UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Securities Exchange Act of 1934 (Amendment
(Amendment No.)
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☐ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
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☒ | Definitive Proxy Statement |
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Glatfelter Corporation
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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2022 PROXY STATEMENT | 1
NOTICE OF ANNUALSPECIAL MEETING OF SHAREHOLDERS
Time and Date: | November 11, 2022 | |
| 10:00 a.m. Eastern Time | |
Place: | Virtual Meeting | |
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The 2018 Annual2022 Special Meeting of Shareholders (“Annual(the “Special Meeting”) of P. H. Glatfelter CompanyCorporation (“Glatfelter”Glatfelter,” the “Company,” “we,” “us,” or the “Company”“our”), a Pennsylvania corporation, will be held on Thursday, May 3, 2018November 11, 2022 at 9:10:00 a.m., Eastern Time, to consider and act on:on the following proposals:
1. | To approve amendments to our Articles of Incorporation and Bylaws to implement a majority voting standard for uncontested director elections; |
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4. | To approve an amendment to our Bylaws to allow our Board to determine the time and place of the annual meeting; |
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Only holders of record of the Company’s common stock at the close of business on March 9, 2018September 26, 2022 (the “Record Date”), will be entitled to notice of, and to vote at, the AnnualSpecial Meeting.
It is important that your shares be represented, and voted atwe encourage you to vote your shares in advance of the AnnualSpecial Meeting. Whether you plan to attend the Annual Meeting or not, pleasePlease vote your shares by telephone at 1-800-652-VOTE (8683),1-800-690-6903, online at http://www.investorvote.com/GLTwww.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 U.S.)United States). If you choose, you may still vote in person atonline during the AnnualSpecial Meeting, even if you previously voted by telephone, internet, or mail.
Because the health and safety of our shareholders, directors, employees, and other attendees remain our most important concerns, we are holding the Special Meeting exclusively in a virtual only format via live webcast on the internet, also known as a “virtual meeting.” There will not be a physical location for the Special Meeting, and you will not be able to attend the Special Meeting in person.
To participate in the Special Meeting, you must log onto www.virtualshareholdermeeting.com/GLT2022SM (the “Meeting Website”) and enter the 16-digit control number found on your proxy card or voting instruction form, as applicable. Therefore, it is very important that you retain your proxy card or voting instruction form, as applicable, if you wish to virtually attend the Special Meeting. 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 meeting platform and ensure you can hear the streaming audio. Online access will be available starting at 9:45 a.m. Eastern Time on November 11, 2022. Whether or not you plan to virtually attend the Special Meeting, we urge you to vote and submit your proxy in advance of the Special Meeting by one of the methods described above.
Kent K. Matsumoto,
Jill L. Urey, Secretary
March 29, 2018October 7, 2022
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE 2022 SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON NOVEMBER 11, 2022:
Glatfelter Corporation’s proxy statement for the 2022 Special Meeting of Shareholders is available via the Internet at www.glatfelter.com/investors/financials-and-filings/.
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2022 PROXY
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2022 PROXY STATEMENT |
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This Proxy Summary highlights information explained more fully elsewhere in this proxy statement and westatement. We ask that you read the entire proxy statement before voting.
Special Meeting Information
Time and Date: |
| November 11, 2022 10:00 a.m. at Eastern Time |
Place: | Virtual Meeting | |
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Record Date: |
| September 26, 2022 |
Voting: | Shareholders of Glatfelter as of the Record Date are entitled to vote. Each share of Glatfelter common stock is entitled to one vote for each |
Proposals Requiring Your Vote
YouThe Company is calling the Special Meeting to allow shareholders of the Company an opportunity to vote on the below listed proposals (each a “Proposal” and collectively, the “Proposals”). Your vote is very important to us and our business. Please cast your vote immediately on all proposals to ensure your shares are represented.
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1 | PROPOSAL 1 — Election of Directors | 7 | |
| The nine director nominees possess the necessary qualifications and range of experience and expertise to provide effective oversight and advice to Management. | FOR |
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2 | PROPOSAL 2 — Ratification of Appointment of Deloitte & Touche LLP | 11 | |
| The Board, at the recommendation of the Audit Committee, approved the retention of Deloitte & Touche LLP as the Company’s independent auditor for fiscal year 2018. Shareholders are being asked to ratify the Committee’s selection of the independent auditor. | FOR |
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3 | PROPOSAL 3 — Advisory Approval of Named Executive Officer Compensation | 12 | |
| The Company’s executive compensation program is designed to create a direct linkage between shareholder interests and Management, with incentives specifically tailored to the achievement of financial, operational and stock performance goals. 2017 incentive payouts and 2018 compensation decisions reflect feedback received from our shareholders through comprehensive engagement efforts. | FOR |
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Core Values: Who We Are and What We Stand For
Our Core Values guide and capture the essence of the Company’s identity, establishing pillars upon which to build the business for the long-term. Our Core Values are:
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PROXY SUMMARY
Our directors have a diversity of experience that spans a broad range of industries in the public and not-for-profit sectors. They bring a wide variety of skills, qualifications and viewpoints that strengthen the Board’s ability to carry out its oversight role on behalf of our shareholders. Glatfelter—and our shareholders—clearly benefit from their individual and collective business acumen, sound judgment, thoughtful decision-making and careful guidance.
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Approval of an amendment to the Articles of Incorporation of the Company to eliminate cumulative voting in director elections. | FOR |
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| PROPOSAL 3 — Fix Board Size by Board Resolution | 8 | ||||||||||
| Approval of | FOR |
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| PROPOSAL 4 — Elimination of Designated Annual Meeting Date and Time | 9 | ||||||||||
Approval of an amendment to our Bylaws to allow our Board of Directors to determine the time and place of the annual meeting. | FOR |
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| PROPOSAL 5 — Proxy Access | 10 | ||||||||||
| Approval of | FOR |
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| PROPOSAL 6 — Shareholder Approval – Voting Standards | 11 | ||||||||||
| Approval of | FOR |
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Corporate ResponsibilityCAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING INFORMATION
Glatfelter’s commitmentAny statements included in this proxy statement that pertain to sustainability is onefuture financial and business matters are “forward-looking statements” within the meaning of our most important missions because the three interdependent aspectssafe harbor provisions of sustainability—environmental, economicthe United States Private Securities Litigation Reform Act of 1995. The Company uses words such as “anticipates,” “believes,” “expects,” “future,” “intends,” “plans,” “targets,” and social—work togethersimilar expressions to define our organization and ensure a long-standing and successful future. We take seriously our role as a corporate citizen and weidentify forward-looking statements. Any such statements are proud to share our 2017 sustainability program and objectives.based on the
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PROXY SUMMARY
Glatfelter is a global manufacturer of engineered materials and specialty papers. We operate under three distinct business units: Composite Fibers (“CFBU”), Advanced Airlaid Materials (“AMBU”), and Specialty Papers (“SPBU”). Our growth strategy is centered on continually expanding our engineered materials business, which includes CFBU and AMBU. These two businesses serve key, growing global markets such as single-serve coffee and tea, wallcover, hygiene and wipes products. Our engineered materials businesses have grown meaningfully over the last ten years and now represent half of our net sales and three-quarters of adjusted earnings before interest, taxes, depreciation and amortization (“EBITDA”). Conversely, our Specialty Papers business operates in a more challenging market environment with sizeable exposure to uncoated free sheet products that are in secular decline.
Our strategy focuses on:
We are committed to growing in our key markets and maintaining our leadership positions, while making appropriate investments to support our customers’ needs. For example, we invested approximately $85 million to build a new advanced airlaid facility in Fort Smith, Arkansas, to provide needed capacity to serve the growing North American market for wipes products. Production at the new facility began in early 2018 and will provide approximately 22,000 tons of additional capacity. This investment increases our total global airlaid materials capacity to approximately 129,000 tons.
Our investment in a global business system transformation will unify our processes and systems to improve our cost structure, facilitate global growth, empower employees, enable compliance and improve the customer experience. AMBU successfully completed implementation of new manufacturing and business systems in North America during the fourth quarter of 2017 with implementation at its European site to follow in 2018.
We are also dedicated to maintaining our leading market positions, expanding product margins and generating strong free cash flows. In 2017, we continued to deliver superior customer service, improve product quality, generate new business and develop new products. We implemented significant cost optimization initiatives in both CFBU and SPBU and sharpened our focus on strategic investments and continuous improvement initiatives.
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PROXY SUMMARY
2017 Financial Performance Highlights
We entered 2017 expecting CFBU to return to growth after more difficult conditions impacted its results in 2015 and 2016. In addition, we expected AMBU to continue its steady growth. Notwithstanding our overall expectations for the engineered materials business, we expected all of our business units to face headwinds from increased competition in key markets, pressures on selling prices, and increased input costs. The Specialty Papers business unit, in particular, was expected to experience a challenging environment due to the secular decline in its markets, supply/demand imbalance and low industry operating rates.
CFBU and AMBU reported 15% and 14% growth in operating profits, respectively. The performance of these businesses was driven by higher shipping volumes, strong operating performance, and cost optimization and continuous improvement initiatives. However, Specialty Papers’ profitability declined much more than we expected with selling prices reaching eleven year lows due to declining industry operating rates. The weakness of Specialty Papers more than offset meaningful growth in the engineered materials businesses. On a consolidated basis adjusted earningswere $51.5 million in 2017 compared with $60.7 million in 2016.
Cash flowfrom operations for 2017 and 2016 totaled $104.3 million and $116.1 million, respectively. The decline was primarily due to expenses associated with strategic initiatives. During 2017, we substantially completed our investment to expand our airlaid capacity which will support growth in 2018 and beyond. The following charts present financial highlights for the periods indicated. EBITDA by business unit represents operating profit as presented in our 2017 Annual Report on Form 10-K before depreciation and amortization. A reconciliation of adjusted earnings per share to the nearest GAAP measure is incorporated by reference to Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2016 and 2017 Annual Reports on Form 10-K.
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PROXY SUMMARY
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 (Integrity, Financial Discipline, Mutual Respect, Customer Focus, and Environmental and Social Responsibility). The objectives of the Company’s executive compensation programs are to attract, retain, motivate, and reward executives crucial to achieving the Company’s strategic plan and creating long-term shareholder value. Our compensation programs are organized around three principles:
Total compensation for our executives consists of:
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GovernanceCompany’s current expectations and Best Practices
are subject to numerous risks, uncertainties, and other unpredictable or uncontrollable factors that could cause future results to differ materially from those expressed in the forward-looking statements. The Compensation Committee, comprised entirely of independent directors, regularly monitorsrisks, uncertainties, and implements best practicesother unpredictable or uncontrollable factors are described in executive compensation and governance. The following practices demonstrate our commitment to strong governance within our executive compensation programs:
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2018 PROXY STATEMENT › 5
PROXY SUMMARY
Shareholder Engagement Highlights
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Proposal 1: Election of Directors
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Name | Age | Director Since | Occupation | Audit | Comp | Fin | Nom & Gov | |||
Bruce Brown* | 59 | 2014 | Retired Chief Technology Officer, Procter & Gamble | 2 |
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Kathleen A. Dahlberg* | 65 | 2001 | CEO, G.G.I., Inc. | -- |
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Nicholas DeBenedictis* | 72 | 1995 | Retired Chairman & CEO, Aqua America | 3 |
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Kevin M. Fogarty* (L) | 52 | 2012 | President, CEO, Kraton Corporation, Inc. | 1 |
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J. Robert Hall* | 65 | 2002 | CEO, Ole Smoky Distillery | -- |
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Richard C. Ill* | 74 | 2004 | Retired Chairman & CEO, Triumph Group, Inc. | 1 |
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Ronald J. Naples* | 72 | 2000 | Chairman Emeritus, Quaker Chemical Corp. | 1 |
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Dante C. Parrini | 53 | 2010 | Chairman, CEO, P. H. Glatfelter Co. | 1 |
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Lee C. Stewart* | 69 | 2002 | Private Financial Consultant | -- |
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The Board recommends a vote “FOR” each of the director nominees.
2018 PROXY STATEMENT › 7
PROPOSAL 1: ELECTION OF DIRECTORS
Additional Information about Director Nominees
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PROPOSAL 1: ELECTION OF DIRECTORS
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2018 PROXY STATEMENT › 9
PROPOSAL 1: ELECTION OF DIRECTORS
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Proposal 2: Ratification of Independent Registered Public Accounting Firm
The Audit Committee of the Board has appointed Deloitte & Touche LLP (“Deloitte”) as the Company’s independent registered public accounting firm forfilings with the fiscal year 2018. Deloitte auditedU.S. Securities and Exchange Commission (“SEC”) in the Risk Factors section and under the heading “Forward-Looking Statements” in the Company’s consolidated financial statementsAnnual Report on Form 10-K for the fiscal year ended December 31, 2017.
Although shareholder ratification is2021, and its subsequent filings with the SEC, which are available on the SEC’s website at www.sec.gov. In light of these risks, uncertainties, and other factors, the forward-looking matters discussed in this proxy statement may not occur and readers are cautioned not to place undue reliance on these forward-looking statements. The forward-looking statements speak only as of the date of this proxy statement and the Company undertakes no obligation, and does not intend, to update these forward-looking statements to reflect events or circumstances occurring after the date of this proxy statement, except as may be required by our organizational documents or applicable law,law.
Websites
Website addresses referenced in this proxy statement are provided for convenience only, and the Board believes that it iscontent on the referenced websites does not constitute a sound corporate governance practice to seek shareholder ratificationpart of the appointment of Deloitte. In the event the shareholders fail to ratify the appointment, the Audit Committee will reconsider its selection.this proxy statement.
A Deloitte representative is expected to attend the Annual Meeting and will be available to respond to appropriate shareholder questions.
What did the Company pay its independent registered public accounting firm in 2016 and 2017?
For the years ended December 31, 2016, and December 31, 2017, fees paid to Deloitte by the Company were as follows:
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Audit Fees(1) | $ | 2,766,209 |
| $ | 3,002,418 |
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Audit Related Fees(2) |
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Tax Fees(3) |
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All Other Fees(4) |
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Total Fees | $ | 3,446,131 |
| $ | 3,552,409 |
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2022 PROXY STATEMENT | › | 2 |
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All of Deloitte’s 2017 services for the Company were permissible under applicable laws and regulations. The Audit Committee’s Audit and Non-Audit Services Pre-Approval Policy (“Pre-Approval Policy”) provides for the pre-approval of audit and non-audit services performed by Deloitte. Under the Pre-Approval Policy, the Audit Committee must pre-approve specific services, including fee levels, to be performed by the independent registered public accounting firm in a designated category (audit, audit-related, tax services and all other services). For fiscal year 2017, 100% of Audit-Related Fees, Tax Fees and All Other Fees were approved by the Audit Committee. The Audit Committee may delegate this authority in writing to one or more of its members, and in such case the member or members to whom such authority is delegated must report their decisions to the Audit Committee at its next scheduled meeting.
The Board recommendsand Management are dedicated to effective corporate governance. In an effort to comply with a vote “FOR” ratificationframework of duties and requirements established by Pennsylvania statute, government regulations and court decisions, the Board and Management periodically review and assess the Company’s Bylaws and Articles (collectively, the “Organizational Documents”) . Following the SEC’s adoption of new “universal proxy” rules, the Board and Management recently completed one such review of the appointment of Deloitte asOrganizational Documents and determined that amendments were required to ensure the Company’s independent registered public accounting firm.governance materials were beneficial to shareholders and consistent with the market.
To ensure the Organizational Documents contain provisions that are beneficial to the Board’s governing function and the interests of the shareholders, the Board and Management conferred with shareholders regarding potential amendments to the Organizational Documents. After discussion, the Board, Management and shareholders expressed interest in adopting changes to the Organizational Document, which are intended to modernize such documents and bring them in line with the overall market, increase the efficiency of the Board by eliminating unnecessary restraints on their abilities to conduct their duties, and improve the ability of shareholders to have an impact on the Company’s governance.
In an effort to make the necessary amendments, in August 2022, the Board and Management approved revisions to the Organizational Documents that, among other things, increased the information required to be provided to shareholders in connection with proposals to be brought at a shareholder meeting. The prior changes did not result in any diminution of shareholder rights that would require a shareholder vote; however, the remaining changes that are outlined herein would require an affirmative vote from the shareholders.
The Board and Management believe the contemplated amendments, which, include updates to various voting standards and resignation provisions, the elimination of cumulative voting and certain restrictions on the Board’s ability to determine the date and time of shareholder meetings and the size of the Board, proxy access for shareholders, as well as general clean-up, would modernize the Organizational Documents and ensure the Board is well equipped to continue to efficiently and effectively govern the Company for the benefit of the shareholders.
2022 PROXY STATEMENT | › | 3 |
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Proposal 3: Advisory Approval of Named Executive Officer Compensation (“Say-on-Pay” Vote)1: Majority Voting
Executive compensationThe Company is an important topic for our shareholders. At the core of our executive compensation philosophy is the belief that compensation should reflect performance; be fair, competitive and reasonable; and be determined in a manner consistent with the Company’s long-term strategy, competitive industry practice, sound corporate governance principles and shareholder interests. We believe our compensation program is strongly aligned with the long-term interests of our shareholders. We urge our shareholders to read the Compensation Discussion and Analysis (“CD&A”) section of this proxy statement for additional details on the Company’s compensation philosophy and objectives and the 2017 compensation of the NEOs.
Pursuant to Section 14A of the Securities Exchange Act of 1934 (as amended, the “Exchange Act”), we are asking shareholders to vote onconsider two separate but related changes to the following resolution:way in which nominees are elected as directors. Currently, directors are elected under a plurality voting standard, pursuant to which nominees who receive the most votes (up to the number of directors to be elected in such election) are elected as directors. In addition, shareholders are currently permitted to cumulate their votes in the elections of directors, which means that a shareholder has the power to give one nominee a number of votes equal to the number of directors to be elected, multiplied by the number of shares held by that shareholder, or to distribute those votes among two or more nominees.
RESOLVED, The Board has recommended that the compensation paidshareholders approve amendments to the Company’s Named Executive Officers, as disclosed pursuant to Item 402Articles of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion is hereby APPROVED.
As an advisory vote, the results on this proposal are non-binding. Nevertheless, the BoardIncorporation (“Articles”) and the Compensation Committee valueCompany’s Bylaws (“Bylaws”) relating to director elections. The proposed amendments presented in this Proposal 1, which are contingent upon the opinionsapproval of ourProposal 2, will implement a majority voting standard for the election of directors in uncontested director elections. In contested elections, directors would continue to be elected by a plurality vote of shareholders. The proposed amendment presented in Proposal 2 below, which is not contingent upon the approval of Proposal 1, will eliminate cumulating voting in all director elections.
The Board has determined that taken together, these proposed amendments represent a balanced and integrated approach designed to provide all of the Company’s shareholders a meaningful vote in the election of directors. Together, the amendments provide shareholders an effective way in which to exercise their voting rights in director elections and to ensure that the directors continue to represent all of the Company’s shareholders. In addition, the amendments reduce the possibility that a holder of far less than a majority of the outstanding shares could elect a director even when a significant majority of shares are voted against the election of the director. Because the amendments are designed to work together, the implementation of Proposal 1 (the proposal to amend the Articles and Bylaws to implement majority voting in uncontested director elections) is conditioned upon shareholder approval of Proposal 2 (the proposal to amend the Articles to eliminate cumulative voting in director elections). Accordingly, unless Proposal 2 is approved, Proposal 1 will considernot be implemented regardless of the outcome of the vote when making future compensation decisionsthereon.
The Company is asking shareholders to approve amendments to the Articles and Bylaws of the Company that would implement majority voting in uncontested elections of directors. The text of a new Article VII of the Articles and amendments to Section 2.4 of the Bylaws implementing majority voting are included in Appendix A and Appendix B, respectively. On September 20, 2022, the Board approved the new Article VII of the Articles and the amendments to Section 2.4 of the Bylaws subject to approval by the shareholders of the Company, and further subject to shareholder approval of new Article VI of the Articles, which is presented in Proposal 2 of this proxy statement. In other words, if approved by shareholders, effectiveness of the proposed amendments under this Proposal 1 is further conditioned on shareholder approval of Proposal 2 relating to the elimination of cumulative voting in director elections.
The Board believes that a change to a majority vote standard in uncontested elections is appropriate at this time and is consistent with the Board’s desire to maintain alignment of shareholder interests and Board accountability. Under the Company’s current plurality voting standard, a director nominee in a director election can be elected or re-elected with as little as a single affirmative vote, even while a substantial majority of the votes cast are “withheld” from that director nominee. Even if 99% of the shares “withhold” authority to vote for our NEOs.a candidate or all the candidates, a 1% “for” vote results in the candidate’s election or re-election to the Board. The Board believes that the adoption of the proposed majority voting standard will give shareholders a greater voice in determining the composition of the Board by giving effect to shareholder votes “against” a director candidate, and by requiring a majority of the votes cast be voted “for” a candidate in order for such candidate to obtain or retain a seat on the Board. Furthermore, the adoption of a majority voting standard is intended to reinforce the Board’s belief that it is accountable to, and should represent the interests of all, of the Company’s shareholders.
In the case of “contested director elections,” however, the Board believes that a plurality voting standard should continue to apply. An election shall be contested if, as of the record date for a meeting of shareholders at which directors are to be elected, the Secretary of the Company determines that the number of nominees exceeds the number of directors to be elected at such meeting. In a contested election where there are two or more candidates for a single director position, if majority voting were utilized, there is an increased likelihood that no candidate would receive a majority vote, resulting in a failed election.
The description of the proposed amendments to the Articles and Bylaws of the Company presented in this Proposal 1 is only a summary of the amendments and is qualified in its entirety by reference to the actual text of the proposed
2022 PROXY STATEMENT | › | 4 |
PROPOSAL 1: MAJORITY VOTING |
amendments to the Articles and Bylaws, which are set forth in Appendix A and Appendix B, respectively. If the Company’s shareholders approve the amendments to the Articles and Bylaws of the Company proposed by this Proposal 1, and also approve the amendment to the Articles of the Company proposed by Proposal 2, the amendments to the Company’s Articles will become effective upon filing with the Pennsylvania Department of State, which is expected to occur promptly following the Special Meeting, and the amendments to the Bylaws would become effective immediately following the Special Meeting.
Additionally, under Pennsylvania law, if an incumbent director fails to receive a sufficient number of votes for re-election at the end of his or her term, such director continues to serve on the Board until his or her successor is elected and qualified or until earlier resignation or removal (known as the “holdover rule”). In light of the holdover rule and to give appropriate effect to the majority voting standard, if Proposals 1 and 2 are approved, the Board will amend its Corporate Governance Principles to adopt a resignation policy that will require each director to submit an advance, contingent, irrevocable resignation that the Board may accept if shareholders do not re-elect that director. In that situation, our Nominating and Corporate Governance Committee would make a recommendation to the Board about whether to accept or reject the resignation, or whether to take the recommendation of any other committees and publicly disclose its decision and the rationale behind it. In addition, if Proposals 1 and 2 are adopted, the Board will further amend its Bylaws to provide an additional requirement for shareholders wishing to nominate a person for election to our Board at a meeting of our shareholders pursuant to the advance notice requirements set forth in our Bylaws. Specifically, the new requirement would provide that the shareholder’s notice would need to contain a statement as to whether the nominee, if elected, intends to comply with all applicable corporate governance and other policies and guidelines of the Company applicable to directors and in effect during such person’s term in office as a director, including, without limitation, the director resignation provisions set forth in the Company’s Corporate Governance Guidelines.
Further, in connection with these amendments, the Board has adopted a policy providingprocedural change to the Bylaws via the addition of the new Section 2.5, to provide for annual say-on-pay advisory votes.specific mechanisms by which directors may submit their resignations to the Chair of the Board. Set forth below is the text of the new Section 2.5 giving effect to these amendments:
“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 be 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 the power to fill such vacancy or vacancies, the vote thereon to take effect when such resignation or resignations shall become effective.”
Required Vote: The next say-on-pay advisoryaffirmative 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 amendments to the Company’s Articles of Incorporation and Bylaws to implement a majority voting standard for uncontested director elections. Abstentions and shares not in attendance and not voted at the Special Meeting will be held at our 2019 Annual Meeting.not count as a vote cast on this proposal but will have the same effect as a vote “Against” the proposal.
The Board recommends a vote “FOR” the non-binding resolution approving the compensation paidamendments to the NEOs, as disclosed pursuantArticles of Incorporation and Bylaws of the Company to Item 402implement a majority voting standard in uncontested director elections.
2022 PROXY STATEMENT | › | 5 |
Cumulative Voting
Under this Proposal 2, the Company is asking shareholders to approve an amendment to the Articles of the Company that would eliminate cumulative voting in director elections. The full text of a new Article VI of the Articles eliminating cumulative voting in director elections is included in Appendix A hereto. On September 20, 2022, the Board conditionally approved the new Article VI subject to the approval by the Company’s shareholders.
For a Pennsylvania corporation, such as the Company, unless otherwise provided in such company’s articles of incorporation, Pennsylvania law provides for cumulative voting by shareholders. As the Company’s Articles do not currently provide otherwise, the Company’s shareholders currently have the right to cumulate their votes, which provides shareholders the power to give one nominee a number of votes equal to the number of directors to be elected, multiplied by the number of shares held by that shareholder, or to distribute those votes among two or more nominees. The effect of cumulative voting is potentially to allow a shareholder that holds significantly less than a majority of the outstanding voting power to have the power to elect one or more directors.
In deciding to propose a majority voting standard under Proposal 1, the Board considered how a majority voting standard in uncontested director elections might affect the Company’s current cumulative voting procedures for director elections. The Board concluded that it would be very difficult to apply both majority voting and cumulative voting in a director election. In particular, concurrently applying majority voting and cumulative voting standards could raise difficult corporate governance issues and unintended consequences, including the potential for multiple vacancies on the Board if a large shareholder were to cumulate votes in a director election. Many investors, advisory firms and corporate governance experts have previously recognized significant compatibility issues between majority voting and cumulative voting in director elections.
Moreover, the Board believes that cumulative voting is philosophically incompatible with the rationale for adopting a majority voting standard. As noted above, majority voting for directors seeks to empower a majority of a company’s shareholders to determine who should serve as a director, with that majority comprised of large and small shareholders alike. In contrast, cumulative voting allows a shareholder to cumulate shares to elect a director, even if that director was not supported by a majority of our shareholders. The Board believes that each director should represent the interests of all shareholders, rather than the interests of a majority shareholder or special constituency.
The Board has determined that implementing both majority voting in uncontested director elections and eliminating cumulative voting in all director elections is consistent with the Board’s desire to maintain alignment of shareholder interests and Board accountability. The Board further believes that these governance improvements are in the best interests of the Company and its shareholders. As previously noted, the Board has conditioned the effectiveness of Proposal 1 to implement majority voting in uncontested director elections on shareholder approval of this Proposal 2 to eliminate cumulative voting in all director elections. The Board has made this determination due to the potential negative consequences of adopting a majority voting standard without eliminating cumulative voting. As the Board does not believe there will be similar negative consequences if Proposal 2 is implemented without the approval of Proposal 1, it has not conditioned the effectiveness of Proposal 2 on shareholder approval of Proposal 1. While the Board believes that the approval of both Proposals 1 and 2 will optimize the company’s ability to provide shareholders with a meaningful voice in director elections, even if shareholders only approve the elimination of cumulative voting in director elections proposed in this Proposal 2, but not the majority voting standard presented in Proposal 1, the Board believes that the elimination of cumulative voting in director elections will still move the Company’s governance practices towards empowering the broadest group of the Company’s shareholders as it relates to director elections. Therefore, the Company intends to implement the elimination of cumulative voting even if shareholders do not approve the majority voting standard proposed in Proposal 1, which provides the added benefit of making it easier for the Company to implement a majority voting standard in the future.
The Board’s recommendation to eliminate cumulative voting in director elections is not part of a plan by the Company’s management to adopt anti-takeover governance measures and it is not a response by the Company to any specific effort by a shareholder to accumulate larger holdings of the Company’s common stock.
By eliminating cumulative voting, our shareholders would gain the protections of a “one share, one vote” framework in director elections. In addition, shareholders would prevent 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
Our Board believes that each director should represent the interests of all shareholders rather than potentially only the interests of a limited constituency. Our Board has determined that it is in the best interests of the Company and its
2022 PROXY STATEMENT | › | 6 |
|
PROPOSAL 2: ELIMINATION OF CUMULATIVE VOTING |
shareholders to eliminate cumulative voting in all director elections as cumulative voting increases the chances that a holder of even a small minority of our shares could take disruptive actions in opposition to the wishes of the holders of a majority of the shares voting, including by electing directors that represent their special interests as opposed to the interests of the majority of our shareholders.
This description of the proposed amendment to the Company’s Articles presented in this Proposal 2 is only a summary of the amendment and is qualified in its entirety by reference to the actual text of the proposed amendment to the Articles, which is set forth Appendix A hereto. If approved, the amendment to the Company’s Articles to eliminate cumulative voting in director elections will be effective upon filing with the Pennsylvania Department of State, which is expected to occur promptly following the Special Meeting. Additionally, provided Proposal 2 is approved, the Company shall make some renumbering amendments to the Articles, as described in Appendix A hereto. Your approval of Proposal 2 shall constitute approval of such renumbering amendments.
Required Vote: 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 Board recommends a vote “FOR” the amendment of the Articles of Incorporation of the Company to eliminate cumulative voting in the election of directors.
2022 PROXY STATEMENT | › | 7 |
Proposal 3: Fix Board Size by Resolution
Subject to shareholder approval, on September 20, 2022, our Board approved an amendment to our Bylaws to allow our Board to determine the number of authorized directors.
The Company is asking shareholders to consider a change to the way in which the size of the Board is determined. Currently, the size of the Board is fixed in the Bylaws and requires the Board to amend the Bylaws to adjust the size of the Board. This leads to increased cost and time demands for management due to the need to post and file the Bylaw amendments any time there is a change in the Board size. As such, the Board has recommended that shareholders approve amendments to the Company’s Bylaws relating to the size of the Board which would allow the size of the Board to be fixed by the directors by resolution. The proposed amendments presented in this Proposal 3 are not contingent upon the approval of any other Proposal.
Set forth below is the text of revised Section 2.1 of the Bylaws after giving effect to these amendments:
“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.”
The Board’s recommendation to amend our Bylaws to allow the Board to set its size by resolution is not part of a plan by the Company’s management to adopt anti-takeover governance measures and is not a response by the Company to any specific effort by a shareholder to accumulate larger holdings of the Company’s common stock.
Our Board of Directors believes that the foregoing proposed amendment to the Bylaws is in our best interests because it will provide us with flexibility to determine the size of our Board of Directors which will allow us to properly accommodate our needs in the future and facilitate attracting additional candidates for the Board in a timely manner. The ability of a board of directors to determine its own size is a common governance practice among public companies in the U.S. that allows boards to adapt rapidly to changing circumstances that companies face. Moreover, the current Bylaws require the Board to amend the Bylaws each time it believes it is in the best interest of the Company to increase or decrease the size of the Board. These amendments will enable the Board of Directors to meet changing circumstances without seeking an amendment to the Bylaws in each instance.
If Proposal 3 is approved by the shareholders, the then current Board of Directors will be able to set or change the number of directors, based on a resolution duly approved by the Board of Directors.
Required Vote: 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 Board recommends a vote “FOR” the amendment of the Bylaws to allow the Board to set its size by resolution.
2022 PROXY STATEMENT | › | 8 |
Proposal 4: Elimination of Designated Annual Meeting Date and Time
Subject to shareholder approval, on September 20, 2022, our Board of Directors approved an amendment to our Bylaws to allow our Board of Directors to determine the time and place of the annual meeting of shareholders.
The Company is asking shareholders to consider a change to eliminate the provision that provides a default date and time for the annual meeting, if the Board has not designated another date and time. Currently, the default date and time for the Company’s annual meeting is the first Thursday of May at 9:00 a.m. The proposed amendments would remove the date requirement and provide the Board with more flexibility to hold its annual meeting. The proposed amendments presented in this Proposal 4 are not contingent upon the approval of any other Proposal.
Set forth below is the text of revised Section 1.1 of the Bylaws after giving effect to these amendments:
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 to these Bylaws to an annual meeting or annual meetings also shall be deemed to refer to any special meeting(s) in lieu thereof.
Our Board of Directors believes that the foregoing proposed amendments to the Bylaws are in our best interests because they will provide us with flexibility to determine the date and time of our annual meeting which will allow us to properly accommodate our needs in the future.
If Proposal 4 is approved by the shareholders, then there will no longer be a default annual meeting date and time, and the determination of the annual meeting date and time will be made by the Board or the Chair of the Board, as applicable, in accordance with the Company’s Bylaws.
Required Vote: 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 Board recommends a vote “FOR” the amendment of the Bylaws to eliminate the designated annual meeting date and time.
2022 PROXY STATEMENT | › | 9 |
Subject to shareholder approval, on September 20, 2022, our Board of Directors approved 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.
The Company is asking shareholders to consider a proposal to amend our Bylaws to provide for proxy access. The proposed amendment presented in this Proposal 5 is not contingent upon the approval of any other Proposal.
The amendment would permit any eligible shareholder, or group of no more than twenty (20) eligible shareholders, that complies with certain existing informational disclosure requirements in our Bylaws, to include a director nominee in the Company’s proxy statement for its annual meeting. Such informational disclosure requirements include, but are not limited to, the name and address of the shareholder, beneficial owner, if any, and of their respective affiliates or associates or others acting in concert therewith, 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 therewith, derivative securities which are directly or indirectly owned by such shareholder, such beneficial owner and their respective affiliates or associates or others acting in concert therewith, and certain other agreements and interests of the shareholder.
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 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, consistent with the Company’s existing policies with respect to shareholder nominations of directors.
In addition to satisfying the foregoing requirements under our Bylaws, to comply with the universal proxy rules (once effective), shareholders who intend to solicit proxies in support of Director nominees other than the Company’s nominees must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act.
Set forth below is the text of revised Section 1.9(c) of the Bylaws after giving effect to this amendment:
The Company shall include in its proxy statement for an annual meeting for 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.
Our Board of Directors believes that the foregoing proposed amendments to the Bylaws reflect the Board’s continuing review of our corporate governance practices, and a commitment to responding to the views of the Company’s shareholders and to provide them with a voice in corporate governance matters.
Required Vote: The affirmative vote of a majority of the votes 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 provide for proxy access. 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 Board recommends a vote “FOR” the amendment of the Bylaws to provide for proxy access.
2022 PROXY STATEMENT | › | 10 |
Proposal 6: Shareholder Approval - Voting Standards
Subject to shareholder approval, on September 20, 2022, our Board of Directors approved amendments to our Bylaws to clarify our voting standards. The proposed amendments presented in this Proposal 6 are not contingent upon the approval of any other Proposal.
Currently, our Bylaws provide that any action taken by shareholders shall be decided by the vote of a majority of the shares entitled to be cast at a meeting. The amendments would provide that for any action to be taken by shareholders other than the election of directors, the affirmative vote of a majority of the votes entitled to be cast in person or by proxy at the meeting of shareholders by the holders entitled to vote thereon will be required to approve such action. The amendments also provide that each shareholder will be entitled to one vote per share on each matter and consistent with Section 1757(a) of the Pennsylvania Business Corporation Law of 1988, as amended, that matters will be approved by the affirmative vote of a majority of the votes cast in person or by proxy at the meeting of shareholders.
Set forth below is the text of revised Section 1.1(c) of the Bylaws after giving effect to these amendments:
(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 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. |
(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. |
Further, in connection with these amendments, the Board has adopted changes to Section 6.1 of the Bylaws to conform the provision relating to amendments of the Bylaws to the revisions made to Section 1.1(c) with respect to majority voting standards. Set forth below is the text of revised Section 6.1 giving effect to these 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 proposal is presented to the Board of Directors for adoption) or 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.
Our Board of Directors believes that the foregoing proposed amendments to the Bylaws are consistent with the letter and spirit of Pennsylvania corporation law and provide a clearer and more standardized set of voting standards than our Bylaws currently do.
Required Vote: 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 amendments to the Company’s Bylaws to provide for majority voting standards. 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 Board recommends a vote “FOR” the amendment of the Bylaws to provide for majority voting standards.
2022 PROXY STATEMENT | › | 11 |
To the best of the Company’s knowledge, the following table sets forth information regarding ownership of the Company’s outstanding common stock as of March 9, 2018,the Record Date (except as otherwise noted) by: (1) each person who is known by the Company to own beneficially more than 5% of the common stock of the Company; (2) each director, director nominee and NEO;named executive officer (“NEO”); and (3) all directors, director nominees and executive officers as a group. Except as otherwise indicated and subject to applicable community property laws, each owner has sole voting and investment powers for the securities listed. The number of shares beneficially owned by each person is determined under the rules of the Securities and Exchange Commission (“SEC”),SEC, and the information is not necessarily indicative of beneficial ownership for any other purpose. Under SEC rules, all shares to which a person has the right to acquire beneficial ownership within 60 days are considered beneficially owned by that person.
Security Ownership of Certain Beneficial Owners and Management
Name of Beneficial Owner | Shares Beneficially Owned(1) | Total Number of Shares Owned(1) | % of Class | |||||
BlackRock, Inc. |
| 5,486,251 |
|
| 5,486,251(2) |
| 12.60% |
|
The Vanguard Group, Inc. |
| 4,230,261 |
|
| 4,230,261(3) |
| 9.70% |
|
Dimensional Fund Advisors LP |
| 3,673,451 |
|
| 3,673,451(4) |
| 8.43% |
|
Fuller & Thaler Asset Management, Inc. |
| 3,079,602 |
|
| 3,079,602(5) |
| 6.90% |
|
Victory Capital Management Inc. |
| 2,435,214 |
|
| 2,435,214(6) |
| 5.59% |
|
Name of Beneficial Owner | Position | Directly Owned | Indirectly Owned | Options to Acquire Stock(7) | Total Number of Shares Owned | % of Class |
| ||||||||||||
Dante C. Parrini | Chairman of the Board & Chief Executive Officer |
| 146,652 |
|
| 7,083(8) |
|
|
| 227,872 |
|
|
| 381,607 |
|
| * |
| |
John P. Jacunski | Executive V. P. & Chief Financial Officer |
| 60,994 |
|
| 3,514(9) |
|
|
| 117,246 |
|
|
| 181,754 |
|
| * |
| |
Martin Rapp | Senior V.P. & Business Unit President, Composite Fibers |
| 53,408 |
|
|
| — |
|
|
| 14,434 |
|
|
| 67,842 |
|
| * |
|
Nicholas DeBenedictis | Director |
| 57,935 |
|
|
| — |
|
|
| — |
|
|
| 57,935 |
|
| * |
|
Kathleen A. Dahlberg | Director |
| 45,283 |
|
|
| — |
|
|
| — |
|
|
| 45,283 |
|
| * |
|
Ronald J. Naples | Director |
| 12,385 |
|
| 30,864(10) |
|
|
| — |
|
|
| 43,249 |
|
| * |
| |
J. Robert Hall | Director |
| 42,033 |
|
|
| — |
|
|
| — |
|
|
| 42,033 |
|
| * |
|
Richard C. Ill | Director |
| 40,963 |
|
|
| — |
|
|
| — |
|
|
| 40,963 |
|
| * |
|
Christopher W. Astley | Senior V.P. & Business Unit President, Advanced Airlaid Materials |
| 10,374 |
|
| 1,009(11) |
|
|
| 29,365 |
|
|
| 40,748 |
|
| * |
| |
Lee C. Stewart | Director |
| 40,283 |
|
|
| — |
|
|
| — |
|
|
| 40,283 |
|
| * |
|
Timothy R. Hess | Senior V.P. & Business Unit President, Specialty Papers |
| 9,365 |
|
| 386(12) |
|
|
| 21,173 |
|
|
| 30,924 |
|
| * |
| |
Kevin M. Fogarty | Director |
| 12,585 |
|
|
| — |
|
|
| — |
|
|
| 12,585 |
|
| * |
|
Bruce Brown | Director |
| 2,429 |
|
|
| — |
|
|
| — |
|
|
| 2,429 |
|
| * |
|
All directors and executive officers as a group (17 individuals) |
| 592,714 |
|
|
| 48,664 |
|
|
| 470,717 |
|
|
| 1,112,095 |
|
| 2.55% |
|
Name of Beneficial Owner |
| Shares Beneficially Owned(1) | % of Class | |||||
BlackRock, Inc.(2) | 7,197,179 | 16.1% | ||||||
The Vanguard Group, Inc.(3) | 4,853,566 | 10.8% | ||||||
Dimensional Fund Advisors LP(4) | 3,359,027 | 7.5% | ||||||
Segall Bryant & Hamill, LLC(5) | 3,278,506 | 7.3% | ||||||
Carlson Capital, L.P.(6) | 2,260,000 | 5.1% | ||||||
Name of Beneficial Owner | Position | Total Number of Shares Owned(7) | % of Class | |||||
Kevin M. Fogarty | Director, Non-Executive Chair of the Board | 108,125 | * | |||||
J. Robert Hall | Director | 107,573 | * | |||||
Kathleen A. Dahlberg | Director | 90,823 | * | |||||
Lee C. Stewart | Director | 85,823 | * | |||||
Bruce Brown | Director | 51,719 | * | |||||
Christopher W. Astley | Senior Vice President & Chief Commercial Officer | 45,382 | * | |||||
Darrel Hackett | Director | 36,702 | * | |||||
Wolfgang Laures | Senior Vice President, Integrated Global Supply Chain and IT | 23,000 | * | |||||
Eileen L. Beck | Vice President, Global Human Resources and Administration | 22,793 | * | |||||
Ramesh Shettigar | Senior Vice President, Chief Financial Officer & Treasurer | 18,610 | * | |||||
Marie T. Gallagher | Director | 17,632 | * | |||||
Thomas Fahnemann | Director, President and Chief Executive Officer | 13,000 | * | |||||
All directors and executive officers as a group (14 individuals) | 702,407 | 1.6% | ||||||
Dante C. Parrini(8) | Former Chairman of the Board & Chief Executive Officer | 461,975 | 1.0% | |||||
Samuel L. Hillard(9) | Former Senior Vice President & Chief Financial Officer | 56,423 | * |
* | indicates ownership of < 1% |
(1) | For purposes of the table, shares of common stock are considered beneficially owned by a person if such person has, or shares, voting or investment power for such stock. As a result, more than one person may beneficially own the same security and, in some cases, the same shares are listed opposite more than one name in the table. The table includes, in some cases, shares beneficially held by spouses or minor children, as to which beneficial ownership is disclaimed. The address of each director, director nominee and NEO of the Company is c/o |
2018 PROXY STATEMENT › 13
OWNERSHIP OF COMPANY STOCK
2022 PROXY STATEMENT | › | 12 |
OWNERSHIP OF COMPANY STOCK |
BlackRock Investment Management, LLC; BlackRock Investment Management (UK) Limited; BlackRock Asset Management Canada |
(3) | Pursuant to |
|
|
|
|
| Pursuant to |
(5) | Pursuant to a Schedule 13G filed on August 4, 2022, consists of shares beneficially owned, as of December 31, 2021, by Segall Bryant & Hamill, LLC, an investment advisor with sole voting power and sole dispositive power over 2,688,894 shares and 3,278,506 shares, respectively, and shared voting power and shared dispositive power over 0 shares. The address of Segall Bryant & Hamill, LLC is 540 W. Madison Street, Suite 1900, Chicago, IL 60661. |
(6) | Pursuant to Amendment No. 2 to Schedule 13G filed on February 25, 2022, consists of shares beneficially owned, as of February 24, 2022, by Carlson Capital, |
(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 | — |
2022 PROXY STATEMENT | › | 13 |
OWNERSHIP OF COMPANY STOCK |
| Represents the gross number of shares of common stock that would be issued upon exercise of vested stock-only stock appreciation rights (“SOSARs”) on the Record Date. As of the Record Date, |
|
|
|
|
|
|
|
|
|
|
|
OWNERSHIP OF COMPANY STOCK
Equity Compensation Plan Information
The following table provides certain information as of December 31, 2017, 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)(4) | |||||||||
Equity compensation plans approved by security holders |
| 3,491,232 |
|
| $ | 17.87 |
|
|
| 2,188,572 |
|
|
Equity compensation plans not approved by security holders |
| — |
|
|
| — |
|
|
| — |
|
|
Total |
| 3,491,232 |
|
| $ | 17.87 |
|
|
| 2,188,572 |
|
|
|
|
|
|
|
|
|
|
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires the Company’s directors and executive officers and persons who own more than ten percent (10%) of a registered class of the Company’s equity securities (“10% Holders”) to file reports of holdings and transactions in the Company’s common stock with the SEC and the New York Stock Exchange (“NYSE”). Based on the
Company’s review of such reports (and amendments thereto), the Company believes that in 2017 its directors, executive officers and 10% Holders filed all required reports of holdings and transactions in the Company’s common stock on a timely basis.
2018 PROXY STATEMENT › 15
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 set forth in full on the Company’s website at www.glatfelter.com/about_us/corporate_governance/principles. The Company’s website (www.glatfelter.com) includes a Corporate Governance page containing, among other information, the Code of Business Conduct, a list of the directors and executive officers of the Company, the charters of each of
the Committees of the Board, the Company’s Code of Business Ethics for the CEO and Senior Financial Officers and other related information. Copies of these materials are available, in print at no charge, upon request to the Secretary of the Company at 96 South George Street, Suite 520, York, PA 17401-1434.
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 the CEO and Senior Financial Officers by posting such information on its website.
Board Composition and Leadership
The Board currently consists of nine members. Each year, the Board elects one of its members to serve as Chair. Under the Board’s governance structure, the Chair:
presides at all meetings of the Board, other than executive sessions;
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 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 Chair who has wide-ranging, in-depth knowledge of the Company’s business operations and the Company’s industry and who can best execute the Company’s strategic plan. Based on his extensive experience and knowledge of the Company’s operations, industry, competitive challenges and opportunities, the Board has determined that Dante C. Parrini is the director
best qualified to serve in the role of Chair. The Board therefore nominated Mr. Parrini in February 2018 as Chair, subject to his re-election as a director at the Annual Meeting.
The Board has also determined that when the same person serves as both Chair and CEO, the interests of the Company and the shareholders are best served by appointment of an independent Lead Director. In February 2018, the Nominating and Corporate Governance (“NCG”) Committee recommended and the independent directors approved Kevin M. Fogarty to continue as the independent Lead Director, effective on the date of the 2018 Annual Meeting, subject to his re-election as a director at the Annual Meeting. The Lead Director presides over the executive sessions of the Board and coordinates and develops the agenda for those sessions. The Lead Director communicates to the Chair and CEO regarding the discussions at executive sessions as appropriate. In the absence or disability of the Chair, the Lead Director assumes the authority of and performs the duties of the Chair, as provided in Section 2.18 of the Company’s by-laws, including presiding at any Board meeting at which the Chair is not in attendance.
The Corporate Governance Principles and the Company’s policies and procedures provide for an empowered, independent Board and the full involvement of the independent members of the Board in the Board’s operations and decision making.
In the Company’s Corporate Governance Principles, the Board has adopted the NYSE standards 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 nominee for director has an affirmative duty to disclose to the NCG Committee relationships between and among that director (or an immediate family member), the Company, and/or Management. The Board has determined the following directors are independent and have no material relationship with the Company: Ms. Dahlberg and Messrs. Brown, DeBenedictis, Fogarty, Hall, Ill, Naples and Stewart. The Board has determined Mr. Parrini, as the Company’s CEO, is not an independent director as defined under the NYSE listing standards and the Company’s Corporate Governance Principles.
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CORPORATE GOVERNANCE AND BOARD OF DIRECTORS
The NCG Committee reviews all director nominations submitted to the Company, including individuals recommended by shareholders, directors or members of Management. 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, availability to serve on the Board, knowledge, experience, skills, expertise, wisdom, integrity, business acumen and understanding of the Company’s business environment.
In evaluating director candidates, the NCG Committee considers a wide variety of qualifications, attributes and other factors and recognizes that a diversity of viewpoints and practical experiences can enhance the effectiveness of the Board. Accordingly, as part of its evaluation of each director candidate, the NCG Committee takes into account how that candidate’s background, experience, qualifications, attributes and skills may complement, supplement or duplicate those of other prospective candidates.
The NCG Committee reviews the qualifications of each incumbent director, including the director’s understanding of the Company’s businesses and the environment in which the Company operates, attendance and participation at 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 majority voting policy.
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.
We will report any material change to this procedure in a quarterly or annual filing with the SEC. In addition, we will make any changes to this procedure available promptly by posting that information on the Corporate Governance section of our website at http://www.glatfelter.com/about_us/ corporate_governance/default.aspx.
Based on the process described above, the NCG Committee recommended, and the Board approved to nominate, each of the incumbent directors for re-election at the Annual Meeting. These decisions were based on the individual experience, qualifications, attributes and skills of each candidate, including as described in the skills matrix on page 2. The NCG Committee and the Board assessed these factors in light of the Company’s businesses, which provide diverse lines of engineered materials and specialty papers.
Resignation and Majority Voting Policy
Director Nominee Irrevocable Resignation
Each person who is nominated to stand for election as director must, 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 the Company’s by-laws, (a) the person does not receive a majority vote at the next meeting for the election of directors, or (b) in the case of a nominee who is an incumbent director, the Board accepts the resignation.
Majority Voting
Contested Election. In an election of directors, where the Board determines that the number of nominees exceeds the number of directors to be elected, the directors shall be elected by a plurality of the votes cast.
Uncontested Election. If in an election of directors in which the number of nominees does not exceed the number of directors to be elected, any nominee who is not an incumbent director and receives a plurality of the votes cast but does not receive a majority of the votes cast, the nominee’s resignation will be automatically accepted. If the nominee is an incumbent director
and receives a plurality but not majority of the votes cast, the NCG Committee will make a recommendation to the Board on whether to accept the director’s resignation or whether other action should be taken. The incumbent director not receiving a majority of the votes cast will not participate in the NCG Committee’s recommendation or the Board’s decision regarding the tendered resignation. The independent members of the Board will consider the NCG Committee’s recommendation and publicly disclose the Board’s decision and the basis for that decision within 90 days from the date of the certification of the final election results.
A director whose resignation is not accepted by the Board will continue to serve until the next annual meeting at which he or she is up for election and until his or her successor is duly elected, or until his or her earlier resignation or removal. If a director’s resignation is accepted by the Board, or if a nominee for director who is not an incumbent director is deemed to have been elected and to have automatically resigned, then the Board, in its sole discretion, may fill any resulting vacancy pursuant to the Company’s by-laws, or may amend the Company’s by-laws to decrease the size of the Board.
2018 PROXY STATEMENT › 17
CORPORATE GOVERNANCE AND BOARD OF DIRECTORS
The Board held nine meetings during 2017. The standing committees established by the Board held a total of 20 meetings in 2017. Each incumbent director attended at least 89% of the total number of Board and Committee meetings on which he or she served in 2017. Independent directors meet in regularly scheduled executive sessions (without Management), presided by the Lead Director.
Committees of the Board of Directors
Our Board has four standing committees: Audit, Compensation, Finance, and Nominating and Corporate Governance. The Board determined that effective in May 2018, the Finance Committee will be dissolved and its duties assumed by the Board and other Board Committees. Each committee has its own Charter, which is available, at no charge, from the Secretary or on the Company’s website at http://www.glatfelter.com/about_us/
corporate_governance/committees.aspx.
The Board determined that all members of each of the Audit, Compensation, and NCG Committees are independent as required under the current listing standards of the NYSE and the SEC’s applicable rules and regulations.
The following chart provides a summary of each committee’s duties and responsibilities.
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CORPORATE GOVERNANCE AND BOARD OF DIRECTORS
We believe that our shareholders are best served by a Board that is well versed in subject matter relevant to board service and thoroughly comprehends the role and responsibilities of an effective Board in the oversight and management of the Company. We feel it is appropriate for our directors to have access to educational programs on an ongoing basis to assist them in discharging their duties as directors. In 2017, the Company was a member of the NYSE Corporate Board Member
Board Leadership Program until November. Since November 2017, the Company has been a member of the National Association of 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 continuing education programs for incumbent directors.
The Board performs its oversight role using several different levels of review. For its reviews of the Company’s business unit operations and corporate functions, the Board reviews and considers the primary risks associated with those units and functions. The Board also reviews risks associated with the Company’s strategic plan at an annual strategic planning session and periodically throughout the year as part of its consideration of the Company’s strategy.
Each Committee also oversees the management of Company risks falling within the Committee’s areas of responsibility. In
performing this oversight function, each Committee has full access to Management as well as the ability to engage advisors. At each Board meeting, the Chair of each Committee reports to the Board on the Committee’s oversight activities.
The Company continues to manage its enterprise risks through a variety of policies, programs and internal control functions and processes designed to identify the primary risks and protect the Company’s operations and reputation while ensuring legal compliance.
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2018 PROXY STATEMENT › 19
CORPORATE GOVERNANCE AND BOARD OF DIRECTORS
Payments to Directors in 2017 |
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Name(1) | Fees Earned or Paid in Cash ($)(2) | Stock Awards ($)(3) | All Other Compensation ($)(4) | Total ($) |
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Bruce Brown | $ | 79,000 |
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| $ | 114,993 |
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| $ | 5,174 |
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| $ | 199,167 |
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Kathleen A. Dahlberg |
| 80,500 |
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| 114,993 |
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| 5,115 |
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| 200,608 |
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Nicholas DeBenedictis |
| 89,000 |
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| 114,993 |
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| 5,115 |
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| 209,108 |
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Kevin M. Fogarty(5) |
| 97,500 |
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| 114,993 |
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| 5,115 |
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| 217,608 |
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J. Robert Hall |
| 87,500 |
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| 114,993 |
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| 5,115 |
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| 207,608 |
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Richard C. Ill |
| 100,500 |
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| 114,993 |
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| 5,115 |
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| 220,608 |
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Ronald J. Naples |
| 79,000 |
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| 114,993 |
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| 5,115 |
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| 199,108 |
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Lee C. Stewart |
| 94,000 |
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| 114,993 |
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| 5,115 |
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| 214,108 |
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Non-employee directors receive compensation for their service that is designed to compensate them fairly for the time, effort and accountability required of a Board member and align their interests with our stockholders. In making its recommendation to the Board on independent director compensation, the Compensation Committee considers peer and general industry data, including an analysis of director compensation provided by Meridian Compensation Partners LLC, independent compensation consultant.
Cash Compensation
In 2017 each non-employee director received an annual retainer fee of $70,000, paid in cash. In addition to the annual retainer, non-employee directors were paid in cash $1,500 for each Committee meeting they attended in excess of eight committee meetings per year. The director serving as Chair of the Audit Committee was paid an additional $20,000 in cash for his service; the director serving as Chair of the Compensation Committee was paid an additional $15,000 in cash for his service; the directors serving as Chair of the Finance Committee and the NCG Committee each received an additional $10,000 in cash for their service. The Lead Director received an additional $20,000 for his service in that capacity. All accrued, but unpaid, director cash compensation payments are made twice annually, on May 1 and November 1.
Equity Compensation
In 2017 each non-employee director received an annual RSU award valued at $115,000 on the grant date. Such awards vest 100%, all restrictions lapse and the shares are paid out on the first anniversary of the grant date. During the one-year vesting
period, quarterly dividends accrue in the form of additional RSUs (but are not paid unless the awards vest). RSUs granted to directors will immediately vest upon a change in control. In the event of the death or disability of the director, all unvested RSUs will become immediately vested, and the restrictions will lapse.
Deferred Compensation
Pursuant to the Company’s Deferred Compensation Plan for Directors, every year each director may elect to defer 50%, 75% or 100% of his or her annual retainer for serving on the Board, but any fees paid to a director for attending meetings of any Committee or for serving as a Chair may not be deferred. No deferral elections were made in 2017.
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 5X the annual Board retainer of $70,000. Directly held shares and unvested RSUs count toward attainment of the guideline.
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Sustainability: The Glatfelter Way
Glatfelter enhances everyday life for millions of people around the world through the products we make, the manner in which we conduct our business and the value that we generate for all stakeholders. "Sustainability" means striking the appropriate balance between our environmental responsibilities, financial performance, and social commitments. Only through continually achieving this balance can we truly be sustainable.
Every day, Glatfelter PEOPLE bring this sustainability mindset to the workplace and the communities we call home. Most of our facilities are located in small communities where our actions make a lasting impact. As an employer, we understand the
integral role we play in these communities because of the taxes we pay, the jobs we create that sustain families, and the philanthropic endeavors we support. We actively encourage our 4,200 employees to be involved in their communities and the activities important to them.
For 153 years we have taken seriously our role as a responsible corporate citizen. The confidence and trust our customers, employees, and communities have placed in us must be consistently earned over time through our performance and commitment to building a better tomorrow.
Environmental Responsibility
Looking at our products’ lifecycles, incorporating recycled content and creating products that conserve resources and improve everyday life are some of the ways we protect the environment. Air emission methods, forestry management, water discharge practices and production processes are all thoughtfully examined. Reducing waste and increasing our use of environmentally-friendly raw materials and renewable fibers, as well as renewable biomass fuels, help reduce our environmental footprint.
In 2017 we celebrated the completion of our largest environmental protection endeavor to date: a $113 million upgrade to the boiler systems in Spring Grove, Pennsylvania and Chillicothe, Ohio from coal to natural gas. In the past, the Company used readily available, affordable coal to power manufacturing operations at these two locations.
Improvements were also made to air emission control systems. The improvements are expected to reduce sulfur dioxide emissions by 90% and greenhouse gasses by 50 – 60%.
Similarly, our airlaid facilities have committed to a zero-waste program, one that has reduced landfill waste by 67% since its inception by reducing, reusing and recycling. Reducing waste production and using waste beneficially allows us to continuously lessen our environmental impact.
Conservation and innovation are necessary to sustain the Earth’s natural resources, which is why we are working to create value and develop sustainable, global solutions.
Economic Sustainability
Since 1864 Glatfelter has been a secure and profitable investment for the communities in which we operate, our skilled and dedicated employees, the countless suppliers who rely on us to help keep their small businesses in operation, and our investors, who provide us the opportunity to grow stronger and return value.
We have built a business model around high-value niche markets using speed, flexibility, innovation, solid operational performance and customer intimacy. This model has enabled us to build strong customer relationships and enhance shareholder value. It has also positioned us to reinvest in our business to develop new world-class products.
In December 2017 Glatfelter’s new state-of-the-art manufacturing facility in Fort Smith, Arkansas, produced its first airlaid roll, marking a major milestone in becoming the world’s
largest producer of airlaid material and cementing our position as a leader in the personal care market.
Glatfelter Fort Smith is the Company’s fifth North American manufacturing operation and first U.S.-based operation for AMBU. Locating in Fort Smith puts us in closer proximity to key suppliers and customers, and positions the facility close to highly efficient transportation routes across the southern United States. The new location also allows the Company to tap into the area’s high-quality workforce, from which over 60 new Glatfelter PEOPLE were recruited during the year.
With a strong balance sheet and investments in new products, Glatfelter is strategically positioned for continual growth and to become the global supplier of choice in the markets we serve.
2018 PROXY STATEMENT › 21
CORPORATE RESPONSIBILITY
From a well-established safety management system to ongoing training efforts and charitable giving programs, Glatfelter encourages a work environment that is safe, promotes healthy living and gives back to the community.
Globally, Glatfelter completed 2017 with a total case incident rate (“TCIR”) of 1.27. Half of all our facilities have safety rankings among the industry’s top 25% or better. With every Injury Free day that passes we get closer to earning world-class safety performance.
Concern and caring for current and future generations is a critical part of sustainability. By investing in employee education through U.S.-based tuition reimbursement and European-based apprenticeship programs, Glatfelter is helping to strengthen communities in the regions in which we operate by living our Core Values and providing opportunities to others.
The ability to develop highly skilled workers is a key competitive advantage, and one that our leaders in Gernsbach, Germany leverage through a proven apprenticeship program. Apprentices alternate for three years between a vocational education classroom and the Gernsbach facility, receiving real-world experience to become proficient as paper technology engineers, industrial clerks (office workers), electrical technicians, and industrial mechanics, careers that depend on internship-trained workers. A similar apprenticeship program was implemented in 2017 for our United Kingdom manufacturing operations.
Nearly all apprentices complete their on-the-job training and 92% go on to become loyal employees. In fact, more than 40% of Gernsbach’s 650 employees are former apprentices. Gernsbach’s training and apprenticeship programs are just one example of Glatfelter’s dedication to developing a world-class workforce with the technical know-how and commitment to customer service that customers have come to rely on for more than 150 years.
Through philanthropy and volunteerism, we impact many communities—and many countries—in positive ways, helping to ensure the sustainability of our business, employees, customers, and fellow world residents. Volunteer services
embrace many areas of the community, including the arts, education, economic development and the environment.
In 2017, our Ohio Operations employees continued their successful partnership with the local Tiffin Elementary School. Teams of Glatfelter PEOPLE visited the school on Friday mornings to greet the children as they started their day, providing encouragement and helping with homework. They also helped 5th and 6th graders with their science fair projects, and promoted literacy by providing children’s books printed on Glatfelter paper. Volunteers also cheered on students during the school’s annual field day. For this partnership, we were awarded the Community Partner of the Year award by the Ohio School Board Administration.
Our facility in Gatineau, Quebec, Canada sponsored the building of a new maternity ward in the local hospital. In Ober-Schmitten, Germany, Glatfelter PEOPLE participated in an annual challenge run for charity, while the Falkenhagen, Germany facility cheered on special athletes with disabilities during a yearly sporting event.
Glatfelter PEOPLE from our Pennsylvania Operations taught financial literacy with Junior Achievement in local classrooms, raised money for the local United Way, and joined Corporate team members in providing time and talent to local nonprofit boards.
Partnering with the York, Pennsylvania-based water company and health system, we underwrote a Summer Reading Program for more than 10,000 local children. Glatfelter PEOPLE also participated in the annual Leukemia and Lymphoma Society’s “Light the Night” event and showcased their talents in a singing competition to benefit the arts.
In the Philippines, we facilitate an abaca sustainability initiative aimed at improving people’s lives. Since its inception, the program has offered agricultural education, training and certification coordination for hundreds of local farmers, and it has established and supported a women’s handicraft group, generating income for many families in the area.
Together, Glatfelter PEOPLE are contributing to the betterment of the communities in which we operate and live around the world.
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Compensation Discussion and Analysis
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Vested SOSARS | |||||
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| 498,312 | ||||
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| 108,138 | ||||
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| 24,553 | ||||
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| N/A | ||||
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| N/A |
This Compensation Discussion and Analysis (“CD&A”) describes the Company’s executive compensation philosophy and programs, the 2017 compensation decisions made by the Compensation Committee and the factors influencing their decisions including feedback received from shareholders throughout 2017. The CD&A focuses on the compensation of the following 2017 named executive officers (“NEOs”):
Dante C. Parrini, Chairman of the Board and Chief Executive Officer (“CEO”)
John P. Jacunski, Executive Vice President (“EVP”) and Chief Financial Officer (“CFO”)*
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• Timothy R. Hess, SVP and Business Unit President, Specialty Papers (“SPBU”)
Martin Rapp, SVP and Business Unit President, Composite Fibers (“CFBU”)
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SAY-ON-PAY VOTE AND SHAREHOLDER ENGAGEMENT
An advisory shareholder vote on the Company’s executive compensation practices (“Say-on-Pay”) was held at the 2017 Annual Meeting of Shareholders, with 63.5% of the shares voting in favor of the Company’s NEO compensation, well below Glatfelter’s historical average outcomes in excess of 90%. In response, we engaged in extensive discussions with shareholders to solicit feedback on our executive compensation programs and discuss opportunities for improvement. The outreach was conducted by the Compensation Committee chair, the EVP & CFO and the Vice President (“VP”) of Human Resources. From April to November members of the team reached out to firms representing approximately 60% of our shareholder ownership to discuss specific governance and compensation matters to ensure our strategies were in alignment with shareholder expectations. Based on the resulting feedback from the investor meetings the following themes emerged:
Perceived misalignment between CEO pay and the company’s 3-year total shareholder return;
Increased 2016 annual incentive payout opportunities compared to 2015 while 2016 financial results were below prior year actuals; and
A long-term equity plan that does not include a relative total shareholder return (“TSR”) metric.
2018 PROXY STATEMENT › 23
EXECUTIVE COMPENSATION
In response to the expected challenging business conditions during 2017 and shareholder feedback at multiple checkpoints, our Compensation Committee approved certain changes for 2017 and 2018 compensation programs.
Action – Total Compensation
Prior to receiving the 2017 Say-on-Pay outcome the Compensation Committee made decisions to freeze target compensation for executives due to the challenging business conditions expected during the fiscal year 2017.
Base salaries for the Named Executive Officers were not increased in 2017 except for Mr. Hess who received a promotional increase for his role as SVP & President of SPBU.
All short-term and long-term target incentive opportunities in 2017 were frozen and unchanged from 2016 levels except for Mr. Hess whose targets were increased based on his promotion.
As additional context, the total compensation from the summary compensation table for Messrs. Parrini, Jacunski and Hess includes legacy pension values that fluctuate year-over-year based partly on actuarial assumptions.
Action - Short-term Incentives (Management Incentive Plan)
The Compensation Committee and the Board exercised downward discretion and reduced the corporate component of the NEO’s 2017 payouts by -12% to reflect the Company’s lower year-over-year performance when compared to 2016 and to align executive pay with our 2017 business results, thus reinforcing the Company’s commitment to pay for performance. As a result of the discretionary adjustment, the change in pension value for Mr. Parrini was also negatively impacted, resulting in a reduction of $77,000 in pension value as reported in the summary compensation table.
For 2018, the Compensation Committee approved short-term incentive compensation targets based on Company growth and financial improvement from year to year, tied directly to the 2018 operating plan. The rigorous targets took into consideration the expected market conditions from each business unit, including gains in key markets, recently developed new products, the completion of major capital investments in AMBU and SPBU, and cost optimization initiatives in CFBU and SPBU, with an overall focus on adjusting to pressures in specialty paper markets and gains in engineered products.
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Action - Long-term Incentives (Equity Plans)
For 2017 the Compensation Committee authorized a change to the mix of awards (at target) increasing the weight of performance share awards (“PSAs”) from 50% of total grant value to 60% of total grant value, and replacing stock-only stock appreciation rights (“SOSARs”) with restricted stock units (“RSUs”) using a 40% weighting. The Compensation Committee’s intent with these changes is to strengthen the performance element of the equity plan design by increasing the weighting of the PSAs, and to further align the plan design with market given the overall decline in the use of stock option vehicles against industry peers.
Key business metrics for the PSAs are Return on Capital Employed (“ROCE”) and earnings before interest, taxes, depreciation and amortization (“EBITDA”), which focus on efficient use of resources and longer-term profitability across business units to support shareholder return. These metrics received favorable support from shareholders we spoke with in 2017. In combination the short and long-term metrics were perceived to provide a balanced approach and alignment with the strategic objectives of the Company.
Based on feedback received from shareholders as well as the desire to be consistent with general market practice, the Compensation Committee approved the addition of a three-year relative TSR metric to the 2018 performance share plan. The metric will serve as a modifier to the PSAs, using the S&P SmallCap 600 Index for comparison. The modification to the PSAs would occur if the Company’s 3-year relative TSR is in the bottom or top quartile of the index, with a respective reduction or increase of the shares earned by 25%. An overall maximum payment of 200% of target will be applied regardless of any TSR modifier.
These actions are intended to address shareholder concerns and further align the Company’s compensation philosophy and executive compensation practices, enhancing pay for performance, pay at risk, and shareholder alignment.
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EXECUTIVE COMPENSATION
Glatfelter is a global leader in the manufacturing of engineered materials and specialty papers. Headquartered in York, Pennsylvania, we own and operate manufacturing facilities in Arkansas, Pennsylvania, Ohio, Canada, Germany, the United Kingdom, France, and the Philippines as well as sales and distribution offices in Russia and China. Our 13 manufacturing facilities have a combined production capacity of approximately 1.0 million tons of specialty papers, composite fibers and airlaid products used in a wide array of applications. Additional information about our business can be found in our Annual Report posted at http://www.glatfelter.com/about_us/ investor_relations/annual_reports.aspx.
2017 Business Overview
During 2017 we focused on achieving growth in CFBU and AMBU at least commensurate with the market; cost reduction and continuous improvement efforts, including organization workforce efficiency initiatives in both CFBU and SPBU, expanding product margins, and maximizing free cash flows.
Significant attention was directed towards ensuring the investment in our new airlaid facility remained on schedule. In addition, we completed the first phase of a new global business and manufacturing system for AMBU.
Significant strategic accomplishments during 2017 include:
Generating a 14.7% increase in operating profit in our engineered materials businesses through increased shipping volumes, stronger operations, continuous improvement and cost optimization initiatives, and through new product opportunities in dispersible wipes, electrical component materials and wallcoverings.
Implementing cost optimization programs in CFBU and SPBU consisting of workforce efficiencies, eliminating underutilized assets and reduced discretionary spending. Combined, the actions are delivering meaningful results and are expected to increase annual operating profit by approximately $20 million when fully implemented.
Completing major capital spending projects in SPBU to achieve environmental and regulatory compliance in the U.S.
Substantially completing the $85 million advanced airlaid capacity expansion project which will add 22,000 tons of capacity to serve the growing North American airlaid market.
On a consolidated basis, key financial metrics include:
Adjusted earnings totaled $51.5 million in 2017 compared with $60.7 million in 2016. The lower earnings reflect significant growth of our engineered materials businesses that was more than offset by substantially lower pricing and lower profitability of Specialty Papers;
Total revenue declined less than 1% as 5.3% and 4.8% growth in CFBU and AMBU, respectively, nearly offset the significant decline in SPBU;
Cash flow from operations was $104.3 million in 2017 compared with $116.1 million in 2016; and
A dividend increase for the fifth consecutive year or 44% cumulative over this period.
The following provides a summary of 2017 for each of our business units.
During 2017 our engineered materials businesses, CFBU and AMBU, performed very well, led by higher shipping volumes and strong operating performance as well as cost optimization and continuous improvement initiatives.
COMPOSITE FIBERS
Composite Fibers’ operating profit increased 15%;
This business unit returned to growth in 2017 with strong recovery and growth across key product lines;
Shipping volumes increased by 9.2% compared to 2016;
Strong operational improvement;
Cost optimization program in CFBU generating approximately $10 million in annual savings; and
Record EBITDA margins of 16.7%
ADVANCED AIRLAID MATERIALS
Advanced Airlaid operating profit increased 14%;
Delivered strong profit and margin growth;
Shipping volumes increased 3.1% compared with 2016;
Fort Smith initial start-up completed and on track for commercial shipments in early 2018;
Successful business system implementation in Gatineau, Canada;
Continuous improvement initiatives drove expanded margins; and
Record EBITDA margins of 15.5%
2018 PROXY STATEMENT › 25
EXECUTIVE COMPENSATION
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Shipments declined 3.8%;
Industry operating rates below 90% led to selling prices falling to an eleven-year low;
Lower selling prices adversely impacted earnings by approximately $20.3 million in comparison of results in 2017 versus 2016; and
Implemented cost optimization actions including the shutdown of a paper machine (10% reduction in capacity) and a 15% reduction of the unit’s salaried workforce. The actions are expected to generate $9 million annual benefit.
On February 6, 2018, the Company announced its intention to explore a range of potential strategic alternatives for the Specialty Papers business, including a potential sale of the business unit.
The elements of our executive compensation programs for 2017 included base salary, short- and long-term incentives, minimal perquisites, and retirement and other benefits, as summarized in the following table:
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EXECUTIVE COMPENSATION
2017 NEO Compensation Overview and Highlights
The NEOs received the following compensation, with short- and long-term incentives linked to Company performance:
Base salaries:
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Short-term incentive (“STI”) awards payable under the Management Incentive Plan (“MIP”):
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Mr. Parrini’s target MIP at 100% was $973,865. The amount prior to the reduction would have been $633,012, therefore the -12% adjustment negatively impacted his payout by $75,961.
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Long-term incentives (“LTI”):
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- RSUs comprise the remaining 40% of the total grant value (at target) to promote retention and provide increased incentives to increase the share value. RSUs have a three-year vesting period.
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Mr. Hess received payment of a one-time cash retention bonus of $112,750 which was established in 2015, during his tenure as Vice President of SPBU Sales and Marketing, for his critical leadership of SPBU through the anticipated challenging business environment.
In addition to total direct compensation (consisting of base salary, STI and LTI) the Company provides retirement benefits to NEOs which are important for long-term retention. Messrs. Parrini, Jacunski, and Hess participate in legacy pension plans which the Compensation Committee considers prior commitments based on their long service. The legacy pension plans (qualified and non-qualified) have been closed to new entrants since 2007. Changes in the pension value illustrated in the proxy Summary Compensation Table are legacy pension agreements and determined in substantial part by actuarial factors outside the Compensation Committee’s direct control (see footnote 5 of the summary compensation table for additional details regarding change in pension values).
Additional details regarding the compensation programs are included in the Compensation Programs and Elements of Compensation and Target Pay Mix sections of the CD&A.
2018 PROXY STATEMENT › 27
EXECUTIVE COMPENSATION
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:
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 (Integrity, Financial Discipline, Mutual Respect, Customer Focus, and Environmental and Social Responsibility as described in the “Corporate Responsibility” section of this proxy statement.) The Compensation Committee recommends approval of the Company’s compensation philosophy to the Board of Directors and oversees the compensation programs for the NEOs and other executive officers of the Company. All compensation decisions impacting the Chief Executive Officer are approved by the Compensation Committee and require the ratification and approval of the Board.
Total compensation for the NEOs and other Company executive officers consists of base salary, short-term and long-term incentives, retirement and other benefits, and minimal perquisites. The Company’s executive compensation programs generally target total compensation at the size-adjusted 50th percentile of the market and provide flexibility to deviate from the target to support Company growth strategies and evolving talent needs. 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.
Determination of Compensation Levels
The Compensation Committee seeks input from certain NEOs, external advisors and other Company executives when determining compensation decisions. Specifically:
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EXECUTIVE COMPENSATION
The Compensation Committee may invite NEOs to attend portions of its meetings; however, the Compensation Committee meets in executive session alone and with and without the Consultant to reach final decisions regarding NEO 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 and Company performance, and the Company’s succession planning when making compensation decisions for eachDenotes former NEO.
In 2017 the Compensation Committee retained the services of Meridian Compensation Partners, LLC (“Meridian”) as the Consultant. 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; and
advising the Compensation Committee on:
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Compensation Peer Group and Benchmarking Process
To determine market levels, the Company targets the size-adjusted 50th percentile, and the Compensation Committee reviews target total compensation for similarly situated
executives from peer group companies (“Compensation Peer Group”) where data is available, as well as from multiple nationally recognized survey sources including:
William H. Mercer’s Executive Compensation Database;
Willis Towers Watson’s Executive Compensation Database; and
Korn Ferry Hay Group’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 2017 compensation decisions, the market review included the total compensation of the CEO and CFO.
The Compensation Committee annually reviews the Company’s Compensation Peer Group to establish a relevant and appropriate peer group size. For 2017 Wausau Paper was removed due to their acquisition by SCA. The annual revenues of the companies in the 2017 peer group range from $545 million to $5.9 billion with median revenue of $3.6 billion (versus the Company’s 2017 annual revenue of $1.59 billion).
Although the median annual revenue of the Company’s Compensation Peer Group is greater than the Company’s 2017 annual revenue, the Company targets the size-adjusted revenue at the 50th percentile through regression analysis to determine appropriate market levels in setting competitive pay. Benchmarking pay to regressed peer compensation levels is a widely-accepted methodology.
The Compensation Committee believes the current peer group is appropriate as it consists of companies within a reasonable revenue range compared to Glatfelter in the paper, packaging and forest products industries. In selecting peer companies, the Compensation Committee believes that consistency in the Company’s Compensation Peer Group is appropriate to ensure that it continues to reflect companies within its industry for which the Company competes for talent.
The following is a list of companies included in the Compensation Peer Group for 2017:
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2018 PROXY STATEMENT › 29
EXECUTIVE COMPENSATION
Annually the Compensation Committee reviews the mix of base salary, STI and LTI (total target direct compensation) for each NEO to ensure an appropriate level of the executives’ 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 peer group.
The mix of compensation varies for each NEO with an average of 65% of target pay considered at risk. This average does not include pension or other benefits. Mr. Parrini has the greatest level of STI and LTI, with 72% of his total target direct compensation considered at risk. The Compensation Committee believes this level is appropriate for Mr. Parrini given his responsibility as CEO to deliver and sustain shareholder value.
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 approved annually by the Compensation Committee and, in the case of the CEO, 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;
the accountability and complexity of the NEO’s role in attaining Company objectives;
the external competitiveness of the NEO’s compensation;
company executive succession planning; and
internal equity and retention considerations.
There were no increases in NEO base salaries for 2017, with the exception of Mr. Hess, as previously noted. The Compensation Committee did not increase base salaries due to the expected market headwinds and to support alignment with expected business conditions.
NEO Base Salaries (Annualized) |
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NEO | Prior Base Salary (effective February 1, 2016) |
| New Base Salary (effective February 1, 2017) |
| % change |
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Parrini | $ | 973,865 |
| $ | 973,865 |
| 0% |
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Jacunski | $ | 529,024 |
| $ | 529,024 |
| 0% |
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Astley | $ | 368,051 |
| $ | 368,051 |
| 0% |
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Hess(1) | $ | 287,513 |
| $ | 375,000 |
| 30% |
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Rapp(2) | € | 346,495 |
| € | 346,495 |
| 0% |
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| (b) |
EXECUTIVE COMPENSATION
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. The Compensation Committee establishes target bonuses for the NEOs at the 50th percentile of the market. There were no changes to NEO target bonuses for 2017 with the exception of Mr. Hess, whose target was increased based on his promotion to SVP and Business Unit President.
2017 NEO target bonus opportunities were as follows:
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In February each year, the Compensation Committee, in consultation with the Audit Committee, determines the degree to which the pre-established MIP performance metrics have been met. The Compensation Committee then decides whether to award bonuses to the NEOs, and at what level. The amount ultimately earned by the NEOs and other eligible executives depends on the achievement of performance metrics. The Compensation Committee may in its discretion adjust downward any bonus earned by any NEO or other executive. Any downward adjustment to the CEO’s bonus requires ratification and approval by the independent members of the Board.
For 2017 the Compensation Committee adopted a MIP design generally consistent with the design used in 2016 where 80% achievement of target performance pays 50% of the target award and 140% achievement pays 200% of target (except
that SPBU EBITDA has a threshold at 75% performance paying 20%), incorporating the following two metrics for all NEOs:
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The short-term incentives for the Company’s Business Unit leaders (Messrs. Astley, Hess and Rapp) were measured on operating profit or EBITDA for their respective business unit in addition to the Company’s ONI and Free Cash Flow. Operating profit is determined in accordance with US GAAP and excludes pension expense and certain non-recurring items as determined by the Compensation Committee. As noted above the SPBU EBITDA threshold payout was established at 20% for 75% achievement due to the challenging market factors in 2017. The maximum opportunity is consistent with the rest of the MIP metrics with 140% achievement paying 200%. Performance below the threshold levels will not earn a payout, as determined by each metric and associated weighting.
These metrics are intended to focus NEOs and other key executives on generating earnings and effectively managing cash flow. The Compensation Committee supported continuing to use these metrics in 2017 to reinforce the Company’s operational and strategic objectives.
In 2017 the performance metrics were weighted as follows for the NEOs:
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2018 PROXY STATEMENT › 31
EXECUTIVE COMPENSATION
The targeted performance levels of ONI, Free Cash Flow, and business unit operating profit or EBITDA were derived from the Company’s 2017 budgeted levels that were approved by the Board. The development of the budget takes into account a variety of factors and assumptions including the Company’s strategic planning process and an assessment of the expected business environment. The Compensation Committee incorporates a requirement that the Company achieve minimum performance for each metric separately before any bonus may be earned (“Threshold”) on the respective portions of the overall award.
In setting performance goals for 2017 the Compensation Committee considered, among other factors, expectations of projected growth in many markets with a focus on markets across engineered products. The Compensation Committee considered expected major capital projects to be completed by the end of 2017, with ongoing long-term investments in AMBU. The Compensation Committee considered the impact of key organizational changes, such as the promotion of Mr. Hess to lead SPBU. In addition, the Compensation Committee considered the increasingly challenging business environment due to secular declines in demand, increasing competition, and excess capacity in many key markets. Furthermore, the Compensation Committee set the MIP goals in consideration of the risk that adverse global economic conditions could impact our target markets resulting in decreased demand for our products.
Fiscal Year 2017 Annual Bonus - Use of Downward Discretion
Throughout 2017 the Compensation Committee considered the potential to exercise its judgment and use downward discretion to modify short-term incentive payments if appropriate based on Company results. The year concluded with growth in AMBU and in CFBU but lower than expected results in SPBU, with earnings below Management’s expectations due to severe pricing pressures and difficult operational conditions.
The Compensation Committee and the Board determined that it was appropriate to exercise downward discretion to reduce the corporate component of final MIP awards for NEOs from 65% to 57.2%, or -12%, to reflect the Company’s lower year-over-year performance when compared to 2016 and to align executive pay with annual business results, thus reinforcing the Company’s commitment to pay for performance. The approach applies a commensurate reduction to the payout based on the reduction in 2017 target performance compared to 2016 actual results as illustrated below:
MIP Metric |
2016 Actual | 2017 Target |
Variance |
ONI | $65.3 | $58.3 | -$7 or -11% |
Cash Flow | $70.3 | $59.5 | -$10.8 or -15% |
Weighted Average Adjustment: | -12% |
The following table outlines the approved threshold, target and maximum payment opportunities and financial goals for the NEOs under the 2017 MIP, as well as the weighted payout results based on the performance metric weights and downward adjustments of 12% on the corporate components made by the Compensation Committee and the Board.
NEO MIP Performance Metrics and Payout Levels |
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| Plan Goals |
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| 2017 Results |
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| Below Threshold (0% Payout) | Threshold (50% Payout) (3) |
| Target (100% Payout) |
| Maximum (200% Payout) |
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| Achievement Factor |
| Weighted MIP Payout % |
| Adjusted Payout % |
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Achievement against Financial Goals |
< 80% |
| 80% |
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| 100% |
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| 140% |
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Performance metric (millions) |
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Operating Net Income(1) |
< $ 46.6 | $ | 46.6 |
| $ | 58.3 |
| $ | 81.6 |
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| $ | 50.4 |
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| 66.0 | % |
65.0
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57.2
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Free Cash Flow(1) |
< $ 47.6 | $ | 47.6 |
| $ | 59.5 |
| $ | 83.3 |
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| $ | 50.3 |
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| 61.3 | % | ||||||
Advanced Airlaid Materials Business Unit Operating Profit(2) | < $ 23.7 | $ | 23.7 |
| $ | 29.6 |
| $ | 41.4 |
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| $ | 29.2 |
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| 96.5 | % |
| 77.6 | % |
| 72.9 | % |
Specialty Papers Business Unit EBITDA(2) |
< $ 41.3 | $ | 41.3 |
| $ | 55.0 |
| $ | 77.0 |
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| $ | 46.3 |
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| 60.2 | % |
| 63.1 | % |
| 58.4 | % |
Composite Fibers Business Unit Operating Profit(2) | < $ 49.2 | $ | 49.2 |
| $ | 61.5 |
| $ | 86.1 |
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| 91.2 | % |
| 75.5 | % |
| 70.8 | % |
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EXECUTIVE COMPENSATION
The resulting MIP payments for our NEOs based on the financial results above and downward adjustments made by the Compensation Committee (and the Board in the case of the CEO) were as follows:
NEO MIP Payments |
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NEO | 2017 Target Bonus (as a percentage of 2017 Base Salary) |
| Eligible Salary |
| 2017 MIP Target Bonus |
| 2017 MIP Payout Percent - without reduction |
| 2017 MIP Payout - without reduction |
| Reduced 2017 MIP Payout Percent |
| Reduced 2017 MIP Payment |
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Parrini | 100% |
| $ | 973,865 |
| $ | 973,865 |
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| 65.0% |
| $ | 633,012 |
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| 57.2% |
| $ | 557,051 |
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Jacunski | 65% |
| $ | 530,842 |
| $ | 345,047 |
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| 65.0% |
| $ | 224,281 |
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| 57.2% |
| $ | 197,367 |
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Astley | 55% |
| $ | 368,051 |
| $ | 202,428 |
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| 77.6% |
| $ | 157,084 |
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| 72.9% |
| $ | 147,570 |
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Hess | 55% |
| $ | 375,000 |
| $ | 206,250 |
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| 63.1% |
| $ | 130,103 |
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| 58.4% |
| $ | 120,450 |
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Rapp1 | 55% |
| € | 346,495 |
| € | 190,572 |
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| 75.5% |
| € | 143,882 |
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| 70.8% |
| € | 134,925 |
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| Mr. |
Long-Term Incentives: The Long-Term Incentive Plan
The Compensation Committee believes long-term compensation provides strong incentives for executives to deliver and sustain long-term financial performance to its shareholders. Annually the Compensation Committee determines the target opportunity of long-term compensation to be granted to executives by targeting the size-adjusted 50th percentile of the market, but reserves flexibility to deviate from the target.
The Company’s 2017 LTIP design consists of performance-based PSAs, which vest over three years with a two-year performance period, and time-based RSUs, which vest over
three years based on continued service. PSAs comprise the majority of the total annual target value at 60% of the award value (versus 50% in 2016) and the remaining 40% as RSUs. The Compensation Committee increased the weight of PSAs from 50% to 60% in 2017 to enhance the performance element of the equity plan design, with PSAs tied directly to the achievement of ROCE and EBITDA results, and the remaining value tied to RSUs. The Company discontinued the use of SOSARs to further align the plan design to market and the overall decline in the use of stock option vehicles.
The 2017 LTIP design is summarized below:
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2018 PROXY STATEMENT › 33
EXECUTIVE COMPENSATION
EBITDA is a commonly used measure of the cash earnings generated. ROCE measures how effectively capital is being employed and the return from capital management decisions. ROCE, in general terms, is calculated as adjusted earnings divided by an adjusted capital base. These metrics are appropriate due to the focus on efficient use of resources and longer-term profitability across the business units.
PSAs have a two-year performance period and a three year vesting period, so that a NEO must continue in employment for one year after the end of the performance period to receive payment of the award. Note, in 2018 the Company has added a three-year cumulative total shareholder return financial goal as part of the PSA design as noted under 2018 LTI Design on the next page. The Compensation Committee believes that a two-year performance period is appropriate for PSAs at this time, in order to give more accurate visibility to goal setting. In determining to establish a two-year performance measurement period for PSAs granted in 2017 the Compensation Committee considered (1) the need to provide line-of-sight to incent executives to achieve capital productivity and earnings goals over the longer-term and (2) the inability to forecast performance goals beyond the two-year period due to cyclical downturn in our business and adverse global economic conditions. The Compensation Committee decided to set two-
year performance goals, with one additional year of time-based vesting (assuming achievement of the performance goals), in order to promote sustained performance focus, encourage long-term retention and align with a three-year vesting period.
Given their relationship to our annual operating plan and business strategy, the pre-established ROCE and EBITDA goals and their specific target levels for the 2017-2018 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 Compensation Committee set 2017-2018 ROCE and EBITDA targets for the PSAs at a level that it believed would be challenging but possible for the Company to achieve.
The RSUs cliff-vest at the end of a three-year period, based on continued service. The Compensation Committee determined that three-year vesting is appropriate for RSUs because it aligns with the Company’s strategic planning cycle and supports retention.
The PSAs and RSUs granted to the NEOs during 2017 were based on NEOs’ overall responsibilities and individual performance, and information provided by the Consultant based on a market benchmarks for each position. The following table provides a summary of the RSU and PSA (at target) awards granted in 2017:
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| Performance Shares |
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NEO | Time-Vested RSUs |
| Minimum Shares (0% payout below threshold) |
| Performance Share Target (100% payout) |
| Maximum Shares (200% payout at Maximum) |
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Parrini |
| 27,190 |
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| 0 |
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| 40,786 |
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| 81,572 |
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Jacunski |
| 9,991 |
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| 0 |
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| 14,987 |
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| 29,974 |
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Astley |
| 6,082 |
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| 0 |
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| 9,123 |
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| 18,246 |
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Hess(2) |
| 31,929 |
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| 0 |
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| 7,819 |
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| 15,638 |
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Rapp |
| 4,648 |
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| 0 |
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| 6,972 |
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| 13,944 |
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In addition to his annual grant, Mr. Hess received a one-time retention grant of 26,716 RSUs in connection with his promotion as SPBU President. The Board believes Mr. Hess is essential to executing the Company’s strategic plan and addressing challenges with the SPBU business. Mr. Hess must remain employed for five years to vest in the award. If Mr. Hess is involuntarily terminated prior to five years, for reasons other than performance, he will vest in the grant.
Vesting of Performance Share Grants
The chart below illustrates the overlapping performance cycles for PSA grants:
PSA Grant Cycle | Performance Period Duration | ||||
Grant Year | 2015 | 2016 | 2017 | 2018 | 2019 |
2015 |
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2016 |
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2017 |
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| Additional year vesting tail |
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EXECUTIVE COMPENSATION
PSAs that were granted in 2015 vested on December 31, 2017 following the conclusion of a three-year performance period. 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:
2015 Performance Share Performance Goals |
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| Cumulative Adjusted EBITDA (millions) Weighted 40% |
| ROCE –(three year average) Weighted 60% |
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Maximum | $889.0 |
| 11.2% |
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Target | 635.0 |
| 8.0 |
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Threshold | 381.0 |
| 4.8 |
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Actual | 480.1 |
| 7.1 |
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Percent Achievement | 35.6% |
| 67.5% |
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Payout Percent | 54.7% |
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The resulting payouts from the 2015-2017 PSA cycle reflecting performance against the goals are shown below.
NEO Performance Share Earned from 2015 Grant |
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NEO | Target Performance Shares |
| Payout (as a % of Target) |
| Actual Shares Awarded (1) |
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Parrini |
| 25,242 |
| 54.7% |
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| 13,807 |
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Jacunski |
| 9,569 |
| 54.7% |
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| 5,234 |
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Astley |
| 5,540 |
| 54.7% |
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| 3,030 |
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Hess |
| 3,146 |
| 54.7% |
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| 1,720 |
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Rapp |
| 4,570 |
| 54.7% |
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| 2,499 |
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For more information regarding the 2015 PSAs, see page 35 of our proxy statement filed on March 31, 2016.
PSAs that were granted in 2016 were based on performance through December 31, 2017. The following table illustrates the performance goals for the two-year performance period (2016-2017), the final results and payout levels based on actual performance delivered during the performance period. Payouts are subject to time-based vesting through December 31, 2018.
2016 Performance Share Performance Goals |
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| Cumulative Adjusted EBITDA (millions) Weighted 40% |
| ROCE – (three year average) Weighted 60% |
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Maximum | $467.1 |
| 9.7% |
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Target | 333.6 |
| 6.9 |
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Threshold | 200.2 |
| 4.1 |
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Actual | 319.0 |
| 6.9 |
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Percent Achievement | 86.8% |
| 97.8% |
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Payout Percent | 93.4% |
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For more information regarding the 2016 PSAs, see page 53 of our proxy statement filed on March 30, 2017.
2018 LTI Design
The Compensation Committee determined that changes to the general design of the LTI awards would be made for 2018 to incorporate a relative Total Shareholder Return (“TSR”) modifier, to align compensation with performance using an established and appropriate index. PSAs will remain tied to the Company’s EBITDA and ROCE performance, with the addition of a three-year relative TSR modifier to be measured against the S&P SmallCap 600 index. The modifier will apply positive or negative 25% adjustments if the Company’s TSR is in the first or fourth quartile, respectively. An overall maximum payment of 200% will be applied regardless of any TSR modifier.
Perquisites at Glatfelter are very limited. The Compensation Committee believes perquisites should be a minimal part of executive compensation. Perquisites include a club membership for Mr. Parrini, and, a car allowance for Mr. Rapp as is customary for executives in Europe. All NEOs are eligible to
receive a Company-paid executive physical and executive long-term disability coverage. More information on the perquisite costs can be found in the Summary Compensation Table.
2018 PROXY STATEMENT › 35
EXECUTIVE 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.
The Company provides qualified and non-qualified pension plans for U.S.-based employees and other arrangements for those outside of the U.S. Regarding the qualified pension plan, eligible employees who were hired prior to 2007 participate in a traditional pension formula and those hired beginning in 2007 and later participate in a cash balance pension formula.
Non-qualified pension plans consist of a Supplemental Executive Retirement Plan (“SERP”) and a Supplemental Management
Pension Plan (“SMPP”). The SERP is tied to the qualified pension plan and provides post-employment benefits for eligible NEOs. The SMPP provides an Early Retirement Supplement for certain NEOs. Details regarding pension benefits and potential payments to the NEOs under these plans are discussed in the Pension Benefits section.
All plans except the qualified cash balance and SERP Restoration for cash balance are closed to new entrants.
The NEOs participate in the following pension plans:
(c) |
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EXECUTIVE COMPENSATION
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, EVP, SVPs and other VPs in the case of certain terminations of employment from the Company (other than for cause, resignation, death, disability or retirement). The severance guidelines do not apply in circumstances in which the change in control agreements 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.
Change in Control Arrangements and Double Trigger Equity Grant Vesting
The Company has entered into Change in Control (“CIC") Agreements with each of the NEOs and certain other executives. The Compensation Committee believes these arrangements will serve as an incentive for executives to act in the interest of shareholders in the event of a CIC without regard to personal risks to their continued employment resulting from a CIC. Generally, these agreements provide for severance and other benefits to be paid to executives upon a qualifying CIC. Since 2011, new CIC Agreements do not provide a tax gross-up provision for excise taxes imposed under the Code. Therefore, Messrs. Astley and Hess do not have any tax gross-up provisions. The legacy CIC agreements of Messrs. Parrini, Jacunski and Rapp, which were entered into before 2011, contain tax gross up provisions.
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 (as defined in the applicable 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 benefitting 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.
Executive Share Ownership Guidelines
The Compensation Committee believes it is important to require the Company’s senior executives, including NEOs, to meet minimum stock ownership guidelines.
The executive share ownership guidelines align the interests of the shareholders with the Company’s long- term growth strategy. The Compensation Committee determines the guidelines using a multiple of each senior executive’s base salary. Depending on the executive’s position, the executive share ownership guidelines require the executive to own Company stock that ranges in value from two to five times the senior executive’s base salary as follows:
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|
|
|
|
|
|
|
The value of required ownership is 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. The share ownership guidelines also include unvested restricted stock and RSUs, and earned but unvested PSAs, consistent with market practices.
Holding Requirement
Until the executive share ownership guideline level is attained, executives must retain 50% of net after-tax profit shares realized at exercise of SOSARs and payment of PSAs and RSUs. The Compensation Committee reviews executives’ progress toward satisfying the requirements annually.
Clawback Policy
The Compensation Committee has discretion to recover or “claw back” incentive compensation when the basis for recouping performance-based compensation is triggered by a material financial restatement. The Compensation Committee may recoup performance-based compensation, including cash and equity incentive awards, that is paid within three years prior to a restatement and in excess of the amount the NEO or executive officer would have otherwise received without the material noncompliance. Recoupment is applicable to an executive who is directly accountable for the cause of the restatement and could apply to any officer in an upward reporting hierarchy to the responsible individual. In addition, a recoupment could be made for compensation paid in a fiscal year in which an officer engages in intentional misconduct in performing his or her duties.
Hedging and Pledging Policies
All executives and directors, including the NEOs, are subject to an insider trading policy under which hedging transactions, including put or call options, short selling or similar hedging activities involving Company stock, and pledging of Company stock are prohibited.
Tax Deductibility under Section 162(m)
Certain awards made under the LTIP and the MIP are intended to qualify for an exemption from the federal income tax $1 million deduction limitation imposed under Section 162(m) of the Code. The Compensation Committee has established procedures to maintain tax deductibility; however, the Compensation Committee has not established a policy requiring that all executive compensation be exempt from the limitations provided in Section 162(m). The Compensation Committee structured the 2017 MIP bonus payments and PSAs in a manner that is intended to qualify as an exemption from the Section 162(m) deduction limitation as performance-based compensation. The exemption from Section 162(m)’s deduction limit for performance-based compensation has been repealed, effective for taxable years beginning after December 31, 2017, such that compensation paid to our covered executive officers in excess of $1 million will not be deductible for our 2018 tax year, except for compensation paid under grandfathered contracts under the new tax law.
2018 PROXY STATEMENT › 37
EXECUTIVE COMPENSATION
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 his 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. The meetings of the Compensation Committee are regularly attended by the Consultant. The CEO, CFO, Vice President of Human Resources and Vice President, General Counsel and Secretary also generally attend the Compensation Committee meetings. All members of Management present at the meeting, 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 or members of the Compensation Committee.
During 2017 the Compensation Committee retained Meridian Compensation Partners LLC an executive compensation consulting firm (the “Consultant”), to provide advice and
assistance to the Compensation Committee and to Management in the area of executive and non-employee directors’ compensation for the Company. 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 departments.
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 2017 the Compensation Committee assessed the independence of the Consultant and other outside advisors as required under the NYSE listing rules, 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 the Consultant. Based on this review, the Compensation Committee did not identify any conflict of interest raised by the work conducted by the Consultant for 2017.
Report of the Compensation Committee
The Compensation Committee has reviewed and discussed the Company’s Compensation Discussion and Analysis with Management. Based on this review and discussion, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this proxy statement for the year ended December 31, 2017.
The information disclosed in this Report shall not be considered as “soliciting material,” or to be “filed” with the SEC. This information is not subject to Regulation 14A, 14C or the liabilities of Section 18 of the Exchange Act.
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 or the Securities Exchange Act of 1934, except to the extent that the Company specifically incorporates the Report by reference therein.
Lee C. Stewart (Chair)
Kathleen A. Dahlberg
Nicholas DeBenedictis
J. Robert Hall
|
EXECUTIVE COMPENSATION
The following table sets forth certain compensation information of the Chief Executive Officer of the Company, the Chief Financial Officer of the Company and the Company’s three most highly compensated executive officers in 2017 other than the Chief Executive Officer and the Chief Financial Officer.
Name and Principal Position in 2017 | Year | Salary(1) |
|
| Bonus |
|
| Stock Awards(2) |
|
| Option Awards(3) |
|
| Non-Equity Incentive Plan Compen-sation(4) |
|
| Change in Pension Value and Non-Qualified Deferred Comp Earnings(5) |
|
| All Other Compen- sation(6) |
|
| Total |
| ||||||||
Dante C. Parrini | 2017 | $ | 973,865 |
|
| $ | — |
|
| $ | 1,564,808 |
|
| $ | — |
|
| $ | 557,051 |
|
| $ | 1,824,000 |
|
| $ | 18,955 |
|
| $ | 4,938,679 |
|
Chairman & | 2016 |
| 971,501 |
|
|
| — |
|
|
| 782,400 |
|
|
| 782,410 |
|
|
| 1,288,423 |
|
|
| 1,612,000 |
|
|
| 19,522 |
|
|
| 5,456,256 |
|
Chief Executive Officer | 2015 |
| 943,208 |
|
|
| — |
|
|
| 588,310 |
|
|
| 901,988 |
|
|
| 724,253 |
|
|
| 567,000 |
|
|
| 15,842 |
|
|
| 3,740,601 |
|
John P. Jacunski | 2017 | $ | 530,842 |
|
| $ | — |
|
| $ | 574,994 |
|
| $ | — |
|
| $ | 197,367 |
|
| $ | 432,000 |
|
|
| 11,985 |
|
| $ | 1,747,188 |
|
Executive Vice President | 2016 |
| 609,775 |
|
|
| — |
|
|
| 787,494 |
|
|
| 287,505 |
|
|
| 545,582 |
|
|
| 208,000 |
|
|
| 11,050 |
|
|
| 2,449,406 |
|
& Chief Financial Officer | 2015 |
| 488,009 |
|
|
| — |
|
|
| 223,013 |
|
|
| 341,916 |
|
|
| 224,817 |
|
|
| 26,000 |
|
|
| 8,848 |
|
|
| 1,312,603 |
|
Christopher W. Astley | 2017 | $ | 368,051 |
|
| $ | — |
|
| $ | 350,019 |
|
| $ | — |
|
| $ | 147,570 |
|
| $ | 26,000 |
|
|
| 8,596 |
|
| $ | 900,236 |
|
Senior Vice President & | 2016 |
| 367,158 |
|
|
| — |
|
|
| 174,997 |
|
|
| 175,003 |
|
|
| 254,857 |
|
|
| 25,000 |
|
|
| 8,177 |
|
|
| 1,005,192 |
|
Business Unit President, AMBU | 2015 |
| 355,919 |
|
|
| — |
|
|
| 129,114 |
|
|
| 197,948 |
|
|
| 82,186 |
|
|
| 15,000 |
|
|
| 5,237 |
|
|
| 785,404 |
|
Timothy R. Hess (7) | 2017 | $ | 375,000 |
|
| $ | 112,750 |
|
| $ | 949,997 |
|
| $ | — |
|
| $ | 120,450 |
|
| $ | 309,000 |
|
|
| 9,522 |
|
| $ | 1,876,719 |
|
Senior Vice President & | 2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Business Unit President, SPBU | 2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Martin Rapp (8) | 2017 | $ | 391,193 |
|
| $ | — |
|
| $ | 267,492 |
|
| $ | — |
|
| $ | 161,816 |
|
| $ | 441,000 |
|
|
| 15,022 |
|
| $ | 1,276,523 |
|
Senior Vice President & | 2016 |
| 383,431 |
|
|
| — |
|
|
| 137,504 |
|
|
| 137,501 |
|
|
| 226,796 |
|
|
| 249,000 |
|
|
| 14,724 |
|
|
| 1,148,956 |
|
Business Unit President, CFBU | 2015 |
| 372,463 |
|
|
| — |
|
|
| 106,519 |
|
|
| 163,309 |
|
|
| 137,341 |
|
|
| — |
|
|
| 13,571 |
|
|
| 793,203 |
|
|
|
|
|
|
|
| 2016 |
| 2015 |
| ||
Dividend yield | 2.85% |
| 1.94% |
| ||
Risk-free rate of return |
| 1.34 |
|
| 1.64 |
|
Volatility |
| 31.97 |
|
| 36.38 |
|
Term | 6 years |
| 6 years |
|
|
|
|
|
For Mr. Parrini, the 113% increase in the actuarial present value of his pension value is attributable to three factors. First, lower discount rate assumptions were used to estimate the value of the benefit. A lower discount rate produces a greater pension value. Approximately 50% of the increase in Mr. Parrini’s reported change in pension value is attributable to the decrease in the discount rate based on rates as of December 31, 2017 as noted in financial disclosures under US GAAP reporting for retirement plans. Second, as Mr. Parrini worked for a full year in 2017, his pension benefits increased because he earned an additional year of benefit service. Approximately 39% of the increase in the pension value is attributable to his additional year of service. Third, approximately 11% of Mr. Parrini’s reported increase in the pension value is attributable to increases in his pay, as measured by his average compensation over the five years immediately preceding his assumed retirement. Mr. Parrini did not receive a base pay increase in 2017; his earnings in 2017 are slightly higher than 2016 since his 2016 pay increase was not effective until February 1, 2016 as noted in note #1 above. As described in “Pension Benefits”, a significant portion of Mr. Parrini’s SERP benefit is unvested.
2018 PROXY STATEMENT › 39
EXECUTIVE COMPENSATION
401(k) Match |
| Perquisites (i, ii) |
| Life Insurance Premium (iii) |
| Other Compensation (iv) |
| Total |
| ||||||||
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Parrini | $ | 4,050 |
| $ | 8,814 |
| $ | 1,496 |
| $ | 4,595 |
| $ | 18,955 |
| ||
Jacunski |
| 4,050 |
| - |
|
| 814 |
|
| 7,121 |
|
| 11,985 |
| |||
Astley |
| 4,050 |
| - |
|
| 567 |
|
| 3,979 |
|
| 8,596 |
| |||
Hess |
| 4,050 |
| - |
|
| 576 |
|
| 4,896 |
|
| 9,522 |
| |||
Rapp | - |
|
| 14,600 |
|
| 422 |
| - |
|
| 15,022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
We are providing information about the relationship of the annual total compensation of our employees and the annual total compensation of Mr. Parrini, our CEO, as required by Item 402(u) of Regulation S-K.
For 2017 our ratio was estimated as follows:
|
| ||
|
| ||
|
| ||
|
|
(d) |
|
|
To identify the median employee, the methodology and the material assumptions, adjustments and estimates we used were as follows:
We used October 1, 2017 as the date to determine the median employee.
All employees throughout our global operations were taken into account.
Using this methodology, we determined the appropriate median employee to be a full-time U.S. employee.
For purposes of this determination we applied the appropriate exchange rate to U.S. dollars of the average exchange rate for October 2017 as to our non-US employees.
When calculating the Annual Total Compensation of the CEO, we used the amount reported in the “Total” column of our Summary Compensation Table included in this proxy statement as well as medical premiums paid by the Company. We used the same methodology for calculating the Annual Total Compensation for the median employee.
| (f) | Consists of 890 shares held in a 401(k) account for the benefit of Mr. Astley. |
EXECUTIVE COMPENSATION
2017 Grants of Plan-Based Awards
The following table, including footnotes, sets forth information concerning grants of plan-based awards in 2017:
| Estimated Possible Payouts Under Non-Equity Incentive Plan Awards(1) |
| Estimated Possible Payouts Under Equity Incentive Plan Awards(2) |
| All Other Stock Awards: Number of Shares of Stock or |
| All Other Option Awards: Number of Securities Underlying | Exercise or Base Price of Option | Grant Date Fair Value of Stock and Option |
| ||||||||||||||||
Name and Grant Date | Threshold ($) |
| Target ($) |
| Maximum ($) |
| Threshold (#) |
| Target (#) |
| Maximum (#) |
| Units (#)(3) |
| Options (#) | Awards ($/Share) | Awards ($) |
| ||||||||
Parrini |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/23/2017 |
| 486,933 |
|
| 973,865 |
|
| 1,947,730 |
|
| 8,157 |
|
| 40,786 |
|
| 81,572 |
|
|
|
| — | N/A |
| 938,894 |
|
2/23/2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 27,190 |
|
|
|
| 625,914 |
|
Jacunski |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/23/2017 |
| 172,524 |
|
| 345,047 |
|
| 690,095 |
|
| 2,997 |
|
| 14,987 |
|
| 29,974 |
|
|
|
| — | N/A |
| 345,001 |
|
2/23/2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 9,991 |
|
|
|
| 229,993 |
|
Astley |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/23/2017 |
| 101,214 |
|
| 202,428 |
|
| 404,856 |
|
| 1,825 |
|
| 9,123 |
|
| 18,246 |
|
|
|
| — | N/A |
| 210,011 |
|
2/23/2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 6,082 |
|
|
|
| 140,008 |
|
Hess |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/6/2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 26,716 (4) |
| — | N/A |
| 650,000 |
| |
2/23/2017 |
| 103,125 |
|
| 206,250 |
|
| 412,500 |
|
| 1,564 |
|
| 7,819 |
|
| 15,638 |
|
|
|
|
|
|
| 179,993 |
|
2/23/2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 5,213 |
|
|
|
| 120,003 |
|
Rapp (5) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/23/2017 | € | 95,286 |
| € | 190,572 |
| € | 381,145 |
|
| 1,394 |
|
| 6,972 |
|
| 13,944 |
|
|
|
| — | N/A |
| 160,495 |
|
2/23/2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 4,648 |
|
|
|
| 106,997 |
|
| (g) |
|
| (h) |
|
|
|
|
|
| Mr. |
2018 PROXY STATEMENT › 41
EXECUTIVE COMPENSATION
2017 Outstanding Equity Awards at Fiscal Year-End
The following table, including footnotes, sets forth information concerning outstanding equity awards as of December 31, 2017:
| Option and Stock Awards |
| ||||||||||||||||||||
| 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 | Exercisable |
| Unexercisable |
| Price ($) |
| Date | Vested(#)(2) |
| Vested($)(3) |
| Not Vested (#)(4) |
| Not Vested ($)(3) |
| |||||||
Parrini |
| 169,510 |
|
| — |
|
| 9.91 |
| 5/5/2019 |
| 100,000 |
|
| 2,144,000 |
|
| 109,679 |
|
| 2,351,518 |
|
|
| 66,300 |
|
| — |
|
| 13.95 |
| 3/3/2020 |
| 27,190 |
|
| 582,954 |
|
|
|
|
|
|
|
|
| 88,140 |
|
| — |
|
| 12.56 |
| 3/3/2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 85,130 |
|
| — |
|
| 15.61 |
| 3/6/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 98,010 |
|
| — |
|
| 18.36 |
| 3/5/2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 82,997 |
|
| — |
|
| 29.89 |
| 2/26/2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 79,751 |
|
| 39,876 |
|
| 24.94 |
| 2/26/2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 65,893 |
|
| 131,785 |
|
| 17.27 |
| 2/25/2026 |
|
|
|
|
|
|
|
|
|
|
|
|
Jacunski |
| 101,170 |
|
| — |
|
| 9.91 |
| 5/5/2019 |
| 15,892 |
|
| 340,724 |
|
| 40,576 |
|
| 869,949 |
|
|
| 44,880 |
|
| — |
|
| 13.95 |
| 3/3/2020 |
| 24,728 |
|
| 530,168 |
|
|
|
|
|
|
|
|
| 39,300 |
|
| — |
|
| 12.56 |
| 3/3/2021 |
| 9,991 |
|
| 214,207 |
|
|
|
|
|
|
|
|
| 33,790 |
|
| — |
|
| 15.61 |
| 3/6/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 39,780 |
|
| — |
|
| 18.36 |
| 3/5/2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 30,230 |
|
| — |
|
| 29.89 |
| 2/26/2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 30,231 |
|
| 15,116 |
|
| 24.94 |
| 2/26/2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 24,213 |
|
| 48,426 |
|
| 17.27 |
| 2/25/2026 |
|
|
|
|
|
|
|
|
|
|
|
|
Astley |
| 8,000 |
|
| — |
|
| 11.92 |
| 7/23/2020 |
| 10,371 |
|
| 222,354 |
|
| 24,433 |
|
| 523,844 |
|
|
| 20,710 |
|
| — |
|
| 12.56 |
| 3/3/2021 |
| 6,082 |
|
| 130,398 |
|
|
|
|
|
|
|
|
| 21,730 |
|
| — |
|
| 15.61 |
| 3/6/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 21,600 |
|
| — |
|
| 18.36 |
| 3/5/2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 16,070 |
|
| — |
|
| 29.89 |
| 2/26/2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 17,502 |
|
| 8,751 |
|
| 24.94 |
| 2/26/2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 14,739 |
|
| 29,476 |
|
| 17.27 |
| 2/25/2026 |
|
|
|
|
|
|
|
|
|
|
|
|
Hess |
| 17,600 |
|
| — |
|
| 13.95 |
| 3/3/2020 |
| 26,716 |
|
| 572,791 |
|
| 16,115 |
|
| 345,506 |
|
|
| 12,380 |
|
| — |
|
| 12.56 |
| 3/3/2021 |
| 5,213 |
|
| 111,767 |
|
|
|
|
|
|
|
|
| 11,930 |
|
| — |
|
| 15.61 |
| 3/6/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 13,300 |
|
| — |
|
| 18.36 |
| 3/5/2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 9,520 |
|
| — |
|
| 29.89 |
| 2/26/2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 9,947 |
|
| 4,973 |
|
| 24.94 |
| 2/26/2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 7,790 |
|
| 15,580 |
|
| 17.27 |
| 2/25/2026 |
|
|
|
|
|
|
|
|
|
|
|
|
Rapp |
| 18,530 |
|
| — |
|
| 15.61 |
| 3/6/2022 |
| 14,988 |
|
| 321,343 |
|
| 19,205 |
|
| 411,755 |
|
|
| 22,170 |
|
| — |
|
| 18.36 |
| 3/5/2023 |
| 4,648 |
|
| 99,653 |
|
|
|
|
|
|
|
|
| 14,730 |
|
| — |
|
| 29.89 |
| 2/26/2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 14,439 |
|
| 7,220 |
|
| 24.94 |
| 2/26/2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 11,580 |
|
| 23,160 |
|
| 17.27 |
| 2/25/2026 |
|
|
|
|
|
|
|
|
|
|
|
|
| (9) |
|
|
|
|
|
|
|
|
EXECUTIVE COMPENSATION
2017 Options Exercised and Stock Vested
The following table, including footnotes, sets forth information concerning SOSARs exercised during fiscal 2017. No other stock grants vested or were exercised in 2017.
| Stock Awards |
|
|
|
| ||||
| No. of Shares Acquired on Exercise of SARs(1) |
| Value Realized on Exercise of SARs(2) |
| Total Value Realized from all Exercised and Vested Grants |
| |||
Parrini |
| 16,418 |
| $ | 344,115 |
| $ | 344,115 |
|
Jacunski |
| 9,777 |
|
| 204,920 |
|
| 204,920 |
|
Astley | — |
| — |
| — |
| |||
Hess | — |
| — |
| — |
| |||
Rapp | — |
| — |
| — |
|
|
|
|
|
PENSION PLAN OVERVIEW
All U.S.-based NEOs participate in the Qualified Pension Plan, which is a tax-qualified defined benefit pension plan. The Qualified Pension Plan has two methods under which participant benefits are determined, the traditional pension and the cash balance pension.
Traditional Pension (closed to new entrants since 2007)
Messrs. Parrini, Jacunski and Hess were plan participants on January 1, 2007, and are eligible for a normal unreduced retirement pension (“traditional pension”) beginning at age 65 equal to:
2022 PROXY STATEMENT | › | |||
|
|
|
Final average compensation (“FAC”) means the participant’s highest average compensation over any consecutive five-year period that spans the ten-year period preceding the year of the participant’s retirement.
Eligible compensation includes salary as listed in the Summary Compensation Table plus paid non-equity incentive plan compensation (to a maximum of the IRS limit, which was $270,000 for 2017).
The Qualified Pension Plan provides for early retirement benefits for participants who retire at or after age 55 and prior to age 65. The amount of the monthly early retirement pension is reduced due to early commencement, at the rate of 2.5% per year.
Cash Balance Pension
Mr. Astley was hired after January 1, 2007, and therefore participates in the cash balance pension. At the end of each month, the Company determines contribution credits equal to 5.5% of eligible monthly base pay. Interest is accrued on the account balance at the end of each month based on an external index (Moody’s AA Nominal bond yield). Full vesting occurs after three years of service.
Mr. Rapp’s Pension Agreement
Mr. Rapp is covered under a Retirement Pension Contract, dated October 31, 2007, negotiated with the Company at the time of his hire to offset loss from his prior employer. Under this
arrangement, he is eligible for a normal retirement benefit after having attained age 65.
Mr. Rapp’s normal retirement benefit is based on 1.5% of his pensionable income multiplied by his years of service. Pensionable income is the average of his base pay plus bonus for the five years immediately preceding his retirement. Mr. Rapp is eligible for an early retirement benefit after reaching age 60. His early retirement benefit equals his normal retirement benefit reduced by 2.5% per year. Mr. Rapp’s normal form of benefit is a 60% joint-and-survivor annuity.
2018 PROXY STATEMENT › 43
EXECUTIVE COMPENSATION
The Company also sponsors for certain executives non-qualified pension plans, providing benefits that coordinate with and supplement the pension plan benefits.
Supplemental Executive Retirement Plan (SERP)
The SERP consists of post-employment benefits for certain NEOs who have been approved for participation by the Compensation Committee, or by the independent members of the Board in the case of the CEO.
|
|
|
|
Supplemental Management Pension Plan (SMPP)
The SMPP provides an Early Retirement Supplement to benefits otherwise provided by the Qualified Pension Plan if the participant retires early. Normal retirement age under the Qualified Pension Plan is age 65; however, under the Qualified Plan, a participant who is at least age 55 may either:
Elect early retirement and receive a reduced monthly early retirement pension that begins immediately following retirement, or
Postpone the start of the pension until a later date, but not later than age 65.
If the participant agrees to postpone his or her Qualified Pension Plan pension until at least 36 months following early retirement date, then the Early Retirement Supplement will pay a
supplemental benefit during the 36-month period. The Early Retirement Supplement is equal to the sum of the monthly amount of the Qualified Pension Plan benefit and the SERP Restoration Pension benefit in the form of a single life annuity. The benefit begins on the first day of the month following early retirement and continues for 36 months (or until normal retirement date), at which time the Qualified Pension Plan pension begins to be paid, subject to a six-month delay as applicable under Section 409A of the Code. Messrs. Jacunski and Hess participate in the SMPP. Mr. Parrini does not participate in the SMPP since he is eligible for the FAC pension benefits.
|
EXECUTIVE COMPENSATION
CURRENT PENSION BENEFITS OF NEOS
The following table, including footnotes, sets forth information concerning pension benefits during fiscal year 2017.
Name | Age |
| Plan Name | Number of Years Credited Services (#) |
| Present Value of Accumulated Benefit ($)(1) |
| Payments During Last Fiscal Year ($) |
| ||||
Parrini (2) |
| 53 |
| Traditional Pension |
| 20 |
|
| 772,000 |
|
| — |
|
|
|
|
| SERP - FAC Pension |
| 20 |
|
| 3,438,000 |
|
| — |
|
|
|
|
| SERP - Restoration Pension |
| 20 |
|
| 4,163,000 |
|
| — |
|
Jacunski |
| 52 |
| Traditional Pension |
| 14 |
|
| 468,000 |
|
| — |
|
|
|
|
| SERP - Restoration |
| 14 |
|
| 931,000 |
|
| — |
|
|
|
|
| SMPP |
| 14 |
|
| 94,000 |
|
| — |
|
Astley (3) |
| 44 |
| Cash Balance Pension |
| 7 |
|
| 113,000 |
|
| — |
|
|
|
|
| SERP - Cash Balance |
| 7 |
|
| 17,000 |
|
| — |
|
Hess |
| 51 |
| Traditional Pension |
| 24 |
|
| 891,000 |
|
| — |
|
|
|
|
| SERP - Restoration |
| 24 |
|
| 393,000 |
|
| — |
|
|
|
|
| SMPP |
| 24 |
| 169,000 |
|
| — |
| |
Rapp (4) |
| 58 |
| Pension Agreement |
| 15 |
|
| 2,412,000 |
| — |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name | Traditional or Cash Balance Pension/Pension Agreement | SERP-Restoration or SMPP | SERP-FAC Pension |
Parrini | 63 | 63 | 62 |
Jacunski | 65 | 65 (SMPP-62) | N/A |
Astley | 65 | 65 | N/A |
Hess | 62 | 62 (SMPP-59) | N/A |
Rapp | 65 | N/A | N/A |
|
|
|
|
|
|
2018 PROXY STATEMENT › 45
EXECUTIVE COMPENSATION
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. The executive termination guidelines do not apply if the NEO is eligible to receive payments under a Change in Control Agreement upon a termination of employment. The table on the following page describes benefits payable under the executive termination guidelines.
CHANGE IN CONTROL AGREEMENTS AND DOUBLE TRIGGER EQUITY VESTING
The Company has entered into a Change in Control Agreement with each NEO as described in the CD&A. Under these agreements, each executive’s employment with the Company will continue for two years from the date of a change in control or each executive will become entitled to severance payments and benefits upon termination under certain conditions within such two-year period. During such period, the employee 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. The table below describes the benefits payable under the Change in Control Agreements.
Change in Control. Under Change in Control 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, P. H. Glatfelter;
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
Tax Gross-Up Payments. For Change in Control Agreements in effect before 2011 (including Messrs. Parrini, Jacunski and Rapp), if any payment contingent on a change in control is subject to excise tax under the Code, then an additional payment will be made to the executive so that the amount he receives on a net basis will be the same amount he would have received without the excise tax. Beginning in 2011, the provision for excise tax gross-ups was eliminated from the new Change in Control Agreements for Company executives. Messrs. Astley and Hess’s Change in Control Agreements therefore do not contain a tax gross-up provision.
“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 agreements).
|
EXECUTIVE COMPENSATION
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:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2018 PROXY STATEMENT › 47
EXECUTIVE COMPENSATION
|
|
|
|
|
|
|
EXECUTIVE COMPENSATION
QUANTIFICATION OF PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
The following table, including the footnotes that follow, describes the potential payments to the NEOs 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, 2017.
Name | Death or Disability |
| Retirement |
| Involuntary Termination Without Cause |
| Change in Control |
| |||||||
Dante Parrini |
|
|
|
|
|
|
|
|
|
|
|
| |||
Severance Payments (1) | N/A |
| N/A |
| $ | 2,951,050 |
| $ | 4,869,325 |
| |||||
RSUs(2) | $ | 2,726,954 |
| $ | 1,866,598 |
| $ | - |
| $ | 2,726,954 |
| |||
SOSARs(2) | $ | 549,544 |
| $ | 232,614 |
| $ | - |
| $ | 549,544 |
| |||
PSAs(2)(3) | $ | 631,165 |
| $ | 631,165 |
| $ | - |
| $ | 1,821,200 |
| |||
Health & Welfare Benefits(4) | N/A |
| N/A |
| $ | 64,255 |
| $ | 64,255 |
| |||||
Outplacement Assistance | N/A |
| N/A |
| $ | 40,000 |
| $ | 40,000 |
| |||||
Pension(5)(6) | N/A |
| N/A |
| N/A |
| $ | 6,542,000 |
| ||||||
Excise Tax Gross-Up | N/A |
| N/A |
| N/A |
| $ | 6,164,170 |
| ||||||
Total | $ | 3,907,663 |
| $ | 2,730,377 |
| $ | 3,055,305 |
| $ | 22,777,448 |
| |||
John Jacunski |
|
|
|
|
|
|
|
|
|
|
|
| |||
Severance Payments (1) | N/A |
| N/A |
| $ | 964,823 |
| $ | 2,089,645 |
| |||||
RSUs(2) | $ | 1,085,099 |
| $ | 493,406 |
| $ | - |
| $ | 1,085,099 |
| |||
SOSARs(2) | $ | 201,936 |
| $ | 85,477 |
| $ | - |
| $ | 201,936 |
| |||
PSAs(2)(3) | $ | 231,923 |
| $ | 231,923 |
| $ | - |
| $ | 669,206 |
| |||
Health & Welfare Benefits(4) | N/A |
| N/A |
| $ | 51,280 |
| $ | 68,373 |
| |||||
Outplacement Assistance | N/A |
| N/A |
| $ | 30,000 |
| $ | 30,000 |
| |||||
Pension(5) | N/A |
| N/A |
| N/A |
| $ | - |
| ||||||
Excise Tax Gross-Up | N/A |
| N/A |
| N/A |
| $ | 1,135,882 |
| ||||||
Total | $ | 1,518,958 |
| $ | 810,807 |
| $ | 1,046,103 |
| $ | 5,280,141 |
| |||
Christopher Astley |
|
|
|
|
|
|
|
|
|
|
|
| |||
Severance Payments (1) | N/A |
| N/A |
| $ | 292,005 |
| $ | 1,343,386 |
| |||||
RSUs(2) | $ | 352,752 |
| $ | 199,789 |
| $ | - |
| $ | 352,752 |
| |||
SOSARs(2) | $ | 122,914 |
| $ | 52,028 |
| $ | - |
| $ | 122,914 |
| |||
PSAs(2)(3) | $ | 141,175 |
| $ | 141,175 |
| - |
| $ | 407,360 |
| ||||
Health & Welfare Benefits(4) | N/A |
| N/A |
| $ | 55,034 |
| $ | 73,378 |
| |||||
Outplacement Assistance | N/A |
| N/A |
| $ | 30,000 |
| $ | 30,000 |
| |||||
Pension(5) | N/A |
| N/A |
| N/A |
| $ | - |
| ||||||
Total | $ | 616,841 |
| $ | 392,993 |
| $ | 377,039 |
| $ | 2,329,790 |
| |||
Timothy Hess |
|
|
|
|
|
|
|
|
|
|
|
| |||
Severance Payments (1) | N/A |
| N/A |
| $ | 691,475 |
| $ | 1,368,750 |
| |||||
RSUs(2) | $ | 684,558 |
| $ | 137,318 |
| $ | - |
| $ | 684,558 |
| |||
SOSARs(2) | $ | 64,968 |
| $ | 27,500 |
| $ | - |
| $ | 64,968 |
| |||
PSAs(2)(3) | $ | 74,625 |
| $ | 74,625 |
| $ | - |
| $ | 279,577 |
| |||
Health & Welfare Benefits(4) | N/A |
| N/A |
| $ | 51,665 |
| $ | 68,887 |
| |||||
Outplacement Assistance | N/A |
| N/A |
| $ | 30,000 |
| $ | 30,000 |
| |||||
Pension(5) | N/A |
| N/A |
| N/A |
| $ | - |
| ||||||
Total | $ | 824,151 |
| $ | 239,444 |
| $ | 773,140 |
| $ | 2,496,740 |
| |||
Martin Rapp |
|
|
|
|
|
|
|
|
|
|
|
| |||
Severance Payments (1) | N/A |
| N/A |
| $ | 729,549 |
| $ | 1,514,942 |
| |||||
RSUs(2) | $ | 420,996 |
| $ | 269,106 |
| $ | - |
| $ | 420,996 |
| |||
SOSARs(2) | $ | 96,578 |
| $ | 40,880 |
| $ | - |
| $ | 96,578 |
| |||
PSAs(2)(3) | $ | 110,916 |
| $ | 110,916 |
| $ | - |
| $ | 315,854 |
| |||
Health & Welfare Benefits(4) | N/A |
| N/A |
| $ | 1,870 |
| $ | 2,493 |
| |||||
Outplacement Assistance | N/A |
| N/A |
| $ | 30,000 |
| $ | 30,000 |
| |||||
Pension(6) | N/A |
| N/A |
| N/A |
| $ | - |
| ||||||
Excise Tax Gross-Up(7) | N/A |
| N/A |
| N/A |
| $ | 721,325 |
| ||||||
Total | $ | 628,490 |
| $ | 420,902 |
| $ | 761,419 |
| $ | 3,102,188 |
|
|
|
|
|
2018 PROXY STATEMENT › 49
EXECUTIVE COMPENSATION
|
|
|
|
|
|
|
|
|
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 2017.
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 transactions;
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; and
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 of the Company or other members of the Board.
Compensation Committee Interlocks and Insider Participation
The current members of the Company’s Compensation Committee are Lee C. Stewart (Chair), Kathleen A. Dahlberg, Nicholas DeBenedictis and J. Robert Hall. No executive officer of the Company has served as a director or member of the
Compensation Committee (or other committee serving an equivalent function) of any other entity whose executive officers served as a director or member of the Compensation Committee of the Company.
2018 PROXY STATEMENT › 51
The Audit Committee has reviewed and discussedWhy did I receive these materials?
You are receiving these materials because, as a shareholder, the Company’s audited consolidated financial statements for the year ended December 31, 2017 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, theCompany is soliciting your vote on matters required to be discussedconsidered at the upcoming Special Meeting. The notice, this proxy statement, and the accompanying proxy card were first sent or given to shareholders on or about October 7, 2022. Please read this proxy statement and vote your shares by Auditing Standard No. 1301, “Communicationsmailing the attached proxy card, voting online at www.proxyvote.com, by telephone at 1-800-690-6903, or on the Meeting Website during the Special Meeting. The Board has appointed directors Kevin M. Fogarty and Lee C. Stewart, or either of them (the “Proxy Holders”) with Audit Committees,” as issued bypower of substitution, to vote all properly-executed proxies received from shareholders entitled to vote at 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 requirementsSpecial Meeting or at any adjournment, continuation, or postponement 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.Special Meeting.
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, 2017, 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 or the Securities Exchange Act of 1934, except to the extent that the Company specifically incorporates the Report by reference therein.
Richard C. Ill (Chair)
Bruce Brown
Kathleen A. Dahlberg
Nicholas DeBenedictis
|
When and where is the AnnualSpecial Meeting?
The 2018 AnnualSpecial Meeting of Shareholders will be held on Thursday, May 3, 2018,November 11, 2022, at 9:10:00 a.m., Eastern Time via live audio cast at www.virtualshareholdermeeting.com/GLT2022SM (Meeting Website). There will not be a physical location for the York County History Center, Historical Society Museum, 250 East Market Street, York, PA 17403.
Who maySpecial Meeting, and you will not be able to attend the meeting in person. To virtually attend the Special Meeting, visit the Meeting Website and what elseenter the 16-digit control number found on your proxy card or voting instruction form, as applicable.
If you encounter any difficulties accessing the virtual Special 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 requiredsoliciting 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 admittance?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.
Only shareholdersWho is entitled to vote?
Shareholders of record as of the close of business on the Record Date (September 26, 2022) may vote at the Special Meeting. At the close of business on the Record Date, there were 44,796,505 shares of the Company’s common stock on March 9, 2018 (the “Record Date”) may attend the Annual Meeting,issued and those shareholders attending in person must present an admission ticket or other proof of stock ownership to be admitted to the Annual Meeting. For example, a shareholder may present an account statement or a letter from his/her bank or broker confirming that the shareholder owned Company common stock on the Record Date.
For registered shareholders of the Company, an admission ticket is attached to their proxy card. Registered shareholders planning to attend the Annual Meeting are requestedoutstanding and eligible to vote in advance of the Annual Meeting by telephone, internet or mail by completing and mailing in their proxy card, retaining the admission ticket and presenting the ticket at the Annual Meeting if they plan to attend.Special Meeting.
Shareholders whose shares are registered in the name of a bank, broker or other institution are referred to as “beneficial owners” of Company stock. Beneficial owners should have received voting instructions or a proxy card from their broker or agent rather than from the Company and should follow the voting instructions provided by their broker or agent to ensure that their votes are counted.
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 (or stockholder) of record. If you are a registered shareholder, we sent this Noticethe notice 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.” This Notice hasThe notice 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.
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 2018 Annual Meeting. The Notice of Annual Meeting, this proxy statement, the accompanying proxy card and our 2017 Annual Report to shareholders, were first sent or given on or about March 29, 2018. Please read this proxy statement and vote your shares by mailing the attached proxy card, voting online, by telephone or in person at the Annual Meeting. The
Board has appointed directors Nicholas DeBenedictis and Kevin M. Fogarty, 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 Annual Meeting or at any adjournment of the Annual Meeting.
Who is entitled to vote?
Shareholders of record as of the close of business on March 9, 2018, the Record Date, may vote at the Annual Meeting. At the close of business on March 9, 2018, there were 43,695,415 shares of the Company’s common stock issued and outstanding and eligible to vote at the Annual Meeting.
How do I vote?
If you are a registered shareholder: Ifshareholder, meaning you hold your shares in your own name as a holder of record, you may vote in person atby attending the AnnualSpecial 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. You mayIf you are the record holder of your stock, you can vote yourby proxy by telephone at 1-800-652-VOTE (8683), online at http://www.investorvote.com/GLT 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 mark, sign and date your proxy card prior to mailing. 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 |
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. |
All valid proxies received and not revoked prior to the AnnualSpecial Meeting will be voted in accordance with your instructions.
If you are a beneficial owner: Ifowner, 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.
Who may virtually attend the Special Meeting and what else is required for admittance?
Only shareholders of the Company’s common stock on the Record Date (September 26, 2022) may attend the Special 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. 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 to the Meeting Website will be available starting at 9:45 a.m. Eastern Time, on November 11, 2022.
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 AnnualSpecial 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 various national and regional securities exchanges,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 3 (Fix Board Size by Board Resolution) and Proposal 4 (Elimination of Designated Annual Meeting Date and Time) are routine matters. Proposal 1 (election(Majority Voting), Proposal 2 (Elimination of directors)Cumulative Voting), Proposal 5 (Proxy Access) and Proposal 3 (advisory vote on executive compensation)6 (Shareholder Approval – Voting Standards) are non-routine matters. Proposal 2 (ratification of auditors) is routine.
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 Special 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.
2018 PROXY STATEMENT › 53
FREQUENTLY ASKED QUESTIONS
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 if theyby: (1) deliverdelivering a written revocation of their proxy to the Company’s Secretary; (2) submitsubmitting a later-dated proxy (or voting instruction form if they hold their shares in street name); or (3) vote in person atvoting on the AnnualMeeting Website during the Special 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 AnnualSpecial Meeting?
As of March 9, 2018, 43,695,415September 26, 2022, 44,796,505 shares of the Company’s common stock were outstanding and entitled to vote. The presence 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 or broker “non-votes”“broker non-votes” are counted as present and entitled to vote for purposes of determining a quorum. A broker “non-vote”“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.
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FREQUENTLY ASKED QUESTIONS |
May shareholders ask questions atduring the AnnualSpecial Meeting?
Yes. If you wish to submit a question, you may do so in two ways. To ask a question in advance of the Special Meeting, you may log into www.proxyvote.com and enter your 16-digit control number and use the Submit a Question for Management box. Alternatively, you will be able to submit questions live during the Special Meeting through the Q&A box by accessing the Meeting Website at www.virtualshareholdermeeting.com/GLT2022SM. After the formal business of the meetingSpecial Meeting has concluded and adjourned, the chairmanchair of the meetingSpecial Meeting will answer questions from shareholders during the designated question and answer (“Q&A”) period of the meeting. To provide anSpecial Meeting agenda.
In order to give as many shareholders as possible the opportunity for everyone wishing to ask a question, shareholdersquestions, we ask that questions are succinct and cover only one topic per question. Up to three minutes will be limitedallocated to three (3) minutesread and respond to each question that we are able to present their question. When speaking, shareholders must directanswer during the Special 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 chairman and limit theirCompany will not address questions to matters relating directlythat are:
Irrelevant to the business of the meeting. Shareholders willCompany or to the business of the Special Meeting
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 be permittedmatters of interest to make statements.shareholders generally
Who pays
Out of order or not otherwise suitable for the proxyconduct of the Special 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 Special Meeting by contacting Investor Relations at (717) 225-2746 or ir@glatfelter.com.
Who will pay for the solicitation related to the Annual Meeting?of proxies?
The Company payscosts and expenses of the costBoard’s soliciting of preparing, printing, assemblingproxies, including the preparation, assembly and mailing of this Proxy Statement, the Proxy Card, the notice of the Special Meeting of Shareholders 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 personal solicitation by our directors, officers or staff members. Other than the persons described in this Proxy Statement, no general class of employee of the Company will be employed to solicit shareholders in connection with this proxy statementsolicitation. However, in the course of their regular duties, our employees, officers and other proxydirectors 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. The Companymaterials will alsobe 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 will reimburse brokersbrokerage houses and other custodians, nominees and fiduciaries for their reasonable out-of-pocket expenses for forwarding proxy and solicitation material to the proxy statement and other proxy solicitation materialsbeneficial owners of common stock.
We have engaged MacKenzie Partners, Inc. to beneficial owners. In addition toassist in the solicitation of proxies by mail, somein connection with the Annual Meeting, for a service fee and the reimbursement of our directors, officers, other employees and agents may solicit proxies personally, by telephone and by other means. The officers and directors who may solicit proxies personally receive no special compensation for any solicitation activities.customary disbursements, which 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
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What proposals will be acted upon at the meeting,Special Meeting, and what number of votes is needed for the proposals to be adopted?
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| 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 Size by Resolution | Majority of Votes Outstanding and Entitled to be Cast | Yes | Vote Against | Not applicable, as this is a routine matter | |||||
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4 | Elimination of | Majority of Votes Outstanding and Entitled to be Cast |
| Yes | Vote Against | Not | ||||
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 |
ElectionMajority Voting. The affirmative vote of Directors. As required by our bylaws, each of the nine nominees for election has submitted an irrevocable resignation in advance. Because each of the nominees is an incumbent director, the following procedure applies if the nominee receives a plurality but not a majority of votes cast. Although the nomineecommon shares of the Company outstanding and entitled to vote at the Special Meeting is required to approve and adopt the amendments to the Company’s Articles of Incorporation and Bylaws to implement a majority voting standard for uncontested 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 beenthe 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 for the election of directors in uncontested director elections. In contested elections, directors would continue to be elected by a plurality vote of shareholders. The proposed amendment presented in Proposal 2 below, which is not contingent upon 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 determine whethernot 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 acceptvote at the nominee’s advance irrevocable resignation, sinceSpecial Meeting is required to approve and adopt the nominee didamendment to the Company’s Bylaws to eliminate a designated annual meeting date and time. Abstentions and shares not receivein 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.
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FREQUENTLY ASKED QUESTIONS |
Proxy Access. The affirmative vote of a majority of the votes cast for each director. For more information regarding the election of directors and the resignation procedure, see the discussion of the “Directorcommon shares of the Company and entitled to vote at the Special Meeting is required to approve and adopt the amendment to the Company’s Bylaws to provide for proxy access. 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 5 is not contingent upon the approval of any other Proposal.
Shareholder Approval – Voting and Resignation Policy” in the “Corporate Governance and Board” sectionStandards. The affirmative vote of this proxy statement.
Ratification of Independent Registered Public Accounting Firm. Aa majority of the votes entitled to be cast at the meeting, in person or by proxy, must vote “For”Special Meeting is required to approve and adopt the ratification of Deloitte & Touche LLP asamendments to the Company’s independent public accounting firmBylaws to provide for majority voting standards. Abstentions and shares not in attendance and not voted at the proposal to be adopted.
Approval of Named Executive Officer Compensation. This proposal gives you,Special Meeting will not count as a shareholder, the opportunity to endorse, not endorse, or take no position on our compensation program for the NEOs. A majority of the votes entitled to bevote cast at the meeting, in person or by proxy, must vote “For” the proposal to approve NEO compensation for fiscal year 2017. While the Board intends to carefully consider the shareholder vote on this proposal but will have the same effect as a vote “Against” the proposal. The proposed amendments presented in this vote isProposal 6 are not binding oncontingent upon the Company and is advisory in nature.approval of any other Proposal.
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FREQUENTLY ASKED QUESTIONS
What are the Board of Directors’ recommendations for voting on these proposals?
The Board recommends a vote:
FOR the electionapproval of an amendment to the Articles of Incorporation and Bylaws of the nine nomineesCompany to implement a majority voting standard for director;uncontested director elections;
FOR the ratificationapproval of Deloitte & Touche LLP asan amendment to the Company’s independent registered public accounting firm for fiscal year 2018; andArticles of Incorporation of the Company to eliminate cumulative voting in director elections;
FOR approvalthe amendment of named executive officer compensation. 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 Annual Meeting, except each shareholder has cumulative voting rights for electing directors. Cumulative voting means a shareholder is entitled to as many votes in electing directors as is equal to the number of shares of common stock owned by the shareholder on the Record Date, multiplied by the number of directors to be elected. Accordingly, for the election of nine directors, a shareholder may either cast that total number of votes “For” or “Withhold” all of those votes from a single nominee. The shareholder may also distribute or withhold the total number of votes among the nine nominees as the shareholder determines, up to the number of shares of common stock owned by the shareholder on the Record Date, multiplied by nine. To utilize cumulative voting, a shareholder must check the appropriate box on the proxy card.Special Meeting.
For the proposal to ratifyamend the appointmentArticles of Deloitte & Touche LLP as the Company’s independent registered public accounting firmIncorporation to implement majority voting for the fiscal year ending December 31, 2018,election of directors in uncontested elections, a shareholder may either vote “For” or “Against” the proposal or “Abstain” from voting.
For the non-binding advisory vote on executive compensation, commonly known as a “say on pay” vote,proposal to amend the Articles of Incorporation to eliminate cumulative voting, 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 meeting?Special Meeting?
No. TheNo, the Company’s by-laws required shareholdersBylaws do not provide for the submission of other business to submita special meeting of stockholders, and therefore, the business to be acted upon at the Special Meeting will be limited to the Company, by November 30, 2017, notice of all director nominations and shareholder proposals to be considered at the 2018 Annual Meeting, regardless of whether shareholders sought inclusion of their nomination or proposalbusiness set forth 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 2018 Annual Meeting.statement.
How may a shareholder present a proposal for next year’s Annual Meeting?
A shareholder wishing to present a proposal at the 2019 Annual Meeting must submit it to the Company’s Secretary prior to the preparation of the 2019 proxy statement, and the Company’s by-laws prescribe the procedures a shareholder must follow. To present a proposal for consideration at the 2019 Annual Meeting, whether or not the shareholder wishes to include the matter in
the proxy statement for that meeting, a notice including all of the information required by the Company’s by-laws must be submitted in writing to the Company’s Secretary and delivered to, or mailed and received by, the Company no later than the close of business on November 30, 2018, regardless of delivery method.
How may a shareholder nominate a candidate to sit on the Board of Directors?
A shareholder may recommend nominees for consideration by the Board’s Nominating and Corporate Governance Committee for nomination for election to the Board. Shareholder recommendations for director nominees will receive the same consideration by the Nominating and Corporate Governance 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. Such recommendation must be made in accordance with the procedures described herein and in the Company’s by-laws. To nominate a candidate for director at the 2019 Annual Meeting, notice of the nomination must be in writing and delivered to, or mailed and received by, the Company no later than the close of business on November 30, 2018.
What must be included in the notice to submit a shareholder proposal or to nominate a director candidate?
Requirements for the notice are as follows:
A proposal submitted by a shareholder must include a description of the business desired to be brought before the meeting, the reasons for conducting the business at the meeting and any material interest the shareholder has in the business.
A nomination for election to the Board must include information regarding the nominee (name, address, occupation, number of shares held and a representation by both shareholder and nominee that there are no undisclosed voting arrangements).
The notice must include:
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2018 PROXY STATEMENT › 55
FREQUENTLY ASKED QUESTIONS
This is a general description of the notice required to submit a proposal or nomination for consideration at the 2018 Annual Meeting. The Company’s by-laws contain a complete description of the notice requirements for shareholder proposals. Copies of the Company’s by-laws may be obtained from the Company’s website at www.glatfelter.com/about_us/corporate_governance /bylaws.aspx or at no charge from the Company’s Secretary. The proposal and notice must otherwise comply with the requirements of Rule 14a-8 under the Exchange Act.
How may a shareholder communicate with the Company’s Board or the non-managementindependent directors of the Company?
A shareholderInterested parties may address written correspondence to the Board or any individual director (whether managementManagement or non-management)independent), c/o Company Secretary, P. H. Glatfelter Company, 96 South GeorgeCorporation, 4350 Congress Street, Suite 520, York, PA 17401-1434.600, 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 Chairchair 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 non-managementindependent director by calling the Company’s toll-free Integrity Helpline at 800-346-1676.
1-800-346-1676.
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2022 PROXY STATEMENT | › | 19 |
Copies of the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, as filed with the SEC, are being mailed to shareholders with this proxy statement. A shareholder may obtain a copy of the Annual Report, this proxy statement, and form of proxy, relating to this annual meeting and future
meetings of shareholders, without charge by writing to: Investor Relations, P. H. Glatfelter Company, 96 South George Street, Suite 520, York, PA 17401. The 10-K, proxy statement and Annual Report can also be obtained through our website, www.glatfelter.com.
As of the date of this proxy statement, the Board knows of no business that will be presented for consideration at the AnnualSpecial Meeting other than the items referred to above. If any other matter is properly brought before the AnnualSpecial 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 AnnualSpecial 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 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 Investor Relations, P. H. Glatfelter Company, 96 South GeorgeCorporation, 4350 Congress Street, Suite 520, York, PA 17401,600, Charlotte, NC 28209, or call us at (717) 225-2719, if the shareholder (1) wishes to receive a separate copy of an Annual Report orthe proxy statement for thisthe Special Meeting; (2) wishes to receive separate copies of those materialsthe proxy statements for future meetings;special meetings of shareholders; or (3) is sharing an address and wishes to request delivery of a single copy of Annual Reports orthe proxy statements if the shareholder is now receiving multiple copies of Annual Reports or proxy statements.
2022 PROXY STATEMENT | › | 20 |
2018Appendix 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. |
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. |
2022 PROXY STATEMENT | › | A-1 |
APPENDIX A |
PROXY STATEMENT › 57PREFERRED 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. |
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: |
(a) | The designation of such series; |
Using a black ink pen, mark your votes
(b) | The dividend rate of such series; |
(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; |
(d) | The amounts payable upon shares of such series in the event of voluntary liquidation of the Company; |
(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; |
(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 |
(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. |
The Board of Directors may from time to time authorize and direct by resolution or resolutions an X as shownincrease in this example. Please do not write outside the designated areas. X P. H. GLATFELTER COMPANY 02SCUB 1 U P X + Annual Meeting Proxy Card . IMPORTANT ANNUAL MEETING INFORMATION + A 1. Election of Directors: CUMULATIVE VOTING: Director Nominees Number of Votes 01 - Bruce Brown ________ Votes FOR 02 - Kathleen A. Dahlberg ________ Votes FOR 03 - Nicholas DeBenedictis ________ Votes FOR 04 - Kevin M. Fogarty ________ Votes FOR 05 - J. Robert Hall ________ Votes FOR 06 - Richard C. Ill ________ Votes FOR 07 - Ronald J. Naples ________ Votes FOR 08 - Dante C. Parrini ________ Votes FOR 09 - Lee C. Stewart ________ Votes FOR Total Votes Cast ________ 01 - Bruce Brown 02 - Kathleen A. Dahlberg 03 - Nicholas DeBenedictis 04 - Kevin M. Fogarty 05 - J. Robert Hall Mark here to WITHHOLD vote from all nominees Mark here to vote FOR all nominees For All EXCEPT - To withhold a vote for one or more nominees, mark the box to the left and the corresponding numbered box(es) to the right. CUMULATIVE VOTING: If you desire to allocate your votes to individual nominees on a cumulative basis, as explained in the Proxy Statement, mark the CUMULATIVE VOTING box and indicate the number of votes that you would like to cast FOR each nominee. The total of the votes you cast on this proxy may not exceed the number of shares you ownof 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 |
2022 PROXY STATEMENT | › | A-2 |
APPENDIX A |
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. |
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. |
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. |
(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 |
2022 PROXY STATEMENT | › | A-3 |
APPENDIX A |
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. |
(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. |
(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 |
2022 PROXY STATEMENT | › | A-4 |
APPENDIX A |
(including the elapsed portion of the current dividend period), less the amount of all dividends paid, or deemed paid upon such share. |
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. |
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: |
(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; |
2022 PROXY STATEMENT | › | A-5 |
APPENDIX A |
(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; |
(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 |
(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. |
(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. |
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 9. NOTE: If you wishbe subject to use cumulativethe 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.
2022 PROXY STATEMENT | › | A-6 |
APPENDIX A |
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. |
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. |
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). |
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.
2022 PROXY STATEMENT | › | A-7 |
Appendix B
GLATFELTER CORPORATION
(a Pennsylvania corporation)
AMENDED AND RESTATED BYLAWS
(Amended and Restated as of , 2022)
2022 PROXY STATEMENT | › | B-1 |
APPENDIX B |
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 |
2022 PROXY STATEMENT | › | B-2 |
APPENDIX B |
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 |
2022 PROXY STATEMENT | › | B-3 |
APPENDIX B |
GLATFELTER CORPORATION
(a Pennsylvania corporation)
AMENDED AND RESTATED BYLAWS
(Amended and Restated as of , 2022)
MEETINGS OF SHAREHOLDERS AND RECORD DATE
1.6 | VOTING. |
(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 |
2022 PROXY STATEMENT | › | B-4 |
APPENDIX B |
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. |
(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. |
1.8 | CONSIDERATION OF DIRECTOR NOMINATIONS AND BUSINESS AT SHAREHOLDERS’ MEETINGS. |
(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. |
(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. |
(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 |
2022 PROXY STATEMENT | › | B-5 |
APPENDIX B |
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. |
(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. |
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 |
2022 PROXY STATEMENT | › | B-6 |
APPENDIX B |
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. |
1.9 | ADVANCE NOTICE OF SHAREHOLDER NOMINATIONS AND OTHER BUSINESS. |
(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. |
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
2022 PROXY STATEMENT | › | B-7 |
APPENDIX B |
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. |
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. |
(d) | Disclosure Requirements. |
(i) | To be in proper form, a shareholder’s notice to the Secretary of the Company must include the following, as applicable: |
(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 |
2022 PROXY STATEMENT | › | B-8 |
APPENDIX B |
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 |
2022 PROXY STATEMENT | › | B-9 |
APPENDIX B |
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; |
(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 |
2022 PROXY STATEMENT | › | B-10 |
APPENDIX B |
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; |
(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 |
(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 |
2022 PROXY STATEMENT | › | B-11 |
APPENDIX B |
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. |
(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. |
(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. |
(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. |
(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 |
2022 PROXY STATEMENT | › | B-12 |
APPENDIX B |
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. |
(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. |
(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. |
(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. |
(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. |
2022 PROXY STATEMENT | › | B-13 |
APPENDIX B |
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. |
1.11 | SHAREHOLDER REQUESTED SPECIAL MEETINGS. |
(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. |
(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. |
(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 |
2022 PROXY STATEMENT | › | B-14 |
APPENDIX B |
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. |
(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. |
(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. |
(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 |
(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. |
(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. |
(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. |
(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 |
2022 PROXY STATEMENT | › | B-15 |
APPENDIX B |
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. |
(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. |
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. |
2022 PROXY STATEMENT | › | B-16 |
APPENDIX B |
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. |
2.4 | ELECTION OF DIRECTORS; MAJORITY VOTING RESIGNATION POLICY. |
(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). |
(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). |
(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. |
2022 PROXY STATEMENT | › | B-17 |
APPENDIX B |
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. |
2.12 | QUORUM AND ACTION BY UNANIMOUS CONSENT. |
(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. |
(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. |
2.13 | COMPENSATION. Directors shall receive such compensation for their services as shall be fixed by the Board of Directors. |
2022 PROXY STATEMENT | › | B-18 |
APPENDIX B |
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. |
2022 PROXY STATEMENT | › | B-19 |
APPENDIX B |
INDEMNIFICATION
2022 PROXY STATEMENT | › | B-20 |
APPENDIX B |
2022 PROXY STATEMENT | › | B-21 |
APPENDIX B |
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. |
STOCK CERTIFICATES AND CORPORATE SEAL
NOTICES
2022 PROXY STATEMENT | › | B-22 |
APPENDIX B |
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. |
AMENDMENTS
EMERGENCY BYLAWS
7.2 | MEETINGS. During any such emergency: |
(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. |
(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 |
2022 PROXY STATEMENT | › | B-23 |
APPENDIX B |
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. |
(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. |
7.5 | LIABILITY. No officer, director or employee acting in accordance with these emergency bylaws shall be liable except for willful misconduct. |
PENNSYLVANIA ACT 36 OF 1990
FORUM SELECTION
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 you MUST voteinstructions 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 mail. 06 - Richard C. Ill 07 - Ronald J. Naples 08 - Dante C. Parrini 09 - Lee C. Stewart Proposals — 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
THIS 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 all the nominees listedProposals 1, 2, 3, 4, 5 and FOR Proposals 26.
1. Proposal to approve amendments to our Articles of Incorporation and 3. For Against Abstain 3. Advisory approval of the Company’s named executive officer compensationBylaws to implement a majority voting standard for the fiscal year ended December 31, 2017. uncontested director elections.
2. Proposal to ratifyapprove 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 appointmentBoard of Deloitte & Touche LLPDirectors 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
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 independent registered public accounting firmMeeting 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 Company for the fiscal year ending December 31, 2018. MMMMMMMMMMMM MMMMMMMMMMMMMMM 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000004 MR A SAMPLE DESIGNATION (IF ANY) ADD 1 ADD 2 ADD 3 ADD 4 ADD 5 ADD 6 ENDORSEMENT_LINE______________ SACKPACK_____________ 1234 5678 9012 345 MMMMMMM 3 7 3 2 8 7 1 MR A SAMPLE (THIS AREA IS SET UP TO ACCOMMODATE 140 CHARACTERS) MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MMMMMMMMM C 1234567890 J N T C123456789 2022 Special Meeting of Shareholders is available at www.glatfelter.com/investors/financials-and-filings/ and www.proxyvote.com.
IF VOTING BY MAIL, YOU MUST COMPLETE SECTIONS A - C ON BOTH SIDES OF THIS CARD. Admission Ticket qIF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION,SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.q Electronic Voting Instructions Available 24 hours a day, 7 days a week! Instead of mailing your proxy, you may choose one of the voting methods outlined below to vote your proxy. VALIDATION DETAILS ARE LOCATED BELOW IN THE TITLE BAR. Proxies submitted by the Internet or telephone must be received by 11:59 p.m., Eastern Time, on May 2, 2018. Vote by Internet • Go to www.investorvote.com/glt • Or scan the QR code with your smartphone • Follow the steps outlined on the secure website Vote by telephone • Call toll free 1-800-652-VOTE (8683) within the USA, US territories & Canada on a touch tone telephone • Follow the instructions provided by the recorded message
YORK, PENNSYLVANIA ENVELOPE.
D91492-S53608
Proxy — GLATFELTER CORPORATION CHARLOTTE, NORTH CAROLINA
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY FOR THE ANNUALSPECIAL MEETING OF SHAREHOLDERS TO BE HELD MAY 3, 2018, 9:FRIDAY, NOVEMBER 11, 2022 AT 10:00 A.M. EASTERN TIME
The undersigned shareholder of P. H. Glatfelter CompanyCorporation hereby appoints Nicholas DeBenedictis and 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 annual meetingSpecial Meeting of shareholdersShareholders of the Company to be held virtually at the York County History Center, Historical Society Museum, 250 E. Market St. York, PA 17403www.virtualshareholdermeeting.com/GLT2022SM on Thursday, May 3, 2018,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 the re-election of each of the directors listedProposals 1, 2,
3, 4, 5 and FOR proposals 2 and 3. (PLEASE6.
(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) Proxy — P. H. GLATFELTER COMPANY IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE 2018 ANNUAL MEETING OF SHAREHOLDERS TO BE HELD MAY 3, 2018. P. H. Glatfelter Company’s Proxy Statement for the 2018 Annual Meeting of Shareholders and the Annual Report for the year ended December 31, 2017, are available via the Internet at: www.glatfelter.com/about_us/investor_relations/sec_filings.aspx and also at www.investorvote.com/glt B Non-Voting Items Change of Address — Please print new address below. Comments — Please print your comments below. C Authorized Signatures — This section must be completed for your vote to be counted. — Date and Sign Below In voting by mail this section must be completed for your vote to be counted. Please sign exactly as name(s) appear hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title. Date (mm/dd/yyyy) — Please print date below. Signature 1 — Please keep signature within the box. Signature 2 — Please keep signature within the box. IF VOTING BY MAIL, YOU MUST COMPLETE SECTIONS A - C ON BOTH SIDES OF THIS CARD. + + 2018 Annual Meeting Admission Ticket Thursday, May 3, 2018 at 9:00 a.m. York County History Center, Historical Society Museum 250 E. Market Street, York, PA 17403 Upon arrival, please present this admission ticket, photo identification and any other required documents. Driving Instructions to the York County History Center, Historical Society Museum, 250 E. Market Street, York, PA 17403: From the South: Take I-83 North to Exit 15 (S. George Street - Business 83). Follow George St. into the Center Square of York (Market & George St. intersection). Make a right on Market St. and go 3 blocks to 250 E. Market on your right. From the North: Take I-83 to Exit 22 (N. George Street). Follow George St. South to traffic light at Market St. Make a left on Market St. and go 3 blocks to 250 E. Market St. on your right. From the East: Take Route 30 West and make a left onto George Street (just past I-83) and follow directions from the North above. From the West: Take Route 462 (W. Market Street) from Route 30. Follow Market Street into town to 250 E. Market St. on your right. qIF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.q