PROPOSAL 1ELECTION OF DIRECTORS
At the 2017 annual meeting of stockholders, eight nominees are standing for election or re-election, as applicable, as directors of the Company
for a one-year term. As previously disclosed, Matthew J. Espe resigned from the Board effective February 15, 2017. Following a search process initiated by the Nominating and Governance
Committee, with the assistance of a global executive search firm, the Nominating and Governance Committee identified Liza K. Landsman as a qualified director candidate and recommended her to the
Board. The Board appointed Ms. Landsman as a director effective March 8, 2017.
Each
director nominee will be elected if he or she receives more "FOR" votes than "AGAINST" votes. Each nominee elected as a director will continue in office until the 2018 annual
meeting of stockholders and until his or her successor has been duly elected and qualified or until his or her earlier resignation or removal.
The
Nominating and Governance Committee of the Board of Directors is responsible for making recommendations to the Board concerning nominees for election as directors and nominees for
Board vacancies. When assessing a director candidate's qualifications, the Nominating and Governance Committee will consider the candidate's independence, skills, current and previous occupations,
other board memberships and professional experiences in the context of the needs of the Board. In addition, this Committee looks at the overall composition of the Board and how a candidate would
contribute to the overall synergy and collaborative process of the Board. The Nominating and Governance Committee has adopted Director Qualification Criteria and Independence Standards, which, in
general, require that director candidates have ample experience and a proven record of professional success, leadership and the highest level of personal and professional ethics, integrity and values.
The Nominating and Governance Committee seeks qualified candidates with diverse backgrounds including, but not limited to, such factors as race, gender and ethnicity. Our Corporate Governance
Guidelines provide that the Nominating and Governance Committee will consider director candidates recommended by stockholders, provided such recommendations comply with the process set forth in our
bylaws. In assessing such candidates, the Nominating and Governance Committee will consider the same criteria described above. See our Corporate Governance Guidelines and our Director Qualification
Criteria and Independence Standards, which may be viewed in the governance section of our website at http://ir.veritivcorp.com, for additional information on the selection of director candidates.
Each
nominee named in this proxy statement has consented to being named in this proxy statement and to serve if elected. If any nominee becomes unable to serve, proxies will be voted for
the election of such other person as the Board may designate, unless the Board chooses to reduce the number of director seats. However, the Company has no reason to believe that any nominee will be
unable to serve.
The
following are descriptions of the business and public company director experience of our director nominees, including their current principal positions, terms of office, and ages as
of March 27, 2017. We have been advised that there are no family relationships among any of our executive officers and directors.
Daniel T. Henry
, 67, has been a director of the Company since June 2014. He served as the Chief Financial Officer of American Express
Company, a global financial services company, from October 2007 until his retirement in August 2013 and as its Executive Vice President from February 2007 until his August 2013 retirement. While at
American Express, Mr. Henry was responsible for leading the company's finance organization and representing American Express to investors, lenders and rating agencies. Mr. Henry joined
American Express in 1990 and served in a variety of senior finance roles including Comptroller. Prior to joining American Express, Mr. Henry was a Partner with Ernst & Young LLP.
Mr. Henry brings to the Board of Directors substantial experience and expertise with respect to complex financial systems, public company financial management and reporting, and financial
8
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and
strategic planning. Mr. Henry also serves as a director of The Hanover Insurance Group and formerly served on the board of directors of Groupon, Inc.
Liza K. Landsman
, 47, has been a director of the Company since March 2017. She is the President and Chief Customer Officer of Jet.com, an
online retailer recently acquired by Walmart, a position she assumed in February 2017. From March 2015 to February 2017, Ms. Landsman served as Executive Vice President and Chief Customer
Officer of Jet.com, overseeing marketing, advertising and all aspects of the customer experience. From May 2013 to March 2015, Ms. Landsman served as Executive Vice President and Chief
Marketing Officer for E*Trade, an online financial services company. From March 2012 to May 2013, Ms. Landsman served as Managing Director and Global Head of Digital for BlackRock, Inc.,
a global investment firm, where she was responsible for firm wide digital marketing strategy, including social websites and mobile applications. Previously, Ms. Landsman served as Operating
Partner and Acting Chief Marketing Officer at Bravas Partners LLC, and in a variety of senior leadership roles at Citigroup, Inc. over a 10-year period. Ms. Landsman brings to the
Board of Directors strong leadership skills and extensive digital, mobile and social media marketing and business development experience. Ms. Landsman also serves as a director of Choice Hotels
International, Inc.
Mary A. Laschinger
, 56, has served as Chairman and Chief Executive Officer of the Company since July 2014. Ms. Laschinger served as
Senior Vice President of International Paper Company, a global packaging and paper manufacturing company, from 2007 to July 2014 and as President of its xpedx distribution business from January 2010
to July 2014. She previously served as President of International Paper's Europe, Middle East, Africa and Russia business, Vice President and General Manager of International Paper's Wood Products and
Pulp businesses and in other senior management roles at International Paper in sales, marketing, manufacturing and supply chain. Ms. Laschinger joined International Paper in 1992. Prior to
joining International Paper, Ms. Laschinger held various positions in product management and distribution at James River Corporation and Kimberly-Clark Corporation. Ms. Laschinger brings
to the Board of Directors significant knowledge and executive management experience running domestic and international manufacturing and distribution businesses as well as a deep understanding of
Veritiv and the industry in which it operates. Ms. Laschinger also serves as a director of Kellogg Company and the Federal Reserve Bank of Atlanta.
Tracy A. Leinbach
, 57, has been a director of the Company since June 2014. She served as Executive Vice President and Chief Financial
Officer of Ryder System, Inc., a global leader in supply chain, warehousing and transportation management solutions, from March 2003 until her retirement in February 2006. Ms. Leinbach
served as Executive Vice President of Ryder's Fleet Management Solutions from March 2001 to March 2003, Senior Vice President, Sales and Marketing from September 2000 to March 2001, and Senior Vice
President, Field Management from July 2000 to September 2000. Since beginning her career at Ryder in 1985, Ms. Leinbach served in various finance, operations and sales positions of increasing
responsibility, including serving Ryder Transportation Services as Managing Director-Europe, Senior Vice President and Chief Financial Officer, Senior Vice President, Business Services and Senior Vice
President, Purchasing and Asset Management. Prior to her career with Ryder, Ms. Leinbach, a former licensed CPA, worked in public accounting for Price Waterhouse. Ms. Leinbach brings to
the Board of Directors particular knowledge, expertise and perspectives in corporate finance; operations, sales and logistics; strategic planning and risk management; issues regarding the management
of a multinational corporation; and financial reporting and accounting issues for large public companies. Ms. Leinbach also serves as a director of Hasbro, Inc. and Forward Air
Corporation.
William E. Mitchell
, 73, has been a director of the Company since June 2014. He is the managing partner of Sequel Capital
Management, LLC, an investment management firm that he founded in 2010. Mr. Mitchell served as Chairman of the Board of Directors of Arrow Electronics, Inc., a global electronic
components and computer products distributor, from May 2006 to December 2009, and also served as Arrow's Chief Executive Officer from February 2003 to May 2009 and as Arrow's President from February
2003 to February 2008. Prior to that, Mr. Mitchell was President of Solectron Global
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Services, Inc.
from 1999 to 2003 and was Chairman, President and Chief Executive Officer of Sequel, Inc. from 1995 to 1999 until its acquisition by Solectron. Mr. Mitchell brings
to the Board of Directors extensive experience as president and chief executive officer of a global distribution company, extensive knowledge of international business operations and significant
experience in the governance
of large publicly-traded corporations. Mr. Mitchell currently serves as a director of Humana, Inc. and Rogers Corporation. In addition to formerly serving as Chairman of Arrow
Electronics, Inc., Mr. Mitchell previously served as a director of Brown-Forman Corporation, National Semiconductor Corporation and Spansion, Inc.
Michael P. Muldowney
, 53, has been a director of the Company since June 2014. He is the Chief Financial Officer of Gordon Brothers Group,
a global advisory, restructuring and investment firm, a position he assumed in May 2014. From 2012 to May 2014, Mr. Muldowney served as Founder and Chief Executive Officer of Foxford
Capital, LLC, a strategic financial advisory and investment management firm. From 2007 to 2011, Mr. Muldowney served as the Executive Vice President and Chief Financial Officer of
Houghton Mifflin Harcourt Company, a global educational publishing company. From March 2011 to September 2011, Mr. Muldowney also served as Houghton Mifflin Harcourt Company's Interim Chief
Executive Officer. Houghton Mifflin Harcourt Company filed for voluntary reorganization under Chapter 11 of the U.S. Bankruptcy Code in May 2012 and emerged with a confirmed plan in June 2012.
Previously, Mr. Muldowney served in various capacities, including as Chief Operating Officer, Chief Financial Officer, President and Director, at Nextera Enterprises, Inc., a consulting firm.
Early in his career, Mr. Muldowney held various management positions with Marsh & McLennan Companies, including Corporate Controller and Principal of the Mercer Management Consulting
subsidiary. Mr. Muldowney, a former Certified Public Accountant, brings to the Board of Directors a broad-based business background and significant financial expertise and leadership skills.
Charles G. Ward, III
, 64, has been a director of the Company since June 2014. He was a partner at Perella Weinberg Partners, a global,
independent advisory and asset management firm, from March 2012 until his retirement in December 2015. From October 2010 to December 2011, Mr. Ward served as Chief Investment Officer for
Arcapita Inc., a private equity firm. Arcapita filed for voluntary reorganization under Chapter 11 of the U.S. Bankruptcy Code in March 2012 and emerged with a confirmed plan in
September 2013. From 2002 to 2010, Mr. Ward was President of Lazard Ltd., a leading financial advisory and investment management firm. Prior to that, Mr. Ward served as Global
Head of Investment Banking and Private Equity for Credit Suisse First Boston and as a Co-Founder and member of the board of directors of Wasserstein Perella Group, a U.S. investment bank.
Mr. Ward brings to the Board of Directors extensive investment banking, capital markets and private equity experience.
John J. Zillmer
, 61, has been a director of the Company since June 2014. He is the retired Executive Chairman of Univar Inc., a
leading global distributor of industrial and specialty chemicals and related services, which position he held from May 2012 to December 2012. Mr. Zillmer served as President and Chief Executive
Officer of Univar Inc. from October 2009 to May 2012. Prior to joining Univar Inc., Mr. Zillmer was Chairman and Chief Executive Officer of Allied Waste Industries, Inc.,
the nation's second-largest waste management company, from May 2005 until December 2008, when Allied Waste Industries, Inc. merged with Republic Services, Inc. Previously,
Mr. Zillmer spent 18 years at Aramark Corporation, a leading foodservice, facilities and uniforms provider, in roles of increasing responsibility, the last of which was President, Food
and Support Services. Mr. Zillmer brings to the Board of Directors strong leadership skills, broad experience with public and private boards of directors, and extensive knowledge in the areas
of strategy development and execution, operational efficiencies, management of global operations, capital investments and executive compensation. Mr. Zillmer also serves as a director of
Ecolab Inc., Performance Food Group Company and Reynolds American, Inc.
OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" EACH OF THE NOMINEES NAMED IN THIS PROXY STATEMENT FOR ELECTION TO THE BOARD
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CORPORATE GOVERNANCE
Corporate Governance Principles
Our business is managed under the direction of our Board of Directors pursuant to the Delaware General Corporation Law and our bylaws. The Board
has responsibility for establishing broad corporate policies and for the overall performance of our Company. The Board is kept advised of company business through regular written reports and analyses
and discussions with the
Chairman and CEO and other executive officers, by reviewing materials provided to them and by participating in Board and committee meetings.
The
Board has adopted policies and procedures designed to ensure effective governance of the Company. Our corporate governance materials, including our Corporate Governance Guidelines,
the charters of each of the standing committees of the Board and our Code of Business Conduct and Ethics, may be viewed in the governance section of our website at http://ir.veritivcorp.com. We intend
to include on our website information about any amendments to, or waivers from, a provision of the Code of Business Conduct and Ethics that applies to our principal executive officer, principal
financial officer, principal accounting officer or controller in accordance with SEC rules.
The
Nominating and Governance Committee reviews our Corporate Governance Guidelines on a regular basis and proposes modifications to the principles and other key governance practices as
warranted for adoption by the Board.
Director Independence
The Company requires that a majority of its directors be "independent" as defined by the Director Qualification Criteria and Independence
Standards and the rules of the NYSE and the SEC. The Board makes a determination as to the independence of each director upon such director's initial appointment and thereafter on an annual basis. The
Board has determined that each of the current members of the Board, except for Mary A. Laschinger, has no material relationship with the Company and satisfies all the criteria for being "independent"
members of our Board within the meaning of the Director Qualification Criteria and Independence Standards and the rules of the NYSE and the SEC.
Board Composition and Leadership Structure
The Board currently consists of eight directors, all of whom are standing for election or re-election, as applicable, at the annual meeting. Our
charter and bylaws provide that the Board may increase or decrease the size of the Board and fill any vacancies.
Ms. Laschinger
serves as the Chairman of the Board and CEO of the Company. Our Board has concluded that combining the roles of CEO and Chairman of the Board is the most effective
leadership
structure for the Company at the present time as it promotes unified leadership and direction for the Company, allowing for a single, clear focus for management to execute the Company's strategic and
business plans. In coming to this conclusion, the independent directors considered Ms. Laschinger's vast experience within the Company's industry that affords her a broad and uniquely
well-informed perspective on the Company's business, as well as substantial insight into the trends and opportunities that may affect the Company's future. The combination of the Chairman and CEO
roles is balanced by the appointment of a Presiding Director, as well as a majority of our Board being comprised of independent directors. As discussed further below, the Presiding Director is
responsible for providing leadership to our Board when circumstances arise in which the joint role of the Chairman and CEO may be, or may be perceived to be, in conflict and chairing those Board
sessions that are attended only by independent directors. Our Board believes that having a Presiding Director as part of its leadership structure promotes greater management accountability and ensures
that directors have an independent contact on matters of concern to them.
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Board Meetings, Executive Sessions and Presiding Director
During 2016, the Board met nine times and each director nominee standing for re-election attended at least 90% of the total number of Board
meetings and meetings of the standing committees on which he or she then served. Our independent directors meet at regularly scheduled executive sessions at least semiannually without management
representatives or non-independent directors present. Executive sessions generally coincide with regularly scheduled meetings of the Board. As provided in the Company's Corporate Governance
Guidelines, executive sessions are chaired by the Presiding Director. The independent members of the Board, based on the recommendation of the Nominating and Governance Committee, elected
Mr. Mitchell to serve as Presiding Director until the 2017 annual meeting and expect to elect him to continue in that role for another one-year term, subject to his re-election at the 2017
annual meeting.
The
responsibilities of the Presiding Director include:
-
-
convening and presiding over executive sessions attended only by independent and non-employee directors;
-
-
in consultation with the Compensation and Leadership Development Committee, organizing the process pursuant to which the independent directors
shall evaluate the performance of the Chairman and CEO;
-
-
coordinating, developing agenda items, moderating and maintaining a record of all meetings of independent directors;
-
-
consulting with the Chairman and CEO regarding agenda items and other logistics for Board meetings;
-
-
serving as a liaison between non-management directors and the Chairman and CEO and other leadership team members, particularly with respect to
sensitive matters; and
-
-
participating in the director recruitment process along with the Chairman and CEO and the Nominating and Governance Committee.
The
Presiding Director is also available to receive direct communications from stockholders through Board approved procedures and may periodically, as directed by our Board, be asked to
speak for the Company or perform other responsibilities.
Annual Meeting Attendance
Our Corporate Governance Guidelines provide that members of the Board are expected to attend annual stockholder meetings and all of the
directors standing for re-election attended the 2016 annual stockholder meeting.
Board Committees
The standing committees of the Board are the Audit and Finance Committee, the Compensation and Leadership Development Committee and the
Nominating and Governance Committee. All of the standing committees are comprised entirely of independent directors in accordance with the NYSE
12
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listing
standards. The table below shows the current members of each of the committees and the number of meetings each committee held in 2016:
|
|
|
|
|
|
|
Name
|
|
Audit and
Finance
Committee
|
|
Compensation and
Leadership
Development
Committee
|
|
Nominating
and
Governance
Committee
|
Daniel T. Henry
|
|
Chair
|
|
ü
|
|
|
Liza K. Landsman
|
|
|
|
|
|
ü
|
Tracy A. Leinbach
|
|
ü
|
|
|
|
Chair
|
Michael P. Muldowney
|
|
ü
|
|
ü
|
|
|
Charles G. Ward, III
|
|
ü
|
|
|
|
ü
|
John J. Zillmer
|
|
|
|
Chair
|
|
ü
|
Number of Meetings
|
|
5
|
|
4
|
|
7
|
Audit and Finance Committee
The principal functions of the Audit and Finance Committee include:
-
-
reviewing and discussing with the independent auditors of the Company the scope and thoroughness of the independent auditors' examination and
reports, and judgments made, and considering recommendations of the independent auditors;
-
-
reviewing and discussing with management of the Company analyses prepared, the scope and thoroughness of review, and judgments made;
-
-
appointing the independent auditor and pre-approving all services and related fees for the year;
-
-
preparing and approving the committee report required by the rules of the SEC for inclusion in the Company's annual proxy statement and annual
report to stockholders;
-
-
reviewing the independent auditor's qualifications, performance and independence;
-
-
reviewing the sufficiency and effectiveness of the Company's system of internal controls, including compliance with legal and regulatory
requirements;
-
-
reviewing and discussing the Company's quarterly and annual filings on Form 10-Q and Form 10-K, respectively;
-
-
reviewing periodically the Company's antifraud programs and controls;
-
-
evaluating enterprise risk issues and risk management policies;
-
-
reviewing and authorizing capital structure plans, significant commitments and contingent liabilities, and capital expenditures, financings,
acquisitions and divestments; and
-
-
performing other functions or duties deemed appropriate by the Board.
Our
Board has determined that each member of the Audit and Finance Committee satisfies all applicable financial literacy requirements, each member meets the definition of an "audit
committee financial expert" as defined by the SEC and each member is "independent" as defined by the listing standards of the NYSE.
The
Audit and Finance Committee charter is posted in the governance section of the Company's website at http://ir.veritivcorp.com.
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Compensation and Leadership Development Committee
The principal functions of the Compensation and Leadership Development Committee include:
-
-
establishing, periodically reviewing and implementing the Company's compensation philosophy and overseeing the development and implementation
of the compensation programs for the executive officers;
-
-
determining the corporate and individual performance measures and objectives of the Company's executive officers;
-
-
assuring that the total compensation paid to the Company's executive officers is fair, equitable and competitive, based on an internal review
and comparison to survey data;
-
-
approving and administering the terms and policies of the Company's long-term incentive compensation programs for executive officers;
-
-
approving and administering the terms and policies of the Company's short-term incentive compensation programs for executive officers;
-
-
approving the Company's performance achievement as measured against its incentive compensation plan metrics and the resulting payouts;
-
-
reviewing and approving employment agreements, severance agreements and change-in-control agreements, and any additional special or
supplemental benefits for executive officers;
-
-
reviewing and approving retirement and benefit plans for executive officers;
-
-
reviewing at least annually senior management succession planning and policies and programs for the development of leadership personnel;
-
-
preparing and approving the report of the compensation committee required by the rules of the SEC for inclusion in the Company's annual proxy
statement and annual report to stockholders; and
-
-
performing other functions or duties deemed appropriate by the Board.
The
Compensation and Leadership Development Committee charter is posted in the governance section of the Company's website at http://ir.veritivcorp.com.
Nominating and Governance Committee
The principal functions of the Nominating and Governance Committee include:
-
-
developing qualifications/criteria for selecting and evaluating director nominees and evaluating current directors;
-
-
considering and proposing director nominees for election to the Board;
-
-
selecting candidates to fill Board vacancies as they may occur;
-
-
making recommendations to the Board regarding the committees' memberships;
-
-
reviewing and making recommendations with respect to the compensation (including equity-based compensation plans) of non-employee directors,
including the Presiding Director;
-
-
developing and generally monitoring the Company's Corporate Governance Guidelines and procedures;
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-
-
addressing possible and actual conflicts of interest and any other potential issues concerning a director's compliance with the Company's Code
of Business Conduct and Ethics, including, but not limited to, compliance with the Related Person Transaction Policy;
-
-
administering the annual evaluation of the Board; and
-
-
performing other functions or duties deemed appropriate by the Board.
The
Nominating and Governance Committee charter is posted in the governance section of the Company's website at http://ir.veritivcorp.com.
Communications with the Board
Interested parties who wish to communicate with members of the Board as a group, with non-employee or independent directors as a group, or with
individual directors, may do so by writing to Board Members c/o Corporate Secretary, Veritiv Corporation, 1000 Abernathy Road NE, Building 400, Suite 1700, Atlanta, Georgia 30328. The directors
have requested that the Corporate Secretary act as their agent in processing any communications received. All communications that relate to matters that are within the scope of responsibilities of the
Board and its committees will be forwarded to the appropriate directors. Communications relating to matters within the responsibility of one of the committees of the Board will be forwarded to the
chair of the appropriate committee. Communications relating to ordinary business matters are not within the scope of the Board's
responsibility and will be forwarded to the appropriate officer at the Company. Solicitations, advertising materials, and frivolous or inappropriate communications will not be forwarded.
Related Person Transaction Policy
The Board recognizes that transactions with Related Persons (as defined below) present a potential for conflict of interest (or the perception
of a conflict) and, together with the Company's senior management, the Board has enforced the conflict of interest provisions set forth in the Company's Code of Business Conduct and Ethics. All
employees and members of the Board are subject to the Company's Code of Business Conduct and Ethics. Additionally, we have adopted a written policy regarding review and approval of related party
transactions by the Audit and Finance Committee (the "Related Person Transaction Policy"). The Related Person Transaction Policy is posted in the governance section of the Company's website at
http://ir.veritivcorp.com.
The
Company's Related Person Transaction Policy defines a "Related Person" as any person who is, or at any time since the beginning of our last fiscal year
was:
-
-
a director or executive officer of the Company or a nominee to become a director of the Company;
-
-
any person who is known to be the beneficial owner of more than 5% of our common stock;
-
-
any immediate family member of any of the foregoing persons, including any child, stepchild, parent, stepparent, spouse, sibling,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law of the director, executive officer, nominee or more than 5% beneficial owner, and any person (other than a
tenant or employee) sharing the household of such director, executive officer, nominee or more than 5% beneficial owner; and
-
-
any firm, corporation or other entity in which any of the foregoing persons is a general partner or, for other ownership interests, a limited
partner or other owner in which such person has a beneficial ownership interest of 10% or more.
Pursuant
to the terms of the Related Person Transaction Policy, any Related Person Transaction is required to be reported to the General Counsel, who will then determine whether it
should be
15
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submitted
to our Audit and Finance Committee for consideration (or if it is not practicable or desirable for the Company to wait until the next regularly scheduled Audit and Finance Committee meeting,
to the Chair of the Audit and Finance Committee). The Audit and Finance Committee, or where submitted to the Chair of the Audit and Finance Committee, the Chair, must then review and decide whether to
approve any Related Person Transaction. The Audit and Finance Committee (or the Chair) shall approve only those Related Person Transactions that are in, or are not inconsistent with, the best
interests of the Company. When applicable, the Chair of the Audit and Finance Committee shall report to the Audit and Finance Committee at its next meeting any approval under the policy pursuant to
the Chair's delegated authority.
For
purposes of the Related Person Transaction Policy, a "Related Person Transaction" is a transaction, arrangement or relationship (or any series of similar transactions, arrangements
or relationships) in which we (including any of our subsidiaries) were, are or will be a participant and the amount involved exceeds $120,000, and in which any Related Person had, has or will have a
direct or indirect interest.
There
were no transactions from January 1, 2016 through the date of this proxy statement required to be disclosed pursuant to Item 404(a) of Regulation S-K.
Board Role in Risk Oversight
Management is responsible for identifying and prioritizing enterprise risks facing the Company. The Board, in turn, is responsible for ensuring
that material risks are managed appropriately. The Board and its committees regularly review material strategic, operational, financial, compensation and compliance risks with management.
The
Audit and Finance Committee is responsible for discussing our overall risk assessment and risk management practices, as set forth in the Audit and Finance Committee charter. The
Audit and Finance Committee also performs a central oversight role with respect to financial and compliance risks, and periodically reports on its findings to the full Board. In addition, the Audit
and Finance Committee is responsible for assessing risk, including internal control over financial reporting, related to our capital structure and significant financial exposures, and regularly
evaluates financial risks associated with such programs.
The
Compensation and Leadership Development Committee oversees risk management as it relates to our compensation plans, policies and practices in connection with structuring our
executive compensation programs and reviewing our incentive compensation programs for other employees and has reviewed with management whether our compensation programs may create incentives for our
employees to take excessive or inappropriate risks which could have a material adverse effect on us.
The
Nominating and Governance Committee oversees risks related to our governance structure and processes, including whether they are successful in preventing illegal or improper
liability-creating conduct.
OTHER MATTERS
The Company does not know of any matters to be brought before the meeting except as indicated in this notice. However, if any other matters
properly come before the meeting for action, it is intended that the persons authorized under solicited proxies may vote or act thereon in accordance with his or her own judgment.
Whether or not you plan to attend the annual meeting, it is important that your shares are represented at the annual meeting. Accordingly, we urge you to vote
your shares by one of the prescribed methods as soon as possible. Thank you for your prompt attention to this important stockholder responsibility.
|
|
|
|
|
By Order of the Board of Directors,
|
|
|
|
|
|
Mark W. Hianik
Senior Vice President, General Counsel & Corporate Secretary
|
April 13,
2017
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APPENDIX A
VERITIV CORPORATION
2014 OMNIBUS INCENTIVE PLAN
(As Amended and Restated, Effective March 8, 2017)
ARTICLE I
Purpose; Eligibility
Section 1.1
General Purpose
. This Veritiv Corporation 2014 Omnibus Incentive Plan, as may be amended from
time to time (the "
Plan
"), has the following purposes: (1) to attract and retain employees, consultants and directors who will contribute to the
long-range success of Veritiv Corporation (the "
Company
") and its Subsidiaries (as defined herein); (2) to provide incentives that align the
interests of employees, consultants and directors of the Company and its Subsidiaries with those of the shareholders of the Company; and (3) to promote the success of the Company's business.
Section 1.2
Eligible Award Recipients
. The persons eligible to receive Awards are the Service Providers
of the Company and its Subsidiaries and such other individuals designated by the Committee who are reasonably expected to become Service Providers after the receipt of Awards.
Section 1.3
Available Awards
. Awards that may be granted under the Plan include Options, Stock Purchase
Rights, Restricted Stock, Restricted Stock Units, Performance Shares, Performance Units, SARs, Dividend Equivalents, Deferred Share Units or other Stock-Based Awards.
ARTICLE II
Definitions
Whenever
the following terms are used in this Plan, they shall have the meanings specified below unless the context clearly indicates to the contrary. The singular
pronoun shall include the plural where the context so indicates.
"
Administrator
" shall mean the Board or any committee of the Board designated by the Board to administer the Plan. To the extent
Section 162(m) of the Code is applicable to the Company and the Plan, and for those Awards intended to qualify as performance-based compensation under Section 162(m) of the Code, the
Administrator shall mean the Compensation and Leadership Development Committee of the Board (the "
Compensation Committee
") or such other committee or
subcommittee of the Board or the Compensation Committee as the Board or the Compensation Committee shall designate, consisting of two or more members, each of whom is a "non-employee director" within
the meaning of Rule 16b-3, as promulgated under the Exchange Act, and an "outside
director" within the meaning of Section 162(m) of the Code and Treasury Regulations Section 1.162-27(e)(3) or any successor to such statute and regulation.
"
Affiliate
" shall mean, with respect to any Person, any other Person directly or indirectly controlling, controlled by or under common
control with, such Person where "control" shall have the meaning given such term under Rule 405 of the Securities Act.
"
Alternative Award
" shall have the meaning set forth in Section 14.1.
"
Applicable Laws
" shall mean the requirements relating to the administration of stock option, restricted stock, restricted stock unit and
other equity-based compensation plans under U.S. state corporate laws, U.S. federal and state securities laws, the Code, any stock exchange or quotation system on which any shares of Company Common
Stock are listed or quoted and the applicable laws of any other country or jurisdiction where Awards are granted under the Plan.
"
Award
" shall mean any right granted under the Plan, including an Option, Stock Purchase Right, Restricted Stock, Restricted Stock Unit,
Performance Share, Performance Unit, SAR, Dividend
A-1
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Equivalent,
Deferred Share Unit or other Stock-Based Award granted to a Participant pursuant to the Plan, including an Award combining two or more types of Awards into a single grant.
"
Award Agreement
" shall mean any written agreement, contract or other instrument or document evidencing the terms and conditions of an
individual Award granted under the Plan, including the rights and obligations of the Participant upon the issuance of Company Common Stock subject to an Award. The Administrator may provide for the
use of electronic, internet or other non-paper Award Agreements, and the use of electronic, internet or other non-paper means for the Participant's acceptance of, or actions under, an Award Agreement
unless otherwise expressly specified herein. In the event of any inconsistency or conflict between the express terms of the Plan and the express terms of an Award Agreement, the express terms of the
Plan shall govern.
"
Base Price
" shall have the meaning set forth below in the definition of Stock Appreciation Right.
"
Board
" shall mean the Board of Directors of the Company, as constituted at any time.
"
Cause
" shall, as to any Award granted to a Participant, have the meaning provided in the Award Agreement or the Participant's employment
agreement with the Company or a Subsidiary (including, without limitation, offer letters), or, if there is no such definition in any such agreement, "Cause" shall include, but is not limited to,
misconduct or other activity detrimental to the business interest or reputation of the Company or continued unsatisfactory job performance without making reasonable efforts to improve. Examples
include insubordination, protracted or repeated absence from work without permission, illegal activity, disorderly conduct, etc. A termination for Cause shall be deemed to include a determination by
the Administrator following a Participant's termination of employment that circumstances existing prior to such termination would have entitled the Company or one of its Subsidiaries to have
terminated such Participant's employment for Cause.
"
Change in Control
" shall mean the first to occur of any of the following events after the Effective Date:
(a) the
acquisition, directly or indirectly, by any Person (which, for purposes of this definition, shall include a "group" (as defined in Section 13(d) of the
Exchange Act)) of beneficial ownership of more than fifty percent (50%) of the combined voting power of the Company's then outstanding voting securities, other than any such acquisition by the
Company, any of its Subsidiaries, any employee benefit plan of the Company or any of its Subsidiaries or any Affiliates of the foregoing;
(b) the
merger, consolidation or other similar transaction involving the Company, as a result of which Persons who were holders of voting securities of the Company
immediately prior to such merger, consolidation, or other similar transaction do not immediately thereafter beneficially own, directly or indirectly, more than fifty percent (50%) of the combined
voting power entitled to vote generally in the election of directors of the merged or consolidated company;
(c) within
any 24-month period, the Incumbent Directors shall cease to constitute at least a majority of the Board;
(d) the
approval by the Company's shareholders of the liquidation or dissolution of the Company other than a liquidation of the Company into any Subsidiary or a liquidation
as a result of which Persons who were holders of voting securities of the Company immediately prior to such liquidation own, directly or indirectly, more than fifty percent (50%) of the combined
voting power entitled to vote generally in the election of directors of the entity that holds substantially all of the assets of the Company following such event; or
(e) the
sale, transfer or other disposition of all or substantially all of the assets of the Company to one or more Persons that are not, immediately prior to such sale,
transfer or other disposition, Affiliates of the Company;
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in
each case,
provided
that, as to Awards subject to Section 409A of the Code, such event also constitutes a "change in control"
within the meaning of Section 409A of the Code. In addition, notwithstanding the foregoing, a "Change in Control" shall not be deemed to occur if the Company files for bankruptcy, liquidation
or reorganization under the United States Bankruptcy Code or as a result of any restructuring that occurs as a result of any such.
"
Change in Control Price
" shall mean the highest price per share of Company Common Stock offered in conjunction with any transaction
resulting in a Change in Control. If any part of the offered price is payable other than in cash, the value of the non-cash portion of the Change in Control Price shall be determined in good faith by
the Administrator as constituted immediately prior to the Change in Control.
"
Code
" shall mean the Internal Revenue Code of 1986, as amended.
"
Company
" shall mean Veritiv Corporation, a Delaware corporation, and any successor thereto.
"
Company Common Stock
" shall mean the common stock, par value $0.01 per share, of the Company and such other stock or securities into
which such common stock is hereafter converted or for which such common stock is exchanged.
"
Compensation Committee
" shall have the meaning set forth above in the definition of Administrator.
"
Competitive Activity
" shall mean a Participant's material breach of restrictive covenants relating to noncompetition, nonsolicitation (of
customers or employees) or preservation of confidential information, or other covenants having the same or similar scope, included in an Award Agreement or other agreement to which the Participant and
the Company or any of its Subsidiaries is a party.
"
Consultant
" shall mean any natural person who is engaged by the Company or any of its Subsidiaries to render consulting or advisory
services to such entity as an independent contractor.
"
Corporate Event
" shall mean, as determined by the Administrator in its sole discretion, any transaction or event described in
Section 4.3(a) or any unusual or nonrecurring transaction or event affecting the Company, any Subsidiary of the Company, or the financial statements of the Company or any of its Subsidiaries,
or changes in applicable laws, regulations or accounting principles (including, without limitation, a recapitalization of the Company).
"
Deferred Share Unit
" shall mean a unit credited to a Participant's account in the books of the Company under Article X which
represents the right to receive one Share of Company Common Stock or cash equal to the Fair Market Value thereof on settlement of the account.
"
Director
" shall mean a member of the Board or a member of the board of directors of any Subsidiary of the Company.
"
Disability
" shall mean (
x
) for Awards that are not subject to Section 409A of the
Code, "disability" as such term is defined in the long-term disability insurance plan or program of the Company or any Subsidiary then covering the Participant and
(
y
) for Awards that are subject to Section 409A of the Code, "disability" shall have the meaning set forth in Section 409A(a)(2)(c) of the
Code;
provided
that with respect to Awards that are not subject to Section 409A, in the case of any Participant who, as of the date of
determination, is a party to an effective services, severance, consulting or employment agreement with the Company or any Subsidiary of the Company that employs such individual (including, without
limitation, offer letters), "Disability" shall have the meaning, if any, specified in such agreement.
"
Dividend Equivalent
" shall mean the right to receive payments, in cash or in Shares, based on dividends paid with respect to Shares.
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"
Effective Date
" shall mean the date as of which this Plan is adopted by the Board.
"
Eligible Representative
" for a Participant shall mean such Participant's personal representative or such other person as is empowered
under the deceased Participant's will or the then applicable laws of descent and distribution to represent the Participant hereunder.
"
Employee
" shall mean any individual classified as an employee by the Company or one of its Subsidiaries, whether such employee is so
employed at the time this Plan is adopted or becomes so employed subsequent to the adoption of this Plan, including any person to whom an offer of employment has been extended (except that any Award
granted to such person shall be conditioned on his or her commencement of service). A person shall not cease to be an Employee in the case of
(
a
) any leave of absence approved by the Company or (
b
) transfers between locations of the
Company or between the Company, any of its Subsidiaries, or any successor to the foregoing. For purposes of Incentive Stock Options, no such leave may exceed three (3) months, unless
reemployment upon expiration of such leave is guaranteed by statute or contract. If reemployment upon expiration of a leave of absence approved by the Company is not so guaranteed, the employment
relationship shall be deemed to have terminated on the first day immediately following such three (3)-month period, and such Incentive Stock Option held by the Optionee shall cease to be treated as an
Incentive Stock Option and shall be treated for tax purposes as a Non-qualified Stock Option on the first day immediately following a three (3)-month period from the date the employment relationship
is deemed terminated.
"
Exchange Act
" shall mean the Securities Exchange Act of 1934, as amended.
"
Executive Officer
" shall mean each person who is an officer of the Company or any Subsidiary and who is subject to the reporting
requirements under Section 16(a) of the Exchange Act.
"
Fair Market Value
" of a Share as of any date of determination shall be:
(a) If
the Company Common Stock is listed on any established stock exchange or a national market system, then the closing price on such date per Share as reported as quoted
on such stock exchange or system shall be the Fair Market Value for the date of determination;
(b) If
there are no transactions in the Company Common Stock that are available to the Company on any date of determination pursuant to clause (a) but transactions
are available to the Company as of the immediately preceding trading date, then the Fair Market Value determined as of the immediately preceding trading date shall be the Fair Market Value for the
date of determination; or
(c) If
neither clause (a) nor clause (b) shall apply on any date of determination, then the Fair Market Value shall be determined in good faith by the
Administrator with reference to (
x
) the most recent valuation of the Company Common Stock performed by an independent valuation consultant or
appraiser of nationally recognized standing selected by the Administrator, if any, (
y
) sales prices of
securities issued to investors in any recent arm's length transactions, and (
z
) any other factors determined to be relevant by the Administrator,
and such determination shall be conclusive and binding for all purposes.
"
Good Reason
" shall, in the case of any Participant who, as of the date of determination, is a party to an employment, severance or
similar agreement with the Company or any Subsidiary of the Company that employs such individual, have the meaning, if any, specified in such agreement (including, without limitation, offer letters),
provided, however that if there is no such employment, severance or similar agreement in which such term is defined, "Good Reason" shall have the meaning, if any, given such term in the applicable
Award Agreement. For the avoidance of doubt, if a Participant is not a party to any such an agreement defining "Good Reason" or its substantial equivalent, the "Good Reason" definition shall not apply
to such Participant.
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"
Grant Date
" shall mean the date on which the Administrator adopts a resolution, or takes other appropriate action, expressly granting an
Award to a Participant that specifies the key terms and conditions of the Award or, if a later date is set forth in such resolution, then such date as is set forth in such resolution.
"
Incentive Stock Option
" shall mean an Option which qualifies under Section 422 of the Code and is expressly designated as an
Incentive Stock Option in the Award Agreement.
"
Incumbent Directors
" shall mean individuals who, on the Effective Date, constitute the Board;
provided
that
any individual becoming a Director subsequent to the Effective Date whose election or nomination for election to the Board was approved by a vote of at least two-thirds of
the Incumbent Directors then on the Board (either by specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for Director without objection to
such nomination) shall be an Incumbent Director. No individual initially elected as a director of the Company as a result of an actual or threatened election contest with respect to the Directors or
as a result of any other actual or threatened solicitation of proxies by or on behalf of any person other than the Board shall be an Incumbent Director.
"
normal retirement age
" shall have the meaning set forth in the applicable Award Agreement or, if not defined in the Award Agreement,
pursuant to the customary policies of the Company.
"
Non-qualified Stock Option
" shall mean an Option which is not an Incentive Stock Option.
"
Non-U.S. Awards
" shall have the meaning set forth in Section 3.5.
"
Option
" shall mean an option to purchase Company Common Stock granted under the Plan. The term "Option" includes both an Incentive Stock
Option and a Non-qualified Stock Option.
"
Option Price
" shall have the meaning set forth in Section 6.3.
"
Optionee
" shall mean a Participant to whom an Option or SAR is granted under the Plan.
"
Participant
" shall mean any Service Provider who has been granted an Award pursuant to the Plan or, if applicable, such other person who
holds an outstanding Award.
"
Performance Award
" shall mean Performance Shares, Performance Units and all other Awards that vest (in whole or in part) upon the
achievement of specified Performance Goals.
"
Performance Cycle
" shall mean the period of time selected by the Administrator during which performance is measured for the purpose of
determining the extent to which a Performance Award has been earned or vested.
"
Performance Goals
" shall mean the objectives established by the Administrator for a Performance Cycle pursuant to Section 9.5 for
the purpose of determining the extent to which a Performance Award has been earned or vested.
"
Performance Share
" shall mean an Award granted pursuant to Article IX of the Plan of a contractual right to receive a number of
Shares (or the cash equivalent thereof) upon the achievement, in whole or in part, of the applicable Performance Goals.
"
Performance Unit
" shall mean a U.S. Dollar-denominated unit (or a unit denominated in the Participant's local currency) granted pursuant
to Article IX of the Plan, payable in cash or in Shares upon the achievement, in whole or in part, of the applicable Performance Goals.
"
Person
" shall mean an individual, partnership, corporation, limited liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, governmental authority or any other entity of whatever nature.
"
Plan
" shall have the meaning set forth in Section 1.1.
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"
Replacement Awards
" shall mean Shares issued in assumption of, or in substitution for, any outstanding awards of any entity acquired in
any form or combination by the Company or any of its Subsidiaries.
"
Restricted Stock
" shall mean an Award granted pursuant to Section 8.1.
"
Restricted Stock Unit
" shall mean an Award granted pursuant to Section 8.2.
"
Securities Act
" shall mean the Securities Act of 1933, as amended.
"
Service Provider
" shall mean an Employee, Consultant or Director.
"
Share
" shall mean a share of Company Common Stock.
"
Stock Appreciation Right
" or "
SAR
" shall mean the right to receive a payment from the
Company in cash and/or Shares equal to the product of (
i
) the excess, if any, of the Fair Market Value of one Share on the exercise date over a
specified price (the "
Base Price
") fixed by the Administrator on the Grant Date (which specified price shall not be less than the Fair Market Value of
one Share on the Grant Date), multiplied by (
ii
) a stated number of Shares.
"
Stock-Based Award
" shall have the meaning set forth in Section 11.1.
"
Stock Purchase Right
" shall mean an Award granted pursuant to Section 11.2.
"
Subplans
" shall have the meaning set forth in Section 3.5.
"
Subsidiary
" shall mean any entity that is directly or indirectly controlled by the Company or any entity in which the Company directly or
indirectly has at least a 50% equity interest,
provided
that, to the extent required under Section 422 of the Code when granting an Incentive
Stock Option, Subsidiary shall mean any corporation in an unbroken chain of corporations beginning with such entity if each of the corporations other than the last corporation in the unbroken chain
then owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.
"
Termination of employment
," "
termination of service
" and any similar term or terms shall
mean, with respect to a Director who is not an Employee of the Company or any of its Subsidiaries, the date upon which such Director ceases to be a member of the Board, with respect to a Consultant
who is not an Employee of the Company or any of its Subsidiaries, the date upon which such Consultant ceases to provide consulting or advisory services to the Company or any of its Subsidiaries and,
with respect to an Employee, the date the Participant ceases to be an Employee;
provided
that with respect to any Award subject to Section 409A
of the Code, such terms shall mean "separation from service," as defined in Section 409A of the Code and the rules, regulations and guidance promulgated thereunder. A "termination of
employment" or "termination of service" shall not occur if a Director, immediately upon ceasing to be a member of the Board, becomes an Employee of the Company or any of its Subsidiaries or if an
Employee, immediately upon termination of employment with the Company or any of its Subsidiaries, becomes or continues to serve as a member of the Board.
"
Withholding Taxes
" shall mean the statutory minimum of any federal, state, local or foreign income taxes, withholding taxes or employment
taxes required to be withheld under Applicable Law.
ARTICLE III
Administration
Section 3.1
Administrator
. The Plan shall be administered by the Administrator, which Administrator,
unless otherwise determined by the Board, shall be constituted to comply with Applicable Laws, including, without limitation, Section 16 of the Exchange Act and Section 162(m) of the
Code.
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Section 3.2
Powers of the Administrator
. Subject to the provisions of the Plan and, in the case of a
committee, the specific duties delegated by the Board to such Administrator, and subject to the approval of any relevant authorities, the Administrator shall have the authority in its discretion to:
(a) determine
the Fair Market Value;
(b) select
the Service Providers to whom Awards may from time to time be granted hereunder;
(c) determine
the type or types of Awards to be granted to each Participant;
(d) determine
the number of Awards to be granted and the number of Shares to which an Award will relate;
(e) determine
when Awards are to be granted under the Plan and the applicable Grant Date;
(f) determine
the terms and conditions of any Awards granted hereunder (including, without limitation, the exercise price, the vesting provisions, the time or times when
Awards may be exercised (which may be based on performance criteria), any vesting acceleration or waiver of forfeiture restrictions and any restriction or limitation regarding any Awards or the
Company Common Stock relating thereto) based in each case on such factors as the Administrator, in its sole discretion, shall determine;
(g) determine
all matters and questions related to the termination of service of a Service Provider with respect to any Award granted to such Service Provider hereunder,
including, but not by way of limitation of, all questions of whether a particular Service Provider has taken a leave of absence, all questions of whether a leave of absence taken by a particular
Service Provider constitutes a termination of service, and all questions of whether a termination of service of a particular Service Provider resulted from discharge for Cause;
(h) approve
forms of agreement for use under the Plan, which need not be identical for each Service Provider;
(i) prescribe,
amend and rescind rules and regulations relating to the Plan, including rules and regulations relating to Subplans established for the purpose of satisfying
applicable foreign laws;
(j) determine
whether, to what extent, and pursuant to what circumstances an Award may be settled in, or the exercise or purchase price of an Award may be paid in, cash,
Company Common Stock, other Awards, or other property, or an Award may be canceled, forfeited or surrendered;
(k) suspend
or accelerate the vesting of any Award granted under the Plan;
(l) amend
any outstanding Awards as set forth in Section 15.2 hereof;
(m) construe
and interpret the terms of the Plan and Awards granted pursuant to the Plan and apply its provisions;
(n) determine
the effect of a Corporate Event under Section 4.3;
(o) make
decisions with respect to outstanding Awards that may become necessary upon a change in corporate control or an event that triggers anti-dilution adjustments;
(p) authorize
any person to execute, on behalf of the Company, any instrument required to carry out the purposes of the Plan;
(q) interpret,
administer, reconcile any inconsistency in, correct any defect in and/or supply any omission in the Plan and any instrument or agreement relating to, or Award
granted under, the Plan; and
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(r) make
all other decisions and determinations that may be required pursuant to the Plan or as the Administrator deems necessary or advisable to administer the Plan.
Section 3.3
Delegation by the Administrator
. The Administrator may delegate, subject to such terms or
conditions or guidelines as it shall determine, to any officer or group of officers, or Director or group of Directors, of the Company or its Affiliates any portion of its authority and powers under
the Plan with respect to Participants who are not Executive Officers or non-employee Directors of the Board;
provided
that any delegation to one or more
officers of the Company shall be subject to and comply with Section 157(c) of the Delaware General Corporation Law (or successor provision). In addition,
(
i
) with respect to any Award intended to qualify as "performance-based" compensation under Section 162(m) of the Code, the Administrator shall
mean the Compensation Committee or such other committee or subcommittee of the Board or the Compensation Committee as the Board or the Compensation Committee shall designate, consisting solely of two
or more members, each of whom is an "outside director" within the meaning of Section 162(m) of the Code and Treasury Regulations Section 1.162-27(e)(3) or any successor to such statute
and regulation and (
ii
) with respect to any Award intended to qualify for the exemption contained in Rule 16b-3 promulgated under the Exchange
Act, the Administrator shall consist of solely two or more "non-employee directors" within the meaning of such rule, or, in the alternative, the entire Board.
Section 3.4
Compensation, Professional Assistance, Administrator Decisions Final; Indemnification
. The
Administrator shall receive no compensation for its services hereunder except as may be determined by the Board. All expenses and liabilities incurred by the Administrator in connection with the
administration of the Plan shall be borne by the Company. The Administrator may, in its discretion, elect to engage the services of attorneys, consultants, accountants, appraisers, brokers or other
persons. The Administrator, the Company and its officers and Directors shall be entitled to rely upon the advice, opinions or valuations of any such persons. All actions taken and all interpretations,
decisions and determinations made by the Administrator shall be final, binding and conclusive upon all Participants, the Company and all other interested persons. The Administrator's determinations
under the Plan need not be uniform and may be made by the Administrator selectively among persons who receive, or are eligible to receive, Awards under the Plan, whether or not such persons are
similarly situated. The Administrator (and its members) shall not be personally liable for any action, determination or interpretation made with respect to the Plan or the Awards, and the
Administrator (and its members), in addition to such other rights of indemnification as they may have as Directors or members of the Administrator, and to the extent allowed by Applicable Laws, shall
be indemnified by the Company against the reasonable expenses, including attorney's fees, actually incurred in connection with any action, suit or proceeding or in connection with any appeal therein,
to which the Administrator (and its members) may be party by reason of any such action, determination or interpretation.
Section 3.5
Participants Based Outside the United States
. To conform with the provisions of local laws
and regulations, or with local compensation practices and policies, in foreign countries in which the Company or any of its Subsidiaries or Affiliates operate, but subject to the limitations set forth
herein regarding the maximum number of shares issuable hereunder and the maximum Award to any single Participant, the Administrator may
(
i
) modify the terms and conditions of Awards granted to Participants employed or providing services outside the United States
("
Non-U.S. Awards
"), (
ii
) establish subplans with such modifications as may be necessary or
advisable under the circumstances ("
Subplans
") and (
iii
) take any action which it deems advisable
to obtain, comply with or otherwise reflect any necessary governmental regulatory procedures, exemptions or approvals with respect to the Plan. The Administrator's decision to grant Non-U.S. Awards or
to establish Subplans is entirely voluntary, and at the complete discretion of the Administrator. The Administrator may amend, modify
or terminate any Subplans at any time, and such amendment, modification or termination may be made without prior notice to the Participants. The Company, Subsidiaries, Affiliates and members of the
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Administrator
shall not incur any liability of any kind to any Participant as a result of any change, amendment or termination of any Subplan at any time. The benefits and rights provided under any
Subplan or by any Non-U.S. Award (
x
) are wholly discretionary and, although provided by either the Company, a Subsidiary or Affiliate, do not
constitute regular or periodic payments and (
y
) except as otherwise required under Applicable Laws, are not to be considered part of the
Participant's salary or compensation under the Participant's employment with the Participant's local employer for purposes of calculating any severance, resignation, redundancy or other end of service
payments, vacation, bonuses, long-term service awards, indemnification, pension or retirement benefits, or any other payments, benefits or rights of any kind.
ARTICLE IV
Shares Subject to Plan
Section 4.1
Shares Subject to Plan.
(a) Subject
to Section 4.3, the aggregate number of Shares which may be issued under this Plan is 3,080,000, all of which may be issued in the form of Incentive Stock
Options under the Plan. The Shares issued under the Plan may be authorized but unissued, or reacquired Company Common Stock. No provision of this Plan shall be construed to require the Company to
maintain the Shares in certificated form.
(b) Upon
the grant of an Award, the maximum number of Shares set forth in Section 4.1(a) shall be reduced by the maximum number of Shares that are issued or may be
issued pursuant to such Award. Upon the exercise, settlement or conversion of any Award or portion thereof, there shall again be available for grant under the Plan the number of Shares subject to such
Award or portion thereof minus the actual number of Shares issued in connection with such exercise, settlement or conversion. If any such Award or portion thereof is for any reason forfeited,
canceled, expired or otherwise terminated without the issuance of Shares, the Shares subject to such forfeited, canceled, expired or otherwise terminated Award or portion thereof shall again be
available for grant under the Plan. If Shares are withheld from issuance with respect to an Award by the Company in satisfaction of any tax
withholding or similar obligations, such withheld Shares shall again be available for grant under the Plan. Awards which the Administrator reasonably determines will be settled in cash shall not
reduce the Plan maximum set forth in Section 4.1(a). Notwithstanding the foregoing, and except to the extent required by Applicable Law, Replacement Awards shall not be counted against Shares
available for grant pursuant to this Plan.
Section 4.2
Individual Award Limitations.
Subject to Section 4.1(a) and Section 4.3, the
following individual Award limits shall apply to the extent Section 162(m) of the Code is applicable to the Company and the Plan, and for those Awards intended to qualify as performance-based
compensation under Section 162(m) of the Code:
(a) No
Participant may be granted in any calendar year more than 1,000,000 Options, SARs or any other Award based solely on the increase in value of the Shares from the
Grant Date under the Plan.
(b) No
Participant may be granted in any calendar year more than 1,000,000 Performance Shares, shares of performance-based Restricted Stock, performance-based Restricted
Stock Units or performance-based Dividend Equivalents under the Plan.
(c) No
Participant may be granted in any calendar year Performance Units or any other performance-based Award settled in cash under the Plan with a value of more than US
$10,000,000 (or the equivalent of such amount denominated in the Participant's local currency).
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Section 4.3
Changes in Company Common Stock; Disposition of Assets and Corporate
Events.
(a) If
and to the extent necessary or appropriate to reflect any stock dividend, extraordinary dividend, stock split or share combination or any recapitalization,
reorganization, merger, consolidation, combination, exchange of shares, spin-off, liquidation or dissolution of the Company or other similar transaction affecting the Company Common Stock (each, a
"
Corporate Event
"), the Administrator shall adjust the number and type of shares available for issuance under the Plan, the maximum number and type of
shares subject to all Awards, the maximum number and type of shares with respect to which any one person may be granted Awards during any period and the number, class and Option Price (if applicable)
or Base Price (if applicable) of any outstanding Award, and/or make such substitution, revision or other provisions or take such other actions with respect to any outstanding Award or the holder or
holders thereof, in each case as it determines to be equitable. Without limiting the generality of the foregoing sentence, in the event of any such Corporate Event, the Administrator shall have the
power to make such changes as it deems appropriate in (
i
) the number and type of shares or other securities covered by outstanding Awards,
(
ii
) the prices specified therein (if applicable), (
iii
) the securities, cash or other property to be
received upon the exercise, settlement or conversion of such outstanding Awards or otherwise to be received in connection with such outstanding Awards and
(
iv
) and any applicable Performance Goals. After any adjustment made by the Administrator pursuant to
this Section 4.3, the number of shares subject to each outstanding Award shall be rounded down to the nearest whole number.
(b) Any
adjustment of an Award pursuant to this Section 4.3 shall be effected in compliance with Section 422 and 409A of the Code to the extent applicable.
Section 4.4
Award Agreement Provisions.
The Administrator may include such further provisions and
limitations in any Award Agreement as it may deem equitable and in the best interests of the Company and its Subsidiaries.
Section 4.5
Prohibition Against Repricing.
Except to the extent
(
i
) approved in advance by holders of a majority of the Shares entitled to vote generally in the election of Directors or
(
ii
) pursuant to Section 4.3 as a result of any Corporate Event, the Administrator shall not have the power or authority to reduce the
exercise price of outstanding Options or SARs or cancel, convert, exchange, replace, buyout or surrender outstanding Options or SARS in exchange for cash, other awards or Options or SARs with an
exercise price that is less than the exercise price of the original Options or SARs.
ARTICLE V
Granting of Options and SARs and Sale of Company Common Stock
Section 5.1
Eligibility.
Non-qualified Stock Options and SARs may be granted to Service Providers.
Subject to Section 5.2, Incentive Stock Options may only be granted to Employees.
Section 5.2
Qualification of Incentive Stock Options.
No Employee may be granted an Incentive Stock
Option under the Plan if such Employee, at the time the Incentive Stock Option is granted, owns stock possessing more than ten (10) percent of the total combined voting power of all classes of
stock of the Company or any then existing Subsidiary of the Company or "parent corporation" (within the meaning of Section 424(e) of the Code) unless such Incentive Stock Option conforms to the
applicable provisions of Section 422 of the Code.
Section 5.3
Granting of Options and SARs to Service Providers.
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(i) Select
from among the Service Providers (including those to whom Options or SARs have been previously granted under the Plan) such of them as in its opinion should be
granted Options and/or SARs;
(ii) Determine
the number of Shares to be subject to such Options and/or SARs granted to such Service Provider, and determine whether such Options are to be Incentive Stock
Options or Non-qualified Stock Options; and
(iii) Determine
the terms and conditions of such Options and SARs, consistent with the Plan.
(b) SARs
may be granted in tandem with Options or may be granted on a freestanding basis, not related to any Option. Unless otherwise determined by the Administrator at the
Grant Date or determined thereafter in a manner more favorable to the Participant, SARs granted in tandem with Options shall have substantially similar terms and conditions to such Options to the
extent applicable, or may be granted on a freestanding basis, not related to any Option.
(c) Upon
the selection of a Service Provider to be granted an Option or SAR under this Section 5.3, the Administrator shall issue, or shall instruct an authorized
officer to issue, such Option or SAR and may impose such conditions on the grant of such Option or SAR as it deems appropriate. Subject to Section 15.2 of the Plan, any Incentive Stock Option
granted under the Plan may be modified by the Administrator, without the consent of the Optionee, even if such modification would result in the disqualification of such Option as an "incentive stock
option" under Section 422 of the Code.
ARTICLE VI
Terms of Options and SARs
Section 6.1
Award Agreement.
Each Option and each SAR shall be evidenced by a written Award Agreement,
which shall be executed by the Optionee and an authorized officer and which shall contain
such terms and conditions as the Administrator shall determine, consistent with the Plan. Award Agreements evidencing Incentive Stock Options shall contain such terms and conditions as may be
necessary to qualify such Options as "incentive stock options" under Section 422 of the Code.
Section 6.2
Exercisability and Vesting of Options and SARs.
(a) Each
Option and SAR shall vest and become exercisable according to the terms of the applicable Award Agreement;
provided
,
however
, that by a resolution adopted
after an Option or SAR is granted the Administrator may, on such terms and conditions as it may determine to be
appropriate, accelerate the time at which such Option or SAR or any portion thereof may be exercised.
(b) Except
as otherwise provided by the Administrator or in the applicable Award Agreement, no portion of an Option or SAR which is unexercisable on the date that an
Optionee incurs a termination of service as a Service Provider shall thereafter become exercisable.
(c) The
aggregate Fair Market Value (determined as of the Grant Date of the Option) of all Shares with respect to which Incentive Stock Options are first exercisable by a
Service Provider in any calendar year may not exceed $100,000 or such other limitation as imposed by Section 422(d) of the Code, or any successor provision. To the extent that Incentive Stock
Options are first exercisable by a Participant in excess of such limitation, the excess shall be considered Non-qualified Stock Options.
(d) SARs
granted in tandem with an Option shall become vested and exercisable on the same date or dates as the Options with which such SARs are associated vest and become
exercisable. SARs that are granted in tandem with an Option may only be exercised upon the surrender of the
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right
to exercise such Option for an equivalent number of Shares, and may be exercised only with respect to the Shares for which the related Option is then exercisable.
Section 6.3
Option Price and Base Price.
Excluding Replacement Awards, the per Share purchase price of
the Shares subject to each Option (the "
Option Price
") and the Base Price of each SAR shall be set by
the Administrator and shall be not less than 100% of the Fair Market Value of such Shares on the Grant Date of such Option or SAR.
Section 6.4
Expiration of Options and SARs.
No Option or SAR may be exercised after the first to occur of
the following events:
(a) The
expiration of ten (10) years from the Grant Date of the Option or SAR; or
(b) With
respect to an Incentive Stock Option in the case of an Optionee owning (within the meaning of Section 424(d) of the Code), at the time the Incentive Stock
Option was granted, more than 10% of the total combined voting power of all classes of stock of the Company or any Subsidiary, the expiration of five (5) years from the date the Incentive Stock
Option was granted.
ARTICLE VII
Exercise of Options and SARs
Section 7.1
Person Eligible to Exercise.
During the lifetime of the Optionee, only the Optionee may
exercise an Option or SAR (or any portion thereof) granted to him or her;
provided
,
however
, that the
Optionee's Eligible Representative may exercise his or her Option or SAR or portion thereof during the period of the Optionee's Disability. After the death of the Optionee, any exercisable portion of
an Option or SAR may, prior to the time when such portion becomes unexercisable under the Plan or the applicable Award Agreement, be exercised by his or her Eligible Representative.
Section 7.2
Partial Exercise.
At any time and from time to time prior to the date on which the Option or
SAR becomes unexercisable under the Plan or the applicable Award Agreement, the exercisable portion of an Option or SAR may be exercised in whole or in part;
provided
,
however
, that the Company shall not be required to issue fractional Shares and the
Administrator may, by the terms of the Option or SAR, require any partial exercise to exceed a specified minimum number of Shares.
Section 7.3
Manner of Exercise.
Subject to any generally applicable conditions or procedures that may be
imposed by the Administrator, an exercisable Option or SAR, or any exercisable portion thereof, may be exercised solely by delivery to the Administrator or its designee of all of the following prior
to the time when such Option or SAR or such portion becomes unexercisable under the Plan or the applicable Award Agreement:
(a) Notice
in writing signed by the Optionee or his or her Eligible Representative, stating that such Option or SAR or portion thereof is being exercised, and specifically
stating the number of Shares with respect to which the Option or SAR is being exercised (which form of notice shall be provided by the Administrator upon request and may be electronic);
(b) (i) With
respect to the exercise of any Option, full payment (in cash (through wire transfer only) or by personal, certified, or bank cashier check) of the
aggregate Option Price of the Shares with respect to which such Option (or portion thereof) is thereby exercised; or
(ii) With
the consent of the Administrator, (
A
) Shares owned by the Optionee duly endorsed for transfer to the Company or
(
B
) Shares issuable to the Optionee upon exercise of the Option, with a Fair Market Value on the date of Option exercise equal to the aggregate Option
Price of the Shares with respect to which such Option (or portion thereof) is thereby exercised; or
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(iii) With
the consent of the Administrator, payment of the Option Price through a broker-assisted cashless exercise program established by the Company or other "cashless",
or net issuance, basis; or
(iv) With
the consent of the Administrator, any form of payment of the Option Price permitted by Applicable Laws and any combination of the foregoing methods of payment.
(c) Full
payment to the Company (in cash or by personal, certified or bank cashier check or by any other means of payment approved by the Administrator) of all minimum
amounts necessary to satisfy any and all Withholding Taxes arising in connection with the exercise of the Option or SAR (notice of the amount of which shall be provided by the Administrator as soon as
practicable following receipt by the Administrator of the notice of exercise);
(d) Such
representations and documents as the Administrator deems necessary or advisable to effect compliance with all applicable provisions of the Securities Act and any
other federal or state securities laws or regulations. The Administrator shall provide the Optionee or Eligible Representative with all such representations and documents as soon as practicable
following receipt by the Administrator of the notice of exercise. The Administrator may, in its sole discretion, also take whatever additional actions it deems appropriate to effect such compliance
including, without limitation, placing legends on share certificates and issuing stop-transfer orders to transfer agents and registrars; and
(e) In
the event that the Option or SAR or portion thereof shall be exercised as permitted under Section 7.1 by any person or persons other than the Optionee,
appropriate proof of the right of such person or persons to exercise the Option or SAR or portion thereof.
Section 7.4
Optionee Representations.
The Administrator, in its sole discretion, may require an Optionee
to make certain representations or acknowledgements on or prior to the purchase of any Shares pursuant to any Option or SAR granted under this Plan, in respect thereof including, without limitation,
that the Optionee is acquiring the Shares for an investment purpose and not for resale, and, if the Optionee is an Affiliate, additional acknowledgements regarding when and to what extent any
transfers of such Shares may occur.
Section 7.5
Settlement of SARs.
Unless otherwise determined by the Administrator, upon exercise of a SAR,
the Participant shall be entitled to receive payment in the form, determined by the Administrator, of Shares, or cash, or a combination of Shares and cash having an aggregate value equal to the amount
determined by multiplying:
(a) any
increase in the Fair Market Value of one Share on the exercise date over the Base Price of such SAR, by
(b) the
number of Shares with respect to which such SAR is exercised;
provided
,
however
, that on the Grant Date, the Administrator may establish, in its sole
discretion, a maximum amount per Share that may be payable upon exercise
of a SAR, and
provided
,
further
, that in no event shall the value of the Company Common Stock or cash
delivered on exercise of a SAR exceed the excess of the Fair Market Value of the Shares with respect to which the SAR is exercised over the Fair Market Value of such Shares on the Grant Date of such
SAR.
Section 7.6
Conditions to Issuance of Shares.
The Company shall evidence the issuance of Shares delivered
upon exercise of an Option or SAR in the books and records of the Company or in a manner determined by the Company. Notwithstanding the above, the Company shall not be required to effect the issuance
of any Shares purchased upon the exercise of any Option or SAR or portion thereof prior to fulfillment of all of the following conditions:
(a) The
admission of such Shares to listing on any and all stock exchanges on which such class of Company Common Stock is then listed;
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(b) The
completion of any registration or other qualification of such Shares under any state or federal law or under the rulings or regulations of the U.S. Securities and
Exchange Commission or any other local, state, federal or foreign governmental regulatory body, which the Administrator shall, in its sole discretion, deem necessary or advisable;
(c) The
obtaining of any approval or other clearance from any state or federal governmental agency which the Administrator shall, in its sole discretion, determine to be
necessary or advisable; and
(d) The
payment to the Company (or its Subsidiary, as applicable) of all amounts which it is required to withhold under Applicable Law in connection with the exercise of the
Option or SAR.
The
Administrator shall not have any liability to any Optionee for any delay in the delivery of Shares to be issued upon an Optionee's exercise of an Option or SAR.
Section 7.7
Rights as Stockholders.
The holder of an Option or SAR shall not be, nor have any of the
rights or privileges of, a stockholder of the Company in respect of any Shares purchasable upon the exercise of any part of an Option or SAR unless and until the Shares attributable to the exercise of
the Option or SAR have been issued by the Company to such holder and, unless otherwise determined by the Administrator, such holder has made such representations and provided such documents as the
Administrator deems necessary or advisable to effect compliance with all applicable provisions of the Securities Act and any other federal or state securities laws or regulations.
Section 7.8
Transfer Restrictions.
Unless otherwise determined by the Administrator, the Shares acquired
upon exercise of an Option or SAR shall be subject to the terms and conditions of the Award Agreement and such other terms and conditions as the Administrator shall determine. In addition, the
Administrator, in its sole discretion, may set forth in an Award Agreement such further restrictions on the transferability of the Shares purchasable upon the exercise of an Option or SAR as it deems
appropriate. Any such restriction may be referred to in the Share register maintained by the Company or otherwise in a manner reflecting its applicability to the Shares. The Administrator may require
the Employee to give the Company prompt notice of any disposition of Shares acquired by exercise of an Incentive Stock Option, within two (2) years from the Grant Date of such Option or one
(1) year after the transfer of such Shares to such Employee. The Administrator may cause the Share register maintained by the Company to refer to such requirement.
ARTICLE VIII
Restricted Stock Awards and Restricted Stock Unit Awards
Section 8.1
Restricted Stock.
(a)
Grant of Restricted Stock.
The Administrator is authorized to make Awards of Restricted Stock to any Service
Provider selected by the Administrator in such amounts and subject to such terms and conditions as determined by the Administrator. All Awards of Restricted Stock shall be evidenced by an Award
Agreement.
(b)
Issuance and Restrictions.
Restricted Stock shall be subject to such restrictions on transferability and
other restrictions as the Administrator may impose (including, without limitation, limitations on the right to vote Restricted Stock or the right to receive dividends on the Restricted Stock). These
restrictions may lapse separately or in combination at such times, pursuant to such circumstances, in such installments, or otherwise, as the Administrator determines on the Grant Date of the Award or
thereafter.
(c)
Issuance of Restricted Stock.
The issuance of Restricted Stock granted pursuant to the Plan may be evidenced
in such manner as the Administrator shall determine;
provided
,
that
, no
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provision
of this Plan shall be construed to require the Company to maintain the Shares in certificated form.
Section 8.2
Restricted Stock Units.
The Administrator is authorized to make Awards of Restricted Stock
Units to any Service Provider selected by the Administrator in such amounts and subject to such terms and conditions as determined by the Administrator. On the Grant Date, the Administrator shall
specify
the date or dates on which the Restricted Stock Units shall become fully vested and nonforfeitable, and may specify such conditions to vesting as it deems appropriate. On the Grant Date, the
Administrator shall specify the settlement date applicable to each grant of Restricted Stock Units which shall be no earlier than the vesting date or dates of the Award and may be determined at the
election of the grantee. Unless otherwise provided in an Award Agreement, on the settlement date, the Company shall, subject to the terms of this Plan (including satisfaction of applicable Withholding
Taxes), transfer to the Participant one Share for each Restricted Stock Unit scheduled to be paid out on such date and not previously forfeited. The Administrator shall specify the purchase price, if
any, to be paid by the grantee to the Company for such Shares.
Section 8.3
Rights as a Stockholder.
A Participant shall not be, nor have any of the rights or privileges
of, a stockholder in respect of Restricted Stock Units awarded pursuant to the Plan unless and until the Shares attributable to such Restricted Stock Units have been issued to such Participant and,
unless otherwise determined by the Administrator, such Participant has made such representations and provided such documents as the Administrator deems necessary or advisable to effect compliance with
all applicable provisions of the Securities Act and any other federal or state securities laws or regulations.
ARTICLE IX
Performance Shares and Performance Units
Section 9.1
Grant of Performance Awards.
The Administrator is authorized to make Awards of Performance
Shares and Performance Units to any Participant selected by the Administrator in such amounts and subject to such terms and conditions as determined by the Administrator. All Performance Shares and
Performance Units shall be evidenced by an Award Agreement.
Section 9.2
Issuance and Restrictions.
The Administrator shall have the authority to determine the
Participants who shall receive Performance Shares and Performance Units, the number of Performance Shares and the number and value of Performance Units each Participant receives for any Performance
Cycle, and the Performance Goals applicable in respect of such Performance Shares and Performance Units for each Performance Cycle. The Administrator shall determine the duration of each Performance
Cycle (the duration of Performance Cycles may differ from one another), and there may be more than one Performance Cycle in existence at any one time. An Award Agreement evidencing the grant of
Performance Shares or Performance Units shall specify the number of Performance Shares and the number and value of Performance Units awarded to the Participant, the Performance Goals applicable
thereto, and such other terms and conditions not inconsistent with the Plan as the Administrator shall determine. No Company Common Stock will be issued at the time an Award of Performance Shares is
made, and the Company shall not be required to set aside a fund for the payment of Performance Shares or Performance Units.
Section 9.3
Earned Performance Shares and Performance Units.
Performance Shares and Performance Units
shall become earned, in whole or in part, based upon the attainment of specified Performance Goals or the occurrence of any event or events, as the Administrator shall determine, either in an Award
Agreement or thereafter on terms more favorable to the Participant;
provided
,
that
, as to any such Award
subject to Section 162(m), to the extent consistent with Section 162(m). In addition to the achievement of the specified Performance Goals, the Administrator may condition payment of
Performance Shares and Performance Units on such other conditions as the Administrator
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shall
specify in an Award Agreement. The Administrator may also provide in an Award Agreement for the completion of a minimum period of service (in addition to the achievement of any applicable
Performance Goals) as a condition to the vesting of any Performance Share or Performance Unit Award.
Section 9.4
Rights as a Stockholder.
A Participant shall not have any rights as a stockholder in respect
of Performance Shares or Performance Units awarded pursuant to the Plan (including, without limitation, to the right to vote on any matter submitted to the Company's stockholders) unless and until the
Shares attributable to such Performance Shares or Performance Units have been issued to such Participant or his or her beneficiary and, unless otherwise determined by the Administrator, such
Participant has made such representations and provided such documents as the Administrator deems necessary or advisable to effect compliance with all applicable provisions of the Securities Act and
any other federal or state securities laws or regulations.
Section 9.5
Performance Goals.
The Administrator shall establish the Performance Goals that must be
satisfied in order for a Participant to receive an Award for a Performance Period or for an Award of Performance Shares or Performance Units to be earned or vested. At the discretion of the
Administrator, the Performance Goals may be based upon (alone or in combination): (
a
) net or operating income (before or after taxes) or other income
measures; (
b
) earnings before taxes, interest, depreciation and/or amortization ("
EBITDA
");
(
c
) basic or diluted earnings per share or improvement in basic or diluted earnings per share; (
d
) sales
(including, but not limited to, total sales, net sales and revenue growth); (
e
) profit (including, but not limited to, net profit, gross profit,
operating profit, net operating profit, economic profit or other corporate profit measures); (
f
) financial return measures (including, but not limited
to, return on assets, income, capital, invested capital, equity, investments, sales and revenue); (
g
) cash flow measures (including, but not limited to,
operating cash flow, free cash flow, cash flow return on equity and cash flow return on investment); (
h
) productivity ratios (including, but not limited
to, measuring liquidity, profitability and leverage); (
i
) share price (including, but not limited to, growth measures and total shareholder return);
(
j
) expense/cost management targets (including, but not limited, to expense management, expense ratio, expense efficiency ratios or other expense
measures); (
k
) margins (including, but not limited to, operating margin, net income margin, cash margin, gross, net or operating profit margins and
EBITDA margins); (
l
) operating efficiency; (
m
) market share or market penetration;
(
n
) customer targets (including, but not limited to, customer growth and customer satisfaction); (
o
)
working capital targets or improvements; (
p
) economic value
added; (
q
) balance sheet metrics (including, but not limited to, inventory, inventory turns, receivables turnover, net asset turnover, total debt, net
debt, debt reduction, retained earnings, year-end cash, cash conversion cycle and ratio of debt to equity or to EBITDA); (
r
) workforce targets
(including, but not limited to, diversity goals, employee engagement or satisfaction, employee retention and workplace health and safety goals); (
s
)
implementation, completion or attainment of measurable objectives with respect to research and development, key products or key projects, lines of business, acquisitions and divestitures and strategic
plan development and/or implementation; (
t
) comparisons with various stock market indices, peer companies or industry groups or classifications with
regard to one more of these criteria; (
u
) improvements in capital structure; (
v
) business expansion or
consolidation (acquisitions and divestitures); (
w
) internal rate of return or increase in net present value,
(
x
) productivity measures; (
y
) cost reduction measures or, for any period of time in which
Section 162(m) is not applicable to the Company and the Plan, or at any time in the case of (
A
) persons who are not "covered employees" under
Section 162(m) of the Code or (
B
) Awards (whether or not to "covered employees") not intended to qualify as performance-based compensation under
Section 162(m) of the Code, such other criteria as may be determined by the Administrator.
Performance
Goals may be established on a Company-wide basis or with respect to one or more Subsidiaries or Affiliates or business units, divisions, regions, departments, functions or
products within the Company, a Subsidiary or Affiliate and may be expressed in absolute terms, or an adjusted basis, in
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percentages,
or in terms of growth from period to period or growth rates over time, or measured relative to (
i
) current internal targets or budgets,
(
ii
) the past performance of the Company (including the performance of one or more Subsidiaries, divisions or operating units),
(
iii
) the performance of one or more similarly situated companies, (
iv
) the performance of an index
covering a peer group of companies or (
v
) other external measures of the selected performance criteria. Performance Goals need not be based upon an
increase or positive result under a business criterion and could include, for example, the maintenance of the status quo or the limitation of economic losses (measured, in each case, by reference to a
specific business criterion). Any performance objective may measure performance on an individual basis, as appropriate. The Administrator may provide for a threshold level of performance below which
no Shares or compensation will be granted or paid in respect of Performance Shares or Performance Units, and a maximum level of performance above which no additional Shares or compensation will be
granted or paid in respect of Performance Shares or Performance Units, and it may provide for differing amounts of Shares or compensation to be granted or paid in respect of Performance Shares or
Performance Units for different levels of performance. The applicable Performance Goals set forth above may be applied on a pre- or post-tax basis and may be established or adjusted in accordance with
Section 162(m) of the Code to include or exclude objectively determinable components of any Performance Goal, including, without limitation, "non-recurring items" as determined under U.S.
generally accepted accounting principles, as identified in the financial statements, notes to the financial statements or management's discussion and analysis in the annual report, and the charges or
costs associated with restructurings of the Company, impairments, debt refinancing costs, noncash items, discontinued operations, capital gains and losses, dividends, Share repurchases, other unusual,
non-recurring or infrequently occurring items, and the cumulative effects of changes in the law or accounting principles. Except in the case of Awards to "covered employees" intended to be
performance-based compensation under Section 162(m) of the Code, the Administrator
may also adjust the Performance Goals for any Performance Cycle as it deems equitable in recognition of unusual or non-recurring events affecting the Company, changes in applicable tax laws or
accounting principles, or such other factors as the Administrator may determine.
Section 9.6
Special Rule for Performance Goals.
If, at the time of grant, the Administrator intends a
Performance Share Award, Performance Unit or other Performance Award to qualify as performance-based compensation within the meaning of Section 162(m) of the Code, the Administrator must
establish Performance Goals for the applicable Performance Cycle prior to the 91
st
day of the Performance Cycle (or by such other date as may be required under
Section 162(m) of the Code) and not later than the date on which 25% of the Performance Cycle has elapsed.
Section 9.7
Negative Discretion.
Notwithstanding anything in this Article IX to the contrary, the
Administrator shall have the right, in its absolute discretion, (
i
) to reduce or eliminate the amount otherwise payable to any Participant under
Section 9.8 based on individual performance or any other factors that the Administrator, in its discretion, shall deem appropriate and (
ii
) to
establish rules or procedures that have the effect of limiting the amount payable to each Participant to an amount that is less than the maximum amount otherwise authorized under the Award or under
the Plan.
Section 9.8
Certification of Attainment of Performance Goals.
As soon as practicable after the end of a
Performance Cycle and prior to any payment or vesting in respect of such Performance Cycle, the Administrator shall certify in writing the number of Performance Shares or other Performance Awards and
the number and value of Performance Units that have been earned or vested on the basis of performance in relation to the established Performance Goals.
Section 9.9
Payment of Awards.
Payment or delivery of Company Common Stock with respect to earned
Performance Shares and earned Performance Units shall be made to the Participant or, if the Participant has died, to the Participant's Eligible Representative, as soon as practicable after the
expiration of the Performance Cycle and the Administrator's certification under Section 9.8 above and (unless an applicable Award Agreement shall set forth one or more other dates) in any event
no later
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than
the earlier of (
i
) ninety (90) days after the end of the fiscal year in which the Performance Cycle has ended and
(
ii
) ninety (90) days after the expiration of the Performance Cycle. The Administrator shall determine and set forth in the applicable Award
Agreement whether earned Performance Shares and the value of earned Performance Units are to be distributed in the form of cash, Shares or in a combination thereof, with the value or number of Shares
payable to be determined based on the Fair Market Value of the Company Common Stock on the date of the Administrator's certification under Section 9.8 above or such other date specified in the
Award Agreement. The Administrator may, in an
Award Agreement with respect to the award or delivery of Shares, condition the vesting of such Shares on the performance of additional service.
Section 9.10
Newly Eligible Participants.
Notwithstanding anything in this Article IX to the
contrary, the Administrator shall be entitled to make such rules, determinations and adjustments as it deems appropriate with respect to any Participant who becomes eligible to receive Performance
Shares, Performance Units or other Performance Awards after the commencement of a Performance Cycle.
ARTICLE X
Deferred Share Units
Section 10.1
Grant.
Subject to Article III, the Administrator is authorized to make awards of
Deferred Share Units to any Participant selected by the Administrator at such time or times as shall be determined by the Administrator without regard to any election by the Participant to defer
receipt of any compensation or bonus amount payable to him. Upon the grant of Deferred Share Units pursuant to the Plan, the Company shall establish a notional account for the Participant and will
record in such account the number of Deferred Share Units awarded to the Participant. No Shares will be issued to the Participant at the time an award of Deferred Share Units is granted. Subject to
Article III, Deferred Share Units may become payable on a Corporate Event, Change in Control, termination of employment or on a specified date or dates or a specified event or events set forth
in the Award Agreement evidencing such Deferred Share Units.
Section 10.2
Rights as a Stockholder.
A Participant shall not be, nor have any of the rights and
privileges of, a stockholder of the Company in respect of Deferred Share Units awarded pursuant to the Plan unless and until the Shares attributable to such Deferred Share Units have been issued to
such Participant and, unless otherwise determined by the Administrator, such Participant has made such representations and provided such documents as the Administrator deems necessary or advisable to
effect compliance with all applicable provisions of the Securities Act and any other federal or state securities laws or regulations.
Section 10.3
Vesting.
Unless the Administrator provides otherwise on the Grant Date or provides
thereafter in a manner more favorable to the Participant, Deferred Share Units shall be fully vested and nonforfeitable when granted.
Section 10.4
Further Deferral Elections.
A Participant may elect to further defer receipt of Shares
issuable in respect of Deferred Share Units (or an installment of an Award) for a specified period or until a specified event and in a manner consistent with Section 409A of the Code, subject
in each case to the
Administrator's approval and to such terms as are determined by the Administrator, all in its sole discretion. Subject to any exceptions adopted by the Administrator, such election must generally be
made at least twelve (12) months prior to the prior settlement date of such Deferred Share Units (or any such installment thereof) and must defer settlement for at least five (5) years
after such prior settlement date. A further deferral opportunity does not have to be made available to all Participants, and different terms and conditions may apply with respect to the further
deferral opportunities made available to different Participants.
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Section 10.5
Settlement.
Subject to this Article X, upon the date
specified in the Award Agreement evidencing the Deferred Share Units, for each such Deferred Share Unit the Participant shall receive, as specified in the Award Agreement (and subject to satisfaction
of applicable withholding taxes), (
i
) a cash payment equal to the Fair Market Value of one (1) Share as of such payment date,
(
ii
) one (1) Share or (
iii
) any combination of clauses (i) and (ii).
ARTICLE XI
Other Stock-Based Awards
Section 11.1
Grant of Stock-Based Awards.
The Administrator is authorized to make Awards of other types
of equity-based or equity-related awards ("
Stock-Based Awards
") not otherwise described by the terms of the Plan in such amounts and subject to such
terms and conditions as the Administrator shall
determine. All Stock-Based Awards shall be evidenced by an Award Agreement. Such Stock-Based Awards may be granted as an inducement to enter the employ of the Company or any Subsidiary or in
satisfaction of any obligation of the Company or any Subsidiary to an officer or other key employee, whether pursuant to this Plan or otherwise, that would otherwise have been payable in cash or in
respect of any other obligation of the Company. Such Stock-Based Awards may entail the transfer of actual Shares, or payment in cash or otherwise of amounts based on the value of Shares and may
include, without limitation, Awards designed to comply with or take advantage of the applicable local laws of jurisdictions other than the United States.
Section 11.2
Sale of Company Common Stock to Service Providers.
The Administrator, acting in its sole
discretion, may from time to time designate one or more Service Providers to whom an offer to sell Shares shall be made and the terms and conditions thereof,
provided
,
however
, that the price per Share shall not be less than the Fair Market Value of such Shares
on the date any such offer is accepted. Any Shares sold under this Section 11.2 shall be subject to the same limitations, restrictions and administration hereunder as would apply to any Shares
issued pursuant to the exercise of an Option under this Plan including, without limitation, conditions and restrictions set forth in Section 7.6 above. Unless otherwise determined by the
Administrator, Shares acquired pursuant to this Section 11.2 shall also be subject to the terms and conditions of an Award Agreement, which shall be executed by the Participant and an
authorized officer.
Section 11.3
Automatic Grants for Directors.
The Administrator may institute, by resolution, grants of
automatic Awards to new and continuing Directors, with the number and type of such Awards, the frequency of grant and all related terms and conditions, including any applicable vesting conditions, as
determined by the Administrator in its sole discretion.
ARTICLE XII
Dividend Equivalents
Section 12.1
Generally.
Dividend Equivalents may be granted to Participants at such time or times as
shall be determined by the Administrator. Dividend Equivalents may be granted in tandem with other Awards, in addition to other Awards, or freestanding and unrelated to other Awards. Dividend
Equivalents may, at the discretion of the Administrator, be fully vested and nonforfeitable when granted or subject to such vesting conditions as determined by the Administrator. For the avoidance of
doubt, Dividend Equivalents with respect to Awards (including any performance-based awards) shall not be fully vested until the Awards have been earned and shall be forfeited if the related Award is
forfeited. Dividend Equivalents shall be evidenced in writing, whether as part of the Award Agreement governing the terms of the Award, if any, to which such Dividend Equivalent relates, or pursuant
to a separate Award Agreement with respect to freestanding Dividend Equivalents, in each case, containing such provisions not inconsistent with the Plan as the Administrator shall determine, including
customary representations, warranties and covenants with respect to securities law matters.
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ARTICLE XIII
Termination and Forfeiture
Section 13.1
Termination for Cause.
Unless otherwise determined by the Administrator at the Grant Date
and set forth in the Award Agreement covering the Award or otherwise in writing or determined thereafter in a manner more favorable to the Participant, if a Participant's employment or service
terminates for Cause, all Options and SARs, whether vested or unvested, and all other Awards that are unvested or unexercisable or otherwise unpaid (or were unvested or unexercisable or unpaid at the
time of occurrence of Cause) shall be immediately forfeited and canceled, effective as of the date of the Participant's termination of service.
Section 13.2
Termination for Any Other Reason.
Unless otherwise determined by the Administrator at the
Grant Date and set forth in the Award Agreement covering the Award or otherwise in writing or determined thereafter in a manner more favorable to the Participant, if a Participant's employment or
service terminates for any reason other than Cause:
(a) All
Awards that are unvested or unexercisable shall be immediately forfeited and canceled, effective as of the date of the Participant's termination of service;
(b) All
Options and SARs that are vested shall remain outstanding until the earliest of the following: (
x
) in the case of
termination for death, Disability or retirement at normal retirement age, the 180th day following the date of the Participant's death, Disability or retirement at normal retirement age,
(
y
) the three-month anniversary of the effective date of the Participant's termination for any reason other than death, Disability or retirement at
normal retirement age or (
z
) the Award's normal expiration date, after which any unexercised Options and SARs shall immediately terminate; and
(c) All
Awards other than Options and SARs that are vested shall be treated as set forth in the applicable Award Agreement (or in any more favorable manner determined by the
Administrator).
Section 13.3
Post-Termination Informational Requirements.
Before the settlement of any Award following
termination of employment or service, the Administrator may require the Participant (or the Participant's Eligible Representative, if applicable) to make such representations and provide such
documents as the Administrator deems necessary or advisable to effect compliance with Applicable Law and determine whether the provisions of Section 13.1 or Section 13.4 may apply to
such Award.
Section 13.4
Forfeiture of Awards.
Awards granted under this Plan (and gains earned or accrued in
connection with Awards) shall be subject to such generally applicable policies as to forfeiture and recoupment (including, without limitation, upon the occurrence of material financial or accounting
errors, financial or other misconduct, Competitive Activity or other conduct by the Participant that is detrimental to the business or reputation of the Company and/or its Affiliates) as may be
adopted by the Administrator or the Board from time to time and communicated to Participants. Any such policies may (in the discretion of the Administrator or the Board) be applied to outstanding
Awards at the time of adoption of such policies, or on a prospective basis only. The Administrator may specify in an Award Agreement that the Participant's rights, payments and benefits with respect
to an Award shall be subject to reduction, cancellation, forfeiture or recoupment upon the occurrence of certain events (including, without limitation, upon the occurrence of material financial or
accounting errors, financial or other misconduct, Competitive Activity or other conduct by the Participant that is detrimental to the business or reputation of the Company and/or its Affiliates). The
Participant shall also forfeit and disgorge to the Company any Awards granted or vested and any gains earned or accrued due to the exercise of Options or SARs or the sale of any Company Common Stock
to the extent required by Applicable Law or regulations in effect on or after the Effective Date, including Section 304 of the Sarbanes-Oxley Act of 2002 and Section 10D of the Exchange
Act. For the avoidance of doubt, the
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Administrator
shall have full authority to implement any policies and procedures necessary to comply with Section 10D of the Exchange Act and any rules promulgated thereunder. The
implementation of policies and procedures pursuant to this Section 13.4 and any modification of the same shall not be subject to any restrictions on amendment or modification of Awards.
Section 13.5
Clawbacks.
Awards shall be subject to any generally applicable clawback policy adopted by
the Administrator, the Board or the Company that is communicated to the Participants or any such policy adopted to comply with Applicable Law.
ARTICLE XIV
Change in Control
Section 14.1
Alternative Award.
Subject to Section 14.2, upon a Change in Control, outstanding
Awards (other than Awards that by their express terms are forfeited upon a Change in Control (e.g., by reason of performance goals not having been satisfied)) shall be honored or assumed, or
new rights shall be substituted therefor, effective following the Change in Control (such honored, assumed or substituted award, an "
Alternative Award
")
having such terms and conditions as are determined by the Administrator,
provided
that any Alternative Awards must
(
i
) include rights and entitlements substantially equivalent to or better than the rights and entitlements applicable under the Award immediately prior
to the Change in Control (except that, for avoidance of doubt, the Alternative Awards may relate to an equity interest of a direct or indirect parent of the Company or an Affiliate rather than to the
Company Common Stock); (
ii
) as to any service-based vesting requirement applicable to the Award, provide for full vesting of the Alternative Award upon
the Participant's termination of employment without Cause or in a constructive discharge during the remaining vesting period thereof (with "constructive discharge" to have such meaning as is
determined by the Administrator as to a Participant who is not otherwise covered by a Good Reason provision); (
iii
) as to any performance-based vesting
requirement applicable to the Award, provide for vesting of the Alternative Award at target levels upon the Participant's termination of employment without Cause or in a constructive discharge during
the remaining vesting period thereof; (
iv
) as to any Alternative Awards that are stock options, have identical or better methods of payment of the
exercise price thereof; and (
iv
) provide for a substantially equivalent method by which the Participant is able to receive cash in respect of the
Alternative Awards (or such other method as may be agreed by the Administrator and the counterparty in the Change in Control). If the Administrator determines in connection with a Change in Control
that performance-based vesting requirements applicable to an Award will no longer operate as intended following the Change in Control or will no longer provide the intended incentive, the
Administrator may modify such performance-based vesting requirements or impose new performance-based vesting requirements so long as the Administrator determines that such modified or new
performance-based vesting requirements are not materially more difficult to achieve than the performance-based vesting requirements applicable to the Award immediately prior to the Change in Control.
Section 14.2
Accelerated Vesting and Payment.
In the event that the Administrator determines, whether in
an Award Agreement or thereafter, including at the time of or in connection with a Change in Control, that the provisions of Section 14.1 shall not (or shall no longer) apply, then the
Administrator may determine, in whole or in part and in any combination, that, upon a Change in Control:
(a) each
vested and unvested Option or SAR shall be canceled in exchange for a payment equal to the excess, if any, of the Change in Control Price over the applicable Option
Price or Base Price;
(b) the
vesting restrictions applicable to all other unvested Awards (other than freestanding Dividend Equivalents not granted in connection with another Award) shall lapse,
all such Awards
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shall
vest and become non-forfeitable and be canceled in exchange for a payment equal to the Change in Control Price;
(c) all
other Awards (other than freestanding Dividend Equivalents not granted in connection with another Award) that were vested prior to the Change in Control but that
have not been settled or converted into Shares prior to the Change in Control shall be canceled in exchange for a payment equal to the Change in Control Price; and
(d) all
freestanding Dividend Equivalents not granted in connection with another Award shall be cancelled without payment therefor.
To
the extent any portion of the Change in Control Price is payable other than in cash and/or other than at the time of the Change in Control, equity holders under the Plan may (to the extent
consistent with Section 409A) receive the same time and form of payment in the Change in Control in the same proportion as the Company's stockholders, or the Administrator may, in its sole
discretion, cause equity holders under the Plan to be paid in cash at the time of the Change in Control. For avoidance of doubt, upon a Change in Control the Administrator may cancel Options and SARs
for no consideration if the aggregate Fair Market Value of the Shares subject to Options and SARs is less than or equal to the Option Price of such Options or the Base Price of such SARs.
Section 14.3
Section 409A.
Notwithstanding the broad discretion of the Administrator in
Sections 14.1 and 14.2, if any Award is subject to Section 409A of the Code and an Alternative Award would be deemed a non-compliant modification of such Award under Section 409A,
then no Alternative Award shall be provided and such Award shall instead be treated as provided in Section 14.2 or in the Award Agreement (or in such other manner determined by the
Administrator that is a compliant modification under Section 409A).
Section 14.4
Successors and Assigns.
The obligations of the Company under the Plan shall be binding upon
any successor corporation or organization resulting from the merger, consolidation or other
reorganization of the Company, or upon any successor corporation or organization succeeding to all or substantially all of the assets and business of the Company and its Affiliates, taken as a whole.
ARTICLE XV
Other Provisions
Section 15.1
Awards Not Transferable.
Unless otherwise agreed to in writing by the Administrator, no
Award or interest or right therein or part thereof shall be liable for the debts, contracts or engagements of the Participant or his or her successors in interest or shall be subject to disposition by
transfer, alienation, anticipation, pledge, encumbrance, assignment or any other means whether such disposition be voluntary or involuntary or by operation of law, by judgment, levy, attachment,
garnishment or any other legal or equitable proceedings (including bankruptcy), and any attempted disposition thereof shall be null and void and of no effect;
provided
,
however
, that nothing in this Section 15.1 shall prevent transfers by will or by the
applicable laws of descent and distribution or, with the prior approval of the Company's General Counsel or the Administrator, estate planning transfers.
Section 15.2
Amendment, Suspension or Termination of the Plan or Award Agreements.
(a) The
Plan may be wholly or partially amended or otherwise modified, suspended or terminated at any time or from time to time by the Administrator;
provided
that without the approval by a majority of the
shares entitled to vote at a duly constituted meeting of shareholders of the Company, no
amendment or modification to the Plan may (
i
) except as otherwise expressly provided in Section 4.3, increase the number of Shares subject to the
Plan or the individual Award limitations specified in Section 4.2; (
ii
) modify the class of persons eligible for participation in the
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Plan;
or (
iii
) materially modify the Plan in any other way that would require shareholder approval under Applicable Law.
(b) Except
as otherwise expressly provided in the Plan, neither the amendment, suspension nor termination of the Plan shall, without the consent of the holder of the Award,
adversely alter or impair any rights or obligations under any Award theretofore granted. Except as provided by Section 4.3, notwithstanding the foregoing, the Administrator at any time, and
from time to time, may amend the terms of any one or more existing Award Agreements,
provided
,
however
,
that the rights of a Participant under an Award Agreement shall not be adversely impaired without the Participant's written consent. The Company shall provide a Participant with notice of any
amendment made to such Participant's existing Award Agreement in accordance with the terms of this Section 15.2(b).
(c) Notwithstanding
any provision of the Plan to the contrary, in no event shall adjustments made by the Administrator pursuant to Section 4.3 or the application of
Section 13.5, Section 14.1, Section 14.2, Section 15.7 or Section 15.14 to any Participant constitute an amendment of the Plan or of any Award Agreement requiring
the consent of any Participant.
(d) No
Award may be granted during any period of suspension nor after termination of the Plan, and in no event may any Award be granted under this Plan after the expiration
of ten (10) years from the Effective Date.
Section 15.3
Effect of Plan upon Other Award and Compensation Plans.
The adoption of this Plan shall not
affect any other compensation or incentive plans in effect for the Company or any of its Subsidiaries. Nothing in this Plan shall be construed to limit the right of the Company or any of its
Subsidiaries (
a
) to establish any other forms of incentives or compensation for Service Providers or
(
b
) to grant or assume options or restricted stock other than under this Plan in connection with any proper corporate purpose, including, but not
by way of limitation, the grant or assumption of options or restricted stock in connection with the acquisition by purchase, lease, merger, consolidation or otherwise, of the business, stock or assets
of any corporation, firm or association.
Section 15.4
No Fractional Shares.
No fractional shares of Common Stock shall be issued or delivered
pursuant to the Plan. The Administrator shall determine whether cash, additional Awards or other securities or properties shall be issued or paid in lieu of fractional shares of Common Stock or
whether any fractional shares should be rounded, forfeited or otherwise eliminated.
Section 15.5
At-Will Employment.
Nothing in the Plan or any Award Agreement hereunder shall confer upon
the Participant any right to continue as a Service Provider of the Company or any of its Subsidiaries or shall interfere with or restrict in any way the rights of the Company and any of its
Subsidiaries, which are hereby expressly reserved, to discharge any Participant at any time for any reason whatsoever, with or without notice, and with or without Cause.
Section 15.6
Titles.
Titles are provided herein for convenience only and are not to serve as a basis for
interpretation or construction of the Plan.
Section 15.7
Conformity to Securities Laws.
The Plan is intended to conform to the extent necessary with
all provisions of the Securities Act and the Exchange Act and any and all regulations and rules promulgated under any of the foregoing, to the extent the Company, any of its Subsidiaries or any
Participant is subject to the provisions thereof. Notwithstanding anything herein to the contrary, the Plan shall be administered, and Awards shall be granted and may be exercised, only in such a
manner as to conform to such laws, rules and regulations. To the extent permitted by applicable law, the Plan and Awards granted hereunder shall be deemed amended to the extent necessary to conform to
such laws, rules and regulations.
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Section 15.8
Term of Plan.
The Plan became effective on the date as of which it was initially adopted by
the Board (the "
Effective Date
") and shall continue in effect, unless sooner terminated pursuant to Section 15.2, until the tenth
(10
th
) anniversary of the Effective Date. No Award shall be granted pursuant to the Plan after such date, but Awards theretofore granted may extend beyond that date. The provisions of
the Plan shall continue thereafter to govern all outstanding Awards. The Plan has been amended and restated, as set forth herein, effective March 8, 2017, subject to approval by the
stockholders of the Company at the Company's 2017 annual meeting.
Section 15.9
Governing Law.
To the extent not preempted by federal law, the Plan shall be construed in
accordance with and governed by the laws of the State of Delaware regardless of the application of rules of conflict of law that would apply the laws of any other jurisdiction.
Section 15.10
Severability.
In the event any portion of the Plan or any action taken pursuant thereto
shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or
invalid provisions had not been included, and the illegal or invalid action shall be null and void.
Section 15.11
Governing Documents.
In the event of any express contradiction between the Plan and any
Award Agreement or any other written agreement between a Participant and the Company or any Subsidiary of the Company that has been approved by the Administrator, the express terms of the Plan shall
govern, unless it is expressly specified in such Award Agreement or other written document that such express provision of the Plan shall not apply.
Section 15.12
Withholding Taxes.
In addition to any rights or obligations with respect to Withholding
Taxes under the Plan or any applicable Award Agreement, the Company or any Subsidiary employing a Service Provider shall have the right to withhold from the Service Provider, or otherwise require the
Service Provider or an assignee to pay, any Withholding Taxes arising as a result of grant, exercise,
vesting or settlement of any Award or any other taxable event occurring pursuant to the Plan or any Award Agreement, including, without limitation, to the extent permitted by law, the right to deduct
any such Withholding Taxes from any payment of any kind otherwise due to the Service Provider or to take such other actions (including, without limitation, withholding any Shares or cash deliverable
pursuant to the Plan or any Award) as may be necessary to satisfy such Withholding Taxes;
provided
,
however
, that in the event that the Company withholds
Shares issued or issuable to the Participant to satisfy all or any portion of the Withholding
Taxes, the Company shall withhold a number of whole Shares having a Fair Market Value, determined as of the date of withholding, not in excess of the minimum of tax required to be withheld by
Applicable Law (or such lower amount as may be necessary to avoid liability award accounting) and any remaining amount shall be remitted in cash or withheld; and
provided
,
further
, that with respect to any Award subject to Section 409A of the Code, in no
event shall Shares be withheld pursuant to this Section 15.12 (other than upon or immediately prior to settlement in accordance with the Plan and the applicable Award Agreement) other than to
pay taxes imposed under the U.S. Federal Insurance Contributions Act (FICA) and any associated U.S. federal withholding tax imposed under Section 3401 of the Code and in no event shall the
value of such Shares (other than upon immediately prior to settlement) exceed the amount of the tax imposed under FICA and any associated U.S. federal withholding tax imposed under Section 3401
of the Code. The Participant shall be responsible for all Withholding Taxes and other tax consequences of any Award granted under this Plan.
Section 15.13
Unfunded Plan.
The Plan shall be unfunded. The Company shall not be required to establish
any special or separate fund or to segregate any assets to assure the performance of its obligations under the Plan.
Section 15.14
Section 409A.
To the extent that the Administrator determines that any Award granted
under the Plan is subject to Section 409A of the Code, the Award Agreement evidencing such Award shall incorporate the terms and conditions required by Section 409A of the Code. To the
extent
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applicable,
the Plan and Award Agreements shall be interpreted in accordance with Section 409A of the Code and Department of Treasury regulations and other interpretive guidance issued
thereunder, including without limitation any such regulations or other guidance that may be issued after the adoption of the Plan. Notwithstanding any provision of the Plan to the contrary, in the
event that following the adoption of the Plan, the Administrator determines that any Award may be subject to Section 409A of the Code and related regulations and Department of Treasury guidance
(including such Department of Treasury guidance as may be issued after the adoption of the Plan), the Administrator may adopt such amendments to the Plan and the applicable Award Agreement or adopt
other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, that the Administrator determines are necessary or appropriate to
(
a
) exempt the Award from Section 409A of the Code and/or preserve the intended tax treatment of the benefits provided with respect to the Award,
(
b
) comply with the requirements of Section 409A of the Code and related Department of Treasury guidance or
(
c
) comply with any correction procedures available with respect to Section 409A of the Code. Notwithstanding anything else contained in this
Plan or any Award
Agreement to the contrary, if a Service Provider is a "specified employee" as determined pursuant to Section 409A under any Company Specified Employee policy in effect at the time of the
Service Provider's "separation from service" (as determined under Section 409A) or, if no such policy is in effect, as defined in Section 409A of the Code), then, to the extent necessary
to comply with, and avoid imposition on such Service Provider of any tax penalty imposed under, Section 409A of the Code, any payment required to be made to a Service Provider hereunder upon or
following his or her separation from service shall be delayed until the first to occur of (
i
) the six-month anniversary of the Service Provider's
separation from service and (
ii
) the Service Provider's death. Should payments be delayed in accordance with the preceding sentence, the accumulated
payment that would have been made but for the period of the delay shall be paid in a single lump sum during the ten-day period following the lapsing of the delay period. Notwithstanding the foregoing,
neither the Company nor the Administrator shall have any obligation to take any action to prevent the assessment of any excise tax or penalty on any Participant under Section 409A of the Code
and neither the Company nor the Administrator shall have any liability to any Participant for such tax or penalty. No provision of this Plan or an Award Agreement shall be construed to indemnify any
Service Provider for any taxes incurred by reason of Section 409A (or timing of incurrence thereof), other than an express indemnification provision therefor.
Section 15.15
Section 16.
It is the intent of the Company that the Plan satisfy, and be
interpreted in a manner that satisfies, the applicable requirements of Rule 16b-3 as promulgated under Section 16 of the Exchange Act so that Participants will be entitled to the benefit
of Rule 16b-3, or any other rule promulgated under Section 16 of the Exchange Act, and will not be subject to short-swing liability under Section 16 of the Exchange Act.
Accordingly, if the operation of any provision of the Plan would conflict with the intent expressed in this Section 15.15, such provision to the extent possible shall be interpreted and/or
deemed amended so as to avoid such conflict.
Section 15.16
Section 162(m).
To the extent the Administrator issues any Award that is intended to
be exempt from the deduction limitation of Section 162(m) of the Code, the Administrator may, without shareholder or grantee approval, amend the Plan or the relevant Award Agreement
retroactively or prospectively to the extent it determines necessary in order to comply with any subsequent clarification of Section 162(m) of the Code required to preserve the Company's
federal income tax deduction for compensation paid pursuant to any such Award.
Section 15.17
Beneficiary Designation.
Each Participant under the Plan may from time to time name any
beneficiary or beneficiaries by whom any right under the Plan is to be exercised in case of such Participant's death. Each designation will revoke all prior designations by the same Participant, shall
be in a form reasonably prescribed by the Administrator and shall be effective only when filed by the Participant in writing with the Company during the Participant's lifetime.
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Section 15.18
Notices.
Except as provided otherwise in an Award Agreement, all notices and other
communications required or permitted to be given under this Plan or any Award Agreement shall be in writing and shall be deemed to have been given if delivered personally, sent by email or any other
form of electronic transfer approved by the Administrator, sent by certified or express mail, return receipt requested, postage prepaid, or by any recognized international equivalent of such delivery,
(
i
) in the case of notices and communications to the Company, to 1000 Abernathy Road NE, Building 400, Suite 1700, Atlanta, GA 30328 to the
attention of the Corporate Secretary of the Company or (
ii
) in the case of a Participant, to the last known address, or email address or, where the
individual is an employee of the Company or one of its subsidiaries, to the individual's workplace address or email address or by other means of electronic transfer acceptable to the Administrator.
All such notices and communications shall be deemed to have been received on the date of delivery, if sent by email or any other form of electronic transfer, at the time of dispatch or on the third
business day after the mailing thereof.
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APPENDIX B
VERITIV CORPORATION
2015 ANNUAL INCENTIVE PLAN
(As Amended and Restated, Effective March 8, 2017)
I. PURPOSES
The purposes of the Veritiv Corporation 2015 Annual Incentive Plan (the "
Plan
") are to retain
and motivate the officers and other employees of Veritiv Corporation (the "
Company
") and its subsidiaries who have been designated by the Committee to
participate in the Plan for a specified Performance Period by providing them with the opportunity to earn incentive payments based upon the extent to which specified performance goals have been
achieved or exceeded for an applicable Performance Period. It is intended that all amounts payable to Participants who are "covered employees" within the meaning of Section 162(m) of the Code
will constitute "qualified performance-based compensation" within the meaning of U.S. Treasury regulations promulgated thereunder, and the Plan and the terms of any awards hereunder shall be so
interpreted and construed to the maximum extent possible.
II. CERTAIN DEFINITIONS
"
Board
" means the Board of Directors of the Company.
"
Code
" means the Internal Revenue Code of 1986, as amended.
"
Committee
" means the Compensation and Leadership Development Committee of the Board or such other committee or subcommittee designated by
the Board or the Compensation and Leadership Development Committee that satisfies any then applicable requirements of the New York Stock Exchange, or such other principal national stock exchange on
which the common stock of the Company is then traded, to constitute a compensation committee, and which consists of two or more members of the Board, each of whom is intended to be an "outside
director" within the meaning of Section 162(m) of the Code.
"
Company
" means Veritiv Corporation, a Delaware corporation, and any successor thereto.
"
Competitive Activity
" means a Participant's material breach of restrictive covenants relating to noncompetition, nonsolicitation (of
customers or employees) or preservation of confidential information, or other covenants having the same or similar scope, included in an award under this Plan, an award under the Company's 2014
Omnibus Incentive Plan or any agreement to which the Participant and the Company or any of its subsidiaries is a party.
"
Determination Period
" means, with respect to any Performance Period, a period commencing on or before the first day of the Performance
Period and ending not later than the earlier of (i) 90 days after the commencement of the Performance Period and (ii) the date on which twenty-five percent (25%) of the
Performance Period has been completed. Any action required to be taken within a Determination Period may be taken at a later date if permissible under Section 162(m) of the Code or regulations
promulgated thereunder, as they may be amended from time to time.
"
Individual Award Opportunity
" means the potential of a Participant to receive an incentive payment based on the extent to which the
applicable performance goals for a Performance Period shall have been satisfied. An Individual Award Opportunity may be expressed in U.S. dollars or pursuant to a formula that is consistent with the
provisions of the Plan.
"
Participant
" means an officer or other employee of the Company or any of its subsidiaries who is designated by the Committee to
participate in the Plan for a Performance Period, in accordance with Article III.
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"
Performance Period
" means any period commencing on or after January 1, 2015, for which performance goals are established pursuant
to Article IV. A Performance Period may be coincident with one or more fiscal years of the Company or a portion of any fiscal year of the Company.
"
Plan
" means the Veritiv Corporation 2015 Annual Incentive Plan, as set forth herein, as it may be amended from time to time.
III. ADMINISTRATION
3.1.
General
. The Plan shall be administered by the Committee, which shall have the full
power and authority to interpret, construe and administer the Plan and any Individual Award Opportunity granted hereunder (including reconciling any inconsistencies, correcting any defaults and
addressing any
omissions). The Committee's interpretation, construction and administration of the Plan and all its determinations hereunder shall be final, conclusive and binding on all persons for all purposes.
3.2.
Powers and Responsibilities
. The Committee shall have the following discretionary
powers, rights and responsibilities in addition to those described in
Section 3.1
:
-
(a)
-
to
designate within the Determination Period the Participants for a Performance Period;
-
(b)
-
to
establish within the Determination Period the performance goals and other terms and conditions that are to apply to each Participant's Individual Award
Opportunity, including the extent to which any incentive payment shall be made to a Participant in the event of (A) the Participant's termination of employment with the Company due to
disability, retirement, death or any other reason or (B) a change of control of the Company;
-
(c)
-
to
determine the form of payment of Individual Award Opportunities, which may include, without limitation, cash, shares of Company common stock or stock-based awards
granted under the Company's equity incentive plan as in effect from time to time, or any other property approved by the Committee;
-
(d)
-
to
determine and certify in writing prior to the payment under any Individual Award Opportunity that the performance goals for a Performance Period and other
material terms applicable to the Individual Award Opportunity have been satisfied;
-
(e)
-
subject
to the requirements of Section 409A of the Code, to decide whether, and under what circumstances and subject to what terms, Individual Award
Opportunities are to be paid on a deferred basis, including whether such a deferred payment shall be made solely at the Committee's discretion or whether a Participant may elect deferred payment; and
-
(f)
-
to
adopt, revise, suspend, waive or repeal, when and as appropriate, in its sole and absolute discretion, such administrative rules, guidelines and procedures for
the Plan as it deems necessary or advisable to implement the terms and conditions of the Plan.
3.3.
Delegation of Power
. The Committee may delegate some or all of its power and
authority hereunder to the Chief Executive Officer or other executive officer of the Company as the Committee deems appropriate; provided, however, that with respect to any person who is a "covered
employee" within the meaning of Section 162(m) of the Code or who, in the Committee's judgment, is likely to be a covered employee at any time during the applicable Performance Period, only the
Committee shall be permitted to (i) designate such person to participate in the Plan for such Performance Period, (ii) establish performance goals and Individual Award Opportunities for
such person, and (iii) certify the achievement of such performance goals.
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IV. PERFORMANCE GOALS
The Committee shall establish within the Determination Period of each Performance Period one or more objective performance goals for each
Participant or for any group of Participants (or both), provided that the outcome of each goal is substantially uncertain at the time the Committee establishes such goal. At the discretion of the
Committee, the performance goals may be based upon (alone or in combination): (a) net or operating income (before or after taxes) or other income measures; (b) earnings before taxes,
interest, depreciation and/or amortization ("
EBITDA
"); (c) basic or diluted earnings per share or improvement in basic or diluted earnings per
share; (d) sales (including, but not limited to, total sales, net sales and revenue growth); (e) profit (including, but not limited to, net profit, gross profit, operating profit, net
operating profit, economic profit or other corporate profit measures); (f) financial return measures (including, but not limited to, return on assets, income, capital, invested capital, equity,
investments, sales and revenue); (g) cash flow measures (including, but not limited to, operating cash flow, free cash flow, cash flow return on equity and cash flow return on investment);
(h) productivity ratios (including, but not limited to, measuring liquidity, profitability and leverage); (i) share price (including, but not limited to, growth measures and total
shareholder return); (j) expense/cost management targets (including, but not limited, to expense management, expense ratio, expense efficiency ratios or other expense measures);
(k) margins (including, but not limited to, operating margin, net income margin, cash margin, gross, net or operating profit margins and EBITDA margins); (l) operating efficiency;
(m) market share or market penetration; (n) customer targets (including, but not limited to, customer growth and customer satisfaction); (o) working capital targets or
improvements; (p) economic value added; (q) balance sheet metrics (including, but not limited to, inventory, inventory turns, receivables turnover, net asset turnover, total debt, net
debt, debt reduction, retained earnings, year-end cash, cash conversion cycle and ratio of debt to equity or to EBITDA); (r) workforce targets (including, but not limited to, diversity goals,
employee engagement or satisfaction, employee retention and workplace health and safety goals); (s) implementation, completion or attainment of measurable objectives with respect to research
and development, key products or key projects, lines of business, acquisitions and divestitures and strategic plan development and/or implementation; (t) comparisons with various stock market
indices, peer companies or industry groups or classifications with regard to one more of these criteria; (u) improvements in capital structure; (v) business expansion or consolidation
(acquisitions and
divestitures); (w) internal rate of return or increase in net present value; (x) productivity measures; (y) cost reduction measures or, for any period of time in which
Section 162(m) is not applicable to the Company and the Plan, or at any time in the case of (A) persons who are not "covered employees" under Section 162(m) of the Code or
(B) awards (whether or not to "covered employees") not intended to qualify as performance-based compensation under Section 162(m) of the Code, such other criteria as may be determined by
the Committee.
Performance
goals may be established on a Company-wide basis or with respect to one or more subsidiaries or affiliates or business units, divisions, regions, departments, functions or
products within the Company, a subsidiary or affiliate and may be expressed in absolute terms, or an adjusted basis, in percentages, or in terms of growth from period to period or growth rates over
time, or measured relative to (i) current internal targets or budgets, (ii) the past performance of the Company (including the performance of one or more subsidiaries, divisions or
operating units), (iii) the performance of one or more similarly situated companies, (iv) the performance of an index covering a peer group of companies or (v) other external
measures of the selected performance criteria. Performance goals need not be based upon an increase or positive result under a business criterion and could include, for example, the maintenance of the
status quo or the limitation of economic losses (measured, in each case, by reference to a specific business criterion). Any performance objective may measure performance on an individual basis, as
appropriate. The Committee may provide for a threshold level of performance below which no payment will be made, and a maximum level of performance above which no additional payments will be made, and
it may provide for differing amounts of payments for different levels of performance. The applicable performance goals set forth above may be applied on a
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pre-
or post-tax basis and may be established or adjusted in accordance with Section 162(m) of the Code to include or exclude objectively determinable components of any performance goal,
including, without limitation, "non-recurring items" as determined under U.S. generally accepted accounting principles, as identified in the financial statements, notes to the financial statements or
management's discussion and analysis in the annual report, and the charges or costs associated with restructurings of the Company, impairments, debt refinancing costs, noncash items, discontinued
operations, capital gains and losses, dividends, share repurchases, other unusual, non-recurring or infrequently occurring items, and the cumulative effects of changes in the law or accounting
principles. Except in the case of awards to "covered employees" intended to be performance-based compensation under Section 162(m) of the Code, the Committee may also adjust the performance
goals for any Performance Period as it deems equitable in recognition of unusual or non-recurring events affecting the Company, changes in applicable tax laws or accounting principles, or such other
factors as the Committee may determine.
V. INDIVIDUAL AWARD OPPORTUNITIES
5.1.
Terms
. At the time performance goals are established for a Performance Period, the
Committee also shall establish an Individual Award Opportunity for each Participant or group of Participants, which shall be based on the achievement of one or more specified targets of performance
goals. The targets shall be expressed in terms of an objective formula or standard and the Individual Award Opportunity may, at the discretion of the Committee, be based upon the Participant's annual
base salary or pay level midpoint or a multiple thereof. In all cases the Committee shall have the sole and absolute discretion to reduce the amount of any payment under any Individual Award
Opportunity that would otherwise be made to any Participant or to decide that no payment shall be made, and the Committee may in its sole discretion establish secondary performance goals, that need
not be specified in
Article IV
of the Plan, which the Committee may use as guidelines in making the decision whether to reduce any such payment.
No Participant shall receive a payment under the Plan with respect to any fiscal year of the Company in excess of $10,000,000, which maximum amount shall be proportionately increased or decreased with
respect to Performance Periods that are more or less than one year in duration.
5.2.
Incentive Payments
. Subject to
Section 3.2(e)
, payments under Individual Award
Opportunities shall be made within 2
1
/
2
months after the end of the Performance
Period for which the incentive awards are payable, except that no such payment shall be made unless and until the Committee, based to the extent applicable on the Company's audited consolidated
financial statements for such Performance Period (as prepared and reviewed by the Company's independent public accountants), has certified in writing the extent to which the applicable performance
goals for such Performance Period have been satisfied.
5.3.
Forfeiture of Awards
.
Awards granted under this Plan shall
be subject to such generally applicable policies as to forfeiture and recoupment (including, without limitation, upon the occurrence of material financial or accounting errors, financial or other
misconduct, Competitive Activity or other conduct by a Participant that is detrimental to the business or reputation of the Company and/or its affiliates) as may be adopted by the Committee or the
Board from time to time and communicated to Participants. Any such policies may (in the discretion of the Committee or the Board) be applied to outstanding awards at the time of adoption of such
policies, or on a prospective basis only. The Committee may specify that a Participant's rights, payments and benefits with respect to an award shall be subject to reduction, cancellation, forfeiture
or recoupment upon the occurrence of certain events (including, without limitation, upon the occurrence of material financial or accounting errors, financial or other misconduct, Competitive Activity
or other conduct by the Participant that is detrimental to the business or reputation of the Company and/or its affiliates). A Participant shall also forfeit and disgorge to the Company any awards
granted or paid to the extent required by applicable law or regulations in effect on or after the effective date of the Plan, including Section 304 of the Sarbanes-Oxley Act of
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2002
and Section 10D of the Securities Exchange Act of 1934, as amended (the "
Exchange Act
"). For the avoidance of doubt, the Committee shall
have full authority to implement any policies and procedures necessary to comply with Section 10D of the Exchange Act and any rules promulgated thereunder. The implementation of policies and
procedures pursuant to this Section 5.3 and any modification of the same shall not be subject to any restrictions on amendment or modification of awards.
5.4.
Clawbacks.
Awards shall be subject to any generally applicable clawback policy
adopted by the Committee, the Board or the Company that is communicated to Participants or any such policy adopted to comply with applicable law.
VI. GENERAL
6.1.
Effective Date and Term of Plan
. The Plan was submitted to the stockholders of the
Company for approval at the 2015 annual meeting of stockholders and, subject to approval by the affirmative vote of the holders of a majority in voting power of the shares of common stock of the
Company entitled to vote and represented in person or by proxy at the annual meeting, become effective for Performance Periods beginning on and after January 1, 2015. This Plan may be
terminated at any time by the Committee. The Plan has been amended and restated, as set forth herein, effective March 8, 2017, subject to approval by the affirmative vote of the holders of a
majority in voting power of the shares of common stock of the Company entitled to vote and represented in person or by proxy at the Company's 2017 annual meeting. In the event that this Plan, as
amended and restated, is not approved by the stockholders of the Company, the amendment and restatement of this Plan shall be null and void.
6.2.
Amendment or Termination of Plan
. The Committee may amend or terminate this Plan as
it shall deem advisable, subject to any requirement of stockholder approval required by applicable law, rule or regulation, including Section 162(m) of the Code.
6.3.
Non-Transferability of Awards
. No award under the Plan shall be transferable other
than by will, the laws of descent and distribution or pursuant to beneficiary designation procedures approved by the Company. Except to the extent permitted by the foregoing sentence, no award may be
sold, transferred, assigned, pledged, hypothecated, encumbered or otherwise disposed of (whether by operation of law or otherwise) or be subject to execution, attachment or similar process. Upon any
attempt to sell, transfer,
assign, pledge, hypothecate, encumber or otherwise dispose of any such award, such award and all rights thereunder shall immediately become null and void.
6.4.
Tax Withholding
. The Company shall have the right to require, prior to the payment
of any amount pursuant to an award made hereunder, payment by the Participant of any Federal, state, local or other taxes which may be required to be withheld or paid in connection with such award.
6.5.
No Right of Participation or Employment
. No person shall have any right to
participate in this Plan. Neither this Plan nor any award made hereunder shall confer upon any person any right to continued employment by the Company, any subsidiary or any affiliate of the Company
or affect in any manner the right of the Company, any subsidiary or any affiliate of the Company to terminate the employment of any person at any time without liability hereunder.
6.6.
Designation of Beneficiary
. If permitted by the Company, a Participant may file
with the Company a written designation of one or more persons as such Participant's beneficiary or beneficiaries (both primary and contingent) in the event of the Participant's death. Each beneficiary
designation shall become effective only when filed in writing with the Company during the Participant's lifetime on a form prescribed by the Company. The spouse of a married Participant domiciled in a
community property jurisdiction shall join in any designation of a beneficiary other than such spouse. The filing with the Company of a new beneficiary designation shall cancel all previously filed
beneficiary
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designations.
If a Participant fails to designate a beneficiary, or if all designated beneficiaries of a Participant predecease the Participant, then each outstanding award shall be payable to the
Participant's executor, administrator, legal representative or similar person.
6.7.
Governing Law
. This Plan and each award hereunder, and all determinations made and
actions taken pursuant thereto, to the extent not otherwise governed by the Code or the laws of the United States, shall be governed by the laws of the State of Delaware and construed in accordance
therewith without giving effect to principles of conflicts of laws.
6.8.
Other Plans
. Neither the adoption of the Plan nor the submission of the Plan to the
Company's stockholders for their approval shall be construed as limiting the power of the Board or the Committee to adopt such other incentive arrangements as it may otherwise deem appropriate.
6.9.
Binding Effect
. The Plan shall be binding upon the Company and its successors and
assigns and the Participants and their beneficiaries, personal representatives and heirs. If the Company becomes a party to any merger, consolidation or reorganization, then the Plan shall remain in
full force and effect as an obligation of the Company or its successors in interest, unless the Plan is amended or terminated pursuant to
Section 6.2
.
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MMMMMMMMMMMM . MMMMMMMMMMMMMMM C123456789 000004 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext ENDORSEMENT_LINE______________ SACKPACK_____________ Electronic Voting Instructions Available 24 hours a day, 7 days a week! Instead of mailing your proxy, you may choose one of the voting methods outlined below to vote your proxy. VALIDATION DETAILS ARE LOCATED BELOW IN THE TITLE BAR. Proxies submitted by the Internet or telephone must be received by 11:59 p.m., Eastern Daylight Time, on May 24, 2017. MR A SAMPLE DESIGNATION (IF ANY) ADD 1 ADD 2 ADD 3 ADD 4 ADD 5 ADD 6 Vote by Internet Go to www.envisionreports.com/VRTV Or scan the QR code with your smartphone Follow the steps outlined on the secure website Vote by telephone Call toll free 1-800-652-VOTE (8683) within the USA, US territories & Canada on a touch tone telephone Follow the instructions provided by the recorded message Using a black ink pen, mark your votes with an X as shown in this example. Please do not write outside the designated areas. q IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q Proposals The Board of Directors recommends a vote FOR all nominees and FOR Proposals 2, 3, 4 and 5. 1. Election of Directors: + For Against Abstain For Against Abstain For Against Abstain 01 - Daniel T. Henry 02 - Liza K. Landsman 03 - Mary A. Laschinger 04 - Tracy A. Leinbach 05 - William E. Mitchell 06 - Michael P. Muldowney 07 - Charles G. Ward, III 08 - John J. Zillmer For Against Abstain ForAgainst Abstain 2. To ratify the appointment of Deloitte & Touche LLP as the Companys independent registered public accounting firm for 2017. 4. To approve the Veritiv Corporation 2014 Omnibus Incentive Plan, as amended and restated to increase the number of shares available for issuance under the plan and to modify the performance goals that may be used to grant awards that are intended to qualify as performance-based compensation. 3. To approve, on an advisory basis, the Companys executive compensation. 5. To approve the Veritiv Corporation 2015 Annual Incentive Plan, as amended and restated to modify the performance goals that may be used to grant awards that are intended to qualify as performance-based compensation. Non-Voting Items Change of Address Please print your new address below. Comments Please print your comments below. Meeting Attendance Mark the box to the right if you plan to attend the Annual Meeting. leted for your vote to be counted. Date and Sign Below Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title. Date (mm/dd/yyyy) Please print date below. Signature 1 Please keep signature within the box. Signature 2 Please keep signature within the box. MMMMMMMC 1234567890 J N T MR A SAMPLE (THIS AREA IS SET UP TO ACCOMMODATE 140 CHARACTERS) MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND + 1 U P X3 2 7 7 0 0 1 02KL6A MMMMMMMMM C Authorized Signatures This section must be comp B A Annual Meeting Proxy Card1234 5678 9012 345 X IMPORTANT ANNUAL MEETING INFORMATION
. q IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q Proxy Veritiv Corporation Notice of 2017 Annual Meeting of Stockholders Le Méridien Atlanta Perimeter 111 Perimeter Center West, Atlanta GA 30346 Proxy Solicited by Board of Directors for Annual Meeting May 25, 2017 Mary A. Laschinger and Mark W. Hianik, or either of them, each with the power of substitution, are hereby authorized to represent and vote the shares of the undersigned, with all the powers which the undersigned would possess if personally present, at the Annual Meeting of Stockholders of Veritiv Corporation to be held on May 25, 2017 or at any postponement or adjournment thereof. This proxy, when properly executed and returned, will be voted in the manner directed herein by the undersigned stockholder. If this proxy is properly executed and returned but no direction is made, this proxy will be voted FOR all of the nominees for director in proposal 1 and FOR proposals 2, 3, 4 and 5. Whether or not direction is made, this proxy, when properly executed, will be voted in the discretion of the proxy holders upon such other business as may properly come before the Annual Meeting of Stockholders or any adjournment or postponement thereof. The undersigned hereby revokes all proxies previously given by the undersigned to vote at the Annual Meeting of Stockholders or any adjournment or postponement thereof. In their discretion, the proxy holders are authorized to vote upon such other business as may properly come before the meeting. (Items to be voted appear on reverse side.)