UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No. )
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☐ | Soliciting Material Pursuant to § 240.14a-12 |
Koppers Holdings Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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March 30, 2020April 5, 2021
Dear Fellow Shareholder:
You are cordially invited to attend the 20202021 Annual Meeting of Shareholders of Koppers Holdings Inc. (Koppers). The meeting will be held at the Duquesne Club, 325 Sixth Avenue, Pittsburgh, PA 15222via live virtual meeting webcast on Wednesday,Thursday, May 6, 2020,2021, beginning at 10:00 a.m. Eastern Daylight Time.
Purpose of Our Meeting
The purpose of the meeting will be to elect eight directors, to approve an amendment to our 2020 Long Term Incentive Plan, to approve our amended and restated Employee Stock Purchase Plan, to hold an advisory vote on executive compensation and to ratify the audit committee’s appointment of KPMG LLP as our independent registered public accounting firm for fiscal year 2020.2021.
This booklet includes the Notice of Annual Meeting and Proxy Statement. The proxy statement describes the business we will conduct
at the meeting and provides information about Koppers that you should consider when you vote your shares. Also enclosed is our Annual Report, which includes our consolidated financial statements for 2019.2020.
Your Vote is Important
Your vote is important regardless of how many shares you own and I urge you to vote your shares. Whether or not you plan to attend the annual meeting, please provide your proxy via Internet, telephone or sign, date and return the proxy card in the enclosed envelope to make sure that your shares are voted at the meeting. Voting your shares by proxy does not limit your right to be present at the virtual meeting and vote your shares in person.electronically during the virtual annual meeting.
I appreciate your continued confidence in Koppers and look forward to seeing you at the meeting.Koppers.
Sincerely,
Leroy M. Ball President and Chief Executive Officer |
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
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Thursday, May 6, | |||
10:00 a.m. Eastern Daylight Time | ||||
www.meetingcenter.io/243893297 |
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Proposals:
1. | To elect eight members of our board of directors. |
2. | To approve an amendment to our 2020 Long Term Incentive Plan. |
3. | To approve our amended and restated Employee Stock Purchase Plan. 4. To approve an advisory resolution on our executive compensation. |
5. To ratify the appointment of KPMG LLP as our independent registered public accounting firm for fiscal year |
We will also transact any other business that is properly raised at the meeting or any adjournment of the meeting.
There will be no in-person annual meeting. The meeting will be held virtually over the Internet and you will be able to attend and participate in the annual meeting online, vote your shares electronically and submit your questions prior to and during the meeting by visiting www.meetingcenter.io/243893297. The meeting will begin promptly at 10:00 a.m. Eastern Daylight Time and online access will open 15 minutes prior to allow time to log-in. The login password is KOP2021. Please follow these instructions to attend and participate in the annual meeting online:
Registered Shareholders
If your shares are registered in your name with Koppers transfer agent or you are a participant holding Koppers stock in a Koppers-sponsored plan and you wish to attend the online-only virtual meeting, please use the website and password set forth above and the voter control number that is located on your proxy card to log-in to the meeting at the date and time set forth above.
Beneficial Shareholders (those holding shares through a stock brokerage account or by a bank or other holder of record)
If you hold your shares through an intermediary, such as a bank, broker or other nominee, you must register in advance to attend the online-only virtual annual meeting by submitting proof of your proxy power (legal proxy) reflecting your Koppers holdings along with your name and email address to Computershare. You can obtain a legal proxy by contacting your account representative at the bank, broker or other nominee that holds your shares.
Requests for registration must be labeled as “Legal Proxy” and be received no later than 5:00 p.m. Eastern Daylight Time on Tuesday, May 4, 2021. You will receive a confirmation of your registration by email with a voter control number after we receive your valid registration materials. In order to attend the online-only virtual meeting, please use the website and password set forth above and the voter control number that you receive to log-in to the meeting at the date and time set forth above. Requests for registration should be directed to us by email as follows:
Forward the email from your broker, or attach a legible photograph of your legal proxy, to legalproxy@computershare.com.
In order to maintain the interactive nature of the virtual meeting, virtual attendees are able to:
Vote using the online meeting website
Submit questions during the meeting
Record Date:
You can vote if you were a shareholder of record on March 16, 2020.22, 2021.
If the annual meeting is adjourned because of the absence of a quorum, those shareholders entitled to vote who attend the adjourned annual meeting, although constituting less than a quorum as provided herein, shall nevertheless constitute a quorum for the purpose of electing directors. If the annual meeting is adjourned for one or more periods aggregating at least fifteen (15) days because of the absence of a quorum, those shareholders entitled to vote who attend the reconvened annual meeting, if less than a quorum as determined under applicable law, shall nevertheless constitute a quorum for the purpose of acting upon any matter set forth in this Notice of Annual Meeting of Shareholders.
Admission to the Meeting:
Only holders of our common stock or their authorized representatives by proxy may attend the meeting. If you are a shareholder of record and planYou will not be able to attend the annual meeting in person. To attend the virtual annual meeting, please markfollow the appropriate box on the proxy card. If your shares are held through an intermediary, such as a broker or a bank, you must present proof of your ownership as of March 16, 2020. Proof of ownership could include a proxy card from your bank or broker or a copy of your account statement. All attendees will need to present valid photo identification for admission to the meeting.instructions above.
By Order of the Board of Directors |
Stephanie L. Apostolou
General Counsel and Secretary
March 30, 2020April 5, 2021
Your Vote Is Important
Whether or not you plan to attend the meeting, please complete, date, signpromptly provide your proxy via Internet, telephone or by completing, dating, signing and returnreturning the accompanying proxy card promptly so that we can be assured of having a quorum present at the meeting and so that your shares may be voted in accordance with your wishes.
Important Notice Regarding the Availability of Proxy
Materials for the Annual Meeting of Shareholders to Bebe Held on May 6, 20202021
A complete copy of this proxy statement and our annual report for the year ended
December 31, 20192020 are also available at www.proxydocs.com/KOP.
20202021 PROXY SUMMARY
This 20202021 Proxy Summary highlights certain information contained elsewhere in this proxy statement. This summary does not contain all of the information that you should consider before voting, and we strongly encourage you to carefully read the entire proxy statement before voting.
General Information About This Annual Meeting
Date and Time: |
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Location: |
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Record Date: | March | |
Voting: | Shareholders as of the record date have one vote for each share held on the record date for each proposal. |
You are entitled to vote if you owned shares of our common stock at the close of business on the record date, March 16, 2020.22, 2021. This proxy statement and the related proxy materials were first mailed to shareholders and made available on the internetInternet on or about March 30, 2020.April 5, 2021.
How to cast your vote (page 58)73)
You may vote your shares by proxy or in person atelectronically during the virtual annual meeting. If you are a shareholder of record, to vote your shares by proxy, you must complete, sign and dateprovide your proxy via one of the proxy card and return it in the postage prepaid envelope. following methods:
Internet | Telephone | |||
www.investorvote.com/KOP | Follow the instructions on the proxy card. | Complete, sign and date the proxy card and return it in the postage prepaid envelope provided. |
If you are a beneficial owner, you must complete, sign and date the voting instructions included in the package from your broker, bank or other record holder and return those instructions to the broker, bank or other holder of record.
Proposals to be Considered and Board Recommendations
Proposal | Board Voting Recommendation | Page Reference | ||
FOR each director nominee | 1 | |||
FOR | 52 | |||
Approve our amended and restated Employee Stock Purchase Plan | 64 | |||
• Approve an advisory resolution on our executive compensation | FOR | |||
2021 | FOR | 70 |
KOPPERS HOLDINGS INC. |
2021 PROXY SUMMARY
Name | Age | Director Since | Independent | Committee Memberships | ||||
Leroy M. Ball
| 51
| 2015
| No
| SC
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Xudong Feng, Ph.D.
| 61
| 2009
| Yes
| MDC; NCG; SC (Chair)
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Traci L. Jensen
| 53
| 2018
| Yes
| AC; MDC; SRC; SC
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David L. Motley
| 61
| 2018
| Yes
| AC; NCG (Chair); SRC
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Albert J. Neupaver
| 69
| 2009
| Yes
| AC; MDC; SRC (Chair)
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Louis L. Testoni
| 70
| 2013
| Yes
| AC (Chair); NCG; SRC
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Stephen R. Tritch
| 70
| 2009
| Yes
| SC
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Sonja M. Wilkerson
| 59
| 2018
| Yes
| MDC (Chair); NCG; SC
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Committee Memberships | ||||||||||||||||
Name | Age | Director Since | Independent | Audit | Management Development and Compensation | Nominating and Corporate Governance | Strategy and Risk | Sustainability | ||||||||
Leroy M. Ball | 52 | 2015 | No | ✓ | ||||||||||||
Xudong Feng, Ph.D. | 62 | 2009 | Yes | ✓ | ✓ | (Chair) | ||||||||||
Traci L. Jensen | 54 | 2018 | Yes | ✓ | ✓ | ✓ | ✓ | |||||||||
David L. Motley | 62 | 2018 | Yes | ✓ | (Chair) | ✓ | ||||||||||
Albert J. Neupaver | 70 | 2009 | Yes | ✓ | ✓ | (Chair) | ||||||||||
Louis L. Testoni | 71 | 2013 | Yes | (Chair) | ✓ | ✓ | ||||||||||
Stephen R. Tritch (Chairman) | 71 | 2009 | Yes | ✓ | ||||||||||||
Sonja M. Wilkerson | 60 | 2018 | Yes | (Chair) | ✓ | ✓ |
20192020 Performance Highlights1:
Consolidated sales $1.669 billion increased by $32.1 million, or 2.0 percent, as compared to $1.637 billion in the prior year | Net income $122.0 million compared with net income of $66.6 million in the prior year | Adjusted EBITDA $211.0 million compared with $201.1 million in the prior year | Diluted earnings per share $5.71 compared with $3.16 in the prior year |
Consolidated sales of $1.773$1.669 billion increased by $62.6$32.1 million, or 3.72.0 percent, as compared to $1.710$1.637 billion in the prior year. 2019Despite headwinds associated with the global pandemic, 2020 sales represented the thirdfourth consecutive year of growth as well as the highest level of revenues in the history of the company.company, excluding Koppers (Jiangsu) Carbon Chemical Company Limited (“KJCC”), which was divested in September 2020.
Net income attributable to Koppers for 20192020 was $66.6$122.0 million compared with net income of $23.4$66.6 million in the prior year. As adjusted, earnings before interest, taxes, depreciation and amortization (“EBITDA”) was $210.8$211.0 million, compared with $221.6$201.1 million in the prior year.
Adjusted EBITDA margin for 20192020 was 11.9%12.6% compared with 13.0%12.3% in the prior year.
We achieved diluted earnings per share (“EPS”) of $3.16$5.71 for fiscal year 20192020, our second highest EPS ever behind only fiscal year 2008, compared with $1.10$3.16 in the prior year. As adjusted, EPS was $3.31$4.12 compared with $3.50$3.18 in the prior year.
1 On pages vi, 21, 23-27 and 52, we refer to our 2020 adjusted EBITDA, adjusted EBITDA margin and adjusted EPS results. Adjusted EBITDA, adjusted EBITDA margin and adjusted EPS are non-GAAP measures, which provide information useful to investors in understanding the underlying operational performance of our company, its business and performance trends, and facilitate comparisons between periods. The exclusion of certain items permits evaluation and a comparison of results for ongoing business operations, and it is on this basis that our management internally assesses the company’s performance. In addition, our board of directors and executive management team use adjusted EBITDA as a performance measure under the company’s annual incentive plan. As previously announced, the divestiture of KJCC was completed on September 30, 2020. Beginning in 2020, KJCC results are classified as held for sale and as discontinued operations for the current year as well as the comparable prior year period. The adjustments to EBITDA, EBITDA margin and EPS, as well as reconciliations to the most directly comparable GAAP measures, are set forth in Appendix C of this proxy statement. These reconciliations also reflect how adjusted EBITDA is calculated for purposes of compensation.
2021 Proxy StatementKOPPERS HOLDINGS INC. - 2020vi iv
20202021 PROXY SUMMARY
Executive Compensation Highlights:
In awarding compensation to each of our named executive officers (“NEOs”) in 20192020 our management development and compensation committee considered the company’s overall performance for the year. The table below reflects, for each NEO, the total direct compensation awarded in 2019,2020, computed in accordance with SEC regulations.
Long-Term Incentive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-Term Incentive | ||||||||||||||||||||||||||||||||||||||||||||||||||||
NEO | Base Salary | Annual Cash Incentive | PSUs | Stock Options | RSUs | Total Direct Compensation | Base Salary | One-Time Cash Incentive(1) | Annual Incentive | PSUs | Stock Options | RSUs | Total Direct Compensation | |||||||||||||||||||||||||||||||||||||||
Leroy M. Ball
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| $857,719
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| $864,634
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| $1,746,723
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| $692,535
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| $461,684
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| $4,623,295
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| $864,450 | $205,808 | $890,384 | $763,596 | $777,999 | $518,664 | $4,020,901 | |||||||||||||||||||||||||||
Michael J. Zugay
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| $399,641
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| $241,694
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| $ 369,873
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| $146,651
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| $ 97,759
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| $1,255,618
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| $402,791 | $ 57,538 | $248,925 | $148,245 | $151,042 | $100,682 | $1,109,223 | |||||||||||||||||||||||||||
James A. Sullivan | $500,000 | $189,280 | $386,250 | $294,445 | $300,000 | $199,990 | $1,869,965 | |||||||||||||||||||||||||||||||||||||||||||||
Leslie S. Hyde | $322,040 | $ 46,431 | $200,875 | $119,623 | $121,882 | $ 81,249 | $ 892,100 | |||||||||||||||||||||||||||||||||||||||||||||
Stephanie L. Apostolou | $282,913 | $ 35,712 | $154,500 | $ 88,330 | $ — | $149,993 | $ 711,448 | |||||||||||||||||||||||||||||||||||||||||||||
Steven R. Lacy
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| $446,263
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| $269,829
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| $ 412,954
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| $163,721
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| $109,130
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| $1,401,897
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| $449,817 | $ 94,255 | $ — | $ — | $ — | $562,262 | $1,106,334 | |||||||||||||||||||||||||||
James A. Sullivan
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| $408,766
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| $247,193
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| $ 453,980
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| $179,999
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| $119,995
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| $1,409,933
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Douglas J. Fenwick
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| $299,316
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| $176,306
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| $ 269,809
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| $106,974
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| $ 71,315
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| $ 923,720
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| $304,485 | $ 92,730 | $188,172 | $112,063 | $114,176 | $ 76,106 | $ 887,732 |
(1) | All NEOs received a one-time cash incentive related to the sale of KJCC in 2020. In addition, Mr. Fenwick received a one-time cash incentive related to the exceptional performance of the Performance Chemicals business in 2020. |
Our Summary Compensation Table can be found on page 27.33. In accordance with SEC regulations, the Summary Compensation Table also reports amounts for Changes in Pension Value, Nonqualified Deferred Compensation Earnings and All Other Compensation.
KeyPay-for-Performance Features of Our Executive Compensation Program:
Total compensation consists primarily of base salary, an annual cash incentive and long-term equity incentives.
Our NEOs received annual incentive awards at 103% of their targets. Additional one-time only cash incentives were awarded to all eligible participants in our annual incentive plan, including our NEOs, to recognize the successful completion of the sale of KJCC and related annual incentive shortfalls from prior years caused by understated pricing paid by KJCC’s largest customer in such prior years. All eligible participants in our annual incentive plan from our Performance Chemicals segment, including Mr. Fenwick, also received an additional one-time discretionary bonus in recognition of the exceptional performance of the Performance Chemicals business in 2020.
Long-term incentives comprise a significant portion of the executives’ total compensation package, with, generally, approximately 50% of the total dollar value of such awards consisting of performance-based restricted stock units (“PSUs”) with multi-year performance objectives and a three-year period for vesting (if the applicable performance objective is achieved).
PSUs do not vest unless a threshold level of performance is surpassed.
Executives receive only limited perquisites, allmost of which are for business-related purposes.
KOPPERS HOLDINGS INC. | vii |
2021 PROXY SUMMARY
Total Realized Compensation
Below is a comparison of 2020 target compensation to total realized compensation for our NEOs. Total realized compensation is based on the actual dollar value of awards delivered to our NEOs in any given year. This measure further demonstrates our ongoing commitment to compensating our leadership based on the company’s performance and placing a significant portion of senior executive compensation at risk. For example, total realized compensation was meaningfully lower than target for most of our NEOs in 2020 because our total shareholder return measured against that of the S&P Small Cap 600 Materials Index over the three-year period ended December 31, 2020 was at the 24th percentile, and therefore, none of the PSUs awarded in 2018 vested. Mr. Lacy’s total realized compensation was meaningfully higher than target in 2020 because, in connection with Mr. Lacy’s transition from his position as Chief Administrative Officer, General Counsel and Secretary into the role of Assistant to the President of Koppers Inc., prior to his subsequent retirement on December 31, 2020, Mr. Lacy’s 2020 long-term incentive award consisted of a single time-based restricted stock unit (“RSU”) grant, which vested on December 31, 2020.
NEO | 2020 Target Compensation | 2020 Total Realized Compensation | % of Target Realized | |||||||||
Leroy M. Ball | $4,322,250 | $2,789,450 | 64.5% | |||||||||
Michael J. Zugay | $1,147,955 | $ 933,678 | 81.3% | |||||||||
James A. Sullivan | $1,875,000 | $1,306,644 | 69.7% | |||||||||
Leslie S. Hyde | $ 926,364 | $ 783,298 | 84.6% | |||||||||
Stephanie L. Apostolou | $ 750,000 | $ 506,830 | 67.6% | |||||||||
Steven R. Lacy | $1,012,088 | $1,836,765 | 181.5% | |||||||||
Douglas J. Fenwick | $ 867,782 | $ 730,485 | 84.2% |
Total realized compensation is calculated as follows:
viii | 2021 Proxy Statement |
2021 PROXY SUMMARY
Corporate Governance Highlights:
Majority Voting and Director Resignation Policy | Our board is subject to a majority voting requirement; any director not receiving a majority of votes cast (excluding abstentions) in an uncontested election must tender his or her resignation to the board. | |
Term Limits for Directors | All directors, other than our CEO, who are first elected to the board of directors after August 2, 2017, will have a term limit of 15 years, unless the board approves an exception to this limit, which the board has the authority to do on acase-by-case basis. | |
Age Limits for Directors | A director is not eligible to stand forre-election if he or she has reached the age of 74 before the date of election, unless the board approves an exception to this limit, which the board has authority to do on acase-by-case basis. | |
Declassified Board Structure | Our entire board isre-elected every year; we have no staggered elections. | |
Annual Board and Committee Self-Evaluations | Our board and committees engage in thorough self-evaluations on an annual basis. | |
No Poison Pill | The company currently does not have a poison pill in place. | |
Independent Board | Our board is comprised of all independent directors, other than Mr. Ball, and our independent directors regularly meet in executive sessions. | |
Stock Ownership Guidelines for Directors and Stock Ownership Requirements for Executive Officers | We have adopted stock ownership guidelines for directors and stock ownership requirements for executives that encourage a long-term perspective and ensure that the interests of directors and executives are closely aligned with shareholders. | |
Corporate Governance Guidelines | We have adopted corporate governance guidelines to ensure we are fully compliant with the law and engaging in corporate governance “best practices.” These guidelines are reviewed at least annually. | |
Strong Board Attendance | In |
KOPPERS HOLDINGS INC. | ix |
1 Onpages iv-v, 16and 18-21, we refer to our 2019 adjusted EBITDA, adjusted EBITDA margin and adjusted EPS results. Adjusted EBITDA, adjusted EBITDA margin and adjusted EPS arenon-GAAP measures, which provide information useful to investors in understanding the underlying operational performance of our company, its business and performance trends, and facilitates comparisons between periods. The exclusion of certain items permits evaluation and a comparison of results for ongoing business operations, and it is on this basis that our management internally assesses the company’s performance. In addition, our board of directors and executive management team use adjusted EBITDA as a performance measure under the company’s annual incentive plan. The adjustments to EBITDA, EBITDA margin and EPS, as well as reconciliations to the most directly comparable GAAP measures, are set forth in Annex A of this proxy statement. These reconciliations also reflect how adjusted EBITDA is calculated for purposes of compensation.
v KOPPERS HOLDINGS INC. - 2020 Proxy Statement
PROXY ITEM 1 — PROPOSAL FOR ELECTION OF DIRECTORS
We are asking shareholders to elect the eight nominees named in this proxy statement to serve on the board of directors of Koppers Holdings Inc. (the “company,” “Koppers,” “we” or “us”) until the 20212022 Annual Meeting of Shareholders or until their successors have been duly elected and qualified.
Each nominee currently serves on our board of directors and has been nominated for election by our nominating and corporate governance committee and approved by our board. The board has nominated Leroy M. Ball, Xudong Feng, Ph.D., Traci L. Jensen, David L. Motley, Albert J. Neupaver, Louis L. Testoni, Stephen R. Tritch and Sonja M. Wilkerson for election.
Each nominee who is elected as a director will hold office for the length of their term or until the director’s death, resignation, incapacity or until the
director’s successor shall be elected and shall qualify. Vacancies on the board of directors, including vacancies resulting from an increase in the number of directors, will be filled by a majority vote of the directors then in office, even if less than a quorum.
As set forth in our corporate governance guidelines, all directors, other than our CEO, who are first elected to the board of directors after August 2, 2017, will have a term limit of 15 years, unless the board approves an exception to this limit, which the board has the authority to do on acase-by-case basis. In addition, a director will not be eligible to stand forre-election as a director where he or she has reached the age of 74 before the date of election, unless the board approves an exception to this guideline, which the board has the authority to do on acase-by-case basis.
In any uncontested election of directors, each director will be elected if more votes are cast “for” the director’s election than are cast “against” the director’s election, with abstentions and brokernon-votes not being counted as a vote cast either “for” or “against” the director’s election. A plurality standard will apply in any contested election of directors, which is an election in which the number of nominees for director exceeds the number of directors to be elected.
If any incumbent director fails to receive a majority of the votes cast in any uncontested election, the director will be required to tender his or her resignation to the board of directors within ten days following certification of the election results. The nominating and corporate governance committee of the board of directors, or such other committee as the board may designate, will then recommend to the board whether to accept or reject such director’s resignation, or whether other action
should be taken. The nominating and corporate governance committee may consider any factors it considers appropriate or relevant in considering whether to accept or reject a director’s resignation, or whether other action should be taken. The board will act on the nominating and corporate governance committee’s recommendation and publicly disclose its decision within 120 days following the date of the certification of the election results. If the tendered resignation is accepted by the board, the board may fill the resulting vacancy or decrease the number of directors comprising the board in accordance with our bylaws.
Your proxy will be voted “FOR” the election of the nominees set forth in the proxy card, unless you vote against, or abstain from voting for or against, one or more of them. If any nominee is unable or unwilling to stand for election, your proxy authorizes us to vote for a replacement nominee if the board names one.
KOPPERS HOLDINGS INC. | 1 |
PROXY ITEM 1 — PROPOSAL FOR ELECTION OF DIRECTORS
There are no specific minimum qualifications a nominee must meet in order to be recommended for the board. However, our nominating and corporate governance committee seeks to establish, as required by the committee’s charter, a board that consists of individuals from diverse educational and professional experiences and backgrounds, that, when taken as a whole, provide meaningful counsel to management. Board candidates are considered based upon various criteria, such as their broad- basedbroad-based business skills and experiences, prominence and reputation in their profession, global business perspective, concern for the long-term interests of our shareholders and personal integrity, values and judgment — all in the context of an assessment of the perceived needs of the board. In addition, directors must have significant time available to devote to board activities and to enhance their knowledge of our business. Although we do not have a formal policy with respect to diversity, our nominating and corporate governance committee considers the diversity of our board as a whole, including the skills, background and experience of our directors.
Our nominating and corporate governance committee believes each member of our board of directors possesses the individual qualities necessary
to serve on the company’s board of directors, including high personal and professional ethical standards and integrity, honesty and good values. Our directors are highly educated and have diverse backgrounds and extensive track records of success in what we believe are highly relevant positions with large international companies, firms and major private and public institutions. They have each demonstrated an ability to exercise sound judgment and have exhibited a commitment of service to the company and to the board, and each of our directors possesses strong communication skills. In addition, we believe that each director brings the skills, experience and perspective that, when taken as a whole, creates a board that possesses the requirements necessary to oversee the company’s business. Each nominee’s particular experience, qualifications, attributes and skills that led the board to conclude that such nominee should serve as a director for the company are set forth below. The committee reviews the board membership criteria and modifies them as necessary each year.
The board of directors recommends a vote “FOR” the election of all eight nominees.
Biographical Summaries of Nominees
NOMINEES
Leroy M. Ball
Age 51
Director Since 2015
Mr. Ball has served as President and Chief Executive Officer of the company and Koppers Inc., our wholly-owned subsidiary, since January 2015. From August 2014 through December 2014, Mr. Ball served as Chief Operating Officer of the company and Koppers Inc. and from May 2014 until August 2014, Mr. Ball served as both Chief Operating Officer and Chief Financial Officer of the company and Koppers Inc. Mr. Ball served as Vice President and Chief Financial Officer of the company and Koppers Inc. from September 2010 to May 2014. Prior to joining Koppers, Mr. Ball was Senior Vice President and Chief Financial Officer of Calgon Carbon Inc., a provider of services, products and solutions for purifying water and air, since 2002. Mr. Ball has been a director of Koppers Inc. since May 2013. Mr. Ball has served as a director of Allegheny Technologies Incorporated, a public company and global manufacturer of technically advanced specialty materials and complex components, since February 2019.
Mr. Ball has significant leadership experience in global businesses and valuable financial expertise and experience. As the only current management representative on our board, Mr. Ball enhances board discussions by providing an insider’s perspective on the company’s business, operations and strategic direction and insight into all aspects of the company’s business.
Xudong Feng, Ph.D.
Age 61
Director Since 2009
Dr. Feng serves as Director of Science and Technology and Global Analytical Sciences of PPG Industries, Inc., a public company and a global supplier of paints, coatings, optical products, and specialty materials, effective as of March 2, 2020. Previously, Dr. Feng served as Director of Research, Industrial and Packaging Coatings of PPG Industries, Inc. since June 2018. In addition, Dr. Feng has served as the Chief Executive Officer of ImmunArtes LLC, a biotech startup company, since November 2017. From September 2012 to June 2018, Dr. Feng held the positions of Executive Director and subsequently the Senior Associate Dean for Budget and Strategy of the University of Chicago’s Institute for Molecular Engineering, an interdisciplinary research institute and academic unit of a private research university.
Dr. Feng holds a Ph.D. in inorganic chemistry, which has provided her with a technical background and a strong expertise in the specialty chemicals industry. Dr. Feng’s technical and industry experience, her experience in risk management and regulatory compliance, and her knowledge of environmental risks and best practices, developed through her leadership positions with PPG Industries, Inc., Bayer MaterialScience LLC and Lanxess Corporation, provide an invaluable perspective to the board’s discussions. In addition, her insights into international business development, particularly in Asian markets, contribute to the board’s consideration of operations in that region.
2021 Proxy Statement2 KOPPERS HOLDINGS INC. - 20202
PROXY ITEM 1 — PROPOSAL FOR ELECTION OF DIRECTORS
Traci L. JensenBiographical Summaries of Nominees
Age 53
Director Since 2018
Ms. Jensen has served as Vice President, Global Business Process Improvement, at H.B. Fuller Company, a global adhesives manufacturer based out of St. Paul, Minnesota, since January 2020. From September 2016 to January 2020, Ms. Jensen served as Senior Vice President, Global Construction Adhesives, at H.B. Fuller Company. Ms. Jensen served as Senior Vice President, Americas Adhesives, at H.B. Fuller Company from January 2012 to September 2016. Additionally, Ms. Jensen serves on the board of H.B. Fuller Foundation and previously served as Executive Committee Chairman on the Adhesives and Sealants Council.
Ms. Jensen’s experience in international operations within the chemicals industry and unique chemicals industry insights, developed through her leadership responsibilities in areas such as manufacturing, sales, marketing, research and development, and human resources, bring important perspective to the board’s discussions. In particular, Ms. Jensen’s international expertise contributes to the board’s consideration of our global operations.
David L. Motley
Age 61
Director Since 2018
Mr. Motley has served as Managing Partner with BlueTree Venture Fund, a venture fund based in Pittsburgh, Pennsylvania, since April 2012. In addition, Mr. Motley has served as Chief Executive Officer and President of MCAPS, LLC, a professional services company, since January 2018. From February 2011 to July 2017, Mr. Motley served as Senior Managing Partner of Headwaters SC, a private equity advisory services company.
During his career, Mr. Motley has served in various leadership roles involving strategic planning, business group management, mergers and acquisitions, and corporate portfolio management. With more than 30 years of experience in consulting with executive management across multiple industries, Mr. Motley has been instrumental in developing corporate diversity initiatives in the U.S. and has also served as a director on variousnon-profit charitable and educational organizations. Mr. Motley is also an experienced board member, having served as a director of F.N.B. Corporation, a public financial services corporation, since July 2013. In addition to his board experience, Mr. Motley’s knowledge and experience in corporate strategy, mergers and acquisitions and other corporate growth initiatives deliver valuable insight to the board and enhance Mr. Motley’s ability to evaluate these matters as a member of our board.
Age: 52 Director since: 2015 Committees: • Sustainability | LEROY M. BALL Experience, Qualifications, Attributes or Skills: Mr. Ball has served as President and Chief Executive Officer of the company and Koppers Inc., our wholly-owned subsidiary, since January 2015. From August 2014 through December 2014, Mr. Ball served as Chief Operating Officer of the company and Koppers Inc. and from May 2014 until August 2014, Mr. Ball served as both Chief Operating Officer and Chief Financial Officer of the company and Koppers Inc. Mr. Ball served as Vice President and Chief Financial Officer of the company and Koppers Inc. from September 2010 to May 2014. Prior to joining Koppers, Mr. Ball was Senior Vice President and Chief Financial Officer of Calgon Carbon Inc., a provider of services, products and solutions for purifying water and air, since 2002. Mr. Ball has been a director of Koppers Inc. since May 2013. Mr. Ball has served as a director of Allegheny Technologies Incorporated, a public company and global manufacturer of technically advanced specialty materials and complex components, since February 2019. Mr. Ball has significant leadership experience in global businesses and valuable financial expertise and experience. As the only current management representative on our board, Mr. Ball enhances board discussions by providing an insider’s perspective on the company’s business, operations and strategic direction and insight into all aspects of the company’s business. Other Public Company Directorships: • Allegheny Technologies Incorporated |
Albert J. Neupaver
Age 69
Director Since 2009
Mr. Neupaver has served as the Chairman and subsequently the Executive Chairman of Westinghouse Air Brake Technologies Corporation, a public company and one of the world’s largest providers of value-added, technology-based equipment and services for the global rail industry, since May 2017. From May 2014 to May 2017, Mr. Neupaver served as the Executive Chairman of Westinghouse Air Brake Technologies Corporation. From February 2006 until May 2014, Mr. Neupaver served as the President and Chief Executive Officer of Westinghouse Air Brake Technologies Corporation. His operational knowledge and leadership skills are further demonstrated by his additional public company experience at AMETEK, Inc., a leading global manufacturer of electronic instruments and electromechanical devices, where he served as the President of the electromechanical group from 1998 to February 2006.
Mr. Neupaver is also an experienced board member, having served as a director of Westinghouse Air Brake Technologies Corporation since 2006, a director of Robbins & Myers, Inc., a public company and leading supplier of engineered equipment and systems, from January 2009 to February 2013 and a director of Genesee & Wyoming Inc., a public company and owner/operator of short line and regional freight railroads, from October 2015 to December 2019. His other affiliations include service on the board of directors of the Carnegie Science Center, the board of trustees of the Carnegie Museums of Pittsburgh and the Children’s Hospital Foundation Board. Mr. Neupaver’s experience as a chief executive officer allows him to better assess our operational risks and growth opportunities.
Louis L. Testoni
Age 70
Director Since 2013
Mr. Testoni has served as a member of the board of directors of ABARTA, Inc., a private holding company, since April 2011, and has served as Independent Lead Director since January 2019. Mr. Testoni has also served as the Lead Independent Director for Control Concepts Corporation, Inc., a family-owned business, since 2015, and as a member of the board of advisors of Henderson Brothers, Inc., a privately-held insurance agency, since December 2012. Mr. Testoni served as an executive in residence at the University of Pittsburgh Katz School of Business, a major public university, from September 2012 until June 2016. From September 2007 through June 2010, Mr. Testoni served as the Lake Erie Market Managing Partner of PricewaterhouseCoopers LLP, an international professional services firm.
Mr. Testoni’s board experience also includes his position as a member of the board of trustees of The Frick Art and Historical Center and as a member of the board of Achieving The Dream, Inc., anon-profit seeking to bring under-educated urban youth into colleges for advanced education and technical training. Mr. Testoni also previously served as Chairman of the board of trustees of the Carnegie Library of Pittsburgh and as a director of the Three Rivers Chapter of the National Association of Corporate Directors, anon-profit membership group for corporate board members. In addition to his broad board experience, Mr. Testoni’s financial background offers the board a key perspective and depth on financial and accounting matters.
Age: 62 Director since: 2009 Committees: • Management Development and Compensation • Nominating and Corporate Governance • Sustainability (Chair) | XUDONG FENG, PH.D. Experience, Qualifications, Attributes or Skills: Dr. Feng has served as Director of Science and Technology and Global Analytical Sciences of PPG Industries, Inc., a global supplier of paints, coatings, optical products, and specialty materials, since March 2020. From June 2018 to March 2020, Dr. Feng served as Director of Research, Industrial and Packaging Coatings of PPG Industries, Inc. In addition, Dr. Feng has served as the Chief Executive Officer of ImmunArtes LLC, a biotech startup company, since November 2017. From September 2012 to June 2018, Dr. Feng held the positions of Executive Director and subsequently the Senior Associate Dean for Budget and Strategy of the University of Chicago’s Institute for Molecular Engineering, an interdisciplinary research institute and academic unit of a private research university. Dr. Feng holds a Ph.D. in inorganic chemistry, which has provided her with a technical background and a strong expertise in the specialty chemicals industry. Dr. Feng’s technical and industry experience, her experience in risk management and regulatory compliance, and her knowledge of environmental risks and best practices, developed through her leadership positions with PPG Industries, Inc., Bayer MaterialScience LLC and Lanxess Corporation, provide an invaluable perspective to the board’s discussions. Other Public Company Directorships: • None |
KOPPERS HOLDINGS INC. | 3 |
PROXY ITEM 1 — PROPOSAL FOR ELECTION OF DIRECTORS
Age: 54 Director since: 2018 Committees: • Audit • Management Development and Compensation • Strategy and Risk • Sustainability | TRACI L. JENSEN Experience, Qualifications, Attributes or Skills: Ms. Jensen has served as Vice President, Global Business Process Improvement, at H.B. Fuller Company, a global adhesives manufacturer, since January 2020. From September 2016 to January 2020, Ms. Jensen served as Senior Vice President, Global Construction Adhesives, at H.B. Fuller Company. Ms. Jensen served as Senior Vice President, Americas Adhesives, at H.B. Fuller Company from January 2012 to September 2016. Additionally, Ms. Jensen serves on the board of the H.B. Fuller Foundation and previously served as Executive Committee Chairman on the Adhesives and Sealants Council. Ms. Jensen brings to the board robust experience in international operations within the chemicals industry and unique chemicals industry insights, developed through her leadership responsibilities in areas such as manufacturing, sales, marketing, research and development, and human resources. In particular, Ms. Jensen’s international expertise contributes to the board’s consideration of our global operations. Other Public Company Directorships: • None |
Age: 62 Director since: 2018 Committees: • Audit • Nominating and Corporate Governance (Chair) • Strategy and Risk | DAVID L. MOTLEY Experience, Qualifications, Attributes or Skills: Mr. Motley has served as Managing Partner with BlueTree Venture Fund, a venture fund based in Pittsburgh, Pennsylvania, since April 2012. In addition, Mr. Motley has served as Chief Executive Officer and President of MCAPS, LLC, a professional services company, since January 2018. From February 2011 to July 2017, Mr. Motley served as Senior Managing Partner of Headwaters SC, a private equity advisory services company. Mr. Motley has served as a director of F.N.B. Corporation, a public financial services corporation, since July 2013. Mr. Motley has also served as a director of Deep Lake Capital Acquisition Corp., a publicly-listed special purpose acquisition company formed for the purpose of entering into a combination with one or more businesses, since January 2021, and as a director of II-VI Incorporated, a worldwide leader in engineered materials and opto-electronic components, since February 2021. During his career, Mr. Motley has served in various leadership roles involving strategic planning, business group management, mergers and acquisitions, and corporate portfolio management. With more than 30 years of experience in consulting with executive management across multiple industries, Mr. Motley has been instrumental in developing corporate diversity initiatives in the United States and has served as a director on various non-profit charitable and educational organizations. In addition to his deep board experience, Mr. Motley’s expertise in corporate strategy, mergers and acquisitions and other corporate growth initiatives deliver valuable insight to the board and enhance Mr. Motley’s ability to evaluate these matters as a member of our board. Other Public Company Directorships: • F.N.B. Corporation • Deep Lake Capital Acquisition Corp. • II-VI Incorporated |
4 | 2021 Proxy Statement |
Stephen R. TritchPROXY ITEM 1 — PROPOSAL FOR ELECTION OF DIRECTORS
Age: 70 Director since: 2009 Committees: • Audit • Management Development and Compensation • Strategy and Risk (Chair) | ALBERT J. NEUPAVER Experience, Qualifications, Attributes or Skills: Mr. Neupaver has alternately served as the Executive Chairman or Chairman of Westinghouse Air Brake Technologies Corporation, a public company and one of the world’s largest providers of value-added, technology-based equipment and services for the global rail industry, since May 2014. From February 2006 until May 2014, Mr. Neupaver served as the President and Chief Executive Officer of Westinghouse Air Brake Technologies Corporation. His operational knowledge and leadership skills are further demonstrated by his additional public company experience at AMETEK, Inc., a leading global manufacturer of electronic instruments and electromechanical devices, where he served as the President of the electromechanical group from 1998 to February 2006. Mr. Neupaver is also an experienced board member, having served as a director of Westinghouse Air Brake Technologies Corporation since 2006, a director of Robbins & Myers, Inc., a public company and leading supplier of engineered equipment and systems, from January 2009 to February 2013 and a director of Genesee & Wyoming Inc., a public company and owner/operator of short line and regional freight railroads, from October 2015 to December 2019. His other affiliations include service on the board of directors of the Carnegie Science Center, the board of trustees of the Carnegie Museums of Pittsburgh and the Children’s Hospital Foundation Board. Mr. Neupaver’s experience as a chief executive officer provides the board with important leadership insights and allows him to better assess our operational risks and growth opportunities. Other Public Company Directorships: • Westinghouse Air Brake Technologies Corporation |
Age: 71 Director since: 2013 Committees: • Audit (Chair) • Nominating and Corporate Governance • Strategy and Risk | LOUIS L. TESTONI Experience, Qualifications, Attributes or Skills: Mr. Testoni has served as a member of the board of directors of ABARTA, Inc., a private holding company, since April 2011, and has served as its Independent Lead Director since January 2019. Mr. Testoni has also served as the Lead Independent Director for Control Concepts Corporation, Inc., a family-owned business, since 2015, and as a member of the board of advisors of Henderson Brothers, Inc., a privately-held insurance agency, since December 2012. Mr. Testoni served as an executive in residence at the University of Pittsburgh Katz School of Business, a major public university, from September 2012 until June 2016. From September 2007 through June 2010, Mr. Testoni served as the Lake Erie Market Managing Partner of PricewaterhouseCoopers LLP, an international professional services firm. Mr. Testoni’s board experience also includes his position as a member of the board of trustees of The Frick Art and Historical Center and as a member of the board of Achieving The Dream, Inc., a non-profit seeking to bring under-educated urban youth into colleges for advanced education and technical training. Mr. Testoni also previously served as Chairman of the board of trustees of the Carnegie Library of Pittsburgh and as a director of the Three Rivers Chapter of the National Association of Corporate Directors, a non-profit membership group for corporate board members. In addition to his broad board experience, Mr. Testoni’s financial background offers the board a key perspective and depth on financial and accounting matters. Other Public Company Directorships: • None |
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Age 70PROXY ITEM 1 — PROPOSAL FOR ELECTION OF DIRECTORS
Age: 71 Director since: 2009 Chairman Committees: • Sustainability | STEPHEN R. TRITCH Experience, Qualifications, Attributes or Skills: Mr. Tritch served as the Chief Executive Officer of Westinghouse Electric Company, a global provider of fuel, services, technology, plant design, and equipment for the commercial nuclear electric power industry, from June 2002 to June 2008. While serving in that role, Mr. Tritch had oversight of that company’s operations, financial reporting and risk analysis. During his 37 years with Westinghouse Electric Company, Mr. Tritch held a number of management positions, including Senior Vice President Fuel Business Unit, Senior Vice President Integration and Senior Vice President Services Business Unit. Mr. Tritch has served as a director of Charah Solutions, Inc., a public company and leading provider of mission critical environmental and maintenance services to the power generation industry, since June 2018, and currently serves as Chairman of its board. An experienced board member, Mr. Tritch has served as Chairman of the Company’s board since October 2018 and served as the Chairman of the board of Westinghouse Electric Company from June 2006 until his retirement in June 2010. He also served as Chairman of the audit committee of Westinghouse Electric Company. Mr. Tritch served as a director of The Shaw Group, Inc., a public company and a global provider of pumping systems, engineering procurement and construction services, from April 2009 to February 2013. His additional leadership roles include past service as the Chairman of the board of trustees at the University of Pittsburgh and as a former member of the board of trustees of the John Heinz History Center. His business acumen and proven leadership skills developed through years of managing an international organization provide the board with an executive and leadership perspective on the management and operations of a large company with global operations. Other Public Company Directorships: • Charah Solutions, Inc. |
Age: 60 Director since: 2018 Committees: • Management Development and Compensation (Chair) • Nominating and Corporate Governance • Sustainability | SONJA M. WILKERSON Experience, Qualifications, Attributes or Skills: Ms. Wilkerson has served as the Executive Vice President and Chief Human Resource Officer of Bloom Energy Corporation, which designs, manufactures and sells solid-oxide fuel cell systems, since January 2019. From December 2016 to January 2019, Ms. Wilkerson served as the Senior Vice President, Human Resources, at Infinera Corporation, a vertically integrated packet-optical solutions provider, serving the largest network operators in the world. From November 2014 to December 2016, Ms. Wilkerson served as Vice President, Human Resources, at Hewlett Packard Enterprise. From October 2004 to October 2014, Ms. Wilkerson served as Director, Human Resources, at Cisco Systems. Ms. Wilkerson brings years of global and diverse experience having served as a Vice President of Administration, responsible for human resources, information technology and facilities management for both domestic and international operations. In addition, Ms. Wilkerson has led merger integration activities and successfully managed the joining of diverse international cultures. Ms. Wilkerson’s depth of experience in human resources and talent management, especially with respect to planning for the workforce of the future, serve as a unique resource and valuable viewpoint in the board’s discussions. Other Public Company Directorships: • None |
6 | 2021 Proxy Statement |
Director Since 2009PROXY ITEM 1 — PROPOSAL FOR ELECTION OF DIRECTORS
Mr. Tritch served as the Chief Executive Officer of Westinghouse Electric Company, a global provider of fuel, services, technology, plant design, and equipment for the commercial nuclear electric power industry, from June 2002 to June 2008. While serving in that role, Mr. Tritch had oversight of that company’s operations, financial reporting and risk analysis. During his 37 years with Westinghouse Electric Company, Mr. Tritch held a number of management positions, including Senior Vice President Fuel Business Unit, Senior Vice President Integration and Senior Vice President Services Business Unit. His business acumen and proven leadership skills developed through years of managing this international organization provide the board with an executive and leadership perspective on the management and operations of a large company with global operations.
An experienced board member, Mr. Tritch served as the Chairman of the board of Westinghouse Electric Company from June 2006 until his retirement in June 2010. He also served as Chairman of the audit committee of Westinghouse Electric Company. Mr. Tritch served as a director of The Shaw Group, Inc., a public company and a global provider of pumping systems, engineering procurement and construction services, from April 2009 to February 2013. Mr. Tritch has served as a director of Charah Solutions, Inc., a leading provider of mission critical environmental and maintenance services to the power generation industry, since June 2018, and currently serves as Chairman of its board. His additional leadership roles include past service as the Chairman of the board of trustees at the University of Pittsburgh and as a former member of the board of trustees of the John Heinz History Center.
Sonja M. Wilkerson
Age 59
Director Since 2018
Ms. Wilkerson has served as the Executive Vice President and Chief Human Resource Officer of Bloom Energy Corporation, which designs, manufactures and sells solid-oxide fuel cell systems, since January 2019. From December 2016 to January 2019, Ms. Wilkerson served as the Senior Vice President, Human Resources, at Infinera Corporation, a vertically integrated packet-optical solutions provider, serving the largest network operators in the world. From November 2014 to December 2016, Ms. Wilkerson served as Vice President, Human Resources, at Hewlett Packard Enterprise. From October 2004 to October 2014, Ms. Wilkerson served as Director, Human Resources, at Cisco Systems.
Ms. Wilkerson brings years of global and diverse experience having served as a Vice President of Administration, responsible for human resources, information technology and facilities management for both domestic and international operations. In addition, Ms. Wilkerson has led merger integration activities and successfully managed the joining of diverse international cultures. Ms. Wilkerson’s depth of experience in human resources and talent management, especially with respect to planning for the workforce of the future, serve as a unique resource and valuable viewpoint in the board’s discussions.
Board Meetings
Our corporate governance guidelines provide that our directors are expected to attend the meetings of the board, the board committees on which they serve and the annual meeting of shareholders. All directors then in office typically attend all committee meetings. All directors then in office attended our 20192020 annual meeting of shareholders.
During 2019,2020, the board held eightseven meetings. Each incumbent director attended at least 75 percent of the aggregate number of meetings of our board and of the committees on which he or she sat, and the cumulative attendance at meetings of our board and committees of our board during 20192020 was 98 percent.
Board Committees
Our board of directors currently has five standing committees: an audit committee, a management development and compensation committee, a nominating and corporate governance committee, a strategy and risk committee and a sustainability committee (formerly the safety, health and environmental committee).committee. Descriptions of these
committees are set forth below. Each of our committees operates under a charter adopted by our board of directors. The charters of our committees are available on our website atwww.koppers.com. You may also request a printed copy of any committee charter at no cost by writing to our corporate secretary at Koppers Holdings Inc., Attention: Corporate Secretary’s Office, 436 Seventh Avenue, Pittsburgh, Pennsylvania 15219.
Our shares of common stock are listed on the New York Stock Exchange, or NYSE. We are subject to the NYSE corporate governance rules and certain rules of the Securities and Exchange Commission, which we refer to as the SEC, including the rules relating to independent members on certain of our board committees. The NYSE rules require that all of the members of our audit, nominating and corporate governance, and management development and compensation committees be independent. Certain SEC independence rules also apply to members of our audit committee. All of the members of our audit, nominating and corporate governance, and management development and compensation committees are independent as required by theapplicable NYSE and SEC rules.
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PROXY ITEM 1 — PROPOSAL FOR ELECTION OF DIRECTORS
Audit Committee | Members: Louis L. Testoni (Chair and, as determined by our board of directors, Audit Committee Financial Expert), Traci L. Jensen, David L. Motley, Albert J. Neupaver | |
All Members Independent
| Responsibilities.The audit committee’s responsibilities include oversight of the integrity of our financial statements; the appointment, compensation and supervision of our independent registered public accounting firm, which we also refer to as our independent auditor; review of the independence of our independent auditor; resolution of disagreements between our management and our independent auditor and oversight of our internal audit function. The audit committee has the authority to engage independent counsel or other outside advisors and experts as necessary to advise the committee in the performance of its duties. | |
Overseeing the Integrity of our Financial Statements. The audit committee’s responsibilities include oversight of the integrity of our financial statements, which entails:
• Reviewing, prior to the audit, the scope and procedures to be utilized in the audit with the independent auditor;
• Receiving reports from the independent auditor regarding our critical accounting policies and practices;
• Meeting with the independent auditor, without our management, to discuss the audit or other issues deemed relevant by the audit committee, including, but not limited to significant audit issues or concerns and management’s response thereto;
• Reviewing management’s assessment of the effectiveness of internal controls over financial reporting, including any significant deficiencies or material weaknesses identified by management or the independent auditor;
• Meeting with management and the independent auditor to review significant reporting issues and practices, including changes in or adoption of accounting principles and disclosure practices; and
• Reviewing disclosures in our periodic reports filed with the SEC, including the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of such reports. | ||
Appointment and Supervision of the Independent Auditor.In connection with the appointment and supervision of our independent auditor, the audit committee’s responsibilities include, among other things:
• Receiving annual written communication from the independent auditor delineating all relationships with and proposed professional services to us;
• Reviewing allnon-audit services proposed to be provided by the independent auditor;
• Receiving and reviewing, on an annual basis, reports from the independent auditor regarding its internal quality control procedures,
• Reviewing the qualifications and performance of the independent auditor and the lead partner of the independent auditor and making certain that a replacement is named to the lead partner position every five years; and
• Reviewing and approving, as appropriate, the compensation of the independent auditor. | ||
Receipt and Treatment of Complaints.The board has established, and the audit committee has reviewed, procedures for the receipt and treatment of complaints we receive concerning, among other things, accounting, internal controls or auditing matters, as well as confidential anonymous submissions by our employees regarding accounting or auditing matters. The audit committee also reviews our process for communicating these procedures to our employees. |
2021 Proxy StatementKOPPERS HOLDINGS INC. - 20208 5
PROXY ITEM 1 — PROPOSAL FOR ELECTION OF DIRECTORS
Management Development and Compensation Committee | Members: Sonja M. Wilkerson (Chair), Xudong Feng, Traci L. Jensen, Albert J. Neupaver | |
All Members Independent
6 meetings in | Responsibilities.The management development and compensation committee is responsible, among other things, for establishing and reviewing compensation criteria at the board and executive levels. The committee seeks to ensure that our compensation practices are in compliance with the law and with our Code of Conduct and are commensurate with the high standards of performance expected of our directors and officers. | |
Director and Executive Compensation.The committee will periodically review and propose to the full board the compensation fornon-employee directors. Such review must occur at least once every two years. In addition, the management development and compensation committee annually approves and recommends to the board for ratification our chief executive officer’s compensation and, based in part on recommendations from our chief executive officer, the compensation structure for all other officers and key executives, including the adoption of cash-based and equity-based incentive compensation plans. | ||
Administration of Incentive Compensation Plans.The management development and compensation committee is charged with administering our cash-based and equity-based incentive compensation plans, which we refer to as incentive compensation plans. Among other things, the management development and compensation committee will determine which eligible employees receive awards under such plans, determine the types of awards to be received and the conditions thereof, and will make any other determination or take any other action that it deems necessary or desirable to administer each incentive compensation plan. From time to time, the management development and compensation committee will also review and recommend medical, retirement, insurance and other benefit packages for officers and eligible employees. | ||
Succession Planning.At least annually, after considering the recommendations of management, the management development and compensation committee will make recommendations to the board regarding a succession plan, including succession in the event of an emergency or crisis, for our chief executive officer and other officers and key employees, after considering recommendations of management. | ||
Use of Advisers.The management development and compensation committee has the sole power to retain and terminate consulting firms to assist it in performing its responsibilities, including the authority to approve the firm’s fees and retention terms. The committee has the authority to obtain advice and assistance from internal or external legal, accounting, human resource or other advisors and to have direct access to such advisors without the presence of our management or other employees. The committee is directly responsible for the appointment, compensation and oversight of the work of any such advisors retained by the committee and may select a compensation consultant, legal counsel or other advisor only after taking into consideration all factors relevant to that person’s independence from management, as required by NYSE rules. |
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PROXY ITEM 1 — PROPOSAL FOR ELECTION OF DIRECTORS
Nominating and Corporate Governance Committee | Members: David L. Motley (Chair), Xudong Feng, Louis L. Testoni, Sonja M. Wilkerson | |
All Members Independent
| Recommendations for Director Candidates.The nominating and corporate governance committee’s goals and responsibilities include identifying and recommending individuals qualified to serve as members of the board of directors consistent with criteria approved by the board of directors. The committee identifies candidates for the board of directors by soliciting recommendations from committee members and incumbent directors and considering recommendations from employees and shareholders. The committee also has sole authority to retain and terminate search firms, which will report directly to the committee, to assist in identifying director candidates. The nominating and corporate governance committee charter provides that the committee will ensure that the nominees for membership on the board of directors are of a high caliber and are able to provide insightful, intelligent and effective guidance to our management. The committee may establish procedures for evaluating the suitability of potential director nominees proposed by management, other members of the board or by shareholders. | |
Oversight of the Evaluation of the Board and Management.The committee is responsible for the oversight of the evaluation of the board of directors and corporate management. In doing so, the nominating and corporate governance committee evaluates, and reports to the board of directors, the performance and effectiveness of the board of directors as a whole and each committee of the board as a whole (including an evaluation of itself and the effectiveness of the management development and compensation committee in its process of establishing goals and objectives for, and evaluating the performance of, our chief executive officer and our other officers). The committee reviews the suitability for continued service as a director of each board member when his or her term expires, when he or she has a significant change in status, including but not limited to an employment change, or when the director submits his or her resignation in accordance with the company’s director resignation policy then in effect, and recommends whether or not the director should continue to serve. | ||
Corporate Governance Matters.The committee is committed to ensuring that our corporate governance is in full compliance with the law, reflects generally accepted principles of good corporate governance, encourages flexible and dynamic management without undue burdens and effectively manages the risks of our business and our operations. To accomplish this, the committee developed and recommended to the board of directors a set of corporate governance guidelines. The committee must review and, if appropriate, recommend to the board appropriate changes to the corporate governance guidelines at least once every year and the articles of incorporation, bylaws, the Code of Conduct and the Code of Ethics Applicable to Senior Officers at least once every two years. The committee is charged with investigating and advising the board with respect to any violations of the Code of Ethics Applicable to Senior Officers and, to the extent involving directors or officers, the Code of Conduct, including conflicts of interest between directors or officers and us, and including a review of the outside activities of directors and officers. It is the obligation of each director and officer to bring to the attention of the nominating and corporate governance committee any actual, apparent or possible conflict of interest. |
2021 Proxy StatementKOPPERS HOLDINGS INC. - 202010 7
PROXY ITEM 1 — PROPOSAL FOR ELECTION OF DIRECTORS
Strategy and Risk Committee | Members: Albert J. Neupaver (Chair), Traci L. Jensen, David L. Motley, Louis L. Testoni | |
All Members Independent
| The committee’s responsibilities include, among other things:
• Advising the board and management regarding long-range planning in the areas of transactions, financial matters, shareholder engagement, risk management and related matters;
• Assessing and providing oversight to management relating to the identification and evaluation of major strategic, operational, regulatory, information and external risks inherent in the business of the company and the control processes with respect to such risks;
• Reviewing significant relationships with analysts, shareholders, financing sources and related parties;
• Reviewing and advising the board and management regarding the company’s strategic planning process;
• Staying abreast of activities of the company’s shareholders and other stakeholders;
• Monitoring shareholder turnover;
• Reviewing governance as it pertains to the company’s shareholder base; and
• Preparing in advance in order to respond to engagement from the company’s shareholders. | |
Sustainability Committee
| Members: Xudong Feng (Chair), Leroy M. Ball, Traci L. Jensen, Stephen R. Tritch, Sonja M. Wilkerson | |
| Our sustainability committee • Reviewing the company’s strategy, policies and practices for consistency with sustainability concepts, including (1) environmental protection, (2) climate change, (3) resource protection, (4) human rights, (5) workplace rights, (6) communications programs, (7) stakeholder engagement, and (6) promotion of inclusion and diversity; • Reviewing standards and best practices for sustainability and assessment of the company’s programs in comparison to industry practice; • Confirming and advising the board on progress against key sustainability goals and alignment with stakeholder expectations; • Reviewing the company’s external reporting on sustainability; • Reviewing the company’s positions in relevant independent ranking systems and the company’s progress and position in sustainability rankings; • Advising the board on whether the company should seek external assurance of its sustainability data; • Advising the board on significant stakeholder concerns and shareholder proposals related to sustainability; • Monitoring the company’s corporate reputation and providing guidance on the protection of the company’s reputation; and • Bringing to the attention of the board, as appropriate, current and emerging political, social and environmental trends and major public policy issues that The committee is also responsible for reviewing and overseeing our programs and performance related to safety (occupational and process), health, |
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Corporate Governance Guidelines
Our board of directors has adopted corporate governance guidelines to ensure we are fully compliant with the law and engaging in corporate governance “best practices,” which promote the long-term interests of shareholders and strengthen board and management accountability.
Our corporate governance guidelines address matters such as:
the selection and composition of the board;
board leadership;
board performance;
the board’s relationship to senior management;
meeting procedures;
committee matters;
leadership development; and
stock ownership guidelines fornon-employee directors.
A copy of our corporate governance guidelines is available on our website atwww.koppers.com. You may also request a printed copy at no cost by writing to our corporate secretary at Koppers Holdings Inc., Attention: Corporate Secretary’s Office, 436 Seventh Avenue, Pittsburgh, Pennsylvania 15219.
For a director to qualify as independent, our board must affirmatively determine that a director does not have a material relationship with the company (either directly or as a partner, shareholder or officer of an organization that has a material relationship with the company). Our board has established its own guidelines for what constitutes independence for directors (which are included in our corporate governance guidelines available on our website atwww.koppers.com) which conform to, or are more exacting than, the independence requirements of the NYSE. In making its independence determinations, the board reviewed the independence guidelines that are part of our corporate governance guidelines, the corporate governance rules of the NYSE and the individual circumstances of each director.
Our Guidelines on Independence
The following is a summary of the guidelines established by our board in our corporate governance guidelines and which are used by the board to help determine the independence of each director. In general, the board will determine that a director will not be independent if, within the preceding three years:
the director was or is currently also our employee;
an immediate family member of the director was or is currently employed by us as an executive officer;
the director was (but is no longer) a partner in or employed by a firm that is our internal or external auditor and personally worked on our audit within that time;
an immediate family member of the director was (but is no longer) a partner in or employed by a firm that is our internal or external auditor and personally worked on our audit within that time;
one of our current executive officers was or is currently on the compensation committee of a company which employed our director, or which employed an immediate family member of the director as an executive officer at the same time; or
the director or an immediate family member of the director received in any twelve-month period during such three-year period direct compensation from us and our consolidated subsidiaries in excess of $120,000 other than director compensation (including committee fees) and pensions or other forms of deferred compensation for prior service (provided such compensation is not contingent in any way on continued service).
In addition, the board will determine that a director is not independent if:
the director or the immediate family member of the director is a current partner of a firm that is our internal or external auditor;
the director is a current employee of such internal or external auditing firm; or
the director has an immediate family member who is a current employee of such internal or external auditing firm and who personally works on our audit.
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When the board reviews the independence of its members, the board considers the following commercial or charitable relationships to be material relationships that would impair a director’s independence:
the director is a current employee of, or has an immediate family member who is a current executive officer of, another company that has made payments to, or received payments from, us in any of the last three fiscal years that exceed the greater of $1.0 million or two percent of the consolidated gross revenues of the company with which he or she is so associated;
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the director is an executive officer of another company which is indebted to us, or to which we are indebted, and the total amount of either company’s indebtedness to the other is two percent or more of the total consolidated assets of the company for which he or she serves as an executive officer; or
the director serves as an officer, director or trustee of a charitable organization, and our discretionary charitable contributions to the organization exceed the greater of $1.0 million or two percent of that organization’s consolidated gross revenues (excluding for this purpose our automatic matching, if any, of employee and director charitable contributions).
Each independent director is required to notify the chair of the nominating and corporate governance committee of any event, situation or condition that may affect the board’s evaluation of the director’s independence.
Our Board’s Independence Determinations
Our board of directors reviewed the independence of each of our current directors and nominees, in accordance with our corporate governance guidelines and NYSE rules. Based on its review, the board of directors determined that a majority of our current directors and nominees have no material relationship with us (either directly or as a partner, shareholder or an officer of an organization that has a relationship with us) and are independent under the independence criteria for directors established by the NYSE and in accordance with our corporate governance guidelines. Based on this evaluation, our board has determined that Dr. Feng, Ms. Jensen, Mr. Motley, Mr. Neupaver, Mr. Testoni, Mr. Tritch and Ms. Wilkerson each satisfy the independence standards. In addition, based on its evaluation, the board determined that Mr. Ball is not independent.
Our current practice is that the roles of the chairman of the board and the chief executive officer should be separate because our board believes separating the roles allows the chairman to serve as a check on the chief executive officer and to independently assess the overall performance of the company on behalf of the shareholders. In addition, our board believes it is important to separate the roles of the chief executive officer and the chairman of the board due to the differences between the two roles and the time-intensive responsibilities of each. Our chief executive officer is the officer through whom the board delegates authority to corporate management. He is responsible for setting our strategic direction and
theday-to-day leadership and performance of the company, while ensuring that all orders and resolutions of the board are carried into effect. The chairman of the board, on the other hand, provides guidance to our chief executive officer, presides over meetings of the full board, calls meetings of the board and board committees when he deems them necessary and performs all duties assigned to him by the board. Our chairman of the board is also responsible for acting as chairman at all meetings of our shareholders. Mr. Tritch, one of our independent directors, is currently the chairman of our board and the lead independent director for executive sessions.
Our independent directors meet at regularly scheduled executive sessions without management. Our corporate governance guidelines provide that when the roles of the chairman of the board of directors and the chief executive officer are separate and the chairman of the board of directors is not an employee, then the chairman of the board of directors also serves as the independent Presiding Director. The independent Presiding Director presides over the executive sessions of the
independent directors and, together with the members of the nominating and corporate governance committee, develops the agendas for the executive sessions and periodically reviews and proposes revisions to the board’s procedures and the corporate governance guidelines. The independent Presiding Director is also responsible for communicating the board’s annual evaluation of the chief executive officer.
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information regarding accounting, operational, legal and regulatory, and strategic and reputational risks based on reports from senior management, including by our chiefdirector of compliance, officer, and our independent auditor.
In addition, our board has established a formal risk management process that involves regular and systematic identification and evaluation of risks. Our board delegates the oversight of specific risk areas to board committees as follows:
Committee | Risk Oversight Responsibilities | |
Audit | • Review with management and our independent auditor the company’s risk assessment and risk management practices and discuss policies with respect to risk assessment and risk management
• Oversee the company’s risk policies and processes relating to financial statements, financial systems, financial reporting processes, compliance and auditing, as well as the guidelines, policies and processes for monitoring and mitigating such risks | |
Nominating and Corporate Governance | • Manage risks associated with the independence of the board, potential conflicts of interest, reputation and ethics and corporate governance | |
Management Development and Compensation | • Review risks associated with human capital, employee benefits and executive compensation | |
Strategy and Risk | • Assess and provide oversight to management relating to the identification and evaluation of major strategic, operational, regulatory, information and external risks inherent in the business of the company and the control processes with respect to such risks | |
Sustainability | • Review and oversee the company’s programs and performance related to sustainability, safety (occupational and process), health, the environment, security and product stewardship |
Code of Conduct and Code of Ethics
Our board of directors has adopted a Code of Conduct for all directors, officers and employees and a Code of Ethics Applicable to Senior Officers. A copy of each code is available on our website atwww.koppers.com. You may also request a written copy at no cost by writing to our corporate secretary at Koppers Holdings Inc., Attention: Corporate Secretary’s Office, 436 Seventh Avenue, Pittsburgh, Pennsylvania 15219. The Code of Conduct covers such matters as conflicts of interest, insider trading, misuse of confidential information, compliance with laws and protection and proper
use of corporate assets. Directors are expected to comply with the Code of Conduct and report any violations of the code, including any potential conflicts of interest, as outlined in the code. All directors must remove themselves from any discussion or decision affecting their business or personal interests. We intend to post on our website all disclosures that are required by law, the SEC rules or the NYSE rules concerning any amendments to, or waivers from, any provision of our codes.
Koppers aspires to be a leader in sustainability through the ways we operate our business, care for our communities and secure success for all our stakeholders. Sustainability is a journey we undertake with a steadfast commitment to—and belief in—our ability to create positive change. With a greater appreciation of Koppers place in the world, our decision-making is guided by a clear and unifying Purpose: To Protect What Matters and Preserve the Future.
Our shareholders, employees, customers, regulators and other stakeholders are all increasingly focused on the importance of effective engagement and action on environmental, social, and governance (“ESG”) topics. Corporate social responsibility, our obligation to people, the environment, and to good corporate governance processes, has been a part of our culture for many years. We believe this culture, supported by a spirit of collaboration and innovation, allows us to decrease our impact on the environment and create value for all of our stakeholders. We believe this commitment is reflected in our improving safety culture and our trend of greenhouse gas and energy usage reductions.
We have established a governance structure to support and develop our sustainability practices. In 2020, we established a sustainability committee of the board of directors (formerly the safety, health and environmental committee) to provide oversight of our programs. The sustainability committee of our board of directors serves to assist the board in its assessment of the company’s policies, programs and performance in accordance with our vision and commitment to environmental and social responsibility and sustainability principles. Management provides direction through its leadership council, which is chaired by
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the CEO. We have also established a chief sustainability officer position, reporting directly to the CEO and sitting on the leadership council, to ensure that the company’s strategy, policies and practices are consistent with its sustainability goals. Our sustainability steering committee, chaired by our chief sustainability officer, provides guidance on goals and programs designed to improve our performance against expectations.
Toward this goal, and starting in 2019, we began work on a materiality analysis in line with the Global Reporting Initiative Standards, both internally and externally, that highlighted the areas where we can most effectively address the needs of our stakeholders. The materiality assessment considered a full range of ESG topics based on relevant sources and frameworks, including: the American Chemistry Council’s Responsible Care® guidelines, the Sustainable Forestry Initiative, the World Business Council for Sustainable Development’s Chemical Sector Roadmap for the United Nations Sustainable Development Goals, and the Sustainability Accounting Standards Board’s standards for the Chemical and Building Materials & Construction industries.
In December 2020, we were named as one of America’s Most Responsible Companies 2021 by Newsweek magazine in recognition of our corporate performance in environmental, social and governance areas. Koppers, ranked 178th, placed in the top half of 399 companies making the list, from a pool of 2,000 U.S.-based publicly traded companies. The company also ranked 30th overall in the social category and placed in the top 10 among Pennsylvania-based companies included. |
Our full annual disclosure of sustainability performance can be found in our most recent Sustainability Report on the Company’s website at www.koppers.com. We published our first Corporate Social Responsibility report (“CSR”) in 2008 and our historical CSR reports are also available on www.koppers.com. Our sustainability reporting referenced in this proxy statement, including, without limitation, our most recent Sustainability Report and our historical CSR reports, and the information on, or accessible through, our websites are not part of or incorporated by reference into this proxy statement.
Environmental
The circular nature of our business starts with our raw materials, the majority volume of which are by-products generated by other industries (including scrap copper and coal tar) and renewable resources (trees). We annually purchase approximately 33 million pounds of scrap copper or other compounds containing copper, all of which is postconsumer or post-industrial in nature. We believe this places Koppers in the center of what is known as the “circular economy” that emphasizes the “reduce, reuse, recycle” mentality that continues to frame global conservation efforts. Our wood-treatment solutions, while supporting an important role in our global infrastructure across multiple industries, also support an important role in the carbon cycle. Treating wood significantly increases its useful lifespan, allowing the carbon stored within the wood to be immobilized for up to 50 years, keeping it out of the atmosphere and limiting carbon’s impact on the environment.
In 2018, we advanced our circular business model even further through our acquisitions of Koppers Recovery Resources and Koppers Utility and Industrial Products. Both businesses add product life cycle management capabilities to help solve our customers’ challenge of responsibly disposing of end-of-life crossties and utility poles by repurposing used wood products, including as a fuel source. This reduces the end-of-life impact of our ties and poles, contributing to greater product sustainability.
Social
Our ability to positively affect our communities starts with investing in our people. We put the health, safety and well-being of our employees at the forefront of everything we do as part of our Zero Harm culture. Our people-focused strategy considers all aspects of the employee experience, from hiring practices and onboarding to health and wellness and talent management. We seek to create and foster an inclusive and welcoming culture where all employees feel empowered and can directly impact and share in the organization’s success. Key to this effort is delivering a consistent onboarding experience, as well as communications and safety training in all of our facilities across the globe.
Our decision-making considers the impact our actions may have on our employees and for each action we take, protecting employee health and well-being is our priority. To accomplish all this, and to better reflect the importance of our employees, we recently transformed our human resources function into a Culture and
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Engagement team to enhance the employee experience. This transformation is a reflection of how we approach our corporate culture, and how we engage with and support our employees both at work and in other aspects of their lives.
We support an inclusive and diverse work environment across our company through a range of strategic programs. Our internal processes and programs target inclusion and diversity as a key area of importance and externally we place emphasis on the topic during philanthropic activities. Our Director for Global Inclusion and Diversity focuses on supporting our strategy to be an employer of choice, chairs the company’s Inclusion and Diversity Committee, and helps to ensure that all employees feel they are heard and valued to harness the power of an engaged workforce.
We are committed to proactively evaluating and addressing community needs in the areas where we operate. Many of our locations have made strong connections with local community members, allowing Koppers representatives to share facility information and address any questions, observations, concerns and ideas. Our community impact is demonstrated through our employees’ volunteer commitments and a corporate philanthropy program. Employees worldwide volunteer their time to mentor students, enhance local education initiatives, take care of the elderly, assist at homeless shelters and provide hands-on help to those affected by natural disasters.
Collaboration – Communication across our global footprint drives our efforts. All Koppers employees take part in safety training programs and provide direct feedback to leadership as part of the company’s annual engagement survey.
Inclusion and Diversity – We are committed to supporting inclusion and diversity in process and practice. Our Culture and Engagement team ensures that a diverse slate of candidates is considered for open positions. Our first employee resource group, LINKwomen, which was launched in 2018, provides an important development forum for employees and serves as a model for future initiatives. Additionally, the composition of our board of directors has been recognized for gender and racial diversity, including the following:
The 2020 Women on Boards Gender Diversity Index ranks Koppers as a Winning “W” Company with 20% or more women on our board of directors.
• | In February 2020, three members of our board of directors, Xudong Feng, Traci L. Jensen and Sonja M. Wilkerson were named to WomenInc. magazine’s 2019 Most Influential Corporate Directors. |
In 2019, we were nominated for the National Association of Corporate Directors NXT recognition in the Small Cap category, which recognizes exemplary board leadership practices that promote greater diversity and inclusion, ultimately fostering long-term value creation.
Governance
We believe our corporate governance structure is designed to assure accountability to our stakeholders and to make certain that we conduct business in a responsible, ethical way. We maintain a comprehensive Code of Conduct that details the expectations and requirements we have as an organization for our employees. This Code of Conduct applies to all employees, whether we are engaging in peer-to-peer interactions, working to comply with complex regulations, marketing our products, purchasing materials, creating new products, managing our finances or interacting with our communities.
Training employees on the Code of Conduct is a key aspect of our approach to ethics. We require every Koppers employee to complete training on the Code of Conduct annually. We also conduct focused trainings on specific topics that are relevant to employees with particular responsibilities.
We encourage our employees who have questions regarding the Code of Conduct and other ethics issues to seek guidance. Similarly, if an employee recognizes a potential ethics violation, they are empowered and encouraged to notify the appropriate management personnel so that Koppers can investigate and take appropriate corrective action. Employees can also utilize the Koppers Compliance Line, a free confidential resource available 24 hours a day, seven days a week, to ask questions or raise concerns. Another option for anonymous reporting is our third-party email reporting system.
Our board of directors is broadly responsible for contributing to the strategic direction and oversight of the company. Among its duties and responsibilities, the board oversees management’s direction of the legal, ethical and socially responsible behavior of the company, such as developing effective performance measurement systems, reviewing the company’s long-term strategy and overseeing risk management processes. Our leadership council is responsible for directing the development and implementation of the company’s strategic plan, and business operations around the globe. These executive leaders establish and maintain our commitment to ethics, integrity, fiscal responsibility, growth and sustainability.
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The board of directors welcomes the input and suggestions of shareholders and other interested parties. Shareholders and other interested parties wishing to contact the chairman of the board, or thenon-management directors as a group or specified individual directors may do so by sending a written communication to the attention of the chairman of the board, c/o Koppers Holdings Inc., Corporate Secretary’s Office, 436 Seventh Avenue, Pittsburgh, Pennsylvania 15219. Issues or complaints regarding questionable
accounting practices, internal accounting controls or auditing matters may be sent in writing to the attention of the audit committee chairman, c/o Koppers Holdings Inc., Corporate Secretary’s Office, 436 Seventh Avenue, Pittsburgh, Pennsylvania 15219. Our corporate secretary will forward all written communications to the director or directors to whom it is addressed. Alternatively, you may place an anonymous, confidential, toll-free call in the United States to our Compliance Line at800-385-4406.
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The nominating and corporate governance committee will consider nominees for director recommended by the committee, other directors, employees and shareholders and evaluate such nominees against the same criteria used to evaluate all candidates for director. Any shareholder wishing to recommend a candidate for director to the nominating and corporate governance committee should submit the recommendation in writing to our corporate secretary at Koppers Holdings Inc., Attention: Corporate Secretary’s Office, 436 Seventh Avenue, Pittsburgh, Pennsylvania 15219. With respect to the 2021 election of directors, your recommendation to the nominating and corporate governance committee must be received by our corporate secretary on or before November 30, 2020 in accordance with SEC Rule14a-8.
Pursuant to our bylaws, in order to recommend a nominee for election at our annual meeting a shareholder must provide advance notice of such nomination (1) if the meeting is to be held on a date that is within 30 days before or 30 days after the anniversary date of the prior annual meeting, not less than 120 days nor more than 150 days prior to such annual meeting, or (2) if the meeting is to be held on a date that is not within 30 days before or 30 days after the prior annual meeting, not later than the tenth day following the day on which notice of the date of the meeting was mailed or the first public disclosure of the date of such meeting was made, whichever occurs first. In the case of a special meeting to elect directors, notice must be received no later than the tenth day following the earlier of the day on which notice was mailed or the first public disclosure of the date of such meeting. Any such notice must set forth, among other things: (1) the name, age, address and principal occupation of the nominee; (2) a representation that the notifying shareholder intends to appear in person or by proxy to nominate the nominee; (3) the class and number of shares beneficially owned by the nominee; (4) the number of shares to be voted by the notifying shareholder for the nominee; (5) a description of all arrangements between the notifying shareholder and the nominee and other persons pursuant to which the nomination is to be made; (6) all information about the nominee that would be required to be disclosed in a proxy
statement (including a written consent to serving as director); and (7) a written representation and agreement, (i) disclosing, and providing that if elected that he or she will disclose, any agreement with any person as to how such nominee will act or vote, (ii) disclosing, and providing that if elected that he or she will disclose, any other commitments that could interfere with his or her fiduciary duties, (iii) disclosing, and providing that if elected that he or she will disclose, any agreement with any person with respect to direct or indirect compensation or indemnification for services as director, and (iv) providing that if elected that he or she will comply with all applicable corporate governance, conflict of interest, stock ownership, trading, and other policies and guidelines.
As to the shareholder giving notice, any beneficial owner on whose behalf the nomination is made, and any person controlled by or controlling such shareholder and beneficial owners, such notice must set forth: (1) their name and address; (2) class and number of shares beneficially owned and of record and any other positions owned, including derivatives, hedges and any other economic or voting interest in the company; (3) a representation whether such person intends to be part of the group which intends to deliver a proxy statement or otherwise solicit proxies from shareholders; (4) whether hedging or other transactions have been made to mitigate a loss of such person; and (5) any other information relating to each party that would be required to be disclosed in a proxy statement.
All notices provided must be updated so that the information provided is true and correct as of the record date and as of the date that is ten business days prior to the meeting.
The company may also require any nominee to submit to background checks and anin-person interview and furnish such other information as reasonably required to determine the eligibility of the nominee to serve as an independent director or that could be material to the understanding of independence.
Under our bylaws, no nominations may now be made by shareholders for the 20202021 annual meeting.
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Committee Reports to Shareholders
As set forth in our charter, management is responsible for the preparation, presentation and integrity of our financial statements, and for maintaining appropriate accounting and financial reporting principles and policies and internal controls and procedures designed to provide reasonable assurance of compliance with accounting standards and related laws and regulations. Our internal auditors are responsible for providing reliable and timely information to the board of directors and senior management concerning the quality and effectiveness of, and the level of adherence to, our control and compliance procedures and risk management systems. Our independent auditor is responsible for planning and carrying out an integrated audit of our consolidated annual financial statements and the effectiveness of internal control over financial reporting in accordance with the standards of the Public Company Accounting Oversight Board (the “PCAOB”), reviewing our annual report on Form10-K prior to the filing of such report with the SEC, and reviewing our quarterly financial statements prior to the filing of each of our quarterly reports onForm 10-Q with the SEC.
In the performance of its oversight function, the audit committee has reviewed and discussed the audited financial statements for the year ended December 31, 2019,2020, with management and with KPMG LLP, our independent auditor for 2019.2020. The audit committee has discussed with our independent auditor the matters required to be discussed by the applicable requirements of the PCAOB. The audit committee has received the written disclosures and the letter from the independent auditor required by the applicable requirements of the PCAOB regarding the independent auditor’s communications with the audit committee concerning independence and has discussed with the independent auditor its independence. Also, in the performance of its oversight function, during 20192020 the audit committee received frequent reports from our director of internal audit.
At various times the audit committee has considered whether the provision ofnon-audit services by the independent auditor to us is compatible with maintaining the independent auditor’s independence and has discussed with KPMG LLP their independence. The audit committee or its chairman (acting pursuant to delegated authority)pre-approves all newnon-audit services (as defined in the Sarbanes-Oxley Act of 2002) proposed to be performed by our independent auditor.
Based upon the review and discussions described in this report, and subject to the limitations on the role and responsibilities of the audit committee referred to above and in its charter, the audit committee recommended to the board of directors that the audited financial statements be included in our Annual Report on Form10-K for the year ended December 31, 2019,2020, for filing with the SEC.
The audit committee of the board of directors presents the foregoing report.
Louis L. Testoni | David L. Motley | |
Traci L. Jensen | Albert J. Neupaver |
Management Development and Compensation Committee Report
The management development and compensation committee has reviewed and discussed the Compensation Discussion and Analysis with our management. Based on our review and discussions, the committee has recommended to our board of directors that the Compensation Discussion and Analysis be included in this proxy statement.
The management development and compensation committee of the board of directors presents the foregoing report.
Sonja M. Wilkerson (Chairman)
Sonja M. Wilkerson (Chair) | Traci L. Jensen | |
Xudong Feng
| Albert J. Neupaver |
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Director and Executive Officer Stock Ownership
Set forth below is certain information with respect to the beneficial ownership of shares of our common stock as of March 22, 2021, by directors, the NEOs, who are included in the Summary Compensation Table, and all directors and executive officers as a group. Except as otherwise indicated, sole voting power and sole investment power with respect to the shares shown in the table are held either by the individual alone or by the individual together with his or her spouse.
Name of Beneficial Owner | Amount and Nature of Beneficial Ownership(1)(2)(3) | |||
Xudong Feng | 32,192 | |||
Traci L. Jensen | 14,138 | |||
David L. Motley | 14,138 | |||
Albert J. Neupaver | 65,936 | |||
Louis L. Testoni | 32,708 | |||
Stephen R. Tritch | 38,217 | |||
Sonja M. Wilkerson | 14,138 | |||
Leroy M. Ball | 533,773 | |||
Michael J. Zugay | 146,353 | |||
James A. Sullivan | 130,564 | |||
Leslie S. Hyde | 88,361 | |||
Stephanie L. Apostolou | 18,608 | |||
Steven R. Lacy | 67,609 | (4) | ||
Douglas J. Fenwick | 43,718 | (5) | ||
All Directors and Executive Officers as a Group (15 in total) | 1,291,153 |
(1) | Includes the following amounts of common stock that the following individuals and the group have the right to acquire on or within 60 days after March 22, 2021 through the exercise of stock options or vesting of restricted stock units: Mr. Ball, 295,697; Mr. Zugay, 69,287; Mr. Sullivan, 72,290; Ms. Hyde, 48,826; Mr. Lacy, 47,128; and Mr. Fenwick, 27,662; 8,434 restricted stock units for Dr. Feng, Mses. Jensen and Wilkerson and Messrs. Motley, Neupaver, Testoni and Tritch; and all directors and executive officers as a group, 626,987. |
Relative TSR | Performance | % of Units to Vest | ||||||
Outstanding | ³80th percentile | % | ||||||
| ||||||||
| ||||||||
% | ||||||||
| 50th percentile | 100 | % | |||||
| 35th percentile | 50 | % | |||||
Threshold | £ 25th percentile |
0 |
|
% |
The percentage vesting is interpolated on a straight-line basis for performance between levels above the threshold. If the company’s TSR is negative during the three-year performance period, then the cumulative number of units that may vest for such three-year period will be capped at either 100% of target (for awards granted in or before 2019) or 150% of target (for awards granted in or after 2020). For PSUs granted in 2019 or later, performance is based upon the same range of relative TSR to the S&P Small Cap 600 Materials Index, but, as described above, such PSUs will be eligible to be earned in three equal tranches based upon the company’s relative TSR achieved over one-year, two-year and three-year performance periods.
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EXECUTIVE AND DIRECTOR COMPENSATION
We grant equity awards to executives on an annual basis using a grant date that occurs in the first quarter of each year following the release of the prior year’s earnings.year. We also periodically grant equity awards in connection with certain management events, such as the hiring or promotion of an executive or the achievement by an executive of extraordinary personal performance objectives. Each equity award granted to our executives has a grant date that was on or after the date on which the committee approved the award. It is possible that the committee may possess material
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nonpublic information when it approves awards. However, awards are granted only at certain times of the year or in connection with certain management events, and the committee does not try to achieve more advantageous grant dates in connection with the timing of the release of material nonpublic information.
The target dollar value of all equity awards to each NEO is determined based upon a multiplier of base salary. Once the total dollar value of the awards is determined for each NEO, the actual number of PSUs, stock options and RSUs is determined for each NEO (except Mr. Lacy and Ms. Apostolou) as follows: 50 percent of the total dollar value is allocated to the PSU portion of the award, 30 percent of the total dollar value is allocated to the stock option portion of the award and 20 percent of the total dollar value is allocated to the RSU portion of the award. As described above, for Mr. Lacy 100 percent of the total dollar value of his 2020 award was allocated to RSUs and, for Ms. Apostolou, 50 percent of the total dollar value was allocated to the PSU portion of the award and 50 percent of the total dollar value was allocated to the RSU portion of the award. The committee then uses the closing price of our common stock on the NYSE on the grant date to determine the number of PSUs and RSUs awarded. To determine the number of stock options awarded, the committee divides the total dollar value attributed to the stock option portion of the award by the estimated fair value of the stock options on the date of grant, which is determined in accordance with the Black-Scholes valuation method by an independent valuation consultant.
The granting of a combination of stock options, RSUs and PSUs falls within the range of peer group practices and has a strong performance orientation. Based on data provided by our compensation consultant, the long-term incentive portion of our NEO’s total direct compensation is aligned with peer group average practice.
Results forForfeiture of the 2017-20192018-2020 Performance-Based Restricted Stock Units. On December 31, 2019,2020, the three-year performance period ended for the PSUs awarded in 2017.2018. Our total shareholder return was measured against that of the S&P Small Cap 600 Materials Index (as described above) over the three-year period ended December 31, 2019.2020. Our ranking on this performance measure was at the 56th24th percentile, which meant that the threshold was not met. Therefore, none of the PSUs awarded in 2018 vested.
Results for the 2019-2021 Performance-Based Restricted Stock Units. On December 31, 2020, the two-year performance period ended for the second tranche of the PSUs awarded in 2019, and on December 31, 2019, the one-year performance period ended for the first tranche of the PSUs awarded in 2019. Our total shareholder return was measured against that of the S&P Small Cap 600 Materials Index (as described above) over the two-year period ended December 31, 2020 and the one-year period ended December 31, 2019, respectively. Our ranking on this performance measure was at the 85th percentile for the two-year period ended December 31, 2020 and at the 92nd percentile for the one-year period ended December 31, 2019, resulting in payouts at 200% of target for both tranches. All earned shares generally will vest on March 6, 2022 if the participant remains in service through such date. If the company’s TSR is negative during the three-year performance period beginning on January 1, 2019 and ending on December 31, 2021, then the cumulative number of units that may vest for such three-year period will be capped at 100% of target. The payouts
Results for the 2020-2022 Performance-Based Restricted Stock Units. On December 31, 2020, the one-year performance period ended for the first tranche of the PSUs awarded in 2020. Our total shareholder return was measured against that of the S&P Small Cap 600 Materials Index (as described above) over the one-year period ended December 31, 2020. Our ranking on this performance measure was at the 6th percentile for the one-year period ended December 31, 2020. Therefore, no shares were distributedearned for the first tranche of the PSUs awarded in 2020. All earned shares of our common stock, which vestedfor the second tranche and third tranche, if any, generally will vest on March 3, 2020. Payouts to2023 if the NEOsparticipant remains in service through such date. If the company’s TSR is negative during the three-year performance period beginning on January 1, 2020 and ending on December 31, 2022, then the cumulative number of units that may vest for the 2017-2019 PSUs were: Mr. Ball, 22,675 shares; Mr. Zugay, 5,211 shares; Mr. Lacy, 5,803 shares; Mr. Sullivan, 4,838 shares; and Mr. Fenwick, 2,947 shares.such three-year period will be capped at 150% of target.
Retirement Benefits.We maintain a defined contribution plan that permits U.S. salaried employees, including the NEOs, to contribute up to 60 percent of pay, subject to applicable limits for 401(k) plans. We match 100 percent of salaried employee contributions to the 401(k) plan on the first three percent of an employee’s salary contributed to the plan and match 50 percent on the next two percent of an employee’s salary contributed to the plan. We also maintain a supplemental benefit plan, which we refer to as the benefit restoration plan, to restore employernon-elective contributions lost by certain U.S. highly-paid employees, including the NEOs, in our defined contribution plan under U.S. tax law. Under both plans, we make employernon-elective contributions tied to our financial performance. Employer contributions have not yet been made for 2019,2020, however, we have assumed such contributions will be paid for 20192020 and the corresponding amounts are included in the tables below.
At the time of his retirement on December 31, 2020, Mr. Lacy iswas covered by the Retirement Plan of Koppers Inc. and Subsidiaries for Salaried Employees, atax-qualified pension plan that we refer to as the
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EXECUTIVE AND DIRECTOR COMPENSATION
salaried plan, the Retirement Income Restoration Plan, anon-qualified excess defined benefit plan that we refer to as SERP l, and the Supplemental Executive Retirement Plan, anon-qualified excess defined benefit plan that we refer to as SERP II. Ms. Hyde is also a participant in the salaried plan and SERP II. No other NEOs participate in the salaried plan, SERP I or SERP II. At the time of his retirement on December 31, 2020, Mr. Lacy iswas also covered under our Survivor Benefit Plan, which makes him eligible for a post-retirement survivor benefit. Ms. Hyde is also a participant in the Survivor Benefit Plan. No other NEOs are covered under our Survivor Benefit Plan. More information on the salaried plan, SERP I, SERP II and the Survivor Benefit Plan can be found under 20192020 Pension Benefits on pages 3341 and 34.42.
Perquisites and Other Benefits. We provide a limited number of perquisites and other benefits to certain of our NEOs, which include club dues, parking and executive physicals. Additional details of the perquisites and other benefits we provide are more fully described in the footnotes to the “All Other Compensation” column of the Summary Compensation Table below.
We provide these perquisites and other benefits to promote a healthy work/life balance and provide opportunities for developing business relationships. We believe they are important to our ability to attract and retaintop-quality executive talent and are consistent with those provided to executives at other companies comparable to us. The costs associated with providing these benefits for our NEOs are reflected in the “All Other Compensation” column of the Summary Compensation Table below on page 27.33.
Our NEOs also participate in the same standard salaried benefit plans as our other U.S. salaried employees. This includes a basic welfare benefits
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package consisting of medical, dental, vision, life and disability insurance and accident insurance plans, as well as flexible spending arrangements for health care, dependent care and transportation expenses.
Compensation Policies and Practices
Compensation and Risk.The committee believes that the company’s compensation policies and practices do not create risks that are reasonably likely to have a material adverse effect on the company. The committee has designed a total compensation package with features that it believes will mitigate the risks associated with compensation policies and practices including:
Our compensation programs provide a reasonable balance between annual and long-term performance, with a significant portion of compensation being delivered in the form of long-term incentives;
Annual cash incentives are determined based on the company’s performance;
The committee has the ability to modify annual cash incentives earned to reflect the quality of the company’s financial performance, individual performance and other factors that should influence compensation;
The long-term incentive program focuses participants on longer-term stock price appreciation; and
Executives are subject to stock ownership requirements that encourage a long-term perspective and ensure that the interests of executive officers are closely aligned with shareholders.
Role of Consultants.In accordance with its authority to retain advisors, in early 2019,2020, the committee engaged Meridian Compensation Partners, LLC (“Meridian”) as outside consultants to advise the committee with respect to 20192020 compensation design decisions.
Meridian does not advise our management, or receive any other compensation from us. In its role as independent advisor to the committee, Meridian provided advice to the committee from time to time on various executive compensation matters including conducting an annual competitive compensation analysis, which Meridian prepared for the committee in early 2019.2020.
In compliance with the SEC and the NYSE disclosure requirements regarding the independence of compensation consultants, Meridian provided the committee with a completed questionnaire addressing each of the six independence factors enumerated in the SEC requirements. Their responses affirm the independence of Meridian and the partners, consultants, and employees who service the committee on executive compensation matters and governance issues.
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Companies Used for Defining Competitive Compensation.As stated above, one of the committee’s principles is to target the compensation of our NEOs within a range of the market median of our peer companies that were selected based on comparability in terms of industry, revenue and complexity. For purposes of 20192020 compensation decisions, the peer group selected by the committee, in consultation with Meridian, consisted of the following:
Aegion Corporation | H.B. Fuller Company | Simpson Manufacturing Co., Inc. | ||
Armstrong World Industries, Inc. | Hillenbrand, Inc. | Standex International Corporation | ||
Cabot Corporation | Innospec, Inc. | Stepan Company | ||
EnPro Industries, Inc. | Louisiana-Pacific Corporation | Sterling Construction Company, Inc. | ||
Ferro Corporation | Masonite International Corporation | Tronox | ||
Gibraltar Industries, Inc. | Minerals Technologies, Inc. |
| ||
The Greenbrier Companies, Inc. | OMNOVA Solutions Inc.(1) |
| ||
Granite Construction Incorporated | Quaker Chemical Corporation |
(1) | OMNOVA Solutions Inc. was part of the peer group for purposes of determining 2020 compensation. OMNOVA Solutions Inc. was acquired by Synthomer PLC in April 2020. Because compensation benchmarking data is no longer available for OMNOVA Solutions Inc., the committee removed it from the peer group for 2021. |
In terms of size, our revenue, and total assets and net income ranked in the 4756th, 39thand 4232ndpercentiles, respectively, of our peer group, while our market capitalization net income and number of employees ranked below the 25th25th percentile. Statistical regression was not used to adjust peer compensation data based on our revenue positioning relative to the peer group.
Through its competitive assessment, Meridian determined that the aggregate target cash and target total compensation for the majority of our executives fell at or below the market median
competitive range, primarily due to base salaries (which drive target annual incentives and long-term incentives) that are generally below market.
In advance of its decisions regarding 20202021 compensation, the committee again reviewed with Meridian the peer group companies listed above and confirmed that it continues to constitute an appropriate peer group for benchmarking our executive compensation programs. Accordingly, the committee did not make any changes to the peer group for purposes of 20202021 compensation decisions.decisions, other than the removal of OMNOVA Solutions Inc. from the peer group as described above.
24 KOPPERS HOLDINGS INC. - 2020 Proxy Statement
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Stock Ownership Requirements for Our Named Executive Officers.The committee and our board of directors have approved stock ownership requirements. The requirements apply to selected members of the management team, including all of the NEOs.NEOs except Mr. Lacy. The committee and our board of directors have also approved stock ownership guidelines, which apply to ournon-employee directors, as described more fully below under “Stock Ownership Guidelines for OurNon-Employee Directors.” The stock ownership requirements were designed to achieve the following objectives:
demonstrate senior management’s commitment to and confidence in the company’s long-term prospects;
align senior management’s interests with those of our shareholders;
support a long-term focus; and
quantify our expectations with regard to ownership of our stock by our senior management.
Our stock ownership requirements require our officers to accumulate a specified number of shares expressed as the value of stock ownership as a multiple of base salary. The required stock ownership level is converted into a number of shares that is recalculated annually. Until the stock ownership level is achieved, members of the management team are required to retain 75 percent of the net profit shares (i.e., excluding shares used for the payment of taxes) received from exercising stock options, the vesting of RSUs and PSUs.
Position | Ownership Requirement Multiple of Base Salary | |||||
Chief Executive Officer | (Mr. Ball) | 6x | ||||
Chief Operating Officer | (Mr. Sullivan) | 4x | ||||
Chief Financial Officer; Chief Sustainability Officer; President, Performance Chemicals | (Mr. Zugay, Ms. Hyde and Mr. Fenwick) | 3x | ||||
General Counsel and Secretary | (Ms. Apostolou) | 2x |
| ||||
KOPPERS HOLDINGS INC. |
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EXECUTIVE AND DIRECTOR COMPENSATION
Chief Operating Officer
(Mr. Sullivan)
Chief Financial Officer; Assistant to the President of Koppers Inc.; President, Performance Chemicals
(Messrs. Zugay, Lacy and Fenwick)
Unvested RSUs and shares owned outright by the executives and/or their spouses count toward meeting the requirements. Unvested PSUs and unexercised stock options do not count toward meeting the stock ownership requirements for our executives.
ThreeFour of our NEOs have achieved compliance with the target ownership level and the other two NEOs continue to comply with the 75 percent retention ratio. Mr. Lacy was no longer subject to our stock ownership requirements effective March 1, 2020 upon his transition into the role of Assistant to the President of Koppers Inc.
Policy on Derivative Transactions and Restrictions on Hedging Transactions.In January 2017, we instituted a policy that prohibits our employees, officers and directors from directly or indirectly engaging in the following types of transactions with respect to our securities: certain forms of hedging or monetization transactions, such as prepaid variable forward contracts, equity swaps, collars and exchange funds, that would allow an employee, officer or director to hedge or offset any decrease in the market value of our securities; short sales; transactions in publicly traded options; pledging our securities as collateral for a loan; or holding our securities in margin accounts or a brokerage account with a “margin feature” (unless the margin feature is not utilized, company securities are otherwise excluded from being pledged or the account holder does not engage in any transaction that results in a lien upon the company securities in the account).
Clawback PolicyPolicy. .In March 2017, we instituted a clawback policy that provides that any cash or equity incentive-based compensation paid to any executive officer and certain employees is subject to recoupment if we are required to restate our
financial statements due to material noncompliance with any financial reporting requirement. Our right of recoupment under this policy applies only to cash or equity incentive-based compensation paid during the three years prior to the date of the restatement, provided, however, that this three-year limitation will not apply if the restatement resulted from fraud or misconduct.
Contracts. We use contractual arrangements where appropriate to assist in recruitment and retention of our NEOs. We have entered into an employment agreement with Mr. Lacy. We have also entered into separate change in control agreements with all NEOs, except Mr. Lacy. Each of these agreements is described in the “Potential Payments upon Termination or Change in Control” section beginning on page 3543 below.
Tax Considerations.For federal income tax purposes, cash compensation, such as base salary or annual cash incentive, is includible as ordinary compensation income when earned, unless deferred under a company-sponsored deferral plan. Deferrals undertax-qualified plans, such as a 401(k) plan, do not affect the timing of our tax deduction. Deferrals undernon-qualified plans, the adoption of which have been approved by the board of directors, will result in the deferral of our compensation deduction until such time as the cash compensation is paid to the employee.
Section 162(m) of the Internal Revenue Code of 1986, as amended, limits the deductibility of compensation in excess of $1 million paid to any one NEO in any calendar year. Under the tax rules in effect before 2018, compensation that qualified as “performance-based” under Section 162(m) was
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deductible without regard to this $1 million limit. In 2017 and prior years, the committee designed awards under the Cash Bonus Program,its prior cash incentive plan, as well as PSUs and stock options granted under equity incentive plans, that were intended to qualify for this performance-based compensation exception. However, the Tax Cuts and Jobs Act, which was signed into law December 22, 2017, eliminated this performance-based compensation exception effective January 1, 2018, subject to a special rule that “grandfathers” certain awards and arrangements that were in effect on or before November 2, 2017. As a result, compensation payable under awards granted by the committee before 2018 with the intent of qualifying as performance-based compensation under Section 162(m) that is paid on or after January 1, 2018 may not be fully deductible, depending on the application of the special grandfather rules.
Moreover, compensation in excess of $1 million payable to our NEOs under awards granted on and after January 1, 2018 generally will not be deductible. While the Tax Cuts and Jobs Act will limit the deductibility of compensation paid to the NEOs, the committee will — consistent with its past practice — design compensation programs that are intended to be in the best long-term interests of the company and our shareholders, with deductibility of compensation being one of several considerations taken into account.
Accounting Considerations.When reviewing preliminary recommendations and in connection with approving the terms of a given incentive plan period, management and the committee review and consider the accounting implications of a given award, including the estimated expense and impact on EPS.
2021 Proxy Statement26 KOPPERS HOLDINGS INC. - 202032
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The following table and related footnotes describe the total compensation awarded to, earned by or paid to our NEOs for services rendered during fiscal years 2020, 2019 2018 and 2017.2018.
Name and Principal Position | Year | Salary | Stock Awards(2) | Option Awards(2) | Non-Equity Incentive Plan Compensation | Change in Pension Value and Nonqualified Deferred Compensation Earnings(3) | All Other Compensation(4) | Total | ||||||||||||||||||||||||
Leroy M. Ball | 2019 | $ | 857,719 | $ | 2,208,407 | $ | 692,535 | $ | 864,634 | $ | 977 | $ | 94,066 | $ | 4,718,338 | |||||||||||||||||
President and Chief Executive Officer | 2018 | 833,338 | 1,717,559 | 672,361 | 725,350 | 854 | 94,583 | 4,044,045 | ||||||||||||||||||||||||
2017 | 792,500 | 1,851,641 | 599,990 | 928,000 | 1,057 | 106,836 | 4,280,024 | |||||||||||||||||||||||||
Michael J. Zugay | 2019 | $ | 399,641 | $ | 467,632 | $ | 146,651 | $ | 241,694 | $ | 223 | $ | 50,275 | $ | 1,306,116 | |||||||||||||||||
Chief Financial Officer | 2018 | 388,243 | 363,662 | 142,376 | 202,760 | 182 | 65,157 | 1,162,380 | ||||||||||||||||||||||||
2017 | 376,700 | 425,512 | 137,884 | 282,394 | 171 | 54,198 | 1,276,859 | |||||||||||||||||||||||||
Steven R. Lacy | 2019 | $ | 446,263 | $ | 522,084 | $ | 163,721 | $ | 269,829 | $ | 66,180 | $ | 177,995 | $ | 1,646,072 | |||||||||||||||||
Assistant to the President of Koppers Inc. | 2018 | 433,438 | 406,015 | 158,955 | 226,363 | 790 | 51,528 | 1,277,089 | ||||||||||||||||||||||||
2017 | 420,300 | 473,864 | 153,546 | 314,496 | 53,484 | 104,267 | 1,519,957 | |||||||||||||||||||||||||
James A. Sullivan | 2019 | $ | 408,766 | $ | 573,975 | $ | 179,999 | $ | 247,193 | $ | 190 | $ | 56,706 | $ | 1,466,829 | |||||||||||||||||
Executive Vice President and Chief Operating Officer | 2018 | 388,642 | 459,756 | 179,997 | 219,143 | 142 | 53,966 | 1,301,646 | ||||||||||||||||||||||||
2017 | 351,300 | 395,063 | 128,021 | 284,728 | 114 | 55,623 | 1,214,849 | |||||||||||||||||||||||||
Douglas J. Fenwick(1) | 2019 | $ | 299,316 | $ | 341,124 | $ | 106,974 | $ | 176,306 | $ | 157 | $ | 39,212 | $ | 963,089 | |||||||||||||||||
President, Performance Chemicals |
Name and Principal Position | Year | Salary | Bonus | Stock Awards(4) | Option Awards(4) | Non-Equity Incentive Plan Compensation | Change in Pension Value and Nonqualified Deferred Compensation Earnings(5) | All Other Compensation(6) | Total | |||||||||||||||||||||||||||
Leroy M. Ball President and Chief Executive Officer | 2020 | $ | 864,450 | $ | 205,808 | $ | 1,282,260 | $ | 777,999 | $ | 890,384 | $ | 2,383 | $ | 103,263 | $ | 4,126,547 | |||||||||||||||||||
2019 | 857,719 | — | 2,208,407 | 692,535 | 864,634 | 977 | 94,066 | 4,718,338 | ||||||||||||||||||||||||||||
2018 | 833,338 | — | 1,717,559 | 672,361 | 725,350 | 854 | 94,583 | 4,044,045 | ||||||||||||||||||||||||||||
Michael J. Zugay Chief Financial Officer | 2020 | $ | 402,791 | $ | 57,538 | $ | 248,927 | $ | 151,042 | $ | 248,925 | $ | 553 | $ | 56,696 | $ | 1,166,472 | |||||||||||||||||||
2019 | 399,641 | — | 467,632 | 146,651 | 241,694 | 223 | 50,275 | 1,306,116 | ||||||||||||||||||||||||||||
2018 | 388,243 | — | 363,662 | 142,376 | 202,760 | 182 | 65,157 | 1,162,380 | ||||||||||||||||||||||||||||
James A. Sullivan Executive Vice President and Chief Operating Officer | 2020 | $ | 500,000 | $ | 189,280 | $ | 494,435 | $ | 300,000 | $ | 386,250 | $ | 499 | $ | 66,726 | $ | 1,937,190 | |||||||||||||||||||
2019 | 408,766 | — | 573,975 | 179,999 | 247,193 | 190 | 56,706 | 1,466,829 | ||||||||||||||||||||||||||||
2018 | 388,642 | — | 459,756 | 179,997 | 219,143 | 142 | 53,966 | 1,301,646 | ||||||||||||||||||||||||||||
Leslie S. Hyde(1) Senior Vice President and Chief Sustainability Officer | 2020 | $ | 322,040 | $ | 46,431 | $ | 200,872 | $ | 121,882 | $ | 200,875 | $ | 39,718 | $ | 125,481 | $ | 1,057,299 | |||||||||||||||||||
Stephanie L. Apostolou(2) General Counsel and Secretary | 2020 | $ | 282,913 | $ | 35,712 | $ | 238,323 | $ | — | $ | 154,500 | $ | — | $ | 21,204 | $ | 732,652 | |||||||||||||||||||
Steven R. Lacy Former Assistant to the President of Koppers Inc. | 2020 | $ | 449,817 | $ | 94,255 | $ | 562,262 | $ | — | $ | — | $ | 60,953 | $ | 155,317 | $ | 1,322,604 | |||||||||||||||||||
2019 | 446,263 | — | 522,084 | 163,721 | 269,829 | 66,180 | 177,995 | 1,646,072 | ||||||||||||||||||||||||||||
2018 | 433,438 | — | 406,015 | 158,955 | 226,363 | 790 | 51,528 | 1,277,089 | ||||||||||||||||||||||||||||
Douglas J. Fenwick(3) President, Performance Chemicals | 2020 | $ | 304,485 | $ | 92,730 | $ | 188,169 | $ | 114,176 | $ | 188,172 | $ | 350 | $ | 45,274 | $ | 933,356 | |||||||||||||||||||
2019 | 299,316 | — | 341,124 | 106,974 | 176,306 | 157 | 39,212 | 963,089 | ||||||||||||||||||||||||||||
(1) |
|
(2) | Ms. Apostolou was not an NEO in 2018 or 2019. |
(3) | Mr. Fenwick was not an NEO in 2018. |
(4) | The amounts shown in these columns represent the aggregate grant date fair value of RSUs, stock options and PSUs granted to our NEOs computed in accordance with FASB ASC Topic 718. The value of PSUs disclosed in the table is based upon the target amount of shares granted, using a fair value based on a Monte Carlo valuation model. These award grant date fair values have been determined using the assumptions underlying the valuation of equity awards set forth in note 8 of the consolidated financial statements in our annual reports on Form10-K for the years ended December 31, |
The amount disclosed in this column |
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(6) | Includes all other compensation as described in the table below. |
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All Other Compensation Table (2019)(2020)
Perquisites | Other Compensation | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Perquisites | Other Compensation | Club Dues | Total Perquisites(1) | Defined Contribution Plan Contributions(2) | Benefit Restoration Plan Contributions(3) | Total Other Compensation(4) | Total All Other Compensation | |||||||||||||||||||||||||||||||||||||||||||||||||
Club Dues | Executive Physical | Parking | Total Perquisites(1) | Defined Contribution Plan Contributions(2) | Benefit Restoration Plan Contributions(3) | Total Other Compensation(4) | Total All Other Compensation | |||||||||||||||||||||||||||||||||||||||||||||||||
Leroy M. Ball | $ | 14,420 | $ | — | $ | 3,540 | $ | 17,960 | $ | 22,680 | $ | 53,426 | $ | 76,106 | $ | 94,066 | $ | 14,710 | $ | 15,055 | $ | 20,546 | $ | 67,662 | $ | 88,208 | $ | 103,263 | ||||||||||||||||||||||||||||
Michael J. Zugay | 14,377 | — | — | 14,377 | 22,680 | 13,218 | 35,898 | 50,275 | 16,463 | 16,513 | 23,085 | 17,098 | 40,183 | 56,696 | ||||||||||||||||||||||||||||||||||||||||||
James A. Sullivan | 16,978 | 17,028 | 23,085 | 26,613 | 49,698 | 66,726 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Leslie S. Hyde | — | — | 21,566 | 8,497 | 125,481 | 125,481 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Stephanie L. Apostolou | — | — | 17,228 | 3,976 | 21,204 | 21,204 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Steven R. Lacy | 15,534 | 4,493 | — | 20,027 | 22,680 | 16,098 | 157,968 | 177,995 | — | — | 23,085 | 21,685 | 155,317 | 155,317 | ||||||||||||||||||||||||||||||||||||||||||
James A. Sullivan | 19,762 | — | — | 19,762 | 22,680 | 14,264 | 36,944 | 56,706 | ||||||||||||||||||||||||||||||||||||||||||||||||
Douglas J. Fenwick | 11,650 | — | — | 11,650 | 22,680 | 4,882 | 27,562 | 39,212 | 12,378 | 12,378 | 23,085 | 9,811 | 32,896 | 45,274 |
(1) | The aggregate incremental cost for the perquisites is based on our direct,out-of-pocket cost for providing those benefits. In addition to club dues, Mr. Ball received parking reimbursement and Messrs. Ball, Zugay and Sullivan received a nominal holiday gift. |
(2) | The full amount of “defined contribution plan contributions” disclosed for each NEO includes an assumed amount for employer contributions made under our 401(k) plan. Actual employer contributions have not yet been made for |
(3) | Actual Benefit Restoration Plan contributions have not yet been made for |
(4) | The full amount of |
2021 Proxy Statement28 KOPPERS HOLDINGS INC. - 202034
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20192020 Grants of Plan Based Awards Table
As further described in the “Compensation Discussion and Analysis” section above, the following table shows the details concerning the potential amounts payable to Messrs. Ball, Zugay, Sullivan, Lacy Sullivan and Fenwick and Mses. Hyde and Apostolou for performance during 20192020 under our annual incentive plan. The actual amounts paid to each NEO are included in the “Summary Compensation Table” above. The table below also reflects PSUs, RSUs and stock options granted to each NEO during 20192020 under our LTIP.LTIP, where applicable.
Form of Award(1) | Grant Date | Date Management, Development and Compensation Committee Took Action to Grant Award |
Estimated Possible 2019 Payouts Under |
Estimated Future Payouts Under | All Other Stock Awards: Number of Shares of Stock or (#) | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards(4) ($/Sh) | Grant Date Fair Value of Stock and Option Awards(5) ($) | Form of | Grant Date | Date Management, Development and Compensation Committee Took Action to Grant Award | Estimated Possible 2020 Payouts Under Non-Equity Incentive Plan Awards(2)(4) |
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Estimated Future Payouts Under Equity Incentive Plan Awards(3) | All Other Stock Awards: Number Shares of Stock or Units(3) (#) | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise Base Price of Option Awards(4) ($/Sh) | Grant Date Fair Value of Stock and Option Awards(5) ($) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) |
Threshold ($) | Target ($) | Maximum ($) |
| Threshold (#) | Target (#) | Maximum (#) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leroy M. Ball | Annual Cash Incentive Award | 419,725 | 839,450 | 1,259,175 | Annual Cash Incentive Award |
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| 432,225 | 864,450 | 1,296,675 |
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| PSU Award | 3/3/2020 | 2/11/2020 |
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| 33,028 | 66,055 | 132,110 |
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| $ | 763,596 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| RSU Award | 3/3/2020 | 2/11/2020 |
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| 26,422 |
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| 518,664 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PSU Award | 3/6/2019 | 2/12/2019 | 21,672 | 43,343 | 86,686 | $1,746,723 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RSU Award | 3/6/2019 | 2/12/2019 | 17,337 | 461,684 | Option Award | 3/3/2020 | 2/11/2020 |
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| 92,180 | $ | 19.63 | 777,999 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Option Award | 3/6/2019 | 2/12/2019 | 61,178 | $26.63 | 692,535 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Michael J. Zugay | Annual Cash Incentive Award | 117,328 | 234,655 | 351,983 | Annual Cash Incentive Award |
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| 120,838 | 241,675 | 362,513 |
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|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PSU Award | 3/6/2019 | 2/12/2019 | 4,589 | 9,178 | 18,356 | $369,873 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RSU Award | 3/6/2019 | 2/12/2019 | 3,671 | 97,759 | PSU Award | 3/3/2020 | 2/11/2020 |
|
|
|
| 6,412 | 12,824 | 25,648 |
|
|
| $ | 148,245 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Option Award | 3/6/2019 | 2/12/2019 | 12,955 | $26.63 | 146,651 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Steven R. Lacy | Annual Cash Incentive Award | 119,997 | 239,993 | 359,990 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| RSU Award | 3/3/2020 | 2/11/2020 |
|
|
|
|
|
|
| 5,129 |
|
| 100,682 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PSU Award | 3/6/2019 | 2/12/2019 | 5,124 | 10,247 | 20,494 | $412,954 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RSU Award | 3/6/2019 | 2/12/2019 | 4,098 | 109,130 | Option Award | 3/3/2020 | 2/11/2020 |
|
|
|
|
|
|
|
| 17,896 | $ | 19.63 | 151,042 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Option Award | 3/6/2019 | 2/12/2019 | 14,463 | $26.63 | 163,721 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
James A. Sullivan | Annual Cash Incentive Award | 130,985 | 261,970 | 392,955 | Annual Cash Incentive Award |
|
| 187,500 | 375,000 | 562,500 |
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PSU Award | 3/6/2019 | 2/12/2019 | 5,633 | 11,265 | 22,530 | $453,980 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RSU Award | 3/6/2019 | 2/12/2019 | 4,506 | 119,995 | PSU Award | 3/3/2020 | 2/11/2020 |
|
|
|
| 12,736 | 25,471 | 50,942 |
|
|
| $ | 294,445 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Option Award | 3/6/2019 | 2/12/2019 | 15,901 | $26.63 | 179,999 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| RSU Award | 3/3/2020 | 2/11/2020 |
|
|
|
|
|
|
| 10,188 |
|
| 199,990 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Option Award | 3/3/2020 | 2/11/2020 |
|
|
|
|
|
|
|
| 35,545 | $ | 19.63 | 300,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leslie S. Hyde | Annual Cash Incentive Award |
|
| 97,512 | 195,024 | 292,536 |
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PSU Award | 3/3/2020 | 2/11/2020 |
|
|
|
| 5,174 | 10,348 | 20,696 |
|
|
| $ | 119,623 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| RSU Award | 3/3/2020 | 2/11/2020 |
|
|
|
|
|
|
| 4,139 |
|
| 81,249 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Option Award | 3/3/2020 | 2/11/2020 |
|
|
|
|
|
|
|
| 14,441 | $ | 19.63 | 121,882 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stephanie L. Apostolou | Annual Cash Incentive Award |
|
| 75,000 | 150,000 | 225,000 |
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PSU Award | 3/3/2020 | 2/11/2020 |
|
|
|
| 3,821 | 7,641 | 15,282 |
|
|
| $ | 88,330 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| RSU Award | 3/3/2020 | 2/11/2020 |
|
|
|
|
|
|
| 7,641 |
|
| 149,993 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Steven R. Lacy | RSU Award | 3/3/2020 | 2/11/2020 |
|
|
|
|
|
|
| 28,643 |
|
| $ | 562,262 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Douglas J. Fenwick | Annual Cash Incentive Award | 85,586 | 171,171 | 256,757 | Annual Cash Incentive Award |
|
| 91,346 | 182,691 | 274,037 |
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PSU Award | 3/6/2019 | 2/12/2019 | 3,348 | 6,695 | 13,390 | $269,809 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RSU Award | 3/6/2019 | 2/12/2019 | 2,678 | 71,315 | PSU Award | 3/3/2020 | 2/11/2020 |
|
|
|
| 4,847 | 9,694 | 19,388 |
|
|
| $ | 112,063 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Option Award | 3/6/2019 | 2/12/2019 | 9,450 | $26.63 | 106,974 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| RSU Award | 3/3/2020 | 2/11/2020 |
|
|
|
|
|
|
| 3,877 |
|
| 76,106 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Option Award | 3/3/2020 | 2/11/2020 |
|
|
|
|
|
|
|
| 13,528 | $ | 19.63 | 114,176 |
(1) | The material terms of the awards reflected in this column are provided in the “Compensation, Discussion and Analysis— |
(2) | The amounts shown in these columns represent the threshold, target and maximum possible payouts in |
(3) | Unvested RSUs and PSUs granted under our LTIP are entitled to dividends at the same rate as those paid, if any, to holders of our common stock which are converted annually into additional RSUs or PSUs, respectively, that vest on the same schedule as the underlying award. We call these dividend equivalent units. |
KOPPERS HOLDINGS INC. | 35 |
EXECUTIVE AND DIRECTOR COMPENSATION
(4) | The option and RSU awards generally will vest in equal annual installments over four years and have a maximum term of 10 years. As noted above, Mr. Lacy’s 2020 long-term incentive award consisted of a single RSU award, which vested on December 31, 2020. |
(5) | The amounts shown in this column represent the aggregate grant date fair value of RSUs, stock options and PSUs granted to our NEOs in |
2021 Proxy StatementKOPPERS HOLDINGS INC. - 202036 29
EXECUTIVE AND DIRECTOR COMPENSATION
Outstanding Equity Awards at FiscalYear-End 20192020
The table below provides information concerning unvested RSUs, PSUs and unexercised options held by each NEO at December 31, 2019.2020.
| Option Awards | Stock Awards | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name | Grant Date | Number of Securities Underlying Unexercised Options Exercis- able (#) | Number of Securities Underlying Unexercised Options Unexercis- able(1)(#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested(2)(#) | Market Value of Shares or Units of Stock That Have Not Vested(3)($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested(4)(#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested(3)($) | Grant Date | Number of Securities Underlying Unexercised Options Exercisable(#) | Number of Securities Underlying Unexercised Options Unexercisable(1)(#) | Option Exercise Price($) | Option Expiration Date |
| Number of Shares or Units of Stock That Have Not Vested(2)(#) | Market Value of Shares or Units of Stock That Have Not Vested(3)($) |
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested(4)(#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested(3)($) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leroy M. Ball | Leroy M. Ball |
| 2/22/2011 | 6,100 |
| $ | 40.26 | 2/21/2021 |
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2/21/2012 | 7,807 |
| 38.21 | 2/21/2022 |
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2/19/2013 | 7,591 |
| 42.76 | 2/19/2023 |
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2/18/2014 | 9,167 |
| 37.93 | 2/18/2024 |
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3/3/2015 | 92,410 |
| 17.57 | 3/3/2025 |
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3/1/2016 | 60,728 |
| 18.11 | 3/1/2026 |
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 9/1/2010 | 2,500 | $ | 20.00 | 8/31/2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2/22/2011 | 6,100 | 40.26 | 2/22/2021 | 3/3/2017 | 25,139 | 8,380 | 44.10 | 3/3/2027 |
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2/21/2012 | 7,807 | 38.21 | 2/21/2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2/19/2013 | 7,591 | 42.76 | 2/19/2023 | 3/2/2018 | 20,561 | 20,562 | 41.60 | 3/2/2028 |
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2/18/2014 | 9,167 | 37.93 | 2/18/2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/3/2015 | 92,410 | 17.57 | 3/3/2025 | 3/6/2019 | 15,294 | 45,884 | 26.63 | 3/6/2029 |
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/1/2016 | 45,546 | 15,182 | 18.11 | 3/1/2026 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/3/2017 | 16,759 | 16,760 | 44.10 | 3/3/2027 | 3/3/2020 | — | 92,180 | 19.63 | 3/1/2030 |
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/2/2018 | 10,280 | 30,843 | 41.60 | 3/2/2028 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/6/2019 | — | 61,178 | 26.63 | 3/6/2029 |
|
|
|
|
|
| 104,871 | $ | 3,267,780 | 50,914 | $ | 1,586,480 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
85,663 | $ | 3,274,040 | 84,730 | $ | 3,238,380 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Michael J. Zugay | Michael J. Zugay |
| 3/3/2015 | 26,041 |
| $ | 17.57 | 3/3/2025 |
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/3/2015 | 26,041 | $ | 17.57 | 3/3/2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/1/2016 | 13,546 | 4,515 | 18.11 | 3/1/2026 | 3/1/2016 | 18,061 |
| 18.11 | 3/1/2026 |
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/3/2017 | 3,851 | 3,852 | 44.10 | 3/3/2027 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/2/2018 | 2,177 | 6,531 | 41.60 | 3/2/2028 | 3/3/2017 | 5,777 | 1,926 | 44.10 | 3/3/2027 |
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/6/2019 | — | 12,955 | 26.63 | 3/6/2029 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
18,984 | $ | 725,568 | 17,942 | $ | 919,573 | 3/2/2018 | 4,354 | 4,354 | 41.60 | 3/2/2028 |
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Steven R. Lacy |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3/6/2019 | 3,238 | 9,717 | 26.63 | 3/6/2029 |
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3/3/2020 | — | 17,896 | 19.63 | 3/1/2030 |
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
| �� |
|
|
|
| 21,781 | $ | 678,696 | 10,395 | $ | 323,908 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
James A. Sullivan | 3/3/2015 | 23,437 |
| $ | 17.57 | 3/3/2025 |
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2/22/2011 | 6,584 | $ | 40.26 | 2/22/2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2/21/2012 | 8,327 | 38.21 | 2/21/2022 | 3/1/2016 | 16,609 |
| 18.11 | 3/1/2026 |
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2/19/2013 | 7,864 | 42.76 | 2/19/2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2/18/2014 | 9,204 | 37.93 | 2/18/2024 | 3/3/2017 | 5,364 | 1,788 | 44.10 | 3/3/2027 | �� |
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/3/2015 | 34,580 | 17.57 | 3/3/2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/1/2016 | 14,996 | 4,998 | 18.11 | 3/1/2026 | 3/2/2018 | 5,504 | 5,505 | 41.60 | 3/2/2028 |
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/3/2017 | 4,289 | 4,289 | 44.10 | 3/3/2027 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/2/2018 | 2,430 | 7,292 | 41.60 | 3/2/2028 | 3/6/2019 | 3,975 | 11,926 | 26.63 | 3/6/2029 |
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/6/2019 | — | 14,463 | 26.63 | 3/6/2029 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
21,165 | $ | 808,926 | 20,032 | $ | 1,026,666 | 3/3/2020 | — | 35,545 | 19.63 | 3/1/2030 |
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
James A Sullivan |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
| 30,514 | $ | 950,816 | 16,000 | $ | 498,560 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leslie S. Hyde | 2/22/2011 | 2,952 |
| $ | 40.26 | 2/21/2021 |
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/3/2015 | 23,437 | $ | 17.57 | 3/3/2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/1/2016 | 12,457 | 4,152 | 18.11 | 3/1/2026 | 2/21/2012 | 3,731 |
| 38.21 | 2/21/2022 |
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/3/2017 | 3,576 | 3,576 | 44.10 | 3/3/2027 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/2/2018 | 2,752 | 8,257 | 41.60 | 3/2/2028 | 2/19/2013 | 3,508 |
| 42.76 | 2/19/2023 |
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/6/2019 | — | 15,901 | 26.63 | 3/6/2029 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
21,117 | $ | 807,092 | 22,231 | $ | 1,136,701 | 2/18/2014 | 4,096 |
| 37.93 | 2/18/2024 |
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Douglas J. Fenwick |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/1/2016 | 7,895 | 2,631 | $ | 18.11 | 3/1/2026 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/3/2017 | 2,178 | 2,179 | 44.10 | 3/3/2027 | 3/3/2015 | 12,803 |
| 17.57 | 3/3/2025 |
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/2/2018 | 1,557 | 4,674 | 41.60 | 3/2/2028 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/6/2019 | — | 9,450 | 26.63 | 3/6/2029 | 3/1/2016 | 9,311 |
| 18.11 | 3/1/2026 |
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
12,619 | $ | 482,298 | 13,010 | $ | 667,780 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3/3/2017 | 2,951 | 984 | 44.10 | 3/3/2027 |
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3/2/2018 | 2,568 | 2,569 | 41.60 | 3/2/2028 |
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3/6/2019 | 1,990 | 5,972 | 26.63 | 3/6/2029 |
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3/3/2020 | — | 14,441 | 19.63 | 3/1/2030 |
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
| 14,290 | $ | 445,276 | 7,211 | $ | 224,695 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stephanie L. Apostolou |
|
|
|
|
|
| 12,013 | $ | 374,325 | 3,831 | $ | 119,374 |
KOPPERS HOLDINGS INC. | 37 |
EXECUTIVE AND DIRECTOR COMPENSATION
|
| Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||||
Name | Grant Date | Number of Securities Underlying Unexercised Options Exercisable(#) | Number of Securities Underlying Unexercised Options Unexercisable(1)(#) | Option Exercise Price($) | Option Expiration Date |
| Number of Shares or Units of Stock That Have Not Vested(2)(#) | Market Value of Shares or Units of Stock That Have Not Vested(3)($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested(4)(#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested(3)($) | ||||||||||||||||||||||||||||||
Steven R. Lacy | 2/22/2011 | 6,584 |
|
|
| $ | 40.26 | 2/21/2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
| 2/21/2012 | 8,327 |
|
|
| 38.21 | 2/21/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||
| 2/19/2013 | 7,864 |
|
|
| 42.76 | 2/19/2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||
| 2/18/2014 | 9,204 |
|
|
| 37.93 | 12/31/2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||
| 3/3/2015 | 34,580 |
|
|
| 17.57 | 12/31/2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||
| 3/1/2016 | 19,994 |
|
|
| 18.11 | 12/31/2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||
| 3/3/2017 | 8,220 |
|
|
| 44.10 | 12/31/2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||
| 3/2/2018 | 6,885 |
|
|
| 41.60 | 12/31/2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||
| 3/6/2019 | 6,628 |
|
|
| 26.63 | 12/31/2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 9,112 | $ | 283,930 | 4,556 | $ | 141,965 | ||||||||||||||||
Douglas J. Fenwick | 3/1/2016 | 10,526 |
|
|
| $ | 18.11 | 3/1/2026 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
| 3/3/2017 | 3,267 | 1,090 | 44.10 | 3/3/2027 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||
| 3/2/2018 | 3,115 | 3,116 | 41.60 | 3/2/2028 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||
| 3/6/2019 | 2,362 | 7,088 | 26.63 | 3/6/2029 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||
| 3/3/2020 | — | 13,528 | 19.63 | 3/1/2030 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 15,923 | $ | 496,161 | 7,695 | $ | 239,776 |
(1) | Options granted on |
30 KOPPERS HOLDINGS INC. - 2020 Proxy Statement
EXECUTIVE AND DIRECTOR COMPENSATION
(2) | The amounts shown in this column reflect the aggregate number of unvested RSUs awarded in |
Name | Grant Date | # of Unvested Shares | Vesting Date | ||||||||||||||||||
Leroy M. Ball | |||||||||||||||||||||
3/3/2017 | 2,268 | 3/3/2021 | |||||||||||||||||||
3/2/2018 | 2,694 | 3/2/2021 | |||||||||||||||||||
3/2/2018 | 2,694 | 3/2/2022 | |||||||||||||||||||
3/6/2019 | 4,334 | 3/6/2021 | |||||||||||||||||||
3/6/2019 | 4,334 | 3/6/2022 | |||||||||||||||||||
3/6/2019 | 4,335 | 3/6/2023 | |||||||||||||||||||
| 3/ | 3/ | |||||||||||||||||||
3/3/2020 | |||||||||||||||||||||
3/3/2020 | 6,605 | 3/3/2022 | |||||||||||||||||||
3/3/2020 | 6,606 | 3/3/2023 | |||||||||||||||||||
3/3/2020 | 6,606 | 3/3/2024 | |||||||||||||||||||
Michael J. Zugay | 3/3/2017 | 521 | 3/3/2021 | ||||||||||||||||||
3/2/2018 | 570 | 3/2/2021 | |||||||||||||||||||
3/2/2018 | 571 | 3/2/2022 | |||||||||||||||||||
3/6/2019 | 918 | 3/6/2021 | |||||||||||||||||||
3/6/2019 | 918 | 3/6/2022 | |||||||||||||||||||
3/6/2019 | 918 | 3/6/2023 | |||||||||||||||||||
| 3/ | 3/ |
38 | 2021 Proxy Statement |
EXECUTIVE AND DIRECTOR COMPENSATION
Name | Grant Date | # of Unvested Shares | Vesting Date | ||||||||||||||||||
3/3/2020 | |||||||||||||||||||||
3/3/2021 | |||||||||||||||||||||
| |||||||||||||||||||||
3/3/2020 | |||||||||||||||||||||
3/3/2020 | 1,282 | 3/3/2023 | |||||||||||||||||||
3/3/2020 | 1,283 | 3/3/2024 | |||||||||||||||||||
James A. Sullivan | 3/3/2017 | 484 | 3/3/2021 | ||||||||||||||||||
3/2/2018 | 721 | 3/2/2021 | |||||||||||||||||||
3/2/2018 | 721 | 3/2/2022 | |||||||||||||||||||
3/6/2019 | 1,126 | 3/6/2021 | |||||||||||||||||||
3/6/2019 | 1,127 | 3/6/2022 | |||||||||||||||||||
3/6/2019 | 1,127 | 3/6/2023 |
KOPPERS HOLDINGS INC. - 2020 Proxy Statement 31
EXECUTIVE AND DIRECTOR COMPENSATION
|
|
| |||||||||||||||||||
| 3/ | 3/ | |||||||||||||||||||
3/3/2020 | 2,547 | 3/3/2021 | |||||||||||||||||||
3/3/2020 | 2,547 | 3/3/2022 | |||||||||||||||||||
3/3/2020 | 2,547 | 3/3/2023 | |||||||||||||||||||
3/3/2020 | 2,547 | 3/3/2024 | |||||||||||||||||||
Leslie S. Hyde | 3/3/2017 | 3/3/2021 | |||||||||||||||||||
3/2/2018 | 336 | 3/2/2021 | |||||||||||||||||||
3/2/2018 | 337 | 3/2/2022 | |||||||||||||||||||
3/6/2019 | 564 | 3/6/2021 | |||||||||||||||||||
3/6/2019 | 564 | 3/6/2022 | |||||||||||||||||||
3/6/2019 | 564 | 3/6/2023 | |||||||||||||||||||
3/6/2019 | 7,520 | 3/6/2022 | |||||||||||||||||||
3/3/2020 | |||||||||||||||||||||
3/3/2020 | 1,035 | 3/3/2022 | |||||||||||||||||||
3/3/2020 | 1,035 | 3/3/2023 | |||||||||||||||||||
3/3/2020 | 1,035 | 3/3/2024 | |||||||||||||||||||
Stephanie L. Apostolou | 3/2/2018 | 182 | 3/2/2021 | ||||||||||||||||||
3/2/2018 | 183 | 3/2/2022 | |||||||||||||||||||
3/6/2019 | 481 | 3/6/2021 | |||||||||||||||||||
3/6/2019 | 481 | 3/6/2022 | |||||||||||||||||||
3/6/2019 | 481 | 3/6/2023 | |||||||||||||||||||
3/6/2019 | 2,564 | 3/6/2022 | |||||||||||||||||||
3/3/2020 | 1,910 | 3/3/2021 | |||||||||||||||||||
3/3/2020 | 1,910 | 3/3/2022 | |||||||||||||||||||
3/3/2020 | 1,910 | 3/3/2023 | |||||||||||||||||||
3/3/2020 | 1,911 | 3/3/2024 | |||||||||||||||||||
Steven R. Lacy | 3/6/2019 | 9,112 | 3/6/2022 | ||||||||||||||||||
Douglas J. Fenwick | 3/3/2017 | 295 | 3/3/2021 | ||||||||||||||||||
3/2/2018 | 408 | 3/2/2021 | |||||||||||||||||||
3/2/2018 | 408 | 3/2/2022 | |||||||||||||||||||
3/6/2019 | 669 | 3/6/2021 | |||||||||||||||||||
3/6/2019 | 670 | 3/6/2022 | |||||||||||||||||||
3/6/2019 | 670 | 3/6/2023 | |||||||||||||||||||
3/6/2019 | 8,926 | 3/6/2022 | |||||||||||||||||||
3/3/2020 | 969 | 3/3/2021 | |||||||||||||||||||
3/3/2020 | 969 | 3/3/2022 | |||||||||||||||||||
3/3/2020 | 969 | 3/3/2023 | |||||||||||||||||||
3/3/2020 | 970 | 3/3/2024 |
(3) | The amounts shown in this column represent the market value of these stock awards and related dividend equivalent units based on a closing market price of |
KOPPERS HOLDINGS INC. | 39 |
EXECUTIVE AND DIRECTOR COMPENSATION
(4) | The amounts shown in this column reflect the aggregate number of unvested PSUs awarded in |
Name | Grant Date | # of Shares | Vesting Date | |||||||||||||
Leroy M. Ball | ||||||||||||||||
3/6/2019 | 3/ | |||||||||||||||
| ||||||||||||||||
3/3/2020 | 22,018 | 3/3/2023 | ||||||||||||||
Michael J. Zugay | 3/6/2019 | 3/ | ||||||||||||||
| ||||||||||||||||
3/3/2020 | 4,275 | 3/3/2023 | ||||||||||||||
James A. Sullivan | 3/6/2019 | 3/ | ||||||||||||||
| ||||||||||||||||
3/3/2020 | 8,490 | 3/3/2023 | ||||||||||||||
Leslie S. Hyde | 3/6/2019 | 3/ | ||||||||||||||
| ||||||||||||||||
3/3/2020 | 3,449 | 3/3/2023 | ||||||||||||||
Stephanie L. Apostolou | 3/6/2019 | 3/6/2022 | ||||||||||||||
3/3/2020 | 2,547 | 3/3/2023 |
32 KOPPERS HOLDINGS INC. - 2020 Proxy Statement
EXECUTIVE AND DIRECTOR COMPENSATION
Stephen R. Lacy
Douglas J. Fenwick
20192020 Option Exercises and Stock Vested
The table below sets forth information concerning aggregate exercises of stock options and the vesting of a portion of RSUs held by the NEOs during 2019.2020.
Option Awards | Stock Awards | Option Awards | Stock Awards | |||||||||||||||||||||||||||||
Name | Number of Shares Acquired on Exercise | Value Realized on Exercise(1) | Number of Shares Acquired on Vesting | Value Realized on Vesting(2) | Number of Shares Acquired on Exercise | Value Realized on Exercise(1) | Number of Shares Acquired on Vesting | Value Realized on Vesting(2) | ||||||||||||||||||||||||
Leroy M. Ball
|
| —
|
| $
| —
|
|
| 18,864
|
| $
| 493,482
|
| 2,500 | $ | 11,682 | 36,110 | $ | 713,863 | ||||||||||||||
Michael J. Zugay
|
| —
|
| $
| —
|
|
| 5,157
|
| $
| 134,907
|
| — | $ | — | 8,450 | $ | 167,728 | ||||||||||||||
James A. Sullivan | — | $ | — | 8,301 | $ | 164,388 | ||||||||||||||||||||||||||
Leslie S. Hyde | — | $ | — | 4,463 | $ | 88,471 | ||||||||||||||||||||||||||
Stephanie L. Apostolou | — | $ | — | 663 | $ | 12,501 | ||||||||||||||||||||||||||
Steven R. Lacy
|
| 7,078
|
| $
| 101,074
|
|
| 5,993
|
| $
| 156,777
|
| — | $ | — | 39,916 | $ | 1,137,376 | ||||||||||||||
James A. Sullivan
|
| —
|
| $
| —
|
|
| 4,920
|
| $
| 128,707
|
| ||||||||||||||||||||
Douglas J. Fenwick
|
| —
|
| $
| —
|
|
| 2,347
|
| $
| 61,398
|
| — | $ | — | 5,037 | $ | 99,824 |
(1) | The amounts in this column are calculated by multiplying the number of shares acquired on exercise by the difference between the fair market value of the common stock on the date of exercise of |
(2) | The amounts in this column represent the number of shares acquired upon the vesting of PSUs and RSUs during 2020 on March 1, |
40 | 2021 Proxy Statement |
EXECUTIVE AND DIRECTOR COMPENSATION
The table below sets forth information as of December 31, 2019,2020, with respect to each plan that provides for payments or other benefits at, following, or in connection with retirement. None of our NEOs received any payments during 20192020 under any of these plans.
Name | Plan Name | Number of Years Credited Service (#) | Present Value of Accumulated Benefit ($)(1) | Plan Name | Number of Years Credited Service (#) | Present Value of Accumulated Benefit ($)(1) | ||||||||||||||
Leslie S. Hyde | Retirement Plan for Koppers Inc. | 7.5 | 188,033 | |||||||||||||||||
| Koppers Inc. Supplemental Executive Retirement Plan II (SERP II) | 7.5 | 113,076 | |||||||||||||||||
|
|
| $ | 301,109 | ||||||||||||||||
Steven R. Lacy | Retirement Plan for Koppers Inc. | 5.5 | $ | 210,154 | Retirement Plan for Koppers Inc. | 5.5 | $ | 233,526 | ||||||||||||
Koppers Inc. Retirement Income Restoration Plan (SERP I) | 5.5 | 121,388 | ||||||||||||||||||
Koppers Inc. Supplemental Executive Retirement Plan II (SERP II)
|
| 5.5
|
|
| 169,954
|
| Koppers Inc. Retirement Income Restoration Plan (SERP I) | 5.5 | 133,503 | |||||||||||
$ | 501,496 | |||||||||||||||||||
| Koppers Inc. Supplemental Executive Retirement Plan II (SERP II) | 5.5 | 193,846 | |||||||||||||||||
|
|
| $ | 560,875 |
(1) | These present values have been determined using the assumptions and valuation methodology set forth in note |
Pension Plan
Ms. Hyde and Mr. Lacy isare covered by the Retirement Plan of Koppers Inc. and Subsidiaries for Salaried Employees, which we refer to as the salaried plan. Prior to June 1, 2004, annual retirement benefits were computed at the rate of 1.2 percent of terminal salary (as defined below) not in excess of $16,000, plus 1.6 percent of terminal salary in excess of $16,000, all multiplied by years of credited service (as defined below). Other elected U.S. officers also participate in the salaried plan.
Terminal salary was determined based on the average annual salary (defined as salary plus 50 percent of any incentive payments) for the five highest consecutive years of the last ten years of credited service, or during all years of such credited service if less than five. Credited service included all accumulated service as a salaried employee except for any period of layoff or leave of absence. In 1998, we amended the salaried plan to provide a minimum pension equal to 1.2 percent of terminal salary multiplied by years of credited service up to 35 years
reduced by any pension benefit paid by the pension plan of the former Koppers Company, Inc., now known as Beazer East, Inc. (“Old Koppers” for the period prior to December 29, 1988). For purposes of the minimum pension calculations, terminal salary was determined based on the average annual salary (defined as salary plus 75 percent of any incentive payments) for the five highest consecutive years of the last ten years of credited service, or during all years of credited service if less than five.
Effective June 1, 2004 we further amended the salaried plan. For credited service after May 31, 2004, annual retirement benefits are computed at the rate of one percent of terminal salary multiplied by years of credited service after May 31, 2004. Effective June 1, 2004 we also amended the definition of terminal salary to mean the average annual salary (defined as salary plus 100 percent of any incentive payments) for the five highest consecutive years of the last ten years of credited service or during all years of credited service if less than five.
KOPPERS HOLDINGS INC. - 2020 Proxy Statement 33
EXECUTIVE AND DIRECTOR COMPENSATION
Retirement Income Restoration Plan (SERP l)
Effective January 1, 1991, the board of directors established the Retirement Income Restoration Plan, which we refer to as SERP l, for participating elected U.S. officers, includingofficers. Mr. Lacy.Lacy is the only NEO participant in SERP I. SERP l pays an annual benefit equal to the difference betweenbetween: (i) the benefit a participant would receive under the salaried plan if not for the compensation limit imposed under the tax codecode; and (ii) the benefit the participant actually receives under the salaried plan.
Supplemental Executive Retirement Plan (SERP II)
Effective December 1, 1997, the board of directors established the Supplemental Executive Retirement Plan, which we refer to as SERP II, for participating elected U.S. officers, includingofficers. Ms. Hyde and Mr. Lacy.Lacy are the only NEO participants in SERP II. SERP II pays an annual benefit equal to two percent of final average pay multiplied by years of service up to 35 years, reduced by the sum of: (i) pension benefits received from us; (ii) pension benefits received from Old Koppers; (iii) benefits received under any othernon-qualified retirement plan sponsored by us or Old Koppers; and(iv) one-half of any Social Security benefits.
At the time of his retirement on December 31, 2020, Mr. Lacy is currentlywas eligible for early retirement under our salaried plan, SERP I and SERP II with unreduced benefits. Ms. Hyde is eligible for early retirement under our salaried plan and SERP II with unreduced benefits. The eligibility standards for early retirement under the salaried plan and SERP I are 60 years of age with 10 years of service, in which case the benefits are
KOPPERS HOLDINGS INC. | 41 |
EXECUTIVE AND DIRECTOR COMPENSATION
unreduced, and 55 years of age with 10 years of service, in which case the benefits are reduced five percent per year from age 65. The eligibility standards for early retirement under SERP II are 60 years of age with 10 years of service, in which case the benefits are unreduced, and 55 years of age with 10 years of service, in which case the benefits are reduced three percent per year from age 60.
2006 Freeze of Pension Plan, SERP I and SERP II
On November 2, 2006, our board of directors approved a freeze of our domestic qualified and correspondingnon-qualified defined benefit plans for U.S. salaried employees. No U.S. salaried employee hired after December 31, 2006, will become a participant in the salaried plan or in
SERP l or SERP ll and U.S. salaried employees will no longer accrue additional benefits under such plans after December 31, 2006. However, years of service will continue to accrue for vesting purposes and for purposes of eligibility for certain benefits under the plans, such as early retirement benefits. In light of freezing future benefit accruals under the qualified defined benefit plan, we provided to eligible U.S. salaried employees in 2007 and 2008 an annual employernon-elective contribution under the qualified defined contribution plan ranging from three percent to nine percent of compensation determined based on age and years of service. In 2009, we amended the plan to remove the automatic employernon-elective contribution feature and to provide that we may decide each plan year whether to make employer discretionary contributions for the plan year and the amount of any such contribution. Effective January 1, 2017, we have modified the structure of the employer discretionary contribution such that it will be an employernon-elective contribution tied to the company’s financial performance. Through 2016, we matched 50 percent of salaried employee contributions to the 401(k) plan up to six percent of an employee’s salary contributed to the plan. Effective January 1, 2017, we match 100 percent of salaried employee contributions to the 401(k) plan on the first three percent of an employee’s salary contributed to the plan and match 50 percent on the next two percent of an employee’s salary contributed to the plan.
Survivor Benefit Plan
The Survivor Benefit Plan provides a post-retirement survivor benefit to selected key employees, including Ms. Hyde and Mr. Lacy. The benefit payable under the plan equals three times the participant’s base salary at the time of retirement or $750,000, whichever is less. Benefits payable under this plan are reduceddollar-for-dollar by proceeds paid under our group life insurance plan. If the participant’s employment is terminated for any reason prior to retirement, the participant will not be entitled to benefits under the plan. No new participants have been approved for this plan since before 2008 and the committee does not currently intend to add any new participants in the future.
34 KOPPERS HOLDINGS INC. - 2020 Proxy Statement
EXECUTIVE AND DIRECTOR COMPENSATION
20192020 Non-qualified Deferred Compensation
The table below sets forth information as of December 31, 2019,2020, with respect to our Benefit Restoration Plan, a defined contribution plan that provides for the deferral of compensation on a basis that is nottax-qualified. The Benefit Restoration Plan is described in further detail below. None of our NEOs made any contributions or withdrawals during 20192020 under the Benefit Restoration Plan.
Name | Registrant Contributions in Last Fiscal Year ($)(1)(2) | Aggregate Earnings ($)(3) | Aggregate Balance at Last Fiscal End ($)(2)(4) | Registrant Contributions in Last Fiscal Year ($)(1)(2) | Aggregate Earnings in Last Fiscal Year ($)(3) | Aggregate Balance at Last Fiscal Year End ($)(2)(4) | ||||||||||||||||||
Leroy M. Ball
| $
| 53,426
|
| $
| 8,917
|
| $
| 261,827
|
| $ | 67,662 | $ | 11,704 | $ | 341,192 | |||||||||
Michael J. Zugay
|
| 13,218
|
|
| 2,036
|
|
| 60,803
|
| 17,098 | 2,718 | 80,619 | ||||||||||||
James A. Sullivan | 26,613 | 2,451 | 83,901 | |||||||||||||||||||||
Leslie S. Hyde | 8,497 | 851 | 28,379 | |||||||||||||||||||||
Stephanie L. Apostolou | 3,976 | — | 3,976 | |||||||||||||||||||||
Steven R. Lacy
|
| 16,098
|
|
| 6,713
|
|
| 172,978
|
| 21,685 | 7,732 | 202,395 | ||||||||||||
James A. Sullivan
|
| 14,264
|
|
| 1,736
|
|
| 54,836
|
| |||||||||||||||
Douglas J. Fenwick
|
| 4,882
|
|
| 1,437
|
|
| 38,456
|
| 9,811 | 1,719 | 49,986 |
(1) | The amounts shown in this column are reported as compensation in |
(2) | The amounts disclosed in these columns |
(3) | The following amounts reported in this column are reported as compensation in |
(4) | The following amounts reported in this column were reported as compensation in the Summary Compensation Table for previous years: |
42 | 2021 Proxy Statement |
EXECUTIVE AND DIRECTOR COMPENSATION
Benefit Restoration Plan
On August 8, 2007, the board of directors approved (effective January 1, 2007) anon-qualified, deferred compensation plan for eligible, highly compensated employees, including our NEOs, to replace certain contributions lost under the qualified defined contribution plan as a result of the compensation limits imposed under the tax code. Annually, the account of each participant is credited with a contribution equal to the difference betweenbetween: (a) the amount the participant would have received under the qualified defined contribution plan for such year but for tax code limitslimits; and (b) the amount the
participant actually received under the defined contribution plan for such year. Generally, amounts in a participant’s account vest according to the same schedule as contributions made under our qualified defined contribution plan. Accounts are credited with investment earnings based on an interest rate determined by the committee based, primarily, on the Moody’s Corporate Bond Yield Average as of the preceding December 31. The interest rate for 20192020 was 4.473.43 percent. Benefits will typically be paid upon a separation from service in five equal annual installments.
Potential Payments upon Termination or Change in Control
The following information and related table set forth the details of the payments and benefits that would be provided to each NEO in the event that his or her employment is terminated with us for any reason including resignation, termination without cause, retirement, a constructive termination of the executive, a change in control or a change in the executive’s responsibilities.
Employment Agreement
We currently have an employment agreement with Mr. Lacy. The following discussion summarizes this agreement.
Steven R. Lacy.We entered into an employment agreement with Mr. Lacy in April 2002. The employment agreement provides that Mr. Lacy will serve as Vice President, General Counsel and Corporate Secretary. The initial term of the agreement was from April 5, 2002 through April 4, 2004. The term is automatically extended for additionalone-year periods unless notice is given 180 days in advance by
us or Mr. Lacy that such party does not wish to extend the term. Mr. Lacy’s employment agreement established an initial base salary, subject to periodic review by our chief executive officer, and addressed additional initial compensation matters. The employment agreement provides for participation in our corporate senior management incentive pool and provides for participation in all of our benefits plans.
In February 2020, Mr. Lacy advised us that he has elected to retire from the company, effective December 31, 2020. Pursuant to a managed transition
KOPPERS HOLDINGS INC. - 2020 Proxy Statement 35
EXECUTIVE AND DIRECTOR COMPENSATION
plan, effective March 1, 2020, Mr. Lacy vacated his position as Chief Administrative Officer, General Counsel and Secretary. In connection with this transition, we entered into a Letter Agreement with Mr. Lacy in February 2020, pursuant to which he will act as Assistant to the President of Koppers Inc. through the end of 2020. Mr. Lacy’s annual base salary of $449,817 will remain the same, and he will continue to be eligible for all of the same employee benefits and perquisites as he currently receives. Mr. Lacy will not be eligible for an annual cash incentive award for 2020. Mr. Lacy’s 2020 LTIP award will remain at his current target of 125 percent of his annual base salary and will consist of a single RSU grant, which will vest on December 31, 2020, provided that he remains employed through that date and satisfies the other applicable requirements under the LTIP and award agreements.
In the event of termination by us other than for cause, Mr. Lacy is entitled to receive the following:
all of his accrued salary to the date of his termination;
104 weeks of salary and benefits continuation;
an additional number of weeks of salary equal to the number of full years of service with us;
|
a lump sum severance payment equal to 50 percent of the amount awarded to him under certain bonus and incentive plans for the two years preceding the date of termination; and
a lump sum severance payment equal to the pro rata portion of all contingent awards granted under certain bonus and incentive plans then in effect for all uncompleted periods, taking certain assumptions into consideration.
If Mr. Lacy is terminated (other than for cause) within two years after the occurrence of a change in control, Mr. Lacy will be entitled to receive the following:
all of his accrued salary to the date of his termination;
apro-rata bonus for the year in which his termination occurs;
a lump sum payment equal to two times the sum of his base salary plus one half of the amounts awarded to him under certain bonus and incentive plans for the two years preceding the date of termination or the change in control;
|
reasonable legal fees and expenses incurred by Mr. Lacy as a result of his termination; and
continued indemnification forpre-termination acts and omissions.
The payments and benefits to which Mr. Lacy would be entitled in the event he is terminated after a change in control will also be reduced as necessary to cause the total payments and “parachute payments” (as defined in the tax code) to comply with the limitation set forth in Section 280G of the tax code.
Change in Control Agreements
We have entered into separate change in control agreements with each of our NEOs, except Mr. Lacy. These agreements have an initial two-year term and, thereafter, one-year evergreen terms. Notwithstanding the foregoing, in each case we reserve the right, in our discretion, to terminate the change in control agreement by providing notice of termination at least 90 days prior to the expiration of the then current term.
These agreements are designed to mitigate concerns arising from a change in control, and help to ensure the continued dedicated service of our key employees. Cash payments received under these agreements require a “double trigger”—that is, the occurrence of both a change in control and a qualifying termination of employment. Specifically, the change in control agreements set out benefits that become payable if one of the following events occurs within two years after a change in control has occurred:
the executive terminates his or her employment upon 30 days written notice after (i) being requested to relocate his or her primary office to a location greater than 50 miles from the then current primary office of the executiveexecutive; or (ii) a material reduction in the executive’s duties, responsibilities or compensation; or
the executive’s employment is terminated other than for cause or disability.
The benefits to which the executive would be entitled in the event of a termination of the
executive’s employment under the above-specified conditions following a change in control include:
all of the executive’s accrued salary to the date of termination;
apro-rata bonus for the year in which the termination occurs equal to the average of the payments awarded for the previous two years;
a lump sum payment equal to twice the executive’s base salary;
life, disability, accident and group health benefits (or the monetary equivalent of such benefits) for two years or until the executive receives comparable benefits from a third party; and
continued indemnification forpre-termination acts and omissions.
The treatment of equity awards in connection with a change in control is handled in the equity awardsaward agreements themselves, described below, not in these agreements.
The payments and benefits to which the executive would be entitled in the event he or she is terminated after a change in control will also be reduced as necessary to cause the total payments and “parachute payments” (as defined in the tax code) to comply with the limitation set forth in Section 280G of the tax code.
36 KOPPERS HOLDINGS INC. - 2020 Proxy Statement
EXECUTIVE AND DIRECTOR COMPENSATION
Effect of Termination for Any Reason or Change in Control on Unvested LTIP Awards
As further described in the “Outstanding Equity Awards at Fiscal Year End” table, certain NEOs hold unvested RSUs, PSUs and stock options under the LTIP. IfOther than in connection with an involuntary termination related to a change in control (as described below), if the employment of any of the NEOs is terminated for any reason (other than retirement, death or permanent disability), the executive will forfeit any unvested RSUs, PSUs and stock options; the executive will not forfeit any RSUs, PSUs and stock options
KOPPERS HOLDINGS INC. | 43 |
EXECUTIVE AND DIRECTOR COMPENSATION
already vested. Except for PSUs granted in 2019, if the employment of any of the NEOs is terminated for retirement, death or permanent disability prior to the originally scheduled vesting date, vesting of RSUs, PSUs and stock options will be as follows:
Type of Award | Vesting | |
PSUs | Pro-Rata Vesting at End of Measurement Period. Upon completion of the performance measurement period, the executive will vest in a number of shares equal to the number of shares (if any) in which the executive would have vested at the end of the measurement period had he/she continued in our service through the end of the measurement period multiplied by a fraction, the numerator of which is the number of months of service the executive completed between the award date and the termination of the executive’s service and the denominator of which is the total number of months in the measurement period. | |
RSUs and Stock Options | ImmediatePro-Rata Vesting. For awards granted in 2015 and thereafter, immediate vesting in the number of RSUs or stock options in which the executive would have been vested at the time of the executive’s termination had 25% of the RSUs or stock options that were scheduled to vest on the next anniversary of the award date instead vested in a series of 12 successive equal monthly installments over the duration of the12-month period preceding such anniversary of the award date. |
PSUs granted in 2020 and 2021 also provide that if the grantee’s employment terminates by reason of his or her retirement, death or permanent disability on or after the last day of the measurement period but before the vesting date, then the grantee will vest in a number of shares equal to the number of shares (if any) in which he/she would have vested had his or her service continued without interruption through the vesting date.
PSUs granted in 2019 provide that if the grantee’s employment terminates by reason of his or her retirement, death or permanent disability prior to the originally scheduled vesting date, upon completion of the performance measurement period, the grantee will vest in a number of shares equal to the number of shares (if any) in which the grantee would have vested at the end of the measurement period had he/she continued in our service through the end of the measurement period multiplied by a fraction, the numerator of which is the number of days of service the grantee completed between the award date and the termination of the grantee’s service, and the denominator of which is the number of days from the award date to the vesting date; provided, however, that if the grantee’s employment terminates by reason of his or her retirement on or after December 31st and prior to the next anniversary of the award date on or before the vesting date, then the grantee will vest in a number of shares equal to the number of shares (if any) in which he or she would have vested had his or her service continued without interruption through such anniversary date. For example, with respect to PSUs granted in March 2019, if the grantee’s service terminatesterminated on account of retirement in January 2021, for purposes of vesting, the grantee’s service would behave been treated as having continued without interruption through the anniversary of the award date in March 2021.
Upon his retirement on December 31, 2020, Mr. Lacy had outstanding 2018 and 2019 PSUs, and outstanding 2017, 2018 and 2019 RSUs and stock options. Mr. Lacy’s outstanding 2018 PSUs did not vest because we did not meet the applicable performance threshold upon completion of the relevant measurement period and his 2019 PSU awards will vest upon completion of the relevant measurement period on a As an exception to thePro-Ratapro-rata Vesting at End of Measurement Periodbasis in accordance with the vesting provisions as described above PSUs grantedfor such awards. Similarly, for his outstanding RSUs and stock options for 2017, 2018 and 2019, upon his retirement on December 31, 2020, Mr. Lacy received pro-rata vesting of such shares and options in 2020 provide that if the grantee’s
employment terminates by reason of his or her retirement, death or permanent disability on or after the last day of the measurement period but beforeaccordance with the vesting date, then the grantee will vest inprovisions as described above for such awards. Mr. Lacy’s 2020 long-term incentive award consisted of a number of shares equal to the number of shares (if any) insingle RSU award, which he/she would havefully vested had his or her service continued without interruption through the vesting date.on December 31, 2020.
For purposes of these awards, “retirement” is defined as a voluntary termination from service (i) on or after the attainment of age 65, or (ii) on or after the attainment of age 55 with at least 10 years of service, or involuntary termination from service with at least 30 years of service other than in connection with a termination for misconduct. “Years of service” means the total number of years of “accumulated service” as such term is defined under our pension plan for salaried employees (regardless of whether the grantee is eligible to receive a benefit under such plan). At the time of his retirement on December 31, 2020, Mr. Lacy was eligible for retirement for purposes of these awards. Ms. Hyde is currently eligible for retirement for purposes of these awards.
In the event of a change in control, awards to the NEOs may be assumed or otherwise continued in effect or replaced with a cash retention program by the successor company. If this occurs, there will be no accelerated vesting of unvested RSUs, PSUs and stock options, unless the executive is involuntarily terminated (for reasons other than misconduct) within 24 months following the change in control. If the awards are not assumed or otherwise continued in effect or replaced with a cash retention program by the successor company (or if the executive is involuntarily terminated for reasons other than misconduct within
2021 Proxy StatementKOPPERS HOLDINGS INC. - 202044 37
EXECUTIVE AND DIRECTOR COMPENSATION
involuntarily terminated for reasons other than misconduct within 24 months following the change in control), there will be accelerated vesting of unvested RSUs, PSUs and stock options. For PSUs, if the change in control occurs within the first eighteen months of the measurement period, this accelerated vesting would be for a number of units equal to the number of units that would have been earned if the performance objective at the end of the measurement period was at the target level (less any shares in which the grantee is at the time vested), and if the change in control occurs on or after the first day of the nineteenth month of the measurement period, this accelerated vesting would be for a number of units equal to the number of shares that would have been earned pursuant to the performance objective(pro-rated through the date of the change in control if it occurs prior to the end of the measurement period) based on our actual performance through the earlier of the effective date of the change in control or the end of the measurement period.
Payments Made Upon Death or Disability
In the event of the death or disability of aan NEO, the NEO will receive benefits under our life insurance plan or payments under our disability plan, as appropriate, plus any amounts payable under such executive’s employment agreement, if any.
Quantification of Payments Made Upon Death, Change in Control and Termination Without Cause
The following assumptions and principles apply with respect to the following table and any termination of aan NEO:
The amounts shown in the table assume that each NEO was terminated on December 31, 20192020 and the price of our common stock is equal to $38.22,$31.16, the closing market price on such date, and include the estimate of any additional amounts that would be paid to the NEO on the occurrence of the termination event. The actual amounts that would be paid to an NEO can only be determined at the time of an actual termination event or change in control and may be materially different from the estimated amounts included in the table below. In some cases a release may be required before amounts would be payable.
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AAn NEO is entitled to receive amounts earned during the term of his or her employment (such as his or her base salary) regardless of the manner in which his or her employment is terminated.
In the event of a termination without cause, Messrs. Ball, Zugay, Sullivan and Fenwick and Mses. Hyde and Apostolou would be eligible to receive payments under the Company’s broad-based severance plan. These amounts are not reflected in the table below.
The estimated amounts included in the table only represent additional amounts that would be payable on the specific termination event. We have not included any amounts which have already been accrued in the name of and vested in the executive under our pension or other relevant plans, including those disclosed in the “Pension Benefits” table above.
The amounts estimated in the event of a change of control in the table include the amount aan NEO is entitled to receive under the LTIP if the awards are not assumed or otherwise continued in effect or replaced with a cash retention program by the successor company. The amounts shown relating to PSU awards outstanding less than 19 months represent the value of these awards assuming achievement of target performance goals. The amounts shown relating to PSU awards outstanding for greater than 19 months represent the value of these awards based on the actual performance through the effective date of the change in control on a pro-rated basis.
Named Executive Officer | Death, Disability or Retirement(1) | Qualifying Termination Following a Change in Control | ||||||
Leroy M. Ball | ||||||||
Bonus | $ 890,384 | $ 794,992 | ||||||
Cash severance | — | 1,728,900 | ||||||
Equity vesting | 2,448,820 | 5,760,591 | ||||||
Health and welfare | — | 37,546 | ||||||
$3,339,204 | $8,322,029 | |||||||
Michael J. Zugay | ||||||||
Bonus | $ 248,925 | $ 222,227 | ||||||
Cash severance | — | 805,582 | ||||||
Equity vesting | 505,967 | 1,163,732 | ||||||
Health and welfare | — | 41,080 | ||||||
$ 754,892 | $2,232,621 |
38 KOPPERS HOLDINGS INC. - 2020 Proxy Statement
KOPPERS HOLDINGS INC. | 45 |
EXECUTIVE AND DIRECTOR COMPENSATION
Named Executive Officer | Death, Disability or Retirement(1) | Qualifying Termination Following a Change in Control | Without Cause (2) | Death, Disability or Retirement (1) | Qualifying Termination Following a Change in Control | |||||||||||||||
Leroy M. Ball
| ||||||||||||||||||||
James A. Sullivan | ||||||||||||||||||||
Bonus
| $
| 864,634
|
| $
| 826,675
|
| $
| —
|
| $ 386,250 | $ 233,168 | |||||||||
Cash severance
|
| —
|
|
| 1,728,900
|
|
| —
|
| — | 1,000,000 | |||||||||
Equity vesting
|
| 2,891,303
|
|
| 6,422,379
|
|
| —
|
| 731,575 | 1,904,793 | |||||||||
Health and welfare
|
| —
|
|
| 25,160
|
|
| —
|
| — | 57,596 | |||||||||
$
| 3,755,937
|
| $
| 9,003,114
|
| $
| —
|
| $1,117,825 | $3,195,557 | ||||||||||
Michael J. Zugay
| ||||||||||||||||||||
Leslie S. Hyde | ||||||||||||||||||||
Bonus
| $
| 241,694
|
| $
| 242,577
|
| $
| —
|
| $ 200,875 | $ 111,731 | |||||||||
Cash severance
|
| —
|
|
| 805,582
|
|
| —
|
| — | 650,080 | |||||||||
Equity vesting
|
| 661,383
|
|
| 1,418,388
|
|
| —
|
| 338,094 | 834,316 | |||||||||
Health and welfare
|
| —
|
|
| 30,995
|
|
| —
|
| — | 48,884 | |||||||||
$
| 903,077
|
| $
| 2,497,542
|
| $
| —
|
| $ 538,969 | $1,645,011 | ||||||||||
Steven R. Lacy
| ||||||||||||||||||||
Bonus
| $
| 269,829
|
| $
| 270,430
|
| $
| 269,829
|
| |||||||||||
Cash severance
|
| —
|
|
| 1,440,494
|
|
| 1,170,030
|
| |||||||||||
Equity vesting
|
| 736,738
|
|
| 1,581,567
|
|
| —
|
| |||||||||||
Health and welfare
|
| —
|
|
| 32,485
|
|
| 32,448
|
| |||||||||||
$
| 1,006,567
|
| $
| 3,324,976
|
| $
| 1,472,307
|
| ||||||||||||
James A. Sullivan
| ||||||||||||||||||||
Stephanie L. Apostolou | ||||||||||||||||||||
Bonus
| $
| 247,193
|
| $
| 251,936
|
| $
| —
|
| $ 154,500 | $54,890 | |||||||||
Cash severance
|
| —
|
|
| 824,000
|
|
| —
|
| — | 600,000 | |||||||||
Equity vesting
|
| 720,811
|
|
| 1,637,517
|
|
| —
|
| 171,975 | 526,433 | |||||||||
Health and welfare
|
| —
|
|
| 42,869
|
|
| —
|
| — | 6,664 | |||||||||
$
| 968,004
|
| $
| 2,756,322
|
| $
| —
|
| $ 326,475 | $1,187,987 | ||||||||||
Douglas J. Fenwick
| ||||||||||||||||||||
Bonus
| $
| 176,306
|
| $
| 133,887
|
| $
| —
|
| $ 188,172 | $ 138,027 | |||||||||
Cash severance
|
| —
|
|
| 608,970
|
|
| —
|
| — | 608,970 | |||||||||
Equity vesting
|
| 429,976
|
|
| 971,361
|
|
| —
|
| 370,639 | 862,470 | |||||||||
Health and welfare
|
| —
|
|
| 30,627
|
|
| —
|
| — | 57,678 | |||||||||
$
| 606,282
|
| $
| 1,744,845
|
| $
| —
|
| $ 558,811 | $1,667,145 |
(1) | In the event of termination due to disability or retirement, the executive will receive thepro-rata share of the bonus to which he or she would have otherwise been entitled atyear-end subject to the discretion of the CEO (as approved by the management development and compensation committee and the board). |
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In addition to the above amounts, Mr. LacyMs. Hyde would also be entitled to post-retirement pension benefits under our salaried plan and SERP II, as described on pages 41 and 42, and a post-retirement survivor benefit under our Survivor Benefit Plan, as described on page 42. In addition to the above amounts, Messrs. Ball, Zugay, Sullivan and Fenwick and Mses. Hyde and Apostolou would also be entitled to a post-retirement benefit under our Benefit Restoration Plan, as described on page 43.
Payments and Benefits Provided to Mr. Lacy in Connection with his Retirement
In connection with his retirement, Mr. Lacy also received a payment of $69,203 in January 2021 representing his unused vacation accrual. In addition to the above amounts, Mr. Lacy is also entitled to post-retirement pension benefits under our salaried plan, SERP l, and SERP ll, as described on pages 3341 and 34, and42, a post-retirement survivor benefit under our Survivor Benefit Plan, as described on page 34. In addition to the above amounts, each of our NEOs would also be entitled to42, and a post-retirement benefit under our Benefit Restoration Plan, as described on page 35.43.
2021 Proxy StatementKOPPERS HOLDINGS INC. - 202046 39
EXECUTIVE AND DIRECTOR COMPENSATION
We have adopted a standard arrangement to compensate each of ournon-employee directors, which was revised in early 2019. The table below summarizes our director compensation program as in effect from January 1, 2019 through February 12, 2019 and from February 13, 2019 through December 31, 2019. The 2019 director compensation paid waspro-rated for the aforementioned periods to reflect the changes to the director compensation program.directors. In 2019,2020, eachnon-employee director received the following:
Director Compensation Program | January 1, 2019 through February 12, 2019 | February 13, 2019 through December 31, 2019 | ||||||||||
Annual Cash Retainer forNon-Management Directors
|
| $70,000
|
|
| $ 80,000
|
| ||||||
Annual Cash Retainer for Non-Employee Directors | $ | 80,000 | ||||||||||
Supplemental Annual Cash Retainer forNon-Executive Chairman
|
| $80,000
|
|
| $100,000
|
| $ | 100,000 | ||||
Supplemental Annual Cash Retainer for Committee Chair (except Audit Committee and Management Development and Compensation Committee)
|
| $10,000
|
|
| $ 10,000
|
| $ | 10,000 | ||||
Supplemental Annual Cash Retainer for Audit Committee Chair
|
| $15,000
|
|
| $ 20,000
|
| $ | 20,000 | ||||
Supplemental Annual Cash Retainer for Management Development and Compensation Committee Chair
|
| $10,000
|
|
| $ 15,000
|
| $ | 15,000 | ||||
Annual Equity Award of RSUs
|
| $95,000
|
|
| $105,000
|
| $ | 105,000 | ||||
Supplemental board meeting attendance fee for meetings in excess of six per year
|
| $ 1,000
|
|
| $ 1,000
|
| $ | 1,000 | ||||
Supplemental committee meeting attendance fee for meetings in excess of six per year
|
| $ 1,000
|
|
| $ 1,000
|
| $ | 1,000 |
We also reimburse directors for theirout-of-pocket expenses incident to their service on the board and in connection with attendance at board and committee meetings and the annual meeting of shareholders.
The annual equity award is issued to incumbent directors upon the date of our annual meeting. The annual equity award is issued to newnon-employee directors upon the date that they are first elected to the board and is prorated for newnon-employee directors serving less than twelve months. The actual number of RSUs to be granted to eachnon-employee director is determined on the grant date and is based upon the closing selling price per share of our common stock at the close of regular hours trading (i.e., before after-hours trading begins) on the NYSE as such price is officially quoted in the composite tape of transactions on the NYSE on the grant date. The annual equity award vests upon the earlier to occur of (a) the date which is 365 days after the grant date or (b) the date of the next annual meeting of the company, provided that, in both cases, the director remains in continuous service as a director of the company during such period. If a director terminates service prior to the vesting of his or her RSUs, the director
will receive, on the date of termination of service, a number of shares equal to the number of shares in which the director would have vested at the end of the vesting period had he/she continued in our service through the end of such period multiplied by a fraction, the numerator of which is the number of days of service the director completed between the award date and the termination of the director’s service and the denominator of which is 365.
At least every two years, the board reviews and sets the compensation fornon-employee directors based, in part, on the recommendation of the management development and compensation committee. Factors considered include (i) the level of compensation necessary to attract and retain qualified directors; (ii) maintaining director independence; and (iii) providing incentives that encourage directors to act in the interests of shareholders. Pursuant to the terms of our LTIP, the aggregate grant date fair value of all awards granted to anynon-employee director during any single calendar year (excluding awards made at the election of suchnon-employee director in lieu of all or a portion of annual and committee cash retainers) will not exceed $200,000.
40 KOPPERS HOLDINGS INC. - 2020 Proxy Statement
EXECUTIVE AND DIRECTOR COMPENSATION
20192020 Director Compensation Table
The table below provides information concerning the compensation of ournon-employee directors for 2019.2020.
Name | Fees Earned or Paid in Cash(1) | Stock Awards(2) | Total | Fees Earned or Paid in Cash(1) | Stock Awards(2) | Total | ||||||||||||||||||
Stephen R. Tritch | $ | 182,151 | (3) | $ | 105,012 | $ | 287,163 |
| $181,000(3) |
|
| $105,003 |
|
| $286,003 |
| ||||||||
Cynthia A. Baldwin | 25,562 | — | 25,562 | |||||||||||||||||||||
Xudong Feng | 90,493 | (4) | 105,012 | 195,506 |
| 90,000(4) |
|
| 105,003 |
|
| 195,003 |
| |||||||||||
Traci L. Jensen | 80,493 | (5) | 105,012 | 185,506 |
| 85,000(5) |
|
| 105,003 |
|
| 190,003 |
| |||||||||||
David L. Motley | 87,137 | (6) | 105,012 | 192,149 |
| 94,000(6) |
|
| 105,003 |
|
| 199,003 |
| |||||||||||
Albert J. Neupaver | 90,493 | (7) | 105,012 | 195,506 |
| 95,000(7) |
|
| 105,003 |
|
| 200,003 |
| |||||||||||
Louis L. Testoni | 99,822 | (8) | 105,012 | 204,834 |
| 105,000(8) |
|
| 105,003 |
|
| 210,003 |
| |||||||||||
Sonja M. Wilkerson | 89,459 | (9) | 105,012 | 194,471 |
| 96,000(9) |
|
| 105,003 |
|
| 201,003 |
| |||||||||||
T. Michael Young | 28,904 | (10) | — | 28,904 |
(1) | Each director received a total amount of |
(2) | On May |
KOPPERS HOLDINGS INC. | 47 |
EXECUTIVE AND DIRECTOR COMPENSATION
assumptions underlying the valuation of equity awards set forth in note 8 of the consolidated financial statements in our annual report on Form10-K for the year ended December 31, |
(3) | Mr. Tritch received an additional |
(4) | Dr. Feng received an additional $10,000 for serving as chair of the |
(5) | Ms. Jensen received an additional |
(6) | Mr. Motley received an additional |
(7) | Mr. Neupaver received an additional $10,000 for serving as chair of the strategy and risk committee and an additional |
(8) | Mr. Testoni received an additional |
(9) | Ms. Wilkerson received an additional |
|
KOPPERS HOLDINGS INC. - 2020 Proxy Statement 41
EXECUTIVE AND DIRECTOR COMPENSATION
Stock Ownership Guidelines for OurNon-Employee Directors
The committee and our board of directors have approved stock ownership guidelines fornon-employee directors as part of our corporate governance guidelines. The stock ownership guidelines were designed to achieve the following objectives:
demonstrate the commitment ofnon-employee directors to and confidence in the company’s long-term prospects;
establish commonality of interest through direct ownership of company stock, encouraging a partner-like environment withnon-employee directors and shareholders;
support a long-term focus; and
quantify our expectations with regard to ownership of our stock by ournon-employee directors.
Our corporate governance guidelines provide that eachnon-employee director shall strive to accumulate a specified number of company shares. The suggested stock ownership level fornon-employee directors is five times the annual cash
retainer payable to thenon-employee director. The suggested stock ownership level is converted into a number of shares that is recalculated annually. Until the stock ownership level is achieved, it is suggested thatnon-employee directors retain 75 percent of the net profit shares (i.e., excluding shares used for the payment of taxes) received from the vesting of RSUs.Non-employee directors are permitted to sell company securities pursuant to an approvedRule 10b5-1 plan or in an open window period outside of an approved Rule10b5-1 plan.
Shares owned outright by thenon-employee director and/or their spouses, shares held in a personal individual retirement account or rollover individual retirement account and unvested restricted stock or RSUs count toward meeting the guidelines.
Four of our non-employee directors have achieved compliance with the suggested ownership level and the other three non-employee directors continue to comply with the 75 percent retention ratio.
48 | 2021 Proxy Statement |
EXECUTIVE AND DIRECTOR COMPENSATION
As required by applicable SEC rules, we are providing the following information about the relationship of the annual total compensation of our employees and the annual total compensation of Leroy M. Ball, our President and Chief Executive Officer (our “CEO”).
For 2019,2020, our last completed fiscal year:
the annual total compensation of our median employee was $80,157;$84,924; and
the annual total compensation of our CEO, as reported in the Summary Compensation Table included elsewhere in this proxy statement (adjusted as noted below), was $4,731,679.$4,146,070.
Based on this information, for 20192020 the ratio of the annual total compensation of Leroy M. Ball, our President and Chief Executive Officer, to the annual total compensation of our median employee was 5949 to 1.
We took the following steps, as permitted by SEC rules, to identify the median of the annual total compensation of all ofAs disclosed in our employees, as well as to determine the annual total compensation of2020 proxy statement, we previously identified our median employee using our full-time, part-time, and our CEO using the same methodology that we use to determine our named executive officers’ annual total compensation for the Summary Compensation Table in this proxy statement.
We determined that,temporary employee population (without exclusions) as of December 31, 2019 our employee population consisted of approximately 2,129 individuals. This population consisted of our full-time, part-time, and temporary employees employed with us as of that determination date.
To identify the “median employee” from our employee population, we used the amount ofmeasured compensation based on “gross wages” for the identified employees as reflected in our payroll records for the twelve-month period beginning on January 1, 2019 and ending December 31, 2019. For gross wages, we generally used the total amount of compensation the employees were paid before any taxes, deductions, insurance premiums, and other payroll withholding. We did not use any statistical sampling techniques.
There has been no change in our employee population or our employee compensation arrangements that we believe would significantly impact our pay ratio disclosure. Therefore, as permitted by SEC rules, we are using the same median employee that we used last year as the 2020 median employee. As required by SEC rules, we calculated 2020 annual total compensation for both our median employee and our CEO using the same methodology that we use to determine our NEOs’ annual total compensation for the Summary Compensation Table in this proxy statement. We took the following steps, as permitted by SEC rules, to determine the annual total compensation of our median employee and our CEO. |
For the annual total compensation of our median employee, we identified and calculated the elements of that employee’s compensation for 20192020 in accordance with the requirements of Item 402(c)(2)(x) of RegulationS-K, but including the estimated value of the median employee’s health care benefits, resulting in annual total compensation of $80,157.$84,924.
For the annual total compensation of our CEO, we used the amount reported in the “Total” column of our 20192020 Summary Compensation Table included in this proxy statement. However, to maintain consistency between the annual total compensation of our CEO and the median employee, we also added the estimated value of our CEO’s health care benefits on an annualized basis (estimated for our CEO and our CEO’s eligible dependents at $19,523) to the amount reported in the Summary Compensation Table.
42 KOPPERS HOLDINGS INC. - 2020 Proxy Statement
EXECUTIVE AND DIRECTOR COMPENSATION
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The CEO pay ratio reported above is a reasonable estimate calculated in a manner consistent with SEC rules based on the methodologies and assumptions
described above. SEC rules for identifying the median employee and determining the CEO pay ratio permit companies to employ a wide range of methodologies, estimates and assumptions. As a result, the CEO pay ratios reported by other companies, which may have employed other permitted methodologies or assumptions and which may have a significantly different work force structure from ours, are likely not comparable to our CEO pay ratio.
KOPPERS HOLDINGS INC. | 49 |
TRANSACTIONS WITH RELATED PERSONS
Policy Regarding Review of Related Party Transactions
The audit committee’s charter provides that the audit committee is responsible for reviewing and approving, or requesting review and approval by the board of, all proposed transactions with persons and entities that are considered to be “related persons” (as described below) which would be required to be disclosed in the proxy statement for our annual meeting and certain other filings in accordance with rules promulgated by the SEC (which we refer to as “reportable related party transactions”). We have not adopted a written policy with respect to the audit committee’s or the board’s review, approval or ratification of reportable related party transactions. However, we are prohibited under the indenture governing our senior debt obligations from engaging in certain transactions with, or for the benefit of, our affiliates as described below.
Our indenture prohibits us from entering into any transactions with, or for the benefit of, our affiliates, unless:
the terms of the transaction are no less favorable to us than we could obtain in an arms-length transaction with anon-affiliate;
if the transaction involves an amount over $20 million, the board has made a determination that the terms are no less favorable to us than we could obtain in an arms-length transaction with anon-affiliate and have approved the transaction by a resolution of the board; and
if the transaction involves an amount over $40 million, the board has received a written opinion from an independent financial advisor stating that the transaction is fair from a financial standpoint to the holders of our senior notes.
Some transactions have been carved out from these restrictions and are permitted even without meeting the conditions noted above. These include, among others:
loans or advances in the aggregate amount outstanding at any one time of $5 million or less to employees in the ordinary course of business in accordance with our past practices;
the payment of customary director, officer and employee compensation (including bonuses) and other benefits and indemnification arrangements, and agreements to register securities of directors, officers, employees or other affiliates, provided such arrangements are approved by our board;
the issuance or sale of our capital stock (other than certain disqualified stock); and
any agreement in effect before January 25, 2017, and any amendments, renewals or replacements of these agreements (as long as the amendments, renewals or replacements are not disadvantageous to the holders of our senior notes when taken as a whole as compared to the original agreement).
Related Party Transactions with R. Michael Johnson
Mr. Johnson served as our Vice President, Utility and Industrial Products until January 2, 2020. In 2019, we incurred approximately $181,000 of expenses for
our use of an aircraft owned and operated by CUT Aviation LLC, which is wholly-owned by Mr. Johnson.
2021 Proxy Statement44 KOPPERS HOLDINGS INC. - 202050
The audit committee of the board of directors has appointed KPMG LLP as our independent registered public accounting firm for the 20202021 fiscal year.
Representatives of KPMG LLP are expected to be present at our annual meeting and, while they do not plan to make a statement (although they will have the opportunity if they desire to do so), they will be available to respond to your appropriate questions.
We retained KPMG LLP during 20192020 and 20182019 to provide services in the following categories and amounts. Audit fees include fees and expenses related to the fiscal year audit and interim reviews, notwithstanding when the fees and expenses were billed or when the services were rendered. Audit-related fees and tax fees include fees and expenses for services rendered from January through December ofrelated to the fiscal year, notwithstanding when the fees and expenses were billed or paid.when the services were rendered.
(Dollars in thousands) | 2019 | 2018 | 2020 | 2019 | ||||||||||||
Audit fees(1)
| $
| 2,349
|
| $
| 2,952
|
| $ | 2,472 |
| $ | 2,569 |
| ||||
Audit-related fees(2)
|
| 243
|
|
| 25
|
|
| 30 |
|
| 23 |
| ||||
Tax compliance(3)
|
| 236
|
|
| 126
|
|
| 200 |
|
| 236 |
| ||||
Tax other(4)
|
| 413
|
|
| 616
|
|
| 192 |
|
| 413 |
| ||||
All other fees
|
| —
|
|
| —
|
|
| — |
|
| — |
| ||||
$
| 3,241
|
| $
| 3,719
|
| $ | 2,894 |
| $ | 3,241 |
|
(1) | Fees related to professional services rendered for the audits of our consolidated financial statements included in our Annual Report on Form10-K, quarterly reviews of the consolidated financial statements included in our Quarterly Reports on Form10-Q, audits of internal control over financial reporting and statutory audits. |
|
(2) | Fees for both years include professional services |
(3) | Fees related to tax compliance review of our federal and foreign tax return filing and preparation of related calculations and transfer pricing documentation. |
(4) | Fees related to United States and international tax consulting services, assistance with tax audits and advice on other international tax matters. |
Our audit committee has adopted a writtenpre-approval policy, which requires the audit committee to generallypre-approve or specificallypre-approve all audit, audit-related, tax and other permissiblenon-audit services that may be provided by the independent auditor. Anypre-approvals made by the audit committee must specify the services covered by suchpre-approvals in reasonable detail.
All proposals to engage the independent auditor to perform services which requirepre-approval by the audit committee will be submitted to the chief financial officer and must include a description of the services to be rendered that is sufficiently detailed so that management will not be called upon to make a judgment about whether the services arepre-approved.
Proposals to engage the independent auditor to provide services that require specific approval by the audit committee will be submitted to the committee by both the independent auditor and the chief financial officer.
The audit committee has designated our internal auditor to monitor the performance of all services provided by the independent auditor, to determine whether such services are in compliance with this policy and to report to the audit committee on a periodic basis on the results of its monitoring.
All generallypre-approved services may not extend for more than one year, unless the audit committee specifically provides for a different period.
The chairman of the audit committee has been delegated the authority by the audit committee topre-approve proposed services by the independent auditor when the entire audit committee is unable to do so. The chairman must report all suchpre-approvals to the audit committee at the next audit committee meeting. The chairman has authority to approve fees and costs of generallypre-approved services in amounts up to $100,000 per project, not to exceed an annual aggregate of $500,000. Any proposed services exceeding such levels require specificpre-approval by the audit committee.
The members of the audit committee believe they have performed their oversight responsibilities with diligence and care but believe it is important to note that in their capacity as members of our board of directors and audit committee, they are not professionally engaged in the practice of auditing or accounting.
The services performed by KPMG LLP in 20192020 werepre-approved in accordance with the audit committeepre-approval procedures. In so doing, the audit committee determined that the provision of these services is compatible with maintaining the independence of our independent auditor.
KOPPERS HOLDINGS INC. | 51 |
PROXY ITEM 2 — PROPOSAL TO APPROVE AN AMENDMENT TO OUR 2020 LONG TERM INCENTIVE PLAN
Introduction
We are asking you to approve an amendment (the “2021 Amendment”) to our 2020 Long Term Incentive Plan (the “2020 LTIP”), which would increase the number of shares of our common stock available for the grant of equity compensation awards under the 2020 LTIP by 1,500,000. A copy of the 2020 LTIP is attached as Appendix A to our definitive proxy statement filed on March 30, 2020 and is incorporated in this proposal by reference. A copy of the 2021 Amendment appears as Appendix A to this proxy statement. To enable us to continue offering meaningful equity-based incentives to employees, non-employee directors and consultants, we believe that it is both necessary and appropriate to increase the number of shares available for these purposes.
As a result, on March 22, 2021, our board, upon the recommendation of the management development and compensation committee (the “committee”), unanimously approved and adopted the 2021 Amendment, subject to shareholder approval. The 2020 LTIP authorizes equity compensation awards for up to 1,000,000 shares of our common stock, plus shares underlying outstanding awards granted under our 2018 Long Term Incentive Plan (the “2018 LTIP”) that expire, or are terminated, surrendered or forfeited for any reason without issuance. If approved by shareholders, the 2021 Amendment to the 2020 LTIP would increase the number of shares available for equity compensation grants by 1,500,000 shares. As of January 4, 2021, approximately 513,639 shares remained available for grant under the 2020 LTIP at target. Accordingly, upon adoption of the 2021 Amendment to the 2020 LTIP, a total of 2,013,639 shares would remain available for the grant of equity compensation awards under the 2020 LTIP.
Discussion of the Purpose of this Proposal
We use equity compensation awards to provide long-term incentive compensation and to attract and retain highly regarded employees,non-employee directors and othernon-employee service providers. Our board believes that our equity compensation program is an integral part of our approach to long-term incentive compensation, focused on shareholder return, and our continuing efforts to align shareholder and management interests. We believe that growth in shareholder value depends on, among other things, our continued ability to attract and retain employees and other service providers, in a competitive workplace market, with the experience and capacity to perform at the highest levels.
We are asking you to approveAs of January 4, 2021, only 513,639 shares remain available for the 2020 Long Term Incentive Plan, a copygrant of which appears as Appendix A to this Proxy Statement (the “2020 LTIP”), to serve as the successor to our 2018 Long Term Incentive Plan (the “2018 LTIP”). The 2018 LTIP authorized the issuance of up to 900,000 shares of our common stock pursuant toequity compensation awards under the plan. As of March 3, 2020 no shares wereLTIP at target. When measured at maximum, the amount available for grant of equity compensation awards is reduced to 363,887 shares. The board has determined that this is insufficient for our future equity compensation award needs. If shareholders do not approve the 2021 Amendment, we anticipate that we would not be able to make annual equity compensation award grants to employees and other eligible individuals in 2022 or in future years at the levels we believe appropriate to incentivize, attract and retain employees and other eligible individuals and would be required to consider other compensation alternatives. In addition, we would have insufficient shares to use for equity compensation grants to new employees and other eligible individuals at the levels we anticipate to be appropriate.
The board believes that equity compensation awards serve as a powerful attraction, retention and motivational tool that produces value for our shareholders. For the 2020 fiscal year, despite the challenges of the global pandemic, our consolidated sales increased by $32.1 million, or 2.0% (our fourth consecutive year of growth and the highest level of revenues in the company’s history, excluding KJCC), our adjusted EBITDA increased by $9.9 million and our earnings per share increased by approximately $2.55, or 80.7%, all compared to the 2019 fiscal year. We believe these results are attributable in part to the contributions of our employees and non-employee directors. We believe that those contributions are significantly enhanced by linking compensation to company performance through equity compensation awards. If we exhaust the shares available for grant under the 2018 LTIP. To enable us2020 LTIP, we will no longer be able to grant equity compensation awards to our employees and non-employee directors. In order to continue offering meaningful equity-basedto provide competitive compensation packages, we would need to replace those awards with other forms of compensation, such as greater short and long-term cash performance incentives. Alternative forms of compensation, such as cash performance incentives, can be an important part of a compensation package. The company already includes cash performance incentives in its compensation packages, and we believe that by linking compensation to company performance they play a significant role in providing shareholder value. However, we believe that including equity awards in our compensation packages provides even greater shareholder
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PROXY ITEM 2 — PROPOSAL TO APPROVE AN AMENDMENT TO OUR 2020 LONG TERM INCENTIVE PLAN
value because we believe that the opportunity for equity ownership in the company has a more direct, long-term impact on employee performance.
Our board, upon the recommendation of the committee, with the assistance of its independent compensation consultant, determined the additional number of shares available for issuance under the 2020 LTIP pursuant to the 2021 Amendment based upon projected annual grants to current employees andnon-employee directors, we believe
other eligible individuals and equity compensation awards to new employees and other eligible individuals. We anticipate that itif the 2021 Amendment is both necessary and appropriate to increaseapproved, the number of shares available for these purposes.
As a result, on March 16, 2020, our Board, upon the recommendation of the management development and compensation committee, unanimously approved and adoptedissuance under the 2020 LTIP subjectwill be sufficient to shareholder approval. The 2020 LTIP authorizespermit the grant of equity compensation awards to attract, retain and motivate employees and other eligible individuals for upthe next three to 1,000,000five years (based upon the total number of shares subject to time-vested grants and target number of shares subject to performance-based grants).
In evaluating whether to adopt the 2021 Amendment, our board considered the dilutive effect of equity awards including the company’s equity overhang and annual share usage (burn rate).
Overhang. As of January 4, 2021, approximately 2,971,113 shares of our common stock plus shares underlyingwere subject to outstanding equity compensation awards grantedor available for future equity compensation awards under the 2018 LTIP that expire, or are terminated, surrendered or forfeited for any reason without issuance. If approved by shareholders at the 2020 Annual Meeting, the 2020 LTIP will be effective upon such approval (the “Effective Date”). If approved by shareholders, the 2020 LTIP will replace the 2018 LTIP, and no further awards will be made under the 2018 LTIP after the Effective Date. However, each outstanding award under the 2018 LTIP will remain outstanding and will continue to be governed under its terms and any applicable award agreement.
The board recommends that our shareholders approve the 2020 LTIP.
Information on Equity Compensation Plans as of March 3, 2020
The information included in this Proxy Statement and our Annual Report on Form10-K for the fiscal year ending December 31, 2019 is updated by the following information regarding all existing equity compensation plans, aswhich represented approximately 14.1% of March 3, 2020:
Stock options outstanding: 949,440
Restricted stock units (“RSUs”) and performance share units (“PSUs”) outstanding: 1,122,159
Totalour shares of common stock outstanding as of March 3: 20,922,798
No(the “overhang percentage”). The 1,500,000 new shares were available for grant under the 2018 LTIP. Ifproposed to be included in the 2020 LTIP is approved, noLTIP’s reserve would increase the overhang percentage by an additional 7.1% (for a share overhang of 21.2%).
Burn Rate. The following table sets forth information regarding the total number of shares will be available for grant fromof our common stock subject to stock-settled, time-vested and performance-based equity compensation awards granted over each of the last three fiscal years under our 2005 Long Term Incentive Plan, as amended and restated effective March 24, 2016 (the “2005 LTIP”), the 2018 LTIP and the only shares available for grant will be the 1,000,000 shares authorized2020 LTIP:
2020 | 2019 | 2018 | ||||||||||
Time-Vested Stock Options: | 187,701 | 145,301 | 144,825 | |||||||||
Time-Vested Restricted Stock Units: | 369,161 | 233,781 | 121,947 | |||||||||
Performance-Vested Restricted Stock Units(1): | 232,481 | 156,287 | 134,351 | |||||||||
Weighted Average Shares Outstanding: | 20,992,000 | 20,665,000 | 20,871,000 | |||||||||
Burn Rate: | 3.8 | % | 2.6 | % | 1.9 | % |
(1) | Number of shares is based upon the target number of shares subject to awards. We reserve shares based upon the target number of shares. The maximum number of shares that may be earned for grants in 2020, 2019 and 2018, respectively, are 1,021,824, 691,656 and 535,474. |
In addition, we have already granted annual equity compensation awards under the 2020 LTIP plusfor the 2021 fiscal year. With respect to 2021 fiscal year awards, time-vested stock options have been granted with respect to a total of 90,879 shares, underlyingtime-vested restricted stock units (“RSUs”) have been granted with respect to a total of 195,336 shares, and performance-vested restricted stock units (“PSUs”) have been granted with respect to 149,752 shares (at target). Using the weighted average shares outstanding for the year ended December 31, 2020, this would represent an estimated burn rate of approximately 2.0% to 2.5% for 2021. The actual burn rate for 2021 awards will be determined when the fiscal year is complete as additional awards may be granted, including to new employees and other eligible individuals, and the actual weighted average outstanding shares is determined.
Effect of Non-Approval. In the event the 2021 Amendment is not approved at the 2021 annual meeting, then the increase in the number of authorized shares available for issuance under the 20182020 LTIP that expire, or are terminated, surrendered or forfeitedwill not be implemented. As a result, we will likely have insufficient shares to grant annual equity compensation awards to employees and other eligible individuals at the levels the board believes may be necessary to properly incentivize, attract and retain new and current employees and other eligible individuals, beginning with annual awards for any reason without issuance.the 2022 fiscal year.
Key Features of the 2020 LTIP
The following features of the 2020 LTIP will protect the interests of our shareholders:
• | Limitation on terms of stock options and stock appreciation rights. The maximum term of each stock option and stock appreciation right, or SAR, is ten years. |
• | No repricing or grant of discounted stock options or SARs. The 2020 LTIP does not permit the repricing of options or SARs either by amending an existing award or by substituting a new award at a lower price. The 2020 LTIP prohibits the |
granting of stock options or SARs with an exercise price less than the fair market value of the common stock on the date of grant. |
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PROXY ITEM 2 — PROPOSAL TO APPROVE AN AMENDMENT TO OUR 2020 LONG TERM INCENTIVE PLAN
• | No single-trigger acceleration. Under the 2020 LTIP we do not automatically accelerate vesting of awards in connection with a change in control of the company. |
• | Minimum Vesting Requirements. The 2020 LTIP includes minimum vesting requirements. Equity-based awards generally cannot vest earlier than one year after grant. Certain limited exceptions are permitted. |
46 KOPPERS HOLDINGS INC. - 2020 Proxy Statement
PROXY ITEM 2 — PROPOSAL TO APPROVE OUR 2020 LONG TERM INCENTIVE PLAN
• | Dividends. We do not pay dividends or dividend equivalents on stock options or SARs. We also do not pay dividends or dividend equivalents on unearned restricted shares, RSUs or PSUs, except to the extent the award actually becomes vested. |
• | Clawback. Awards granted under the 2020 LTIP and the right to receive shares or cash payments with respect to awards are subject to rescission, cancellation or recoupment under any clawback, recoupment or similar policy. |
• | Director Limits.The 2020 LTIP contains annual limits on the amount of awards that may be granted tonon-employee directors. |
• | No Liberal Share Recycling Provisions. The 2020 LTIP prohibits there-use of shares withheld or delivered to satisfy the exercise price of a stock option or SAR or to satisfy tax withholding requirements. The 2020 LTIP also prohibits “net share counting” upon the exercise of stock options or SARs and prohibits there-use of shares purchased on the open market with the proceeds of option exercises. |
The following is a summary of the material features of the 2020 LTIP.LTIP, as amended by the 2021 Amendment. This summary is qualified in its entirety by reference to the complete text of the 2020 LTIP, which is attached as Appendix A to our definitive proxy statement filed on March 30, 2020, and is incorporated in this Proxy Statement.proposal by reference, and the 2021 Amendment, which is attached as Appendix A to this proxy statement. To the extent the description below differs from the text of the 2020 LTIP, as amended by the 2021 Amendment, the text of the 2020 LTIP and the 2021 Amendment shall control.
Material Terms of the 2020 LTIP
General. The purposes of the 2020 LTIP are to provide selected individuals in our service or the service of our subsidiaries and selected affiliates with the opportunity to acquire a proprietary interest in our growth and performance, to generate an increased incentive to contribute to our future success and to enhance our ability and that of our subsidiaries and affiliates to attract and retain qualified individuals.
Awards. The 2020 LTIP provides for the grant to eligible persons of stock options, SARs, restricted stock, RSUs, performance shares, performance awards and dividend equivalents, which we refer to collectively as the “awards”. As of March 16, 2020,22, 2021, the fair market value of a share of our common stock was $11.10.$36.10.
Eligibility. Individuals eligible to participate in the 2020 LTIP (“participants”) include officers and employees,non-employee board members and consultants in our service or the service of our subsidiaries or selected affiliates. However, an employee who is a member of a collective bargaining unit will not be eligible to receive an award under the 2020 LTIP unless the collective bargaining agreement covering that employee allows for his or her participation in the 2020 LTIP. As of March 3, 2020,January 4, 2021, approximately 60 employees (including eight executive officers), sevennon-employee board members and no consultants would have been eligible to participate ingranted equity compensation awards under the 2020 LTIP if it was then effective.LTIP.
Administration. The 2020 LTIP will beis administered primarily by our management development and compensation committee. However, our board of directors may appoint a secondary committee of two or more board members to grant awards under the 2020 LTIP to individuals other than executive officers andnon-employee board members. In addition, our board of directors may appoint a special award committee of one or more executive officers to administer the 2020 LTIP with respect to eligible employees other than members of such committee
and our executive officers. Each committee acting within the scope of its administrative jurisdiction under the 2020 LTIP will determine,determines, among other things, which eligible individuals will receive awards, the types of awards to be received and the terms and conditions thereof and will havehas authority to make any other determination(s) or take any other action(s) that it deems necessary or desirable to administer the 2020 LTIP. The term “plan administrator” as used in this plan summary will mean the management development and compensation committee, the secondary committee or the special award committee, to the extent each such committee is acting within its administrative jurisdiction under the 2020 LTIP.
Share Reserve. 1,000,0002,500,000 shares of our common stock have been reserved for issuance under the 2020 LTIP.LTIP (representing 1,000,000 previously authorized shares, plus 1,500,000 newly authorized shares under the 2021 Amendment subject to the approval of the company’s shareholders). In addition, shares underlying outstanding awards granted under the 2018 LTIP that, following the Effective Date of the 2020 LTIP, expire, or are terminated, surrendered or forfeited for any reason without issuance of such shares are also available for the grant of new awards under the 2020 LTIP. For this purpose, for any performance-vesting share-based awards granted under the 2018 LTIP that become earned after the Effective Date of the 2018 LTIP,
54 | 2021 Proxy Statement |
PROXY ITEM 2 — PROPOSAL TO APPROVE AN AMENDMENT TO OUR 2020 LONG TERM INCENTIVE PLAN
(i) any shares earned will be satisfied from the 2018 LTIP share pool to the extent available, (ii) any shares earned in excess of the 2018 LTIP share pool will be issued from the aggregate number of shares available for issuance under the 2020 LTIP, and (iii) any shares that are not earned as a result of performance results will be treated as forfeitures. In no event may more than 1,000,0002,500,000 shares be issued pursuant to option grants under the 2020 LTIP that are intended to be incentive stock options under the federal tax laws. All of these share amounts will be subject to anti-dilution adjustments in the event of certain changes in our capital structure, as described below.
Generally, the aggregate number of shares available for issuance under the 2020 LTIP will be reduced by
KOPPERS HOLDINGS INC. - 2020 Proxy Statement 47
PROXY ITEM 2 — PROPOSAL TO APPROVE OUR 2020 LONG TERM INCENTIVE PLAN
one share for each share issued in settlement of any award; provided, however, that any award (or portion thereof) that is settled in cash, or the payment in cash of dividends or dividend equivalents under any outstanding award, will not be counted against, or have any effect on the 2020 LTIP’s share reserve. If any shares covered by an award granted under the 2020 LTIP are forfeited, or otherwise terminated or canceled without the delivery of shares, then the shares covered by such award, or the number of shares otherwise counted against the aggregate number of shares with respect to which awards may be granted, to the extent of any such settlement, forfeiture, termination or cancellation, will again become available for issuance under the 2020 LTIP; provided, however, that shares (i) delivered in payment of the exercise or price of an option or SAR, as applicable, (ii) not issued upon the settlement of a SAR, (iii) repurchased by us using proceeds from option exercises, or (iv) delivered to or withheld by us to pay withholding taxes, will not become available again for issuance under the 2020 LTIP. The 2020 LTIP also permits certain substitute awards granted in assumption of or in substitution for awards of an acquired company. Substitute awards do not count against the share pool.
We intend to register the new 1,500,000 shares reserved for issuance under the 2021 Amendment on a Registration Statement on Form S-8 under the Securities Act of 1933, as amended, as soon as practicable after receiving shareholder approval.
Limitations on Awards toNon-Employee Directors. The aggregate grant date fair value of all awards granted to anynon-employee director during any single calendar year (excluding awards made at the election of suchnon-employee director in lieu of all or a portion of annual and committee cash retainers) will not exceed $200,000.
Grants Generally. All awards granted under the 2020 LTIP are subject to the terms and conditions of the 2020 LTIP and such other terms and conditions consistent with the 2020 LTIP as the plan administrator deems appropriate and as are specified in writing in an award agreement. Awards need not be uniform among the participants.
Stock Options. Incentive stock options, or ISOs, which are intended to qualify for special tax treatment in accordance with the federal tax laws, and nonqualified stock options, which are not intended to qualify for special tax treatment under the U.S. tax codeInternal Revenue Code of 1986, as amended (the “Code”), may be granted under the 2020 LTIP. The plan administrator is authorized to set the terms of each option grant it makes under the 2020 LTIP, including the exercise price and the time and method of exercise. However, the exercise price will not be less than the fair market value of our common stock on the grant date, and the option term may not exceed ten years.
Stock Appreciation Rights. Two types of stock appreciation rights may be issued:
Tandem stock appreciation rights which provide the holders with the right to surrender their options for an appreciation distribution from us in an amount equal to the excess of (i) the fair market value of the vested shares of our common stock subject to the surrendered option over (ii) the aggregate exercise price payable for those shares.
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Stand-alone stock appreciation rights which allow the holders to exercise those rights as to a specific number of shares of our common stock and receive in exchange an appreciation distribution from us in an amount equal to the excess of (i) the fair market value of the shares of common stock as to which those rights are exercised over (ii) the aggregate base price in effect for those shares. The base price per share may not be less than the fair market value per share of our common stock on the date the stand-alone stock appreciation right is granted, and the right may not have a term in excess of ten years.
The appreciation distribution on any exercised tandem or stand-alone stock appreciation right may be paid in shares of our common stock or in cash. The plan administrator is authorized to set the terms of each stock appreciation right grant it makes under the 2020 LTIP, including the time and method of exercise.
Restricted Stock and RSUs. Awards of restricted stock and RSUs will be subject to such restrictions on transferability and other restrictions, if any, as the plan administrator may impose. Such restrictions will lapse under circumstances as the plan administrator may deem appropriate, including, without limitation, upon the completion of a specified period of continued employment or the attainment ofpre-established performance objectives. Except as otherwise determined by the plan administrator, eligible participants
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PROXY ITEM 2 — PROPOSAL TO APPROVE AN AMENDMENT TO OUR 2020 LONG TERM INCENTIVE PLAN
granted restricted stock will have all of the rights of a stockholder,shareholder, including the right to vote restricted stock and receive dividends thereon, provided that dividends will only be paid to the extent the restricted shares become vested. Except as otherwise determined by the plan administrator, upon termination of employment or service for any reason during the applicable restriction period, all shares of restricted stock and all RSUs still subject to restriction shall be forfeited.
Performance Awards. The plan administrator is authorized to grant performance bonuses and long-term performance awards under the 2020 LTIP, and has the discretion to determine, among other matters, whether performance awards are denominated or payable in cash, shares (including restricted stock and RSUs), other securities, other awards and property, the length of performance periods, and the performance goals applicable to the awards.
A performance bonus is an award that is denominated in cash or shares and that is paid solely on account of the attainment of one or more specified performance targets related to one or
48 KOPPERS HOLDINGS INC. - 2020 Proxy Statement
PROXY ITEM 2 — PROPOSAL TO APPROVE OUR 2020 LONG TERM INCENTIVE PLAN
more of the business criteria that are selected by the plan administrator to measure the level of performance of the company and/or its affiliates during a performance cycle (the “performance measures”), which are identified below. A long-term performance award may be structured as an award of restricted stock, RSUs or performance units based on the attainment of performance measures under the terms of the 2020 LTIP.
The plan administrator determines (A) the performance measures that will apply to the performance cycle; (B) with respect to performance bonuses and performance units, the target amount payable to each participant; (C) with respect to RSUs and restricted stock, the target vesting percentage for the shares subject to the award; and (D) subject to the adjustment provisions described below, the criteria for computing the amount that will be paid with respect to each level of attained performance. The plan administrator may also set forth a threshold level of performance that must be attained during the performance cycle before any performance bonuses and long-term performance awards will vest and become payable and the percentage of the target amount (with respect to performance bonuses and performance units) or the percentage of each award (with respect to RSUs and restricted stock) that will vest and become payable upon attainment of various levels of performance that equal or exceed the required threshold level.
The plan administrator may select as the performance measure for a performance cycle any performance goals which it may consider appropriate for the award, which may include, but may not be limited to, one or a combination of the following performance measures, as interpreted by the plan administrator, which measures (to the extent applicable) will be determined in accordance with United States generally accepted accounting principles relating to the company and/or its affiliates: (i) earnings or operating income before interest, taxes, depreciation, amortization and/or charges for stock-based compensation; (ii) earnings or operating income before interest and taxes and/or charges for stock-based compensation (iii) earnings per share; (iv) growth in earnings or earnings per share; (v) market price of the company’s common stock; (vi) return on equity or average shareholder equity; (vii) total shareholder return or growth in total shareholder return, either directly or in relation to a comparative group; (viii) return on capital; (ix) return on assets or net assets; (x) invested capital, rate of return on capital, return on invested capital or improvements on capital structure; (xi) bond ratings; (xii) safety, health or environmental record or performance; (xiii) sales, revenue, growth in revenue or return on sales; (xiv) income or net income; (xv) operating income or net operating income; (xvi) operating profit or net operating profit; (xvii) operating margin; (xviii) return on operating revenue or return on operating profit; (xix) cash flow
or cash flow per share (before or after dividends); (xx) market share; (xxi) collections and recoveries; (xxii) debt reduction, borrowing levels, leverage ratios or credit rating; (xxiii) compliance with covenants in the company’s and/or its affiliates’ debt agreements; (xxiv) litigation and regulatory resolution goals; (xxv) expense control goals; (xxvi) budget comparisons; (xxvii) development and implementation of strategic plans and/or organizational restructuring goals; (xxviii) productivity goals; (xxix) workforce management and succession planning goals; (xxx) economic value added or other value added measures;(xxxi) on-time delivery, quality standards and/or other measures of customer satisfaction; (xxxii) employee retention and/or attrition rates; (xxxiii) comparable site sales; (xxxiv) resolution and/or settlement of litigation and other legal proceedings; (xxxv) regulatory compliance; (xxxvi) satisfactory internal or external audits; (xxxvii) improvement of financial ratings; (xxxviii) strategic business criteria, consisting of one or more objectives based on meeting specified market penetration; geographic business expansion goals, cost targets, management of employment practices and employee benefits, or supervision of information technology; (xxxix) formation of joint ventures or marketing or customer service collaborations or the completion of other corporate transactions intended to enhance the company’s revenue or profitability or enhance its customer base; (xxxx) mergers and acquisitions, divestitures and/or business expansion; and (xxxxi) other similar criteria consistent with the foregoing. The plan administrator may also grant performance awards that are based on measures other than those set forth above.
The plan administrator may, in its discretion, select performance measures that measure the performance of the company or one or more business units, divisions or subsidiaries of the company, and may select
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performance measures that are absolute or relative to the performance of one or more comparable companies or an index of comparable companies.
No performance bonus or long-term performance award will vest until the plan administrator certifies in writing the level at which each applicable performance measure has been attained for the performance cycle. In determining the level of attainment of each applicable performance measure, the plan administrator may, in its discretion, include or exclude any extraordinary or nonrecurring items, as determined in accordance with United States generally accepted accounting principles, certain changes in our capital structure and the cumulative effect of changes in the law, regulations or accounting rules, and may determine to include or exclude, among other items, one or more of the following items, each determined in accordance with United States generally accepted accounting principles (to the extent applicable) and as identified in our financial statements, notes to the financial statements or discussion and analysis of
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management: (A) asset impairments or write-downs; (B) litigation expenses, judgments, verdicts and settlements; (C) accruals for reorganization and restructuring programs; (D) the income, gain or loss attributable to the operations of any business acquired by us (including our affiliates); (E) the income, gain or loss attributable to one or more business operations or the assets thereof that are the subject of divestiture during the applicable performance cycle; (F) the effect of foreign currency fluctuations or changes in exchange rates; and (G) expenses incurred in connection with a refinancing of our debt (including the debt of our affiliates).
Performance awards will be paid no later than the 15th day of the third month following the end of the calendar year (or, if later, following the end of the company’s fiscal year) in which such performance bonuses are no longer subject to a substantial risk of forfeiture, except to the extent that payment is deferred under the terms of a duly authorized deferred compensation arrangement that complies with the applicable requirements of Section 409A of the Internal Revenue Code, of 1986, as amended (the “Code”), in which case the terms of such arrangement shall govern.
Performance awards will automatically terminate if the performance measures established for the performance award are not attained or satisfied.
Dividends and Dividend Equivalents. Subject to the terms of the 2020 LTIP and any applicable award agreement, a participant may be entitled to receive dividends or dividend equivalents with respect to shares covered by an award, other than an award of stock options or SARs. Dividends or dividend equivalents may be credited as additional shares or units. However, no dividends or dividend equivalents will vest or otherwise be paid out prior to the time that the underlying award (or portion thereof) has vested and, accordingly, will be subject to cancellation and forfeiture if such award does not vest (including both time-based and performance-based awards).
Minimum Vesting Requirements. While the plan administrator generally may set the terms and conditions of awards, the 2020 LTIP requires that equity-based awards may not vest earlier than the first anniversary of the date the award is granted. This requirement does not apply to (i) substitute awards, (ii) shares delivered in lieu of fully vested cash awards and (iii) awards tonon-employee directors that vest on the earlier of the one year anniversary of the date of grant or the next annual meeting of shareholders (but not less than 50 weeks). Also, the plan administrator may grant equity-based awards without regard to the minimum vesting requirement with respect to a maximum of 5% of the available share reserve authorized for issuance under the 2020 LTIP. In addition, the minimum vesting requirement does not apply to the plan administrator’s discretion to provide for accelerated exercisability or vesting of
any award, including in cases of retirement, death, disability or a change in control, in the terms of the award or otherwise.
Prohibition on Repricing. Under the terms of the 2020 LTIP the plan administrator may not (i) implement any cancellation orre-grant program pursuant to which outstanding options or stock appreciation rights are cancelled and new options or stock appreciation rights are granted in replacement with a lower exercise or base price per share, (ii) cancel outstanding options or stock appreciation rights with exercise or base prices per share in excess of the then-current fair market per share for consideration payable in cash, equity or in the form of any other award, except in connection with a change in control transaction or pursuant to an adjustment in connection with certain corporate transactions, or (iii) otherwise reduce the exercise price or base price in effect for outstanding options or stock appreciation rights, as applicable, except in connection with an equity adjustment under the terms of the 2020 LTIP, without in each such instance obtaining the approval of our shareholders.
Changes in Control. Unless otherwise provided under the terms of the award, in the event that we experience a change in control, the plan administrator may provide for the following treatment for any outstanding awards under the 2020 LTIP:
(i) | If and to the extent that outstanding awards under the 2020 LTIP are (1) assumed or otherwise continued in effect by the successor corporation or (2) replaced with a cash incentive program or equity awards which preserve the spread existing value of the awards (e.g., for stock options and stock appreciation rights, the excess of the fair market value of those shares over the exercise or base price |
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payable for such shares) at the time of the change in control and provides for subsequent payout of that spread in accordance with the same vesting schedule in effect for those shares, then all such awards or such substitutes for such awards shall remain outstanding and be governed by their respective terms and the provisions of the 2020 LTIP. |
(ii) | If and to the extent that outstanding awards are not so assumed, continued or replaced, then the plan administrator may provide for any of the following treatment for such awards: (1) outstanding options and stock appreciation rights will immediately vest upon a change in control; and/or (2) the restrictions and other conditions applicable to outstanding restricted stock and restricted stock units, including vesting requirements shall immediately lapse; provided that any awards as to which |
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vesting depends upon the satisfaction of one or more performance measures shall immediately vest and become payable based upon the level of the attainment of the performance measures as of the change in control date andpro-ration based on the time elapsed in the applicable performance period as of the date of the change in control. Such awards shall be paid in cash, shares or a combination thereof, as determined by the plan administrator, within 30 days following the change in control (unless the settlement of the award must be made pursuant to its original schedule in order to avoid the incurrence of certain additional taxes). Alternatively, the plan administrator may, in its sole discretion, upon advance notice to participants, provide for the cancellation of such awards and for a payment based upon the price per share to be received by shareholders of the company in such a transaction. |
(iii) | The plan administrator will have complete discretion to grant one or more awards which will become exercisable as to all the underlying shares upon a change in control followed by the individual’s termination of service with us or the successor entity |
Unless otherwise provided in an award agreement, a change in control will be deemed to occur in the event (a) we are acquired by merger or asset sale, (b) any person or group of related persons becomes directly or indirectly the beneficial owner of securities possessing more than 50% of the total combined voting power of our securities, (c) there is a change in the majority of our board of directors over a consecutivetwo-year period as a result of one or more contested elections for board membership, (d) securities possessing more than 20% of the total combined voting power of our outstanding securities are acquired pursuant to a hostile tender offer, (e) there is a sale of all or substantially all of our assets, or (f) there is a consummation of a liquidation or dissolution of the company. Notwithstanding anything to the contrary, any definition of change in control in an award agreement must provide that a change in control will not occur until consummation or effectiveness of a change in control of the company (i.e., it may not provide that a change in control will occur upon the announcement, commencement, stockholdershareholder approval or other potential occurrence of any event or transaction that, if completed, would result in a change in control of the company).
Withholding.Withholding. Under the terms of the 2020 LTIP, we (including any affiliate) may withhold from any
award granted under the 2020 LTIP, or any payment due or transfer made under any award or the 2020 LTIP, an amount (in cash, shares, securities, other awards or other property) that is sufficient to satisfy Federal,federal, state, local, foreign or other taxes (including FICAFederal Insurance Contributions Act or other applicable social tax obligation). The plan administrator may provide participants with the right to have us (including any affiliate) withhold a portion of the shares otherwise issuable to such participants in an amount equal to the aggregate fair market value of the applicable withholding taxes to which such participants become subject in connection with the exercise, vesting or settlement of their awards.
Capital Structure Adjustments. In the event that the plan administrator determines that any dividend or other distribution (other than regular cash dividends), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation,split-up,spin-off, combination, repurchase or exchange of our shares or our other securities, issuance of warrants or other rights to purchase our shares or our other securities, or other similar corporate transaction or event affects our shares such that an adjustment is determined under the 2020 LTIP to be appropriate in order to prevent dilution or enlargement of the benefits intended to be made available under the 2020 LTIP, then the plan administrator will make adjustments, in such manner as it may deem equitable, to (i) the number and type of shares (or other securities or property) which thereafter may be made the subject of awards under the 2020 LTIP, (ii) the number and type of shares (or other securities or property) subject to outstanding awards, (iii) the grant, purchase or exercise price with respect to any award, or, if the plan administrator deems it appropriate, make provision for a cash payment to the holder of an outstanding award, (iv) the maximum number of shares or other securities which may be issued pursuant to ISOs, and (v) the maximum number of shares or other securities for which any one participant may be granted awards per calendar year. Shares issued under awards granted in assumption, substitution or exchange for previously granted awards of a company acquired by the company will not reduce the shares available under the 2020 LTIP, and available shares under a shareholder approved plan of an acquired company (as appropriately adjusted to reflect the transaction) may be used for awards under the 2020 LTIP
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and will not reduce the 2020 LTIP’s share reserve (subject to any applicable stock exchange listing requirements).
Amendments to the 2020 LTIP. Our board of directors (or any authorized committee thereof) may amend or modify the 2020 LTIP at any time. However, no such amendment or modification may materially adversely affect the rights and obligations with respect to any outstanding award unless the participant consents to such amendment or
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modification. In addition, amendments to the 2020 LTIP will be subject to shareholder approval to the extent required under applicable law or regulation or pursuant to the listing standards of the stock exchange on which our common stock is at the time primarily traded. Additionally, the provisions of the 2020 LTIP prohibiting the repricing of options or SARs may not be amended without obtaining the approval of shareholders.
Amendments to Awards. Except as otherwise provided in the 2020 LTIP, the plan administrator may waive any conditions or rights with respect to, or amend, alter, suspend, discontinue, or terminate, any unexercised award. However, the participant’s consent will be required with respect to any suspension, discontinuation or termination of an award or any amendment or alteration, that would materially impair the rights of such participant thereunder.
Effective Date and Term. The 2020 LTIP becomesbecame effective on May 6, 2020 upon shareholder approval at the 2020 annual meeting.meeting (the “Effective Date”). The 2020 LTIP will terminate at the earliest of (a) such time as no shares of Companycompany common stock remain available for issuance under the 2020 LTIP, (b) termination of the 2020 LTIP by the Board,board, or (c) the tenth anniversary of the Effective Date.Date of the 2020 LTIP. No awards may be made under the 2020 LTIP after the 10th anniversary of the Effective Date.Date of the 2020 LTIP. Any awards that are outstanding when the 2020 LTIP expires will remain in effect until the awards have been exercised or terminated, or have expired.
Clawback. Any award granted under the 2020 LTIP, and the right to receive and retain any shares or cash payments covered by such award, will be subject to rescission, cancellation or recoupment, in whole or part, if and to the extent so provided under any “clawback,” recoupment or similar policy
of ours in effect on the date of the award or that may be established thereafter, including any modification or amendment thereto, or as required by the Sarbanes-Oxley Act of 2002, the Dodd-Frank Wall Street Reform and Consumer Protection Act, or other applicable law, as may be in effect from time to time, and which may operate to create additional rights for us with respect to awards and recovery of amounts relating thereto. By accepting awards under the 2020 LTIP, participants will agree and acknowledge that they are obligated to cooperate with, and provide any and all assistance necessary to,for, us to recover or recoup any award or amounts paid under the 2020 LTIP subject to clawback or recoupment pursuant to such law, government regulation, stock exchange listing requirement or our policy. Such cooperation and assistance will include, but is not limited to, executing, completing and submitting any documentation necessary to recover or recoup any award or amounts paid under the 2020 LTIP from a participant’s accounts, or pending or future compensation or awards.
Awards in Foreign Countries. The plan administrator may grant awards to participants who are foreign nationals or employed outside the United States with different terms and conditions than those specified in the 2020 LTIP as the plan administrator believes necessary or desirable to accommodate differences in applicable law, tax policy, or custom, while furthering the purposes of the Plan.plan. The plan administrator may also approve anysub-plans to the 2020 LTIP as it believes to be necessary or appropriate. The plan administrator may not approve anysub-plan inconsistent with the terms or share limits in the 2020 LTIP or which would otherwise cause the 2020 LTIP to cease to satisfy any conditions under applicable law.
Summary of Federal Income Tax Consequences
The federal income tax consequences of the issuance and exercise or settlement of awards under the 2020 LTIP are as described below. The following information is only a summary of the tax consequences of the awards. This summary does not address all aspects of U.S. federal taxation that may be relevant to a particular participant in light of his or her personal circumstances. Participants should consult with their own tax advisors with respect to the tax consequences inherent in the ownership and exercise of the awards, and the ownership and disposition of any underlying securities.
Option Grants. Options granted under the 2020 LTIP may be either incentive stock options which satisfy the requirements of Section 422 of the Code ornon-statutory options which are not intended to meet such requirements. The Federalfederal income tax treatment for the two types of options differs as follows:
Incentive Options. No taxable income is recognized by the optionee at the time of the option grant, and no taxable income is recognized for regular tax purposes at the time the option is exercised, although taxable income may arise at that time for alternative minimum tax purposes. The optionee will recognize taxable income in the year in which the purchased shares are sold or otherwise made the subject of certain other
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dispositions. For Federalfederal tax purposes, dispositions are divided into two categories: (i) qualifying, and (ii) disqualifying. A qualifying disposition occurs if the sale or other disposition is made more than two years after the date the option for the shares involved in such sale or disposition is granted and more than one year after the date the option is exercised for those shares. If the sale or disposition occurs before these two periods are satisfied, then a disqualifying disposition will result.
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Upon a qualifying disposition, the optionee will recognize long-term capital gain in an amount equal to the excess of (i) the amount realized upon the sale or other disposition of the purchased shares over (ii) the exercise price paid for the shares. If there is a disqualifying disposition of the shares, then the excess of (i) the fair market value of those shares on the exercise date or (if less) the amount realized upon such sale or disposition over (ii) the exercise price paid for the shares will be taxable as ordinary income to the optionee. Any additional gain recognized upon the disposition will be a capital gain.
If the optionee makes a disqualifying disposition of the purchased shares, then the company will be entitled to an income tax deduction, for the taxable year in which such disposition occurs, equal to the amount of ordinary income recognized by the optionee as a result of the disposition. The company will not be entitled to any income tax deduction if the optionee makes a qualifying disposition of the shares.
Non-Statutory Options. No taxable income is recognized by an optionee upon the grant of anon-statutory option. The optionee will in general recognize ordinary income, in the year in which the option is exercised, equal to the excess of the fair market value of the purchased shares on the exercise date over the exercise price paid for the shares, and the optionee will be required to satisfy the tax withholding requirements applicable to such income. The company will be entitled to an income tax deduction equal to the amount of ordinary income recognized by the optionee with respect to the exercisednon-statutory option. The deduction will in general be allowed for the company’s taxable year in which such ordinary income is recognized by the optionee.
Stock Appreciation Rights. No taxable income is recognized upon receipt of a stock appreciation right. The holder will recognize ordinary income in the year in which the stock appreciation right is exercised, in an amount equal to the excess of the fair market value of the underlying shares of common stock on the exercise date over the exercise price, and the holder will be required to satisfy the tax withholding requirements applicable to such income. The company will be entitled to an income tax deduction equal to the amount of ordinary income recognized by the holder in connection with the exercise of the stock appreciation right. The deduction will be allowed for the taxable year in which such ordinary income is recognized.
Restricted Stock Awards. The recipient of unvested shares of common stock issued under the 2020 LTIP will not recognize any taxable income at the time those shares are issued but will have to report as ordinary income, as and when those shares subsequently vest, an amount equal to the excess of (i) the fair market value of the shares on the vesting
date over (ii) the cash consideration (if any) paid for the shares. The recipient may, however, elect under Section 83(b) of the Code to include as ordinary income in the year the unvested shares are issued an amount equal to the excess of (i) the fair market value of those shares on the issue date over (ii) the cash consideration (if any) paid for such shares. If the Section 83(b) election is made, the recipient will not recognize any additional income as and when the shares subsequently vest. The company will be entitled to an income tax deduction equal to the amount of ordinary income recognized by the recipient with respect to the restricted stock award. The deduction will in general be allowed for the company’s taxable year in which such ordinary income is recognized by the recipient.
Restricted Stock Units. No taxable income is recognized upon receipt of restricted stock units. The holder will recognize ordinary income in the year in which the cash or shares subject to the units are actually issued to the holder. The amount of that income will be equal to the fair market value of the cash or shares on the date of issuance, and the holder will be required to satisfy the tax withholding requirements applicable to such income. The company will be entitled to an income tax deduction equal to the amount of ordinary income recognized by the holder at the time the units are settled. The deduction will be allowed for the taxable year in which such ordinary income is recognized.
Cash Awards. The payment of a cash award will result in the recipient’s recognition of ordinary income equal to the dollar amount received. The recipient will be required to satisfy the tax withholding requirements applicable to such income. The company will be entitled to an income tax deduction equal to the amount of ordinary income recognized by the holder at the time the cash award is paid. The deduction will be allowed for the taxable year in which such ordinary income is recognized.
Performance Units. No taxable income is recognized upon receipt of performance units. The holder will recognize ordinary income in the year in which the performance units are settled. The amount of that income will be equal to the fair market value of the shares of common stock or cash received in settlement of the performance units, and the holder will be required to satisfy the tax withholding requirements applicable to such income. The company will be entitled to an income tax deduction equal to the amount of
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the ordinary income recognized by the holder of the performance units at the time those units are settled. That deduction will be allowed for the taxable year in which such ordinary income is recognized.
Dividend Equivalent Rights. No taxable income is recognized upon receipt of a dividend equivalent right award. The holder will recognize ordinary income in the year in which a payment pursuant to such right, whether in cash, securities or other
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property, is made to the holder. The amount of that income will be equal to the fair market value of the cash, securities or other property received, and the holder will be required to satisfy the tax withholding requirements applicable to such income. The company will be entitled to an income tax deduction equal to the amount of the ordinary income recognized by the holder of the dividend equivalent right award at the time the dividend or distribution is paid to such holder. That deduction will be allowed for the taxable year in which such ordinary income is recognized.
Impact of Section 409A. Section 409A of the Code applies to deferred compensation, which is generally defined as compensation earned currently, the payment of which is deferred to a later taxable year. Awards under the 2020 LTIP are intended to be exempt from the requirements of Section 409A or to satisfy its requirements. An award that is subject to Section 409A of the Code and fails to satisfy its requirements will subject the holder of the award to immediate taxation, interest and an additional 20% tax on the vested amount underlying the award.
Section 162(m) of the Code. Prior to 2018, Section 162(m) of the Code imposed a $1 million limit on the amount a public company may deduct for compensation paid to a company’s chief executive officer or any of the company’s three other most highly compensated executive officers (other than
the chief financial officer) who are employed as of the end of the year. This limitation did not apply to compensation that meets the tax code requirements for “qualifying performance-based” compensation (i.e., compensation paid only if the individual’s performance meetspre-established objective goals based on performance criteria approved by stockholders,shareholders, including stock options).
The performance-based compensation exemption and the exemption of the chief financial officer from Section 162(m)’s deduction limit have been repealed, among other changes, effective for taxable years beginning after December 31, 2017, such that awards paid to our covered executive officers (including our chief executive officer) in excess of $1 million will not be deductible in future years, unless it qualifies for transition relief applicable to certain arrangements that were in effect as of November 2, 2017 and are not materially modified thereafter.
As in prior years, while deductibility of executive compensation for federal income tax purposes is among the factors the committee considers when structuring our executive compensation arrangements, it is not the sole or primary factor considered. We retain the flexibility to authorize compensation that may not be deductible if we believe it is in the best interests of the company.
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2020 LTIP Option Grants
The granting of awardsfollowing table shows all options that have been granted under the 2020 LTIP is discretionary. As such,to the Board cannot now determine the number, value or type of awards to be granted in the future for any individual or group of individuals. The equity grant program for ournon-employee directors is described under the Director Compensation section in this proxy statement.named individuals and groups.
Name and Position | Options | |||
Leroy M. Ball President and Chief Executive Officer | 49,272 | |||
Michael J. Zugay Chief Financial Officer | — | |||
James A. Sullivan Executive Vice President and Chief Operating Officer | 18,999 | |||
Leslie S. Hyde Senior Vice President and Chief Sustainability Officer | 7,719 | |||
Stephanie L. Apostolou General Counsel and Secretary | — | |||
Steven R. Lacy Former Assistant to the President of Koppers Inc. | — | |||
Douglas J. Fenwick President, Performance Chemicals | 7,231 | |||
All executive officers as a group | 75,990 | |||
All directors who are not executive officers as group | — | |||
Christian A. Nielsen Senior Vice President, Global Carbon Materials and Chemicals | 7,658 | |||
All employees who are not executive officers as a group | 14,889 |
Market Price Ofof Shares
The closing price of a share of our common stock, as reported on the New York Stock Exchange on March 16, 202022, 2021 was $11.10.$36.10.
Board Recommendation
Our board of directors believes that the adoption of the 2020 LTIP2021 Amendment will enable the company to continue to provide significant equity-based incentives to
employees,non-employee directors and consultants who are expected to contribute materially to the company’s future success. Accordingly, our board of directors unanimously recommends approval of the 2020 LTIP2021 Amendment by our shareholders.
Approval of the adoption of the 2020 LTIP2021 Amendment requires the affirmative vote of a majority of the votes cast on the proposal at the annual meeting by the holders of common stock voting in person or by proxy. Under the applicable requirements of the New York Stock Exchange, an abstention is counted as a vote cast and will therefore have the same effect as a vote against this proposal. Brokernon-votes will not count as votes cast with respect to this proposal and will have no effect on the outcome of the vote on this proposal.
The board recommends that you vote “FOR” the proposal to approve the 2021 Amendment to the 2020 LTIP to increase the number of shares of the company’s common stock available for issuance under our 2020 Long Term Incentive Plan.LTIP.
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The following table provides information as of December 31, 2019,2020 regarding the number of shares of our common stock that may be issued under our 2005 LTIP, 2018 LTIP, and 2020 LTIP and the 2018 LTIP:Employee Stock Purchase Plan:
Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted-average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in first column) | Number of securities to be issued upon of outstanding options, warrants and rights | Weighted-average price of outstanding warrants and rights | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in first column) | ||||||||||||||||||
Equity compensation plans approved by security holders | 1,755,047 | (1) | $28.45 | (2) | 602,985 | 2,021,507(1) | $26.89(2) | 954,607 | (3) | |||||||||||||||
Equity compensation plans not approved by | — | $ — | — | |||||||||||||||||||||
Total | 2,021,507 | $26.89 | 954,607 |
(1) | Includes shares of our common stock that may be issued pursuant to outstanding options, |
(2) | Does not reflect |
(3) | There were no outstanding purchase rights under the Employee Stock Purchase Plan as of December 31, 2020. A total of 4,998 shares were available for issuance under the Employee Stock Purchase Plan as of December 31, 2020. |
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PROXY ITEM 3 — PROPOSAL TO APPROVE OUR AMENDED AND RESTATED EMPLOYEE STOCK PURCHASE PLAN
Introduction
We are proposing to amend and restate our Employee Stock Purchase Plan (as amended and restated, the “ESPP”). The ESPP is intended to (i) qualify as an “employee stock purchase plan” under Section 423 of the Internal Revenue Code of 1986, as amended (the “Code”), (ii) promote ownership of shares of the company’s common stock by employees as an incentive to better performance and improvement of profits, and (iii) provide a convenient and practical means by which employees may participate in stock ownership of the company. Our board of directors adopted the amendment and restatement of the ESPP on March 22, 2021. The primary purpose for the amendment and restatement, and the purpose for the request for shareholder approval at this time, is to increase the number of shares available for purchase under the ESPP. Such increase is subject to shareholder approval.
The following is a summary of the material features of the ESPP. This summary is qualified in its entirety by reference to the complete text of the ESPP, which is attached as Appendix B to this proxy statement. To the extent the description below differs from the text of the ESPP, the text of the ESPP will control.
Discussion of the Purpose of this Proposal
Increase in Authorized Shares Available under the ESPP. The reason for submitting this proposal to our shareholders at the 2021 annual meeting is to increase the number of shares available for grant under the ESPP, which will enable the company to continue to grant options to eligible employees. Notably, if we do not increase the share reserve at the 2021 annual meeting we will need to discontinue offering options to purchase the company’s common stock when the number of shares currently available for grant under the ESPP have been issued.
The company initially reserved 200,000 shares of the company’s common stock for issuance to eligible employees under the ESPP. Our board of directors believes that it is in the best interest of the company and its shareholders to increase the maximum number of shares authorized to be issued under the ESPP by 300,000 shares. Upon approval by the shareholders, a total of 500,000 shares would be authorized to be issued under the ESPP. As of March 22, 2021, a total of 195,002 shares had previously been issued under the ESPP. Accordingly, as of March 22, 2021, upon approval of the increase by the shareholders, a total of 304,998 shares would remain available for issuance under the ESPP.
In rendering its decision to increase the shares authorized for issuance under the ESPP, our board of directors took into account potential share dilution, the historical share usage and the number of years each of the current share reserve and the requested increased authorized share reserve is expected to last.
Other Changes. The ESPP was also amended to make a few other miscellaneous modifications, including:
Eliminating the requirement that the company’s shareholders must approve any modification of the eligibility requirements for participation in the ESPP or any decrease in the purchase price for shares of common stock offered pursuant to the ESPP.
Modifications to the rules regarding the impact of corporate transactions on the ESPP.
Eliminating the automatic termination of the ESPP when all shares reserved for purposes of the ESPP have been purchased.
Other clarifying changes.
Effect of Non-approval. In the event the ESPP, as amended and restated, is not approved at the 2021 annual meeting, then the increase in the number of authorized shares available for issuance under the ESPP will not be implemented.
Material Terms of the ESPP
Eligibility. The ESPP enables participants to purchase shares of common stock during certain offering periods. All active employees of the company and its participating subsidiaries are eligible to participate in the ESPP, except for the following: (i) any employee whose customary employment is 20 hours or less per week or not more than five months per calendar year, (ii) any employee who would, after the purchase of shares under the ESPP, own or be deemed to own five percent or more of the voting power or value of all
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classes of stock of the company or any subsidiary of the company, or (iii) any employee whose participation under the ESPP would be prohibited under the laws of any foreign jurisdiction of which the employee is a citizen or resident (or where compliance with the laws of such foreign jurisdiction would cause the ESPP or the offering to violate the requirements of Section 423 of the Code). The board of directors and Plan Administrator (as defined below) will have the sole discretion to determine whether an individual is eligible to participate in the ESPP, and any such determination will be final and binding on all parties. Approximately 2,000 employees are currently eligible to participate in the ESPP.
Share Reserve. 500,000 shares of our common stock have been reserved for issuance under the ESPP (representing 200,000 previously authorized shares, plus 300,000 newly authorized shares subject to approval of the company’s shareholders). The number of shares reserved for the ESPP is subject to adjustment in the event of 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. The determination of whether an adjustment will be made and the manner of any such adjustment shall be made by the Plan Administrator, which determination will be conclusive. On March 22, 2021, the closing market price of our common stock as reported by the New York Stock Exchange was $36.10 per share.
We intend to register the new 300,000 shares reserved for issuance under the ESPP on a Registration Statement on Form S-8 under the Securities Act of 1933, as amended, as soon as practicable after receiving shareholder approval.
Administration. The ESPP is administered by the management development and compensation committee of our board of directors (the “Plan Administrator”), which may delegate authority under the ESPP to certain officers and employees of the company as permitted by the ESPP. The Plan Administrator may promulgate rules and regulations, adopt forms, and decide any question of interpretation or rights arising under the ESPP. The company pays all expenses of the ESPP.
ESPP Offerings. The ESPP is implemented by a series of three-month offerings, with a new offering commencing on January 1, April 1, July 1, and October 1 of each year. The first day of each offering is the “offering date” for that offering, and the last day of each offering is the “purchase date” for that offering. If the offering date is not a date on which the New York Stock Exchange is open for trading then the offering date is the next date on which such exchange is open for trading. An employee may purchase shares only through payroll deductions permitted under the ESPP. Payroll deductions must be not less than one percent (1%) of the participant’s eligible compensation.
The maximum number of shares that any employee may purchase in any single offering is 500 shares. In addition, the terms of an offering may not allow an employee’s right to purchase shares under all stock purchase plans of the company and its subsidiaries to which Section 423 of the Code applies to accrue at a rate that exceeds $25,000 of fair market value of shares, as determined on the offering date, in any calendar year.
As a condition to participation in the ESPP, subject to applicable law, each participant will agree not to sell or otherwise dispose of shares acquired pursuant to the ESPP for a period of at least one year following the purchase date, unless (i) the sale or disposition is pursuant to termination of employment as set forth in the ESPP, or (ii) such sale or disposition is required to cover tax liabilities incurred as a result of participation in the ESPP with respect to participating subsidiaries outside of the United States.
An employee may terminate participation in the ESPP by written notice to the company, in the form specified by the company, to be submitted no later than a number of days prior to the purchase date as established from time to time by the Plan Administrator. An employee may not reinstate participation in the ESPP with respect to a particular offering after once terminating participation in the ESPP with respect to that offering, but may participate in subsequent offerings. Generally, upon termination of an employee’s participation in the ESPP, all amounts deducted from the employee’s pay that had not yet been used to purchase shares shall be returned to the employee. The rights of employees under the ESPP are not transferable.
Purchase Price. The price at which shares may be purchased in an offering is the lower of (a) 85 percent (85%) of the fair market value of a share of common stock on the offering date, or (b) 85 percent (85%) of the fair market value of a share of common stock on the purchase date of the offering. The fair market value of a share of common stock will be determined by such methods or procedures as will be established from time to time by the Plan Administrator.
Delivery and Custody of Shares. Shares purchased under the ESPP are delivered to and held in the custody of a custodian (the “Custodian”), which is an investment or financial firm appointed by the Plan Administrator. By appropriate instructions to the Custodian, a participant may obtain (i) transfer into his or
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her own name all or part of the whole shares held by the Custodian for the participant’s account and delivery of such whole shares to the participant, or (ii) transfer of all or part of the whole shares held for the participant’s account by the Custodian to a regular individual brokerage account in the participant’s own name, either with the firm then acting as Custodian or with another firm; provided, however, that no shares may be so transferred until two years after the offering date in which the shares were purchased. As set forth in the ESPP, these procedures are designed solely to assure that any sale of shares prior to the satisfaction of this two-year period is made through the participant’s account, and will in no way limit when the participant may sell his or her shares.
Dividends. Stock dividends and other distributions in shares of common stock of the company on shares held by the Custodian will be issued to the Custodian and held by it for the account of the respective participants. Cash distributions other than dividends, if any, on shares held by the Custodian will be paid currently to any participants entitled to such distributions. Cash dividends, if any, on shares held by the Custodian will be reinvested in common stock on behalf of the participants. The Custodian will establish a separate account for each participant for the purpose of holding any shares acquired through reinvestment of dividends. There is no holding period requirement for a transfer from a dividend reinvestment account.
Voting. In connection with voting on any matter submitted to the shareholders of the company, the company will furnish to the participant a proxy authorizing the participant to vote the shares held by the Custodian for his or her accounts.
Withholding. Each participant who has purchased shares under the ESPP will immediately, upon notification of the amount due, if any, pay to the company in cash amounts necessary to satisfy any applicable federal, state and local income taxes, employment taxes, social insurance, payroll tax, national insurance contributions, other contributions, payment on account obligations or other amounts determined by the company to be required to be withheld, collected or accounted for to any tax authority. If the company determines that additional withholding, collection or accounting is required beyond any amount deposited at the time of purchase, the participant must pay such amount to the company on demand. If the participant fails to pay the amount so demanded, the company may withhold that amount from other amounts payable by the company to the participant, including, subject to applicable law, salary amounts.
Termination and Amendment. Our board of directors may, in its sole discretion, terminate the ESPP at any time.
The board of directors or the Plan Administrator may, from time to time, amend the ESPP in any and all respects, except that only the board may change (i) the number of shares reserved for the ESPP, (ii) the purchase price of shares offered pursuant to the ESPP, (iii) the terms of Section 6 of the ESPP relating to the offering and purchase dates, or (iv) the maximum percentage of a participant’s compensation that may be deducted during an offering. Notwithstanding the foregoing, in no event may the board effect any of the following amendments or revisions to the ESPP without the approval of the company’s shareholders: (a) increase the number of shares of common stock issuable under the ESPP (except for permissible adjustments authorized in the plan), or (b) any amendment that requires approval of the company’s shareholders under Section 423 of the Code, applicable stock exchange listing rules or other applicable law.
Adjustments and Corporate Transactions. In the event of any dividend or other distribution, recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of the company’s 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 Plan Administrator will, in a manner as it deems equitable, adjust the number of shares and class of common stock that may be delivered under the ESPP, the option price per share and the number of shares of common stock covered by each outstanding option under the ESPP, the maximum number of shares that may be issued under the ESPP and the maximum number of shares that may be purchased by any individual in any single offering.
In the event of a merger, consolidation, acquisition of property or stock, separation, reorganization or other eligible corporate event with respect to the company, each outstanding option will be assumed or an equivalent option substituted by the successor corporation or a parent or subsidiary of the successor corporation. If the successor corporation refuses to assume or substitute the option, the offering with respect to which the option relates will be shortened by setting a new purchase date on which the offering will end. The new purchase date will occur before the date of the corporate event. Prior to the new purchase date, the Plan Administrator will provide each participant with written notice, which may be electronic, of the new purchase date and that the participant’s option will be exercised automatically on such date, unless before such time, the participant has withdrawn from the offering.
Tax Consequences. The following is a brief description of the U.S. federal income tax consequences generally arising with respect to participation in the ESPP. This discussion is intended for the information of
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shareholders considering how to vote at the annual meeting, and not as tax guidance to participants in the ESPP. This summary does not address the effects of other federal taxes or taxes imposed under state, local or foreign tax laws.
The ESPP is intended to qualify as an “employee stock purchase plan” under Section 423 of the Code. An eligible employee will not have any taxable income when shares purchased under the ESPP are purchased at a discount. No income will be taxable to the employee until the shares purchased under the ESPP are sold. If an employee disposes of shares purchased under the ESPP more than two years after the offering date, the employee will be required to report as ordinary compensation income for the taxable year of disposition or death an amount equal to the lesser of (a) the excess of the fair market value of the shares at the time of disposition over the applicable purchase price, or (b) 15 percent of the fair market value of the shares on the offering date. Any gain on the disposition in excess of the amount treated as ordinary compensation income generally will be capital gain. In the case of such a disposition, the company will not be entitled to any deduction from income.
If an employee disposes of shares purchased under the ESPP within two years after the offering date, the employee will be required to report the excess of the fair market value of the shares on the purchase date over the applicable purchase price as ordinary compensation income for the year of disposition. The amount of such ordinary income will be added to the employee’s basis in the shares, and any additional gain or resulting loss recognized on the disposition of shares after such basis adjustment will be a capital gain or loss. A capital gain or loss will be long-term if the employee holds the shares for more than one year after the purchase date. In the event of such a disposition, the company generally will be entitled to a deduction from income in the year of such disposition equal to the amount the employee is required to report as ordinary compensation income.
Accounting Consequences. Pursuant to accounting principles that apply to employee stock purchase plans, the fair value of each purchase right granted under the ESPP is charged as a direct compensation expense to our reported earnings over the offering period to which that purchase right pertains. The fair value of each such purchase right will be determined as of its grant date.
ESPP Grants
The following table shows the total number of shares of common stock that have been purchased by the named individuals and groups under the ESPP.
Name and Position | Number of Shares | |||
Leroy M. Ball President and Chief Executive Officer | 2,883 | |||
Michael J. Zugay Chief Financial Officer | 3,243 | |||
James A. Sullivan Executive Vice President and Chief Operating Officer | 1,618 | |||
Leslie S. Hyde Senior Vice President and Chief Sustainability Officer | 1,315 | |||
Stephanie L. Apostolou General Counsel and Secretary | 2,328 | |||
Steven R. Lacy Former Assistant to the President of Koppers Inc. | 3,143 | |||
Douglas J. Fenwick President, Performance Chemicals | 906 | |||
Current executive officer group | 14,451 | |||
Non-executive officer employee group | 180,551 |
Board Recommendation
Our board of directors believes that the ESPP promotes the interests of the company and its shareholders by encouraging employees of the company and participating subsidiaries to become shareholders, and therefore promotes the company’s growth and success. The board also believes that the opportunity to acquire a proprietary interest in the success of the company through the acquisition of shares of stock pursuant to the ESPP is an important aspect of the company’s ability to attract and retain highly-qualified and motivated employees. The board believes that it is desirable and in the best interests of the company and its shareholders to continue to provide employees of the company and its participating subsidiaries with benefits under the ESPP.
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Approval of the increase in the number of shares available for issuance under the ESPP requires the affirmative vote of a majority of the votes cast on the proposal at the annual meeting by the holders of common stock voting in person or by proxy. Under the applicable requirements of the New York Stock Exchange, an abstention is counted as a vote cast and will therefore have the same effect as a vote against this proposal. Broker non-votes will not count as votes cast with respect to this proposal and will have no effect on the outcome of the vote on this proposal.
The board recommends that you vote “FOR” the proposal to approve our Amended and Restated Employee Stock Purchase Plan.
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Section 14A of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), requires that we include in this proxy statement an advisory(non-binding) shareholder vote on the compensation of our named executive officersNEOs as described in this proxy statement.
Our NEOs are identified on page 16,21, and the compensation of the NEOs is described on pages 1621 through 39,46, including the “Compensation Discussion and Analysis” on pages 1621 to 26.32. We encourage our shareholders to review these sections of the proxy statement. As discussed in the Compensation Discussion and Analysis, we believe that our compensation policies and decisions are based on pay for performance principles and are strongly aligned with the long-term interests of our shareholders. Compensation of our NEOs is designed to enable us to attract and retain talented and experienced senior executives to lead the company successfully in a competitive environment.
The board and management are committed to our shareholders and understand that it is useful and appropriate to obtain the views of our shareholders when considering the design and initiation of executive compensation programs. At our 20192020 annual meeting of shareholders, our shareholders cast an advisory vote on the compensation of our NEOs as disclosed in the proxy statement for the
2019 2020 annual meeting, and our shareholders overwhelmingly approved the proposal, with over 98%97% of the votes cast in favor.
Accordingly, we are requesting yournon-binding approval of the following resolution:
“RESOLVED, that the compensation paid to the company’s NEOs, as disclosed pursuant to Item 402 of RegulationS-K and described on pages 1621 to 3946 of the company’s Notice of Annual Meeting & Proxy Statement for the 20202021 Annual Meeting of Shareholders, including the “Compensation Discussion and Analysis,” the compensation tables and narrative discussion, is hereby APPROVED.”
We currently intend to offer thisnon-binding advisory vote at each of our annual meetings.meetings and to hold our next advisory vote on the frequency of such future advisory votes in 2023. Although it is not binding, we welcome our shareholders’ views on our NEOs’ compensation and will carefully consider the outcome of this advisory vote when considering future executive compensation programs.
Approval of the advisory vote on executive compensation requires support from a majority of votes cast, assuming the presence of a quorum.
The board recommends that you vote “FOR” the proposal to approve the advisory resolution on our executive compensation.
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PROXY ITEM 45 — PROPOSAL TO RATIFY THE APPOINTMENT OF KPMG LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR FISCAL YEAR 20202021
We are asking you to vote on a proposal by the audit committee to ratify the appointment of KPMG LLP as our independent registered public accounting firm for the 20202021 fiscal year.
Adoption of the proposal to ratify the appointment of KPMG LLP as our independent registered public accounting firm for fiscal year 20202021 requires the affirmative vote of a majority of votes cast on the proposal at the annual meeting by the holders of our common stock voting in person or by proxy at the annual meeting.
If the appointment of KPMG LLP as our independent registered public accounting firm for fiscal year 20202021 is not ratified, the audit committee will reconsider its selection.
The board recommends that you vote “FOR” the proposal to ratify the appointment of KPMG LLP as our independent registered public accounting firm for fiscal year 2020.2021.
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The board of directors is soliciting your proxy for our 20202021 annual meeting of shareholders and any adjournment of the meeting, for the purposes set forth in the Notice of Annual Meeting. We began distributing the proxy materials contained in this package on or about March 30, 2020.April 5, 2021.
We will provide a printed copy of our Annual Report on Form10-K for the fiscal year ended December 31, 20192020 upon request and without charge to any shareholder requesting it in writing at Koppers Holdings Inc., Attention: Corporate Secretary’s Office, 436 Seventh Avenue, Pittsburgh, Pennsylvania 15219. In addition, you can access that report on the SEC’s website atwww.sec.gov and on our website atwww.koppers.com.
Q. | Who may vote at the annual meeting? |
A. | If you owned shares of our common stock at the close of business on March |
Q. | How can I attend the annual meeting? |
A. | There will be no in-person annual meeting. The meeting will be held virtually over the Internet and you will be able to attend and participate in the annual meeting online, vote your shares electronically and submit your questions prior to and during the meeting by visiting www.meetingcenter.io/243893297. The meeting will begin promptly at 10:00 a.m. Eastern Daylight Time and online access will open 15 minutes prior to allow time to log-in. The login password is KOP2021. We encourage you to access the meeting prior to the start time leaving ample time for login. Please follow the registration instructions as outlined in this proxy statement. |
Q. | How do I register to attend the annual meeting virtually on the Internet? |
A. | If your shares are registered in your name with Koppers transfer agent or you are a participant holding Koppers stock in a Koppers-sponsored plan and you wish to attend the online-only virtual meeting, please use the website and password set forth above and the voter control number that is located on your proxy card to log-in to the meeting at the date and time set forth above. |
If you hold your shares through an intermediary, such as a bank, broker or other nominee, you must register in advance to attend the online-only virtual annual meeting by submitting proof of your proxy power (legal proxy) reflecting your Koppers holdings along with your name and email address to Computershare. You can obtain a legal proxy by contacting your account representative at the bank, broker, or other nominee that holds your shares. |
Requests for registration must be labeled as “Legal Proxy” and be received no later than 5:00 p.m., Eastern Daylight Time, on Tuesday, May 4, 2021. You will receive a confirmation of your registration by email with a voter control number after we receive your valid registration materials. In order to attend the online-only virtual meeting, please use the website and password set forth above and the voter control number that you receive to log-in to the meeting at the date and time set forth above. Requests for registration should be directed to us by email as follows: |
Forward the email from your broker, or attach a legible photograph of your legal proxy, to legalproxy@computershare.com. |
In order to maintain the interactive nature of the virtual meeting, virtual attendees are able to: |
Vote using the online meeting website
Submit questions during the meeting
Q. | Why are you holding a virtual annual meeting instead of an in-person annual meeting? |
A. | We are holding a virtual annual meeting instead of an in-person annual meeting as part of addressing the ongoing coronavirus (COVID-19) situation, and to support our key priorities of keeping our employees, shareholders and other stakeholders safe while effectively operating our business as well as preventing the spread of COVID-19. |
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Q. | What if I have trouble accessing the virtual annual meeting? |
A. | The virtual meeting platform is fully supported across MS Edge, Firefox, Chrome and Safari browsers and devices (desktops, laptops, tablets and cell phones) running the most up-to-date version of applicable software and plugins. Please note that Internet Explorer is no longer supported. Participants should ensure that they have a strong Wi-Fi connection wherever they intend to participate in the meeting. We encourage you to access the meeting prior to the start time. A link on the meeting page will provide further assistance should you need it or you may call 1-888-724-2416 or 1-781-575-2748. |
Q. | What is the difference between holding shares as a shareholder of record and as a beneficial owner? |
A. | If your shares are registered directly in your name with our transfer agent, Computershare, you are considered the “shareholder of record” with respect to those shares. We have sent the notice of annual meeting, proxy statement, proxy card and |
If your shares are held in a stock brokerage account or by a bank or other holder of record, you are considered the “beneficial owner” or “street name” holder of those shares. The notice
of annual meeting, proxy statement, proxy card and 2019
If your shares are held in a stock brokerage account or by a bank or other holder of record, you are considered the “beneficial owner” or “street name” holder of those shares. The notice of annual meeting, proxy statement, proxy card and 2020 annual report have been forwarded to you by your broker, bank or other holder of record who is considered the shareholder of record with respect to those shares. As the beneficial owner, you have the right to direct your broker, bank or other holder of record on how to vote your shares by following the instructions included in the package from the broker, bank or other holder of record. |
Q. | How does a proxy work? |
A. | If you complete the enclosed proxy or provide your proxy via Internet or telephone, that means that you authorize the persons appointed as proxies to vote your shares at the annual meeting in accordance with your directions. When you vote by proxy, you should direct how your shares should be voted for each proposal. If you do not tell us how to vote your shares for any proposal, then your shares will be voted in accordance with the recommendations of our board of directors. Unless you tell us otherwise, the persons appointed proxies to vote at our annual meeting may vote your shares in accordance with their judgment on any other matters properly presented for action at the meeting or at any adjournment of the meeting that are not described on the proxy form. |
The board is not aware of any matters other than those set forth in this proxy statement that will be presented for action at the annual meeting. However, if any other matter should properly come before the annual meeting, the persons authorized by the accompanying proxy will vote and act with respect thereto in what, according to their judgment, is in the interests of the company and its shareholders. If any nominee is unable or unwilling to stand for election, your proxy authorizes us to vote for a replacement nominee if the board names one.
The board is not aware of any matters other than those set forth in this proxy statement that will be presented for action at the annual meeting. However, if any other matter should properly come before the annual meeting, the persons authorized by the accompanying proxy will vote and act with respect thereto in what, according to their judgment, is in the interests of the company and its shareholders. If any nominee is unable or unwilling to stand for election, your proxy authorizes us to vote for a replacement nominee if the board names one. |
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Q. | How do I vote? |
A. | You may vote your shares by proxy or |
By proxy | • If you are a shareholder of record, please use one of the following methods to vote your shares by proxy: • Internet: Go to www.investorvote.com/KOP and follow the instructions. This voting system has been designed to provide security for the voting process and to confirm that your vote has been recorded accurately. • Telephone: Follow the instructions on the proxy • Mail: Complete, sign and date the proxy card and return it in the postage prepaid | |||||
Internet
www.investorvote.com/KOP | Telephone Follow the instructions on the proxy card. | Complete, sign and date the proxy card and return it in the postage prepaid envelope provided. | ||||
• If you are a beneficial owner, you must complete, sign and date the voting instructions included in the package from your broker, bank or other record holder and return those instructions to the broker, bank or other holder of record. | ||||||
| All shareholders may vote
• If you are a shareholder of record, you may vote your shares directly
• If you are a beneficial owner of shares, you must obtain a legal proxy from your broker, bank or other holder of record and |
Your vote is important. Please vote your shares promptly. We recommend you vote by proxy even if you plan to attend the meeting. You can always revoke your proxy before it is exercised by voting electronically during the virtual annual meeting or otherwise as described below in person at the meeting.answer to the question “What can I do if I change my mind after I vote my shares?”.
Q. | What if I receive more than one proxy card? |
A. | You may receive more than one proxy or voting card depending on how you hold your shares. Shares registered in your name are generally covered by one card. If you beneficially hold shares through someone else (such as a broker, bank or other record holder), you may get voting instructions and related materials from that person asking how you want to vote. If you receive more than one proxy card for shares registered in your name, you have shares registered differently in more than one account. We encourage you to have all accounts registered in the same name and address whenever possible. You can do this by contacting our transfer agent, Computershare at P.O. Box 50500, Louisville, KY 40233, at its toll-free number(866-293-5637) or on its website athttps:// |
Q. | What is a quorum? |
A. | In order to conduct the business of the meeting, we must have a quorum. This means at least a majority of shares of our common stock outstanding must be represented at the meeting, either |
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your proxy via Internet or telephone. Abstentions and brokernon-votes (as defined below) will be considered to be represented at the meeting in determining the presence of a quorum. |
Q. | What vote is needed for the proposals to be adopted? |
A. | You have one vote for each share that you held on the record date for each proposal. |
Our bylaws provide for a majority vote standard in an uncontested election of directors, such as this year’s election. As a result, any nominee who receives a majority of the votes cast (the number of shares voted “for” the director must exceed 50% of the votes cast with respect to that director) at the annual meeting will be elected as a director. Any nominee who does not receive a majority of the votes cast will be required to tender his or her resignation to the board of directors within ten days following certification of the election results.
All other matters to be voted on at the annual meeting require the favorable vote of a majority of the votes cast on the applicable matter, at the meeting in person or by proxy, for approval.
Any abstentions or brokernon-votes are not votes cast for purposes of Proposals 1, 3 and 4 do not count either for or against those proposals.
Accordingly, abstentions and brokernon-votes will not affect the outcome of Proposals 1, 3, or 4. With respect to Proposal 2, abstentions will count as votes cast and will have the effect of a vote against that proposal. Brokernon-votes will not count as votes cast with respect to Proposal 2 and will have no effect on the outcome of that proposal.
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GENERAL MATTERS
Our bylaws provide for a majority vote standard in an uncontested election of directors, such as this year’s election. As a result, any nominee who receives a majority of the votes cast (the number of shares voted “for” the director must exceed 50% of the votes cast with respect to that director) at the annual meeting will be elected as a director. Any nominee who does not receive a majority of the votes cast will be required to tender his or her resignation to the board of directors within ten days following certification of the election results. |
All other matters to be voted on at the annual meeting require the favorable vote of a majority of the votes cast on the applicable matter, at the meeting electronically or by proxy, for approval. |
Any abstentions or broker non-votes are not votes cast for purposes of Proposals 1, 4 and 5 and do not count either for or against those proposals. |
Accordingly, abstentions and broker non-votes will not affect the outcome of Proposals 1, 4 or 5. With respect to Proposals 2 and 3, abstentions will count as votes cast and will have the effect of a vote against that proposal. Broker non-votes will not count as votes cast with respect to Proposals 2 and 3 and will have no effect on the outcome of those proposals. |
Q. | Does Koppers have a recommendation on voting? |
A. | The board of directors recommends a voteFOR the election of all nominees as directors, andFOR Proposals 2, 3, 4 and |
Q. | What are brokernon-votes? |
A. | The NYSE permits brokers to vote their customers’ shares on routine matters when brokers have not received voting instructions from their customers. Routine matters include Proposal |
Q. | What can I do if I change my mind after I vote my shares? |
A. | If you are a shareholder of record, you may revoke your proxy before it is exercised by: |
Written notice to our corporate secretary at the address given on page 9;12
Timely delivery of a valid, later-dated proxy; or
Voting in person by ballot atelectronically during the virtual annual meeting.
If you are a beneficial owner of shares, you may submit new voting instructions by contacting your broker, bank or other holder of record. You may also vote in person at the annual meeting if you obtain a legal proxy as described previously in the answer to the question “How do I vote?”.
All shares that have been properly voted and not revoked will be voted at the annual meeting.
If you revoke by mail, we must receive the written notice or a valid, later-dated proxy before the annual meeting begins. Please make sure you have provided enough time for the written notice or later-dated proxy to reach us. |
If you are a beneficial owner of shares, you may submit new voting instructions by contacting your broker, bank or other holder of record. You may also vote electronically during the virtual annual meeting if you obtain a legal proxy as described previously in the answer to the question “How do I vote?”. |
All shares that have been properly voted and not revoked will be voted at the annual meeting. |
Q. | Who counts the votes cast at the annual |
A. | Representatives of Computershare will tabulate the votes and act as inspectors of election at the annual meeting. |
Q. | Who will pay for the cost of this proxy solicitation? |
A. | We will pay the cost of soliciting proxies. We may make arrangements with brokerage houses and other custodians, nominees and fiduciaries for them to forward proxy materials to the beneficial owners of the shares they hold of record and we may reimburse them for doing so. Proxies may be solicited on our |
74 | 2021 Proxy Statement |
GENERAL MATTERS
behalf by directors, officers or employees, for no additional compensation, in |
person or by telephone, electronic transmission and facsimile transmission. We have hired Computershare/Georgeson to handle search and distribution services for proxy materials. We will pay Computershare/Georgeson an estimated fee of $1,900, plus its reasonable expenses, for these services. |
Q. | Will my vote be confidential? |
A. | Shareholder voting records will be permanently kept confidential except as may be necessary to meet legal requirements. |
Delinquent Section 16(a) Reports
Section 16(a) of the Exchange Act requires our directors, officers and beneficial owners of more than 10% of our common stock to file reports of beneficial ownership and changes in beneficial ownership of our stock. Directors and officers must furnish us with copies of these reports. We also offer assistance to our executive officers and directors with fulfilling these requirements based on information provided by our executive officers and directors and obtained from our internal records. Based on our review of the forms and directors and executive officers’ representations, we believe all directors and executive officers complied with the requirements in 2019, with the following exception. Historically, including in 2019, the settlements of PSUs granted to our executive officers were reported in Form 4s filed on behalf of our executive officers at the time such PSUs vested, which typically has been in March. As a technical matter, we now believe that a reporting event occurs with respect to these PSUs when our management development and compensation committee determines that the applicable performance criteria have been met and that the PSUs will be settled, subject to completion of the remaining vesting period. Beginning in 2020, we have begun to file Form 4s on behalf of our executive officers with respect to these PSUs both when our management development and compensation committee makes its determination regarding the satisfaction of the applicable performance criteria, which typically occurs in February, and when the remaining vesting period is completed, at which time some number of the underlying shares of our common stock are withheld to cover related tax obligations.
Shareholder Proposals for the Next Annual Meeting
If you would like to have a shareholder proposal included in our proxy statement and proxy card for our 20212022 annual meeting, your shareholder proposal must be received by our corporate secretary on or before November 30, 2020.December 6, 2021.
If you intend to present business for consideration at our 20212022 annual meeting, you must give notice to our corporate secretary in accordance with Section 3.05
60 KOPPERS HOLDINGS INC. - 2020 Proxy Statement
GENERAL MATTERS
of our bylaws (which are available on our website atwww.koppers.com under “Corporate Governance”) and such business must otherwise be a proper matter for shareholder action. Under our bylaws, in order to be timely your notice must be received by our corporate secretary (1) if the meeting is to be held on a date that is within 30 days before or 30 days after the anniversary date of the prior annual meeting, not less than 120 days nor more than 150 days prior to such annual meeting, or (2) if the meeting is to be held on a date that is not within 30 days before or 30 days after the anniversary date of the prior annual meeting, not later than the tenth day following the day on which notice of the date of the meeting was mailed or the first public disclosure of the date of such meeting was made, whichever occurs first.
The proposal must set forth the following:
A description of the business desired to be brought before the meeting, the reasons for such business and the text of any proposal;
Any material interest of such shareholder or any person controlled by or controlling such shareholder and beneficial owners (a “Shareholder Associated Person”) in such business;
A representation that the shareholder intends to appear in person or by proxy to bring the business before the meeting;
The total number of shares that will be voted by such shareholder; and
As it relates to such shareholder and any Shareholder Associated Person and, as applicable, the proposal, the following information:
Their name and address;
Class and number of shares beneficially owned and of record and any other positions owned, including derivatives, hedges and any other economic or voting interest in the company;
A representation whether such person intends to be part of the group which intends to deliver a proxy statement or otherwise solicit proxies from shareholders;
Whether hedging or other transactions have been made to mitigate a loss of such person; and
Any other information relating to each party that would be required to be disclosed in a proxy statement.
By Order of the Board of Directors
Stephanie L. Apostolou
General Counsel and Secretary
March 30, 2020April 5, 2021
KOPPERS HOLDINGS INC. | 75 |
APPENDIX A — ProposedPROPOSED FIRST AMENDMENT TO THE KOPPERS HOLDINGS INC. 2020 LONG TERM INCENTIVE PLAN
First Amendment to the
Koppers Holdings Inc. 2020 Long Term Incentive Plan
KOPPERS HOLDINGS INC.
2020 LONG TERM INCENTIVE PLAN
AS ADOPTED EFFECTIVEThis First Amendment (this “Amendment”), dated March 16, 2020
Section 1. Purpose
The purposes of22, 2021, to the Koppers Holdings Inc. 2020 Long Term Incentive Plan (the “Plan”) are to encourage selected individuals in the service of, is made and adopted by Koppers Holdings Inc. (together with(the “Company”), subject to approval of the shareholders of the Company as set forth below.
Statement of Purpose
The Plan originally became effective upon approval of the Plan by the Company’s shareholders on May 6, 2020. Pursuant to Section 7(a) of the Plan, the Board of Directors of the Company (the “Board”) may amend the Plan at any successor thereto,time, contingent on approval by the “Company”)shareholders of the Company, if shareholder approval is required by applicable law or Stock Exchange listing standards. The Board has determined that it is advisable and its Affiliates (as defined below) to acquire a proprietary interest in the Company’s growthbest interest of the Company to amend the Plan as described in this Amendment.
NOW, THEREFORE, the Plan is hereby amended as follows, subject to approval by the shareholders of the Company as set forth below:
1. Capitalized Terms. All capitalized terms used and performance, to generate an increased incentive to contributenot defined herein shall have the meanings given thereto in the Plan.
2. Amendment of Section 4(a) of Plan. Section 4(a) of the Plan is hereby amended and restated in its entirety as follows:
(a) Shares Available. Subject to the share counting provisions and adjustment procedures set forth in subsection (b) and (c) below, the aggregate number of Shares reserved and available for issuance under the Plan shall be 2,500,000 shares of the Company’s future successcommon stock (representing 1,000,000 previously authorized Shares, plus 1,500,000 newly authorized Shares as of the effective date of the First Amendment to the Plan). In addition, shares of the Company’s common stock underlying any outstanding award granted under the Predecessor Plan that, following the Effective Date, expire, or is terminated, surrendered or forfeited for any reason without issuance of such shares shall be available for the grant of new Awards under this Plan. For this purpose, for any performance-vesting share-based awards granted under the Predecessor Plan that become earned after the Effective Date, (i) any shares earned shall be satisfied from the Predecessor Plan share pool to the extent available, (ii) any shares earned in excess of the Predecessor Plan share pool shall be issued from the aggregate number of Shares available for issuance under this Plan, and (iii) any shares that are not earned as a result of performance results shall be treated as forfeitures in accordance with the preceding sentence. Subject to enhanceadjustment pursuant to subsection (c) below, in no event may more than 2,500,000 Shares (representing 1,000,000 previously authorized Shares, plus 1,500,000 newly authorized Shares as of the abilityeffective date of the First Amendment to the Plan) in the aggregate, be granted pursuant to Incentive Stock Options granted under the Plan.
3.Reference to and Effect on the Plan. The Plan, as amended hereby, and all other documents, instruments and agreements executed and/or delivered in connection therewith, shall remain in full force and effect, and are hereby ratified and confirmed.
4. Effective Date. This Amendment is adopted by the Board on March 22, 2021 and shall become effective upon the date on which this Amendment is approved by the Company’s shareholders at the 2021 annual meeting.
KOPPERS HOLDINGS INC. | A-1 |
APPENDIX B — PROPOSED AMENDED AND RESTATED EMPLOYEE STOCK PURCHASE PLAN
KOPPERS HOLDINGS INC.
EMPLOYEE STOCK PURCHASE PLAN
AS AMENDED AND RESTATED EFFECTIVE MARCH 22, 2021
1. Purpose of the Plan. Koppers Holdings Inc. (the “Company”) believes that ownership of shares of its common stock by employees of the Company and its AffiliatesParticipating Subsidiaries (as defined below) is desirable as an incentive to attractbetter performance and retain key service providers. Ifimprovement of profits, and as a means by which employees may share in the rewards of growth and success. The purpose of the Company’s Employee Stock Purchase Plan (the “Plan”) is to provide a convenient means by which employees of the Company and Participating Subsidiaries may purchase the Company’s shares through payroll deductions and a method by which the Company may assist and encourage such employees to become shareholders.
2. Definitions. In addition to words and terms defined elsewhere in this Plan, the following terms have the meaning set forth below unless the context clearly indicates otherwise:
(a) “Board of Directors” or “Board” shall mean the Board of Directors of the Company.
(b) “Corporate Transaction” shall mean a merger, consolidation, acquisition of property or stock, separation, reorganization or other corporate event described in Section 424 of the Code.
(c) “Code” shall mean the Internal Revenue Code of 1986, as amended.
(d) “Common Stock” means shares of the Company’s common stock, par value $0.01 per share.
(e) “Compensation” shall mean amounts received by a Participant from the Company or Participating Subsidiary, to the extent that the amounts are subject to federal income tax withholding on wages under Section 3401(a) of the Code, determined without regard to any limitations based on the nature or location of the employment or the services performed, and adjusted as follows:
(i) Before-tax contributions to a non-qualified deferred compensation arrangement, contributions to a plan qualified under Section 401(k) of the Code, and any amounts set aside by the Participant from otherwise taxable pay under a welfare benefit plan qualified under Section 125 of the Code or for qualified transportation fringe benefits under Section 132 of the Code shall be included.
(ii) Taxable expense reimbursements, any amount paid in lieu of unused paid-time off (before or after termination of employment), moving expenses, welfare benefits, payments from a nonqualified deferred compensation plan, amounts realized from the exercise of a stock option or lapse of restrictions on restricted property, payments made in any form under the Company’s 2020 Long Term Incentive Plan (or similar long term incentive arrangements maintained by the Company or a Participating Subsidiary), and adjustments for overseas employment (other than any transfer premium) shall be excluded.
(iii) The Plan Administrator may make modifications to the definition of Compensation for one or more Offerings as deemed appropriate.
(f) “Eligible Employee” shall mean an employee of the Company or a Participating Subsidiary who is employed by the Company or a Participating Subsidiary as of the Offering Date, but excluding (i) any employee whose customary employment is (i) 20 hours or less per week or (y) not more than five months per calendar year and (ii) any employee who would, after a purchase of shares under the Plan, own or be deemed (under Section 424(d) of the Code) to own stock (including stock subject to any outstanding options held by the employee) possessing 5 percent or more of the total combined voting power or value of all classes of stock of the Company or any parent or Subsidiary of the Company (determined in accordance with Treasury Regulation Section 1.423-2(d)). No employee shall be deemed an “Eligible Employee” if the employee is a citizen or resident of a foreign jurisdiction and (i) the grant of an option under the Plan or Offering to such employee is prohibited under the laws of such foreign jurisdiction, or (ii) compliance with the laws of such foreign jurisdiction would cause the Plan or Offering to violate the requirements of Section 423 of the Code. For purposes of the Plan, the employment relationship shall be treated as continuing intact while an individual is on military leave, sick leave or other leave of absence approved by shareholders, the Plan supersedes and replacesCompany or a Participating Subsidiary that meets the Predecessor Plan (as defined below)requirements of Treasury Regulation Section 1.421-1(h)(2). No further awards shall be made under Where the Predecessor Plan if the Plan is approved by shareholders and becomes effective on the Effective Date. Any Awards made under the Predecessor Plan prior to the Effective Date shall be governed by the termsperiod of the Predecessor Plan in effect prior to the Effective Date, including with respect to any restrictive covenants.
Section 2. Definitions
As used in the Plan:leave exceeds three (3) months, or such
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KOPPERS HOLDINGS INC. - 2020 Proxy Statement A-1
APPENDIX AB — PROPOSED 2020 LONG TERM INCENTIVEAMENDED AND RESTATED EMPLOYEE STOCK PURCHASE PLAN
other period of time specified in Treasury Regulation Section 1.421-1(h)(2), and the individual’s right to reemployment is not guaranteed by statute or contract, the employment relationship shall be deemed to have terminated on the first day immediately following such three-month period, or such other period specified in Treasury Regulation Section 1.421-1(h)(2). The determination of whether an individual is an employee shall be made in a manner consistent with Treasury Regulation Section 1.421-1(h)(2). (g) “Fair Market Value” shall mean the fair market value of a share of Common Stock determined by such methods or procedures as shall be established from time to time by the Plan Administrator. Unless otherwise determined by the Plan Administrator in good faith, the per share Fair Market Value as of a particular date shall mean (i) the closing price per share of Common Stock on the national securities exchange on which the Common Stock is principally traded, for such date or, if such date is not a Trading Day, the last preceding date on which there was a sale of such Common Stock on such exchange, or (ii) if the shares of Common Stock are then traded in an over- the-counter market, the average of the closing bid and asked prices for the shares of Common Stock in such over-the-counter market for such date or, if such date is not a Trading Day, the last preceding date on which there was a sale of such Common Stock in such market, or (iii) if the shares of Common Stock are not then listed on a national securities exchange or traded in an over-the-counter market, such value as the Plan Administrator, in its sole discretion, shall determine. (h) “Participant” shall mean any Eligible Employee who elects to participate in the Plan. (i) “Participating Subsidiary” shall mean any Subsidiary of the Company designated by the Plan Administrator to (i) have Eligible Employees and (ii) participate in the Plan. (j) “Plan Administrator” shall mean the Management Development and Compensation Committee of the Board. (k) “Restatement Effective Date” shall mean March 22, 2021. (l) “Subsidiary” shall mean any corporation, domestic or foreign, of which not less than 50% of the combined voting power is held by the Company or a Subsidiary, whether or not such corporation exists now or is hereafter organized or acquired by the Company or a Subsidiary. In all cases, the determination of whether an entity is a Subsidiary shall be made in accordance with Section 424(f) of the Code. (m) “Trading Day” means any day on which the national stock exchange upon which the Common Stock is listed is open for trading or, if the Common Stock is not listed on an established stock exchange or national market system, a business day, as determined by the Plan Administrator in good faith. 3. Shares Reserved for the Plan. (a) Effective February 14, 2017, there were 200,000 shares of the Company’s authorized but unissued or reacquired Common Stock reserved for purposes of the Plan. Subject to adjustment under Section 20(a), the aggregate number of shares of the Company’s authorized but unissued or reacquired Common Stock reserved for issuance under the Plan shall be equal to (i) 4,998, plus (ii) effective March 22, 2021 (subject to stockholder approval within twelve months after the Restatement Effective Date), 300,000. (b) The number of shares of Common Stock that an Eligible Employee may purchase in an Offering under the Plan may be reduced if the Offering is over-subscribed. No option granted under the Plan shall permit a Participant to purchase shares of Common Stock that, if added together with the total number of shares of Common Stock purchased by all other Eligible Employees in such Offering would exceed the total number of shares of Common Stock remaining available under the Plan. If the Plan Administrator determines that, on a particular Purchase Date, the number of shares of Common Stock with respect to which options are to be exercised exceeds the number of shares of Common Stock then available under the Plan, the Company shall make a pro rata allocation of the shares of Common Stock remaining available for purchase in as uniform a manner as practicable and as the Plan Administrator determines to be equitable. 4. Administration of the Plan. (a) The Plan shall be administered by the Plan Administrator. The Plan Administrator may promulgate rules and regulations for the operation of the Plan, adopt forms for use in connection with the Plan, and decide any question of interpretation of the Plan or rights arising thereunder. The Plan Administrator may delegate administrative matters relating to the Plan to such of the Company’s officers and employees as the Plan Administrator so determines. (b) The Plan Administrator may adopt rules or procedures relating to the operation and administration of the Plan to accommodate the specific requirements of local laws and procedures. Without limiting the generality of the foregoing, the Plan Administrator is specifically authorized to adopt rules and |
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A-2 KOPPERS HOLDINGS INC. - 20202021 Proxy Statement
APPENDIX AB — PROPOSED 2020 LONG TERM INCENTIVEAMENDED AND RESTATED EMPLOYEE STOCK PURCHASE PLAN
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procedures regarding handling of payroll deductions or other contributions by Participants, payment of interest, conversion of local currency, data privacy security, payroll tax, withholding procedures and handling of stock certificates which vary with local requirements.
KOPPERS HOLDINGS INC. - 2020 Proxy Statement A-3
APPENDIX A — PROPOSED 2020 LONG TERM INCENTIVE PLAN
(c) The Plan Administrator may establish separate Offerings (as defined in Section 3. Administration
The Primary Committee shall serve6(a) below) for one or more Participating Subsidiaries and two or more Offerings may run concurrently under the Plan, each with its own terms and conditions. In addition, special Offerings may be established with respect to entities that are acquired by the Company (or any Subsidiary of the Company) or under such other circumstances as the primary administrator of the Plan and in that capacityAdministrator deems appropriate. In no event, however, shall have full power and authority to: (i) designate Participants; (ii) determine the Awards to be granted to Participants; (iii) determine the number of Shares (or securities convertible into Shares) to be covered by Awards; (iv) determine the terms and conditions of any Award; (v)Offering contravene the express limitations and restrictions of the Plan, and the participants in each separate Offering shall have equal rights and privileges under that Offering in accordance with the requirements of Section 423(b)(5) of the Code and the applicable Treasury Regulations thereunder.
(d) Unless otherwise determined by the Board, all determinations and decisions of the Plan Administrator or the Board shall be conclusive.
5. Eligible Employees. The Board hereby authorizes the purchase of shares of Common Stock pursuant to the Plan by employees of the Company and of each corporate Subsidiary of the Company, but has delegated to the Plan Administrator the authority to designate from time to time the Participating Subsidiaries in the Plan. All Eligible Employees of the Company and all Eligible Employees of each Participating Subsidiary may participate in the Plan. The Board and Plan Administrator shall have the sole discretion to determine whether an individual satisfies the definition of Eligible Employee under Section 2(f) and this Section 5 and any such determination shall be final and binding on all parties. Notwithstanding the foregoing, any individual retroactively determined to what extent,be an Eligible Employee by the Company, a court, or a governmental agency will be permitted to participate only prospectively from the date of such determination, unless it is determined that the Company’s decision was made in bad faith.
6. Offerings.
(a) Offering and Purchase Dates. The Plan shall be implemented by a series of three-month offerings (the “Offerings”), with a new Offering commencing on January 1, April 1, July 1, and October 1 of each year. Each Offering commencing on January 1 of any year shall end on March 31 of that year, each Offering commencing on April 1 of any year shall end on June 30 of that year, each Offering commencing on July 1 shall end on September 30 of that year, and each Offering commencing on October 1 of any year shall end on December 31 of that year. The first day of each Offering is the “Offering Date” for that Offering and the last day of each Offering is the “Purchase Date” for that Offering. If the otherwise applicable Offering Date for an Offering is not a Trading Date, then the Offering Date for such Offering shall be the first Trading Date after such otherwise applicable Offering Date.
(b) Grants; Limitations. On each Offering Date, each Eligible Employee shall be granted an option under what circumstances Awardsthe Plan to purchase shares of Common Stock on the Purchase Date for the Offering for the price determined under Section 8 of the Plan through payroll deductions or other contributions authorized under Section 7 of the Plan; provided, however, that (i) no option shall permit the purchase of more than 500 shares, and (ii) no option may be settledgranted under the Plan that would allow an employee’s right to purchase shares under all stock purchase plans of the Company and its parents and Subsidiaries to which Section 423 of the Code applies to accrue at a rate that exceeds $25,000 of Fair Market Value of shares of Common Stock (determined as of the first day of the Offering) in any calendar year in which the option is outstanding at any time (determined in accordance with Treasury Regulation Section 1.423-2(i)).
7. Participation in the Plan.
(a) Initiating Participation. An Eligible Employee may participate in an Offering under the Plan by submitting to the Company or exercisedits agent a subscription and payroll deduction authorization in cash, Sharesthe form specified by the Company or accessing the website designated by the Company and electronically subscribing to and authorizing payroll deductions no later than the “Subscription Deadline,” which shall be a number of days prior to the beginning of the Offering, with the exact number of days being established from time to time by the Plan Administrator by written notice to Eligible Employees. Once submitted, a subscription and payroll deduction authorization shall remain in effect unless amended or terminated consistent with the terms of this Plan, and upon the expiration of an Offering, the Participants in that Offering will be automatically enrolled in the new Offering starting the following day. The payroll deduction authorization will authorize the employing corporation to make payroll deductions in an amount designated by the Participant from each of the Participant’s paychecks during the Offering. The designated amount to be deducted from each paycheck must be a whole percentage of not less than one percent of the Participant’s Compensation for the period covered by the paycheck; provided,
KOPPERS HOLDINGS INC. | B-3 |
APPENDIX B — PROPOSED AMENDED AND RESTATED EMPLOYEE STOCK PURCHASE PLAN
however, that the amount actually deducted from any paycheck shall not exceed the amount remaining after deduction of all other securitiesrequired or property,elective withholdings and deductions from that paycheck. The Plan Administrator may permit Participants in one or canceled, substituted, forfeitedmore Offerings to contribute to the Plan by means other than payroll deductions. An individual who is not an Eligible Employee on the Offering Date for an Offering is not eligible to participate in the Offering.
(b) Amending Participation. After a Participant has begun participating in the Plan by initiating payroll deductions, subject to applicable law, the Participant may not amend the payroll deduction during the pendency of the Offering, either to increase or suspended, anddecrease the methoddeduction. Notwithstanding the foregoing, the Participant may amend the payroll deduction authorization effective for the first paycheck of a subsequent Offering, to either increase or methodsdecrease the amount of payroll deductions, by which Awardssubmitting to the Company the form specified by the Company no later than the Subscription Deadline for the new Offering. In addition, if the amount of payroll deductions from any Participant during an Offering exceeds the maximum amount that can be applied to purchase shares in that Offering under the limitations set forth in Section 6(b) above, then (x) all such excess amounts shall be refunded to the Participant as soon as administratively practicable at the end of the Offering, without interest (unless as otherwise may be settled, exercised, canceled, substituted, forfeitedrequired by applicable law), and (y) payroll deductions from the Participant shall restart as of the commencement of the next Offering at the rate set forth in the Participant’s then effective payroll deduction authorization. Any Participant who discontinues payroll deductions during an Offering may again become a Participant for a subsequent Offering upon completion of the enrollment procedures described in Section 7(a) above. Subject to applicable law, absent an extreme hardship, as determined by the Plan Administrator in its sole discretion (and subject to the terms of such extreme hardship withdrawal as may be imposed by the Plan Administrator), a Participant may not cancel his or suspended; (vi) determine whether,her participation entirely during an Offering.
(c) Holding Period. As a condition to what extent, andparticipation in the Plan, subject to applicable law, each Participant agrees not to sell or otherwise dispose of such shares for a period of at least one (1) year following the Purchase Date (the “Holding Period”), unless (i) the sale or disposition is pursuant to termination of employment under what circumstances cash, Shares, other securities, other Awards, other property and other amounts payableSection 7(d) below or (ii) with respect to Participating Subsidiaries outside the United States, such sale or disposition is required to cover tax liabilities incurred as a result of participation in the Plan.
(d) Terminating Participation. After a Participant has begun participating in the Plan by initiating payroll deductions, the Participant may terminate participation in the Plan by notice to the Company in the form specified by the Company. To be effective to terminate participation in an AwardOffering, a notice of termination must be submitted no later than the number of days prior to the Purchase Date for that Offering, with the exact number of days being established from time to time by the Plan Administrator by written notice to Participants. A Participant may not reinstate participation in the Plan with respect to a particular Offering after once terminating participation in the Plan with respect to that Offering. Participation in the Plan shall also terminate when a Participant ceases to be an Eligible Employee for any reason, including death or retirement. Upon termination of a Participant’s participation in the Plan, all amounts deducted from the Participant’s Compensation and not previously used to purchase shares under the Plan shall be deferred either automaticallyreturned to the Participant, without interest (unless as otherwise may be required by applicable law).
8. Option Price. The price at which shares shall be purchased in an Offering shall be the lower of (a) 85% of the Fair Market Value of a share of Common Stock on the Offering Date of the Offering or (b) 85% of the Fair Market Value of a share of Common Stock on the Purchase Date of the Offering.
9. Purchase of Shares. All amounts withheld from the Compensation of a Participant shall be credited to his or her account under the Plan. No interest will be paid on such accounts, unless otherwise determined by the Plan Administrator. On each Purchase Date, the amount of the account of each Participant will be applied to the purchase of shares by such Participant from the Company at the price determined under Section 8 above. Pursuant to the terms of Section 22 below, no fractional shares shall be purchased or credited to a Participant’s account under the Plan. Any cash balance remaining in a Participant’s account after a Purchase Date for any reason, including (i) as a result of the limitations set forth in Section 6(b) above, (ii) in lieu of the purchase of fractional shares, or (iii) as a result of an over-subscription under Section 3(b) above, shall be credited to the subsequent Offering or repaid to the Participant, in the discretion of the Plan Administrator.
10. Delivery and Custody of Shares. Shares purchased by Participants pursuant to the Plan will be delivered to and held in the custody of such investment or financial firm (the “Custodian”) as shall be appointed by the Plan Administrator. The Custodian may hold in nominee or street name certificates for shares purchased pursuant to the Plan, and may commingle shares in its custody pursuant to the Plan in a single account without identification as to individual Participants. By appropriate instructions to the Custodian, a Participant may, from time to time, sell all or part of the shares held by the Custodian for the Participant’s account at the market price at the time the order is executed. By appropriate instructions to the Custodian, a Participant
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APPENDIX B — PROPOSED AMENDED AND RESTATED EMPLOYEE STOCK PURCHASE PLAN
may (a) transfer into the Participant’s own name of all or part of the whole shares held by the Custodian for the Participant’s account and delivery of such whole shares to the Participant, or (b) transfer of all or part of the whole shares held for the Participant’s account by the Custodian to a regular individual brokerage account in the Participant’s own name, either with the firm then acting as Custodian or with another firm; provided, however, that no shares may be transferred under (a) or (b) until two years after the Offering Date of the Offering in which the shares were purchased (the “Two Year Period”).
Except as otherwise set forth in Section 7(c), the foregoing procedures shall not in any way limit when the Participant may sell his or her shares. Those procedures are designed solely to assure that any sale of shares prior to the satisfaction of the Two Year Period is made through the Participant’s account. In addition, the Participant may request a stock certificate or share transfer from his or her account prior to the satisfaction of the Two Year Period, should the Participant wish to make a gift of any shares held in that account, provided that such request or transfer complies with Section 7(c) hereof. However, shares may not be transferred (either electronically or in certificate form) from the Participant’s account for use as collateral for a loan, unless those shares have been held for the Two Year Period.
The foregoing procedures shall apply to all shares purchased by each Participant, whether or not that Participant continues in Eligible Employee status.
A Participant will become a shareholder with respect to the shares of Common Stock that are purchased pursuant to options granted under the Plan when the shares are issued and delivered to the Custodian. A Participant will have no voting, dividend or other rights as a shareholder with respect to shares of Common Stock for which an election to participate in an Offering has been made until such Participant becomes a shareholder as provided above.
11. Records and Statements. The Custodian will maintain the records of the Plan. As soon as practicable after each Purchase Date, each Participant will receive a statement showing the activity of his or her account since the preceding Purchase Date and the balance on the Purchase Date as to both cash and shares. Participants will be furnished such other reports and statements, and at such intervals, as the Plan Administrator shall determine from time to time.
12. Expense of the Plan. The Company will pay all expenses incident to operation of the Plan, including costs of record keeping, accounting fees, legal fees, commissions and issue or transfer taxes on purchases pursuant to the Plan, on dividend reinvestments and on delivery of shares to a Participant or into his or her brokerage account. Unless otherwise provided by the Board or the Plan Administrator in its discretion, the Company will not pay expenses, commissions or taxes incurred in connection with sales of shares by the Custodian at the request of a Participant. Expenses to be paid by a Participant will be deducted from the proceeds of sale prior to remittance.
13. Rights Not Transferable. The right to purchase shares under this Plan is not transferable by a Participant, and such right is exercisable during the Participant’s lifetime only by the Participant. Upon the death of a Participant, any cash withheld and not previously applied to purchase shares, together with any shares held by the Custodian for the Participant’s account shall be transferred to the persons entitled thereto under the laws of the state of domicile of the Participant orupon a proper showing of authority.
14. Dividends and Other Distributions; Reinvestment. Stock dividends and other distributions in shares of Common Stock of the Committee; (vii) interpretCompany on shares held by the Custodian shall be issued to the Custodian and administer the Plan and any instrument or agreement relating to, or Award made under, the Plan; (viii) establish, amend, suspend or waive such rules and guidelines and appoint such agents asheld by it shall deem appropriate for the administrationaccount of the Plan; (ix) establish and interpretrespective Participants entitled thereto. Cash distributions other than dividends, if any, on shares held by the various Performance Measures (or, as applicable, other performance criteria) that are to applyCustodian will be paid currently to the Performance Bonuses and Long Term Performance Awards made underParticipants entitled thereto. Cash dividends, if any, on shares held by the Plan, evaluateCustodian will be reinvested in Common Stock on behalf of the levelParticipants entitled thereto. The Custodian shall establish a separate account for each Participant for the purpose of performance overholding any shares acquired through reinvestment of Participants’ dividends. On each dividend payment date, the applicable Performance Cycle, certifyCustodian shall receive from the level at which Performance Measures (or other performance criteria, as applicable) for that Performance Cycle has been attained and determineCompany the aggregate amount of dividends payable with respect to those Awardsall shares held by the Custodian for Participants’ accounts under the Plan. As soon as practicable thereafter, the Custodian shall use such portion of the funds designated for reinvestment to purchase shares of Common Stock in the public market, and shall then allocate such shares among the dividend reinvestment accounts of the Participants pro rata based on the certified levelamount of Performance Measure attainment; (x) waivedividends reinvested for such Participants. For those Participants receiving cash dividends, the forfeitureCustodian shall allocate the remainder of such funds among the accounts of such Participants pro rata based upon the amount of dividends received. A Participant may sell or transfer shares in the Participant’s dividend reinvestment account in accordance with Section 10 above, except that there shall be no holding period required for a transfer from a dividend reinvestment account.
15. Voting and Shareholder Communications. In connection with voting on any matter submitted to the shareholders of the Company, the Company will furnish to the Participant a proxy authorizing the Participant to vote the shares held by the Custodian for his or her accounts. Copies of all general communications to shareholders of the Company will be sent to Participants in the Plan.
KOPPERS HOLDINGS INC. | B-5 |
APPENDIX B — PROPOSED AMENDED AND RESTATED EMPLOYEE STOCK PURCHASE PLAN
16. Tax Withholding. Each Participant who has purchased shares under the Plan shall immediately upon notification of the amount due, if any, pay to the Company in cash amounts necessary to satisfy any applicable federal, state and local income taxes, employment taxes, social insurance, payroll tax, national insurance contributions, other contributions, payment on account obligations or other amounts determined by the Company to be required to be withheld, collected or accounted for to any tax authority. If the Company determines that additional withholding, collection or accounting is required beyond any amount deposited at the time of purchase, the Participant shall pay such amount to the Company on demand. If the Participant fails to pay the amount demanded, the Company may withhold that amount from other amounts payable by the Company to the Participant, including salary, subject to applicable law.
17. Responsibility and Indemnity. Neither the Company, the Board, the Plan Administrator, the Custodian, any Participating Subsidiary, nor any member, officer, agent, or employee of any of them, shall be liable to any Participant under the Plan for any mistake of judgment or for any omission or wrongful act unless resulting from gross negligence, willful misconduct or intentional misfeasance. The Company will indemnify and save harmless the Board, the Plan Administrator, the Custodian and any other conditions set forth insuch member, officer, agent or employee against any Award Agreement under appropriate circumstances (including the death, disabilityclaim, loss, liability or retirement of the Participant or a material change in circumstancesexpense arising after the date of an Award) and subject to such terms and conditions as the Committee shall deem appropriate; and (xi) make any other determination and take any other action that it deems necessary or desirable for such administration.
The Board may also establish a Secondary Committee and delegate to such committee separate but concurrent authority with the Primary Committee to exercise all of the foregoing power and authority with respect to Awards to persons other than Section 16 Insiders. In addition, administrationout of the Plan, except such as may atresult from the Board’sgross negligence, willful misconduct or Primary Committee’s discretion, be vested in a Special Award Committee with authority to administer the Plan with respect to employees other than Section 16 Insiders and membersintentional misfeasance of such Special Award Committeeentity or person.
18. Conditions and to make Awards to such individualsApprovals. The obligations of the Company under the Plan shall be subject to compliance with all applicable state and federal laws and regulations, compliance with the rules of any stock exchange on which the Company’s securities may be listed, and approval of such limitationsfederal and other terms and conditionsstate authorities or agencies as may have jurisdiction over the Plan or the Company.
19. Amendment of the Plan. Unless otherwise determined by the Board, shall specifythe Board or the Plan Administrator may from time to time. All designations, determinations, interpretationstime amend the Plan in any and other decisions with respectall respects; provided, however, that only the Board may change (a) the number of shares reserved for purposes of the Plan, (b) the purchase price of shares offered pursuant to the Plan, (c) the terms of Section 6 above, or (d) the maximum percentage of a Participant’s Compensation that may be deducted from a Participant’s paycheck during an Offering pursuant to in Section 7(a) above. In no event may the Board, without the approval of the Company’s shareholders, effect any increase the number of shares of Common Stock issuable under the Plan, except for permissible adjustments authorized in Section 3 above or any Awardother amendment that requires approval of the Company’s shareholders under Section 423 of the Code and the regulations thereunder, applicable stock exchange listing rules or other applicable law.
20. Adjustments and Corporate Transactions.
(a) In the event that any dividend or other distribution (whether in the form of cash, Common Stock, or other property), 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 Plan, the Plan Administrator will, in such manner as it deems equitable, adjust the number of shares and class of Common Stock that may be delivered under the Plan, the option price per share and the number of shares of Common Stock covered by each outstanding option under the Plan, and the numerical limits of Section 3 and Section 6(b). The determination of whether an adjustment shall be made and the manner of any such adjustment shall be made by the Primary CommitteePlan Administrator, which determination shall be conclusive.
(b) In the event of a Corporate Transaction, each outstanding option will be assumed or an equivalent option substituted by the successor corporation or a parent or Subsidiary of such successor corporation. If the successor corporation refuses to assume or substitute the option, the Offering with respect to Awards underwhich the option relates will be shortened by setting a new Purchase Date on which the Offering will end. The new Purchase Date will occur before the date of the Corporate Transaction. Prior to the new Purchase Date, the Plan Administrator will provide each Participant with written notice, which may be electronic, of the new Purchase Date and that the Participant’s option will be exercised automatically on such date, unless before such time, the Participant has withdrawn from the Offering in accordance with Section 7(b).
21. Termination of the Plan. The Board may, in its jurisdiction,sole discretion, terminate the Secondary Committee or Special Award Committee,Plan at any time without any obligation on account of such termination, except as otherwise provided in this Section 21. Upon termination of the Plan, the cash and shares, if any, held in the account of each Participant shall be final, conclusivedistributed to the Participant. The foregoing notwithstanding, if, prior to the termination of the Plan, the Board shall have adopted a substantially similar plan, the Board may in its discretion determine that the account of each Participant under this Plan shall be carried forward and binding upon all Persons, includingcontinued as the Company, any Affiliate, any Participants, any holder or beneficiaryaccount of such Participant under such other plan, subject to the right of any Award, any shareholder and any employeeParticipant to request distribution of the Companycash and shares, if any, held for his or of any Affiliate. The powers of the Primary Committee, Special Award Committee and the Secondary Committee include the adoption of modifications, amendments, procedures, subplans and the like as are necessary to comply with provisions of the laws of other countries in which the Company or an Affiliate may operate in order to assure the viability of Awards granted under the Plan and to enable Participants employed in such other countries to receive benefits under the Plan and such laws.
Section 4. Shares Available for Awardsher account.
B-6 |
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A-4 KOPPERS HOLDINGS INC. - 20202021 Proxy Statement
APPENDIX AB — PROPOSED 2020 LONG TERM INCENTIVEAMENDED AND RESTATED EMPLOYEE STOCK PURCHASE PLAN
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22. Section 5. EligibilityNo Fractional Shares. No fractional shares of Common Stock shall be purchased, issued or delivered pursuant to this Plan, and the Plan Administrator shall determine whether cash, other securities, or other property shall be paid or transferred in lieu of any such fractional shares, or whether such fractional shares or any rights thereto shall be canceled, terminated, or otherwise eliminated.
Any Employee, including any officer or employee member of the Board, any23. Governing Lawnon-employee member of the Board or the board of directors of an Affiliate,. The Plan and any consultant in the service of the Company or an Affiliateall rights and obligations thereunder shall be eligible to be designated a Participant. However, any Employee who is a member of a collective bargaining unit shall not be eligible to be designated a Participant unless the collective bargaining agreement covering that Employee allows for his or her participation in the Plan.
Section 6. Awards
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KOPPERS HOLDINGS INC. - 2020 Proxy Statement A-5
APPENDIX A — PROPOSED 2020 LONG TERM INCENTIVE PLAN
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A-6 KOPPERS HOLDINGS INC. - 2020 Proxy Statement
APPENDIX A — PROPOSED 2020 LONG TERM INCENTIVE PLAN
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KOPPERS HOLDINGS INC. - 2020 Proxy Statement A-7
APPENDIX A — PROPOSED 2020 LONG TERM INCENTIVE PLAN
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A-8 KOPPERS HOLDINGS INC. - 2020 Proxy Statement
APPENDIX A — PROPOSED 2020 LONG TERM INCENTIVE PLAN
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KOPPERS HOLDINGS INC. - 2020 Proxy Statement A-9
APPENDIX A — PROPOSED 2020 LONG TERM INCENTIVE PLAN
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A-10 KOPPERS HOLDINGS INC. - 2020 Proxy Statement
APPENDIX A — PROPOSED 2020 LONG TERM INCENTIVE PLAN
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KOPPERS HOLDINGS INC. - 2020 Proxy Statement A-11
APPENDIX A — PROPOSED 2020 LONG TERM INCENTIVE PLAN
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Section 7. Amendmentconstructed and Termination
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A-12 KOPPERS HOLDINGS INC. - 2020 Proxy Statement
APPENDIX A — PROPOSED 2020 LONG TERM INCENTIVE PLAN
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Section 8. Change in Control
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KOPPERS HOLDINGS INC. - 2020 Proxy Statement A-13
APPENDIX A — PROPOSED 2020 LONG TERM INCENTIVE PLAN
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Any such action taken shall be performedenforced in accordance with the laws of the Commonwealth of Pennsylvania and any applicable provisions of the Code so as not to affectand the tax statusrelated regulations.
24. Section 423 of (A) any Awardthe Code. The Plan is intended to qualify asbe an Incentive Stock Option underemployee stock purchase plan within the meaning of Section 422423 of the Code unless the Committee determines otherwise, or (B) any Award intendedand to comply with or qualify for an exception to, Section 409A of the Code. Any such action taken by the Committee will be final, conclusiverequirements thereof and binding for all purposes of this Plan.
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Notwithstanding anything to the contrary, any definition of Change in Control in an Award Agreement may not provide that a Change in Control will occur before the consummation or effectiveness of a change in control (e.g., upon the announcement, commencement, shareholder approval or other potential occurrence of any event or transaction that, if completed, would result in a change in control).
Section 9. Section 409A
Notwithstanding any provision of the Plan or an Award Agreement to the contrary, if any Award provided under this Plan is subject to the provisions of Section 409A of the Code, the provisions of the Plan and any applicable Award Agreement shall be administered, interpreted and construed in a manner necessary in order to complyconsistent with Section 409A of the Code or an exception thereto (or disregarded to the extent such provision cannot be so administered, interpreted or construed), and the following provisions shall apply, as applicable and as required by Section 409A:
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A-14 KOPPERS HOLDINGS INC. - 2020 Proxy Statement
APPENDIX A — PROPOSED 2020 LONG TERM INCENTIVE PLAN
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25. Section 10. Effective Date of the Plan
. The Plan becomeswas originally effective upon approval byFebruary 14, 2017 and is hereby amended and restated effective as the Company’s shareholders at the 2020 Annual Meeting (the “Effective Date”).
Section 11. Term of the Plan
The Plan shall terminate at the earliest of (a) such time as no Shares remain available for issuance under the Plan, (b) termination of this Plan by the Board, or (c) the tenth anniversary of theRestatement Effective Date. Awards outstanding upon expiration of the Plan shall remain in effect until they have been exercised or terminated, or have expired.Date
KOPPERS HOLDINGS INC. | B-7 |
ANNEX AAPPENDIX C — Unaudited Reconciliations ofUNAUDITED RECONCILIATIONS OF Non-GAAPNON-GAAP Financial MeasuresFINANCIAL MEASURES
This proxy statement contains the followingnon-GAAP financial measures: adjusted earnings (loss) before interest, income taxes, depreciation and amortization (“EBITDA”), adjusted EBITDA margin and adjusted earnings per share (“EPS”).
We believe that adjusted EBITDA, adjusted EBITDA margin and adjusted EPS provide information useful to investors in understanding the underlying operational performance of our company, its business and performance trends, and facilitates comparisons between periods and with other corporations in similar industries. The exclusion of certain items permits evaluation and a comparison of results for ongoing business operations, and it is on this basis that our management internally assesses the company’s performance. In addition, the board of directors and executive management team use adjusted EBITDA as performance measures under the company’s annual incentive plan.
Although we believe that thesenon-GAAP financial measures enhance investors’ understanding of our business and performance, thesenon-GAAP financial measures should not be considered an alternative to GAAP basis financial measures and should be read in conjunction with the relevant GAAP financial measure. Other companies in a similar industry may define or calculate these measures differently than our company, limiting their usefulness as comparative measures. Because of these limitations, thesenon-GAAP financial measures should not be considered in isolation or as substitutes for performance measures calculated in accordance with GAAP.
UNAUDITED RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA AND ADJUSTED EBITDA MARGIN
(In millions, except Adjusted EBITDA Margin)
Year ended December 31, | ||||||||||||||||
Year ended December 31, | ||||||||||||||||
2019 | 2018 | 2020 | 2019(1) | |||||||||||||
Net income | $ | 67.4 | $ | 29.2 |
| $ 121.0 |
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| $ 67.4 |
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Interest expense | 62.6 | 56.3 |
| 48.9 |
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| 61.7 |
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Depreciation and amortization | 58.5 | 54.8 |
| 56.1 |
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| 54.8 |
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Income taxes | 1.4 | 26.0 |
| 21.0 |
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| — |
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Income (loss) from discontinued operations | 0.0 | (0.4 | ) | |||||||||||||
Discontinued operations |
| (31.9 | ) |
| (3.7 | ) | ||||||||||
EBITDA with noncontrolling interests | 189.9 | 165.9 |
| 215.1 |
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| 180.2 |
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Unusual items impacting net income | ||||||||||||||||
Adjustments to arrive at adjusted EBITDA: | ||||||||||||||||
Impairment, restructuring and plant closure costs | 20.4 | 23.5 |
| 15.7 |
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Non-cash LIFO expense | 4.5 | 12.6 | ||||||||||||||
Mark-to-market commodity hedging loss (gain) | (4.0 | ) | 6.9 | |||||||||||||
UIP inventory purchase accounting adjustment | 0.0 | 6.0 | ||||||||||||||
Acquisition closing costs | 0.0 | 3.1 | ||||||||||||||
Contract buyout | 0.0 | 1.6 | ||||||||||||||
Sale of land | 0.0 | 1.1 | ||||||||||||||
Sale of specialty chemicals business | 0.0 | 0.9 | ||||||||||||||
Non-cash LIFO (benefit) expense |
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| 4.5 |
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Mark-to-market commodity hedging gain |
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Pension settlement |
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Discretionary incentive related to the sale of KJCC |
| 3.0 |
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Total adjustments | 20.9 | 55.7 |
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Adjusted EBITDA with noncontrolling interests | 210.8 | $ | 221.6 |
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Less: Adjustment for performance measurement | (1.5 | ) | — | |||||||||||||
Plus (less): Adjustment for performance measurement |
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Plus: EBITDA of discontinued operations |
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Adjusted EBITDA for performance measurement | $ | 209.3 | $ | 221.6 |
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Net sales | $ | 1,772.8 | $ | 1,710.2 |
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Adjusted EBITDA margin | 11.9 | % | 13.0 | % |
| 12.6 | % |
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| C-1 |
ANNEX AAPPENDIX C — UNAUDITED RECONCILIATIONS OFNON-GAAP FINANCIAL MEASURES
UNAUDITED RECONCILIATION OF NET INCOME ATTRIBUTABLE TO KOPPERS AND ADJUSTED NET INCOME
(In millions)
Year ended December 31, | ||||||||
2019 | 2018 | |||||||
Net income attributable to Koppers | $ | 66.6 | $ | 23.4 | ||||
Unusual items impactingpre-tax income | ||||||||
Impairment, restructuring and plant closure costs | 25.3 | 27.1 | ||||||
Non-cash LIFO expense | 4.5 | 12.6 | ||||||
Mark-to-market commodity hedging loss (gain) | (4.0 | ) | 6.9 | |||||
UIP inventory purchase accounting adjustment | 0.0 | 6.0 | ||||||
Acquisition closing costs | 0.0 | 3.1 | ||||||
Contract buyout | 0.0 | 1.6 | ||||||
Sale of land | 0.0 | 1.1 | ||||||
Sale of specialty chemicals business | 0.0 | 1.0 | ||||||
Total adjustments | 25.8 | 59.4 | ||||||
Adjustments to income tax and noncontrolling interests | ||||||||
Income tax on adjustments topre-tax income | (22.7 | ) | (13.0 | ) | ||||
Income tax - U.S. Tax Reform | 0.0 | 5.3 | ||||||
Effect on adjusted net income | 3.1 | 51.7 | ||||||
Adjusted net income including discontinued operations | 69.7 | 75.1 | ||||||
Income (loss) from discontinued operations | 0.1 | (0.4 | ) | |||||
Adjusted net income | $ | 69.8 | $ | 74.7 |
Year ended December 31, | ||||||||
2020 | 2019(1) | |||||||
Net income attributable to Koppers |
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Impairment, restructuring and plant closure costs |
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Pension settlement |
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Discretionary incentive related to the sale of KJCC |
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Total adjustments |
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| 25.8 |
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Adjustments to income tax and noncontrolling interests | ||||||||
Income tax on adjustments to pre-tax income |
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Noncontrolling interest |
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Effect on adjusted net income |
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Adjusted net income including discontinued operations |
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Discontinued operations |
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Adjusted net income attributable to Koppers |
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UNAUDITED RECONCILIATION OF DILUTED EARNINGS PER SHARE AND ADJUSTED EARNINGS PER SHARE
(In millions except share and per share amounts)
Year ended December 31, | ||||||||||||||||
Year ended December 31, | ||||||||||||||||
2019 | 2018 | 2020 | 2019(1) | |||||||||||||
Net income attributable to Koppers | $ | 66.6 | $ | 23.4 |
| $ 122.0 |
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Adjusted net income (from above) | $ | 69.8 | $ | 74.7 |
| $ 88.0 |
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Denominator for diluted earnings per share (in thousands) | 21,068 | 21,326 |
| 21,374 |
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Earnings per share: | ||||||||||||||||
Diluted earnings per share | $ | 3.16 | $ | 1.10 |
| $ 5.71 |
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Adjusted earnings per share | $ | 3.31 | $ | 3.50 |
| $ 4.12 |
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(1) | In September 2020, we sold Koppers (Jiangsu) Carbon Chemical Company Limited (KJCC). As a result, KJCC’s results of operations were reclassified as a discontinued operation during 2020. Amounts previously reported for 2019 have been restated accordingly. |
KOPPERS HOLDINGS INC. - 2020
C-2 | 2021 Proxy Statement |
Your vote matters – here’s how to vote!
You may vote online or by phone instead of mailing this card.
Online
Go to www.investorvote.com/KOP or scan the QR code – login details are located in the shaded bar below.
Phone
Call toll free 1-800-652-VOTE (8683) within the USA, US territories and Canada
Using ablack ink pen, mark your votes with an X as shown in this example. Please do not write outside the designated areas.
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Annual Meeting Proxy Card
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q IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.q
A | Proposals – THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” ALL LISTED NOMINEES AND “FOR” PROPOSALS 2, 3, 4 AND |
1. | PROPOSAL FOR ELECTION OF DIRECTORS Nominees: | + | ||||||||||||||||||||||||
For | Against | Abstain | For | Against | Abstain | For | Against | Abstain | ||||||||||||||||||
01 - Leroy M. Ball | ☐ | ☐ | ☐ | 02 - Xudong Feng | �� | ☐ | ☐ | ☐ | 03 - Traci L. Jensen | ☐ | ☐ | ☐ | ||||||||||||||
04 - David L. Motley | ☐ | ☐ | ☐ | 05 - Albert J. Neupaver | ☐ | ☐ | ☐ | 06 - Louis L. Testoni | ☐ | ☐ | ☐ | |||||||||||||||
07 - Stephen R. Tritch | ☐ | ☐ | ☐ | 08 - Sonja M. Wilkerson | ☐ | ☐ | ☐ |
For | Against | Abstain | For | Against | Abstain | For | Against | Abstain | For | Against | Abstain | |||||||||||||||||||||||||||||
2. | PROPOSAL TO APPROVE 2020 LONG TERM INCENTIVE PLAN | ☐ | ☐ | ☐ | 3. | ADVISORY RESOLUTION TO APPROVE EXECUTION COMPENSATION | ☐ | ☐ | ☐ | PROPOSAL TO APPROVE AN AMENDMENT TO OUR 2020 LONG TERM INCENTIVE PLAN | ☐ | ☐ | ☐ | 3. | PROPOSAL TO APPROVE OUR AMENDED AND RESTATED EMPLOYEE STOCK PURCHASE PLAN | ☐ | ☐ | ☐ | ||||||||||||||||||||||
4. | PROPOSAL TO RATIFY THE APPOINTMENT OF KPMG LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR FISCAL YEAR 2020 | ☐ | ☐ | ☐ | PROPOSAL TO APPROVE AN ADVISORY RESOLUTION ON OUR EXECUTIVE COMPENSATION | ☐ | ☐ | ☐ | 5. | PROPOSAL TO RATIFY THE APPOINTMENT OF KPMG LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR FISCAL YEAR 2021 | ☐ | ☐ | ☐ |
B | Authorized Signatures – This section must be completed for your vote to be counted. – Date and Sign Below |
Note: Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person. |
Date (mm/dd/yyyy) – Please print date below. | Signature 1 – Please keep signature within the box. | Signature 2 – Please keep signature within the box. | ||||||
/ / |
| + |
036XBG03EIUE
The 2021 Annual Meeting of Shareholders of Koppers Holdings Inc. will be held on
Thursday, May 6, 2021 at 10:00 a.m. Eastern Daylight Time, virtually via the Internet at www.meetingcenter.io/243893297
To access the virtual meeting, you must have the information that is printed in the shaded bar
located on the reverse side of this form.
The password for this meeting is — KOP2021.
Important notice regarding the availability of proxy materials for the Annual Meeting of Shareholders to be held on May 6, 2020.
2021.
The Proxy Statement and the 20192020 Annual Report to Shareholders are available at: www.proxydocs.com/KOP
q IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.q
Proxy – Koppers Holdings Inc. | + |
ANNUAL MEETING OF SHAREHOLDERS – MAY 6, 20202021
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder hereby appoints Michael J. Zugay and Stephanie L. Apostolou or either of them, as proxies, each with the power to act without the other and power of substitution, and herbyhereby authorizes them to represent and to vote, as designated on the reverse, and in their discretion on any other business which may properly come before the Annual Meeting of Shareholders (the “Annual Meeting”), all the shares of stock of Koppers Holdings Inc. held of record by the undersigned on March 16, 2020,22, 2021, at the Annual Meeting to be held on May 6, 2020,2021, or any adjournments thereof.If this proxy card is executed and no direction is given, such shares will be voted for all listed nominees and in accordance with the recommendation of the Board of Directors on the other matters referred to on the reverse side and in the discretion of Michael J. Zugay and Stephanie L. Apostolou on such other business as may properly come before the meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” ALL LISTED NOMINEES AND “FOR” PROPOSALS 2, 3, 4 AND 4.5.
YOU MAY RECEIVE MORE THAN ONE PROXY CARD FOR SHARES OF COMMON STOCK THAT YOU OWN DEPENDING ON HOW YOU OWN YOUR SHARES. PLEASE COMPLETE, SIGN AND RETURN EACH PROXY CARD THAT YOU RECEIVE AS EACH CARD REPRESENTS SEPARATE SHARES OF COMMON STOCK HELD BY YOU.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
(Continued and to be signed on the reverse side)
C | Non-Voting Items |
Change of Address– Please print new address below. | Comments– Please print your comments below. | Meeting Attendance | ||||||
Mark box to the right if you plan to attend the Annual Meeting. | ☐ |
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