Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
As previously reported on August 22, 2018, the Registrant promoted B. Andrew Rose to President-Chief Financial Officer and Geoffrey G. Gilmore to Executive Vice President-Chief Operating Officer. In light of such promotions, at its meeting on September 25, 2018, the Compensation Committee (the “Compensation Committee”) of the Board of Directors (the “Board”) of the Registrant approved the compensation changes and awards set forth below. Mr. Rose and Mr. Gilmore were listed as named executive officers of the Registrant in its Proxy Statement for its Annual Meeting of Shareholders held on September 26, 2018 (the “Named Executive Officers”).
Increases in Base Salary and Short-Ter
m Incentive
Bonus Awards
.
Effective as of October 2018, base salaries and short-term incentive bonus awards for the twelve-month performance period ending May 31, 2019 for Mr. Rose and Mr. Gilmore were increased to the amounts as set forth below.
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Short-Term Incentive Bonus Award
for the Period ending May 31, 2019(i):
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Name
|
Annual Base
Salary ($)
|
Threshold ($)
|
Target($)
|
Maximum($)
|
B. Andrew Rose
|
550,000
|
375,000
|
750,000
|
1,500,000
|
Geoffrey G. Gilmore
|
546,000
|
330,000
|
660,000
|
1,306,000
|
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(i)
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The last three columns show the potential payouts which can be earned under short-term cash incentive bonus awards based on achievement of specified levels of corporate performance for the twelve-month period ending May 31, 2019. Payouts which can be earned under these annual cash incentive bonus awards are generally tied to achieving specified levels (threshold, target and maximum) of corporate economic value added and earnings per share for the twelve-month performance period with each performance measure carrying a 50% weighting. For all calculations, restructuring and impairment charges and non-recurring items are generally excluded and earnings per share are adjusted to eliminate the impact of FIFO gains and losses. If the performance level falls between threshold and target or between target and maximum, the award is prorated. If threshold levels are not reached for a performance measure, no annual cash incentive bonus will be paid as to that measure. Annual cash incentive bonus award payouts will be made within a reasonable time following the end of the performance period. In the event of a change in control of the Company (followed by actual or constructive termination of the Named Executive Officer’s employment during the performance period), the annual cash incentive bonus award would be considered to be earned at target.
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Time-Based Restricted Stock Awards.
Effective September 26, 2018, the Compensation Committee approved the following time-based restricted stock awards (also referred to as “restricted shares”) made to Mr. Gilmore pursuant to the Registrant’s Amended and Restated 1997 Long-Term Incentive Plan (the “1997 Long-Term Incentive Plan”):
Name
|
Number of Restricted
Shares Awarded
|
Vesting Period
|
Geoffrey G. Gilmore
|
20,000
30,000
|
3 Years
5 Years
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The restricted shares will be held in escrow by the Registrant and may not be sold, transferred, pledged, assigned or otherwise alienated or hypothecated until the restrictions thereon have lapsed. Subject to the continued employment of Mr. Gilmore, the restrictions on the restricted shares will lapse and the restricted shares will become fully vested on the applicable anniversary of the grant date. Any unvested restricted shares will become fully vested if Mr. Gilmore dies or becomes disabled, as determined by the Compensation Committee. Upon a change in control (as defined in the 1997 Long-Term Incentive Plan), the restrictions on the restricted shares will lapse and the restricted shares will become fully vested if Mr. Gilmore’s employment is terminated within two years thereafter by the Registrant without cause or by Mr. Gilmore due to an adverse change in his employment terms. If Mr. Gilmore retires, the restricted shares will vest on a pro rata basis based on the number of full months served prior to retirement, provided that the Compensation Committee may elect, in its discretion, to accelerate the vesting of all or a portion of the unvested restricted shares of Mr. Gilmore. If Mr. Gilmore’s employment with the Registrant terminates for any other reason, the restricted shares will be forfeited. During the time between the grant date and the vesting date of the restricted shares, Mr. Gilmore may exercise full voting rights in respect of the restricted shares and dividends will be accrued and paid in respect of the restricted shares upon the vesting date, if the underlying restricted shares vest.
Performance-Based Restricted Stock Awards
.
The Compensation Committee granted, effective September 26, 2018, the following performance-based restricted stock awards to Mr. Rose and Mr. Gilmore pursuant to the 1997 Long-Term Incentive Plan.
Name
|
Number of Performance-Based
Restricted Shares Awarded
|
B. Andrew Rose
Geoffrey G. Gilmore
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175,000
50,000
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These restricted shares will be held in escrow by the Registrant and may not be sold, transferred, pledged, assigned or otherwise alienated or hypothecated until the restrictions thereon have lapsed.
R
estrictions on the restricted shares will lapse and the restricted shares will become fully vested if and when both of the following conditions are met: (a) the closing price of the Registrant’s common shares equals or exceeds $65 per share for 90 consecut
ive calendar days during the five-year period beginning on the effective date of the grant; and (b) the
Named Executive O
fficer has remained continuously
employed by the Registrant
through the fifth annual anniversary of the effective date of the grant. U
pon a change in control (as defined in the 1997 Long-Term Incentive Plan), the restrictions on the restricted shares will lapse and the restricted shares will become fully vested if the
Named E
xecutive O
fficer’s employment is terminated within two years th
ereafter by the Regi
strant without cause or by the Named E
x
ecutive O
fficer due to an adverse change in the t
erms of his employment. If the Named Executive O
fficer’s employment is terminated due to death or disability or by the Company without cause after t
he stock price
performance
condition has been met, but before the time-based condition has been met, the restricted shares will vest as of the termination of employment date. If
the
Named Executive O
fficer’s employment with the Registrant terminates for an
y other reason, the restricted shares will be forfeited; provided that if the
Named Executive O
fficer’s employment with the Registrant terminates due to death or disability, the Compensation Committee may, in its sole discretion, elect to have all or a por
tion of the restricted shares become fully vested. During the time between the grant date and the vesting date
of the restricted shares, the Named Executive O
fficer may exercise full voting rights in respect of the restricted shares and dividends will be
accrued and paid in respect of the restricted shares upon the vesting date, if the underlying restricted shares vest. The restricted shares will be forfeited five years from the effective date of the award (i.e., on September 26, 2023) to the extent that
the restrictions thereon have not lapsed and vesting has not occurred.
Revision of Existing Performance-Based Restricted Share Award
Effective as of September 26, 2018, the Compensation Committee approved an amendment to an existing 25,000 share performance-based restricted share award granted to Mr. Gilmore on June 24, 2014, extending the continuous employment time-based vesting condition from five to six years (until June 24, 2020) and extending the period of time to meet the $60 per share stock price performance requirement from five years to six years so that it now must be satisfied by June 24, 2020.
Item 5.07. Submission of Matters to a Vote of Security Holders
.
On September 26, 2018, the Registrant held the 2018 Annual Meeting of Shareholders of the Registrant (the “2018 Annual Meeting”) as a virtual meeting and shareholders were able to participate in the 2018 Annual Meeting, vote and submit questions via live webcast. At the close of business on August 1, 2018, the record date for the 2018 Annual Meeting, there were a total of 59,409,192 common shares of the Registrant outstanding and entitled to vote. At the 2018 Annual Meeting, the holders of 54,548,193 (91.52%) of the Company’s common shares were represented by proxy, constituting a quorum.
The vote on the proposals presented for shareholder vote at the 2018 Annual Meeting was as follows:
Proposal 1
— Election of directors
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Votes For
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Votes Withheld
|
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Broker Non-Votes
|
John B. Blystone
|
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46,473,586
|
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2,129,126
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5,945,481
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Mark C. Davis
|
|
39,622,710
|
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8,980,002
|
|
5,945,481
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Sidney A. Ribeau.
|
|
46,160,112
|
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2,442,600
|
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5,945,481
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At the 2018 Annual Meeting, each of John B. Blystone, Mark C. Davis and Sidney A. Ribeau was elected as a director of the Registrant for a three-year term, expiring at the 2021 Annual Meeting of Shareholders.
The directors of the Registrant whose terms of office continue until the 2019 Annual Meeting of Shareholders are: Kerrii B. Anderson, John P. McConnell and Mary Schiavo.
The directors of the Registrant whose terms of office continue until the 2020 Annual Meeting of Shareholders are: Michael J. Endres, Ozey K. Horton, Jr., Peter Karmanos, Jr. and Carl A. Nelson, Jr.
Proposal 2
— Approval of the advisory resolution on executive compensation.
Votes For
|
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Votes Against
|
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Abstentions
|
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Broker Non-Votes
|
47,401,489
|
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1,038,098
|
|
163,125
|
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5,945,481
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At the 2018Annual Meeting, the Registrant’s shareholders approved the advisory resolution on executive compensation.
Proposal 3
— Ratification of the selection of KPMG LLP as the independent registered public accounting firm of the Registrant for the fiscal year ending May 31, 2019.
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Votes For
|
|
Votes Against
|
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Abstentions
|
|
Broker Non-Votes
|
54,122,326
|
|
355,493
|
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70,374
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0 (N/A)
|
At the 2018 Annual Meeting, the shareholders of the Registrant ratified the selection of KPMG LLP as the Registrant’s independent registered public accounting firm for the fiscal year ending May 31, 2019.