PROPOSAL NO. 2 –
AMENDMENT TO ADOPT MAJORITY VOTING STANDARD FORAPPROVAL OF THE
ELECTION OF DIRECTORS IN UNCONTESTED ELECTIONS2024 MYERS INDUSTRIES, INC. EMPLOYEE STOCK PURCHASE PLANOverview
In Proposal 2, weWe are asking shareholdersseeking your vote to approve an amendmentthe 2024 Myers Industries, Inc. Employee Stock Purchase Plan (the “ESPP”).
On February 29, 2024, our Board unanimously adopted the ESPP, subject to Article 7 ofapproval by our Articles to eliminate plurality voting standards in uncontested elections of directors. Under the current “plurality voting” standard, the nominees who receive the greatest number of affirmative votes are elected to the Board. However, as described under Corporate Governance and Compensation Practices – Director Resignation Policy, the Company has adopted a director resignation policy under which, in an uncontested election, any incumbent director who receives a greater number of votes “Withheld” from his or her election than votes “For” his or her election (and with respect to such incumbent director’s election at least 25% of the Company’s shares outstanding and entitled to vote thereon were “Withheld” from the election of such director) must submit an offer of resignation to the Board. The proposed amendment, described in more detail below, will replace the plurality voting standards in our Articles with majority voting for uncontested elections of directors.shareholders. If this proposal is approved, the Board will subsequently amend Article 2, Section 3 of our Amended and Restated Code of Regulations (the “Regulations”) to incorporate the majority voting standard for the election of directors in uncontested elections, and will rescind the Director Resignation Policy.
If approved, this proposal will add Article 7, Section B to our Articles to establish majority voting for uncontested elections of directors beginning with the 2022 Annual Meeting. As a result, all director nominees in uncontested elections would be required to receive a number of “FOR” votes representing at least a majority of votes cast in person or by proxy, by the holders of shares entitled to vote at a meeting at which a quorum is present. Abstentions and broker non-votes will have no effect in determining whether the required affirmative majority vote has been obtained. A nominee in an uncontested election who does not receive a majority vote shall not be elected. An incumbent director not elected because he or she does not receive a majority vote shall continue to serve as a holdover director until the earliest of (x) 90 days after the date on which an inspector determines the voting results as to that director; (y) the date on which the Board appoints an individual to fill the office held by such director, which appointment shall constitute the filling of a vacancy by the Board pursuant to Article II, Section 4, or (z) the date of the director’s resignation.
If the proposal is not approved by our shareholders, such amendmentthe ESPP will not be implemented, our plurality voting standard for uncontested elections will continue in place, Article 7become effective as of our Articles will continue in its current form, and the Company’s Director Resignation Policy will remain in place.
In contested elections, the directors shall continue to be elected by the vote of a plurality of the votes cast. A contested election is one in which (i) a shareholder has complied with the requirements of Article I, Section 12 regarding one or more nominees, or an Eligible Shareholder has complied with the requirements of Article I, Section 13 regarding one or more nominees, and (ii) prior to the date that notice of the meeting is given, the Board has not made a determination that none of the candidacies of the shareholder or Eligible Shareholder’s nominees creates a bona fide election contest.
Our Board has observed current corporate governance trends and analyzed the benefits to our company and its shareholders of adopting majority voting standards for the uncontested election of directors. Our Board recognizes that many public companies have amended their governing documents to provide for a majority voting standard rather than our current plurality standard.October 1, 2024. Our Board believes that requiring directorsapproval of the ESPP will advance the interests of the Company by providing eligible employees the opportunity to purchase common stock in the Company. Accordingly, the Board unanimously recommends a vote in favor of the ESPP.
The purpose of the ESPP is to encourage stock ownership in the Company by all eligible employees through the purchase of shares of our common stock. The ESPP is intended to qualify as an “employee stock purchase plan” meeting the requirements of Section 423 of the Internal Revenue Code.
The maximum aggregate number of shares of our common stock that may be elected by a majority of votes cast works to ensure that only director nominees broadly accepted among our voting shareholderspurchased under the ESPP will be elected and also bolsters the accountability of each elected director500,000 shares, subject to our shareholders. Accordingly, after careful consideration, our Board has determined that it would beadjustment as provided for in the best interestsESPP. The share pool for the ESPP represents approximately 1.35% of the total number of 36,939,137 shares of our shareholders to amend our Articlescommon stock outstanding as of March 7, 2024. The number of outstanding shares will not materially change between March 7, 2024 and Regulations to adopt a majority voting standard for uncontested elections of directors.
Text of Proposed Amendment
The following is the text of Article 7, Section B, proposed to be added to the Articles:
“A nominee for a director shall be elected to the Board by the vote of the majority of the votes cast. A majority of votes cast means thatMarch 16, 2024. In determining the number of votes cast “for”shares to reserve for the ESPP, our Board considered the potential dilutive impact to shareholders, the projected participation rate over the ten-year term of the ESPP and equity plan guidelines established by certain proxy advisory firms. If the ESPP is approved by shareholders, no additional options to purchase shares of common stock will be granted under the Myers Industries, Inc. Employee Stock Purchase Plan, effective January 1, 2019 and last amended effective as of October 1, 2022. As of March 7, 2024, there were 87,928 remaining authorized shares that could be issued under this current Employee Stock Purchase Plan (approximately 0.24% of our current outstanding shares).
Summary of Material Terms of the ESPP A summary of the material terms of the ESPP, as it is proposed, is set forth below. The summary does not purport to be complete and is qualified in its entirety by reference to the full text of the ESPP, as it is proposed, which is attached to this Proxy Statement as Appendix A.
Subject to adjustment as provided in the ESPP, a director’s election exceedstotal of 500,000 shares of our common stock will be made available for purchase under the ESPP. The shares may be newly issued shares, treasury shares or shares acquired in the open market. In the event that any dividend or other distribution, recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of common stock or other securities of the Company, or other change in the Company’s structure affecting the common stock occurs, then, in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the ESPP, the CMD Committee will, in such manner it deems equitable, adjust the number of votes cast “against”shares and class of common stock that director. may be delivered under the ESPP, the purchase price per share and number of shares of common stock covered by each outstanding option to purchase under the ESPP, the number of shares reserved under the ESPP, and the number of shares subject to the purchase period limit.
The following shall notCMD Committee will administer the ESPP, and will have the authority to construe and interpret the terms of the ESPP and take any other actions necessary or desirable for the administration of the ESPP. The CMD Committee will determine eligibility to participate in the ESPP, subject to the terms of the ESPP. The CMD Committee may delegate to a Company officer or to one or more other persons some or all of its responsibilities and duties to administer the Plan.
Generally, any employee of the Company or any of its participating subsidiaries will be countedeligible to participate in an offering period if, as votes cast: (a)of the first day of the enrollment period for the offering period, the employee has been employed by the Company or a share whose ballotparticipating subsidiary for at least 30 days and is marked as withheld; (b) a share otherwise presentcustomarily employed for at least 20 hours per week.
No employee may be granted an option to purchase shares of our common stock under the meeting but for which there is an abstention; and (c) a share otherwise present atESPP if (i) immediately after the grant, the employee would own capital stock of the Company or hold outstanding options to purchase stock possessing 5% or
