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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Kaiser Aluminum Corporation | NASDAQ:KALU | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
1.78 | 1.89% | 96.11 | 89.75 | 100.00 | 96.47 | 93.425 | 95.83 | 156,017 | 05:00:14 |
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to §240.14a-12
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No fee required
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11
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(1)
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Title of each class of securities to which transaction applies:
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(2)
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Aggregate number of securities to which transaction applies:
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(3)
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
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(4)
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Proposed maximum aggregate value of transaction:
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(5)
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Total fee paid:
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Fee paid previously with preliminary materials:
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
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(1)
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Amount previously paid:
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(2)
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Form, Schedule or Registration Statement No.:
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(3)
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Filing Party:
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(4)
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Date Filed:
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Advance our position as the supplier of choice
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Enhance quality and depth of technical and managerial talent
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Achieve and sustain a position as a low cost producer
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Sustain financial strength and flexibility
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Pursue profitable sales growth
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Enhance our standing as a valued corporate citizen
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We maintain a strong focus on financial strength and flexibility and manage our liquidity and conservative capital structure to remain strong through the business and economic cycles.
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Our core values drive our strategic initiatives, which are translated into annual key process indicators focused on results, and our incentive compensation structure includes performance metrics to ensure we are aligned with our common goal of creating enduring value in our company for all of our stakeholders.
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We strive to be an employer of choice by providing equal opportunity employment and a non-discriminating workplace, protecting the health and safety of our employees, maintaining a positive and constructive relationship with our employees and their designated representatives, developing and empowering our employees and being responsible and active members of our communities.
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We believe it is important to the success of our business that we be good stewards of our environment and resources. To that end, we focus on both compliance and ensuring that we are taking the steps now to facilitate compliance in the future. Our focus on lean manufacturing processes helps us proactively mitigate our environmental footprint.
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Jack A. Hockema
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Alfred E. Osborne, Jr.
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Chief Executive Officer and Chairman of the Board
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Lead Independent Director
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(1)
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To elect
four
members to our board of directors for three-year terms to expire at our
2022
annual meeting of stockholders;
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(2)
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To approve, on a non-binding, advisory basis, the compensation of our named executives officers as disclosed in the accompanying Proxy Statement;
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(3)
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To ratify the selection of
Deloitte & Touche LLP
as our independent registered public accounting firm for
2019
; and
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(4)
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To consider such other business as may properly come before the Annual Meeting or any adjournments thereof.
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By Order of the Board of Directors
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John M. Donnan
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Executive Vice President - Legal,
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Compliance and Human Resources
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April 30, 2019
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Foothill Ranch, California
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Name
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Age
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Director Since
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Primary Occupation
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Independent
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Committee Membership
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Alfred E. Osborne, Jr.
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74
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2006
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Interim Dean, UCLA Anderson School of Management
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ü
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Audit
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Executive
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Nominating and Corporate Governance (Chair)
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Teresa Sebastian
(New)
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61
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N/A
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President and Chief Executive Officer of The Dominion Asset Group
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ü
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Donald J. Stebbins
(New)
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61
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N/A
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Former President and Chief Executive Officer of Superior Industries International, Inc.
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ü
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Thomas M. Van Leeuwen
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62
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2006
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Retired Director - Senior Equity Research Analyst, Deutsche Bank Securities, Inc.
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ü
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Audit
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Executive
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Compensation (Chair)
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Nominating and Corporate Governance
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COMPANY OVERVIEW
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Leading North American producer of highly engineered aluminum mill products
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Focus on demanding applications for aerospace, automotive and general industrial end-markets
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Fundamental part of business model is mitigating impact of aluminum price volatility
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Long-standing customer relationships - original equipment manufacturers, tier 1 suppliers and metal service centers
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Differentiate through broad product offering and “Best in Class” customer satisfaction
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Significant investment in talent development throughout company
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PERFORMANCE HIGHLIGHTS
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Achieved key cost position with plant & equipment investments at 2x rate of depreciation
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Maintained financial strength through business cycle, steadily increasing quarterly dividends
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Invested over $750 million in organic investments and over $140 million in bolt-on acquisitions since 2007
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Returned over $700 million to shareholders since 2007
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Solid total stockholder return ("TSR") over extended period (outperformed direct peers and S&P 600 Materials Index) with less volatility than many other industry participants
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Excellent results despite significant headwinds from aerospace supply chain destocking, high contained metal and freight costs and newly authorized tariffs
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RECORD
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RECORD
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RECORD
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NEAR RECORD
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RECORD
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Shipments
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Net Sales
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Net Income
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Adjusted Net Income*
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Value Added Revenue*
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Adjusted EBITDA*
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Earnings Per Share
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Adjusted Earnings Per Share*
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652
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$1,586
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$92
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$109
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$828
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$205
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$5.43
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$6.48
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Million lbs
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Million
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Million
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Million
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Million
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Million
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BOARD OF DIRECTORS
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Diverse and independent Board
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Robust and multi-tiered Board and Committee annual assessment process
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Utilize internal resource and/or third party to facilitate Board and Committee evaluations
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Continuing focus on identifying critical skills needed to support company strategy and succession planning
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United Steelworkers ("USW") has right to nominate 40% of our Board members
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Elected new independent director, Emily Liggett, in 2018 with significant CEO, board and manufacturing experience
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Two new highly qualified individuals have been nominated to join the board this year
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Strong support for continued proactive and effective stockholder engagement (> 50% annually)
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2018 CAPITAL ALLOCATION
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Consistent capital allocation strategy focused on organic growth, external growth and returning cash to shareholders through dividends and share repurchases
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Continued investment to further manufacturing efficiency, quality and capacity
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Acquired Imperial Machine & Tool Co. ("IMT"), a leader in multi-material additive manufacturing and machining technologies for aerospace and defense, automotive, high-tech, and general industrial applications, to further advance capability to deliver highly engineered solutions for customers
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Increased quarterly dividend for the 8th consecutive year
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Returned approximately $100 million to shareholders through share repurchases and dividends
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CONSISTENT CAPITAL ALLOCATION STRATEGY
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Cash deployment track record
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Invested ~$750M in the business since 2007 (~2x depreciation)
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Distributed >700M to stockholders since 2007
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Dividends increased each year since 2011
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~6.2 million shares repurchased at an average price of $67.42
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ENVIRONMENT & SUSTAINABILITY
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Sustainability is an integral part of our corporate values
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Our business is managed for long-term success in a manner that is economically, environmentally and socially responsible
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Our products are part of the carbon solution, facilitating light weighting and increased fuel efficiency
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Aluminum is infinitely recyclable and we have continued to increase our use of recycled scrap
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Our investments increasing our manufacturing efficiency reduce our environmental impact and the impact of our customers
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Published inaugural Corporate Sustainability Report in response to feedback from stockholders in connection with our proactive engagement efforts
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Launched new website with enhanced environmental, social and governance disclosures
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Continued proactive engagement with BlueGreen Alliance, environmental groups and others
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Executive Compensation
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Approximately 75% of CEO and COO target compensation is “at-risk”, with >50% subject to stringent performance metrics
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Approximately 65% of other NEO target compensation is “at-risk”, with >50% subject to stringent performance metrics
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Compensation programs supported by best practices and aligned with our strategic objectives and stockholder interests
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Stockholder approval of compensation consistently exceeds 90%; 93% approval in 2018
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Incentive plans' financial and performance metrics continue to demand increasing levels of performance as more fully described below in our Executive Compensation Highlights
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Advance our position as the supplier of choice
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Enhance quality and depth of technical and managerial talent
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Achieve and sustain a position as a low cost producer
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Sustain financial strength and flexibility
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Pursue profitable sales growth
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Enhance our standing as a valued corporate citizen
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•
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align the interest of our named executive officers and stockholders by tying a significant portion of compensation to enhancing stockholder return;
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attract, motivate and retain highly experienced executives with significant industry experience vital to our short-term and long-term success, profitability and growth;
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deliver a mix of fixed and at-risk compensation with the portion of compensation at risk increasing with seniority; and
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tie our executive compensation to our ability to pay and safety, quality, delivery, cost and individual performance directly linked to our strategic initiatives.
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a base salary targeted at the 50
th
percentile of our compensation peer group (1) compensating each named executive officer based on the level and scope of responsibility, individual expertise and prior experience and (2) providing a fixed amount of cash compensation upon which our named executive officers can rely;
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a short-term annual cash incentive targeted at the 50
th
percentile of our compensation peer group (1) payable only if our company achieved a certain adjusted earnings before interest, taxes, depreciation and amortization, or Adjusted EBITDA, performance level which has continued to increase, resulting in increasingly demanding performance required to realize the same or similar payouts year-over-year, (2) adjusted based on our (a) safety performance, (b) quality performance, (c) delivery performance, (d) cost performance, and, (e) in exceptional and rare instances approved by our compensation committee, individual and group performance, and (3) capped at three times target; and
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an equity-based, long-term incentive targeted at between the 50
th
and 65
th
percentile of our compensation peer group and designed to align compensation with the interests of our stockholders and to enhance retention of our named executive officers consisting of (1) restricted stock units with three-year cliff vesting and (2) performance shares, which vest, if at all, based on our performance against demanding underlying metrics over the applicable three-year performance period.
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Incentive Program
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Performance Metric
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Weighting
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Modifier
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Impact on Multiplier
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Short-Term Incentive Plan
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Adjusted EBITDA
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100%
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Safety (TCIR & LCIR)
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+/- 10%
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Quality
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+/- 10%
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Delivery
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+/- 10%
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Cost
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+/- 20%
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Individual*
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+/- 100%
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Long-Term Incentive Plan
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Total Controllable Cost
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40%
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EVA
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30%
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TSR
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30%
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Adjusted EBITDA
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FEATURES
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Pay for performance
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Adjusted EBITDA target determined based on return on net assets (excluding cash) plus depreciation
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Modifiers for safety, quality, delivery and cost performance establishing a strong linkage to strategic non-financial results
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In exceptional and rare instances approved by our compensation committee, individual adjustment up to plus or minus 100% based on actual performance, including individual, facility, and/or functional area performance
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No payout unless we:
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(1)
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achieve the threshold Adjusted EBITDA goal
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(2)
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generate positive adjusted net income
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Maximum payout capped at three times the target
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Rigorous financial performance goals - target increases with investments and increasingly higher net assets and depreciation
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The Adjusted EBITDA targets under our short- term incentive plan reflect the Adjusted EBITDA required to achieve 7.5%, 15% and 35% returns on our net assets (excluding cash) at the threshold, target and maximum payout levels and also recover our depreciation. As we have continued to invest in our business our net assets and depreciation have continued to grow, and, as a result, the Adjusted EBITDA targets have continued to increase each year. To that end, our Adjusted EBITDA performance at the target level increased 10% from 2017 to 2018 and 21% from 2016 to 2018.
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The table on the right illustrates our annual Adjusted EBITDA performance multiplier for the last three years under our short-term incentive plans before the application of modifiers. See Appendix A to this Proxy Statement for reconciliations of GAAP to non-GAAP measures.
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FEATURES
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Three-year performance period (2016-2018)
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Include retention features by utilizing time-vested restricted stock units
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Pay for performance by utilizing performance shares subject to demanding metrics
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Performance metrics:
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(1)
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40% based on controllable cost
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(2)
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60% based on relative TSR
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Payout for relative TSR performance is capped at target if TSR is negative
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Payout at target for controllable cost performance only if we offset inflation
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No windfall upon a change in control for performance shares - only shares earned based on performance through the date of the change in control will vest
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Performance Period
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Payout Year
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Performance Metric
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Weighting
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Company Performance
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Actual Payout as Percentage of Target
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2016-2018
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2019
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Relative TSR
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60
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%
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45th Percentile
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90
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%
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Controllable Cost
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40
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%
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1% Cost Reduction*
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118
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%
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Weighted Average
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101
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%
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2015-2017
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2018
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Relative TSR
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100
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%
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81st Percentile
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170
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%
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2014-2016
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2017
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Relative TSR
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100
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%
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63rd Percentile
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126
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%
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Performance shares earned, if any, are based on our TSR over the underlying three year performance period compared to the other companies comprising the S&P 600 SmallCap Materials Sector Index. In considering constituents for the S&P SmallCap 600, S&P Dow Jones Indices looks for companies (1) with market capitalizations of between $450 million and $2.1 billion, (2) meeting certain float requirements, (3) with a U.S. domicile, (4) required to file SEC annual reports, and (5) listed on a major U.S. exchange, among other factors.
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The beginning and ending stock prices used to determine our TSR are calculated using the 20-trading day average preceding the beginning and end of the performance period.
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The performance share multiplier is determined by using straight line interpolation based on our TSR percentile ranking within our comparison group based on the table to the right:
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Percentile Ranking
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Multiplier
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< 25th
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0.0x
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25th
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0.5x
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50th
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1.0x
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75th
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1.5x
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> 90th
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2.0x
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Page
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GENERAL QUESTIONS AND ANSWERS
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PROPOSALS REQUIRING YOUR VOTE
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Proposal 1 - Election of Directors
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Proposal 2 - Advisory Vote on Executive Compensation
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Proposal 3 - Ratification of the Selection of our Independent Registered Public Accounting Firm
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CORPORATE GOVERNANCE
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Board Leadership Structure
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Risk Oversight
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Director Independence
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Director Designation Agreement
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Board Committees
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Board and Committee Meetings and Consents in 2018
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Annual Meetings of Stockholders
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Annual Performance Reviews
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Stockholder Engagement
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Sustainable Value Creation
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Stock Ownership Guidelines and Securities Trading Policy
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Risks Arising from Compensation Policies and Practices
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Stockholder Communications with the Board of Directors
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EXECUTIVE OFFICERS
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EXECUTIVE COMPENSATION
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Compensation Committee Report
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Compensation Discussion and Analysis
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Summary Compensation Table
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All Other Compensation
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Grants of Plan-Based Awards in 2018
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Employment-Related Agreements and Certain Employee Benefit Plans
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Outstanding Equity Awards at December 31, 2018
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Stock Vested in 2018
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Pension Benefits as of December 31, 2018
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Nonqualified Deferred Compensation for 2018
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Pay Ratio
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Potential Payments and Benefits Upon Termination of Employment
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DIRECTOR COMPENSATION
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Director Compensation for 2018
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Director Compensation Arrangements
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EQUITY COMPENSATION PLAN INFORMATION
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PRINCIPAL STOCKHOLDERS AND MANAGEMENT OWNERSHIP
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
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AUDIT COMMITTEE REPORT
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INDEPENDENT PUBLIC ACCOUNTANTS
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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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OTHER MATTERS
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STOCKHOLDER PROPOSALS
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Q:
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When is the Proxy Statement being sent to stockholders and what is its
purpose?
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A:
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This Proxy Statement is first being sent to our stockholders on or about
May 6, 2019
at the direction of our board of directors in order to solicit proxies for our use at the Annual Meeting.
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Q:
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When is the Annual Meeting and where will it be held?
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A:
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The Annual Meeting will be held on
Thursday
,
June 6, 2019
, at 9:00 a.m., local time, at our corporate office, located at 27422 Portola Parkway, Suite 200, Foothill Ranch, California 92610.
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Q:
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Who may attend the Annual Meeting?
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A:
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All of our stockholders may attend the Annual Meeting.
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Q:
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Who is entitled to vote?
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A:
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Stockholders as of the close of business on
April 12, 2019
are entitled to vote at the Annual Meeting. Each share of our common stock is entitled to one vote.
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Q:
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On what am I voting?
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A:
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You will be voting on:
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•
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The election of
four
members to our board of directors to serve until our
2022
annual meeting of stockholders;
|
•
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The approval, on a non-binding, advisory basis, of the compensation of our named executive officers as disclosed in this Proxy Statement;
|
•
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The ratification of the selection of
Deloitte & Touche LLP
as our independent registered public accounting firm for
2019
; and
|
•
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Such other business as may properly come before the Annual Meeting or any adjournments.
|
Q:
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How does the board of directors recommend that I vote?
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A:
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The board of directors recommends that you vote your shares:
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•
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"FOR ALL"
the director nominees identified in "Proposals Requiring Your Vote - Proposal 1 - Election of Directors" below;
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•
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"FOR"
the approval , on a non-binding, advisory basis, of the compensation of our named executive officers as disclosed in this Proxy Statement; and
|
•
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"FOR"
the ratification of the selection of
Deloitte & Touche LLP
as our independent registered public accounting firm for
2019
.
|
Q:
|
How can I vote?
|
A:
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You can vote in person at the Annual Meeting or you can vote prior to the Annual Meeting by proxy. Whether or not you plan to attend the Annual Meeting, we urge you to vote by proxy without delay.
|
Q:
|
How do I vote by proxy?
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A:
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If you choose to vote your shares by proxy, you have the following options:
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•
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Over the Internet:
You can vote over the Internet at the website shown on your proxy card. Internet voting will be available 24 hours a day, seven days a week, until 11:59 p.m., Eastern Time, on
Wednesday
,
June 5, 2019
.
|
•
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By telephone:
You can vote by telephone by calling the toll-free number shown on your proxy card. Telephone voting will be available 24 hours a day, seven days a week, until 11:59 p.m., Eastern Time, on
Wednesday
,
June 5, 2019
.
|
•
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By mail:
You can vote by mail by completing, signing and dating your proxy card and returning it in the enclosed prepaid envelope.
|
Q:
|
I want to attend the Annual Meeting and vote in person. How do I
obtain directions to the Annual Meeting?
|
A:
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You may obtain directions to the Annual Meeting by calling us at (949) 614-1740.
|
Q:
|
What constitutes a quorum?
|
A:
|
As of
April 12, 2019
, the record date, 16,128,768 shares of our common stock were issued and outstanding. A majority of these shares present or represented by proxy will constitute a quorum for the transaction of business at the Annual Meeting. If you properly vote by proxy by submitting your voting instructions over the Internet, by telephone or by mail, then your shares will be counted as part of the quorum. Abstentions or votes that are withheld on any matter will be counted towards a quorum but will be excluded from the vote relating to the particular matter under consideration. Broker non-votes are counted towards a quorum but are excluded from the vote with respect to the matters for which they are applicable. A broker non-vote occurs when a broker holding shares for a beneficial owner does not vote on a particular proposal because the broker does not have discretionary voting power with respect to that proposal and has not received instructions with respect to that proposal from the beneficial owner. Among our proposals, brokers will have discretionary voting power only with respect to the proposal to ratify the selection of
Deloitte & Touche LLP
as our independent registered public accounting firm for
2019
.
|
Q:
|
What are the voting requirements for the proposals?
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A:
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There are different voting requirements for the proposals.
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•
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Each director will be elected by an affirmative vote of the majority of the votes cast with respect to the director in an uncontested election. If an incumbent director nominee receives a greater number of votes cast against his or her election than in favor of his or her election (excluding abstentions) in an uncontested election, the nominee must promptly tender his or her resignation, and the board of directors will decide, through a process managed by the nominating and corporate governance committee, whether to accept the resignation, taking into account its fiduciary duties to our company and our stockholders. The board of director's explanation of its decision will be promptly disclosed in a Form 8-K furnished to the Securities and Exchange Commission. An election of directors is considered to be contested if there are more nominees for election than positions on the board of directors to be filled by election at the meeting of stockholders. In the event of a contested election, each director will be elected by a plurality vote of the votes cast at such meeting. The election of directors at the Annual Meeting is uncontested.
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•
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The approval of the holders of a majority of the total number of outstanding shares of our common stock present in person or represented by proxy at the Annual Meeting and actually voted on the proposal is necessary (1) to approve, on a non-binding, advisory basis, the compensation of our named executive officers as disclosed in this Proxy Statement, and (2) to ratify the selection of
Deloitte & Touche LLP
as our independent registered public accounting firm for
2019
. If you abstain from voting on the proposal to approve the compensation of our named executive officers as disclosed in this Proxy Statement and/or the proposal to ratify the selection of
Deloitte & Touche LLP
as our independent registered public accounting firm for
2019
, your shares will not be counted in the vote for such proposal(s) and will have no effect on the outcome of the vote.
|
Q:
|
If my shares are held in "street name" by my broker, will my broker
vote my shares for me?
|
A:
|
As discussed above, among our proposals, brokers will have discretionary voting power only with respect to the proposal to ratify the selection of
Deloitte & Touche LLP
as our independent registered public accounting firm for
2019
. To be sure your shares are voted, you should instruct your broker to vote your shares using the instructions provided by your broker.
|
Q:
|
What will happen if the compensation of the company's named executive officers is not approved by
the stockholders?
|
A:
|
Because this is an advisory vote, our board of directors and compensation committee will not be bound by the approval of, or the failure to approve, the executive compensation of our named executive officers as disclosed in this Proxy Statement. The board of directors and the compensation committee, however, value the opinions that our stockholders express in their votes and will consider the outcome of the vote when determining future executive compensation programs.
|
Q:
|
What will happen if the selection of
Deloitte & Touche LLP
as our
independent registered public accounting firm for
2019
is not ratified
by the stockholders?
|
A:
|
Pursuant to the audit committee charter, the audit committee of our board of directors has sole authority to appoint our independent registered public accounting firm, and the audit committee will not be bound by the ratification of, or failure to ratify, the selection of
Deloitte & Touche LLP
. The audit committee will, however, consider any failure to ratify the selection of
Deloitte & Touche LLP
in connection with the appointment of our independent registered public accounting firm the following year.
|
Q:
|
Can I change my vote after I give my proxy?
|
A:
|
Yes. If you vote by proxy, you can revoke that proxy at any time before voting takes place at the Annual Meeting. You may revoke your proxy by:
|
•
|
delivering, no later than 5:00 p.m., Eastern Time, on
Wednesday
,
June 5, 2019
, written notice of revocation to our Secretary, c/o Computershare, P.O. Box 43126, Providence, Rhode Island 02940-5138; or
|
•
|
attending the Annual Meeting and voting in person.
|
Q:
|
What does it mean if I receive more than one proxy card?
|
A:
|
If you receive more than one proxy card, it is because your shares are held in more than one account. You must vote each proxy card to ensure that all of your shares are voted at the Annual Meeting.
|
Q:
|
Who will count the votes?
|
A:
|
Representatives of Computershare, our transfer agent, will tabulate the votes and act as inspectors of election.
|
Q:
|
How much will this proxy solicitation cost?
|
A:
|
We have hired MacKenzie Partners, Inc. to assist us in the distribution of proxy materials and solicitation of votes at a cost not to exceed $10,000, plus out-of-pocket expenses. We will reimburse brokerage firms and other custodians, nominees and fiduciaries for their reasonable out-of-pocket expenses for forwarding proxy and solicitation materials to the owners of our common stock. Our officers and regular employees may also solicit proxies, but they will not be specifically compensated for these services. In addition to the use of the mail, proxies may be solicited personally or by telephone by our employees or by MacKenzie Partners.
|
Carolyn Bartholomew
|
Lauralee E. Martin
|
|
|
David Foster
|
Alfred E. Osborne, Jr., Ph.D.
|
|
|
L. Patrick Hassey
|
Jack Quinn
|
|
|
Jack A. Hockema
|
Thomas M. Van Leeuwen
|
|
|
Emily Liggett
|
Brett E. Wilcox
|
Public Board of Directors Experience
|
|
Industry-Specific
|
|
Economic, Regulatory and/or Policy
|
|
Diversity
|
|
|
|
|
|
|
|
Leadership /Management
|
|
Labor / Talent Management and Development
|
|
Financial / Investment
|
|
International Industrial
|
Diversity (Gender or Ethnicity)
|
|
Independence
|
40%
|
|
90%
|
Alfred E. Osborne, Jr.
|
|
Lead Independent Director
|
|
Director since: July 2006
|
|
Committees: Audit; Executive; and Nominating and Corporate Governance (Chair)
|
|
Age: 74
|
|
Other Current Public Board Memberships:
|
–
First Pacific Advisor family of seven funds (Capital, Crescent, International Value, New Income, Paramount, Perennial and Source Capital) (1999 - Present)
|
–
Nuverra Environmental Solutions, Inc. (formerly Heckmann Corporation) (2007 - Present)
|
|
Other Affiliations:
|
–
Member of board of directors of Wedbush, Inc. (1998 - Present)
|
|
DESCRIPTION OF BUSINESS EXPERIENCE:
|
|
Dr. Osborne has been the Interim Dean at the UCLA Anderson School of Management since July 2018 and a Professor of Global Economics and Management since July 2008. Dr. Osborne was previously the Senior Associate Dean at the UCLA Anderson School of Management from July 2003 to June 2018 and an Associate Professor of Global Economics and Management and served as the Director of the Harold and Pauline Price Center for Entrepreneurial Studies at the UCLA Anderson School of Management.
|
|
PREVIOUS DIRECTORSHIPS:
|
–
Nordstrom, Inc.
|
–
AFH Acquisition VII, Inc.
|
–
EMAK Worldwide, Inc.
|
–
K2, Inc.
|
|
QUALIFICATIONS:
|
|
Dr. Osborne has served on many boards and board committees of public companies and investment funds over a more than 30-year period. During that time, Dr. Osborne worked extensively on the development of board and director best practices, as well as director training and governance programs sponsored by the UCLA Anderson School of Management. Dr. Osborne was one of the original directors selected by a search committee (referred to herein as the search committee) to serve as a director of our company upon our emergence from chapter 11 bankruptcy in 2006 and was selected because of his public company experience and governance background. During his service on our board of directors, Dr. Osborne has gained an understanding of our company and the environment in which we operate. Dr. Osborne's experience as a director of public companies, as a member of various board committees of public companies, and as an educator in the fields of business management and corporate governance allow him to draw on his experience and offer guidance to our board of directors and management on issues that affect our company, including governance and board best practices.
|
Teresa Sebastian
(New)
|
|
Age: 61
|
|
Other Affiliations:
|
–
Member Board of Directors, Assemble Sound, a private company
|
–
Member Board of Directors and Chair of Audit Committee, The United Negro College Fund
|
–
Member Dean’s Advisory Council, University of Michigan School of Literature Sciences and Arts
|
|
DESCRIPTION OF BUSINESS EXPERIENCE:
|
|
Ms. Sebastian has been the President and Chief Executive Officer of The Dominion Asset Group, an angel investment and venture capital firm, since June 2015, an adjunct professor for accounting and enterprise risk management at Vanderbilt Law School since August 2017, and an adjunct professor for governance and compliance at the University of Michigan Law School since August 2016. Ms. Sebastian was previously the Senior Vice President, General Counsel, Corporate Secretary and Internal Audit executive leader, of Darden Restaurants, Inc, a publicly held multi-brand restaurant operator, from October 2010 to March 2015.
|
|
Before joining Darden Restaurants, Ms. Sebastian served as Vice President at Veyance Technologies, Inc., a m
anufacturer and marketer of engineered rubber products
, Senior Vice President at Information Resources, Inc., a provider of information, analytics and insights, and held leadership roles in senior management in two regulated companies, DTE Energy Company, and CMS Energy Corporation. She also held positions in financial analysis at Michigan Consolidated Gas Co., Morgan Stanley, and Bank of America
.
|
|
QUALIFICATIONS:
|
|
The board of directors nominated Ms. Sebastian because of her broad experience and background in management, expertise in corporate governance and matters relating to the Sarbanes-Oxley Act, risk management and compliance, and experience in a wide variety of industries, including manufacturing, finance and data technology. Ms. Sebastian has significant experience in public and private company capital raising, mergers and acquisitions, and global transactions. Her service as a board member of a private company, chair of an audit committee for one of the largest non-profits in the U.S., executive position as leader of internal audit, professorship of accounting, and positions in financial analysis, reinforce her qualification as an SEC audit committee financial expert and understanding of our company’s financial statements to provide guidance and insight to our board of directors and management regarding business, risk management, accounting and financial issues. Ms. Sebastian was designated by the United Steel, Paper and Foresting, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO, CLC (referred to herein as the USW) as a director candidate pursuant to the terms of our Director Designation Agreement with the USW (described under “Corporate Governance - Director Designation Agreement”) in connection with the Annual Meeting.
|
Donald J. Stebbins (New)
|
|
Age: 61
|
|
Other Current Public Board Memberships:
|
–
Snap-on Tools (2015 - Present)
|
|
DESCRIPTION OF BUSINESS EXPERIENCE:
|
|
Mr. Stebbins served as President and Chief Executive Officer, and also as a director, of Superior Industries International, Inc. ("Superior"), a manufacturer of aluminum wheels for the automotive industry, from May 2014 to December 2018. For two years prior to joining Superior, Mr. Stebbins provided consulting services to various private equity firms. Mr. Stebbins previously served as Chairman, President and Chief Executive Officer of Visteon Corporation, an automotive components manufacturer, from 2008 until 2012, after having served as Visteon’s President and Chief Operating Officer prior to that time. Before joining Visteon, Mr. Stebbins held various positions with increasing responsibility at Lear Corporation, a supplier of automotive seating and electrical distribution systems, including President and Chief Operating Officer–Europe, Asia and Africa, President and Chief Operating Officer–Americas, and Senior Vice President and Chief Financial Officer. Mr. Stebbins holds a Bachelor of Science degree in finance from Miami University and a Master of Business Administration degree from the University of Michigan.
|
|
PREVIOUS DIRECTORSHIPS:
|
–
Superior Industries International, Inc. (2014-2018)
|
–
WABCO Holdings, Inc. (2007-2016)
|
–
ITT Corporation (2012-2014)
|
–
Visteon Corporation (2006-2012)
|
|
QUALIFICATIONS:
|
|
The board of directors nominated Mr. Stebbins because of his board and chief executive officer experience and, among his other qualifications, he possesses experience and/or expertise in the automotive industry, international business, manufacturing, sales, product innovation/development, operations, accounting/finance (including as a chief financial officer), mergers and acquisitions, strategy development, executive compensation and leadership development.
|
Thomas M. Van Leeuwen
|
|
Director since: July 2006
|
|
Committees: Audit; Executive; Compensation (Chair); and Nominating and Corporate Governance
|
|
Age: 62
|
|
DESCRIPTION OF BUSINESS EXPERIENCE:
|
|
Prior to his retirement in 2002, Mr. Van Leeuwen served as a Director - Senior Equity Research Analyst for Deutsche Bank Securities Inc. Mr. Van Leeuwen also previously served as a Director - Senior Equity Research Analyst for Credit Suisse First Boston and as First Vice President of Equity Research with Lehman Brothers. Mr. Van Leeuwen held the positions of research analyst with Sanford C. Bernstein & Co., Inc. and systems analyst with The Procter & Gamble Company. Mr. Van Leeuwen is also a Chartered Financial Analyst.
|
|
QUALIFICATIONS:
|
|
Mr. Van Leeuwen was selected by the search committee to serve as a director of our company upon our emergence from chapter 11 bankruptcy in 2006 because of his experience working with investment banks, including as an analyst in the aluminum industry. Mr. Van Leeuwen's experience as an equity research analyst and service as a director of our company since 2006 allow him to provide guidance and insight to our board of directors and management with respect to financial analyses of our company, whether generated internally or externally, as well as other financial issues, and with respect to the investment community's understanding of our company. He also qualifies as an audit committee financial expert.
|
Carolyn Bartholomew
|
|
Director since: June 2007
|
|
Committees: Audit and Nominating and Corporate Governance
|
|
Age: 61
|
|
DESCRIPTION OF BUSINESS EXPERIENCE:
|
|
Ms. Bartholomew has served as Commissioner of the U.S.-China Economic and Security Review Commission since April 2003 and its Chairman since January 2019. Ms. Bartholomew also served as its Chairman in 2015 and 2017 and as its Vice-Chairman in 2016 and 2018. From October 2012 to April 2014, Ms. Bartholomew also served as Vice President - Development and Corporate Initiatives of the BlueGreen Alliance. In that role, she developed strategies for funding and initiatives to create and strengthen relationships between business and the labor and environmental communities on issues of shared interest. She was also a Visiting Professor at Antioch University New England from 2011 to December 2018. Ms. Bartholomew also served as Legislative Director, District Director and Chief of Staff to Congresswoman Nancy Pelosi from 1987 to 2003.
|
|
QUALIFICATIONS:
|
|
Ms. Bartholomew's experience in Washington, D.C., and with the U.S.-China Economic and Security Review Commission and the BlueGreen Alliance, allow her to provide guidance and insight to our board of directors and management regarding government relations, policy and appropriations for defense and other government funded programs that utilize our products, and our efforts to expand into Chinese markets and effectively compete with Chinese manufacturers, as well as environmental, regulatory and labor initiatives potentially impacting U.S.-based manufacturers. Pursuant to the terms of the Director Designation Agreement, Ms. Bartholomew was designated by the USW to fill a vacancy on our board of directors in 2007 and as a director candidate in connection with our 2008, 2011, 2014 and 2017 annual meetings of stockholders.
|
Jack A. Hockema
|
|
CEO and Chairman of the Board
|
|
Director since: 2001
|
|
Committees: Executive (Chair)
|
|
Age: 72
|
|
DESCRIPTION OF BUSINESS EXPERIENCE:
|
|
For information as to Mr. Hockema, see "Executive Officers" below.
|
|
QUALIFICATIONS:
|
|
Mr. Hockema's substantial experience with our company and in the metals industry allows him to provide a unique perspective to our board of directors regarding our business and strategic direction for our company.
|
|
PREVIOUS DIRECTORSHIPS:
|
–
Superior Industries International, Inc. (2014-2018)
|
–
Clearwater Paper Corporation (2008 - 2009)
|
Lauralee E. Martin
|
|
Director since: September 2010
|
|
Committees: Audit (Chair); Compensation; Executive; and Talent Development
|
|
Age: 68
|
|
Other Affiliations
|
–
Member of board of directors of QuadReal Property Group
|
|
DESCRIPTION OF BUSINESS EXPERIENCE:
|
|
Ms. Martin served as Chief Executive Officer and President of HCP, Inc., a real estate investment trust focusing on properties serving the healthcare industry, from October 2013 to July 2016. Prior to joining HCP, Inc., Ms. Martin served as Chief Executive Officer of the Americas Division of Jones Lang LaSalle, Inc., a financial and professional services firm specializing in real estate services and investment management, from January 2013 to October 2013. She served as Executive Vice President and Chief Financial Officer of Jones Lang LaSalle from January 2002 and was appointed Chief Operating and Financial Officer in October 2005 and served in that capacity until January 2013.
She joined Jones Lang LaSalle after 15 years with Heller Financial, Inc., a commercial finance company with international operations, where she was Vice President, Chief Financial Officer, Senior Group President, and President of the Real Estate group. Prior to joining Heller Financial, Ms. Martin held certain senior management positions with General Electric Credit Corporation.
|
|
PREVIOUS DIRECTORSHIPS:
|
–
ABM Industries (2015 - 2019)
|
–
HCP, Inc. (2008 - 2016)
|
–
Jones Lang LaSalle, Inc. (2005 - 2013)
|
–
KeyCorp (2003 - 2010)
|
–
Gable Residential Trust (1994 - 2015)
|
|
QUALIFICATIONS:
|
|
Having served as both the chief financial officer and the head of the real estate lending group at Heller Financial and having served as the chief operating and financial officer for Jones Lang LaSalle for more than seven and 12 years, respectively, as well as having served as the Chief Executive Officer of the Americas division of Jones Lang LaSalle, Inc. and being the Chief Executive Officer of HCP, Inc., Ms. Martin has significant experience in all aspects of corporate financial and operational matters, including the oversight of complex financial, accounting and corporate infrastructure functions. Her service as a member of the boards of directors of two real estate investment trusts and a major bank holding company have reinforced those qualifications and also have deepened her expertise in corporate governance and matters relating to the Sarbanes-Oxley Act. Ms. Martin also has a deep foundation in evaluating acquisition opportunities, managing banking relationships and investor relations. Ms. Martin's experience and background, qualification as an audit committee financial expert, and understanding of our company's financial statements allow her to provide guidance and insight to our board of directors and management regarding business, strategic, accounting and financial issues.
|
Brett E. Wilcox
|
|
Director since: July 2006
|
|
Committees: Audit; Executive; Compensation; and Talent Development (Chair)
|
|
Age: 65
|
|
DESCRIPTION OF BUSINESS EXPERIENCE:
|
|
Mr. Wilcox has served as Chief Executive Officer of Cv̄ictus, a Canadian company developing a single cell protein and related production process to substitute for soybean meal and fishmeal in animal feed, since September 2018 and has been an active investor in, on the board of directors of, or an executive consultant for, a number of metals and energy companies since 2005. From June 2005 to December 2011, Mr. Wilcox served as Chief Executive Officer of Summit Power Alternative Resources where he managed the development of wind generation and new energy technologies. Prior to that, Mr. Wilcox served as: Chief Executive Officer of Golden Northwest Aluminum Company and its predecessors. Mr. Wilcox has also served as Executive Director of Direct Services Industries, Inc., a trade association of large aluminum and other energy-intensive companies; an attorney with Preston, Ellis & Gates in Seattle, Washington; Vice Chairman of the Oregon Progress Board; Chairman of the Oregon Economic and Community Development Commission; a member of the Oregon Governor's Comprehensive Review of the Northwest Regional Power System; and a member of the Oregon Governor's Task Forces on structure and efficiency of state government, employee benefits and compensation, and government performance and accountability.
|
|
QUALIFICATIONS:
|
|
Mr. Wilcox was selected by the search committee to serve as a director of our company upon our emergence from chapter 11 bankruptcy in 2006 because of his business and financial background and experience, including his experience as the Chief Executive Officer of Golden Northwest Aluminum Company and its predecessors, his experience working successfully with the USW and his experience in the power industries, and because of his qualification as an audit committee financial expert. Mr. Wilcox was designated by the USW as a director candidate in connection with the search process, and, pursuant to the terms of the Director Designation Agreement, Mr. Wilcox was designated by the USW as a director candidate in connection with our 2008, 2011, 2014 and 2017 annual meetings of stockholders. Mr. Wilcox's experience as a chief executive officer, his financial expertise, his experience in the aluminum and energy industries, and his working relationship with the USW allow him to offer guidance and insight to our board of directors and management on business, finance, strategic and labor issues.
|
David Foster
|
|
Director since: June 2009
|
|
Committees: Nominating and Corporate Governance, and Talent Development
|
|
Age: 71
|
|
Other affiliations:
|
–
Member of board of directors of Evraz North America, d/b/a Oregon Steel Manufacturing
|
|
DESCRIPTION OF BUSINESS EXPERIENCE:
|
|
Since May 2017, Mr. Foster has served as Distinguished Associate of Energy Futures Initiative, a non-profit organization conducting objective, fact-based and rigorous technical, economic, financial and policy analyses supported by a multidisciplinary network of experts. Mr. Foster is also a consultant to the Massachusetts Institute of Technology, working on the Roosevelt Project, a three-year research project focused on energy technology and economic development.
|
|
Mr. Foster was Senior Advisor to the Office of the Secretary of the U.S. Department of Energy from June 2014 to January 2017. Prior to that, Mr. Foster was Executive Director of BlueGreen Alliance, a strategic national partnership between labor unions and environmental organizations to expand the job-creating potential of the green economy and improve the rights of workers at home and around the world, from June 2006 to June 2014 and an adjunct faculty member of the University of Minnesota from January 2003 to June 2014. Mr. Foster was also previously a director of the USW for District #11.
|
|
QUALIFICATIONS:
|
|
The board of directors nominated Mr. Foster because of his extensive labor experience representing the USW and with the BlueGreen Alliance which allows him to provide guidance and insight to the board and management regarding labor relations, including with the USW, relations with our hourly workforce, the impact of environmental and regulatory initiatives on US based manufacturers and sustainability. Mr. Foster was designated by the USW as a director candidate pursuant to the terms of our Director Designation Agreement in connection with our 2009, 2012, 2015 and 2018 annual meetings of stockholders. However, his experience with our company exceeds 20 years and includes his former role as the primary USW negotiator of our master labor agreement with the USW prior to joining our board of directors.
|
L. Patrick Hassey
|
|
Director since: September 2014
|
|
Committees: Compensation, and Talent Development
|
|
Age: 73
|
|
DESCRIPTION OF BUSINESS EXPERIENCE:
|
|
Prior to his retirement in May 2011, Mr. Hassey served as Chairman and Chief Executive Officer of ATI, a global leader in the production of specialty materials for the aerospace, chemical and oil and gas industries, where he was elected to the board of directors in July 2003, appointed as the President and Chief Executive Officer in October 2003, and became Chairman in May 2004. Mr. Hassey served as ATI's President until August 2010.
|
|
Before joining ATI, Mr. Hassey served as Executive Vice President and as a member of the corporate executive committee of Alcoa, as Executive Vice President of Alcoa and Group President of Alcoa Industrial Components, and as Executive Vice President of Alcoa and President of Alcoa Europe, Inc.
|
|
QUALIFICATIONS:
|
|
The board of directors nominated Mr. Hassey because of his extensive experience and background and qualification as a chief executive officer in the aluminum and specialty metal industries which allows him to provide guidance and insight to the board of directors and management regarding business and strategic issues.
|
|
PREVIOUS DIRECTORSHIPS:
|
–
Ryder System, Inc. (2005 - 2018)
|
–
Alpha Natural Resources (2012 - 2016)
|
–
Allegheny Technologies Incorporated (referred to herein as ATI) (2003 - 2011)
|
Emily Liggett
|
|
Director since: June 2018
|
|
Committees: Audit
|
|
Age: 63
|
|
Other Public Board Memberships:
|
–
Ultra Clean Holdings
|
|
Other Affiliations:
|
–
Member of Advisory Board of Purdue University School of Engineering
|
|
DESCRIPTION OF BUSINESS EXPERIENCE:
|
|
Ms. Liggett has served as a strategy consultant and business advisor for technology-based businesses since 2017.
|
|
Ms. Liggett was president and chief executive officer of NovaTorque, Inc., a manufacturer of high-efficiency electric motor systems, from March 2009 until December 2016, when it was acquired by Regal Beloit. She previously served as president and chief executive officer of Apexon, Inc., a provider of supply chain optimization software solutions for global manufacturers, from 2004 to 2007. Ms. Liggett served as president and chief executive officer of Capstone Turbine Corporation, a provider of microturbine systems for clean, continuous distributed energy generation, from 2002 to 2003 and, prior to that, held various management and executive roles at Raychem Corporation (acquired by Tyco International in 1999) from 1984 to 2001, including corporate vice president of Raychem and managing director of Tyco Ventures.
|
|
Ms. Liggett holds a bachelor of science in chemical engineering from Purdue University, a master’s of science in engineering and manufacturing systems from Stanford University and a master’s degree in business administration from the Stanford University Graduate School of Business.
|
|
QUALIFICATIONS:
|
|
The board of directors nominated Ms. Liggett because of her chief executive officer, management and board experience in a variety of manufacturing companies, as well as her experience managing worldwide businesses, partnerships and international joint ventures. She also has public company and private company operating and board experience, and expertise in strategy, operations, new product development, sales, marketing, and business development.
|
|
PREVIOUS DIRECTORSHIPS:
|
–
MTS Systems Corporation (2010-2016)
|
–
Immersion Corporation (2005-2011)
|
–
Capstone Turbine (2002-2003)
|
Jack Quinn
|
|
Director since: July 2006
|
|
Committees: Compensation and Nominating and Corporate Governance
|
|
Age: 68
|
|
Other Affiliations:
|
–
Trustee of the AFL-CIO Housing Investment Trust (2005 - Present)
|
|
DESCRIPTION OF BUSINESS EXPERIENCE:
|
|
Mr. Quinn has served as Senior Advisor for Public and Community Relations of Barclay Damon LLP since September 2017. Mr. Quinn was President of Erie Community College in Buffalo, New York from April 2008 to June 2017. From September 2013 to December 2013, Mr. Quinn was Commissioner of the Tax Relief Commission, which was formed to investigate and explore methods to reduce taxes for New York residents under the state's 2014 budget plan. From January 2013 to March 2013, Mr. Quinn was Commissioner of the Hurricane Sandy Task Force for the State of New York, assisting the state in securing federal funding for the repairs of damages caused by Hurricane Sandy. Mr. Quinn was previously the President of Cassidy & Associates, a government relations firm which assists clients promoting policy and appropriations objectives in Washington, D.C. with a focus on transportation, aviation, railroad, highway, infrastructure, corporate and industry clients. Mr. Quinn served as a United States Congressman for the State of New York. While in Congress, Mr. Quinn was Chairman of the Transportation and Infrastructure Subcommittee on Railroads. He was also a senior member of the Transportation Subcommittees on Aviation, Highways and Mass Transit. In addition, Mr. Quinn was Chairman of the Executive Committee in the Congressional Steel Caucus. Prior to his election to Congress, Mr. Quinn served as supervisor of the town of Hamburg, New York.
|
|
QUALIFICATIONS:
|
|
Mr. Quinn was selected by the search committee to serve as a director of our company upon our emergence from chapter 11 bankruptcy in 2006 because of his background and experience in Washington, D.C. Mr. Quinn was designated by the USW as a director candidate in connection with the search process, and pursuant to the terms of the Director Designation Agreement, Mr. Quinn was designated by the USW as a director candidate in connection with our 2007, 2010, 2013 and 2016 annual meetings of stockholders. During his service on our board of directors, Mr. Quinn has gained an understanding of our company and the environment in which we operate. Mr. Quinn's experience in Washington, D.C., including as a U.S. Congressman, and his working relationship with the USW allow him to offer guidance and insight to our board of directors and management regarding government relations, policy and appropriations for defense and other government funded programs that utilize our products and labor relations.
|
•
|
align the interest of our named executive officers and stockholders by tying a significant portion of compensation to enhancing stockholder return;
|
•
|
attract, motivate and retain highly experienced executives vital to our short-term and long-term success, profitability and growth;
|
•
|
deliver a mix of fixed and at-risk compensation with the portion of compensation at risk increasing with seniority; and
|
•
|
tie our executive compensation to our ability to pay and safety, quality, delivery, cost and individual performance.
|
•
|
a base salary targeted at the 50
th
percentile of our compensation peer group (1) compensating each named executive officer based on the level of responsibility, individual expertise and prior experience and (2) providing a fixed amount of cash compensation upon which our named executive officers can rely;
|
•
|
a short-term annual cash incentive targeted at the 50
th
percentile of our compensation peer group (1) payable only if our company achieves a certain Adjusted EBITDA performance level which has continued to increase, resulting in increasingly demanding performance to realize the same or similar payouts year-over-year as more fully described below, (2) adjusted based on (a) our safety performance based on our total case incident rate, or TCIR, which is the average number of work-related injuries incurred by 100 workers during a one-year period, as well as lost-time case incident rate, or LCIR, which is the average number work-related injuries that resulted in lost or restricted days or job transfer incurred by 100 workers during a one-year period, (b) our quality performance based on our no-fault claim rate, (c) delivery performance based on our on-time delivery rate, (d) cost performance based on our manufacturing efficiency, and (e) in exceptional and rare instances approved by the compensation committee, individual performance based on individual, facility, and/or functional performance, and (3) capped at three times target; and
|
•
|
an equity-based, long-term incentive targeted at between the 50
th
and 65
th
percentile of our compensation peer group and designed to align compensation with the interests of our stockholders and to enhance retention of our named executive officers consisting of (1) restricted stock units with three-year cliff vesting and (2) performance shares, 30% of which that vest, if at all, based on our TSR, compared to the TSR of our peers in the S&P SmallCap 600 Materials Index, 40% of which that vest, if at all, based on our total controllable cost performance, and 30% of which that vest, if at all, based on our economic value added, or EVA, each over the
2018
-
2020
performance period.
|
Board Structure
|
ü
|
Highly independent - 90% of the directors are independent; 100% of the audit committee, compensation committee and nominating and corporate governance committee are independent
|
ü
|
Diverse in perspective and background - 40% of the directors are gender or ethnically diverse
|
|
ü
|
Strong independent lead director
|
|
Board Practices and Policies
|
ü
|
Robust annual board and committee assessments with external and/or internal resources
|
ü
|
Majority vote standard in uncontested director elections
|
|
ü
|
Executive session of independent directors at every in-person meeting without management present
|
|
ü
|
Commitment to board refreshment - Two new highly qualified individuals have been nominated to join the board this year, for a total of four highly qualified individuals nominated to join the board in the last five years
|
|
ü
|
Directors are prohibited from serving on more than three other boards of public companies or public investment funds without board approval
|
|
ü
|
Strong equity ownership and retention requirements for directors
|
|
Stockholder Engagement
|
ü
|
Regular engagement by management with stockholders to discuss our performance, governance structure, compensation practices and approach to sustainability, as well as other matters
|
•
|
routinely meeting and conferring with our CEO to address comments, issues and areas of interest expressed or identified by our independent directors, to assess the governance of our board of directors and our company, and to review board responsibilities, meeting schedules, meeting agenda and information requested or otherwise provided to our directors routinely or in connection with meetings of our board of directors.
|
•
|
the USW has been a good steward of its rights under the Director Designation Agreement;
|
•
|
the nominees of the USW have made significant contributions to our board of directors;
|
•
|
the Director Designation Agreement reflects the constructive relationship between the USW and our company; and
|
•
|
the Director Designation Agreement facilitates discussions with the USW in regard to our strategy, our key strategic initiatives, the critical skills needed on our board of directors and other matters of mutual interest.
|
•
|
the qualifications to serve as a director as set forth in any applicable corporate governance guidelines adopted by the board of directors and policies adopted by the nominating and corporate governance committee establishing criteria to be utilized by it in assessing whether a director candidate has appropriate skills and experience; and
|
•
|
any other qualifications to serve as director imposed by applicable law.
|
Committee
|
|
Members
|
|
Number of Meetings Held in 2018
|
|
Number of Times Acted By Unanimous Written Consent
|
Executive Committee
|
|
Jack A. Hockema (Chair)
|
|
1
|
|
3
|
|
|
Teresa A. Hopp*
|
|
|
|
|
|
|
Lauralee E. Martin
|
|
|
|
|
|
|
Alfred E. Osborne, Jr.
|
|
|
|
|
|
|
Brett E. Wilcox
|
|
|
|
|
|
|
Thomas M. Van Leeuwen
|
|
|
|
|
Audit Committee
|
|
Lauralee E. Martin (Chair)
|
|
6
|
|
1
|
|
|
Teresa A. Hopp (Chair)*
|
|
|
|
|
|
|
Carolyn Bartholomew
|
|
|
|
|
|
|
Emily Liggett**
|
|
|
|
|
|
|
Alfred E. Osborne, Jr.
|
|
|
|
|
|
|
Thomas M. Van Leeuwen
|
|
|
|
|
|
|
Brett E. Wilcox
|
|
|
|
|
Compensation
|
|
Thomas M. Van Leeuwen (Chair)
|
|
7
|
|
8
|
Committee
|
|
L. Patrick Hassey
|
|
|
|
|
|
|
Lauralee E. Martin
|
|
|
|
|
|
|
Jack Quinn
|
|
|
|
|
|
|
Brett E. Wilcox
|
|
|
|
|
Nominating and
|
|
Alfred E. Osborne, Jr. (Chair)
|
|
7
|
|
1
|
Corporate Governance
|
|
Carolyn Bartholomew
|
|
|
|
|
Committee
|
|
David Foster
|
|
|
|
|
|
|
Jack Quinn
|
|
|
|
|
|
|
Thomas M. Van Leeuwen
|
|
|
|
|
Talent Development
|
|
Brett E. Wilcox (Chair)
|
|
2
|
|
0
|
Committee
|
|
David Foster
|
|
|
|
|
|
|
L. Patrick Hassey
|
|
|
|
|
|
|
Teresa A. Hopp*
|
|
|
|
|
|
|
Lauralee E. Martin
|
|
|
|
|
•
|
establishing hiring policies for employees or former employees of the independent accounting firm;
|
•
|
reviewing our systems of internal accounting controls;
|
•
|
discussing risk management policies;
|
•
|
approving related-party transactions;
|
•
|
establishing procedures for complaints regarding financial statements or accounting policies; and
|
•
|
performing other duties delegated to the audit committee by our board of directors from time to time.
|
•
|
administering plans adopted by our board of directors that contemplate administration by the compensation committee, including our 2016 Equity and Incentive Compensation Plan (referred to herein as our 2016 Plan);
|
•
|
overseeing regulatory compliance with respect to compensation matters;
|
•
|
reviewing director compensation; and
|
•
|
performing other duties delegated to the compensation committee by our board of directors from time to time.
|
•
|
exhibits strong leadership in his or her particular field or area of expertise;
|
•
|
possesses the ability to exercise sound business judgment;
|
•
|
has a strong educational background or equivalent life experiences;
|
•
|
has substantial experience both in the business community and outside the business community;
|
•
|
contributes positively to the existing collaborative culture among members of our board of directors;
|
•
|
represents the best interests of all of our stockholders and not just one particular constituency;
|
•
|
has experience as a senior executive of a company of significant size or prominence or another business or organization comparable to our company;
|
•
|
possesses skills and experience which make him or her a desirable addition to a standing committee of our board of directors;
|
•
|
consistently demonstrates integrity and ethics in his or her professional and personal life; and
|
•
|
has the time and ability to participate fully in activities of our board of directors, including attendance at, and active participation in, meetings of our board of directors and the committee or committees of which he or she is a member.
|
•
|
assisting in management succession planning, including with respect to the chairman of our board of directors and our CEO;
|
•
|
considering possible conflicts of interest of members of our board of directors and management and making recommendations to prevent, minimize or eliminate such conflicts of interests;
|
•
|
evaluating whether an incumbent director should be nominated for re-election to our board of directors upon expiration of the incumbent's term;
|
•
|
making recommendations to our board of directors regarding the appropriate size of our board of directors; and
|
•
|
performing other duties delegated to the nominating and corporate governance committee by our board of directors from time to time.
|
•
|
proof that the stockholder or group of stockholders submitting the recommendation has beneficially owned, for the required one-year holding period, more than 5% of our outstanding common stock;
|
•
|
a written statement that the stockholder or group of stockholders intends to continue to beneficially own more than 5% of our outstanding common stock through the date of the next annual meeting of our stockholders;
|
•
|
the name and record address of each stockholder submitting a recommendation for the director candidate, the written consent of each such stockholder and the director candidate to be publicly identified (including, in the case of the
|
•
|
a description of all arrangements or understandings between or among any of the stockholders or group of stockholders submitting the recommendation, the director candidate and any other person or persons (naming such person or persons) pursuant to which the submission of the recommendation is to be made by such stockholder or group of stockholders;
|
•
|
with respect to the director candidate, (1) his or her name, age, business and residential address and principal occupation or employment, (2) the number of shares of our common stock beneficially owned by him or her, (3) a resume or similar document detailing his or her personal and professional experiences and accomplishments, and (4) all other information relating to the candidate that would be required to be disclosed in a proxy statement or other filing made in connection with the solicitation of proxies for the election of directors pursuant to the Exchange Act, the rules of the Securities and Exchange Commission or the rules of the Nasdaq Stock Market; and
|
•
|
a written statement that each submitting stockholder and the director candidate shall make available to the nominating and corporate governance committee all information reasonably requested in connection with the committee's evaluation of the candidate.
|
People and Communities
|
||
Our talented workforce is a key factor underlying our success. We are committed to treating our employees with dignity and respect. We strive to be the employer of choice by:
|
||
|
Providing equal employment and a non-discriminatory workplace
|
|
|
Protecting the health and safety of our employees including:
|
|
|
|
Implementing corporate wellness programs
|
|
|
Incorporating safety performance in our executive compensation program
|
|
|
Providing focused safety training, including training for high risk activities
|
|
|
Assessing and measuring our safety performance using TCIR and LCIR, as well as leading indicators such as internal and third party audits and assessments
|
|
|
Identifying and monitoring safety improvements in our high hazard areas to ensure compliance and proper progress
|
|
Developing and empowering our employees through:
|
|
|
|
The Kaiser Leadership Program, an internally developed program emphasizing our values, expectations and business practices
|
|
|
Ongoing training and development opportunities on the job, through Kaiser University, our internal web-based learning and development platform, and through external programs
|
|
|
The Kaiser Aluminum Education Scholarship Program, an educational scholarship program to assist eligible employees and their children reach their education goals
|
|
Maintaining a positive and constructive relationship with labor unions of which our employees are members
|
|
|
Significant participation in employee directed community and charitable outreach, including charitable contributions and donations of materials used in college and university student competitions
|
Environment
|
||
Our efforts to achieve and maintain manufacturing efficiency and reduce environmental impact include:
|
||
|
Significant investments in our business targeted to increase both manufacturing and energy efficiency and other lean manufacturing initiatives
|
|
|
Identifying opportunities where we can achieve energy cost savings and promoting the efficient use of energy and material resources to reduce our carbon footprint
|
|
|
Maximizing use of scrap/recycled aluminum and closed loop programs to reduce waste and gain cost efficiency, including painted scrap at our Kalamazoo, Michigan facility
|
|
|
Significant reduction in carbon dioxide, electrical consumption, and water usage per unit of production
|
|
|
Promoting the inherent sustainability and recyclability of our aluminum mill products
|
|
|
Participation in customer light-weighting to achieve greater fuel efficiency
|
|
|
Developing new products, processes and capabilities that customer efficiency including our KaiserSelect® product offerings
|
|
|
Substantially increased engagement with:
|
|
|
|
the USW
|
|
|
BlueGreen Alliance, a partnership between labor unions and environmental organizations
|
|
|
Government offices, office holders and agencies
|
|
|
Industry and business peers
|
|
Implementation of ISO 14001 environmental management systems in our facilities
|
|
|
|
Responsible Business Practices
|
||
We promote fair business practices and a culture of accountability, responsibility and ethical behavior through:
|
||
|
Strong emphasis on the importance of integrity and competence to leadership, character and culture
|
|
|
Encouraging the reporting of illegal or unethical behavior, including the use of In-Touch, a third party reporting program
|
|
|
Ongoing ethics and compliance training
|
|
|
Conducting annual governance surveys to assess our culture and the effectiveness of our training
|
|
|
Adopting and enforcing:
|
|
|
|
Our corporate governance guidelines
|
|
|
Our code of business conduct and ethics, which applies to all employees, requires, among other things, compliance with laws and regulations, ethical behavior and fair dealing and prohibits bribery, discrimination and harassment
|
|
|
Our conflict minerals sourcing policy, which prohibits the purchase of materials containing conflict minerals (including tin, tantalum, gold and tungsten) originating from the Democratic Republic of Congo and adjoining countries
|
|
|
|
•
|
Potential payouts under our incentive plans are capped, and overall variable compensation does not materially impact our financial results;
|
•
|
Our overall compensation is comprised of a mix of long- and short-term compensation which discourages short-term decisions that could be at the expense of long-term results;
|
•
|
A significant portion of the variable compensation is in the form of restricted stock units and performance shares with three-year vesting and performance periods, which ensure that three years of unvested grants are outstanding at any time and encourage decisions expected to create long-term value for our stockholders;
|
•
|
All of our incentive programs contain clawback provisions, which provide for the forfeiture of outstanding unvested awards and the return of vested awards;
|
•
|
Our short-term incentive plan and our performance shares require the attainment of threshold company performance levels before any payments are earned or performance shares vest; and
|
•
|
Our stock ownership guidelines require our board of directors and executive officers to retain significant equity interests in our company to ensure the ongoing alignment of executive officers and our stockholders.
|
Name
|
|
Age
|
|
Position(s)
|
Jack A. Hockema
|
|
72
|
|
CEO and Chairman of the Board; Director
|
Keith A. Harvey
|
|
59
|
|
President and COO
|
Neal E. West
|
|
60
|
|
Senior Vice President and Chief Financial Officer
|
John M. Donnan
|
|
58
|
|
Executive Vice President - Legal, Compliance and Human Resources
|
Courtney Lynn
|
|
37
|
|
Vice President and Treasurer
|
Jennifer Huey
|
|
38
|
|
Vice President and Chief Accounting Officer
|
Melinda C. Ellsworth
|
|
60
|
|
Vice President - Investor Relations and Corporate Communications
|
Mark R. Krouse
|
|
67
|
|
Vice President - Human Resources
|
Ray Parkinson
|
|
60
|
|
Vice President - Advanced Engineering
|
•
|
a discussion of the objectives of our comprehensive compensation structure and the design of our overall
2018
compensation program for senior management,
|
•
|
a summary of the board’s consideration of the
2018
advisory vote on executive compensation,
|
•
|
a discussion of actions with respect to
2019
compensation,
|
•
|
a summary of our stock ownership guidelines and securities trading policy,
|
•
|
a summary of our current employment contracts, termination of employment arrangements, and change-in-control arrangements with our named executive officers, and
|
•
|
a discussion of all material elements of
2018
compensation for each of our named executive officers whose names and titles (during
2018
) are set forth in the following table:
|
Name
|
|
Title
|
Jack A. Hockema
|
|
CEO (principal executive officer)
|
Keith A. Harvey
|
|
President and COO
|
Daniel J. Rinkenberger (1)
|
|
Executive Vice President and Chief Financial Officer (principal financial officer)
|
John M. Donnan
|
|
Executive Vice President - Legal, Compliance and Human Resources
|
John Barneson (2)
|
|
Senior Vice President - Corporate Development
|
RECORD
|
|
|
|
|
|
RECORD
|
|
RECORD
|
|
NEAR RECORD
|
|
|
|
RECORD
|
Shipments
|
|
Net Sales
|
|
Net Income
|
|
Adjusted Net Income*
|
|
Value Added Revenue*
|
|
Adjusted EBITDA*
|
|
Earnings Per Share
|
|
Adjusted Earnings Per Share*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
652
|
|
$1,586
|
|
$92
|
|
$109
|
|
$828
|
|
$205
|
|
$5.43
|
|
$6.48
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Million lbs
|
|
Million
|
|
Million
|
|
Million
|
|
Million
|
|
Million
|
|
|
|
|
2018 CAPITAL ALLOCATION
|
|
Consistent capital allocation strategy focused on organic growth, external growth and returning cash to shareholders through dividends and share repurchases
|
|
|
Continued investment to further manufacturing efficiency, quality and capacity
|
||
|
Acquired Imperial Machine & Tool Co. ("IMT"), a leader in multi-material additive manufacturing and machining technologies for aerospace and defense, automotive, high-tech, and general industrial applications, to further advance capability to deliver highly engineered solutions for customers
|
||
|
Increased quarterly dividend for the 8th consecutive year
|
||
|
Returned approximately $100 million to shareholders through share repurchases and dividends
|
|
CONSISTENT CAPITAL ALLOCATION STRATEGY
|
|
||||
|
|
|
Cash deployment track record
|
|
||
|
|
|
Invested ~$750M in the business since 2007 (~2x depreciation)
|
|
||
|
|
|
Distributed >700M to stockholders since 2007
|
|
||
|
|
|
|
Dividends increased each year since 2011
|
|
|
|
|
|
|
~6.2 million shares repurchased at an average price of $67.42
|
|
|
|
|
|
|
|
•
|
objectives for our compensation programs;
|
•
|
the structure of our compensation programs;
|
•
|
the role of our compensation programs in management succession planning; and
|
•
|
compensation of other members of senior management, including our other named executive officers.
|
•
|
creating alignment between our senior management and our stockholders by rewarding our senior management for achieving strategic goals that successfully drive our operations and enhance our stockholder return;
|
•
|
attracting, motivating and retaining highly experienced executives vital to our short-term and long-term success, profitability and growth;
|
•
|
correlating our senior management compensation with our actual short- and long-term performance; and
|
•
|
providing competitive, targeted compensation levels that are benchmarked to our compensation peer group discussed below as follows:
|
•
|
for base salary, the 50th percentile;
|
•
|
for annual cash incentives at target-level performance, the 50th percentile; and
|
•
|
for annualized economic equity grant value of long-term incentives, between the 50th and the 65th percentiles.
|
•
|
a short-term annual cash incentive payable only if the performance threshold is met; and
|
•
|
an equity-based, long-term incentive consisting of (1) restricted stock units with three-year cliff vesting to promote senior management retention, and (2) performance shares, 30% of which that vest, if at all, based on our TSR compared to a group of peer companies, 40% of which that vest, if at all, based on our total controllable cost performance, and 30% of which that vest, if at all, based on our EVA performance, each over a three-year performance period (
2018
through
2020
).
|
•
|
balanced short-term and long-term goals, with:
|
•
|
approximately
57%
of our CEO's target total compensation being delivered through long-term incentives; and
|
•
|
approximately 44% to 52% of the target total compensation for our other named executive officers being delivered through long-term incentives;
|
•
|
delivered a mix of fixed and at-risk compensation directly related to our overall performance and the creation of stockholder value, with:
|
•
|
approximately
75%
of the target compensation of our CEO and our President and COO being at-risk compensation payable only if certain corporate performance levels are achieved; and
|
•
|
approximately 63% to 68% of the target total compensation for our other named executive officers being at-risk compensation payable only if certain corporate performance levels are achieved;
|
•
|
provided compensation that is competitive with our compensation peer group recommended by the compensation committee's independent compensation consultant;
|
•
|
utilized equity-based awards, including performance shares that vest only if we achieve a certain relative TSR, cost performance or EVA performance goal, stock ownership guidelines and annual cash incentives linked to achievement of financial, corporate, operational and individual performance;
|
•
|
emphasized the importance of safety, quality, delivery and cost performance; and
|
•
|
utilized forfeiture provisions that can result in the loss of awards and resulting benefits if we determine that a recipient, including any of our named executive officers, has engaged in certain activities detrimental to us.
|
•
|
The external challenges to our near- and long-term ability to attract and retain strong senior management;
|
•
|
Each individual's contributions to our overall results;
|
•
|
Our historical and anticipated operating and financial performance compared with targeted goals; and
|
•
|
Our size and complexity compared with companies in our compensation peer group.
|
•
|
the company's key strategic initiatives, business plan and underlying assumptions;
|
•
|
the goal of maintaining alignment between our senior management and our stockholders through the use of short- and long-term, performance-based compensation;
|
•
|
the benefits of maintaining a consistent approach to compensation and the structure of our programs through business cycles;
|
•
|
the anticipated performance of the company's compensation programs based on the company's business plan and current financial position;
|
•
|
the economic conditions in the United States and abroad; and
|
•
|
stockholder feedback.
|
Actuant Corp.
|
ITT Corporation
|
Briggs & Stratton Corp.
|
John Bean Technologies Corporation
|
Carpenter Technology Corp.
|
Kennamental Inc.
|
Century Aluminum Co.
|
Lydall, Inc.
|
Chart Industries, Inc.
|
Mueller Industries, Inc.
|
Clearwater Paper Corp.
|
Mueller Water Products, Inc.
|
Cleveland-Cliffs Inc.
|
Nordson Corp.
|
Comfort Systems USA, Inc.
|
P.H. Glatfelter Co.
|
Donaldson Co.
|
SPX FLOW, Inc.
|
EnPro Industries, Inc.
|
Standex International Corp.
|
ESCO Technologies Inc.
|
SunCoke Energy, Inc.
|
Franklin Electric Co., Inc.
|
The Timken Company
|
Global Brass and Copper Holdings, Inc.
|
Timken Steel Corporation
|
Graco Inc.
|
TriMas Corp.
|
Harsco Corp.
|
Watts Water Technologies, Inc.
|
Hillenbrand, Inc.
|
Woodward, Inc.
|
IDEX Corp.
|
Worthington Industries, Inc.
|
Principal Elements
|
|||||||
|
|
|
|
|
|
|
|
Element
|
|
Form
|
|
Objective
|
|
Performance Metric
|
|
|
|
|
|
|
|
|
|
Base Salary
|
|
Cash
|
|
|
Provide a competitive, fixed compensation upon which our named executive officers can rely.
|
|
No performance metric.
|
|
|
|
|
|
|
|
|
Short-Term Incentives
|
|
Cash
|
|
|
Create financial incentive for
|
|
Adjusted EBITDA
|
|
|
|
|
|
achieving or exceeding company
|
|
Modifiers for safety,
|
|
|
|
|
|
performance goals.
|
|
quality, delivery, cost
|
|
|
|
|
|
|
|
and individual
|
|
|
|
|
|
|
|
performance.
|
|
|
|
|
|
|
|
|
Long-Term Incentives
|
|
Restricted Stock Units
|
|
|
Create financial incentive for
|
|
No performance metric
|
|
|
|
|
|
continued employment with our
|
|
(retention based and "at
|
|
|
|
|
|
company through three-year cliff
|
|
risk" to the extent
|
|
|
|
|
|
vesting.
|
|
underlying performance
|
|
|
|
|
|
|
|
impacts stock price).
|
|
|
|
|
|
|
|
|
|
|
Performance Shares
|
|
|
Create financial incentive for
|
|
30%: Relative TSR
|
|
|
|
|
|
achieving or exceeding long-term
|
|
(compared to peer
|
|
|
|
|
|
performance goals.
|
|
companies in the S&P
|
|
|
|
|
|
|
|
600 SmallCap Materials
|
|
|
|
|
|
|
|
Index).
|
|
|
|
|
|
|
|
40%: Total controllable
|
|
|
|
|
|
|
|
cost performance (added
|
|
|
|
|
|
|
|
as performance metric in
|
|
|
|
|
|
|
|
2016).
|
|
|
|
|
|
|
|
30%: EVA (added as
|
|
|
|
|
|
|
|
performance metric in
|
|
|
|
|
|
|
|
2017).
|
•
|
level and scope of responsibility;
|
•
|
prior experience;
|
•
|
base salaries paid for comparable positions by our compensation peer group; and
|
•
|
the relationship among base salaries paid within our company.
|
Name
|
2018 Base Salary
|
|||
Jack A. Hockema
|
$
|
915,000
|
|
|
Keith A. Harvey
|
$
|
552,000
|
|
|
Daniel J. Rinkenberger
|
$
|
468,000
|
|
|
John M. Donnan
|
$
|
438,800
|
|
|
John Barneson
|
$
|
386,500
|
|
|
Adjusted EBITDA
|
|
|
FEATURES
|
||
|
Pay for performance
|
|
|
Adjusted EBITDA target determined based on return on net assets (excluding cash) plus depreciation
|
|
|
Modifiers for safety, quality, delivery and cost performance establishing a strong linkage to strategic non-financial results
|
|
|
In exceptional and rare instances approved by our compensation committee, individual adjustment up to plus or minus 100% based on actual performance, including individual, facility, and/or functional area performance
|
|
|
No payout unless we:
|
|
|
(1)
|
achieve the threshold Adjusted EBITDA goal
|
|
(2)
|
generate positive adjusted net income
|
|
Maximum payout capped at three times the target
|
|
|
Rigorous financial performance goals - target increases with investments and increasingly higher net assets and depreciation
|
Name
|
|
Below Threshold
|
|
Threshold
|
|
Target
|
|
Maximum
|
|
Actual
|
||||||||||||
Jack A. Hockema
|
|
—
|
|
$
|
337,500
|
|
|
|
$
|
675,000
|
|
|
|
$
|
2,025,000
|
|
|
|
$
|
794,475
|
|
|
Keith A. Harvey
|
|
—
|
|
$
|
225,000
|
|
|
|
$
|
450,000
|
|
|
|
$
|
1,350,000
|
|
|
|
$
|
529,650
|
|
|
Daniel J. Rinkenberger
|
|
—
|
|
$
|
155,000
|
|
|
|
$
|
310,000
|
|
|
|
$
|
930,000
|
|
|
|
$
|
364,870
|
|
|
John M. Donnan
|
|
—
|
|
$
|
146,800
|
|
|
|
$
|
293,600
|
|
|
|
$
|
880,800
|
|
|
|
$
|
345,567
|
|
|
John Barneson
|
|
—
|
|
$
|
87,500
|
|
|
|
$
|
175,000
|
|
|
|
$
|
525,000
|
|
|
|
$
|
205,975
|
|
|
The Adjusted EBITDA targets under our short- term incentive plan reflect the Adjusted EBITDA required to achieve 7.5%, 15% and 35% returns on our net assets (excluding cash) at the threshold, target and maximum payout levels and also recover our depreciation. As we have continued to invest in our business our net assets and depreciation have continued to grow, and, as a result, the Adjusted EBITDA targets have continued to increase each year. To that end, our Adjusted EBITDA performance at the target level increased 10% from 2017 to 2018 and 21% from 2016 to 2018.
|
|
|
|
|
|
The table on the right illustrates our annual Adjusted EBITDA performance multiplier for the last three years under our short-term incentive plans, before the application of modifiers. See Appendix A to this Proxy Statement for reconciliations of GAAP to non-GAAP measures.
|
|
Relative TSR*
|
|
Controllable Cost**
|
|
EVA***
|
|
FEATURES
|
||
|
Three-year performance period (2018-2020)
|
|
|
Include retention features by utilizing time-vested restricted stock units
|
|
|
Pay for performance by utilizing performance shares subject to demanding metrics
|
|
|
Performance metrics:
|
|
|
(1)
|
40% based on controllable cost
|
|
(2)
|
30% based on relative TSR
|
|
(3)
|
30% based on EVA
|
|
Payout for relative TSR performance is capped at target if TSR is negative
|
|
|
Payout at target for controllable cost performance only if we offset underlying inflation
|
|
|
No windfall upon a change in control for performance shares - only shares earned based on performance through the date of the change in control will vest
|
•
|
a maximum performance level at or above which the maximum number of performance shares (equal to two times the target number of performance shares) will vest and be earned; and
|
•
|
pro rata vesting between the threshold and maximum performance levels.
|
Percentile Ranking
|
|
Multiplier
|
< 25th
|
|
0.0x
|
25th
|
|
0.5x
|
50th
|
|
1.0x
|
75th
|
|
1.5x
|
> 90th
|
|
2.0x
|
•
|
there is no payout under the controllable cost performance metric if the annualized controllable cost increase is equal to or greater than 3%;
|
•
|
the performance required for the target payout under the controllable cost performance metric is an annualized controllable cost increase at 0% after offsetting underlying inflation; and
|
•
|
the performance required for the maximum payout under the controllable cost performance metric is an annualized controllable cost reduction equal to or greater than 3% after offsetting underlying inflation.
|
Name
|
|
Target Monetary Value
|
|
Number of
Restricted Stock Units (1)
|
|
Number of
Performance Shares (2)
|
|||||||
Jack A. Hockema
|
|
$
|
2,140,000
|
|
|
|
8,285
|
|
|
|
35,190
|
|
|
Keith A. Harvey
|
|
$
|
1,100,000
|
|
|
|
3,904
|
|
|
|
18,934
|
|
|
Daniel J. Rinkenberger
|
|
$
|
675,000
|
|
|
|
3,629
|
|
|
|
8,670
|
|
|
John M. Donnan
|
|
$
|
585,000
|
|
|
|
3,145
|
|
|
|
7,514
|
|
|
John Barneson
|
|
$
|
481,000
|
|
|
|
2,586
|
|
|
|
6,177
|
|
|
(1)
|
The restricted stock units granted will vest on
March 5, 2021
or earlier if the named executive officer's employment terminates as a result of death or disability or in the event of a change in control. If the named executive officer’s employment is terminated by us without cause or the named executive officer’s employment is terminated by him for good reason, in either case before
March 5, 2021
, the restricted stock units will remain outstanding and vest on
March 5, 2021
(or earlier in the event of his death or disability or a change in control). If the employment of Mr. Hockema or Mr. Barneson terminates before
March 5, 2021
as a result of his retirement, a prorated portion of such restricted stock units, determined based on the actual days of his employment during the restriction period, will remain outstanding and vest on
March 5, 2021
(or earlier in the event of his death or disability or a change in control). The number of restricted stock units granted was calculated by dividing the applicable percentage (i.e., 36% and 33% for Messrs. Hockema and Harvey, respectively, and 50% for the other named executive officers) of the target monetary value by the sum of (i) the average of the closing prices of our company's common stock for the 20 trading days prior to the grant date, which was $
105.10
per share, reduced by (ii) 11.53%, the discount factor provided by Meridian to reflect the design characteristics, including the vesting period, of the restricted stock units.
|
(2)
|
The table below sets forth the number of performance shares that will vest and be earned for each of Messrs. Hockema, Harvey, Rinkenberger, Donnan and Barneson under our
2018
-
2020
LTI Program at each performance level:
|
Name
|
|
Below Threshold
|
|
Threshold
|
|
Target
|
|
Maximum
|
||||||
Jack A. Hockema
|
|
—
|
|
8,797
|
|
|
|
17,594
|
|
|
|
35,190
|
|
|
Keith A. Harvey
|
|
—
|
|
4,733
|
|
|
|
9,467
|
|
|
|
18,934
|
|
|
Daniel J. Rinkenberger
|
|
—
|
|
2,167
|
|
|
|
4,334
|
|
|
|
8,670
|
|
|
John M. Donnan
|
|
—
|
|
1,878
|
|
|
|
3,757
|
|
|
|
7,514
|
|
|
John Barneson
|
|
—
|
|
1,544
|
|
|
|
3,087
|
|
|
|
6,177
|
|
|
•
|
the threshold number of performance shares reflects that no performance shares will be earned in
2021
under our
2018
-
2020
LTI Program unless our company's performance exceeds the applicable threshold performance required over the
2018
through
2020
performance period;
|
•
|
the target number of performance shares was calculated by dividing the applicable percentage (i.e., 64% and 67% for Messrs. Hockema and Harvey, respectively, and 50% for the other named executive officers) of the target monetary value by the sum of (i) the average of the closing prices of our company's common stock for the 20 trading days prior to the grant date, which was $
105.10
per share, reduced by (ii) 25.93%, the discount factor provided by Meridian in connection with the calculation of the economic value of the performance shares for purposes of determining the number of performance shares to be granted on the grant date; and
|
•
|
the maximum number of performance shares for each metric is approximately twice the target number of performance shares for that metric.
|
Relative TSR*
|
|
|
Controllable Cost**
|
|
TSR =
|
(Ending Average – Beginning Average)
|
Beginning Average
|
TSR =
|
$97.09 – $84.36
|
= 15.10%
|
$84.36
|
|
Performance shares earned, if any, are based on our TSR over the underlying three year performance period compared to the other companies comprising the S&P 600 SmallCap Materials Sector Index.
|
|||
|
|
|
|
|
The beginning and ending stock prices used to determine our TSR are calculated using the 20-trading day average preceding the beginning and end of the performance period.
|
||||
|
|
|
|
|
The performance share multiplier is determined by using straight line interpolation based on our TSR percentile ranking within our comparison group based on the table to the right:
|
Percentile Ranking
|
|
Multiplier
|
|
< 25th
|
|
0.0x
|
||
25th
|
|
0.5x
|
||
50th
|
|
1.0x
|
||
75th
|
|
1.5x
|
||
> 90th
|
|
2.0x
|
||
|
|
|
|
•
|
the Kaiser Aluminum Savings and Investment Plan, a tax-qualified profit-sharing and 401(k) plan (which we refer to as our Savings Plan); and
|
•
|
a nonqualified and unsecured deferred compensation plan (which we refer to as our Restoration Plan) intended to restore benefits that would be payable to designated participants in our Savings Plan but for the limitations on benefit accruals and payments imposed by the Code.
|
•
|
A company match of the employee's pre-tax deferrals under our Savings Plan;
|
•
|
A company contribution to the employee's account under our Savings Plan; and
|
•
|
A company contribution to the employee's account under our Restoration Plan.
|
•
|
provide an economic incentive for Mr. Hockema to delay his retirement until at least July 2020;
|
•
|
improve our ability to retain other key members of senior management;
|
•
|
facilitate the development and executive of succession plans; and
|
•
|
provide assurance to our stockholders, customers and other stakeholders of the continuity of senior management for an extended period.
|
Name and Principal
Position
|
|
Year
|
|
Salary
|
|
Stock Awards (1)
|
|
Non-Equity
Incentive Plan
Compensation
(2)
|
|
Change in
Pension Value
and Nonqualified
Deferred
Compensation
Earnings (3)
|
|
All Other
Compensation
(4)
|
|
Total
|
||||||||||||||||
Jack A. Hockema,
|
|
2018
|
|
$
|
915,000
|
|
|
$
|
3,177,845
|
|
|
|
$
|
794,475
|
|
|
|
—
|
|
|
|
$
|
526,551
|
|
|
|
$
|
5,413,871
|
|
|
Chief Executive Officer
|
|
2017
|
|
$
|
911,000
|
|
|
$
|
3,364,576
|
|
|
|
$
|
951,300
|
|
|
|
—
|
|
|
|
$
|
501,821
|
|
|
|
$
|
5,728,697
|
|
|
and Chairman of the Board
|
|
2016
|
|
$
|
894,750
|
|
|
$
|
3,484,939
|
|
|
|
$
|
1,337,336
|
|
|
|
—
|
|
|
|
$
|
277,081
|
|
|
|
$
|
5,994,106
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Keith A. Harvey,
|
|
2018
|
|
$
|
547,750
|
|
|
$
|
1,657,495
|
|
|
|
$
|
529,650
|
|
|
|
—
|
|
|
|
$
|
376,138
|
|
|
|
$
|
3,111,033
|
|
|
President and Chief
|
|
2017
|
|
$
|
532,500
|
|
|
$
|
4,229,899
|
|
|
|
$
|
656,850
|
|
|
$
|
44,164
|
|
|
|
$
|
352,834
|
|
|
|
$
|
5,816,247
|
|
|
Operating Officer
|
|
2016
|
|
$
|
506,250
|
|
|
$
|
1,822,826
|
|
|
|
$
|
1,110,000
|
|
|
$
|
33,287
|
|
|
|
$
|
197,348
|
|
|
|
$
|
3,669,711
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Daniel J. Rinkenberger,
|
|
2018
|
|
$
|
464,750
|
|
|
$
|
933,087
|
|
|
|
$
|
364,870
|
|
|
|
—
|
|
|
|
$
|
185,492
|
|
|
|
$
|
1,948,199
|
|
|
Executive Vice President
|
|
2017
|
|
$
|
452,700
|
|
|
$
|
975,928
|
|
|
|
$
|
453,000
|
|
|
$
|
42,841
|
|
|
|
$
|
185,496
|
|
|
|
$
|
2,109,965
|
|
|
and Chief Financial Officer
|
|
2016
|
|
$
|
443,625
|
|
|
$
|
1,008,821
|
|
|
|
$
|
641,313
|
|
|
$
|
32,426
|
|
|
|
$
|
119,113
|
|
|
|
$
|
2,245,298
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
John M. Donnan,
|
|
2018
|
|
$
|
435,600
|
|
|
$
|
808,679
|
|
|
|
$
|
345,567
|
|
|
|
—
|
|
|
|
$
|
178,993
|
|
|
|
$
|
1,768,839
|
|
|
Executive Vice President -
|
|
2017
|
|
$
|
424,000
|
|
|
$
|
846,311
|
|
|
|
$
|
430,350
|
|
|
$
|
37,357
|
|
|
|
$
|
183,213
|
|
|
|
$
|
1,921,231
|
|
|
Legal, Compliance and
|
|
2016
|
|
$
|
415,950
|
|
|
$
|
877,221
|
|
|
|
$
|
604,841
|
|
|
$
|
27,883
|
|
|
|
$
|
125,188
|
|
|
|
$
|
2,051,083
|
|
|
Human Resources
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
John Barneson
|
|
2018
|
|
$
|
383,625
|
|
|
$
|
664,839
|
|
|
|
$
|
205,975
|
|
|
$
|
3,587
|
|
|
|
$
|
161,591
|
|
|
|
$
|
1,419,617
|
|
|
Senior Vice President -
|
|
2017
|
|
$
|
373,200
|
|
|
$
|
695,867
|
|
|
|
$
|
256,700
|
|
|
$
|
73,921
|
|
|
|
$
|
169,445
|
|
|
|
$
|
1,569,133
|
|
|
Corporate Development
|
|
2016
|
|
$
|
366,000
|
|
|
$
|
719,339
|
|
|
|
$
|
440,000
|
|
|
$
|
57,998
|
|
|
|
$
|
105,623
|
|
|
|
$
|
1,688,960
|
|
|
(1)
|
Reflects the aggregate grant date fair value of restricted stock units and performance share awards to our named executive officers determined in accordance with Financial Accounting Standards Board Accounting Standard Code Topic 718 (referred to herein as ASC Topic 718), without regard to potential forfeiture. The aggregate grant date fair value of the performance shares awards reflected in this table has been determined assuming the probable outcome of the performance condition on the date of the grant and without adjustment for actual performance during the period and, for performance shares with relative TSR as the performance metric, using a Monte Carlo simulation of future stock prices of our company and our peer companies on the S&P 600 SmallCap Materials Sector Index. The aggregate grant date fair value of the
2018
performance share awards determined assuming the probable outcome of the performance conditions and assuming an outcome of the performance conditions at the maximum level are as follows:
|
|
|
|
|
Aggregate Grant Date Fair Value
|
||||||||
Name
|
|
Year
|
|
At Probable
Performance
|
|
At Maximum
Performance
|
||||||
Jack A. Hockema
|
|
2018
|
|
$
|
2,394,415
|
|
|
|
$
|
3,849,258
|
|
|
Keith A. Harvey
|
|
2018
|
|
$
|
1,288,333
|
|
|
|
$
|
2,071,090
|
|
|
Daniel J. Rinkenberger
|
|
2018
|
|
$
|
589,928
|
|
|
|
$
|
948,368
|
|
|
John M. Donnan
|
|
2018
|
|
$
|
511,288
|
|
|
|
$
|
821,914
|
|
|
John Barneson
|
|
2018
|
|
$
|
420,307
|
|
|
|
$
|
675,669
|
|
|
(2)
|
Reflects payments earned under our short-term incentive plans.
|
(3)
|
Reflects the aggregate change in actuarial present value of the named executive officer's accumulated benefit under a defined pension benefit plan previously maintained by us for our salaried employees, which we refer to as our Old Pension Plan, during the applicable fiscal year, calculated by (a) assuming mortality according to the RP-2014 White Collar Healthy Annuitant mortality table, adjusted to 2006 and then projected forward with Scale MP-2016 as of December 31,
2017
and the RP-2014 White Collar Healthy Annuitant mortality table, adjusted to 2006, and then projected forward with Scale MP-2018 as of December 31,
2018
and (b) applying a discount rate of 3.60%, 3.20% and 3.90% per annum for
2016
,
2017
and
2018
, respectively, to determine the actuarial present value of the accumulated benefit at December 31 of the preceding year and a discount rate of 3.90%, 3.60% and 3.20% per annum, respectively, to determine the actuarial present value of the accumulated benefit at December 31 of the applicable year. Effective December 17, 2003, the Pension Benefit Guaranty Corporation, or PBGC, terminated and effectively assumed responsibility for making benefit payments in respect of our Old Pension Plan, whereupon all benefit accruals under the Old Pension Plan ceased and benefits available thereunder to certain salaried employees, including Mr. Hockema, were significantly reduced due to the limitations on benefits payable by the PBGC. Above-market or preferential earnings are not available under our Restoration Plan, which is our only plan or arrangement pursuant to which compensation may be deferred on a basis that is not tax-qualified, or any of our other benefit plans.
|
(4)
|
Includes (a) contributions made or to be made by us under our Savings Plan, (b) contributions made or to be made by us under our Restoration Plan (which is intended to restore the benefit of contributions that we would have otherwise paid to participants under our Savings Plan but for limitations imposed by the Code), (c) dividend and dividend equivalent payments which were not factored into the reported grant date fair value of the restricted stock unit and performance share awards, and (d) the costs to us of perquisites and other personal benefits. See the table set forth under "- All Other Compensation" below for information regarding each such component.
|
•
|
For
2018
Mr. Hockema,
16.9%
; Mr. Harvey,
17.6%
; Mr. Rinkenberger,
23.9%
; Mr. Donnan,
24.6%
; and Mr. Barneson,
27.0%
;
|
•
|
For
2017
, Mr. Hockema,
15.9%
; Mr. Harvey,
9.2%
; Mr. Rinkenberger,
21.5%
; Mr. Donnan,
22.1%
; and Mr. Barneson,
23.8%
; and
|
•
|
For
2016
Mr. Hockema,
14.9%
; Mr. Harvey,
13.8%
; Mr. Rinkenberger,
19.8%
; Mr. Donnan,
20.3%
; and Mr. Barneson,
21.7%
.
|
Name
|
|
Year
|
|
Savings Plan
Contributions
|
|
Restoration
Plan
Contributions
|
|
Dividend
and
Dividend
Equivalent
Payments
|
|
Club
Membership
Dues
|
|
Vehicle
Allowance
|
|
Total
|
||||||||||||||||||
Jack A. Hockema
|
|
2018
|
|
$
|
29,625
|
|
|
|
$
|
194,331
|
|
|
|
$
|
288,025
|
|
|
|
|
—
|
|
|
|
$
|
14,570
|
|
|
|
$
|
526,551
|
|
|
|
|
2017
|
|
$
|
29,092
|
|
|
|
$
|
240,709
|
|
|
|
$
|
217,450
|
|
|
|
|
—
|
|
|
|
$
|
14,570
|
|
|
|
$
|
501,821
|
|
|
|
|
2016
|
|
$
|
28,550
|
|
|
|
$
|
166,666
|
|
|
|
$
|
67,295
|
|
|
|
|
—
|
|
|
|
$
|
14,570
|
|
|
|
$
|
277,081
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Keith A. Harvey
|
|
2018
|
|
$
|
33,000
|
|
|
|
$
|
111,552
|
|
|
|
$
|
214,830
|
|
|
|
$
|
4,500
|
|
|
|
$
|
12,256
|
|
|
|
$
|
376,138
|
|
|
|
|
2017
|
|
$
|
32,400
|
|
|
|
$
|
164,700
|
|
|
|
$
|
142,314
|
|
|
|
$
|
1,164
|
|
|
|
$
|
12,256
|
|
|
|
$
|
352,834
|
|
|
|
|
2016
|
|
$
|
31,800
|
|
|
|
$
|
78,400
|
|
|
|
$
|
73,827
|
|
|
|
$
|
1,065
|
|
|
|
$
|
12,256
|
|
|
|
$
|
197,348
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Daniel J. Rinkenberger
|
|
2018
|
|
$
|
27,417
|
|
|
|
$
|
64,358
|
|
|
|
$
|
83,429
|
|
|
|
|
—
|
|
|
|
$
|
10,288
|
|
|
|
$
|
185,492
|
|
|
|
|
2017
|
|
$
|
27,000
|
|
|
|
$
|
82,401
|
|
|
|
$
|
65,807
|
|
|
|
|
—
|
|
|
|
$
|
10,288
|
|
|
|
$
|
185,496
|
|
|
|
|
2016
|
|
$
|
26,500
|
|
|
|
$
|
52,962
|
|
|
|
$
|
29,363
|
|
|
|
|
—
|
|
|
|
$
|
10,288
|
|
|
|
$
|
119,113
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
John M. Donnan
|
|
2018
|
|
$
|
27,500
|
|
|
|
$
|
59,095
|
|
|
|
$
|
72,509
|
|
|
|
$
|
7,205
|
|
|
|
$
|
12,684
|
|
|
|
$
|
178,993
|
|
|
|
|
2017
|
|
$
|
27,000
|
|
|
|
$
|
75,884
|
|
|
|
$
|
57,211
|
|
|
|
$
|
10,434
|
|
|
|
$
|
12,684
|
|
|
|
$
|
183,213
|
|
|
|
|
2016
|
|
$
|
26,500
|
|
|
|
$
|
48,207
|
|
|
|
$
|
25,533
|
|
|
|
$
|
12,264
|
|
|
|
$
|
12,684
|
|
|
|
$
|
125,188
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
John Barneson
|
|
2018
|
|
$
|
38,500
|
|
|
|
$
|
53,146
|
|
|
|
$
|
59,486
|
|
|
|
|
—
|
|
|
|
$
|
10,459
|
|
|
|
$
|
161,591
|
|
|
|
|
2017
|
|
$
|
36,000
|
|
|
|
$
|
77,848
|
|
|
|
$
|
45,138
|
|
|
|
|
—
|
|
|
|
$
|
10,459
|
|
|
|
$
|
169,445
|
|
|
|
|
2016
|
|
$
|
35,000
|
|
|
|
$
|
44,051
|
|
|
|
$
|
16,113
|
|
|
|
|
—
|
|
|
|
$
|
10,459
|
|
|
|
$
|
105,623
|
|
|
Name
|
|
Grant
Date
|
|
Estimated Future Payouts Under Non-
Equity Incentive Plan Awards (1)
|
|
Estimated Future Payouts Under Equity Incentive Plan Awards (2)
|
|
All Other
Stock
Awards:
Number of
Shares of
Stock or
Units
(#)
|
|
Grant Date
Fair Value
of Stock and
Option
Awards (3) ($)
|
|||||||||||||||||||||||||||||||
Threshold
($)
|
|
Target
($)
|
|
Maximum
($)
|
|
Threshold (#)
|
|
Target (#)
|
|
Maximum (#)
|
|
||||||||||||||||||||||||||||||
Jack A. Hockema
|
|
—
|
|
|
|
$
|
337,500
|
|
|
|
|
$
|
675,000
|
|
|
|
|
$
|
2,025,000
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
||
|
|
3/5/2018
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,285
|
|
(4)
|
|
|
$
|
783,430
|
|
|
|||
|
|
3/5/2018
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
8,797
|
|
|
17,594
|
|
|
35,190
|
|
|
—
|
|
|
|
|
$
|
2,394,415
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Keith A. Harvey
|
|
—
|
|
|
|
$
|
225,000
|
|
|
|
|
$
|
450,000
|
|
|
|
|
$
|
1,350,000
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
||
|
|
3/5/2018
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,904
|
|
(4)
|
|
|
$
|
369,162
|
|
|
|||
|
|
3/5/2018
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
4,733
|
|
|
9,467
|
|
|
18,934
|
|
|
—
|
|
|
|
|
$
|
1,288,333
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Daniel J. Rinkenberger
|
|
—
|
|
|
|
$
|
155,000
|
|
|
|
|
$
|
310,000
|
|
|
|
|
$
|
930,000
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
||
|
|
3/5/2018
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,629
|
|
(4)
|
|
|
$
|
343,158
|
|
|
|||
|
|
3/5/2018
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
2,167
|
|
|
4,334
|
|
|
8,670
|
|
|
—
|
|
|
|
|
$
|
589,928
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
John M. Donnan
|
|
—
|
|
|
|
$
|
146,800
|
|
|
|
|
$
|
293,600
|
|
|
|
|
$
|
880,800
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
||
|
|
3/5/2018
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,145
|
|
(4)
|
|
|
$
|
297,391
|
|
|
|||
|
|
3/5/2018
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
1,878
|
|
|
3,757
|
|
|
7,514
|
|
|
—
|
|
|
|
|
$
|
511,288
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
John Barneson
|
|
—
|
|
|
|
$
|
87,500
|
|
|
|
|
$
|
175,000
|
|
|
|
|
$
|
525,000
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
||
|
|
3/5/2018
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,586
|
|
(4)
|
|
|
$
|
244,532
|
|
|
|||
|
|
3/5/2018
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
1,544
|
|
|
3,087
|
|
|
6,177
|
|
|
—
|
|
|
|
|
$
|
420,307
|
|
|
(1)
|
Reflects the threshold, target and maximum award amounts under our
2018
STI Plan for our named executive officers. No awards are payable when performance does not reach the threshold performance level. Under our
2018
STI Plan, if the threshold performance level was reached, participants were eligible to receive a cash incentive award between one-half and three times the participant's target award amount. See the "Non-Equity Incentive Plan Compensation" column of the Summary Compensation Table for the actual monetary awards paid to the named executive officers under the
2018
STI Plan in March
2019
.
|
(2)
|
Reflects the number of performance shares that will become vested and earned for each of the named executive officers under our
2018
-
2020
LTI Program in
2021
at the threshold, target and maximum performance levels. No performance
|
(3)
|
Reflects the aggregate grant date fair value of restricted stock units and performance share awards to our named executive officers determined in accordance with ASC Topic 718, without regard to potential forfeiture. The aggregate grant date fair value of the performance share awards reflected in this table has been determined assuming the probable outcome of the performance condition on the date of the grant and without adjustment for actual performance during the period and, for performance shares with relative TSR as the performance metric, using a Monte Carlo simulation of future stock prices of our company and our peer companies on the S&P 600 SmallCap Materials Index.
|
(4)
|
Reflects the number of restricted stock units received by the named executive officer pursuant to awards granted effective
March 5, 2018
. The restricted stock units granted will vest on
March 5, 2021
or earlier if the named executive officer's employment terminates as a result of death or disability or in the event of a change in control. If the named executive officer’s employment is terminated by us without cause or the named executive officer’s employment is terminated by him for good reason, in either case before
March 5, 2021
, the restricted stock units will remain outstanding and vest on
March 5, 2021
(or earlier in the event of his death or disability or a change in control). If the employment of Mr. Hockema or Mr. Barneson terminates before
March 5, 2021
as a result of his retirement, a prorated portion of such restricted stock units, determined based on the actual days of his employment during the restriction period, will remain outstanding and vest on March 5, 2021 (or earlier in the event of his death or disability or a change in control). Mr. Barneson's employment terminated as a result of his retirement in February 2019. The named executive officer will receive dividend equivalent payments equal to cash dividends and distributions that such named executive officer would receive if the number of shares of common stock underlying such restricted stock units were issued and outstanding and held of record by such named executive officer on the applicable record date for such dividend or distribution.
|
•
|
base salary earned through the date of such termination;
|
•
|
except in the case of a termination by us for cause, earned but unpaid incentive awards;
|
•
|
accrued but unpaid vacation;
|
•
|
benefits under our employment benefit plans to the extent vested and not forfeited on the date of such termination; and
|
•
|
benefit continuation and conversion rights to the extent provided under our employment benefit plans.
|
•
|
the employee received severance compensation or welfare benefit continuation pursuant to a Change in Control Agreement (described below) or any other agreement;
|
•
|
the employee's employment is terminated other than by us without cause; or
|
•
|
the employee declined to sign, or subsequently revokes, a designated form of release.
|
•
|
the participant's employment is terminated other than by us without cause or by the participant for good reason; or
|
•
|
the participant declines to sign, or subsequently revokes, a designated form of release.
|
•
|
two times the sum of his base pay and most recent short-term incentive target;
|
•
|
a prorated portion of his short-term incentive target for the year of termination; and
|
•
|
a prorated portion of his long-term incentive target in effect for the year of his termination, provided that such target was achieved.
|
•
|
for our employees who were employed with us on or before January 1, 2004, we contribute in a range from 2% to 10% of the total of the employee's base salary and short-term incentive award, based upon the sum of the employee's age and years of continuous service as of January 1, 2004; and
|
•
|
for our employees who were first employed with us after January 1, 2004, we contribute 2% of the total of the employee's base salary and short-term incentive award.
|
•
|
if our matching contributions to a participant under the Savings Plan are limited in any year, we will make an annual contribution to that participant's account under the Restoration Plan equal to the difference between:
|
•
|
the matching contributions that we could have made to that participant's account under the Savings Plan if the Code did not impose any limitations; and
|
•
|
the maximum contribution we could in fact make to that participant's account under the Savings Plan in light of the limitations imposed by the Code; and
|
•
|
annual fixed-rate contributions to the participant's account under the Restoration Plan are made in an amount equal to between 2% and 10% of the participant's excess compensation, as defined in Section 401(a)(17) of the Code.
|
|
|
|
Stock Awards
|
|
|||||||||||||||||
|
|
|
Number of Shares or Units of Stock That Have Not Vested
|
|
Market Value or Shares or Units of Stock That Have Not Vested (1)
|
|
|
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested
|
|
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested (1)
|
|||||||||||
Name
|
|
|
(#)
|
|
|
($)
|
|
|
(#)
|
|
|
($)
|
|
||||||||
Jack A. Hockema
|
|
|
10,830
|
|
(2)
|
|
|
$
|
967,011
|
|
|
|
22,997
|
|
(5)
|
|
|
$
|
2,053,402
|
|
|
|
|
|
10,509
|
|
(3)
|
|
|
$
|
938,349
|
|
|
|
22,312
|
|
(6)
|
|
|
$
|
1,992,238
|
|
|
|
|
|
8,285
|
|
(4)
|
|
|
$
|
739,768
|
|
|
|
17,594
|
|
(7)
|
|
|
$
|
1,570,968
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Keith A. Harvey
|
|
|
25,000
|
|
(8)
|
|
|
$
|
2,232,250
|
|
|
|
12,385
|
|
(5)
|
|
|
$
|
1,105,857
|
|
|
|
|
|
5,107
|
|
(2)
|
|
|
$
|
456,004
|
|
|
|
12,015
|
|
(6)
|
|
|
$
|
1,072,819
|
|
|
|
|
|
4,955
|
|
(3)
|
|
|
$
|
442,432
|
|
|
|
9,467
|
|
(7)
|
|
|
$
|
845,308
|
|
|
|
|
|
30,000
|
|
(9)
|
|
|
$
|
2,678,700
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
3,904
|
|
(4)
|
|
|
$
|
348,588
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Daniel J. Rinkenberger
|
|
|
4,723
|
|
(2)
|
|
|
$
|
421,717
|
|
|
|
5,641
|
|
(5)
|
|
|
$
|
503,685
|
|
|
|
|
|
4,596
|
|
(3)
|
|
|
$
|
410,377
|
|
|
|
5,487
|
|
(6)
|
|
|
$
|
489,934
|
|
|
|
|
|
3,629
|
|
(4)
|
|
|
$
|
324,033
|
|
|
|
4,334
|
|
(7)
|
|
|
$
|
386,983
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
John M. Donnan
|
|
|
4,107
|
|
(2)
|
|
|
$
|
366,714
|
|
|
|
4,905
|
|
(5)
|
|
|
$
|
437,967
|
|
|
|
|
|
3,985
|
|
(3)
|
|
|
$
|
355,821
|
|
|
|
4,760
|
|
(6)
|
|
|
$
|
425,020
|
|
|
|
|
|
3,145
|
|
(4)
|
|
|
$
|
280,817
|
|
|
|
3,757
|
|
(7)
|
|
|
$
|
335,463
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
John Barneson
|
|
|
3,368
|
|
(2)
|
|
|
$
|
300,729
|
|
|
|
4,022
|
|
(5)
|
|
|
$
|
359,124
|
|
|
|
|
|
3,277
|
|
(3)
|
|
|
$
|
292,603
|
|
|
|
3,912
|
|
(6)
|
|
|
$
|
349,302
|
|
|
|
|
|
2,586
|
|
(4)
|
|
|
$
|
230,904
|
|
|
|
3,087
|
|
(7)
|
|
|
$
|
275,638
|
|
|
(1)
|
Reflects the aggregate market value determined based on a per share price of $
89.29
, the closing price per share of our common stock as reported on the Nasdaq Global Select Market on
December 31, 2018
.
|
(2)
|
Reflects the number restricted stock units received by the named executive officer pursuant to awards granted effective March 5, 2016. All such restricted stock units vested on March 5, 2019, with each entitling the named executive officer to one share of common stock.
|
(3)
|
Reflects the number of restricted stock units received by the named executive officer pursuant to awards granted effective March 5, 2017. All such restricted stock units will vest on March 5, 2020 or earlier if the named executive officer’s employment terminates as a result of death or disability or in the event of a change in control. If the named executive officer’s employment is terminated by us without cause or the named executive officer’s employment is terminated by him for good reason, in either case before March 5, 2020, the restricted stock units will remain outstanding and vest on March 5, 2020 (or earlier in the event of his death or disability or a change in control). If, prior to March 5, 2020, the employment of Mr. Hockema or Mr. Barneson terminates as a result of his retirement, a prorated portion of such restricted stock units, determined based on the actual days of the named executive officer's employment during the restriction period, will vest on March 5, 2020. Mr. Barneson’s employment terminated as a result of his retirement in February 2019.
|
(5)
|
Reflects the target number of performance shares received by the named executive officer pursuant to awards granted effective March 5, 2016. Such target number is approximately one-half of the performance shares received by the named executive officer pursuant to awards granted effective March 5, 2016. The number of performance shares earned based on the level of performance achieved during the three-year performance period vested on March 5, 2019. The compensation committee certified the performance level achieved during the three-year performance period on March 5, 2018 and, based on the certified performance level, 101% of the target performance shares received by the named executive officers were earned.
|
(6)
|
Reflects the target number of performance shares received by the named executive officer pursuant to awards granted effective March 5, 2017. Such target number is approximately one-half of the performance shares received by the named executive officer pursuant to awards granted effective March 5, 2017. The number of performance shares, if any, earned based on the level of performance achieved during the three-year performance period will vest on the later to occur of March 15, 2020 and the date on which the compensation committee certifies the performance level achieved during the three-year performance period, which shall be no later than March 15, 2020. If, prior to December 31, 2019, the named executive officer’s employment terminates as a result of death or disability, the target number of performance shares will vest. If, prior to the vesting date, the named executive officer’s employment is terminated by us without cause or is voluntarily terminated by him for good reason, the performance shares granted to him will remain outstanding and the number of performance shares, if any, earned on the vesting date will be determined based on the performance level achieved during the performance period. If, prior to December 31, 2019, a change in control occurs, the performance shares granted to him will vest immediately and the number of performance shares, if any, earned upon the change of control date will be determined based on the performance level achieved during the performance period through the change in control date. If, prior to the vesting date, the employment of Mr. Hockema or Mr. Barneson terminates as a result of his retirement, the performance shares granted to him will remain outstanding and the number of performance shares, if any, that will vest on the vesting date will be determined based on the performance level achieved during the applicable performance period and prorated based on the actual days of the named executive officer's employment during the performance period. Mr. Barneson’s employment terminated as a result of his retirement in February 2019.
|
(7)
|
Reflects the target number of performance shares received by the named executive officer pursuant to awards granted effective March 5, 2018. Such target number is approximately one-half of the performance shares received by the named executive officer pursuant to awards granted effective March 5, 2018. See Note 2 to the table set forth under "- Grants of Plan-Based Awards in 2018" above for more information on the performance shares granted to the named executive officers effective March 5, 2018.
|
(8)
|
Reflects the number of shares of restricted stock received by Mr. Harvey pursuant to an award granted effective June 4, 2014 upon his promotion to Executive Vice President - Fabricated Products. The restrictions on all such shares will lapse on June 4, 2019 or earlier if Mr. Harvey’s employment terminates as a result of death or disability, the named executive officer’s employment is terminated by us without cause, the named executive officer’s employment is voluntarily terminated by him for good reason or in the event of a change in control.
|
(9)
|
Reflects the number of restricted stock units received by Mr. Harvey pursuant to an award granted effective July 15, 2017 to increase his compensation and retention in connection with our succession planning. All such restricted stock units will vest on July 15, 2022 or earlier if Mr. Harvey’s employment terminates as a result of death or disability or in the event of a change in control. If the named executive officer’s employment is terminated by us without cause or the named executive
|
|
|
Stock Awards
|
||||||||
Name
|
|
Number of Shares
Acquired on Vesting
(#)
|
|
Value Realized
on Vesting
($)(1)
|
||||||
Jack A. Hockema
|
|
50,926
|
|
|
|
|
$
|
5,177,137
|
|
|
Keith A. Harvey
|
|
16,730
|
|
|
|
|
$
|
1,700,772
|
|
|
Daniel J. Rinkenberger
|
|
14,599
|
|
|
|
|
$
|
1,484,134
|
|
|
John M. Donnan
|
|
12,696
|
|
|
|
|
$
|
1,290,676
|
|
|
John Barneson
|
|
10,410
|
|
|
|
|
$
|
1,058,281
|
|
|
(1)
|
Reflects the aggregate market value of (i) shares of restricted stock that vested on
March 5, 2018
, determined based on a per share price of $
101.66
, the closing price per share of our common stock as reported on the Nasdaq Global Select Market on the vesting date of such shares of restricted stock, and (ii) shares of common stock that were received upon the vesting on
March 5, 2018
of 126% of the target number of performance shares (63% of the total number of performance shares) granted to our named executive officers in
2015
based on actual results over the three-year performance period, determined based on a per share price of $
101.66
, the closing price per share of our common stock as reported on the Nasdaq Global Select Market on the vesting date of such performance shares.
|
Name
|
|
Plan Name
|
|
Number of Years
Credited Service
(#)
|
|
Present Value of
Accumulated
Benefit (1)
($)
|
Jack A. Hockema
|
|
Kaiser Aluminum Salaried Employees Retirement Plan
|
|
11.92
|
|
$337,267
|
Keith A. Harvey
|
|
Kaiser Aluminum Salaried Employees Retirement Plan
|
|
17.83
|
|
$479,844
|
Daniel J. Rinkenberger
|
|
Kaiser Aluminum Salaried Employees Retirement Plan
|
|
12.67
|
|
$478,883
|
John M. Donnan
|
|
Kaiser Aluminum Salaried Employees Retirement Plan
|
|
10.25
|
|
$380,094
|
John Barneson
|
|
Kaiser Aluminum Salaried Employees Retirement Plan
|
|
28.83
|
|
$773,880
|
(1)
|
Determined (a) assuming mortality according to the RP-2014 White Collar Healthy Annuitant mortality table, adjusted for 2006 and then projected with Scale MP-2018 and (b) applying a discount rate of 3.90% per annum.
|
Name
|
|
Registrant
Contributions
in Last FY (1)
|
|
Aggregate
Earnings in
Last FY (2)(3)
|
|
Aggregate
Balance at
Last FYE
|
||||||||||||
Jack A. Hockema
|
|
|
$
|
194,331
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
4,591,540
|
|
|
Keith A. Harvey
|
|
|
$
|
111,552
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
956,081
|
|
|
Daniel J. Rinkenberger
|
|
|
$
|
64,358
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
670,790
|
|
|
John M. Donnan
|
|
|
$
|
59,095
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
789,662
|
|
|
John Barneson
|
|
|
$
|
53,146
|
|
|
|
|
$
|
40,138
|
|
|
|
|
$
|
3,203,331
|
|
|
(1)
|
In each case, 100% of such amount is included in the amounts for
2018
reflected in the "All Other Compensation" column of the Summary Compensation Table above.
|
(2)
|
Amounts included in this column reflect the change in market value of the investments made under the Restoration Plan and do not include amounts reflected in the "Registrant Contributions in Last FY" column of this table.
|
(3)
|
Amounts included in this column do not include above-market or preferential earnings (of which there were none) and, accordingly, such amount is not included in the "Change in Pension Value and Nonqualified Deferred Compensation Earnings" column of the Summary Compensation Table above.
|
•
|
we applied a Canadian to U.S dollar exchange rate for compensation paid in Canadian currency using the exchange rate in effect as of December 31, 2017;
|
•
|
we ranked the annual gross income of all employees for the year ended December 31, 2017, except for Mr. Hockema, using the Form W-2 compensation for our U.S. employees and Form T4 compensation for our Canadian employees; and
|
•
|
voluntary termination by the named executive officer prior to age 65 (except for Messrs. Hockema and Barneson, who turned age 65 during 2011 and 2016, respectively);
|
•
|
termination by us for cause;
|
•
|
termination by us without cause or by the named executive officer with good reason;
|
•
|
termination by us without cause or by the named executive officer with good reason following a change in control;
|
•
|
termination at retirement at or after age 65 for Messrs. Hockema and Barneson (but not for Messrs. Harvey, Rinkenberger or Donnan because none of such named executive officers had reached age 65 as of
December 31, 2018
);
|
•
|
termination as a result of disability; or
|
•
|
termination as a result of death.
|
Name
|
Triggering Event
|
Payments Earned but Unpaid (1)
|
Other Benefits (2)
|
Equity Awards (3)
|
Distribution of Restoration Plan Outline (4)
|
Total
|
||||||||||
Hockema
|
Voluntary Termination
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
||||||||||
Termination for Cause
|
$
|
87,981
|
|
—
|
|
—
|
|
—
|
|
$
|
87,981
|
|
||||
Termination by us without Cause or by NEO with Good Reason
|
$
|
882,456
|
|
$
|
3,165,234
|
|
$
|
8,564,941
|
|
$
|
4,591,540
|
|
$
|
17,204,171
|
|
|
Termination by us without Cause or by NEO with Good Reason Following CIC
|
$
|
882,456
|
|
$
|
4,703,513
|
|
$
|
8,748,379
|
|
$
|
4,591,540
|
|
$
|
18,925,888
|
|
|
Retirement
|
$
|
882,456
|
|
—
|
|
$
|
5,692,533
|
|
$
|
4,591,540
|
|
$
|
11,166,529
|
|
||
Disability (5)
|
$
|
882,456
|
|
—
|
|
$
|
8,538,695
|
|
$
|
4,591,540
|
|
$
|
14,012,691
|
|
||
Death (6)
|
$
|
882,456
|
|
$
|
50,000
|
|
$
|
8,538,695
|
|
$
|
4,591,540
|
|
$
|
14,062,691
|
|
|
Harvey
|
Voluntary Termination
|
$
|
53,077
|
|
—
|
|
—
|
|
$
|
956,081
|
|
$
|
1,009,158
|
|
||
Termination for Cause
|
$
|
53,077
|
|
—
|
|
—
|
|
—
|
|
$
|
53,077
|
|
||||
Termination by us without Cause or by NEO with Good Reason
|
$
|
53,077
|
|
$
|
321,639
|
|
$
|
9,345,121
|
|
$
|
956,081
|
|
$
|
10,675,918
|
|
|
Termination by us without Cause or by NEO with Good Reason Following CIC
|
$
|
582,727
|
|
$
|
5,248,755
|
|
$
|
9,444,029
|
|
$
|
956,081
|
|
$
|
16,231,592
|
|
|
Retirement
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
|||||||||||
Disability (5)
|
$
|
582,727
|
|
$
|
827,933
|
|
$
|
9,331,092
|
|
$
|
956,081
|
|
$
|
11,697,833
|
|
|
Death (6)
|
$
|
582,727
|
|
$
|
800,000
|
|
$
|
9,331,092
|
|
$
|
956,081
|
|
$
|
11,669,900
|
|
|
Rinkenberger
|
Voluntary Termination
|
$
|
45,000
|
|
—
|
|
—
|
|
$
|
670,790
|
|
$
|
715,790
|
|
||
Termination for Cause
|
$
|
45,000
|
|
—
|
|
—
|
|
—
|
|
$
|
45,000
|
|
||||
Termination by us without Cause or by NEO with Good Reason
|
$
|
45,000
|
|
$
|
247,770
|
|
$
|
2,611,161
|
|
$
|
670,790
|
|
$
|
3,574,721
|
|
|
Termination by us without Cause or by NEO with Good Reason Following CIC
|
$
|
409,870
|
|
$
|
1,607,489
|
|
$
|
2,656,014
|
|
$
|
670,790
|
|
$
|
5,344,163
|
|
|
Retirement
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
|||||||||||
Disability (5)
|
$
|
409,870
|
|
—
|
|
$
|
2,604,767
|
|
$
|
670,790
|
|
$
|
3,685,427
|
|
||
Death (6)
|
$
|
409,870
|
|
$
|
50,000
|
|
$
|
2,604,767
|
|
$
|
670,790
|
|
$
|
3,735,427
|
|
|
Donnan
|
Voluntary Termination
|
$
|
42,192
|
|
—
|
|
—
|
|
$
|
789,662
|
|
$
|
831,854
|
|
||
Termination for Cause
|
$
|
42,192
|
|
—
|
|
—
|
|
—
|
|
$
|
42,192
|
|
||||
Termination by us without Cause or by NEO with Good Reason
|
$
|
42,192
|
|
$
|
253,495
|
|
$
|
2,266,425
|
|
$
|
789,662
|
|
$
|
3,351,774
|
|
|
Termination by us without Cause or by NEO with Good Reason Following CIC
|
$
|
387,759
|
|
$
|
1,551,901
|
|
$
|
2,305,434
|
|
$
|
789,662
|
|
$
|
5,034,756
|
|
|
Retirement
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
|||||||||||
Disability (5)
|
$
|
387,759
|
|
$
|
950,477
|
|
$
|
2,260,889
|
|
$
|
789,662
|
|
$
|
4,388,787
|
|
|
Death (6)
|
$
|
387,759
|
|
$
|
800,000
|
|
$
|
2,260,889
|
|
$
|
789,662
|
|
$
|
4,238,310
|
|
Name
|
Triggering Event
|
Payments Earned but Unpaid (1)
|
Other Benefits (2)
|
Equity Awards (3)
|
Distribution of Restoration Plan Outline (4)
|
Total
|
||||||||||
Barneson
|
Voluntary Termination
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
||||||||||
Termination for Cause
|
$
|
37,163
|
|
—
|
|
—
|
|
—
|
|
$
|
37,163
|
|
||||
Termination by us without Cause or by NEO with Good Reason
|
$
|
37,163
|
|
$
|
236,754
|
|
$
|
1,861,289
|
|
$
|
3,203,331
|
|
$
|
5,338,537
|
|
|
Termination by us without Cause or by NEO with Good Reason Following CIC
|
$
|
243,138
|
|
$
|
1,766,428
|
|
$
|
1,893,390
|
|
$
|
3,203,331
|
|
$
|
7,106,287
|
|
|
Retirement
|
$
|
243,138
|
|
—
|
|
$
|
1,226,328
|
|
$
|
3,203,331
|
|
$
|
4,672,797
|
|
||
Disability (5)
|
$
|
243,138
|
|
—
|
|
$
|
1,856,804
|
|
$
|
3,203,331
|
|
$
|
5,303,273
|
|
||
Death (6)
|
$
|
243,138
|
|
$
|
50,000
|
|
$
|
1,856,804
|
|
$
|
3,203,331
|
|
$
|
5,353,273
|
|
(1)
|
Includes (a) any earned but unpaid payments under the
2018
STI Plan and (b) any accrued but unpaid vacation, as applicable; assumes that there is no earned but unpaid
2018
base salary at December 31,
2018
, that all
2018
vacation was used, and that the named executive officer had five weeks of accrued vacation for
2019
.
|
(2)
|
Includes, in the case of (x) termination by us without cause or by the named executive officer with good reason and (y) termination by us without cause or by the named executive officer with good reason following a change in control, any lump sum payment, the value of any continuation of welfare benefits, the value of any continuation of perquisites and any tax gross-up or reduction, as applicable, with:
|
(a)
|
the value of any continuation of healthcare benefits (medical and dental) commencing on December 31,
2018
being determined (i) assuming family coverage in a consumer-driven health plan and a premium dental plan throughout the named executive officer’s applicable benefit continuation period, (ii) based on current COBRA coverage rates for
2019
, and (iii) assuming a 10% increase in the cost of medical and dental coverage for
2020
as compared to
2019
;
|
(b)
|
the value of any continuation of disability benefits commencing on December 31,
2018
being determined (i) assuming coverage throughout the applicable benefit continuation period, (ii) based on our current costs of providing such benefits and assuming such costs do not increase during the applicable benefit continuation period, (iii) assuming we pay such costs throughout the applicable benefit continuation period in the same manner as we currently pay such costs, (iv) assuming mortality according to the RP-2014 Mortality Table for Disabled Retirees, adjusted to 2006, and projected therefrom with MP-2018 Generational Mortality Improvement Projection, and (v) applying a discount rate of 3.90% per annum;
|
(c)
|
the value of any continuation of life insurance benefits commencing on December 31,
2018
being determined (i) assuming coverage throughout the applicable benefit continuation period at his current election of coverage, (ii) based on our current costs of providing such benefits and assuming such costs do not increase during the applicable benefit continuation period, (iii) assuming we pay such costs throughout the applicable benefit continuation period in the same manner as we currently pay such costs, (iv) assuming mortality according to the RP-2014 White Collar Healthy Annuitant Mortality Table, adjusted to 2006 and projected forward with MP-2018 Generational Mortality Improvement Projection, and (v) applying a discount rate of 3.90% per annum; and
|
(d)
|
the value of any continuation of perquisites commencing on December 31,
2018
being determined based on the estimated cost to us of continuing such perquisites for the applicable continuation period.
|
(3)
|
Reflects an amount equal to the product of $
89.29
, the closing price per share of our common stock as reported on the Nasdaq Global Select Market on
December 31, 2018
, and:
|
(a)
|
in the case of termination by us without cause or by the named executive officer with good reason, a number of shares equal to (1) in the case of Mr. Harvey, all shares of restricted stock granted to him effective June 4, 2014, (2) all restricted stock units granted to him effective March 5,
2016
, March 5,
2017
and March 5,
2018
and, in the case of Mr. Harvey, July 15, 2017, (3) with respect to the performance shares granted to him effective March 5,
2016
, the actual number of such performance shares earned and vested in March
2019
, and (4) the target number of performance shares granted to him effective March 5,
2017
and March 5,
2018
;
|
(b)
|
in the case of termination by us without cause or by the named executive officer with good reason following a change in control, a number of shares equal to (1) in the case of Mr. Harvey, all shares of restricted stock granted to him effective June 4, 2014, (2) all restricted stock units granted to him effective March 5,
2016
, March 5,
2017
and March 5,
2018
and, in the case of Mr. Harvey, July 15, 2017, (3) with respect to the performance shares granted to him effective March 5,
2016
, the actual number of such performance shares earned and vested in March 2019, and (4) with respect to the performance shares granted to him effective March 5,
2017
and March 5,
2018
, the number of shares of common stock, if any, that would be received by such named executive officer in respect to such performance shares determined based on the performance level achieved during the applicable performance period through the change in control on December 31,
2018
;
|
(c)
|
in the case of termination as a result of qualified retirement, a number of shares equal to (1) all restricted stock units granted to him effective March 5,
2016
(without proration because he was employed for the entire restriction period), (2) a prorated portion of the restricted stock units granted to him effective March 5,
2017
and March 5,
2018
, determined based on the actual days of his employment during the applicable restriction period, (3) with respect to the performance shares granted to him effective March 5,
2016
, the actual number of such performance shares earned and vested in March
2019
, and (4) the target number of performance shares granted to him effective March 5,
2017
and March 5,
2018
; and
|
(d)
|
in the case of termination as a result of death or disability, a number of shares equal to (1) in the case of Mr. Harvey, all shares of restricted stock granted to him effective June 4, 2014, (2) all restricted stock units granted to him effective March 5,
2016
, March 5,
2017
and March 5,
2018
and, in the case of Mr. Harvey, July 15, 2017, (3) with respect to the performance shares granted to him effective March 5,
2016
, the actual number of such performance shares earned and vested in March
2019
, and (4) the target number of performance shares granted to him effective March 5,
2017
and March 5,
2018
.
|
(4)
|
Reflects the named executive officer’s account balance under our Restoration Plan to which he was entitled. In addition, under our Savings Plan, upon termination, each named executive officer is eligible to receive a distribution of his vested balance thereunder; such balance is not reflected in the table.
|
(5)
|
Certain of the named executive officers may have elected to participate in our group disability plan, which is available generally to all of our salaried employees and does not discriminate in scope, terms or operation, in favor of executive officers. Any disability benefits paid to any named executive officer who elected to participate in such plan would be paid by a third-party insurer and not by us. The value of such benefits is not reflected in the table.
|
(6)
|
Certain of the named executive officers may have elected to participate in our group life insurance plan, which is available generally to all of our salaried employees and does not discriminate in scope, terms or operation in favor of executive officers. Any life insurance benefit paid to any named executive officer who elected to participate in such plan would be paid by a third-party insurer and not by us. We also maintain a travel and accidental death policy for salaried employees, including our named executive officers, that would provide an additional $1 million death benefit payable to the named executive officer’s estate if this death occurs during company-related travel. Such additional life insurance benefit would be paid by a third-party insurer and not by us. Such life insurance and accidental death benefits are not reflected in the table.
|
Name
|
|
Fees Earned or
Paid in Cash (1)
|
|
Stock Awards (2)
|
|
All Other Compensation (3)
|
|
Total
|
||||||||||||||||
Carolyn Bartholomew
|
|
|
$
|
78,750
|
|
|
|
|
$
|
110,000
|
|
|
|
|
$
|
2,545
|
|
|
|
|
$
|
191,295
|
|
|
David Foster
|
|
|
$
|
75,250
|
|
|
|
|
$
|
110,000
|
|
|
|
|
$
|
2,545
|
|
|
|
|
$
|
187,795
|
|
|
L. Patrick Hassey
|
|
|
$
|
78,250
|
|
|
|
|
$
|
110,000
|
|
|
|
|
$
|
2,545
|
|
|
|
|
$
|
190,795
|
|
|
Emily Liggett
|
|
|
$
|
67,000
|
|
|
|
|
$
|
110,000
|
|
|
|
|
$
|
1,101
|
|
|
|
|
$
|
178,101
|
|
|
Lauralee E. Martin
|
|
|
$
|
99,750
|
|
|
|
|
$
|
110,000
|
|
|
|
|
$
|
2,545
|
|
|
|
|
$
|
212,295
|
|
|
Alfred E. Osborne, Jr., Ph.D.
|
|
|
$
|
103,500
|
|
|
|
|
$
|
110,000
|
|
|
|
|
$
|
2,545
|
|
|
|
|
$
|
216,045
|
|
|
Jack Quinn
|
|
|
$
|
78,250
|
|
|
|
|
$
|
110,000
|
|
|
|
|
$
|
2,545
|
|
|
|
|
$
|
190,795
|
|
|
Thomas M. Van Leeuwen
|
|
|
$
|
98,500
|
|
|
|
|
$
|
110,000
|
|
|
|
|
$
|
2,545
|
|
|
|
|
$
|
211,045
|
|
|
Brett E. Wilcox
|
|
|
$
|
92,250
|
|
|
|
|
$
|
110,000
|
|
|
|
|
$
|
2,545
|
|
|
|
|
$
|
204,795
|
|
|
(1)
|
Reflects (a) annual retainer of $55,000, (b) any additional annual retainer for serving as Lead Independent Director or chair of a committee of the board of directors, and (c) fees for attendance of board or board committee meetings. Each non-employee director had the right to elect to receive shares of our common stock in lieu of any or all of his or her annual cash retainer, including retainers for serving as Lead Independent Director or a committee chair. In
2018
: Mr. Hassey elected to receive
250
shares of common stock in lieu of
$27,470
of his annual retainer; Ms. Liggett elected to receive
250
shares of common stock in lieu of
$27,470
of her annual retainer; Ms. Martin elected to receive
318
shares of common stock in lieu of
$34,942
of her annual retainer; Dr. Osborne elected to receive
705
shares of common stock in lieu of
$77,465
of his annual retainer; Mr. Van Leeuwen elected to receive
147
shares of common stock in lieu of
$16,152
of his annual retainer; and Mr. Wilcox elected to receive
284
shares of common stock in lieu of
$31,206
of his annual retainer. In each case, the number of shares received was determined based on a per share price of
$109.88
, the average of the closing prices per share of our common stock as reported on the Nasdaq Global Select Market for the 20 trading days prior to the award date of the annual retainers.
|
(2)
|
Reflects the aggregate grant date fair value of restricted stock awards to non-employee directors determined in accordance with ASC Topic 718, without regard to potential forfeiture. On
June 14, 2018
, in accordance with our director compensation policy described below, each non-employee director received a grant of restricted stock having a value of
$110,000
; the average of the closing prices per share of our common stock as reported on the Nasdaq Global Select Market for the 20 trading days prior to the award date was
$109.88
, resulting in the issuance of
1,001
shares of restricted stock to each non-employee director. For additional information regarding the assumptions made in the valuation of restricted stock awards with respect to our
2018
fiscal year, see Note 6 of the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended
December 31, 2018
. As of
December 31, 2018
, each non-employee director held
1,001
shares of restricted stock. The restrictions on 100% of the shares of restricted stock granted to non-employee directors will lapse on June 14,
2019
or earlier if the director's services to our company terminate as a result of death or disability, or in the event of a change in control. The non-employee director will receive all dividends and other distributions paid with respect to the shares of restricted stock he or she holds, but if any of such dividends or distributions are paid in shares of our capital stock, such shares will be subject to the same restrictions on transferability as are the shares of restricted stock with respect to which they were paid.
|
(3)
|
Reflects dividends received on restricted stock.
|
•
|
an annual retainer of $55,000 per year;
|
•
|
an annual grant of restricted stock having a value equal to $110,000;
|
•
|
a fee of $1,500 per day for each meeting of our board of directors attended in person and $750 per day for each such meeting attended by phone; and
|
•
|
a fee of $1,500 per meeting for each in-person board committee meeting attended ($2,000 per meeting for each such audit committee meeting) and $750 per meeting for each telephonic board committee meeting attended ($1,000 per meeting for each such audit committee meeting).
|
Plan Category
|
|
Number of Shares
of Common Stock to
be Issued Upon Exercise of
Outstanding Options,
Warrants and Rights
|
|
Number of Shares of Common Stock
Remaining Available for Future
Issuance
Under Equity Compensation Plans
(Excluding Shares of Common Stock
Reflected in Column (a))
|
||
|
|
(a)
|
|
(c)
|
||
Equity compensation plans approved by stockholders (1)
|
|
611,864
|
(2)
|
|
577,014
|
(3)
|
Equity compensation plans not approved by stockholders
|
|
N/A
|
|
|
N/A
|
|
Total
|
|
611,864
|
(2)
|
|
577,014
|
(3)
|
(1)
|
Includes awards made under the Kaiser Aluminum Corporation Amended and Restated 2006 Equity and Performance Incentive Plan (the "2006 Plan") and the 2016 Plan. Our 2006 Plan initially became effective on July 6, 2006. Thereafter, our board of directors amended and restated the 2006 Plan effective as of February 6, 2008, again effective as of June 2, 2009 and again effective as of March 1, 2010; these amendments were not material and did not affect the number of shares available for issuance under the 2006 Plan. Subsequently, the 2006 Plan was amended and restated by our board of directors and approved by our stockholders effective as of June 8, 2010; in this instance, the amendments increased the number of shares available for issuance under the 2006 Plan. Following June 8, 2010, our board of directors amended and restated the 2006 Plan effective as of February 8, 2012 and again effective as of April 10, 2013; these amendments were not material and did not affect the number of shares available for issuance under the 2006 Plan. With respect to new awards, the 2006 Plan was succeeded in its entirety by the 2016 Plan on May 26, 2017, the date the 2016 Plan was approved by our stockholders and became effective. Copies of the 2006 Plan and 2016 Plan are attached as Exhibit 10.7 to our Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on April 24, 2013 and as Exhibit 10.1 to our Current Report on Form 8-K filed with the Securities and Exchange Commission on May 26, 2016, respectively.
|
(2)
|
Reflects restricted stock units covering 185,504 shares of our common stock and performance shares covering 426,360 shares of our common stock, in each case outstanding as of
December 31, 2018
, and does not include 34,009 shares of restricted stock that remained subject to forfeiture as of
December 31, 2018
because such shares are already outstanding.
|
(3)
|
Subject to certain adjustments that may be required from time to time to prevent dilution or enlargement of the rights of participants, a maximum of 1,045,000 shares of our common stock, less any common shares subject to awards granted under the 2006 Plan between December 31, 2015 and May 26, 2016, plus any common shares that become available under the 2016 Plan as a result of forfeiture, cancellation, expiration or cash settlement of awards under the 2006 Plan after December 31, 2015, may be issued under the 2016 Plan.
|
•
|
each named executive officer;
|
•
|
each of our current directors and director nominees;
|
•
|
all our current directors and executive officers as a group; and
|
•
|
each person or entity known to us to beneficially own 5% or more of our common stock as determined in accordance with Rule 13d-3 under the Exchange Act.
|
Name of Beneficial Owner
|
|
Amount and Nature of
Beneficial Ownership (1)
|
|
Percent
of Class
|
||||
Directors and Named Executive Officers (2)
|
|
|
|
|
|
|
||
Jack A. Hockema
|
|
71,291
|
|
(3)
|
|
*
|
|
|
Keith A. Harvey
|
|
45,076
|
|
(4)
|
|
*
|
|
|
John M. Donnan
|
|
13,749
|
|
|
|
*
|
|
|
Carolyn Bartholomew
|
|
14,345
|
|
(5)
|
|
*
|
|
|
David Foster
|
|
12,919
|
|
(5)
|
|
*
|
|
|
L. Patrick Hassey
|
|
7,578
|
|
(5)
|
|
*
|
|
|
Emily Liggett
|
|
1,251
|
|
(5)
|
|
*
|
|
|
Lauralee E. Martin
|
|
16,933
|
|
(5)
|
|
*
|
|
|
Alfred E. Osborne, Jr., PhD
|
|
20,328
|
|
(5)(6)
|
|
*
|
|
|
Jack Quinn
|
|
4,196
|
|
(5)
|
|
*
|
|
|
Teresa Sebastian
|
|
—
|
|
|
|
*
|
|
|
Donald J. Stebbins
|
|
—
|
|
|
|
*
|
|
|
Thomas M. Van Leeuwen
|
|
12,850
|
|
(5)
|
|
*
|
|
|
Brett E. Wilcox
|
|
15,276
|
|
(5)
|
|
*
|
|
|
All current directors and executive officers as a group (20 persons)
|
|
267,957
|
|
(2)(3)(5)(6)
|
|
1.7
|
%
|
|
5% Stockholders
|
|
|
|
|
|
|
||
BlackRock, Inc.
|
|
2,345,611
|
|
(7)
|
|
14.5
|
%
|
|
Vanguard Group, Inc.
|
|
1,796,051
|
|
(8)
|
|
11.1
|
%
|
|
Dimensional Fund Advisors LP
|
|
893,824
|
|
(9)
|
|
5.5
|
%
|
|
(1)
|
Does not includes restricted stock units held by executive officers pursuant to awards granted effective March 5, 2017, July 15, 2017, March 5, 2018 and March 5, 2019.
|
(2)
|
Messrs. Rinkenberger and Barneson are not included in the table as they retired from our company in March and February 2019, respectively.
|
(3)
|
Includes 52,741 shares of our common stock held by the Hockema Family Trust.
|
(5)
|
Includes shares of restricted stock that remained subject to forfeiture as of
April 12, 2019
, as follows: Bartholomew (
1,001
shares); Foster (
1,001
shares); Hassey (
1,001
shares); Liggett (
1,001
shares); Martin (
1,001
shares); Osborne (
1,001
shares); Quinn (
1,001
shares); Van Leeuwen (
1,001
shares); Wilcox (
1,001
shares).
|
(6)
|
Includes 3,500 shares of our common stock held by a Keough plan of which Dr. Osborne is the beneficiary and 500 shares held by the Rahnasto/Osborne Revocable Trust U/A DTD 11/07/1999 of which Dr. Osborne is a co-beneficiary and a co-trustee.
|
(7)
|
Shares beneficially owned by BlackRock, Inc. are as reported on Amendment No. 10 to Schedule 13G filed by BlackRock, Inc. on January 31, 2019. BlackRock, Inc. has sole voting power with respect to 2,290,737 shares and sole dispositive power with respect to 2,345,611 shares. The principal address of BlackRock, Inc. is 55 East 52nd Street, New York, New York 10055.
|
(8)
|
Shares beneficially owned by Vanguard Group, Inc. are as reported on Amendment No. 7 to Schedule 13G filed by Vanguard Group, Inc. on February 11, 2019. Vanguard Group, Inc. has sole voting power with respect to 25,454 shares and shared voting power with respect to 2,319 shares. Vanguard Group, Inc. has sole dispositive power with respect to 1,770,171 shares and shared dispositive power with respect to 25,880 shares. The principal address of Vanguard Group, Inc. is 100 Vanguard Boulevard, Malvern, Pennsylvania 19355.
|
(9)
|
Shares beneficially owned by Dimensional Fund Advisors LP are as reported on Amendment No. 8 to Schedule 13G filed by Dimensional Fund Advisors LP on February 8, 2019. Dimensional Fund Advisors LP has sole voting power with respect to 858,133 shares and sole dispositive power with respect to 893,824 shares. The principal address of Dimensional Fund Advisors LP is Building One, 6300 Bee Cave Road, Austin, Texas, 78746.
|
•
|
external data relating to the audit quality and performance, including recent Public Company Accounting Oversight Board reports on
Deloitte & Touche LLP
and its member firms;
|
•
|
the appropriateness of
Deloitte & Touche LLP
's fee;
|
•
|
Deloitte & Touche LLP
's tenure as our independent registered public accounting firm and its familiarity with our operations and businesses, accounting policies and practices and internal control over financial reporting;
|
•
|
Deloitte & Touche LLP
's capability and expertise in relation to the breadth and complexity of our operations; and
|
•
|
Deloitte & Touche LLP
's independence.
|
|
|
|
2017
|
|
|
|
2018
|
|
||||
Audit Fees(1)
|
|
|
$
|
1,781,640
|
|
|
|
|
$
|
1,827,000
|
|
|
Audit-Related Fees (2)
|
|
|
$
|
20,800
|
|
|
|
|
$
|
30,800
|
|
|
Tax Fees (3)
|
|
|
$
|
16,851
|
|
|
|
|
$
|
7,233
|
|
|
All Other Fees (4)
|
|
|
$
|
4,395
|
|
|
|
|
$
|
4,395
|
|
|
(1)
|
Audit fees for 2017 and 2018 consist principally of fees for the audit of our annual financial statements included in our Annual Report on Form 10-K for those years and review of our financial statements included in our Quarterly Reports on Form 10-Q for those years and audit services provided in connection with compliance with the requirements of the Sarbanes-Oxley Act. Audit fees for 2018 also included services provided in connection with the audit of the acquisition of Imperial Machine & Tool Co.
|
(2)
|
Audit-related fees for 2017 consist principally of fees for statutory audits. Audit-related fees for 2018 consist principally of fees for statutory audits and review of the response letter to a comment letter from the Securities and Exchange Commission.
|
(3)
|
Tax fees consist principally of fees for tax advisory services related to compliance and payroll and income taxes related to equity grants to French employees and the preparation of tax returns for certain of our subsidiaries.
|
(4)
|
All other fees for 2017 and 2018 consist of the subscription fee to the Deloitte & Touche LLP Research Tool Library and fees relating to the review of agreed-upon procedures relating to certain environmental matters.
|
|
By Order of the Board of Directors
|
|
|
|
John M. Donnan
|
|
Executive Vice President - Legal,
|
|
Compliance and Human Resources
|
Reconciliation of Non-GAAP Measures - Consolidated
|
|||||||||||
(Unaudited)
|
|||||||||||
(In millions of dollars, except share and per share amounts)
|
|||||||||||
|
|
||||||||||
|
Year Ended
|
||||||||||
|
December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
|
|
|
|
|
||||||
Net sales
|
$
|
1,585.9
|
|
|
$
|
1,397.5
|
|
|
$
|
1,330.6
|
|
Hedged cost of alloyed metal
1
|
$
|
(758.0
|
)
|
|
$
|
(611.2
|
)
|
|
$
|
(517.6
|
)
|
Value added revenue
|
$
|
827.9
|
|
|
$
|
786.3
|
|
|
$
|
813.0
|
|
|
|
|
|
|
|
||||||
GAAP net income
|
$
|
91.7
|
|
|
$
|
45.4
|
|
|
$
|
91.7
|
|
Interest expense
|
22.7
|
|
|
22.2
|
|
|
20.3
|
|
|||
Other expense, net
2
|
0.9
|
|
|
—
|
|
|
13.6
|
|
|||
Income tax provision
|
28.3
|
|
|
87.6
|
|
|
55.5
|
|
|||
GAAP operating income
|
143.6
|
|
|
155.2
|
|
|
181.1
|
|
|||
Mark-to-market loss (gain)
3
|
17.7
|
|
|
(19.4
|
)
|
|
(18.7
|
)
|
|||
Goodwill impairment
|
—
|
|
|
18.4
|
|
|
—
|
|
|||
Other operating NRR (gain) loss
4,5
|
(0.4
|
)
|
|
4.9
|
|
|
8.1
|
|
|||
Operating income, excluding operating NRR items
|
160.9
|
|
|
159.1
|
|
|
170.5
|
|
|||
Depreciation and Amortization
|
43.9
|
|
|
39.7
|
|
|
36.0
|
|
|||
Adjusted EBITDA
6
|
$
|
204.8
|
|
|
$
|
198.8
|
|
|
$
|
206.5
|
|
|
|
|
|
|
|
||||||
GAAP net income
|
$
|
91.7
|
|
|
$
|
45.4
|
|
|
$
|
91.7
|
|
Operating NRR Items
|
17.3
|
|
|
3.9
|
|
|
(10.6
|
)
|
|||
Non-Operating NRR Items
|
6.1
|
|
|
4.5
|
|
|
3.3
|
|
|||
Tax impact of above NRR Items
|
(5.8
|
)
|
|
(3.1
|
)
|
|
2.7
|
|
|||
NRR tax charge
|
—
|
|
|
37.2
|
|
|
—
|
|
|||
Adjusted net income
|
$
|
109.3
|
|
|
$
|
87.9
|
|
|
$
|
87.1
|
|
|
|
|
|
|
|
||||||
GAAP earnings per diluted share
7
|
$
|
5.43
|
|
|
$
|
2.63
|
|
|
$
|
5.09
|
|
Adjusted earnings per diluted share
7
|
$
|
6.48
|
|
|
$
|
5.09
|
|
|
$
|
4.83
|
|
|
|
|
|
|
|
||||||
1
Hedged cost of alloyed metal is our Midwest transaction price of aluminum plus the price of alloying elements plus any realized gains and/or losses on settled hedges, related to the metal sold in the referenced period.
|
|||||||||||
2
2016 and 2017 restated to reflect the retrospective adoption of ASU 2017-07.
|
|||||||||||
3
Mark-to-market loss (gain) on derivative instruments for 2018 represents the reversal of mark-to-market loss (gain) on hedges entered into prior to the adoption of ASU 2017-12 and settled in 2018. Operating income excluding non-run-rate items reflects the realized loss (gain) of such settlements.
|
|||||||||||
4
NRR is an abbreviation for Non-Run-Rate; NRR items are pre-tax.
|
|||||||||||
5
Other operating NRR items primarily represent the impact of non-cash net periodic benefit cost (income) related to the salaried VEBA, adjustments to plant-level LIFO, lower of cost or market, environmental expenses, workers' compensation cost (benefit) due to discounting and impairment losses.
|
|||||||||||
6
Adjusted EBITDA = Consolidated Operating Income before non-run-rate plus Depreciation and Amortization.
|
|||||||||||
7
Diluted shares for EPS calculated using treasury method.
|
1 Year Kaiser Aluminum Chart |
1 Month Kaiser Aluminum Chart |
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