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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Glatfelter Corporation
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2022 PROXY STATEMENT | 1
NOTICE OF ANNUALSPECIAL MEETING OF SHAREHOLDERS
Time and Date: | , 2022 | |
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Place: | Virtual Meeting | |
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The 2020 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 7, 2020, 2022 at 8:00 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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| such other business as may properly come before the |
Only holders of record of the Company’s common stock at the close of business on March 17, 2020, 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 1-800-690-6903, online at www.proxyvote.com, or by completing and signing the enclosed proxy card and returning it promptly in the enclosed envelope (requiring no postage if mailed in the United States). If you choose, you may still vote in person atonline during the AnnualSpecial Meeting, even if you previously voted by telephone, Internetinternet, or mail.
TheBecause the health and safety of our shareholders, directors, officers, employees, and other attendees and the public at large, areremain our most important concerns. We presently intend to hold our Annualconcerns, we are holding the Special Meeting exclusively in person. However, in light ofa virtual only format via live webcast on the public health and safety concerns associated with the current coronavirus (COVID-19) outbreak, we may elect under our By-laws to change the Annual Meeting location and hold it solely via remote communications,internet, also known as a “virtual meeting,meeting.” rather than atThere will not be a physical location. In that case,location for the Special Meeting, and you wouldwill not be able to attend the AnnualSpecial Meeting physically,in person.
To participate in the Special Meeting, you must log onto www.virtualshareholdermeeting.com/GLT2022SM (the “Meeting Website”) and enter the Company will provide reasonable advance notice of that decision, as well as instructions16-digit control number found on how to attend the virtual Annual Meeting, through a press release and Securities and Exchange Commission filing. We will also provide this information on the Investor Relations page of our website www.glatfelter.com. Your Notice of Availability,your proxy card or voting instruction form, will not be updated to reflect the change to a virtual meeting and you will need the 16-digit control number provided to attend the virtual meeting.as applicable. Therefore, it is very important that you retain your Notice of Availability, proxy card or voting instruction form, as applicable, if you wish to virtually attend the Special Meeting. You may vote your shares and related materials, includingask 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 on , 2022. Whether or not you plan to virtually attend the Special Meeting, we urge you to vote and submit your assigned 16-digit control number, through the dateproxy in advance of the Annual Meeting.Special Meeting by one of the methods described above.
Jill L. Urey, Secretary
March 31, 2020 , 2022
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE 2022 SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON , 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 STATEMENT | › |
Table of Contents
2022 PROXY STATEMENT |
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This Proxy Summary highlights information explained more fully elsewhere in this proxy statement. We ask that you read the entire proxy statement before voting.
Special Meeting Information
Time and Date: |
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Place: | Virtual Meeting | |
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Record Date: |
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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
The 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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| Board Recommendation | Page |
1 | PROPOSAL 1 — Election of Directors | 9 | |
| 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 | 13 | |
| 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 2020. Shareholders are being asked to ratify the Audit Committee’s selection of the independent auditor. | FOR |
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3 | PROPOSAL 3 — Advisory Approval of Named Executive Officer Compensation | 14 | |
| 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. | FOR |
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CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING INFORMATION
This proxy statement contains forward-looking statements within the meaning of federal securities laws. Forward-looking statements may be identified by words like “anticipate,” “expect,” “project,” “believe,” “plan,” “may,” “estimate,” “intend,” and other similar words. These forward-looking statements are based on our beliefs, assumptions, and estimates using information available to us at the time and are not intended to be guarantees of future events or performance. Factors that may cause actual results to differ materially from those contemplated by the statements in this proxy statement can be found in our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) and in the Quarterly Reports on Form 10-Q we have filed or will file with the SEC hereafter under the headings “Risk Factors” and “Forward-Looking Statements”.
You are cautioned not to place undue reliance on any of our forward-looking statements. We disclaim any intention or obligation to publicly update or revise any forward-looking statements, except as required by law. This cautionary statement applies to all forward-looking statements contained in this document.
2020 PROXY STATEMENT › 1
PROXY SUMMARY
Our commitment to sustainability and being a responsible corporate citizen has been longstanding and is reflected in our Core Values. We operate our business in line with those values, and we contribute to the health, well-being and everyday living of millions of people around the world. Our existing products contain mostly plant-based fibers and are engineered for performance.
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 and govern our business for the long-term. Our Core Values are:
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Over the last few years, we have undertaken a strategic transformation to evolve Glatfelter from a paper business in secular decline to a leading global supplier of engineered materials that is less capital intensive and focused on consistently meeting or exceeding our shareholders’ expectations. We manage the new Glatfelter under an integrated functional operating model with two distinct reporting segments: Airlaid Materials and Composite Fibers – serving high-value, niche nonwovens growth markets. We implemented the functional operating model to accelerate the transformation which enables us to operate a leaner, flatter, more agile organization focused on supply chain effectiveness, product innovation and sustainability. We believe these initiatives are important to achieving our goals of building a more profitable, cash-generative, and consistently performing business.
In 2019 and continuing into 2020, Glatfelter is implementing several measures to enhance and formalize our sustainability priorities under the ESG (Environmental, Social, Governance) pillars.
2020 PROXY STATEMENT › 2
PROXY SUMMARY
Our Board of Directors
Our directors have a diversity of experience that spans a broad range of industries in the public, private and not-for-profit sectors. They bring a wide variety of skills, qualifications and viewpoints that strengthen and enrich 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.
2020 PROXY STATEMENT › 3
PROXY SUMMARY
Glatfelter is a leading global supplier of engineered materials currently headquartered in York, PA and transitioning to its new headquarters in Charlotte, North Carolina effective mid-year 2020. Our high-quality, innovative and customizable solutions are found in tea and single-serve coffee filtration, personal hygiene products as well as in many diverse packaging, home, and industrial applications. For the year ending December 31, 2019, our net sales were nearly $1 billion to customers in over 100 countries and we employed approximately 2,600 people worldwide. We own and operate eleven manufacturing facilities located in the United States, Canada, Germany, France, the United Kingdom and the Philippines. Our manufacturing facilities have a combined production capacity of approximately 293,000 metric tons of composite fibers and airlaid materials used in a wide array of applications. In addition, we operate sales and distribution offices in Russia, Italy, China, and the United States. Additional information about Glatfelter may be found in our Annual Report posted at http://www.glatfelter.com/about_us/ investor_relations/annual_reports.aspx.
We manage our business and make investment decisions under a functional operating model with two distinct reporting segments: Airlaid Materials and Composite Fibers. These segments serve growing global customers and markets by providing innovative and customizable solutions that ultimately deliver high-quality engineered materials. For more than 150 years, we have demonstrated a strong commitment to sustainability through deep partnerships with our customers and suppliers, and broadly promote responsible corporate citizenship in the communities in which we operate.
Our growth strategy focuses on expanding our engineered materials business by building leading positions in high-value, specialty businesses supported by new product and business development, organic investments and acquisitions, and optimization of our cost structure to deliver on the expectations of our stakeholders.
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2019 was a remarkable and productive year for Glatfelter as we completed several important steps toward transforming the Company to a higher-margin, growth-oriented engineered materials business.
Our Airlaid Materials segment delivered breakthrough results with record EBITDA of $62 million and 15.3% EBITDA margin. The business drove 11% legacy volume growth by servicing the North American airlaid markets with the successful operation of our new Fort Smith, Arkansas facility and achieved the high-end operating targets at our state-of-the-art Steinfurt, Germany facility at the conclusion of its first year of operations under Glatfelter’s ownership that took effect in October 2018.
Our Composite Fibers segment delivered 14% EBITDA margin despite challenging market conditions.
We refinanced our debt for $7 million in interest savings and increased operating earnings, further improving our financial flexibility for future investments.
We successfully terminated the long-standing U.S. qualified pension plan and settled our qualified pension liabilities for all participants, creating a pathway to revert approximately $32 million of unrestricted surplus cash to the Company. This event, coupled with the refinancing of our debt and strong earnings, enabled us to significantly reduce our financial leverage. Our adjusted free cash flow was $56 million higher than 2018, excluding cash related to the pension settlement.
2020 PROXY STATEMENT › 4
PROXY SUMMARY
We settled the long-standing Fox River environmental matter within amounts previously reserved, agreeing to perform long-term monitoring and maintenance.
We successfully implemented our new functional operating model that is built for greater speed and efficiency and restructured our senior leadership structure to sharpen our focus on driving growth and sustainable profitability.
As we entered 2020, our focus on delivering our strategic imperatives continued. In early January, we announced a 100-person restructuring at our Gernsbach, Germany facility, including the discontinuation of its metalized production, which we will now concentrate at our Caerphilly, UK facility. We also announced cost optimization actions in Dresden, Germany to balance production with demand in our wallcover facility.
In February 2020, we announced plans to relocate the Company’s corporate headquarters from York, Pennsylvania to Charlotte, North Carolina, in mid-2020. Our decision to move Glatfelter’s headquarters to a larger metropolitan area is another important step in our ongoing transformation. We look to enhance our access to more efficient business travel and availability of a larger pool of critical resources and talent for future growth by locating the headquarters in the Carolinas, which is known as a leading hub for the broader nonwovens industry.
Glatfelter Transformation History – Building Momentum in Engineered Materials
We have taken a number of meaningful steps over recent years to evolve Glatfelter from a company with significant exposure to paper markets in secular decline to a leading global supplier of engineered materials. Ultimately, the combined multi-year actions we have taken across the enterprise to achieve a more growth-driven portfolio, less capital-intensive and more cash-generative business, have positioned us well to further enhance shareholder value. We remain committed to aggressively managing costs and improving operating efficiencies to ensure we have the most competitive cost structure for our current scale as we continue to execute our business transformation. Our goals are to maintain and grow our leading positions in our chosen markets, partner with customers to co-create innovative solutions for new markets and generate strong earnings growth and free cash flows.
2020 PROXY STATEMENT › 5
PROXY SUMMARY
2019 Financial Performance - Year in Review
On an adjusted basis, a non-GAAP measure, our earnings for 2019 totaled $33.2 million, or $0.75 per share, compared with $9.2 million, or $0.21 per share, a year ago. These results reflect the positive momentum from the actions we have taken in 2019 to transform our business by sharpening our focus on commercial excellence, supply chain efficiencies, and rigorous cost optimization across the enterprise. Our legacy volume growth and successful acquisition integration in Airlaid Materials improved earnings per share by $0.14; Composite Fibers declined by $0.01; corporate cost rightsizing and cost reduction efforts generated $0.20; and our debt refinancing, improved tax rate, and the resolution of tax matters combined to add $0.21.
Cash flow from operations contributed $102.8 million in 2019 compared to a cash use of $6.0 million in 2018. The improvements in cash from operations primarily reflects $53.4 million of excess cash from the pension settlement, improved earnings, reduced working capital use, predominately inventory, as well as lower payments for interest as a result of changes in our capital debt structure in early 2019. These improvements were partially offset by the $20.8 million payment related to the Fox River matter. During 2019 and 2018, capital expenditures totaled $27.8 million and $42.1 million, respectively, with 2018 reflecting the final payments related to the completion of the airlaid capacity expansion. In 2020, after a portion of the excess cash from the pension termination is used to establish an account to fund future 401(k) contributions for approximately seven years and pay excise taxes and fees, approximately $32 million will be available for unrestricted general use.
The following charts present financial information for the periods indicated. Earnings before interest, taxes, depreciation and amortization (“EBITDA”) by reporting segment represents operating profit as presented in our 2019 Annual Report on Form 10-K, adjusted to exclude depreciation and amortization (totals exclude corporate unallocated costs and other income and expense items). 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 2019 Annual Report on Form 10-K.
† Results are from continuing operations with an assumed tax rate of 40% for 2017.
2020 PROXY STATEMENT › 6
The Compensation Committee designs compensation programs that reflect the Company’s financial performance and are market-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, Environmental Responsibility and Social Responsibility). The objectives of our 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. Given the Company’s business transformation, the retention of key talent and leadership continuity are of paramount importance for sustaining the momentum and business performance achieved in 2019.
Our compensation programs are organized around three principles:
Board Recommendation | Page | ||||||
1 | PROPOSAL 1 — Majority Voting | 4 | |||||
| Approval of amendments to the Articles of Incorporation and Bylaws of the Company to implement a majority voting standard for uncontested director elections. | FOR |
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2 | PROPOSAL 2 — Elimination of Cumulative Voting | 6 | |||||
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Approval of an amendment to the Articles of Incorporation of the Company to eliminate cumulative voting in director elections. |
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3 | PROPOSAL 3 — Fix Board Size by Board Resolution | 8 | |||||
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an amendment to our Bylaws to allow our Board of Directors to determine the number of authorized directors. |
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4 | 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 | |||||
5 | PROPOSAL 5 — Proxy Access | 10 | |||||
| Approval of 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. | FOR | |||||
6 | PROPOSAL 6 — Shareholder Approval – Voting Standards | 11 | |||||
| Approval of amendments to our Bylaws to clarify our voting standards. | FOR |
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Total compensation for our executives consists of:CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING INFORMATION
Any statements included in this proxy statement that pertain to future financial and business matters are “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. The Company uses words such as “anticipates,” “believes,” “expects,” “future,” “intends,” “plans,” “targets,” and similar expressions to identify forward-looking statements. Any such statements are based on the
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Given
Company’s current expectations and 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 risks, uncertainties, and other unpredictable or uncontrollable factors are described in the Company’s business transformation, our Boardfilings with the U.S. Securities and Compensation Committee approvedExchange Commission (“SEC”) in the following organizationalRisk Factors section and compensation changes for 2019 to further alignunder the heading “Forward-Looking Statements” in the Company’s compensation philosophy and executive compensation practices with shareholder expectations:
Terminated the long-standing U.S. qualified pension plan and settled our qualified pension liabilities for all plan participants, creating a pathway to revert approximately $32 million of unrestricted surplus cash to the Company for general use, and froze future benefits under the U.S. non-qualified pension plan, replacing the pension program with an enhanced 401(k) benefit and non-qualified defined contribution program with benefit levels that are aligned to current market practices.
Aligned the senior leadership team structure to the functional operating model, contributing approximately $2.5 million of savings toward the $15 million reduction in corporate costs. Base salary increases for the senior leaders were limited to only the individuals assuming expanded responsibilities.
Aligned the 2019 financial performance targets for the short- and long-term incentive programs to the Company’s annual budget and long-term strategic plan, respectively, that require year-over-year improvement in performance to achieve meaningful payouts.
Maintained the use of a cumulative three-year relative Total Shareholder Return (“TSR”) modifier for earning performance shares under the long-term incentive program to emphasize the long-term nature of the program and reward for outperformance versus peers.
Utilized one-time three-year retention equity grants to certain members of the senior leadership team in connection with their roles that are critical for driving the Company’s strategic transformation during this period of transition.
2020Annual Report on Form PROXY STATEMENT10-K › 7
Comprised entirely of independent directors, the Compensation Committee regularly monitors and implements best practices in executive compensation and governance. The following practices demonstrate our commitment to strong governance within our executive compensation programs:
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2020 PROXY STATEMENT › 8
Proposal 1: Election of Directors
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Name | Age | Director Since | Occupation | Audit | Comp | Nom & Gov |
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Bruce Brown* | 61 | 2014 | Retired Chief Technology Officer, Procter & Gamble | 1 |
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Kathleen A. Dahlberg* | 67 | 2001 | CEO, G.G.I., Inc
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Nicholas DeBenedictis* | 74 | 1995 | Chairman Emeritus, Essential Utilities, Inc. (formerly Aqua America, Inc.) | 3 |
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Kevin M. Fogarty* (L) | 54 | 2012 | President, CEO, Kraton Corporation, Inc. | 1 |
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Marie T. Gallagher* | 60 | 2020 | SVP and Controller, PepsiCo, Inc. | -- |
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J. Robert Hall* | 67 | 2002 | CEO, Ole Smoky Distillery | -- |
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Ronald J. Naples* | 74 | 2000 | Chairman Emeritus, Quaker Chemical Corp. | 1 |
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Dante C. Parrini | 55 | 2010 | Chairman, CEO, P. H. Glatfelter Company | 1 |
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Lee C. Stewart* | 71 | 2002 | Private Financial Consultant | 2 |
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The Board recommends a vote “FOR” each of the director nominees.
2020 PROXY STATEMENT › 9
Additional Information about Director Nominees
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2020 PROXY STATEMENT › 11
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2020 PROXY STATEMENT › 12
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 for the fiscal year 2020. Deloitte audited the Company’s consolidated financial statements for the fiscal year ended December 31, 2019.
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. The representative will have an opportunity to make a statement at the meeting, if he or she desires to do so, and is expected to be available to respond to appropriate shareholder questions. See Item 9(c) of Schedule 14A.
What did the Company pay its independent registered public accounting firm in 2018 and 2019?
For the years ended December 31, 2018, and December 31, 2019, fees paid to Deloitte by the Company were as follows:
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Audit Fees (1) | $ | 3,030,181 |
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Audit Related Fees (2) |
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Tax Fees (3) |
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Total Fees | $ | 4,057,860 |
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All of Deloitte’s 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 2019, 100% of all 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 |
2020 PROXY STATEMENT › 13
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 2019 compensation of our named executive officers (“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
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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 2021 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.
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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
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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.
2020Required 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.
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OWNERSHIP OF COMPANY STOCK
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.
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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.
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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.
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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.
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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 17, 2020,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 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) | % of Class |
BlackRock, Inc. (2) | 6,818,736 | 15.39% |
The Vanguard Group, Inc. (3) | 4,536,420 | 10.24% |
Dimensional Fund Advisors LP (4) | 3,695,886 | 8.34% |
Franklin Mutual Advisers, LLC (5) | 2,755,870 | 6.22% |
Silvercrest Asset Management Group LLC; Silvercrest L.P.; Silvercrest Asset Management Group Inc. (6) | 2,583,274 | 5.83% |
Name of Beneficial Owner | Position | Total Number of Shares Beneficially Owned (7) | % of Class |
|
Dante C. Parrini | Chairman of the Board & Chief Executive Officer | 339,943 | * |
|
Nicholas DeBenedictis | Director | 97,218 | * |
|
Kathleen A. Dahlberg | Director | 74,566 | * |
|
Ronald J. Naples | Director | 72,532 | * |
|
J. Robert Hall | Director | 71,316 | * |
|
Lee C. Stewart | Director | 69,566 | * |
|
David C. Elder | Vice President, Finance & Chief Accounting Officer | 44,317 | * |
|
Kevin M. Fogarty | Director | 41,868 | * |
|
Bruce Brown | Director | 31,712 | * |
|
Christopher W. Astley | Senior Vice President & Chief Commercial Officer | 26,139 | * |
|
Samuel L. Hillard | Senior Vice President & Chief Financial Officer | 15,060 | * |
|
Joseph J. Zakutney | Vice President, Global Business Services and CIO | 12,788 | * |
|
Marie T. Gallagher | Director | — | * |
|
Martin Rapp | Former Senior V.P. & Business Unit President, Composite Fibers | 8,577 | * |
|
John P. Jacunski | Former Executive V. P. & Chief Financial Officer | 1,988 | * |
|
All directors and executive officers as a group (19 individuals) | 921,349 | 2.08% |
|
Name of Beneficial Owner | Shares Beneficially Owned(1) | % of Class | ||||||
BlackRock, Inc.(2) | 7,197,179 | |||||||
The Vanguard Group, Inc.(3) | 4,853,566 | |||||||
Dimensional Fund Advisors LP(4) | 3,359,027 | |||||||
Segall Bryant & Hamill, LLC(5) | 3,278,506 | |||||||
Carlson Capital, L.P.(6) | 2,260,000 | |||||||
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 | % | ||||||
Dante C. Parrini(8) | Former Chairman of the Board & Chief Executive Officer | 461,975 | ||||||
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 |
(2) | Pursuant to |
2022 PROXY STATEMENT | › | 12 |
OWNERSHIP OF COMPANY STOCK |
BlackRock Investment Management, LLC; BlackRock Investment Management (UK) Limited; BlackRock Asset Management Canada Limited; BlackRock Investment Management (Australia) |
2020 PROXY STATEMENT › 15
OWNERSHIP OF COMPANY STOCK
(4) | Pursuant to |
(5) | Pursuant to a Schedule 13G filed on |
(6) | Pursuant to |
(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 |
Name of Beneficial Owner | Directly Owned |
| Indirectly Owned |
| Options to Acquire Stock (a) |
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Dante C. Parrini (b) |
| 332,333 |
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| 7,610 |
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| — |
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Nicholas DeBenedictis |
| 97,218 |
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| — |
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| — |
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Kathleen A. Dahlberg |
| 74,566 |
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| — |
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| — |
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Ronald J. Naples (c) |
| 69,282 |
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| 3,250 |
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| — |
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J. Robert Hall |
| 71,316 |
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| — |
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| — |
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Lee C. Stewart |
| 69,566 |
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| — |
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| — |
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David C. Elder (d) |
| 41,776 |
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| 2,541 |
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| — |
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Kevin M. Fogarty |
| 41,868 |
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| — |
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| — |
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Bruce Brown |
| 31,712 |
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| — |
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| — |
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Christopher W. Astley (e) |
| 25,055 |
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| 1,084 |
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| — |
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Samuel L. Hillard |
| 15,060 |
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| — |
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| — |
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Joseph J. Zakutney |
| 12,788 |
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| — |
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| — |
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Marie T. Gallagher (f) |
| — |
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| — |
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| — |
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Martin Rapp (g) |
| 8,577 |
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| — |
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| — |
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John P. Jacunski (h) |
| 1,988 |
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| — |
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| — |
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All Directors and executive officers as a group (i) |
| 906,080 |
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| 15,269 |
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| — |
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OWNERSHIP OF COMPANY STOCK |
(a) | Represents the gross number of shares of common stock that would be issued upon exercise of vested stock-only stock appreciation rights (“SOSARs”) on the Record Date. As of the Record Date, the following NEOs had vested SOSARS: |
As of the Record Date, the following NEOs had vested SOSARS:
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Name | Number of Vested SOSARS | ||||||
Dante C. Parrini* | 498,312 | ||||||
Christopher W. Astley |
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| 108,138 | |||||
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| 24,553 | |||||
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| N/A | |||||
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| N/A |
* Mr. Jacunski’s SOSARS were either exercised or expired based on his separation date.
* | Denotes former NEO. |
(b) | Consists of |
(c) | Consists of |
2020 PROXY STATEMENT › 16
OWNERSHIP OF COMPANY STOCK
| Consists of |
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| Consists of |
(f) | Consists of 890 shares held in a 401(k) account for the benefit of Mr. Astley. |
(g) | Consists of 433 shares held in a 401(k) account for the benefit of Ms. Beck. |
(h) | Consists of 0 shares vesting within 60 days from the |
Equity Compensation Plan Information
The following table provides certain information as of December 31, 2019, 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 | 2,188,410 | $20.05 | 2,060,034 |
Equity compensation plans not approved by security holders | — | — | — |
Total | 2,188,410 | $20.05 | 2,060,034 |
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Delinquent Section 16(a) Reports
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) and the written representations of the Company’s directors, executive officers and 10% Holders, the Company believes that in 2019 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, except that one Form 4 was inadvertently filed late for Mr. Naples with respect to one transaction.
2020 PROXY STATEMENT › 17
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 Corporate Governance page of the Company’s website at www.glatfelter.com/about_us/corporate_governance, which also contains the Company’s Articles of Incorporation and By-laws, its 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, and the Company’s Code of Business Ethics for the CEO and Senior Financial Officers. 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 500, 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. In February 2020, Marie T. Gallagher was elected to the Board. 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 nominated Mr. Parrini in February 2020 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 2020, 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 2020 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.
2020 PROXY STATEMENT › 18
CORPORATE GOVERNANCE AND BOARD OF DIRECTORS
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 director nominees are independent and have no material relationship with the Company: Ms. Dahlberg, Ms. Gallagher and Messrs. Brown, DeBenedictis, Fogarty, Hall, 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.
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 meet the changing needs of the Company, and 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.
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 3. The NCG Committee and the Board assessed these factors in light of the Company’s business.
2020 PROXY STATEMENT › 19
CORPORATE GOVERNANCE AND BOARD OF DIRECTORS
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.
The Board held six meetings during 2019. The standing committees established by the Board held a total of 20 meetings in 2019. Also in 2019, the Pension Subcommittee held 2 meetings. Each incumbent director attended at least 90% of the total number of Board and Committee meetings on which he or she served in 2019. Independent directors meet in regularly scheduled executive sessions (without Management), presided by the Lead Director.
Our Board has three standing committees: Audit, Compensation and Nominating & Corporate Governance (NCG). In 2019, the Compensation Committee formed a Pension Subcommittee effective January 1, 2019. Each standing 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.
2020 PROXY STATEMENT › 20
CORPORATE GOVERNANCE AND BOARD OF DIRECTORS
The following chart provides a summary of each committee’s duties and responsibilities:
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2018 PROXY STATEMENT › 19
CORPORATE GOVERNANCE AND BOARD OF DIRECTORS
We believe our shareholders are best served by a board that is well versed in subject matters relevant to board service and thoroughly comprehends the role and responsibilities of an effective board in the oversight and management of the Company. The Board regularly conducts Board education sessions on relevant topics for the Company’s future growth and success and to stay informed about best governance practices. We also feel it is appropriate for our directors to have access to educational programs on an ongoing basis to assist them
in performing their duties as directors. 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 suggests topics for continuing education programs for incumbent directors.
Our Board believes in a constructive self-evaluation process as a governance best practice to improve Board performance and ensure it is functioning effectively. As required by our Corporate Governance Principles, the NCG Committee oversees an annual self-evaluation of the Board and its Committees. Each director completes a written questionnaire to gather suggestions for improvement and feedback on a range of issues related to Board and Committee effectiveness. Board counsel reviews the questionnaire responses and additionally conducts individual interviews with each Board Member. The feedback is aggregated and summarized by Board
counsel, who shares the feedback with the Board and its Committees during their regularly-scheduled meetings. Changes to Board practices, procedures and agendas are considered and implemented in response to the feedback as appropriate.
The Board also conducts an annual review of its Corporate Governance Principles and Committee charters and recommends revisions accordingly.
The Board plays an active role in risk oversight to ensure that Company Management is taking appropriate actions to identify, evaluate, manage, and mitigate significant risks. The Board reviews risks associated with the Company’s strategic plan and enterprise level risks annually at a strategic planning session. Periodically throughout the year, the Board actively monitors risks associated with the Company’s strategic plan through formal business updates it receives from Management.
The Board administers its risk oversight responsibilities by delegating certain business and governance activities to the appropriate Committee for more detailed consideration and evaluation. In performing this oversight function, each Committee has full access to
Company Management as well as the ability to engage advisors or other experts it deems necessary in the performance of its duties. At each Board meeting, the Chair of each Committee reports to the Board on the Committee’s oversight activities.
The Company’s Management is responsible for identifying, evaluating, managing, and mitigating the Company’s risk exposures. The Company manages these enterprise risks through a variety of policies, programs, committees, and internal controls designed to protect the Company’s assets, operations, and reputation, while ensuring compliance with applicable laws and regulations.
2020 PROXY STATEMENT › 22
CORPORATE GOVERNANCE AND BOARD OF DIRECTORS
The below chart summarizes the Board’s risk-governance framework:
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CORPORATE GOVERNANCE AND BOARD OF DIRECTORS
Payments to Directors in 2019 | ||||||||||||||||
Name (1) | Fees Earned or Paid in Cash ($) (2) | Stock Awards ($) (3) | All Other Compensation (4) | Total | ||||||||||||
Bruce Brown | $ | 73,000 |
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| $ | 115,000 |
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| $ | 1,189 |
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| $ | 189,189 |
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Kathleen A. Dahlberg |
| 80,500 |
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| 115,000 |
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| 1,189 |
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| 196,689 |
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Nicholas DeBenedictis |
| 80,500 |
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| 115,000 |
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| 1,189 |
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| 196,689 |
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Kevin M. Fogarty (5) |
| 90,000 |
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| 115,000 |
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| 1,189 |
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| 206,189 |
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J. Robert Hall |
| 84,500 |
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| 115,000 |
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| 1,189 |
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| 200,689 |
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Ronald J. Naples |
| 91,500 |
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| 115,000 |
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| 1,189 |
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| 207,689 |
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Lee C. Stewart |
| 86,500 |
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| 115,000 |
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| 1,189 |
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| 202,689 |
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Richard C. Ill (6) |
| — |
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| — |
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| 1,189 |
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| 1,189 |
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Marie T. Gallagher (7) |
| — |
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| — |
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| — |
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(1) Only non-employee directors receive compensation for service on the Board. Mr. Parrini does not receive compensation for his services as a director.
(2) The amounts include annual retainer fees, meeting fees and chair fees paid in cash.
(3) In accordance with ASC Topic 718 the amount shown for all directors is based on the fair market value of $15.64 per share for RSUs granted on May 9, 2019, which vest one year after the grant date.
(4) Represents dividend equivalents paid in cash. The Company paid dividend equivalents in cash on outstanding director RSUs granted through 2016.
(5) Mr. Fogarty’s compensation includes a Lead Director fee paid in cash.
(6) Mr. Ill's term as Director ended on May 9, 2019.
(7) Ms. Gallagher was appointed in February 2020 and did not receive any compensation in 2019.
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 the results of an analysis of director compensation provided by Meridian Compensation Partners LLC, the Committee’s independent compensation consultant. Meridian conducted a competitive assessment that included a review of annual cash retainers, annual equity grants, meeting fees and Committee fees compared to the Company’s compensation peer group (see page 35 regarding the Compensation Peer Group). The results of the assessment determined that non-executive director total compensation approximates the median of the peer group, and that the Company’s pay policies are aligned with market.
Cash Compensation
In 2019 each non-employee director received the following cash fees for service:
Annual cash retainer fee: $70,000
Additional fees for those serving in role:
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In addition to the annual retainer, non-employee directors were paid in cash $1,500 for each standing Committee and Pension Subcommittee meeting they attended in excess of eight meetings per year (May 1 – April 30). All accrued, but unpaid, director cash compensation payments are made twice annually, in May and November.
In 2019, each non-employee director received an annual RSU award valued at $115,000 on the grant date. Such awards fully vest, 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 until 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 2019.
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 5 times the annual Board retainer of $70,000. Directly held shares and unvested RSUs count toward attainment of the guideline.
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SUSTAINBILITY
Sustainability – Our Approach to ESG
Overview
Our commitment to sustainability and being a responsible corporate citizen has been longstanding since our founding in 1864. It is reflected in our Core Values of Integrity, Financial Discipline, Mutual Respect, Customer Focus, Environmental Responsibility, and Social Responsibility. We operate our business in line with those values, and we contribute to the health, well-being and everyday living of millions of people around the world. Our existing products contain mostly plant-based fibers and are engineered for performance.
As a result of the strategic transformation that we have undertaken over the last few years, “the new Glatfelter” consists of two global operating segments – Composite Fibers and Airlaid Materials – serving high-value, niche nonwovens growth markets. To accelerate that transformation, we have implemented a functional operating model that enables us to work across the enterprise to address areas such as supply chain effectiveness, product innovation and sustainability. We believe these initiatives are important in our transformation to a less capital-intensive business that consistently meets and exceeds our shareholders’ expectations.
In 2019 and continuing into 2020, Glatfelter is implementing several measures to formalize our sustainability program under the ESG (Environmental, Social, Governance) pillars. These recent activities include:
Forming a cross-functional ESG steering committee (co-led by the Legal and Investor Relations functions), whose primary role includes setting the sustainability/ESG strategy and providing implementation support to Glatfelter’s businesses and facilities.
Publishing on our website a formal Sustainability Policy, which complements our existing Global Health and Safety Policy, Environmental Policy, Quality Statement, The Glatfelter Code of Business Conduct, and other Corporate Governance documents, all of which are posted on our website.
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2020 PROXY STATEMENT › 25
SUSTAINBILITY
Glatfelter’s Environmental Policy reflects our commitment to comply with applicable environmental laws and regulations, practice pollution prevention, and improve our environmental performance. Instituted in 1997 as part of the ISO 14001 certification process, our Environmental Policy is the foundation for our Environmental Management Systems (EMS) and reflects one of our Core Values – Environmental Responsibility.
Glatfelter is committed to operating as a responsible steward of the environment and delivering engineered products that perform well, use natural materials responsibly, and contribute to waste reduction in both the manufacturing process and following their end use. Our environmental pillar is focused in two areas that impact our business and where we can make a difference for our stakeholders: (1) Environmental Management; and (2) Innovation and Environmentally Responsible Products.
Environmental Management
Glatfelter’s environmental management system is focused on maintaining compliance with all environmental laws and regulations in the regions where we operate, as well as developing programs and continuous improvement initiatives that address areas such as natural resource management, energy usage, greenhouse gas emissions and waste.
Natural resource management: Glatfelter has achieved Forest Stewardship Council certification at all our manufacturing facilities – maintaining a strong chain of custody to ensure that 100% of the wood fibers we use come from well-managed, sustainable forests. In addition, as the world’s top purchaser of abaca fiber, Glatfelter adheres to Rainforest Alliance and Sustainable Agriculture Network standards to ensure responsible harvesting and ongoing replanting of this “super fiber” in the Philippines.
Our Composite Fibers business in Europe uses water to produce its products, which is reused and recycled within the manufacturing process, and for equipment cleaning. Each manufacturing facility has a dedicated waste water treatment plant to remove solids and biodegradable materials to ensure that the final effluent discharged back into the water system meets or exceeds permit requirements. We also seek to identify manufacturing efficiency measures that reduce the amount of water required. Our Airlaid Materials products are manufactured with a dry forming process. Overall, our operations used 69.5 m3 of water per tonne of production in 2019.
Energy usage: One of the byproducts of transforming our business into a leading global supplier of engineered materials is that we have become a less-energy-intensive, lower-emissions company. Nonetheless, energy still accounts for up to 10% of our cost of goods sold, and we seek to drive efficiencies through equipment upgrades and process improvements, where feasible. Five of our European sites have formal energy management systems (ISO 50001) to drive energy efficiency. Our U.K. sites have improvement targets to reduce energy usage per ton as part of formal industry agreements with the government to achieve long-term energy efficiency improvements. At our facility in Gernsbach, Germany, two water turbines generate electric power that is sold to the adjacent electric grid. We are currently working with the nearby city of Gaggenau to add two additional water turbines that will increase the capacity to generate sustainable energy. In
2019, our operations consumed 1.524 megawatt hours of electricity per tonne of production. A total of 65,800 megawatt hours of electricity was produced by cogeneration at several of our Composite Fibers facilities, which also provides steam for use in our manufacturing facilities.
Greenhouse gas emissions: We are working to lower our greenhouse gas emissions by reducing our carbon dioxide emissions and increasing our energy savings through recycling and other responsible practices. In addition to using the cogeneration process and complying with ISO 50001, other efforts include participating in climate change agreements to drive improvements in efficiency and investing in more efficient equipment and processes such as variable speed drives on motors and better control processes. Our greenhouse gas emissions in 2019 were 0.623 tonnes per metric tonne of production, which represents approximately a 1% decrease over the previous year.
Waste: Consistent with our application of Lean Manufacturing and Six Sigma principles, we view waste as an opportunity to improve efficiency or to find a new use for byproducts. We have had success in both our Composite Fibers and Airlaid Materials segments. For example, a significant volume of off-spec material in Composite Fibers is used for lower-grade applications. In Airlaid Materials, we achieved zero waste to landfill for two consecutive quarters by finding buyers who valued our byproducts’ high-absorbency performance.
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2020 PROXY STATEMENT › 26
SUSTAINBILITY
Innovation and Environmentally Responsible Products
We believe our commitment to innovation and environmentally responsible products gives us a competitive advantage in an increasingly environment-aware marketplace. Our solutions can help customers achieve their sustainability goals and demonstrate their environmental commitments to their customers.
To capitalize on these opportunities, we are focused in two primary areas: (1) Helping our customers and markets appreciate the full sustainability benefits of our existing products, which are mostly plant-based; and (2) Developing new products with enhanced sustainability profiles, by replacing oil-based plastic ingredients with plant-based materials that provide improved biodegradability and compostability
Environmentally responsible products: Natural materials are the most significant raw material input in our products. In fact, 60% to 80% of our product content is natural cellulose fiber, which compares very favorably to products that have more synthetic content. In our products, the remaining materials consist of a combination of binders, coatings and adhesives – some of which are derived from oil and/or are plastic-based. Environmental considerations are an ongoing part of product line discussions internally and with customers and suppliers. For example, we are pursuing alternatives to traditional petroleum-based plastics, including the use of polylactic acid (PLA), a plastic substitute made from fermented plant starch (usually corn).
Innovation: Sustainability considerations have consistently been part of every new product development program at Glatfelter. Our R&D scientists and product developers are actively and systematically evaluating ideas for products and applications that have a lesser environmental footprint. This includes ways to further reduce the use of plastics in our finished goods, including increasing bio-based content in wipes, table top and feminine hygiene products, and studying alternative materials for food and beverage filter media applications. Given that many of our products already have a relatively high percentage of natural content, we believe we have an advantage in developing next-generation solutions that are environmentally sustainable to further differentiate Glatfelter in the market.
Social Responsibility is a Glatfelter Core Value, and we have a consistent record of following through on our commitments and supporting communities where we work and live. In formalizing our ESG program, we have identified three priority areas: (1) Occupational Health and Safety; (2) Product Safety and Quality; and (3) Community and Employee Engagement.
Occupational Health and Safety
Safety first: Glatfelter facilities are striving to be “injury-free every day” through implementation of our Global Health & Safety Policy (published in English, French and German), a focus on regulatory compliance, site-specific safety plans and safety resources/training, and an ongoing risk assessment and safety auditing program. Seven of our eleven manufacturing facilities are third-party certified under the Occupational Health and Safety Assessment Series (OHSAS 18001) standards.
Safety performance: We track multiple critical safety metrics, including total case incident rate (TCIR). Since the October 2018 disposition of our Specialty Papers assets, Glatfelter’s TCIR has consistently ranked in the top quartile of safety performance in our industry. Glatfelter’s TCIR for 2019 was 0.74 which is approximately 15% lower than in 2018 and a 22% improvement over 2017. TCIR represents the average number of work-related injuries incurred by 100 full-time employees working 200,000 hours per year (40 hours/week for 50 weeks). With every injury-free day that passes, we get closer to earning world-class safety performance.
Compliance: We are committed to ensuring a consistent, high level of product safety and quality compliance, which is critical given our leading market position in several food-grade and personal hygiene products. Our regulatory obligations in this area include complying with requirements and guidelines from the U.S. Food and Drug Administration, U.S. Federal Trade Commission, European Union, and ISO 9001 quality standards. We conduct extensive product testing during both the development and commercialization stages, and have an ongoing program to make sure that, first and foremost, our products continue to meet and exceed product safety requirements and quality specifications.
2020 PROXY STATEMENT › 27
SUSTAINBILITY
Supply chain:We seek to partner with stable, trusted, high-quality suppliers and contractors who uphold our standards of safety and quality, and we encourage them to expect the same of their suppliers and contractors. Our questionnaire for qualifying suppliers looks at a wide variety of factors, including their commitment to product performance, safety and quality. We conduct in-person audits of key suppliers’ production and warehousing facilities.
Community and Employee Engagement
Community: Glatfelter has a long history of engaging with and supporting our local communities through philanthropy, volunteer work and other charitable initiatives. We believe our efforts help to improve the quality of life for the communities in which we live and work, and we value the relationships we have built with government officials, community leaders, business partners, and nonprofit and volunteer organizations. In early 2020, we announced plans to relocate our corporate headquarters from York, Pennsylvania, to Charlotte, North Carolina. In making this move, we are committed to a thoughtful and planned transition in York and we intend to be an active and engaged corporate citizen in the Charlotte metropolitan business community.
Employees: Glatfelter PEOPLE are a critical component of our success and ability to drive growth and innovation. Even as our organization has undertaken substantial change in recent years, our culture and our Core Values have remained strong. We are working to implement and integrate enterprise-level systems for talent attraction, career development, and training. We are a global company that embraces different cultures and backgrounds. Our PEOPLE, including our management team, are diverse – as we rely on in-country hiring for both salaried and production positions to make sure we are aligned with local laws and culture.
Governance and Ethics Initiative
The pursuit of our vision to be the leading global supplier of engineered materials is supported by strong corporate governance standards, The Glatfelter Code of Business Conduct and a variety of policies and principles. Our priorities are: (1) Corporate Governance; and (2) Ethics and Integrity.
Corporate Governance Our Board members have a diversity of experience that spans a broad range of industries in the public, private and not-for-profit sectors. In February 2020, we added Marie T. Gallagher, a senior executive with PepsiCo, as a director, which provided our Board with 22% gender diversity. As discussed elsewhere in this proxy statement, six of our nine director nominees have environmental/sustainability skills and experience, and all Board members have skills and experience in corporate governance, compliance and risk management. Eight of our nine directors standing for election meet the criteria to be considered “independent,” as defined by our stock exchange.
Ethics and Integrity Our expectation is that our personal and business ethics shall be above reproach. We believe our accomplishments, as well as our prospects, are based not just on what we have done, but how we have done it. The decisions we make and why we make them are key to our continued success, as stated in The Glatfelter Code of Business Conduct. Our Code defines the expectations and behaviors necessary for living up to our Core Values of Integrity, Financial Discipline, Mutual Respect, Customer Focus, Environmental Responsibility, and Social Responsibility. Every quarter, we provide compliance and ethics training for salaried employees. We expect, and regularly achieve, 100% participation in the training by the completion deadline, and following the training, we require our employees to pass a test with a score of 80% or better.
2020 PROXY STATEMENT › 28
Compensation Discussion and Analysis
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This Compensation Discussion and Analysis (“CD&A”) describes the Company’s executive compensation philosophy and programs, the 2019 compensation decisions made by the Compensation Committee and the factors influencing its decisions. The CD&A focuses on the compensation of the following 2019 named executive officers (“NEOs”):
Dante C. Parrini, Chairman of the Board and Chief Executive Officer (“CEO”)
Samuel L. Hillard, Senior Vice President (“SVP”), and Chief Financial Officer (“CFO”)
Christopher W. Astley, Senior Vice President (“SVP”), and Chief Commercial Officer
David C. Elder, Vice President (“VP”), Finance and Chief Accounting Officer
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John P. Jacunski,former Executive Vice President (“EVP”) and Chief Financial Officer (“CFO”)
Martin Rapp,former Senior Vice President (“SVP”) and Business Unit President, Composite Fibers Business Unit (“CFBU”)
On February 28, 2019, the Board appointed Mr. Hillard to the position of SVP, Chief Financial Officer, effective March 1, 2019. Mr. Hillard succeeded Mr. Jacunski, who left the Company effective March 31, 2019. In addition, Mr. Rapp left the Company effective September 30, 2019.
An advisory shareholder vote on the Company’s executive compensation practices (“Say-on-Pay”) was held at the 2019 Annual Meeting of Shareholders, with 98.3% of the shares voting in favor of the Company’s NEO compensation. The Compensation Committee built upon the actions taken in 2018 following extensive shareholder outreach, by continuing to evaluate the Company’s executive compensation program to ensure alignment with shareholder expectations. In 2019, the Compensation Committee engaged in a detailed assessment of the Company’s U.S. pension benefits which resulted in the termination of the U.S. qualified pension program and the freezing of pension benefits under the non-qualified pension program, for which further details are provided throughout the CD&A.
2019 was a remarkable and productive year for the Company as discussed in the Business Highlights section on page 4. We have taken a number of meaningful steps over recent years to evolve Glatfelter from a company with significant exposure to paper markets in secular decline to a leading global supplier of engineered materials. Following the sale of the Specialty Papers business in 2018, we successfully implemented our new functional operating model that is built for greater speed and efficiency and aligned our senior leadership structure to focus on driving growth and sustainable profitability. The new structure integrates the Company’s global supply chain with the goal of further enhancing our operational
2020 PROXY STATEMENT › 29
EXECUTIVE COMPENSATION
excellence; provides enhanced customer service for our Airlaid Materials and Composite Fibers segments; and targets an expanded pipeline of innovative products.
The Board and Compensation Committee leveraged the business transformation and shift to the functional operating model to further align the Company’s compensation programs with market-competitive offerings to ensure the programs remain relevant and cost competitive based on the Company’s current scale as we continue to execute the transformation. The Committee’s assessment primarily focused on the long-standing legacy pension programs which resulted in several meaningful actions:
We froze future benefits under the U.S. non-qualified pension plan, replacing the pension program with an enhanced 401(k) benefit and non-qualified defined contribution program with benefit levels that are aligned to current market practices.
In addition to the changes to the pension benefits, we also maintained several key provisions in the Company’s incentive structures based on shareholder feedback:
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The Board and Compensation Committee also utilized one-time three-year retention equity grants to certain members of the senior leadership team in connection with their promotions or critical retentions for driving the Company’s strategic transformation during this period of transition.
The elements of our executive compensation programs for 2019 included base salary, short- and long-term incentives, and other benefits, as summarized in the following table:
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2020 PROXY STATEMENT › 30
EXECUTIVE COMPENSATION
2019 CEO Compensation Highlights
Mr. Parrini’s base salary and his target short-term incentive plan payout were not increased for 2019. Mr. Parrini’s short-term incentive plan payout for 2019 was earned at 104.9% of target payout based on the Company’s over-attainment of the combined Operating Net Income and Free Cash Flow performance goals.
Mr. Parrini received a FY 2019 long-term incentive grant comprised of 60% performance share awards and 40% restricted stock awards. The performance share awards will vest based on performance goals tied to Return on Capital Employed, EBITDA and a relative three-year TSR.
Mr. Parrini turned age 55 in September 2019 and became eligible to receive his early retirement accrued pension benefits under the Company’s long-standing U.S. qualified pension plan in the event he elected to retire from employment. Given the Company’s momentum with the business transformation and the retirement program no longer providing a significant retention incentive, the Board granted Mr. Parrini a one-time three-year retention grant requiring his continued employment that was comprised of time-based restricted stock units valued at $2 million on the date of the grant. The Board believes Mr. Parrini’s continued leadership is critical to the ongoing success of the Company and our shareholders as we further progress the transformation with a focus on creating long-term sustainable value by reshaping our business portfolio, driving operational excellence, aggressively managing costs, enhancing growth and innovation, and solidifying the new functional operating model including developing several newly-appointed leaders in key roles.
2019 NEO Compensation Overview and Highlights
Several senior leadership changes occurred in 2019 as part of our migration to the functional operating model. The roles of Chief Financial Officer and Vice President, Corporate Development and Strategy were combined into one role and Mr. Samuel Hillard was promoted to the role of Senior Vice President, Chief Financial Officer, effective March 1, 2019. Mr. Chris Astley was promoted into the role of Senior Vice President, Chief Commercial Officer, effective August 1, 2019 and his expanded role includes oversight of global sales, marketing and innovation. Mr. John Jacunski, formerly the Chief Financial Officer, left the Company effective March 31, 2019. Mr. Martin Rapp, formerly the Senior Vice President and Business Unit President, Composite Fibers, left the Company effective September 30, 2019 and this role was not replaced.
The NEOs received the following compensation, with short- and long-term incentives linked to Company performance:
Base salaries: There were no annual base salary increases for 2019 with the exception of Messrs. Hillard and Astley who were each provided a salary increase to recognize their promotions and expanded responsibilities.
Short-term incentive (“STI”) awards payable under the Management Incentive Plan (“MIP”): The NEOs’ annual incentives under the MIP were contingent on the achievement of Operating Net Income (“ONI”) and Free Cash Flow to encourage the executives to focus on earnings and cash flow generation at the corporate level. The STI award for business unit leaders (Mr. Astley given his role as Senior Vice President and Airlaid Materials Business Unit President, prior to assuming the role of Senior Vice President, Chief Commercial Officer) was also based on the operating profit aligned to the performance of the applicable business unit.
Individual STI target bonus opportunities were unchanged for 2019, except that Mr. Hillard received a 10-percentage point target increase to align with his new responsibilities as CFO. Messrs. Jacunski and Rapp received a payment in lieu of 2019 bonus based on the terms of their separation agreements.
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EXECUTIVE COMPENSATION
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Retirement Programs: The Company made significant changes to its retirement programs in 2019.
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Additional details regarding the compensation programs are included in the Compensation Programs and Elements of Compensation and followed by the Target Pay Mix sections of the CD&A.
2020 PROXY STATEMENT › 32
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:
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The Compensation Committee believes compensation should reflect the Company’s financial performance and be competitive based on a person’s responsibilities, individual performance and ability to exemplify the Company’s Core Values of Integrity, Financial Discipline, Mutual Respect, Customer Focus, and Environmental and Social Responsibility. The Compensation Committee recommends approval of the Company’s compensation philosophy to the Board and oversees the compensation programs for the NEOs and other executive officers of the Company. All compensation decisions impacting the Chief Executive Officer are approved by the Compensation Committee and require the ratification and approval of the independent members of the Board.
Total compensation for the NEOs and other Company executive officers consists of base salary, short-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 peer group. 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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2020 PROXY STATEMENT › 33
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 each NEO.
Consistent with the prior year, the Compensation Committee continued to retain the services of Meridian Compensation Partners, LLC (“Meridian”) as the Consultant during 2019. 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 of the Company’s peer group
companies (“Compensation Peer Group”), and the Compensation Committee reviews target total compensation for similarly situated executives from the Compensation Peer Group where data is available, as well as from multiple nationally-recognized compensation survey sources including:
William H. Mercer’s Executive Compensation Database;
Willis Towers Watson’s Executive Compensation Database; 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 executives, unless market conditions warrant a market study for additional executive roles for the year. For 2019 compensation decisions, the market review included the total compensation of the CEO and CFO and all other NEOs.
The Compensation Committee annually reviews the Company’s Compensation Peer Group to establish a relevant and appropriate peer group size.
The Compensation Committee believes the current Compensation Peer Group was appropriate for 2019 as it consists of companies within a reasonable revenue range compared to Company (subject to size-adjusting as described below) in the paper, packaging and forest products industries. In selecting peer companies, the Compensation Committee targets consistency in the Company’s Compensation Peer Group to ensure it continues to reflect companies within its industry for which the Company competes for talent.
Recognizing that the median annual revenue of the Company’s Compensation Peer Group is greater than the Company’s 2019 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. The Compensation Committee believes the methodology of benchmarking pay to regressed peer compensation levels is a widely-accepted and appropriate methodology.
2020 PROXY STATEMENT › 34
EXECUTIVE COMPENSATION
The following is a list of companies included in the 2019 Compensation Peer Group with size-adjusted revenues:
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Although the revenue size of the Company has been reduced significantly following the sale of the Specialty Papers business unit in 2018, the Compensation Committee kept the Compensation Peer Group unchanged. The peer group companies remain those with whom the Company competes with for business and for talent, and the Compensation Committee believes the statistical analyses used to size-adjust the data compensates for the size variances that exist among the group. The Compensation Committee intends to continue to monitor the Compensation Peer Group and analyze a sub-set of the group (which eliminates those companies with revenues over $5 billion) to ensure that these companies do not skew the overall results of the existing group.
2020 PROXY STATEMENT › 35
EXECUTIVE COMPENSATION
Annually, the Compensation Committee reviews the mix of base salary, STI and LTI, which comprises 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 targeted pay mix of compensation varies for each NEO with an average of 58% of target pay considered at risk. This average does not include one-time equity grants, pension or other benefits. Mr. Parrini has the greatest level of STI and LTI opportunity, with 74% 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, by the independent members of the Board. The Compensation Committee considers several factors, without any assigned relative weightings, when determining base salary increases for NEOs:
salary recommendations from the CEO for the NEOs other than himself;
Company and individual NEO performance;
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 annual base salary increases for 2019 with the exception of Messrs. Hillard and Astley whose roles expanded as part of the functional operating model and leadership changes. Messrs. Hillard and Astley were each provided a salary increase to recognize their promotions and expanded responsibilities, consistent with the Compensation Committee’s benchmarking.
NEO Base Salaries (Annualized) |
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NEO |
| Prior Base Salary (as of February 1, 2018) |
| New Base Salary (as of February 1, 2019) |
% change |
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Parrini |
| $ 998,212 |
| $ 998,212 | 0.0% |
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Hillard (1) |
| 327,600 |
| 375,000 | 14.5% |
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Astley (1) |
| 393,815 |
| 426,000 | 8.2% |
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Elder |
| 311,451 |
| 311,451 | 0.0% |
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Zakutney |
| 321,300 |
| 321,300 | 0.0% |
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Jacunski |
| 550,185 |
| 550,185 | 0.0% |
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Rapp (2) |
| 363,820 |
| 363,820 | 0.0% |
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(1) Salary increase provided to recognize role change and/or promotion
(2) Mr. Rapp’s salary was paid in Euros; average 2019 exchange rate was 1.1196$/Euro.
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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 Company’ Compensation Peer Group. There were no changes to NEO target bonuses for 2019 except for Mr. Hillard, whose target was increased by 10 percentage points to recognize his promotion to CFO and align to market-competitive levels.
2019 NEO target bonus opportunities were as follows:
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In February each year, the Compensation Committee, in consultation with the Audit Committee Chair, determines the degree to which the pre-established MIP performance metrics have been met. The Compensation Committee then decides whether to award bonuses to the NEOs, and at what level. The amount ultimately earned by the NEOs depends on the achievement of performance metrics. The Compensation Committee may in its discretion adjust downward any bonus of a NEO or other executive based on their judgment of management’s achievement of the financial outcomes. The use of downward discretion was last used in determining payouts of the 2017 MIP. Any downward adjustment to the CEO’s bonus requires ratification and approval by the independent members of the Board.
For 2019, the Compensation Committee adopted a MIP design generally consistent with the design used in 2018 with a floor of 80% achievement of target performance which pays 50% of the target award and a ceiling of 140% achievement, which pays 200% of target. Performance below threshold levels results in a zero payout. The 2019 MIP incorporated the following metrics for our NEOs:
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These metrics are intended to focus NEOs and other key executives on generating earnings and effectively managing cash flow.
In 2019, the performance metrics were weighted as follows for the NEOs:
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EXECUTIVE COMPENSATION
The targeted performance levels of ONI, Free Cash Flow, and business unit operating profit were derived from the Company’s 2019 budgeted levels as approved by the Board. Developing the budget involves a variety of factors and assumptions including the Company’s strategic planning process and an assessment of the future business environment. The Compensation Committee incorporates a requirement that the Company achieve minimum performance (“Threshold”) for each metric separately before any bonus may be earned on the respective portions of the overall award.
The Compensation Committee set rigorous MIP goals for 2019 with targets above the prior year actual results to emphasize the importance of year-over-year growth. In setting performance goals for 2019, the Compensation Committee considered, among other factors, expectations of projected growth in certain markets with a focus on engineered materials and the overall future business environment.
The following table outlines the approved threshold, target and maximum payment opportunities and financial goals for the NEOs under the 2019 MIP, as well as the weighted payout results based on the performance metric weights.
NEO MIP Performance Metrics and Payout Levels |
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| Weighted MIP Payout % |
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Achievement against Financial Goals |
| < 80% |
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| 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) |
| < $27.7 |
| $ 27.7 |
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| $ 34.6 |
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| $ 48.4 |
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| $ 35.5 |
| 107% |
| 104.9% |
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Free Cash Flow (1) |
| < 43.2 |
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| 43.2 |
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| 54.0 |
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| 75.5 |
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| 53.4 |
| 98% |
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Airlaid Materials Business Unit Operating Profit (2) |
| < 35.8 |
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| 35.8 |
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| 44.8 |
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| 62.7 |
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| 41.3 |
| 81% |
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| 87.8% |
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Composite Fibers Business Unit Operating Profit (2) |
| < 48.3 |
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| 48.3 |
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| 60.4 |
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| 84.6 |
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| 49.5 |
| 55% |
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| 69.8% |
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The 2019 MIP payouts earned for our NEOs are shown below: Messrs. Jacunski and Rapp each received a payment in lieu of 2019 bonus as per the terms of their respective separation agreements with the Company, as described under “Executive Compensation Policies and Practices: Executive Severance Guidelines.”
NEO MIP Payments |
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NEO | 2019 Target Bonus (as a percentage of 2019 Base Salary) |
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| 2019 MIP Payout Percent |
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Parrini | 100% |
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| $ 998,212 |
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| 104.9% |
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| $ | 1,047,124 |
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Hillard (1) | 50% |
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| 54,600 |
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| 27,300 |
| 104.9% |
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| 28,638 |
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| 60% |
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| 312,500 |
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| 187,500 |
| 104.9% |
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| 196,688 |
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| 367,100 |
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| 214,800 |
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| 225,325 |
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Astley (2) | 55% |
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| 229,725 |
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| 126,349 |
| 87.8% |
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| 110,934 |
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| 55% |
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| 177,500 |
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| 97,625 |
| 87.8% |
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| 85,715 |
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| Total Astley |
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| 407,225 |
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| 223,974 |
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| 196,649 |
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Elder | 45% |
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| 311,451 |
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| 140,153 |
| 104.9% |
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| 147,020 |
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Zakutney | 45% |
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| 321,300 |
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| 144,585 |
| 104.9% |
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| 151,670 |
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2020 PROXY STATEMENT › 38
EXECUTIVE COMPENSATION
The Compensation Committee believes long-term compensation provides strong incentives for executives to deliver and sustain long-term financial performance to the Company’s shareholders. Annually, the Compensation Committee determines the target opportunity of LTI compensation to be granted to executives by targeting the size-adjusted 50th percentile of the market but reserves flexibility to deviate from the target.
The Company’s 2019 LTIP design was unchanged from 2018 and consisted of:
PSAs comprise the majority of the total annual target value at 60% of the annual LTIP award value and the remaining 40% as RSUs.
The 2019 annual LTIP design is summarized below:
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EBITDA is a commonly used measure of the cash earnings that are 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 a 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 ROCE/EBITDA performance period and a three-year vesting period, so that a NEO must remain employed for one year after the end of the ROCE/EBITDA performance period to receive the underlying shares. A three-year relative TSR modifier is measured against the S&P SmallCap 600 Index at the end of the vesting period. The TSR modifier will apply a positive or negative 25% modifier if the Company’s TSR is in the first or fourth quartile, respectively. An overall
EXECUTIVE COMPENSATION
maximum payment of 200% will be applied regardless of any TSR modifier.
The Compensation Committee believes that a two-year ROCE/EBITDA performance period is appropriate for PSAs at this time, in order to give more accurate visibility to goal setting. In setting two-year performance measurement periods for PSAs granted in 2019, the
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EXECUTIVE COMPENSATION
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 ROCE/EBITDA performance goals beyond the two-year period due to the cyclical nature of our business. The Compensation Committee decided to set two-year ROCE/EBITDA performance goals, with a three- year relative TSR modifier and three years of time-based vesting (assuming achievement of the performance goals), in order to promote sustained performance focus and encourage long-term retention.
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 2019-2020 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 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.
In addition to the annual LTIP grant, certain NEOs were granted RSUs in 2019 in connection with their roles in driving the Company’s strategic transformation: Mr. Parrini turned age 55 in September 2019 and became eligible to receive his early retirement pension benefits under the Retirement Plan and Supplemental Executive Retirement Plan (SERP) in the event he elected to retire from employment. As a result, these pension plans no longer provide a significant retention incentive. Given the Company’s momentum with its strategic transformation and the importance of Mr. Parrini to the corporate initiatives, the Board determined that it was appropriate to grant Mr. Parrini a one-time three-year LTI retention grant on November 13, 2019 comprised of time-based RSUs valued at $2 million (110,132 RSUs). The Board believes Mr. Parrini’s continued leadership is important to the Company and our shareholders, especially during this period of transition, as the Company continues its transformation and further solidifies the leadership team under the functional operating model. The RSU grant is subject to three-year vesting based on continued service. The Company also granted the following LTIP grants in connection with the strategic transformation: Mr. Astley received a grant of 27,185 RSUs on August 1, 2019 upon his promotion to SVP and Chief Commercial Officer; Mr. Elder received a grant of 13,011 RSUs on February 28, 2019 in recognition of his role in providing continuity during the change of Chief Financial Officers, and Mr. Zakutney received a grant of 7,097 RSUs on February 21, 2019 related to his oversight of the Company’s strategic transformation including the standardization of the Company’s technology platform and global business processes. Each grant is subject to three-year vesting based on continued service.
The PSAs and RSUs granted to the NEOs during 2019 were based on the 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 2019:
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| PSAs |
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|
| ||
NEO | Total Shares (2) |
| Time Based RSU's |
| One-Time Retention Shares |
| Minimum Shares (0% payout below threshold) |
| Performance Share Target (100% payout) |
| Maximum Shares (200% payout at Maximum) |
| |||||||
Parrini |
| 228,952 |
|
| 47,528 |
|
| 110,132 |
|
| — |
|
| 71,292 |
|
| 142,584 |
| |
Hillard |
| 21,647 |
|
| 8,659 |
|
|
|
|
| — |
|
| 12,988 |
|
| 25,976 |
| |
Astley |
| 54,510 |
|
| 10,930 |
|
| 27,185 |
|
| — |
|
| 16,395 |
|
| 32,790 |
| |
Elder |
| 28,980 |
|
| 6,388 |
|
| 13,011 |
|
| — |
|
| 9,581 |
|
| 19,162 |
| |
Zakutney |
| 24,485 |
|
| 6,955 |
|
| 7,097 |
|
| — |
|
| 10,433 |
|
| 20,866 |
| |
Jacunski |
| 42,583 |
|
| 17,033 |
|
|
|
|
| — |
|
| 25,550 |
|
| 51,100 |
| |
Rapp |
| 21,629 |
|
| 8,652 |
|
|
|
|
| — |
|
| 12,977 |
|
| 25,954 |
|
|
|
|
|
2020 PROXY STATEMENT › 40
EXECUTIVE COMPENSATION
Vesting of Performance Share Grants
The chart below illustrates the overlapping performance cycles for performance share awards. Payouts for the 2018 and 2019 grants may be adjusted based on the three-year relative TSR modifier: +25% for top quartile performance or -25% for fourth quartile performance:
Performance Period Duration | |||||
Grant Year | 2017 | 2018 | 2019 | 2020 | 2021 |
2017 | 2-year ROCE Goal | Additional |
| ||
2-year EBITDA Goal | |||||
2018 |
| 2-year ROCE and EBITDA Goals |
|
| |
3-year TSR Modifier | |||||
2019 |
|
| 2-year ROCE and EBITDA Goals |
| |
3-Year TSR Modifier |
|
PSAs that were granted in 2017 vested on December 31, 2019 following the conclusion of a two-year performance period (ending December 31, 2018) and three-year vesting requirement. 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:
The resulting payouts from the 2017-2019 PSA cycle reflecting performance against the goals are shown below.
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EXECUTIVE COMPENSATION
PSAs that were granted in 2018 were based on ROCE and EBITDA performance through December 31, 2019 and are subject to adjustment based on a three-year relative TSR modifier for the period 2018-2020. The following table describes the performance goals for the two-year performance period (2018-2019), and the payout levels based on actual ROCE and EBIDTA performance delivered during the performance period. The final payout amounts are subject to change based on the three-year relative TSR modifier.
Payouts are also subject to time-based vesting through December 31, 2020. Payout of performance shares may be adjusted based on the three-year relative TSR modifier: +25% for top quartile performance or -25% for fourth quartile performance.
EXECUTIVE COMPENSATION
Perquisites at the Company 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 prior to his termination, 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.
POST-EMPLOYMENT RETIREMENT COMPENSATION
The Compensation Committee believes offering post-employment compensation allows the Company to attract, retain, and motivate qualified employees and executives in the current competitive marketplace.
During 2019, the Company provided qualified and non-qualified pension plans for U.S.-based employees and other arrangements for those outside of the United States.
Under the tax-qualified Glatfelter Retirement Plan (the Retirement Plan), eligible employees who were hired prior to 2007 participated in a traditional pension formula and those hired beginning in 2007 and later participated in a cash balance pension formula.
Non-qualified pension plans consisted of a Supplemental Executive Retirement Plan (SERP) and a Supplemental Management Pension Plan (SMPP). The SERP was tied to the qualified Retirement Plan and provided post-employment benefits for eligible NEOs. The SMPP provided 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.
The Company froze benefit accruals under the Retirement Plan as of May 31, 2019 and terminated the Retirement Plan effective June 30, 2019. Additionally, the Company froze the benefits of all participants in the SERP effective December 31, 2019.
The Company offered a new non-qualified deferred compensation plan effective January 1, 2020. The 2020 non-qualified deferred compensation plan coordinates with the 401(k) plan by providing a Company contribution related to compensation in excess of the 401(k) plan limits with a maximum non-qualified contribution of 7% of such excess compensation. Accrued benefits from the frozen SERP were converted to opening balances under the nonqualified deferred compensation plan as of January 1, 2020, which will be credited with a market rate of interest (Moody’s Aa bond yield) until distribution. The opening balance, with interest, will be paid after separation from service in the same form that the SERP benefit would have been paid.
2020 PROXY STATEMENT › 42
EXECUTIVE COMPENSATION
The NEOs participated in the following pension plans during 2019:
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2020 PROXY STATEMENT › 43
EXECUTIVE COMPENSATION
ADDITIONAL COMPENSATION POLICIES AND PRACTICES
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 or disability). The severance guidelines do not apply in circumstances in which 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.
On March 1, 2019, the Company announced certain key leadership changes in connection with its launch of the next steps in its business transformation. As a result, Mr. Jacunski entered into a Separation Agreement with the Company on March 27, 2019. Consistent with the executive severance guidelines, the Company agreed to pay or provide Mr. Jacunski the following: a) $997,293 which represents 15 months of base salary and bonus which was paid in a combination of 15 monthly installments and a lump sum payment; b) reimbursement of COBRA premiums for continued medical, prescription drug and dental coverage for the 15-month period following the termination date, less the amount that active employees pay for such coverage; and c) $30,000 in lieu of outplacement services. In addition, pursuant to the negotiated separation agreement, and separate from the Company’s standard executive severance guidelines, the Company agreed to a) a cash payment of $89,500 in lieu of any 2019 annual bonus; b)an additional lump sum payment of $500,000; and c) an enhancement to Mr. Jacunski’s SERP benefit to calculate the value of the SERP benefit as if he was 55 years old as of the date of his separation rather than his actual age of 53. Mr. Jacunski’s pension benefits will otherwise be determined based on his years of service and compensation as of the termination date in accordance with the terms of the SERP and the Retirement Plan. The Company also paid earned but unused vacation according to Company policy.
Mr. Rapp entered into a Separation Agreement with the Company on April 23, 2019 that provided for his continued employment through September 30, 2019. Consistent with Mr. Rapp’s employment agreement with the Company, the Company agreed to pay Mr. Rapp €676,387 as a severance, which represented 17 months of base salary. In addition, pursuant to the negotiated severance agreement,
the Company agreed to pay (a) €141,072 in lieu of a prorated 2019 bonus, and (b) €59,030 as a bonus after the successful completion of transition duties including a seamless handoff of customer relations. Consistent with Mr. Rapp’s employment agreement with the Company, the Company also agreed to reimburse Mr. Rapp for the cost of health insurance for the 17-month period following the termination date, less the amount that the Company would have paid for such health insurance had Mr. Rapp remained employed during the 17-month period following the termination date. The Company also paid earned, but unused, vacation according to Company policy.
Messrs. Rapp and Jacunski must comply with covenants related to confidentiality, non-competition and non-solicitation of employees and other service providers as a condition to receiving the severance payments described above.
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 Internal Revenue Code of 1986, as amended (the “Code”). Therefore, Messrs. Astley, Hillard and Zakutney do not have any tax gross-up provisions. The legacy CIC agreements of Messrs. Parrini and Elder, 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.
2020 PROXY STATEMENT › 44
EXECUTIVE COMPENSATION
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.
Until the executive share ownership guideline level is attained, executives must retain 50% of net profit shares realized at (i) exercise of SOSARs and (ii) payment of performance shares and (iii) vesting of restricted shares. 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 are 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 also apply to any executive 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 executive engages in intentional misconduct in performing his or her duties.
All employees, 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 Code Section 162(m) Section 162(m) of the Code generally imposes a $ 1 million deduction limitation on compensation paid to certain executive officers of a publicly-held corporation during the year. The executive officers to whom the Section 162(m) deduction limit applies include the Company’s Chief Executive Officer and Chief Financial Officer, the next three most highly compensated executive officers, and any such “covered employee” for a year after 2016. The Compensation Committee reserves discretion to award compensation that is not deductible under Section 162(m), as the Compensation Committee deems appropriate.
2020 PROXY STATEMENT › 45
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, and Vice President of Global Human Resources and Administration 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 2019, the Compensation Committee retained the Consultant, Meridian Compensation Partners LLC, to
provide advice and assistance to the Compensation Committee and to Management in the area of executive and non-employee directors’ compensation. The Consultant reports directly to the Compensation Committee and has been authorized by the Compensation Committee to work with certain executive officers of the Company and other employees in the Company’s human resources, legal and finance 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 2019, 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 2019.
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, 2019.
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
2020 PROXY STATEMENT › 46
EXECUTIVE COMPENSATION
The following table sets forth 2019 compensation information for the NEOs.
Name and Principal Position in 2019 | Year |
| Salary |
|
| Bonus |
|
| Stock Awards (1) |
|
| Option Awards |
|
| Non-Equity Incentive Plan Compensation (2) |
|
| Change in Pension Value and Non-Qualified Deferred Comp Earnings (3) |
|
| All Other Compensation (4) |
|
| Total |
| ||||||||
Dante C. Parrini (5) | 2019 |
| $ | 998,212 |
|
| $ | — |
|
| $ | 3,821,745 |
|
| $ | — |
|
| $ | 1,047,124 |
|
| $ | 5,079,000 |
|
| $ | 25,831 |
|
| $ | 10,971,912 |
|
Chairman & | 2018 |
|
| 996,183 |
|
|
| — |
|
|
| 1,771,525 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 22,199 |
|
|
| 2,789,907 |
|
Chief Executive Officer | 2017 |
|
| 973,865 |
|
|
| — |
|
|
| 1,564,808 |
|
|
| — |
|
|
| 557,051 |
|
|
| 1,824,000 |
|
|
| 18,955 |
|
|
| 4,938,679 |
|
Samuel L. Hillard | 2019 |
| $ | 367,100 |
|
| $ | — |
|
| $ | 331,891 |
|
| $ | — |
|
| $ | 225,325 |
|
| $ | 20,000 |
|
| $ | 16,151 |
|
| $ | 960,467 |
|
Senior Vice President | 2018 |
|
| 326,550 |
|
|
| — |
|
|
| 650,335 |
|
|
| — |
|
|
| — |
|
|
| 19,000 |
|
|
| 5,014 |
|
|
| 1,000,899 |
|
& Chief Financial Officer | 2017 |
|
| 315,000 |
|
|
| — |
|
|
| 295,001 |
|
|
| — |
|
|
| 81,081 |
|
| N/A |
|
|
| 12,784 |
|
|
| 703,867 |
| |
Christopher W. Astley (6) | 2019 |
| $ | 407,225 |
|
| $ | — |
|
| $ | 844,936 |
|
| $ | — |
|
| $ | 196,649 |
|
| $ | 31,000 |
|
| $ | 17,646 |
|
| $ | 1,497,456 |
|
Senior Vice President | 2018 |
|
| 391,668 |
|
|
| — |
|
|
| 407,384 |
|
|
| — |
|
|
| — |
|
|
| 29,000 |
|
|
| 8,608 |
|
|
| 836,660 |
|
& Chief Commercial Officer | 2017 |
|
| 368,051 |
|
|
| — |
|
|
| 350,019 |
|
|
| — |
|
|
| 147,570 |
|
|
| 26,000 |
|
|
| 8,596 |
|
|
| 900,236 |
|
David C. Elder (7) | 2019 |
| $ | 311,451 |
|
| $ | — |
|
| $ | 419,834 |
|
| $ | — |
|
| $ | 147,020 |
|
| $ | 255,000 |
|
| $ | 15,785 |
|
| $ | 1,149,090 |
|
Vice President, Finance |
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& Chief Accounting Officer |
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Joseph J. Zakutney (8) | 2019 |
| $ | 321,300 |
|
| $ | — |
|
| $ | 366,590 |
|
| $ | — |
|
| $ | 151,670 |
|
| $ | 16,000 |
|
| $ | 15,408 |
|
| $ | 870,968 |
|
Vice President, Global Business |
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Services & Chief Information Officer |
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John P. Jacunski | 2019 |
| $ | 137,546 |
|
| $ | — |
|
| $ | 652,883 |
|
| $ | — |
|
| $ | — |
|
| $ | 1,133,000 |
|
| $ | 1,413,102 |
|
| $ | 3,336,531 |
|
Former Executive Vice President | 2018 |
|
| 548,422 |
|
|
| — |
|
|
| 634,898 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 10,222 |
|
|
| 1,193,542 |
|
& Chief Financial Officer | 2017 |
|
| 530,842 |
|
|
| — |
|
|
| 574,994 |
|
|
| — |
|
|
| 197,367 |
|
|
| 432,000 |
|
|
| 11,985 |
|
|
| 1,747,188 |
|
Martin Rapp (9) | 2019 |
| $ | 305,506 |
|
| $ | — |
|
| $ | 331,615 |
|
| $ | — |
|
| $ | — |
|
| $ | 2,713,000 |
|
| $ | 973,734 |
|
| $ | 4,323,855 |
|
Former Senior Vice President & | 2018 |
|
| 428,157 |
|
|
| — |
|
|
| 336,498 |
|
|
| — |
|
|
| — |
|
|
| 348,000 |
|
|
| 17,295 |
|
|
| 1,129,950 |
|
Business Unit President, CFBU | 2017 |
|
| 391,193 |
|
|
| — |
|
|
| 267,492 |
|
|
| — |
|
|
| 161,816 |
|
|
| 441,000 |
|
|
| 15,022 |
|
|
| 1,276,523 |
|
|
|
|
|
|
2020 PROXY STATEMENT › 47
EXECUTIVE COMPENSATION
(4)Other compensation includes the following:
2019 | 401(k) Company Contribution |
| Perquisites (i, ii) |
| Life Insurance Premium (iii) |
| Other Compensation (iv) |
| Post-Employment Compensation (v, vi) |
| Total |
| ||||||
Parrini | $ | 13,183 |
| $ | 3,534 |
| $ | 2,550 |
| $ | 6,564 |
| $ | - |
|
| $ 25,831 |
|
Hillard |
| 13,183 |
| - |
|
| 286 |
|
| 2,682 |
|
| - |
|
| 16,151 |
| |
Astley |
| 13,183 |
| - |
|
| 382 |
|
| 4,081 |
|
| - |
|
| 17,646 |
| |
Elder |
| 13,183 |
| - |
|
| 454 |
|
| 2,148 |
|
| - |
|
| 15,785 |
| |
Zakutney |
| 13,183 |
| - |
|
| 707 |
|
| 1,518 |
|
| - |
|
| 15,408 |
| |
Jacunski |
| 2,079 |
| - |
|
| 413 |
|
| 3,527 |
|
| 1,407,083 |
|
| 1,413,102 |
| |
Rapp |
| - |
|
| 11,365 |
|
| 418 |
|
| - |
|
| 961,951 |
|
| 973,734 |
|
|
|
|
|
|
|
|
|
|
|
(5) Mr. Parrini received a one-time retention grant of 110,132 RSUs on November 13, 2019, in addition to his annual LTI grant of 47,528 RSUs and 71,292 PSAs. The RSUs have three-year cliff vesting.
|
|
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|
|
(9) Mr. Rapp’s cash compensation is paid in Euros (€). Amounts presented here have been converted to United States dollars ($) using the average exchange rate for 2019, or 1.1196 $/€. Mr. Rapp’s cash compensation (not including automobile expense reimbursement) was 272,871€ in 2019 (January through September), 363,820 € in 2018 and 346,495 € in 2017.
2020 PROXY STATEMENT › 48
EXECUTIVE COMPENSATION
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 2019, our ratio was estimated as follows:
|
|
(8) |
|
|
To identify the median employee, the methodology and the material assumptions, adjustments and estimates we used were as follows:
We continued to use October 1 as the date to determine the median employee.
All employees throughout our global operations were considered.
|
|
|
Using this methodology, we determined the appropriate median employee to be a full-time employee in the United Kingdom. The 2018 median employee could no longer be used due to divesture of the Specialty Papers business in 2018.
For purposes of this determination, we applied the appropriate exchange rate to U.S. dollars of the average exchange rate for October 2019 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 benefit premiums paid by the Company. We used the same methodology for calculating the Annual Total Compensation for the median employee.
EXECUTIVE COMPENSATION
2020 PROXY STATEMENT › 49
EXECUTIVE COMPENSATION
2019 Grants of Plan-Based Awards
The following table, including footnotes, sets forth information concerning grants of plan-based awards in 2019:
| 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 ($/Share) | Awards ($) |
| ||||||||
Dante C. Parrini |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/21/2019 |
| 499,106 |
|
| 998,212 |
|
| 1,996,424 |
|
| 14,258 |
|
| 71,292 |
|
| 142,584 |
|
|
|
| — | N/A |
| 1,152,079 |
|
2/21/2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 47,528 |
|
|
|
| 669,670 |
|
11/13/2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 110,132 |
|
|
|
| 1,999,997 |
|
Samuel L. Hillard |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/21/2019 |
| 107,400 |
|
| 214,800 |
|
| 429,600 |
|
| 2,598 |
|
| 12,988 |
|
| 25,976 |
|
|
|
| — | N/A |
| 209,886 |
|
2/21/2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 8,659 |
|
|
|
| 122,005 |
|
Christopher W. Astley |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/21/2019 |
| 111,987 |
|
| 223,974 |
|
| 447,948 |
|
| 3,279 |
|
| 16,395 |
|
| 32,790 |
|
|
|
| — | N/A |
| 264,943 |
|
2/21/2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 10,930 |
|
|
|
| 154,004 |
|
8/1/2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 27,185 |
|
|
|
| 425,989 |
|
David C. Elder |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/21/2019 |
| 70,076 |
|
| 140,153 |
|
| 280,306 |
|
| 1,916 |
|
| 9,581 |
|
| 19,162 |
|
|
|
| — | N/A |
| 154,829 |
|
2/21/2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 6,388 |
|
|
|
| 90,007 |
|
2/28/2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 13,011 |
|
|
|
| 174,998 |
|
Joseph J. Zakutney |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
2/21/2019 |
| 72,293 |
|
| 144,585 |
|
| 289,170 |
|
| 2,087 |
|
| 10,433 |
|
| 20,866 |
|
|
|
| — | N/A |
| 168,597 |
|
2/21/2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 14,052 |
|
|
|
| 197,993 |
|
John P. Jacunski |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/21/2019 |
| 178,810 |
|
| 357,620 |
|
| 715,240 |
|
| 5,110 |
|
| 25,550 |
|
| 51,100 |
|
|
|
| — | N/A |
| 412,888 |
|
2/21/2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 17,033 |
|
|
|
| 239,995 |
|
Martin Rapp (4) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/21/2019 | € | 100,051 |
| € | 200,101 |
| € | 400,202 |
|
| 2,595 |
|
| 12,977 |
|
| 25,954 |
|
|
|
| — | N/A |
| 209,708 |
|
2/21/2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 8,652 |
|
|
|
| 121,907 |
|
|
|
|
|
|
|
| Mr. |
2020 PROXY STATEMENT › 50
EXECUTIVE COMPENSATION
2019 Outstanding Equity Awards at Fiscal Year-End
The following table, including footnotes, sets forth information concerning outstanding equity awards as of December 31, 2019:
| Option and Stock Awards |
| ||||||||||||||||||||
|
Number of Securities Underlying Unexercised Options (#) (1) |
| Option Exercise Price ($)
|
| Option Expiration Date
| Number of Shares or Units of Stock That Have Not Vested (#) (2) |
| Market Value of Shares of Units of Stock That Have Not Vested ($) (3) |
| Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) (4) |
| Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (3) |
| |||||||||
Name |
Exercisable |
|
Unexercisable |
|
|
|
|
|
| |||||||||||||
Dante C. Parrini |
| 85,130 |
|
| — |
|
| 15.61 |
| 3/6/2022 |
| 217,139 |
|
| 3,973,644 |
|
| 119,725 |
|
| 2,190,968 |
|
|
| 98,010 |
|
| — |
|
| 18.36 |
| 3/5/2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 82,997 |
|
| — |
|
| 29.89 |
| 2/26/2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 119,627 |
|
| — |
|
| 24.94 |
| 2/26/2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 197,678 |
|
|
|
|
| 17.27 |
| 2/25/2026 |
|
|
|
|
|
|
|
|
|
|
|
|
Samuel L. Hillard |
| 63,286 |
|
| — |
|
| 19.38 |
| 3/21/2026 |
| 50,837 |
|
| 930,318 |
|
| 21,812 |
|
| 399,160 |
|
Christopher W. Astley |
| 8,000 |
|
| — |
|
| 11.92 |
| 7/23/2020 |
| 51,622 |
|
| 944,684 |
|
| 27,533 |
|
| 503,854 |
|
|
| 20,710 |
|
| — |
|
| 12.56 |
| 3/3/2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 21,730 |
|
| — |
|
| 15.61 |
| 3/6/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 21,600 |
|
| — |
|
| 18.36 |
| 3/5/2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 16,070 |
|
| — |
|
| 29.89 |
| 2/26/2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 26,253 |
|
| — |
|
| 24.94 |
| 2/26/2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 44,215 |
|
| — |
|
| 17.27 |
| 2/25/2026 |
|
|
|
|
|
|
|
|
|
|
|
|
David C. Elder |
| 16,000 |
|
| — |
|
| 13.95 |
| 3/3/2020 |
| 27,648 |
|
| 505,958 |
|
| 16,090 |
|
| 294,447 |
|
|
| 13,750 |
|
| — |
|
| 12.56 |
| 3/3/2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 14,750 |
|
| — |
|
| 15.61 |
| 3/6/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 15,440 |
|
| — |
|
| 18.36 |
| 3/5/2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 11,840 |
|
| — |
|
| 29.89 |
| 2/26/2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 17,900 |
|
| — |
|
| 24.94 |
| 2/26/2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 28,424 |
|
| — |
|
| 17.27 |
| 2/25/2026 |
|
|
|
|
|
|
|
|
|
|
|
|
Joseph J. Zakutney |
| 15,322 |
|
|
|
|
| 17.25 |
| 9/14/2025 |
| 27,856 |
|
| 509,765 |
|
| 17,521 |
|
| 320,634 |
|
|
| 30,951 |
|
|
|
|
| 17.27 |
| 2/25/2026 |
|
|
|
|
|
|
|
|
|
|
|
|
Martin Rapp |
| 18,530 |
|
| — |
|
| 15.61 |
| 3/6/2022 |
| 9,045 |
|
| 165,524 |
|
| 5,160 |
|
| 94,428 |
|
|
| 22,170 |
|
| — |
|
| 18.36 |
| 9/30/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 14,730 |
|
| — |
|
| 29.89 |
| 9/30/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 21,659 |
|
| — |
|
| 24.94 |
| 9/30/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 34,740 |
|
| — |
|
| 17.27 |
| 9/30/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2020 PROXY STATEMENT › 51
EXECUTIVE COMPENSATION
2019 Options Exercised and Stock Vested
The following table, including footnotes, sets forth information concerning stock grants that vested during fiscal 2019:
| Option Awards |
|
| Stock Awards |
|
|
|
| ||||||||||||||
| No. of Shares Acquired on Exercise |
| Value Realized on Exercise |
|
| No. of Shares Acquired on Vesting (Payout) |
| Value Realized on Vesting |
| Total Value Realized from all |
| |||||||||||
|
|
|
|
|
|
|
| PSAs (1) |
| RSUs (2) |
| PSAs (3) |
| RSUs (4) |
| Exercised and Vested Grants |
| |||||
Parrini |
| 323,950 |
| $ | 1,550,191 |
|
|
| 22,332 |
|
| — |
| $ | 408,676 |
|
| — |
|
| $ 1,958,867 |
|
Hillard |
| — |
|
| — |
|
|
| 4,210 |
|
| — |
|
| 77,043 |
|
| — |
|
| 77,043 |
|
Astley |
| — |
|
| — |
|
|
| 4,995 |
|
| 11,730 |
|
| 91,409 |
|
| 162,461 |
|
| 253,869 |
|
Elder |
| 40,890 |
|
| 240,024 |
|
|
| 3,210 |
|
| — |
|
| 58,743 |
|
| — |
|
| 298,767 |
|
Zakutney |
| — |
|
| — |
|
|
| 3,496 |
|
|
|
|
| 63,977 |
|
| — |
|
| 63,977 |
|
Jacunski |
| 219,140 |
|
| 553,331 |
|
|
| — |
|
| 17,976 |
|
| — |
|
| 248,968 |
|
| 802,299 |
|
Rapp |
| — |
|
| — |
|
|
| 3,479 |
|
| 16,953 |
|
| 63,666 |
|
| 234,799 |
|
| 298,465 |
|
|
|
|
|
|
|
|
|
2020 PROXY STATEMENT › 52
EXECUTIVE COMPENSATION
PENSION PLAN OVERVIEW
During 2019, the Company provided qualified and non-qualified pension plans for U.S.-based employees and other arrangements for those outside of the United States.
Effective May 31, 2019, the Company eliminated (“froze”) all future accruals under our U.S. qualified Retirement Plan, and we terminated the Retirement Plan effective June 30, 2019. The Retirement Plan liabilities to participants were settled by December 31, 2019.
The Company liquidated the associated pension obligations through lump sum payments to participants or the purchase of an annuity contract on their behalf.
Approximately $13 million of the amount that would otherwise have reverted to the Company from the terminated Retirement Plan will be transferred to the 401(k) plan in 2020 and will be allocated to 401(k) plan
participants as Company contributions over the next seven years.
The Company enhanced the 401(k) contribution given the termination of the qualified Retirement Plan. The enhancement included a Company contribution of 7% on eligible earnings (base salary and annual short-term incentive). This new Company contribution replaced the Company match that provided up to a 25% match on employee contributions up to 6% of base salary (i.e. - a maximum matching contribution of 1.5% of base salary).
Starting in 2020, the amount transferred to the 401(k) plan from the terminated Retirement Plan will be allocated to participants as the annual Company contribution. The allocation percentage may vary based on Internal Revenue Code requirements.
The below chart highlights the changes in the U.S. qualified plan benefit programs for the NEOs:
|
| |
|
|
|
|
|
|
|
|
|
2020 PROXY STATEMENT › 53
EXECUTIVE COMPENSATION
All U.S.-based NEOs participated in the Retirement Plan, which was a tax-qualified defined benefit pension plan. The Retirement Plan had two methods under which participant benefits were determined: the traditional pension and the cash balance pension. The Retirement Plan was frozen as of May 31, 2019 and terminated as of June 30, 2019. All Retirement Plan benefits of the NEOs were paid in lump sum payments in 2019, based on their elections in connection with the Retirement Plan termination
Traditional Pension (closed to new entrants since 2007)
Messrs. Parrini, Elder and Jacunski were plan participants on January 1, 2007, and accordingly were 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 $280,000 for 2019).
The Retirement Plan provided 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
Messrs. Astley, Hillard and Zakutney were hired after January 1, 2007, and therefore participated in the cash balance pension. At the end of each month, the Company determined contribution credits equal to 5.5% of their eligible monthly base pay. Interest was accrued on the account balance at the end of each month based on an external index (Moody’s Aa bond yield). Full vesting occurred 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. Mr. Rapp no longer accrues pension benefits given his termination, effective October 1, 2019. Mr. Rapp’s benefit is being paid in the form of an annuity.
During 2019, the Company sponsored for certain executives non-qualified pension plans, providing benefits that coordinated with and supplemented the Retirement Plan benefits. The Company froze the benefits for all participants in the SERP effective December 31, 2019. No additional benefits will accrue for any NEO under the SERP after December 31, 2019. In connection with the Retirement Plan freeze and termination, the SERP and SMPP were amended so that no new participants would be eligible to participate in the SERP or SMPP and, before the SERP was frozen, to provide that benefits under the SERP were calculated in part as if the Retirement Plan had not been frozen and were reduced by certain benefits provided under the Company’s enhanced 401(k) plan. Under these amendments, the aggregate benefit provided to a SERP participant did not exceed the benefit that would have been provided had the Retirement Plan not been frozen.
Supplemental Executive Retirement Plan (SERP)
The SERP consisted 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.
2020 PROXY STATEMENT › 54
EXECUTIVE COMPENSATION
The following table summarizes the terms of the SERP:
|
|
|
|
As of January 1, 2020, the present value of the frozen SERP benefits for Messrs. Parrini, Hillard, Astley, Elder, and Zakutney were credited to the new deferred compensation plan established by the Company and will accrue interest annually using the Moody’s Aa bond yield. The present value of the frozen SERP benefits for those in the traditional pension plan was calculated as of December 31, 2019 utilizing an interest rate of 3.13% (based on a 30-day average Moody’s Aa bond yield from November 12, 2019 through December 11, 2019), the mortality table specified in the qualified pension plan for lump sum calculations, and an assumed commencement age of the later of current age or age 55. The frozen SERP benefits, with interest, will be paid in the same form and conditions as previously provided for under the SERP. Mr. Jacunski’s SERP benefit is being paid in an annuity as a result of his termination of employment, according to the terms of the SERP.
Supplemental Management Pension Plan (SMPP)
The SMPP provided an Early Retirement Supplement to benefits otherwise provided by the Retirement Plan if the participant retired early. If the SMPP participant agreed to postpone his or her Retirement Plan pension until at least 36 months following the early retirement date, then the Early Retirement Supplement would pay a supplemental benefit during the 36-month period. The Early Retirement Supplement was equal to the monthly amount of the Retirement Plan benefit in the form of a single life annuity. Mr. Elder’s participation ceased as a result of his qualified pension plan distribution, and Mr. Jacunski’s participation ceased because of his termination of employment. Mr. Parrini did not participate in the SMPP since he was eligible for the FAC Pension benefitsFrequently Asked Questions (“FAQS”)
New Non-Qualified Deferred Compensation Plan
Given the freezing of all future benefits under the SERP, the Compensation Committee approved a new non-qualified deferred compensation plan for actively employed participants in the SERP, effective January 1, 2020. This plan will coordinate with the 401(k) plan and participants willWhy did I receive a 7% Company contribution on earnings in excess of the annual Internal Revenue Code earnings limit. As described above, the frozen SERP benefits for Messrs. Parrini, Hillard, Astley, Elder, and Zakutney will be paid pursuant to the new non-qualified plan.
2020 PROXY STATEMENT › 55
EXECUTIVE COMPENSATION
CURRENT PENSION BENEFITS OF NEOSthese materials?
The following table, including footnotes, sets forth information concerning pension benefits during fiscal year 2019.
Name | Age |
| Plan Name | Number of Years Credited Services (#) |
| Present Value of Accumulated Benefit ($) (1) |
| Payments During Last Fiscal Year ($) (2) |
| ||||
| 55 |
| SERP - FAC Pension |
| 22 |
|
| 5,277,000 |
|
|
|
| |
|
|
|
| SERP - Restoration Pension |
| 22 |
|
| 6,317,000 |
|
| — |
|
|
|
|
| Traditional Pension | N/A |
| X |
|
| 997,795 |
| ||
Samuel L. Hillard |
| 38 |
| SERP - Restoration Pension |
| 3 |
|
| 9,000 |
|
| — |
|
|
|
|
| Cash Balance Pension | N/A |
| X |
|
| 55,931 |
| ||
Christopher W. Astley |
| 46 |
| SERP - Restoration Pension |
| 9 |
|
| 34,000 |
|
| — |
|
|
|
|
| Cash Balance Pension | N/A |
| X |
|
| 155,447 |
| ||
David C. Elder |
| 51 |
| SERP - Restoration Pension |
| 14 |
|
| 359,000 |
|
| — |
|
|
|
|
| Traditional Pension | N/A |
| X |
|
| 506,919 |
| ||
Joseph J. Zakutney |
| 57 |
| SERP - Restoration Pension |
| 4 |
|
| 9,000 |
|
| — |
|
|
|
|
| Cash Balance Pension | N/A |
| X |
|
| 62,149 |
| ||
John P. Jacunski |
| 54 |
| SERP - Restoration Pension |
| 15 |
|
| 2,095,000 |
|
| 75,798 |
|
|
|
|
| Traditional Pension | N/A |
| X |
|
| 445,499 |
| ||
Martin Rapp |
| 60 |
| Pension Agreement |
| 16 |
|
| 5,430,000 |
|
| 43,078 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
|
| ||
|
| ||
|
| ||
|
| ||
|
|
|
|
|
|
2020 PROXY STATEMENT › 56
EXECUTIVE COMPENSATION
Potential Payments upon Termination or Change in Control
EXECUTIVE TERMINATION GUIDELINES
Payments made to a NEO upon involuntary termination byshareholder, the Company without cause are made in accordance withis soliciting your vote on matters to be considered at the Company’s executive termination guidelines.upcoming Special Meeting. The executive termination guidelines do not apply ifnotice, this proxy statement, and the NEO is eligibleaccompanying proxy card were first sent or given to receive payments under a Change in Control Agreement upon a termination of employment. The tableshareholders on or about , 2022. Please read this proxy statement and vote your shares by mailing the attached proxy card, voting online at www.proxyvote.com, by telephone at 1-800-690-6903, or on the following page describes benefits payable underMeeting Website during the executive termination guidelines.
CHANGE IN CONTROL AGREEMENTS AND DOUBLE TRIGGER EQUITY VESTING
Special Meeting. The CompanyBoard has entered into a Change in Control Agreementappointed directors Kevin M. Fogarty and Lee C. Stewart, or either of them (the “Proxy Holders”) with each NEO as described in the CD&A. Under these agreements, each executive’s employment with the Company will continue for two yearspower of substitution, to vote all properly-executed proxies received from the date of a change in control or each executive will becomeshareholders entitled to severance payments and benefits upon termination under certain conditions within such two-year period. During such period,vote at 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 the 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
the consummation of (i) a reorganization, merger or consolidation in which shareholders of the Company immediately prior to such event do not, immediately thereafter, beneficially own more than 50% of the combined voting power of the reorganized, merged or consolidated company’s then outstanding voting securities; or (ii) a liquidation or dissolution of the Company, or the sale of all or substantially all of the assets of the Company to a third party.
Tax Gross-Up Payments: Change in Control Agreements in effect before 2011 (including the agreements of Messrs. Parrini and Elder) provide that, if any payment is subject to excise tax under the Code, an additional gross-up payment will be made to the executive. The gross-up payment will effectively place the executive in the same net position as without the excise tax. Beginning in 2011, the provision for excise tax gross-ups was eliminated from new Change in Control Agreements. As such, the Change in Control Agreements of Messrs. Astley, Hillard and Zakutney 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).
2020 PROXY STATEMENT › 57
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:
|
|
|
|
|
|
|
|
|
|
|
|
2020 PROXY STATEMENT › 58
EXECUTIVE COMPENSATION
|
|
|
|
|
|
|
|
|
2020 PROXY STATEMENT › 59
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, 2019.
Name |
| Death or Disability |
|
| Retirement |
|
| Involuntary Termination Without Cause |
|
| Termination Following Change in Control |
| ||||
Dante C. Parrini |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance Payments (1) |
| N/A |
|
| N/A |
|
| $ | 2,957,845 |
|
| $ | 4,991,060 |
| ||
RSUs (2) |
| $ | 3,973,644 |
|
| $ | 1,086,422 |
|
| $ | 0 |
|
| $ | 3,973,644 |
|
PSAs (2)(3) |
| $ | 1,025,764 |
|
| $ | 1,025,764 |
|
| $ | 0 |
|
| $ | 2,190,968 |
|
Health & Welfare Benefits (4) |
| N/A |
|
| N/A |
|
| $ | 24,891 |
|
| $ | 77,700 |
| ||
Outplacement Assistance |
| N/A |
|
| N/A |
|
| $ | 40,000 |
|
| $ | 40,000 |
| ||
Pension (5) |
| N/A |
|
| N/A |
|
| N/A |
|
| $ | 0 |
| |||
Excise Tax Gross-Up (6) |
| N/A |
|
| N/A |
|
| N/A |
|
| $ | 0 |
| |||
Total |
| $ | 4,999,408 |
|
| $ | 2,112,186 |
|
| $ | 3,022,736 |
|
| $ | 11,273,372 |
|
Samuel L. Hillard |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance Payments (1) |
| N/A |
|
| N/A |
|
| $ | 112,690 |
|
| $ | 1,425,000 |
| ||
RSUs (2) |
| $ | 930,318 |
|
| $ | 396,612 |
|
| $ | 0 |
|
| $ | 930,318 |
|
PSAs (2)(3) |
| $ | 186,879 |
|
| $ | 186,879 |
|
| $ | 0 |
|
| $ | 399,160 |
|
Health & Welfare Benefits (4) |
| N/A |
|
| N/A |
|
| $ | 5,592 |
|
| $ | 78,040 |
| ||
Outplacement Assistance |
| N/A |
|
| N/A |
|
| $ | 30,000 |
|
| $ | 30,000 |
| ||
Unvested 401(k) Match (7) |
| N/A |
|
| N/A |
|
| N/A |
|
| $ | 8,536 |
| |||
Total |
| $ | 1,117,197 |
|
| $ | 583,491 |
|
| $ | 148,282 |
|
| $ | 2,871,054 |
|
Christopher W. Astley |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance Payments (1) |
| N/A |
|
| N/A |
|
| $ | 420,107 |
|
| $ | 1,554,900 |
| ||
RSUs (2) |
| $ | 944,684 |
|
| $ | 316,315 |
|
| $ | 0 |
|
| $ | 944,684 |
|
PSAs (2)(3) |
| $ | 235,893 |
|
| $ | 235,893 |
|
| $ | 0 |
|
| $ | 503,854 |
|
Health & Welfare Benefits (4) |
| N/A |
|
| N/A |
|
| $ | 13,577 |
|
| $ | 65,262 |
| ||
Outplacement Assistance |
| N/A |
|
| N/A |
|
| $ | 30,000 |
|
| $ | 30,000 |
| ||
Total |
| $ | 1,180,577 |
|
| $ | 552,208 |
|
| $ | 463,684 |
|
| $ | 3,098,700 |
|
David Elder |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance Payments (1) |
| N/A |
|
| N/A |
|
| $ | 434,352 |
|
| $ | 1,043,361 |
| ||
RSUs (2) |
| $ | 505,958 |
|
| $ | 216,934 |
|
| $ | 0 |
|
| $ | 505,958 |
|
PSAs (2)(3) |
| $ | 137,854 |
|
| $ | 137,854 |
|
| $ | 0 |
|
| $ | 294,447 |
|
Health & Welfare Benefits (4) |
| N/A |
|
| N/A |
|
| $ | 12,112 |
|
| $ | 46,014 |
| ||
Outplacement Assistance |
| N/A |
|
| N/A |
|
| $ | 30,000 |
|
| $ | 30,000 |
| ||
Excise Tax Gross-Up (6) |
| N/A |
|
| N/A |
|
| N/A |
|
| $ | 553,476 |
| |||
Total |
| $ | 643,812 |
|
| $ | 354,788 |
|
| $ | 476,464 |
|
| $ | 2,473,256 |
|
Joseph Zakutney |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance Payments (1) |
| N/A |
|
| N/A |
|
| $ | 137,287 |
|
| $ | 1,076,355 |
| ||
RSUs (2) |
| $ | 509,765 |
|
| $ | 255,418 |
|
| $ | 0 |
|
| $ | 509,765 |
|
PSAs (2)(3) |
| $ | 150,115 |
|
| $ | 150,115 |
|
| $ | 0 |
|
| $ | 320,634 |
|
Health & Welfare Benefits (4) |
| N/A |
|
| N/A |
|
| $ | 6,034 |
|
| $ | 67,952 |
| ||
Outplacement Assistance |
| N/A |
|
| N/A |
|
| $ | 30,000 |
|
| $ | 30,000 |
| ||
Unvested 401(k) Match (7) |
| N/A |
|
| N/A |
|
| N/A |
|
| $ | 3,695 |
| |||
Total |
| $ | 659,880 |
|
| $ | 405,533 |
|
| $ | 173,321 |
|
| $ | 2,008,401 |
|
John Jacunski (8) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance Payments |
| N/A |
|
| N/A |
|
| $ | 1,497,293 |
|
| N/A |
| |||
Health & Welfare Benefits |
| N/A |
|
| N/A |
|
| $ | 22,054 |
|
| N/A |
| |||
Cash in Lieu of Outplacement |
| N/A |
|
| N/A |
|
| $ | 30,000 |
|
| N/A |
| |||
Amount in Lieu of 2019 MIP |
| N/A |
|
| N/A |
|
| $ | 89,500 |
|
| N/A |
| |||
Earned but Not Used Vacation |
| N/A |
|
| N/A |
|
| $ | 1,058 |
|
| N/A |
| |||
Total |
| $ | — |
|
| $ | — |
|
| $ | 1,639,905 |
|
| $ | — |
|
Martin Rapp (9) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance Payments |
| N/A |
|
| N/A |
|
| $ | 757,295 |
|
| N/A |
| |||
Cash in Lieu of Outplacement |
|
|
|
|
| N/A |
|
| $ | 29,463 |
|
| N/A |
| ||
Amount in Lieu of 2019 MIP |
| N/A |
|
| N/A |
|
| $ | 157,944 |
|
| N/A |
| |||
Bonus for Successful Transition |
| N/A |
|
| N/A |
|
| $ | 66,090 |
|
| N/A |
| |||
Earned but Not Used Vacation |
| N/A |
|
| N/A |
|
| $ | 17,261 |
|
| N/A |
| |||
Total |
| $ | — |
|
| $ | — |
|
| $ | 1,028,053 |
|
| $ | — |
|
2020 PROXY STATEMENT › 60
EXECUTIVE COMPENSATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2020 PROXY STATEMENT › 61
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,Special Meeting or at any time since the beginningadjournment, continuation, or postponement 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 2019.Special Meeting.
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 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.
2020 PROXY STATEMENT › 62
The Audit Committee* has reviewed and discussed the Company’s audited consolidated financial statements for the year ended December 31, 2019 with the Company’s Management and its independent registered public accounting firm. The Company’s Management has advised the Audit Committee that such audited consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America.
The Audit Committee has discussed with Deloitte, the Company’s independent registered public accounting firm, the matters required to be discussed by Auditing Standard No. 1301, “Communications with Audit Committees,” as issued by the Public Company Accounting Oversight Board. The Audit Committee has also discussed with Deloitte its independence from the Company and its Management. The Audit Committee has received a letter and written disclosures from Deloitte required by applicable requirements of the Public Company Accounting Oversight Board, disclosing all relationships between Deloitte and its related entities and the Company. In addition to the information provided by Deloitte, the Audit Committee considered the level of non-audit and tax services provided by Deloitte in determining that it was independent. Based on the review and discussions described above, the Audit Committee
recommended to the Company’s Board that the Company’s audited consolidated financial statements be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, 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.
Ronald J. Naples (Chair)
Bruce Brown
Kathleen A. Dahlberg
Nicholas DeBenedictis
Lee C. Stewart
*Marie T. Gallagher became a member of the Audit Committee in February 2020 after this report was approved.
2020 PROXY STATEMENT › 63
Frequently Asked Questions (“FAQs”)
When and where is the Annual Meeting and how will I know if it changes?Special Meeting?
The 2020 AnnualSpecial Meeting of Shareholders of P.H. Glatfelter Company (the “Annual Meeting”) will be held on Thursday, May 7, 2020,, 2022, at 8:00 a.m.,Eastern Time via live audio cast at The Kimpton, Tryon Park Hotel, 303 South Church Street, Charlotte, NC 28202.
Inwww.virtualshareholdermeeting.com/GLT2022SM (Meeting Website). There will not be a physical location for the event the Company changes the venue or format of the AnnualSpecial Meeting, especially in light of the public health and safety concerns associated with the current coronavirus (COVID-19) outbreak, the Companyyou will provide reasonable advance notice of that decision, as well as instructions on hownot be able to attend the Annualmeeting in person. To virtually attend the Special Meeting, through a press releasevisit the Meeting Website and Securities and Exchange Commission filing. We will also provide this informationenter the 16-digit control number found on the Investor Relations page of our website: www.glatfelter.com. In the case the Annual Meeting is changed to a virtual meeting or other format, your Notice of Availability, proxy card or voting instruction form, will not be updated to reflect the change. In the case of a virtual meeting,as applicable.
If you will need the 16-digit control number provided to attendencounter any difficulties accessing the virtual meeting. Therefore, itSpecial 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 very important that you retain your Noticesoliciting this proxy?
Solicitation of Availability,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 or voting instruction form and relatedother soliciting materials, including your assigned 16-digit control number, throughas well as the datecost of forwarding such material to the beneficial owners of stock, will be paid by us, except for some costs associated with individual shareholders’ use of the Annual MeetingInternet or telephone, and postage. In addition to the solicitation by electronic communications and/or by mail, directors, officers, regular employees and others may also, but without compensation other than their regular compensation, solicit proxies personally or by telephone or other means of electronic communication. We may reimburse brokers and others holding stock in their names or in the names of nominees for their reasonable out-of-pocket expenses in sending proxy materials to principals and beneficial owners. Proxies will be solicited on behalf of the Board by the Company’s directors, director nominees, and certain executive officers and other employees of the Company.
Shareholders of record as of the close of business on the Record Date ( ) may attendvote at the meeting and what else is required for admittance?
Only shareholdersSpecial Meeting. At the close of business on the Record Date, there were shares of the Company’s common stock on March 17, 2020 (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.
|
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 2020 Annual Meeting. The Notice of Annual Meeting, this proxy statement, the accompanying proxy card and our 2019 Annual Report to shareholders, were first sent or given to shareholders on March 31, 2020. 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 Bruce Brown and Ronald J. Naples, 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 17, 2020, the Record Date, may vote at the Annual Meeting. At the close of business on March 17, 2020, there were 44,308,440 shares of the Company’s common stock issued and outstanding and eligible to vote at the Annual Meeting.
If you are a registered shareholder, 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 1-800-690-6903, online at www.proxyvote.com or by
2020 PROXY STATEMENT › 64in three ways:
FREQUENTLY ASKED QUESTIONS
1. | By telephone at 1-800-690-6903; |
2022 PROXY STATEMENT | › | 15 |
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. |
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. 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, 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 ( ) 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 Eastern Time, on , 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.
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 17, 2020, 44,308,440, 2022, 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.
2022 PROXY STATEMENT | › | 16 |
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 AnnualSpecial Meeting has concluded and adjourned, the chair 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 chair 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
2022 PROXY STATEMENT | › | 17 |
FREQUENTLY ASKED QUESTIONS |
2020 PROXY STATEMENT › 65
FREQUENTLY ASKED QUESTIONS
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 By-laws, 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.
2022 PROXY STATEMENT | › | 18 |
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 “Resignationcommon shares of the Company and Majorityentitled 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 Policy” in the “Corporate Governance and BoardStandards. The affirmative vote of Directors” section 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 2019. 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.
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 Articles of Incorporation of the Company to eliminate cumulative voting in director elections;
FOR the amendment of the Bylaws to allow the Board to set its size by resolution;
FOR the amendment of the Bylaws to eliminate the designated annual meeting date and time;
FOR the amendment of the Bylaws to provide for proxy access; and
FOR the amendment of the Bylaws to clarify the Company’s independent registered public accounting firm for fiscal year 2020; andvoting standards.
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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, 2020,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 29, 2019, notice of all director nominations and shareholder proposals to be considered at the 2019 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
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FREQUENTLY ASKED QUESTIONSstatement.
receive any such notice of nominations or proposals, no other director nominations, shareholder proposals or other matters will be considered at the 2020 Annual Meeting.
How may a shareholder present a proposal for next year’s Annual Meeting?
A shareholder wishing to present a proposal at the 2021 Annual Meeting must submit it to the Company’s Secretary pursuant to the requirements of Rule 14a-8 under the Exchange Act and the Company’s By-laws prescribe the procedures a shareholder must follow. To present a proposal for consideration at the 2021 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 December 1, 2020 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 2021 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 December 1, 2020.
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.
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The notice must include:
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This is a general description of the notice required to submit a proposal or nomination for consideration at the 2021 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 http://www.glatfelter.com/Files/about_us/
corporate_governance/GLT-By-Laws.pdf 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 500, 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 chair of the CommitteeBoard committee responsible for the matter addressed in the communication. All communications regarding accounting, internal controls, or auditing matters will be forwarded to the chair 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.
2022 PROXY STATEMENT | › | 19 |
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Copies of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, 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 500, York, PA 17401. The 10-K, proxy statement and Annual Report can also be obtained through our website, www.glatfelter.com on the Investor Relations page.
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 Annual
Special 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 500, 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 this Annualthe 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 |
Appendix A
2020GLATFELTER 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 › 68PREFERRED 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; |
(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 increase in the number of shares of any series of Preferred Stock already created by specifying that any or all unissued shares of Preferred Stock shall be assigned to and included in such series and/or a decrease in the number of shares of any such series (but not below the number of shares thereof then outstanding) by specifying that any or all unissued shares of Preferred Stock previously assigned to such series shall no longer be included therein.
5. | (a) The holders of shares of Preferred Stock of each series shall be entitled to receive, when and as declared by the Board of Directors, dividends at the rate for such series fixed in Section 4 of this Article or fixed by resolution or resolutions as provided in Section 4 of this Article and no more, payable quarterly on the first days of February, May, August and November in each year (the quarterly periods ending on the first days of such months, respectively, being herein designated as dividend periods), in each case from the date of cumulation, as hereinafter in subdivision (f) of this Section 5 defined, of such series. Such dividends shall be cumulative (whether or not in any dividend period or periods there shall be net profits or net assets of the Company legally available for the payment of such dividends), so that if at any time full cumulative dividends upon the |
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 be subject to the power of the Board of Directors from time to time to set aside such reserves and to make such other provisions, if any, as said Board shall deem to be necessary or advisable for working capital, for additions and improvements to plant and equipment, for expansion of the Company’s business (including the acquisition of real and personal property for that purpose) or for any other proper purpose of the Company.
COMMON STOCK
The holders of Common Stock shall have no preemptive rights and the Company shall have the right to issue any shares of its capital stock, option rights or securities having conversion or option rights without first offering such shares, rights or securities to the holders of the Common Stock.
ARTICLE VI
The holders of Common Stock shall not have the right to cumulate their votes for the election of directors of the Company.
2022 PROXY STATEMENT | › | A-6 |
APPENDIX A |
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 |
SCAN TO VIEW MATERIALS & VOTE P. H. Appendix B
GLATFELTER COMPANY96 SOUTH GEORGECORPORATION
(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 |
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 500 YORK, PA 17401-1434600 CHARLOTTE, NC 28209 Your vote matters - here'smatters-here’s how to vote!votel code above VOTE BY INTERNET - www.proxyvote.comINTERNET-www.proxywote.com or scan the QR Barcode above Use the Internetinternet to transmitit your voting instructions and for electronic delivery of information.information Vote by 11:59 p.m.pm. Eastern Time on May 6, 20202022 for shares held directly and by 11:59 p.m.pm. Eastern Time on May 4, 20202022 for shares held in a Plan. Have your proxy card in hand when you access the web sitewebsite and follow the instructions to obtain your records and to create an electronic voting instruction form. ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years.form VOTE BY PHONE - 1-800-690-6903PHONE-1-400-600-6903 Use any touch-tone telephone to transmit your voting instructions. Vote by 11:59 p.m. Eastern Time59pm. CateTime on May 6, 20202022 for shares held directly and by 11:59 p.m. Eastern Time59pm. T on May 4, 20202002 for shares held in a Plan. Have your proxy card in hand when you call and then follow the instructions.int VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or returnretum it to Vote Processing, c/ooo Broadridge, 51 Mercedes Way Edgewood, NY 11717. D03966-Z76761 For All Withhold All For All Except To withhold authority to vote for any individual nominee(s), mark "For All Except" and write the number(s) of the nominee(s) on the line below. P. H. GLATFELTER COMPANYTO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INKAS FOLLOWS: GLATTELTER CORPORATION The Board of Directors recommends a vote Q Proposals 1, 2, 3, 4, 5 and 6. D91491-553608 THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. 1. FOR all the nominees listedYOUR RECORDS DETACH AND RETURN THIS PORTION ONLY Proposal to approve amendments to our Articles of Incorporation and FOR Proposals 2 and 3. ! ! ! 1. Election of Directors: Nominees: 01) Bruce Brown 02) Kathleen A. Dahlberg 03) Nicholas DeBenedictis 04) Kevin M. Fogarty 05) Marie T. Gallagher 06) J. Robert Hall 07) Ronald J. Naples 08) Dante C. Parrini 09) Lee C. Stewart CUMULATIVE VOTING: Director Nominees Number of Votes 06 - J. Robert Hall Votes FOR 07 - Ronald J. Naples Votes FOR 08 - Dante C. Parrini Votes FOR 09 - Lee C. Stewart Votes FOR Total Votes Cast 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 - Marie T. Gallagher Votes FOR Abstain For Against ! ! !Bylaws to implement a majority voting standard for 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 LLP as the independent registered public accounting firm forDirectors of the Company for the fiscal yearending December 31, 2020. ! ! ! 3. Advisory approval(the “Board” or “Board of the Company’s named executive officer compensation for the fiscal year ended December 31, 2019. NOTE: If you wishDirectors”) to use cumulative voting, you MUST vote your proxy by mail. ! To cumulate votes as to a particular nominee as explained in the Proxy Statement, check box to the right then indicate the name(s) anddetermine 00 the number of votesauthorized directors by resolution 4. Proposal to be givenapprove an amendment to such nominee(s) above. Please do not check box unless you wantour Bylaws to exercise cumulative voting. Yes No ! ! Do you planallow our Board to attenddetermine the Glatfelter Annual Shareholder Meetingtime and place of the annual meeting 0 0 0 0 0 0 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 person? Inthe 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.name) appear hereon Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer,office trustee, guardian, or custodian, please give full title. title.Glatfelter Corporation Signature PLEASE SIGN WITHIN BOX Date Signatum (Joint Owne Date
2020 AnnualGlatfelter Corporation 2022 Special Shareholder Meeting Admission Ticket Thursday, May 7, 2020.2022 at 8:00 a.m. The Kimpton Tryon Park Hotel 303 South Church Street, Charlotte, NC 28202 Upon arrival, please present this admission ticketEastern Time www.virtualshareholdermeeting.com/GLT20225M To be admitted to the Meeting Website, you must enter the 16-digit control number found on your proxy card, voting instruction form, or Notice of Special Meeting (“Notice”). You may vote your shares and photo identification atask questions during the registration desk. DirectionsSpecial Meeting by following the instructions available on the Meeting Website. We encourage you to The Kimpton Tryon Park Hotel: From Charlotte Douglas International Airport: Take Josh Birmingham Parkwayaccess the Meeting Website prior to US 74; Continue on US 74 Eastthe start time to South Mint Street; Turn Left on South Mint Street past Bank of America Stadium; Follow South Mint Street to West 3rd Street; Turn right intofamiliarize yourself with the hotel entrance. From I-77 heading north: Take I-77 North to Exit 9 (I-277 North / US I-77 East); Take Carson Boulevard exit to South Mint Street; Turn Left on South Mint Street past Bank of America Stadium; Follow South Mint Street to West 3rd Street; Turn right intovirtual platform and ensure you can hear the hotel entrance. From I-77 heading south: Take I-77 South to Exit 11 and merge onto I-277 South / NC16 South heading toward North Church Street; Take Exit 3B, making a right turn onto North Church Street; Follow North Church Street less than one mile; The hotelstreaming audio. Online access will be available starting at a.m., Eastern Time, on the left-hand side.2022. Important Notice Regarding the Availability of Proxy Materials for the 2020 Annual2022 Special Meeting of Shareholders to be Held May 7, 2020: P. H.,2022: Glatfelter Company’sCorporation’s Proxy Statement for the 2020 Annual2022 Special Meeting of Shareholders and the Annual Report for the year ended December 31, 2019, areis available at www.glatfelter.com/about_us/investor_relations/sec_filings.aspxinvestors/financials-and-filings/ and www.proxyvote.com. . . IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. D03967-Z76761 Proxy — P. H. GLATFELTER COMPANYâ–¼ 091492-553608 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 7, 2020, 8:00.2022 AT A.M. EASTERN TIME The undersigned shareholder of P. H. Glatfelter CompanyCorporation hereby appoints Bruce BrownKevin M. Fogarty and Ronald J. NaplesLee 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 The Kimpton Tryon Park Hotel, 303 South Church Street, Charlotte, NC 28202www.virtualshareholdermeeting.com/GLT2022SM on Thursday, May 7, 2020,2022, 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 3.6. (PLEASE FILL IN, SIGN AND DATE ON THE OTHER SIDE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE) (Continued and to be signed on reverse side)