| (6) | Pursuant to Amendment No. 2 to Schedule 13G filed on February 25, 2022,
dispositive power over 3,165,378 shares, and shared voting power and shared dispositive power over 0 shares. Beneficial ownership reported by BlackRock, Inc. includes shares acquired by its subsidiaries: BlackRock Advisors, LLC; Aperio Group, LLC; BlackRock Asset Management Canada Limited; BlackRock (Netherlands) B.V.; BlackRock Fund Advisors; BlackRock Institutional Trust Company, National Association; BlackRock Financial Management, Inc.; and BlackRock Investment Management, LLC.; which beneficially owns 5% or greater of the shares of common stock of the Company. The address of BlackRock, Inc. is 50 Hudson Yards, New York, NY 10001. (4)Pursuant to Schedule 13G filed on February 13, 2024, consists of shares beneficially owned, as of December 31, 2023, by The Vanguard Group, Inc., an investment advisor which has sole voting power and sole dispositive power over 0 shares and 2,239,561 shares, respectively, and shared voting power and shared dispositive power over 20,575 and 38,109 shares, respectively. The Vanguard Group, Inc.’s clients, including investment companies registered under the Investment Company Act of 1940 and other managed accounts, have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the securities reported herein. No one person’s interest in the securities reported by The Vanguard Group, Inc. is more than 5% of the shares of common stock of the Company. The address of The Vanguard Group, Inc. is 100 Vanguard Boulevard, Malvern, PA 19355. (5)Represents shares beneficially owned by each owner as noted below: | | | | | | | | | | | | | Name of Beneficial Owner | Directly Owned (a) | Indirectly Owned | Options to Acquire Stock (b) | Kevin M. Fogarty(c) | 96,021 | 150,000 | — | | J. Robert Hall | 145,469 | — | — | | Kathleen A. Dahlberg | 128,719 | — | — | David C. Elder(d) | 108,374 | 2,921 | — | Bruce Brown(e) | 85,865 | 3,750 | — | | Darrel Hackett | 74,598 | — | — | | Thomas M. Fahnemann | 70,026 | — | — | | Marie T. Gallagher | 55,528 | — | — | Ramesh Shettigar(f) | 46,701 | 96 | — | Eileen L. Beck(g) | 40,880 | 511 | — | | Boris Illetschko | — | — | — | | All directors and current executive officers as a group (12 individuals) | 864,132 | 157,688 | — | | Wolfgang Laures | 316,568 | — | — | | Christopher W. Astley | 61,385 | — | — |
(a)Consists of 147,068 shares vesting within 60 days of March 14, 2024. (b)Represents the gross number of shares of common stock that would be issued upon exercise of vested stock-only stock appreciation rights (“SOSARs”) on March 14, 2024. As of March 14, 2024, the following NEOs had vested SOSARs: | | | | | | | Name | Number of
Vested
SOSARs | | Eileen L. Beck | 17,569 | | David C. Elder | 46,324 | | Ramesh Shettigar | 17,290 |
.(c)Consists of 150,000 shares held indirectly by GBBH Family Limited Partnership. (d)Consists of 2,921 shares held in a 401(k) account for the benefit of Mr. Elder. (e)Consists of 3,750 shares held indirectly by the Bruce Brown Revocable Trust. (f)Consists of 96 shares held in a 401(k) account for the benefit of Mr. Shettigar. (g)Consists of 511 shares held in a 401(k) account for the benefit of Ms. Beck.
2024 PROXY STATEMENT › 18
Equity Compensation Plan Information The following table provides certain information as of December 31, 2023, regarding the Company’s equity compensation plans. | | | | | | | | | | | | | (a) | (b) | (c) | | Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights (1) | Weighted-average exercise price of outstanding options, warrants and rights (2) | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (3) | | Equity compensation plans approved by security holders | 2,805,458 | $ | 22.10 | 2,385,486 | | Equity compensation plans not approved by security holders | — | — | — | | Total | 2,805,458 | $ | 22.10 | 2,385,486 |
(1)Includes 1,044,204 RSUs; 1,229,735PSAs; and 531,519 SOSARs. For purposes of this calculation, it is assumed that PSAs will be paid at 100% of target. (2)Weighted average exercise price is based on outstanding SOSAR prices only. (3)Represents the securities remaining available for issuance under the Equity Plan. For purposes of this calculation, it is assumed that PSAs will be paid at 100% of target.
Delinquent Section 16(a) Reports Pursuant to Section 16(a) of the Exchange Act, our executive officers, directors, and persons who beneficially own more than 10% of shares of our common stock (collectively, “Reporting Persons”) must file reports of their initial beneficial ownership, any changes in such ownership and, if required, annual statements of such beneficial ownership on Forms 3, 4, and 5, respectively, and any amendments thereto, with the SEC. The SEC has designated specific due dates for these reports, and we must identify in this proxy statement those Reporting Persons who did not file these reports when due. Based solely upon our review of the Forms 3, 4, and 5, as applicable, filed electronically with the SEC and the written representations of the reporting persons, for the fiscal year ended December 31, 2023, we have determined that our Reporting Persons filed their required reports with the SEC in a timely manner, other than one Form 4 for Wolfgang Laures related to one transaction, which was inadvertently filed late due to administrative error.
2024 PROXY STATEMENT › 19
| | | | Corporate Governance and Board of Directors |
Corporate Governance Principles The Board and Management are dedicated to effective corporate governance. The Board has adopted Corporate Governance Principles that provide a framework for the Company’s governance. The Board has also adopted a Code of Business Conduct and a Code of Business Ethics for our CEO and Senior Financial Officers. The Corporate Governance Principles are available on the Corporate Governance page of the Company’s website at www.glatfelter.com/investors/corporate-governance, which also contains the Company’s Amended and Restated Articles of Incorporation and Amended and Restated Bylaws (“Bylaws”), Code of Business Conduct, a list of the directors of the Company, the charters of each standing committee of the Board, and the Code of Business Ethics for CEO and Senior Financial Officers. Copies of these materials are also available, in print and at no charge, upon request to the Secretary of the Company at 4350 Congress Street, Suite 600, Charlotte, NC 28209. The Company intends to satisfy the disclosure requirement for any future amendments to, or waivers from, its Code of Business Conduct or Code of Business Ethics for CEO and Senior Financial Officers by posting such information on its website. Board Composition and Leadership The Board currently consists of seven members. Each year, the Board elects one of its members to serve as Board Chair. Under the Board’s governance structure, the Board Chair: •presides at all meetings of the Board, including executive sessions (unless the Board Chair and CEO positions are combined); •identifies strategic issues to be considered for the Board agenda; and •consults with directors on the development of the schedule, agenda, and materials for all meetings of the Board. When considering the election of a Board Chair, the Board reviews its governance structure and the qualifications of each director and determines who is best qualified to chair the Board. The Board believes the Company and its shareholders are best served by having a Board Chair who has knowledge of the Company’s business operations and industry and who can best oversee execution of the Company’s strategic plan, based on his or her extensive experience and knowledge of the Company’s operations, industry, competitive challenges, and opportunities. Our Corporate Governance Principles do not require the separation of offices of the Board Chair and the CEO, however, when the same person serves as both Board Chair and CEO, the Board believes the interests of the Company and the shareholders are best served by the appointment of an independent Lead Director. Kevin M. Fogarty, an independent director, has served as the Board’s Non-Executive Chair since August 24, 2022. As such, there is currently not an independent Lead Director. Based on his prior CEO experience and his knowledge of the Company’s business and industry, the Board determined that Mr. Fogarty is the director best qualified to serve in the role of Non-Executive Chair. The Board nominated Mr. Fogarty in February 2024 to continue as Non-Executive Chair, subject to and effective upon his re-election as a director at the Annual Meeting. In the absence or disability of the Board Chair, the Chair of the Nominating and Corporate Governance ("NCG") Committee assumes the authority and performs the duties of the Board Chair, as provided in Section 2.20 of the Company's Bylaws, including presiding at any Board Meeting at which the Board Chair is not in attendance. Board Independence The Corporate Governance Principles and the Company’s policies and procedures provide for an empowered, independent Board and the full involvement of the independent directors in the Board’s operations and decision-making. As set forth in the Company’s Corporate Governance Principles, the Board has adopted the listing standards of the New York Stock Exchange (the “NYSE”) for determining the independence of directors, which require that a director not have a material relationship with the Company. Annually, each member of the Board is required to complete a questionnaire designed, in part, to provide information to assist the Board in determining if the director is independent under NYSE rules and our Corporate Governance Principles. In addition, each director or director nominee has an affirmative duty to disclose to the NCG Committee relationships 2024 PROXY STATEMENT › 20
| | | | CORPORATE GOVERNANCE AND BOARD OF DIRECTORS |
between and among that director (or an immediate family member), the Company, or Management. The Board has determined the following directors are independent and have no material relationship with the Company: Messes. Dahlberg and Gallagher and Messrs. Brown, Fogarty, Hackett, and Hall. The Board has determined Mr. Fahnemann, as the Company’s CEO, is not an independent director as defined under the NYSE listing standards and the Company’s Corporate Governance Principles. Evaluation of Board Nominees The NCG Committee reviews all director nominations submitted to the Company, including individuals recommended by shareholders, directors, or members of Management, using the same criteria. When evaluating whether to recommend an individual for nomination or re-nomination, the NCG Committee will consider, at a minimum and in accordance with the Company’s Corporate Governance Principles, the candidate’s independence, professional experience, diversity in personal background, knowledge of the Company’s business or industry, skills, expertise, wisdom, integrity, business acumen and availability to devote the necessary time to serve on the Board. Although the Company does not have a formal policy on Board diversity, as set forth in our Corporate Governance Principles, the Board believes that diverse viewpoints and practical experiences can enhance the effectiveness of the Board. Further, the Board believes that diversity in personal background, professional experience, qualifications, attributes and skills, and how they complement, supplement, or duplicate those of other Board members, are important considerations in selecting candidates. Accordingly, the NCG Committee considers the foregoing as part of its evaluation of each director candidate. The NCG Committee reviews the qualifications of each incumbent director, including the director’s understanding of the Company’s business and the environment in which the Company operates, attendance, and participation at Board and applicable committee meetings, and independence, including any relationships with the Company. Prior to nomination, each candidate for director must consent to stand for election, and each director nominee must agree in writing to abide by the Company’s Elections Policy set forth in its Corporate Governance Principles (as discussed in greater detail below). After the NCG Committee has completed its evaluation of all director candidates, it presents a recommended slate of directors to the Board for consideration and approval. The NCG Committee also discusses with the Board any candidates considered by the NCG Committee but not recommended for election or re-election as a director. Based on the process described above, the NCG Committee recommended, and the Board approved, the nomination of all seven of the incumbent directors for re-election at the Annual Meeting. These decisions were based on the individual experiences, qualifications, attributes, and skills of each candidate, including as described in the skills matrix on page 4of this proxy statement. The NCG Committee and the Board assessed these factors in light of the Company’s business. Resignation and Majority Voting Policy Incumbent Director Irrevocable Resignation Pursuant to the Elections Policy in our Corporate Governance Principles, each incumbent director standing for election to the Board must, as a condition to such nomination, tender an irrevocable resignation in advance of the meeting for the election of directors. If such director is not re-elected by a majority of the votes cast, the NCG Committee will make a recommendation to the Board about whether to accept or reject the director’s tendered contingent, irrevocable resignation. A director whose resignation is not accepted by the Board shall continue to serve until the next annual meeting of shareholders and until a successor has been elected and qualified, or until the earlier of their death, resignation, or removal. In making its recommendation, the NCG Committee will publicly disclose its decision and the rationale behind such decision within 90 days from the date of the certification of the final election results of the Annual Meeting of Shareholders. Majority Voting In 2022, the Company amended its Articles of Incorporation (as amended, the “Articles of Incorporation”) to implement a majority voting standard in uncontested elections of directors and to eliminate cumulative voting in director elections. The change to a majority vote standard in uncontested elections was intended to further align shareholder interests and Board accountability. The Board believes that this change gives shareholders a greater voice in determining the composition of the Board by giving effect to shareholder votes “against” a director nominee and by requiring a majority of votes cast to be “for” a director nominee in order for such nominee to obtain or retain a seat on the Board. Furthermore, the adoption of a majority voting standard reinforces the Board’s belief that it is accountable to, and should represent the interests of, all of the Company’s shareholders.
2024 PROXY STATEMENT › 21
| | | | CORPORATE GOVERNANCE AND BOARD OF DIRECTORS |
Similarly, our shareholders are afforded the protection of a “one share, one vote” framework in director elections. This prevents any individual shareholder from having the ability to exercise disproportionate voting power, control, or influence over director elections in excess of their actual economic ownership of our shares. Pursuant to our Articles of Incorporation, our directors are elected as follows: Contested Election. In a contested election of directors, the nominees for election to the Board receiving the highest number of votes, up to the number of directors to be elected in such election, shall be elected. Uncontested Election. In an election of directors that is not a contested election, a nominee for director shall be elected to the Board if the votes cast for such nominee’s election exceed the votes cast against such nominee’s election. Abstentions and broker non-votes shall not be considered to be votes cast. Proxy Access In 2022, the Company amended its Bylaws to provide for proxy access. Pursuant to the Bylaws, any eligible shareholder, or group of no more than 20 eligible shareholders, that complies with certain informational disclosure requirements set forth in Sections 1.9(d) and 1.10 of our Bylaws, is permitted to include a director nominee or nominees (not to exceed 20% of the number of directors) in the Company’s proxy statement for its annual meeting. In order to provide adequate time to assess shareholder-nominated candidates, requests to include shareholder-nominated candidates in the Company’s proxy materials must be delivered to, or mailed and received by, the Secretary of the Company at the principal executive offices of the Company not later than the close of business on the one hundred twentieth (120th) calendar day, nor earlier than the close of business on the one hundred fiftieth (150th) calendar day prior to the first anniversary of the date the Company’s proxy statement was released to shareholders in connection with the annual meeting of shareholders in the immediately preceding year, subject to certain limited exceptions set forth in our Bylaws. Board Meetings The Board held 16 meetings during 2023. The standing committees established by the Board held a combined total of 19 meetings in 2023. Each director attended 96% or more of the total number of Board and standing committee meetings on which they served in 2023; overall attendance at such meetings was 99%. Independent directors meet in regularly scheduled executive sessions (without Management), presided by the Non-Executive Chair. Although the Company does not have a formal policy regarding director attendance at the annual meeting of shareholders, directors are strongly encouraged to attend the annual meeting of shareholders and historically have done so. All of our then-serving directors virtually attended the 2023 Annual Meeting of Shareholders. Committees of the Board of Directors Our Board has three standing committees: Audit, Compensation, and Nominating & Corporate Governance. Each standing committee has its own charter, which is available on the Company’s website at: www.glatfelter.com/investors/corporate-governance. Paper copies of the charters are also available, at no charge, upon written request to the Secretary of the Company. The Board determined that all members of each of the Audit, Compensation, and NCG Committees are independent as required under the NYSE listing standards and the applicable SEC rules and regulations. 2024 PROXY STATEMENT › 22
| | | | CORPORATE GOVERNANCE AND BOARD OF DIRECTORS |
The following chart provides a summary of each Board standing committee’s duties and responsibilities: | | | | | | | | | | | | | Board Committees | | Committee | Responsibilities and Duties | 2023 Members | Meetings in 2023 | AuditCommittee | The Audit Committee assists the Board with oversight of the quality and integrity of the accounting, auditing, and financial reporting practices of the Company; the compliance by the Company, its directors and officers with applicable laws and regulations and its Code of Business Conduct; the independent auditor’s qualifications and independence; the performance of the Company’s internal audit function and independent auditors; the Company’s management of financial risks involving cybersecurity, insurance, natural disasters, environmental, and other ESG-related matters; and financial policies and other matters of financial significance to the Company. | Marie T. Gallagher (1), (2), (3) Kathleen A. Dahlberg (3) Darrel Hackett (2), (3), (4) J. Robert Hall (2), (3) Lee C. Stewart (2), (3), (6) | 7 | | Compensation Committee | The Compensation Committee discharges the Board’s responsibilities relating to compensation of the Company’s executive officers, including recommending to the Board an overall executive compensation policy designed to support overall business strategies and objectives; attract, retain, motivate and reward key executives; link compensation with organizational performance while appropriately balancing risk and reward; align executives’ interests with those of the Company’s shareholders; and provide competitive and reasonable compensation opportunities. The Compensation Committee also periodically reviews the non-employee director compensation program for recommendation to the Board and provides Board oversight with respect to the Company’s human capital strategy.
| Bruce Brown (1) Kevin M. Fogarty Darrel Hackett (5) J. Robert Hall | 7 | | Nominating & Corporate Governance Committee | The NCG Committee carries out responsibilities relating to governance matters, including making recommendations for nominations for election of directors, the composition of Board committees, appointment of executive officers, and Board structure; developing and maintaining the Company’s Corporate Governance Principles; and providing oversight of the Company’s ESG strategy, risk management, and compliance.The NCG Committee also oversees the annual self-assessment of the Board and its committees. | Kathleen A. Dahlberg (1), (7) Bruce Brown Marie T. Gallagher Darrel Hackett (5) Lee C. Stewart (6) | 5 | | (1)Committee Chair (2)Financial Expert, as defined in the applicable SEC regulations (only shown for Audit Committee) (3)Financially Literate within the meaning of the NYSE listing standards (only shown for Audit Committee) (4)Darrel Hackett stepped off of the Audit Committee as of February 24, 2022, by Carlson Capital, L.P., an investment advisor with sole voting power and sole dispositive power over 0 shares and shared voting power and shared dispositive power over 2,260,000 shares. Beneficial ownership reported by Carlson Capital, L.P. includes shares acquired by funds for which it serves as the investment manager: Double Black Diamond Offshore Ltd., Black Diamond Arbitrage Offshore Ltd., Delaware Domiciled Single Investor Limited Partnership—101, Asgard Investment Corp. II, and Mr. Clint D. Carlson. The address of Carlson Capital, L.P. is 2100 McKinney Avenue, Suite 1800, Dallas, TX 75201. |
| (7) | Shares beneficially owned by each owner as noted below:
|
| | | | | | | | | | | | | Name of Beneficial Owner | | Directly
Owned | | Indirectly
Owned | | Options to Acquire
Stock(a) | | | | | | Dante C. Parrini(b) | | 454,256 | | 7,719 | | — | | | | | | Thomas Fahnemann | | 13,000 | | — | | — | | | | | | Kathleen A. Dahlberg | | 90,823 | | — | | — | | | | | | J. Robert Hall | | 107,573 | | — | | — | | | | | | Lee C. Stewart | | 85,823 | | — | | — | | | | | | Kevin M. Fogarty(c) | | 58,125 | | 50,000 | | — | | | | | | Samuel L. Hillard | | 56,423 | | — | | — | | | | | | Ramesh Shettigar(d) | | 18,525 | | 85 | | — | | | | | | Bruce Brown(e) | | 47,969 | | 3,750 | | — | | | | | | Christopher W. Astley(f) | | 44,492 | | 890 | | — | | | | | | Eileen Beck(g) | | 22,360 | | 433 | | — | | | | | | Marie T. Gallagher | | 17,632 | | — | | — | | | | | | Darrel Hackett | | 36,702 | | — | | — | | | | | | Wolfgang Laures | | 23,000 | | — | | — | | | | | | All Directors and executive officers as a group (h) | | 1,076,703 | | 62,877 | | — |
| OWNERSHIP OF COMPANY STOCK |
| (a) | Represents the gross number of shares of common stock that would be issued upon exercise of vested stock-only stock appreciation rights (“SOSARs”)(5)Darrel Hackett served on the Record Date. As of the Record Date, the following NEOs had vested SOSARS:
|
| | | | | | | | Name | | Number of
Vested
SOSARS | | | Dante C. Parrini*
| | | | 498,312 | | | | Christopher W. Astley
| | | | 108,138 | | | | Eileen L. Beck
| | | | 24,553 | | | | Samuel L. Hillard*
| | | | N/A | | | | Wolfgang Laures
| | | | N/A | |
| (b) | Consists of 7,719 shares held in a 401(k) account for the benefit of Mr. Parrini.
|
| (c) | Consists of 50,000 shares held by GBBH Family Limited Partnership.
|
| (d) | Consists of 85 shares held in a 401(k) account for the benefit of Mr. Shettigar.
|
| (e) | Consists of 3,750 shares held by the Bruce Brown Revocable Trust.
|
| (f) | Consists of 890 shares held in a 401(k) account for the benefit of Mr. Astley.
|
| (g) | Consists of 433 shares held in a 401(k) account for the benefit of Ms. Beck.
|
| (h) | Consists of 0 shares vesting within 60 days from the Record Date.
|
| (8) | Mr. Parrini’s serviceCompensation Committee until October 2023, at which time he was reassigned to the Company as Chief Executive Officer ended on August 24, 2022: Mr. ParriniNCG Committee.
(6)Lee C. Stewart resigned from the Board effective asSeptember 25, 2023. (7)Chair of NCG Committee changed from Lee C. Stewart to Kathleen A. Dahlberg in September 13, 2022.2023. |
Continuing Board Education We believe our shareholders are best served by a board that is well versed in subject matters relevant to board service and thoroughly comprehends the role and responsibilities of an effective board in the oversight and management of the Company. The Board regularly conducts Board education sessions on relevant topics for the Company’s future growth and success and to stay informed about best governance practices. We also feel it is appropriate for our directors to have access to educational programs on an ongoing basis to assist them in performing their duties as directors. The Company will reimburse directors for the reasonable costs of attending relevant and timely director education programs approved by the Board’s Non-Executive Chair. Since November 2017, the Company has been a member of the National Association of
2024 PROXY STATEMENT › 23
| | | | CORPORATE GOVERNANCE AND BOARD OF DIRECTORS |
Corporate Directors. This membership provides continuing education programs, research data, conferences, and other resources for the Company’s directors and executives. The NCG Committee periodically reviews and oversees orientation programs for newly-elected directors and suggests topics for continuing education programs for incumbent directors. . Board Self-Assessment Our Board believes in a constructive self-assessment process as a governance best practice to improve Board performance and ensure it is functioning effectively. As required by our Corporate Governance Principles, the NCG Committee oversees an annual self-assessment of the Board and its standing committees. Each director completes a written questionnaire to gather suggestions for improvement and feedback on a range of issues related to Board and standing committee effectiveness. Outside counsel to the Board reviews the questionnaire responses and additionally conducts individual interviews with each director. The feedback is aggregated and summarized by outside counsel, who shares the feedback with the Board and its standing committees during their regularly-scheduled meetings. Changes to Board practices, procedures, policies, and agendas are considered and implemented in response to the feedback as appropriate. The Board also conducts an annual review of the Company’s corporate governance documents, including its Corporate Governance Principles, Bylaws, Code of Business Ethics for CEO and Senior Financial Officers, and standing committee charters, and recommends revisions accordingly. Risk Oversight The Board plays an active role in risk oversight to ensure that Management is taking appropriate actions to identify, evaluate, manage, and mitigate significant risks. The Board reviews risks associated with the Company’s strategic plan and enterprise level risks annually, typically at a strategic planning session. Periodically throughout the year, the Board actively monitors risks associated with the Company’s strategic plan through formal business updates it receives from Management, including an annual report from Management on information security matters. The Board administers its risk oversight responsibilities by delegating certain business and governance activities to the appropriate committees for more detailed consideration and evaluation. In performing this oversight function, each committee has full access to Management, as well as the ability to engage advisors or other experts it deems necessary in the performance of its duties. At each regularly-scheduled Board meeting, the Chair of each standing committee reports to the Board on the respective committee’s oversight activities, as needed. The Company’s Management is responsible for the day-to-day identification, evaluation, management, and mitigation of the Company’s risk exposures. The Company manages these enterprise risks through a variety of policies, programs, committees, and internal controls designed to protect the Company’s assets, operations, and reputation, while ensuring compliance with applicable laws and regulations.
2024 PROXY STATEMENT › 24
| | | | CORPORATE GOVERNANCE AND BOARD OF DIRECTORS |
The below chart summarizes the Board’s risk-governance framework: | | | | | | | | | | | | | | | | Board of Directors | | Oversees the management of risks inherent in the operation of the Company’s business and the implementation of its strategic plan. | | Audit Committee | (9)Compensation Committee | Mr. Hillard
Nominating and Corporate Governance Committee | Management | Internal Audit | | Oversees significant financial risks relating to accounting, foreign exchange, commodity exposures, contingent liabilities, reporting matters, cyber-security, insurance, natural disasters, environmental and ESG, regulatory requirements, and compliance with laws and regulations. Oversees the evaluation of internal control effectiveness and meets regularly with representatives of the Company’s independent auditors. | Oversees the Company’s human capital strategy and compensation policies and procedures, including the incentives that such policies create and factors that may reduce the likelihood of excessive risk taking, to annually assess whether such policies are reasonably likely to have a material adverse effect on the Company. | Oversees the Company’s governance matters including the development and maintenance of the Company’s Corporate Governance Principles and related policies and provides oversight of the Company’s ESG strategy, risk management and compliance. | Oversees the implementation, execution, and evaluation of policies, procedures, programs, and internal controls designed to identify and mitigate significant risks in order to provide reasonable assurance in the protection of Company assets and achievement of its strategic plans. | Assists and advises the Company’s Management in identifying, evaluating, improving, and monitoring risk management techniques and methodologies as part of the Company’s enterprise risk management and internal control framework. The Company’s Director, Internal Audit reports functionally directly to the Audit Committee. |
Director Compensation Non-employee directors receive compensation for their service that is designed to compensate them fairly for the time, effort, and accountability required of a director and to align their interests with our shareholders. In making its recommendation to the Board on non-employee director compensation, the Compensation Committee considered the results of an analysis of director compensation provided by Meridian Compensation Partners LLC (“Meridian”), the Compensation Committee’s independent compensation consultant. In 2020, Meridian conducted a competitive assessment that included a review of annual cash retainers, annual equity grants, meeting fees, and committee fees compared to the Company’s Compensation Peer Group (as defined below; see page 41 regarding the Compensation Peer Group). The results of the assessment showed our non-executive director total compensation approximated the median of the Compensation Peer Group for 2023, and that the Company’s pay policies were generally aligned with market. Updated benchmarking conducted in 2023 to inform 2024 decisions found the Company’s non-executive director total compensation levels, which have remained unchanged since 2016, were determined to be slightly behind market. As a result, the Board approved an increase to the NCG Committee chair fee from $10,000 to $15,000, effective as of 2024, and made plans to reevaluate the other fees as well. Cash Compensation In 2023, non-employee director compensation included the following cash fees for service: •Annual cash retainer fee: $70,000 •Additional fees for those serving in role: ◦Audit Committee chair: $20,000 ◦Compensation Committee chair: $15,000 ◦NCG Committee chair: $10,000 ◦Non-Executive Chair: $80,000 In addition to the annual retainer, non-employee directors were paid in cash $1,500 for each standing committee meeting they attended in excess of eight meetings per year (May 1 – April 30). All accrued, but unpaid, director cash compensation payments are made twice annually, in May and November.
2024 PROXY STATEMENT › 25
| | | | CORPORATE GOVERNANCE AND BOARD OF DIRECTORS |
In 2023, in connection with the formation of the Director Succession Special Committee, the Board authorized a one-time payment of $7,500 to the chair (the “Special Committee One-Time Payment”). No other changes were made to the non-employee director compensation program in 2023. Equity Compensation Each non-employee director received an annual RSU award valued at $81,650 on May 8, 2023, based on the fair market value of the shares on the grant date. The target value of the RSU awards was $115,000, but in an effort to manage the equity plan share pool available for use amid business headwinds, the number of RSUs granted was calculated by dividing the target value by a stock price grant value of $5.00, rather than by the grant date stock price of $3.55. Such RSU awards fully vest, all restrictions lapse, and the shares are paid out on the first anniversary of the grant date. Any quarterly dividends issued by the Company during the one-year vesting period will accrue in the form of additional RSUs (but are not vested or paid until the awards vest). RSUs granted to directors will immediately vest upon a change in control and in the event of the death or disability of the director. Deferred Compensation Pursuant to the Company’s Deferred Compensation Plan for Directors, every year, each non-employee director may elect to defer 50%, 75%, or 100% of his or her annual retainer for serving on the Board. Any fees paid to a director for attending meetings of any Board standing committee or for serving as a standing committee chair may not be deferred. No deferral elections were made in 2023. Other Benefits and Coverage Each non-employee director is covered by the Company’s director and officer liability insurance policy, has entered into an indemnification agreement with the Company, and is covered under the Company’s travel accident insurance policy. Share Ownership Guidelines The Company has established share ownership guidelines for non-employee directors to enhance their alignment with shareholders’ interests. The share ownership guidelines preclude the sale of shares by a director until he or she holds shares with a value equal to five times the annual Board retainer of $70,000. Directly held shares and unvested RSUs count toward attainment of the guideline. All non-employee directors are in compliance or on track to be in compliance with the share ownership guidelines. Director Compensation Table | | | | | | | | | | | | | Name (1) | Fees Earned or Paid in Cash ($) (2) | Stock Awards ($) (3) | Total | | Bruce Brown | $ | 91,000 | $81,650 | $ | 172,650 | Kathleen A. Dahlberg(4) | $ | 89,505 | $81,650 | $ | 171,155 | | Kevin M. Fogarty | $ | 151,500 | $81,650 | $ | 233,150 | | Marie T. Gallagher | $ | 96,000 | $81,650 | $ | 177,650 | | Darrel Hackett | $ | 79,000 | $81,650 | $ | 160,650 | | J. Robert Hall | $ | 79,000 | $81,650 | $ | 160,650 | Lee C. Stewart(5) | $ | 43,000 | $81,650 | $ | 124,650 |
(1)Only non-employee directors receive compensation for service on the Board. Accordingly, our CEO, Thomas M. Fahnemann, did not receive compensation for his service as director in 2023. For information on Mr. Fahnemann’s 2023 compensation, see the Summary Compensation Table on page56. (2)The amounts include annual retainer fees, meeting fees, the Special Committee One-Time Payment, and standing committee chair fees paid in cash. (3)In accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718, the amount shown for all non-employee directors is based on the grant date fair market value of $3.55 per share for RSUs granted on May 8, 2023, which vest one year after the grant date. As of December 31, 2023, the current non-employee directors held the following number of outstanding RSUs:
2024 PROXY STATEMENT › 26
| | | | CORPORATE GOVERNANCE AND BOARD OF DIRECTORS |
| | | | | | | Director Name | Number of Restricted Stock Units Outstanding | | Bruce Brown | 23,000 | | Kathleen A. Dahlberg | 23,000 | | Kevin M. Fogarty | 23,000 | | Marie T. Gallagher | 23,000 | | Darrel Hackett | 23,000 | | J. Robert Hall | 23,000 | Lee C. Stewart (a) | — |
(a) Mr. Stewart’s 2023 RSU award vested on September 25, 2023 upon separation from service.
(4)Ms. Dahlberg’s compensation includes a one-time payment of $7,500 for serving as Chair of the Director Succession Special Committee, and a pro-rated fee paid in cash for chairing the NCG Committee from September 25, 2023-October 31, 2023. (5) Mr. Stewart resigned from the Board on September 25, 2023.
2024 PROXY STATEMENT › 27
| | | Enhancing Everyday Life®…Sustainably |
Overview Our commitment to sustainability and responsible corporate citizenship has been an essential part of Glatfelter since our founding in 1864. Today, it is reflected in our Core Values of Integrity, Financial Discipline, Mutual Respect, Customer Focus, Environmental Responsibility, and Social Responsibility. We strive to engineer products that meet the sustainability and performance requirements of our customers, while operating our business in line with our Core Values. We are proud of our role in contributing to the health, well-being, and everyday living of millions of people around the world. In December 2022, we published a 2021-2022 Sustainability Report as our second formal update on our ESG activities and priorities. For this report, we refreshed our material topics, introduced short- and long-term goals in each priority area (Environmental Impact, Social Responsibility, and Governance and Ethics) and introduced two reporting references: the Global Reporting Initiative (“GRI”) standard and the United Nations Sustainable Development Goals (“UN SDGs”). The goals were established with strategic input from the Board, senior executive team, and functional leaders throughout the organization. In 2023 our MSCI ESG Rating improved to AA as a result of our strengthened carbon management strategy. In addition, we are proud to have achieved EcoVadis Silver status once again in 2023. Over the past five years, Glatfelter has bolstered its sustainability program, most recently by establishing an executive leadership role with dedicated responsibility for advancing the Company’s ESG program aligned to its long-term growth strategy. Our ESG Steering Committee sets the sustainability/ESG strategy for the Company and provides implementation support to the business and individual facilities. The ESG Steering Committee is composed of members from Legal, Investor Relations, Human Resources, Supply Chain, Finance, Marketing/Business Development, Product Innovation, and EHS (Environmental, Health & Safety) to encourage cross-functional insight and expertise. The ESG Steering Committee reports to the CEO and provides ESG updates at least annually to the NCG Committee, which has oversight for ESG strategy. The full Board also receives an annual update on ESG and EHS progress. Environmental Impact Glatfelter is committed to operating as a responsible steward of the environment and creating a more sustainable world for future generations. As stated in our Environmental Policy, our concern for the environment guides everything we do in our business. The Environmental Policy further reflects our commitment to comply with applicable environmental laws and regulations, practice pollution prevention, and improve our environmental performance. Instituted in 1997 as part of the ISO 14001 certification process, our Environmental Policy is the foundation for our Environmental Management Systems and reflects one of our Core Values – Environmental Responsibility. Glatfelter strives to deliver engineered products that perform well, use natural materials responsibly, and contribute to waste reduction in both the manufacturing process and following their end use. Our environmental pillar is focused in two areas that impact our business and where we can make a difference for our stakeholders: (1) Environmental Management in our Operations; and (2) Innovation and Environmentally Responsible Products. Environmental Management Glatfelter focuses its environmental management on maintaining compliance with all environmental laws and regulations in the regions where we operate, as well as developing programs and continuous improvement initiatives that address areas such as natural resource management, energy-efficient processes, and waste reduction. Natural resource management:Natural materials are the most significant feedstock in our manufacturing processes. Glatfelter has achieved Forest Stewardship Council certification at all our manufacturing facilities – maintaining a strong chain of custody to ensure that 100% of the wood fibers we use come from well-managed, sustainable forests. In addition, as the world’s top purchaser of abaca fiber, Glatfelter monitors its farmers and traders to ensure they follow local compliance requirements and Glatfelter’s Supplier Code of Conduct. We also partner with the Rainforest Alliance™ and Sustainable Agricultural Network to ensure abaca farms meet both organizations’ standards for environmental, social, and economic sustainability. 2024 PROXY STATEMENT › 28
Water is a significant natural resource input for our Composite Fibers and Spunlace businesses. Water is used within the manufacturing process, for equipment cleaning and in a few cases, for cooling purposes. Apart from the cooling water, all water used in our manufacturing process is recycled at least once. For water that can no longer be used in the manufacturing process, each manufacturing facility has a dedicated wastewater treatment process to remove solids and biodegradable materials to ensure the final effluent discharged back into the water system meets or exceeds regulatory requirements. We also seek to identify manufacturing efficiency measures that reduce the amount of water required. We regularly discuss water-related risks with public officials and local authorities. Our Airlaid Materials products are manufactured with a dry forming process where water is not a significant natural resource. Overall, our operations used 70.4 m3 of water per tonne of production in 2023. Energy usage: One of the byproducts of transforming our business into a leading global supplier of engineered materials is that we have become a less-energy-intensive, lower-emissions company. Nonetheless, in 2023, direct energy spend accounted for near double-digit percentage of our cost of goods sold, and we seek to drive efficiencies through equipment upgrades and process improvements, where feasible. Four of our European sites comply with formal energy management systems (ISO 50001) to drive energy efficiency. At several of our Composite Fibers facilities, we produce a significant amount of electricity through co-generation, which produces useful heat that can be used in the manufacturing process. In 2023, a total of 54,583 megawatt hours of electricity was produced by co-generation and our operations consumed 1.61 megawatt hours of electricity per tonne of production. Approximately 90.8% of our consumed electricity came from the grid in 2023. Our overall 2023 energy intensity was 4.85 megawatt hours per tonne of production. We continue to look for opportunities to drive efficiencies and reduce our use of nonrenewable energy. Greenhouse gas emissions: We are working to lower our greenhouse gas emissions by reducing our carbon dioxide emissions and increasing our energy efficiency across our operations. In addition to using the co-generation process and complying with ISO 50001, other efforts include driving improvements in efficiency and investing in more efficient equipment and processes, such as variable speed drives on motors, improved heat recovery, installation of LED lighting, and better control processes. Our greenhouse gas emissions in 2023 were 0.54 tonnes CO2e per metric tonne of production. Waste: Consistent with our application of Lean Manufacturing and Six Sigma principles, we view waste as an opportunity to improve efficiency and cost effectiveness, while reducing our environmental impact. We have had waste reduction and recycling success in all three of our business segments. For example, a significant volume of off-spec material in Composite Fibers is used for lower-grade applications. In Airlaid Materials, we strive for zero waste to landfill by recycling materials and finding buyers who value our byproducts’ high-absorbency performance. In Spunlace, technology-based engineering improvements were implemented to ensure greater precision and a significant reduction of manufacturing waste. Overall, we have dedicated resources focused on repurposing our by-products across all three segments. We also have general business waste recycling efforts in place at our corporate headquarters and several of our major locations. Innovation and Environmentally Responsible Products We believe our commitment to innovation and environmentally responsible products gives us a competitive advantage in an environment of elevated sustainability awareness. We collaborate and work directly with our customers to help them achieve their sustainability goals and demonstrate their environmental commitments to their customers. To capitalize on these opportunities, we are focused on two primary areas: (1) Helping our customers and markets appreciate the full sustainability benefits of our existing products, which are mostly plant-based; and (2) Developing new products with enhanced sustainability profiles, such as replacing oil-based plastic ingredients with recycled polymers or plant-based materials. These developments consider a product’s end of life, providing improved recyclability, biodegradability, and compostability. Environmentally responsible products: Plant-based materials are the most significant raw material input in all our products. In fact, an average of 64% to 76% of our Airlaid Materials and Composite Fibers product content is wood-based cellulose fiber, with many containing 100% plant-based materials. Any remaining materials in our products consist of a combination of binders, coatings, and adhesives – some of which are derived from petroleum products. In our Spunlace segment, plant-based fibers represent the primary input for most products. Our proprietary airlaid-hydroentangled technology allows the production of products that are highly dispersible and are typically ranked as best-in-class solutions in terms of performance, flush-ability, and dispersibility in personal care applications. A blend of plant-based and polymer-based fibers characterizes the portfolio directed to industrial and healthcare or institutional customers, where high performance is paramount and the disposal of the products after use happens in a regulated environment. Our proprietary Sontara® process technology ensures the performance of these products for highly engineered applications is unparalleled. Environmental considerations are an ongoing part of product line discussions internally and with customers and suppliers in all our segments.
2024 PROXY STATEMENT › 29
In 2023, two integral components of our menstrual care products — GlatPure™ Acquisition Distribution Layers (ADL) and Absorbent Core — received the prestigious class 4 OK Biobased certification from TUV Austria. The OK Biobased certification from TUV Austria is a recognized global standard for verifying the biobased content of products. It guarantees that the certified products are derived from renewable sources and meet the stringent criteria set by TUV Austria. Glatfelter’s products received this certification for having 100% biobased carbon content. This certification reinforces our dedication to environmental sustainability and eco-friendly practices within the absorbent hygiene industry. Innovation: Sustainability considerations have consistently been part of every new product development program at Glatfelter. Our research and development (“R&D”) scientists and product developers are actively and systematically evaluating ideas for products and applications that have a smaller environmental impact. This includes ways to further reduce the use of virgin plastics in our finished goods, such as increasing bio-based content in wipes, tabletop, and feminine hygiene products, and studying alternative materials for food and beverage filter media applications. Given that many of our products already have a relatively high percentage of natural content, we believe we have an advantage in developing next-generation solutions that are environmentally sustainable to further differentiate Glatfelter in the marketplace. Through the acquisition of the Spunlace business, we now have a leading position as a nonwoven supplier of Personal Protective Equipment (“PPE”) to various critical first responders, from nurses and doctors using spunlace drapes, gowns, and other protective equipment, to fire fighters using fire blocking equipment containing Sontara® high performance nonwovens. Social Responsibility Social Responsibility is a Glatfelter Core Value, and we have a consistent record of following through on our commitments and supporting communities where we work and live. We have three areas of focus in the “S” pillar: (1) Occupational Health and Safety; (2) Product Safety and Quality; and (3) Community and Employee Engagement. Occupational Health and Safety We view health and safety as everyone’s responsibility and involve all employees at every level of the organization in our programs. Safety first: Glatfelter sites are striving to be “injury free every day” through implementation of our Global Health & Safety Policy, a focus on regulatory compliance, site-specific safety plans and safety resources/training, and an ongoing risk assessment and safety auditing program. Eight of our 15 manufacturing facilities and one of our specialty fiber facilities are third-party certified under the Occupational Health and Safety management standard ISO 45001. Safety performance: We track multiple critical safety metrics, including total case incident rate (“TCIR”), to encourage and ensure continuous improvement and mitigation of potential safety risks. In recent years, Glatfelter’s TCIR has consistently ranked in the top quartile of safety performance in our industry. For 2023, Glatfelter continued to deliver top quartile safety performance with a TCIR of 1.11. TCIR represents the average number of work-related injuries incurred by 100 full-time employees working 200,000 hours per year (40 hours/week for 50 weeks).A number of our facilities have multi-year incident free records demonstrating excellent continuing safety performance. Product Safety and Quality People around the world rely on Glatfelter’s solutions for their most important daily needs – from their morning cup of coffee or tea to the cleaning wipes used to keep their families healthy. We take pride in our role in Enhancing Everyday Life®. Compliance: Ensuring a consistent, high level of product safety and quality is critical given our leading positions in several food-grade, personal hygiene, and medical categories. Our regulatory obligations with various products include complying with requirements and guidelines from the U.S. Food and Drug Administration, U.S. Federal Trade Commission, European Union, and ISO 9001 quality standards. In conjunction with our customers, we conduct extensive product testing during both the development and commercialization stages, and have an ongoing program to make sure that, first and foremost, our products continue to meet or exceed product safety requirements and quality specifications. For the fourth consecutive year, the Company had no consumer product recalls due to product safety or quality concerns. Supply chain:We strive to partner with stable, trusted, high-quality suppliers and contractors who uphold our standards of safety and quality as outlined in Glatfelter’s Supplier Code of Conduct and Glatfelter’s Human Rights Policy, and we encourage them to expect the same of their suppliers and contractors. Our questionnaire for qualifying suppliers looks at a wide variety of factors, including their safety, compliance, and quality. 2024 PROXY STATEMENT › 30
Community and Employee Engagement Glatfelter owes its success in large part to the dedication of its employees and support from the communities where we operate. We aim to provide current and potential employees around the globe with good paying jobs and meaningful work, close to home. Community: Glatfelter has a long history of positively impacting our local communities and groups through philanthropy, volunteer work, and other charitable initiatives. We believe our efforts help to improve the quality of life for the communities in which we live and work, and we value the relationships we have built with government entities, community leaders, business partners, and nonprofit and volunteer organizations. We focus our support for nonprofit giving in four key areas: Education, Civic, Environment, and Arts and Culture. Our leadership team encourages each business location to identify and support local initiatives in these four areas. Employees:Glatfelter people are an essential component of our success and ability to drive growth and innovation. Even as our organization has undertaken substantial change in recent years, our culture and our Core Values have remained strong. We are always working to implement and integrate enterprise-level systems for talent attraction, career development, and training. We are a global company embracing different cultures and backgrounds. Our people, including our Management team, are diverse. We rely on in-country hiring for both salaried and production positions to ensure we are aligned with local laws and culture. Additional details of our employee engagement initiatives are provided in the “Human Capital Management” section on page 33. Governance and Ethics The pursuit of our vision to be the leading global supplier of engineered materials is supported by strong corporate governance standards, the Glatfelter Code of Business Conduct, and a variety of policies and principles, including a specific policy demonstrating our commitment to human rights. Our “G” priorities are: (1) Corporate Governance; and (2) Ethics and Integrity. Corporate Governance: Our commitment to sustainability and responsible corporate practice begins with our Board. As discussed elsewhere in this proxy statement, our directors have a varied and balanced combination of backgrounds and experiences that span a broad range of industries in the public, private, and not-for-profit sectors. The slate of director nominees has 28.6% gender diversity and 14.3% racial/ethnic diversity (based on self-identification information). Five of our seven director nominees have environmental/sustainability skills and experience, and all Board members have skills and experience in corporate governance, compliance, and risk management. In 2020, the Board determined that the NCG Committee should have ultimate oversight of ESG strategy for the Company, although each Board committee has identified ESG responsibilities incorporated into their respective committee charters. The Board received several reports from Management in 2023 on ESG-related matters, including our 2024 priorities and progress toward our defined ESG targets and commitments, our social responsibility work, and an update on the initiatives underway to further improve cybersecurity as well as the systems in place to ensure adequate protections. Ethics and Integrity: Glatfelter’s expectation is that our personal and business ethics should be above reproach. We believe our accomplishments, as well as our prospects, are based not just on what we have done, but how we have done it. The decisions we make and why we make them are key to our continued success as a high-integrity company. The Glatfelter Code of Business Conduct aligns with our Core Values of Integrity, Financial Discipline, Mutual Respect, Customer Focus, Environmental Responsibility, and Social Responsibility, and defines appropriate conduct and behaviors for our organization and conducting business. Every quarter, we provide compliance and ethics training for salaried employees, who are required to pass a test with a score of 80% or better to complete the training. We expect, and regularly achieve, 100% participation in the training by the completion deadline. The quarterly trainings cover topics related to either ethics/compliance, anti-bribery/corruption, information security, antitrust, financial fraud, or diversity, equity and inclusion. As we rely more and more upon electronic systems to conduct our business, cyber-security and protection of the Company's information and personal data has grown in importance. To address the human element of data protection, our employees with access to our electronic systems complete information security and compliance training annually. Additionally, employees are subject to intermittent phishing tests throughout the year that can result in supplemental training for those who do not take the appropriate actions. We have controls in place for our employees and outside partners to report and address critical concerns. Our Integrity Helpline provides a free, anonymous, and confidential way to make a report via telephone or mobile device, and is available 24 hours a day, seven days a week, in multiple languages to support our global population. Concerns may also be shared directly with our Legal Department or the Audit Committee Chair.
2024 PROXY STATEMENT › 31
In 2020, we officially adopted and published our Human Rights Policy, which expanded on the human rights language that has been part of the Glatfelter Code of Business Conduct and other employment policies for years. This policy demonstrates our commitment to ensure our business and supply chain adhere to high ethical standards to protect human rights. Our Human Rights Policy covers a range of topics including safety and health, prohibition of child labor, diversity/equal opportunity, and the right to water. 2024 PROXY STATEMENT › 32
Our business is guided by our diverse Board of Directors and Management team comprised of leaders with extensive business and industry experience. Additional information on our leadership team is set forth within our 2023 Form 10-K for the fiscal year ended December 31, 2023 under the caption “Executive Officers.” As of December 31, 2023, we employed approximately 2,920 people worldwide, the substantial majority of whom are skilled personnel responsible for the production and commercialization of our composite fibers, airlaid materials, and spunlace products. Our facilities are a continuous flow manufacturing operation, with approximately 68.3% of our employees represented by local works councils or trade unions in the European Union, the United Kingdom, Canada, and the Philippines. The daily work of Glatfelter employees is rooted in the Company’s longstanding Code of Business Conduct and Core Values of Integrity, Financial Discipline, Mutual Respect, Customer Focus, Environmental Responsibility, and Social Responsibility. We understand how important it is to be a good neighbor, employer, and corporate citizen, as we aim to provide current and potential employees around the globe with good paying jobs and meaningful work, close to home. Throughout 2023, we took several key actions to ensure ongoing business continuity in response to the highly-competitive labor market. Examples include the retention of key members of Management; continuation of contemporary work arrangements, including hybrid and remote constructs, where feasible; assessment of competitive production labor rates and compensation offerings; expansion of employee well-being programs; and progress with enhancing the Company’s culture of diversity, equity, and inclusion. Employee Health and Safety The safety, health, and overall well-being of our employees remain a top priority. We have a well-established safety management system aimed at sustaining our top-quartile industry safety performance, and we continue to provide confidential mental health resources accessible to employees and their family members. We view health and safety as everyone’s responsibility and involve all employees at every level of the organization in our programs. Glatfelter facilities are striving to be “injury free every day” through the implementation of our Global Health & Safety Protocol, regulatory compliance, site-specific safety plans, safety resources and training, ongoing risk assessment, and a safety auditing program. We track multiple safety metrics to encourage and ensure continuous improvement and mitigation of potential safety risks. Talent Attraction, Retention, and Development Our employees make essential contributions to our success and ability to drive growth and innovation. Even as the organization has undertaken substantial change in recent years, our vision and Core Values remain the center of our steadfast compliant culture. We are always working to enhance our human resources programs by implementing and integrating enterprise-level processes for talent attraction, career development, and training. Creating a best-in-class, globally consistent process for these employee experiences has become even more important as part of our efforts to compete for talent in the highly-competitive labor market. Glatfelter’s Performance Management program is one of the key tools we use to provide direction, coaching, performance feedback, and encouragement to motivate employees and improve overall individual and Company performance. This is done by linking employee goals, feedback, and rewards to key business objectives. This approach ensures we remain focused on generating value for our customers and shareholders. Glatfelter supports its team by providing fair and competitive wages, comprehensive benefits, multi-faceted wellness programs, and other programs to enhance the lives of our employees. We regularly review our employee offerings to ensure we are positioned to attract, support, and retain world-class talent. We provide flexible work arrangements for jobs that are conducive to working a combination of remotely and in the office, and an employee referral program for our U.S.-based staff and production jobs. Employee Training Training and professional growth are central to developing our workforce and driving long-term success for our organization. Global training encompasses a variety of programs, from apprenticeships and machine-specific skill development, grant-funded partnerships, Lean Six Sigma principles training, leadership development, and compliance training. To ensure we continue to have the necessary resources with the skills needed to support the production of increasingly sophisticated engineered materials, we invest in the development of skills required to operate our machinery, including operational apprenticeship programs in many of our global locations.
2024 PROXY STATEMENT › 33
Diversity, Equity, and Inclusion We are a global company that encourages and embraces different cultures and backgrounds. Our employees, including our Management team, are diverse. Our facilities hire locally for leadership positions, as well as salaried and production positions at all levels. We strive to create an inclusive culture and provide opportunities for people of all backgrounds to share their unique viewpoints and contribute to our success. The global nature of our business helps drive our inclusive corporate environment, as we regularly collaborate with colleagues who have different backgrounds, ethnicities, and world views. We are committed to ensuring our Company is diverse and an inclusive place to work, while also strengthening the communities in which we live. In 2023, we continued to enhance our training offerings through content that reinforces the importance of a diverse, equitable, and inclusive culture, and we allocated a portion of our charitable contributions to support community partners whose missions address social inequities and racial injustice. Supporting Our Communities Through philanthropy and volunteerism, Glatfelter positively impacts many communities and groups across our footprint. We believe that supporting our communities not only involves financial contributions, but also extends to partnering with community organizations, giving time and talent to those who need our help, and supporting causes important to Glatfelter people. We focus our support for nonprofit organizations in four key areas: 1.Education: We encourage the development of knowledge for individuals and application of knowledge for the betterment of society. 2.Civic: We engage in challenges and opportunities that impact the local community, and, where possible, we find opportunities to lead by example. 3.Environment: We support programs that protect and conserve the natural environment, including critical habitats and waterways. 4.Arts and Culture: We recognize the importance of experiences with culture and the arts and help enhance the participation and exposure for local programs. The Glatfelter leadership team encourages each site to identify and support local initiatives in these four key areas. Employees are encouraged to participate in Glatfelter’s Charitable Giving program and may request support for local nonprofit organizations that are important to them and reflect the Company’s Core Values and community priorities. In 2023, Glatfelter recorded donations of approximately $75,000 to organizations in communities where we operate and whose mission is aligned to the four key areas. Contributions included $25,000 to organizations in the Nashville, Tennessee area following a series of devastating tornadoes, $25,000 to the World Central Kitchen for Israel and Gaza humanitarian aid, and $25,000 to Doctors Without Borders for earthquake disaster relief in Turkey and Syria.
2024 PROXY STATEMENT › 34
Compensation Discussion and Analysis | | | | | | | | | | Highlights | Introduction | | | Say-on-Pay Vote | | | Executive Summary | | What We Pay and Why | Compensation Programs | | | Target Pay Mix | | | Perquisites | | | Post-Employment Compensation | | | Policies and Practices | Additional Compensation Policies and Practices | | | Role of the Compensation Committee and Consultant Independence | |
This Compensation Discussion and Analysis (“CD&A”) describes the Company’s executive compensation philosophy and programs, the 2023 compensation decisions made by the Compensation Committee, and the factors influencing its decisions. The CD&A focuses on the 2023 compensation of the following NEOs: •Thomas M. Fahnemann, President and Chief Executive Officer (“CEO”) •Ramesh Shettigar, Senior Vice President (“SVP”), Chief Financial Officer (“CFO”) & Treasurer •Boris Illetschko, Senior Vice President (“SVP”), Chief Operating Officer (“COO”)(1) •David C. Elder, Vice President (“VP”), Strategic Initiatives, Business Optimization & Chief Accounting Officer •Eileen L. Beck, Senior Vice President (“SVP”) Global Human Resources and Administration(2) •Christopher W. Astley,Former Senior Vice President (“SVP”), Chief Commercial Officer(3) •Wolfgang Laures,Former Senior Vice President (“SVP”), Integrated Global Supply Chain & Information Technology(4)
(1) Mr. Illetschko was appointed SVP, COO effective April 5, 2023. Due to European notice periods with respect to his prior employer, his employment started August 1, 2023. (2) Ms. Beck was promoted to SVP on February 1, 2023. (3) Mr. Astley served as the Company’s SVP, Chief Commercial Officer until April 5, 2023. (4) Mr. Laures served as the Company’s SVP, Integrated Global Supply Chain and Information Technology until April 5, 2023. An advisory shareholder vote on the Company’s executive compensation practices (“Say-on-Pay”) was held at the 2023 Annual Meeting of Shareholders, with 88.05% of the shares voting in favor of the Company’s NEO compensation. In determining 2023 compensation, the Compensation Committee considered the outcomes of the 2023 Say-on-Pay vote and built upon the actions taken in 2021 and 2022 by continuing to evaluate the Company’s executive compensation programs to ensure alignment with the Company’s long-term strategy and shareholder expectations. During 2023, we conducted investor outreach as the Company faced difficult market conditions and low stock price performance. Engagement efforts were focused on the performance of the Company and steps taken with the Turnaround Strategy. We value our shareholders’ feedback and will continue to review and take into consideration the results of our Say-on-Pay proposals.
2024 PROXY STATEMENT › 35
2023 Year in Review
Executive Leadership Changes The Board entered 2023 with a view that Glatfelter has the right combination of business segments serving attractive, growth-oriented markets and customers, with sustainable product offerings to address fundamental challenges in today’s changing world. Nevertheless, unprecedented global inflationary challenges, and the geopolitical conflict in Russia/Ukraine, yielded major challenges impacting Glatfelter’s overall financial performance. After Mr. Fahnemann’s appointment to CEO in August 2022, the Board continued to assess the leadership needed to address the specific business concerns and unlock Glatfelter’s full value potential. In an effort to streamline the decision-making and real-time assessment of the business needs for the commercial and supply chain functions under one single point of accountability for delivering results, the Board appointed Mr. Boris Illetschko as SVP, Chief Operating Officer “COO”, replacing Mr. Christopher W. Astley, SVP, Chief Commercial Officer and Mr. Wolfgang Laures, SVP Integrated Global Supply Chain and Information Technology (the “COO transition”) on April 5, 2023. Mr. Illetschko joined Glatfelter on August 1, 2023 after completing his legally required notice period with the prior employer. During the interim period between his appointment and start date, Mr. Fahnemann provided direct leadership to the members of the Management team who report in to Mr. Illetschko. The changes in executive leadership were not related to Glatfelter’s operations, financial reporting or controls, or personal conduct.
2023 Compensation Overview The elements of the executive compensation programs for 2023 included base salary, short-term incentive cash compensation and long-term incentive equity compensation, and other benefits, as summarized in the following table: | | | | | | | | | | Primary Elements of Compensation | | Element | Form | Relation to Performance | | Base Salary | Fixed Cash | Reflects each NEO’s performance, responsibilities, skills, and value to the Company | | Short-Term Incentive (“STI”) | Annual Cash Bonus (Management Incentive Plan (“MIP”)) | Variable pay motivates and rewards NEOs for achieving annual financial results | | Long-Term Incentives (“LTI”) | Performance Share Awards (“PSAs”) | Variable pay motivates and rewards NEOs for achieving cumulative business and financial results derived from the Company as Chief Financial Officer effective May 6, 2022. |
| | | | Company’s strategic plan; directly aligns the NEOs’ interests with shareholders’ interests | 2022 PROXY STATEMENTRestricted Stock Units (“RSUs”) | Promotes retention of key NEOs that is aligned with Company stock price and supports execution of the Company’s strategic plan | | Other Benefits | ›401(k) plan, non-qualified deferred compensation plan (“NQDCP”), health and welfare benefits, severance arrangements, and minimal perquisites | | 14Market-competitive offerings to attract and retain high-caliber NEO talent |
2023 CEO Compensation Highlights Each year, the Board conducts an annual performance evaluation of the Company's Chief Executive Officer for the prior business cycle. Despite his abbreviated tenure, the Board conducted an interim performance review of Mr. Fahnemann in February 2023 to ensure early success. The Board provided feedback that was constructive in establishing Mr. Fahnemann’s critical priorities and leadership approach for 2023. In parallel, the Board reviewed Mr. Fahnemann’s total direct compensation and determined not to make any adjustments given his short tenure and market position. 2024 PROXY STATEMENT › 36
2023 NEO Compensation Overview and Highlights 2023 was an important year for Glatfelter, as we continued to align senior leadership to focus on driving operational improvements and sustainable profitability amid a very challenging environment. The COO transition provided an opportunity for the Compensation Committee to reinforce the importance of driving financial performance, operational excellence, and commercial strategy through a single point of accountability coupled with targeted compensation actions for certain NEOs. On April 5, 2023, the Company announced the appointment of Mr. Boris Illetschko as Senior Vice President, Chief Operating Officer. Mr. Illetschko joined Glatfelter in August 2023 after completing his legally required notice period with respect to his prior employer. Mr. Illetschko’s historical experience within global commercial and operational leadership roles positioned him to play a critical role in executing Glatfelter’s Turnaround Strategy. On May 1, 2023, following termination from the Company on April 5, 2023, Mr. Astley entered into a Separation Agreement with the Company, which was consistent with the guidelines generally offered to long-standing executives. Under the terms of the Separation Agreement, the Company agreed to (1) provide a cash payment in lieu of outplacement valued at $30,000, (2) provide severance to be paid over 12 months valued at $636,586, (3) provide subsidized medical benefits over the 12-month severance period estimated to be valued at approximately $15,421, and (4) provide a cash payment for earned but unused vacation valued at $13,493. The provisions of Mr. Astley’s medical benefits and payment for unused vacation were consistent with the program provided to long-service employees of the Company. Mr. Astley was not eligible to receive an annual cash bonus for 2023 based on the terms of his Separation Agreement and he forfeited any unvested equity awards, consistent with the terms of the applicable award agreements. Additional details regarding Mr. Astley’s separation compensation can be found on page 51Frequently Asked Questions under “Additional Compensation Policies and Practices.” On June 14, 2023, Mr. Laures executed a Termination Agreement after being released from duty to work on April 5, 2023. Under the terms of his Termination Agreement, which was consistent with his employment contract, the Company agreed to (1) continue to his salary (totaling approximately 186,000 CHF) for the duration of his notice period ending August 31, 2023 (“FAQS”Termination Date”), (2) provide a cash payment in lieu of outplacement of 30,000 CHF, and (3) provide reimbursement of up to 15,000 USD per year for fiscal years 2022 and 2023 for tax assistance. Mr. Laures was not eligible to receive an annual cash bonus for 2023 based on the terms of his Termination Agreement and he forfeited any unvested equity awards, consistent with the terms of the applicable award agreements. Details regarding Mr. Laures’ Notice Period pay is included under “Salary” in the Summary Compensation Table on page 56. Additional details pertaining to Mr. Laures’ separation compensation can be found on page 51 under “Additional Compensation Policies and Practices.” The changes in executive leadership were not related to Glatfelter’s operations, financial reporting or controls, or personal conduct. Additionally, effective February 1, 2023, the Company promoted Ms. Eileen Beck to Senior Vice President, Global Human Resources & Administration. Ms. Beck joined the Company in 2012 and served in leadership roles with increasing responsibility critical to the Human Resources function. Ms. Beck’s extensive experience in global total rewards, strategic human capital management, and communications uniquely positions her to drive critical people initiatives while simultaneously advancing the business strategy. The NEOs received the following compensation and benefits, with short- and long-term incentives linked to Company performance: •Base salaries: A key input into the Compensation Committee’s pay decisions for 2023 was the need for ongoing continuity of certain members of the Management team in order to deliver on the Turnaround Strategy while positioning the business to navigate difficult market challenges. Salary increases ranging between 0% to 10.7% were awarded to Messrs. Elder and Shettigar and Ms. Beck effective February 1, 2023, consistent with market benchmarking and in acknowledgement of the NEO’s role in driving the Company’s business transformation. Mr. Elder received a 3.8% increase given his critical institutional knowledge and additional responsibilities for leading the Turnaround Strategy and project oversight. Mr. Shettigar received a ~6% increase in an effort to progress his salary towards aligning to the 50th percentile of market and to acknowledge his overall performance. Ms. Beck received a ~10.7% increase in conjunction with her promotion to Senior Vice President, Global Human Resources and Administration. Messrs. Fahnemann, Astley and Laures did not receive any base salary increases. Mr. Illetschko’s base salary was established upon hire commensurate with market. •Short-term incentive awards payable under the Management Incentive Plan (“MIP”): Under Mr. Fahnemann’s leadership, the Company embarked on a Turnaround Strategy. As a result, the Compensation
2024 PROXY STATEMENT › 37
Committee adopted a MIP design intended to incentivize NEOs to remain focused on earnings to drive improved financial performance while simultaneously introducing Non-Financial Strategic Objectives intended to reinforce accountability for executing key initiatives critical to the business. The NEOs’ annual incentives under the MIP were contingent on the Company’s achievement of Adjusted EBITDA (weighted 80%) and discretionary Strategic Objectives (weighted 20%) to encourage the NEOs to focus on earnings and driving the Turnaround Strategy. –Individual STI target bonus opportunities were unchanged for 2023, except for Mr. Elder whose target was increased from 45% to 50% to recognize his leadership and commitment to leading the Company’s Turnaround Strategy. Messrs. Astley and Laures were ineligible to receive any payout under the terms of their separation agreements. –The combined result for Adjusted EBITDA fell short of achieving the threshold performance level established by the Compensation Committee. The Board approved a 100% payout of the Strategic Objectives, yielding a 20% payout for the annual cash bonuses for 2023. •Long-term Incentives (“LTI”): The Company provided all NEOs with market-competitive equity awards. Consistent with previous years, each NEO’s annual LTI award consisted of 40% time-based RSUs and 60% PSAs. In 2023, no changes were made to LTI annual target values, except for Messrs. Shettigar and Elder whose values were increased to $500,000 and $300,000, respectively, in order to reinforce the importance of their continued leadership and accountability to deliver on the financial and operational expectations. In an effort to manage the available equity plan share pool, shares were calculated by dividing the target value by a stock price grant value of $5.00 (and corresponding Monte Carlo value for TSR metric), rather than using the actual stock price on date of grant. The 2023 equity awards for Messrs. Astley and Laures were subsequently forfeited upon their respective separations. –2023 RSUs ▪The time-based RSUs granted to the NEOs in 2023 (the “2023 RSUs”) are weighted 40% of the full award value and will vest equally in 1/3rd increments on the first, second, and third anniversaries of the grant date. ▪ A $5.00 stock price grant value was used for purposes of calculating the number of shares subject to the RSU grant –2023 PSAs: ▪The LTI program is designed to be primarily performance-based, with 60% of each NEO’s grant date equity value (at target) awarded in PSAs that are tied directly to the Company’s achievement of financial and relative TSR performance goals derived from the Company’s strategic plan. In 2023, the plan metrics were changed to reinforce Management’s focus on earnings growth and reducing debt. As such, Adjusted EBITDA was included as a financial metric, since it is viewed as an important factor for improving the Company’s financial performance in the near-to long-term. In addition, 2023 PSAs include Senior Secured Net Leverage and Relative TSR performance goals. ▪The PSAs granted to the NEOs are payable in shares of Company common stock contingent upon the achievement of two-year performance goals tied to cumulative Adjusted EBITDA (weighted 50%) and Senior Secured Net Leverage (“Net Leverage”) (weighted 25%) and a three-year TSR performance metric relative to the S&P Small Cap 600 Index (weighted 25%). The PSAs are payable at the end of three years based on achievement of the performance goals and continued employment. ▪A $5.00 stock price grant value (and corresponding Monte Carlo value for TSR metric) was used for purposes of calculating the number of shares subject to the PSA grant. –Outstanding PSAs: ▪For the PSAs granted in 2021 (the “2021 PSAs”), no payout was achieved based on the Company’s two-year average ROCE performance during the period ended December 31, 2022. In addition, the Company’s cumulative three-year relative TSR for the performance cycle ranked below the 25th percentile (threshold), resulting in no payout. The 2021 PSAs vested on December 31, 2023, subject to continued service through such date; however, no payout was earned. 2024 PROXY STATEMENT › 38
▪For the PSAs granted in 2022 (the “2022 PSAs”), a potential payout of 21.1% was achieved based on the Company’s two-year cumulative EBITDA (weighted 50%) and 0% of target was achieved for the cumulative ROCE during the two-year performance period ended December 31, 2023. The 2022 PSAs are subject to the three-year relative TSR performance for the 2022-2024 period and continued service through December 31, 2024 for vesting. ▪The initial 2022 Fahnemann PSA grant awarded to Mr Fahnemann upon hire was designed to foster the realignment of the business strategy to drive stock price appreciation. It will cliff vest after three years and will be earned if certain stock price hurdles are achieved over the three-year performance period ending August 23, 2025. Specifically, 50% of Mr. Fahnemann’s initial PSAs will be earned if a stock price of $10 per share is reached and maintained for 20 consecutive trading days throughout the performance period. The remaining 50% will be earned if a stock price of $18 per share is reached and maintained for 20 consecutive trading days throughout the performance period. •Retirement Programs: –The Company maintains a qualified 401(k) plan for U.S. employees, which includes a discretionary Company contribution on eligible earnings (base salary and earned annual short-term incentive). The Company contribution for 2023 was 7% of earnings, capped at the required limits of the Internal Revenue Code of 1986, as amended (the “Code”), and administered consistent with the Code requirements for allocating excess pension assets received by the 401(k) plan upon termination of the Company’s Retirement Plan in 2019. –The Company maintains a non-qualified deferred compensation plan (“NQDCP”) for U.S. employees that aligns with contemporary market practice, which replaced the Supplemental Executive Retirement Plan (“SERP”) that was frozen effective December 31, 2019. The NQDCP coordinates with the Company’s 401(k) plan, and participants will receive a Company contribution of up to 7% on earnings in excess of the annual Code earnings limit. Accrued benefits from the frozen SERP were converted to opening balances under the new NQDCP as of January 1, 2020, which will be credited with a market rate of interest until distribution. –With respect to Messrs. Illetschko and Laures, a defined contribution plan was implemented for all Swiss employees, which provides the mandatory minimum contribution rates based on age, paid 50% by the employer and 50% by the employee. Under the terms of his Swiss Contract, Mr. Illetschko also receives an amount of 15% of gross base pay as a contribution toward his Austrian private pension fund. This benefit is paid directly to Mr. Illetschko as a cash stipend. Additional details regarding elements of the compensation program are included on page 36 under “2023 Compensation Overview” and on page 42 of the “Target Pay Mix” section. Compensation Program Objectives The objectives of the Company’s executive compensation programs are to attract, retain, motivate, and reward those executives crucial to the success of the Company and to create long-term shareholder value. Our programs are organized around three principles: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Pay for Performance | | Pay at Risk | | Shareholder Alignment | | | Rewarding achievement of financial outcomes that increase shareholder value | |
Providing a mix of compensation with strong emphasis on short- and long-term incentives tied to the Company’s financial performance | | Requiring executives to own a meaningful personal stake in the Company | | | | | | | | |
2024 PROXY STATEMENT › 39
Overview The Compensation Committee believes compensation should reflect the Company’s financial performance and be competitive based on a person’s responsibilities, individual performance, and ability to exemplify the Company’s Core Values of Integrity, Financial Discipline, Mutual Respect, Customer Focus, Environmental Responsibility, and Social Responsibility. The Compensation Committee recommends approval of the Company’s compensation philosophy to the Board and oversees the compensation programs for the NEOs and other executive officers of the Company. All compensation decisions impacting the CEO are approved by the Compensation Committee and require the ratification and approval of the independent members of the Board. Total compensation for the NEOs and other Company executive officers consists of base salary, short- and long-term incentives, retirement and other benefits, and minimal perquisites. The Company’s executive compensation programs generally target total compensation at a reasonable range around the size-adjusted 50th percentile of its Compensation Peer Group for a given year. A significant portion of each NEO’s compensation is tied to the Company’s financial performance. The opportunity to earn incentive compensation, and the level of pay at risk, generally increases commensurate with the NEO’s level of responsibility. The Compensation Committee reviews the incentive plans annually, as discussed in the “Risk Oversight” section of this proxy statement, to determine whether they present undue risk to the Company. Based on this review of the incentive plans and input from the independent compensation consultant (the “Consultant”), the Compensation Committee determined that the Company’s compensation policies and practices are not reasonably likely to have a material adverse impact on the Company. Determination of Compensation Levels The Compensation Committee seeks input from certain NEOs, external advisors, and other Company executives when determining compensation decisions. Specifically: | | | | The Compensation Committee retains an independent compensation consultant (the “Consultant”) that regularly meets with the Compensation Committee in executive session to provide advice, information, and analysis on executive compensation and benefits. | | The Compensation Committee confers with the Consultant, the CEO, the CFO, and the SVP of Global Human Resources and Administration to design compensation programs and obtain background on the Company’s key financial objectives, metrics, and performance, and design of the Company’s short- and long-term incentive compensation programs. | | Compensation decisions pertaining to the CEO are ratified by the independent members of the Board, based on recommendations by the Compensation Committee and guidance from the Consultant. | | Compensation decisions pertaining to the NEOs, other than the CEO, are made by the Compensation Committee with consideration of recommendations from the CEO and guidance from the Consultant. | | The Company’s legal counsel and Human Resources staff provide legal, governance, and technical input to the Compensation Committee with oversight by the Consultant. |
The Compensation Committee may invite NEOs or other executive officers to attend portions of its meetings; however, the Compensation Committee meets in executive session alone, with and without the Consultant, to reach final decisions regarding NEO compensation. Additionally, while the CEO makes recommendations to the Compensation Committee on the other NEOs’ compensation, he does not provide input or partake in the discussions and deliberations regarding his own compensation. To assist with reviewing NEO compensation, the Compensation Committee considers market benchmark data, pay history, tally sheets, vested and unvested equity holdings, and required share ownership. The Compensation Committee uses this information, in addition to market compensation data, individual NEO and Company performance, and the Company’s succession planning when making compensation decisions for each NEO. Consistent with the prior year, the Compensation Committee continued to retain the services of Meridian as the Consultant during 2023.
2024 PROXY STATEMENT › 40
The role of the Consultant is to assist with: •providing competitive compensation market data •assessing the competitiveness of the executive compensation programs •making recommendations regarding program design based on prevailing market practices and business conditions •advising the Compensation Committee on: –the level of each NEO’s compensation –the composition of the Compensation Peer Group –incentive plan performance metrics and design –external trends and regulatory developments –changes or enhancements to the Company’s executive compensation policies –Say-on-Pay guidance and input Compensation Peer Group and Benchmarking Process To determine market levels, the Company targets a reasonable range around the size-adjusted 50th percentile of the Company’s peer group companies (the “Compensation Peer Group”), and the Compensation Committee reviews target total compensation for similarly situated executives from the Compensation Peer Group where data is available, as well as from multiple nationally-recognized compensation survey sources including: •William H. Mercer’s Executive Compensation Database •Willis Towers Watson’s Executive Compensation Database A market analysis is performed annually for the CEO and CFO and biennially for the remaining NEOs unless market conditions warrant a market study for additional executive roles for the year. For 2023 compensation decisions, the market review included the total compensation of the CEO, CFO, and all other NEOs. The Compensation Committee annually reviews the Company’s peer group companies to ensure that they are a relevant and appropriate peer group. In 2022, the Compensation Committee reassessed the Company’s Compensation Peer Group for 2023 and made changes appropriate to the current market. The Compensation Peer Group continues to be comprised of size-appropriate peer companies that share common industry and financial characteristics and compete with the Company for executive and employee talent. The Compensation Committee used the following list of companies to establish 2023 compensation decisions: | | | | | | 2023 Compensation Peer Group (1) | | AptarGroup, Inc. | Neenah, Inc. | | Balchem Corporation | PotlatchDeltic Corporation | | Clearwater Paper Corporation | Quaker Chemical Corporation | | GCP Applied Technologies Inc. | Rayonier Advanced Materials Inc. | | H.B. Fuller Company | Rayonier Inc. | | Innospec Inc. | Resolute Forest Products, Inc. | | Kaiser Aluminum Corporation | Schweitzer-Mauduit International, Inc. | | Mercer International Inc. | Tredegar Corporation | | Myers Industries, Inc. | |
(1) Lydall, Inc. and Verso Corporation were removed from the Compensation Peer Group for 2023, as executive pay data for these companies is no longer publicly available. Compensation benchmarking for 2023 was conducted in 2022 prior to Schweitzer-Mauduit International, Inc. and Neenah, Inc. merging to form Mativ Holdings, Inc.
2024 PROXY STATEMENT › 41
The Compensation Committee is using the following list of companies to establish 2024 compensation decisions: | | | | | | 2024 Compensation Peer Group (1) | | Aptar Group, Inc. | Mercer International Inc. | | Balchem Corporation | Myers Industries, Inc. | | Clearwater Paper Corporation | PotlatchDeltic Corporation | | H.B. Fuller Company | Quaker Chemical Corporation | | Innospec Inc. | Rayonier Advanced Materials Inc. | | Kaiser Aluminum Corporation | Rayonier Inc. | | Mativ Holdings, Inc. | Tredegar Corporation |
(1) GCP Applied Technologies Inc. and Resolute Forest Products, Inc. were removed from the Compensation Peer Group for 2024, as executive pay data for these companies is no longer publicly available. Former peer companies Schweitzer-Mauduit International, Inc. and Neenah, Inc. merged in 2022 to form Mativ Holdings, Inc.
Annually, the Compensation Committee reviews each NEO’s compensation mix of base salary, STI, and LTI, which comprises total target direct compensation for each NEO, to ensure that an appropriate level of the NEO’s recurring target compensation is tied to Company performance. The Compensation Committee believes this approach is appropriate to provide year-over-year consistency in analyzing the pay mix when compared to the Compensation Peer Group. The targeted annual pay mix of compensation varies for each NEO, with an average of 60% of target pay considered at-risk for the active NEOs (excluding the CEO). This average does not include one-time equity grants or other health, welfare, or retirement benefits. Mr. Fahnemann has the highest level of STI and LTI target opportunity compared to the other NEOs, with 79% of his annualized total target direct compensation considered at-risk and variable. The Compensation Committee believes this level is appropriate for Mr. Fahnemann given his responsibility as CEO to deliver on the Company’s Turnaround Strategy and long-term shareholder value.
| | | | | | | | | | Fixed 21% Variable 79% | | Fixed 40% Variable 60% |
Base Salary The Compensation Committee believes base salary, which contributes to the Company’s compensation objectives of attracting and retaining talented executives, is an important element of compensation. The base salaries of the NEOs are reviewed and approved annually by the Compensation Committee and, in the case of the CEO, ratified by the independent members of the Board. The Compensation Committee considers several factors, without any assigned relative weightings, when determining base salary increases for NEOs: •Salary recommendations from the CEO for the NEOs other than himself •Company and individual NEO performance •Accountability and complexity of the NEO’s role in attaining Company objectives 2024 PROXY STATEMENT › 42
•External competitiveness of the NEO’s compensation •Executive succession planning •Internal equity and retention considerations In 2023, salary increases were awarded effective February 1, 2023, and were consistent with benchmarking. The Compensation Committee believes that the 2023 salary increases were appropriate when compared to market, and in light of the NEOs’ roles and the value they provide in overcoming the business challenges. A key input into the Compensation Committee’s pay decisions for 2023 was the need for ongoing continuity of certain members of the Management team in order to deliver on the Turnaround Strategy while positioning the business to navigate difficult market challenges. The below table provides the details related to the NEOs’ 2023 base salary changes. | | | | | | | | | | | | | | | | | | NEO Base Salaries (Annualized) (1) | | NEO | | 2022 Base Salary
(effective February 1, 2022) | | 2023 Base Salary
(effective February 1, 2023) | %
change | | Fahnemann | | $1,050,000 | | $1,050,000 | —% | Shettigar(2) | | $425,000 | | $450,000 | 5.9% | Illetschko(3) | | N/A | | $459,638 | N/A | Elder(4) | | $335,410 | | $348,000 | 3.8% | Beck(5) | | $334,374 | | $370,000 | 10.7% | | Astley | | $467,761 | | $467,761 | —% | Laures(6) | | $497,198 | | $497,198 | —% |
(1)See Summary Compensation Table on page 56for the base salary amounts actually earned by the NEOs in 2023. (2)Mr. Shettigar received a salary increase to progress his salary towards aligning to the 50th percentile of market and to acknowledge his overall performance. (3)Mr. Illetschko joined the company in August 2023 and his salary was paid in EURO (EUR) and converted to USD using an exchange rate of 1.0815 EUR:USD. (4)Mr. Elder received a salary increase given his critical institutional knowledge and additional responsibilities for leading the Turnaround Strategy and project oversight. (5)Ms. Beck received a salary increase in connection with her promotion to SVP, Global Human Resources & Administration. (6)Mr. Laures’s salary was paid in Swiss Francs (CHF) and converted to USD using an exchange rate of 1.11284 CHF:USD Short-Term Incentives: The Management Incentive Plan The Company provides an annual STI bonus opportunity to the NEOs under the Company’s MIP. The Compensation Committee approves a target bonus for each NEO expressed as a percentage of the NEO’s base salary. Generally, the Compensation Committee establishes target bonuses for the NEOs at the 50th percentile of the Company’ Compensation Peer Group for a given year. Individual STI target bonus opportunities were unchanged for 2023, except for Mr. Elder, whose target was increased from 45% to 50% to recognize his leadership and commitment to leading the Company’s Turnaround Strategy. In setting Mr. Illetschko’s STI bonus opportunity, the Compensation Committee aligned his target to the 50th percentile of market.
| | | | | | | | | | NEO MIP Target Bonus | | NEO | 2022 Target Bonus (as a percentage of 2022 Base Salary) | 2023 Target Bonus (as a percentage of 2023 Base Salary) | | Fahnemann | 100% | 100% | | Shettigar | 60% | 60% | | Illetschko | N/A | 65% | | Elder | 45% | 50% | | Beck | 50% | 50% | | Astley | 60% | 60% | | Laures | 55% | 55% |
2024 PROXY STATEMENT › 43
In February of each year, the Compensation Committee, in consultation with the Audit Committee Chair, determines the degree to which the pre-established MIP performance metrics have been met with respect to the prior fiscal year. The Compensation Committee then decides whether — and if so, at what percentage level — to award bonuses to the NEOs. The amount ultimately earned by the NEOs depends on the achievement of performance metrics; provided, however, the Compensation Committee may, in its discretion, adjust downward any bonus of an NEO based on its judgment of Management’s achievement of the financial outcomes. Any downward adjustment to the CEO’s bonus requires ratification and approval by the independent members of the Board. Historically, the MIP design was comprised solely of financial performance metrics weighted 80% EBITDA and 20% Free Cash Flow. Under Mr. Fahnemann’s leadership, the Company embarked on a Turnaround Strategy. As a result, the Compensation Committee adopted a MIP design intended to incentivize NEOs to remain focused on earnings to drive improved financial performance while simultaneously introducing Non-Financial Strategic Objectives intended to reinforce accountability for executing key initiatives critical to the business. The 2023 MIP was based on Adjusted EBITDA achievement weighted 80% and Non-Financial Strategic Objective components weighted 20%. The Adjusted EBITDA metric had a threshold of 84% achievement of target performance (which pays 50% of the target award) and a ceiling of 120% achievement (which pays 200% of the target award). Adjusted EBITDA performance below threshold levels results in a zero payout for that metric. The Non-Financial Strategic Objective metric achievement is based on Board judgement of key strategic initiatives outlined on a Management Scorecard. The Board may apply up to 2x upside for the strategic component based on Management’s successful delivery of the strategic initiatives. Achievement of the Non-Financial Strategic Initiatives is determined independent from the Adjusted EBITDA metric. •Adjusted EBITDA (weighted 80%) - Adjusted EBITDA (“Adj. EBITDA”), a non-GAAP measure, is defined as the Company’s revenues minus its costs, after excluding from such costs interest expense, taxes, depreciation, and amortization subject to adjustment (such as foreign exchange adjustments and timberland sales) as determined by the Compensation Committee. •Non-Financial Strategic Objectives (weighted 20%) - Non-Financial Strategic Objectives (“Strategic Objectives”) is a discretionary metric that measures achievement of key initiatives on a Management Scorecard. The Management Scorecard includes goals pertaining to refinancing and investor relations, execution of the Turnaround Strategy, building organizational skills and talent, progressing organic growth and other strategic initiatives. These metrics are intended to focus the NEOs on generating earnings and reinforcing accountability for executing key strategic initiatives. In 2023, the performance metrics were weighted as follows for all NEOs: The targeted performance levels of Adj. EBITDA and Strategic Objectives were derived from the Company’s 2023 budgeted levels and business strategy as approved by the Board. Developing the budget and critical business priorities involves a variety of factors and assumptions, including the Company’s strategic planning process and an assessment of the future business environment. 2024 PROXY STATEMENT › 44
•Short-term incentive awards payable under the Management Incentive Plan (“MIP”): The NEOs’ annual incentives under the MIP were contingent on the Company’s achievement of Adj. EBITDA and Strategic Objectives. –Individual STI target bonus opportunities were unchanged for 2023, except for Mr. Elder whose target was increased from 45% to 50% to recognize his leadership and commitment to leading the Company’s Turnaround Strategy. Messrs. Astley and Laures were ineligible to receive any payout under the terms of their separation agreements. –The combined result for Adj. EBITDA fell short of achieving the threshold performance level established by the Compensation Committee, so no payout was made for that metric. The Board approved a 100% payout of the Strategic Objectives yielding a 20% combined payout for the annual cash bonuses for 2023. Consistent with historic practice, all financial performance targets were established at the start of the year and maintained throughout the fiscal year, with financial targets set above the prior year’s actual results to emphasize the importance of year-over-year earnings growth. No adjustments were made to lower the performance targets, or otherwise, on account of the impacts from any internal/external business conditions. The following table outlines the approved threshold, target, and maximum payment opportunities and financial goals for the NEOs under the 2023 MIP, as well as the weighted payout results based on the performance metric weights. | | | | | | | | | | | | | | | | | | | | | | | | | NEO MIP Performance Metrics and Payout Levels | | Plan Goals | 2023 Results | | Below Threshold (0% Payout) | Threshold (50% Payout) | Target (100% Payout) | Maximum (200% Payout) | Actual | Achievement Factor | Weighted MIP Payout % | | 0% | 50% | 100% | 200% | | | | | Achievement of Financial Goals | <84% | 84% | 100% | 120% | | | 20.0% | Adjusted EBITDA (millions) (1) | < $100 | $100.0 | $120.0 | $144.0 | $95.3 | 0% | | Achievement of Non- Financial Goals | | Strategic Objectives | | | Strategic Objectives (2) | | 0% | 100% | 200% | 100% | 100% |
(1)Adjusted EBITDA metric weighted 80%. (2)Non-Financial Strategic Objectives weighted 20%. Determination of the strategic objectives are based on Board judgement and comprised of achievement of the initiatives outlined on the Management Scorecard. The 2023 MIP target bonuses and payouts for the NEOs are shown below: | | | | | | | | | | | | | | | | | | | NEO MIP Payments | | NEO | 2023 Target Bonus (as a percentage of 2023 Base Salary) | Eligible Salary | 2023 MIP Target Bonus | 2023 MIP Payout Percent | 2023 MIP Payout | | Fahnemann | 100% | $ | 1,050,000 | | $ | 1,050,000 | | 20.0% | $210,000 | | Shettigar | 60% | $ | 450,000 | | $ | 270,000 | | 20.0% | $54,000 | Illetschko(1) | 65% | $ | 191,516 | | $ | 124,485 | | 20.0% | $24,897 | | Elder | 50% | $ | 348,000 | | $ | 174,000 | | 20.0% | $34,800 | | Beck | 50% | $ | 370,000 | | $ | 185,000 | | 20.0% | $37,000 | Astley(2) | 60% | $ | 467,761 | | $ | 280,657 | | 0.0% | $0 | Laures(2) | 55% | $ | 497,198 | | $ | 273,459 | | 0.0% | $0 |
(1)As Mr. Illetschko began service as COO in August 2023, his 2023 MIP target bonus was prorated to reflect the period during 2023 that he served as COO. Mr. Illetschko’s bonus is paid in EUR and converted to USD using an exchange rate of 1.0815 EUR:USD. Pro-rated bonus opportunity in local currency is 23,021 EUR. (2)As Mr. Astley and Mr. Laures ceased to be employed by the Company during 2023, they were not eligible to receive any 2023 MIP payout. Mr. Laures is paid in CHF and all amounts reflected are converted to USD using an exchange ratio of 1.11284 CHF:USD.
2024 PROXY STATEMENT › 45
Long-Term Incentives The Compensation Committee believes long-term compensation provides strong incentives for executives to deliver and sustain long-term financial performance to the Company’s shareholders. Annually, the Compensation Committee determines the target opportunity of LTI compensation to be granted to executives by targeting the size-adjusted 50th percentile of the market, but reserves discretion to deviate from the target. The Company provided NEOs an annual LTI award comprised of 40% time-based RSUs and 60% PSAs. In 2023, LTI values were increased for Messrs. Shettigar and Elder to provide upside opportunity for earning Glatfelter equity and to reinforce the importance of their roles and leadership given the business challenges. To further support the alignment of the interests of NEOs and shareholders and to tie in the Company’s annual operating budget for its three-year strategic plan, the 2023 LTI program consisted of: –2023 RSUs ▪The time-based RSUs granted to the NEOs in 2023 (the “2023 RSUs”) are weighted 40% of the full award value and will vest equally in 1/3rd increments on the first, second, and third anniversaries of the grant date. ▪A $5.00 stock price grant value was used for purposes of calculating the number of shares subject to the RSU grant. –2023 PSAs: ▪The LTI program is designed to be primarily performance-based, with 60% of each NEO’s grant date equity value (at target) awarded in PSAs that are tied directly to the Company’s achievement of financial and relative TSR performance goals derived from the Company’s strategic plan. In 2023, the plan metrics were changed to reinforce Management’s focus on earnings growth and reducing debt. As such, Adj. EBITDA was included as a financial metric since it is viewed as an important factor for improving the Company’s financial performance in the near-to long-term. In addition, 2023 PSAs include Senior Secured Net Leverage and Relative TSR performance goals. ▪The PSAs granted to the NEOs receive shares of Company common stock contingent upon the achievement of two-year performance goals tied to cumulative Adj. EBITDA (weighted 50%) and Senior Secured Net Leverage (“Net Leverage”) (weighted 25%) and a three-year TSR metric relative to the S&P Small Cap 600 Index (weighted 25%). ▪The PSAs are payable at the end of three years based on achievement of the performance goals and continued employment. TSR payouts will be capped at 100% of target in the event GLT absolute TSR is negative for the 3-year performance period. ▪A $5.00 stock price grant value (and corresponding Monte Carlo value for TSR metric) was used for purposes of calculating the number of shares subject to the PSA grant.
2024 PROXY STATEMENT › 46
The 2023 LTI program design is summarized below: | | | | | | | | | | | | | 2023 Annual LTI Program Design | Equity Vehicle (Weight) | Compensation Opportunity | Financial Performance Metrics | Objective | PSAs (60%) | –Ability to earn shares of Company common stock upon the attainment of a pre-established two-year performance goal based on Adjusted EBITDA and Senior Secured Net Leverage (January 1, 2023 through December 31, 2024) and a three-year relative TSR performance goal (January 1, 2023 through December 31, 2025). –Vesting occurs at the end of the three-year period, subject to continued employment. –Adjusted EBITDA: –Threshold performance level: 60% achievement results in a 20% of target payout. –Maximum performance level: 140% achievement results in a 200% of target payout. –Net Leverage: –Threshold performance level: 3.0x achievement results in a 50% payout –Maximum performance level: 1.5x achievement results in a 200% payout –Relative TSR: –Threshold performance level: 25th percentile achievement results in a 50% payout –Maximum performance level: 75th percentile or greater achievement results in a 200% payout | –Weighted 50% on two-year cumulative Adjusted EBITDA –Weighted 25% on Senior Secured Net Leverage at FYE 2024 –Weighted 25% on the three-year relative TSR metric (S&P Small Cap 600 Index). | –Align NEOs’ and shareholders’ interests to drive stock price appreciation. –Drive long-term earnings growth and reduce debt. | RSUs (40%) | –Ability to earn shares of Company common stock based on continued employment through the vesting date(s). –Pro-rata, time-based vesting: 1/3rd increments on the first, second, and third anniversaries of the grant date. | –Value increases as the Company stock price increases. | –Promote retention of NEOs to support execution of the Company’s strategic plan.
–Provide opportunity to obtain share ownership |
2024 PROXY STATEMENT › 47
Adj. EBITDA is a commonly used measure of the cash earnings that are generated. Senior Secured Net Leverage was introduced given the importance of achieving certain debt leverage milestones under the refinanced debt covenant. TSR is a measure of financial performance, indicating the total amount a shareholder reaps from an investment. These metrics are appropriate due to the focus on generating earnings, debt management, and profitability across the business, as well as aligning the interests of shareholders with those of the NEOs and rewarding for out-performance compared to peers. The 2023 PSAs have a two-year Adj. EBITDA and Net Leverage performance period and a three-year relative TSR performance period. The three-year relative TSR metric is measured against the S&P Small Cap 600 Index at the end of the vesting period. TSR payouts will be capped at 100% of target in the event GLT absolute TSR is negative for the 3-year performance period. The Compensation Committee believes that a two-year Adj. EBITDA and Net Leverage performance period is appropriate for the 2023 PSAs at this time, in order to give more accurate visibility to goal setting. In setting a two-year Adj. EBITDA and Net Leverage performance measurement period for the 2023 PSAs, the Compensation Committee considered: (1) the need to provide line-of-sight to incentivize the NEOs to achieve earnings goals; and (2) the importance of achieving certain debt leverage milestones under the refinanced debt covenant. The Compensation Committee decided to set a three-year relative TSR metric, in order to promote sustained performance focus and encourage long-term retention. Given its relationship to our annual operating plan and business strategy, the pre-established Adj. EBITDA and Net Leverage goals and their specific target levels for the 2023-2024 performance period are confidential and commercially-sensitive information that we do not publicly disclose until after the performance period is completed. We believe that such information would provide our competitors, customers, and other third parties with significant insights regarding our confidential business strategies and could cause us substantial competitive harm. The relative TSR metric is not determined until it is measured against the S&P Small Cap 600 Index at the end of the three-year performance period (December 31, 2025). 2023 RSUs The 2023 RSUs vest equally in 1/3rd increments on the first, second, and third anniversaries of the grant date. The Compensation Committee determined that pro-rata vesting is appropriate for the 2023 RSUs because it fosters employee share in the business and is a market-competitive vesting schedule. The 2023 RSUs and 2023 PSAs granted were based on the NEOs’ overall responsibilities and individual performance, and information provided by the Consultant based on a market benchmarking for each position. As noted above, Messrs. Shettigar and Elder received increased LTI target values in order to reinforce the importance of their continued leadership and accountability to deliver on the financial and operational expectations despite anticipated business challenges. Messrs. Astley and Laures forfeited their respective 2023 RSUs and 2023 PSAs, as they separated from service before such awards vested. The following table provides a summary of the 2023 RSUs and 2023 PSAs (at target). | | | | | | | | | | | | | | | | | | 2023 LTI Grants (1) | | | | PSAs | | NEO | Total Shares (2) | Time Based RSU's | Minimum Shares (0% payout below threshold) | Performance Share Target (100% payout) | Maximum Shares (200% payout at Maximum) | | Fahnemann | 579,230 | 240,000 | — | 339,230 | 678,460 | | Shettigar | 96,538 | 40,000 | — | 56,538 | 113,076 | | Illetschko | 95,771 | 39,682 | — | 56,089 | 112,178 | | Elder | 57,923 | 24,000 | — | 33,923 | 67,846 | | Beck | 48,269 | 20,000 | — | 28,269 | 56,538 | Astley(3) | 101,365 | 42,000 | — | 59,365 | 118,730 | Laures(3) | 71,132 | 29,473 | — | 41,659 | 83,318 |
(1)Additional details regarding the NEOs’ 2023 LTI grants can be found in the Grants of Plan-Based Awards table on page 58 (2)Total shares reflect the time-based RSUs and PSAs assuming target performance. In an effort to manage the equity plan share pool, a $5.00 stock price grant value (and corresponding Monte Carlo value for market conditioned shares) was used to calculate shares. (3)Messrs. Astley and Laures separated before meeting the vesting requirements for the 2023 LTI grants, and therefore, all reflected 2023 PSAs and 2023 RSUs were forfeited. 2024 PROXY STATEMENT › 48
Vesting of Previous Grants The 2021 PSAs vested based on a two-year performance goal tied to ROCE and a three-year performance goal tied to a relative TSR metric. In 2022, the plan metrics were changed to reinforce Management’s focus on earnings growth and to align with a metric more closely tied to managing the business. As such, Adj. EBITDA was included as a financial metric since it is viewed as an important factor for improving the Company’s financial performance in the near-to long-term. In addition, 2022 PSAs continued to include ROCE and Relative TSR in the plan. In 2023, Adj. EBITDA remained the primary performance metric given its importance to evaluating the company’s near- to long-term financial success. 2023 PSAs continued to include Relative TSR in the plan and introduced Senior Secured Net Leverage given the importance of achieving certain debt leverage milestones under the refinanced debt covenant. The chart below illustrates the overlapping performance cycles for 2021 PSAs, 2022 PSAs, and 2023 PSAs.
PSAs that were granted in 2021 vested on December 31, 2023, following the conclusion of a two-year performance period ended December 31, 2022, and the Company’s cumulative three-year relative TSR for the performance cycle ending December 31, 2023. Based on below threshold performance for both ROCE and Relative TSR, no payout was earned for the 2021 PSAs.
The following table illustrates the pre-determined performance goals, as well as the final results and payout level based on actual performance delivered during the performance period for the 2021 PSAs: | | | | | | | | | | 2021 Performance Awards | | Two-Year Average ROCE
Weighted 70% | Three-Year Relative TSR Weighted 30% | | Maximum | 8.4% | >75th | | Target | 6.0% | 50th | | Threshold | 4.0% | 25th | | Actual | 2.4% | 2nd | | Percent Achievement | 0% | 0% | | Financial Performance | 0% |
2024 PROXY STATEMENT › 49
The resulting payouts from the 2021 PSAs reflecting performance against the goals are shown below. | | | | | | | | | | | | | NEO Performance Shares Earned from 2021 Grant | | NEO | Target Performance Shares | Payout (as a % of Target) (1) | Actual Shares Awarded (2) | Fahnemann(3) | N/A | N/A | N/A | | Shettigar | 4,402 | —% | — | Illetschko(3) | N/A | N/A | N/A | | Elder | 8,329 | —% | — | | Beck | 8,622 | —% | — | Astley(4) | N/A | —% | N/A | Laures(4) | N/A | —% | N/A |
(1)Reflects final payout of 0% based on below-threshold achievement for ROCE and Relative TSR. (2)Actual shares earned include dividends accrued during the performance period, as applicable, and represent the number of underlying PSAs earned, prior to the withholding of shares to satisfy taxes. (3)Messrs. Fahnemann and Illetschko did not join the Company until 2022 and 2023, respectively, and therefore did not receive a 2021 award. (4)Messrs. Astley and Laures separated employment prior to the three-year vesting date and therefore forfeited all 2021 PSAs.
For more information regarding the 2021 PSAs, see pages 60-61 of our proxy statement filed on March 31, 2022.
The 2022 PSAs vest on December 31, 2024, and are based on a two-year performance goal tied to Cumulative Adj. EBITDA and Average ROCE (weighted 50% and 25%, respectively), ending December 31, 2023, and three-year cumulative relative TSR (weighted 25%) for the 2022-2024 period and a three-year vesting requirement. The following table illustrates the pre-determined Adj. EBITDA and ROCE performance goals, as well as the results and the potential payout level based on actual performance delivered during the two-year performance period: | | | | | | | | | | | | | 2022 Performance Goals | | Two-Year Cumulative Adj. EBITDA Weighted 50% | Two-Year Average ROCE
Weighted 25% | Three-Year Relative TSR Weighted 25% | | Maximum | $439 | 5.7% | >75th | | Target | $314 | 4.1% | 50th | | Threshold | $188 | 2.5% | 25th | | Actual | $192 | 1.7% | TBD | | Percent Achievement | 21.1% | 0% | TBD |
For more information regarding the 2022 PSAs, see pages 59-61 of our proxy statement filed on March 31, 2023.
The Company provides limited perquisites. The Compensation Committee believes perquisites should be a minimal part of executive compensation. All NEOs are eligible to receive a Company-paid executive physical and executive long-term disability coverage, as well as relocation benefits coincident with the move of the corporate headquarters to Charlotte, North Carolina. More information on the perquisite costs can be found in the Summary Compensation Table on page 56.
| | | | POST-EMPLOYMENT RETIREMENT COMPENSATION |
The Compensation Committee believes offering post-employment compensation allows the Company to attract, retain, and motivate qualified employees and executives in the current competitive marketplace. 2024 PROXY STATEMENT › 50
During 2023, the Company provided a qualified 401(k) plan for U.S.-based employees and other arrangements for those outside of the U.S. Effective January 1, 2020, the Company began offering the non-qualified deferred compensation plan (“NQDCP”) to replace the Supplemental Executive Retirement Plan (“SERP”), which was frozen effective December 31, 2019. The NQDCP coordinates with the 401(k) plan by providing a Company contribution related to compensation in excess of the 401(k) plan limits, with a maximum non-qualified contribution of 7% of such excess compensation. Executive officers can elect to defer compensation under the NQDCP. All of the NEOs, other than Messrs. Illetschko and Laures, were participants in the NQDCP in 2023. Information regarding the frozen SERP balance is reflected in the Pension Benefits Table on page 63. Information regarding Company contributions under the NQDCP is reflected in the “Non-Qualified Deferred Compensation” section on page 64. Please also refer to the Summary Compensation Table on page 56. Mr. Illetschko participates in a Swiss defined contribution plan which provides the mandatory minimum benefit for all employees hired in Switzerland. Mr. Illetschko participates in the plan on the same terms and conditions as all other Swiss employees. The Swiss defined contribution plan provides for the contribution of an annual amount based on a percentage of salary and bonus and the participant's age. Employees may also make contributions based on a percentage of salary and bonus and age. Based on Mr. Illetschko’s’ age in 2023, the Company contributed 7.5% of eligible salary (base salary plus bonus paid). Mr. Laures participated in the same Swiss defined contribution plan and received the same Company contribution of 7.5% while employed with the Company in 2023. Under the terms of his Swiss Employment Contract, Mr. Illetschko also receives an amount of 15% of gross base pay as a contribution toward his Austrian private pension fund. This benefit is paid directly to Mr. Illetschko as a cash stipend.
| | | | ADDITIONAL COMPENSATION POLICIES AND PRACTICES |
Executive Severance Guidelines The Company has executive severance guidelines to serve as the basis for determining the severance benefits available to the CEO, EVPs, SVPs, and other VPs in the case of certain terminations of employment from the Company (other than for cause, resignation, death, or disability, each as defined in the executive severance guidelines). The severance guidelines do not apply in circumstances in which the CIC Agreements (as defined below) apply. The Compensation Committee retains the authority to modify or terminate severance arrangements, in its discretion, as circumstances may warrant. Additional details on severance guidelines and potential payments in the event of a termination of employment are discussed in the “Potential Payments upon Termination or Change in Control” section on page 65. On April 5, 2023, the Company announced the appointment Mr. Boris Illetschko as Senior Vice President, Chief Operating Officer and subsequent termination of employment for Messrs. Astley and Laures. The changes in executive leadership were not related to Glatfelter’s operations, financial reporting or controls, or personal conduct. Astley Separation On May 1, 2023, following termination from the Company, Mr. Astley entered into a Separation Agreement (as defined below) with the Company, which was generally consistent with the guidelines provided to long-standing executives. Under the terms of the Separation Agreement, the Company agreed to provide the following: a.) a cash payment in lieu of outplacement valued at $30,000 b.) severance to be paid over 12 months valued at $636,586 c.) subsidized medical benefits over the 12-month severance period estimated to be valued at approximately $15,421. Reimbursement consists of the difference between Active Employee rates versus Retiree/COBRA rates based on COBRA enrollment; however, reimbursement amount will vary depending on benefits plans selected during each plan year. e.) a cash payment for earned but unused vacation valued at $13,493 The provisions of Mr. Astley’s medical benefits and payment for unused vacation were generally consistent with the program provided to long-service employees of the Company. Mr. Astley was not eligible to receive an annual cash bonus for 2023 based on the terms of his Separation Agreement and he forfeited any unvested equity awards, consistent with the terms of the applicable award agreements. Mr. Astley’s non-qualified retirement benefits, including his frozen SERP
2024 PROXY STATEMENT › 51
benefits, commenced in 2023 in accordance to the terms of the NQDCP and after satisfying the six-month delay under Section 409A of the Code and/or any special elections. Mr. Astley must comply with covenants related to confidentiality, non-competition, and non-solicitation of employees and other service providers as a condition to receiving the severance payments described above. Laures Separation Mr. Laures was notified of his termination with the Company on April 5, 2023 (“Notice Date”) and was terminated on August 31, 2023 after satisfying the legal notice period as outlined in his employment agreement. Mr. Laures was released from his duty to work on his Notice Date and continued to receive full pay totaling approximately 186,000 CHF for the duration of his notice period running from April through August 2023. Upon his termination from the Company on August 31, 2023, Mr. Laures received the following under the terms of his termination agreement: a.) 30,000 CHF cash payment in lieu of outplacement b.) up to $15,000 USD gross per year reimbursement for tax assistance for fiscal years 2022 and 2023 Mr. Laures was not eligible to receive an annual cash bonus for 2023 based on the terms of his termination agreement and he forfeited any unvested equity awards, consistent with the terms of the applicable award agreements. Details regarding Mr. Laures’ Notice Period pay is included under “Salary” in the Summary Compensation Table on page 56. Change in Control Arrangements and Double Trigger Equity Grant Vesting The Company has entered into Change in Control (“CIC") Agreements (the “CIC Agreements”) with each of the NEOs. The Compensation Committee believes these arrangements serve as an incentive for the NEOs to act in the interest of shareholders in the event of a CIC, without regard to personal risks related to their continued employment resulting from a CIC. Generally, the CIC Agreements provide for severance and other benefits to be paid to the NEOs upon a qualifying CIC. CIC Agreements entered into after 2011 do not include a tax gross-up provision for excise taxes imposed under the Code. Therefore, the CIC Agreements for Messrs. Fahnemann, Shettigar, Illetschko, Astley, and Laures and Ms. Beck do not have any tax gross-up provisions. Mr. Elder entered into his CIC Agreement before 2011; he is the only remaining currently-employed NEO whose CIC Agreement contains a tax gross-up provision. The Company’s equity grant agreements include “double trigger” provisions that accelerate vesting in the event of a CIC if the executive is terminated without “cause” or resigns with “good reason” (each as defined in the applicable CIC Agreement). The Compensation Committee believes that the double trigger provision will ensure continuity of Management during mergers and acquisitions and assist with retaining key executives, ultimately benefiting shareholders. Additional details on the CIC Agreements and potential payments in the event of a CIC are discussed in the “Potential Payments upon Termination or Change in Control” section on page 65. Executive Share Ownership Guidelines The Compensation Committee believes it is important to require the Company’s senior executives, including the NEOs, to meet minimum stock ownership guidelines. The executive share ownership guidelines require senior executives to accumulate and hold a meaningful level of Glatfelter stock in order to align the interests of the senior executives with those of the shareholders. The Compensation Committee determines the guidelines using a multiple of each senior executive’s base salary. Depending on the senior executive’s position, the executive share ownership guidelines require the senior executive to own Company stock that ranges in value from two to five times his or her base salary as follows: | | | | | | | 2023 Share Ownership Guidelines | | Position | Ownership Guideline (Relative to Base Salary) | | CEO | 5X | | CFO, COO | 3X | | Other Senior Executives | 2X |
The value of required ownership is reviewed and adjusted annually for salary increases and the number of shares needed to be owned will be affected by changes in stock price. Directly-owned shares, beneficially-owned shares held indirectly (e.g., by family members, trusts, etc.), and shares held in the 401(k) plan are eligible for satisfying ownership guidelines. 2024 PROXY STATEMENT › 52
Unvested restricted stock and RSUs and earned PSAs also count towards satisfying the ownership guidelines. As of the May 2023 review, all NEOs were in compliance with the guidelines by either reaching the ownership multiple or adhering to the holding requirement as outlined below. Given Mr. Illetschko’s August 2023 employment date, his share ownership will be reviewed in May 2024, along with the remainder of the applicable senior executives. Holding Requirement Until the executive share ownership guideline level is attained, senior executives must retain 50% of net profit shares realized at (i) exercise of SOSARs; (ii) payment of PSAs; and (iii) vesting of RSUs. The Compensation Committee reviews senior executives’ progress toward satisfying the requirements annually. Clawback Policy The Company maintains a discretionary clawback policy that was adopted by the Board. Under the discretionary clawback policy, the Compensation Committee has the authority to recover or “claw back” incentive-based compensation when the basis for recouping incentive-based compensation is triggered by a material financial restatement. Incentive-based compensation includes cash bonuses and time-based and performance-based equity awards (such as RSUs, PSAs, and SOSARs). The Compensation Committee may recoup incentive-based compensation that is paid within three years prior to a restatement and in excess of the amount the executive officer or key manager would have otherwise received without the material noncompliance. Recoupment is applicable to an executive officer or key manager who is directly accountable for the cause of the restatement and could also apply to any executive officer or key manager who is in an upward reporting hierarchy to the responsible individual. In addition, recoupment could be made for compensation paid in a fiscal year in which an executive officer or key manager engages in intentional misconduct in performing his or her duties. In October 2022, the SEC adopted the New Exchange Act Rule 10D-1, which requires national securities exchanges, including the NYSE, to establish listing standards relating to executive officer incentive compensation clawback and disclosure rules. In compliance with the new rule, the Board adopted the SEC’s mandatory clawback policy (“Dodd Frank Clawback Policy”) and included it as an exhibit to the 2023 Form 10-K. All Section 16 Officers are subject to the Dodd Frank Clawback Policy where any accounting restatement from material noncompliance will trigger mandatory recoupment of certain incentive compensation granted, earned or vested, based on attainment of a “Financial Reporting Measure.” The Company also revised its existing discretionary clawback policy to indicate that it operates in addition to the newly mandated Dodd-Frank Clawback policy. Hedging and Pledging Policies Directors and all employees, including the NEOs, are subject to an insider trading policy that prohibits such individuals from engaging in transactions in financial instruments (including, for example, prepaid variable forward contracts, equity swaps, collars, or exchange funds, as well as any other hedging instrument) designed to hedge or offset any decrease in the market value of Company stock. Our insider trading policy also prohibits covered persons from holding Company stock in a margin account or pledging our stock as collateral for a loan. Tax Deductibility under Internal Revenue Code Section 162(m) Section 162(m) of the Code generally imposes a $1 million deduction limitation on compensation paid to certain executive officers of a publicly-held corporation during the year. The executive officers to whom the Section 162(m) deduction limit applies include the Company’s CEO and CFO, the next three most highly compensated executive officers, and any such “covered employee” for a year after 2016. The Compensation Committee reserves discretion to award compensation that is not deductible under Section 162(m), as the Compensation Committee deems appropriate.
| | | | ROLE OF THE COMPENSATION COMMITTEE AND CONSULTANT INDEPENDENCE | |
The Compensation Committee is responsible for approving NEO compensation, and, in the case of the CEO, submits the CEO’s pay for ratification and approval by the independent members of the Board. The Chair of the Compensation Committee is responsible for leading the Compensation Committee. The Compensation Committee may form subcommittees and delegate authority to them as it deems appropriate; provided that any subcommittee must be solely comprised of one or more members of the Compensation Committee and such delegation should not otherwise be inconsistent with law and applicable rules and regulations of the SEC and the NYSE. Additionally, the Compensation Committee may delegate to the Company’s Management any or all of its authority under any incentive plan to make grants to non-executive officer employees, to the extent the Compensation Committee deems appropriate, consistent with
2024 PROXY STATEMENT › 53
the terms of the applicable incentive plan and applicable law. The meetings of the Compensation Committee are regularly attended by the Consultant. The CEO, CFO, SVP, Global Human Resources and Administration and Director of Global Talent & Rewards also generally attend the Compensation Committee meetings. All members of Management present at a meeting of the Compensation Committee, including the CEO, are excused from the meeting prior to any discussion of their compensation. The Compensation Committee holds a final executive session with only Compensation Committee members present before approving any compensation. The Compensation Committee has the authority to engage compensation consultants, legal counsel, or other advisors, as needed. The Compensation Committee provides oversight and approves related fees and retention terms of the consultants, counsel, or advisors, and may select a compensation consultant, legal counsel, or other advisor after assessing that person’s independence from Management and members of the Compensation Committee. During 2023, the Compensation Committee retained Meridian Compensation Partners, LLC (“Meridian”) as its Consultant to provide advice and assistance to the Compensation Committee and to Management with respect to executive officer and non-employee directors’ compensation. The Consultant reports directly to the Compensation Committee and has been authorized by the Compensation Committee to work with certain executive officers of the Company and other employees in the Company’s human resources, legal, and finance functions. The Compensation Committee has established several practices to ensure the Consultant’s independence, candor, and objectivity. The Consultant is engaged by and reports directly to the Compensation Committee, frequently meets separately with the Compensation Committee with no members of Management present, and consults with the Compensation Committee’s Chair between meetings as needed. Management periodically reports to the Compensation Committee the fees paid for services performed by the Consultant, and the Compensation Committee approves the annual work plan and budget for the Consultant. In 2023, the Compensation Committee assessed the independence of Meridian and other outside advisors as required under the NYSE listing standards, and considered and assessed all relevant factors, including those required by the SEC that could give rise to potential conflict of interests with respect to Meridian. Based on this review, the Compensation Committee did not identify any conflict of interest raised by the work conducted by Meridian for 2023. Meridian does not perform any work for the Company other than as the Consultant and accordingly, no fees were paid for any additional services. 2024 PROXY STATEMENT › 54
Report of the Compensation Committee
The Compensation Committee has reviewed and discussed the Company’s CD&A with Management. Based on this review and discussion, the Compensation Committee recommended to the Board that the CD&A be included in this proxy statement for the year ended December 31, 2023. The foregoing Report does not constitute soliciting material and should not be deemed filed or incorporated by reference into any other filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that the Company specifically incorporates the Report by reference therein. Bruce Brown (Chair) Kevin M. Fogarty J. Robert Hall
2024 PROXY STATEMENT › 55
Summary Compensation Table The following table sets forth 2023 compensation and, where applicable, 2022 and 2021 compensation information for the NEOs. | | | | | | | | | | | | | | | | | | | | | | | | | | | Name and Principal Position in 2023 | Year | Salary (1) | Bonus | Stock Awards (2) | Non-Equity Incentive Plan Compensation (3) | Change in Pension Value and NQDCP Earnings (4) | All Other Compensation (5) | Total | | Thomas M. Fahnemann | 2023 | $ | 1,050,000 | | $ | — | | $ | 2,153,742 | | $ | 210,000 | | $ | — | | $ | 82,177 | | $ | 3,495,919 | | | President & Chief Executive Officer | 2022 | $ | 372,827 | | $ | 250,000 | | $ | 1,750,800 | | $ | — | | $ | — | | $ | 26,949 | | $ | 2,400,576 | | | Ramesh Shettigar | 2023 | $ | 447,916 | | $ | — | | $ | 358,955 | | $ | 54,000 | | $ | — | | $ | 36,358 | | $ | 897,230 | | Senior Vice President,
Chief Financial Officer and Treasurer | 2022 | $ | 392,737 | | $ | — | | $ | 449,984 | | $ | — | | $ | — | | $ | 41,244 | | $ | 883,966 | | Boris Illetschko(6) | 2023 | $ | 191,516 | | $ | — | | $ | 353,886 | | $ | 24,897 | | $ | — | | $ | 59,489 | | $ | 629,787 | | | Senior Vice President & Chief Operating Officer | | | | | | | | | | | | | | | | | | David C. Elder | 2023 | $ | 346,951 | | $ | — | | $ | 215,374 | | $ | 34,800 | | $ | 58,000 | | $ | 29,473 | | $ | 684,598 | | | Vice President, Strategic Initiatives, Business Optimization & Chief Accounting Officer | 2022 | $ | 334,596 | | $ | — | | $ | 499,993 | | $ | — | | $ | 4,000 | | $ | 38,229 | | $ | 876,818 | | | 2021 | | | | | | | | | Eileen L. Beck | 2023 | $ | 367,031 | | $ | — | | $ | 179,478 | | $ | 37,000 | | $ | — | | $ | 28,410 | | $ | 611,918 | | | Senior Vice President, Global Human Resources & Administration | | | | | | | | | | 2021 | $ | 323,847 | | $ | — | | $ | 234,990 | | $ | 128,394 | | $ | — | | $ | 88,158 | | $ | 775,389 | | | Christopher W. Astley | 2023 | $ | 122,787 | | $ | — | | $ | 376,904 | | $ | — | | $ | 1,000 | | $ | 707,619 | | $ | 1,208,309 | | | Former Senior Vice President & Chief Commercial Officer | 2022 | $ | 502,626 | | $ | — | | $ | 924,984 | | $ | — | | $ | — | | $ | 58,188 | | $ | 1,485,798 | | | 2021 | $ | 452,857 | | $ | — | | $ | 430,001 | | $ | 197,573 | | $ | 1,000 | | $ | 221,508 | | $ | 1,302,939 | | Wolfgang Laures(7) | 2023 | $ | 331,465 | | $ | — | | $ | 264,490 | | $ | — | | $ | — | | $ | 103,696 | | $ | 699,650 | | | Former Senior Vice President, Integrated Global Supply Chain & Information Technology | 2022 | $ | 467,136 | | $ | — | | $ | 653,995 | | $ | — | | $ | — | | $ | 89,168 | | $ | 1,210,299 | | | 2021 | $ | 457,117 | | $ | — | | $ | 312,467 | | $ | 206,490 | | $ | — | | $ | 84,039 | | $ | 1,060,113 | |
(1)Amount reflected for Mr. Astley includes salary paid while actively employed. Amount listed for Mr. Laures includes salary paid while actively employed and approximately 186,000 CHF paid while satisfying his legal notice period. (2)The amounts reflect the grant date fair value of RSUs and/or PSAs granted in 2023, 2022, and 2021 determined in accordance with ASC Topic 718. The method used to calculate these amounts is set forth in Note 12 to the Company’s audited financial statements included in the 2023 Form 10-K. In an effort to manage the equity plan share pool, a $5.00 stock price grant value was used to calculate the number of shares to be awarded for RSUs and PSAs, subject to a $6.50 Monte Carlo value for the PSAs that vest based on TSR. The grant date fair values of the 2023 PSAs are reported based on the probable outcome of being earned at the target level. If the 2023 PSAs are earned at the maximum level (200% of target), the grant date fair value of the 2023 PSAs would be as follows: Mr. Fahnemann $1,316,142; Mr. Shettigar $219,355; Mr. Elder $131,614; and Ms. Beck $109,678, based on the grant date stock price of $3.49 on February 24, 2023, and Mr. Illetschko $215,793, based on the grant date stock price of $3.48 on August 1, 2023. For PSAs with TSR performance metrics, the grant date fair value was determined using a Monte Carlo simulation model. Messrs. Astley and Laures forfeited their 2023 PSAs and 2023 RSUs due to their respective employment separations. (3)The 2023, 2022, and 2021 amounts reflect the STI cash payments under the Company’s MIP. See discussion of the MIP in the “Compensation Discussion and Analysis” section beginning on page 35. (4)The Company’s SERP was frozen in 2019. The SERP benefits for active employees were converted to opening balances in the NQDCP as of January 1, 2020 and accrue interest annually under the NQDCP using the Moody’s Aa bond yield for the month of November of the preceding year (November 2022, for the 2023 plan year). Interest was calculated for the 2023 plan year on the frozen SERP balances at the annual rate of 5.23%. The frozen SERP balances are accounted for as a defined benefit plan in the Company’s financial statements and, accordingly, the Company has treated such amounts consistent with disclosure for a defined benefit plan in the Summary Compensation Table. For each NEO, the estimated amounts reflect the actuarial increase in the present value of the frozen SERP balance under the NQDCP, based on interest rate and mortality assumptions that are consistent with those used in the Company’s financial statements and further defined in the Pension Benefits table on page 63. If the frozen SERP balances had been considered a defined contribution plan, then “All Other Compensation” in the Summary Compensation Table would have included $2,000 of above- 2024 PROXY STATEMENT › 56
market interest for the NEOs who have frozen SERP balances, for 2023, instead of the amount shown in the “Change in Pension Value and NQDCP Earnings” column. For information regarding the frozen SERP balances, please refer to footnote (1) to the Pension Benefits Table on page 63. (5)All Other Compensation includes the following: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2023 | 401(k) Company Contributions | NQDCP Company Contributions (I) | Life Insurance Premium | Executive Disability | Executive Physical | Swiss Allowances (II) | Swiss Disability Benefits (III) | Post-Employment Compensation (IV) | Total | | Fahnemann | $23,100 | $50,400 | $744 | $7,933 | $— | $— | $— | $— | $82,177 | | Shettigar | $23,100 | $8,255 | $744 | $1,263 | $2,996 | $— | $— | $— | $36,358 | Illetschko(V) | $— | $9,666 | $— | $— | $— | $46,572 | $3,251 | $— | $59,489 | | Elder | $23,100 | $1,187 | $625 | $2,148 | $2,414 | $— | $— | $— | $29,473 | | Beck | $23,100 | $2,593 | $623 | $2,094 | $— | $— | $— | $— | $28,410 | | Astley | $8,595 | $— | $744 | $529 | $2,250 | $— | $— | $695,501 | $707,619 | Laures(VI) | $— | $29,574 | $— | $— | $— | $15,512 | $8,532 | $50,078 | $103,696 |
I.Represents NQDCP Company contributions for Messrs. Fahnemann, Shettigar, Astley, and Elder and Ms. Beck, and Company contributions to the Swiss defined contribution plan for Messrs. Illetschko and Laures. II.Represents certain Swiss Allowances provided to Messrs. Illetschko and Laures under the terms of their respective employment agreements. Mr. Illetschko receives a monthly car allowance, healthcare allowance, and a cash stipend as a contribution toward his Austrian private pension fund. This benefit is paid directly to Mr. Illetschko as a cash stipend. While actively employed, Mr. Laures received a travel stipend and a tax support. III.Represents premiums paid by the Company on behalf of Messrs. Illetschko and Laures for mandatory accident insurance, supplemental accident insurance, and salary continuation in Switzerland. IV.Post-Employment Compensation for Mr. Astley represents $13,493 vacation payout per policy, $30,000 cash in lieu of outplacement, $636,586 severance to be paid over the 12 month severance period and approximately $15,421 for COBRA Reimbursement to be paid over the 12 month severance period. Post-Employment Compensation for Mr. Laures represents 30,000 CHF cash in lieu of outplacement and 15,000 USD for 2022 and 2023 tax assistance. V.Amounts shown for Mr. Illetschko were paid in Euro and have been converted to USD using an exchange rate of 1.0815 EUR:USD. VI.Amounts shown for Mr. Laures were paid in Swiss Francs and converted to USD using an exchange rate of 1.11284 CHF:USD.
(6)Amounts shown for Mr. Illetschko were paid in Euro and have been converted to USD using an exchange rate of 1.0815 EUR:USD.
(7)Amounts shown for Mr. Laures were paid in Swiss Francs and converted to USD using an exchange rate of 1.11284 CHF:USD. 2024 PROXY STATEMENT › 57
2023 Grants of Plan-Based Awards The following table, including footnotes, sets forth information concerning grants of plan-based awards in 2023: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name | Grant Date | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards (1) | | Estimated Possible Payouts Under Equity Incentive Plan Awards (2) | All Other Stock Awards: Shares of Stock or | Grant Date Fair Value of Stock and Option | | | Threshold ($) | Target ($) | Maximum ($) | | Threshold (#) | Target (#) | Maximum (#) | Units (#) (3) | Awards ($) | | Thomas M. Fahnemann | | | | | | | | | | | | 2/24/2023 | $420,000 | $1,050,000 | $2,100,000 | | | | | | | | 2/24/2023 | | | | | 118,731 | 339,230 | 678,460 | | $ | 1,316,142 | | 2/24/2023 | | | | | | | | 240,000 | $ | 837,600 | | Ramesh Shettigar | | | | | | | | | | | | 2/24/2023 | $108,000 | $270,000 | $540,000 | | | | | | | | 2/24/2023 | | | | | 19,788 | 56,538 | 113,076 | | $ | 219,355 | | 2/24/2023 | | | | | | | | 40,000 | $ | 139,600 | | Boris Illetschko | | | | | | | | | | | | 8/1/2023 | $49,794 | $124,485 | $248,970 | | | | | | | | 8/1/2023 | | | | | 19,631 | 56,089 | 112,178 | | $ | 215,793 | | 8/1/2023 | | | | | | | | 39,682 | $ | 138,093 | | David C. Elder | | | | | | | | | | | | 2/24/2023 | $69,600 | $174,000 | $348,000 | | | | | | | | 2/24/2023 | | | | | 11,873 | 33,923 | 67,846 | | $ | 131,614 | | 2/24/2023 | | | | | | | | 24,000 | $ | 83,760 | | Eileen L. Beck | | | | | | | | | | | | 2/24/2023 | $74,000 | $185,000 | $370,000 | | | | | | | | 2/24/2023 | | | | | 9,894 | 28,269 | 56,538 | | $ | 109,678 | | 2/24/2023 | | | | | | | | 20,000 | $ | 69,800 | | Christopher W. Astley | | | | | | | | | | | | 2/24/2023 | $112,263 | $280,657 | $561,313 | | | | | | | | 2/24/2023 | | | | | 20,778 | 59,365 | 118,730 | | $ | 230,324 | | 2/24/2023 | | | | | | | | 42,000 | $ | 146,580 | | Wolfgang Laures | | | | | | | | | | | | 2/24/2023 | $109,384 | $273,459 | $546,918 | | | | | | | | 2/24/2023 | | | | | 14,581 | 41,659 | 83,318 | | $ | 161,629 | | 2/24/2023 | | | | | | | | 29,473 | $ | 102,861 |
(1)The amounts shown represent target, threshold, and maximum STI awards under the Company’s MIP. Threshold payments equal 40% of the target amount (50% for the financial component: Adj. EBITDA, and 0% for the non-financial component: Strategic Objectives) and maximum payments equal 200% of the target amount shown. For 2023, achievement of the performance goals resulted in MIP payments as described in the “NEO MIP Payments” table on page 45 of the CD&A. (2)The amounts shown reflect the threshold, target, and maximum amounts of the 2023 PSAs granted to the NEOs under the LTI program. The 2023 PSAs vest over a three-year period based on Adj. EBITDA and Senior Secured Net Leverage performance measured over two years and relative TSR performance measured over three years. In an effort to manage the sharepool, a $5.00 stock price grant value was used to calculate the number of shares to be awarded for RSUs and PSAs, subject to a $6.50 Monte Carlo value for the PSAs that vest based on TSR. The actual number of shares paid out will range from 0% to 200% of the target amount, depending upon attainment of performance goals. As previously disclosed, Messrs. Astley and Laures separated from the Company before satisfying the vesting requirements for the 2023 equity award and therefore all 2023 PSAs and 2023 RSUs were forfeited. (3)The amounts shown reflect the 2023 RSUs granted to the NEOs under the LTI program. In an effort to manage the equity plan share pool, a $5.00 stock price grant value was used to calculate RSUs to be awarded. The 2023 RSUs will vest equally in 1/3rd increments on the first, second, and third anniversaries of the grant date.
2024 PROXY STATEMENT › 58
2023 Outstanding Equity Awards at Fiscal Year-End The following table, including footnotes, sets forth information concerning outstanding equity awards as of December 31, 2023: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Option and Stock Awards | | Option Grant | Number of Securities Underlying Unexercised Options (#) (1) | Option Exercise | Option Expiration | | Number of Shares or Units of Stock That Have Not | Market Value of Shares of Units of Stock That Have Not | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have | | Name | Date | Exercisable | Unexercisable | Price ($) | Date | | Vested (#) (2),(5) | Vested ($) (3) | Not Vested (#) (4),(5) | Not Vested ($) (3) | | Thomas M. Fahnemann | — | — | — | — | — | | 480,000 | $ | 931,200 | | 699,230 | $ | 1,356,506 | | | Ramesh Shettigar | 7/16/2014 | 3,552 | | — | $ | 25.01 | | 7/16/2024 | | 56,140 | | $ | 108,912 | | 85,981 | $ | 166,803 | | | 2/26/2015 | 4,973 | | — | $ | 24.94 | | 2/26/2025 | | | | | | | 4/6/2016 | 7,775 | | — | $ | 20.22 | | 4/6/2026 | | | | | | | 6/13/2016 | 990 | | | $ | 20.52 | | 6/13/2026 | | | | | | | Boris Illetschko | — | — | — | — | — | | 39,682 | | $ | 76,983 | | 56,089 | $ | 108,813 | | | David C. Elder | 2/26/2014 | 11,840 | | — | $ | 29.89 | | 2/26/2024 | | 43,606 | | $ | 84,596 | | 64,476 | $ | 125,083 | | | 2/26/2015 | 17,900 | | — | $ | 24.94 | | 2/26/2025 | | | | | | | 2/25/2016 | 28,424 | | — | $ | 17.27 | | 2/25/2026 | | | | | | | Eileen L. Beck | 2/26/2014 | 2,588 | | — | $ | 29.89 | | 2/26/2024 | | 31,184 | | $ | 60,497 | | 38,678 | $ | 75,035 | | | 2/26/2015 | 4,276 | | — | $ | 24.94 | | 2/26/2025 | | | | | | | 9/1/2015 | 2,426 | | — | $ | 17.50 | | 9/1/2025 | | | | | | | 2/25/2016 | 11,167 | | — | $ | 17.27 | | 2/25/2026 | | | | | | | Christopher W. Astley | — | — | — | $ | — | | — | — | — | $ | — | | — | — | | Wolfgang Laures | — | — | — | $ | — | | — | — | — | $ | — | | — | — |
(1)Represents SOSARs with a 10-year term, which vest ratably on the first, second, and third anniversaries of the grant date. All SOSARs are settled in shares of the Company’s common stock. (2)All RSUs granted prior to 2022 have a three-year cliff vesting requirement. All RSUs granted in 2023 and certain RSUs granted in 2022 vest over three years with one-third of the award vesting each year over three years. Mr. Fahnemann's RSUs granted in 2022 vest over three years with 50% of the award vesting in each of the last two years. See the “Unvested RSUs” column in footnote 5 for more detail. (3)Calculated based on the closing price of the Company’s common stock on December 29, 2023 ($1.94). (4)The amount shown reflects the aggregate target number of PSAs granted on February 18, 2022 and May 12, 2022 that vest on December 31, 2024, and the PSAs that were granted on August 24, 2022 and vest on August 23, 2025. The actual number of shares to be paid out ranges from 0% to 200% of the target amount, depending upon attainment of performance goals. In February 2024, the Board confirmed a 21.1% payout for the EBITDA PSAs and 0% payout for the ROCE PSAs granted on February 18, 2022 and May 12, 2022 based on achievement of the two-year performance goals. The final shares to be earned by participants is subject to the three-year relative TSR performance that will be determined as of December 31, 2024, therefore the final combined award payout amount is not yet known. See the “Unearned PSAs” column in footnote 5 for further detail.
2024 PROXY STATEMENT › 59
(5)The amounts listed in the table below represent the outstanding equity awards, including dividend equivalent units, for each NEO as of December 31, 2023:
| | | | | | | | | | | | | | | | | | | Outstanding Equity Awards | Name(a) | Award | Grant Date | Unvested RSUs | Unearned PSAs | Vesting Date | | Fahnemann | RSU | 8/24/2022 | 240,000 | | 50% 8/24/24; 50% 8/24/25 | | RSU | 2/24/2023 | 240,000 | | 33.33% 2/24/24; 33.33% 2/24/25; 33.34% 2/24/26 | | PSA | 8/24/2022 | | 360,000 | 8/24/2025 | | PSA | 2/24/2023 | | 339,230 | 12/31/2025 | | | | 480,000 | 699,230 | | | Shettigar | RSU | 2/17/2021 | 3,202 | | 2/17/2024 | | RSU | 2/18/2022 | 3,438 | | 33.33% 2/18/23; 33.33% 2/18/24; 33.34% 2/18/25 | | RSU | 5/12/2022 | 9,500 | | 33.33% 5/12/23; 33.33% 5/12/24; 33.34% 5/12/25 | | RSU | 2/24/2023 | 40,000 | | 33.33% 2/24/24; 33.33% 2/24/25; 33.34% 2/24/26 | | PSA | 2/18/2022 | | 7,286 | 12/31/2024 | | PSA | 5/12/2022 | | 22,157 | 12/31/2024 | | PSA | 2/24/2023 | | 56,538 | 12/31/2025 | | | | 56,140 | 85,981 | | | Illetschko | RSU | 8/1/2023 | 39,682 | | 33.33% 8/1/24; 33.33% 8/1/2025; 33.34% 8/1/26 | | PSA | 8/1/2023 | | 56,089 | 12/31/2025 | | | | 39,682 | 56,089 | | | Elder | RSU | 2/17/2021 | 6,059 | | 2/17/2024 | | RSU | 2/18/2022 | 4,911 | | 33.33% 2/18/23; 33.33% 2/18/24; 33.34% 2/18/25 | | RSU | 5/12/2022 | 8,636 | | 33.33% 5/12/23; 33.33% 5/12/24; 33.34% 5/12/25 | | RSU | 2/24/2023 | 24,000 | | 33.33% 2/24/24; 33.33% 2/24/25; 33.34% 2/24/26 | | PSA | 2/18/2022 | | 10,409 | 12/31/2024 | | PSA | 5/12/2022 | | 20,144 | 12/31/2024 | | PSA | 2/24/2023 | | 33,923 | 12/31/2025 | | | | 43,606 | 64,476 | | | Beck | RSU | 2/17/2021 | 6,273 | | 2/17/2024 | | RSU | 2/18/2022 | 4,911 | | 33.33% 2/18/23; 33.33% 2/18/24; 33.34% 2/18/25 | | RSU | 2/24/2023 | 20,000 | | 33.33% 2/24/24; 33.33% 2/24/25; 33.34% 2/24/26 | | PSA | 2/18/2022 | | 10,409 | 12/31/2024 | | PSA | 2/24/2023 | | 28,269 | 12/31/2025 | | | | 31,184 | 38,678 | |
a.) Messrs. Astley and Laures forfeited all outstanding equity awards upon their employment separations.
2024 PROXY STATEMENT › 60
2023 Options Exercised and Stock Vested The following table, including footnotes, sets forth information concerning stock grants that vested during fiscal year 2023: | | | | | | | | | | Stock Awards | | No. of Shares Acquired on Vesting (Payout)(1) | Value Realized on Vesting(2) | Fahnemann3 | — | — | | Shettigar | 17,365 | $63,787 | Illetschko3 | — | — | | Elder | 12,864 | $74,540 | | Beck | 8,817 | $51,106 | | Astley | 19,508 | $33,013 | | Laures | 13,353 | $47,746 |
(1)Includes RSUs granted on February 21, 2020, February 18, 2022, and May 12, 2022, which vested on February 21, 2023, February 18, 2023, and May 12, 2023, respectively. Such amounts include accrued dividend equivalents in the form of additional RSUs. Amounts represent the number of shares of underlying RSUs that vested on the applicable vesting dates, prior to the withholding of shares to satisfy taxes. Upon payout of the RSU awards, the Company withheld a portion of the otherwise distributable shares in respect of taxes, as follows: Shettigar 6,459 shares; Elder 4,112 shares; Beck 3,002 shares; Astley 6,731 shares; Laures 709 shares. The 2021 PSAs that were granted on February 17, 2021 and vested on December 31, 2023 did not achieve minimum performance, therefore no shares were awarded upon vesting. (2)For the RSUs that vested on February 21, 2023, February 18, 2023, and May 12, 2023, the amounts are based on $3.63, $4.04, and $3.64, respectively, the closing stock price on such vesting dates. The 2021 PSAs did not achieve minimum performance and therefore no shares were awarded upon vesting. (3)Messrs. Fahnemann and Illetschko joined the Company in 2022 and 2023, respectively, and therefore acquired no shares upon vesting during 2023.
2024 PROXY STATEMENT › 61
2023 Retirement Benefits 401(k) PLAN OVERVIEW The Company’s long-standing U.S. qualified Retirement Plan was terminated in 2019, and liabilities to participants were settled. Approximately $14 million of the amount that would otherwise have reverted to the Company from the terminated Retirement Plan was transferred to the 401(k) plan in 2020 and will be allocated to 401(k) plan participants as Company contributions over seven years, starting in 2020. The allocation percentage will vary year to year, consistent with the Code requirements. The 2023 annual allocation to participant accounts in the 401(k) plan was 7% of participant compensation (base salary plus earned annual short-term incentive), up to the Code limits. The below chart explains the allocations under the 401(k) Plan for the NEOs: | | | | | | | NEO | 401(k) Plan: 2023 Company Contribution Allocation | | Messrs. Fahnemann, Shettigar, Elder, and Astley and Ms. Beck | 7% Company contribution on eligible earnings (base salary and earned annual STI), with earnings capped at the Code limit. |
SWISS RETIREMENT BENEFIT Mr. Illetschko participates in a Swiss defined contribution plan which provides the mandatory minimum benefit for all employees hired in Switzerland. Mr. Illetschko participates in the plan on the same terms and conditions as all other Swiss employees. The Swiss defined contribution plan provides for the contribution of an annual amount based on a percentage of salary and bonus and the participant's age. Employees may also make contributions based on a percentage of salary and bonus and age. Based on Mr. Illetschko’s’ age in 2023, the Company contributed 7.5% of eligible salary (base salary plus bonus paid). Mr. Laures participated in the same Swiss defined contribution plan and received the same Company contribution of 7.5% while employed with the Company in 2023. Under the terms of his Swiss Contract, Mr. Illetschko also receives an amount of 15% of gross base pay as a contribution toward his Austrian private pension fund. This benefit is paid directly to Mr. Illetschko as a cash stipend. Frozen Supplemental Executive Retirement Plan The Company froze the benefits for all participants in the SERP effective December 31, 2019, so no additional benefits have accrued for any NEO under the SERP after December 31, 2019 and no new participants are eligible to participate. As of January 1, 2020, the present value of the frozen SERP benefits for Messrs. Shettigar, Elder, and Astley and Ms. Beck were credited to the new NQDCP established by the Company and will accrue interest annually using the Moody’s Aa bond yield for the month the interest rate is set (which is November of the year preceding the year for which interest is credited). The frozen SERP balances, with interest, will be paid in the same form and at the same time as previously provided for under the SERP. Although the frozen SERP balances have been subsumed within the new NQDCP, the Company has accounted for them as a separate defined benefit plan in its financial statements. Accordingly, the Company has disclosed the frozen SERP balance information in the Pension Benefits Table. The following table summarizes the terms of the frozen SERP: | | | | | | | Restoration Benefit | The restoration pension benefit under the SERP (the “Restoration Pension”) provided those participants whose benefits under the Retirement Plan were reduced due to legal limits with a supplemental pension benefit. The supplemental benefit restored the portion of the pension benefit that was earned but not able to be paid under the Retirement Plan because of the legal limits provided in the Code. The Restoration Pension calculation considered, as a reduction to the benefit, the participant’s Retirement Plan benefits and certain 401(k) contributions. The Restoration Pension was generally paid in the form of an annuity, except that small benefit amounts were paid in a lump sum. Participants were vested in their Restoration Pension benefits. Messrs. Shettigar, Astley, Elder, and Ms. Beck had Restoration Pension benefits. Mr. Astley’s Restoration Pension distribution commenced in 2023 after satisfying his six-month delay under Section 409A of the Code for specified employees. |
2024 PROXY STATEMENT › 62
Non-Qualified Deferred Compensation Plan The Company maintains the NQDCP, which coordinates with the 401(k) plan whereby participants will receive a Company contribution of up to 7% on earnings in excess of the annual Code earnings limit. In addition, executives may elect to defer compensation under the NQDCP. Accounts in the NQDCP attributable to Company contributions and participant deferrals are credited with earnings based on the investment return of funds in which such participant accounts are invested on a notional basis. The NQDCP only applies to U.S. employees, so Messrs. Illetschko and Laures were not participants in the NQDCP. Given the hybrid nature of the NQDCP, the frozen SERP balances in the NQDCP are considered a defined benefit plan on the Company’s financial statements and are reflected in the Pension Benefits Table below, and the Company contribution and participant deferral portions of the NQDCP are considered a defined contribution plan and reflected in the “Non-Qualified Deferred Compensation” table below. PENSION BENEFITS The following table, including footnotes, sets forth information concerning pension benefits (frozen SERP balances) during fiscal year 2023. | | | | | | | | | | | | | | | | | | | Name | Age | Plan Name | Number of Years Credited Service (#)(1) | Present Value of Accumulated Benefit ($) (2)(3) | Payments During Last Fiscal Year
($) | | Ramesh Shettigar | 48 | Frozen SERP - Restoration Pension | 5 | $ | 1,000 | $ | — | | David C. Elder | 55 | Frozen SERP - Restoration Pension | 14 | $ | 442,000 | $ | — | | Eileen L. Beck | 61 | Frozen SERP - Restoration Pension | 8 | $ | 5,000 | $ | — | | Christopher W. Astley | 50 | Frozen SERP - Restoration Pension | 9 | $ | 36,000 | $ | 1,563 |
(1)Years of Credited Service is based on the date that the SERP was frozen (i.e., December 31, 2019). Accordingly, there is a difference between the number of years of service that were credited to each NEO for purposes of calculating the frozen SERP benefit and each NEO’s actual years of service with the Company. The NEOs’ actual years of service with the Company as of December 31, 2023 were as follows: Mr. Shettigar 9 years; Mr. Elder 17 years; Ms. Beck 12 years; and Mr. Astley 13 years. (2)The SERP was frozen as of December 31, 2019 and all NEOs are vested in the benefit, but no longer accrue service. Although the frozen SERP balances were incorporated into the new NQDCP, they are accounted for as a separate defined benefit plan and disclosed accordingly. (3)For Messrs. Shettigar, Elder, and Astley and Ms. Beck, the Present Value of Accumulated Benefits is based on the present value of the frozen SERP balances in the NQDCP as of December 31, 2023, as shown in the table below. The present value of accumulated benefits is based on actuarially determined assumptions including: (i) discount rate of 5.41% (SERP II for U.S. GAAP Accounting); (ii) Moody’s Aa average for November 2023 interest crediting rate of 5.67%; and (iii) assumed retirement age. The frozen SERP balances in the NQDCP as of December 31, 2023, including interest credited for the 2023 fiscal year (at the annual rate of 5.23%) are set forth in the below table: | | | | | | | | | | | | | Name | Frozen SERP Balance as of 12/31/2022 | Interest Credited for 2023 | Frozen SERP Balance as of 12/31/2023 | | Ramesh Shettigar | $ | 1,191 | $ | 62 | $ | 1,253 | | David C. Elder | $ | 393,607 | $ | 20,473 | $ | 414,080 | | Eileen L. Beck | $ | 4,571 | $ | 236 | $ | 4,807 | | Christopher W. Astley | $ | 37,663 | $ | 656 | $ | 38,319 |
2024 PROXY STATEMENT › 63
NON-QUALIFIED DEFERRED COMPENSATION The following table, including footnotes, sets forth information concerning non-qualified deferred compensation benefits (Company contributions and participant deferrals under the NQDCP) during 2023. | | | | | | | | | | | | | | | | | | | Name | Executive Contributions in 2023(1) | Registrant Contributions in 2023(1) | Aggregate Earnings in 2023(2) | Aggregate Withdrawals/Distributions(3) | Aggregate Balance at Last FYE(4) | | Thomas M. Fahnemann | $ | — | $ | 50,400 | $ | 5,004 | $ | — | $ | 58,554 | | Ramesh Shettigar | $ | — | $ | 8,255 | $ | 5,679 | $ | — | $ | 46,280 | | David C. Elder | $ | — | $ | 1,187 | $ | 4,938 | $ | — | $ | 40,627 | | Eileen L. Beck | $ | — | $ | 2,593 | $ | 10,399 | $ | — | $ | 69,852 | | Christopher W. Astley | $ | — | $ | — | $ | 7,688 | $ | 110,566 | $ | — |
(1)For Messrs. Fahnemann, Shettigar, Elder, and Astley and Ms. Beck, these amounts reflect the Company contributions to the NQDCP for 2023 and the participants’ elective deferrals into the NQDCP in 2023. Mr. Astley elected to defer 5% of his 2023 STI bonus; however, no STI bonus was earned due to his separation in April 2023. No other NEOs made elective deferrals in 2023. The amounts shown as Registrant Contributions in 2023 are also reported as compensation to the NEOs in the All Other Compensation column in the Summary Compensation Table as follows: Fahnemann $50,400; Shettigar $8,255; Elder $1,187; Beck $2,593; and Astley $0. The amounts represented as Registrant Contributions in 2023 do not reflect the frozen SERP balances in the NQDCP, which are reflected in the above Pension Benefits Table and supplemental table under “Pension Benefits” as described on page 63. (2)Represents aggregate gains and losses on all accounts attributable to Company contributions and participant deferrals to the NQDCP, based on the investment return of funds in which such participant accounts were invested on a notional basis. Interest on the frozen SERP balances is not included in the foregoing table, and, instead, is described on page 63 under “Pension Benefits.” (3)Reflects any distributions that occurred in 2023. Mr. Astley received distributions for the following NQDCP accounts after satisfying his six-month delay under Section 409A of the Code: 2020 Bonus Account, $15,182; 2020 Supplemental Company Contributions Account, $26,824; 2021 Bonus Account, $9,022; 2021 Supplemental Company Contributions Account, $29,018; and 2022 Supplemental Company Contributions Account, $30,520. Mr. Astley’s Restoration Pension distribution is described on page 63under “Pension Benefits.” (4)Amounts listed reflect the cumulative aggregate balance in all accounts under the NQDCP as of December 31, 2023. The amounts represented in Aggregate Balance at Last FYE do not reflect the frozen SERP balances in the NQDCP, which are reflected in the above Pension Benefits Table and supplemental table under “Pension Benefits” as described on page 63. The amounts represent the aggregate executive contributions and registrant contributions to the NQDCP that were reported in the Summary Compensation Table for fiscal year 2023 and applicable previous fiscal years, commencing with fiscal year 2020. 2024 PROXY STATEMENT › 64
Potential Payments upon Termination or Change in Control | | | | EXECUTIVE TERMINATION GUIDELINES | |
Payments made to a NEO upon involuntary termination by the Company without cause are made in accordance with the Company’s executive termination guidelines or employment agreement (if applicable). The executive termination guidelines do not apply if the NEO is eligible to receive payments under a CIC Agreement upon a termination of employment. | | | | CHANGE IN CONTROL AGREEMENTS AND DOUBLE TRIGGER EQUITY VESTING | |
The Company has entered into a CIC Agreement with each NEO as described in the CD&A. Under these agreements, each NEO’s employment with the Company will continue for two years from the date of a change in control (as defined below) or each NEO will become entitled to severance payments and benefits upon termination under certain conditions within such two-year period. During such period, the NEO will continue in a position at least equal to the position held prior to the change in control and will receive compensation and benefits from the Company at least equal to those paid prior to the change in control. Change in Control: Under the CIC Agreements, change in control means: •the acquisition of direct or indirect beneficial ownership of 20% or more of the combined voting power of the Company’s outstanding voting securities by any person, entity, or group, excluding the Company, its subsidiaries, any employee benefit plan of the Company or its subsidiaries; and any purchaser or group of purchasers who are descendants of, or entities controlled by descendants of, the Company; or •in any 12-month period, the ceasing of individuals who constitute the Board to constitute at least a majority of the Board, other than any person becoming a director whose election was approved by at least a majority of incumbent directors, excluding any such person whose initial election occurs as a result of an actual or threatened election contest; or •the consummation of (i) a reorganization, merger, or consolidation in which shareholders of the Company immediately prior to such event do not, immediately thereafter, beneficially own more than 50% of the combined voting power of the reorganized, merged, or consolidated company’s then outstanding voting securities; or (ii) a liquidation or dissolution of the Company, or the sale of all or substantially all of the assets of the Company to a third party. Tax Gross-Up Payments: CIC Agreements in effect before 2011 (including Mr. Elder’s CIC Agreement) provide that, if any payment is subject to excise tax under the Code, an additional gross-up payment will be made to the executive. The gross-up payment will effectively place the executive in the same net position as without the excise tax. No changes have been made to Mr. Elder’s CIC agreement since 2011. Beginning in 2011, the provision for excise tax gross-ups was eliminated from CIC Agreements entered into thereafter. As such, the CIC Agreements of Messrs. Fahnemann, Shettigar, and Illetschko and Ms. Beck do not contain a tax gross-up provision, and Messrs. Astley’s and Laures’ CIC Agreements terminated upon their termination of employment in April 2023. “Double Trigger” Provisions: Under equity grant agreements, a double trigger provision accelerates vesting in the event of a change in control if the executive is terminated without cause or resigns with good reason (as those terms are defined in the CIC Agreements).
2024 PROXY STATEMENT › 65
The following table describes how each element of the NEO’s post-employment compensation would be treated in the event of termination, with and without a change in control: | | | | | | | | | Type of Post-Employment Compensation/Treatment upon Termination | Termination without Cause by the Company or for Good Reason by the NEO following a Change in Control | Termination Not in Connection with a Change in Control | | Cash Severance | The NEO (excluding CEO and COO) receives a severance payment in an amount equal to: ◦two times the NEO’s annual base salary (at the highest rate achieved before the date of termination), plus ◦the NEO’s annual bonus, defined as the greater of the NEO’s three-year average bonus or the NEO’s target bonus.
The CEO and COO receive a severance payment in an amount equal to: ◦two times the NEO’s annual base salary (at the highest rate achieved before the date of termination), plus ◦target bonus.
| The Compensation Committee may authorize severance benefits if determined to be appropriate. In the past, the Company has agreed to provide severance benefits to departing executive officers in exchange for definitive termination agreements. In the event of termination by the Company without cause, the executive termination guidelines provide for cash severance amounts equal to one month’s pay (including base salary plus 1/12 of a bonus) per year of service up to the following maximums (the severance period), depending on an executive’s level (excluding CEO and COO): ◦Executive VPs and SVPs: 18 months ◦VPs: 12 months
The CEO and COO receive a severance payment in an amount equal to 12 months base salary (regardless of service) and target bonus. Under the terms of Mr. Illetschko’s (COO) employment agreement, he has a 6 month notice period to the end of the month.
| | Health & Welfare Benefits | For a period of two years after the date of termination, the Company continues to provide group medical, prescription, dental, disability, salary continuance, group life, accidental death and dismemberment, and travel accident insurance benefits at levels substantially equal to those that would have been provided if the NEO’s employment had not been terminated. Outplacement assistance will be offered.
| In the event of termination by the Company without cause, the executive termination guidelines provide for continuation of health benefits through the length of the severance period, Employee Assistance Program support, and payment of any accrued unused vacation. Outplacement assistance will be offered. | | STI Compensation under the MIP | The NEO (excluding CEO and COO) receives a pro-rated bonus payment, based on the greater of the NEO’s three-year average bonus or the NEO’s target bonus. The CEO and COO will receive a pro-rated bonus based on target performance in the year of termination consistent with program terms and conditions. | The Compensation Committee may authorize a pro-rata bonus payment if determined to be appropriate in order to enter into a definitive termination agreement. The CEO is not eligible to receive a pro-rata bonus payment. Under the terms of his employment agreement, Mr. Illetschko (COO) will receive a pro-rata bonus based on Company performance in year of termination. In the case of termination due to death, disability, or retirement, the NEO receives a pro-rated award based on performance.
|
2024 PROXY STATEMENT › 66
| | | | | | | | | Type of Post-Employment Compensation/Treatment upon Termination | Termination without Cause by the Company or for Good Reason by the NEO following a Change in Control | Termination Not in Connection with a Change in Control | | Long-Term Incentives | A “double trigger” provision applies, under which RSUs, SOSARs, and PSAs will accelerate vesting upon involuntary termination or good reason termination upon or following a change in control. PSAs will generally be deemed to have been earned at the greater of target or actual performance through the change in control. In the event of a change in control in which the Company’s stock is no longer the stock of the surviving entity, the Company will cause the surviving entity to issue replacement RSUs and PSAs. For awards issued prior to August 2022, a value restoration payment with respect to any vested replacement SOSARs, RSUs, or PSAs will be paid based on the difference between the fair market value of the surviving entity’s common stock on the date of the change in control and, if less, the fair market value of the surviving entity’s common stock on the vesting date (which will include the date of the NEO’s involuntary separation from service other than for Cause, or voluntary separation from service for Good Reason). Any value restoration payment will include interest (at the prime rate of interest of the Company’s principal bank in effect on the vesting date for the period between the date of the change in control and the vesting date) and will be paid in cash within 30 days after the vesting date. Beginning in August 2022 and applicable for future awards, no value restoration payment will be made for replacement awards. | RSUs: If the NEO ceases employment other than upon death, disability, or retirement, unvested RSUs are forfeited. If the NEO is terminated for cause, outstanding RSUs, vested or unvested, are forfeited. Upon death or disability, vesting of RSUs is accelerated, and upon retirement, unvested RSUs are pro-rated. SOSARs: If the NEO ceases employment other than upon death, disability, retirement, or termination for cause, then, for a period of 90 days following such termination, the NEO may exercise any vested SOSARs. Unvested SOSARs are forfeited. If the NEO is terminated for cause, outstanding SOSARs, vested or unvested, are forfeited. Upon retirement, there is pro-rated vesting of SOSARs, and the SOSARs are exercisable for a period of 3 years or if shorter, until the end of the term. In the case of death or disability, all unvested SOSARs will accelerate and become fully vested and exercisable for three years from the date of such death or disability, or if shorter, until the end of the term. PSAs: If the NEO ceases employment, other than upon death, disability, or retirement, unvested PSAs are forfeited. Upon death, disability, or retirement, the NEO is entitled to receive a pro-rated award based on performance after the end of the performance period.
| | 401(k) | In the event that the NEO’s vesting service is insufficient to have earned a vested interest in matching contributions under the Company’s 401(k) plan, the Company will pay to the NEO an amount equal to the NEO’s unvested matching contribution account under the 401(k) plan. | If a NEO leaves the Company before full vesting in the employer-matching contributions under the 401(k) plan, then the non-vested portion is forfeited, except upon attainment of age 65 or death, which would accelerate vesting. Employee deferrals and rollover contributions are always vested. |
The above description of the benefits upon termination or a change in control for each of our NEOs is only a general description of their existing arrangements as of December 31, 2023. For a description of any specific arrangements negotiated or to be implemented in connection with the Proposed Transaction, once available, please see the registration statement on Form S-4, to be filed by Glatfelter, that will contain a proxy statement/prospectus relating to the Proposed Transaction. 2024 PROXY STATEMENT › 67
QUANTIFICATION OF PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL The following table, including the footnotes that follow, describes the potential payments to the NEOs (except with respect to Messrs. Astley and Laures) upon termination of employment or due to a change in control of the Company as if such termination or change in control occurred on December 31, 2023. As discussed above, Messrs. Astley’s and Laures’ employment with the Company terminated on April 5, 2023 and August 31, 2023, respectively. Accordingly, information regarding the amount of compensation actually received by Messrs. Astley and Laures in connection with their respective separations is set forth in narrative disclosure following the table. | | | | | | | | | | | | | | | | Name | Death or Disability | Retirement | Involuntary Termination Without Cause | Termination Following CIC | | Thomas M. Fahnemann | | | | | Severance Payments (1) | N/A | N/A | $ | 2,100,000 | | $ | 5,250,000 | | RSUs (2) | $ | 931,200 | | $ | 506,864 | | $ | 0 | | $ | 931,200 | | PSAs (2),(3) | $ | 315,077 | | $ | 315,077 | | $ | 0 | | $ | 1,356,506 | | Health & Welfare Benefits (4) | N/A | N/A | $ | 32,677 | | $ | 65,354 | | | Outplacement Assistance | N/A | N/A | $ | 40,000 | | $ | 40,000 | | 401(k) / NQDCP (5) | N/A | N/A | N/A | $ | 104,508 | | | Total | $ | 1,246,277 | | $ | 821,941 | | $ | 2,172,677 | | $ | 7,747,568 | | | Ramesh Shettigar | | | | | Severance Payments (1) | N/A | N/A | $ | 401,394 | | $ | 1,710,000 | | RSUs (2) | $ | 108,909 | | $ | 64,430 | | $ | 0 | | $ | 108,909 | | PSAs (2),(3) | $ | 74,643 | | $ | 74,643 | | $ | 0 | | $ | 166,805 | | Health & Welfare Benefits (4) | N/A | N/A | $ | 17,596 | | $ | 64,994 | | | Outplacement Assistance | N/A | N/A | $ | 30,000 | | $ | 30,000 | | 401(k) / NQDCP (5) | N/A | N/A | N/A | $ | 0 | | | Total | $ | 183,552 | | $ | 139,073 | | $ | 448,990 | | $ | 2,080,708 | | | Boris Illetschko | | | | | Severance Payments (1) | N/A | N/A | $ | 764,363 | | $ | 1,829,838 | | RSUs (2) | $ | 76,983 | | $ | 19,591 | | $ | 0 | | $ | 76,983 | | PSAs (2),(3) | $ | 36,271 | | $ | 36,271 | | $ | 0 | | $ | 108,813 | | Health & Welfare Benefits (4) | N/A | N/A | $ | 0 | | $ | 6,552 | | | Outplacement Assistance | N/A | N/A | $ | 30,000 | | $ | 30,000 | | 401(k) / NQDCP (5) | N/A | N/A | N/A | $ | 0 | | | Total | $ | 113,254 | | $ | 55,862 | | $ | 794,363 | | $ | 2,052,185 | | | David C. Elder | | | | | Severance Payments (1) | N/A | N/A | $ | 447,634 | | $ | 1,218,000 | | RSUs (2) | $ | 84,593 | | $ | 54,527 | | $ | 0 | | $ | 84,593 | | PSAs (2),(3) | $ | 61,459 | | $ | 61,459 | | $ | 0 | | $ | 125,103 | | Health & Welfare Benefits (4) | N/A | N/A | $ | 24,006 | | $ | 64,994 | | | Outplacement Assistance | N/A | N/A | $ | 15,000 | | $ | 15,000 | | 401(k) / NQDCP (5) | N/A | N/A | N/A | $ | 0 | | | Excise Tax Gross-Up | N/A | N/A | N/A | $ | 0 | | | Total | $ | 146,052 | | $ | 115,986 | | $ | 683,156 | | $ | 1,507,690 | | | Eileen L. Beck | | | | | Severance Payments (1) | N/A | N/A | $ | 440,033 | | $ | 1,295,000 | | RSUs (2) | $ | 60,499 | | $ | 39,420 | | $ | 0 | | $ | 60,499 | | PSAs (2),(3) | $ | 31,743 | | $ | 31,743 | | $ | 0 | | $ | 75,035 | | Health & Welfare Benefits (4) | N/A | N/A | $ | 14,213 | | $ | 39,486 | | | Outplacement Assistance | N/A | N/A | $ | 30,000 | | $ | 30,000 | | 401(k) / NQDCP (5) | N/A | N/A | N/A | $ | 0 | | | Total | $ | 92,242 | | $ | 71,163 | | $ | 484,246 | | $ | 1,500,020 | |
2024 PROXY STATEMENT › 68
(1)In the event of an involuntary termination without cause, cash severance is equal to 12 months' base salary and target bonus for the CEO and COO. For other U.S.-based NEOs, cash severance amounts equal to one month’s pay (including base salary plus 1/12 of a notional bonus) per year of service up to 18 months for SVPs and 12 months for VPs. The notional bonus is calculated as the lesser of (i) the target bonus for the terminated executive in the year of termination or (ii) the average of annual bonuses paid to the terminated executive with respect to the three fiscal years preceding the year of termination. As Mr. Illetschko is employed in Switzerland, his separation benefits will be governed by his employment contract which provides for a 6 month notice period to the end of the month. Mr. Illetschko’s employment agreement also provides cash severance equal to 12 months' base salary and target bonus and a pro-rated bonus in year of termination. (2)The values above represent awards for which vesting fully or partially accelerates upon termination as a result of death, disability, or retirement, as applicable. The values are calculated (a) based on the closing price of $1.94 of the Company’s common stock on December 29, 2023, and (b) as if death, disability, or retirement had occurred on December 31, 2023. For change in control, the value assumes vesting (as determined under applicable award agreements) and exercise on December 31, 2023. Upon an involuntary termination without cause, unvested RSUs and PSAs are forfeited. (3)Assumes achievement of a target performance level at the end of the performance period. (4)Based on current type of coverage and premium levels. (5)Represents the (1) Unvested Company Contributions, including any matching contribution, if applicable under the 401(k) Plan, and (2) Unvested account balance under the Deferred Compensation plan, both valued as of the Date of Termination.
Christopher W. Astley Payments upon Termination of Employment
Mr. Astley’s employment with the Company terminated effective as of April 5, 2023. In connection with his termination, Mr. Astley received the following: a.) $636,586 in severance, which represents 12 months of base salary and bonus which will be paid in installments over the 12-month period following the separation date and following a six-month delay for specified employees. b.) Reimbursement for retiree medical/COBRA premiums for continued medical, prescription drug, and dental coverage for the 12-month period following the separation date and following a six-month delay for specified employees. Reimbursement will consist of the difference between Active Employee rates versus Retiree/COBRA rates (estimated to be approximately $15,421 during the severance period based on current enrollment; however, reimbursement amount will vary depending on benefits plans selected). c.) $30,000 cash payment in lieu of outplacement. Per our policy, Mr. Astley was paid $13,493 in earned but unused vacation. All outstanding equity grants that had vested as of Mr. Astley’s separation date will be payable or exercisable, as applicable, in accordance with the terms of the applicable long-term incentive plan and the applicable grant agreements. Mr. Astley’s non-qualified retirement benefits, including his frozen SERP benefits, were paid in 2023 in accordance to the terms of the NQDCP and after satisfying the six-month delay under Section 409A of the Code and/or any special elections. Mr. Astley must comply with covenants related to confidentiality, non-competition, and non-solicitation of employees and other service providers as a condition to receiving the severance payments described above.
Wolfgang Laures Payments upon Termination of Employment
Mr. Laures was notified of his termination with the Company on April 5, 2023 (“Notice Date”) and was terminated on August 31, 2023 after satisfying the legal notice period as outlined in his employment agreement. Mr. Laures was released from his duty to work on his Notice Date and continued to receive full pay totaling approximately 186,000 CHF for the duration of his notice period running from April through August 2023. Upon his termination from the Company on August 31, 2023, Mr. Laures received the following: a.) 30,000 CHF cash payment in lieu of outplacement. b.) up to $15,000 USD gross per year reimbursement for tax assistance for fiscal years 2022 and 2023.
The changes in executive leadership were not related to Glatfelter’s operations, financial reporting or controls, or personal conduct. 2024 PROXY STATEMENT › 69
Pay Versus Performance The following information is presented to disclose the relationship between Compensation Actually Paid (“CAP”), as calculated under applicable SEC rules, and the financial performance of the Company. As required by SEC rules, the table presented below discloses CAP for (i) the Company’s principal executive officer(s) (“PEO(s)”) and (ii) the Company’s NEOs other than the PEO (the “non-PEO NEOs”), on an average basis, for the fiscal years 2023, 2022, 2021, and 2020. The methodology for calculating amounts presented in the columns “CAP to PEO (Current),” “CAP to PEO (Former),” and “Average CAP to Non-PEO NEOs,” including details regarding the amounts that were deducted from, and added to, the Summary Compensation Table (“SCT”) totals to arrive at the values presented for CAP, are provided in the footnotes to the table. A narrative discussion of the relationship between CAP and the Company performance measures (i) listed in the table and (ii) that the Company has deemed most important in linking CAP during 2023 to Company performance is also presented below. Consistent with SEC rules, Glatfelter has identified Adj. EBITDA(4) as its “Company-Selected Measure.” Glatfelter believes that this measure represents the most important financial performance measure used to link CAP to Company performance.Adj. EBITDA is a key component of Glatfelter’s compensation program, as described in the Compensation Discussion and Analysis (“CD&A”) beginning on page 35. Compensation decisions at Glatfelter are made independently of the Pay versus Performance (“PvP”) disclosure requirements and this disclosure is intended to be supplemental to the compensation program objectives and strategy discussed in the CD&A, not in replacement. For information related to how the Compensation Committee assessed Glatfelter’s performance and established compensation for the NEOs, see “Compensation Discussion and Analysis” in this proxy statement and in proxy statements for 2022, 2021, and 2020. PAY VERSUS PERFORMANCE TABLE In accordance with applicable SEC rules, the following table sets forth information concerning SCT Total Compensation and CAP for the Company’s PEO(s) and non-PEO NEOs for fiscal years 2023, 2022, 2021, and 2020 and the corresponding financial performance in each year.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Year | Current PEO | Former PEO | Non-PEO NEOs | Value of Initial Fixed $100 Investment Based on: | Net Income
(millions) | Adj. EBITDA(4) (millions) | SCT Total For PEO (Current)(1) | CAP to PEO (Current)(1)(5) | SCT Total For PEO (Former)(1) | CAP to PEO (Former)(1)(5) | Average SCT Total for Non-PEO NEOs(2) | Average CAP to Non-PEO NEOs(2)(5) | Total Shareholder Return | Peer Group(3) Total Shareholder Return | 2023(6) | $3,495,919 | $1,946,589 | N/A | N/A | $788,582 | $525,945 | $12 | $164 | $(79.3) | $92.6 | 2022(7) | $2,400,576 | $1,457,376 | $9,007,845 | $2,436,271 | $1,153,086 | $(45,485) | $17 | $136 | $(194.2) | $98.9 | 2021(8) | N/A | N/A | $4,611,728 | $3,681,582 | $1,070,643 | $963,460 | $102 | $145 | $6.9 | $119.6 | 2020(9) | N/A | N/A | $4,561,385 | $4,003,894 | $1,189,843 | $1,128,941 | $94 | $123 | $21.3 | $125.3 |
1.) As a result of a PEO transition that occurred in 2022, two PEO’s are reported in the table. In fiscal years 2020 and 2021, Dante Parrini was the PEO (listed as “Former PEO”). On August 24, 2022, Mr. Parrini ceased to serve as PEO and Thomas Fahnemann was appointed PEO (listed as “Current PEO”). Mr. Fahnemann is reported as PEO in 2023. 2.) The non-PEO NEOs reported in fiscal years 2020 and 2021 are Samuel Hillard, Christopher Astley, Wolfgang Laures, and Eileen Beck. The non-PEO NEOs reported in fiscal year 2022 are Ramesh Shettigar, Samuel Hillard, Christopher Astley, Wolfgang Laures, and David Elder. The non-PEO NEOs reported in fiscal year 2023 are Ramesh Shettigar, Boris Illetschko, David Elder, Eileen Beck, Christopher Astley, and Wolfgang Laures. 3.) Amounts reported in this column represent returns on an initial $100 investment in the S&P Small Cap 600 Materials Index, which was utilized as the Company’s peer group for purposes of calculating peer group total shareholder return included inthis table pursuant to Item 201(e) of Regulation S-K. 4.) Adj. EBITDA is a non-GAAP measure that is reconciled to the nearest GAAP measure on page 21 of our 2023 Form 10-K filed on February 28, 2024. 5.) CAP, as required under SEC rules, reflects adjustments to the value of unvested and vested equity awards during the years shown in the table based on year-end stock prices, various accounting valuation assumptions, and projected performance modifiers but does not reflect actual amounts paid out for those awards. CAP generally fluctuates due to stock price achievement and varying levels of projected and actual achievement of performance goals. Valuations calculated on such dates are determined in accordance with the 2024 PROXY STATEMENT › 70
Company’s methodology used for financial reporting purposes. Equity awards issued by the Company during the covered periods are subject to certain market conditions and have been valued using a Monte Carlo simulation where applicable. 6.) The following table sets forth the amounts deducted from and added to SCT total compensation pursuant to Item 401(v) of Regulation S-K to determine CAP for the Current PEO and non-PEO NEOs in 2023: | | | | | | | | | | | | | | | | 2023 | Current PEO(1) | | Avg. Non-PEO NEOs(2) | | SCT Total Compensation | $3,495,919 | | $788,582 | ‘- | Aggregate Change in Pension Value Reported in SCT | $0 | | $(9,833) | ‘- | Amounts reported in SCT for Stock Awards | $(2,153,742) | | $(291,514) | ‘+ | Value of Service Cost Attributable to Executive under Pension(i) | $0 | | $0 | ‘+ | Value of Awards Granted in Covered Year, Outstanding and Unvested at Year- End | $878,012 | | $75,412 | ‘+ | Dividends Paid on Unvested Awards | $0 | | $0 | ‘+/- | Change in Value of Awards Granted in Any Prior Year, Outstanding and Unvested at Year End | $(273,600) | | $(10,098) | ‘+/- | Change in Value of Awards Granted in Any Prior Year, Vested During the Year | $0 | | $6,566 | ‘- | Value of Awards Forfeited in Covered Year | $0 | | $(33,171) | ‘= | CAP | $1,946,589 | | $525,945 |
i.) Glatfelter’s qualified pension plan was terminated in 2019 and related liabilities were settled. In addition, the Company froze the benefits for all participants in the SERP effective December 31, 2019 so no additional benefits have accrued for any NEO under the SERP. The frozen SERP has been subsumed by a NQDCP. Based on these factors, Glatfelter did not have any service cost under the frozen SERP in 2023 for purposes of calculating CAP.
7.) The following table sets forth the amounts deducted from and added to SCT total compensation pursuant to Item 401(v) of Regulation S-K to determine CAP for the Current PEO, Former PEO, and non-PEO NEOs in 2022: | | | | | | | | | | | | | | | | | | | 2022 | Current PEO(1) | Former PEO(1) | | Avg. Non-PEO NEOs(2) | | SCT Total Compensation | $2,400,576 | $9,007,845 | | $1,153,086 | ‘- | Aggregate Change in Pension Value Reported in SCT | $0 | $(284,000) | | $(800) | ‘- | Amounts reported in SCT for Stock Awards | $(1,750,800) | $(2,999,988) | | $(728,249) | ‘+ | Value of Service Cost Attributable to Executive under Pension(i) | $0 | $0 | | $0 | ‘+ | Value of Awards Granted in Covered Year, Outstanding and Unvested at Year- End | $807,600 | $3,042,096 | | $267,133 | ‘+ | Dividends Paid on Unvested Awards | $0 | $241,203 | | $11,288 | ‘+/- | Change in Value of Awards Granted in Any Prior Year, Outstanding and Unvested at Year End | $0 | $(753,193) | | $(288,841) | ‘+/- | Change in Value of Awards Granted in Any Prior Year, Vested During the Year | $0 | $(581,355) | | $(145,316) | ‘- | Value of Awards Forfeited in Covered Year | $0 | $(5,236,338) | | $(313,786) | ‘= | CAP | $1,457,376 | $2,436,271 | | $(45,485) |
i.) Glatfelter’s qualified pension plan was terminated in 2019 and related liabilities were settled. In addition, the Company froze the benefits for all participants in the SERP effective December 31, 2019 so no additional benefits have accrued for any NEO under the SERP. The frozen SERP has been subsumed by a NQDCP. Based on these factors, Glatfelter did not have any service cost under the frozen SERP in 2022 for purposes of calculating CAP.
2024 PROXY STATEMENT › 71
8.) The following table sets forth the amounts deducted from and added to SCT total compensation pursuant to Item 401(v) of Regulation S-K to determine CAP for the Former PEO and non-PEO NEOs in 2021: | | | | | | | | | | | | | | | | 2021 | Former PEO(1) | | Avg. Non-PEO NEOs(2) | | SCT Total Compensation | $4,611,728 | | $1,070,643 | ‘- | Aggregate Change in Pension Value Reported in SCT | $(413,000) | | $(250) | ‘- | Amounts reported in SCT for Stock Awards | $(1,889,987) | | $(356,863) | ‘+ | Value of Service Cost Attributable to Executive under Pension(i) | $0 | | $0 | ‘+ | Value of Awards Granted in Covered Year, Outstanding and Unvested at Year- End | $1,545,525 | | $291,824 | ‘+ | Dividends Paid on Unvested Awards | $216,167 | | $33,953 | ‘+/- | Change in Value of Awards Granted in Any Prior Year, Outstanding and Unvested at Year End | $(388,035) | | $(73,789) | ‘+/- | Change in Value of Awards Granted in Any Prior Year, Vested During the Year | $(815) | | $(2,058) | ‘- | Value of Awards Forfeited in Covered Year | $0 | | $0 | ‘= | CAP | $3,681,582 | | $963,460 |
i.) Glatfelter’s qualified pension plan was terminated in 2019 and related liabilities were settled. In addition, the Company froze the benefits for all participants in the SERP effective December 31, 2019 so no additional benefits have accrued for any NEO under the SERP. The frozen SERP has been subsumed by a NQDCP. Based on these factors, Glatfelter did not have any service cost under the frozen SERP in 2021 for purposes of calculating CAP. 9.) The following table sets forth the amounts deducted from and added to SCT total compensation pursuant to Item 401(v) of Regulation S-K to determine CAP for the Former PEO and the non-PEO NEOs in 2020: | | | | | | | | | | | | | | | | 2020 | Former PEO(1) | | Avg. Non-PEO NEOs(2) | | SCT Total Compensation | $4,561,385 | | $1,189,843 | ‘- | Aggregate Change in Pension Value Reported in SCT | $(265,000) | | $(250) | ‘- | Amounts reported in SCT for Stock Awards | $(1,767,347) | | $(336,745) | ‘+ | Value of Service Cost Attributable to Executive under Pension(i) | $0 | | $0 | ‘+ | Value of Awards Granted in Covered Year, Outstanding and Unvested at Year- End | $1,661,121 | | $316,504 | ‘+ | Dividends Paid on Unvested Awards | $192,758 | | $28,803 | ‘+/- | Change in Value of Awards Granted in Any Prior Year, Outstanding and Unvested at Year End | $(288,619) | | $(56,462) | ‘+/- | Change in Value of Awards Granted in Any Prior Year, Vested During the Year | $(90,404) | | $(12,753) | ‘- | Value of Awards Forfeited in Covered Year | $0 | | $0 | ‘= | CAP | $4,003,894 | | $1,128,941 |
i.) Glatfelter’s qualified pension plan was terminated in 2019 and related liabilities were settled. In addition, the Company froze the benefits for all participants in the SERP effective December 31, 2019 so no additional benefits have accrued for any NEO under the SERP. The frozen SERP has been subsumed by a NQDCP. Based on these factors, Glatfelter did not have any service cost under the frozen SERP in 2020 for purposes of calculating CAP.
2024 PROXY STATEMENT › 72
Tabular List of Most Important Performance Measures The following table sets forth an unranked list of the most important financial performance measures, including the Company-Selected Measure, used by the Company to link CAP for all NEOs to Company performance for the fiscal year 2023.
| | | | Company-Selected Performance Measures | | Adjusted EBITDA | | Adjusted Free Cash Flow | | Senior Secured Net Leverage | | ROCE | | Relative TSR |
Relationship Between Compensation Actually Paid and Performance Measures As evidenced by the below illustrations, the CAP to the Former PEO (in applicable years), the Current PEO, and the non-PEO NEOs over the four-year reporting period aligns to performance trends in Glatfelter’s TSR, Net Income, and Adj. EBITDA results over the same time period. The biggest driver of the year-over-year change in CAP is tied to the value of equity due to the decline in the Company’s stock price. In parallel, business challenges, coupled with the difficult macroeconomic environment, negatively impacted the Company’s Net Income, Adj. EBITDA, and TSR. The charts below illustrate the relationship between the CAP to the Former PEO (in applicable years), the Current PEO, and the non-PEO NEOs and the Company’s TSR, Net Income, and Adj. EBITDA over the four fiscal years ending December 31, 2023. A comparison of the Company’s TSR and the TSR of the S&P 600 Small Cap Materials Index is also provided. Note that the current PEO began employment on August 24, 2022 so year-over-year comparison is available for 2023 only. Chart 1: Alignment of CAP with Company TSR: The Company’s TSR is expressed as a $100 investment in the Company’s common stock on December 31, 2019. For 2020 to 2023, the CAP to the Former PEO and the average CAP to the non-PEO NEOs decreased by 39% and 53%, respectively, and the CAP to the Current CEO increased by 34% compared to an 87% decrease in the Company’s TSR over the same time horizon.
2024 PROXY STATEMENT › 73
Chart 2 : Comparison of Company TSR and Peer Group TSR: The S&P 600 Small Cap Materials Index, as the Company’s peer group for purposes of Item 201(e) of Regulation S-K, was utilized for purposes of calculating peer group TSR. The TSR for the peer group disclosed in the chart above increased by 33% for the four-year period ending December 31, 2023, as compared to the Company's TSR, which decreased by 87% over the same time period. Chart 3 : Alignment of CAP with Company Net Income: For 2020 to 2023, the CAP to the Former PEO and the average CAP to the non-PEO NEOs decreased by 39% and 53%, respectively, and the CAP to the Current CEO increased by 34% compared to a significant decrease in the Company’s Net Income over the same time period.
2024 PROXY STATEMENT › 74
Chart 4 : Alignment of CAP with Adjusted EBITDA: For 2020 to 2023, the CAP to the Former PEO and the average CAP to the non-PEO NEOs decreased by 39% and 53%, respectively, and the CAP to the Current CEO increased by 34% compared to a 26% decrease in the Company’s Adj. EBITDA performance over the same time horizon.
2024 PROXY STATEMENT › 75
CEO Pay Ratio As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and Item 402(u) of Regulation S-K, we are providing information about the relationship of the annual total compensation of our median employee and the annual total compensation of Mr. Fahnemann, the CEO serving in position on the date selected for identifying the median employee. For 2023, our ratio was estimated as follows: | | | | | | Name | Annual Total Compensation (in 000x)(1) | | CEO | $3,530.3 | | Median Employee | $55.3 | | CEO Pay Ratio | 64:1 |
(1)Annual total compensation includes compensation calculated for purposes of the Summary Compensation Table, as well as benefit premiums for the CEO, and the market-competitive compensation and benefits for the median employee. •SEC rules provide that we may use the same median employee for three years before identifying a new median employee, provided that during our last completed fiscal year there has been no change in our employee population or employee compensation arrangements that we reasonably believe would result in a significant change to our pay ratio disclosure. We believe that there have been no material changes in our employee population or our compensation arrangements in fiscal 2023 that would result in a material change in our pay ratio disclosure or our median employee. As such, we used the same median employee as 2022 with compensation data refreshed for the ratio calculation, consistent with previous methodology. •The median employee was determined using the previous methodology which is outlined below: •Continued to use October 1, 2023 as the date to determine the median employee. •Considered all permanent employees throughout our global operations. •Selected base salary or wages, overtime, premium pay, and short-term incentives as the most appropriate measure of compensation. •Annualized compensation of permanent employees hired between January 1, 2023 and October 1, 2023. •Using this methodology, we determined the appropriate median employee to be a full-time employee in the United Kingdom. For purposes of this determination, we applied the appropriate exchange rate to U.S. dollars of the average exchange rate for October 2023 as to our non-US employees. •We calculated all of the elements of the median employee’s compensation and the CEO’s compensation for fiscal year 2023 in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K. The above pay ratio is a reasonable estimate calculated in a manner consistent with Item 402(u) of the Regulation S-K. •In making this pay ratio disclosure, other companies may use assumptions, estimates, and methodologies different than ours; as a result, the following information may not be directly comparable to the information provided by other companies in our peer group or otherwise.
2024 PROXY STATEMENT › 76
| | | | Certain Relationships and Related Transactions |
Related Party Transactions Policy The NCG Committee (or its Chair, under some circumstances) will review the relevant facts of all proposed Related Person Transactions and either approve or disapprove of the entry into the Related Person Transaction. For purposes of this review, as defined in the NCG Committee Charter, a “Related Person Transaction” is a transaction, arrangement, or relationship (or any series of similar transactions, arrangements, or relationships) involving an amount that is at least $120,000, and in which the Company was, is, or will be a participant, and in which any Related Person had, has, or will have a direct or indirect material interest. A “Related Person” is generally any person who is, or at any time since the beginning of the Company’s last fiscal year was, (i) a director or executive officer of the Company or a nominee to become a director of the Company; (ii) any person who is known to be the beneficial owner of more than 5% of any class of the Company’s voting securities; (iii) any immediate family member of any of the foregoing persons; or (iv) any firm, corporation, or other entity in which any of the foregoing persons is employed or is a general partner or principal or in a similar position, or in which such person has a 5% or greater beneficial ownership interest. There were no Related Person Transactions during 2023. According to the Board’s Related Party Transaction Policy, Related Person Transactions are approved only if they are determined to be in, or not inconsistent with, the best interests of the Company and its shareholders. No director may participate in any consideration or approval of a Related Person Transaction in which he or she, or any of his or her immediate family members or related entities, is the Related Person. If a Related Person Transaction that has not been previously approved or ratified is discovered, the NCG Committee, or its Chair, will promptly consider all of the relevant facts. If the transaction is ongoing, the NCG Committee will consider all options and may ratify, amend, or terminate the Related Person Transaction. If the transaction has been completed, the NCG Committee will consider if rescission of the transaction is appropriate and if disciplinary action is warranted. The NCG Committee will review all ongoing Related Person Transactions on an annual basis to determine whether to continue, modify, or terminate the Related Person Transaction. In reviewing the relevant facts related to all proposed Related Person Transactions, the NCG Committee, or its Chair, will take the following considerations into account, along with other factors it deems appropriate: •the benefits to the Company of the transaction •the impact on a director’s independence, in the event the “Related Person” is a director, an immediate family member of a director, or an entity in which a director is a partner, shareholder, or executive officer •the availability of other sources for comparable products or services •the terms of the transaction •the terms available from unrelated third parties or to employees generally To the extent that the NCG Committee, or its Chair, needs additional information to make an informed decision regarding a proposed Related Person Transaction, the NCG Committee, or its Chair, may consult with Management or other members of the Board. 2024 PROXY STATEMENT › 77
| | | | Report of the Audit Committee |
The Audit Committee has reviewed and discussed the Company’s audited consolidated financial statements for the year ended December 31, 2023 with the Company’s Management and its independent registered public accounting firm. The Company’s Management has advised the Audit Committee that such audited consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America. The Audit Committee has discussed with Deloitte, the Company’s independent registered public accounting firm, the matters required to be discussed by Auditing Standard No. 1301, “Communications with Audit Committees,” as issued by the Public Company Accounting Oversight Board. The Audit Committee has also discussed with Deloitte its independence from the Company and its Management. The Audit Committee has received a letter and written disclosures from Deloitte required by applicable requirements of the Public Company Accounting Oversight Board, disclosing all relationships between Deloitte and its related entities and the Company. In addition to the information provided by Deloitte, the Audit Committee considered the level of non-audit and tax services provided by Deloitte in determining that it was independent. Based on the review and discussions described above, the Audit Committee recommended to the Company’s Board that the Company’s audited consolidated financial statements be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, for filing with the SEC. The foregoing Report does not constitute soliciting material and should not be deemed filed or incorporated by reference into any other filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that the Company specifically incorporates the Report by reference therein. Marie T. Gallagher (Chair) Kathleen A. Dahlberg J. Robert Hall
2024 PROXY STATEMENT › 78
| | | | Frequently Asked Questions (“FAQs”) | |
Why did I receive these materials? You are receiving these materials because, as a shareholder, the Company is soliciting your vote on matters to be considered at the upcoming SpecialAnnual Meeting. The notice,Notice of Annual Meeting (the “Notice”), this proxy statement, and the accompanying proxy card, and our 2023 Form 10-K, were first sent or given to shareholders on or about October 7, 2022.March 26, 2024. Please read this proxy statement and vote your shares by mailing the attached proxy card, voting online at www.proxyvote.com, by telephone at 1-800-690-6903, or on the Meeting Website during the SpecialAnnual Meeting. The Board has appointed directors Kevin M. FogartyKathleen A. Dahlberg and Lee C. Stewart,Marie T. Gallagher, or either of them (the “Proxy Holders”) with power of substitution, to vote all properly-executed proxies received from shareholders entitled to vote at the SpecialAnnual Meeting or at any adjournment, continuation, or postponement of the SpecialAnnual Meeting.
When and where is the SpecialAnnual Meeting? The SpecialAnnual Meeting will be held on November 11, 2022,Friday, May 10, 2024, at 10:8:00 a.m. Eastern Time via live audio cast at on the Meeting Website, which is www.virtualshareholdermeeting.com/GLT2022SM (Meeting Website)GLT2024. There will not be a physical location for the SpecialAnnual Meeting, and you will not be able to attend the meeting in person. To virtually attend the SpecialAnnual Meeting, visit the Meeting Website and enter the 16-digit control number found on your proxy card, or voting instruction form, as applicable.or Notice. If you encounter any difficulties accessing the virtual SpecialAnnual Meeting during the check-in or meeting time, you should call the technical support number that will be posted on the login page of the Meeting Website.
Who is soliciting this proxy? Solicitation of proxies is made on behalf of the Board. The cost of soliciting proxies, including preparing, assembling and mailing the proxy statement, form of proxy card, and other soliciting materials, as well as the cost of forwarding such material to the beneficial owners of stock, will be paid by us, except for some costs associated with individual shareholders’ use of the Internet or telephone, and postage. In addition to the solicitation by electronic communications and/or by mail, directors, officers, regular employees and others may also, but without compensation other than their regular compensation, solicit proxies personally or by telephone or other means of electronic communication. We may reimburse brokers and others holding stock in their names or in the names of nominees for their reasonable out-of-pocket expenses in sending proxy materials to principals and beneficial owners. Proxies will be solicited on behalf of the Board by the Company’s directors, director nominees, and certain executive officers and other employees of the Company.
Shareholders of record as of the close of business on the Record Date, (September 26, 2022)which is March 14, 2024, may vote at the SpecialAnnual Meeting. At the close of business on the Record Date, there were 44,796,505 45,252,530 shares of the Company’s common stock issued and outstanding and eligible to vote at the SpecialAnnual Meeting.
What is the difference between a registered shareholder and a beneficial owner? If your shares are registered in your name in the records of our transfer agent, Computershare Limited, (“Computershare”), you are a “registered shareholder,” also sometimes called a shareholder of record. If you are a registered shareholder, we sent the noticeNotice directly to you. If your shares are held in the name of your broker or bank, your shares are held in “street name” and you are considered the “beneficial owner.” The noticeNotice should have been forwarded to you by your broker, bank, or other holder of record, who is considered the shareholder of record for those shares. As the beneficial owner, you have the right to direct your broker, bank, or other holder of record how to vote your shares by following the voting instructions included in the mailing.
If you are a registered shareholder, meaning you hold your shares in your own name as a holder of record, you may vote by attendingduring the SpecialAnnual Meeting on the Meeting Website, or you can vote by proxy and instruct the Proxy Holders named in the enclosed proxy card how to vote your shares. IfYou may vote your proxy by telephone at 1-800-690-6903, online at www.proxyvote.com, or by completing and signing the enclosed proxy card and returning it promptly in the enclosed envelope (requiring no postage if mailed in the United States). Please make certain you are the record holder ofmark, sign, and date your stock, you can vote by proxy in three ways: | 1. | By telephone at 1-800-690-6903;
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| FREQUENTLY ASKED QUESTIONS |
| 2. | Via internet at www.proxyvote.com; or
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| 3. | By mail by completing and signing the enclosed proxy card and returning it promptly in the enclosed envelope (requiring no postage if mailed in the United States). Please make certain you mark, sign, and date your proxy card as instructed on the proxy card prior to mailing.
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card prior to mailing. All valid proxies received and not revoked prior to the SpecialAnnual Meeting will be voted in accordance with your instructions. If you are a beneficial owner, meaning your shares are held by a brokerage firm, bank, or other nominee (i.e., in “street name”), you should receive directions from your bank or broker that you must follow in order to have your shares voted.
2024 PROXY STATEMENT › 79
| | | | FREQUENTLY ASKED QUESTIONS |
Who may virtually attend the SpecialAnnual Meeting and what else is required for admittance? Only shareholders of the Company’s common stock on the Record Date (September 26, 2022)(March 14, 2024) may attend the SpecialAnnual Meeting. To be admitted to the Meeting Website, you must enter the 16-digit control number found on your proxy card, or voting instruction form, as applicable.or Notice. You may vote your shares and ask questions during the SpecialAnnual Meeting by following the instructions available on the Meeting Website. We encourage you to access the Meeting Website prior to the start time of the Annual Meeting to familiarize yourself with the virtual platform and ensure you can hear the streaming audio. Online access to the Meeting Website will be available starting at 9:7:45 a.m. , Eastern Time, on November 11, 2022.May 10, 2024. Will my shares be voted if I do not sign and return my proxy card? If a shareholder of record signs and returns the accompanying proxy card, but does not make any selections, the Board’s appointed Proxy Holders will have discretion to vote the shareholder’s shares on behalf of the shareholder at the SpecialAnnual Meeting as recommended by the Board. If a beneficial owner of shares does not provide the bank or broker holding such shares with specific voting instructions, under the rules of the NYSE, the shareholder’s bank or broker may generally vote on “routine”"routine" matters, but cannot vote on “non-routine”“non-routine” matters. “Broker non-votes” occur when a beneficial owner of shares held in street name fails to provide instructions to the broker, bank, or other holder of record as to how to vote on matters deemed non-routine. Proposal 1 (election of directors) and Proposal 3 (Fix Board Size by Board Resolution) and Proposal 4 (Elimination of Designated Annual Meeting Date and Time)(Say-on-Pay advisory vote) are routinenon-routine matters. Proposal 1 (Majority Voting), Proposal 2 (Elimination(ratification of Cumulative Voting), Proposal 5 (Proxy Access) and Proposal 6 (Shareholder Approval – Voting Standards) are non-routine matters.the selection of independent auditor) is a routine matter. If a shareholder’s bank or broker does not receive the shareholder’s instructions on how to vote the shareholder’s shares on a non-routine matter, the shareholder’s bank or broker will inform the Company it does not have the beneficial owner’s authority to vote on the non-routine matter. In these cases, the broker, bank, or other holder of record can register your shares as being present at the SpecialAnnual Meeting for purposes of determining the presence of a quorum, but will not be able to vote on those matters for which specific authorization is required under the NYSE rules. We encourage beneficial shareholders to provide voting instructions to the bank, broker, or agent holding their shares by carefully following the instructions in the notice provided by the shareholder’s bank, broker, or agent. YOUR VOTE IS IMPORTANT. Please submit your proxy even if you plan to attend the Special Meeting. If you properly give your proxy and submit it to us in time to vote, the individuals named as your Proxy Holders will vote your shares as you have directed.
How do I change my vote or revoke my proxy if I wish to do so? Shareholders of record can revoke their proxy at any time before their shares are voted by: (1) delivering a written revocation of their proxy to the Company’s Secretary; (2) submitting a later-dated proxy (or voting instruction form if they hold their shares in street name); or (3) voting on the Meeting Website during the SpecialAnnual Meeting. Shareholders who are beneficial owners should follow the instructions provided by their respective broker or bank to change their vote.
What is the required quorum to hold this SpecialAnnual Meeting? As of September 26, 2022, 44,796,505 sharesthe Record Date, 45,252,530 shares of the Company’s common stock were outstanding and entitled to vote. The presence by virtual attendance or by proxy of shareholders entitled to cast at least a majority of the votes that all shareholders are entitled to cast on a particular matter will constitute a quorum for the purposes of such matter. Abstentions orand “broker non-votes” are counted as present and entitled to vote for purposes of determining a quorum. A “broker non-vote” occurs when a broker or bank holding shares for a beneficial owner does not vote on a particular matter because the broker or bank does not have discretionary voting authority to vote on the proposal, and the beneficial owner has not provided voting instructions.
| FREQUENTLY ASKED QUESTIONS |
May shareholders ask questions during the SpecialAnnual Meeting? Yes. If you wish to submit a question, you may do so in two ways. To ask a question in advance of the SpecialAnnual Meeting, you may log into www.proxyvote.com and enter your 16-digit control number and use the Submit“Submit a Question for ManagementManagement” box. Alternatively, you will be able to submit questions live during the SpecialAnnual Meeting through the question and answer (“Q&A&A”) box by accessing the Meeting Website at www.virtualshareholdermeeting.com/GLT2022SMGLT2024. After the formal business of the SpecialAnnual Meeting has concluded and adjourned, the chair of the SpecialAnnual Meeting will answer questions from shareholders during the designated question and answer (“Q&A”)&A period of the SpecialAnnual Meeting agenda. In order to give as many shareholders as possible the opportunity to ask questions, we ask that questions are succinct and cover only one topic per question. Up to three minutes will be allocated to read and respond to each question that we are able to answer during the SpecialAnnual Meeting. The Q&A session will continue until all relevant questions have been answered, subject to time constraints. Shareholders’ views, constructive comments, and criticisms are welcome, but the Company will not address questions that are: •Irrelevant to the business of the Company or to the business of the SpecialAnnual Meeting 2024 PROXY STATEMENT › 80
| | | | FREQUENTLY ASKED QUESTIONS |
•Related to material non-public information of the Company •Repetitious of prior questions or statements from others •Derogatory references to individuals that are in bad taste •Related to personal grievances •In furtherance of a shareholder’s personal or business interests, which are not matters of interest to shareholders generally •Out of order or not otherwise suitable for the conduct of the SpecialAnnual Meeting If there are any matters of individual concern to a shareholder or questions that are not answered, they may be raised separately after the SpecialAnnual Meeting by contacting Investor Relations at (717) 225-2746 or ir@glatfelter.com.
Who will paypays for the proxy solicitation related to the Annual Meeting? The Company pays the cost of proxies?The costs and expenses of the Board’s soliciting of proxies, including the preparation, assemblypreparing, printing, assembling, and mailing of this Proxy Statement, the Proxy Card, the notice of the Special Meeting of Shareholdersproxy statement and any additional information furnished to shareholders will be borne by the Company. Solicitation of proxies may be in person, by telephone, facsimile, electronic mail or personalother proxy solicitation by our directors, officers or staff members. Other than the persons described in this Proxy Statement, no general class of employee of thematerials. The Company will be employed to solicit shareholders in connection with this proxy solicitation. However, in the course of their regular duties, our employees, officers and directors may be asked to perform clerical or ministerial tasks in furtherance of this solicitation. None of these individuals will receive any additional or special compensation for doing this, but they may be reimbursed for reasonable out-of-pocket expenses. Copies of solicitation materials will be furnished to banks, brokerage houses, fiduciaries and custodian holding shares of the common stock in their names that are beneficially owned by others to forward to those beneficial owners. We willalso reimburse brokerage housesbrokers and other custodians, nominees, and fiduciaries for their reasonable out-of-pocket expenses for forwarding the proxy statement and other proxy solicitation materialmaterials to the beneficial owners of common stock.
We have engaged MacKenzie Partners, Inc.owners. In addition to assist in the solicitation of proxies in connection with the Annual Meeting,by mail, some of our directors, officers, other employees, and agents may solicit proxies personally, by telephone, text message, email, and by other means. The officers and directors who may solicit proxies personally receive no special compensation for any solicitation activities.
How many votes are needed to elect a service feedirector and the reimbursementhow are votes counted? Under Pennsylvania law, unless a company’s articles of customary disbursements, whichincorporation or bylaws provide otherwise, directors are not expected to exceed $20,000 in total.Who should I call if I have questions or need assistance voting my shares?
If you have questions about the Annual Meeting, would like additional copies of this proxy statement or need assistance voting your shares, requests should be directed as described below:
MacKenzie Partners, Inc.
1407 Broadway, 27th Floor
New York, NY 10018
Shareholders Call Toll Free: 800-322-2885 or 212-929-5500
Email: GLT@mackenziepartners.com
| FREQUENTLY ASKED QUESTIONS |
What proposals will be acted upon at the Special Meeting, and what number of votes is needed for the proposals to be adopted?
| | | | | | | | | | | | | | | | | | | Proposal | | Vote Required | | Broker
Discretionary
Voting
Allowed? | | Effect of
Abstention | | Effect of
Broker
Non-Votes | | | | | | | 1 | | Approval of an amendment to the Articles of Incorporation and Bylaws of the Company to implement a majority voting standard for uncontested director elections. | | Majority of Votes Outstanding and Entitled to be Cast | | No | | Vote Against | | Vote Against | | | | | | | 2 | | Elimination of Cumulative Voting. | | Majority of Votes Cast | | No | | No Effect | | No Effect | | | | | | | 3 | | Fix Board Sizeelected by Resolution | | Majority of Votes Outstanding and Entitled to be Cast | | Yes | | Vote Against | | Not applicable, as this is a routine matter | | | | | | | 4 | | Elimination of Designated Annual Meeting Date and Time | | Majority of Votes Outstanding and Entitled to be Cast | | Yes | | Vote Against | | Not applicable, as this is a routine matter | | | | | | | 5 | | Proxy Access | | Majority of Votes Outstanding and Entitled to be Cast | | No | | Vote Against | | Vote Against | | | | | | | 6 | | Shareholder Approval – Voting Standards | | Majority of Votes Outstanding and Entitled to be Cast | | No | | Vote Against | | Vote Against |
Majority Voting. The affirmative vote of a majorityplurality of the common shares of the Company outstanding and entitled to vote at the Special Meeting is required to approve and adopt the amendments to the Company’svotes cast. Our Articles of Incorporation and Bylawsprovide that in an election of directors that is not a contested election, a director nominee shall be elected to implement a majority voting standardthe Board if the votes cast for uncontested director elections.such nominee’s election exceed the votes cast against such nominee’s election. Abstentions and sharesbroker non-votes shall not be considered to be votes cast.
A director nominee will be elected to our Board if the votes cast “FOR” such director nominee exceed the votes cast “AGAINST” them. As required by our Corporate Governance Principles, each of the seven director nominees for election has submitted an irrevocable resignation in attendance and not voted at the Special Meeting will not count as a vote cast on this proposal but will have the same effect as a vote “Against” the proposal.The proposed amendments presented in Proposal 1 are contingent upon the approval of Proposal 2. The amendments in Proposal 1 will implement a majority voting standard foradvance. For more information regarding the election of directors and the resignation procedure, see the discussion of the “Resignation and Majority Voting Policy” in uncontested director elections. In contested elections, directors would continuethe “Corporate Governance and Board of Directors” section on page
21 of this proxy statement. How many votes are needed for proposals 2 and 3 to be electedapproved and how are votes counted? The Company is incorporated in the Commonwealth of Pennsylvania and our shares are listed on the NYSE. As a result, the Pennsylvania Business Corporation Law and NYSE listing standards govern the voting standards applicable to actions taken by a plurality vote ofour shareholders. The proposed amendment presented in Proposal 2 below, which is not contingent upon Under our Bylaws, the approval of Proposal 1, will eliminate cumulating voting in all director elections.Elimination of Cumulative Voting. The affirmative vote of a majority of the common shares of the Company outstanding and entitled to vote at the Special Meeting is required to approve and adopt the amendment to the Company’s Articles of Incorporation to eliminate cumulative voting in director elections. Abstentions and shares not in attendance and not voted at the Special Meeting will not count as a vote cast on this proposal but will have the same effect as a vote “Against” the proposal. The proposed amendments in Proposal 2 are not contingent upon the approval of any other Proposal.
Fix Board Size by Board Resolution. The affirmative vote of a majority of the common shares of the Company outstanding and entitled to vote at the Special Meeting is required to approve and adopt the amendment to the Company’s Bylaws to allow the Board to set its size by resolution. Abstentions and shares not in attendance and not voted at the Special Meeting will not count as a vote cast on this proposal but will have the same effect as a vote “Against” the proposal. The proposed amendment in Proposal 3 is not contingent upon the approval of any other Proposal.
Elimination of Designated Annual Meeting Date and Time. The affirmative vote of a majority of the common shares of the Company outstanding and entitled to vote at the Special Meeting is required to approve and adopt the amendment to the Company’s Bylaws to eliminate a designated annual meeting date and time. Abstentions and shares not in attendance and not voted at the Special Meeting will not count as a vote cast on this proposal but will have the same effect as a vote “Against” the proposal. The proposed amendment in Proposal 4 is not contingent upon the approval of any other Proposal.
| FREQUENTLY ASKED QUESTIONS |
Proxy Access. The affirmative vote of a majority of the votes cast in person or by proxy at the Annual Meeting by the holders of the common shares of the Company and entitled to vote at the Special Meetingthereon is required to approve proposals 2 and adopt3 set forth on the amendment to the Company’s Bylaws to provide for proxy access. card.Abstentions and sharesbroker non-votes are counted for purposes of determining the presence or absence of a quorum, but are not considered votes cast under Pennsylvania law and our Bylaws.
| | | | | | | | | | | | | | | | | | | Proposal | Vote Required | Broker
Discretionary
Voting
Allowed? | Effect of Abstention | Effect of
Broker Non-Votes(1) | | 2 | Ratification of Appointment of Deloitte as Independent Registered Public Accounting Firm | Majority of Votes Cast
| Yes | No effect | Not applicable, as this is a routine matter | | 3 | Approval of Named Executive Officer 2023 Compensation (“Say-on-Pay” Vote) | Majority of Votes Cast | No | No effect | No effect |
(1) Under NYSE rules, proposal 2 is considered a “routine” proposal on which brokers are permitted to vote in attendancetheir discretion, even if the beneficial owners do not provide voting instructions. However, proposal 3 is not considered to be a routine matter and not voted at the Special Meetingbrokers will not count as abe entitled to vote cast on this proposal but will have the same effect as a vote “Against” the proposal. The proposed amendment in Proposal 5 is not contingent upon the approval of any other Proposal.Shareholder Approval – Voting Standards. The affirmative vote of a majority of the votes entitled to be cast at the Special Meeting is required to approve and adopt the amendments to the Company’s Bylaws tounless beneficial owners provide for majority voting standards. Abstentions and shares not in attendance and not voted at the Special Meetinginstructions. Accordingly, broker non-votes will not count as a vote castbe counted toward the tabulation of votes on this proposal but will have the same effect as a vote “Against” the proposal. The proposed amendments presented in this Proposal 6 are not contingent upon the approval of any other Proposal.
3. 2024 PROXY STATEMENT › 81
| | | | FREQUENTLY ASKED QUESTIONS |
What are the Board of Directors’ recommendations for voting on these proposals? The Board recommends a vote: •FOR the election of the seven director nominees •FOR the ratification of the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for fiscal year ending December 31, 2024 •FOR approval of an amendment to the Articles of Incorporation and Bylaws of the Company to implement a majority voting standard for uncontested director elections;NEO 2023 compensation FOR the approval of an amendment to the Articles of Incorporation of the Company to eliminate cumulative voting in director elections;
FOR the amendment of the Bylaws to allow the Board to set its size by resolution;
FOR the amendment of the Bylaws to eliminate the designated annual meeting date and time;
FOR the amendment of the Bylaws to provide for proxy access; and
FOR the amendment of the Bylaws to clarify the Company’s voting standards.
What are my options for voting on these proposals? A shareholder is entitled to one vote per share of stock owned on the Record Date, on each item of business presented at the SpecialAnnual Meeting. For the proposal to amendelect the Articlesseven director nominees, a shareholder may either vote “For” or “Against” each director nominee or “Abstain” from voting. For the proposal to ratify the appointment of Incorporation to implement majority votingDeloitte & Touche LLP as the Company’s independent registered public accounting firm for the election of directors in uncontested elections,fiscal year ending December 31, 2024, a shareholder may either vote “For” or “Against” the proposal or “Abstain” from voting. For the proposal to amend the Articles of Incorporation to eliminate cumulative voting,non-binding advisory vote on NEO compensation, commonly known as a “Say-on-Pay” vote, a shareholder may either vote “For” or “Against” the proposal or “Abstain” from voting. For the proposal to amend the Bylaws to set the size of the board by a Board Resolution, a shareholder may either vote “For” or “Against” the proposal or “Abstain” from voting.
For the proposal to amend the Bylaws to eliminate a designated annual meeting date and time, a shareholder may either vote “For” or “Against” the proposal or “Abstain” from voting.
For the proposal to amend the Bylaws to add shareholder Proxy Access Rights, a shareholder may either vote “For” or “Against” the proposal or “Abstain” from voting.
For the proposal to amend the Bylaws to provide for majority voting standards, a shareholder may either vote “For” or “Against” the proposal or “Abstain” from voting.
Aside from these proposals, will any other business be acted upon at the SpecialAnnual Meeting? No,
No. The Company’s Bylaws required shareholders to submit to the Company, by December 2, 2023, notice of all director nominations and shareholder proposals to be considered at the Annual Meeting, regardless of whether shareholders sought inclusion of their nomination or proposal in this proxy statement or intended to solicit proxies on their own. Because the Company did not receive any such notice of nominations or proposals, no other director nominations, shareholder proposals, or other matters will be considered at the Annual Meeting. How may a shareholder present a proposal for the 2025 Annual Meeting of Shareholders? A shareholder wishing to include a proposal in the Company’s proxy statement for the 2025 Annual Meeting of Shareholders (“2025 Annual Meeting”) must submit it to the Company’s Secretary pursuant to the requirements of Rule 14a-8 under the Exchange Act (“Rule 14a-8”). Notice of such a proposal must be submitted in writing and received by the Company’s Secretary at the principal executive offices of the Company no later than November 26, 2024. A shareholder wishing to include a proposal in the Company’s proxy statement for the 2025 Annual Meeting must comply with requirements under the Company’s Bylaws. Notice of such proposals, including all of the information required by the Company’s Bylaws, domust be submitted in writing and delivered to, or mailed and received by, the Company’s Secretary at the principal executive offices of the Company no earlier than the close of business on October 27, 2024 and no later than the close of business on November 26, 2024, regardless of delivery method. How may a shareholder recommend or nominate a candidate to sit on the Board of Directors? A shareholder may recommend director nominees for consideration by the NCG Committee for nomination for election to the Board. Shareholder recommendations for director nominees will receive the same consideration by the NCG Committee that all other director nominee recommendations receive. If a shareholder wishes to recommend a nominee for director, the shareholder must submit such recommendation in writing, together with any supporting materials deemed appropriate, to the Company’s Secretary. To nominate a candidate for director at the 2025 Annual Meeting, notice of the nomination must be submitted in writing and delivered to, or mailed and received by, the Company’s Secretary at the principal executive offices of the Company no earlier than the close of business on October 27, 2024 and no later than the close of business on November 26, 2024, regardless of delivery method. Additionally, as set forth in Section 1.9(c) of the Bylaws, a shareholder, or group of no more than 20 shareholders, that, collectively, have owned for at least three years 3% or more of the outstanding capital stock of the Company and that expressly elect at the time of providing notice (the “Nomination Notice”) to have their nominee or nominees included in the Company’s proxy materials, may nominate and have included in the Company’s proxy statement director nominees not provideexceeding 20% of the number of directors in office as of the last day on which a Nomination Notice may be delivered pursuant to Section 1.9 of the Bylaws. 2024 PROXY STATEMENT › 82
| | | | FREQUENTLY ASKED QUESTIONS |
What must be included in the notice to submit a shareholder proposal or to nominate a director candidate? Notice of a shareholder proposal for inclusion in the Company’s proxy materials for the submission2025 Annual Meeting must include the information required by and otherwise comply with the requirements of Rule 14a-8. Requirements for notice of a shareholder proposal or director nomination under the Company’s Bylaws are as follows: •Notice of a nomination or proposal must include the information required by Section 1.9(d) and Section 1.10 of the Bylaws (collectively, the “Requisite Information”), which includes, but is not limited to: ◦the name and address of the shareholder, beneficial owner, if any, and their respective affiliates or associates or others acting in concert therewith; ◦the class or series and number of shares of the Company and derivative securities that are directly or indirectly owned by the shareholder, beneficial owner, if any, and their respective affiliates or associates or others acting in concert therewith, and certain other businessinformation with respect to securities of the Company directly or indirectly owned by such persons; ◦all information that would be required to be set forth in a special meetingSchedule 13D filed by the shareholder, beneficial owner, if any, and their respective affiliates or associates or others acting in concert therewith pursuant to Rule 13d-1(a) under the Exchange Act; ◦a description of stockholders,any relationship, arrangement, or understanding between the shareholder, beneficial owner, if any, and therefore,their respective affiliates or associates or others acting in concert therewith and the Company or any director, officer, affiliate, or associate of the Company; ◦a written undertaking by the shareholder giving notice or beneficial owner on whose behalf notice is being given that such shareholder or beneficial owner will solicit proxies from the owners of shares representing at least 67% of the voting power of the stock entitled to vote in the election of directors through delivery of either a definitive proxy statement or a Notice of Internet Availability of Proxy Materials, in accordance with certain deadlines; and ◦any other information relating to the shareholder, beneficial owner, if any, and their respective affiliates or associates or others acting in concert therewith that would be required to be disclosed in a proxy statement and form of proxy in connection with solicitation of proxies for the proposal and/or nomination. •Notice of a proposal must also include, as part of the Requisite Information: ◦a description of the business to be acted uponbrought before the 2025 Annual Meeting, the reasons for conducting such business at the Special2025 Annual Meeting, will be limitedand any material interest of the shareholder, beneficial owner, if any, and their respective affiliates or associates or others acting in concert therewith in such business; ◦the complete text of the proposal or business; ◦a description of all agreements, arrangements, and understandings between the shareholder, beneficial owner, if any, and their respective affiliates or associates or others acting in concert therewith and any other person(s) in connection with the proposal of such business; and ◦any other information relating to the proposal of such business set forththat would be required to be disclosed in thisa proxy statement.statement in connection with the solicitation of proxies or special meeting demands by such shareholder. •Notice of a director nomination must also include, as part of the Requisite Information, additional information and documentation regarding the director nominee, which includes, but is not limited to: ◦all information relating to such individual that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors in a contested election pursuant to Section 14 of the Exchange Act and the rules and regulation promulgated thereunder; ◦a description of all direct and indirect compensation, reimbursement, indemnification and other benefits agreements, arrangements and understandings during the past three years and any other relationships, between or among such shareholder and beneficial owner, if any, and their respective affiliates and associates, or others acting in concert therewith, on the one hand, and each proposed director nominee, and any respective affiliates and associates, or others acting in concert therewith, on the other hand; 2024 PROXY STATEMENT › 83
| | | | FREQUENTLY ASKED QUESTIONS |
◦to the extent that such proposed director nominee has been convicted of any past criminal offenses involving dishonesty or a breach of trust or duty, a description of such offense and all legal proceedings relating thereto; ◦to the extent that such proposed director nominee has been determined by any governmental authority or self-regulatory organization to have violated any federal or state securities or commodities laws, a description of such violation and all legal proceedings relating thereto; ◦to the extent that such proposed director nominee has ever been suspended or barred by any governmental authority or self-regulatory organization from engaging in any profession or participating in any industry, or has otherwise been subject to a disciplinary action by a governmental authority or self-regulatory organization that provides oversight over the proposed director nominee’s current or past profession or an industry that the proposed director nominee has participated in, a description of such action and the reasons therefor; ◦a description of any and all litigation relating to the proposed director nominee’s past or current service on the board of directors of any corporation, limited liability company, partnership, trust or any other entity where a legal complaint filed in any state or federal court alleges that the proposed director nominee committed any act constituting a breach of fiduciary duties, misconduct, fraud, breaches of confidentiality obligations, and/or a breach of the entity’s code of conduct applicable to directors; ◦all other information that would be required to be disclosed pursuant to Items 403 and 404 under Regulation S-K if the shareholder making the nomination and any beneficial owner on whose behalf the nomination is made, if any, or any affiliate or associate thereof or person acting in concert therewith, were the “registrant” for purposes of such Item and the proposed director nominee were a director or executive officer of such registrant; ◦the director nominee’s completed and executed written questionnaire with respect to the background and qualifications of such director nominee and the background of any other person or entity on whose behalf the nomination is being made; and ◦the director nominee’s completed and executed written representation and agreement (in the form provided by the Secretary of the Company). This is a general description of the notice required to submit a proposal or nomination for consideration at the 2025 Annual Meeting. Please refer to Sections 1.9 and 1.10 of the Company’s Bylaws for a complete description of the notice requirements. Copies of the Company’s Bylaws may be obtained from the Company’s website at www.glatfelter.com/investors/corporate-governance or at no charge from the Company’s Secretary. How may a shareholder communicate with the Company’s Board or the independent directors of the Company? Interested parties may address written correspondence to the Board or any individual director (whether Management or independent), c/o Company Secretary, Glatfelter Corporation, 4350 Congress Street, Suite 600, Charlotte, NC 28209. The Company’s Board has approved a process whereby the Secretary of the Company will receive, review, and, as appropriate, forward any communications addressed to the Board or a director to the chair of the Board committee responsible for the matter addressed in the communication. All communications regarding accounting, internal controls, or auditing matters will be forwarded to the chairChair of the Audit Committee. Alternatively, the Board has established a method for interested parties to communicate directly with the entire Board or any independent director by calling the Company’s toll-free Integrity Helpline at 1-800-346-1676. 2024 PROXY STATEMENT › 84
| | | | | 2022 PROXY STATEMENT | | › | | 19Additional Information |
Annual Report on Form 10-K Copies of the Company’s 2023 Annual Report, as filed with the SEC, are being mailed to shareholders with this proxy statement. A shareholder may obtain a copy of the 2023 Annual Report, this proxy statement, and form of proxy, relating to the Annual Meeting and future meetings of shareholders, without charge by writing to: Investor Relations, Glatfelter Corporation, 4350 Congress Street, Suite 600, Charlotte, NC 28209. The 2023 Annual Report and proxy statement can also be obtained through our website, www.glatfelter.com/investors. As of the date of this proxy statement, the Board knows of no business that will be presented for consideration at the SpecialAnnual Meeting other than the items referred to above. If any other matter is properly brought before the SpecialAnnual Meeting for action by shareholders, the persons named in the accompanying proxy will have discretionary authority to vote proxies for such matter in accordance with their best judgment.
The Company is permitted by SEC regulations to deliver a single SpecialAnnual Report or proxy statement to any household at which two or more registered shareholders have the same last name and address, unless the Company has received instructions to the contrary from one or more of the shareholders. This is known as “householding” and is intended to save the cost of delivering multiple duplicate copies of the proxy materials to the same address. The Company will continue to include a separate proxy card for each registered shareholder account. The Company will deliver promptly, upon written or oral request, a separate copy of the 2023 Annual Report or proxy statement, as applicable, to a shareholder at a shared address to which a single copy of the documents was delivered. The shareholder should send a written request to Glatfelter Corporation, 4350 Congress Street, Suite 600, Charlotte, NC 28209, or call us at (717) 225-2719,225-2746, if the shareholder (1) wishes to receive a separate copy of the 2023 Annual Report or proxy statement for the SpecialAnnual Meeting; (2) wishes to receive separate copies of theAnnual Reports or proxy statements for future specialannual meetings of shareholders; or (3) is sharing an address and wishes to request delivery of a single copy of theAnnual Reports or proxy statements if the shareholder is now receiving multiple copies of Annual Reports or proxy statements.
Appendix A
GLATFELTER CORPORATION
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
ARTICLE I
The name of the corporation is
GLATFELTER CORPORATION
ARTICLE II
The name of the Corporation’s Commercial Registered Office Provider and the county of venue is Corporation Service Company, Dauphin County.
ARTICLE III
The purpose or purposes for which the corporation is organized are to acquire by purchase, or otherwise, own, buy, sell and deal in standing timber lands, and to buy, cut, haul, drive and sell timber and logs, and to saw and otherwise work the same, and to buy, manufacture and sell lumber, bark, wood, pulp and all products made therefrom; to manufacture, produce, purchase, sell and deal in any and all kinds of papers, and in all ingredients, products and compounds thereof, and in any and all materials that now are or hereafter may be used in or in connection with such manufacture, including the manufacture of wood pulp and any other fibre; and to engage in, and to do, any other lawful act concerning any or all lawful business for which corporations may be incorporated under the Business Corporation Law of the Commonwealth of Pennsylvania, including, but not limited to, manufacturing, processing, owning, using and dealing in personal property of every class and description, engaging in research and development, furnishing services, and acquiring, owning, using and disposing of real property of any nature whatsoever.
ARTICLE IV
The term for which the corporation is to exist is perpetual.
ARTICLE V
| 1. | The aggregate number of shares which the corporation (hereinafter referred to as the “Company”) has authority to issue is 120,040,000 shares divided into two classes consisting of (a) 40,000 shares of Preferred Stock of the par value of $50 each; and (b) 120,000,000 shares of Common Stock of the par value of $.01 each. Each share of Common Stock of the par value of $.01 each which is issued and outstanding when this provision becomes effective, including each share owned by the Company, shall be reclassified as two fully paid and non-assessable shares of Common Stock of the par value of $.01 each, which shall be included in the 120,000,000 shares of Common Stock herein authorized. Any or all classes and series of shares, or any part thereof, may be represented by certificates or may be uncertificated shares, provided, however, that any shares represented by a certificate that are issued and outstanding shall continue to be represented thereby until the certificate is surrendered to the Company. The rights and obligations of the holders of shares represented by certificates and the rights and obligations of the holders of uncertificated shares of the same class and series shall be identical.
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| 2. | The Board of Directors of the Company (hereinafter referred to as the “Board of Directors”) may designate the powers, preferences and rights, qualifications, limitations and restrictions of all classes of stock of the Company which are not fixed by the Articles of Incorporation by resolution or resolutions.
|
PREFERRED STOCK
| 3. | The Preferred Stock may be issued at any time or from time to time in any amount, not exceeding in the aggregate the total number of shares of Preferred Stock hereinabove authorized, as Preferred Stock of one or more series, as hereinafter provided, and for such lawful consideration as shall be fixed from time to time by the Board of Directors. All shares of any one series of Preferred Stock shall be alike in every particular, each series of Preferred Stock shall be distinctively designated by letter or descriptive words, and all series of Preferred Stock shall rank equally and be identical in all respects except as permitted by the provisions of Section 4 of this Article.
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| 4. | To the extent that this Article does not establish series of Preferred Stock and fix and determine the variations in the relative rights and preferences as between series, authority is hereby expressly granted to and vested in the Board of Directors at any time, or from time to time, to authorize the issue of Preferred Stock as Preferred Stock of one or more series and, in connection with the creation of each such series, to fix by resolution or resolutions providing for the issue of shares thereof the designations, preferences and relative, participating, optional or other special rights, and qualifications, limitations or restrictions thereof, of such series, to the full extent now or hereafter permitted by the laws of the Commonwealth of Pennsylvania, in respect of the matters set forth in the following subdivisions (a) to (g), inclusive:
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| (a) | The designation of such series;
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| (b) | The dividend rate of such series;
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| (c) | The price at, and the terms and conditions on, which shares of such series may be redeemed, subject to the provisions of subdivision (e) of Section 5 of this Article;
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| (d) | The amounts payable upon shares of such series in the event of voluntary liquidation of the Company;
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| (e) | Subject to the limitations provided by law, whether or not the shares of such series shall be entitled to the benefit of a sinking fund to be applied to the purchase or redemption of shares of such series, and if so entitled, the amount of such fund, the manner of its application and the sinking fund redemption price;
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| (f) | Whether or not the shares of such series shall be made convertible into, or exchangeable for, shares of any other class or classes or of any other series of the same or any other class or classes of stock of the Company, and, if made so convertible or exchangeable, the conversion price or prices, or the rates of exchange, and the adjustments, if any, at which, and all other terms and conditions upon which, such conversion or exchange may be made; and
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| (g) | Whether or not the shares of such series shall be entitled to other special rights in addition to those in this Article provided for, including, without limitation, restrictive provisions with respect to the issue of additional shares of stock of the same class or series or of any other class of the Company or of any subsidiary, restrictive provisions with respect to the payment of dividends upon, or the making of any other distribution in respect of, or the making of any purchase or redemption of, stock of any class of the Company or of any subsidiary, and the incurring of indebtedness, secured or unsecured, by the Company or by any subsidiary, and, if so, the nature thereof.
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The Board of Directors may from time to time authorize and direct by resolution or resolutions an increase in the number of shares of any series of Preferred Stock already created by specifying that any or all unissued shares of Preferred Stock shall be assigned to and included in such series and/or a decrease in the number of shares of any such series (but not below the number of shares thereof then outstanding) by specifying that any or all unissued shares of Preferred Stock previously assigned to such series shall no longer be included therein.
| 5. | (a) The holders of shares of Preferred Stock of each series shall be entitled to receive, when and as declared by the Board of Directors, dividends at the rate for such series fixed in Section 4 of this Article or fixed by resolution or resolutions as provided in Section 4 of this Article and no more, payable quarterly on the first days of February, May, August and November in each year (the quarterly periods ending on the first days of such months, respectively, being herein designated as dividend periods), in each case from the date of cumulation, as hereinafter in subdivision (f) of this Section 5 defined, of such series. Such dividends shall be cumulative (whether or not in any dividend period or periods there shall be net profits or net assets of the Company legally available for the payment of such dividends), so that if at any time full cumulative dividends upon the
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| outstanding Preferred Stock of all series to the end of the then current dividend period shall not have been paid or declared and set apart for payment, the amount of the deficiency shall be fully paid, but without interest, either by redemption and the payment or deposit, as provided in subdivision (e) hereof, of the redemption price thereof or by dividends in the amount of such deficiency paid or declared and set apart for payment on each such series, before any sum or sums shall be set aside for or applied to the purchase or redemption of Preferred Stock of any series, Common Stock or any other class of stock ranking junior to the Preferred Stock and before any dividend shall be paid or declared or any other distribution ordered or made upon the Common Stock or any other class of stock ranking junior to the Preferred Stock, provided that any moneys theretofore set aside for any sinking fund provided for in Section 4 of this Article or by resolution or resolutions as provided in Section 4 of this Article may be applied to the purchase or redemption of the Preferred Stock in accordance with the terms of Section 4 of this Article or in accordance with the terms of such resolution or resolutions.
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All dividends declared on the Preferred Stock of the respective series outstanding shall be declared pro rata, so that the amounts of dividends declared per share on the Preferred Stock of different series shall in all cases bear to each other the same ratio that full cumulative dividends on such respective series bear to each other.
| (b) | After full cumulative dividends to the end of the then current dividend period upon the outstanding Preferred Stock of all series shall have been paid or declared and set apart for payment, and before any sum or sums shall be set aside for, or applied to, the purchase of Common Stock or any other class of stock ranking junior to the Preferred Stock and before any dividend shall be paid or declared or any other distribution ordered or made upon the Common Stock or any other class of stock ranking junior to the Preferred Stock, the Company shall set aside as a sinking fund, when and as required, out of any funds legally available for that purpose, in respect of each series of Preferred Stock any shares of which shall at the time be outstanding and in respect of which a sinking fund for the purchase or redemption thereof has been provided for in Section 4 of this Article or by resolution or resolutions as provided in Section 4 of this Article, the sum or sums required by the terms of Section 4 of this Article or by the terms of such resolution or resolutions as a sinking fund to be applied in the manner specified therein.
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Preferred Stock of any series purchased or redeemed by the use of sinking fund moneys or purchased or redeemed otherwise than by the use of sinking fund moneys and applied by the Company as a credit against sinking fund payments, shall be cancelled and shall not be reissued.
| (c) | After full cumulative dividends to the end of the then current dividend period upon the Preferred Stock of all series then outstanding shall have been paid or declared and set apart for payment, and after the Company shall have complied with the provisions of the foregoing subdivision (b) of this Section 5 in respect of any and all amounts then or theretofore required to be set aside or applied in respect of any sinking fund mentioned in said subdivision (b), then and not otherwise, the holders of the Common Stock shall, subject to the provisions of this Article and of any resolution providing for the issue of any series of the Preferred Stock, be entitled to receive such dividends as may be declared by the Board of Directors.
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| (d) | In the event of any liquidation, dissolution or winding up of the Company, the holders of the Preferred Stock of each series then outstanding shall be entitled to receive out of the assets of the Company available for distribution to its stockholders, whether from capital, surplus or earnings, before any distribution of the assets shall be made to the holders of the Common Stock or any other class of stock ranking junior to the Preferred Stock, if such liquidation, dissolution or winding up shall be involuntary, the sum of $50 for every share of their holdings of Preferred Stock of such series plus full cumulative dividends thereon to the date of final distribution, and if such liquidation, dissolution or winding up shall be voluntary, the amount fixed in Section 4 of this Article or fixed by resolution or resolutions as provided in Section 5 of this Article for every share of their holdings of Preferred Stock of such series; and in the event of any such distribution of assets, the holders of the Common Stock shall be entitled, to the exclusion of the holders of the Preferred Stock, to share ratably in all assets of the Company thereafter remaining according to the number of shares of the Common Stock held by them respectively. If upon any liquidation, dissolution or winding up of the Company the amounts payable on or with respect to the Preferred Stock of all series are not paid in full, the holders of shares of Preferred Stock of all series shall share ratably in any distribution of assets in proportion to the respective amounts which would be payable in respect of the shares held by them upon such distribution if all amounts payable on or with respect to the Preferred Stock of all series were paid in full. Neither the merger or consolidation of the Company into or with any other corporation, nor the merger or
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| consolidation of any other corporation into or with the Company, nor a sale or lease of all or substantially all the assets of the Company, shall be deemed to be a liquidation, dissolution or winding up of the Company.
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| (e) | The Preferred Stock of all series, or of any series thereof, or any part of any series thereof, at any time outstanding, may be redeemed by the Company, at its election expressed by resolution of the Board of Directors, at any time or from time to time (which time, when fixed in each case, is hereinafter called the “redemption date”), upon not less than thirty (30) days’ previous notice to the holders of record of the Preferred Stock to be redeemed, given by mail in such manner as may be prescribed by resolution or resolutions of the Board of Directors, at the redemption price or prices fixed in Section 4 of this Article or fixed by resolution or resolutions as provided in Section 4 of this Article for the Preferred Stock to be redeemed. If less than all the outstanding shares of the Preferred Stock of any series is to be redeemed, the redemption may be made either by lot or pro rata in such manner as may be prescribed by resolution of the Board of Directors. The Company may, if it so elects, provide moneys for the payment of the redemption price by depositing the amount thereof, after notice of redemption has first been mailed, for the account of the holders of Preferred Stock entitled thereto with a bank or trust company doing business in the City of Philadelphia, Pennsylvania, or in the Borough of Manhattan, in the City of New York, and having capital and surplus of at least Five Million Dollars ($5,000,000) (the date of any such deposit being hereinafter called the “date of deposit”). In such event, the notice of redemption shall include a statement of the date of deposit and the name and address of the bank or trust company with which the deposit will be made. From and after the redemption date (unless default shall be made by the Company in providing moneys for the payment of the redemption price), or, if the Company shall make such deposit on or before the date specified therefor in the notice, then on and after the date of deposit, all rights of the holders thereof as stockholders of the Company shall cease and terminate, except the right to receive the redemption price as hereinafter provided and except any conversion rights not theretofore expired. Anything herein or in any resolution providing for the issue of any series of the Preferred Stock to the contrary notwithstanding, said redemption price shall include an amount equal to full cumulative dividends on the Preferred Stock to be redeemed to the redemption date thereof, and the Company shall not be required to declare or pay on such Preferred Stock to be redeemed, and the holders thereof shall not be entitled to receive, any dividends in addition to those thus reflected in the redemption price; provided, however, that the Company may pay in regular course any dividends thus reflected in the redemption price either to the holders of record on the record date fixed for determination of stockholders entitled to receive such dividends (in which event, anything herein to the contrary notwithstanding, the amount so deposited need not include any dividends so paid or to be paid), or as part of the redemption price upon surrender of the certificates for the shares redeemed. On and after the redemption date, or, if the Company shall elect to deposit the moneys for such redemption as herein provided, then on and after the date of deposit, the holders of record of the Preferred Stock to be redeemed shall be entitled to receive the redemption price upon actual delivery to the Company or, in the event of such a deposit, to the bank or trust company with which such deposit is made, of certificates for the number of shares to be redeemed (such certificates, if required, to be properly stamped for transfer and duly endorsed in blank or accompanied by proper instruments of assignment and transfer duly endorsed in blank). Any moneys so deposited which shall remain unclaimed by the holders of such Preferred Stock at the end of six (6) years after the redemption date shall be paid by such bank or trust company to the Company; provided, however, that all moneys so deposited, which shall not be required for such redemption because of the exercise of any right of conversion or exchange, shall be returned to the Company forthwith. Any interest accrued on moneys so deposited shall be paid to the Company from time to time. Preferred Stock redeemed pursuant to the provisions of this subdivision (e) shall be cancelled and shall not be reissued.
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| (f) | The term “full cumulative dividends” whenever used in this Article with reference to any share of any series of the Preferred Stock shall be deemed to mean (whether or not in any dividend period, or any part thereof, in respect of which such term is used there shall have been net profits or net assets of the Company legally available for the payment of such dividends) that amount which shall be obtained by multiplying the full dividend rate for such series fixed in Section 4 of this Article or fixed by resolution or resolutions as provided in Section 4 of this Article by the period of time elapsed from the date of cumulation of such series to the date as of which full cumulative dividends are to be computed
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| (including the elapsed portion of the current dividend period), less the amount of all dividends paid, or deemed paid upon such share.
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The term “date of cumulation” as used in this Article with reference to any series of the Preferred Stock shall be deemed to mean the February 1, May 1, August 1 or November 1 on which, or next preceding the date on which, shares of Preferred Stock of such series shall first be issued.
In the event of the issue of additional Preferred Stock of any then existing series, all dividends paid on Preferred Stock of such series prior to the issue of such additional Preferred Stock, and all dividends declared and payable to holders of Preferred Stock of such series of record on any date prior to such additional issue, shall be deemed to have been paid on the additional Preferred Stock so issued.
The term “stock ranking junior to the Preferred Stock”, whenever used in this Article, shall mean any stock of the Company over which the Preferred Stock has preference or priority in the payment of dividends or in the distribution of assets on any dissolution, liquidation or winding up of the Company
| (g) | Except as otherwise required by the statutes of the Commonwealth of Pennsylvania and as otherwise provided in this Article, and subject to the provisions of the by-laws of the Company, as from time to time amended, with respect to the closing of the transfer books and the fixing of a record date for the determination of stockholders entitled to vote, the holders of the Common Stock shall exclusively possess voting power for the election of directors and for all other purposes, and the holders of the Preferred Stock shall have no voting power and shall not be entitled to any notice of any meeting of stockholders.
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Provided, however, that if and whenever a default in preferred dividends, as hereinafter defined, shall exist, the holders of the outstanding Preferred Stock, voting separately as a class, shall have the right to elect two directors at the annual meeting of stockholders of the Company for the election of directors next succeeding the occurrence of such default, and at each such annual meeting thereafter so long and only so long as such default shall exist. The term of office of each such director elected by the holders of the Preferred Stock as aforesaid shall continue until the next annual meeting of stockholders of the Company for the election of directors, notwithstanding that prior to the end of such term the default in preferred dividends shall cease to exist. If, prior to the end of such term, a vacancy in the office of such director shall occur by reason of his death, resignation, removal or disability, or for any other cause, such vacancy shall be filed for the remainder of the term in the manner provided in the by-laws of the Company; provided, that, if such vacancy shall be filled by election by the stockholders at a meeting thereof, the holders of the then outstanding Preferred Stock, voting separately as a class, shall have the right to fill such vacancy for the remainder of the term, unless at the time of such election or default in preferred dividends shall exist. At any meeting of stockholders at which the holders of Preferred Stock shall be entitled to vote for the election of a director or directors as aforesaid, the holders of twenty-five percent (25%) of the then outstanding Preferred Stock present in person or by proxy shall be sufficient to constitute a quorum for the election of such director or directors and for no other purpose, and the vote of the holders of a majority of the Preferred Stock so present at such meeting at which there shall be a quorum, shall be sufficient to elect such director or directors. For the purposes of this subdivision (g), a default in preferred dividends shall be deemed to have occurred whenever, on any dividend payment date, the amount of unpaid full cumulative dividends upon any series of the Preferred Stock shall be equivalent to eight (8) quarterly dividends thereon or more, and, having so occurred, such default shall be deemed to exist thereafter until, but only until, full cumulative dividends on all shares of Preferred Stock then outstanding of each and every series, to the end of the last preceding dividend period, shall have been paid. Nothing herein contained shall be deemed to prevent an amendment of the by-laws of the Company, in the manner therein provided, which shall increase the number of directors of the Company or to prevent any other change in the number of directors of the Company.
| (h) | So long as any shares of the Preferred Stock of any series shall be outstanding, the Company shall not without the consent given by resolution adopted at a meeting duly called for that purpose of the holders of record of at least two-thirds of the number of shares of the Preferred Stock of all series then outstanding:
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| (i) | alter or change the designations or the powers, preferences or rights, or the qualifications, limitations or restrictions thereof, of the Preferred Stock or of any series thereof in any material respect prejudicial to the holders thereof;
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| (ii) | create any new class of stock having preference over the Preferred Stock as to dividends or assets, or create any obligation or security of the Company convertible into shares of stock of any class having such preference over the Preferred Stock;
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| (iii) | sell, transfer or lease all, or substantially all, the assets of the Company unless as a part of such transaction or prior thereto the Preferred Stock of all series shall be retired or called for redemption and the necessary funds therefor deposited as provided in subdivision (e) hereof; or
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| (iv) | effect a statutory merger or consolidation of or with any other corporation or corporations; provided that such consent shall not be necessary if as a result of such merger or consolidation (A) the Company shall be the surviving corporation and the Preferred Stock then outstanding shall continue to be outstanding, there shall be no alteration or change in the designations or the powers, preferences or rights, or the qualifications, limitations or restrictions thereof, in any material respect prejudicial to the holders thereof, there shall be no increase in the authorized number of shares of Preferred Stock, and there shall not be created any new class of stock having preference over, or being on a parity with, the Preferred Stock as to dividends or assets, or (B) if the Company shall not be the surviving corporation, the shares of the Preferred Stock of each series then outstanding shall be converted into, or be exchangeable for, a like number of shares of preferred stock of the surviving corporation which preferred stock shall have substantially the same designations, powers, preferences and rights, and qualifications, limitations or restrictions thereof, as the Preferred Stock of such series, and there shall not be outstanding or created any class of stock of the surviving corporation having preference over, or being on a parity with, such preferred stock as to dividends or assets.
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| (i) | So long as any shares of the Preferred Stock of any series shall be outstanding, the Company shall not, without the consent given by resolution adopted at a meeting duly called for that purpose of the holders of record of at least a majority of the number of shares of the Preferred Stock of all series then outstanding, increase the authorized number of shares of the Preferred Stock or create any new class of stock which shall be on a parity with the Preferred Stock as to dividends or assets, or create any obligation or security of the Company convertible into shares of stock of any class which shall be on a parity with the Preferred Stock as to dividends or assets.
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The holders of the Preferred Stock shall not be entitled to subscribe to any increased issue of the Preferred Stock or the Common Stock unless such privilege is provided for by resolution of the holders of the Common Stock and the Board of Directors of the Company.
Anything in this Article hereof or in any resolution or resolutions providing for the issue of Preferred Stock of any series contained to the contrary notwithstanding, dividends upon shares of stock of any class of the Company shall be payable only out of unreserved and unrestricted earned surplus of the Company legally available for dividends, and the rights of the holders of all classes of stock of the Company in respect of the payment of dividends shall at all times be subject to the power of the Board of Directors from time to time to set aside such reserves and to make such other provisions, if any, as said Board shall deem to be necessary or advisable for working capital, for additions and improvements to plant and equipment, for expansion of the Company’s business (including the acquisition of real and personal property for that purpose) or for any other proper purpose of the Company.
COMMON STOCK
The holders of Common Stock shall have no preemptive rights and the Company shall have the right to issue any shares of its capital stock, option rights or securities having conversion or option rights without first offering such shares, rights or securities to the holders of the Common Stock.
ARTICLE VI
The holders of Common Stock shall not have the right to cumulate their votes for the election of directors of the Company.
ARTICLE VII
| 1. | In an election of directors that is not a contested election, a nominee for director shall be elected to the Board of Directors if the votes cast for such nominee’s election exceed the votes cast against such nominee’s election. Abstentions and broker non-votes shall not be considered to be votes cast.
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| 2. | In a contested election of directors, the nominees for election to the Board of Directors receiving the highest number of votes, up to the number of directors to be elected in such election, shall be elected. Shareholders shall not have the right to vote against a nominee in a contested election of directors.
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| 3. | For purposes of this Article VII, an election of directors shall be deemed contested if (i) the Secretary of the Company receives from a shareholder an advance notice indicating that such shareholder intends to propose at least one candidate for election as a director at a meeting of shareholders which notice is in compliance with the advance notice requirements for shareholder nominees for director set forth in the Company’s Amended and Restated Bylaws, as amended from time to time, and (ii) such notice of nomination has not been withdrawn by such shareholder on or before the tenth (10th) calendar day before the Company files its definitive proxy statement for such shareholders’ meeting with the U.S. Securities and Exchange Commission (regardless of whether or not such proxy statement is thereafter revised or supplemented).
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ARTICLE VIII
Subject to the rights of holders of any series of Preferred Stock with respect to the election of directors, the number of directors that constitutes the entire Board of Directors shall be fixed solely by resolution of the Board of Directors, provided that no decrease in the number of directors constituting the Board of Directors shall shorten the term of any incumbent director.
Appendix B
GLATFELTER CORPORATION
(a Pennsylvania corporation)
AMENDED AND RESTATED BYLAWS
(Amended and Restated as of , 2022)
Table of Contents
| | | | | | | | | Page | | | | ARTICLE I MEETINGS OF SHAREHOLDERS AND RECORD DATE
| | | B-4 | | | | 1.1 ANNUAL MEETING
| | | B-4 | | | | 1.2 SPECIAL MEETINGS
| | | B-4 | | | | 1.3 PLACE OF SHAREHOLDERS’ MEETINGS
| | | B-4 | | | | 1.4 NOTICE
| | | B-4 | | | | 1.5 QUORUM
| | | B-4 | | | | 1.6 VOTING
| | | B-4 | | | | 1.7 RECORD DATES
| | | B-5 | | | | 1.8 CONSIDERATION OF DIRECTOR NOMINATIONS AND BUSINESS AT SHAREHOLDERS’ MEETINGS
| | | B-5 | | | | 1.9 ADVANCE NOTICE OF SHAREHOLDER NOMINATIONS AND OTHER BUSINESS
| | | B-7 | | | | 1.10 SUBMISSION OF QUESTIONNAIRE, REPRESENTATION AND AGREEMENT
| | | B-13 | | | | 1.11 SHAREHOLDER REQUESTED SPECIAL MEETINGS
| | | B-14 | | | | 1.12 POSTPONEMENT AND CANCELLATION OF MEETINGS
| | | B-16 | | | | 1.13 ORGANIZATION
| | | B-16 | | | | ARTICLE II DIRECTORS
| | | B-16 | | | | 2.1 NUMBER
| | | B-16 | | | | 2.2 TERM
| | | B-16 | | | | 2.3 AGE QUALIFICATION
| | | B-16 | | | | 2.4 ELECTION OF DIRECTORS; MAJORITY VOTING RESIGNATION POLICY
| | | B-17 | | | | 2.5 RESIGNATIONS
| | | B-17 | | | | 2.6 VACANCIES
| | | B-18 | | | | 2.7 REMOVAL OF DIRECTORS
| | | B-18 | | | | 2.8 ANNUAL MEETING
| | | B-18 | | | | 2.9 REGULAR MEETINGS
| | | B-18 | | | | 2.10 SPECIAL MEETINGS
| | | B-18 | | | | 2.11 MEETINGS OF INDEPENDENT DIRECTORS
| | | B-18 | | | | 2.12 QUORUM AND ACTION BY UNANIMOUS CONSENT
| | | B-18 | | | | 2.13 COMPENSATION
| | | B-18 | | | | 2.14 COMMITTEES
| | | B-18 | | | | 2.15 PARTICIPATION IN MEETINGS BY COMMUNICATIONS EQUIPMENT
| | | B-18 | | | | 2.16 LIABILITY OF DIRECTORS
| | | B-19 | | | | 2.17 OFFICERS
| | | B-19 | | | | 2.18 TERM
| | | B-19 | | | | 2.19 AUTHORITY, DUTIES AND COMPENSATION
| | | B-19 | | | | 2.20 CHAIR OF THE BOARD
| | | B-19 | | | | 2.21 CHIEF EXECUTIVE OFFICER
| | | B-19 | | | | 2.22 CHIEF FINANCIAL OFFICER
| | | B-19 | | | | 2.23 PRESIDENT
| | | B-19 | | | | 2.24 VICE PRESIDENT
| | | B-19 | | | | 2.25 SECRETARY
| | | B-19 | | | | 2.26 TREASURER
| | | B-19 | | | | ARTICLE III INDEMNIFICATION
| | | B-20 | | | | 3.1 MANDATORY INDEMNIFICATION OF DIRECTORS, OFFICERS AND OTHER PERSONS
| | | B-20 | | | | 3.2 ADVANCEMENT OF EXPENSES
| | | B-20 | |
| | | | | | | | | Page | | | | 3.3 EMPLOYEE BENEFIT PLANS
| | | B-21 | | | | 3.4 EXCEPTIONS
| | | B-21 | | | | 3.5 SECURITY FOR INDEMNIFICATION OBLIGATIONS
| | | B-21 | | | | 3.6 CONTRACT RIGHTS
| | | B-21 | | | | 3.7 RELIANCE UPON PROVISIONS
| | | B-21 | | | | 3.8 AMENDMENT OR REPEAL
| | | B-21 | | | | 3.9 NON-EXCLUSIVITY OF RIGHTS
| | | B-21 | | | | 3.10 CONTINUATION OF RIGHTS
| | | B-22 | | | | 3.11 NO IMPUTATION
| | | B-22 | | | | 3.12 ENFORCEMENT OF RIGHTS
| | | B-22 | | | | ARTICLE IV STOCK CERTIFICATES AND CORPORATE SEAL
| | | B-22 | | | | 4.1 EXECUTION
| | | B-22 | | | | 4.2 SEAL
| | | B-22 | | | | ARTICLE V NOTICES
| | | B-22 | | | | 5.1 FORM OF NOTICE
| | | B-22 | | | | 5.2 ADJOURNED SHAREHOLDER MEETINGS
| | | B-23 | | | | 5.3 WAIVER OF NOTICE
| | | B-23 | | | | ARTICLE VI AMENDMENTS
| | | B-23 | | | | 6.1 AMENDMENTS
| | | B-23 | | | | ARTICLE VII EMERGENCY BYLAWS
| | | B-23 | | | | 7.1 WHEN OPERATIVE
| | | B-23 | | | | 7.2 MEETINGS
| | | B-23 | | | | 7.3 LINES OF SUCCESSION
| | | B-24 | | | | 7.4 OFFICES
| | | B-24 | | | | 7.5 LIABILITY
| | | B-24 | | | | 7.6 REPEAL OR CHANGE
| | | B-24 | | | | ARTICLE VIII PENNSYLVANIA ACT 36 OF 1990
| | | B-24 | | | | 8.1 NON-APPLICABILITY OF PENNSYLVANIA’S CONTROL-SHARE ACQUISITION STATUTE
| | | B-24 | | | | 8.2 NON-APPLICABILITY OF PENNSYLVANIA’S DISGORGEMENT STATUTE
| | | B-24 | | | | ARTICLE IX FORUM SELECTION
| | | B-24 | | | | 9.1 EXCLUSIVE FORUM
| | | B-24 | |
GLATFELTER CORPORATION
(a Pennsylvania corporation)
AMENDED AND RESTATED BYLAWS
(Amended and Restated as of , 2022)
ARTICLE I
MEETINGS OF SHAREHOLDERS AND RECORD DATE
| 1.1 | ANNUAL MEETING. An annual meeting of the shareholders of Glatfelter Corporation (the “Company”) for the election of directors and the transaction of such other business as may properly come before the meeting in accordance with these Bylaws, the Company’s Articles of Incorporation, as amended (the “Articles of Incorporation”), the Pennsylvania Business Corporation Law of 1988, as amended (the “PBCL”), and other applicable law shall be held on the date (which date shall not be a legal holiday in the place where the meeting is to be held, and if held over the Internet or other electronic technology, which date shall not be a federal holiday) and at the time as shall be designated, from time to time, by (i) resolution of the Board of Directors (the “Board” or the “Board of Directors”) adopted by a majority of the total number of authorized directors (whether or not there exist any vacancies in previously authorized directorships at the time such resolution is presented to the Board of Directors for adoption), (ii) resolution of a duly authorized committee of the Board of Directors, or (iii) the Chair of the Board of Directors, if delegated that authority by a resolution of the Board of Directors adopted by a majority of the total number of authorized directors (whether or not there exist any vacancies in previously authorized directorships at the time any such resolution is presented to the Board of Directors for adoption) and which shall be stated in the notice of meeting. The date and time of the annual meeting may subsequently be changed in the same manner as is required to fix the original date and time of the annual meeting. Any and all references hereafter in these Bylaws to an annual meeting or annual meetings also shall be deemed to refer to any special meeting(s) in lieu thereof.
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| 1.2 | SPECIAL MEETINGS. Special meetings of the shareholders may be called at any time for any purpose or purposes, (i) by the Board of Directors pursuant to a resolution adopted by a majority of the total number of authorized directors (whether or not there exist any vacancies in previously authorized directorships at the time such resolution is presented to the Board of Directors for adoption), or (ii) by the Secretary of the Company, upon the written request of the record shareholders of the Company as of the record date fixed in accordance with Section 1.9 of these Bylaws who hold, in the aggregate, not less than twenty percent (20%) of the outstanding shares of the Company that would be entitled to vote at the meeting (the “Requisite Percentage”) at the time such request is submitted by the holders of such Requisite Percentage, subject to and in accordance with Section 1.9 of these Bylaws.
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| 1.3 | PLACE OF SHAREHOLDERS’ MEETINGS. The Board of Directors, may, in its sole discretion, designate the place of meeting, within or without the Commonwealth of Pennsylvania, for any meeting of the shareholders (or, if not so designated, the place of the meeting shall be the principal office of the Company) or may, in its sole discretion, determine that a shareholder meeting shall not be held at any physical place, but shall instead be held by means of the Internet or other electronic communications technology in accordance with Section 1704 of the PBCL.
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| 1.4 | NOTICE. Written notice stating the place, day and hour of each meeting of shareholders and, in the case of a special meeting, the general nature of the business to be transacted at such meeting shall be given by the Secretary of the Company or other duly authorized officer of the Company at least ten (10) calendar days before the meeting to each shareholder of record entitled to vote at the meeting.
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| 1.5 | QUORUM. Except as otherwise provided in the Articles of Incorporation, the presence in person or by proxy of shareholders entitled to cast at least a majority of the votes which all shareholders are entitled to cast on a particular matter shall constitute a quorum for the purpose of considering such matter at a meeting of shareholders, but less than a quorum may adjourn from time to time to reconvene at such time and place as they may determine.
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| (a) | Voting on Actions Other Than Director Elections. Whenever any action other than the election of directors is proposed to be taken by vote of the shareholders, except as otherwise expressly required by law, in the Articles of Incorporation or in these Bylaws, it shall be authorized by the affirmative vote
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| of a majority of the votes cast in person or by proxy at the meeting of shareholders by the holders of shares entitled to vote thereon and shall constitute an act of the shareholders.
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| (b) | One Vote Per Share. Except as otherwise provided by the Articles of Incorporation, each shareholder of the Corporation entitled to vote on any matter at any meeting of shareholders shall be entitled to one vote for every such share standing in such shareholder’s name on the record date for the meeting.
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| 1.7 | RECORD DATES. The Board of Directors may fix a time not more than ninety (90) calendar days prior to the date of any meeting of shareholders, or the date fixed for the payment of any dividend or distribution, or the date for the allotment of rights, or the date when any change or conversion or exchange of shares will be made or go into effect, as a record date for the determination of the shareholders entitled to notice of or to vote at any such meeting, or to receive payment of any such dividend or distribution, or to receive any such allotment of rights, or to exercise the rights in respect to any such change, conversion or exchange of shares. In such case, only such shareholders as shall be shareholders of record at the close of business on the date so fixed shall be entitled to notice of or to vote at such meeting, or to receive payment of such dividend or distribution, or to receive such allotment of rights, or to exercise such rights in respect to any change, conversion or exchange of shares, as the case may be, notwithstanding any transfer of any shares on the books of the Company after the record date so fixed.
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| 1.8 | CONSIDERATION OF DIRECTOR NOMINATIONS AND BUSINESS AT SHAREHOLDERS’ MEETINGS.
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| (a) | Annual Meetings of Shareholders. At any annual meeting of the shareholders, only such nominations of individuals for election to the Board of Directors shall be made, and only such other business shall be conducted or considered, as shall have been properly brought before the meeting in accordance with these Bylaws, the Articles of Incorporation, the PBCL and other applicable law.
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| (i) | For nominations of individuals for election to the Board of Directors or proposals of other business to be properly requested by a shareholder to be made at an annual meeting, a shareholder must (i) be a shareholder of record at the time of delivering the advance notice to the Company contemplated by Section 1.9 of these Bylaws, on the record date for the determination of shareholders entitled to notice of and to vote at the annual meeting, at the time of giving of notice of such annual meeting by or at the direction of the Board of Directors (or any duly authorized committee thereof), and at the time of the annual meeting, (ii) be entitled to vote at such annual meeting, and (iii) comply with the procedures set forth in these Bylaws as to such proposed business or nominations. This Section 1.8(a) shall be the exclusive means for a shareholder to make nominations or other business proposals (other than matters properly brought under Rule 14a-8 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and included in the Company’s notice of meeting) before an annual meeting of shareholders.
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| (ii) | For nominations of individuals for election to the Board of Directors to be properly made at an annual meeting, and proposals of other business to be properly brought before an annual meeting, nominations and proposals of other business must be: (a) specified in the Company’s notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors (or any duly authorized committee thereof), (b) otherwise properly made at the annual meeting, by or at the direction of the Board of Directors (or any duly authorized committee thereof), (c) otherwise properly brought before the annual meeting by a shareholder of the Company Present in Person (as defined below) in accordance with these Bylaws or (d) otherwise in compliance in all respects with the requirements of Regulation 14A under Exchange Act, including, without limitation, the requirements of Rule 14a-19 (as such rule and regulations may be amended from time to time by the United States Securities and Exchange Commission (“SEC”) including any SEC staff interpretations relating thereto). In addition, for proposals of business, including those relating to the composition of the Board of Directors, to be properly brought before an annual meeting for action by the Company’s shareholders, they must relate to an item of business that (i) is a proper subject for shareholder action under the Articles of Incorporation, these Bylaws, the PBCL and other applicable law; and (ii) is not expressly reserved for action by the Board of Directors under the Articles of Incorporation, these Bylaws, the PBCL or other applicable law. For purposes of these Bylaws, “Present in Person” shall mean that the shareholder proposing that the business be brought before a meeting, or, if the proposing shareholder is not an individual, a
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| qualified representative of such proposing shareholder, appear in person at such meeting (unless such meeting is held by means of the Internet or other electronic technology in which case the proposing shareholder or its qualified representative shall be present at such annual meeting by means of the Internet or other electronic technology). A “qualified representative” of such proposing shareholder shall be, if such proposing shareholder is (i) a general or limited partnership, any general partner or person who functions as a general partner of the general or limited partnership or who controls the general or limited partnership, (ii) a corporation or a limited liability company, any officer or person who functions as an officer of the corporation or limited liability company or any officer, director, general partner or person who functions as an officer, director or general partner of any entity ultimately in control of the corporation or limited liability company, or (iii) a trust, any trustee of such trust.
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| (b) | Special Meetings of Shareholders. At any special meeting of the shareholders, only such business shall be conducted or considered as shall have been properly brought before the special meeting. For business to be properly brought before a special meeting, it must be (i) specified in the Company’s notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors (or any duly authorized committee thereof), (ii) otherwise properly brought before the special meeting, by or at the direction of the Board of Directors (or any duly authorized committee thereof), (iii) with respect to the election of directors, provided that the Board of Directors has called a special meeting of shareholders for the purpose of electing one or more directors to the Board, by any shareholder of the Company Present In Person who complies in all respects with the advance notice and other procedures set forth in these Bylaws relating to bringing such nominations before a special meeting, including, but not limited to, Section 1.9 hereof, or (iv) specified in the Company’s notice of meeting (or any supplement thereto) given by the Company pursuant to a valid shareholder request that the Company call a special meeting of shareholders (a “Shareholder Requested Special Meeting”) in accordance with Sections 1.2 and 1.9 of these Bylaws, it being understood that business brought before such a Shareholder Requested Special Meeting by the shareholders shall be limited to the matters stated in such valid shareholder request; provided, however, that nothing herein shall prohibit the Board of Directors (or any duly authorized committee thereof) from submitting additional matters to shareholders at any such Shareholder Requested Special Meeting. In addition, for proposals of business to be properly brought before a special meeting, they must (i) relate to an item of business that is a proper subject for shareholder action under the Articles of Incorporation, these Bylaws, the PBCL and other applicable law; and (ii) not be expressly reserved for action by the Board of Directors under the Articles of Incorporation, these Bylaws, the PBCL or other applicable law.
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Nominations of individuals for election to the Board of Directors may be made at a special meeting of shareholders if they are brought before the meeting (a) pursuant to the Company’s notice of meeting by or at the direction of the Board of Directors (or any duly authorized committee thereof), or (b) provided that the Board of Directors has determined that directors shall be elected at such meeting, by any shareholder of the Company who (1) is a shareholder of record at the time of giving of notice of such special meeting and at the time of the special meeting, (2) is entitled to vote at the special meeting, and (3) complies with the advance notice and other procedures set forth in these Bylaws relating to bringing such nominations before a special meeting, including, but not limited to, Section 1.8(b) hereof. This Section 1.8(b) shall be the exclusive means for a shareholder to make nominations or other business proposals (other than matters properly brought under Rule 14a-8 under the Exchange Act and included in the Company’s notice of meeting) before a special meeting of shareholders.
| (c) | General. Except as otherwise provided by the Articles of Incorporation, these Bylaws, the PBCL or other applicable law, the Chair of any annual or special meeting shall have the power to determine, based on the facts and circumstances and in consultation with counsel (who may be the Company’s internal counsel), whether a nomination or any other business proposed to be brought before the meeting was made or proposed, as the case may be, in accordance with these Bylaws and, if any proposed nomination or other business is not in compliance with these Bylaws, to declare that no action shall be taken on such nomination or other proposal and such nomination or other proposal shall be disregarded. In addition, a nomination or other business proposed to be brought by a shareholder may not be brought before a meeting if such shareholder takes action contrary to the representations made in the shareholder notice applicable to such nomination or other business or if (i) when submitted to the Company prior to the deadline for submitting a shareholder notice, the shareholder notice applicable to such nomination or other business contained an untrue statement of a fact or omitted to
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| state a fact necessary to make the statements therein not misleading, or (ii) after being submitted to the Company, the shareholder notice applicable to such nomination or other business was not updated in accordance with these Bylaws to cause the information provided in the shareholder notice to be true, correct and complete in all respects.
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| 1.9 | ADVANCE NOTICE OF SHAREHOLDER NOMINATIONS AND OTHER BUSINESS.
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| (a) | Annual Meeting of Shareholders. Without qualification or limitation, subject to Section 1.9(d)(viii) of these Bylaws, for any nominations or any other business to be properly brought before an annual meeting by a shareholder pursuant to Section 1.7(a) of these Bylaws, (1) the shareholder must have given timely notice thereof (including, in the case of nominations, the completed and signed questionnaire, representation and agreement required by Section 1.9 of these Bylaws), and timely updates and supplements thereof, in each case in proper form, in writing to the Secretary of the Company, and such other business must otherwise be a proper matter for shareholder action, (2) the stockholder must have complied in all respects with the requirements of Regulation 14A under the Exchange Act, including, without limitation, the requirements of Rule 14a-19 (as such rule and regulations may be amended from time to time by the SEC including any SEC staff interpretations relating thereto), and (3) the Board of Directors or an executive officer designated thereby shall determine that the shareholder has satisfied the requirements of this clause (a), including without limitation the satisfaction of any undertaking delivered under paragraph (c) below.
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To be timely, a shareholder’s notice must be delivered to, or mailed and received by, the Secretary of the Company at the principal executive offices of the Company not later than the close of business on the one hundred twentieth (120th) calendar day, nor earlier than the close of business on the one hundred fiftieth (150th) calendar day prior to the first anniversary of the date of the Company’s proxy statement released to shareholders in connection with the annual meeting of shareholders in the immediately preceding year; provided, however, that if the date of the annual meeting of shareholders is more than thirty (30) calendar days prior to, or more than sixty (60) calendar days after, the first anniversary date of the preceding year’s annual meeting of shareholders, or if no annual meeting was held in the preceding year, to be timely, a shareholder’s notice must be received by the Secretary of the Company on the later of (i) the ninetieth (90th) day prior to such annual meeting and (ii) the tenth (10th) calendar day following the day on which public disclosure (as defined below) of the date of the meeting is first made by the Company. In no event shall any adjournment or postponement of an annual meeting, or the public announcement thereof, commence a new time period for the giving of a shareholder’s notice as described above. For purposes of these Bylaws, “public disclosure” or its corollary “publicly disclosed” shall mean disclosure by the Company in (i) a document publicly filed by the Company with, or furnished by the Company to, the SEC pursuant to Section 13, 14 or 15(d) of the Exchange Act, (ii) a press release issued by the Company and distributed through a nationally recognized press release dissemination service, or (iii) another method reasonably intended by the Company to achieve broad-based dissemination of the information contained therein.
Notwithstanding anything in the immediately preceding paragraph to the contrary, in the event that the number of directors to be elected to the Board of Directors is increased by the Board of Directors, and there is no public disclosure by the Company naming all of the nominees for director or specifying the size of the increased Board of Directors at least one hundred and thirty (130) calendar days prior to the first anniversary of the date that the Company’s definitive proxy statement was first made publicly available to shareholders in connection with the preceding year’s annual meeting of shareholders, a shareholder’s notice required by this Section 1.9(a) shall also be considered timely, but only with respect to nominees for any new positions created by such increase, and only with respect to a shareholder who had, prior to such increase in the size of the Board of Directors, previously submitted, on a timely basis and in proper written form, a shareholder notice, if it shall be delivered to the Secretary of the Company at the principal executive offices of the Company not later than the close of business on the tenth (10th) calendar day following the day on which such public disclosure is first made by the Company.
In addition, to be considered timely, a shareholder’s notice shall further be updated and supplemented, if necessary, so that the information provided or required to be provided in such notice shall be true and correct as of the record date for the meeting and as of the date that is ten (10) business days prior to the meeting or any adjournment or postponement thereof, and such update and supplement shall be delivered to the Secretary of the Company at the principal executive offices of the Company not later than five (5) business days after the record date for the meeting in the case of the update and supplement required to be made as of the record date, and not later than eight (8) business days prior to the date for the meeting or any adjournment
or postponement thereof in the case of the update and supplement required to be made as of ten (10) business days prior to the meeting or any adjournment or postponement thereof. For the avoidance of doubt, the obligation to update and supplement as set forth in this paragraph or any other Section of these Bylaws shall not limit the Company’s rights with respect to any deficiencies in any notice provided by a shareholder, extend any applicable deadlines hereunder or under any other provision of the Bylaws or enable or be deemed to permit a shareholder who has previously submitted notice hereunder or under any other provision of the Bylaws to amend or update any proposal or to submit any new proposal, including by changing or adding nominees, matters, business and or resolutions proposed to be brought before a meeting of the shareholders.
| (b) | Special Meetings of Shareholders. Subject to Section 1.9(d)(viii) of these Bylaws, in the event the Company calls a special meeting of shareholders for thepurpose of electing one or more directors to the Board of Directors, any shareholder meeting the requirements set forth in Section 1.8(b) hereof may nominate an individual or individuals (as the case may be) for election to such position(s) as specified in the Company’s notice of meeting, provided that the shareholder gives timely notice of such nomination (including the notice of nomination contemplated by Section 1.9(d) of these Bylaws and the completed and signed questionnaire, representation and agreement required by Section 1.9 of these Bylaws), and timely updates and supplements thereof in each case in proper form, in writing, to the Secretary of the Company.
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To be timely, a shareholder’s notice pursuant to the preceding sentence shall be delivered to the Secretary of the Company at the principal executive offices of the Company not earlier than the close of business on the one hundred twentieth (120th) calendar day prior to the date of such special meeting and not later than the close of business on the later of (x) the ninetieth (90th) calendar day prior to the date of such special meeting and (y) if the first public disclosure by the Company of the date of such special meeting is less than one hundred (100) calendar days prior to the date of such special meeting, the tenth (10th) calendar day following the day on which public disclosure is first made by the Company of the date of the special meeting and of the nominees proposed by the Board of Directors to be elected at such meeting. In no event shall any adjournment or postponement of a special meeting of shareholders, or the public announcement thereof, commence a new time period for the giving of a shareholder’s notice as described above. In addition, to be considered timely, a shareholder’s notice pursuant to the first sentence of this paragraph shall further be updated and supplemented, if necessary, so that the information provided or required to be provided in such notice shall be true and correct as of the record date for the meeting and as of the date that is ten (10) business days prior to the meeting or any adjournment or postponement thereof, and such update and supplement shall be delivered to the Secretary of the Company at the principal executive offices of the Company not later than five (5) business days after the record date for the meeting in the case of the update and supplement required to be made as of the record date, and not later than eight (8) business days prior to the date for the meeting or any adjournment or postponement thereof in the case of the update and supplement required to be made as of ten (10) business days prior to the meeting or any adjournment or postponement thereof.
| (c) | Proxy Access by Shareholders. The Company shall include in its proxy statement for an annual meeting the shareholder the name, together with the information required by Section 1.10, of any person nominated for election (a “Shareholder Nominee”) to the board of directors by a shareholder that satisfies, or by a group of no more than twenty (20) shareholders that, collectively, satisfy, the requirements of this Section 1.9 (an “Eligible Shareholder”), and that expressly elects at the time of providing the notice required by this Section 1.9 (the “Nomination Notice”) to have its nominee or nominees included in the Company’s proxy materials pursuant to this Section 1.9.
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| (d) | Disclosure Requirements.
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| (i) | To be in proper form, a shareholder’s notice to the Secretary of the Company must include the following, as applicable:
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| (1) | As to the shareholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal, as applicable, is made, a shareholder’s notice must set forth: (i) the name and address of such shareholder, as they appear on the Company’s books, of such beneficial owner, if any, and of their respective Affiliates or Associates (for the purposes of these Bylaws, as such terms are defined in Rule 12b-2 of the Exchange Act) or others acting in concert therewith, (ii) (A) the class or series and number of shares of the Company which are, directly or indirectly, owned by such shareholder, such beneficial owner and their respective affiliates or associates or others acting in concert
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| therewith, of record or beneficially (within the meaning of Rule 13d-3 under the Exchange Act), except that such person shall in all events be deemed to beneficially own any shares of any class or series of the Company as to which such person has a right to acquire beneficial ownership at any time in the future, whether such right is exercisable immediately, only after the passage of time or only upon the satisfaction of certain conditions precedent, (B) any option, warrant, convertible security, stock appreciation right, or similar right with an exercise or conversion privilege or a settlement payment or mechanism at a price related to any class or series of shares of the Company or with a value derived in whole or in part from the value of any class or series of shares of the Company, or any derivative or synthetic arrangement having the characteristics of a long position in any class or series of shares of the Company, or any contract, derivative, swap or other transaction or series of transactions designed to produce economic benefits and risks that correspond substantially to the ownership of any class or series of shares of the Company, including due to the fact that the value of such contract, derivative, swap or other transaction or series of transactions is determined by reference to the price, value or volatility of any class or series of shares of the Company, whether or not such instrument, contract or right shall be subject to settlement in the underlying class or series of shares of the Company, through the delivery of cash or other property, or otherwise, and without regard to whether the shareholder of record, the beneficial owner, if any, or any affiliates or associates or others acting in concert therewith, may have entered into transactions that hedge or mitigate the economic effect of such instrument, contract or right, or any other direct or indirect opportunity to profit or share in any profit derived from any increase or decrease in the value of shares of the Company (any of the foregoing, a “Derivative Instrument”) directly or indirectly owned beneficially by such shareholder, the beneficial owner, if any, or any affiliates or associates or others acting in concert therewith, (C) any proxy, contract, arrangement or understanding (written or oral), or relationship or otherwise, pursuant to which such shareholder, such beneficial owner and their respective affiliates or associates or others acting in concert therewith have any right to vote any class or series of shares of the Company, (D) any agreement, arrangement or understanding (written or oral), or relationship or otherwise, including any repurchase or similar so-called “stock borrowing” agreement or arrangement(written or oral), involving such shareholder, such beneficial owner and their respective affiliates or associates or others acting in concert therewith, directly or indirectly, the purpose or effect of which is to mitigate loss to, reduce the economic risk (of ownership or otherwise) of any class or series of the shares of the Company by, manage the risk of share price changes for, or increase or decrease the voting power of, such shareholder, such beneficial owner and their respective affiliates or associates or others acting in concert therewith with respect to any class or series of the shares of the Company, or which provides, directly or indirectly, the opportunity to profit or share in any profit derived from any decrease in the price or value of any class or series of the shares of the Company (any of the foregoing, a “Short Interest”), (E) any rights to dividends on the shares of the Company owned beneficially by such shareholder, such beneficial owner and their respective affiliates or associates or others acting in concert therewith that are separated or separable from the underlying shares of the Company, (F) any proportionate interest in shares of the Company or Derivative Instruments held, directly or indirectly, by a general or limited partnership in which such shareholder, such beneficial owner and their respective affiliates or associates or others acting in concert therewith is a general partner or, directly or indirectly, beneficially owns an interest in a general partner of such general or limited partnership, (G) any performance-related fees (other than an asset-based fee) that such shareholder, such beneficial owner and their respective affiliates or associates or others acting in concert therewith are entitled to, as calculated based on any increase or decrease in the value of shares of the Company or Derivative Instruments, if any, including, without limitation, any such interests held by members of the immediate family sharing the same household of such shareholder, such beneficial owner and their respective affiliates or associates or others acting in concert therewith, (H) any significant equity interests or any Derivative Instruments or Short Interests in any principal competitor of the Company held by such shareholder, such
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| beneficial owner and their respective affiliates or associates or others acting in concert therewith and (I) any direct or indirect interest of such shareholder, such beneficial owner and their respective affiliates or associates or others acting in concert therewith in any contract with the Company, any affiliate of the Company or any principal competitor of the Company (including, in any such case, any employment agreement, collective bargaining agreement or consulting agreement), (iii) all information that would be required to be set forth in a Schedule 13D filed pursuant to Rule 13d-1(a) or an amendment thereto pursuant to Rule 13d-2(a) if such a Schedule 13D or amendment thereto were required to be filed under the Exchange Act and the rules and regulations promulgated thereunder by such shareholder, such beneficial owner and their respective affiliates or associates or others acting in concert therewith, if any (regardless of whether the requirement to file a Schedule 13D is applicable to such person), (iv) a description in reasonable detail of any relationship (including any direct or indirect interest in any agreement, arrangement or understanding, whether written or oral and whether formal or informal) between such shareholder, such beneficial owner and their respective affiliates or associates or others acting in concert therewith, if any, and the Company or any director, officer, affiliate or associate of the Company (naming such officer, director, affiliate, or associate), including, but not limited to, a description in reasonable detail of any discussions between such shareholder, such beneficial owner and their respective affiliates or associates or others acting in concert therewith and any officer, director, affiliate, or associate of the Company (naming such officer, director, affiliate, or associate) with respect to (1) the proposal of any business or the proposal of any nominees sought to be brought before an annual meeting by a shareholder, (2) any changes sought to be made to the composition of the Board of Directors or the Company’s strategic direction, or (3) any plans or proposals for the Company to be potentially pursued by the shareholder, such beneficial owner and their respective affiliates or associates or others acting in concert therewith, if any proposed business was approved, or any proposed nominees were elected, at the shareholders’ meeting, (v) a written undertaking by the shareholder giving the notice or, if the notice is given on behalf of a beneficial owner on whose behalf the nomination is made, by such beneficial owner, that such shareholder or beneficial owner will deliver to beneficial owners of shares representing at least 67% of the voting power of the stock entitled to vote generally in the election of directors either (1) at least twenty (20) calendar days before the annual meeting, a copy of its definitive proxy statement for the solicitation of proxies for its director candidates, or (2) at least forty (40) calendar days before the annual meeting a Notice of Internet Availability of Proxy Materials that would satisfy the requirements of Rule 14a-16(d) of the Exchange Act, and (vi) any other information relating to such shareholder, such beneficial owner and their respective affiliates or associates or others acting in concert therewith, if any, that would be required to be disclosed in a proxy statement and form of proxy or other filings required to be made in connection with solicitations of proxies for, as applicable, the proposal and/or for the election of directors in a contested election pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder;
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| (2) | If the notice relates to any business other than a nomination of a director or directors that the shareholder proposes to bring before the meeting, a shareholder’s notice must, in addition to the matters set forth in Section 1.9(d)(i)(1) above, also set forth: (i) a reasonably detailed description of the business desired to be brought before the meeting, the reasons for conducting such business at the meeting and any material interest of such shareholder, such beneficial owner and each of their respective affiliates or associates or others acting in concert therewith, if any, in such business, (ii) the complete text of the proposal or business (including the complete text of any resolutions proposed for consideration and, in the event that such proposal or business includes a proposal to amend the Bylaws of the Company, the complete text of the proposed amendment), (iii) a reasonably detailed description of all agreements, arrangements and understandings (written or oral) between such shareholder, such beneficial owner and any of their respective affiliates or associates or others acting in concert therewith, if any, and any other person or persons (naming such other person or entity) in connection with
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| | | | | 2022 PROXY STATEMENT | | › | | B-10 |
| the proposal of such business by such shareholder, and (iv) any other information relating to the proposal of such business that would be required to be disclosed in a proxy statement or other filing required to be made with the SEC in connection with any solicitations of proxies or special meeting demands by such shareholder pursuant to Section 14(a) of the Exchange Act;
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| (3) | As to each individual, if any, whom the shareholder proposes to nominate for election or re-election to the Board of Directors, a shareholder’s notice must, in addition to the matters set forth in Section 1.9(d)(i)(1) above, also set forth: (i) all information relating to such individual that would be required to be disclosed pursuant to Section 1.9(d)(i)(1) above if such individual was the stockholder giving the advance notice of nomination to the Company, (ii) all information relating to such individual that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors in a contested election pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder (including such individual’s written and executed consent to being named in the proxy statement of such proposing shareholder as a nominee of such proposing shareholder and to serving as a director of the Company if elected), (iii) a reasonably detailed description of all direct and indirect compensation, reimbursement, indemnification and other benefits (whether monetary or non-monetary) agreements, arrangements and understandings (whether written or oral and formal or informal) during the past three (3) years, and any other relationships, between or among such shareholder and beneficial owner, if any, and their respective affiliates and associates, or others acting in concert therewith (naming each such person or entity), on the one hand, and each proposed nominee, and any respective affiliates and associates, or others acting in concert therewith (naming each such person or entity), on the other hand, (iv) to the extent that such proposed nominee has been convicted of any past criminal offenses involving dishonesty or a breach of trust or duty, a description in reasonable detail of such offense and all legal proceedings relating thereto, (v) to the extent that such proposed nominee has been determined by any governmental authority or self-regulatory organization to have violated any federal or state securities or commodities laws, including but not limited to, the Securities Act of 1933, as amended, the Exchange Act or the Commodity Exchange Act, a description in reasonable detail of such violation and all legal proceedings relating thereto, (vi) to the extent that such proposed nominee has ever been suspended or barred by any governmental authority or self-regulatory organization from engaging in any profession or participating in any industry, or has otherwise been subject to a disciplinary action by a governmental authority or self-regulatory organization that provides oversight over the proposed nominee’s current or past profession or an industry that the proposed nominee has participated in, a description in reasonable detail of such action and the reasons therefor, (vii) a description in reasonable detail of any and all litigation, whether or not judicially resolved, settled or dismissed, relating to the proposed nominee’s past or current service on the board of directors (or similar governing body) of any corporation, limited liability company, partnership, trust or any other entity where a legal complaint filed in any state or federal court located within the United States alleges that the proposed nominee committed any act constituting (1) a breach of fiduciary duties, (2) misconduct, (3) fraud, (4) breaches of confidentiality obligations, and/or (5) a breach of the entity’s code of conduct applicable to directors, and (viii) all other information that would be required to be disclosed pursuant to Items 403 and 404 under Regulation S-K or any successor provision promulgated under Regulation S-K if the shareholder making the nomination and any beneficial owner on whose behalf the nomination is made, if any, or any affiliate or associate thereof or person acting in concert therewith, were the “registrant” for purposes of such Item and the proposed nominee were a director or executive officer of such registrant; and
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| (4) | With respect to each individual, if any, whom the shareholder proposes to nominate for election or re-election to the Board of Directors, a shareholder’s notice must, in addition to the matters set forth in Section 1.9(d)(i)(1) and Section 1.9(d)(i)(3) above, also include
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| | | | | 2022 PROXY STATEMENT | | › | | B-11 |
| such proposed nominee’s (A) irrevocable and executed letter of resignation as a director of the Company, as required by Section 2.4(b) of these Bylaws and Section 5 of the Company’s Governance Principles, effective upon such person’s failure to receive the required vote for re-election at the next meeting of shareholders at which such person would face re-election and upon acceptance of such resignation by the Board of Directors, and (B) completed and executed questionnaire, representation and agreement as required by Section 1.9 of these Bylaws. The Company may require any proposed nominee to furnish such other information as may reasonably be required by the Company to determine the eligibility of such proposed nominee to serve as an independent director of the Company or that could be material to a reasonable shareholder’s understanding of the independence, or lack thereof, of such nominee. Notwithstanding anything to the contrary, only persons who are nominated in accordance with the procedures set forth in these Bylaws, including, without limitation, Section 1.8 and this Section 1.9 hereof, shall be eligible for election as directors.
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| (ii) | Upon written request by the Secretary of the Company, the Board of Directors or any duly authorized committee thereof, any shareholder submitting a shareholder notice proposing a nomination or other business for consideration at a meeting shall provide, within five (5) business days of delivery of such request (or such other period as may be specified in such request), written verification, satisfactory in the reasonable discretion of the Board of Directors, any duly authorized committee thereof or any duly authorized officer of the Company, to demonstrate the accuracy of any information submitted by the shareholder in the shareholder notice delivered pursuant to the requirements of the Bylaws (including, if requested, written confirmation by such shareholder that it continues to intend to bring the nomination or other business proposed in the shareholder notice before the meeting). If a shareholder fails to provide such written verification within such period, the information as to which written verification was requested may be deemed not to have been provided in accordance with the requirements of the Bylaws.
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| (iii) | For a shareholder notice to comply with the requirements of this Section 1.9, each of the requirements of this Section 1.9 shall be directly and expressly responded to and a shareholder notice must clearly indicate and expressly reference which provisions of this Section 1.9 the information disclosed is intended to be responsive to. Information disclosed in one section of the shareholder notice in response to one provision of this Section 1.9 shall not be deemed responsive to any other provision of this Section 1.9 unless it is expressly cross-referenced to such other provision and it is clearly apparent how the information included in one section of the shareholder notice is directly and expressly responsive to the information required to be included in another section of the shareholder notice pursuant to this Section 1.9. For the avoidance of doubt, statements purporting to provide global cross-references that purport to provide that all information provided shall be deemed to be responsive to all requirements of this Section 1.9 shall be disregarded and shall not satisfy the requirements of this Section 1.9.
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| (iv) | For a shareholder notice to comply with the requirements of this Section 1.9, it must set forth in writing directly within the body of the shareholder notice (as opposed to being incorporated by reference from any other document or writing not prepared solely in response to the requirements of these Bylaws) all the information required to be included therein as set forth in this Section 1.9 and each of the requirements of this Section 1.9 shall be directly responded to in a manner that makes it clearly apparent how the information provided is specifically responsive to any requirements of this Section 1.9. For the avoidance of doubt, a shareholder notice shall not be deemed to be in compliance with this Section 1.9 if it attempts to include the required information by incorporating by reference into the body of the shareholder notice any other document, writing or part thereof, including, but not limited to, any documents publicly filed with the SEC not prepared solely in response to the requirements of these Bylaws. For the further avoidance of doubt, the body of the shareholder notice shall not include any documents that are not prepared solely in response to the requirements of these Bylaws.
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| (v) | A shareholder submitting a shareholder notice, by its delivery to the Company, represents and warrants that all information contained therein, as of the deadline for submitting the
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| | | | | 2022 PROXY STATEMENT | | › | | B-12 |
| shareholder notice, is true, accurate and complete in all respects, contains no false or misleading statements and such shareholder acknowledges that it intends for the Company and the Board of Directors to rely on such information as (i) being true, accurate and complete in all respects and (ii) not containing any false or misleading statements. If the information submitted pursuant to this Section 1.9 by any shareholder proposing a nomination or other business for consideration at a meeting shall not be true, correct and complete in all respects prior to the deadline for submitting the shareholder notice, such information may be deemed not to have been provided in accordance with this Section 1.9.
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| (vi) | Notwithstanding any notice of the meeting sent to shareholders on behalf of, or any proxy statement filed by, the Company, a shareholder must separately comply with this Section 1.9 to propose a nomination or other business at any meeting and is still required to deliver its own separate and timely shareholder notice to the Secretary of the Company prior to the deadline for submitting a shareholder notice that complies in all respects with the requirements of this Section 1.9. For the avoidance of doubt, if the shareholder’s proposed business is the same or relates to business brought by the Company and included in the Company’s meeting notice or any supplement thereto, the shareholder is nevertheless still required to comply with this Section 1.9 and deliver, prior to the deadline for submitting the shareholder notice, its own separate and timely shareholder notice to the Secretary of the Company that complies in all respects with the requirements of this Section 1.9.
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| (vii) | Notwithstanding the provisions of these Bylaws, a shareholder shall also comply with all applicable requirements of the Exchange Act, the rules and regulations thereunder and any other requirements of the SEC, the PBCL and other applicable law with respect to the matters set forth in these Bylaws, any solicitation of proxies contemplated by any notices delivered pursuant to these Bylaws and any filings required to be made with the SEC in connection therewith; provided, however, that any references in these Bylaws to the Exchange Act or the rules promulgated thereunder are not intended to and shall not limit the separate and additional requirements set forth in these Bylaws with respect to nominations or proposals as to any other business to be considered.
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| (viii) | Nothing in this Section 1.9 shall be deemed to affect any rights (i) of shareholders to request inclusion of proposals in the Company’s proxy statement pursuant to Rule 14a-8 under the Exchange Act or (ii) of the holders of any series of Preferred Stock if and to the extent provided for under the PBCL, any other applicable law, the Articles of Incorporation or these Bylaws. Subject to Rule 14a-8 under the Exchange Act, nothing in this Section 1.9 shall be construed to permit any shareholder, or give any shareholder the right, to include or have disseminated or described in the Company’s proxy statement any nomination of director or directors or any other business proposal.
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| (ix) | For purposes of these Bylaws, a person shall be deemed to be “acting in concert” with another person if such person knowingly acts (whether or not pursuant to an express agreement, arrangement or understanding) in concert with, or towards a common goal relating to the management, governance or control of the Company in parallel with, such other person where (A) each person is conscious of the other person’s conduct or intent and this awareness is an element in their decision-making processes and (B) at least one additional factor suggests that such persons intend to act in concert or in parallel, which such additional factors may include, without limitation, exchanging information (whether publicly or privately), attending meetings, conducting discussions, or making or soliciting invitations to act in concert or in parallel; provided, however, that a person shall not be deemed to be “acting in concert” with any other person solely as a result of the solicitation or receipt of revocable proxies, or special meeting demands from such other person in response to a solicitation made pursuant to, and in accordance with, Section 14(a) of the Exchange Act by way of a proxy statement filed on Schedule 14A. A person deemed to be “acting in concert” with another person shall be deemed to be “acting in concert” with any third party who is also “acting in concert” with such other person.
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| 1.10 | SUBMISSION OF QUESTIONNAIRE, REPRESENTATION AND AGREEMENT. To be eligible to be a nominee for election or re-election as a director of the Company, a person nominated by a shareholder for election or re-election to the Board of Directors must deliver (in accordance with the time periods prescribed
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| | | | | 2022 PROXY STATEMENT | | › | | B-13 |
| for delivery of an advance notice of nominations pursuant to Section 1.9 of these Bylaws) to the Secretary of the Company at the principal executive offices of the Company a written questionnaire with respect to the background and qualification of such individual and the background of any other person or entity on whose behalf, directly or indirectly, the nomination is being made (which questionnaire shall be provided by the Secretary of the Company upon written request), and a written representation and agreement (in the form provided by the Secretary of the Company upon written request) that such individual (A) is not and will not become a party to (1) any agreement, arrangement or understanding (written or oral) with, and has not given any commitment or assurance (written or oral) to, any person or entity as to how such person, if elected as a director of the Company, will act or vote on any issue or question (a “Voting Commitment”) that has not been expressly disclosed in writing to the Company, or (2) any Voting Commitment that could limit or interfere with such individual’s ability to comply, if elected as a director of the Company, with such individual’s fiduciary duties under applicable law, (B) is not and will not become a party to any agreement, arrangement or understanding (written or oral) with any person or entity other than the Company with respect to any direct or indirect compensation, reimbursement or indemnification in connection with service or action as a director that has not been expressly disclosed therein, (C) is not a party to any agreement, arrangement or understanding (written or oral) with any person or entity, that contemplates such person resigning as a member of the Board of Directors prior to the conclusion of the term of office to which such person was elected, and has not given any commitment or assurance (written or oral) to any person or entity that such person intends to, or if asked by such person or entity would, resign as a member of the Board of Directors prior to the end of the conclusion of the term of office to which such person was elected, except as expressly disclosed therein, (D) has expressly disclosed therein whether all or any portion of securities of the Company were purchased with any financial assistance provided by any other person and whether any other person has any interest in such securities, (E) in such individual’s personal capacity and on behalf of any person or entity on whose behalf, directly or indirectly, the nomination is being made, would be in compliance, if elected as a director of the Company, and will comply, with all applicable code of ethics and/or business conduct, corporate governance, conflicts of interest, confidentiality, public disclosures, hedging and pledging policies relating to the Company’s securities, and stock ownership and stock trading policies and guidelines of the Company that are adopted and publicly disclosed from time to time, (F) consents to being named as a nominee of the proposing shareholder in the proposing shareholder’s proxy statement and agrees to serve as a member of the Board of Directors if elected as a director, and (G) will abide by the requirements of Section 2.4(b) of these Bylaws and Section 5 of the Company’s Governance Principles.
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| 1.11 | SHAREHOLDER REQUESTED SPECIAL MEETINGS.
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| (a) | No shareholder may request that the Secretary of the Company call a Shareholder Requested Special Meeting unless a shareholder of record of the Company has first submitted a request in writing (“Record Date Request Notice”) that the Board of Directors fix a record date (a “Request Record Date”) for the purpose of determining the shareholders entitled to request that the Secretary of the Company call a Shareholder Requested Special Meeting, which Record Date Request Notice shall be delivered to, or mailed and received by, the Secretary of the Company at the principal executive offices of the Company.
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| (b) | Within ten (10) calendar days after receipt of a Record Date Request Notice in compliance with this Section 1.11 from any shareholder of record, the Board of Directors may adopt a resolution fixing a Request Record Date for the purpose of determining the shareholders entitled to request that the Secretary of the Company call a Shareholder Requested Special Meeting, which date shall not precede the date upon which the resolution fixing the Request Record Date is adopted by the Board of Directors. If no resolution fixing a Request Record Date has been adopted by the Board of Directors within the ten (10) calendar day period after the date on which such a request to fix a Request Record Date was received, the Request Record Date in respect thereof shall be deemed to be the twentieth (20th) calendar day after the date on which such a request is received.
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| (c) | In order for a Shareholder Requested Special Meeting to be called, one or more written request or requests to call a Shareholder Requested Special Meeting (each, a “Special Meeting Request” and collectively, the “Special Meeting Requests”), must be in proper written form and must be signed by shareholders who, as of the Request Record Date, hold of record or beneficially, in the aggregate, the Requisite Percentage and must be timely delivered to the Secretary of the Company at the principal executive offices of the Company. To be timely, a Special Meeting Request must be delivered to the principal executive offices of the Company not later than the sixtieth (60th) calendar day following the Request Record Date. In determining whether a Shareholder Requested Special Meeting has been
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| | | | | 2022 PROXY STATEMENT | | › | | B-14 |
| properly requested, multiple Special Meeting Requests delivered to the Secretary of the Company will be considered together only if (i) each Special Meeting Request identifies the same purpose or purposes of the Shareholder Requested Special Meeting and the same matters proposed to be acted on at such meeting (in each case as determined in good faith by the Board of Directors), and (ii) such Special Meeting Requests have been dated and delivered to the Secretary of the Company within sixty (60) calendar days of the earliest dated Special Meeting Request.
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| (d) | In addition to the requirements set forth in Section 1.11(c), to be in proper form for purposes of this Section 1.11, a Special Meeting Request must include and set forth a description of (i) the specific purpose or purposes of the Shareholder Requested Special Meeting, (ii) the matter(s) proposed to be acted on at the Shareholder Requested Special Meeting, and (iii) the reasons for conducting such business at the Shareholder Requested Special Meeting. Shareholders seeking to propose candidates for election to the Board of Directors at a Shareholder Requested Special Meeting where the election of directors is a matter specified in the notice of meeting given by or at the direction of the person calling such Shareholder Requested Special Meeting in accordance with the provisions of Section 1.2 of these Bylaws and this Section 1.11 must also comply with the requirements set forth in Section 1.9 of these Bylaws for providing a timely and proper written notice for the proposal of candidates for election as directors.
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| (e) | A shareholder may revoke a Special Meeting Request by written revocation delivered to the Secretary of the Company at any time prior to the Shareholder Requested Special Meeting. If any such revocation(s) are received by the Secretary of the Company after the Secretary’s receipt of Special Meeting Requests from the Requisite Percentage of shareholders, and as a result of such revocation(s) there no longer are unrevoked demands from the Requisite Percentage of shareholders to call a Shareholder Requested Special Meeting, then the Board of Directors shall have the discretion to determine whether or not to proceed with the Shareholder Requested Special Meeting.
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| (f) | The Secretary of the Company shall not accept, and shall consider ineffective, a Special Meeting Request if such Special Meeting Request does not comply with this Section 1.11 or relates to an item of business to be transacted at the Shareholder Requested Special Meeting that either (i) is not a proper subject for shareholder action under the Articles of Incorporation, these Bylaws, the PBCL or other applicable law, or (ii) is expressly reserved for action by the Board of Directors under the Articles of Incorporation, these Bylaws, the PBCL or other applicable law
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| (g) | If none of the shareholders who submitted and signed the Special Meeting Request appears in person at the Shareholder Requested Special Meeting or sends a qualified representative to the Shareholder Requested Special Meeting to present the matters to be presented for consideration that were specified in the Special Meeting Request (unless the Shareholder Requested Special Meeting is held by means of remote communication in which case the requesting shareholder or its qualified representative shall be present by means of remote communication), the Company need not present such matters for a vote at such meeting.
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| (h) | After Special Meeting Requests have been received on a timely basis, in proper form and in accordance with this Section 1.11 from a shareholder or shareholders holding the Requisite Percentage, the Secretary of the Company shall duly call, and determine the place, date and time of, a Shareholder Requested Special Meeting for the purpose or purposes and to conduct the business specified in the Special Meeting Requests received by the Company; provided, however that the Shareholder Requested Special Meeting shall be held within sixty (60) calendar days after the Company receives one or more valid Special Meeting Requests in compliance with this Section 1.11 from shareholders holding at least the Requisite Percentage. If the Secretary of the Company neglects or refuses to fix the date of such Shareholder Requested Special Meeting and give the notice of meeting required by Section 1.4 of these Bylaws, then the shareholder or shareholders making the request for the Shareholder Requested Special Meeting may do so.
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| (i) | The record date for notice and voting for such a Shareholder Requested Special Meeting shall be fixed in accordance with Section 1.6 of these Bylaws.
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| (j) | The Board of Directors shall provide written notice of such Shareholder Requested Special Meeting in accordance with Section 1.4 of these Bylaws. The business brought before any Shareholder Requested Special Meeting by shareholders shall be limited to the matters proposed in the valid Special Meeting Request; provided, however, that nothing herein shall prohibit the Board of Directors
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| | | | | 2022 PROXY STATEMENT | | › | | B-15 |
| from bringing other matters before the shareholders at any Shareholder Requested Special Meeting and including such matters in the notice of the special meeting it provides to shareholders. Notwithstanding any notice of the special meeting sent to shareholders on behalf of the Company, a shareholder must separately comply with this Section 1.11 to conduct business at any Shareholder Requested Special Meeting. If the business proposed by a shareholder to be brought before a Shareholder Requested Special Meeting is the same or relates to business brought by the Company and included in the Company’s notice for such Shareholder Requested Special Meeting, the shareholder is nevertheless still required to comply with this Section 1.11 and deliver its own separate, timely and proper Special Meeting Request to the Secretary of the Company that complies in all respects with the requirements of this Section 1.11.
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| (k) | Except in accordance with this Section 1.11 and except as provided in Section 1.8(b) of these Bylaws with respect to a shareholder’s ability to propose candidates for election as directors at a special meeting of shareholders where the election of directors is a matter specified in the notice of meeting given by or at the direction of the person calling such special meeting in accordance with the provisions of Section 1.2 of these Bylaws, shareholders shall not be permitted to propose business to be brought before a special meeting of shareholders.
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| 1.12 | POSTPONEMENT AND CANCELLATION OF MEETINGS. Any previously scheduled annual or special meeting of the shareholders may be postponed, and any previously scheduled annual or special meeting of the shareholders called by the Board of Directors may be canceled, by resolution of the Board of Directors upon public notice given prior to the time previously scheduled for such meeting of shareholders.
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| 1.13 | ORGANIZATION. Meetings of shareholders shall be presided over by such person as the Board of Directors may designate as Chair of the meeting, or in the absence of such a person, the Chair of the Board of Directors, or if none or in the Chair of the Board of Directors’ absence or inability to act, the Chief Executive Officer, or if none or in the Chief Executive Officer’s absence or inability to act, the President, or if none or in the President’s absence or inability to act, a Vice President, or, if none of the foregoing is present or able to act, by a Chair to be chosen by the holders of a majority of the shares entitled to vote who are present in person or by proxy at the meeting. The Secretary of the Company, or in the Secretary’s absence, an Assistant Secretary, shall act as secretary of every meeting, but if neither the Secretary nor an Assistant Secretary is present, the presiding officer of the meeting shall appoint any person present to act as secretary of the meeting. The Board of Directors shall be entitled to make such rules or regulations for the conduct of meetings of shareholders as it shall deem necessary, appropriate or convenient. Subject to such rules and regulations of the Board of Directors, if any, the Chair of the meeting shall have the right and authority to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such Chair, are necessary, appropriate or convenient for the proper conduct of the meeting, including, without limitation, establishing an agenda or order of business for the meeting, rules and procedures for maintaining order at the meeting and the safety of those present, limitations on participation in the meeting to shareholders of record of the Company, their duly authorized and constituted proxies and such other persons as the Chair shall permit, restrictions on entry to the meeting after the time fixed for the commencement thereof, appointing inspectors of election, limitations on the time allotted to questions or comments by participants and regulation of the opening and closing of the polls for balloting and matters which are to be voted on by ballot.
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ARTICLE II
DIRECTORS
| 2.1 | NUMBER. The Board of Directors shall consist of at least three (3) persons, however, the size of the Board may be set by resolution of the Board from time to time.
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| 2.2 | TERM. Each director shall serve a term expiring at the next Annual Meeting of Shareholders of the Company and until a successor shall be selected and qualified or until the earlier of death, resignation or removal.
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| 2.3 | AGE QUALIFICATION. No person shall be elected or re-elected as a director after reaching seventy-five (75) years of age (the “Qualifying Age”); provided, however, that the Board has the sole discretion, on a case-by-case basis, to not accept the resignation of a director who has reached the Qualifying Age if it determines, on the recommendation of the Nominating and Corporate Governance Committee, that the director’s continued service (on a year-to-year basis) is in the best interests of the Company in order to retain skills on, or to maintain diversity of, the Board. When the term of any director extends beyond the date when
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| | | | | 2022 PROXY STATEMENT | | › | | B-16 |
| the director reaches the Qualifying Age, such director shall tender notice of resignation from the Board of Directors effective at the annual meeting of shareholders next following the director’s seventy-fifth (75th) birthday.
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| 2.4 | ELECTION OF DIRECTORS; MAJORITY VOTING RESIGNATION POLICY.
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| (a) | Directors shall be elected by a plurality of the votes cast (meaning that the director nominees who receive the highest number of shares voted “for” their election are elected).
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| (b) | Each person who is nominated to stand for election as director, whether such nomination is proposed by the Company or a shareholder, shall, as a condition to such nomination, tender an irrevocable resignation in advance of the meeting for the election of directors. Such resignation will be effective if, pursuant to Section 2.4(c) of these Bylaws, (i) the person does not receive a majority of the votes cast at the next meeting of shareholders held for the election of directors that is not a contested meeting of shareholders, and (ii) the Board of Directors accepts the resignation. For purpose of this Section 2.4, a contested meeting of shareholders is any meeting of shareholders for which (i) the Secretary of the Company receives from a shareholder an advance notice indicating that such shareholder intends to propose at least one candidate for election as a director at a meeting of shareholders which notice is in compliance with the advance notice requirements for shareholder nominees for director set forth in Section 1.8 of these Bylaws and (ii) such notice of nomination has not been withdrawn by such shareholder on or before the tenth (10th) calendar day before the Company files its definitive proxy statement for such meeting with the SEC (regardless of whether or not such proxy statement is thereafter revised or supplemented).
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| (c) | If, at an uncontested meeting of shareholders, any nominee for election to the Board of Directors receives a plurality of the votes cast, but does not receive a majority of the votes cast, the Nominating and Corporate Governance Committee will make a recommendation to the Board of Directors on whether to accept the director’s resignation or whether other action should be taken. The Nominating and Corporate Governance Committee in making its recommendation, and the Board in making its decision, may each consider any factors or other information that it considers appropriate and relevant. The director not receiving a majority of the votes cast will not participate in the Committee’s recommendation or the Board of Directors’ decision regarding the tendered resignation. The independent members of the Board of Directors will consider the Nominating and Corporate Governance Committee’s recommendation and publicly disclose (by means of a press release, a filing with the SEC or other broadly disseminated means of communication) the Board of Directors’ decision and the basis for that decision within ninety (90) calendar days from the date of the certification of the final election results. If less than two members of the Nominating and Corporate Governance Committee are elected at a meeting for the election of directors, the independent members of the Board of Directors who were elected shall consider and act upon the tendered resignation. If a director’s resignation is not accepted by the Board, such director will continue to serve until the next annual meeting and until a successor is duly elected, or the earlier of resignation or removal. If a director’s resignation is accepted by the Board, then the Board, in its sole discretion, may fill any resulting vacancy pursuant to the provisions of Section 2.6 of these Bylaws or may decrease the size of the Board pursuant to the provisions of Section 2.1 of these Bylaws. For purposes of this Section 2.4, a majority of the votes cast means that the number of shares voted “for” must exceed the number of shares voted “against” with respect to that director’s election. For the avoidance of doubt, votes cast shall not include abstentions.
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| 2.5 | RESIGNATIONS. Any director may resign at any time upon notice given in writing or by electronic transmission to the Chair of the Board, the Chief Executive Officer or the Secretary of the Company; provided, however, that if such notice is given by electronic transmission, such electronic transmission must either set forth or be submitted with information from which it can be determined that the electronic transmission was authorized by the director. A resignation is effective when the resignation is delivered, unless the resignation specifies a later effective date or an effective date determined upon the occurrence of an event or events. Acceptance of such resignation shall not be necessary to make it effective. Unless otherwise provided in the Articles of Incorporation or these Bylaws, when one or more directors resign from the Board of Directors, effective at a future date, a majority of the directors then in office, including those who have so resigned, shall have power to fill such vacancy or vacancies, the vote thereon to take effect when such resignation or resignations shall become effective.
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| | | | | 2022 PROXY STATEMENT | | › | | B-17 |
| 2.6 | VACANCIES. In the case of any vacancy in the Board of Directors by death, resignation or for any other cause, including an increase in the number of directors, the Board may, by the affirmative vote of a majority of the remaining directors, even though less than a quorum or by the sole remaining director, fill the vacancy by choosing a director to serve until the next Annual Meeting of Shareholders of the Company and until a successor has been selected and qualified or until the earlier of death, resignation or removal.
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| 2.7 | REMOVAL OF DIRECTORS. Any director, or the entire Board of Directors, may be removed from office without assigning any cause by the vote of shareholders, or of the holders of a class or series of shares, entitled to elect directors. In case the Board of Directors or any one or more directors are so removed, new directors may be elected by the shareholders at the same meeting.
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| 2.8 | ANNUAL MEETING. An annual meeting of the Board of Directors shall be held each year after the Annual Meeting of Shareholders of the Company, at such place as the Board of Directors may determine, in its sole discretion, for the purposes of organization, election of officers and the transaction of such other business as shall come before the meeting. No notice of the meeting need be given.
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| 2.9 | REGULAR MEETINGS. Regular meetings of the Board of Directors may be held without notice at such times and at such places as the Board of Directors may determine.
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| 2.10 | SPECIAL MEETINGS. Special meetings of the Board of Directors may be called by the Chair of the Board, the Chief Executive Officer, the President or any two (2) members of the Board of Directors. Notice of every special meeting shall be given to each director not later than the second day immediately preceding the day of such meeting in the case of notice by mail, telegram or courier service, and not later than the day immediately preceding the day of such meeting in the case of notice delivered personally or by telephone, facsimile transmission, email, text messaging or other electronic communication. Such notice shall state the time and place of the meeting, but, except as otherwise provided in these Bylaws, neither the business to be transacted at, nor the purpose of, any special meeting of the Board of Directors need be specified in the notice, or waiver of notice, of such meeting.
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| 2.11 | MEETINGS OF INDEPENDENT DIRECTORS. Meetings of the independent members of the Board of Directors may be held without notice at such times and at such places as the independent members of the Board of Directors may determine. In the absence or disability of the Chair of the Board, the Chair of the Nominating and Corporate Governance Committee shall preside at any such meetings.
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| 2.12 | QUORUM AND ACTION BY UNANIMOUS CONSENT.
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| (a) | Quorum. A majority of the directors in office shall constitute a quorum for the transaction of business but less than a quorum may adjourn from time to time to reconvene at such time and place as they may determine.
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| (b) | Action by Unanimous Consent. Any action required or permitted to be taken at a meeting of the Board of Directors may be taken without a meeting if, prior or subsequent to the action, a consent or consents thereto by all of the directors in office is filed with the Secretary of the Company. For the purposes of this Section 2.12(b), consent may be given by means of a physical written copy or transmitted by facsimile transmission, email or similar electronic communications technology; provided that the means of giving consent shall enable the Company to keep a record of the consents in a manner satisfying the requirements of Section 107 of the Pennsylvania Associations Code.
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| 2.13 | COMPENSATION. Directors shall receive such compensation for their services as shall be fixed by the Board of Directors.
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| 2.14 | COMMITTEES. The Board of Directors may, by resolution adopted by an affirmative vote of the majority of the total number of authorized directors (whether or not there exist any vacancies in previously authorized directorships at the time such resolution is presented to the Board for adoption), designate one or more committees, each committee to consist of two or more of the directors of the Company. The Board may designate one or more directors as alternate members of any Committee, who may replace any absent or disqualified member at any meeting of the committee. Any such committee to the extent provided in such resolution shall have and exercise the authority of the Board of Directors in the management of the business and affairs of the Company.
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| 2.15 | PARTICIPATION IN MEETINGS BY COMMUNICATIONS EQUIPMENT. One or more directors may participate in a meeting of the Board of Directors or a committee of the Board by means of conference telephone or other electronic technology by means of which all persons participating in the meeting can hear each other. Directors so participating shall be deemed present at the meeting.
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| | | | | 2022 PROXY STATEMENT | | › | | B-18 |
| 2.16 | LIABILITY OF DIRECTORS. A director of the Company shall not be personally liable for monetary damages for any action taken, or any failure to take any action, on or after January 27, 1987, unless such director has breached or failed to perform the duties of the office as provided for under Section 1713 of the PBCL and the breach or failure to perform constitutes self-dealing, willful misconduct or recklessness. Any repeal, amendment, or modification of this Section shall be prospective only and shall not increase, but may decrease, the liability of a director with respect to actions or failures to act occurring prior to such change.
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| 2.17 | OFFICERS. The officers of the Company shall be a Chief Executive Officer, a President, one or more Vice Presidents, a Secretary, a Treasurer and such other officers as the Board of Directors may deem advisable. Any two or more offices may be held by the same person.
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| 2.18 | TERM. Each officer shall hold office until a successor is elected or appointed and qualified or until death, resignation or removal by the Board of Directors.
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| 2.19 | AUTHORITY, DUTIES AND COMPENSATION. All officers shall have such authority, perform such duties and receive such compensation as may be provided in the bylaws or as may be determined by the Board of Directors.
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| 2.20 | CHAIR OF THE BOARD. The Chair of the Board shall preside at all meetings of the Board of Directors and shall perform such other duties as may be assigned by the Board of Directors. In the absence or disability of the Chair of the Board, the Chair of the Nominating and Corporate Governance Committee shall have the authority and perform the duties of the Chair of the Board.
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| 2.21 | CHIEF EXECUTIVE OFFICER. The Chief Executive Officer shall be the chief executive officer of the Company and shall preside at all meetings of the shareholders. The Chief Executive Officer shall be responsible for the general management of the business of the Company, subject to the control of the Board of Directors. In the absence or disability of the President, or if that office is vacant, the Chief Executive Officer shall have the authority and perform the duties of the President.
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| 2.22 | CHIEF FINANCIAL OFFICER. The Chief Financial Officer shall keep or cause to be kept the books of account of the Company in a thorough and proper manner and shall render statements of the financial affairs of the Company in such form and as often as required by the Board of Directors or the President. The Chief Financial Officer, subject to the order of the Board of Directors, shall have the custody of all funds and securities of the Company. The Chief Financial Officer shall perform other duties commonly incident to his office and shall also perform such other duties and have such other powers as the Board of Directors or the President shall designate from time to time. The President may direct the Treasurer to assume and perform the duties of the Chief Financial Officer in the absence or disability of the Chief Financial Officer, and the Treasurer shall perform other duties commonly incident to the office and shall also perform such other duties and have such other powers as the Board of Directors or the President shall designate from time to time.
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| 2.23 | PRESIDENT. The President shall perform such duties as may be assigned by the Board of Directors and, in the absence or disability of the Chief Executive Officer, or if that office is vacant, shall have the authority and perform the duties of the Chief Executive Officer.
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| 2.24 | VICE PRESIDENT. In the absence or disability of the Chief Executive Officer and the President, or any other officer or officers, the Vice Presidents in the order designated by the Board of Directors shall have the authority and perform the duties of the Chief Executive Officer, the President or other officer as the case may be. The Vice President, Finance shall be the principal accounting officer and shall keep books recording the business transactions of the Company. The Vice President shall be in charge of the accounts of all of its offices and shall promptly report and properly record in the books of the Company all relevant data relating to the Company’s business.
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| 2.25 | SECRETARY. The Secretary shall give notice of meetings of the shareholders, of the Board of Directors and of any Board Committee, attend all such meetings and record the proceedings thereof. In the absence or disability of the Secretary, an Assistant Secretary or any other person designated by the Board of Directors or the Chief Executive Officer shall have the authority and perform the duties of the Secretary.
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| 2.26 | TREASURER. The Treasurer shall have charge of the securities of the Company and the deposit and disbursement of its funds, subject to the control of the Board of Directors. In the absence or disability of the Treasurer, an Assistant Treasurer or any other person designated by the Board of Directors or the Chief Executive Officer shall have the authority and perform the duties of the Treasurer.
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| | | | | 2022 PROXY STATEMENT | | › | | B-19 |
ARTICLE III
INDEMNIFICATION
| 3.1 | MANDATORY INDEMNIFICATION OF DIRECTORS, OFFICERS AND OTHER PERSONS. The Company shall, except as otherwise provided in Section 3.4 hereof, indemnify any director or officer of the Company or any of its subsidiaries who was or is an “authorized representative” of the Company (which shall mean for the purposes of this Article III, a director or officer of the Company, or a person serving at the request of, for the convenience of, or to represent the interests of, the Company as a director, officer, employee, partner, agent, manager, member, fiduciary, trustee or other representative of another corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise) and who was or is a “party” (which shall include for purposes of this Article III the giving of testimony or similar involvement) or is threatened to be made a party to any “proceeding” (which shall mean for purposes of this Article III any threatened, pending or completed action, suit, appeal, investigation (including any internal investigation), inquiry, hearing, mediation, arbitration, other alternative dispute mechanism or other proceeding of any nature, whether civil, criminal, administrative, regulatory, legislative, investigative or arbitrative, whether formal or informal, and whether brought by or in the right of the Company, its shareholders, the Board of Directors, any duly authorized committee of the Board of Directors, a governmental agency or instrumentality, a self-regulatory organization or otherwise) by reason of the fact that such person was or is an authorized representative of the Company to the fullest extent permitted by the PBCL and other applicable law (as the same exists or may hereafter be amended, but, in the case of any such amendment, only to the extent that such amendment permits the Company to provide broader indemnification rights than said law permitted the Company to provide prior to such amendment), including, without limitation, indemnification against expenses (which shall include for purposes of this Article III attorneys’ fees and disbursements), damages, punitive damages, judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such proceeding unless the act or failure to act giving rise to the claim is finally determined by a court of competent jurisdiction from which there is no further right of appeal to have constituted willful misconduct or recklessness. For the purposes of this Article III, a person’s service to the Company or another enterprise shall be presumed to be “serving at the request of the Company,” unless it is conclusively determined to the contrary by a majority vote of the directors of the Company, excluding, if applicable, such person. With respect to such determination, it shall not be necessary for such person to show any actual or prior request by the Company or its Board of Directors for such service to the Company or such other enterprise. If an authorized representative is not entitled to indemnification in respect of a portion of any liabilities to which such person may be subject, the Company shall nonetheless indemnify such person to the maximum extent for the remaining portion of the liabilities. Notwithstanding the foregoing, the Company shall not indemnify any such authorized representative in connection with a proceeding (or part thereof) initiated by such person unless such proceeding (or part thereof) is brought by the authorized representative due to the failure of the Company to pay indemnification provided under Sections 3.1, 3.2 or 3.3 and the authorized representative is successful in such proceeding.
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| 3.2 | ADVANCEMENT OF EXPENSES. Except as otherwise provided in Section 3.4 hereof, the Company shall pay the expenses (including attorneys’ fees and disbursements) actually and reasonably incurred in defending a proceeding on behalf of any person entitled to indemnification under Section 3.1 of this Article III in advance of the final disposition of such proceeding upon receipt of an undertaking by or on behalf of such person to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the Company as authorized in this Article III and may pay such expenses in advance on behalf of any employee or agent on receipt of a similar undertaking. Such advances shall be paid by the Company within ten (10) calendar days after the receipt by the Company of a statement or statements from the person entitled to indemnification requesting such advance or advances from time to time together with a reasonable accounting of such expenses. The financial ability of any person entitled to indemnification under Section 3.1 of this Article III to repay the Company any amounts advanced for expenses shall not be a prerequisite to the making of an advance and any advancement of expenses of such a person shall not be required to be secured and shall not bear interest. Except as otherwise provided in the PBCL or this Section 3.2, the Company shall not impose on any person entitled to indemnification under Section 3.1 of this Article III additional conditions to the advancement of expenses or require from such person additional undertakings regarding repayment. Advancements of expenses to any person entitled to indemnification under Section 3.1 of this Article III shall include any and all reasonable expenses incurred pursuing an action to enforce this right of advancement, including expenses incurred preparing and forwarding statements to the Company to support the advancements claimed.
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| | | | | 2022 PROXY STATEMENT | | › | | B-20 |
| 3.3 | EMPLOYEE BENEFIT PLANS. For purposes of this Article III, the Company shall be deemed to have requested an officer or director to serve as fiduciary with respect to an employee benefit plan where the performance by such person of duties to the Company also imposes duties on, or otherwise involves services by, such person as a fiduciary with respect to the plan; excise taxes assessed on an authorized representative with respect to any transaction with an employee benefit plan shall be deemed “fines”; and action taken or omitted by such person with respect to an employee benefit plan in the performance of duties for a purpose reasonably believed to be in the interest of the participants and beneficiaries of the plan shall be deemed to be for a purpose which is not opposed to the best interests of the Company.
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| 3.4 | EXCEPTIONS. No indemnification under Sections 3.1 and 3.3 of this Article III or advancement or reimbursement of expenses under Section 3.2 of this Article III shall be provided to a person covered by Sections 3.1 and 3.3 of this Article III hereof: (i) with respect to expenses or the payment of profits arising from the purchase or sale of securities of the Company in violation of Section 16(b) of Exchange Act; (ii) if a final unappealable judgment or award establishes that such director or officer engaged in intentional misconduct or a transaction from which the director or officer derived an improper personal benefit; (iii) for expenses or liabilities of any type whatsoever (including, but not limited to, judgments, fines, and amounts paid in settlement) which have been paid directly to, or for the benefit of, such person by an insurance carrier under a policy of officers’ and directors’ liability insurance whose premiums are paid for by the Company or by an individual or entity other than such director or officer; and (iv) for amounts paid in settlement of any threatened, pending or completed action, suit or proceeding without the written consent of the Company, which written consent shall not be unreasonably withheld. The Board of Directors of the Company is hereby authorized, at any time by resolution, to add to the foregoing list of exceptions from the right of indemnification under Sections 3.1 and 3.3 of this Article III or advancement or reimbursement of expenses under Section 3.2 of this Article III, but any such additional exception shall not apply with respect to any event, act or omission which occurred prior to the date that the Board of Directors in fact adopts such resolution. Any such additional exception may, at any time after its adoption, be amended, supplemented, waived or terminated by further resolution of the Board of Directors of the Company.
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| 3.5 | SECURITY FOR INDEMNIFICATION OBLIGATIONS. To further effect, satisfy or secure the indemnification obligations provided herein or otherwise, the Company may, at its expense, purchase and maintain insurance, obtain a letter of credit, act as self-insurer, create a reserve, trust, escrow, cash collateral or other fund or account, enter into indemnification agreements, pledge or grant a security interest in any assets or properties of the Company, or use any other mechanism or arrangement whatsoever in such amounts, at such costs, and upon such other terms and conditions as the Board of Directors shall deem appropriate.
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| 3.6 | CONTRACT RIGHTS. Without the necessity of entering into an express contract with any person covered by Sections 3.1 and 3.3 of this Article III and entitled to indemnification under Section 3.1 of this Article III, the obligations of the Company to indemnify an indemnified person under Sections 3.1 and 3.3 of this Article III, including the obligation to advance and/or reimburse expenses under Section 3.2 of this Article III, shall be considered a contract right between the Company and such indemnified person pursuant to which the Company and each such person intend to be legally bound and shall be effective to the same extent and as if provided for in a contract between the Company and such indemnified person. Such contract right shall be deemed to vest at the commencement of such indemnified person’s service to or at the request of the Company, and no amendment, modification or repeal of this Article III shall affect, to the detriment of the indemnified person and such indemnified person’s heirs, executors, administrators and estate, such obligations of the Company in connection with a claim based on any act or failure to act occurring before such modification or repeal.
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| 3.7 | RELIANCE UPON PROVISIONS. Each person who shall act as an authorized representative of the Company shall be deemed to be doing so in reliance upon the rights of indemnification and advancement of expenses provided by this Article III.
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| 3.8 | AMENDMENT OR REPEAL. Any repeal, amendment or modification hereof shall be prospective only and shall not limit, but may expand, any rights or obligations in respect of any proceeding whether commenced prior to or after such change to the extent such proceeding pertains to actions or failures to act occurring prior to such change.
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| 3.9 | NON-EXCLUSIVITY OF RIGHTS. The right to indemnification and the advancement of expenses, as authorized by this Article III, shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any applicable law (common law or statutory law), any provision of the Articles of Incorporation or these Bylaws, agreement, insurance policy, vote
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| | | | | 2022 PROXY STATEMENT | | › | | B-21 |
| of shareholders or disinterested directors or otherwise, both as to action in an official capacity and as to action in any other capacity while holding such office or while employed by or acting as agent for the Company. The Company is specifically authorized to enter into an agreement with any of its directors, officers, employees or agents providing for indemnification and advancement of expenses that may change, enhance, qualify or limit any right to indemnification or the advancement of expenses provided by this Article III, to the fullest extent not prohibited by the PBCL or other applicable law.
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| 3.10 | CONTINUATION OF RIGHTS. The rights of indemnification and advancement or reimbursement of expenses provided by, or granted pursuant to, this Article III shall continue as to an officer or director of the Company who has ceased to be an officer or director in respect of matters arising prior to such time, and shall inure to the benefit of the spouses, heirs, executors and administrators of such person.
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| 3.11 | NO IMPUTATION. The knowledge and/or actions, or failure to act, of any officer, director, employee or representative of the Company, another enterprise or any other person shall not be imputed to any person for purposes of determining the right to indemnification or advancement or reimbursement of expenses under this Article III.
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| 3.12 | ENFORCEMENT OF RIGHTS. If a request for indemnification or for the advancement or reimbursement of expenses pursuant to this Article III is not paid in full by the Company within thirty (30) calendar days after a written claim has been received by the Company, together with all supporting information reasonably requested by the Company, the claimant may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim (plus interest at the prime rate announced from time to time by the Company’s primary lending bank) and, if successful in whole or in part, the claimant shall be entitled also to be paid the expenses (including, but not limited to, attorneys’ and investigation fees and costs) of prosecuting such claim. Neither the failure of the Company (including its Board of Directors or independent legal counsel) to have made a determination prior to the commencement of such action that indemnification of or the advancement or reimbursement of expenses to the claimant is proper in the circumstances, nor an actual determination by the Company (including its Board of Directors or independent legal counsel) that the claimant is not entitled to indemnification or to the reimbursement or advancement of expenses, shall be a defense to the action or create a presumption that the claimant is not so entitled.
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ARTICLE IV
STOCK CERTIFICATES AND CORPORATE SEAL
| 4.1 | EXECUTION. Certificates of shares of capital stock of the Company shall be signed by the Chair of the Board, the Chief Executive Officer, the President or a Vice President and by the Secretary, an Assistant Secretary, the Treasurer or an Assistant Treasurer, but where a certificate is signed by a transfer agent or a registrar, the signature of any corporate officer may be facsimile, engraved or printed.
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| 4.2 | SEAL. The Company shall have a corporate seal which shall bear the name of the Company and State and year of its incorporation. The seal shall be in the custody of the Secretary of the Company and may be used by causing it or a facsimile to be impressed or reproduced upon or affixed to any document.
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ARTICLE V
NOTICES
| 5.1 | FORM OF NOTICE. Whenever written notice is required to be given to any person under the provisions of the PBCL, the Articles of Incorporation or these Bylaws, it may be given to a person: (i) by personal delivery, (ii) by facsimile number, email or other electronic communication to a facsimile number or address for email or other electronic communications supplied by such person to the Company for the purpose of notice, or (iii) by sending a copy thereof by first class or express mail, postage prepaid, or by telegram (with messenger service specified), confirmed facsimile transmission or courier service, charges prepaid, to the address (or to the facsimile number) of the person appearing on the books of the Company or, in the case of notice to be given to a director, to the address (or to the facsimile number) supplied by the director to the Company for the purpose of notice. If the notice is sent by mail, telegraph or courier service, it shall be deemed to have been given to the person entitled thereto when deposited in the United States mail or with a telegraph office or courier service for delivery to that person. Notice given by facsimile transmission, email or other electronic communication shall be deemed to have been given to the person entitled thereto when sent. A notice of
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| | | | | 2022 PROXY STATEMENT | | › | | B-22 |
| meeting shall specify the place, day and hour of the meeting and any other information required by any other provision of the PBCL, the Articles of Incorporation or these Bylaws.
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| 5.2 | ADJOURNED SHAREHOLDER MEETINGS. When a meeting of shareholders is adjourned, it shall not be necessary to give any notice of the adjourned meeting or of the business to be transacted at an adjourned meeting, other than by announcement at the meeting at which the adjournment is taken, unless the Board of Directors fixes a new record date for the adjourned meeting, in which event the notice shall be given in accordance with this section.
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| 5.3 | WAIVER OF NOTICE. Any notice required to be given under these Bylaws may be effectively waived by the person entitled thereto by written waiver signed before or after the meeting to which such notice would relate or by attendance at such meeting otherwise than for the purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting was not lawfully called or convened.
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ARTICLE VI
AMENDMENTS
| 6.1 | AMENDMENTS. These Bylaws may be amended or repealed and new bylaws may be adopted by the affirmative vote of a majority of the total number of the authorized members of the Board of Directors (whether or not there exist any vacancies in previously authorized directorships at the time a resolution regarding the foregoing is presented to the Board of Directors for adoption) or by the by the affirmative vote of a majority of the votes cast in person or by proxy at the meeting of shareholders by the holders of shares entitled to vote thereon, as the case may be; provided, however, that new bylaws may not be adopted and these Bylaws may not be amended or repealed in any way that limits indemnification rights, increases the liability of directors or changes the manner or vote required for any such adoption, amendment or repeal, except by the affirmative vote of a majority of the votes cast in person or by proxy at the meeting of shareholders by the holders of shares entitled to vote thereon. In the case of any meeting of shareholders, in order to consider the adoption, amendment or repeal of these Bylaws, written notice shall be given to each shareholder entitled to vote thereat that the purpose, or one of the purposes, of the meeting is to consider the adoption, amendment or repeal of these Bylaws, which notice shall also include, without limitation, the text of any resolution calling for any adoption, amendment or repeal. Notwithstanding the foregoing, any shareholder seeking to bring a proposed amendment to these Bylaws before a meeting of shareholders, must comply with Sections 1.8 and 1.9 of these Bylaws.
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ARTICLE VII
EMERGENCY BYLAWS
| 7.1 | WHEN OPERATIVE. The emergency bylaws provided by the following Sections shall be operative during any emergency resulting from warlike damage or an attack on the United States or any nuclear or atomic disaster, notwithstanding any different provision in the preceding Sections of these Bylaws, in the Articles of Incorporation or in the PBCL. To the extent not inconsistent with these emergency bylaws, the Bylaws provided in the preceding Sections shall remain in effect during such emergency and upon the termination of such emergency the emergency bylaws shall cease to be operative unless and until another such emergency shall occur.
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| 7.2 | MEETINGS. During any such emergency:
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| (a) | Any meeting of the Board of Directors may be called by any director. Whenever any officer of the Company who is not a director has reason to believe that no director is available to participate in a meeting, such officer may call a meeting to be held under the provisions of this Section.
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| (b) | Notice of each meeting called under the provisions of this Section shall be given by the person calling the meeting or at his request by any officer of the Company. The notice shall specify the time and the place of the meeting, which shall be the head office of the Company at the time if feasible and otherwise any other place specified in the notice. Notice need be given only to such of the directors as it may be feasible to reach at the time and may be given by such means as may be feasible at the time, including publication, radio, email or text messaging. If given by mail, messenger, telephone or telegram, the notice shall be addressed to the director at his residence or business address or such other place as the person giving the notice shall deem suitable. In the case of meetings called by an officer who is not a director, notice shall also be given similarly, to the extent feasible, to the persons
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| | | | | 2022 PROXY STATEMENT | | › | | B-23 |
| named on the list referred to in part (c) of this Section. Notice shall be given at least two (2) calendar days before the meeting if feasible in the judgment of the person giving the notice and otherwise the meeting may be held on any shorter notice as deemed suitable.
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| (c) | At any meeting called under the provisions of this Section, the director or directors present shall constitute a quorum for the transaction of business. If no director attends a meeting called by an officer who is not a director and if there are present at least three of the persons named on a numbered list of personnel approved by the Board of Directors before the emergency, those present (but not more than the seven appearing highest in priority on such list) shall be deemed directors for such meeting and shall constitute a quorum for the transaction of business.
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| 7.3 | LINES OF SUCCESSION. The Board of Directors, during as well as before any such emergency, may provide, and from time to time modify, lines of succession in the event that during such an emergency any or all officers or agents of the Company shall for any reason be rendered incapable of discharging their duties.
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| 7.4 | OFFICES. The Board of Directors, during as well as before any such emergency, may, effective in the emergency, change the head office or designate several alternative head offices or regional offices, or authorize the officers so to do.
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| 7.5 | LIABILITY. No officer, director or employee acting in accordance with these emergency bylaws shall be liable except for willful misconduct.
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| 7.6 | REPEAL OR CHANGE. These emergency bylaws shall be subject to repeal or change by further action of the Board of Directors or by action of the shareholders, except that no such repeal or change shall modify the provisions of the next preceding Section with regard to action or inaction prior to the time of such repeal or change.
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ARTICLE VIII
PENNSYLVANIA ACT 36 OF 1990
| 8.1 | NON-APPLICABILITY OF PENNSYLVANIA’S CONTROL-SHARE ACQUISITION STATUTE. Subchapter G of Chapter 25 of the PBCL (relating to certain control-share acquisitions of the Company’s common stock and the voting of such shares by certain controlling shareholders) shall not be applicable to the Company.
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| 8.2 | NON-APPLICABILITY OF PENNSYLVANIA’S DISGORGEMENT STATUTE. Subchapter H of Chapter 25 of the PBCL (relating to disgorgement to the Company of profits made on the sale of its common stock by certain controlling shareholders if the sale occurs within certain periods and under certain circumstances) shall not be applicable to the Company.
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ARTICLE IX
FORUM SELECTION
| 9.1 | EXCLUSIVE FORUM. Unless the Board of Directors adopts a resolution approving the selection of an alternative forum, the exclusive forum shall be the federal District Court for the Middle District of Pennsylvania, or if such federal court does not have jurisdiction, any other federal or state court located within the Commonwealth of Pennsylvania, for the following types of actions: (i) any derivative action or proceeding brought on behalf of the Company, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director or officer of the Company to the Company, (iii) any action asserting a claim against the Company or any director or officer or other employee of the Company arising pursuant to any provision of the PBCL, the Articles of Incorporation or these Bylaws (as each may be amended from time to time), or (iv) any action asserting a claim against the Company or any director or officer or other employee of the Company governed by the internal affairs doctrine.
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As amended , 2022.
| | | | | 2022 PROXY STATEMENT | | › | | B-24 |
GLATFELTER CORPORATION HOLLY BRODESSER
4350 CONGRESS STREET, SUITE 600
CHARLOTTE, NC 28209
Your vote matters - here’s how to vote!
VOTE BY INTERNET - www.proxyvote.com or scan the QR Barcode above
Use the Internet to transmit your voting instructions and for electronic delivery of information.
Vote by 11:59 p.m. Eastern Time on November 10, 2022 for shares held directly and by 11:59 p.m. Eastern Time on November 8, 2022 for shares held in a Plan. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions. Vote by 11:59 p.m. Eastern Time on November 10, 2022 for shares held directly and by 11:59 p.m. Eastern Time on November 8, 2022 for shares held in a Plan. Have your proxy card in hand when you call and then follow the instructions.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
D91491-S53608
KEEP THIS PORTION FOR YOUR RECORD
THIS2024 PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
DETACH AND RETURN THIS PORTION ONLY
GLATFELTER CORPORATION
The Board of Directors recommends a vote FOR Proposals 1, 2, 3, 4, 5 and 6.
1. Proposal to approve amendments to our Articles of Incorporation and Bylaws to implement a majority voting standard for uncontested director elections.
2. Proposal to approve an amendment to our Articles of Incorporation to eliminate cumulative voting in director elections.
3. Proposal to approve an amendment to our Bylaws to allow the Board of Directors of the Company (the “Board” or “Board of Directors”) to determine the number of authorized directors by resolution.
4. Proposal to approve an amendment to our Bylaws to allow our Board to determine the time and place of the annual meeting.
5. Proposal to approve an amendment to our Bylaws to provide for proxy access, which would allow eligible shareholders to include their own nominees for director in the Company’s proxy materials along with the Board’s nominees.
6. Proposal to approve amendments to our Bylaws to clarify our voting standards.
NOTE: If voting by mail, this section must be completed for your vote to be counted. Please sign exactly as name(s) appear(s) hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title.
Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
For Against Abstain
STATEMENT › 85
Glatfelter Corporation
2022 Special Shareholder Meeting Friday, November 11, 2022 at 10:00 a.m. Eastern Time www.virtualshareholdermeeting.com/GLT2022SM
To be admitted to the Meeting Website, you must enter the 16-digit control number found on your proxy card, voting instruction form, or Notice of Special Meeting (“Notice”). You may vote your shares and ask questions during the Special Meeting by following the instructions available on the Meeting Website. We encourage you to access the Meeting Website prior to the start time to familiarize yourself with the virtual platform and ensure you can hear the streaming audio. Online access will be available starting at 9:45 a.m., Eastern Time, on Friday, November 11, 2022.
Important Notice Regarding the Availability of Proxy Materials for the
2022 Special Meeting of Shareholders to be Held Friday, November 11, 2022: Glatfelter Corporation’s Proxy Statement for the 2022 Special Meeting of Shareholders is available at www.glatfelter.com/investors/financials-and-filings/ and www.proxyvote.com.
IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.
D91492-S53608
Proxy — GLATFELTER CORPORATION CHARLOTTE, NORTH CAROLINA
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY FOR THE SPECIAL MEETING OF SHAREHOLDERS TO BE HELD FRIDAY, NOVEMBER 11, 2022 AT 10:00 A.M. EASTERN TIME
The undersigned shareholder of Glatfelter Corporation hereby appoints Kevin M. Fogarty and Lee C. Stewart and each of them, attorneys and proxies, with power of substitution in each of them, to vote and act for and on behalf of the undersigned at the Special Meeting of Shareholders of the Company to be held virtually at www.virtualshareholdermeeting.com/GLT2022SM on Friday, November 11, 2022, and at all adjournments thereof, according to the number of shares which the undersigned would be entitled to vote if then personally present, as indicated hereon and in their discretion, to the extent permitted by applicable law, rule or regulation, upon such other business as may come before the meeting and hereby ratifies and confirms all that said attorneys and proxies may do or cause to be done by virtue hereof.
When properly executed, this proxy will be voted as directed herein. It is agreed that, if no direction is given or directed on the other side of this proxy card, said attorneys and proxies are appointed WITH authority to vote FOR Proposals 1, 2,
3, 4, 5 and 6.
(PLEASE FILL IN, SIGN AND DATE ON THE OTHER SIDE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE) (Continued and to be signed on reverse side)
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