In addition, to be eligible as a director nominee, the nominee or nominating stockholder must deliver, within the time periods applicable to the written notice
of intention to nominate such individual, to our Secretary at our principal offices (1) a written questionnaire with respect to the background and qualification of such nominee and the background of any other person or entity on whose behalf the
nomination is being made and (2) a written representation and agreement that such person (i) is not and will not become a party to any agreement (other than the Stockholders Agreement), arrangement or understanding with, and has not given any
commitment or assurance to, any person or entity as to how such person, if elected as a director of Covia will act or vote on any issue or question, (ii) is not and will not become a party to any agreement, arrangement or understanding with any
person or entity other than Covia with respect to direct or indirect compensation, reimbursement or indemnification in connection with service or action as a director that has not been disclosed therein and (iii) in such person’s individual capacity
and on behalf of any person or entity on whose behalf the nomination is being made, would be in compliance, if elected as a director of Covia, and will comply with all of our applicable publicly disclosed corporate governance, conflict of interest,
confidentiality and stock ownership and trading polices and guidelines. Only those persons nominated by stockholders in accordance with the procedures described above or otherwise nominated by the Board or any committee to which the Board has
delegated such authority will be eligible to serve as directors. Except as otherwise provided under law, the chairman of the annual meeting or the special meeting, as applicable, may determine whether a nomination was proposed in accordance with the
procedures set forth in our Bylaws and may disregard any nomination not in compliance with such procedures.
Stockholders and other interested parties may send written communications to the Board and, if applicable, to the Chairman of the Board and other individual
directors by mail or courier to our corporate office. Our Secretary will forward all such correspondence that we receive to the Board or, if applicable, to the Chairman of the Board or other individual director. Communications should be addressed
to the Board or applicable director at: Covia Holdings Corporation, Attn: General Counsel and Secretary, 3 Summit Park Drive, Suite 700, Independence, Ohio 44131.
Our Audit Committee has established procedures for the receipt, retention and treatment of complaints regarding accounting, internal accounting controls or
auditing matters, and the receipt, retention and treatment of concerns regarding potential violations of applicable laws, rules and regulations or our codes, policies and procedures. These procedures (1) set forth a statement about our commitment to
comply with laws, (2) encourage employees to inform us of conduct amounting to a violation of applicable standards, (3) describe prohibited conduct, (4) include procedures for making confidential, anonymous complaints, and (5) provide assurances that
there will be no retaliation for reporting suspected violations.
Supervisors and managers are required to report questionable accounting matters and compliance matters to our General Counsel. Upon receipt of a concern, our
General Counsel will determine whether the concern actually pertains to accounting matters or compliance matters. Concerns relating to accounting matters will be reviewed under the Audit Committee’s oversight by our General Counsel, internal audit
department or such other persons as the Audit Committee determines to be appropriate. Concerns relating to compliance matters will be reviewed under the Audit Committee’s oversight by our General Counsel or such other persons as the Audit Committee
determines to be appropriate.
We have also established procedures to enable anyone who has a concern accounting matters or compliance matters to report that concern through our normal
company channels or anonymously. An anonymous ethics hotline is maintained by an independent third party and is available 24 hours a day, seven days per week.
Compensation Committee Report
The Compensation Committee reviewed and discussed the following CD&A with our management. Based on that review and discussion, the Compensation Committee
(which we refer to as the “Committee” in the CD&A) recommended to our Board that the CD&A be included in this Proxy Statement and our Annual Report on Form 10-K for our fiscal year ended December 31, 2018.
Members of the Compensation Committee
William P. Kelly
Jean-Pierre Labroue, Chairman
Jeffrey B. Scofield
Compensation Discussion and Analysis
Executive Summary
This CD&A describes the objectives and principles underlying our executive compensation policies and decisions as well as the elements of the compensation
of our named executive officers for 2018.
Merger of Fairmount Santrol and Unimin
On June 1, 2018, a wholly-owned subsidiary of Unimin merged with and into Fairmount Santrol, with Fairmount Santrol continuing as the surviving corporation and
a wholly-owned subsidiary of Unimin (“Merger”). Unimin changed its name to Covia immediately following the consummation of the Merger. Unimin was determined to be the accounting acquirer in the Merger. As a result, in accordance with SEC rules and
interpretative guidance, this CD&A: (i) describes all compensation paid in 2018 to Covia’s named executive officers who served as executive officers of Unimin before the Merger; and (ii) describes only the compensation paid after the consummation
of the Merger (i.e., from June 1, 2018 through December 31, 2018) to named executive officers of Covia who served as executive officers of Fairmount Santrol before the Merger. In other sections of this Proxy Statement, however, we have identified
references made on the basis of full-year, annualized compensation for our named executive officers.
For 2018, our named executive officers were:
Executive
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Jenniffer D. Deckard
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President and CEO
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Campbell Jones
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Executive Vice President and Chief Operating Officer
(and former CEO of Unimin)
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Andrew D. Eich
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Executive Vice President and Chief Financial Officer
(and former Chief Commercial Officer and Principal Financial Officer of Unimin)
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Gerald L. Clancey
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Executive Vice President and Chief Commercial Officer
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Brian J. Richardson
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Executive Vice President and Chief Administrative Officer
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Chadwick P. Reynolds
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Executive Vice President, General Counsel and Secretary
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Richard M. Solazzo
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Former Senior Vice President, General Counsel and Secretary of Unimin
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Mark B. Oskam
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Former Senior Vice President, Corporate Development of Unimin
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Overview of 2018 Executive Compensation
For the seven-month period of 2018 following the Merger, the Committee considered the work performed by Aon Hewitt for Unimin to develop an executive
compensation program for our named executive officers to focus on maximizing the combined company’s results as well as recognizing and implementing cost savings from the Merger. For 2018, the executive compensation program for our named executive
officers consisted of three components: (i) base salaries; (ii) short-term cash incentive plan opportunities; and (iii) long-term equity incentive plan opportunities. With this structure, a significant portion of each named executive officer’s
compensation is dependent upon our performance. Accordingly, we believe our executive compensation program demonstrates strong pay-for-performance alignment.
Approximately 76% and 67% of the target total compensation awarded to Ms. Deckard and our other named executive officers in 2018, respectively, was variable
compensation tied to our performance and the price performance of our common stock. We believe that tying a majority of each named executive officer’s target total compensation to our performance aligns the interests of our named executive officers
and our stockholders. See the “Pay for Performance” section of this CD&A for more information regarding our commitment to a pay-for-performance compensation philosophy.
Beginning in 2019, we will review annually the total direct compensation for each named executive officer based on market data provided by the Committee’s
independent compensation consultant, contributions to corporate performance, internal pay equity and each executive’s performance, expertise, responsibility and experience.
Base Salaries
In 2018, the Committee recommended and the non-management directors approved the following annual base salary amounts for our current named executive
officers: Ms. Deckard, $800,000; Mr. Jones, $725,000; Mr. Eich, $500,000; Mr. Clancey, $450,000; Mr. Richardson, $415,000; and Mr. Reynolds, $415,000. The 2018 base salaries of Mr. Solazzo and Mr. Oskam, neither of whom continued as executive
officers upon the Merger, were $350,000 and $359,100, respectively.
In establishing initial pay levels of our executive officers in connection with the Merger, the Committee and the Board reviewed competitive market data
provided by Aon Hewitt as part of its work for Unimin, including the base salaries of similarly situated executives in our compensation Peer Group (as described in the “Comparative Compensation Data; 2018 Peer Group” section of this CD&A). The
pre-Merger base salaries of Ms. Deckard, Mr. Eich, Mr. Clancey and Mr. Richardson were below the median for their comparable position within the Peer Group. As a result, Aon Hewitt recommended that we move over time toward bases salaries and total
direct compensation (i.e., base salary, short-term and long-term incentive compensation at targeted levels) near the 50
th
percentile of market compensation to ensure
that we attract and retain the appropriate level of executive talent for a company of our size and complexity. For 2018, the Committee set the base salaries of our named executive officers below the median for the Peer Group, except with respect to
Mr. Jones, whose base salary exceeds the median of the Peer Group in recognition of the experience and expertise he provides as a result of his pre-Merger role as the CEO of Unimin and the scope of his current role, and the Committee expects to
continue evaluating opportunities to migrate base salaries of our other named executive officers to near the Peer Group median.
Short-Term Cash Incentive Compensation
Our named executive officers were eligible to earn short-term incentive compensation awards for the seven-month period of 2018 following the Merger based on:
(i) our adjusted EBITDA (60% weighting); (ii) our adjusted cash flow (20% weighting); and (iii) Merger-related synergy savings (20% weighting). Short-term incentive compensation awards are paid in cash if and to the extent they are earned.
For the seven-month period of 2018 following the Merger, the target levels of performance for adjusted EBITDA, adjusted cash flow and synergy savings were
$413.5 million, $285.9 million and $35.1 million, respectively. A threshold level of performance had to be achieved to earn an award under each component, and a maximum level of performance limited the amount that could be earned under each
component. For the seven-month period of 2018 following the Merger, our adjusted EBITDA, adjusted cash flow and synergy savings were $193.7 million, $31.4 million and $53.5 million, respectively. Threshold levels of adjusted EBITDA and adjusted
cash flow were not achieved for 2018, but as a result of attaining the maximum level of performance under the synergy savings component, each of our named executive officers earned short-term incentive awards equal to 40% of their target opportunity
for the seven-month period of 2018 following the Merger.
Long-Term Equity Incentive Awards
The Committee believes that awarding long-term equity incentive compensation is critical for aligning the interests of our executives with the creation of
long-term stockholder value. Following the Merger, the Committee awarded restricted stock units under our 2018 Omnibus Incentive Plan (“Omnibus Plan”) to our named executive officers employed by us on the grant date.
The restricted stock units awarded in 2018 vest ratably in one-third increments over three years (i.e., 33% per year).
Significant Executive Compensation Policies and Practices
We have implemented the following executive compensation policies and practices that we believe align our policies and practices with industry-leading
standards.
Independent Compensation Committee
Although not required due to our status as a “controlled company” under NYSE rules, the Committee is composed entirely of independent directors who oversee our
executive compensation program.
Pay-for-Performance
The majority of each named executive officer’s compensation is based on our financial performance and/or the value of our common stock, putting the value of
each named executive officer’s variable compensation at risk if we do not perform to targeted levels established by the Committee and/or the value of our common stock declines.
Hedging Prohibited
We prohibit our directors, named executive officers and other employees from engaging in hedging or monetization transactions with respect to our securities
(see the “Hedging Prohibited” section of this Proxy Statement).
Pledging Prohibited
We prohibit our directors, named executive officers and other employees from pledging our securities as collateral for a loan (see the “Pledging Prohibited”
section of this Proxy Statement).
No Tax Gross-Up Payments
Our named executive officers are not entitled to tax gross-up payments as part of their short-term and long-term compensation arrangements or with respect to
any termination or change-in-control arrangements.
In order to make whole those named executive officers who we recruit and seek to relocate, we may provide
a reimbursement of taxes related to certain relocation-related compensation and expenses.
No Repricing
Consistent with the terms of our Omnibus Plan, it is the policy of our Board that we will not reprice or swap stock options without stockholder approval.
Reasonable Perquisites
Our executive compensation program offers perquisites that we believe are reasonable and customary in our industry. In 2018, those perquisites comprised 1% or
less of our named executive officers’ total compensation, except in the case of Mr. Jones, who received expatriate and housing benefits in connection with his prior relocation from Australia to the U.S. to lead the legacy Unimin business, and Mr.
Eich, who received relocation benefits in connection with our request that he relocate from Connecticut to our principal office in Ohio. For 2019, we have eliminated the automobile usage and related expenses perquisite previously provided to Mr.
Jones and Mr. Eich.
Clawback Policy
Our named executive officers are subject to a compensation recovery or “clawback” policy (see the “Clawback Policy” section in this CD&A).
Compensation Objectives and Principles
The objectives of our executive compensation program are to:
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enable us to attract, motivate and retain the executive talent required to successfully manage and grow our business and to achieve our short-term and long-term
business objectives;
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maximize our executive officers’ long-term commitment to our success by providing compensation elements that align their interests with the interests of our
stockholders by linking compensation elements directly to financial metrics that the Committee believes influence the creation of long-term stockholder value; and
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reward our executive officers upon the achievement of short-term and long-term business objectives and the creation of stockholder value.
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The principles of and important processes in our executive compensation program are as follows:
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emphasize pay-for-performance and encourage retention of executive officers who contribute to our performance;
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maintain an appropriate balance between base salary and short-term and long-term incentive compensation;
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link incentive compensation to the achievement of goals recommended by the Committee and set by all non-employee directors;
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align the interests of our executive officers with those of our stockholders;
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evaluate CEO performance against short-term and long-term performance goals;
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require the achievement of threshold performance levels to earn payouts under short-term and long-term performance-based incentives;
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convene an executive session of the Committee (without management) at least once annually;
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recuse our CEO from deliberations and voting regarding his or her compensation;
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consult our CEO, on an advisory basis only, on the compensation awarded to our other named executive officers;
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conduct a thorough annual review and analysis of the recent compensation history of each named executive officer and all forms of compensation to which the executive
may be entitled;
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consider executive compensation data from peers; and
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make recommendations on named executive officer compensation to the non-management directors of our Board after the Committee completes a thorough review and analysis.
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Key Considerations in Setting Compensation
Based on these objectives and principles, the Committee has structured our executive compensation program to motivate our named executive officers to achieve
the business goals set by our Board and to reward them for achieving those goals. The following is a summary of the key considerations that the Committee takes into account in setting the compensation of our named executive officers.
Significance of Overall Corporate Performance
The Committee primarily evaluates our named executive officers’ contributions to our overall performance rather than focusing only on their individual
function. The Committee believes that each named executive officer shares the responsibility to support our goals and performance as key members of our leadership team.
Evaluation of Individual Performance
The Committee does not rely on formulas in determining the amount and mix of each named executive officer’s total direct compensation. Rather, in establishing
compensation, the Committee exercises its judgment to evaluate a broad range of both quantitative and qualitative factors, including reliability in achieving financial targets, performance in the context of the economic environment relative to other
companies, and possessing the characteristics, such as integrity, good judgment and vision, needed to create further growth and effectively lead others. For long-term incentive awards, the Committee primarily considers a named executive officer’s
potential for future successful performance and leadership as part of our executive management team, taking into account past performance as a key indicator. The Committee may also take into account extraordinary, unusual or non-recurring items
incurred or anticipated by us that the Committee deems appropriate in determining compensation.
Pay-for-Performance and Alignment with Stockholder Interests
Aligning executive compensation with our performance and the price performance of our common stock is a key principle of our executive compensation
philosophy. Incentive compensation is designed to drive our performance by rewarding executives if we exceed our targeted performance levels. Similarly, if we fail to meet threshold levels tied to our performance, executives will not earn
compensation for the applicable incentive-based award. We believe our executive compensation program effectively implements the pay-for-performance principle by tying the value of incentive opportunities and equity awards to our financial and stock
price performance.
The key metrics we used to evaluate the performance of our named executive officers in 2018 were adjusted EBITDA, adjusted cash flow, and Merger-related
synergy savings. We believe our adjusted EBITDA is an important financial measure as it reflects the success of our efforts to increase revenue and profitability. Adjusted cash flow is an important metric relative to our ability to service and
reduce our debt. Synergy savings are important to gauge our progress in integrating Fairmount Santrol and Unimin together into Covia. In addition, the value of the incentive equity compensation that we award is significantly impacted by the price
of our common stock.
Total Direct Compensation
To evaluate consistency with the key principle that a significant portion of our executive compensation program align with our financial and/or stock price
performance, we monitor the variable portion of our named executive officers’ “total direct compensation,” which we define as the sum of base salary, short-term incentive bonus opportunity at the target level, and long-term incentive opportunity at
the target level. The following graphs show the annualized 2018 variable compensation (i.e., compensation that is impacted by our performance) for our CEO and other named executive officers as a percentage of their respective total direct
compensation. As the graphs illustrate, 76% of Ms. Deckard’s and 67% of our other current named executive officers’ total direct compensation was dependent on our financial and/or stock price performance.
Mix of Compensation Elements
The Committee strives to provide a mix of compensation elements that balances current, short-term and long-term compensation as well as cash and equity
compensation. Cash payments primarily reward more recent performance while equity awards encourage our named executive officers to deliver long-term results and serve as a retention tool. The Committee believes that executive compensation should be
appropriately weighted on both our long-term and short-term performance.
Comparative Compensation Data; 2018 Peer Group
In making compensation decisions, the Committee considered executive compensation data from a peer group of companies (“Peer Group”). The Peer Group, which
was developed in connection with services provided by Aon Hewitt in connection with the Merger and approved by the Committee and the Board, generally consists of companies (1) in the industrial, materials, energy and consumer discretionary sectors,
(2) with annual revenues between $1.2 billion and $6.2 billion, and (3) with which we compete for business and talent. The members of the Peer Group used in making compensation decisions in 2018 were:
Albemarle Corporation
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Cabot Corporation
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Compass Minerals International, Inc.
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Eagle Materials Inc.
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Granite Construction Incorporated
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Louisiana-Pacific Corporation
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Martin Marietta Materials, Inc.
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Minerals Technologies Inc.
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Olin Corporation
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Summit Materials, Inc.
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Tronox Limited
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U.S. Concrete, Inc.
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U.S. Silica Holdings, Inc.
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USG Corporation
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Vulcan Materials Company
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Role of Independent Compensation Consultant
The Committee may retain independent compensation consultants as it deems necessary. I
n connection with the Merger and the transition forward as a publicly-traded company, and in order to obtain a better understanding of the market practices of its peers, Aon Hewitt conducted an analysis of compensation
practices at peer competitors.
In establishing executive compensation for 2018, the Committee considered the work performed by Aon Hewitt. The Committee has retained Pay Governance LLC as its independent compensation consultant for 2019
to provide peer group compensation data, financial information from the public filings of those companies and compensation design recommendations.
Role of Management
Our executive compensation program is designed and administered by the Committee in consultation with its independent compensation consultant, with all
non-management directors considering the recommendations of the Committee and approving executive compensation decisions. In formulating its recommendations, the Committee solicits the input of management on the overall effectiveness of our
executive compensation program and the establishment of appropriate performance metrics and goals in light of then-current business conditions and expectations. At the invitation of the Committee, our CEO, our Executive Vice President and Chief
Administrative Officer, and our Vice President, Compensation and Benefits, attend Committee meetings and provide management’s perspective on these compensation issues. Our CEO and the Committee also consult with additional management from our human
resources, finance and legal departments regarding the administration of our compensation program for executives and independent directors.
Our CEO annually reviews and evaluates the performance of the other named executive officers and presents recommendations regarding their compensation to the
Committee. The Committee has the discretion to accept, reject or modify these recommendations. Our CEO and management do not participate in executive sessions of the Committee or when executive compensation determinations are made by the Committee
and the other independent directors. The Committee presents its recommendation on executive compensation to the non-management members of our Board, who have the final decision on the compensation for our named executive officers.
Compensation Risk Management
Our Board, the Committee and management do not believe that there are any significant risks arising from our compensation policies and practices for our
directors and employees that are reasonably likely to have a material adverse effect on us. We believe that our compensation programs are balanced and emphasize pay-for-performance. A significant percentage of compensation is tied to the price of
our common stock, which we believe provides strong incentives to manage for the long-term, and avoid excessive risk taking in the short-term. Additionally, goals and objectives reflect a balanced mix of quantitative and qualitative performance
measures to avoid excessive weight on a single performance measure. The elements of compensation are balanced between cash payments and equity awards. The Committee retains discretion to adjust compensation for quality of performance and adherence
to our values. Our Board, the Committee and management, with the assistance of the Committee’s independent compensation consultant, monitor our compensation policies and practices on an ongoing basis to determine whether our risk management
objectives are being met with respect to rewarding our employees for performance.
Say-on-Pay Vote
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, or the Dodd-Frank Act, contains a provision that is commonly known as “Say-on-Pay.”
Say-on-Pay gives our stockholders an opportunity to vote, on an advisory, non-binding basis, to approve the compensation of our named executive officers as disclosed in this Proxy Statement. We are holding our first Say-on-Pay vote at this year’s
Annual Meeting (see Item 2 of this Proxy Statement). This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the executive compensation program and practices
described in this Proxy Statement. Although this vote is advisory and not binding, we will consider the outcome of the Say-on-Pay vote in determining future executive compensation.
Say-on-Frequency Vote
The Dodd-Frank Act also contains a provision enabling our stockholders to indicate how frequently we should hold future Say-on-Pay votes. At least once every
six years, we are required to hold an advisory vote on the frequency of Say-on-Pay votes (commonly referred to as “Say-on-Frequency”). We are holding our first Say-on-Frequency vote at this year’s Annual Meeting (see Item 3 of this Proxy
Statement). Although this vote is advisory and not binding, we will consider the outcome of the Say-on-Frequency vote when determining the frequency of future Say-on-Pay votes.
Clawback Policy
Our named executive officers are subject to the Clawback Policy adopted by our Board. Under the Clawback Policy, if we are required to prepare an accounting
restatement due to our material noncompliance with any financial reporting requirement under U.S. securities laws, we will recover from current or former executives who received incentive-based compensation (including any type of equity compensation)
during the three-year period preceding the date on which we are required to prepare an accounting restatement, the amount of compensation in excess of what would have been paid to the executive based upon the accounting restatement.
Compensation Elements
We believe that the elements of our executive compensation program advance our objectives and principles, as previously described, including the achievement of
our short-term and long-term business objectives. The total compensation awarded to each named executive officer, as well as each element of compensation, is intended to foster our pay-for-performance philosophy and provide a competitive
compensation package as compared to executives in similar positions at our competitors. Although the Committee does not have any specific formula for establishing the amount and mix of base salary and variable compensation, it does reference the
Peer Group compensation data as a market check in making these determinations. The Committee also considers factors relating to each named executive officer’s individual position, performance versus objectives, professional history and experience,
relevant skill set, scope of duties and the internal relationship of pay across all executive positions as it establishes compensation.
Base Salary
The Committee believes a competitive base salary serves an important role in attracting and retaining executive talent. Base salary is not intended to
represent the primary method of rewarding performance. After receiving input from our CEO regarding the performance of the other named executive officers, the Committee and other non-management directors use judgment regarding individual
performance, market competitiveness, internal pay equity, length of service, job responsibilities and other factors to determine the appropriate base salary for each named executive officer.
Short-Term Cash Incentive Compensation
The Committee believes that short-term cash incentive compensation opportunities are an important tool to focus our named executive officers on annual
objectives designed to drive performance, such as earnings, cash flow, debt reduction, safety and other operating results. For 2018, the Committee established a short-term incentive for our named executive officers for the post-Merger seven-month
period from June 1, 2018 until December 31, 2018 based upon the achievement of an adjusted EBITDA goal (constituting 60% of the total opportunity), an adjusted cash flow goal (constituting 20% of the total opportunity), and Merger-related synergy
savings (constituting 20% of the total opportunity). For each of the three metrics, a threshold had to be achieved before any portion of the opportunity relating to such metric would be awarded, 100% of the portion of the opportunity relating to
such metric would be awarded if the metric met plan, and up to 200% of the portion of the opportunity relating to such metric would be awarded if a maximum amount was achieved. Actual award payments, if any, are made in cash and prorated for results
between threshold and maximum levels. The Committee believes the targeted performance levels provided challenging, but reasonable, levels of performance that were appropriate in light of our objective to motivate our executives.
For additional information on the short-term incentive plan opportunity for 2018, see the “Executive Compensation for 2018” section of this CD&A.
Long-Term Equity Incentive Compensation
The Committee believes that long-term equity incentive compensation is critical for aligning executive compensation with the creation of long-term stockholder
value. In July 2018, the Committee made an initial grant of restricted stock units under our Omnibus Plan to our then-current named executive officers, but no other long-term incentive compensation was awarded to our named executive officers in
2018, as the Committee developed and implemented its strategy for long-term incentive compensation in the first quarter of 2019 for implementation during the 2019 calendar year.
The Committee views restricted stock units as excellent mechanisms to align the interests of executives with those of stockholders by supporting a focus on
stockholder value. Restricted stock units are also an effective retention tool as a result of the vesting schedule which occurs over a period of several years.
The restricted stock units awarded in 2018 vest ratably in one-third increments over three years (i.e., 33% per year).
Benefits and Perquisites
Our named executive officers participate in employee benefit plans that are generally available to all employees on the same terms and conditions as other
similarly situated employees. These include customary programs for life insurance, health insurance, prescription drug insurance, dental insurance, short and long term disability insurance and matching gifts for charitable contributions. While these
benefits are considered to be an important and appropriate employment benefit for all employees, they are not considered to be a material component of a named executive officer’s annual compensation program. Because the named executive officers
receive these benefits on the same basis as other employees, these benefits are not established or determined by the Compensation Committee separately for each named executive officer as part of the named executive officer’s annual compensation
package. In addition, we provide minimal perquisites to our named executive officers. The perquisites and other benefits we provide to our named executive officers are summarized in the Summary Compensation Table. For 2019, we have eliminated the
automobile usage and related expenses perquisite previously provided to Mr. Jones and Mr. Eich.
Retirement Plans
Fairmount Santrol and Unimin sponsored retirement plans in which their respective employees, including our named executive officers, were eligible to
participate. We maintained those retirement plans during 2018 as we worked to harmonize the plans during our post-Merger integration process. Additional details regarding the retirement plans are provided below and in the “Executive Compensation –
Retirement Plans” section following this CD&A.
Fairmount Santrol
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The Fairmount Santrol Retirement Savings Plan (“Fairmount 401(k) Plan”) provides benefits under Section 401(k) of the Internal Revenue Code (“Code”) to employees,
including Ms. Deckard, Mr. Clancey, Mr. Richardson and Mr. Reynolds, who are permitted to contribute a portion of their base compensation and bonus to a tax-qualified retirement account. The Fairmount 401(k) Plan also includes a defined
contribution profit sharing provision in which our employees may participate. Ms. Deckard, Mr. Clancey and Mr. Richardson participate in the profit sharing provision of the Fairmount 401(k) Plan.
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The Fairmount Minerals Supplemental Executive Retirement Plan (“Fairmount SERP”) provides employees, including Ms. Deckard, Mr. Clancey, Mr. Richardson and Mr.
Reynolds, with non-qualified deferred compensation benefits intended to restore the benefits that are reduced under the Fairmount 401(k) Plan due to contribution limitations imposed by the Code. Ms. Deckard, Mr. Clancey and Mr. Richardson
participate in the Fairmount SERP.
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Unimin
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The Unimin Corporation Pension Plan (“Unimin Pension Plan”) is a tax-qualified defined benefit pension plan in which Mr. Jones and Mr. Solazzo are the only of our
named executive officers who participate.
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The Unimin Pension Restoration Plan ensures that employees whose benefits under the Unimin Pension Plan, including Mr. Jones and Mr. Solazzo, would otherwise be
limited by the Code receive the full benefit anticipated under the Unimin Pension Plan.
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The Unimin Corporation Savings Plan (“Unimin 401(k) Plan”) provides benefits under Section 401(k) of the Code to employees, including Mr. Jones, Mr. Eich, Mr. Solazzo
and Mr. Oskam, who are permitted to contribute a portion of their base compensation and bonus to a tax-qualified retirement account. The Unimin 401(k) Plan also includes an annual non-elective company contribution, except for those
individuals that continue to accrue benefits under the Unimin Pension Plan, including Mr. Jones and Mr. Solazzo.
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Employment Agreements, Retention Agreements and Other Arrangements
We are a party to agreements and arrangements with our named executive officers which were intended to attract and retain key talent to manage our business,
and to provide us with continuity of management and the continued focus of our executive team before and after the Merger. For additional details regarding these agreements and arrangements, including the retention agreements provided by Unimin and
the FSCIC Plan (as defined below), please see the following descriptions and the “Executive Compensation – Potential Payments Upon Termination or Change In Control – Payments Upon Various Triggering Events at 2018 Fiscal Year-End
– Change in Control – Termination Without Good Cause or Termination by Executive For Good Reason
” section following this CD&A.
Ms. Deckard, Mr. Clancey and Mr. Richardson
We have not entered into employment agreements with Ms. Deckard, Mr. Clancey or Mr. Richardson, each of whom participate in the FSCIC Plan.
Mr. Jones
Mr. Jones was a party to an employment agreement with Unimin dated May 1, 2015 that terminated on April 30, 2018. Under his employment agreement, Unimin
employed Mr. Jones as its CEO and paid Mr. Jones his base salary in U.S. dollars, provided that Mr. Jones could elect to receive up to 50% of his base salary in Australian dollars. During the term of his employment, Mr. Jones was entitled to
participate in Sibelco’s short term cash incentive plan, with the opportunity set at 65% of base salary. In connection with Mr. Jones’s relocation from Australia to the U.S. to become Unimin’s CEO in 2015, his employment agreement included typical
expatriate provisions, including tax equalization, tax return preparation, a housing allowance (including utility reimbursement), relocation costs and the cost of airfare for Mr. Jones and his family for one round trip visit per year between the U.S.
and Australia. Mr. Jones was also entitled, at his election, to a company car or the equivalent value in cash.
In April 2018, in connection with the Merger, Unimin entered into a retention agreement with Mr. Jones. Pursuant to the retention agreement, if we terminate
Mr. Jones’ employment with us without cause within five years following the closing date of the Merger or if Mr. Jones terminates his employment with us for good reason between the 25
th
and 60
th
months following the closing date of the Merger, Mr. Jones shall be entitled to receive (1) a lump-sum payment equal to two years of his
total base package (which is comprised of his base salary and an additional 9.5% which is equivalent to the mandatory employer contributions Mr. Jones gave up upon his localization from Australia to the U.S. to work for us) in effect on the date of
the agreement or the date of termination of his employment, whichever is greater, (2) two years of continued healthcare coverage for Mr. Jones and his dependents, (3) a pro-rata portion of his target bonus for the year in which the qualifying
termination or resignation occurs, (4) reimbursement of the actual cost to complete his tax returns in Australia and the U.S. for two years after the qualifying termination, and (5) reimbursement of the costs to relocate Mr. Jones and his family to
Australia.
Mr. Eich and Mr. Oskam
In November 2017, in anticipation with the Merger, Unimin entered into retention agreements with Mr. Eich and Mr. Oskam. Pursuant to each of the retention
agreements, if we terminate the named executive officer’s employment with us without cause within three years following the closing date of the Merger or if the named executive officer terminates his employment with us for good reason, the executive
shall be entitled to receive (1) a lump-sum payment equal to 18 months of his base salary as in effect on the date of the agreement or the date of termination of his employment, whichever is greater, (2) 18 months of continued healthcare coverage for
the executive and his dependents, and (3) a pro-rata portion of the executive’s target bonus for the year in which the qualifying termination or resignation occurs.
In April 2018, Unimin also agreed to pay certain expenses incurred by Mr. Eich as part of his relocation from Connecticut to near our corporate headquarters in
Ohio. The total relocation package, including a relocation bonus of $50,000, was not to exceed an initial amount of $250,000 plus an additional $130,000 approved by our Board, each on a pre-tax basis.
Mr. Reynolds
In August 2018, we entered into an offer letter with Mr. Reynolds, which provides him with severance benefits pursuant to the FSCIC Plan discussed in the
following section. Additionally, following the lapse of the protection period provided by the FSCIC Plan, if we terminate Mr. Reynolds’ employment with us without cause or if Mr. Reynolds terminates his employment with us for good reason, he will
receive one year base salary, a prorated short-term incentive payment at the target level, continuation in our health insurance plans for one year, and outplacement services for no longer than one year.
Mr. Solazzo
In May 2018, in connection with the Merger, Mr. Solazzo and Unimin entered into a retention agreement as part of his transition out of the role as Unimin’s
Senior Vice President, General Counsel and Secretary. Under the agreement, Unimin agreed to provide Mr. Solazzo (1) a lump-sum transition payment equal to $799,336 following the hiring of our new General Counsel, (2) the completion bonus discussed
below, (3) a temporary increase in salary of $5,000 per month for the period between June 1, 2018 and the commencement date of our new General Counsel, (4) continued participation under our healthcare coverage until reaching age 65 in 2023, and (5) a
lump-sum severance payment equal to 18 months of his base salary as of the date of the agreement or the date of termination of his employment, whichever is greater if such termination is other than for cause or his voluntary resignation and subject
to his execution of a release in our favor. For two years following his termination, Mr. Solazzo will be subject to non-competition restrictions.
Fairmount Santrol Change in Control Plan
Prior to the Merger, Fairmount Santrol maintained the Fairmount Santrol Holdings Inc. Executive Change in Control Severance Plan (“FSCIC Plan”) which provides
certain payments and benefits in connection with a change in control that are intended to help provide continuity of management and continued focus on the business by management in the event of a change in control. As a result of the Merger, a
change in control was deemed to have occurred under the FSCIC Plan. Accordingly, Ms. Deckard, Mr. Clancey, Mr. Richardson and Mr. Reynolds will receive the benefits of the FSCIC Plan if, during the protection period between the closing date of the
Merger (June 1, 2018) and two years thereafter, we terminate their employment with us other than for cause or they terminate their employment with us for good reason. For additional details regarding the FSCIC Plan, please see the “Executive
Compensation – Potential Payments Upon Termination or Change In Control – Payments Upon Various Triggering Events at 2018 Fiscal Year-End
– Change in
Control – Termination Without Good Cause or Termination by Executive For Good Reason
” section following this CD&A.