 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | 5,948 | | | | | | — | | | | | | — | | | | | | 43.97 | | | | | | 1/26/2025 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | 8,142 | | | | | | — | | | | | | — | | | | | | 42.67 | | | | | | 1/25/2026 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | 9,621 | | | | | | — | | | | | | — | | | | | | 60.49 | | | | | | 1/29/2027 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | 9,758 | | | | | | — | | | | | | — | | | | | | 68.74 | | | | | | 1/29/2028 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 9,224(2) | | | | | | 192,782 | | | | | | — | | | | | | — | | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 32,285(3) | | | | | | 674,757 | | | | | | — | | | | | | — | | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 17,717(4) | | | | | | 370,285 | | | | | | — | | | | | | — | | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 41,34(5) | | | | | | 864,027 | | | | | | — | | | | | | — | | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 75,944(6) | | | | | | 1,587,230 | | | | R. Andrew Wamser, Jr. | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 5,000(7) | | | | | | 104,500 | | | | | | — | | | | | | — | | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 2,990(8) | | | | | | 62,491 | | | | | | — | | | | | | — | | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 40,000(9) | | | | | | 836,000 | | | | | | — | | | | | | — | | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 6,432(10) | | | | | | 134,429 | | | | | | — | | | | | | — | | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 8,868(11) | | | | | | 185,341 | | | | | | — | | | | | | — | | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 11,107(12) | | | | | | 232,136 | | | | | | — | | | | | | — | | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 16,470(13) | | | | | | 344,223 | | | | | | — | | | | | | — | | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 47,209(6) | | | | | | 986,668 | | | | Ricardo Nuñez | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 5,000(7) | | | | | | 104,500 | | | | | | — | | | | | | — | | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 2,015(8) | | | | | | 42,114 | | | | | | — | | | | | | — | | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 25,000(9) | | | | | | 522,500 | | | | | | — | | | | | | — | | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 4,177(10) | | | | | | 87,299 | | | | | | — | | | | | | — | | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 5,706(11) | | | | | | 119,255 | | | | | | — | | | | | | — | | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 7,485(12) | | | | | | 156,437 | | | | | | — | | | | | | — | | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 10,595(13) | | | | | | 221,436 | | | | | | — | | | | | | — | | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 41,051(6) | | | | | | 857,966 | | |
(1)
| Values calculated using the December 29, 2023 closing share price of $15.31. |
(2)
| This RSU award vested on February 2, 2024, subject to continued employment through the vesting date. |
(3)
| | | Option Awards | | | Stock Awards | | Name | | | Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable | | | Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable | | | Equity
Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#) | | | Option
Exercise
Price
($) | | | Option
Expiration
Date | | | Number of
SharesThis RSU award vested or
Units of
Stock That
Have Not
Vested
(#) | | | Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
($)(1)
| | | Equity
Incentive
Plan Awards:
Number of
Unearned
Shares,
Units or
Other Rights
That Have
Not Vested
(#) | | | Equity
Incentive
Plan Awards:
Market or
Payout
Value of
Unearned
Shares,
Units or
Other Rights
That Have
Not Vested
($)(1)
| | Michael Rickheim | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 6,780(14)
| | | | | | 141,702 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,029(14)
| | | | | | 21,506 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,480(2)
| | | | | | 30,932 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 5,179(3)
| | | | | | 108,241 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 3,016(4)
| | | | | | 63,034 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 7,037(5)
| | | | | | 147,073 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 34,893(6)
| | | | | | 729,264 | | | Omar Hoek | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 3,500(7)
| | | | | | 73,150 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,999(8)
| | | | | | 41,779 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 32,000(9)
| | | | | | 668,800 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 3,244(10)
| | | | | | 67,800 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 5,788(11)
| | | | | | 120,969 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 7,426(12)
| | | | | | 155,203 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 10,751(13)
| | | | | | 224,696 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 36,895(6)
| | | | | | 771,106 | | is scheduled to vest 50% on January 26, 2024 and 2025, subject to continued employment through each applicable vesting date. |
(4)
| This RSU award is scheduled to vest 100% on December 31, 2024, subject to continued employment through the vesting date. |
(5)
| This PSU award is scheduled to vest, to the extent earned, on December 31, 2024. The number of PSUs earned will be based on the Company’s Synergy Run Rate Achievement during the period beginning on July 6, 2022 and ending December 31, 2024. Number shown is based on target performance. |
(6)
| This PSU award is scheduled to vest, to the extent earned, on February 16, 2026. The number of PSUs earned will be based on the Company’s Free Cash Flow as a percentage of net sales and ROIC, adjusted for relative TSR performance, over the 2023-2025 fiscal years. Number shown is based on target performance. Excluded from this table are 48,114, 8,528, and 6,823 PSUs (at target) for Ms. Schertell, Mr. Weitzel, and Mr. Rickheim, respectively, with respect to the portion of the 2023 PSUs associated with performance goals established in 2024 and 2025. |
(7)
| This RSU award vested or is scheduled to vest one-third on February 16, 2024, 2025 and 2026, subject to continued employment through each applicable vesting date. |
(8)
| This RSU award is scheduled to vest 50% on April 14, 2024 and 2025, subject to continued employment through each applicable vesting date. |
(9)
| This RSU award is scheduled to vest one-third on September 1, 2024, 2025 and 2026, subject to continued employment through each applicable vesting date. |
(1)
Value calculated using the December 30, 2022 closing share price of $20.90.
(2)
This RSU award vested or will vest (as applicable) 50% on February 2, 2023 and 50% on February 2, 2024, subject to continued employment through each applicable vesting date.
(3)
This RSU award vests 100% on February 2, 2024, subject to continued employment through each applicable vesting date.
(4)
This RSU award vested or will vest (as applicable) 1/3 on January 26, 2023, 2024 and 2025, subject to continued employment through each applicable vesting date.
(5)
This RSU award vests 100% on December 31, 2024, subject to continued employment through each applicable vesting date.
(6)
The number of PSUs earned will be based on the Company’s Synergy Run Rate Achievement during the period beginning on July 6, 2022 and ending December 31, 2024. Number shown is based on target performance.
(7)
These restricted shares vested or will vest (as applicable) on January 28, 2023 for Mr. Wamser; January 1, 2024 for Mr. Hoek and January 2, 2023 for Mr. Nuñez.
(8)
These restricted shares vested on February 15, 2023.
(9)
This RSU award will vest on January 30, 2025, subject to continued employment through the vesting date.
(10)
These restricted shares vested February 28, 2023.
(11)
These restricted shares vested 50% on February 16, 2023 and the remaining 50% will vest on February 16, 2024, subject to continued employment through the vesting date.
(12)
This RSU award vests 100% on February 16, 2024, subject to continued employment through the vesting date.
(13)
This RSU award vests 100% on February 16, 2025, subject to continued employment through the vesting date.
(14)
This RSU award vests 100% on April 6, 2023, subject to continued employment through the vesting date.
2022OPTION EXERCISED AND STOCK VESTED TABLE
The following table provides information concerning the exercise of options and vesting of stock during 20222023 for each of the Named Executive Officers. Julie Schertell | | | 6,654 | | | 22,625 | | | 5,772 | | | 280,021 | Gregory Weitzel | | | — | | | — | | | 1,360 | | | 31,707 | Michael W. Rickheim | | | — | | | — | | | 9,553 | | | 209,225 | Mark W. Johnson | | | — | | | — | | | — | | | — | R. Andrew Wamser, Jr. | | | — | | | — | | | 104,723 | | | 2,420,370 | Ricardo Nuñez | | | — | | | — | | | 59,978 | | | 1,110,305 |
2023 PENSION BENEFITS None of the Named Executive Officers exercisedreceived any stock option awards during 2022. | Name | | | Number of
Shares
Acquired on
Vesting (#) | | | Value
Realized on
Vesting ($) | | | Julie Schertell | | | | | 22,129 | | | | | | 462,496 | | | | R. Andrew Wamser, Jr. | | | | | 29,669 | | | | | | 913,432 | | | | Ricardo Nuñez | | | | | 17,230 | | | | | | 534,324 | | | | Michael Rickheim | | | | | 4,626 | | | | | | 96,683 | | | | Omar Hoek | | | | | 11,158 | | | | | | 341,473 | | | | Jeffrey Kramer, PhD | | | | | 302,785 | | | | | | 7.537,171 | | | | Tracey Peacock | | | | | 30,797 | | | | | | 680,004 | | |
2022 PENSION BENEFITS
The following table provides information regarding Mr. Hoek’s pension benefits under the Luxembourg pension plan as of December 31, 2022.
| Name | | | Plan | | | Number of Years
of Credited
Service (#) | | | Present Value of
Accumulated
Benefit ($) | | | Payments
During Last
Fiscal Year | | | Omar Hoek | | | Luxembourg Pension | | | | | 3 | | | | | $ | 81,210 | | | | | | — | | |
Mr. Hoek participated in the Company’s supplemental defined pension contribution plan for Luxembourg employees, which was adopted during 2016. This is a social supplemental plan that provides annuitized income to the participant upon retirement, in addition to the standard insured social retirement benefit. The present value of contributions accrued for his benefit as of December 31, 2022, shown in dollars, was converted from Euros at the December 31, 2022 exchange rate of 0.9323 Euros to the U.S. dollar.
2023.
20222023 NON-QUALIFIED DEFERRED COMPENSATION
The following table provides information regarding compensation that has been deferred by Ms. Schertell and Messrs. Weitzel, Rickheim, Johnson, Wamser and Nuñez and Rickheim and Dr. Kramer pursuant to the terms of the Legacy SWM Deferred Compensation Plan (“DCP”), Neenah’s Supplemental Retirement Contribution Plan (“SRP”) and the Legacy Neenah Deferred Compensation Plan.Plan (“NDP”). | Name | | | Plan Name | | | Executive
contributions
in
last FY ($)(1) | | | Registrant
contributions
in
last FY ($)(2) | | | Aggregate
earnings
in last
FY ($) | | | Aggregate
withdrawals /
distributions | | | Aggregate
balance
at last
FYE ($)(3) | | | Julie Schertell | | | Supplemental RCP | | | | | — | | | | | | 31,281 | | | | | | (78) | | | | | | (458,628) | | | | | | 31,668 | | | | R. Andrew Wamser, Jr. | | | Legacy SWM DCP | | | | | 50,873 | | | | | | 30,524 | | | | | | (13,290) | | | | | | (67,110) | | | | | | 41,674 | | | | Ricardo Nuñez | | | Legacy SWM DCP | | | | | 56,271 | | | | | | 29,552 | | | | | | (26,620) | | | | | | (130,203) | | | | | | 48,278 | | | | Michael Rickheim | | | Legacy Neenah DCP | | | | | 12,625 | | | | | | 12,625 | | | | | | 89 | | | | | | (11,180) | | | | | | 25,330 | | | | Jeffrey Kramer, PhD | | | Legacy SWM DCP | | | | | 108,205 | | | | | | — | | | | | | (160,295) | | | | | | (1,351,920) | | | | | | 0 | | |
Julie Schertell | | | SRP | | | — | | | 134,542 | | | 19,574 | | | — | | | 185,785 | Gregory Weitzel | | | SRP | | | — | | | 15,128 | | | 1,174 | | | — | | | 16,302 | Michael W. Rickheim | | | NDP | | | — | | | — | | | 5,361 | | | — | | | 30,691 | | | DCP | | | 25,500 | | | 15,300 | | | 2,716 | | | — | | | 43,516 | Mark W. Johnson | | | — | | | — | | | — | | | — | | | — | | | — | R. Andrew Wamser, Jr. | | | DCP | | | 56,630 | | | — | | | 21,358 | | | — | | | 119,663 | Ricardo Nuñez | | | DCP | | | 56,468 | | | — | | | 16,503 | | | — | | | 121,249 |
(1)
These amounts represent deferrals of the participating Named Executive Officer’s salary and compensation received under the annual incentive program and are included in the “Salary” and “Non-Equity Incentive Plan Compensation” columns in the 2022 Summary Compensation Table.
(2)
(1)
| These amounts represent deferrals of the participating Named Executive Officer’s salary and/or annual incentive compensation received under the annual incentive program and are included in the “Salary” and Non-Equity Incentive Plan Compensation” columns in the 2023 Summary Compensation Table. |
(2)
| Company contributions to the Neenah Deferred Compensation Plan “2”and the Supplemental RCP were 401(k) savings plan contributions that exceeded IRS limitations on qualified plan contributions and are included in the “All Other Compensation” column in the 2022 Summary Compensation Table. |
TABLE OF CONTENTS (3)
| Amounts in this column include the following amounts that were previously reported in the Summary Compensation Table as compensation for: Ms. Schertell — $31,281; Mr. Wamser — $95,546; Mr. Rickheim — $25,250; and Mr. Nuñez — $152,960. All amounts in this column are vested and would be payable in full following any termination. |
Legacy SWM Deferred Compensation Plan the Legacy Neenah Deferred Compensation Plan and the Supplemental RCP were 401(k) savings plan contributions that exceeded IRS limitations on qualified plan contributions and are included in the “All Other Compensation” column in the 2022 Summary Compensation Table.
(3)
Amounts in this column include the following amounts that were previously reported in the Summary Compensation Table as compensation for: Ms. Schertell — $0; Dr. Kramer — $726,543; Mr. Wamser — $14,149; Mr. Rickheim — $0; and Mr. Nuñez — $67,137. All amounts in this column are vested and will be payable in full following any termination.
Legacy SWM Deferred Compensation Plan
Eligible employees may elect to defer up to 25% of their annual salary and up to 50% of their incentive bonus to the Legacy SWM Deferred Compensation Plan, a non-qualified deferred compensation plan established in 2005 to allow participants to defer receipt of compensation and payment of certain income taxes. Eligibility to participate in the Legacy SWM Deferred Compensation Plan is limited to “management” and “highly compensated employees” as defined in the Employee Retirement Income Security Act of 1974, as amended. The Company may, with Committee approval, make cash contributions to a participant’s account in the Legacy SWM Deferred Compensation Plan. Amounts deferred into the Legacy SWM Deferred Compensation Plan by a participating officer, or contributed on the officer’s behalf by the Company, can be invested at the officer’s election in an account that tracks, but does not actually invest in, some of the fund elections available under the Company’s 401(k) savings plan. The participating officer bears the investment risk. The Company makes no guaranty as to the return of the principal amount of any funds deferred or of any income thereon. The funds remain subject to the Company’s creditors while in the Legacy SWM Deferred Compensation Plan. A participant may elect to receive payment of the vested amount credited to his or her deferral account under the Legacy SWM Deferred Compensation Plan based on a participant election of a single lump sum or three, five, or ten annual installments. No payments may commence in fewer than five years following the date of the deferral election, except for alternative distributions that may occur in certain defined circumstances including disability, death of participant, separation from service, change of control and unforeseeable emergency, as such terms are defined in the plan. Certain individuals, including plan participants who are Named Executive Officers, must defer distributions from the plan for six months following a separation from service. Mr. Rickheim is the only Named Executive Officer who currently participates in the Legacy SWM Deferred Compensation Plan.
In 2023, the Company amended the Legacy SWM Deferred Compensation Plan so that a change of control would no longer be triggered by the acquisition by a person or group of 30% or more of the total voting power or ownership interests of the Company.
Neenah Supplemental Retirement Contribution Plan Following the closing of the Merger, the Company assumed Neenah’s supplemental retirement contribution plan (the “Supplemental RCP”) which is a non-qualified defined contribution plan which is intended to provide a tax-deferred retirement savings alternative for amounts exceeding Internal Revenue Code limitations on qualified plans. Ms. Schertell and Mr. Weitzel currently participate in the Supplemental RCP. The Supplemental RCP is a non-qualified excess benefit and supplemental retirement plan pursuant to which the Company provides additional retirement benefits to certain highly compensated employees. These Company contributions are intended to provide contributions to those individuals whose benefits under tax-qualified programs are restricted by the limitations permitted by the Internal Revenue Code. Contributions are held for each participant in either an excess benefit or supplemental benefit unfunded separate account. Participant accounts are credited with earnings, gains, and losses based on the rate of return of investment funds selected by the participant, which the participant may elect to change in accordance with the participant’s elections under the Supplemental RCP. Payments can be tied to termination of employment, including retirement, and would be paid in a lump sum. If a participant dies before receiving the full value of their account balance, the participant’s beneficiary would receive the remainder of the benefit in one lump sum payment. Legacy Neenah Deferred Compensation Plan The Legacy Neenah Deferred Compensation Plan is the deferred compensation plan for the executive officers of former Neenah, Inc. Upon the consummation of the Merger, the Company assumed the Legacy Neenah Deferred Compensation Plan. The Legacy Neenah Deferred Compensation Plan allows the executive officers of the former Neenah, Inc. to defer a portion of their annual cash compensation (base salary and bonus). The Legacy Neenah TABLE OF CONTENTS Deferred Compensation Plan is intended to allow the executive to maximize the value of the compensation they received from the former Neenah, Inc. and assist in their retention. Participants in the Legacy Neenah Deferred Compensation Plan may elect to defer from (i) 5% to 75% of his or her salary paid during a deferral year; and/or (ii) 5% to 100% of his or her bonus paid during a deferral year, provided that the deferral election may not relate to any payroll withholding amount, including required tax withholding or employee contributions under a 401(k) or cafeteria plan or for group health plan premiums. The minimum deferral required to participate in the Legacy Neenah Deferred Compensation Plan is $5,000. The Company dictates the investment fund options from which the participant can choose to elect their deferrals and deferred benefit accounts in. In the case of retirement and the aggregate balance of all of a participant’s deferred benefit accounts is equal to or more than $100,000, a participant may elect to receive the vested amount credited to the participant’s deferred benefit account in either lump sum or annual installments payable over a period of two or ten years. However, if the deferred benefit accounts’ aggregate balance is less than $100,000 the participant will be paid in lump sum upon retirement. In the event of a termination of employment prior to retirement, the participant’s death, or a change of control, the participant will receive the vested amount in the participant’s deferred benefit accounts in lump sum. In the case of an unforeseeable emergency as defined in the Legacy Neenah Deferred Compensation Plan, the Company will pay the participant an amount from the participant’s deferred benefit accounts necessary to satisfy the unforeseeable emergency.
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL SWM Executive Severance Plan
On November 2, 2016, SWM’s Compensation Committee adopted and approved the Schweitzer-Mauduit International, Inc. 2016 Executive Severance Plan (the “2016 Plan”) for members of the Company’s senior executive team. As of December 31, 2022, Messrs. Wamser and Nuñez were participants in the 2016 Plan.
The 2016 Plan provides that in the event of termination of a participant’s employment with the Company or one of its participating subsidiaries or business units within two years after a change of control of the Company for any reason other than cause, retirement, disability or death, a participant will be entitled to salary and benefit continuation. A change of control is defined as the date as of which: (a) a third person, including a “group” as defined in Section 13(d)(3) of the Exchange Act, acquires actual or beneficial ownership of shares of the Company having 30% or more of the total number of votes that may be cast for the election of directors of the Company; or (b) as the result of any cash tender or exchange offer, merger or other business combination, sale of assets or contested election, or any combination of the foregoing transactions (a “Transaction”), the persons who were directors of the Company before the Transaction cease to constitute a majority of the board of directors of the Company or any successor to the Company.
In the event of a qualifying termination of employment in connection with a change of control as of December 31, 2022, Messrs. Wamser and Nuñez would generally have been entitled to receive:
•
a cash payment in an amount equal to three times the highest annual compensation (base salary and annual incentive awards) paid or payable within the three-year period ending on the date of termination; and
•
welfare benefits (including, health and dental benefits) from the Company for a period of three years.
The 2016 Plan provides that any benefits triggered by a change of control are subject to an automatic reduction to avoid the imposition of excise taxes under Section 4999 of the Internal Revenue Code in the event such reduction would result in a better after-tax result for the executive.
Upon a change of control, all deferred compensation plan contributions that have been granted to a participant, but not yet vested as of December 31, 2022, vest automatically. Awards granted under the Company’s 2015 LTIP are subject to double trigger vesting upon a change of control — meaning that both a qualifying termination of employment and a change of control must occur prior to the accelerated vesting of such awards. Under the Company’s annual incentive program, in the event a participant is terminated without cause within two years following a change of control, the participant is entitled to payment of a pro rata portion of the incentive award at the target performance percentage, without regard to achievement of pre-established objectives.
The 2016 Plan also provides that if a Named Executive Officer’s employment with the Company or an affiliate terminates absent a change of control for a reason other than death, retirement, disability, voluntary resignation or cause, the Company will pay the Named Executive Officer an amount equal to a severance multiple determined by the Committee at the time the individual is selected for participation. In the case of Mr. Nuñez, this severance multiple equals one-half times base salary, and in the case of Mr. Wamser, this severance multiple equals one times base salary, in each case, payable as a cash lump sum. The 2016 Plan also provides for the continuation of the Company’s welfare benefits for the number of years equal to the severance multiple. A participant cannot receive both this payment as well as compensation under the 2016 Plan’s change of control provisions. Messrs. Wamser and Nuñez are also eligible to receive salary continuation in the event of death or disability. Disability pay is provided through a combination of Company-paid short-term disability benefits and insured long-term disability benefits in accordance with Company policy.
Subject to certain conditions, the 2016 Plan may be amended or terminated by resolution of the Board, but no such amendment or termination may be effective during the two-year period following a change of control of the Company without the consent of all participants.
The Company’s equity award agreements also include accelerated vesting provisions for a termination of employment (i) due to death, disability, or retirement (age 55, with at least five years of service to the Company and consent to retire provided by the Committee); (ii) without cause or due to good reason within
24 months following a “change in control” of the Company; or (iii) without cause not within such 24-month period. For the Synergy PSU awards, the only outstanding performance-based award outstanding as of December 31, 2022, the award will (a) vest on a pro rata basis based on target performance in the event of death; (b) vest on a pro rata basis based on actual performance in the event of a termination due to disability or retirement or a termination of employment without cause or due to good reason within 24 months following a change in control; or (c) be forfeited for a termination of employment for any other reason.
Payment of the benefits under the 2016 Plan is subject to the applicable executive executing an agreement that includes a general release of claims against the Company. These benefits are intended to recruit and retain key executives and provide continuity in the Company’s management in the event of a change of control.
The maximum amounts payable upon termination pursuant to the 2016 Plan, assuming that a change of control of the Company and/or a qualifying termination of employment had occurred on December 31, 2022, are set forth in the following tables for Messrs. Wamser and Nuñez.
In addition, in the event of termination, retirement, death or disability, each participating Named Executive Officer is also entitled to his or her benefits discussed above under “2022 Non-Qualified Deferred Compensation” and “2022 Pension Benefits,” as applicable.
Neenah Executive Severance Plan Furthermore, afterEach of our continuing Named Executive Officers are eligible for payments and benefits in connection with certain qualifying terminations of employment pursuant to the closingterms of the Merger, the Company assumed Neenah’s Amended and Restated Neenah Executive Severance Plan (the “Neenah Severance Plan”), in which Ms. Schertell and Mr. Rickheim participate.
. The Neenah Severance Plan categorizes participating executives as either “Tier 1”, “Tier 2”, or “Tier 3” participants in order to provide varying benefit amounts to the different executives. Ms. Schertell and Mr. RickheimEach of our continuing Named Executive Officers are Tier 1 participants under the Neenah Severance Plan. Upon termination of Ms. Schertell’s or Mr. Rickheim’sa Named Executive Officer’s employment by the Company without “cause” outside of a change of control, such Named Executive Officer will be entitled to an amount equal to one and one-half times his or her base salary. Upon termination of the Named Executive Officer’s employment by Neenah without “cause” within the two-year period following a change of control or by the Named Executive Officer for “good reason” within the two-year period following a change of control, the Neenah Severance Plan provides that such terminated Named Executive Officer will be entitled to the sum of: •
two times the sum of his or her annual base salary;
•
the amount of his or her annual bonus that he or she has earned through the date of the change of control, plus two times his or her targeted annual bonus;
•
any profit-sharing contributions or pension plan benefits forfeited as a result of such termination;
•
the amount of profit-sharing contributions and pension plan benefits such participant would have received under the qualified and supplemental retirement plans but for his or her termination for the two-year period following his or her termination; and
•
the cost of medical and dental COBRA premiums for a period of two years.
In addition, such Named Executive Officer will be fully vested in his or her account under the Legacy Neenah Deferred Compensation Plan, and any outstanding equity awards granted to him or her. Furthermore, upon the termination of a Named Executive Officer’s employment by Neenah at any time without “cause” or by the officer for “good reason” within the two-year period following a change of control, the Named Executive Officer will be eligible to receive reimbursement for outplacement service costs for a period of two years in an amount not to exceed $50,000. Any amounts paid to a Named Executive Officer under the Neenah Severance Plan will be reduced to the maximum amount that could be paid without being subject to the excise tax imposed under Sections 280G and 4999 of the Internal Revenue Code, but only if the after-tax benefit of the reduced amount is higher than the after-tax benefit of the unreduced amount.
Payment of the benefits under the Neenah Severance Plan is subject to the applicable executive executing an agreement that includes restrictive covenants and a general release of claims against the Company. These benefits are intended to recruit and retain key executives and provide continuity in the Company’s management in the event of a change of control. Kramer Transition Services AgreementWamser and Nuñez Separation Agreements
Prior to their separation, Messrs. Wamser and Nuñez each participated in the Schweitzer-Mauduit International, Inc. 2016 Executive Severance Plan (the “SWM Executive Severance Plan”). As described above, Dr. KramerMr. Wamser was deemed to have experienced a “Good Reason” eventtermination without “Cause” within two years following a “Change in connection withControl” (each as defined in the Merger and resignedSWM Executive Severance Plan) upon his separations from his role as our Chief Executive Officer in connection with the closing of the Merger and entered into the Kramer Transition Services Agreement with the Company pursuant toin April 2023, which he will serve as an independent contractor and provide transition and consulting services to the Company until the 12-month anniversary ofoccurred within two years following the closing of the Merger. The Kramer Transition Agreement may be terminated by Dr. Kramer for any reason on 30 days’ written notice or by the Company for Cause (as defined in the 2016 Plan). Under the Kramer Transition Agreement, Dr. Kramer will be paid a consulting fee of $166,666.67 each calendar month during the Transition Period (as defined above), payable on the last day of each completed calendar month. In addition, the Kramer Transition Agreement provides for the following benefits: (i) severance benefits under the 2016 Executive Plan, payable in connection with a termination without Cause or for Good Reason within two years following a Change of Control ($7,274,247); (ii) a pro-rated annual incentive payment based on target performance, as described above ($507,205); and (iii) equity vesting for a termination without Cause or for Good Reason within 24 months after the effective date of a Change in Control (each as defined in the 2015 LTIP) ($1,468,213). In connection with the Mergers,his separation, the Company waivedentered into a Separation, Waiver and Release Agreement with Mr. Wamser, memorializing his entitlements to the pro-rata reduction for equity vestingfollowing payments and Dr. Kramer was entitled to full vesting of his equity awards, with performance-based equity vesting at targetbenefits in accordance with the terms of the Merger Agreement. Dr. Kramer also received a payment of $53,221 in respect of his accrued but unused vacation. Peacock Separation Agreement
As described above, Ms. Peacock was deemed to have experienced a “Good Reason” event in connection with the Merger and resigned from her role as ourSWM Executive Vice President, Advanced Materials & Structures upon the closing of the Merger on July 6, 2022. In connection with her separation, Ms. Peacock and the Company entered into the “Peacock Separation Agreement, pursuant to which Ms. Peacock became entitled to the following payments and benefits, payable in accordance with the terms of the 2016Severance Plan: (i) a lump sum cash payment equal to three times the sum of (x) herhis highest base salary for the three-year period preceding herhis separation, plus (y) herhis highest short-term incentive bonus for the
TABLE OF CONTENTS three-year period preceding herhis separation ($1,903,077)3,218,379); (ii) a pro-rated annual incentiveSTIP payment for 2023 based on target performance as described above ($145,706)107,813); and (iii) a cash payment equal to the cost of continued medical, dental, vision, life and supplemental long-term disability coverage for up to three years, at active employee rates ($72,703)93,595). In addition, Ms. Peacock’s restricted stockthe outstanding equity awards and performance share awardsgranted to Mr. Wamser prior to 2023 vested in full (based on target performance with respect to the performance share awards)upon his separations in accordance with the terms of the underlying award agreements but without any pro-rata reduction for period served, as described above ($192,446)1,414,602). Ms. PeacockMr. Wamser was also received a payment of $32,815 in respect of her accrued but unused vacation. Hoek Consulting and Termination Agreements
In October 2022, Mr. Hoek tendered his resignation as the Company’s Chief Operating Officer, effective as of March 1, 2023. In connection with his resignation, Mr. Hoek and SLS, a wholly owned subsidiary of the Company, entered into a consulting agreement, pursuant to which he will continue to provide consulting services to the Company for one-year following his resignation. Under the consulting agreement, Mr. Hoek will be paid an annual consulting fee of €250,000 (equivalent of $268,154 based on € to U.S. dollar conversion rate of 0.9323 as of December 31, 2022). In addition, Mr. Hoek and SLS entered into the Hoek Termination Agreement, pursuant to which Mr. Hoek is entitled to receive an annual incentive amount based on the Company’s performance for fiscal year 2022 ($332,693). The Hoek Termination Agreement also provides that any equity awards previously granted by the Company to Mr. Hoek that are not vested on or before March 1, 2023 will be forfeited. In connection with his resignation, Mr. Hoek also received a payment of $32,411 in respect of his accrued but unused vacation.
Prior to his resignation, Mr. Hoek did not participate in the 2016 Plan and, upon a qualifying termination of employment as of December 31, 2022, would have been entitled to severance benefits as required by Luxembourg law. Upon a qualifying termination of Mr. Hoek’s employment with the Company or an affiliate within one year of a change of control or absent a change of control for a reason other than death, retirement, disability, voluntary resignation or cause, in each case, as of December 31, 2022, Mr. Hoek would have been entitled to receive (i) $482,670, payable as a lump sum, representing one year’s base salary and (ii) $18,897, payable on Mr. Hoek’s behalf, representing Company-paid life and disability insurance premiums for one year. In addition, upon a qualifying termination of Mr. Hoek’s employment with the Company or an affiliate within one year of a change of control or a termination of Mr. Hoek’s employment due to death or disability, in each case as of December 31, 2022, Mr. Hoek would have been entitled to a cash payment of $329,042, representing Mr. Hoek’s incentive award under our annual incentive program, based on actual performance, payable at the same time payments under our annual incentive program are made to other executives. In the event of a termination of Mr. Hoek’s employment for any of the reasons described in this paragraph, Mr. Hoek would also have been entitled to $32,411, payable as a lump sum,$24,880 in respect of accrued but unused vacation.vacation time.
As described above, Mr. Nuñez was deemed to have experienced a termination without “Cause” within two years following a “Change in Control” (each as defined in the SWM Executive Severance Plan) upon his separations from the Company in September 2023, which occurred within two years following the closing of the Merger. In connection with his separation, the Company entered into a Separation, Waiver and Release Agreement with Mr. Nuñez, memorializing his entitlements to the following payments and benefits in accordance with the terms of the SWM Executive Severance Plan: (i) a lump sum cash payment equal to three times the sum of (x) his highest base salary for the three-year period preceding his separation, plus (y) his highest short-term incentive bonus for the three-year period preceding his separation ($2,983,080); (ii) a pro-rated STIP payment for 2023 based on target performance ($216,667); and (iii) a cash payment equal to the cost of continued medical, dental, vision, life and supplemental long-term disability coverage for up to three years, at active employee rates ($93,595). In addition, the outstanding equity awards granted to Mr. Nuñez prior to 2023 vested in full upon his separations in accordance with the terms of the underlying award agreements ($762,947). Mr. Nuñez was also paid $24,880 in respect of accrued but unused vacation time. The maximum amounts payable upon termination pursuant to the severance arrangements described above, assuming that a change of control of the Company and/or a qualifying termination of employment had occurred on December 31, 2022,2023, are set forth in the following tables for each of the continuing Named Executive Officers. The amounts reported in the table below does not reflect the application of any reduction in benefits to avoid the imposition of excise taxes under Section 4999 of the Internal Revenue Code. In addition, as noted above, in connection with Mr. Wamser’s separation from the Company in April 2023, he became entitled to separation benefits for a termination without cause in connection with a change in control, as described further below. | | | | | | | With Change of Control | | | Without Change of Control(1) | | | Name | | | Compensation Component | | | Retirement | | | Without
Cause
or Good
Reason
Termination | | | Death or
Disability | | | Retirement | | | Without
Cause
or Good
Reason
Termination | | | Death or
Disability | | | Julie Schertell | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cash Severance | | | | | — | | | | | | 3,977,500 | | | | | | — | | | | | | — | | | | | | 3,977,500 | | | | | | — | | | | | Non-Equity Incentive Plan Compensation(2) | | | | | — | | | | | | | | | | | | — | | | | | | — | | | | | | | | | | | | — | | | | | Long Term Incentives- Performance(3) | | | | | — | | | | | | 155,235 | | | | | | 155,235 | | | | | | — | | | | | | 155,235 | | | | | | 155,235 | | | | | Long Term Incentives-Time Based(3) | | | | | — | | | | | | 2,101,851 | | | | | | 2,101,851 | | | | | | — | | | | | | 2,101,851 | | | | | | 2,101,851 | | | | | Benefit Continuation | | | | | — | | | | | | 351,877 | | | | | | — | | | | | | — | | | | | | 351,877 | | | | | | — | | | | | Outplacement | | | | | — | | | | | | 50,000 | | | | | | — | | | | | | — | | | | | | 50,000 | | | | | | — | | | | | Total: | | | | | — | | | | | | 6,636,463 | | | | | | 2,257,086 | | | | | | — | | | | | | 6,636,463 | | | | | | 2,257,086 | | | | R. Andrew Wamser, Jr. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cash Severance | | | | | — | | | | | | 3,019,329 | | | | | | — | | | | | | — | | | | | | 3,019,329 | | | | | | — | | | | | Non-Equity Incentive Plan Compensation(2) | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | Long Term Incentives- Performance(3) | | | | | — | | | | | | 96,498 | | | | | | 96,498 | | | | | | — | | | | | | 96,498 | | | | | | 96,498 | | | | | Long Term Incentives-Time Based(3) | | | | | — | | | | | | 1,582,919 | | | | | | 1,582,919 | | | | | | — | | | | | | 1,582,919 | | | | | | 1,582,919 | | | | | Benefit Continuation | | | | | — | | | | | | 85,305 | | | | | | — | | | | | | — | | | | | | 85,305 | | | | | | — | | | | | Outplacement | | | | | — | | | | | | | | | | | | — | | | | | | — | | | | | | | | | | | | — | | | | | Total: | | | | | — | | | | | | 4,784,051 | | | | | | 1,679,417 | | | | | | — | | | | | | 4,784,051 | | | | | | 1,679,417 | | |
Julie Schertell | | | Cash Severance | | | — | | | 3,977,500 | | | — | | | — | | | 3,977,500 | | | — | | | Non-Equity Incentive Plan Compensation(2) | | | — | | | — | | | — | | | — | | | — | | | — | | | Long Term Incentives- Performance(3) | | | — | | | 2,267,641 | | | 979,431 | | | — | | | 2,267,641 | | | 979,431 | | | Long Term Incentives- Time Based(3) | | | — | | | 2,115,306 | | | 2,115,306 | | | — | | | 2,115,306 | | | 2,115,306 | | | Benefit Continuation | | | — | | | 208,092 | | | — | | | — | | | 208,092 | | | — | | | Outplacement | | | — | | | 50,000 | | | — | | | — | | | 50,000 | | | — | | | Total: | | | — | | | 8,618,539 | | | 3,094,737 | | | — | | | 8,618,539 | | | 3,094,737 | Gregory Weitzel | | | Cash Severance | | | — | | | 1,402,500 | | | — | | | — | | | 1,402,500 | | | — | | | Non-Equity Incentive Plan Compensation(2) | | | — | | | — | | | — | | | — | | | — | | | — | | | Long Term Incentives- Performance(3) | | | — | | | 195,815 | | | 59,490 | | | — | | | 195,815 | | | 59,490 | | | Long Term Incentives- Time Based(3) | | | — | | | 222,821 | | | 222,821 | | | — | | | 222,821 | | | 222,821 | | | Benefit Continuation | | | — | | | 116,728 | | | — | | | — | | | 116,728 | | | — | | | Outplacement | | | — | | | 50,000 | | | — | | | — | | | 50,000 | | | — | | | Total: | | | — | | | 1,987,864 | | | 282,311 | | | — | | | 1,987,864 | | | 282,311 | Michael W. Rickheim | | | Cash Severance | | | — | | | 1,402,500 | | | — | | | — | | | 1,402,500 | | | — | | | Non-Equity Incentive Plan Compensation(2) | | | — | | | — | | | — | | | — | | | — | | | — | | | Long Term Incentives- Performance(3) | | | — | | | 690,894 | | | 343,373 | | | — | | | 690,894 | | | 343,373 | | | Long Term Incentives- Time Based(3) | | | — | | | 333,604 | | | 333,604 | | | — | | | 333,604 | | | 333,604 | | | Benefit Continuation | | | — | | | 46,603 | | | — | | | — | | | 46,603 | | | — | | | Outplacement | | | — | | | 50,000 | | | — | | | — | | | 50,000 | | | — | | | Total: | | | | | | 2,523,601 | | | 676,977 | | | | | | 2,523,601 | | | 676,977 |
Mark W. Johnson | | | Cash Severance | | | — | | | 1,551,000 | | | — | | | — | | | 705,000 | | | — | | | Non-Equity Incentive Plan Compensation(2) | | | — | | | — | | | — | | | — | | | — | | | — | | | Long Term Incentives- Performance(3) | | | — | | | — | | | — | | | — | | | — | | | — | | | Long Term Incentives- Time Based(3) | | | — | | | 295,942 | | | 295,942 | | | — | | | — | | | 295,942 | | | Benefit Continuation | | | — | | | 46,603 | | | — | | | — | | | — | | | — | | | Outplacement | | | — | | | 50,000 | | | — | | | — | | | 50,000 | | | — | | | Total: | | | — | | | 1,943,545 | | | 295,942 | | | — | | | 755,000 | | | 295,942 |
| | | | | | | With Change of Control | | | Without Change of Control(1) | | | Name | | | Compensation Component | | | Retirement | | | Without
Cause
or Good
Reason
Termination | | | Death or
Disability | | | Retirement | | | Without
Cause
or Good
Reason
Termination | | | Death or
Disability | | | Ricardo Nuñez | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cash Severance | | | | | — | | | | | | 2,998,506 | | | | | | 750,000 | | | | | | — | | | | | | 2,998,506 | | | | | | 750,000 | | | | | Non-Equity Incentive Plan Compensation(2) | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | Long Term Incentives- Performance(3) | | | | | 83,911 | | | | | | 83,911 | | | | | | 83,911 | | | | | | 83,911 | | | | | | 83,911 | | | | | | 83,911 | | | | | Long Term Incentives-Time Based(3) | | | | | 685,507 | | | | | | 1,048,354 | | | | | | 1,048,355 | | | | | | 718,171 | | | | | | 1,048,354 | | | | | | 1,048,355 | | | | | Benefit Continuation | | | | | — | | | | | | 88,977 | | | | | | — | | | | | | — | | | | | | 88,977 | | | | | | — | | | | | Outplacement | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | Total: | | | | | 769,418 | | | | | | 4,219,748 | | | | | | 1,882,266 | | | | | | 802,082 | | | | | | 4,219,748 | | | | | | 1,882,266 | | | | Michael Rickheim | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cash Severance | | | | | — | | | | | | 1,402,500 | | | | | | — | | | | | | — | | | | | | 1,402,500 | | | | | | — | | | | | Non-Equity Incentive Plan Compensation(2) | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | Long Term Incentives- Performance(3) | | | | | — | | | | | | 71,324 | | | | | | 71,324 | | | | | | — | | | | | | 71,324 | | | | | | 71,324 | | | | | Long Term Incentives-Time Based(3) | | | | | — | | | | | | 512,489 | | | | | | 512,488 | | | | | | — | | | | | | 512,489 | | | | | | 512,488 | | | | | Benefit Continuation | | | | | — | | | | | | 19,074 | | | | | | — | | | | | | — | | | | | | 19,074 | | | | | | — | | | | | Outplacement | | | | | — | | | | | | 50,000 | | | | | | — | | | | | | — | | | | | | 50,000 | | | | | | — | | | | | Total: | | | | | — | | | | | | 2,055,387 | | | | | | 583,812 | | | | | | — | | | | | | 2,055,387 | | | | | | 583,812 | | |
(1)
Because a change of control occurred at the time of the Merger (July 6, 2022), if any of the Named Executive Officers experience an involuntary termination without cause or resign for good reason prior to July 6, 2024, they will receive the payments and benefits associated with such terminations following a change of control. Please see above for a description of the payments and benefits that would be provided upon a termination without cause or resignation for good reason absent a change of control.
(2)
Because the termination events are assumed to occur on the last business day of the reporting year (2022), the amount of non-equity incentive plan compensation earned and reported in the Summary Compensation Table would be paid without regard to any special termination conditions and are not included in this table.
(3)
Represents the value of the accelerated vesting of performance-based or time-based long-term equity awards, as applicable. The value of the accelerated vesting of the equity awards reported in this table is based upon our closing stock price of $20.90 on December 30, 2022, the last trading day of 2022.
(1)
| Because a change of control occurred at the time of the Merger (July 6, 2022), if any of the Named Executive Officers (except Mr. Johnson) have an involuntary termination without cause or resign for good reason prior to July 6, 2024, they will receive the payments and benefits associated with such terminations following a change of control. Please see above for a description of the payments and benefits that would be provided upon a termination without cause or resignation for good reason absent a change of control. |
(2)
| Because the termination events are assumed to occur on the last business day of the reporting year (2023), the amount of non-equity incentive plan compensation earned and reported in the Summary Compensation Table would be paid without regard to any special termination conditions and are not included in this table. |
(3)
| Represents the value of the accelerated vesting of performance-based or time-based long-term equity awards, as applicable. The value of the accelerated vesting of the equity awards reported in this table is based upon our closing stock price of $15.31 on December 29, 2023, the last trading day of 2023. |
PAY RATIO As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(u) of Regulation S-K, we are providing the following disclosure about the relationship of the median of the annual total compensation of our employees to the annual total compensation of Ms. Schertell, our Chief Executive Officer. Ratio For 2022, •
The median of the annual total compensation of all of our employees, other than Ms. Schertell, was $49,743.
•
Ms. Schertell’s annual total compensation was $4,183,018,$3,456,572, which differs from the amount reported in the Total column of the Summary Compensation Table — 2022 due to the annualization of Ms. Schertell’s compensation to reflect her mid-year commencement of employment with the Company,- 2023, as discussed further below.
•
Based on this information, the ratio of the annual total compensation of Ms. Schertell to the median of the annual total compensation of all employees is estimated to be 8466 to 1.
Since Ms. Schertell was appointed President and Chief Executive Officer effective July 6, 2022, we annualized her base salary,Schertell’s compensation differs from the amount of her perquisites and other personal benefits (including the cost of her monthly executive benefits), the amountTotal column of the Summary Compensation Table as it includes $2,910 of Company contributions made on her behalf toprovided Life and Disability insurance, which is also included in the Supplemental RCP and Company 401(k) plan, and the amountmedian total compensation of dividends received on unvested equity awards. We did not annualize the value of Ms. Schertell’s Synergy PSUs as the value of such award was not impacted by the period of service during 2022. We did not annualize the value of Ms. Schertell’s payment under Neenah’s annual incentive program for the pre-Merger portion of 2022 or her payment under the Company’s annual incentive program for the post-Merger portion of 2022, as these payments collectively represented incentive payments for the full year 2022.all employees.
Identification of Median Employee We believe that there have been no significant changes to the Company's employee population or employee compensation arrangements during 2023 that would significantly impact the pay ratio disclosure. Therefore, as permitted by the SEC executive compensation disclosure rules, we are using the same median employee for purposes of disclosing the Company's 2023 pay ratio as was used for the 2022 pay ratio. We selected December 31, 2022 as the date on which to determine our median employee.employee for purposes of our 2022 pay ratio. As of that date, we had approximately 7,521 employees. In addition, as is permitted by the SEC’s executive compensation disclosure rules, we eliminated 175 employees in China (approximately 2% of our total employee population) from the data set, resulting in 7,346 employees used to determine the median employee. For purposes of identifying the median employee from this data set, we considered the base salary and annual incentives for all full-time, part-time, temporary and seasonal employees employed as of December 31, 2022 as this represents the principal form of compensation paid to all of our employees. Since the employee initially identified as the median employee in 2022 was no longer an employee of the Company as of December 31, 2023, for purposes of this pay ratio disclosure, we are using a similarly situated employee to the employee initially identified as the median employee, whose compensation is substantially similar to that of the original median employee identified. The new median employee was identified as a Quality Controlmanufacturing employee located in France.the United States. The median of the annual total compensation of all of our employees, excluding Ms. Schertell, was $49,743$52,497 in 2022,2023, calculated in accordance with the Summary Compensation Table rules.
TABLE OF CONTENTS Pay Versus Performance Disclosure PAY VERSUS PERFORMANCE
| Pay Versus Performance | | YEAR(1) | | | SUMMARY
COMPENSATION
TABLE
TOTAL FOR
SCHERTELL
($)(2) | | | SUMMARY
COMPENSATION
TABLE
TOTAL FOR
KRAMER
($)(2) | | | COMPENSATION
ACTUALLY
PAID TO
SCHERTELL
($)(3) | | | COMPENSATION
ACTUALLY
PAID TO
KRAMER
($)(3) | | | AVERAGE
SUMMARY
COMPENSATION
TABLE
TOTAL FOR
NON-PEO
NAMED
EXECUTIVE
OFFICERS
($)(2) | | | AVERAGE
COMPENSATION
ACTUALLY
PAID TO
NON-PEO
NAMED
EXECUTIVE
OFFICERS
($)(3) | | | VALUE OF INITIAL
FIXED $100
INVESTMENT
BASED ON:(4) | | | NET
INCOME
($ Millions) | | | ADJUSTED
EBITDA
($ Millions)(6) | | | | Total
Shareholder
Return
($) | | | Peer Group
Total
Shareholder
Return
($)(5) | | | 2022 | | | | | 3,476,043 | | | | | | 14,274,246 | | | | | | 2,066,898 | | | | | | 11,257,027 | | | | | | 3,083,162 | | | | | | 1,936,394 | | | | | | 58.69 | | | | | | 136.42 | | | | | | (6.6) | | | | | | 304.7 | | | | 2021 | | | | | N/A | | | | | | 5,150,672 | | | | | | N/A | | | | | | 3,516,159 | | | | | | 1,290,711 | | | | | | 938,432 | | | | | | 78.52 | | | | | | 145.27 | | | | | | 88.9 | | | | | | 209.1 | | | | 2020 | | | | | N/A | | | | | | 5,757,874 | | | | | | N/A | | | | | | 5,448,268 | | | | | | 1,466,461 | | | | | | 1,052,550 | | | | | | 101.04 | | | | | | 122.68 | | | | | | 83.8 | | | | | | 212.9 | | |
(1)
The Principal Executive OfficerIn accordance with rules adopted by the Securities and Exchange Commission pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, we provide the following disclosure regarding executive compensation for our principal executive officer (“PEO”) and Non-PEO Named Executive Officers (“NEOs”) and Company performance for the applicablefiscal years listed below. The Compensation Committee did not consider the pay versus performance disclosure below in making its pay decisions for any of the years shown.
2023 | | | — | | | 3,453,662 | | | — | | | 2,691,524 | | | 2,165,963 | | | 1,807,267 | | | 45.40 | | | 163.35 | | | (309.5) | | | 213.4 | 2022 | | | 14,274,246 | | | 3,476,043 | | | 11,257,027 | | | 2,066,898 | | | 3,099,738 | | | 1,952,970 | | | 58.69 | | | 136.06 | | | (6.6) | | | 304.7 | 2021 | | | 5,150,672 | | | — | | | 3,516,159 | | | — | | | 1,290,711 | | | 938,432 | | | 78.52 | | | 144.89 | | | 88.9 | | | 209.1 | 2020 | | | 5,757,874 | | | — | | | 5,448,268 | | | — | | | 1,466,461 | | | 1,052,550 | | | 101.04 | | | 122.35 | | | 83.8 | | | 212.9 |
1.
| The Principal Executive Officer (“PEO”) and Named Executive Officers for the applicable years were as follows: |
2023: Julie Schertell (“Second PEO”), served as follows:
•
2022: Julie Schertell assumed the role of the Company’s President and Chief Executive Officer on July 6, 2022, and Jeffrey Kramer, PhD (“First PEO”), served as the Company’s Chief Executive Officer during 2022 through July 5, 2022. The Company’s other Named Executive Officers for 2022 were: R. Andrew Wamser, Jr.; Omar Hoek; Ricardo Nuñez; Michael W. Rickheim; and Tracey Peacock.
•
2021: Jeffrey Kramer, PhD, served as the Company’s Chief Executive Officer for the entirety of 2021 and the Company’s other Named Executive Officers were: R. Andrew Wamser, Jr.; Omar Hoek; Ricardo Nuñez; and Tracey Peacock.
•
2020: Jeffrey Kramer, PhD, served as the Company’s Chief Executive Officer for the entirety of 2020 and the Company’s other Named Executive Officers were: R. Andrew Wamser, Jr.; Omar Hoek; Ricardo Nuñez; and Daniel Lister. 2.
| The amounts shown for Compensation Actually Paid have been calculated in accordance with Item 402(v) of Regulation S-K and do not reflect compensation actually earned, realized, or received by the Company’s NEOs. These amounts reflect the Summary Compensation Table Total with certain adjustments as described in footnote 3 below. |
3.
| Compensation Actually Paid reflects the exclusions and inclusions of certain amounts for the PEO and the Non-PEO NEOs as set forth below. Equity values are calculated in accordance with FASB ASC Topic 718. Amounts in the Exclusion of Stock Awards column are based on the amounts from the Stock Awards column set forth in the Summary Compensation Table. |
2023 | | | 3,453,662 | | | (1,800,426) | | | 1,038,288 | | | 2,691,524 |
(2)
Amounts reported in this column represent (i) the total compensation reported in the Summary Compensation Table for the applicable year in the case of Ms. Schertell and Dr. Kramer and (ii) the average of the total compensation reported in the Summary Compensation Table for the applicable year for the Company’s Named Executive Officers reported for the applicable year other than the PEOs for such years.
(3)
To calculate compensation actually paid (“CAP”), adjustments were made to the amounts reported in the Summary Compensation Table for the applicable year. A reconciliation of the adjustments for Ms. Schertell and Dr. Kramer and for the average of the other Named Executive Officers is set forth following the footnotes to this table.
(4)
Pursuant to rules of the SEC, the comparison assumes $100 was invested on December 31, 2019 in our common stock. Historic stock price performance is not necessarily indicative of future stock price performance.
(5)
The TSR Peer Group consists of companies in the S&P SmallCap 600 Materials Index.
(6)
As noted in the CD&A, for 2022, the Compensation Committee determined that Adjusted EBITDA continues to be viewed as a core driver of the Company’s
2023 | | | 2,165,963 | | | (363,570) | | | 4,874 | | | 1,807,267 |
TABLE OF CONTENTS The amounts in the Inclusion of Equity Values in the tables above are derived from the amounts set forth in the following tables: 2023 | | | 780,963 | | | 196,804 | | | — | | | 60,521 | | | — | | | — | | | 1,038,288 |
2023 | | | 109,015 | | | 42,608 | | | — | | | 3,274 | | | (150,023) | | | — | | | 4,874 |
4.
| The Peer Group TSR set forth in this table utilizes the S&P SmallCap 600 Capped Materials Index, which we also utilize in the stock performance graph required by Item 201(e) of Regulation S-K included in our Annual Report for the year ended December 31, 2023. The comparison assumes $100 was invested for the period starting December 31, 2019, through the end of the listed year in the Company and in the S&P SmallCap 600 Capped Materials Index, respectively. Historical stock performance is not necessarily indicative of future stock performance. |
5.
| We determined EBITDA Delivered to be the most important financial performance measure used to link Company performance to Compensation Actually Paid to our PEO and Non-PEO NEOs in 2023. EBITDA Delivered is a non-GAAP measure. For more information on EBITDA Delivered, please see the “2023 Short-Term Incentive Plan” section of the Compensation Discussion & Analysis in this proxy statement. This performance measure may not have been the most important financial performance measure for prior years, and we may determine a different financial performance measure to be the most important financial performance measure in future years. |
performance and stockholder value creation and, accordingly, was utilized as a component in our post-Merger annual incentive program as well as our pre-Merger performance share awards. Adjusted EBITDA is defined as the sum of (a) Net Income, (b) interest expense, (c) depreciation and amortization expense, and (d) taxes on a consolidated basis for continuing operations. For these purposes, “Net Income” does not include (a) any extraordinary gains or losses, (b) any nonrecurring gains or losses, (c) any gains or losses from asset sales, or (d) any facility/asset closure or restructuring costs.
| CAP Adjustments | | | YEAR | | | SUMMARY
COMPENSATION
TABLE TOTAL
($)(a) | | | (MINUS) CHANGE IN
ACCUMULATED
BENEFITS
UNDER
DEFINED
BENEFIT AND
ACTUARIAL
PENSION
PLANS
($)(b) | | | PLUS SERVICE
COSTS
UNDER
DEFINED
BENEFIT AND
ACTUARIAL
PENSION
PLANS
($)(c) | | | (MINUS) GRANT DATE
FAIR VALUE
OF STOCK
AWARDS
GRANTED IN
FISCAL YEAR
($)(d) | | | PLUS FAIR VALUE
AT FISCAL
YEAR-END OF
OUTSTANDING
AND
UNVESTED
STOCK
AWARDS
GRANTED
IN FISCAL
YEAR
($)(e) | | | PLUS/(MINUS) CHANGE
IN FAIR
VALUE OF
OUTSTANDING
AND
UNVESTED
STOCK
AWARDS
GRANTED
IN PRIOR
FISCAL
YEARS
($)(f) | | | PLUS FAIR VALUE
AT VESTING
OF STOCK
AWARDS
GRANTED
IN FISCAL
YEAR THAT
VESTED
DURING
FISCAL
YEAR
($)(g) | | | PLUS/(MINUS) CHANGE IN
FAIR VALUE AS
OF VESTING
DATE OF
STOCK
AWARDS
GRANTED
IN PRIOR
YEARS
FOR WHICH
APPLICABLE
VESTING
CONDITIONS
WERE
SATISFIED
DURING
FISCAL
YEAR
($)(h) | | | (MINUS) FAIR VALUE
AS OF
PRIOR
FISCAL
YEAR-END
OF STOCK
AWARDS
GRANTED
IN PRIOR
FISCAL
YEARS THAT
FAILED TO
MEET
APPLICABLE
VESTING
CONDITIONS
DURING
FISCAL
YEAR
($)(i) | | | EQUALS COMPENSATION
ACTUALLY
PAID
($) | | | Julie Schertell | | | 2022 | | | | | 3,476,043 | | | | | | — | | | | | | — | | | | | | (1,790,000) | | | | | | 470,473 | | | | | | (75,575) | | | | | | — | | | | | | (14,043) | | | | | | — | | | | | | 2,066,898 | | | | 2021 | | | | | N/A | | | | | | N/A | | | | | | N/A | | | | | | N/A | | | | | | N/A | | | | | | N/A | | | | | | N/A | | | | | | N/A | | | | | | N/A | | | | | | N/A | | | | 2020 | | | | | N/A | | | | | | N/A | | | | | | N/A | | | | | | N/A | | | | | | N/A | | | | | | N/A | | | | | | N/A | | | | | | N/A | | | | | | N/A | | | | | | N/A | | | | Jeffrey Kramer | | | 2022 | | | | | 14,274,246 | | | | | | — | | | | | | — | | | | | | (4,879,284) | | | | | | — | | | | | | — | | | | | | 2,358,349 | | | | | | (496,284) | | | | | | — | | | | | | 11,257,027 | | | | 2021 | | | | | 5,150,672 | | | | | | — | | | | | | — | | | | | | (3,291,640) | | | | | | 2,182,031 | | | | | | (1,013,582) | | | | | | — | | | | | | 488,678 | | | | | | — | | | | | | 3,516,159 | | | | 2020 | | | | | 5,757,874 | | | | | | — | | | | | | — | | | | | | (3,110,928) | | | | | | 3,074,670 | | | | | | (11,170) | | | | | | — | | | | | | (262,178) | | | | | | — | | | | | | 5,448,268 | | | | Other Named Executive Officers (Average)(j) | | | 2022 | | | | | 3,083,162 | | | | | | (5,501) | | | | | | 5,501 | | | | | | (1,886,660) | | | | | | 757,404 | | | | | | (90,068) | | | | | | 75,909 | | | | | | (3,353) | | | | | | — | | | | | | 1,936,394 | | | | 2021 | | | | | 1,290,711 | | | | | | (3,025) | | | | | | 3,025 | | | | | | (598,090) | | | | | | 369,290 | | | | | | (167,603) | | | | | | — | | | | | | 44,124 | | | | | | — | | | | | | 938,432 | | | | 2020 | | | | | 1,466,461 | | | | | | (10,411) | | | | | | 10,411 | | | | | | (608,612) | | | | | | 475,782 | | | | | | (1,596) | | | | | | — | | | | | | (36,289) | | | | | | (243,196) | | | | | | 1,052,550 | | |
(a)
Represents Total Compensation as reported in the Summary Compensation Table for the indicated fiscal year. With respect to the other Named Executive Officers, amounts shown represent averages.
(b)
Represents the aggregate change in the actuarial present value of the accumulated benefits under all defined benefit and actuarial pension plans reported in the Summary Compensation Table for the indicated fiscal year.
(c)
Represents the sum of the actuarial present value of the benefits under all defined benefit and actuarial pension plans attributable to services rendered during the indicated fiscal year, calculated using the same methodology as used in the Company’s financial statements under generally accepted accounting principles.
(d)
Represents the grant date fair value of the stock awards granted during the indicated fiscal year, computed in accordance with the methodology used for financial reporting purposes.
(e)
Represents the fair value as of the indicated fiscal year-end of the outstanding and unvested stock awards granted during such fiscal year, computed in accordance with the methodology used for financial reporting purposes.
(f)
Represents the change in fair value during the indicated fiscal year of each stock award that was granted in a prior fiscal year and that remained outstanding and unvested as of the last day of the indicated fiscal year, computed in accordance with the methodology used for financial reporting purposes and, for awards subject to performance-based vesting conditions, based on the probable outcome of such performance-based vesting conditions as of the last day of the fiscal year.
(g)
Represents the fair value at vesting of the stock awards that were granted and vested during the indicated fiscal year, computed in accordance with the methodology used for financial reporting purposes.
(h)
Represents the change in fair value, measured from the prior fiscal year-end to the vesting date, of each stock award that was granted in a prior fiscal year and which vested during the indicated fiscal year, computed in accordance with the methodology used for financial reporting purposes.
(i)
Represents the fair value as of the last day of the prior fiscal year of the stock awards that were granted in a prior fiscal year and which failed to meet the applicable vesting conditions in the indicated fiscal year, computed in accordance with the methodology used for financial reporting purposes.
(j)
See footnote 1 above for the Named Executive Officers included in the average for each year.
Relationship Between Pay and Performance
We believe the CAP in each of the years reported above and over the three-year cumulative period are reflective of the Compensation Committee’s emphasis on “pay-for-performance” as the CAP fluctuated year-over-year, primarily due to the result of our stock performance and our varying levels of achievement against pre-established performance goals under our annual and long-term incentive programs, including our Adjusted EBITDA performance.
Description of Relationship Between PEO and OtherNon-PEO NEO Compensation Actually Paid and Company and Peer Group Total Shareholder Return (“TSR”)
The following chart sets forth the relationship between Compensation Actually Paid to our PEOs, the average of Compensation Actually Paid to our otherNon-PEO NEOs, and the Company’s cumulative TSR over the threefour most recently completed fiscal years.years, and the S&P SmallCap 600 Capped Materials Index over the same period.
Description of Relationship Between PEO and OtherNon-PEO NEO Compensation Actually Paid and Net Income
The following chart sets forth the relationship between Compensation Actually Paid to our PEOs, the average of Compensation Actually Paid to our otherNon-PEO NEOs, and our net incomeNet Income during the threefour most recently completed fiscal years.
Description of Relationship Between PEO and OtherNon-PEO NEO Compensation Actually Paid and Adjusted EBITDA Delivered
The following chart sets forth the relationship between Compensation Actually Paid to our PEOs, the average of Compensation Actually Paid to our otherNon-PEO NEOs, and our Adjusted EBITDA Delivered during the threefour most recently completed fiscal years.
DescriptionTabular List of Relationship Between Company TSR and Peer Group TSRMost Important Financial Performance Measures
The following chart compares our cumulative TSR overtable presents the threefinancial performance measures that the Company considers to have been the most recently completed fiscal years to that of the S&P SmallCap 600 Materials Index over the same period. Performance Measures Used to Linkimportant in linking Compensation Actually Paid to our PEO and Non-PEO NEOs for 2023 to Company Performance
The following is a list of financial performanceperformance. (These measures whichare discussed in the Company’s assessment represent the most important financial performance measures used by the Company to link compensation actually paid to the Named Executive Officers for 2022. Please see the Compensation Discussion &and Analysis for further information regarding thesesection of this proxy statement.) The measures and how they were used in the 2022 executive compensation program.this table are not ranked.
•EBITDA Delivered
Adjusted EBITDA
•Synergies Achieved
Synergy Run Rate AchievementFree Cash Flow as a Percentage of Net Sales
•ROIC
Relative Total Shareholder Return*TSR # # #
•
Adjusted Earnings Per Share*
•
Net Sales *
•
Operating Profit*
*
Used to determine the annual incentive payout for the pre-Merger portion of SWM’s annual incentive program. The performance metrics under the Company’s 2023 annual incentive program will be EBITDA, synergy achievement and safety scorecard.
TABLE OF CONTENTS Compensation of Directors Every other year, the Compensation Committee reviews non-employee director compensation to evaluate whether non-employee director compensation is consistent with market practices. After considering input from Meridian, the Board determined not to make any changes to the compensation of our non-employee directors in connection with the 20222023 pay review. In 2022,2023, each non-employee director received the following cash and stock compensation for service on our Board and its committees:
•
An annual Board retainer of $95,000 in stock plus $70,000 in cash. Retainers are paid quarterly, with the stock retainer valuation based on the closing price on the trading day immediately preceding the grant date and prorated for one partial quarter of service.
•
Additional annual retainer for the Non-Executive Chairman was $75,000 per year, paid quarterly in cash.
•
Directors who serve on committees receive an additional annual retainer, paid quarterly in cash as follows:
•
Audit Committee: $30,000 for Chair; $15,000 for other members
•
Compensation Committee: $20,000 for Chair; $10,000 for other members
•
Nominating & Governance Committee: $15,000 for Chair; $10,000 for other members
A director who is an officer or an employee of the Company or any of its subsidiaries or affiliates does not receive any fees for service as a member of the Board but is reimbursed for expenses incurred as a result of such service. Each non-employee director earned the following compensation in 2022 in addition to reimbursement of his or her actual and reasonable travel expenses. 20222023 DIRECTOR COMPENSATION
Name(1) | | | Fees Earned or
Paid in Cash | | | Stock Awards
($)(2) | | | Total | | Deborah Borg(3) | | | | | 40,000 | | | | | | 47,500 | | | | | | 87,500 | | | Mark Bye(3) | | | | | 47,500 | | | | | | 47,500 | | | | | | 95,000 | | | William Cook(4) | | | | | 42,500 | | | | | | 47,500 | | | | | | 90,000 | | | | Jeffrey Keenan | | | | | 97,500 | | | | | | 95,000 | | | | | | 192,500 | | | | Marco Levi | | | | | 85,000 | | | | | | 95,000 | | | | | | 180,000 | | | | Kimberly Ritrievi | | | | | 105,000 | | | | | | 95,000 | | | | | | 200,000 | | | | John Rogers | | | | | 160,000 | | | | | | 95,000 | | | | | | 255,000 | | | Shruti Singhal(4) | | | | | 47,500 | | | | | | 47,500 | | | | | | 95,000 | | | Tony Thene(4) | | | | | 47,500 | | | | | | 47,500 | | | | | | 95,000 | | | | Anderson Warlick | | | | | 100,000 | | | | | | 95,000 | | | | | | 195,000 | | |
William Cook | | | 85,000 | | | 95,000 | | | 180,000 | Jeffrey Keenan | | | 95,000 | | | 95,000 | | | 190,000 | Marco Levi | | | 80,000 | | | 95,000 | | | 175,000 | Kimberly Ritrievi | | | 100,000 | | | 95,000 | | | 195,000 | John Rogers | | | 160,000 | | | 95,000 | | | 255,000 | Shruti Singhal | | | 95,000 | | | 95,000 | | | 190,000 | Tony Thene | | | 95,000 | | | 95,000 | | | 190,000 | Anderson Warlick | | | 100,000 | | | 95,000 | | | 195,000 |
(1)
Dr. Kramer and Ms. Schertell are not included in this table as each was an employee of the Company while serving on the Board of Directors and received no additional compensation for their service as directors. The 2022 compensation received by Dr. Kramer and Ms. Schertell as employees of the Company is shown in the 2022 Summary Compensation Table.
(2)
The amounts shown in this column are valued based on the aggregate grant date fair value computed in accordance with FASB ASC Topic 718. As of December 31, 2022, the total number of stock awards outstanding per director, in the form of deferred shares or deferred share units, were as follows: Ms. Borg — 0; Mr. Bye — 0; Mr. Cook — 0; Mr. Keenan — 2,150; Mr. Levi — 0; Dr. Ritrievi — 1,075; Dr. Rogers — 1,075; Mr. Singhal — 0; Mr. Thene — 0; and Mr. Warlick — 2,206. These totals also include accumulated dividends on stock units.
(3)
Ms. Borg and Mr. Bye resigned from the Board of Directors effective July 6, 2022, in connection with the Merger.
(4)
Messrs. Cook, Singhal and Thene were appointed to the Board of Directors effective July 6, 2022, in connection with the Merger.
(1)
| Ms. Schertell is not included in this table as she is an employee of the Company and received no additional compensation for her service as a director. The 2023 compensation received by Ms. Schertell as an employee of the Company is shown in the 2023 Summary Compensation Table. |
(2)
| The amounts shown in this column are valued based on the aggregate grant date fair value computed in accordance with FASB ASC Topic 718. Grant date fair value is calculated by multiplying the number of shares granted by our closing share price on the grant date (or the last trading day prior to the grant date). As of December 31, 2023, the total number of stock awards outstanding per director, in the form of deferred shares or deferred share units, were as follows: Mr. Cook — 10,580; Mr. Keenan — 13,474; Mr. Levi — 0; Dr. Ritrievi — 6,735; Dr. Rogers — 6,735; Mr. Singhal — 0; Mr. Thene — 0; and Mr. Warlick — 13,828. These totals also include accumulated dividends on stock units. |
U.S. directors may elect to defer all or part of their compensation to the Deferred Compensation Plan No. 2 for Non-Employee Directors, a non-qualified, deferred compensation plan established in 2005 to allow participants to defer receipt of compensation and payment of certain federal and state income taxes. Each participating director has an individual deferral account that is credited with cash or stock units, which include
accumulated dividends, with stock units credited under the plan to be settled in shares of Common Stock. Cash credits accrue market-based investment earnings. The stock units do not have any voting rights. Because of regulatory changes, Deferred Compensation Plan No. 2 replaced the Deferred Compensation Plan for Non-Employee Directors in effect from 2000 to 2004, which operated in a similar manner. The earlier plan was frozen as of December 31, 2004 to stop the accrual of additional unvested benefits, other than market-based investment earnings or losses on individual account balances as of that date. The Company provides no guaranty of repayment of the principal TABLE OF CONTENTS amount deferred or of any earnings on the participants’ account balances in either plan. As the Merger constituted a “Change of Control” under the Deferred Compensation Plan No. 2 for Non-Employee Directors, each director who previously elected to be paid a lump sum following a Change of Control was required to have their account balance under the plan paid to them within 60 days following the Merger. In 2023, the Company amended the Deferred Compensation Plan No. 2 for Non-Employee Directors so that a change of control would no longer be triggered by the acquisition by a person or group of 30% or more of the total voting power or ownership interests of the Company.
We maintain accountability through our corporate governance policies and practices. Below are highlights of these policies and practices: | •
Director skills and experience cover a well-rounded range of topics and issues
•
89%• 88% of directors are independent (all except CEO)
•
• Majority vote resignation policy for directors
• Annual Board and committee evaluations
•
• Regular executive sessions of independent directors
•
• Executive officer and non-employee director stock ownership guidelines
•
• No stockholder rights plan
•
• Active oversight of enterprise risk management
| | | •
Directors are not eligible for reelection after the age of 72
•
• Hedging or pledging Company equity, directly or indirectly, is prohibited for directors and key executives, and all other employees are strongly discouraged from engaging in similar transactions
•
• Policy on Orientation and Continuing Education for Board members, including training in compliance programs
•
• Overboarding policy
• Membership for each director in the National Association of Corporate Directors (NACD)
| |
Majority Vote Resignation Policy The Company’s bylaws provide for plurality voting in uncontested director elections. However, it is the policy of the Company that any director nominee not elected by a majority of the votes cast—that is, the number of shares voted “for” a director must exceed the number of shares voted “against” that director, will tender his or her resignation to the Board promptly following certification of the stockholder vote. The Nominating & Governance Committee will then consider the tendered resignation and make a recommendation to the Board as to whether to accept or reject the resignation or whether other action should be taken. The Board will act on the recommendation and publicly disclose its decision (by press release, SEC filing or any other public means of disclosure deemed appropriate) regarding the tendered resignation within 90 days following certification of the election results. The director who tenders his or her resignation may not participate in the recommendation of the Nominating & Governance Committee or the decision of the Board with respect to his or her resignation. Board of Directors and Standing Committees Board Leadership Structure The Board is led by the Chair of the Board. Since 2019, Dr. Rogers has served as Chair of the Board. As an independent director, Dr. Rogers serves as Non-Executive Chair. Dr. Rogers is expected to serve as Chair of the Board until the annual meetingAnnual Meeting, at which time Dr. Ritrievi will become the Chair of stockholders held in 2024.the Board. PursuantDr. Ritrievi was appointed by the Board as Chair pursuant to our By-Laws, which provide that, promptly after the annual meeting of stockholders held in 2024 (or December 31, 2024 if an annual meeting of stockholders of the combined company is not held in 2024),Annual Meeting, the continuing directors from SWM, or their successors, will have the right to elect a replacement non-executive Chair to the board of directors following Dr. Rogers’ tenure, to serve until the end of the Governance Period (the date of the annual meeting of stockholders held in 2025, or December 31, 2025, if an annual meeting is not held in 2025).
The Board believes that whether one person should simultaneously occupy the offices of Chair of the Board and Chief Executive Officer should be determined by the Board in its business judgment, on a periodic basis, including at any time there is a vacancy in either position, after considering relevant factors at the time, such as the specific needs of the business and the best interests of the Company and its stockholders. When the same person holds the Chair and Chief Executive Officer roles or when the Chair is not independent, the independent directors elect a Lead Non-Management Director for a two-year term, and after two of such terms, he or she becomes ineligible to stand for re-election to that position for at least one term. The Non-Executive Chair acts as liaison between the Chief Executive Officer and the independent directors. The Non-Executive Chair or non-management directors as a group can retain such independent experts they deem to TABLE OF CONTENTS be necessary or desirable, with the costs borne by the Company. There is also total freedom of communication between any director and the Chief Executive Officer and any other member of management, and such communications are not required to go through the Non-Executive Chair or the Chief Executive Officer, in the case of director communication with other members of management. The Non-Executive Chair will be available for consultation and direct communication if requested by any major stockholder of the Company. Director Independence An independent director is a person who is free from any relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. Annually, the Board will assess the independence of each non-management director based on the existence or absence of a material relationship
with the Company (either directly or as a partner, stockholder or officer of an organization that has a relationship with the Company). In addition to the independence standards of the SEC and the NYSE, the Board has adopted certain categorical standards of independence. The following persons shall not be considered independent: a. A director who is employed by the Company or any of its affiliates for the current year or any of the past five years.
b. A director who is, or in the past five years has been, affiliated with or employed by a (present or former) auditor of the Company (or of an affiliate).
c. A director who is, or in the past five years has been, part of an interlocking directorate in which an executive officer of the Company serves on the compensation committee of another company that concurrently employs the director.
d. A director who is, or in the past five years has been, a Family Member of an individual who was employed by the Company or any of its affiliates as an executive officer. The term “Family Member” shall mean a person’s spouse, parents, children, siblings, mothers and fathers-in-law, sons and daughters-in-law, brothers and sisters-in-law, and anyone (other than household employees) who shares such person’s home.
e. A director who, during the current fiscal year or any of the past five fiscal years, personally provided services to the Company or its affiliates that had an annual value in excess of $60,000; or who was paid or accepted, or who has a non-employee Family Member who was paid or accepted, any payments from the Company or any of its affiliates in excess of $60,000 other than compensation for board service, benefits under a tax-qualified retirement plan, or non-discretionary compensation.
f. A director who is a partner in, or a controlling stockholder or an executive officer of, any organization (profit or non-profit) to which the Company made, or from which the Company received, payments (other than those arising solely from investments in the Company’s securities) that exceed one percent (1%) of the recipient’s annual consolidated gross revenues in the current year or any of the past five fiscal years; unless, for provisions (e) and (f), the Board expressly determines in its business judgment that the relationship does not interfere with the director’s exercise of independent judgment.
a.
| A director who is employed by the Company or any of its affiliates for the current year or any of the past five years. |
b.
| A director who is, or in the past five years has been, affiliated with or employed by a (present or former) auditor of the Company (or of an affiliate). |
c.
| A director who is, or in the past five years has been, part of an interlocking directorate in which an executive officer of the Company serves on the compensation committee of another company that concurrently employs the director. |
d.
| A director who is, or in the past five years has been, a Family Member of an individual who was employed by the Company or any of its affiliates as an executive officer. The term “Family Member” shall mean a person’s spouse, parents, children, siblings, mothers and fathers-in-law, sons and daughters-in-law, brothers and sisters-in-law, and anyone (other than household employees) who shares such person’s home. |
e.
| A director who, during the current fiscal year or any of the past five fiscal years, personally provided services to the Company or its affiliates that had an annual value in excess of $60,000; or who was paid or accepted, or who has a non-employee Family Member who was paid or accepted, any payments from the Company or any of its affiliates in excess of $60,000 other than compensation for board service, benefits under a tax-qualified retirement plan, or non-discretionary compensation. |
f.
| A director who is a partner in, or a controlling stockholder or an executive officer of, any organization (profit or non-profit) to which the Company made, or from which the Company received, payments (other than those arising solely from investments in the Company’s securities) that exceed one percent (1%) of the recipient’s annual consolidated gross revenues in the current year or any of the past five fiscal years; unless, for provisions (e) and (f), the Board expressly determines in its business judgment that the relationship does not interfere with the director’s exercise of independent judgment. |
Based on the foregoing standard, as well as the applicable standards for independence articulated by the NYSE and the SEC, the Board affirmatively determined that the following current and former directors met the applicable independence standards: | Deborah Borg*William M. Cook | | | Mark L. Bye* | Jeffrey J. Keenan | | William M. CookMarco Levi | | | Jeffrey J. Keenan | Kimberly E. Ritrievi | | Marco LeviJohn D. Rogers | | | Kimberly E. Ritrievi | Shruti Singhal | | John D. RogersTony R. Thene | | | Shruti Singhal | | | Tony R. Thene | | | Anderson D. Warlick | |
*
Resigned from the Board in July 2022
Ms. Schertell is a member of management and is not independent. Dr. Kramer, who resigned from the Board in July 2022, was a member of management and not independent during the period in which he served as a director in 2022. FinancialFinancial Experts The Board determined that Drs. Ritrievi and Rogers, and Messrs. Cook Keenan and SinghalKeenan each qualify as “audit committee financial experts” as such term is defined in Item 407(d)(5)(ii) of Regulation S-K. TABLE OF CONTENTS Standing Committees Each of the Audit Committee, the Compensation Committee and the Nominating & Governance Committee is a “Standing Committee” of the Board. Each Standing Committee is composed entirely of independent directors.
The following table lists the current members, principal functions and meetings held in 20222023 for each of the Standing Committees: | Audit Committee
Kimberly E. Ritrievi (Chair)
William M. Cook
Jeffrey J. Keenan
John D. Rogers
Shruti Singhal
No member serves on the audit committee of more than three public companies, including the Company’s Audit Committee.
Following the Annual Meeting, Dr. Rogers will serve as Chair of the Audit Committee and Mr. Singhal will no longer serve on the Audit Committee. | | | •
| | | Appointment of outside auditors to audit the records and accounts of the Company | | | 7 | | | | | | 7 | | | | •
| | | Retain and compensate outside auditors
| | | | | | |
| | | | | | | •
| | | Review scope of audits, provide oversight in connection with internal control, financial reporting and disclosure systems
| | | | | | |
| | | | | | | •
| | | Monitor the Company’s compliance with legal and regulatory requirements
| | | | | | |
| | | | | | | •
| | | The nature and scope of the Committee’s responsibilities are set forth in further detail under the caption “Audit Committee Report”
| | | | Compensation CommitteeAnderson D. Warlick (Chair)
Marco Levi
Tony R. Thene
| | | | | | | | | | Compensation Committee•
Anderson D. Warlick (Chair)
Marco Levi
Tony Thene
Following the Annual Meeting, Mr. Thene will be retiring from the Board and Mr. Singhal will join the Compensation Committee. | | | • | | | Evaluate and approve executive officer compensation | | | 5 | | | | | | 3 | | | | •
| | | Review compensation strategy, plans and programs and evaluate related risk
| | | | | | |
| | | | | | | •
| | | Evaluate and make recommendations on director compensation
| | | | | | |
| | | | | | | •
| | | The nature and scope of the Committee’s responsibilities are set forth in further detail under the caption “Compensation Discussion & Analysis”
| | | | Nominating & Governance CommitteeTony R. Thene (Chair)
Jeffrey Keenan
Shruti Singhal
Anderson D. Warlick
| | | | | | | | | | Nominating & Governance•
Committee Shruti Singhal (Chair)
Jeffrey Keenan
Tony Thene
Anderson D. Warlick
Following the Annual Meeting, Mr. Thene will be retiring from the Board. | | | • | | | Review and recommend to the Board candidates for election by stockholders or to fill any vacancies on the Board; evaluate stockholder nominees | | | 5 | | | | | | 2 | | | | •
| | | Oversee the Board, committee and individual director evaluation processes
| | | | | | |
| | | | | | | •
| | | Evaluate, monitor and recommend changes in the Company’s governance policies
| | | | | | |
| | | | | | | •
| | | Oversee and report to the Board on the succession planning process with respect to directors and the Chief Executive Officer, including review of a transition plan in the event of an unexpected departure or incapacity of the Chief Executive Officer
| | | | | | |
| | | | | | | •
| | | Oversight of environmental, social and governance (ESG) matters
| | |
Director Attendance
Prior to the Merger, the Board of Directors of SWM met three times in 2022 and the Board of Directors of Neenah met two times in 2022. In addition, prior to the Merger the Board of Directors of SWM and the Board of Directors of Neenah each held numerous informational calls to discuss the Merger and receive updates from their respective management teams on the status of the Merger. After the Merger, the Board of the combined company met three times in 2022. All of our directors then in office attended 100 percent of the meetings of the Board and applicable committees in 2022.
TABLE OF CONTENTS Director Attendance
The Company expects members of the Board to attend each Annual Meeting and all directors who were then in office attended the 20222023 Annual Meeting. Director Training From time to time, directors participate in the Company’s compliance training programs and in programs directed specifically to the due and proper execution of their duties as directors. The Board adopted a Policy on Orientation and Continuing Education for Board Members as part of the Company’s Corporate Governance Guidelines. The policy requires orientation for new directors and ongoing presentations and training for existing directors, as well as periodic reports on continuing education to the Nominating & Governance Committee. Board Evaluation The Board and its committees conduct annual self-evaluations, and the Non-Executive Chair or Lead Independent Director, as applicable, may also engage individual Board members regarding Board or Committee performance. Evaluations of individual directors occur in connection with the evaluation of each director’s nomination for re-election to an additional term and also after completing the first year of Board service for any new director. For purposes of this policy, directors that served on the board of directors of Neenah immediately prior to the Merger are not considered new directors in their first year of Board service. The Nominating & Governance Committee oversees the Board, committee, and individual evaluation processes. Overboarding Policy Our Corporate Governance Guidelines provides that directors who also serve as executive officers of other public companies should not serve on more than two boards of public companies in addition to the Company’s Board. Other directors should not serve on more than four other public company boards. No Audit Committee member may serve on more than three public company audit committees, including the Company’s Audit Committee. Board Exercise of Risk Oversight The Board as a whole and through its committees exercises oversight of enterprise risk at a number of levels and utilizes formal and informal mechanisms to do so. The Audit Committee plays a material role in oversight of financial, disclosure and liquidity risk issues and oversees the internal control mechanisms used by management in both the financial and non-financial areas. The Audit Committee regularly discusses with management major financial and cybersecurity risk exposures, compensation risks and other risks, and the steps management has taken to monitor and control such exposures. Virtually every Audit Committee meeting includes items relating to risk review, including ongoing review of financial results, control issues, compliance audit processes and results, debt covenant compliance, hedging activities and liquidity measures. The Audit Committee has regular interaction with the Company’s independent auditors throughout the year, including executive sessions to address internal control and other matters. The Nominating & Governance Committee regularly assesses the Company’s governance controls. It also undertakes an ongoing review of succession planning, including to assure an appropriate process exists to find appropriately qualified replacement directors as needed for the Board and its committees and to maintain the continuity of management. In addition, the Nominating & Governance Committee oversees the Company’s environmental and sustainability efforts and progress, including related risks. The Compensation Committee assesses compensation design and levels from the perspectives of market reasonableness and appropriateness to the objectives of retaining the quantity and level of management expertise and depth required for the successful execution of the Company’s business goals. The Compensation Committee also assesses the risk posed by the Company’s compensation program design and practices and the probability that they might result in adverse impacts on the Company. The Board as a whole regularly reviews financial performance and risks to that performance, competitive market situations, risks to operations and operating capabilities, regulatory change and strategic planning. These reviews are provided through regularly scheduled financial and operations reviews and regular Committee Chair reports to the Board. More in-depth reviews are provided periodically on selected topics, e.g., litigation and regulatory compliance, customer satisfaction, environmental and sustainability related risks, and performance assessments and strategic planning. TABLE OF CONTENTS The Company maintains an internal audit department and an Enterprise Risk Management (“ERM”) function to oversee the development, implementation and ongoing refinement of a comprehensive ERM
program. As part of this program, we undertake an extensive exercise to identify and assess the most significant risks across the enterprise. This annual process includes a robust analysis of both internal and external factors that may impede our ability to execute our strategies, meet business objectives or achieve stakeholder requirements and expectations. We also conduct interviews with senior leaders to identify material risks. This leads us to develop and execute comprehensive actions to manage or mitigate these risks. Furthermore, we continuously monitor these risks and the evolving environment to proactively identify and respond to shifting or emerging risks and strive to provide ongoing assurance that risks are effectively and efficiently managed. Oversight of cybersecurity risk is a joint responsibility of the Board and the Audit Committee. The Audit Committee reviews IT risk as part of the quarterly internal audit and ERM update it receives. The Company’s Chief Information Officer will brief(the “CIO”) provides quarterly updates to the Audit Committee and the chair of the Audit Committee regularly updates the Board on cybersecurity matters potentially impacting the Company. Additionally, the CIO briefs the Board on information security matters at least once annually. In addition to oversight by the Audit Committee and Board, our CIO chairs a Working Council that includes our Chief Financial Officer, Chief Human Resources Officer and our Chief Legal Officer. Our IT organization also includes a Chief Information Security Officer who is responsible for establishing processes as well as management of all cybersecurity risks and programs. The Company maintains a cybersecurity insurance policy. Additionally, SWM’sCompany’s cybersecurity procedures have been externally auditeddeveloped based on the National Institute of Standards and Technology (NIST) cybersecurity framework, withframework. For more information, please refer to Item 1C, “Cybersecurity”, in our Annual Report on Form 10-K for the most recent audit completed in Januaryfiscal year ended December 31, 2023. Neenah’s cybersecurity policies were externally audited in 2021 based on the Center for Internet Security (CIS) cybersecurity framework. In addition to oversight by the Audit Committee and Board, the Company has a Working Council and Executive Council chaired by the Company’s Chief Information Officer that meet regularly to assess the Company’s response to IT and cybersecurity priorities.
As part of the Company’s compliance program, the Company provides educational videos and training to employees on an annual basis that include cybersecurity risk management awareness and sends employees monthly notifications regarding potential cybersecurity risks. The Company also routinely performs assessments of IT and cybersecurity risks and maintains controls to mitigate those risks.
As previously disclosed, during the three-month period ending September 30, 2022, the Company became aware of a cyber attack that had been recently made against certain systems within the Company’s network environment. The attack temporarily affected operations and caused delays in execution of sales transactions at some locations. In addition, the Company incurred financial costs to investigate and remediate the incident, some of which are expected to be mitigated by insurance. During the incident, the attackers accessed and exfiltrated Company data, including some personally identifying information of certain Company employees. The Company believes it has contained the incident, which only affected certain systems, and it has restored operations and notified affected individuals. The Company has put in place remediation measures designed to help prevent future similar attacks and has proactively undertaken to implement certain other enhancements to its security system.
Environmental and Social Matters We believe that building long-term value for our customers, employees and stockholders includes a focus on ensuring the long-term sustainability of our business, good corporate citizenship, and contributing to our communities. Corporate responsibility has long been part of the Mativ corporate mission and is one of our core values. Our manufacturing facilities and corporate office have a longstanding tradition of community engagement and reducing our impact on the environment. We maintain our Supplier Code of Conduct and our Sustainable Forestry Policy to further align with our sustainability goals. General oversight responsibility for environmental, social, and governance (“ESG”) topics and the impacts associated with our business, including climate-related issues, is delegated by the Board to the Nominating & Governance Committee. The Nominating & Governance Committee reviews and guides ESG strategy and oversees the setting of corporate targets established by the Company’s cross-functional, management-level ESG Committee (the “ESG Committee”). This enables the Nominating & Governance Committee to consider the relevant policies and issues and to fulfill its oversight responsibilities. The Chair of the Nominating & Governance Committee then reports out on ESG and climate-related issues, including strategy and corporate targets, at each regularly scheduled meeting of the full Board (five per year). The ESG Committee is led by our Deputy General Counsel and Assistant Secretary with representatives from leaders across our Sustainability, Legal, Corporate Communications, Investor Relations, and Human Resources departments. The ESG Committee meets once per month and updates the Board on key ESG issues that are relevant to our business and stakeholders and on the development and implementation of initiatives to support our sustainability goals at each regularly scheduled meeting of the Nominating & Governance Committee (five per year). In March 2023,February 2024, the Company released a 2023 ESG Commitment Messageinformation and performance data on our website (the “ESG Tear Sheet”) that we consider relevant to our business, covering the period January 1, 2022 through December 31, 2022, as part of its ongoing efforts to increase transparency around its ESG strategy and initiatives. The reportESG Tear Sheet highlights the Company’s commitment to sustainable business practices and how it is addressing key ESG areas of focus. The report includes information regarding:
•
Our environmental practices;
•
Our commitment to social responsibility, including supporting our employees and their health, safety, and development;
•
Our culture that promotes diversity of thought, teamwork, creativity, and innovation; and
•
Our commitment to supporting local communities, among other topics.
Please refer to the Company’s 2023 ESG Commitment Message,Tear Sheet, available at www.mativ.com, for further information. TABLE OF CONTENTS Some of our key environmental and community initiatives are highlighted below: Environmental Initiatives •
Sustainable Packaging Material: The NEENAH ENVIRONMENT® Mailer is designed for the shipping or mailing of non-fragile soft goods, like clothing. The NEENAH ENVIRONMENT® Mailer is constructed from a proprietary, patent-pending, paper-based substrate developed to allow premium printability while providing superior water and puncture resistance. It is made with approximately 50% post-consumer waste and is blue-bin/curbside recyclable. In addition, it carries multiple 3rd party certifications, including FSC��, Green-e® and SmartWay™.
•
Sustainable Innovation: The Company developed RevonexTM membrane backing paper which improves reverse osmosis filtration efficiency by eliminating bleed-through. In addition, the Company developed a biodegradable cigarette filter media that is designed to replace cellulose acetate which contributes to microplastics pollution (or similar debris) in the ocean.
•
Filtration Products that Benefit Society: Mativ produces a diverse portfolio of products that make water and air cleaner and safer. Our HVAC air filtration media can reach removal efficiencies as high as 99.9% while our ASD netting can provide up to a 20% decrease in pressure drop during Reverse Osmosis filtration decreasing energy costs and allowing customers to provide energy efficient water filtration solutions.
•
Reducing Greenhouse Gas (GHG) Emissions and Supporting Air Quality: We recognize the importance of reducing our GHG emissions and have prioritized actions to reduce our Scope 1 and Scope 2 emissions, such as specific initiatives and equipment replacements intended to improve energy efficiency. We also currently have several renewable energy feasibility studies underway.
•
Partnership with Planet Water Foundation: The Company partners with Planet Water Foundation to support global efforts to improve access to clean, safe water. In 2022, through our support, the Foundation installed four AquaTower water systems in India in the state of Tamil Nadu and three AquaHome systems in the Philippines. The four AquaTower systems in India are providing clean, safe drinking water for up to 7,224 people each day. The three AquaHome systems in the Philippines are providing families with solar powered electricity and drinking water at home.
•
FSC Certification: All unprocessed wood fiber and pulp and wood-based bioenergy consumed are sourced exclusively from suppliers maintaining FSC and/or PEFC Chain of Custody certification and/or have achieved FSC and/or PEFC Mix Credit or Controlled Wood certification. The packaging we use for our own business purposes (as opposed to the packaging we sell) is not necessarily certified or derived from certified suppliers, as we often purchase from small suppliers for whom certification is cost-prohibitive.
•
Environmental Certification and Energy Efficiency: 15 Mativ locations are certified to ISO 14001 for environmental management systems and 7 locations are certified to the ISO 50001 energy management standard. In 2022, our Engineered Paper locations launched an in-depth energy efficiency initiative to improve energy efficiency and reduce carbon emissions.
•
Biodiversity Support: The Company has a history of supporting local biodiversity initiatives, such as the installation of salmon and eel runs in the Isole River near our Engineered Paper facility in Quimperlé, France, and the planting of native trees and rebuilding of natural habitat near our plant in Santanesia, Brazil.
•
Recycling: Our U.S.-based Advanced Materials & Structures manufacturing sites have recycled more than 6 million pounds of plastic in 2022 with some of the recycled plastic being used in new products. Across the Company more than 33 million pounds of cardboard and paper were recycled. Many other initiatives are in place involving the reuse of waste products and packaging materials.
| • | Filtration Products that Benefit Society: Mativ produces a diverse portfolio of products that make water and air cleaner and safer. Our HVAC air filtration media can reach removal efficiencies as high as 99.9% while our ASD netting can provide up to a 20% decrease in pressure drop during Reverse Osmosis filtration, decreasing energy costs and allowing customers to provide energy efficient water filtration solutions. |
| • | Partnership with Planet Water Foundation: We partner with the Planet Water Foundation, a non-profit organization that helps bring clean water to the world’s most impoverished communities, to support the installation of water filtration systems and provide hygiene education. As an innovator and producer of products that enable access to fresh water across the world – a significant and urgent global societal need, we believe this to be a strong alignment with our business, expertise, and way to create material positive impacts for the communities where our solutions play a role. In 2023, through our support, the Foundation installed two AquaTower water systems in India, in the state of Tamil Nadu and two AquaTower water systems in Querétaro state in Mexico. Hygiene education programs were also deployed at the AquaTower project schools, reaching 2,600 students. Mativ also deployed an emergency AquaBlock water filtration system in Turkey in Hatay Province after the Kahramanmaras earthquake in February 2023. The five filtration systems are providing clean, safe drinking water for up to 17,200 people each day. Since our partnership with Planet Water Foundation began, Mativ has enabled access to fresh drinking water for up to 33,000 people. |
| • | FSC® Certification: All unprocessed wood fiber and pulp and wood-based bioenergy consumed are sourced exclusively from suppliers maintaining FSC and/or PEFC Chain of Custody certification and/or have achieved FSC and/or PEFC Mix Credit or Controlled Wood certification. The packaging we use for our own business purposes (as opposed to the packaging we sell) is not necessarily certified or derived from certified suppliers, as we often purchase from small suppliers for whom certification is cost-prohibitive. |
| • | Environmental Certification and Energy Efficiency: As of year-end 2023, 11 Mativ locations are certified to ISO 14001 for environmental management systems and 4 locations are certified to the ISO 50001 energy management standard. |
| • | Recycling: Our facilities recycled more than 13,500 metric tons of waste in 2023. When possible, materials are reintroduced into the manufacturing process to produce new products. |
Community Initiatives •
In addition to investing in area communities where our facilities are located by providing jobs and sourcing products, we support efforts to make our communities stronger through financial donations and volunteer participation. Most of our philanthropic efforts are locally directed, empowering our employees to contribute their time and expertise to organizations that matter to them and serve the unique needs of their communities. We donate to nonprofit or community organizations that support the communities where our plants are located.
We continue to look for ways to enhance the sustainability of our business and make a positive impact on the communities in which we live and serve. Corporate Governance Documents We have adopted a codeCentral to our cultural and operational foundation is the Mativ Code of conductConduct (the “Code of Conduct”) that, a key resource for making informed, compliant and ethical decisions. This document details policies, standards and expectations to guide all of our people at Mativ in the course of their work and interactions. All employees receive training on the Code of Conduct, as well as periodic reminders and newsletters on relevant compliance topics. The Code of Conduct applies to all of our directors,employees, officers, and employees, includingdirectors of Mativ and its subsidiaries worldwide. Agents and contractors of the Company are also expected to read, understand, and abide by the Code of Conduct.
The Code of Conduct, which is published in all languages where we operate, covers: Ethics and responsibilities in the workplace TABLE OF CONTENTS Our responsibilities to one another Our responsibilities to our principal executive officer, principal financial officer, principal accounting officercustomers and other persons performing similar functions. business partners Our responsibilities in the marketplace Our responsibilities as corporate citizens (includes corporate social responsibility standards) The Mativ Ethics and Compliance Hotline Our ethics program is overseen by Mativ’s Chief Legal Officer. At the Board level, the Audit Committee is responsible for the ethics reporting hotline and receives a quarterly update on ethics-related matters. The Code of Conduct is posted on the Governance page of the Company’s website at https://ir.mativ.com/investors/governance/governance-documents/. To the extent required under applicable SEC and NYSE rules, any waivers of, or changes to, the Code of Conduct will be posted on our website or otherwise publicly disclosed. In addition, copies of the Company’s Corporate Governance Guidelines and the charters for each of the Standing Committees can also be found on the Governance page of the Company’s website at https://ir.mativ.com/investors/governance/governance-documents/. Copies of these documents may also be obtained by directing a written request to the Investor Relations Department at Mativ Holdings, Inc., 100 North Point Center East,Kimball Place, Suite 600, Alpharetta, Georgia 30022.30009. Transactions with Related Persons The Board has adopted written policies and procedures for the review, approval or ratification of any transaction involving an amount in excess of $120,000 in which the Company was or is to be a participant and in which any director or executive officer of the Company, any nominee for director, any 5% or greater stockholder, or any immediate family member of the foregoing has or will have a material interest as contemplated by Item 404(a) of Regulation S-K (each such transaction, a “Related Person Transaction”). Under these policies and procedures, the Audit Committee or a subcommittee of the Board consisting entirely of independent directors reviews the transaction and either approves or rejects the transaction after taking into account the following factors: •
Whether the proposed transaction is on terms that are at least as favorable to the Company as those achievable with an unaffiliated third party;
•
Size of the transaction and amount of consideration;
•
Nature of the interest;
•
Whether the transaction involves a conflict of interest;
•
Whether the transaction involves services available from unaffiliated third parties; and
•
Any other factors that the Audit Committee or subcommittee deems relevant.
The policy does not apply to (a) compensation and related person transactions involving a director or an executive officer solely resulting from that person’s service as a director or employment with the Company so long as the compensation is approved by the Board (or an appropriate committee thereof), (b) transactions involving the rendering of services as a public utility at rates or charges fixed in conformity with law or governmental authority or (c) any other categories of transactions currently or in the future excluded from the reporting requirements of Item 404(a) of Regulation S-K. Since January 1, 2022,2023, the Company has not participated in any Related Person Transaction.
TABLE OF CONTENTS Significant Beneficial Owners The following table shows the persons known to the Company as of March 4, 2024 to be the beneficial owners of more than 5% of the outstanding shares of the Company’s Common Stock. In furnishing the information below, the Company has relied solely on information filed with the Securities and Exchange Commission (the “SEC”) by the beneficial owners. BlackRock Inc.(1)
50 Hudson Yards
New York, NY 10001
| | | 8,815,096 | | | 16.2% | | | 8,683,945 | | | 0 | | | 8,815,096 | | | 0 | | | | | | | | | | | | | | | | | | The Vanguard Group, Inc.(2)
100 Vanguard Blvd
Malvern, PA 19355
| | | 6,443,276 | | | 11.9% | | | 0 | | | 71,794 | | | 6,316,093 | | | 127,183 | | | | | | | | | | | | | | | | | | Allspring Global(3)
1415 Vantage Park Drive, 3rd Floor
Charlotte, NC 28203
| | | 4,132,265 | | | 7.6% | | | 3,998,210 | | | 0 | | | 4,132,265 | | | 0 | | | | | | | | | | | | | | | | | | Rubric Capital Management LP(4)
155 East 44th St, Suite 1630
New York, NY 10017
| | | 4,000,000 | | | 7.4% | | | 0 | | | 4,000,000 | | | 0 | | | 4,000,000 | | | | | | | | | | | | | | | | | | | | Boundary Creek Advisors LP(5)
340 Madison Avenue, 12th Floor
New York, NY 10173
| | | 3,800,054 | | | 7% | | | 0 | | | 3,800,054 | | | 0 | | | 3,800,054 | | | | | | | | | | | | | | | | | | | | Wellington Management(6)
280 Congress Street
Boston, MA 02210
| | | 3,583,501 | | | 6.6% | | | 0 | | | 3,532,860 | | | 0 | | | 3,583,501 | | | | | | | | | | | | | | | | | | | | The Goldman Sachs Group, Inc.(7)
200 West Street
New York, NY 10282
| | | 2,759,883 | | | 5.1% | | | 0 | | | 2,759,513 | | | 0 | | | 2,759,883 |
*
| Percentages are calculated based on 54,300,282 shares of Common Stock issued and outstanding on March 4, 2024. |
(1)
| Based solely on information contained in a Schedule 13G/A filed on January 22, 2024 by BlackRock Inc. to report its beneficial ownership of Common Stock. |
(2)
| Based solely on information contained in a Schedule 13G/A filed on February 13, 2024 by The Vanguard Group, Inc. to report its beneficial ownership of Common Stock. |
(3)
| Based solely on information contained in a Schedule 13G/A filed on January 12, 2024 by Allspring Global Investments Holdings, LLC (“AGIH”), Allspring Global Investments, LLC (“AGI”), and Allspring Funds Management, LLC (“AFM”) to report their beneficial ownership of Common Stock. AGIH reported sole voting power with respect to 3,998,210 shares of Common Stock and sole investment power with respect to 4,132,265 shares of Common Stock. AGI reported sole voting power with respect to 610,564 shares of Common Stock and sole investment power with respect to 4,128,028 shares of Common Stock. AFM reported sole voting power with respect to 3,387,646 shares of Common Stock and sole investment power with respect to 4,237 shares of Common Stock. |
(4)
| Based solely on information contained in a Schedule 13G/A filed on February 12, 2024 by Rubric Capital Management LP (“Rubric Capital”) and David Rosen (“Rosen”) to report beneficial ownership of Common Stock. Rubric Capital and Mr. Rosen each reported shared voting power and shared investment power with respect to 4,000,000 shares of Common Stock. |
(5)
| Based solely on information contained in a Schedule 13G filed on February 14, 2024 by Boundary Creek Advisors (“Boundary Creek”) and Peter Greatrex (“Greatrex”) to report beneficial ownership of Common Stock. Boundary Creek and Mr. Greatrex each reported shared voting power and shared investment power with respect to 3,800,054 shares of Common Stock, including 2,610,200 shares of Common Stock underlying call options. |
TABLE OF CONTENTS (6)
| Based solely on information contained in a Schedule 13G filed on February 8, 2024 by Wellington Management Group LLP (“WMG”), Wellington Group Holdings LLP (“WGH”), Wellington Investment Advisors Holdings LLP (“WIAH”) and Wellington Management Company LLP (“WMC”) to report their beneficial ownership of Common Stock. WMG reported shared voting power with respect to 3,532,860 shares of Common Stock and shared investment power with respect to 3,583,501 shares of Common Stock. WGH reported shared voting power with respect to 3,532,860 shares of Common Stock and shared investment power with respect to 3,583,501 shares of Common Stock. WIAH reported shared voting power with respect to 3,532,860 shares of Common Stock and shared investment power with respect to 3,583,501 shares of Common Stock. WMC reported shared voting power with respect to 3,424,077 shares of Common Stock and shared investment power with respect to 3,474,718 shares of Common Stock. |
(7)
| Based solely on information contained in a Schedule 13G filed on February 7, 2024 by The Goldman Sachs Group, Inc. (“Goldman”) and Goldman Sachs & Co. LLC (“GSC”) to report their beneficial ownership of Common Stock. Goldman reported shared voting power with respect to 2,759,513 shares of Common Stock and shared investment power with respect to 2,759,883 shares of Common Stock. GSC reported shared voting power with respect to 2,759,513 shares of Common Stock and shared investment power with respect to 2,759,883 shares of Common Stock. |
Directors and Executive Officers To assure that the interests of directors and executive officers are aligned with the Company’s stockholders, the Company requires both directors and key executive officers (including all of the Company’s Named Executive Officers, as described in the section entitled “Executive Compensation - Compensation Discussion & Analysis”) to own minimum amounts of Common Stock within five years of becoming subject to the policy. Either directly or through deferred compensation accounts, each director must hold equity, or equity equivalents, in an amount at least equal in value to five times the value of the directors’ annual Board cash retainer. Each Named Executive Officer must hold vested equity equal to a multiple (from two to five), depending on the position held, of his or her annual base salary. As of the date of this Proxy Statement, all directors and Named Executive Officers have met the guidelines or are within the five year period to be in compliance with these stock ownership guidelines. The following table sets forth information as of March 4, 2024 regarding the number of shares of Common Stock beneficially owned by all directors and nominees, by each Named Executive Officer and by all directors and executive officers as a group. In addition to shares of Common Stock they own beneficially, certain directors as of the date of this Proxy Statement have at some point deferred part of their compensation from the Company through a deferred compensation plan for non-employee directors, explained in more detail under “Compensation of Directors” below. Under such plan, each director holds the equivalent of stock units in a deferral account. Unless otherwise indicated in a footnote, each person listed below possesses sole voting and investment power with respect to the shares indicated as beneficially owned by that person. TABLE OF CONTENTS DIRECTOR AND EXECUTIVE OFFICER BENEFICIAL OWNERSHIP TABLE William M. Cook(3) | | | 18,936 | | | 10,663 | | | * | Mark W. Johnson | | | 19,330 | | | 0 | | | * | Jeffrey J. Keenan(3) | | | 318,000 | | | 13,579 | | | * | Marco Levi(3) | | | 20,442 | | | 0 | | | * | Ricardo Nuñez(4) | | | 43,650 | | | 0 | | | * | Kimberly E. Ritrievi(3) | | | 20,640 | | | 5,477 | | | * | Michael W. Rickheim | | | 48,252 | | | 0 | | | * | John D. Rogers(3) | | | 47,235 | | | 6,787 | | | * | Julie A. Schertell(3) | | | 230,005 | | | 0 | | | * | Shruti Singhal(3) | | | 7,611 | | | 0 | | | * | Tony R. Thene(3) | | | 15,137 | | | 0 | | | * | R. Andrew Wamser, Jr.(5) | | | 160,184 | | | 0 | | | * | Anderson D. Warlick(3) | | | 75,013 | | | 13,936 | | | * | Greg Weitzel | | | 15,566 | | | 0 | | | * | All directors and executive officers as a group (14 persons) | | | 1,040,001 | | | 50,442 | | | 2.01% |
(1)
| Represents the equivalent of stock units, including accumulated dividends, held in deferral accounts. |
(2)
| Percentages are calculated based on 54,300,282 shares of Common Stock issued and outstanding on March 4, 2024, plus shares deemed outstanding pursuant to Rule 13d-3(d)(1). An asterisk shows ownership of less than 1% of the shares of Common Stock outstanding. |
(3)
| In addition, each then-serving director receives $23,750 in stock on the first day of each calendar quarter, based on the applicable stock price. Based on the closing stock price on March 4, 2024 of $17.94, each director would receive 1,045 shares of common stock on April 1, 2024. Ms. Schertell does not receive a quarterly stock grant as she is an employee of the Company and receives no additional compensation for her service as a director. |
(4)
| Mr. Nuñez separated from the Company effective September 1, 2023. |
(5)
| Mr. Wamser separated from the Company effective April 1, 2023. |
TABLE OF CONTENTS RATIFICATION OF DELOITTE & TOUCHE LLP AS THE COMPANY’S INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM FOR 20232024 Selection of the Independent Registered Public Accounting Firm The Audit Committee has recommended, and the Board has selected, Deloitte & Touche LLP (“Deloitte & Touche”) to serve as the Company’s independent registered public accounting firm (the “outside auditor”) for fiscal year 2023.2024. Although it is not required to do so, the Audit Committee is asking our stockholders to ratify the Board’s selection of Deloitte & Touche. If our stockholders do not ratify the selection of Deloitte & Touche, the Board may reconsider its selection. Even if the selection is ratified by our stockholders, the Audit Committee may in its discretion change the appointment at any time during the year, if it determines that such a change would be in the best interest of the Company and its stockholders. Representatives of Deloitte & Touche will be at the Annual Meeting to answer appropriate questions. They also will have the opportunity to make a statement if they wish to do so. The Board of Directors and the Audit Committee unanimously recommend a vote FOR ratification of the selection of Deloitte & Touche as our outside auditor for fiscal year 2023.2024. Information Regarding the Independent Registered Public Accounting Firm Audit, Audit Related, Tax and All Other Fees The following table summarizes the aggregate fees relating to amounts billedprofessional services rendered to the Company by its outside auditor, Deloitte & Touche, the member firm of Deloitte Touche Tohmatsu and their respective affiliates (collectively, “Deloitte”), for the fiscal years ended December 31, 20222023 and 2021:2022: | | | | 2022 | | | 2021 | | Audit Fees(1) | | | | | 4,925,035 | | | | | | 3,695,561 | | | Audit-Related Fees(2) | | | | | 0 | | | | | | 0 | | | | Total Audit and Audit-Related Fees | | | | | 4,925,035 | | | | | | 3,695,561 | | | Tax Compliance Services(3) | | | | | 191,798 | | | | | | 147,939 | | | Tax Consulting and Planning Services(4) | | | | | 717,673 | | | | | | 2,480,944 | | | | Total Tax Fees | | | | | 909,471 | | | | | | 2,628,883 | | | All Other Fees(5) | | | | | 1,895 | | | | | | 1,895 | | | | Total Fees | | | | | 5,836,401 | | | | | | 6,326,339 | | |
Audit Fees(1) | | | 4,756,083 | | | 4,925,035 | Audit-Related Fees(2) | | | 0 | | | 0 | Total Audit and Audit-Related Fees | | | 4,756,083 | | | 4,925,035 | Tax Compliance Services(3) | | | 434,100 | | | 191,798 | Tax Consulting and Planning Services(4) | | | 2,061,584 | | | 717,673 | Total Tax Fees | | | 2,495,684 | | | 909,471 | All Other Fees(5) | | | 71,900 | | | 1,895 | Total Fees | | | 7,323,667 | | | 5,836,401 |
(1)
| Includes fees billed for professional services rendered in connection with the audit of the annual financial statements, audit of the Company’s internal control over financial reporting and management’s assessment thereof, review of financial statements included in the Company’s quarterly reports on Form 10-Q and for services provided for statutory and regulatory filings or engagements. |
(2)
| Includes fees incurred for assurance and related services and consultation on regulatory matters or accounting standards, as well as consultations on internal controls. |
(3)
| Includes fees incurred for tax return preparation and compliance. |
(4)
| Includes non-audit fees incurred for tax advice and tax planning. |
(5)
| Includes fees primarily related to training and subscription services. |
(1)
Includes fees billed for professional services rendered in connection with the audit of the annual financial statements, audit of the Company’s internal control over financial reporting and management’s assessment thereof, review of financial statements included in the Company’s quarterly reports on Form 10-Q and for services provided for statutory and regulatory filings or engagements.
(2)
Includes fees incurred for assurance and related services and consultation on regulatory matters or accounting standards, as well as consultations on internal controls.
(3)
Includes fees incurred for tax return preparation and compliance.
(4)
Includes non-audit fees incurred for tax advice and tax planning.
(5)
Includes fees primarily related to subscription services and comfort letter procedures.
Pre-approval Policies and Procedures All of the services listed above and performed by the outside auditor were pre-approved in accordance with the pre-approval policy and procedures adopted by the Audit Committee. These procedures describe the
permitted audit, audit-related, tax and other services (collectively, the “Disclosure Categories”) that the outside auditor may perform. The procedures require that prior to the beginning of each fiscal year, a description of the services (the “Service List”) in each of the Disclosure Categories expected to be performed by the outside auditor in the following fiscal year be presented to the Audit Committee for pre-approval. TABLE OF CONTENTS Services provided by the outside auditor during the following year that are included in the Service List are pre-approved by the Audit Committee in accordance with its pre-approval policy and procedures. Any requests for audit, audit-related, tax, and other services not contemplated on the Service List must be submitted to the Audit Committee for specific pre-approval and cannot commence until such approval has been granted. Pre-approval is typically reviewed and granted at regularly scheduled meetings of the Audit Committee; however, the authority to grant specific pre-approval between meetings, if necessary, has been delegated, subject to certain dollar limitations, to the Chair of the Audit Committee. In the event of specific pre-approval granted by the Chair between meetings of the Audit Committee, the Chair is required to update the Audit Committee at its next regularly scheduled meeting on such grant. In addition, although not required by the rules and regulations of the SEC, the Audit Committee is provided a range of fees associated with each proposed service on the Service List and any services that were not originally included on the Service List. Providing a range of fees for a service incorporates appropriate oversight and control of the outside auditor when time is of the essence. The policy does not contain a de minimis provision that would provide retroactive approval for permissible non-audit services under certain circumstances. On a periodic basis, the Audit Committee reviews the status of services and fees incurred to-date against the Service List and the forecast of remaining services and fees for the applicable fiscal year.
The following report summarizes the Audit Committee’s actions during 2022.2023. This report shall not be deemed to be incorporated by reference by any general statement incorporating this Proxy Statement by reference into any filing under the Exchange Act or the Securities Act of 1933, as amended, except to the extent that the Company specifically incorporates this information by reference, and shall not otherwise be deemed filed under such acts. In accordance with its written charter, the Audit Committee assists the Board of Directors by overseeing and monitoring: (1)
the integrity of the Company’s financial statements;
(2)
the Company’s compliance with legal and regulatory requirements;
(3)
the outside auditor’s qualifications and independence; and
(4)
the performance of the Company’s internal control function, its system of internal and disclosure controls, and the outside auditor.
(1)
| the integrity of the Company’s financial statements; |
(2)
| the Company’s compliance with legal and regulatory requirements; |
(3)
| the outside auditor’s qualifications and independence; and |
(4)
| the performance of the Company’s internal control function, its system of internal and disclosure controls, and the outside auditor. |
The members of the Audit Committee meet the applicable independence and experience requirements of the SEC and the NYSE and the standards for determining a director’s independence adopted by the Board. The Audit Committee reviewed and discussed the audited financial statements of the Company as of and for the fiscal year ended December 31, 20222023 with management and Deloitte & Touche, the Company’s outside auditor. Management is responsible for the preparation of the Company’s financial statements, and the outside auditor is responsible for conducting an audit of such financial statements. The Audit Committee has received from the outside auditor the written disclosures and the letter required by applicable requirements of the Public Company Accounting Oversight Board (United States) regarding the outside auditor’s communications with the Audit Committee concerning independence, has discussed the independence of the outside auditor with the outside auditor and has satisfied itself as to the outside auditor’s independence. The Committee reviewed with the outside auditor its audit plans, audit scope and identification of audit risks. The Audit Committee also discussed with management and the outside auditor the quality and adequacy of the Company’s internal control function and its system of internal and disclosure controls. The Audit Committee discussed and reviewed with the outside auditor all communications required by SEC regulations and by the standards of the Public Company Accounting Oversight Board (United States), and, with and without management present, discussed and reviewed the results of the outside auditor’s examination of the financial statements. The Audit Committee discussed, reviewed and monitored the Company’s plans and activities related to compliance with Section 404 of the Sarbanes-Oxley Act of 2002 on a regular basis. Based on the above-mentioned reviews and discussions with management and the outside auditor, the Audit Committee recommended to the Board that the Company’s audited financial statements be included in its Annual Report on Form 10-K for the fiscal year ended December 31, 20222023 for filing with the SEC. The Audit Committee also recommended the reappointment of Deloitte & Touche to serve as the Company’s outside auditor for fiscal year 2023,2024, and the Board concurred with such recommendation. | | | AUDIT COMMITTEE OF THE BOARD OF DIRECTORS | | | | | | | | Kimberly E. Ritrievi (Chair)
William M. Cook
Jeffrey J. Keenan
John D. Rogers
Shruti Singhal |
NON-BINDING ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION As required by Section 14A of the Exchange Act pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, or the Dodd-Frank Act, the Board is providing our stockholders with an advisory vote on Executive Compensation. This advisory vote, commonly known as a “say on pay” vote, is a non-binding vote on executive compensation paid to our Named Executive Officers as disclosed pursuant to Regulation S-K, including in the “Compensation Discussion & Analysis,” the accompanying compensation tables and the corresponding narrative discussion and footnotes set forth on pages 1713 to 35.26. The Company intends to submit this “say on pay” vote to its stockholders annually, consistent with the results of the advisory vote on frequency approved by the stockholders at the 20172023 Annual Meeting of Stockholders. As described in detail in the Compensation Discussion & Analysis, the Compensation Committee of the Board believes that the Company’s executive compensation program should reward actions and behaviors that build a foundation for the long-term performance of the Company, while also rewarding the achievement of short-term performance goals informed by the Company’s strategy. To align the Company’s executive compensation program with the Committee’s compensation philosophy, the Compensation Committee has adopted the following objectives: •
Pay-for-performance
•
Align performance goals and executive compensation with stockholder interests
•
Total target compensation set within a range of market median value for like skills and responsibilities to attract, retain and motivate executive officers
We are committed to having strong governance standards with respect to our executive compensation program, policies and practices. Consistent with this focus, we maintain the following policies and practices that we believe demonstrate our commitment to executive compensation best practices. | | | ✓ | | | | Pay-for-performance. | | | | | | ✓ | | | | Maximum payout caps for incentive compensation. | | | | | | ✓ | | | | Linkage between quantitative performance measures and operating objectives. | | | | | | ✓ | | | | “Double trigger” in the event of a change-in-control. | | | | | | ✓ | | | | Independent compensation consultant. | | | | | | ✓ | | | | Stock ownership guidelines. | | | | | | ✓ | | | | Annual risk assessment. | | | | | | ✓ | | | | Annual peer group review. | | | | | | ✓ | | | | Multi-year performance period. | TSR modifier applicable to 2023 performance-based equity awards. | | | | | ✓ | | | | Clawback policy. | policies. | |
| | | ×✘ | | | | No change-in-controlChange-in-control tax gross-ups. | | | | | | ×✘ | | | | The Company does not re-priceRe-price stock options or buy-back equity grants. | | | | | | ×✘ | | | | The Company does not allowAllow directors and key executives (including all Named Executive Officers) to hedge or pledge their Company securities. | | | | | | ×✘ | | | | No executiveExecutive employment contracts unless required by local law. | | | | | | ×✘ | | | | No excessiveExcessive perquisites. | | |
We believe that our executive compensation practices, in combination with a competitive market review, contribute to an executive compensation program that is competitive yet strongly aligned with stockholder interests.
Accordingly, the Board recommends that our stockholders vote for the “say on pay” vote as set forth in the following resolution: RESOLVED, that our stockholders approve, on an advisory basis, the compensation paid to our Named Executive Officers, as disclosed pursuant to Item 402 of Regulation S-K, including in the “Compensation Discussion & Analysis,” the accompanying compensation tables and the corresponding narrative discussion and footnotes. Stockholders are not ultimately voting to approve or disapprove the Board’s recommendation. As this is an advisory vote, the outcome of the vote is not binding on the Company with respect to future executive compensation decisions, including those relating to its Named Executive Officers, or otherwise. The Compensation Committee and Board expect to take into account the outcome of the vote when considering future executive compensation decisions. The Board of Directors unanimously recommends a vote FOR the approval of the advisory resolution relating to the compensation of our Named Executive Officers as disclosed in this Proxy Statement.
TABLE OF CONTENTS ADOPTION OF THE MATIV HOLDINGS, INC. 2024 EQUITY AND INCENTIVE PLAN On March 8, 2024, the Board approved the Mativ Holdings, Inc. 2024 Equity and Incentive Plan (the “2024 Plan”), subject to approval by our stockholders at the Annual Meeting. The 2024 Plan will replace the Schweitzer-Mauduit International, Inc. 2015 Long-Term Incentive Plan (the “2015 Plan”). If the 2024 Plan is approved, no awards will be granted under the 2015 Plan after the 2024 Plan becomes effective. As of March 1, 2024, the Company had utilized the entire share pool under the 2015 Plan. If the 2024 Plan is approved by our stockholders, we will continue to be able to make awards of long-term equity incentives, which we believe are critical for attracting, motivating, rewarding and retaining a talented team who will contribute to our success. If the 2024 Plan is not adopted by our stockholders, we may be required to increase the cash component of our compensation mix (as no shares remain available for future issuance under the 2015 Plan), which we believe would inhibit our ability to (i) align our executives’ interests with the interests of our stockholders, (ii) recruit and retain new executives, key employees and non-employee directors, and (iii) motivate our current executives and key employees over a long-term horizon. Equity Grant Practices Outstanding Equity Awards As of March 1, 2024, there were approximately 418,383 awards issued and outstanding under the 2015 Plan. As noted above, as of March 1, 2024, the Company had utilized the entire share pool under the 2015 Plan. Dilution Annual dilution from our equity compensation program is measured as the total number of shares subject to equity awards granted in a given year, less cancellations and other shares returned to the reserve that year, divided by total shares outstanding at the end of the year. Annual dilution from our equity compensation program for fiscal year 2023 was 0.46%. Overhang is another measure of the dilutive impact of our equity compensation program. Our overhang is equal to the number of shares subject to outstanding equity compensation awards plus the number of shares available to be granted, divided by the total number of outstanding shares. As of March 1, 2024, our overhang was 0.77%. As of March 1, 2024, the 2,800,000 shares being requested under the 2024 Plan would bring our aggregate overhang to approximately 5.9%. Overhang percentages are based on approximately 54,506,900 shares of Common Stock outstanding as of March 1, 2024. Burn Rate Burn rate is a measure of the number of shares subject to equity awards that we grant annually, which helps indicate the life expectancy of our equity plans and is another measure of stockholder dilution. We determine our burn rate by dividing the aggregate number of shares subject to awards granted during the year by the weighted average number of shares outstanding during the year. The Company’s burn rate for the past three fiscal years has been as follows: 2023 | | | 277,479 | | | 0 | | | 54,506,900 | | | 1.15% | 2022 | | | 380,008 | | | 59,276 | | | 42,442,200 | | | 2.01% | 2021 | | | 90,300 | | | 86,802 | | | 31,030,400 | | | 0.57% |
*
| Performance awards are shown based on the number earned. The Company granted 350,911, 471,292 and 86,802 performance awards at target in 2023, 2022, and 2021, respectively. |
Our three-year average Burn Rate is 1.24%. PROPOSAL FOUR60
NON-BINDING ADVISORY VOTE TO APPROVE THE FREQUENCY
TABLE OF THE ADVISORY VOTE ON EXECUTIVE COMPENSATIONCONTENTS Certain Features of the 2024 Plan As requiredThe following features of the 2024 Plan are designed to reinforce alignment between the equity compensation arrangements awarded pursuant to the 2024 Plan and our stockholders’ interests:
Awards will be subject to a one-year minimum vesting period, subject to limited exceptions set forth in the 2024 Plan as described below and the Plan Committee’s (as defined below) ability to provide for accelerated exercisability or vesting of any award, including in cases of retirement, death or disability, in the terms of the award agreement or otherwise; No discounting of stock options or stock appreciation rights; No repricing or replacement of underwater stock options or stock appreciation rights without stockholder approval; No dividend equivalents on stock options or stock appreciation rights; No dividends or dividend equivalents paid on unearned awards; No recycling of shares used to pay the exercise price or taxes with respect to awards; Annual non-employee director compensation limit, which cannot be amended without stockholder approval; and No liberal definition of “change in control.” Purposes of the 2024 Plan Equity-based compensation is a significant component of our compensation program and the 2024 Plan is intended to serve the following purposes: Align the interests of the Company’s stockholders and recipients of awards under the 2024 Plan by increasing the proprietary interest of such recipients in the Company’s growth and success; Advance the interests of the Company by attracting and retaining officers, other employees, non-employee directors, consultants, independent contractors and agents; and Motivate such persons to act in the long-term best interests of the Company and its stockholders. Under the 2024 Plan, the Company may grant: Non-qualified stock options; Incentive stock options (within the meaning of Section 14A422 of the Internal Revenue Code); Stock appreciation rights (“SARs”); Restricted stock, restricted stock units and other stock-based awards (collectively, “Stock Awards”); and Performance Awards. Description of the 2024 Plan The following description is qualified in its entirety by reference to the plan document, a copy of which is attached as Appendix A and incorporated into this Proxy Statement by reference. Administration The 2024 Plan will be administered by the Compensation Committee of the Board, or a subcommittee thereof, or such other committee designated by the Board (the “Plan Committee”), in each case consisting of two or more members of the Board. Each member of the Plan Committee is intended to be (i) a “non-employee director” within the meaning of Rule 16b-3 under the Exchange Act and (ii) “independent” within the meaning of the rules of the NYSE. Subject to the express provisions of the 2024 Plan, the Plan Committee has the authority to select eligible persons to receive awards and determine all of the terms and conditions of each award. All awards are evidenced by an agreement containing such terms and conditions not inconsistent with the 2024 Plan as the Plan Committee TABLE OF CONTENTS approves. The Plan Committee also has authority to establish rules and regulations for administering the 2024 Plan and to decide questions of interpretation or application of any provision of the 2024 Plan. The Plan Committee may take any action such that (1) any outstanding options and SARs become exercisable in part or in full, (2) all or a portion of any restriction period applicable to any outstanding award lapses, (3) all or a portion of any performance period applicable to any outstanding award lapses, and (4) any performance measures applicable to any outstanding award be deemed satisfied at the target, maximum or any other level. The Plan Committee may delegate some or all of its power and authority under the 2024 Plan to the Board, a subcommittee of the Board, a member of the Board, the Chief Executive Officer or such other executive officer of the Company as the Plan Committee deems appropriate, except that it may not delegate its power and authority to a member of the Board, the Chief Executive Officer or any executive officer with regard to awards to persons subject to Section 16 of the Exchange Act. Available Shares Under the 2024 Plan, the number of shares of Common Stock initially available for all awards, other than substitute awards granted in connection with a corporate transaction, will be (i) 2,800,000 shares. In addition, no more than 2,800,000 shares of Common Stock may be issued under the 2024 Plan with respect to incentive stock options. The share limits set forth in the 2024 Plan are subject to adjustment in the event of any equity restructuring that causes the per share value of shares of Common Stock to change, such as a stock dividend, stock split, spinoff, rights offering or recapitalization through an extraordinary cash dividend. On March 4, 2024, the closing sales price per share of our Common Stock as reported on the NYSE was $17.94. To the extent that shares of Common Stock subject to an outstanding award granted under the 2024 Plan or the 2015 Plan are not issued or delivered by reason of (i) the expiration, termination, cancellation or forfeiture of such award (excluding shares of Common Stock subject to an option canceled upon settlement of a related tandem SAR or subject to a tandem SAR cancelled upon exercise of a related option) or (ii) the settlement of such award in cash, then such shares of Common Stock will again be available for re-issuance under the 2024 Plan. Shares of Common Stock subject to an award under the 2024 Plan will not again be available for issuance if such shares are (i) shares that were subject to an option or SAR and were not issued or delivered upon the net settlement or net exercise of such option or SAR, (ii) shares delivered to or withheld by the Company to pay the purchase price or the withholding taxes related to an outstanding award or (iii) shares repurchased by the Company on the open market with the proceeds of an option exercise. Change in Control Unless otherwise provided in an award agreement or a participant’s effective employment, change in control, severance or other similar agreement in effect on the applicable grant date, in the event of a change in control of the Company in which the successor company effectively assumes or substitutes an award and a participant’s employment or service is terminated by the Company, a subsidiary or an affiliate without cause, or by the participant for good reason within 24 months following such change in control, then upon such termination of employment or service (i) each outstanding option and SAR held by such participant will become fully vested and exercisable, (ii) the restriction period applicable to each outstanding stock award held by such holder will lapse, and (iii) performance awards will vest or become exercisable or payable in accordance with the applicable award agreement. Unless otherwise provided in an award agreement, in the event of a change in control of the Company in which awards are not effectively assumed or substituted by the successor company, the Board (as constituted prior to such change in control) may, in its discretion, require that (i) some or all outstanding options and SARs will become exercisable in full or in part, either immediately or upon a subsequent termination of employment, (ii) the restriction period applicable to some or all outstanding Stock Awards will lapse in full or in part, either immediately or upon a subsequent termination of employment, (iii) the performance period applicable to some or all outstanding awards will lapse in full or in part, and (iv) the performance measures applicable to some or all outstanding awards will be deemed to be satisfied at the target, maximum or any other level. In addition, in the event of a change in control, the Board may, in its discretion, require that shares of capital stock of the company resulting from or succeeding to the business of the Company pursuant to such change in control, or the parent thereof, be substituted for some or all of the shares of Common Stock subject to outstanding awards, and/or require outstanding awards, in whole or in part, to be surrendered to the Company in exchange for a payment of TABLE OF CONTENTS cash, other property, shares of capital stock of the company resulting from the change in control (or the parent thereof), or a combination of cash, other property and such shares. Under the terms of the 2024 Plan, a change in control is generally means (i) a third person, including a “group” as defined in Section 13(d)(3) of the Exchange Act, consummates the acquisition of actual or beneficial ownership of shares of the Company having 30% or more of the total number of votes that may be cast for the election of directors of the Board; or (ii) as the result of the consummation of any cash tender or exchange offer, merger or other business combination, sale of assets or contested election, or any combination of the foregoing transactions (a “Transaction”), the persons who were directors of the Company before the Transaction cease to constitute a majority of the Board or any successor to the Company. No Repricing The Plan Committee may not, without the approval of our stockholders, (i) reduce the purchase price or base price of any previously granted option or SAR, (ii) cancel any previously granted option or SAR in exchange for another option or SAR with a lower purchase price or base price or (iii) cancel any previously granted option or SAR in exchange for cash or another award if the purchase price of such option or the base price of such SAR exceeds the fair market value of a share of Common Stock on the date of such cancellation, in each case, other than in connection with a change in control or pursuant to the plan’s adjustment provisions. Clawback of Awards Awards granted under the 2024 Plan and any cash payment or shares of Common Stock delivered pursuant to an award are subject to forfeiture, recovery by the Company or other action pursuant to the applicable award agreement or any clawback or recoupment policy that the Company may adopt from time to time, including, without limitation, the SWM International, Inc. Executive Compensation Adjustment and Recovery Policy, the Mativ Holdings, Inc. Clawback Policy and any other policy that the Company may be required to adopt under the Dodd-Frank Wall Street Reform and Consumer Protection Act and implementing rules and regulations thereunder, or as otherwise required by law or applicable listing standards. Effective Date, Termination and Amendment The 2024 Plan will become effective as of the Board is askingdate of stockholder approval and will terminate as of the first annual meeting of the Company’s stockholders to indicateoccur on or after the frequencytenth anniversary of its effective date, unless earlier terminated by the Board. The Board may amend the 2024 Plan at any time, subject to any requirement of stockholder approval set forth by applicable law, rule or regulation, including any rule of the NYSE, and provided that no amendment may be made that (i) seeks to modify the non-employee director compensation limit or the prohibition on repricing of options and SARs without stockholder approval under the 2024 Plan or (ii) materially impairs the rights of a holder of an outstanding award without the consent of such holder. Eligibility Participants in the 2024 Plan will consist of such officers, other employees, non-employee directors, consultants, independent contractors and agents of the Company and its subsidiaries and affiliates (and such persons who are expected to become any of the foregoing) as selected by the Plan Committee. As of March 4, 2024, approximately seven officers, 5,400 employees and eight non-employee directors would be eligible to participate in the 2024 Plan if selected by the Plan Committee. Non-Employee Director Compensation Limit Under the terms of the 2024 Plan, the aggregate value of cash compensation and the grant date fair value of shares of Common Stock that may be granted during any fiscal year of the Company to any non-employee director will not exceed $750,000, multiplied by two in the year in which a non-employee director commences service on the Board. The non-employee director compensation limit under the 2024 Plan will not apply to awards distributed in lieu of all or a portion of fees receivable by a non-employee director for service on the Board or any Board committee. TABLE OF CONTENTS Minimum Vesting Conditions Notwithstanding any other provision of the 2024 Plan to the contrary, awards granted under the 2024 Plan (other than cash-based awards) will vest no earlier than the first anniversary of the date on which the award is granted; provided, that the following awards will not be subject to the foregoing minimum vesting requirement: any (i) substitute awards granted in connection with awards that are assumed, converted or substituted pursuant to a merger, acquisition or similar transaction entered into by the Company or any of its subsidiaries or affiliates; (ii) shares delivered in lieu of fully vested cash obligations; (iii) awards to non-employee directors that vest on the earlier of the one-year anniversary of the date of grant and the next annual meeting of stockholders that is at least 50 weeks after the immediately preceding year’s annual meeting; and (iv) additional awards the Plan Committee may grant, up to a maximum of five percent (5%) of the available share reserve authorized for issuance under the 2024 Plan (subject to adjustment under the corporate capitalization provisions of the 2024 Plan). The foregoing restriction does not apply to the Plan Committee’s discretion to provide for accelerated exercisability or vesting of any award, including in cases of retirement, death or disability, in the terms of the award agreement or otherwise. Stock Options and SARs The 2024 Plan provides for the grant of options and SARs. The Plan Committee will determine the conditions to the exercisability of each option and SAR. Each option will be exercisable for no more than ten (10) years after its date of grant. If the option is an incentive stock option (within the meaning of Section 422 of the Internal Revenue Code) and the optionee owns greater than ten percent (10%) of the voting power of all shares of capital stock of the Company (a “ten percent holder”), then the option will be exercisable for no more than five years after its date of grant. Except in the case of substitute awards granted in connection with a corporate transaction, the exercise price of an option will not be less than 100% of the fair market value of a share of Common Stock on the date of grant, unless the option is an incentive stock option and the optionee is a ten percent holder, in which case the exercise price will not be less than the price required by the Internal Revenue Code. Each SAR will be exercisable for no more than ten (10) years after its date of grant. Other than in the case of substitute awards granted in connection with a corporate transaction, the base price of a SAR will not be less than 100% of the fair market value of a share of Common Stock on the date of grant, provided that the base price of a SAR granted in tandem with an option (a “tandem SAR”) will be the exercise price of the related option. A SAR entitles the holder to receive upon exercise (subject to withholding taxes) shares of Common Stock (which may be restricted stock) or, to the extent provided in the award agreement, cash or a combination thereof, with an aggregate value equal to the difference between the fair market value of the shares of Common Stock on the exercise date and the base price of the SAR. All of the terms relating to the exercise, cancellation or other disposition of stock options and SARs (i) upon a termination of employment of a participant, whether by reason of disability, retirement, death or any other reason, or (ii) during a paid or unpaid leave of absence, will be determined by the Plan Committee. Notwithstanding anything in the award agreement to the contrary, the holder of an option or SAR will not be entitled to receive dividend equivalents with respect to the shares of Common Stock subject to such option or SAR. Stock Awards The 2024 Plan provides for the grant of Stock Awards. The Plan Committee may grant a Stock Award as a restricted stock award, restricted stock unit award or other stock-based award. Restricted stock awards and restricted stock unit awards are subject to forfeiture if the holder does not remain continuously in the employment of the Company during the restriction period or if specified performance measures (if any) are not attained during the performance period. The terms and conditions applicable to other stock-based awards will be determined by the Plan Committee. Unless otherwise set forth in a restricted stock award agreement, the holder of shares of restricted stock has rights as a stockholder of the Company, including the right to vote and receive dividends with respect to shares of restricted stock and to participate in any capital adjustments applicable to all holders of the Common Stock; provided, however, that any dividend or other distribution paid with respect to shares subject to a restricted stock award will be deposited by the Company and will be subject to the same restrictions as the shares of Common Stock with respect to which such dividend or distribution was made. TABLE OF CONTENTS The agreement awarding restricted stock units will specify (1) whether such award may be settled in shares of Common Stock, cash or a combination thereof and (2) whether the holder will be entitled to receive, on a current or deferred basis, dividend equivalents, and, if determined by the Plan Committee, interest on, or the deemed reinvestment of, any deferred dividend equivalents, with respect to the number of shares of Common Stock subject to such award. Any dividend equivalents credited with respect to restricted stock units will be subject to the same vesting and other restrictions as the restricted stock units to which they believe an advisory voterelate. Prior to settlement of a restricted stock unit, the holder of a restricted stock unit has no rights as a stockholder of the Company. The Plan Committee may also grant other stock-based awards that may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on executive compensation,or related to shares of Common Stock. Any distribution, dividend or dividend equivalents with respect to such other stock-based awards that are subject to vesting conditions shall be subject to the same vesting conditions as the underlying awards. All of the terms relating to the satisfaction of performance measures and the termination of a restriction period or performance period relating to a Stock Award, or the forfeiture and cancellation of a Stock Award (i) upon a termination of employment, whether by reason of disability, retirement, death or any other reason, or (ii) during a paid or unpaid leave of absence, will be determined by the Plan Committee. Performance Awards The 2024 Plan also provides for the grant of performance awards. The agreement relating to a performance award will specify whether such award may be settled in shares of Common Stock (including shares of restricted stock) or cash or a “say-on-pay” vote, should occur. Stockholderscombination thereof, and will provide, in the manner determined by the Plan Committee, for the vesting of such performance award if the specified performance measures are satisfied or met during the specified performance period and for the forfeiture of such award if the specified performance measures are not satisfied or met during the specified performance period. Any dividends or dividend equivalents with respect to a performance award will be subject to the same vesting and other restrictions as such performance award. Prior to the settlement of a performance award in shares of Common Stock, the holder of such award has no rights as a stockholder of the Company with respect to such shares. All of the terms relating to the satisfaction of performance measures and the termination of a performance period, or the forfeiture and cancellation of a performance award upon (i) a termination of employment, whether by reason of disability, retirement, death or any other reason or (ii) during a paid or unpaid leave of absence, will be determined by the Plan Committee. Performance Measures Under the 2024 Plan, the grant, vesting, exercisability or payment of certain awards, or the receipt of shares of Common Stock subject to certain awards, may indicatebe made subject to the satisfaction of performance measures. The performance goals applicable to a particular award will be determined by the Plan Committee at the time of grant. Such performance goals may, without limitation, be based on one or more of the following measures, which may be assessed on an individual basis, or on a corporate-wide basis, or with respect to specified subsidiaries, divisions, business operating units or geographic units of the Company: the attainment by a share of Common Stock of a specified fair market value for, or at, a specified period of time; increase in stockholder value; earnings per share; net assets; return on net assets; return on equity; return on investments; return on capital or invested capital; return on sales; debt to capital ratios; total stockholder return; earnings or income of the Company before or after taxes and/or interest; earnings before interest and/or taxes; earnings before interest, taxes, depreciation and amortization (“EBITDA”); EBITDA margin; operating income; revenues; operating expenses, attainment of expense levels or cost reduction goals; market segment share; cash flow, cash flow per share, cash flow margin or free cash flow; interest expense; economic value created; economic profit; gross profit or margin; operating profit or margin; net cash provided by operations; working capital and/or its components; price-to-earnings growth; revenues from new product development; percentage of revenues derived from designated lines of business and strategic business criteria, consisting of one or more objectives based on meeting specified goals relating to market segment penetration, customer acquisition, business expansion, cost targets, customer satisfaction, reductions in errors and omissions, reductions in lost business, management of employment practices and employee benefits, supervision of litigation and information technology, quality and quality audit scores, compliance, efficiency, ESG-related measures, and acquisitions or divestitures; any combination of the foregoing; or such other goals as the Plan Committee may determine whether they preferor not listed herein. TABLE OF CONTENTS Each such goal may be expressed on an absolute or relative basis and may include comparisons based on current internal targets, the past performance of the Company (including the performance of one or more subsidiaries, divisions, geographic units, or business operating units) or the past or current performance of one or more other companies or market indices (or a combination of such past and current performance). In addition to the ratios specifically enumerated above, performance goals may include comparisons relating to capital (including, but not limited to, the cost of capital), shareholders’ equity, shares outstanding, assets or net assets, sales, or any combination thereof. In establishing a performance measure or determining the achievement of a performance measure, the Plan Committee may provide that we holdachievement of the applicable performance measures may be applied on a “say-on-pay” vote every three years, every two yearspre- or every onepost-tax basis and may be amended or adjusted to include or exclude any components of any performance measure, including, without limitation, foreign exchange gains and losses, asset writedowns, acquisitions and divestitures, change in fiscal year, unbudgeted capital expenditures, special charges such as restructuring or theyimpairment charges, debt refinancing costs, extraordinary or noncash items, unusual, infrequently occurring, nonrecurring or one-time events affecting the Company or its financial statements, changes in law or accounting principles, or changes in the capital structure of the Company. Performance measures will be subject to such other special rules and conditions as the Plan Committee may abstain from this vote.establish at any time. New Plan Benefits The Board, on recommendationfollowing table shows information regarding equity award grants to be made following the adoption of the 2024 Plan by our stockholders. Consistent with the Company’s historical compensation practices, in February 2024, the Compensation Committee has determinedapproved the 2024 long-term incentive award opportunities for certain employees of the Company, including each of the Named Executive Officers, with the grants to be made following approval of the 2024 Plan. In addition, certain equity awards have been promised to certain employees in connection with hire or promotions, with the effectiveness of these awards subject to stockholder approval of the 2024 Plan at the Annual Meeting. All future awards under the 2024 Plan will be made at the discretion of the Committee. Therefore, the future benefits and amounts that will be received or allocated to individuals under the 2024 Plan are not determinable at this time. Julie Schertell | | | $3,227,250(1) | | | 238,157(1) | Greg Weitzel | | | $712,500(1) | | | 52,579(1) | Mark W. Johnson | | | $700,000(1) | | | 51,657(1) | Michael W. Rickheim | | | $618,750(1) | | | 45,661(1) | R. Andrew Wamser, Jr. | | | — | | | — | Ricardo Nuñez | | | — | | | — | All Current Executive Officers as a Group | | | $6,877,346(1) | | | 507,518(1) | All Non-Executive Officer Directors as a Group | | | — | | | — | All Non-Executive Officer Employees as a Group | | | — | | | 560,132(2) |
(1)
| Represents the 2024 long-term incentive opportunity to be granted in the form of RSUs and PSUs following the approval of the 2024 Plan by the Company’s stockholders. Number of shares to be granted in the form of PSUs reflected at target. |
(2)
| Includes equity awards promised to certain employees of the Company in connection with promotion or new hire. Performance equity awards are shown at target. |
Federal Income Tax Consequences The following is a brief summary of certain United States federal income tax consequences generally arising with respect to awards under the 2024 Plan. This discussion does not address all aspects of the United States federal income tax consequences that could arise from participation in the 2024 Plan, some of which may be relevant to participants in light of their personal investment or tax circumstances; it also does not discuss any state, local or non-United States tax consequences of participating in the 2024 Plan. Before taking any actions with respect to any awards, each participant is advised to consult such participant’s tax advisor concerning the application of the United States federal income tax laws to such participant’s particular situation, as well as the applicability and effect of any state, local or non-United States tax laws. TABLE OF CONTENTS Section 162(m) of the Internal Revenue Code Section 162(m) of the Internal Revenue Code generally limits to $1 million the amount that a “say-on-pay” vote everypublicly held corporation may deduct each year for compensation paid to each of the corporation’s chief executive officer, the corporation’s chief financial officer, and certain other current and former executive officers of the corporation. Stock Options A participant will not recognize taxable income at the time an option is granted and the best approachCompany will not be entitled to a tax deduction at that time. A participant will recognize compensation taxable as ordinary income (and subject to income tax withholding in respect of an employee) upon exercise of a non-qualified stock option equal to the excess of the fair market value of the shares purchased over their exercise price, and the Company (or, if applicable, the affiliated employer) will be entitled to a corresponding deduction, subject to the deduction limits under Section 162(m) of the Internal Revenue Code. A participant will not recognize income (except for ourpurposes of the alternative minimum tax) upon exercise of an incentive stock option. If the shares acquired by exercise of an incentive stock option are held for the longer of two years from the date the option was granted and one year from the date the option was exercised, any gain or loss arising from a subsequent disposition of those shares will be taxed as long-term capital gain or loss, and the Company will not be entitled to any deduction. If, however, those shares are disposed of within the above-described period, then in the year of that disposition the participant will recognize compensation taxable as ordinary income equal to the excess of (1) the lesser of the amount realized upon that disposition and our stockholders. Accordingly, the Board recommends that our stockholders vote for a frequencyfair market value of every ONE YEAR when votingthose shares on the advisory vote ondate of exercise over (2) the frequencyexercise price, and the Company (or, if applicable, the affiliated employer) will be entitled to a corresponding deduction, subject to the deduction limits under Section 162(m) of the Internal Revenue Code. SARs A participant will not recognize taxable income at the time SARs are granted and the Company will not be entitled to a “say-on-pay” vote. Stockholders are not ultimately votingtax deduction at that time. Upon exercise, the participant will recognize compensation taxable as ordinary income (and subject to approve or disapproveincome tax withholding in respect of an employee) in an amount equal to the Board’s recommendation. As this is an advisory vote, it is not binding onfair market value of any shares delivered and the amount of cash paid by the Company, and the Compensation CommitteeCompany (or, if applicable, the affiliated employer) will be entitled to a corresponding deduction, subject to the deduction limits under Section 162(m) of the Internal Revenue Code.
Stock Awards A participant will not recognize taxable income at the time restricted stock (i.e., stock subject to restrictions constituting a substantial risk of forfeiture) is granted and Board may decidethe Company will not be entitled to a tax deduction at that ittime, unless the participant makes an election to be taxed at that time pursuant to Section 83(b) of the Internal Revenue Code. If such election is made, the participant will recognize compensation taxable as ordinary income (and subject to income tax withholding in respect of an employee) at the best interesttime of the grant in an amount equal to the excess of the fair market value of the shares at such time over the amount, if any, paid for those shares. If such election is not made, the participant will recognize compensation taxable as ordinary income (and subject to income tax withholding in respect of an employee) at the time the restrictions constituting a substantial risk of forfeiture lapse in an amount equal to the excess of the fair market value of the shares at such time over the amount, if any, paid for those shares. The amount of ordinary income recognized by making the above-described election or upon the lapse of restrictions constituting a substantial risk of forfeiture is deductible by the Company (or, if applicable, the affiliated employer) as compensation expense, subject to the deduction limits under Section 162(m) of the Internal Revenue Code. In addition, a participant receiving dividends with respect to restricted stock for which the above-described election has not been made and prior to the time the restrictions constituting a substantial risk of forfeiture lapse will recognize compensation taxable as ordinary income (and subject to income tax withholding in respect of an employee), rather than dividend income, in an amount equal to the dividends paid and the Company (or, if applicable, the affiliated employer) will be entitled to a corresponding deduction, subject to the deduction limits under Section 162(m) of the Internal Revenue Code. A participant will not recognize taxable income at the time a restricted stock unit is granted and the Company will not be entitled to a tax deduction at that time. Upon settlement of restricted stock units, the participant will recognize compensation taxable as ordinary income (and subject to income tax withholding in respect of an employee) in an amount equal to the fair market value of any shares delivered and the amount of any cash paid by the Company, and the stockholdersCompany (or, if applicable, the affiliated employer) will be entitled to hold a “say-on-pay” vote more or less frequently thancorresponding deduction, subject to the preference receiving the highest number of votes of our stockholders. The Compensation Committee and Board expect to take into account the outcomededuction limits under Section 162(m) of the vote when consideringInternal Revenue Code. TABLE OF CONTENTS A participant who receives shares of Common Stock that are not subject to any restrictions under the frequency2024 Plan will recognize compensation taxable as ordinary income on the date of “say-on-pay” votes.grant in an amount equal to the fair market value of such shares on that date, and the Company (or, if applicable, the affiliated employer) will be entitled to a corresponding deduction, subject to the deduction limits under Section 162(m) of the Internal Revenue Code. Board RecommendationPerformance Awards
A participant will not recognize taxable income at the time performance awards are granted and the Company will not be entitled to a tax deduction at that time. Upon settlement of performance awards, the participant will recognize compensation taxable as ordinary income (and subject to income tax withholding in respect of an employee) in an amount equal to the fair market value of any shares delivered and the amount of cash paid by the Company, and the Company (or, if applicable, the affiliated employer) will be entitled to a corresponding deduction, subject to the deduction limits under Section 162(m) of the Internal Revenue Code. The Board of Directors unanimously recommends athat stockholders vote for a frequency of every FORONE YEAR as the frequencyapproval of the non-binding advisory vote regarding executive compensation for our Named Executive Officers.Mativ Holdings, Inc. 2024 Equity and Incentive Plan. Equity compensation plans approved by stockholders:
| | | | Outside Directors Stock Plan(1) | | | 69,176 | Long-Term Incentive Plan(2) | | | 2,653,428 | Total approved by stockholders | | | 2,722,604 | Equity compensation plans not approved by stockholders | | | — | Grand total | | | 2,722,604 |
(1)
| The Outside Directors Stock Plan consists of shares registered for the purpose of issuance to our outside directors for payment of their retainer fees quarterly in advance. Director's stock retainer fees in 2023 consisted of $23,750 quarterly which are payable in our Common Stock. The number of shares issued each quarter is determined based on the then fair market value of the shares, which is determined in accordance with the plan at the closing price on the date one day prior to the date of distribution. Certain directors have elected to defer receipt of quarterly retainer fees under the terms of our Deferred Compensation Plan No. 2 for Non-Employee Directors, resulting in an accumulation of stock unit credits. Upon a change in control, retirement or earlier termination from the Board, these stock unit credits will be distributed in the form of cash or shares of MATV Common Stock. As of the Merger on July 6, 2022, all of the outstanding deferred stock units were converted to common stock in accordance with the plan. While held in the deferred compensation plan account, these stock unit credits carry no voting rights and cannot be traded as Common Stock, although declared dividends create additional stock unit credits. As of December 31, 2023, deferred retainer fees and credited dividends have resulted in 51,752 accumulated stock unit credits. |
(2)
| The Long-Term Incentive Plan is described in Note 19. Stockholders' Equity of the Notes to Consolidated Financial Statements in Part II, Item 8 herein. Awards of restricted stock units under the Long-Term Incentive Plan are subject to forfeiture and cannot be sold or otherwise transferred until fully vested. As of December 31, 2023, 754,368 shares of Common Stock were subject to outstanding restricted stock units awards under the Long-Term Incentive Plan. |
Stockholder Proposals and Director Nominations for the 20242025 Annual Meeting Stockholder proposals to be considered for inclusion in the Company’s proxy statement and form of proxy for the 20232025 Annual Meeting of Stockholders must be received by the Company’s Chief Legal Officer,Corporate Secretary and Chief Compliance Officer at the Company’s principal executive office no later than November 18, 2023.13, 2024. All proposals for inclusion in the Company’s proxy statement must comply with all of the requirements of Rule 14a-8 under the Exchange Act. Pursuant to Paragraphs 15 and 19 of the Company’s By-Laws, stockholders must give advance notice of other business to be addressed, or nominations for director, at the 20242025 Annual Meeting not earlier than December 22, 202325, 2024 and not later than January 21, 2024.24, 2025. All proposals and nominations must comply with all of the requirements set forth in the Company’s By-Laws, a copy of which may be obtained from the Company’s Chief Legal Officer, Secretary and Chief Compliance Officer.Corporate Secretary. In addition to satisfying the foregoing requirements under Company’s By-Laws, to comply with the universal proxy rules, stockholders who intend to solicit proxies in support of director nominees other than the Company’s nominees must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act no later than February 20, 2024.23, 2025. Annual Report on Form 10-K and Proxy Statement The Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 20222023 (including the consolidated financial statements and schedules thereto but excluding exhibits) has been included with the mailing of this Proxy Statement to stockholders of record and beneficial holders as of March 1, 2023.4, 2024. Additional copies of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 20212023 (excluding exhibits) will be provided without charge to each stockholder requesting such copies in writing. The written request should be directed to the Investor Relations Department at Mativ Holdings, Inc., 100 North Point Center East,Kimball Place, Suite 600, Alpharetta, Georgia 30022.30009. In addition, the Annual Report on Form 10-K, Notice of Meeting, Proxy Statement and form of proxy are available on the Company’s website at www. mativ.com.www.mativ.com. Communicating with the Board Stockholders and interested parties may communicate directly with the Board or any of its members, including the Non-Executive Chair, the Chair of the Audit Committee and the independent directors as a group, by telephonic or written communication as set forth below. Each communication intended for the Board or any of its members and received by the Secretary that is related to the operation of the Company will be forwarded to the designated person. The Secretary may screen communications solely for the purpose of eliminating communications that are commercial in nature or not related to the operation of the Company and conducting appropriate security clearance. All communications relating to the operation of the Company shall be forwarded to the designated recipient in their entirety. If by phone: | | | A voice mail message may be left identifying the individual to whom it is directed by calling (866) 528-2593. This is a toll-free call and is monitored and accessible by the office of the Secretary of the Company. Messages received on this line will be maintained in confidence to the extent practicable. | | | | | | | | If by mail: | | | A sealed envelope prominently marked “Confidential” on the outside of the envelope that is directed to the attention of any director(s), including the Non-Executive Chair, the Chair of the Audit Committee or the independent directors as a group, as appropriate, may be mailed to: | | | | | | | | | | | | | | Secretary
Mativ Holdings, Inc.
100 Kimball Place–Suite 600
Alpharetta, Georgia 30009 |
If by phone:
A voice mail message may be left identifying the individual to whom it is directed by calling (866) 528-2593. This is a toll-free call and is monitored and accessible by the office of the Secretary of the Company. Messages received on this line will be maintained in confidence to the extent practicable.
If by mail:
A sealed envelope prominently marked “Confidential” on the outside of the envelope that is directed to the attention of any director(s), including the Non-Executive Chair, the Chair of the Audit Committee or the independent directors as a group, as appropriate, may be mailed to:
Secretary
Mativ Holdings, Inc.
100 North Point Center East — Suite 600
Alpharetta, Georgia 30022
YOUR VOTE IS IMPORTANT You are encouraged to let us know your preferences by marking the appropriate boxes on the enclosed proxy card or by voting over the Internet prior to the Annual Meeting. Or, if your shares are held in “street name,” please refer to the voting instruction form provided with this Proxy Statement.
TABLE OF CONTENTS Appendix A mativ holdings, INC.
2024 equity and INCENTIVE PLAN I. INTRODUCTION 1.1 Purposes. The purposes of the Mativ Holdings, Inc. 2024 Equity and Incentive Plan (this “Plan”) are (i) to align the interests of the Company’s stockholders and the recipients of awards under this Plan by increasing the proprietary interest of such recipients in the Company’s growth and success, (ii) to advance the interests of the Company by attracting and retaining officers, other employees, Non-Employee Directors, consultants, independent contractors and agents and (iii) to motivate such persons to act in the long-term best interests of the Company and its stockholders. 1.2 Certain Definitions. “Affiliate” shall mean any corporation, limited liability company, partnership, joint-venture or similar entity in which the Company owns directly or indirectly, an equity interest possessing less than 50% but at least 20% of the combined voting power of the total outstanding equity interests of such entity. “Agreement” shall mean the written or electronic agreement evidencing an award hereunder between the Company and the recipient of such award. “Board” shall mean the Board of Directors of the Company. “Cause” shall mean, unless otherwise defined in an Agreement, the willful and continued failure to substantially perform the duties assigned by the Company, a Subsidiary or an Affiliate (other than a failure resulting from the award recipient’s disability), the willful engaging in conduct which is demonstrably injurious to the Company, a Subsidiary or an Affiliate (monetarily or otherwise), any act of dishonesty, the commission of a felony, the continued failure to meet performance standards, excessive absenteeism, or a significant violation of any statutory or common law duty of loyalty to the Company, a Subsidiary or an Affiliate. “Change in Control” shall mean (i) a third person, including a “group” as defined in Section 13(d)(3) of the Exchange Act, consummates the acquisition of actual or beneficial ownership of shares of the Company having 30% or more of the total number of votes that may be cast for the election of directors of the Board, or (ii) as the result of the consummation of any cash tender or exchange offer, merger or other business combination, sale of assets or contested election, or any combination of the foregoing transactions (a “Transaction”), the persons who were directors of the Company before the Transaction shall cease to constitute a majority of the Board or any successor to the Company. “Code” shall mean the Internal Revenue Code of 1986, as amended. “Committee” shall mean the Compensation Committee of the Board, or a subcommittee thereof, consisting of two or more members of the Board, each of whom is intended to be (i) a “Non-Employee Director” within the meaning of Rule 16b-3 under the Exchange Act and (ii) “independent” within the meaning of the rules of the New York Stock Exchange or, if the Common Stock is not listed on the New York Stock Exchange, within the meaning of the rules of the principal stock exchange on which the Common Stock is then traded. “Common Stock” shall mean the common stock, par value $0.10 per share, of the Company, and all rights appurtenant thereto. “Company” shall mean Mativ Holdings, Inc., a Delaware corporation, or any successor thereto. “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended. “Fair Market Value” shall mean the closing price of a share of Common Stock as reported on the New York Stock Exchange on the day immediately preceding the date as of which such value is being determined or, if the Common Stock is not listed on the New York Stock Exchange as of such date, the closing price of a share of Common Stock on the principal national stock exchange on which the Common Stock is traded on the day immediately preceding the date as of which such value is being determined or, if there shall be no reported transactions for such date, on the last preceding date for which transactions were reported; provided, however, that the Company may in its discretion use the closing price of a share of Common Stock on the day preceding the date as of which such value is being determined to the extent the Company determines such method is more ![[MISSING IMAGE: px_03proxy-bw.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-23-033842/px_03proxy-bw.jpg)
TABLE OF CONTENTS practical for administrative purposes, such as for purposes of tax withholding; provided, further, that if the Common Stock is not listed on a national stock exchange or if Fair Market Value for any date cannot be so determined, Fair Market Value shall be determined by the Committee by whatever means or methods as the Committee, in the good faith exercise of its discretion, shall at such time deem appropriate and in compliance with Section 409A of the Code. “Free-Standing SAR” shall mean an SAR which is not granted in tandem with, or by reference to, an option, which entitles the holder thereof to receive, upon exercise, shares of Common Stock (which may be Restricted Stock) or, to the extent provided in the applicable Agreement, cash or a combination thereof, with an aggregate value equal to the excess of the Fair Market Value of one share of Common Stock on the date of exercise over the base price of such SAR, multiplied by the number of such SARs which are exercised. “Good Reason” shall mean, unless otherwise defined in an Agreement, the occurrence of one or more of the following without the participant’s express written consent, which circumstances are not remedied by the Company within thirty (30) days after its receipt of a written notice from the participant describing the applicable circumstances (which notice must be provided by the participant within ninety (90) days after the participant’s knowledge of the applicable circumstances): (i) a material diminution in the Participant’s base compensation; (ii) a material diminution in the participant’s authority, duties, or responsibilities; (iii) a material change in the geographic location at which the participant must perform services; or (iv) any other action or inaction that constitutes a material breach by the Company of the agreement under which the participant provides services; provided, however, in the event of a termination due to “Good Reason” the participant must terminate employment within two years following the initial occurrence of the circumstance constituting good reason. “Incentive Stock Option” shall mean an option to purchase shares of Common Stock that meets the requirements of Section 422 of the Code, or any successor provision, which is intended by the Committee to constitute an Incentive Stock Option. “Non-Employee Director” shall mean any director of the Company who is not an officer or employee of the Company or any Subsidiary. “Nonqualified Stock Option” shall mean an option to purchase shares of Common Stock which is not an Incentive Stock Option. “Other Stock-Based Award” shall mean an award granted pursuant to Section 3.4 of the Plan. “Performance Award” shall mean a right to receive an amount of cash, Common Stock, or a combination of both, contingent upon the attainment of specified Performance Measures within a specified Performance Period. “Performance Measures” shall mean the criteria and objectives, established by the Committee, which shall be satisfied or met (i) as a condition to the grant or exercisability of all or a portion of an option or SAR or (ii) during the applicable Restriction Period or Performance Period as a condition to the grant or vesting of the holder’s interest, in the case of a Restricted Stock Award, of all or a portion of the shares of Common Stock subject to such award, or, in the case of a Restricted Stock Unit Award, Other Stock-Based Award or Performance Award, to the holder’s receipt of all or a portion of the shares of Common Stock subject to such award or of payment with respect to such award. Such criteria and objectives may, without limitation, be based on one or more of the following measures, which may be assessed on an individual basis, or on a corporate-wide basis, or with respect to specified subsidiaries, divisions, business operating units or geographic units of the Company: the attainment by a share of Common Stock of a specified Fair Market Value for, or at, a specified period of time; increase in stockholder value; earnings per share; net assets; return on net assets; return on equity; return on investments; return on capital or invested capital; return on sales; debt to capital ratios; total stockholder return; earnings or income of the Company before or after taxes and/or interest; earnings before interest and/or taxes; earnings before interest, taxes, depreciation and amortization (“EBITDA”); EBITDA margin; operating income; revenues; operating expenses, attainment of expense levels or cost reduction goals; market segment share; cash flow, cash flow per share, cash flow margin or free cash flow; interest expense; economic value created; economic profit; gross profit or margin; operating profit or margin; net cash provided by operations; working capital and/or its components; price-to-earnings growth; revenues from new product development; percentage of revenues derived from designated lines of business and strategic business criteria, consisting of one or more objectives based on meeting specified goals relating to market segment penetration, ![[MISSING IMAGE: px_02proxy-bw.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-23-033842/px_02proxy-bw.jpg)
TABLE OF CONTENTS customer acquisition, business expansion, cost targets, customer satisfaction, reductions in errors and omissions, reductions in lost business, management of employment practices and employee benefits, supervision of litigation and information technology, quality and quality audit scores, compliance, efficiency, ESG-related measures, and acquisitions or divestitures, any combination of the foregoing, or such other goals as the Committee may determine whether or not listed herein. Each such Performance Measure may be expressed on an absolute or relative basis and may include comparisons based on current internal targets, the past performance of the Company (including the performance of one or more subsidiaries, divisions, geographic areas, or business operating units) or the past or current performance of one or more other companies or market indices (or a combination of such past and current performance). In addition to the ratios specifically enumerated above, performance goals may include comparisons relating to capital (including, but not limited to, the cost of capital), shareholders’ equity, shares outstanding, assets or net assets, sales, or any combination thereof. In establishing a Performance Measure or determining the achievement of a Performance Measure, the Committee may provide that achievement of the applicable Performance Measures may be applied on a pre- or post-tax basis and may be amended or adjusted to include or exclude any components of any Performance Measure, including, without limitation, foreign exchange gains and losses, asset writedowns, acquisitions and divestitures, change in fiscal year, unbudgeted capital expenditures, special charges such as restructuring or impairment charges, debt refinancing costs, extraordinary or noncash items, unusual, infrequently occurring, nonrecurring or one-time events affecting the Company or its financial statements, changes in law or accounting principles, or changes in the capital structure of the Company (“Adjustment Events”). The Committee may in its sole discretion amend or adjust the Performance Measures or other terms and conditions of an outstanding award in recognition of any Adjustment Events. Performance Measures shall be subject to such other special rules and conditions as the Committee may establish at any time. “Performance Period” shall mean any period designated by the Committee during which (i) the Performance Measures applicable to an award shall be measured and (ii) the conditions to vesting applicable to an award shall remain in effect. “Prior Plan” shall mean the Schweitzer-Mauduit International, Inc. 2015 Long-Term Incentive Plan and each other plan previously maintained by the Company and its predecessors under which equity awards remain outstanding as of the effective date of this Plan. “Restricted Stock” shall mean shares of Common Stock which are subject to a Restriction Period and which may, in addition thereto, be subject to the attainment of specified Performance Measures within a specified Performance Period. “Restricted Stock Award” shall mean an award of Restricted Stock under this Plan. “Restricted Stock Unit” shall mean a right to receive one share of Common Stock or, in lieu thereof and to the extent provided in the applicable Agreement, the Fair Market Value of such share of Common Stock in cash, which shall be contingent upon the expiration of a specified Restriction Period and which may, in addition thereto, be contingent upon the attainment of specified Performance Measures within a specified Performance Period. “Restricted Stock Unit Award” shall mean an award of Restricted Stock Units under this Plan. “Restriction Period” shall mean any period designated by the Committee during which (i) the Common Stock subject to an award may not be sold, transferred, assigned, pledged, hypothecated or otherwise encumbered or disposed of, except as provided in this Plan or the Agreement relating to such award, or (ii) the conditions to vesting applicable to an award shall remain in effect. “SAR” shall mean a stock appreciation right which may be a Free-Standing SAR or a Tandem SAR. “Stock Award” shall mean a Restricted Stock Award, Restricted Stock Unit Award or Other Stock-Based Award. “Subsidiary” shall mean any corporation, limited liability company, partnership, joint venture or similar entity in which the Company owns, directly or indirectly, an equity interest possessing 50% or more of the combined voting power of the total outstanding equity interests of such entity. “Substitute Award” shall mean an award granted under this Plan upon the assumption of, or in substitution for, outstanding equity awards previously granted by a company or other entity in connection with a corporate ![[MISSING IMAGE: px_01proxy-bw.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-23-033842/px_01proxy-bw.jpg)
TABLE OF CONTENTS transaction, including a merger, combination, consolidation or acquisition of property or stock; provided, however, that in no event shall the term “Substitute Award” be construed to refer to an award made in connection with the cancellation and repricing of an option or SAR. “Tandem SAR” shall mean an SAR which is granted in tandem with, or by reference to, an option (including a Nonqualified Stock Option granted prior to the date of grant of the SAR), which entitles the holder thereof to receive, upon exercise of such SAR and surrender for cancellation of all or a portion of such option, shares of Common Stock (which may be Restricted Stock) or, to the extent provided in the applicable Agreement, cash or a combination thereof, with an aggregate value equal to the excess of the Fair Market Value of one share of Common Stock on the date of exercise over the base price of such SAR, multiplied by the number of shares of Common Stock subject to such option, or portion thereof, which is surrendered. “Tax Date” shall have the meaning set forth in Section 5.5. “Ten Percent Holder” shall have the meaning set forth in Section 2.1(a). 1.3 Administration. This Plan shall be administered by the Committee. Any one or a combination of thefollowing awards may be made under this Plan to eligible persons: (i) options to purchase shares of Common Stock in the form of Incentive Stock Options or Nonqualified Stock Options; (ii) SARs in the form of Tandem SARs or Free-Standing SARs; (iii) Stock Awards in the form of Restricted Stock, Restricted Stock Units or Other Stock-Based Awards; and (iv) Performance Awards. The Committee shall, subject to the terms of this Plan, select eligible persons for participation in this Plan and determine the form, amount and timing of each award to such persons and, if applicable, the number of shares of Common Stock subject to an award, the number of SARs, the number of Restricted Stock Units, the dollar value subject to a Performance Award, the purchase price or base price associated with the award, the time and conditions of exercise or settlement of the award and all other terms and conditions of the award, including, without limitation, the form of the Agreement evidencing the award. The Committee may, in its sole discretion and for any reason at any time, take action such that (i) any or all outstanding options and SARs shall become exercisable in part or in full, (ii) all or a portion of the Restriction Period applicable to any outstanding awards shall lapse, (iii) all or a portion of the Performance Period applicable to any outstanding awards shall lapse and (iv) the Performance Measures (if any) applicable to any outstanding awards shall be deemed to be satisfied at the target, maximum or any other level. The Committee shall, subject to the terms of this Plan, interpret this Plan and the application thereof, establish rules and regulations it deems necessary or desirable for the administration of this Plan and may impose, incidental to the grant of an award, conditions with respect to the award, such as limiting competitive employment or other activities. All such interpretations, rules, regulations and conditions shall be conclusive and binding on all parties. The Committee may delegate some or all of its power and authority under the Plan to the Board or, subject to applicable law, to a subcommittee of the Board, a member of the Board, the Chief Executive Officer or such other executive officer of the Company as the Committee deems appropriate; provided, however, that the Committee may not delegate its power and authority to a member of the Board or the Chief Executive Officer or other executive officer of the Company with regard to the selection for participation in this Plan of an officer, director or other person subject to Section 16 of the Exchange Act or decisions concerning the timing, pricing or amount of an award to such an officer, director or other person. No member of the Board or Committee, and neither the Chief Executive Officer nor any other executive officer to whom the Committee delegates any of its power and authority hereunder, shall be liable for any act, omission, interpretation, construction or determination made in connection with this Plan in good faith, and the members of the Board and the Committee and the Chief Executive Officer or other executive officer shall be entitled to indemnification and reimbursement by the Company in respect of any claim, loss, damage or expense (including attorneys’ fees) arising therefrom to the full extent permitted by law (except as otherwise may be provided in the Company’s Certificate of Incorporation and/or By-laws) and under any directors’ and officers’ liability insurance that may be in effect from time to time. A majority of the Committee shall constitute a quorum. The acts of the Committee shall be either (i) acts of a majority of the members of the Committee present at any meeting at which a quorum is present or (ii) acts approved in writing by all of the members of the Committee without a meeting. 1.4 Eligibility. Participants in this Plan shall consist of such officers, other employees, Non-Employee Directors, consultants, independent contractors, agents and persons expected to become officers, other employees, TABLE OF CONTENTS Non-Employee Directors, consultants, independent contractors and agents of the Company and its Subsidiaries and Affiliates as the Committee in its sole discretion may select from time to time. The Committee’s selection of a person to participate in this Plan at any time shall not require the Committee to select such person to participate in this Plan at any other time. Except as provided otherwise in an Agreement, for purposes of this Plan, references to employment by the Company shall also mean employment by a Subsidiary or an Affiliate, and references to employment shall include service as a Non-Employee Director, consultant, independent contractor or agent. The Committee shall determine, in its sole discretion, the extent to which a participant shall be considered employed during any periods during which such participant is on a leave of absence. The aggregate value of cash compensation and the grant date fair value of shares of Common Stock that may be granted during any fiscal year of the Company to any Non-Employee Director shall not exceed $750,000; provided, however, that (i) the limit set forth in this sentence shall be multiplied by two in the year in which a Non-Employee Director commences service on the Board, and (ii) the limit set forth in this sentence shall not apply to awards made pursuant to an election to receive the award in lieu of all or a portion of fees received for service on the Board or any committee thereunder. 1.5 Shares Available. Subject to adjustment as provided in Section 5.7 and to all other limits set forth in this Plan, the number of shares of Common Stock that shall initially be available for all awards under this Plan, other than Substitute Awards, shall be 2,800,000 shares. Subject to adjustment as provided in Section 5.7, no more than 2,800,000 shares of Common Stock in the aggregate may be issued under the Plan in connection with Incentive Stock Options. The number of shares of Common Stock that remain available for future grants under the Plan shall be reduced by an amount equal to the number of shares subject to awards granted under this Plan, other than Substitute Awards. To the extent that shares of Common Stock subject to an outstanding option, SAR, Stock Award or Performance Award granted under the Plan or a Prior Plan are not issued or delivered by reason of (i) the expiration, termination, cancellation or forfeiture of such award (excluding shares subject to an option cancelled upon settlement in shares of a related Tandem SAR or shares subject to a Tandem SAR cancelled upon exercise of a related option) or (ii) the settlement of such award in cash, such shares of Common Stock shall again be available for re-issuance under this Plan and shall be recycled into this Plan on a one-for-one basis. In addition, shares of Common Stock subject to an award under this Plan shall not again be available for issuance under this Plan if such shares are (x) shares that were subject to an option or a SAR and were not issued or delivered upon the net settlement or net exercise of such option or SAR, (y) shares delivered to or withheld by the Company to pay the purchase price or the withholding taxes related to an outstanding award or (z) shares repurchased by the Company on the open market with the proceeds of an option exercise. The number of shares of Common Stock available for awards under this Plan shall not be reduced by (i) the number of shares of Common Stock subject to Substitute Awards or (ii) available shares under a stockholder approved plan of a company or other entity which was a party to a corporate transaction with the Company (as appropriately adjusted to reflect such corporate transaction) which become subject to awards granted under this Plan (subject to applicable stock exchange requirements). Shares of Common Stock to be delivered under this Plan shall be made available from authorized and unissued shares of Common Stock, or authorized and issued shares of Common Stock reacquired and held as treasury shares or otherwise or a combination thereof. 1.6 Minimum Vesting Conditions. Notwithstanding any other provision of the Plan to the contrary, awards granted under the Plan (other than cash-based awards) shall vest no earlier than the first anniversary of the date on which the award is granted; provided, that the following awards shall not be subject to the foregoing minimum vesting requirement: any (i) Substitute Awards granted in connection with awards that are assumed, converted or substituted pursuant to a merger, acquisition or similar transaction entered into by the Company or any of its Subsidiaries; (ii) shares delivered in lieu of fully vested cash obligations; (iii) awards to Non-Employee Directors that vest on the earlier of the one-year anniversary of the date of grant and the next annual meeting of stockholders that is at least 50 weeks after the immediately preceding year’s annual meeting; and (iv) any additional awards the Committee may grant, up to a maximum of five percent (5%) of the available share reserve authorized for issuance under the Plan pursuant to Section 1.5 (subject to adjustment under Section 5.7); provided, further, that the foregoing restriction does not apply to the Committee’s discretion to provide for accelerated exercisability or vesting of any award, including in cases of retirement, death, or disability, in the terms of the award Agreement or otherwise. TABLE OF CONTENTS II. STOCK OPTIONS AND STOCK APPRECIATION RIGHTS 2.1 Stock Options. The Committee may, in its discretion, grant options to purchase shares of Common Stock to such eligible persons as may be selected by the Committee; provided, however, that a participant may be granted an option only if the underlying Common Stock qualifies, with respect to such participant, as “service recipient stock” within the meaning set forth in Section 409A of the Code. Each option, or portion thereof, that is not an Incentive Stock Option shall be a Nonqualified Stock Option. To the extent that the aggregate Fair Market Value (determined as of the date of grant) of shares of Common Stock with respect to which options designated as Incentive Stock Options are exercisable for the first time by a participant during any calendar year (under this Plan or any other plan of the Company, or any parent or Subsidiary) exceeds the amount (currently $100,000) established by the Code, such options shall constitute Nonqualified Stock Options. Options shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of this Plan, as the Committee shall deem advisable: (a) Number of Shares and Purchase Price. The number of shares of Common Stock subject to an option and the purchase price per share purchasable upon exercise of the option shall be determined by the Committee; provided, however, that the purchase price per share purchasable upon exercise of an option shall not be less than 100% of the Fair Market Value of a share of Common Stock on the date of grant of such option; provided further, that if an Incentive Stock Option shall be granted to any person who, at the time such option is granted, owns capital stock possessing more than 10 percent of the total combined voting power of all classes of capital stock of the Company (or of any parent or Subsidiary) (a “Ten Percent Holder”), the purchase price per share shall not be less than the price (currently 110% of Fair Market Value) required by the Code in order to constitute an Incentive Stock Option. Notwithstanding the foregoing, in the case of an option that is a Substitute Award, the purchase price per share of the shares subject to such option may be less than 100% of the Fair Market Value per share on the date of grant, provided, that the excess of: (a) the aggregate Fair Market Value (as of the date such Substitute Award is granted) of the shares subject to the Substitute Award, over (b) the aggregate purchase price thereof does not exceed the excess of: (x) the aggregate fair market value (as of the time immediately preceding the transaction giving rise to the Substitute Award, such fair market value to be determined by the Committee) of the shares of the predecessor company or other entity that were subject to the grant assumed or substituted for by the Company, over (y) the aggregate purchase price of such shares. (b) Option Period and Exercisability. The period during which an option may be exercised shall be determined by the Committee; provided, however, that no option shall be exercised later than ten (10) years after its date of grant; provided further, that if an Incentive Stock Option shall be granted to a Ten Percent Holder, such option shall not be exercised later than five years after its date of grant. The Committee may, in its discretion, establish Performance Measures which shall be satisfied or met as a condition to the grant of an option or to the exercisability of all or a portion of an option. The Committee shall determine whether an option shall become exercisable in cumulative or non-cumulative installments and in part or in full at any time. An exercisable option, or portion thereof, may be exercised only with respect to whole shares of Common Stock. (c) Method of Exercise. An option may be exercised (i) by giving written notice to the Company specifying the number of whole shares of Common Stock to be purchased and accompanying such notice with payment therefor in full (or arrangement made for such payment to the Company’s satisfaction) either (A) in cash, (B) by delivery (either actual delivery or by attestation procedures established by the Company) of shares of Common Stock having a Fair Market Value, determined as of the date of exercise, equal to the aggregate purchase price payable by reason of such exercise, (C) authorizing the Company to withhold whole shares of Common Stock which would otherwise be delivered having an aggregate Fair Market Value, determined as of the date of exercise, equal to the amount necessary to satisfy such obligation, (D) in cash by a broker-dealer acceptable to the Company to whom the optionee has submitted an irrevocable notice of exercise, (E) in any other permissible payment method set forth in the Agreement, or (F) a combination of the foregoing, in each case to the extent set forth in the Agreement relating to the option, (ii) if applicable, by surrendering to the Company any Tandem SARs which are cancelled by reason of the exercise of the option and (iii) by executing such documents as the Company may reasonably request. No shares of Common Stock shall be issued and no certificate representing shares of Common Stock shall be delivered until the full purchase price therefor and any withholding taxes thereon, as described in Section 5.5, have been paid (or arrangement made for such payment to the Company’s satisfaction). TABLE OF CONTENTS 2.2 Stock Appreciation Rights. The Committee may, in its discretion, grant SARs to such eligible persons as may be selected by the Committee; provided, however, that a participant may be granted a SAR only if the underlying Common Stock qualifies, with respect to such participant, as “service recipient stock” within the meaning set forth in Section 409A of the Code. The Agreement relating to an SAR shall specify whether the SAR is a Tandem SAR or a Free-Standing SAR. SARs shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of this Plan, as the Committee shall deem advisable: (a) Number of SARs and Base Price. The number of SARs subject to an award shall be determined by the Committee. Any Tandem SAR related to an Incentive Stock Option shall be granted at the same time that such Incentive Stock Option is granted. The base price of a Tandem SAR shall be the purchase price per share of the related option. The base price of a Free-Standing SAR shall be determined by the Committee; provided, however, that such base price shall not be less than 100% of the Fair Market Value of a share of Common Stock on the date of grant of such SAR (or, if earlier, the date of grant of the option for which the SAR is exchanged or substituted). Notwithstanding the foregoing, in the case of an SAR that is a Substitute Award, the base price per share of the shares subject to such SAR may be less than 100% of the Fair Market Value per share on the date of grant, provided, that the excess of: (a) the aggregate Fair Market Value (as of the date such Substitute Award is granted) of the shares subject to the Substitute Award, over (b) the aggregate base price thereof does not exceed the excess of: (x) the aggregate fair market value (as of the time immediately preceding the transaction giving rise to the Substitute Award, such fair market value to be determined by the Committee) of the shares of the predecessor company or other entity that were subject to the grant assumed or substituted for by the Company, over (y) the aggregate base price of such shares. (b) Exercise Period and Exercisability. The period for the exercise of an SAR shall be determined by the Committee; provided, however, that no SAR shall be exercised later than ten (10) years after its date of grant; provided further, that no Tandem SAR shall be exercised later than the expiration, cancellation, forfeiture or other termination of the related option. The Committee may, in its discretion, establish Performance Measures which shall be satisfied or met as a condition to the grant of an SAR or to the exercisability of all or a portion of an SAR. The Committee shall determine whether an SAR may be exercised in cumulative or non-cumulative installments and in part or in full at any time. An exercisable SAR, or portion thereof, may be exercised, in the case of a Tandem SAR, only with respect to whole shares of Common Stock and, in the case of a Free-Standing SAR, only with respect to a whole number of SARs. If an SAR is exercised for shares of Restricted Stock, a certificate or certificates representing such Restricted Stock shall be issued in accordance with Section 3.2(c), or such shares shall be transferred to the holder in book entry form with restrictions on the shares duly noted, and the holder of such Restricted Stock shall have such rights of a stockholder of the Company as determined pursuant to Section 3.2(d). Prior to the exercise of a stock-settled SAR, the holder of such SAR shall have no rights as a stockholder of the Company with respect to the shares of Common Stock subject to such SAR. (c) Method of Exercise. A Tandem SAR may be exercised (i) by giving written notice to the Company specifying the number of whole SARs which are being exercised, (ii) by surrendering to the Company any options which are cancelled by reason of the exercise of the Tandem SAR and (iii) by executing such documents as the Company may reasonably request. A Free-Standing SAR may be exercised (A) by giving written notice to the Company specifying the whole number of SARs which are being exercised and (B) by executing such documents as the Company may reasonably request. No shares of Common Stock shall be issued and no certificate representing shares of Common Stock shall be delivered until any withholding taxes thereon, as described in Section 5.5, have been paid (or arrangement made for such payment to the Company’s satisfaction). 2.3 Termination of Employment or Service. All of the terms relating to the exercise, cancellation or other disposition of an option or SAR (i) upon a termination of employment with or service to the Company of the holder of such option or SAR, as the case may be, whether by reason of disability, retirement, death or any other reason, or (ii) during a paid or unpaid leave of absence, shall be determined by the Committee and set forth in the applicable award Agreement. 2.4 No Repricing. The Committee shall not without the approval of the stockholders of the Company, (i) reduce the purchase price or base price of any previously granted option or SAR, (ii) cancel any previously granted option or SAR in exchange for another option or SAR with a lower purchase price or base price or TABLE OF CONTENTS (iii) cancel any previously granted option or SAR in exchange for cash or another award if the purchase price of such option or the base price of such SAR exceeds the Fair Market Value of a share of Common Stock on the date of such cancellation, in each case, other than in connection with a Change in Control or the adjustment provisions set forth in Section 5.7. 2.5 Dividend Equivalents. Notwithstanding anything in an Agreement to the contrary, the holder of an option or SAR shall not be entitled to receive dividend equivalents with respect to the number of shares of Common Stock subject to such option or SAR. III. STOCK AWARDS 3.1 Stock Awards. The Committee may, in its discretion, grant Stock Awards to such eligible persons as may be selected by the Committee. The Agreement relating to a Stock Award shall specify whether the Stock Award is a Restricted Stock Award, Restricted Stock Unit Award, or, in the case of an Other Stock-Based Award, the type of award being granted. 3.2 Terms of Restricted Stock Awards. Restricted Stock Awards shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of this Plan, as the Committee shall deem advisable. (a) Number of Shares and Other Terms. The number of shares of Common Stock subject to a Restricted Stock Award and the Restriction Period, Performance Period (if any) and Performance Measures (if any) applicable to a Restricted Stock Award shall be determined by the Committee. (b) Vesting and Forfeiture. The Agreement relating to a Restricted Stock Award shall provide, in the manner determined by the Committee, in its discretion, and subject to the provisions of this Plan, for the vesting of the shares of Common Stock subject to such award (i) if the holder of such award remains continuously in the employment of the Company during the specified Restriction Period and (ii) if specified Performance Measures (if any) are satisfied or met during a specified Performance Period, and for the forfeiture of the shares of Common Stock subject to such award (x) if the holder of such award does not remain continuously in the employment of the Company during the specified Restriction Period or (y) if specified Performance Measures (if any) are not satisfied or met during a specified Performance Period. (c) Stock Issuance. During the Restriction Period, the shares of Restricted Stock shall be held by a custodian in book entry form with restrictions on such shares duly noted or, alternatively, a certificate or certificates representing a Restricted Stock Award shall be registered in the holder’s name and may bear a legend, in addition to any legend which may be required pursuant to Section 5.6, indicating that the ownership of the shares of Common Stock represented by such certificate is subject to the restrictions, terms and conditions of this Plan and the Agreement relating to the Restricted Stock Award. All such certificates shall be deposited with the Company, together with stock powers or other instruments of assignment (including a power of attorney), each endorsed in blank with a guarantee of signature if deemed necessary or appropriate, which would permit transfer to the Company of all or a portion of the shares of Common Stock subject to the Restricted Stock Award in the event such award is forfeited in whole or in part. Upon termination of any applicable Restriction Period (and the satisfaction or attainment of applicable Performance Measures), subject to the Company’s right to require payment of any taxes in accordance with Section 5.5, the restrictions shall be removed from the requisite number of any shares of Common Stock that are held in book entry form, and all certificates evidencing ownership of the requisite number of shares of Common Stock shall be delivered to the holder of such award. (d) Rights with Respect to Restricted Stock Awards. Unless otherwise set forth in the Agreement relating to a Restricted Stock Award, and subject to the terms and conditions of a Restricted Stock Award, the holder of such award shall have all rights as a stockholder of the Company, including, but not limited to, voting rights, the right to receive dividends and the right to participate in any capital adjustment applicable to all holders of Common Stock; provided, however, that any dividend or other distribution paid with respect to shares subject to a Restricted Stock Award shall be deposited with the Company and shall be subject to the same restrictions as the shares of Common Stock with respect to which such dividend or distribution was made. 3.3 Terms of Restricted Stock Unit Awards. Restricted Stock Unit Awards shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of this Plan, as the Committee shall deem advisable. TABLE OF CONTENTS (a)Number of Shares and Other Terms. The number of shares of Common Stock subject to a Restricted Stock Unit Award and the Restriction Period, Performance Period (if any) and Performance Measures (if any) applicable to a Restricted Stock Unit Award shall be determined by the Committee. (b) Vesting and Forfeiture. The Agreement relating to a Restricted Stock Unit Award shall provide, in the manner determined by the Committee, in its discretion, and subject to the provisions of this Plan, for the vesting of such Restricted Stock Unit Award (i) if the holder of such award remains continuously in the employment of the Company during the specified Restriction Period and (ii) if specified Performance Measures (if any) are satisfied or met during a specified Performance Period, and for the forfeiture of the shares of Common Stock subject to such award (x) if the holder of such award does not remain continuously in the employment of the Company during the specified Restriction Period or (y) if specified Performance Measures (if any) are not satisfied or met during a specified Performance Period. (c) Settlement of Vested Restricted Stock Unit Awards. The Agreement relating to a Restricted Stock Unit Award shall specify (i) whether such award may be settled in shares of Common Stock or cash or a combination thereof and (ii) whether the holder thereof shall be entitled to receive, on a current or deferred basis, dividend equivalents, and, if determined by the Committee, interest on, or the deemed reinvestment of, any deferred dividend equivalents, with respect to the number of shares of Common Stock subject to such award. Any dividend equivalents credited with respect to Restricted Stock Units shall be subject to the same vesting and other restrictions as the Restricted Stock Units to which they relate. Prior to the settlement of a Restricted Stock Unit Award, the holder of such award shall have no rights as a stockholder of the Company with respect to the shares of Common Stock subject to such award. 3.4 Terms of Other Stock-Based Awards. Subject to the limitations set forth in the Plan, the Committee is authorized to grant other awards that may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on, or related to, shares of Common Stock, including without limitation shares of Common Stock granted as a bonus and not subject to any vesting conditions, dividend equivalents, deferred stock units, stock purchase rights and shares of Common Stock issued in lieu of obligations of the Company to pay cash under any compensatory plan or arrangement, subject to such terms as shall be determined by the Committee. The Committee shall determine the terms and conditions of such awards, which may include the right to elective deferral thereof, subject to such terms and conditions as the Committee may specify in its discretion. Any distribution, dividend or dividend equivalents with respect to Other Stock-Based Awards that are subject to vesting conditions shall be subject to the same vesting conditions as the underlying awards. 3.5 Termination of Employment or Service. All of the terms relating to the satisfaction of Performance Measures and the termination of the Restriction Period or Performance Period relating to a Stock Award, or any forfeiture and cancellation of such award (i) upon a termination of employment with or service to the Company of the holder of such award, whether by reason of disability, retirement, death or any other reason, or (ii) during a paid or unpaid leave of absence, shall be determined by the Committee and set forth in the applicable award Agreement. IV. PERFORMANCE AWARDS 4.1 Performance Awards. The Committee may, in its discretion, grant Performance Awards to such eligible persons as may be selected by the Committee. 4.2 Terms of Performance Awards. Performance Awards shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of this Plan, as the Committee shall deem advisable. (e) Value of Performance Awards and Performance Measures. The method of determining the value of the Performance Award and the Performance Measures and Performance Period applicable to a Performance Award shall be determined by the Committee. (f) Vesting and Forfeiture. The Agreement relating to a Performance Award shall provide, in the manner determined by the Committee, in its discretion, and subject to the provisions of this Plan, for the vesting of such Performance Award if the specified Performance Measures are satisfied or met during the specified Performance Period and for the forfeiture of such award if the specified Performance Measures are not satisfied or met during the specified Performance Period. TABLE OF CONTENTS (g) Settlement of Vested Performance Awards. The Agreement relating to a Performance Award shall specify whether such award may be settled in shares of Common Stock (including shares of Restricted Stock) or cash or a combination thereof. If a Performance Award is settled in shares of Restricted Stock, such shares of Restricted Stock shall be issued to the holder in book entry form or a certificate or certificates representing such Restricted Stock shall be issued in accordance with Section 3.2(c) and the holder of such Restricted Stock shall have such rights as a stockholder of the Company as determined pursuant to Section 3.2(d). Any dividends or dividend equivalents with respect to a Performance Award shall be subject to the same vesting and other restrictions as such Performance Award. Prior to the settlement of a Performance Award in shares of Common Stock, including Restricted Stock, the holder of such award shall have no rights as a stockholder of the Company. 4.3 Termination of Employment or Service. All of the terms relating to the satisfaction of Performance Measures and the termination of the Performance Period relating to a Performance Award, or any forfeiture and cancellation of such award (i) upon a termination of employment with or service to the Company of the holder of such award, whether by reason of disability, retirement, death or any other reason, or (ii) during a paid or unpaid leave of absence, shall be determined by the Committee and set forth in the applicable award Agreement. V. GENERAL 5.1 Effective Date and Term of Plan. This Plan shall be submitted to the stockholders of the Company forapproval at the Company’s 2024 annual meeting of stockholders and, if so approved, the Plan shall become effective as of the date of such stockholder approval. Once effective, this Plan shall supersede and replace the Prior Plan; provided, that the Prior Plan shall remain in effect with respect to all outstanding awards granted under the Prior Plan until such awards have been exercised, forfeited, cancelled, expired, or otherwise terminated in accordance with the terms of such awards. This Plan shall terminate as of the first annual meeting of the Company’s stockholders to occur on or after the tenth anniversary of its effective date, unless terminated earlier by the Board; provided, however, that no Incentive Stock Options shall be granted after the tenth anniversary of the date on which the Plan was approved by the Board. Termination of this Plan shall not affect the terms or conditions of any award granted prior to termination. Awards hereunder may be made at any time prior to the termination of this Plan. 5.2 Amendments. The Board may amend this Plan as it shall deem advisable; provided, however, that no amendment to the Plan shall be effective without the approval of the Company’s stockholders if (i) stockholder approval is required by applicable law, rule or regulation, including any rule of the New York Stock Exchange, or any other stock exchange on which the Common Stock is then traded, or (ii) such amendment seeks to modify the limit on Non-Employee Director compensation contained in Section 1.6 orthe prohibition on the repricing or discounting of options and SARs contained in Section 2.4; provided further, that no amendment may materially impair the rights of a holder of an outstanding award without the consent of such holder. 5.3 Agreement. Each award under this Plan shall be evidenced by an Agreement setting forth the terms andconditions applicable to such award. No award shall be valid until an Agreement is executed by the Company and, to the extent required by the Company, either executed by the recipient or accepted by the recipient by electronic means approved by the Company within the time period specified by the Company. Upon such execution or execution and electronic acceptance, and delivery of the Agreement to the Company, such award shall be effective as of the effective date set forth in the Agreement. 5.4 Non-Transferability. No award shall be transferable other than by will, the laws of descent and distributionor pursuant to beneficiary designation procedures approved by the Company or, to the extent expressly permitted in the Agreement relating to such award, to the holder’s family members, a trust or entity established by the holder for estate planning purposes or a charitable organization designated by the holder, in each case, without consideration. Except to the extent permitted by the foregoing sentence or the Agreement relating to an award, each award may be exercised or settled during the holder’s lifetime only by the holder or the holder’s legal representative or similar person. Except as permitted by the second preceding sentence, no award may be sold,transferred, assigned, pledged, hypothecated, encumbered or otherwise disposed of (whether by operation of law or otherwise) or be subject to execution, attachment or similar process. Upon any attempt to so sell, transfer, assign, pledge, hypothecate, encumber or otherwise dispose of any award, such award and all rights thereunder shall immediately become null and void. TABLE OF CONTENTS 5.5 Tax Withholding. The Company shall have the right to require, prior to the issuance or delivery of anyshares of Common Stock or the payment of any cash pursuant to an award made hereunder, payment by the holder of such award of any federal, state, local, foreign or other taxes which may be required to be withheld or paid in connection with such award. An Agreement may provide that (i) the Company shall withhold whole shares of Common Stock which would otherwise be delivered to a holder, having an aggregate Fair Market Value determined as of the date the obligation to withhold or pay taxes arises in connection with an award (the “Tax Date”), or withhold an amount of cash which would otherwise be payable to a holder, in the amount necessary to satisfy any such obligation or (ii) the holder may satisfy any such obligation by any of the following means: (A) a cash payment to the Company; (B) delivery (either actual delivery or by attestation procedures established by the Company) to the Company of previously owned whole shares of Common Stock having an aggregate Fair Market Value, determined as of the Tax Date, equal to the amount necessary to satisfy any such obligation; (C) authorizing the Company to withhold whole shares of Common Stock which would otherwise be delivered having an aggregate Fair Market Value, determined as of the Tax Date, or withhold an amount of cash which would otherwise be payable to a holder, equal to the amount necessary to satisfy any such obligation; (D)in the case of the exercise of an option, a cash payment by a broker-dealer acceptable to the Company to whom the optionee has submitted an irrevocable notice of exercise, (E) in any other permissible payment method set forth in the Agreement, or (F) a combination of the foregoing, in each case to the extent set forth in the Agreement relating to the award. Shares of Common Stock to be delivered or withheld may not have an aggregate Fair Market Value in excess of the amount determined by applying the minimum statutory withholding rate (or, if permitted by the Company, such other rate as will not cause adverse accounting consequences under the accounting rules then in effect, and is permitted under applicable Internal Revenue Service withholding rules); provided, however, that if a fraction of a share of Common Stock would be required to satisfy the minimum statutory withholding taxes, then the number of shares of Common Stock to be delivered or withheld may be rounded up to the next nearest whole share of Common Stock. 5.6 Restrictions on Shares. Each award made hereunder shall be subject to the requirement that if at any time the Company determines that the listing, registration or qualification of the shares of Common Stock subject to such award upon any securities exchange or under any law, or the consent or approval of any governmental body, or the taking of any other action is necessary or desirable as a condition of, or in connection with, the delivery of shares thereunder, such shares shall not be delivered unless such listing, registration, qualification, consent, approval or other action shall have been effected or obtained, free of any conditions not acceptable to the Company. The Company may require that certificates evidencing shares of Common Stock delivered pursuant to any award made hereunder bear a legend indicating that the sale, transfer or other disposition thereof by the holder is prohibited except in compliance with the Securities Act of 1933, as amended, and the rules and regulations thereunder. 5.7 Adjustment. In the event of any equity restructuring (within the meaning of Financial AccountingStandards Board Accounting Standards Codification Topic 718, Compensation—Stock Compensation, or any successor or replacement accounting standard) that causes the per share value of shares of Common Stock to change, such as a stock dividend, stock split, spinoff, rights offering or recapitalization through an extraordinary cash dividend, the number and class of securities available under this Plan, the terms of each outstanding option and SAR (including the number and class of securities subject to each outstanding option or SAR and the purchase price or base price per share), the terms of each outstanding Restricted Stock Award and Restricted Stock Unit Award (including the number and class of securities subject thereto), and the terms of each outstanding Performance Award (including the number and class ofsecurities subject thereto) shall be appropriately adjusted by the Committee, such adjustments to be made in the case of outstanding options and SARs without an increase in the aggregate purchase price or base price and in accordance with Section 409A of the Code. In the event of any other change in corporate capitalization, including a merger, consolidation, reorganization, or partial or complete liquidation of the Company, such equitable adjustments described in the foregoing sentence may be made as determined to be appropriate and equitable by the Committee to prevent dilution or enlargement of rights of participants. In either case, the decision of the Committee regarding any such adjustment shall be final, binding and conclusive. 5.8 Change in Control. (a) Assumption or Substitution of Certain Awards. Unless otherwise provided in an Agreement or a participant's effective employment, change in control, severance or other similar agreement in effect on the date TABLE OF CONTENTS of grant of the appliable award, in the event of a Change in Control of the Company in which the successor company assumes the applicable award or substitutes a replacement award for the applicable award, if an award holder’s employment is terminated by the Company, a Subsidiary or an Affiliate without Cause or by the holder for Good Reason (or otherwise terminates for an eligible reason according to the terms of the Company severance policy or an employment agreement applicable to the holder as of the effective date of a Change in Control) during the period commencing on and ending twenty-four months after the effective date of the Change in Control, then effective on the holder’s date of termination of employment (i) each outstanding option and SAR held by such holder shall become fully vested and exercisable, (ii) the Restriction Period applicable to each outstanding Stock Award held by such holder shall lapse, and (iii) Performance Awards shall vest or become exercisable or payable in accordance with the applicable Agreements; provided, however, that awards that provide for a deferral of compensation within the meaning of Section 409A of the Code shall be settled in accordance with the applicable Agreements, subject to the terms of the Plan and Section 409A of the Code. Notwithstanding any provision of this Plan to the contrary, each option or SAR granted to such holder shall remain exercisable by the holder (or his or her legal representative or similar person) until the earlier of (y) the date that is one-year following the award holder’s termination of employment under this section (or such longer period of time as may be required by local law) or, if an award holder is subject to a severance policy or employment agreement, the end of the severance period applicable to the holder under the Company severance policy or employment agreement (if any) applicable to the holder as of the effective date of a Change in Control, or (z) the expiration date of the term of the option or SAR. For the purposes of this Section, an award shall be considered assumed or substituted for, if following the Change in Control the award confers the right to purchase or receive, for each share of Common Stock subject to the award immediately prior to the Change in Control, the consideration (whether stock, cash or other securities or property) received in the transaction constituting a Change in Control by holders of shares of Common Stock for each share of Common Stock held on the effective date of such transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding shares of Common Stock); provided, however, that if such consideration received in the transaction constituting a Change in Control is not solely common stock of the successor company, the Committee may, with the consent of the successor company, provide that the consideration to be received upon the exercise or vesting of an award, for each share of Common Stock subject thereto, will be solely common stock of the successor company substantially equal in fair market value to the per share consideration received by holders of Common Stock in the transaction constituting a Change in Control. The determination of such substantial equality of value of consideration shall be made by the Committee (as constituted prior to the Change in Control) in its sole discretion and its determination shall be conclusive and binding. (b) Awards Not Assumed or Substituted. Subject to the terms of the applicable Agreements, in the event of a “Change in Control” in which the awards are not effectively assumed or substituted in accordance with Section 5.8(a), the Board, as constituted prior to the Change in Control, may, in its discretion: (i) require that (A) some or all outstanding options and SARs shall become exercisable in full or in part, either immediately or upon a subsequent termination of employment, (B) the Restriction Period applicable to some or all outstanding Stock Awards shall lapse in full or in part, either immediately or upon a subsequent termination of employment, (C) the Performance Period applicable to some or all outstanding awards shall lapse in full or in part, and (D) the Performance Measures applicable to some or all outstanding awards shall be deemed to be satisfied at the target, maximum or any other level; (ii) require that shares of capital stock of the corporation resulting from or succeeding to the business of the Company pursuant to such Change in Control, or a parent corporation thereof, be substituted for some or all of the shares of Common Stock subject to an outstanding award, with an appropriate and equitable adjustment to such award as determined by the Board in accordance with Section 5.7; and/or (iii) require outstanding awards, in whole or in part, to be surrendered to the Company by the holder, and to be immediately cancelled by the Company, and to provide for the holder to receive (A) a cash payment or other property in an amount equal to (1) in the case of an option or an SAR, the aggregate number of shares of Common Stock then subject to the portion of such option or SAR surrendered, whether or not vested or exercisable, multiplied by the excess, if any, of the Fair Market Value of a share of Common Stock as of the date of the Change in Control, over the purchase price or base price per share of Common Stock subject to such option or SAR, (2) in the case of a Stock Award or a Performance Award TABLE OF CONTENTS denominated in shares of Common Stock, the number of shares of Common Stock then subject to the portion of such award surrendered to the extent the Performance Measures applicable to such award have been satisfied or are deemed satisfied pursuant to Section 5.8(b)(i), whether or not vested, multiplied by the Fair Market Value of a share of Common Stock as of the date of the Change in Control, and (3) in the case of a Performance Award denominated in cash, the value of the Performance Award then subject to the portion of such award surrendered to the extent the Performance Measures applicable to such award have been satisfied or are deemed satisfied pursuant to Section 5.8(b)(i); (B) shares of capital stock of the corporation resulting from or succeeding to the business of the Company pursuant to such Change in Control, or a parent corporation thereof, having a fair market value not less than the amount determined under clause (A) above; or (C) a combination of the payment of cash or other property pursuant to clause (A) above and the issuance of shares pursuant to clause (B) above. 5.9 Deferrals and Section 409A. (a) The Committee may determine that the delivery of shares of Common Stock or the payment of cash, or a combination thereof, upon the exercise or settlement of all or a portion of any award (other than awards of Incentive Stock Options, Nonqualified Stock Options and SARs) made hereunder shall be deferred, or the Committee may, in its sole discretion, approve deferral elections made by holders of awards. Deferrals shall be for such periods and upon such terms as the Committee may determine in its sole discretion, subject to the requirements of Section 409A of the Code. (b) Awards under the Plan are intended to comply with, or be exempt from, the applicable requirements of Section 409A of the Code and shall be limited, construed and interpreted in accordance with such intent. Although the Company does not guarantee any particular tax treatment, to the extent that any award is subject to Section 409A of the Code, it shall be paid in a manner that is intended to comply with Section 409A of the Code, including regulations and any other guidance issued by the Secretary of the Treasury and the Internal Revenue Service with respect thereto. In no event whatsoever shall the Company be liable for any additional tax, interest or penalties that may be imposed on the participant by Section 409A of the Code or any damages for failing to comply with Section 409A of the Code. Notwithstanding anything in the Plan or any award Agreement to the contrary, each participant shall be solely responsible for the tax consequences of awards, and in no event shall the Company have any responsibility or liability if an award does not meet any applicable requirements of Section 409A. Although the Company intends to administer the Plan to prevent taxation under section 409A, the Company does not represent or warrant that the Plan or any award complies with Section 409A or any other provision of federal, state, local or other tax law. If a participant is determined on the date of the participant’s termination of employment to be a “specified employee” within the meaning of that term under Section 409A(a)(2)(B) of the Code, then, with regard to any payment under this Plan that is considered nonqualified deferred compensation under Section 409A of the Code and which is payable on account of a “separation from service” (within the meaning of Section 409A of the Code), such payment shall be delayed until the earlier of (i) the first business day following the six-month anniversary of the participant’s “separation from service” and (ii) the date of the participant’s death (the “Delay Period”). Upon the expiration of the Delay Period, all payments delayed pursuant to this Section 5.9(b) (whether they would have otherwise been payable in a single lump sum or in installments in the absence of such delay) will be paid in a lump sum, without interest, on the first business day following the expiration of the Delay Period and any remaining payments due under the award will be paid in accordance with the normal payment dates specified for them in the applicable Agreement. For purposes of Section 409A of the Code, each payment made under this Plan or any award shall be treated as a separate payment. 5.10 No Right of Participation, Employment or Service. Unless otherwise set forth in an employment agreement, no person shall have any right to participate in this Plan. Neither this Plan nor any award made hereunder shall confer upon any person any right to continued employment by or service with the Company, any Subsidiary or any Affiliate of the Company or affect in any manner the right of the Company, any Subsidiary or any Affiliate of the Company to terminate the employment or service of any person at any time without liability hereunder. 5.11 Rights as Stockholder. No person shall have any right as a stockholder of the Company with respect to any shares of Common Stock or other equity security of the Company which is subject to an award hereunder unless and until such person becomes a stockholder of record with respect to such shares of Common Stock or equity security. TABLE OF CONTENTS 5.12 Designation of Beneficiary. To the extent permitted by the Company, a holder of an award may file with the Company a written designation of one or more persons as such holder’s beneficiary or beneficiaries (both primary and contingent) in the event of the holder’s death or incapacity. To the extent an outstanding option or SAR granted hereunder is exercisable, such beneficiary or beneficiaries shall be entitled to exercise such option or SAR pursuant to procedures prescribed by the Company. Each beneficiary designation shall become effective only when filed in writing with the Company during the holder’s lifetime on a form prescribed by the Company. The spouse of a married holder domiciled in a community property jurisdiction shall join in any designation of a beneficiary other than such spouse. The filing with the Company of a new beneficiary designation shall cancel all previously filed beneficiary designations. If a holder fails to designate a beneficiary, or if all designated beneficiaries of a holder predecease the holder, then each outstanding award held by such holder, to the extent vested or exercisable, shall be payable to or may be exercised by such holder’s executor, administrator, legal representative or similar person. 5.13 Governing Law.This Plan, each award hereunder and the related Agreement, and all determinations made and actions taken pursuant thereto, to the extent not otherwise governed by the Code or the laws of the United States, shall be governed by the laws of the State of Delaware and construed in accordance therewith without giving effect to principles of conflicts of laws. 5.14 Foreign Employees. Without amending this Plan, the Committee may grant awards to eligible persons who are foreign nationals and/or reside outside the U.S. on such terms and conditions different from those specified in this Plan as may in the judgment of the Committee be necessary or desirable to foster and promote achievement of the purposes of this Plan and, in furtherance of such purposes the Committee may make such modifications, amendments, procedures, subplans and the like as may be necessary or advisable to comply with provisions of laws in other countries or jurisdictions in which the Company or its Subsidiaries operates or has employees. 5.15 Awards Subject to Clawback. The awards granted under this Plan and any cash payment or shares of Common Stock delivered pursuant to an award are subject to forfeiture, recovery by the Company or other action pursuant to the applicable Agreement or any clawback or recoupment policy which the Company may adopt from time to time, including, without limitation, the SWM International, Inc. Executive Compensation Adjustment and Recovery Policy, the Mativ Holdings, Inc. Clawback Policy and any other policy which the Company may be required to adopt under the Dodd-Frank Wall Street Reform and Consumer Protection Act and implementing rules and regulations thereunder, or as otherwise required by law or applicable listing standards. 0001000623 6 2022-01-01 2022-12-315 2023-01-01 2023-12-31 | 
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