As has been our practice, we do not currently have employment agreements with any of our executive officers. From time to time, however, we have entered into severance agreements with certain of our executive officers to ensure that we will have the executive officer’s continued dedicated service notwithstanding the possibility, threat or occurrence of a change in control.
Tredegar places a strong emphasis on equity ownership by executive officers and other members of senior management to strengthen the alignment of our executives’ interests with shareholder long-term interests. Our Chief Executive OfficerCEO is required to acquire and maintain ownership of common stock with a value equal to five times his base salary. Our other executive officers are required to acquire and maintain ownership of common stock with a value equal to 1.25 times their base salary. The following types of common stock are counted toward the ownership total: shares held outright by the executive or his or her family, in trust for the benefit of the executive, in the executive’s 401(k) Plan, and restricted stock held by the executive (both vested and nonvested). If a participant is newly hired or promoted, the executive is to acquire 50% of the target ownership within three years of the date of hire or promotion and full compliance with the target ownership must be achieved within six years. All NEOs and other employees covered by the policy who are not in compliance with the policy must retain at least 50% of any net shares (shares remaining after shares are sold or netted to pay applicable withholding taxes) received upon vesting of Performance Units and restricted stock awards until the NEO or other employee is in compliance with the policy. The Committee reviews the holdings of our NEOs annually. As of December 31, 2017,2019, all of our NEOs have satisfied the full stock ownership requirement, except Mr. Gottwald met his ownership target in accordance with the policy. Mr. Edwards has met the 50% requirementSteitz, who was elected President and CEO during 2019 and has until 2021 to meet the 100% requirement. Mr. Schewel has until 2019 to meet the 50% requirement and until 2022 to meetsatisfy the 100%three-year, 50% requirement. Mr. Giancaspro has retired from Tredegar and is no longer subject to the policy.
The Board, based on the Committee’s recommendation, approved and adopted an Executive Incentive-Based Compensation Recoupment Policy (Recoupment Policy), effective as of August 2, 2012 (Effective Date). The purpose of the Recoupment Policy is to (i) prevent the unjust enrichment of current or former executive officers by permitting Tredegar to recover incentive-based compensation that was paid or issued or became vested as a result of financial results that were later determined to be incorrect, and (ii) mitigate the risk of manipulation of data used to determine the payment, issuance or vesting of incentive-based compensation. The Recoupment Policy applies to all incentive-based compensation granted on or after the Effective Date to current or former executive officers of Tredegar. The Recoupment Policy applies if (a) Tredegar is required to prepare an accounting restatement of its consolidated financial statements due to the material noncompliance by Tredegar with any financial reporting requirement under the U.S. federal securities laws, and (b) a current or former executive officer of Tredegar received incentive-based compensation in excess of the amount of cash or the number of shares of Tredegar common stock that such executive officer would otherwise have received or that would have become vested if the restated financial statements had been used to determine whether such incentive-based compensation should have been received or vested. In these cases, Tredegar will recover from such current or former executive officer the amount of cash or shares that were paid or issued in excess of the amount of cash or shares that would have been paid or issued or have become vested according to the restated financial statements, net of any income or employment taxes paid by the current or former executive officer on the incentive-based compensation.
The Executive Compensation Committee has the overall responsibility of evaluating the performance and determining the compensation of the Chief Executive Officer and approving the compensation structure for Tredegar’s other executive officers. In fulfilling its responsibilities, the Committee has reviewed and discussed the Compensation Discussion and Analysis section of this proxy statement with management. Based on such review and discussion, the Committee recommended to the Board that the Compensation Discussion and Analysis section be included in this proxy statement.
George C. Freeman, III, Chairman
Kenneth R. Newsome
The following table presents information regarding grants of plan-based awards to our NEOs during the fiscal year ended December 31, 2017.2019.
| (1) | Represents the annual incentive opportunities under the 20172019 Cash Incentive Plan. The actual amount paid to each NEO under the 20172019 Cash Incentive Plan is included under “Summary Compensation Table – Non-Equity Incentive Plan Compensation” beginning on page 29 31 of this proxy statement. Mr.Messrs. Steitz and Gottwald askeddid not to participate in the 20172019 Cash Incentive Plan. |
| (2) | Represents Performance Units granted in 2017.2019. Under ASC Topic 718, it was assumed that the Performance Units granted will vest at the target level based upon the information available at the date of grant. See “Compensation Discussion and Analysis – Long-Term Incentives – 20172019 Performance Units” beginning on page 24 26 of this proxy statement for additional information, including the vesting criteria associated with the Performance Units. Mr.Messrs. Steitz and Gottwald asked not to participate in the 2017 long-term incentive plan and did not receive a grantgrants of Performance Units. |
| (3) | Represents restricted stock awards granted in 2017.2019. Mr. Gottwald asked not to participate in the 2017 long-term incentive plan and did not receive a grant of restricted stock. |
| (4) | Represents stock options granted in 2017. Mr. Gottwald asked not to participate in the 2017 long-term incentive plan and did not receive a grant of stock options.2019. |
Outstanding Equity Awards At Fiscal Year-End
The following table presents information regarding the number and value of stock option awards and stock awards for our NEOs outstanding as of the fiscal year ended December 31, 2017.2019.
| | Option Awards | | Stock Awards | |
Name | | Number of Securities Underlying Unexercised Options | | | | Number of Securities Underlying Unexercised Options | | | | Option Exercise Price(1) | | 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 | | | 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 | |
| | (#) Exercisable | | | | (#) Unexercisable | | | | ($) | | | | | (#) |
| | | ($) | | | | (#) |
| | | ($) | |
John M. Steitz | | | -0- | | | | | 273,057 | | (2) | | | 18.48 | | 3/21/2024 | | | -0- | | | | | -0- | | | | 27,306 | | (10) | | | 610,289 | |
John D. Gottwald | | | -0- | | | | | 361,011 | | (3) | | | 19.35 | | 5/7/2025 | | | -0- | | | | | -0- | | | | -0- | | | | | -0- | |
| | | -0- | | | | | 386,026 | | (4) | | | 18.48 | | 3/21/2026 | | | -0- | | | | | -0- | | | | -0- | | | | | -0- | |
D. Andrew Edwards | | | 39,572 | | (5) | | | -0- | | | | | 15.65 | | 5/22/2024 | | | 6,528 | | (7) | | | 145,901 | | | | 6,146 | | (11) | | | 137,363 | |
| | | -0- | | | | | 16,488 | | (6) | | | 15.65 | | 5/22/2024 | | | 9,386 | | (8) | | | 209,777 | | | | 8,636 | | (12) | | | 193,015 | |
| | | -0- | | | | | 34,358 | | (3) | | | 19.35 | | 5/7/2025 | | | 9,219 | | (9) | | | 206,045 | | | | 8,514 | | (10) | | | 190,288 | |
| | | -0- | | | | | 37,841 | | (4) | | | 18.48 | | 3/21/2026 | | | | | | | | | | | | | | | | | | |
Michael J. Schewel | | | 34,390 | | (5) | | | -0- | | | | | 15.65 | | 5/22/2024 | | | 5,674 | | (7) | | | 126,814 | | | | 5,341 | | (11) | | | 119,371 | |
| | | -0- | | | | | 15,632 | | (6) | | | 15.65 | | 5/22/2024 | | | 8,157 | | (8) | | | 182,309 | | | | 7,505 | | (12) | | | 167,737 | |
| | | -0- | | | | | 29,859 | | (3) | | | 19.35 | | 5/7/2025 | | | 8,012 | | (9) | | | 179,068 | | | | 7,399 | | (10) | | | 165,368 | |
| | | -0- | | | | | 32,886 | | (4) | | | 18.48 | | 3/21/2026 | | | | | | | | | | | | | | | | | | |
| | Option Awards | | | Stock Awards | |
Name | | Number of Securities Underlying Unexercised Options | | | Number of Securities Underlying Unexercised Options | | | | Option Exercise Price(1) | | | 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 | | | 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 | |
| | (#) Exercisable | | | (#) Unexercisable | | | | ($) | | | | | | (#) | | | | ($) | | | (#) | | | | ($) | |
John D. Gottwald | | | -0- | | | | -0- | | | | | - | | | - | | | | -0- | | | | | -0- | | | | -0- | | | | | -0- | |
D. Andrew Edwards | | | -0- | | | | 39,572 | | (2) | | | 15.65 | | | 5/22/2024 | | | | 15,230 | | (4) | | | 292,416 | | | | 4,825 | | (7) | | | 92,640 | |
| | | -0- | | | | 16,488 | | (3) | | | 15.65 | | | 5/22/2024 | | | | 30,965 | | (5) | | | 594,528 | | | | 9,233 | | (8) | | | 177,274 | |
| | | | | | | | | | | | | | | | | | | 6,528 | | (6) | | | 125,338 | | | | 6,146 | | (9) | | | 118,003 | |
Michael J. Schewel | | | -0- | | | | 34,390 | | (2) | | | 15.65 | | | 5/22/2024 | | | | 13,339 | | (5) | | | 256,109 | | | | 4,087 | | (8) | | | 78,470 | |
| | | -0- | | | | 15,632 | | (3) | | | 15.65 | | | 5/22/2024 | | | | 5,674 | | (6) | | | 108,941 | | | | 5,341 | | (9) | | | 102,547 | |
Michael W. Giancaspro | | | -0- | | | | 31,563 | | (2) | | | 15.65 | | | 5/22/2024 | | | | 24,698 | | (5) | | | 474,202 | | | | 7,364 | | (8) | | | 141,389 | |
| | | -0- | | | | 14,347 | | (3) | | | 15.65 | | | 5/22/2024 | | | | 5,207 | | (6) | | | 99,974 | | | | 4,902 | | (9) | | | 94,118 | |
| (1) | In accordance with the Tredegar Corporation Amended and Restated 2004 Plan and the 2018 Plan, the per share exercise price for the stock options was not less than the fair market value of the shares of Tredegar common stock on the date of the grant of the option, as determined by the closing price as reported on the NYSE on that date. |
| (2) | The stock options become exercisable on March 21, 2022. |
| (3) | The stock options become exercisable on May 22, 2019. With respect to Mr. Giancaspro, he retired from Tredegar effective as of January 15, 2018, at which time these stock options immediately vested, as approved by the Committee.7, 2020. |
| (3)(4) | The stock options become exercisable on March 21, 2021. |
| (5) | The stock options became exercisable on May 22, 2019. |
| (6) | The stock options become exercisable on May 22, 2020. With respect to Mr. Giancaspro, he retired from Tredegar effective as of January 15, 2018, at which time these stock options were forfeited. |
| (4)(7) | These Performance Units were tied to 2017 ROCE;2019 ROCE goals. Tredegar’s ROCE was between the performance criteria for 2017 were not satisfied;target and maximum levels; therefore, the following Performance Units contingent upon 2019 ROCE were not earned.earned by the NEOs and vested on February 27, 2020. |
Named Executive Officer | Performance Units Earned | Value ($) |
D. Andrew Edwards | 7,161 | 121,880 |
Michael J. Schewel | 6,224 | 105,932 |
The value of the Performance Units was based on the closing price of Tredegar common stock on February 27, 2020 ($17.02), the vesting date.
| (5)(8) | These Performance Units are tied to 20182020 ROCE; if the performance criteria for 20182020 are satisfied, the shares will be earned by the NEO and will vest onno later than March 15, 2019. With respect to Mr. Giancaspro, he retired from Tredegar effective as of January 15, 2018, at which time his Performance Units were forfeited.2021. |
| (6)(9) | These Performance Units are tied to 20192021 ROCE; if the performance criteria for 20192021 are satisfied, the shares will be earned by the NEO and will vest onno later than March 15, 2020. With respect to Mr. Giancaspro, he retired from Tredegar effective as of January 15, 2018, at which time his Performance Units were forfeited.2022. |
| (7)(10) | The shares of restricted Tredegar common stock will vest on July 20, 2018.March 21, 2022. |
| (8)(11) | The shares of restricted Tredegar common stock vested on February 27, 2020. |
| (12) | The shares of restricted Tredegar common stock will vest on February 25, 2019. With respect to Mr. Giancaspro, he retired from Tredegar effective as of January 15, 2018, at which time these shares of restricted stock immediately vested, as approved by the Committee. |
26, 2021.
| (9) | The shares of restricted Tredegar common stock will vest on February 27, 2020. With respect to Mr. Giancaspro, he retired from Tredegar effective as of January 15, 2018, at which time these shares of restricted stock immediately vested, as approved by the Committee. |
Option Exercises and Stock Vested
The following table presents information concerning the exercise of stock options and vesting of stock (including restricted stock and Performance Units) for our NEOs during the fiscal year ended December 31, 2017.2019.
Option Exercises and Stock Vested
| Option Awards | Stock Awards |
Name | Number of Shares Acquired on Exercise | Value Realized on Exercise | Number of Shares Acquired on Vesting | Value Realized on Vesting |
| (#) | ($) | (#) | ($) |
John M. Steitz | -0- | -0- | -0- | -0- |
John D. Gottwald | -0- | -0- | -0- | -0- |
D. Andrew Edwards | -0- | -0- | 32,148 | 552,641 |
Michael J. Schewel | -0- | -0- | 13,958 | 239,360 |
| Option Awards | Stock Awards |
Name
| Number of Shares Acquired on Exercise | Value Realized on Exercise | Number of Shares Acquired on Vesting | Value Realized on Vesting |
| (#) | ($) | (#) | ($) |
John D. Gottwald | -0- | -0- | -0- | -0- |
D. Andrew Edwards | -0- | -0- | -0- | -0- |
Michael J. Schewel | -0- | -0- | -0- | -0- |
Michael W. Giancaspro(1) | -0- | -0- | -0- | -0- |
| (1) | Mr. Giancaspro retired from Tredegar effective as of January 15, 2018. As approved by the Committee, all 12,266 shares of restricted stock immediately vested upon his retirement ($244,707 value realized upon vesting). |
Pension Benefits
The following table presents information as of December 31, 2017,2019, concerning each of our defined benefit plans that provide for payments or other benefits to our NEOs at, following or in connection with retirement. Mr.Messrs. Steitz and Schewel isare not eligible to participate in the Pension Plan.
Name | Plan Name | Number of Years Credited Service | Present Value of Accumulated Benefit (1) | Payments During Last Fiscal Year |
| | (#) | ($) | ($) |
John D. Gottwald | Pension Plan | 32.10 | 1,817,845 | 101,513 |
D. Andrew Edwards | Pension Plan | 18 | 825,774 | -0- |
Name | Plan Name | Number of Years Credited Service | Present Value of Accumulated Benefit (1) | Payments During Last Fiscal Year |
| | (#) | ($) | ($) |
John D. Gottwald | Pension Plan | 31.10 | 1,950,329 | 54,922 |
D. Andrew Edwards | Pension Plan | 17 | 766,030 | -0- |
Michael W. Giancaspro | Pension Plan | 22.14 | 1,005,034 | 6,232 |
| (1) | For purposes of computing the actuarial present value of the accrued benefit payable to the NEOs, we have used the following assumptions: |
| 12/31/20152017 | 12/31/20162018 | 12/31/20172019 |
Discount Rate | 4.55% (Pension Plan)
4.26% (Restoration Plan)
| 4.29% (Pension Plan)
4.01% (Restoration Plan)
| 3.72% (Pension Plan) 3.56% (Restoration Plan) | 4.40% (Pension Plan) 4.23% (Restoration Plan) | 3.27% (Pension Plan) 3.06% (Restoration Plan) |
Mortality Table | RP-2014 Healthy Annuitant Mortality Table, adjusted with Scale MP-2015MP-2017 | RP-2014 Healthy Annuitant Mortality Table, adjusted with Scale MP-2016MP-2018 | RP-2014 Healthy AnnuitantPri-2012 Retiree Mortality Table, adjusted withprojected using Scale MP-2017 MP-2019 |
Retirement Age | Age 60, or current age, if older |
Preretirement Decrements | None |
Payment Option | Single life annuity with five years of benefits guaranteed |
Pension Plan
The Pension Plan is a defined benefit pension plan applicable generally to salaried, full-time employees who are not covered by a collective bargaining agreement. Of our NEOs, only Messrs. Gottwald Edwards and GiancasproEdwards participate in the Pension Plan.
The Pension Plan assumes a normal retirement age of 65 and does not impose a vested service requirement as a condition to paying benefits to a participant who retires upon reaching that age. In most other cases involving a separation of service from Tredegar before age 65, a participant must have accrued at least five years of pension vesting service, as defined in the Pension Plan, in order to be entitled to receive any benefits under the Pension Plan. The Pension Plan, however, allows participants who reach the age of 55 and have accrued at least ten years of pension vesting service to elect early retirement. As of December 31, 2017,2019, our NEOs eligible to participate in the Pension Plan had accrued the following number of pension vesting service years under the Pension Plan for their service through December 31, 2017:2019:
Name | Vesting Years |
John D. Gottwald | 3537 |
D. Andrew Edwards | 20 |
Michael W. Giancaspro | 2322 |
A participant who retires at age 65 or later, with certain exceptions, is entitled to a monthly benefit paid as a single life annuity with five years of guaranteed payments. The monthly payment equals 1/12th of the sum of: (i) 1.1% of his or her final average pay (which is calculated and frozen as of December 31, 2007 and determined by averaging the participant’s base salary plus 50% of incentive bonuses for his three consecutive highest paid years in the ten-year period preceding January 1, 2008) multiplied by the number of years of pension benefit service he has accrued; and (ii) 0.4% of his final average pay in excess of the participant’s 2007 social security covered compensation, multiplied by his years of pension benefit service.
For a participant who retires prior to age 65, the amount of his retirement benefit is reduced by 7/12 of 1% for each calendar month, up to a maximum of 60 months, if the benefit is started prior to age 60.
In accordance with the provision in the Pension Plan allowing us to amend, modify or terminate it at any time, effective January 1, 2007, we closed the Pension Plan to new participants and froze the pay and covered compensation used to compute benefits for existing participants as of December 31, 2007. Effective February 28, 2014, service accrual for all participants in the Pension Plan was frozen (other than participants who are part of a collective bargaining agreement)agreement, whose service accrual was frozen.frozen upon the execution of a new collective bargaining agreement, resulting in all service accruals being frozen effective January 31, 2018).
Nonqualified Deferred Compensation
The following table presents information concerning the Savings Plan Benefit Restoration Plan for Employees of Tredegar Corporation, which is a defined contribution plan that provides for the deferral of compensation of our NEOs on a basis that is not tax qualified.
Name | Registrant Contributions in Last FY(1) | Aggregate Earnings in Last FY | Aggregate Withdrawals/ Distributions | Aggregate Balance at Last FYE(2) |
| ($) | ($) | ($) | ($) |
John M. Steitz | -0- | -0- | -0- | -0- |
John D. Gottwald | -0- | -0- | -0- | -0- |
D. Andrew Edwards | 12,180 | 13,210 | -0- | 52,407 |
Michael J. Schewel | 6,031 | 3,775 | -0- | 17,972 |
Name | Registrant Contributions in Last FY(1) | Aggregate Earnings in Last FY | Aggregate Withdrawals/ Distributions | Aggregate Balance at Last FYE(2) |
| ($) | ($) | ($) | ($) |
John D. Gottwald | 6,442 | (1,481) | -0- | 12,592 |
D. Andrew Edwards | 10,874 | (1,355) | -0- | 21,246 |
Michael J. Schewel | 4,130 | (17) | -0- | 4,114 |
Michael W. Giancaspro | 3,877 | (44) | -0- | 3,832 |
| (1) | These amounts represent the sum of the amounts included in Note (5) to the Summary Compensation Table beginning on page 29 31 of this proxy statement under the columns “Matching Contributions under the Tredegar Corporation Savings Plan Benefit Restoration Plan” and “Dividends on Shares in the Tredegar Corporation Savings Plan Benefit Restoration Plan.” |
| (2) | These amounts include the following amounts that were previously reported as compensation in the Summary Compensation Table of our 2017 proxy statement:Table: |
Name | Matching Contributions under the Savings Plan Benefit Restoration Plan($) | Dividends on Shares in the Savings Plan Benefit Restoration Plan($) | Total($) |
John M. Steitz | -0- | -0- | -0- |
John D. Gottwald | -0- | 348 | 348 |
D. Andrew Edwards | 11,370 | 810 | 12,180 |
Michael J. Schewel | 5,797 | 234 | 6,031 |
Name | Matching Contributions under the Tredegar Corporation Savings Plan Benefit Restoration Plan($) | Dividends on Shares in the Tredegar Corporation Savings Plan Benefit Restoration Plan($) | Total($) |
John D. Gottwald | 6,300 | 142 | 6,442 |
D. Andrew Edwards | 10,626 | 248 | 10,874 |
Michael J. Schewel | 4,128 | 2 | 4,130 |
Michael W. Giancaspro | 3,877 | -0- | 3,877 |
Because of Internal Revenue Code limitations on the matching contributions we are entitled to make on behalf of highly-compensated employees to Tredegar’s 401(k) Plan, we adopted the SPBR Plan under which we credit the matching contribution we would have been able to make to the 401(k) Plan, but for the Internal Revenue Code limitations, to an account representing the employee’s interest in the SPBR Plan for each payroll period. Every employee who qualifies as “highly-compensated” under the Internal Revenue Code becomes a member of the SPBR Plan as of the date his or her contributions to the 401(k) Plan are limited by IRS regulations.
Our contributions to the SPBR Plan are converted to phantom shares of Tredegar common stock based on the fair market value at the end of the month in which the contributions are credited. Contributions to the SPBR Plan either match those that could not be made to the 401(k) Plan because of Internal Revenue Code limitations or are dividends on shares of stock already credited to the participant.
The value of an account at any given time is based upon the fair market value of Tredegar common stock. The fair market value of Tredegar common stock was $19.20$22.35 on December 29, 2017, the last trading day before December 31, 2017.2019. We reserve the right to terminate or amend the SPBR Plan at any time.
A participant in the SPBR Plan becomes 100% vested in his or her benefit under the Plan if he or she works at least one hour on or after January 1, 2008.
Other Potential Payments Upon Termination or a Change in Control
Equity Incentive Plans
Grants under the Amended and Restated 2004 Equity Incentive Plan. Under the 2004 Plan, Performance Units, shares of restricted Tredegar common stock and stock options granted vest immediately upon the NEO’s death, termination of employment due to disability, a change of control of Tredegar, or retirement (except in the case of the Performance Units and provided that the NEO has reached 65 years of age).
The 2004 Plan generally provides that a change in control occurs if (1) a person (or a group of persons) becomes the owner of 50% or more of our voting securities, (2) there is a substantial change in the composition of our Board, (3) there is a business combination in which our shareholders own 80% or less of the surviving entity or (4) our shareholders approve a liquidation or dissolution of Tredegar or the sale of all or substantially all of Tredegar’s assets.
The table included below assumes a change in control occurred on December 31, 2017 and provides the value that our NEOs could have realized from the equity awards held as of December 31, 2017, based on the closing price of shares of Tredegar common stock on the NYSE on December 29, 2017, the last trading day before December 31, 2017, which was $19.20.
Name | | Equity Awards (#) | | | Exercise Price ($/Sh) | | | Value upon Change of Control ($) | |
John D. Gottwald | | | - | | | | - | | | | - | |
D. Andrew Edwards | | | 4,825 | | | | - | | | | 92,640 | |
| | | 15,230 | | | | - | | | | 292,416 | |
| | | 9,233 | | | | - | | | | 177,274 | |
| | | 30,965 | | | | - | | | | 594,528 | |
| | | 6,146 | | | | - | | | | 118,003 | |
| | | 6,528 | | | | - | | | | 125,338 | |
| | | 39,572 | | | | 15.25 | | | | 156,309 | |
| | | 16,488 | | | | 15.25 | | | | 65,128 | |
| | | | | | | | | | | 1,621,635 | |
| | | | | | | | | | | | |
Michael J. Schewel | | | 4,087 | | | | - | | | | 78,470 | |
| | | 13,339 | | | | - | | | | 256,109 | |
| | | 5,341 | | | | - | | | | 102,547 | |
| | | 5,674 | | | | - | | | | 108,941 | |
| | | 34,390 | | | | 15.25 | | | | 135,841 | |
| | | 15,632 | | | | 15.25 | | | | 61,746 | |
| | | | | | | | | | | 743,654 | |
| | | | | | | | | | | | |
Michael W. Giancaspro | | | 7,364 | | | | - | | | | 141,389 | |
| | | 24,698 | | | | - | | | | 474,202 | |
| | | 4,902 | | | | - | | | | 94,118 | |
| | | 5,207 | | | | - | | | | 99,974 | |
| | | 31,563 | | | | 15.25 | | | | 124,674 | |
| | | 14,347 | | | | 15.25 | | | | 56,671 | |
| | | | | | | | | | | 991,028 | |
Severance Agreements
Agreement with D. Andrew Edwards
On June 25, 2015, we entered into a Severance Agreement with Mr. Edwards, to be effective as of the first day of Mr. Edwards’ employment, which was July 20, 2015, which agreement was subsequently amended by the First Amendment to Severance Agreement dated February 25, 2016 (the Edwards Severance Agreement). The Edwards Severance Agreement provides that Mr. Edwards will be entitled to a lump sum severance payment from us in an amount equal to (i) one and one-half times his base salary and (ii) accrued and unused vacation, if, beginning on the first day of employment and ending upon the earlier of (a) February 25, 2019 and (b) the first anniversary of the date (after February 26, 2016) that Mr. Gottwald is not our Chief Executive Officer, Mr. Edwards is terminated without cause (as defined in the Edwards Severance Agreement), or he resigns with good reason (as defined in the Edwards Severance Agreement).
The Edwards Severance Agreement includes provisions regarding the 4,825 shares of restricted stock granted to him on his first day of employment, which become vested on July 20, 2018 solely on account of his continued employment.
In addition, in consideration of our agreement to pay benefits in accordance with the terms of the Edwards Severance Agreement, Mr. Edwards covenants that during his employment with us or an affiliate and for a period of two years following the date of his separation from service (as defined in the Edwards Severance Agreement), Mr. Edwards will not directly or indirectly render any services for a competitor that are substantially similar to those he provided to us or an affiliate, and will not solicit or attempt to solicit, in whole or in part, or do business with any customer for the purpose of providing products that are in competition with products provided by us or any affiliate at the time of his separation from service. Mr. Edwards also covenants that during his employment with us or an affiliate and for a period of one year following the date of his separation from service, he will not directly or indirectly offer employment to, hire, solicit, or cause to be solicited or recruited, any employee of Tredegar or any of our affiliates for the purpose of having such employee terminate his or her employment with us or any affiliate.
Agreement with Michael J. Schewel
On May 9, 2016, we entered into a Severance Agreement with Mr. Schewel (the Schewel Severance Agreement). The Schewel Severance Agreement provides that Mr. Schewel will be entitled to a lump sum severance payment from us in an amount equal to (i) one and one-half times his base salary and (ii) accrued and unused vacation, if, beginning on the first day of employment and ending upon the earlier of (a) May 9, 2019 and (b) the first anniversary of the date that Mr. Gottwald is not our Chief Executive Officer, Mr. Schewel is terminated without cause (as defined in the Schewel Severance Agreement), or he resigns with good reason (as defined in the Schewel Severance Agreement).
The Schewel Severance Agreement includes provisions regarding the 4,087 shares of restricted stock granted to him on his first day of employment, which become vested on February 25, 2019 solely on account of his continued employment.
In addition, in consideration of our agreement to pay benefits in accordance with the terms of the Schewel Severance Agreement, Mr. Schewel covenants that during his employment with us or an affiliate and for a period of two years following the date of his separation from service (as defined in the Schewel Severance Agreement), Mr. Schewel will not directly or indirectly render any services for a competitor that are substantially similar to those he provided to us or an affiliate, and will not solicit or attempt to solicit, in whole or in part, or do business with any customer for the purpose of providing products that are in competition with products provided by us or any affiliate at the time of his separation from service. Mr. Schewel also covenants that during his employment with us or an affiliate and for a period of one year following the date of his separation from service, he will not directly or indirectly offer employment to, hire, solicit, or cause to be solicited or recruited, any employee of Tredegar or any of our affiliates for the purpose of having such employee terminate his or her employment with us or any affiliate.
SPBR Plan
Retirement. If an NEO retires from Tredegar, he will be entitled to receive the total value of his interest in the SPBR Plan as of the last business day of the month in which his benefit under the 401(k) Plan is distributed, subject to Internal Revenue Code Section 409A.
Termination. If the NEO’s employment with us ends due to termination, he will be entitled to receive the value of his vested benefit in the SPBR Plan as of the last business day of the month in which he receives his vested benefit under the 401(k) Plan, subject to Internal Revenue Code Section 409A.
Disability. If the NEO separates from service due to a disability, he will be entitled to receive the total value of his interest in the SPBR Plan as of the last business day of the month in which his benefit under the 401(k) Plan is distributed, subject to Internal Revenue Code Section 409A.
Death. If the NEO dies while employed by us, his beneficiary will be entitled to receive the total value of his interest in the SPBR Plan as of the last business day of the month in which the NEO’s benefit under the 401(k) Plan is distributed, subject to Internal Revenue Code Section 409A.
The table included below provides information with respect to the benefits we would have had to pay to our NEOs assuming any of the events described above had occurred on December 31, 2017.2019.
Name | Payment on Retirement($)(1) | Payment on Termination($)(1) | Payment on Death or Disability($)(1) |
John M. Steitz | -0- | -0- | -0- |
John D. Gottwald | -0- | -0- | -0- |
D. Andrew Edwards | 52,407 | 52,407 | 52,407 |
Michael J. Schewel | 17,972 | 17,972 | 17,972 |
Name | Payment on Retirement($)(1) | Payment on Termination($)(1) | Payment on Death($)(1) |
John D. Gottwald | 12,592 | 12,592 | 12,592 |
D. Andrew Edwards | 21,246 | 21,246 | 21,246 |
Michael J. Schewel | 4,114 | 4,114 | 4,114 |
Michael W. Giancaspro | 3,832 | 3,832 | 3,832 |
| (1) | Under the terms of the SPBR Plan, if any of these events occurred on December 31, 2017,2019, the earliest payment date would be January 30, 20182020 and the amount payable would be based on the closing price of Tredegar common stock on the NYSE on January 30, 2018,2020, the date of payment. In addition, the SPBR Plan provides that payment for a portion of the shares of Tredegar common stock held in a participant’s account would be withheld for six months and the payment would be based on the closing price of Tredegar common stock on the NYSE on the date of payment. The amounts set forth above assume that the total payment was made on December 31, 20172019 based on the closing price of Tredegar common stock on the NYSE on December 29, 2017, the last trading day before December 31, 2017,2019, which was $19.20.$22.35. |
Other Potential Payments Upon Termination or a Change in Control
Equity Incentive Plans
Grants under the Amended and Restated 2004 Equity Incentive Plan and the 2018 Equity Incentive Plan. Under the 2004 Plan and the 2018 Plan, Performance Units, shares of restricted Tredegar common stock and stock options granted vest immediately upon the NEO’s death, termination of employment due to disability, a change of control of Tredegar, or retirement (except in the case of the Performance Units and provided that the NEO has reached 65 years of age). The 2004 Plan and the 2018 Plan generally provide that a change in control occurs if (1) a person (or a group of persons) becomes the owner of 50% or more of our voting securities, (2) there is a substantial change in the composition of our Board, (3) there is a business combination in which our shareholders own 80% or less of the surviving entity or (4) our shareholders approve a liquidation or dissolution of Tredegar or the sale of all or substantially all of Tredegar’s assets.
The table included below assumes a change in control occurred on December 31, 2019 and provides the value that our NEOs would have realized from the equity awards held as of December 31, 2019, based on the closing price of Tredegar common stock on December 31, 2019, which was $22.35.
Name | | Equity Awards (#) | | | Exercise Price ($/Sh) | | | Value upon Change of Control ($) | |
John M. Steitz | | | 27,306 | | | | - | | | | 610,289 | |
| | | 273,057 | | | | 18.48 | | | | 1,056,731 | |
| | | | | | | | | | | 1,667,020 | |
| | | | | | | | | | | | |
John D. Gottwald | | | 361,011 | | | | 19.35 | | | | 1,083,033 | |
| | | 386,026 | | | | 18.48 | | | | 1,493,921 | |
| | | | | | | | | | | 2,576,954 | |
| | | | | | | | | | | | |
D. Andrew Edwards | | | 6,146 | | | | - | | | | 137,363 | |
| | | 6,528 | | | | - | | | | 145,901 | |
| | | 39,572 | | | | 15.65 | | | | 265,132 | |
| | | 16,488 | | | | 15.65 | | | | 110,470 | |
| | | 8,636 | | | | - | | | | 193,015 | |
| | | 9,386 | | | | - | | | | 209,777 | |
| | | 34,358 | | | | 19.35 | | | | 103,074 | |
| | | 8,514 | | | | - | | | | 190,288 | |
| | | 9,219 | | | | - | | | | 206,045 | |
| | | 37,841 | | | | 18.48 | | | | 146,445 | |
| | | | | | | | | | | 1,707,509 | |
| | | | | | | | | | | | |
Michael J. Schewel | | | 5,341 | | | | - | | | | 119,371 | |
| | | 5,674 | | | | - | | | | 126,814 | |
| | | 34,390 | | | | 15.65 | | | | 230,413 | |
| | | 15,632 | | | | 15.65 | | | | 104,734 | |
| | | 7,505 | | | | - | | | | 167,737 | |
| | | 8,157 | | | | - | | | | 182,309 | |
| | | 29,859 | | | | 19.35 | | | | 89,577 | |
| | | 7,399 | | | | | | | | 165,368 | |
| | | 8,012 | | | | | | | | 179,068 | |
| | | 32,886 | | | | 18.48 | | | | 127,269 | |
| | | | | | | | | | | 1,492,660 | |
Pursuant to Item 402(u) of Regulation S-K, we are required to provide the following information with respect to fiscal year 2017:2019:
| · | The annual total compensation of the individual identified as the median compensated employee of Tredegar (other than Mr. Gottwald, our Chief Executive Officer) was $46,105; and |
The annual total compensation of the individual identified as the median compensated employee of Tredegar (other than Mr. Steitz, our CEO) was $60,138; and
| · | The annual total compensation of Mr. Gottwald, our Chief Executive Officer was $539,076. |
The annual total compensation of Mr. Steitz, our CEO, was $3,651,791.
Based on this information, the ratio of the annual total compensation of our Chief Executive OfficerCEO to our median compensated employee is 1260 to 1.
This pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules based on our payroll and employment records and the methodology described below. Because the SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.
We employed the following methodology, material assumptions, adjustments and estimates to identify the median compensated employee and determine such employee’s annual total compensation:
| ·• | Employee Population Measurement Date: We used The SEC rules permit companies to identify the median paid employee once every three years and simply recalculate total compensation for that employee in years two and three, provided there has been no change in the company’s employee population or compensation arrangements that significantly impacts the pay ratio disclosure. As we have had no such material changes in our organization during 2018 and 2019, we are using the same median employee we identified on December 31, 2017, as the date to determinewe determined our employee population. |
| ·• | Compensation Time Period: We measured compensation for the above employees using the 12-month period endingended December 31, 2017. |
| ·• | Consistently Applied Compensation Measure: To identify our median compensated employee (other than our CEO), we used employee salaries and bonuses. Compensation for full-time employees hired during fiscal year 2017 was annualized. For purposes of this disclosure, salaries and bonuses for employees located outside the United States were converted from local currency to U.S. dollars using the rate of exchange used in our 2017 Strategic Plan for that location. |
| ·• | Determining Median Compensated Employee’s Pay for CEO Ratio: With respect to our median compensated employee, we then identified and calculated the elements of such employee’s compensation for fiscal year 20172019 in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K (which are the same requirements we use to calculate our Chief Executive Officer’sCEO’s annual total compensation), resulting in annual total compensation of $46,105.$60,138. |
| ·• | Determining CEO’s Pay for CEO Ratio: With respect to the annual total compensation of our Chief Executive Officer,CEO, we used the amount reported in the “Total” column of the Summary Compensation tableTable included in this proxy statement. |
PROPOSAL 2:
APPROVAL OF TREDEGAR CORPORATION 2018 EQUITY INCENTIVE PLAN
Tredegar currently has in effect the Amended and Restated 2004 Equity Incentive Plan. The 2004 Plan was adopted by the Board in 2004 and amended from time to time thereafter and last approved by shareholders at the 2014 annual meeting of shareholders. The 2004 Plan authorized the issuance of up to 3,622,472 shares pursuant to awards granted under the 2004 Plan. As of February 1, 2018, 1,748,806 shares remained available for issuance under the 2004 Plan. However, the term of the 2004 Plan will end on March 27, 2019 and no additional awards can be granted under the 2004 Plan after that date.
The Board believes that the 2004 Plan has benefited Tredegar and promoted the retention and incentive objectives of the 2004 Plan. The Board also believes that Tredegar’s ability to grant equity and equity-based awards in the future is a significant element in Tredegar’s executive compensation program. In light of the 2019 expiration of the 2004 Plan, the Board proposes that the shareholders approve the Tredegar Corporation 2018 Equity Incentive Plan (the 2018 Plan). Upon shareholder approval of the 2018 Plan, no additional awards will be granted under the 2004 Plan.
The Board believes that the 2004 Plan has, and the 2018 Plan will, benefit Tredegar by (i) assisting in recruiting and retaining the services of individuals with high ability and initiative, (ii) providing appropriate incentives for employees and other individuals who provide valuable services to Tredegar and its subsidiaries and (iii) associating the interests of those persons with those of Tredegar and its shareholders.
The more significant features of the 2018 Plan are summarized below. The following summary is qualified in its entirety by reference to the 2018 Plan, a copy of which is attached as Annex A to this proxy statement.
Administration
The 2018 Plan is administered by the Executive Compensation Committee (the Committee). The Committee has the authority to select the individuals who will participate in the 2018 Plan (Participants) and to make awards upon such terms (not inconsistent with the terms of the 2018 Plan) as the Committee considers appropriate. The Committee has complete authority to interpret the provisions of the 2018 Plan, to prescribe the form of agreements evidencing awards and to make all determinations necessary or advisable for the administration of the 2018 Plan. Notwithstanding the preceding sentences, the Board administers the 2018 Plan with respect to awards that are made to directors who are not employees of Tredegar or one of its affiliates (Non-Employee Directors).
The Committee may delegate its authority to administer the 2018 Plan to the Executive Committee of the Board or to an officer of Tredegar. The Committee may not delegate its authority, however, with respect to individuals who are subject to Section 16 of the Exchange Act. This summary uses the term “Administrator” to refer to the Committee, any delegate of the Committee and, in the case of awards to Non-Employee Directors, the Board.
Eligibility
Any employee of Tredegar, any employee of any of its affiliates and any person who provides services to Tredegar or an affiliate (including members of the Board) are eligible to participate in the 2018 Plan if the Administrator determines that the individual has contributed significantly or can be expected to contribute significantly to the profits or growth of Tredegar or one of its affiliates. Tredegar is not able to estimate the number of individuals who may be selected by the Administrator to participate in the 2018 Plan or the type or size of awards that the Administrator will approve. Therefore, Tredegar cannot determine the benefits to be allocated to any individual or group of individuals. In recent years, approximately 45 employees participated in the 2004 Plan. Tredegar does not believe that the number of individuals who will be selected to participate under the 2018 Plan will differ materially from the number selected to participate under the 2004 Plan.
Awards
The 2018 Plan permits the grant of options, stock appreciation rights (SARs), stock awards and stock unit awards. As described below, the 2018 Plan includes annual limits on the awards that may be granted to a Participant in a calendar year. The annual limits described below do not apply to Non-Employee Director awards (which are subject to a separate aggregate annual limit). The 2018 Plan provides that a Non-Employee Director may not receive awards in any calendar year covering shares that have a fair market value on the date of the award in excess of $250,000.
As described below, the 2018 Plan provides that options and SARs generally will not become exercisable and stock awards and stock unit awards generally will not become vested before the first anniversary of the date the award is made. This limitation does not apply to awards made to Non-Employee Directors because the current compensation program for those individuals provides for quarterly equity awards as remuneration for services provided in the preceding calendar quarter.
Options. Options granted under the 2018 Plan may be incentive stock options (ISOs) or nonqualified stock options. A stock option entitles the holder to purchase shares of common stock from Tredegar at the option price. The option price will be fixed by the Administrator on the date the option is granted, but the price cannot be less than the shares’ fair market value on the date of grant. Except for adjustments related to stock dividends, stock splits, etc. (as described below), the exercise price of an outstanding option may not be reduced without shareholder approval. The option will be exercisable at the times and subject to the conditions prescribed by the Administrator. Except for options granted to Non-Employee Directors, options generally will not be exercisable before the first anniversary of the grant date. The option price may be paid in cash or a cash equivalent acceptable to the Administrator. If permitted by the terms of the option agreement, the option price also may be paid by the surrender of common stock or, if the option is not an ISO, in a “net exercise” (whereby the number of shares issuable upon exercise is reduced by the number of shares with a fair market value equal to the option price). The option term will be set by the Administrator but it cannot exceed ten years. The 2018 Plan provides that no Participant may be granted options in any calendar year for more than 450,000 shares.
SARs. The 2018 Plan also permits the grant of SARs. A stock appreciation right or SAR generally entitles the holder to receive a payment equal to the excess, if any, of the fair market value of the common stock on the date of exercise over the “initial value” of the SAR (the fair market value of the common stock on the date of grant). Except for adjustments related to stock dividends, stock splits, etc. (as described below), the initial value of a SAR may not be reduced without shareholder approval. The amount payable upon the exercise of a SAR may be settled in cash, with shares of Tredegar common stock or a combination of cash and common stock as the Administrator determines in its discretion. SARs may be exercised at such times and subject to such conditions as the Administrator may establish. Except for SARs granted to Non-Employee Directors, SARs generally will not be exercisable before the first anniversary of the grant date. The maximum term of a SAR is ten years. The 2018 Plan provides that no Participant may be granted SARs in any calendar year for more than 450,000 shares.
Stock Awards and Stock Units. The 2018 Plan permits the grant of stock awards and the grant of stock units. A “stock award” is an award of common stock. A “stock unit” is an award that allows the Participant to earn a benefit based on the fair market value of a share of common stock, which may be paid in cash or common stock. Stock awards and stock units may be nontransferable or subject to forfeiture or both unless and until conditions prescribed by the Administrator are satisfied. The conditions may include, for example, a requirement that the Participant complete a stated period of service or that certain performance objectives be achieved. The objectives may be based on performance goals that are stated with reference to the performance criteria described below. Except for stock awards and stock unit awards granted to Non-Employee Directors, stock awards and stock unit awards generally will not be vested and transferable before the first anniversary of the grant date. The 2018 Plan provides that no Participant may be granted stock awards and/or stock units in any calendar year covering more than 75,000 shares.
Performance Criteria. The Administrator may prescribe that stock awards and stock units will become vested or transferable or both only upon the satisfaction of performance objectives. The 2018 Plan provides that the performance objectives may be stated with reference to the fair market value of the common stock or on Tredegar’s, a subsidiary’s or an operating unit’s economic profit added, return on equity, earnings per share, total earnings, earnings growth, return on capital, return on assets or other measures prescribed by the Administrator.
Transferability
Awards under the 2018 Plan generally are nontransferable other than by will or the laws of descent and distribution. The Administrator may grant options (other than ISOs) and SARs that are transferable during the Participant’s lifetime to members of the Participant’s immediate family and trusts or partnerships of which those individuals are the only beneficiaries or partners.
Change in Control
The 2018 Plan provides that, except as prescribed by the award agreement, (i) all outstanding options and SARs will become vested and exercisable, (ii) all outstanding stock awards will become vested and transferable and (iii) all outstanding stock unit awards will be earned if there is a change in control of Tredegar. The 2018 Plan provides further that upon a change in control and regardless of whether the award becomes vested, the Committee may direct that (i) all outstanding awards will be cancelled in exchange for a payment (in cash, shares or the consideration received by shareholders in the transaction) equal to the value received by shareholders for a share of Tredegar common stock (in the case of stock awards and stock units) or any excess of the value received by shareholders over the option price or initial value (in the case of options and SARs) or (ii) outstanding awards will be assumed by the surviving entity or replaced with awards granted by the surviving entity.
Section 280G of the Internal Revenue Code applies to compensation that is payable on account of a change in control (parachute payments), which may include accelerated vesting of 2018 Plan awards if there is a change in control of Tredegar. If an individual’s parachute payments exceed a “safe harbor” amount (generally 2.99 times the individual’s average taxable compensation for the preceding five years), then the individual must pay a 20% excise tax on a portion of the parachute payments and Tredegar is not entitled to deduct a portion of the parachute payments. The 2018 Plan provides that each participant’s parachute payments, including those related to 2018 Plan awards, will be reduced to the maximum amount that can be paid without triggering liability for the excise tax and the loss of a deduction by Tredegar. The parachute payments will not be reduced, however, if the participant will realize a greater after-tax benefit by receiving all of the parachute payments and paying his or her own excise tax liability. If the individual receives all of the parachute payments and the parachute payments exceed the safe harbor amount, Tredegar will not be allowed to deduct a portion of the parachute payments received by the participant. However, the 2018 Plan further provides that if the terms of an agreement or another plan provide that an individual’s parachute payments cannot exceed the safe harbor amount, then the individual’s parachute payments will be reduced, if necessary, so that they do not exceed the safe harbor amount.
The 2018 Plan generally provides that a change in control occurs if a person (or a group of persons) becomes the owner of 50% or more of Tredegar’s voting securities, if there is a substantial change in the composition of the Board, if there is a business combination in which Tredegar’s shareholders own 80% or less of the surviving entity or if the shareholders approve a liquidation or dissolution of Tredegar or the sale of all or substantially all of Tredegar’s assets.
Share Authorization
A maximum of 2,000,000 shares may be issued under the 2018 Plan, an increase of 251,194 shares from the number of shares that remain available under the 2004 Plan. In determining the number of shares to include in the 2018 Plan, the Committee and the Board, in consultation with Pearl Meyer, the Committee’s independent executive compensation consultant, considered anticipated share usage over the next three to five years. The Committee and the Board also considered annual share burn rate and overhang relative to Tredegar’s peer companies (identified on page 19 of this proxy statement) and peers in other industry groups. Tredegar’s burn rate is below the competitive median, and the requested share authorization will position Tredegar’s total overhang below the median of its peers. The Committee and the Board believe the requested share authorization for the 2018 Plan will be sufficient to provide competitive equity grants to eligible employees over the next few years and will not be perceived by most shareholders as overly dilutive.
If, after the date shareholders approve the 2018 Plan, an award granted under the 2018 Plan or the 2004 Plan is terminated, forfeited, settled for cash or otherwise settled without the issuance of shares or for fewer shares than the number covered by the award (including the net exercise of an option), then the 2018 Plan’s aggregate share authorization will be increased by the number of terminated, forfeited or reduced shares. However, the 2018 Plan’s share authorization will not be increased by the number of shares that are tendered to pay an option exercise price or to satisfy tax withholding obligations with respect to awards granted under the 2018 Plan or the 2004 Plan. Notwithstanding the share reallocation provisions, no more than 2,000,000 shares may be issued upon the exercise of options granted under the 2018 Plan.
The share authorization, the limitation on the issuance of shares under options, the terms of outstanding awards and the individual grant limitations will be adjusted as the Committee determines is appropriate if we have a stock split, stock dividend, combination, reclassification of shares or similar change in our capitalization.
Shareholder Rights
A Participant will not have any rights as a shareholder with respect to an option until the option is exercised and shares are issued to the Participant. A Participant will not have any rights as a shareholder with respect to a SAR or stock unit award until, and then only to the extent that, the SAR or stock unit award is exercised or vests and is settled by the issuance of shares. The Administrator may provide that a stock unit award includes a dividend equivalent right that may be payable on a current or deferred basis. A Participant will have all the rights of a shareholder with respect to the shares covered by a stock award, including the right to vote the shares and to receive dividends (on a current or deferred basis as determined by the Administrator).
Amendment and Termination
The Board may terminate or suspend the 2018 Plan, in whole or in part, at any time. The Board also may amend the 2018 Plan, but the amendment must be approved by shareholders if the amendment (i) increases the number of shares that may be issued under the 2018 Plan (other than in connection with a stock split, stock dividend, etc. as described above), (ii) changes the requirements for participation in the 2018 Plan or (iii) modifies the 2018 Plan in any other way that would require shareholder approval under any applicable regulatory requirement, including the rules of the NYSE.
No awards may be granted under the 2018 Plan after February 20, 2028. Awards made before that date (or before the earlier termination of the 2018 Plan) will remain valid in accordance with their terms. No amendment of the 2018 Plan will adversely affect a Participant’s rights under an outstanding award without the Participant’s consent.
Federal Tax Consequences
Counsel advised us regarding the federal income tax consequences of the 2018 Plan. No income is recognized by a Participant at the time an option or SAR is granted. If the option is an ISO, no income will be recognized upon the Participant’s exercise of the option (although the exercise of an ISO may have alternative minimum tax consequences for the Participant). Income is recognized by a Participant when he or she disposes of shares acquired under an ISO. The exercise of a nonqualified stock option or SAR generally is a taxable event that requires the Participant to recognize, as ordinary income, the difference between the shares’ fair market value and the option price or the amount paid in settlement of the SAR.
Income is recognized on account of the grant of a stock award when the shares first become transferable or are no longer subject to a substantial risk of forfeiture. At that time the fair market value of the common stock is recognized as ordinary income.
No income is recognized upon the grant of a stock unit award. Ordinary income will be recognized on the date that payment is made under the stock unit award in an amount equal to the sum of any cash and the fair market value of any common stock paid to settle the stock unit award.
The employer (either Tredegar or a subsidiary) will be entitled to claim a federal income tax deduction on account of the exercise of a nonqualified stock option or SAR or the vesting of a stock award or the settlement of a stock unit award. The amount of the deduction is equal to the ordinary income recognized by the Participant. The employer will not be entitled to a federal income tax deduction on account of the grant or the exercise of an ISO. The employer may claim a federal income tax deduction on account of certain dispositions of shares acquired under an ISO.
Vote Required and Voting Recommendation
The 2018 Plan must be approved by the holders of a majority of the total votes cast on the 2018 Plan at the annual meeting. Under the rules of the NYSE, abstentions and broker non-votes will be counted as being entitled to vote on the proposal to approve the 2018 Plan. Abstentions will be treated as votes cast on this proposal but broker non-votes will not be treated as votes cast on this proposal. As a result, broker non-votes will have no effect on the proposal to approve the 2018 Plan. Abstentions will have the same effect as a vote against the proposal to approve the 2018 Plan.
Our Board recommends that you vote “FOR” this proposal.
PROPOSAL 3:
NON-BINDING ADVISORY VOTE ON EXECUTIVE COMPENSATION
As required by the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), Tredegar is providing its shareholders with the opportunity to cast a non-binding advisory vote on compensation paid by Tredegar to our NEOs. This non-binding advisory vote, which is commonly referred to as a “say-on-pay” vote, provides shareholders with the opportunity to express their views on the compensation paid by Tredegar to our NEOs. This vote is not intended to address any specific item of compensation, but rather the overall compensation paid by Tredegar to our NEOs as described in “Compensation Discussion and Analysis” beginning on page 16 of this proxy statement, the accompanying compensation tables, and the related narrative disclosure.
At our 2015 annual meeting, approximately 85% of the votes cast on the “say-on-pay” proposal were voted in favor of the proposal. The Executive Compensation Committee believes this affirms shareholders’ support of our approach to executive compensation.
As described in detail in our “Compensation Discussion and Analysis” beginning on page 16 of this proxy statement, our compensation programs are designed so that our executives are incentivized to achieve specific company performance goals and personal objectives that will build shareholder value over the long term without encouraging undue or unreasonable risk taking. The Executive Compensation Committee reviews our executive compensation programs annually to ensure they align executive compensation with the interests of our shareholders.
Our Board recommends that shareholders vote in favor of the following resolution:
“RESOLVED, that the compensation of Tredegar’s named executive officers as disclosed in the Proxy Statement for the 2018 Annual Meeting of Shareholders pursuant to the rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, the accompanying compensation tables and the related narrative disclosure is hereby approved.”
Although this vote is advisory and is not binding, the Board and the Executive Compensation Committee, which is comprised solely of independent directors, expect to take into account the outcome of the vote when considering future executive compensation decisions.
Tredegar currently intends to hold the next non-binding advisory vote to approve the compensation of our NEOs at our 2021 annual meeting of shareholders, unless our Board modifies its policy of holding this vote every three years, particularly after considering the results of the vote on Proposal 4.
Vote Required and Voting Recommendation
This proposal will be approved if the votes cast “FOR” exceed the votes cast “AGAINST.” Abstentions and broker non-votes will have no effect on the outcome.
Our Board recommends that you vote “FOR” this proposal.
PROPOSAL 4:
NON-BINDING ADVISORY VOTE ON THE FREQUENCY OF
THE VOTE ON EXECUTIVE COMPENSATION
The Dodd-Frank Act and related regulations provide shareholders with a non-binding advisory vote on whether future advisory votes to approve the compensation of our NEOs (commonly referred to as a “frequency” vote) should occur every one, two or three years. This frequency vote must occur at least once every six years. When this vote was first held at our annual meeting of shareholders on May 16, 2012, approximately 52% of the votes cast were cast in favor of conducting the “say-on-pay” vote every three years.
Regarding the frequency or say-when-on-pay vote, shareholders are able to choose among four options: holding the say-on-pay vote every one, two or three years, or abstaining.
The Board believes that the optimal interval for conducting the say-on-pay vote is every three years. Shareholders who have concerns about executive compensation during the interval between say-on-pay votes may bring their specific concerns to the attention of the Board and the Executive Compensation Committee through one of the means described under “Voting Instructions — How do I communicate with the Board of Directors?” on page 3 of this proxy statement.
Although this vote is advisory and is not binding, the Board and the Executive Compensation Committee will take into account the outcome of the vote when considering the frequency of future advisory votes on executive compensation.
Vote Required and Voting Recommendation
If none of the frequency options receive a majority of the votes cast, the option receiving the greatest number of votes will be considered the frequency recommended by shareholders. Abstentions and broker non-votes will have no effect on the outcome.
Our Board recommends that you vote for “EVERY THREE YEARS.”
REPORT OF THE AUDIT COMMITTEE
The Audit Committee assists the Board in fulfilling its oversight responsibilities relating to the accounting, reporting and financial practices of Tredegar by monitoring the quality and integrity of the financial statements, the financial reporting processes and the systems of internal accounting and financial controls of Tredegar. The Audit Committee operates under a written charter that has been adopted by Tredegar’s Board and is available on Tredegar’s website (www.tredegar.com) by selecting “Corporate Governance” under “Investors.” Management is responsible for the preparation of Tredegar’s financial statements, for establishing and maintaining an adequate system of internal control over financial reporting, and for assessing the effectiveness of Tredegar’s internal control over financial reporting. PricewaterhouseCoopers LLP (PwC),KPMG, Tredegar’s independent registered public accounting firm, is responsible for performing an independent audit of those financial statements and Tredegar’s internal control over financial reporting. KPMG has acted as Tredegar’s independent registered public accounting firm since May 3, 2018.
The Audit Committee has met and held discussions with management and PwCKPMG regarding Tredegar’s audited 20172019 consolidated financial statements. Management represented to the Audit Committee that Tredegar’s consolidated financial statements were prepared in accordance with generally accepted accounting principles,GAAP, in all material respects, and the Audit Committee has reviewed and discussed the consolidated financial statements with management and PwC.KPMG. The Audit Committee refers shareholders to Section 9A of the 2019 Form 10-K regarding matters related to material weaknesses in Tredegar’s internal control over financial reporting and our remediation plan described therein, which the Audit Committee is monitoring.
The Audit Committee has discussed with PwCKPMG the matters required to be discussed under Public Company Accounting Oversight Board (PCAOB) Standards.standards. In addition, the Audit Committee has received the written disclosures and the letter from PwCKPMG relating to the independence of that firm as required by the applicable requirements of the PCAOB and has discussed with PwCKPMG that firm’s independence fromwith respect to Tredegar.
In reliance upon the Audit Committee’s discussions with management and PwC,KPMG, and the Audit Committee’s review of the representations of management and the report of PwCKPMG to the Audit Committee, the Audit Committee recommended that the Board include the audited consolidated financial statements in Tredegar’s Annual Report on Form 10-K for the year ended December 31, 20172019 to be filed with the Securities and Exchange Commission.SEC.
Audit Committee:
Thomas G. Snead, Jr., Chairman
Gregory A. Pratt
Carl E. Tack, III
Anne G. Waleski
February 19, 2018
The following table presents the fees billed for professional services rendered by KPMG for the audits of our consolidated financial statements for the years ended December 31, 2019 and 2018, and other services rendered by KPMG during this period.
| | | | | | |
| | | | | | |
Audit Fees | | $ | 2,425,000 | | | $ | 2,068,700 | |
Tax Fees | | | 790,264 | | | | 286,823 | |
All Other Fees | | | | | | | | |
Total Fees | | | | | | | | |
The following table presents the fees billed for professional services rendered by PricewaterhouseCoopers LLP (PwC):
| | | | | | |
| | | | | | |
Audit Fees | | $ | 117,011 | | | $ | 30,000 | |
All Other Fees | | | | | | | | |
Total Fees | | | | | | | | |
Audit fees reported for PwC in 2018 have been revised from amounts previously presented to include amounts paid in 2019 for the 2018 fiscal year. Audit fees reported by PwC for 2018 relate to their review of our financial statements for the quarter ended March 31, 2018 and their issuing a consent related to their audit of the 2017 consolidated financial statements of Tredegar in statutory filings for 2018. Audit fees reported for PwC in 2019 relate solely to their issuing a consent related to their audit of the 2017 consolidated financial statements of Tredegar in statutory filings for 2018.
Audit Fees include fees billed for services performed to comply with the standards of the PCAOB, including the recurring audit of our consolidated financial statements and of our internal control over financial reporting. This category also includes fees for audits provided in connection with statutory filings or services that generally only the principal auditor reasonably can provide and assistance with and review of documents filed with the SEC.
Tax Fees primarily include fees associated with tax audits and tax compliance, tax consulting, and preparation of tax returns for expatriate employees, as well as domestic and international tax planning and assistance.
All Other Fees include software licensing for online accounting research and other miscellaneous consulting and training fees.
Our Audit Committee has concluded that the provision of the non-audit services listed above as “All Other Fees” is compatible with maintaining the auditor’s independence.
RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTACCOUNTING FIRM
AUDIT FEES
PwC was our independent registered public accounting firm for the fiscal year ended December 31, 2017 and prior years. TheOur Audit Committee has not selected anappointed KPMG as our independent registered public accounting firm for the fiscal year ending December 31, 2018 because it is currently conducting a competitive proposal process to make2020 and has further directed that management submit such selection and therefore does not propose that any independent registered public accounting firm be ratifiedappointment of KPMG for ratification by the fiscal year ending December 31, 2018shareholders at the annual meeting. We believe that the process reflects good corporate governance and is not dueexpect representatives of KPMG to a disagreement with PwC on any matter related to their audit of Tredegar, PwC declining to stand for re-appointment, or there being reportable events as defined in Item 304(a)(1)(v) of Regulation S-K. PwC is includedparticipate in the proposal processvirtual annual meeting, and the Audit Committee expectsthey will have an opportunity to complete its review by May 1, 2018. The Audit Committee intends to propose in future years the ratification of its independent registered public accounting firm in our proxy statement. A representative of PwC will be present at the annual meetingmake a statement if they so desire and will be available to respond to appropriate questions.
Shareholder ratification of our Audit Committee’s appointment of KPMG as our independent registered public accounting firm is not required by our Bylaws or otherwise. In future years, ifIf our shareholders fail to ratify the appointment, our Audit Committee will take such failure into consideration.consideration in future years. If our shareholders ratify the appointment, our Audit Committee, in its discretion, may direct the appointment of a different independent registered public accounting firm at any time during the year if it is determined that such a change would be in the best interests of Tredegar.
46Vote Required and Board Recommendation
The following table lists fees ourselection of the independent registered public accounting firm PwC, billed to us for services rendered in fiscal years 2016will be ratified if the votes cast “FOR” exceed the votes cast “AGAINST.” Abstentions and 2017.
| | 2016 | | 2017 |
| | | | | | |
Audit Fees | | $2,115,750 | | | $1,880,159 | |
All Other Fees | | 4,592 | | | 3,600 | |
Total Fees | | $2,120,342 | | | $1,883,759 | |
Audit Fees include fees PwC billed for services it performed to comply withbroker non-votes will have no effect on the standards of the PCAOB, including the recurring audit of our consolidated financial statements and of our internal control over financial reporting. This category also includes fees for audits PwC provided in connection with statutory filings or services that generally only the principal auditor reasonably can provide and assistance with and review of documents filed with the SEC.
All Other Fees include software licensing for online accounting research and other miscellaneous consulting and training fees.outcome.
Our Audit Committee has concludedBoard recommends that you vote “FOR” the provisionratification of the non-audit services listed aboveappointment of KPMG LLP as “All Other Fees” is compatible with maintainingTredegar’s independent registered public accounting firm for the auditor’s independence.fiscal year ending December 31, 2020.
DIRECTOR NOMINATING PROCESS AND
SHAREHOLDER PROPOSALS
Nominating and Governance Committee Process for Identifying and Evaluating Director Candidates
Our Nominating and Governance Committee evaluates all director candidates in accordance with the director qualification standards described in our Governance Guidelines, which require that a majority of our Board must be independent directors under the general independence standards of the NYSE listing standards and under our Governance Guidelines. Our Nominating and Governance Committee evaluates all candidates’ qualifications to serve as members of our Board based on the skills and characteristics of individual Board members as well as the composition of our Board as a whole. In addition, our Nominating and Governance Committee will evaluate a candidate’s independence, diversity, age, skills and experience in the context of our Board’s needs. Our Nominating and Governance Committee does not assign specific weights to particular criteria and no particular criteria are necessarily applicable to all prospective nominees and directors other than having the highest standards of business and professional conduct.
Although we have no formal policy on diversity, we believe our Board should exhibit diversity of backgrounds and expertise. Our Nominating and Governance Committee considers diversity in the context of the Board as a whole and takes into account the personal characteristics (e.g., age, gender, skill, etc.) and experience (e.g., industry, professional, public service, etc.) of current and prospective directors to facilitate Board deliberations that reflect a broad range of perspectives. The Nominating and Governance Committee takes into account diversity considerations in determining Tredegar’s nominees for directors and planning for director succession and believes that, as a group, the current directors and nominees bring a diverse range of perspectives to the Board’s deliberations.
Director Candidate Recommendations and Nominations by Shareholders
Our Nominating and Governance Committee’s Charter provides that our Nominating and Governance Committee will consider director candidate recommendations by our shareholders. Shareholders should submit any such recommendations to our Nominating and Governance Committee through one of the methods described under “Voting Information ‒ How do I communicate with the Board of Directors?” on page 34 of this proxy statement. There are no differences in the manner in which our Nominating and Governance Committee evaluates director candidates based on whether shareholders recommend the candidates.
In addition to candidate recommendations, any shareholder of record entitled to vote for the election of directors at the applicable meeting of shareholders may nominate persons for election to the Board so long as that shareholder complies with the requirements set forth in the applicable provisions of our amended and restated Bylaws and summarized in “Shareholders’ Proposals” below.
Our Nominating and Governance Committee did not receive any recommendations of director candidates from any shareholder or group of shareholders during 2017,2019, nor were there any shareholder nominations of any person for election as a director.
Shareholders’ Proposals
The regulations of the SEC require any shareholder wishing to include in our proxy statement a proposal to be acted upon at the 20192021 annual meeting of shareholders to ensure that the proposal is received by Tredegar at our principal office in Richmond, Virginia, no later than November 23, 2018.December 4, 2020. We will consider written proposals received by our Corporate Secretary by that date for inclusion in our proxy statement in accordance with regulations governing the solicitation of proxies.
Article I, Section 10 of our amended and restated Bylaws (Bylaws) also requires any shareholder wishing to make a proposal to be acted on at an annual meeting to give written notice to our Corporate Secretary not later than 120 days before the anniversary date of Tredegar’s annual meeting in the immediately preceding year (January 2, 2019)21, 2021). The notice must contain the information required by our Bylaws.
In addition, Article II, Section 5 of our Bylaws allows any shareholder entitled to vote in the election of directors generally to nominate one or more persons for election as directors at a meeting only if written notice of such shareholder’s intent to make such nomination or nominations has been given, either by personal delivery or by United States mail, postage prepaid, to our Corporate Secretary not later than:
120 days before the anniversary date of Tredegar’s annual meeting in the immediately preceding year; or
| · | 120 days before the anniversary date of Tredegar’s annual meeting in the immediately preceding year, or |
| · | with respect to an election to be held at a special meeting of shareholders for the election of directors, the close of business on the seventh day following the date on which notice of a special meeting of shareholders is first given to shareholders. |
with respect to an election to be held at a special meeting of shareholders for the election of directors, the close of business on the seventh day following the date on which notice of a special meeting of shareholders is first given to shareholders.
Each notice must set forth information required by our Bylaws as to the shareholder giving the notice and the person whom the shareholder proposes to nominate for election as a director.
Because the 20182020 annual meeting is being held on May 2, 2018,21, 2020, our Corporate Secretary must receive notice of a shareholder proposal to be acted on ator director nomination for the 20192021 annual meeting not later than the close of business on January 2, 2019.21, 2021. These requirements are separate from the requirements of the SEC that a shareholder must meet to have a proposal included in our proxy statement.
Our Bylaws are available on our website at www.tredegar.com and on the SEC’s website at www.sec.gov. We will also furnish any shareholder a copy of our Bylaws without charge upon written request to our Corporate Secretary. See “Voting Information ‒ How do I communicate with the Board of Directors?” on page 34 of this proxy statement.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based solely on our review of the copies of the forms prescribed by Section 16(a) of the Exchange Act we received, or written representations from certain reporting persons that no Forms 5 were required for those persons, we believe that all of our Section 16 reporting persons complied with the filing requirements of Section 16(a) as of December 31, 2017.
BENEFICIAL OWNERS
Institutions that hold shares in street name for two or more beneficial owners with the same address are permitted to deliver a single proxy statement and annual report to that address. Any such beneficial owner may request a separate copy of this proxy statement or the 20172019 Form 10-K by contacting our Corporate Secretary in writing at 1100 Boulders Parkway, Richmond, Virginia, 23225 or by telephone at 1-855-330-1001. Beneficial owners with the same address who receive more than one proxy statement and 20172019 Form 10-K may request delivery of a single proxy statement and 20172019 Form 10-K by contacting our Corporate Secretary as provided in the preceding sentence. Such beneficial owners will continue to receive separate proxy cards, voting instruction forms or notice of Internet availability, as applicable, which will allow each individual to vote independently.
Our Board is not aware of any matters to be presented for action at the annual meeting of shareholders other than as described in this proxy statement. However, if any other matters are properly raised at the annual meeting or in any adjournment of the annual meeting, the person or persons voting the proxies will vote them in accordance with their best judgment.
| By Order of the Board of Directors |
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| ![](https://files.docoh.com/DEF 14A/0001140361-20-007908/image00007.jpg) |
| ![](https://files.docoh.com/DEF 14A/0001140361-18-014622/image00003.jpg) Michael J. Schewel |
| Michael J. Schewel |
| Vice President, General Counsel and Corporate Secretary |
45
Annex A![](https://files.docoh.com/DEF 14A/0001140361-20-007908/image00012.jpg)
TREDEGAR CORPORATION
2018 EQUITY INCENTIVE PLAN
ARTICLE I
DEFINITIONS
1.01. | Affiliate means any existing or future "subsidiary" or "parent" corporation (within the meaning of Section 424 of the Code) of the Company. |
1.02. | Agreement means any written or electronic agreement, contract, notice or other instrument or document (including any amendment or supplement thereto) specifying the terms and conditions of an Award. |
1.03. | Award means any Option, SAR, Stock Award or Stock Unit Award. |
1.04. | Board means the Board of Directors of the Company. |
1.05. | Change in Control means the occurrence of any of the following events: |
(1) any person or group (within the meaning of Sections 13(d) and 14(d) of the Exchange Act) (other than the Company, any trustee or other fiduciary holding securities under an employee benefit plan of the Company, or any company owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company), at any time becomes the beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of 50% or more of the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the "Voting Securities"), other than (i) through an acquisition of Voting Securities directly from the Company, (ii) as a result of the Company's repurchase of Voting Securities if, thereafter, such beneficial owner purchases no additional Voting Securities, or (iii) pursuant to a Business Combination (as defined below) that does not constitute a Change in Control pursuant to subparagraph (3) below.
(2) Continuing Directors cease to constitute a majority of the members of the Board other than pursuant to a Business Combination that does not constitute a Change in Control pursuant to subparagraph (3) below;
(3) Consummation of a reorganization, merger, share exchange or consolidation (a "Business Combination"), in each case, unless immediately following such Business Combination, (i) all or substantially all of the persons (as defined above) who were the beneficial owners (as defined above), respectively, of the Common Stock and Voting Securities outstanding immediately prior to such Business Combination Beneficially Own more than 80% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Company through one or more Subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination, of the Common Stock and Voting Securities, as the case may be, (ii) no person (as defined above) (other than the Company, any trustee or other fiduciary holding securities under an employee benefit plan of the Company, or any company owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company), is the beneficial owner (as defined above) of 50% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation and (iii) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination are Continuing Directors; or
(4) the shareholders of the Company approve a complete liquidation or dissolution of the Company or the consummation of a sale or other disposition of all or substantially all of the assets of the Company, in each case, unless immediately following such liquidation, dissolution, sale or other disposition, (i) more than 80% of, respectively, the then outstanding shares of common stock of such corporation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors is then beneficially owned by all or substantially all of the persons (as defined above) who were the beneficial owners (as defined above), respectively, of the Common Stock and Voting Securities outstanding immediately prior to such sale or other disposition in substantially the same proportion as their ownership, immediately prior to such sale or other disposition, of such Common Stock and Voting Securities, as the case may be, (ii) less than 20% of, respectively, the then outstanding shares of common stock of such corporation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors is then Beneficially Owned by any Person (other than any Person who is not an Acquiring Person), and (iii) at least a majority of the members of the board of directors of such corporation are Continuing Directors immediately following such sale or disposition.
In addition, if a Change in Control (as defined in subparagraphs (1), (2), (3) or (4) above) constitutes a payment event with respect to any Award that provides for the deferral of compensation and is subject to Section 409A of the Code, no payment will be made under that Award on account of a Change in Control unless the event described in subparagraphs (1), (2), (3) or (4) above, as applicable, constitutes a “change in control event” as defined in Treasury Regulation Section 1.409A-3(i)(5).
1.06. | Code means the Internal Revenue Code of 1986, and any amendments thereto. |
1.07. | Committee means the Executive Compensation Committee of the Board. |
1.08. | Common Stock means the common stock of the Company. |
1.09. | Company means Tredegar Corporation. |
1.10. | Continuing Director means an individual who is a member of the Board on the Effective Date and each individual who becomes a member of the Board after the Effective Date (other than a director designated by a person (as defined in Section 1.05) who has entered into an agreement with the Company to effect a transaction described in subparagraphs (1), (2) or (4) of Section 1.05 and other than a director initially elected or nominated as a result of an actual or threatened election contest with respect to directors) whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of a majority of the directors then still in office who either were directors on the Effective Date or were so elected or nominated with such approval. |
1.11. | Control Change Date means the date on which a Change in Control occurs. If a Change in Control occurs on account of a series of transactions or events, the Control Change Date is the date of the last of such transactions or events. |
1.12. | Director means a member of the Board. |
1.13. | Effective Date means the date the Plan is approved by the Company’s shareholders in accordance with Article XV. |
1.14. | Exchange Act means the Securities Exchange Act of 1934, as amended from time to time. |
1.15. | Fair Market Value means, with respect to a share of Common Stock, as of any date, (i) the closing price as reported on the New York Stock Exchange composite tape on such date, or, if the shares are not listed on the New York Stock Exchange, as reported on any other such exchange on which the shares are traded, or, in the absence of reported sales on such date, then on the next preceding day that the shares of Common Stock were traded on such exchange, all as reported by such source as the Committee may select or (ii) in the event there is no public market for the shares on such date, the fair market value as determined in good faith by the Committee in its sole discretion.
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1.16. | Initial Value means, with respect to a SAR, the Fair Market Value of one share of Common Stock on the date of grant. Except as provided in Article X, the Initial Value of an outstanding SAR shall not be reduced without the approval of the Company’s shareholders in accordance with applicable law. |
1.17. | Non-Employee Director means a Director who is not an employee of the Company. |
1.18. | Option means a stock option that entitles the holder to purchase from the Company a stated number of shares of Common Stock at the price set forth in an Agreement. |
1.19. | Participant means an employee of the Company or an Affiliate, including an employee who is a member of the Board, a director, or an individual who provides services to the Company or an Affiliate, who satisfies the requirements of Article IV and is selected by the Committee to receive an Award. |
1.20. | Plan means the Tredegar Corporation 2018 Equity Incentive Plan.
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1.21. | Prior Plan means the Company’s 2004 Equity Incentive Plan, as amended through March 27, 2009. |
1.22. | SAR means a stock appreciation right that in accordance with the terms of an Agreement entitles the holder to receive, with respect to each share of Common Stock encompassed by the exercise of such SAR, the amount determined by the Committee and specified in an Agreement. In the absence of such a determination, the holder shall be entitled to receive, with respect to each share of Common Stock encompassed by the exercise of such SAR, the excess of the Fair Market Value on the date of exercise over the Initial Value. |
1.23. | Stock Award means shares of Common Stock awarded to a Participant under Article VIII. |
1.24. | Stock Unit Award means a right to receive the equivalent of shares of Common Stock awarded to a Participant under Article VIII, payable in cash or shares of Common Stock. |
1.25. | Ten Percent Shareholder means any individual owning more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or of an Affiliate. An individual shall be considered to own any voting stock owned (directly or indirectly) by or for his brothers, sisters, spouse, ancestors or lineal descendants and shall be considered to own proportionately any voting stock owned (directly or indirectly) by or for a corporation, partnership, estate or trust of which such individual is a shareholder, partner or beneficiary. |
ARTICLE II
PURPOSES
The Plan is intended to assist the Company and its Affiliates in recruiting and retaining individuals with ability and initiative by enabling such persons to participate in the future success of the Company and its Affiliates and to associate their interests with those of the Company and its shareholders. The Plan is intended to permit the grant of both Options qualifying under Section 422 of the Code ("incentive stock options") and Options not so qualifying, and the grant of SARs, Stock Awards and Stock Unit Awards. No Option that is intended to be an incentive stock option shall be invalid for failure to qualify as an incentive stock option. The proceeds received by the Company from the sale of Shares of Common Stock pursuant to this Plan shall be used for general corporate purposes.
The Plan was adopted by the Board on February 20, 2018, subject to the approval of the Company’s shareholders.
ARTICLE III
ADMINISTRATION
The Plan shall be administered by the Committee. The Committee shall have authority to grant Awards upon such terms (not inconsistent with the provisions of this Plan) as the Committee may consider appropriate. Such terms may include conditions (in addition to those contained in this Plan) on the exercisability of all or any part of an Option or SAR or on the vesting or forfeitability of a Stock Award or Stock Unit Award, including upon a termination of employment or a Change in Control. Notwithstanding any such conditions, the Committee may, in its discretion, accelerate the time at which any Option or SAR may be exercised, or the time at which a Stock Award may become transferable or nonforfeitable or the time at which a Stock Unit Award may be settled. In addition, the Committee shall have complete authority to interpret all provisions of this Plan; to prescribe the form of Agreements; to adopt, amend, and rescind rules and regulations pertaining to the administration of the Plan; and to make all other determinations necessary or advisable for the administration of this Plan. The express grant in the Plan of any specific power to the Committee shall not be construed as limiting any power or authority of the Committee. Any decision made, or action taken, by the Committee or in connection with the administration of this Plan shall be final and conclusive. Neither the Committee nor any member of the Committee shall be liable for any act done in good faith with respect to this Plan or any Award. All expenses of administering this Plan shall be borne by the Company.
The Committee, in its discretion, may delegate to one or more officers of the Company or the Executive Committee of the Board, all or part of the Committee's authority and duties with respect to grants and awards to individuals who are not subject to the reporting and other provisions of Section 16 of the Exchange Act and, to the extent of the Committee’s delegation, references to the Committee shall be deemed to be references to its delegate. The Committee may revoke or amend the terms of a delegation at any time but such action shall not invalidate any prior actions of the Committee's delegate or delegates that were consistent with the terms of the Plan.
Notwithstanding the foregoing, the Plan shall be administered by the full Board with respect to Awards to Non-Employee Directors and, with respect to Awards granted to Non-Employee Directors, any references to the Committee shall be deemed to be references to the Board.
ARTICLE IV
ELIGIBILITY
Any employee of the Company or an Affiliate (including a corporation that becomes an Affiliate after the adoption of this Plan) or a person who provides services to the Company or an Affiliate (including a corporation that becomes an Affiliate after the adoption of this Plan) is eligible to participate in this Plan if the Committee, in its sole discretion, determines that such person has contributed significantly or can be expected to contribute significantly to the profits or growth of the Company or an Affiliate. Directors of the Company may be selected to participate in this Plan.
ARTICLE V
STOCK SUBJECT TO PLAN
5.01. | Shares Issued. Upon the award of shares of Common Stock pursuant to a Stock Award or Stock Unit Award the Company may issue shares of Common Stock from its authorized but unissued shares of Common Stock. Upon the exercise of any Option or SAR the Company may deliver to the Participant (or the Participant's broker if the Participant so directs), shares of Common Stock from its authorized but unissued Common Stock. |
5.02. | Aggregate Limit. Subject to adjustment as provided in Article IX, the total aggregate number of shares of Stock that may be issued or transferred under the Plan on and after the Effective Date is 2,000,000 shares plus any additional shares that become available in accordance with Section 5.03. |
5.03. | Reallocation of Shares. If, after the Effective Date, any Award granted hereunder or any award granted under the Prior Plan expires or is terminated unexercised, or is settled for cash or otherwise settled without the issuance of shares of Common Stock or for fewer shares of Common Stock than the maximum number subject to such Award (including any options that are net settled), then any shares of Common Stock to the extent of such lapse, cancellation, expiration or cash or net settlement of such Award or Prior Plan award shall be available for grant under this Plan. If after the Effective Date any shares of Common Stock are tendered by a Participant to pay the exercise price of, or are delivered to satisfy tax obligations in respect of, any Award under this Plan or any award under the Prior Plan, then any shares of Common Stock covered by such tender shall not be available for grant under this Plan. Notwithstanding the foregoing reallocation, no more than 2,000,000 shares may be issued upon the exercise of Options. |
5.04. | Director Grant Limitation. A Non-Employee Director may not be granted Awards in any calendar year covering or with respect to that number of shares of Common Stock that has a Fair Market Value on the date of grant of the Award in excess of $250,000. |
ARTICLE VI
OPTIONS
6.01. | Award. In accordance with the provisions of Article IV, the Committee will designate each individual to whom an Option is to be granted and will specify the number of shares of Common Stock covered by such awards provided, however, that except as provided in Section 5.04 with respect to Non-Employee Directors, the maximum number of shares of Common Stock covered by Options granted to a Participant in any calendar year is equal to 450,000 shares of Common Stock. |
6.02. | Option Price. The price per share for Common Stock purchased on the exercise of an Option shall be determined by the Committee on the date of grant, but shall not be less than the Fair Market Value on the date the Option is granted (unless such Option is granted in connection with a transaction described in Article IX). Notwithstanding, the preceding sentence, the price per share for shares of Common Stock purchased on the exercise of any Option that is an incentive stock option granted to an individual who is a Ten Percent Shareholder on the date such option is granted, shall not be less than one hundred ten percent (110%) of the Fair Market Value on the date the Option is granted. Except as provided in Article IX, the price per share for Common Stock purchased on the exercise of an Option shall not be reduced without the approval of the Company's shareholders in accordance with applicable law. |
6.03. | Maximum Option Period. The maximum period in which an Option may be exercised shall be ten years from the date such Option was granted. In the case of an incentive stock option that is granted to a Participant who is a Ten Percent Shareholder on the date of grant, such Option shall not be exercisable after the expiration of five years from the date of grant. The terms of any Option may provide that it is exercisable for a period less than such maximum period. |
6.04. | Nontransferability. Except as provided in Section 6.05, each Option granted under this Plan shall be nontransferable except by will or by the laws of descent and distribution and during the lifetime of the Participant to whom the Option is granted, the Option may be exercised only by the Participant. No right or interest of a Participant in any Option shall be liable for, or subject to, any lien, obligation, or liability of such Participant. |
6.05. | Transferable Options. Section 6.04 to the contrary notwithstanding, if the Agreement provides, an Option that is not an incentive stock option may be transferred by a Participant to the Participant's children, grandchildren, spouse, one or more trusts for the benefit of such family members or a partnership in which such family members are the only partners; provided, however, that Participant may not receive any consideration for the transfer. In addition to transfers described in the preceding sentence, the Committee may grant Options that are not incentive stock options that are transferable on other terms and conditions as may be permitted under Securities Exchange Commission Rule 16b-3 under the Exchange Act, as in effect from time to time. The holder of an Option transferred pursuant to this section shall be bound by the same terms and conditions that governed the Option during the period that it was held by the Participant, and may not subsequently transfer the Option, except by will or the laws of descent and distribution. |
6.06. | Employee Status. For purposes of determining the applicability of Section 422 of the Code (relating to incentive stock options), or in the event that the terms of any Option provide that it may be exercised only during employment or continued service or within a specified period of time after termination of employment or service, the Committee may decide to what extent leaves of absence for governmental or military service, illness, temporary disability, or other reasons shall not be deemed interruptions of continuous employment or service. |
6.07. | Exercise. Subject to the provisions of this Plan and the applicable Agreement, an Option may be exercised in whole at any time or in part from time to time at such times and in compliance with such requirements as the Committee shall determine. Subject to the provisions of Article III and Section 10.01, no Option may become exercisable before the first anniversary of its grant or, if earlier, the date of the Participant’s death or termination of employment on account of disability. The preceding sentence shall not apply to an Option granted to a Non-Employee Director. In addition, no option shall be treated as an incentive stock option to the extent that the aggregate Fair Market Value of the shares of Common Stock subject to the incentive stock options granted under the Plan and the Prior Plan which would first become exercisable in any calendar year exceeds $100,000. Any such excess shall instead automatically be treated as a nonqualified option. An Option granted under this Plan may be exercised with respect to any number of whole shares less than the full number of shares for which the Option could be exercised. A partial exercise of an Option shall not affect the right to exercise the Option from time to time in accordance with this Plan and the applicable Agreement with respect to the remaining shares subject to the Option.
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6.08. | Payment. Unless otherwise provided by the Agreement, payment of the Option price shall be made in cash or a cash equivalent acceptable to the Committee. If the Agreement provides, payment of all or part of the Option price may be made by surrendering to the Company (either by actual surrender or by attestation of ownership) shares of Common Stock or, if the Option is not intended to be an incentive stock option, by means of a net exercise (whereby the number of shares of Common Stock issued upon exercise is equal to the number of shares for which the Option is exercised reduced by the number of shares that have a Fair Market Value (on the date of exercise) equal to the Option price of the shares for which the Option is being exercised). If shares of Common Stock are used to pay all or part of the Option price, the sum of the cash and cash equivalent and the Fair Market Value (determined on the date of exercise) of the shares surrendered must not be less than the Option price of the shares for which the Option is being exercised. |
6.09. | Shareholder Rights. No Participant shall have any rights as a shareholder with respect to shares of Common Stock subject to his Option until the date of exercise of such Option. |
6.10. | Disposition of Stock. A Participant shall notify the Company of any sale or other disposition of shares of Common Stock acquired pursuant to an Option that was an incentive stock option if such sale or disposition occurs (i) within two years of the grant of an Option or (ii) within one year of the issuance of the shares of Common Stock to the Participant. Such notice shall be in writing and directed to the Secretary of the Company. |
ARTICLE VII
SARS
7.01. | Award. In accordance with the provisions of Article IV, the Committee will designate each individual to whom SARs are to be granted and will specify the number of shares of Common Stock covered by such awards provided, however, that except as provided in Section 5.04 with respect to Non-Employee Directors, the maximum number of shares of Common Stock covered by SARs granted to a Participant in any calendar year is equal to 450,000 shares. |
7.02. | Maximum SAR Period. The maximum period in which a SAR may be exercised shall be ten years from the date of grant. The terms of any SAR may provide that it is exercisable for a period less than such maximum period. |
7.03. | Nontransferability. Except as provided in Section 7.04, each SAR granted under this Plan shall be nontransferable except by will or by the laws of descent and distribution and during the lifetime of the Participant to whom the SAR is granted, the SAR may be exercised only by the Participant. No right or interest of a Participant in any SAR shall be liable for, or subject to, any lien, obligation, or liability of such Participant. |
7.04. | Transferable SARs. Section 7.03 to the contrary notwithstanding, the Committee may grant transferable SARs to the extent and on such terms as may be permitted by Securities Exchange Commission Rule 16b-3 under the Exchange Act, as in effect from time to time. The holder of a SAR transferred pursuant this section shall be bound by the same terms and conditions that governed the SAR during the period that it was held by the Participant, and may not subsequently transfer the SAR, except by will or the laws of descent and distribution. |
7.05. | Exercise. Subject to the provisions of this Plan and the applicable Agreement, a SAR may be exercised in whole at any time or in part from time to time at such times and in compliance with such requirements as the Committee shall determine. Subject to the provisions of Article III and Section 10.01, no SAR may become exercisable before the first anniversary of its grant or, if earlier, the date of the Participant’s death or termination of employment on account of disability. The preceding sentence shall not apply to a SAR granted to a Non-Employee Director. A SAR granted under this Plan may be exercised with respect to any number of whole shares of Common Stock less than the full number for which the SAR could be exercised. A partial exercise of a SAR shall not affect the right to exercise the SAR from time to time in accordance with this Plan and the applicable Agreement with respect to the remaining shares subject to the SAR. |
7.06. | Employee Status. If the terms of any SAR provide that it may be exercised only during employment or continued service or within a specified period of time after termination of employment or service, the Committee may decide to what extent leaves of absence for governmental or military service, illness, temporary disability or other reasons shall not be deemed interruptions of continuous employment or service. |
7.07. | Settlement. At the Committee's discretion, the amount payable as a result of the exercise of a SAR may be settled in cash, shares of Common Stock, or a combination of cash and shares of Common Stock. No fractional share will be deliverable upon the exercise of a SAR but a cash payment will be made in lieu thereof. |
7.08. | Shareholder Rights. No Participant shall, as a result of receiving a SAR award, have any rights as a shareholder of the Company or any Affiliate until the date that the SAR is exercised and then only to the extent that the SAR is settled by the issuance of shares of Common Stock. |
ARTICLE VIII
STOCK AND STOCK UNIT AWARDS
8.01. | Award. In accordance with the provisions of Article IV, the Committee will designate each individual to whom a Stock Award or a Stock Unit Award is to be made and will specify the number of shares of Common Stock covered by such Awards provided, however, that except as provided in Section 5.04 with respect to Non-Employee Directors, the maximum number of shares of Common Stock covered by Stock Awards and/or Stock Unit Awards granted to a Participant in any calendar year is equal to 75,000 shares of Common Stock. |
8.02. | Vesting. The Committee, on the date of the award, may prescribe that a Participant's rights in the Stock Award or Stock Unit Award shall be forfeitable or otherwise restricted for a period of time or subject to such conditions as may be set forth in the Agreement. Subject to the provisions of Article III and Section 10.01, each Stock Award and Stock Unit Award shall be forfeitable or otherwise restricted until at least the first anniversary of its grant or, if earlier, the date of the Participant’s death or termination of employment on account of disability. The preceding sentence shall not apply to a Stock Award or Stock Unit Award granted to a Non-Employee Director. |
8.03 | Performance Objectives. In accordance with Section 8.02, the Committee may prescribe that Stock Awards and Stock Unit Awards will become vested or transferable or both based on performance objectives stated with respect to the Company, an Affiliate or an operating unit. Performance objectives for any Stock Award or Stock Unit Award may be based on one or more financial measures stated with reference to economic profit added, return on equity, earnings per share, total earnings, earnings growth, return on capital, return on assets, Fair Market Value or other measure prescribed by the Committee. Each goal may be expressed on an absolute basis or relative to the performance of one or more similarly situated companies or a published index. When establishing performance goals for a performance cycle, the Committee may exclude any or all special, unusual, or extraordinary items as determined under U.S. generally accepted accounting principles including, without limitation, the charges or costs associated with restructurings of the Company, discontinued operations, other unusual or non‑recurring items, and the cumulative effects of accounting changes. The Committee may also adjust the performance goals for any performance cycle as it deems equitable in recognition of unusual or non-recurring events affecting the Company, changes in applicable tax laws or accounting principles, or such other factors as the Committee may determine, including, without limitation, any adjustments that would result in the Company paying non-deductible compensation to a Participant. If the Committee, on the date of award, prescribes that a Stock Award or Stock Unit Award shall become nonforfeitable and transferable only upon the attainment of performance objectives, the shares subject to such Award shall become nonforfeitable and transferable only to the extent that the Committee certifies that such objectives have been achieved.
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8.04. | Employee Status. In the event that the terms of any Stock Award or Stock Unit Award provides that shares may become transferable and nonforfeitable thereunder only after completion of a specified period of employment or continued service, the Committee may decide in each case to what extent leaves of absence for governmental or military service, illness, temporary disability, or other reasons shall not be deemed interruptions of continuous employment or service. |
(a) Stock Awards. The Company may implement the grant of a Stock Award by (i) book-entry issuance of shares to the Participant in an account maintained by the Company at its transfer agent or (ii) delivery of certificates for shares of Common Stock to the Participant bearing a legend setting forth the restrictions imposed thereon as the Committee, in its discretion, may determine. While the shares of Common Stock granted pursuant to a Stock Award may be forfeited or are nontransferable, a Participant will have all rights of a shareholder with respect to the Stock Award, including (subject to Section 12.04) the right to receive dividends and vote the shares; provided, however, that the Committee may provide at the time of grant that dividends shall be subject to the same restrictions as the shares; and provided further, that during such period (i) a Participant may not sell, transfer, pledge, exchange, hypothecate, or otherwise dispose of shares of Common Stock granted pursuant to a Stock Award, (ii) if certificates are issued, the Company shall retain custody of the certificates evidencing shares of Common Stock granted pursuant to a Stock Award, and (iii) the Participant will deliver to the Company a stock power, endorsed in blank, with respect to each Stock Award. The limitations set forth in the preceding sentence shall not apply after the shares of Common Stock granted under the Stock Award are transferable and are no longer forfeitable.
(b) Stock Unit Awards. No Participant shall, as a result of receiving a Stock Unit Award, have any rights as a shareholder of the Company until the date the Stock Unit Award is settled and then only to the extent that the Stock Unit Award is settled by the issuance of shares of Common Stock. Each Stock Unit Award shall have a value equal to the Fair Market Value of an equal number of shares of Common Stock. Stock Unit Awards may be paid in cash or shares of Common Stock or a combination of cash and shares of Common Stock, as determined in the sole discretion of the Committee, upon the lapse of the applicable restrictions. In accordance with Section 12.04, the Committee may, in its sole and absolute discretion, credit Participants with dividend equivalents on Stock Unit Awards at the time of any payment of dividends to shareholders on shares. A Participant may not sell, transfer, pledge, exchange, hypothecate, or otherwise dispose of Stock Unit Awards.
ARTICLE IX
ADJUSTMENT UPON CHANGE IN SHARES OF COMMON STOCK
The maximum number of shares as to which Options, SARs, Stock Awards and Stock Unit Awards may be granted under this Plan, the terms of outstanding Awards (including, where applicable, the Option price or Initial Value), and the per individual limitations on Awards, shall be adjusted as the Committee shall determine to be equitably required in the event that (a) the Company (i) effects one or more stock dividends, stock split-ups, subdivisions or consolidations of shares or (ii) engages in a transaction to which Section 424 of the Code applies or (b) there occurs any other event which, in the judgment of the Committee necessitates such action. Any determination made under this Article IX by the Committee shall be final and conclusive.
The issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, for cash or property, or for labor or services, either upon direct sale or upon the exercise of rights or warrants to subscribe therefor, or upon conversion of shares or obligations of the Company convertible into such shares or other securities, shall not affect, and no adjustment by reason thereof shall be made with respect to, the terms of outstanding Awards, the maximum number of shares as to which Options, SARs, Stock Awards and Stock Unit Awards may be granted, or the per individual limitations on the number of shares for which Options, SARs, Stock Awards and Stock Unit Awards may be granted.
The Committee may grant Awards in substitution for performance shares, phantom shares, stock awards, stock options, stock appreciation rights, or similar awards held by an individual who becomes an employee of the Company or an Affiliate in connection with a transaction described in the first paragraph of this Article IX. Notwithstanding any provision of the Plan (other than the limitation in Section 5.02), the terms of such substituted Awards shall be as the Committee, in its discretion, determines is appropriate.
ARTICLE X
CHANGE IN CONTROL
10.01. | Accelerated Vesting. Except as provided in an Agreement, upon a Change in Control, (i) all outstanding Options and SARs shall become vested and exercisable and thereafter may be exercised in accordance with the terms provided in the applicable Agreement, (ii) all outstanding Stock Awards shall become transferable and nonforfeitable and (iii) all outstanding Stock Unit Awards shall become earned and nonforfeitable in their entirety. Upon a Change in Control, the provisions of this Article X shall take precedence over any other provision of the Plan that relates to the vesting of an Award. |
10.02. | Assumption Upon Change in Control. In the event of a Change in Control the Committee, in its discretion and regardless of whether the Award becomes vested under Section 10.01 and without the need for a Participant’s consent, may provide that an outstanding Option, SAR, Stock Award or Stock Unit Award shall be assumed by, or replaced with a substitute award granted by, the surviving entity in the Change in Control. Such assumed or substituted award shall be of the same type of award as the original Option, SAR, Stock Award or Stock Unit Award being assumed or substituted. The assumed or substituted award shall have a value, as of the Control Change Date, that is substantially equal to the value of the original award (or the difference between the Fair Market Value and the option price or Initial Value in the case of Options and SARs) as the Committee equitably determines and vesting and other terms and conditions as may be prescribed by the Committee; provided, however, that the assumed or substituted award, if not sooner vested, shall become vested and nonforfeitable upon the Participant’s termination of employment if such termination is on account of the Participant’s death or disability or involuntary separation from service (determined in accordance with the provisions of Treasury Regulation Section 1.409A-1(n)). |
10.03. | Cash-Out Upon Change in Control. In the event of a Change in Control the Committee, in its discretion and regardless of whether the Award becomes vested under Section 10.01 and without the need of a Participant’s consent, may provide that each Option, SAR, Stock Award or Stock Unit Award shall be cancelled in exchange for a payment. The payment may be in cash, shares of Common Stock or other securities or consideration received by shareholders in the Change in Control transaction. The amount of the payment shall be an amount that is substantially equal to (i) the amount by which the price per share received by shareholders in the Change in Control exceeds the option price or Initial Value in the case of an Option and SAR or (ii) the price per share received by shareholders for each share of Common Stock subject to a Stock Award or Stock Unit Award. If the option price or Initial Value exceeds the price per share received by stockholders in the Change in Control transaction, the Option or SAR may be cancelled under this Section 10.03 without any payment to the Participant. |
10.04. | Limitation of Benefits. The benefits that a Participant may be entitled to receive under this Plan and other benefits that a Participant is entitled to receive under other plans, agreements and arrangements (which, together with the benefits provided under this Plan, are referred to as “Payments”), may constitute Parachute Payments that are subject to Code Sections 280G and 4999. As provided in this Section 10.04, the Parachute Payments will be reduced if, and only to the extent that, a reduction will allow a Participant to receive a greater Net After Tax Amount than a Participant would receive absent a reduction. |
The Accounting Firm will first determine the amount of any Parachute Payments that are payable to a Participant. The Accounting Firm also will determine the Net After Tax Amount attributable to the Participant’s total Parachute Payments.
The Accounting Firm will next determine the largest amount of Payments that may be made to the Participant without subjecting the Participant to tax under Code Section 4999 (the “Capped Payments”). Thereafter, the Accounting Firm will determine the Net After Tax Amount attributable to the Capped Payments.
The Participant will receive the total Parachute Payments or the Capped Payments, whichever provides the Participant with the higher Net After Tax Amount. If the Participant will receive the Capped Payments, the total Parachute Payments will be adjusted by first reducing the amount of any noncash benefits under this Plan or any other plan, agreement or arrangement (with the source of the reduction to be directed by the Participant; provided, however, that any such benefits that are subject to Code Section 409A shall be reduced last) and then by reducing the amount of any cash benefits under this Plan or any other plan, agreement or arrangement (with the source of the reduction to be directed by the Participant; provided, however, that any such benefits that are subject to Code Section 409A shall be reduced last). The Accounting Firm will notify the Participant and the Company if it determines that the Parachute Payments must be reduced to the Capped Payments and will send the Participant and the Company a copy of its detailed calculations supporting that determination.
As a result of the uncertainty in the application of Code Sections 280G and 4999 at the time that the Accounting Firm makes its determinations under this Section 10.04, it is possible that amounts will have been paid or distributed to the Participant that should not have been paid or distributed under this Section 10.04 (“Overpayments”), or that additional amounts should be paid or distributed to the Participant under this Section 10.04 (“Underpayments”). If the Accounting Firm determines, based on either the assertion of a deficiency by the Internal Revenue Service against the Company or the Participant, which assertion the Accounting Firm believes has a high probability of success or controlling precedent or substantial authority, that an Overpayment has been made, the Participant must repay the Overpayment to the Company, without interest; provided, however, that no amount will be payable by the Participant to the Company unless, and then only to the extent that, the repayment would either reduce the amount on which the Participant is subject to tax under Code Section 4999 or generate a refund of tax imposed under Code Section 4999. If the Accounting Firm determines, based upon controlling precedent or substantial authority, that an Underpayment has occurred, the Accounting Firm will notify the Participant and the Company of that determination and the amount of that Underpayment will be paid to the Participant promptly by the Company.
For purposes of this Section 10.04, the term “Accounting Firm” means the independent accounting firm engaged by the Company immediately before the Control Change Date.
For purposes of this Section 10.04, the term “Net After Tax Amount” means the amount of any Parachute Payments or Capped Payments, as applicable, net of taxes imposed under Code Sections 1, 3101(b) and 4999 and any State or local income taxes applicable to the Participant on the date of payment. The determination of the Net After Tax Amount shall be made using the highest combined effective rate imposed by the foregoing taxes on income of the same character as the Parachute Payments or Capped Payments, as applicable, in effect on the date of payment. For purposes of this Section 10.04, the term “Parachute Payment” means a payment that is described in Code Section 280G(b)(2), determined in accordance with Code Section 280G and the regulations promulgated or proposed thereunder.
Notwithstanding any other provision of this Section 10.04, the limitations and provisions of this Section 10.04 shall not apply to any Participant who, pursuant to an agreement with the Company or the terms of another plan maintained by the Company, is not entitled to receive Parachute Payments that exceed the Capped Payments.
ARTICLE XI
COMPLIANCE WITH LAW AND APPROVAL OF REGULATORY BODIES
No Option or SAR shall be exercisable, no shares of Common Stock shall be issued, no certificates for shares of Common Stock shall be delivered, and no payment shall be made under this Plan except in compliance with all applicable federal and state laws and regulations (including, without limitation, withholding tax requirements), any listing agreement to which the Company is a party, and the rules of all domestic stock exchanges on which the Company's shares may be listed. The Company shall have the right to rely on an opinion of its counsel as to such compliance. Any share certificate issued to evidence shares of Common Stock may bear such legends and statements as the Committee may deem advisable to assure compliance with federal and state laws and regulations. No Option or SAR shall be exercisable, no Shares of Common Stock shall be issued, no certificate for shares of Common Stock shall be delivered, and no payment shall be made under this Plan until the Company has obtained such consent or approval as the Committee may deem advisable from regulatory bodies having jurisdiction over such matters.
ARTICLE XII
GENERAL PROVISIONS
12.01. | Effect on Employment and Service. Neither the adoption of this Plan, its operation, nor any documents describing or referring to this Plan (or any part thereof) shall confer upon any individual any right to continue in the employ or service of the Company or an Affiliate or in any way affect any right and power of the Company or an Affiliate to terminate the employment or service of any individual at any time with or without assigning a reason therefore. |
12.02. | Unfunded Plan. The Plan, insofar as it provides for grants, shall be unfunded, and the Company shall not be required to segregate any assets that may at any time be represented by grants under this Plan. Any liability of the Company to any person with respect to any grant under this Plan shall be based solely upon any contractual obligations that may be created pursuant to this Plan. No such obligation of the Company shall be deemed to be secured by any pledge of, or other encumbrance on, any property of the Company. |
12.03. | Withholding. The Company shall have the right to deduct from all amounts paid to a Participant in cash (whether under this Plan or otherwise) any amount of taxes required by law to be withheld in respect of Awards under this Plan as may be necessary in the opinion of the Company to satisfy tax withholding required under the laws of any country, state, province, city or other jurisdiction, including but not limited to income taxes, capital gains taxes, transfer taxes, and social security contributions that are required by law to be withheld. In the case of payments of Awards in the form of shares of Common Stock, at the Committee’s discretion, the Participant shall be required to either pay to the Company the amount of any taxes required to be withheld with respect to such shares of Common Stock or, in lieu thereof, the Company shall have the right to retain (or the Participant may be offered the opportunity to elect to tender) the number of shares of Common Stock whose Fair Market Value equals the amount to be withheld. |
12.04. | Dividends; Dividend Equivalents. At the discretion of the Committee, a Stock Award or Stock Unit Award may provide the Participant with dividends or dividend equivalents, payable in cash or shares of Common Stock on a current or deferred basis. All dividend or dividend equivalents which are not paid currently may, at the Committee’s discretion, accrue interest, be reinvested into additional shares of Common Stock and paid if and when, and to the extent the underlying Awards are earned and paid. The total number of shares of Common Stock available for grant under the Plan shall not be reduced by any dividends or dividend equivalents that are reinvested and credited under Stock Awards or Stock Unit Awards. |
12.05. | Rules of Construction. Headings are given to the articles and sections of this Plan solely as a convenience to facilitate reference. The reference to any statute, regulation, or other provision of law shall be construed to refer to any amendment to or successor of such provision of law. |
All Awards made under this Plan are intended to comply with, or otherwise be exempt from, Section 409A of the Code (“Section 409A”), after giving effect to the exemptions in Treasury Regulation sections 1.409A-1(b)(3) through (b)(12). This Plan and all Agreements shall be administered, interpreted and construed in a manner consistent with Section 409A. If any provision of this Plan or any Agreement is found not to comply with, or otherwise not be exempt from, the provisions of Section 409A, it shall be modified and given effect, in the sole discretion of the Committee and without requiring the Participant’s consent, in such manner as the Committee determines to be necessary or appropriate to comply with, or effectuate an exemption from, Section 409A. Each payment under an Award granted under this Plan shall be treated as a separate identified payment for purposes of Section 409A.
If a payment obligation under an Award or an Agreement arises on account of the Participant’s termination of employment and such payment obligation constitutes “deferred compensation” (as defined under Treasury Regulation section 1.409A-1(b)(1), after giving effect to the exemptions in Treasury Regulation sections 1.409A-1(b)(3) through (b)(12)), it shall be payable only after the Participant’s “separation from service” (as defined under Treasury Regulation section 1.409A-1(h)); provided, however, that if the Participant is a “specified employee” (as defined under Treasury Regulation section 1.409A-1(i)), any such payment that is scheduled to be paid within six months after such separation from service shall accrue without interest and shall be paid on the first day of the seventh month beginning after the date of the Participant’s separation from service or, if earlier, within fifteen days after the appointment of the personal representative or executor of the Participant’s estate following the Participant’s death.
ARTICLE XIII
AMENDMENT
The Board may at any time in its sole discretion, for any reason whatsoever, terminate or suspend the Plan, and from time to time may amend or modify the Plan; provided that without the approval of the Company's shareholders in accordance with applicable law, no amendment or modification to the Plan may (i) except as otherwise expressly provided in Article X, increase the number of shares of Common Stock subject to the Plan, (ii) modify the requirements for participation in the Plan or (iii) modify the Plan or any Award in any other way that would require shareholder approval under any regulatory requirement that the Committee determines to be applicable, including, without limitation, the rules of the New York Stock Exchange.
No amendment shall, without a Participant's consent, adversely affect any rights of such Participant under any Award outstanding at the time such amendment is made.
ARTICLE XIV
DURATION OF PLAN
No Award may be granted under this Plan after February 20, 2028. Awards granted before that date shall remain valid in accordance with their terms.
ARTICLE XV
EFFECTIVENESS DATE OF PLAN
Options, SARs and Stock Unit Awards may be granted under the Plan upon its adoption by the Board, provided that no such Award shall be exercisable or settled unless the Plan is approved by the Company’s shareholders in accordance with applicable law within twelve months of such adoption. Stock Awards may be granted under the Plan upon the later of its adoption by the Board or its approval by shareholders in accordance with the preceding sentence.
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IMPORTANT ANNUAL MEETING INFORMATION Electronic Voting Instructions Available 24 hours a day, 7 days a week! Instead of mailing your proxy, you may choose one of the voting methods outlined below to vote your proxy. VALIDATION DETAILS ARE LOCATED BELOW IN THE TITLE BAR. Proxies submitted by the Internet or telephone must be received by 1:00 a.m., Eastern Time, on May 2, 2018. Vote by Internet Go to www.envisionreports.com/TG Or scan the QR code with your smartphone Follow the steps outlined on the secure website Vote by telephone Call toll free 1-800-652-VOTE (8683) within the USA, US territories & Canada on a touch tone telephone Follow the instructions provided by the recorded message Using a black ink pen, mark your votes with an X as shown in this example. Please do not write outside the designated areas. Annual Meeting Proxy Card IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. A Proposals — The Board of Directors recommends a vote FOR all the nominees listed and FOR Proposals 2 and 3 and every THREE YEARS for Proposal 4. 1. Election of Directors: For Against Abstain For Against Abstain For Against Abstain 01 - George C. Freeman, III 04 - Kenneth R. Newsome 07 - John M. Steitz 02 - John D. Gottwald 05 - Gregory A. Pratt 08 - Carl E. Tack, III 03 - William M. Gottwald 06 - Thomas G. Snead, Jr. 2. Approval of the Tredegar Corporation 2018 Equity Incentive Plan For Against Abstain 3. Advisory vote to Approve Named Executive Officer Compensation For Against Abstain 4. Advisory vote on Frequency of the Vote on Named Executive Officer Compensation. 3 Years 2 Years 1 Year Abstain B Authorized Signatures — This section must be completed for your vote to be counted. — Date and Sign Below Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title. Date (mm/dd/yyyy) — Please print date below. Signature 1 — Please keep signature within the box.Signature 2 — Please keep signature within the box. 02RKED 1 U P X+
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Directions to Tredegar Corporation’s Annual Meeting of Shareholders can be found at https://events.richmond.edu/jepson-alumni-center/directions.html51 YOUR VOTE IS IMPORTANT REGARDLESS OF WHETHER YOU PLAN TO ATTEND THE ANNUAL MEETING OF SHAREHOLDERS, YOU CAN BE SURE YOUR SHARES ARE REPRESENTED AT THE MEETING BY PROMPTLY (i) COMPLETING, SIGNING, DATING AND RETURNING YOUR VOTING INSTRUCTION CARD IN THE ENCLOSED ENVELOPE OR (ii) VOTING VIA THE INTERNET OR BY TELEPHONE PER THE INSTRUCTIONS ON THE REVERSE SIDE. IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. Proxy/Voting Instruction Form — TREDEGAR CORPORATION PROXY FOR ANNUAL MEETING OF SHAREHOLDERS This proxy is solicited on behalf of the Board of Directors for the Annual Meeting to be held on May 2, 2018 As a recordholder of the common stock of Tredegar Corporation (“Tredegar”), the undersigned hereby appoints Kevin C. Donnelly, D. Andrew Edwards, and Michael J. Schewel, or any of them, with full power of substitution in each, as proxies (and if the undersigned is a proxy, substitute proxies) to vote all shares of common stock of Tredegar that the undersigned is entitled to vote at the Annual Meeting of Shareholders to be held on May 2, 2018, and at any and all adjournments and postponements thereof. When properly executed, this proxy will be voted in the manner directed herein by the undersigned shareholder. If no direction is made, this proxy will be voted FOR all nominees in Proposal 1 and FOR Proposals 2, 3 and 5 and every THREE YEARS for Proposal 4 and according to the discretion of the proxy holders on any other matters that may properly come before the Annual Meeting and at any and all adjournments and postponements thereof. IMPORTANT NOTICE TO PARTICIPANTS IN THE RETIREMENT SAVINGS PLAN As a participant in the Tredegar Corporation Retirement Savings Plan (the “Plan”), a notice and proxy statement regarding the Tredegar Annual Meeting of Shareholders to be held on May 2, 2018 is enclosed and a copy of Tredegar’s annual report has been provided to you. You may instruct Great-West Trust Company, LLC (the “Trustee”) how to vote your proportionate shares of Tredegar common stock held by the Trustee in connection with the 2018 Annual Meeting of Shareholders. If you wish to instruct the Trustee how to vote your shares, complete, sign and date this form and send it to Computershare Investor Services in the enclosed postage-paid envelope so it is received by April 26, 2018 or vote your shares via the Internet or by telephone per the instructions on the reverse side. If no instructions are received by the Trustee, the Trustee will vote your Retirement Savings Plan shares FOR all nominees in Proposal 1 and FOR Proposals 2, 3 and 5 and every THREE YEARS for Proposal 4 as contained in the proxy statement and as shown on the reverse side. PLEASE COMPLETE, SIGN, DATE AND RETURN PROMPTLY USING THE ENCLOSED ENVELOPE. (CONTINUED AND TO BE SIGNED ON REVERSE SIDE.)