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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Kronos Worldwide Inc | NYSE:KRO | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.16 | 1.33% | 12.16 | 12.19 | 12.03 | 12.14 | 110,548 | 21:01:09 |
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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) |
Title of each class of securities to which transaction applies:
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Aggregate number of securities to which transaction applies:
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3) |
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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Proposed maximum aggregate value of transaction:
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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) |
Amount Previously Paid:
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2) |
Form, Schedule or Registration Statement No.:
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3) |
Filing Party:
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4)
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Date Filed:
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Kronos Worldwide, Inc.
Three Lincoln Centre
5430 LBJ Freeway, Suite 1700
Dallas, Texas 75240-2697
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1. |
to elect the eight director nominees named in the proxy statement to serve until the 2018 annual meeting of stockholders;
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2. |
to approve on an advisory basis our named executive officer compensation;
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3. |
to approve, on a nonbinding advisory basis, an annual frequency for stockholders to approve executive compensation; and
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4. |
to transact such other business as may properly come before the meeting or any adjournment or postponement thereof.
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·
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the accompanying notice of the 2017 annual meeting of stockholders;
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·
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this proxy statement;
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·
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our 2016 Annual Report to Stockholders, which includes our Annual Report on Form 10-K for the fiscal year ended December 31, 2016; and
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·
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the proxy card (or voting instruction form if you hold your shares through a brokerage firm or other nominee and not in your name in certificate form or electronically with our transfer agent, Computershare).
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Q: |
What is the purpose of the annual meeting?
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A: |
At the annual meeting, stockholders will vote on the following, as described in this proxy statement:
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·
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Proposal 1 – the election of the eight director nominees named in this proxy statement;
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·
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Proposal 2 – the adoption of a nonbinding advisory resolution that approves the named executive officer compensation described in this proxy statement (Say-on-Pay); and
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·
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Proposal 3 – the approval, on a nonbinding advisory basis, of the preferred frequency stockholders will consider approving executive compensation (Say-When-on-Pay).
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Q: |
How does the board recommend that I vote?
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A: |
The board of directors recommends that you vote FOR:
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·
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the election of each of the nominees for director named in this proxy statement;
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·
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the approval and adoption of proposal 2 (Say-on-Pay); and
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·
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as set forth in proposal 3 (Say-When-on-Pay), the approval of an
annual
Say-on-Pay,
as compared to every other year or every three years.
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Q: |
Who is allowed to vote at the annual meeting?
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A: |
The board of directors has set the close of business on March 20, 2017 as the record date for the determination of stockholders entitled to notice of and to vote at the meeting. Only holders of our common stock as of the close of business on the record date are entitled to vote at the meeting. On the record date, 115,894,098 shares of our common stock were issued and outstanding. Each share of our common stock entitles its holder to one vote.
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Q: |
If I hold my shares through a brokerage firm or other nominee, w
hy did I receive a notice regarding the internet availability of proxy materials instead of paper copies of the proxy materials?
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A: |
W
e are using the SEC notice and access rules to
furnish proxy materials over the internet
to our stockholders who hold our common stock
through a brokerage firm or other nominee. If you hold your shares through a brokerage firm or other nominee, you can find instructions on how to access and review the proxy materials, and how to vote over the internet, on the notice of internet availability of proxy materials that you received.
The notice also contains instructions on how you can receive a paper copy of this proxy statement, our 2016 Annual Report to Stockholders and a voting instruction form.
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Q: |
If I hold my shares through a brokerage firm or other nominee, how may I
vote in person at the annual meeting?
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A: |
If you wish
to vote in person at the annual meeting, you will need to follow the instructions on your notice of internet availability of proxy materials on how to obtain the appropriate documents to vote in person at the meeting.
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Q: |
How do I vote if I am a stockholder of record?
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A: |
If you hold shares of our common stock in your name in certificate form or electronically with our transfer agent, Computershare, and not through a brokerage firm or other nominee, you are a stockholder of record. As a stockholder of record, you may:
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·
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vote over the internet at
www.investorvote.com/KRO
;
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·
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vote by telephone using the voting procedures set forth on your proxy card;
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·
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instruct the agents named on your proxy card how to vote your shares by completing, signing and mailing the enclosed proxy card in the envelope provided; or
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·
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vote in person at the annual meeting.
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Q: |
What are the consequences if I am a stockholder of record and I execute my proxy card but do not indicate how I would like my shares voted for one or more of the director nominees named in this proxy statement, proposal 2 (Say-on-Pay) or proposal 3 (Say-When-on-Pay)?
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A: |
If you are a stockholder of record (shares held in the stockholder's name in certificate form or electronically with Computershare, our transfer agent, and not through a brokerage firm or other nominee) the agents named on your proxy card will vote your shares on such uninstructed nominee or proposals as recommended by the board of directors in this proxy statement.
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Q: |
If I do not want to vote my shares in person at the annual meeting, how do I vote if my shares are held through a brokerage firm or other nominee?
|
A: |
If your shares are held through a brokerage firm or other nominee, you must follow the instructions from your brokerage firm or other nominee on how to vote your shares.
In order to ensure your
brokerage firm or other nominee
votes your shares in the manner you would like, you
must provide voting instructions to your
brokerage firm or other nominee
by the deadline provided in the materials you received from your
brokerage firm or other nominee
.
|
Q: |
Who will count the votes?
|
A: |
The board of directors has appointed Computershare, our transfer agent and registrar, to ascertain the number of shares represented, tabulate the vote and serve as inspector of election for the meeting.
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Q: |
Is my vote confidential?
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A: |
Yes. All proxy cards, ballots or voting instructions delivered to Computershare will be kept confidential in accordance with our bylaws.
|
Q: |
How do I change or revoke my proxy instructions if I am a stockholder of record?
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A: |
If you are a stockholder of record, you may change or revoke your proxy instructions in any of the following ways:
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delivering to Computershare a written revocation;
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submitting another proxy card bearing a later date;
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·
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changing your vote on
www.investorvote.com/KRO
;
|
·
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using the telephone voting procedures set forth on your proxy card; or
|
·
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voting in person at the annual meeting.
|
Q: |
How do I change or revoke my voting instructions if my shares are held through a brokerage firm or other nominee?
|
A: |
If your shares are held through a brokerage firm or other nominee, you must follow the instructions from your brokerage firm or other nominee on how to change or revoke your voting instructions or how to vote in person at the annual meeting.
|
Q: |
What constitutes a quorum?
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A: |
A quorum is the presence, in person or by proxy, of the holders of a majority of the outstanding shares of our common stock entitled to vote at the meeting.
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Q: |
Assuming a quorum is present, what vote is required to elect a director nominee?
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A: |
A plurality of affirmative votes of the holders of our outstanding shares of common stock represented and entitled to vote at the meeting is necessary to elect each director nominee. You may indicate on your proxy card or in your voting instructions that you desire to withhold authority to vote for any of the director nominees. Since director nominees need only receive a plurality of affirmative votes from the holders represented and entitled to vote at the meeting to be elected, a vote withheld or a broker/nominee non-vote regarding a particular nominee will not affect the election of such director nominee.
|
Q: |
Assuming a quorum is present, what vote is required to adopt and approve proposal 2 (Say-on-Pay)?
|
A: |
The stockholder resolution contained in this proposal provides that the nonbinding
affirmative vote of the holders of the majority of the outstanding shares present in person or represented by proxy at the meeting and entitled to vote on the subject matter
will be the requisite vote to adopt the resolution and approve the compensation of our named executive officers as such compensation is disclosed in this proxy statement. Abstentions will be counted as represented and entitled to vote and will therefore have the effect of a negative vote.
Broker/nominee non-votes will not be counted as entitled to vote and will have no effect on this proposal.
|
Q: |
Assuming a quorum is present, what vote is required to adopt and approve an annual frequency for proposal 3 (Say-When-on-Pay)?
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A: |
B
ecause there are multiple choices and this proposal is a nonbinding advisory vote, there is no minimum requisite vote under our certificate of incorporation, our bylaws or Delaware law to approve a certain frequency of future Say-on-Pay proposals.
Accordingly, if
you indicate on the proxy card that you approve one of the options other than abstain, we will deem that you consent that a
plurality of the affirmative votes will determine the preferred frequency of future Say-on-Pay proposals,
subject to
the right of our board of directors to decide that it is in the best interests of us and our stockholders to hold a nonbinding advisory vote more or less frequently than the option our stockholders choose by a plurality of the affirmative votes
. Since this proposal needs only receive the plurality of affirmative votes from the holders represented and entitled to vote at the meeting to approve the preferred frequency of future Say-on-Pay proposals, an abstention or a broker/nominee non-vote on this proposal will have no effect on the outcome of this proposal.
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Q: |
Assuming a quorum is present, what vote is required to approve any other matter to come before the meeting?
|
A: |
Except as applicable laws may otherwise provide, the approval of any other matter that may properly come before the meeting will require the affirmative votes of the holders of the majority of the outstanding shares represented and entitled to vote at the meeting.
Abstentions will be counted as represented and entitled to vote and will therefore have the effect of a negative vote.
|
Q: |
If I am a stockholder of record, how will the agents named on my proxy card vote on any other matter to come before the meeting?
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A: |
If you are a stockholder of record and to the extent allowed by applicable law, the agents named on your proxy card will vote in their discretion on any other matter that may properly come before the meeting.
|
Q: |
Who will pay for the cost of soliciting the proxies?
|
A: |
We will pay all expenses related to the solicitation, including charges for preparing, printing, assembling and distributing all materials delivered to stockholders. In addition to the solicitation by mail, our directors, officers and regular employees may solicit proxies by telephone or in person for which such persons will receive no additional compensation. Upon request, we will reimburse brokerage firms or other nominees for their reasonable out-of-pocket expenses incurred in distributing proxy materials and voting instructions to the beneficial owners of our common stock that hold such stock in accounts with such entities.
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Kronos Worldwide Common Stock (1)
|
|||
Name of Beneficial Owner
|
Amount and Nature of
Beneficial Ownership
|
Percent of
Class (2)
|
|
5% Stockholder:
|
|||
Harold C. Simmons Family Trust No. 2; Lisa K. Simmons and Serena Simmons Connelly as co-trustees
|
93,346,984
|
(3)(4)
|
80.5%
|
Serena Simmons Connelly
|
526
|
(3)
|
*
|
Directors and Named Executive Officers:
|
|||
Keith R. Coogan
|
15,000
|
(5)
|
*
|
Loretta J. Feehan
|
5,500
|
(5)
|
*
|
Robert D. Graham.
|
-0-
|
(5)
|
*
|
John E. Harper.
|
1,500
|
(5)
|
*
|
Cecil H. Moore, Jr.
|
16,024
|
(5)
|
*
|
Bobby D. O'Brien
|
19,582
|
(5)(6)
|
*
|
Thomas P. Stafford
|
21,309
|
(5)
|
*
|
R. Gerald Turner
|
17,296
|
(5)
|
*
|
C. Kern Wildenthal
|
5,500
|
(5)
|
*
|
James Buch
|
1,000
|
(5)
|
*
|
Brian W. Christian
|
-0-
|
(5)
|
*
|
Kelly D. Luttmer
|
-0-
|
(5)
|
-0-
|
Gregory M. Swalwell
|
-0-
|
(5)
|
-0-
|
Current directors and executive officers as a group (24 persons)
|
92,592
|
(5)
|
*
|
(1)
|
Beneficial ownership as reported in the above table has been determined in accordance with Rule 13d-3 under the Securities Exchange Act, and is not necessarily indicative of beneficial ownership for any other purpose. Except as otherwise noted, the listed entities, individuals or group have sole investment power and sole voting power as to all shares set forth opposite their names. The business address for each listed person or entity is Three Lincoln Centre, 5430 LBJ Freeway, Suite 1700, Dallas, Texas 75240-2697.
|
(2)
|
The percentages set forth above and in the following footnotes are based on 115,894,098 shares of our common stock outstanding as of the record date.
|
(3)
|
The following is a description of certain related entities or persons that may be deemed to beneficially own outstanding shares of our common stock.
|
Valhi
|
82.9%
|
Kronos Worldwide
|
Less than 1%
|
Serena Simmons Connelly
|
Less than 1%
|
VHC
|
92.6%
|
Serena Simmons Connelly
|
Less than 1%
|
(a)
|
We and NL (including a wholly owned subsidiary of NL) own 1,724,916 shares and 14,372,970 shares, respectively, of Valhi common stock. Since we and NL are majority owned subsidiaries of Valhi, and pursuant to Delaware law, Valhi treats the shares of Valhi common stock that we and NL own as treasury stock for voting purposes. Pursuant to Section 13(d)(4) of the Securities Exchange Act, such shares are not deemed outstanding for the purposes of calculating the percentage ownership of the outstanding shares of Valhi common stock as of the record date in this proxy statement.
|
·
|
Ms. Simmons and Ms. Connelly may be deemed to control the Family Trust;
|
·
|
Ms. Simmons and Ms. Connelly may be deemed to control each of Contran, Dixie Rice, VHC, Valhi, NL, CompX and us; and
|
·
|
Ms. Simmons, Ms. Connelly, Contran, Dixie Rice, VHC, Valhi, NL and we may be deemed to possess indirect beneficial ownership of shares of common stock directly held by such entities, including any shares of our common stock.
|
(4)
|
The shares attributable to the Family Trust and co-trustees consist of shares held directly by the following entities.
|
Kronos Worldwide Common Stock
|
||
Direct Holder
|
Shares
|
Percent of
Class |
Valhi.
|
57,990,042
|
50.0%
|
NLKW.
|
35,219,270
|
30.4%
|
Contran
|
137,672
|
*
|
Total
|
93,346,984
|
80.5%
|
(5)
|
Each of our directors or executive officers disclaims beneficial ownership of any shares of our common stock,
except to the extent he or she has a pecuniary interest in such shares, if any.
|
(6)
|
Stock ownership information for Mr. O'Brien is as of January 20, 2017, the last day on which he served as one of our executive officers.
|
NL Common Stock
|
Valhi Common Stock
|
|||||
Name of Beneficial Owner
|
Amount and Nature
of Beneficial
Ownership (1)
|
Percent of
Class
(1)(2)
|
Amount and Nature
of Beneficial
Ownership (1)
|
Percent of
Class
(1)(3)
|
||
Keith R. Coogan
|
2,000
|
(4)
|
*
|
-0-
|
(4)
|
-0-
|
Loretta J. Feehan
|
5,000
|
(4)
|
*
|
5,000
|
(4)
|
*
|
Robert D. Graham.
|
5,000
|
(4)
|
*
|
2,000
|
(4)
|
*
|
John E. Harper.
|
2,000
|
(4)
|
*
|
-0-
|
(4)
|
-0-
|
Cecil H. Moore, Jr.
|
14,500
|
(4)
|
*
|
-0-
|
(4)
|
-0-
|
Bobby D. O'Brien.
|
-0-
|
(4)
|
-0-
|
5,000
|
(4)(5)
|
*
|
Thomas P. Stafford
|
16,500
|
(4)
|
*
|
-0-
|
(4)
|
-0-
|
R. Gerald Turner
|
1,239
|
(4)
|
*
|
6,569
|
(4)
|
*
|
C. Kern Wildenthal
|
-0-
|
(4)
|
-0-
|
1,500
|
(4)
|
*
|
James Buch
|
-0-
|
(4)
|
-0-
|
-0-
|
(4)
|
-0-
|
Brian W. Christian
|
-0-
|
(4)
|
-0-
|
-0-
|
(4)
|
-0-
|
Kelly D. Luttmer
|
-0-
|
(4)
|
-0-
|
-0-
|
(4)
|
-0-
|
Gregory M. Swalwell
|
-0-
|
(4)
|
-0-
|
3,498
|
(4)
|
*
|
Current directors and executive officers as a group (24 persons)
|
46,239
|
(4)
|
*
|
18,567
|
(4)
|
*
|
(1)
|
Beneficial ownership as reported in the above table has been determined in accordance with Rule 13d-3 under the Securities Exchange Act, and is not necessarily indicative of beneficial ownership for any other purpose. Except as otherwise noted, the listed individuals or group have sole investment power and sole voting power as to all shares set forth opposite their names.
|
(2)
|
The percentages are based on 48,705,884 shares of NL common stock outstanding as of the record date.
|
(3)
|
The percentages are based on 339,158,949 shares of Valhi common stock outstanding as of the record date. We and NL (including a wholly owned subsidiary of NL) own 1,724,916 shares and 14,372,970 shares, respectively, of Valhi common stock. Since we and NL are majority owned subsidiaries of Valhi and pursuant to Delaware law, Valhi treats the shares of Valhi common stock that we and NL own as treasury stock for voting purposes. Pursuant to Section 13(d)(4) of the Securities Exchange Act, such shares are not deemed outstanding for the purposes of calculating the percentage ownership of the outstanding shares of Valhi common stock as of the record date in this proxy statement.
|
(4)
|
Each of our directors or executive officers disclaims beneficial ownership of any shares of NL or Valhi common stock,
except to the extent he or she has a pecuniary interest in such shares, if any.
|
(5)
|
Stock ownership information for Mr. O'Brien is as of January 20, 2017, the last day on which he served as an executive officer of Valhi.
|
Name
|
Age
|
Position(s)
|
Robert D. Graham
|
61
|
Chairman of the Board, President and Chief Executive Officer
|
James Buch
|
56
|
Chief Operating Officer
|
Benjamin R. Corona
|
56
|
President, Global Sales Management
|
Brian W. Christian
|
38
|
Executive Vice President
|
Kelly D. Luttmer.
|
53
|
Executive Vice President and Chief Tax Officer
|
Andrew B. Nace.
|
52
|
Executive Vice President
|
Gregory M. Swalwell
|
60
|
Executive Vice President and Chief Financial Officer
|
Clarence B. Brown, III
|
48
|
Vice President, General Counsel and Assistant Secretary
|
Steven S. Eaton
|
58
|
Vice President and Director of Internal Control over Financial Reporting
|
Tim C. Hafer
|
55
|
Vice President and Controller
|
Janet G. Keckeisen.
|
61
|
Vice President, Corporate Strategy and Investor Relations
|
Patricia
A. Kropp.
|
57
|
Vice President, Director of Global Human Resources
|
A. Andrew R. Louis.
|
56
|
Vice President, Secretary and Associate General Counsel
|
H. Joseph Maas
|
65
|
Vice President, Marketing Development and Communication
|
Courtney J. Riley.
|
51
|
Vice President, Environmental Affairs
|
John A. St. Wrba.
|
60
|
Vice President and Treasurer
|
John A. Sunny.
|
54
|
Vice President and Chief Information Officer
|
·
|
each member of our audit committee is independent, financially literate and has no material relationship with us other than serving as our director; and
|
·
|
Mr. Cecil H. Moore, Jr. and Mr. John E. Harper are each an "audit committee financial expert."
|
·
|
to recommend to the board of directors whether or not to approve any proposed charge to us or any of our privately held subsidiaries pursuant to our ISA with Contran;
|
·
|
to review certain matters regarding our employee benefit plans or programs, including discretionary incentive bonuses and salaries we pay;
|
·
|
to review, approve, administer and grant awards under our equity compensation plan; and
|
·
|
to review and administer such other compensation matters as the board of directors may direct from time to time.
|
·
|
our
board of directors has no specific minimum qualifications for director nominees;
|
·
|
each nominee should possess the necessary business background, skills and expertise at the policy-making level and a willingness to devote the required time to the duties and responsibilities of membership on the board of directors; and
|
·
|
the board of directors believes that experience as our director is a valuable asset and that directors who have served on the board for an extended period of time are able to provide important insight into our current and future operations.
|
·
|
was an officer or employee of ours during 2016 or any prior year;
|
·
|
had any related party relationships with us that requires disclosure under applicable SEC rules; or
|
·
|
had any interlock relationships under applicable SEC rules.
|
·
|
the annualized base salary of such employee at the beginning of the year;
|
·
|
an estimate of the bonus Contran will pay or accrue for such employee (other than bonuses for specific matters) for the year, using as a reasonable approximation for such bonus the actual bonus that Contran paid or accrued for such employee in the prior year; and
|
·
|
Contran's portion of the social security and medicare taxes on such base salary and an estimated overhead factor (23% for each of 2016 and 2015 and 25% for 2014) applied to the base salary for the cost of medical and life insurance benefits, unemployment taxes, disability insurance, defined benefit and defined contribution plan benefits, professional education and licensing and costs of providing an office, equipment and supplies related to providing such services.
|
·
|
the quality of the services Contran provides to us, including the quality of the services our executive officers provide to us;
|
·
|
the comparison of the ISA charge and number of full-time equivalent employees reflected in the charge by department for the prior year and proposed for the current year;
|
·
|
the comparison of the prior year and proposed current year charges by department and in total and such amounts as a percentage of Contran's similarly calculated costs for its departments and in total for those years;
|
·
|
the comparison of the prior year and proposed current year average hourly rate; and
|
·
|
the concurrence of our chief financial officer as to the reasonableness of the proposed charge.
|
·
|
the cost to employ the additional personnel necessary to provide the quality of the services provided by Contran would exceed the proposed aggregate fee to be charged by Contran to us under our ISA with Contran; and
|
·
|
the cost for such services would be no less favorable than could otherwise be obtained from an unrelated third party for comparable services in the committee's collective business judgment and experience, without performing any independent market research.
|
·
|
any ISA charge from Contran to any other publicly held parent or sister company, although such charge was separately reviewed by the management development and compensation committee of the applicable company; and
|
·
|
the compensation policies of Contran or the amount of time our named executive officers are expected to devote to us because:
|
o
|
each of our named executive officers provides services to many companies related to Contran, including Contran itself;
|
o
|
the fee we pay to Contran under our ISA with Contran each year does not represent all of Contran's cost of employing each of such named executive officers;
|
o
|
Contran and these other companies related to Contran absorb the remaining amount of Contran's cost of employing each of such named executive officers; and
|
o
|
the members of our management development and compensation committee consider the other factors discussed above in determining whether to recommend that the proposed ISA fee for each year be approved by the full board of directors.
|
R. Gerald Turner
Chairman of our Management Development and Compensation Committee
|
Keith R. Coogan
Member of our Management Development and Compensation Committee
|
Thomas P. Stafford
Member of our Management Development and Compensation Committee
|
C. Kern Wildenthal
Member of our Management Development and Compensation Committee
|
Name and Principal Position
|
Year
|
Salary
|
Stock Awards
|
Total
|
||
Bobby D. O'Brien (2)
|
2016
|
$958,300
|
(3)
|
$ 8,415
|
(4)
|
$966,715
|
Former Chairman of the Board, President and Chief
|
2015
|
678,600
|
(3)
|
12,560
|
(4)
|
691,160
|
Executive Officer
|
2014
|
625,550
|
(3)
|
14,720
|
(4)
|
640,270
|
James Buch (2)
|
2016
|
1,132,300
|
(3)
|
-0-
|
1,132,300
|
|
Chief Operating Officer
|
2015
|
543,000
|
(3)
|
-0-
|
543,000
|
|
Gregory M. Swalwell
|
2016
|
512,200
|
(3)
|
-0-
|
512,200
|
|
Executive Vice President and Chief Financial Officer
|
2015
|
493,800
|
(3)
|
-0-
|
493,800
|
|
2014
|
446,600
|
(3)
|
-0-
|
446,600
|
||
Kelly D. Luttmer
|
2016
|
837,000
|
(3)
|
-0-
|
837,000
|
|
Executive Vice President and Chief Tax Officer
|
2015
|
807,200
|
(3)
|
-0-
|
807,200
|
|
2014
|
729,000
|
(3)
|
-0-
|
729,000
|
||
Brian W. Christian (2)
|
2016
|
705,800
|
(3)
|
-0-
|
705,800
|
|
Executive Vice President
|
(1)
|
Certain non-applicable columns have been omitted from this table.
|
(2)
|
Mr. O'Brien, who served as our chief executive officer for all of 2016, resigned as a director and executive officer of ours on January 20, 2017. 2015 is the first year Mr. Buch is a named executive officer, and 2016 is the first year that Mr. Christian is a named executive officer.
|
(3)
|
The amounts shown in the 2016 Summary Compensation Table as salary for each of these named executive officers include the portion of the fees we paid pursuant to our ISA with Contran with respect to the services such officer rendered to us and our subsidiaries. The ISA charges disclosed for Contran employees who perform executive officer services to us and our subsidiaries are based on various factors described in the Compensation Discussion and Analysis section of this proxy statement. Our management development and compensation committee considers the factors described in the Compensation Discussion and Analysis section of this proxy statement in determining whether to recommend that our board of directors approve the aggregate proposed ISA fee with Contran. As discussed in the Compensation Discussion and Analysis section of this proxy statement, our management development and compensation committee does not consider any ISA charge from Contran to any other publicly held parent or sister company of ours, although such charge is separately reviewed by the management development and compensation committee of the applicable company. The amounts shown in the table as salary for Mr. O'Brien also include director cash compensation we paid to him for each of the last three years. The components of salary shown in the 2016 Summary Compensation Table for each of these named executive officers are as follows.
|
2014
|
2015
|
2016
|
||||
Bobby D. O'Brien
|
||||||
Contran ISA Fee
|
$602,800
|
$647,600
|
$929,300
|
|||
Director Fees Earned or Paid in Cash
|
22,750
|
(a)
|
31,000
|
29,000
|
||
$
625,550
|
$
678,600
|
$
958,300
|
||||
James Buch
|
||||||
Contran ISA Fee
|
$ 543,000
|
$1,132,300
|
||||
Gregory M. Swalwell
|
||||||
Contran ISA Fee
|
$446,600
|
$ 493,800
|
$ 512,200
|
|||
Kelly D. Luttmer
|
||||||
Contran ISA Fee
|
$729,800
|
$ 807,200
|
$837,000
|
|||
Brian W. Christian
|
||||||
Contran ISA Fee
|
$705,800
|
(a)
|
Our board of directors first elected Mr. O'Brien to our board of directors in February 2014 and, accordingly, his director compensation reflects that he did not serve as a director for all of 2014.
|
(4)
|
Stock awards to Mr. O'Brien in the last three years consisted of shares of our common stock we granted to him for his director services. See the 2016 Grants of Plan-Based Awards Table below for more details regarding the 2016 grants. The stock awards consisted of the following:
|
Shares of our
Common Stock
|
Date of Grant
|
Closing Price
on Date of
Grant
|
Grant Date Value of
Shares of our
Common Stock
|
1,500
|
May 18, 2016
|
$ 5.61
|
$ 8,415
|
1,000
|
May 20, 2015
|
$12.56
|
$12,560
|
1,000
|
May 21, 2014
|
$14.72
|
$14,720
|
Name
|
Grant Date
|
Date of
Approval (2)
|
All Other Stock Awards: Number of Shares of Stock or Units (#) (2)
|
Grant Date Fair Value of Stock and Option Awards (2)(3)
|
Bobby D. O'Brien
|
05/18/16
|
05/10/12
|
1,500
|
$ 8,415
|
(1)
|
Certain non-applicable columns have been omitted from this table.
|
(2)
|
As preapproved by our management development and compensation committee, on the day of each of our annual stockholder meetings each of our directors elected on that day receives a grant of shares of our common stock under our 2012 Director Stock Plan as determined by the following formula based on the closing price of a share of our common stock on the date of such meeting.
|
Range of Closing Price Per
Share on the Date of Grant
|
Shares of Common
Stock to Be Granted
|
Under $5.00
|
2,000
|
$5.00 to $9.99
|
1,500
|
$10.00 to $20.00
|
1,000
|
Over $20.00
|
500
|
2016 Director
Retainers
|
||||
Each director
|
$
|
25,000
|
||
Chairman of our audit committee and any member of our audit committee whom the board identified as an "audit committee financial expert" (provided that if one person served in both capacities only one such retainer was paid)
|
$
|
45,000
|
||
Other members of our audit committee
|
$
|
25,000
|
||
Members of our other committees
|
$
|
5,000
|
Name
|
Fees Earned or Paid in Cash (2)
|
Stock Awards (3)
|
All Other
Compensation(5)
|
Total
|
|
Keith R. Coogan
|
$62,000
|
$ 8,415
|
$ -0-
|
$ 70,415
|
|
Loretta J. Feehan
|
32,000
|
8,415
|
-0-
|
40,415
|
|
Robert D. Graham (4)
|
14,500
|
-0-
|
533,200
|
547,700
|
|
John. E. Harper
|
37,000
|
8,415
|
-0-
|
47,415
|
|
Cecil H. Moore, Jr.
|
77,000
|
8,415
|
-0-
|
85,415
|
|
Thomas P. Stafford
|
60,000
|
8,415
|
-0-
|
68,415
|
|
R. Gerald Turner
|
61,000
|
8,415
|
-0-
|
69,415
|
|
Steven L. Watson (4)
|
14,500
|
8,415
|
473,700
|
496,615
|
|
C. Kern Wildenthal
|
62,000
|
8,415
|
-0-
|
70,415
|
(1)
|
Certain non-applicable columns have been omitted from this table. See footnotes 3 and 4 to the 2016 Summary Compensation Table and 2016 Grants of Plan-Based Awards Table in this proxy statement for compensation we paid Bobby D. O'Brien for director services.
|
(2)
|
Represents cash retainers and meeting fees the director earned for director services he or she provided to us in 2016.
|
(3)
|
Represents the value of 1,500 shares of our common stock we granted to each of these directors on May 18, 2016. For the purposes of this table, we valued these stock awards at the $5.61 closing price per share of such shares on their date of grant, consistent with the requirements of Financial Accounting Standards Board Accounting Standards Codification Topic 718.
|
(4)
|
Mr. Watson resigned as a director and executive officer of ours effective May 26, 2016. In addition, our board of directors first elected Mr. Graham to our board of directors effective May 26, 2016. Accordingly, the 2016 amounts for both individuals reflect that they did not serve for the entire year. In addition, Mr. Graham was not granted any shares of our common stock in 2016 because he was not a director on the May 18, 2016 grant date.
|
(5)
|
The amount shown in the table for all other compensation for Messrs. Graham and Watson represents the portion of the 2016 ISA fees we and our subsidiaries paid pursuant to our ISA with Contran with respect to their non-director services. Such fee as it relates to Mr. Watson reflects that he did not serve as an executive officer of ours for the entire year.
|
·
|
other than stock grants to our directors, we do not grant equity awards to our employees, officers or other persons who provide services to us under our ISA with Contran, which mitigates taking excessive or inappropriate risk for short-term gain that might be rewarded by equity compensation;
|
·
|
our executive officers employed by us are eligible to receive incentive bonus payments that are determined on a discretionary basis and do not guarantee the employee a particular level of bonus based on the achievement of a specified performance or financial target, which also mitigates taking excessive or inappropriate risk for short-term gain
;
|
·
|
our other key employees are eligible to receive bonuses determined in part on the achievement of specified performance or financial targets, but the chance of such employees undertaking actions with excessive or inappropriate risk for short-term gain in order to achieve such bonuses is mitigated because:
|
o
|
our executive officers employed by us who are responsible for setting the specified performance or financial targets are not eligible to receive bonuses based on the achievement of the targets, but instead are only eligible for the discretionary-based bonuses described above; and
|
o
|
there exist ceilings for our other key employee bonuses (which are not a significant part of their compensation) regardless of the actual level of our financial performance achieved
;
|
·
|
our officers and other persons who provide services to us under our ISA with Contran do not receive compensation from us directly and are employed by Contran, one of our parent corporations, which aligns such officers and persons with the long-term interests of our stockholders
;
|
·
|
since we are a controlled company, as previously discussed, management has a strong incentive to understand and perform in the long-term interests of our stockholders
; and
|
·
|
our experience is that our
employees
are appropriately motivated by our compensation policies and practices to achieve profits and other business objectives in compliance with our oversight of material short and long-term risks.
|
·
|
Risk Management Program – a program pursuant to which Contran and certain of its subsidiaries and related entities, including us, as a group purchase third-party insurance policies and risk management services, with the costs thereof apportioned among the participating companies;
|
·
|
Tax Sharing Agreement– the cash payments for income taxes periodically paid by us to Valhi or received by us from Valhi, as applicable, and related items pursuant to the terms of our tax sharing agreement with Valhi (such tax sharing agreement being appropriate, given that we and our qualifying subsidiaries are members of the consolidated U.S. federal income tax return, and certain state and local jurisdiction income tax returns, of which Contran is the parent company).
|
·
|
Cash Management Loans – our unsecured revolving credit facility with Valhi, which provides for loans by us to Valhi of up to $60 million; and
|
·
|
Data Recovery Program - a program pursuant to which Contran and certain of its subsidiaries and related entities, including us, as a group share third-party information technology data recovery services, with the costs thereof apportioned among the participating companies.
|
·
|
intercorporate transactions, such as guarantees, management, expense and insurance sharing arrangements, tax sharing agreements, joint ventures, partnerships, loans, options, advances of funds on open account and sales, leases and exchanges of assets, including securities issued by both related and unrelated parties; and
|
·
|
common investment and acquisition strategies, business combinations, reorganizations, recapitalizations, securities repurchases and purchases and sales (and other acquisitions and dispositions) of subsidiaries, divisions or other business units, which transactions have involved both related and unrelated parties and have included transactions that resulted in the acquisition by one related party of an equity interest in another related party.
|
·
|
the premiums for all of the insurance and reinsurance policies are set by third parties (the underwriters for the insurance or reinsurance carriers bearing the risk), without any markup by Tall Pines or EWI;
|
·
|
the method by which the insurance premiums are allocated among the companies participating in the risk management program is generally the same as the basis used by the insurance or reinsurance carriers to establish the premiums for such insurance/reinsurance (
i.e.
the dominant premium factor, which is the factor that has the greatest impact on the premium, such as revenues, payroll or employee headcount);
|
·
|
EWI provides claims and risk management services to each of the companies participating in the risk management program, including us, and where appropriate EWI engages third-party risk management consultants;
|
·
|
the commissions received by Tall Pines and EWI from the insurance or reinsurance underwriters, and the fees assessed for the policies they so provide or broker, are in amounts equal to the commissions or fees which would be received by third-party brokers or underwriters;
|
·
|
the insurance coverages provided to us by the risk management program are sufficient and adequate for our purposes;
|
·
|
the benefits to our participating in the risk management program include, among others, (a) the ability to obtain broader coverage, with strong/solvent underwriters, at a reduced cost as compared to the coverage and cost that would be available if we were to purchase insurance by itself, (b) the greater spread of risk among the companies participating in the risk management program, (c) the ability to obtain centralized premium and claim reporting, and (d) the ability to have access to the experienced risk management personnel of EWI, including in the areas of loss controls and claims processing; and
|
·
|
the "cost of risk" metric, as defined by the Risk and Insurance Management Society, or RIMS, for the Contran group is lower as compared to the cost of risk as reflected in a recent RIMS benchmark survey for certain groups of companies comparable to the Contran group.
|
·
|
the tax sharing agreement is consistent with accounting principles generally accepted in the United States of America, and consistent with applicable law and regulations; and
|
·
|
our income tax accounts are included in the scope of the annual audit of our consolidated financial statements performed by PwC, and PwC makes periodic reports to the committee regarding income tax matters related to us.
|
·
|
While Valhi has not borrowed any amounts in the last two years, we receive an unused commitment fee of 50 basis points per annum, payable quarterly;
|
·
|
The interest rate we would earn on any outstanding borrowings by Valhi would be higher than the rate of return we would earn on any of our funds available for investment;
|
·
|
The interest rate we would earn on any outstanding borrowings by Valhi would be an interest rate no less than (and generally greater than) the interest rate which a lender would be earning under either our North American revolving bank credit facility or the revolving credit facility of two of our competitors; and
|
·
|
Any amounts we might loan to Valhi would not otherwise be used to paydown the outstanding balance of our term loan indebtedness, in part since the maturity date of such term loan is over two years in excess of the maturity date of our loan to Valhi.
|
·
|
The third-party cost of the data recovery program is passed through to the companies participating in the data recovery program, including us, without markup;
|
·
|
Such third-party cost is allocated to the companies participating in the data recovery program, including us, based on the number of information technology data racks used by each of the companies participating in the data recovery program;
|
·
|
The back-up site made available to us under the data recovery program is sufficient and adequate for our purposes; and
|
·
|
The benefits to our participating in the data recovery program include, among others, the ability to share in the cost of a third-party, off-site data recovery center at a reduced cost as compared to the cost to be incurred if we were to obtain a third-party, off-site data recovery center by ourselves, as well as the shared administration of the third-party, off-site data recovery center as compared to the cost of administering such a site by ourselves.
|
Cecil H. Moore, Jr.
Chairman of our Audit Committee
|
Thomas P. Stafford
Member of our Audit Committee
|
|
Keith R. Coogan
Member of our Audit Committee
|
R. Gerald Turner
Member of our Audit Committee
|
|
John E. Harper
Member of our Audit Committee
|
C. Kern Wildenthal
Member of our Audit Committee
|
·
|
review our quarterly unaudited condensed consolidated financial statements to be included in our Quarterly Reports on Form 10-Q for the second and third quarters of 2017 and the first quarter of 2018; and
|
·
|
audit our annual consolidated financial statements and internal control over financial reporting for the year ending December 31, 2017.
|
Type of Fees
|
2015
|
2016
|
||||||
(in thousands)
|
||||||||
Audit Fees (1)
|
$
|
2,616
|
$
|
2,803
|
||||
Audit-Related Fees (2)
|
132
|
113
|
||||||
Tax Fees (3)
|
8
|
12
|
||||||
All Other Fees
|
-0-
|
-0-
|
||||||
Total
|
$
|
2,756
|
$
|
2,928
|
(1)
|
Fees for the following services:
|
(a) |
audits of consolidated year-end financial statements for each year and, as applicable, of internal control over financial reporting;
|
(b) |
reviews of the unaudited quarterly financial statements appearing in Forms 10-Q for each of the first three quarters of each year;
|
(c) |
consents and/or assistance with registration statements filed with the SEC;
|
(d) |
normally provided statutory or regulatory filings or engagements for each year; and
|
(e) |
the estimated out-of-pocket costs PwC incurred in providing all of such services, for which PwC is reimbursed.
|
(2)
|
Fees for assurance and related services reasonably related to the audit or review of financial statements for each year. These services included accounting consultations and attest services concerning financial accounting and reporting standards and advice concerning internal control over financial reporting, as applicable.
|
(3)
|
Permitted fees for tax compliance, tax advice and tax planning services.
|
·
|
the committee must specifically preapprove, among other things, the engagement of our independent registered public accounting firm for audits and quarterly reviews of our financial statements, services associated with certain regulatory filings, including the filing of registration statements with the SEC, and services associated with potential business acquisitions and dispositions involving us; and
|
·
|
for certain categories of other permitted services provided by our independent registered public accounting firm, the committee may preapprove limits on the aggregate fees in any calendar year without specific approval of the service.
|
·
|
audit-related services, such as certain consultations regarding accounting treatments or interpretations and assistance in responding to certain SEC comment letters;
|
·
|
audit-related services, such as certain other consultations regarding accounting treatments or interpretations, employee benefit plan audits, due diligence and control reviews;
|
·
|
tax services, such as tax compliance and consulting, transfer pricing, customs and duties and expatriate tax services; and
|
·
|
assistance with corporate governance matters and filing documents in foreign jurisdictions not involving the practice of law.
|
·
|
our stockholders also have the option to abstain from making a choice; and
|
·
|
we disclose in the next periodic report we file with the SEC, our decision in light of the nonbinding advisory vote on the Say-When-on-Pay proposal how frequently we will include in our proxy materials a Say-on-Pay proposal.
|
·
|
you no longer wish to participate in householding and would prefer to receive a separate notice of internet availability of proxy materials; or
|
·
|
you receive multiple copies of the notice of internet availability of proxy materials at your address and would like to request householding of our communications.
|
|
Vote by Internet
·
Go to
www.investorvote.com/KRO
·
Or scan the QR code with your
smartphone
·
Follow the steps outlined on the secured
website.
|
·
|
Call toll free
1-800-652-VOTE (8683
) within the USA, US territories & Canada anytime on a touch tone telephone.
|
·
|
Follow the instructions provided by the recorded message
|
Using a
black ink
pen, mark your votes with an
X
as shown in
this example. Please do not write outside the designated areas.☒
|
|
1.
|
Director Nominees:
|
|||||||||||||||||||||||||||
For
|
Withhold
|
For
|
Withhold
|
For
|
Withhold
|
|||||||||||||||||||||||
01 –
Keith R. Coogan
|
☐
|
☐
|
02 – Loretta J. Feehan
|
☐
|
☐
|
03 – Robert D. Graham
|
☐
|
☐
|
||||||||||||||||||||
04 – John E. Harper
|
☐
|
☐
|
05 – Cecil H. Moore, Jr.
|
☐
|
☐
|
06 – Thomas P. Stafford
|
☐
|
☐
|
||||||||||||||||||||
07 – R. Gerald Turner
|
☐
|
☐
|
08 – C. Kern Wildenthal
|
☐
|
☐
|
|||||||||||||||||||||||
For
|
Against
|
Abstain
|
1-Yr
|
2-Yrs
|
3-Yrs
|
Abstain
|
||||||||||||||||||||||
2.
|
Nonbinding advisory vote approving executive officer compensation.
|
☐
|
☐
|
☐
|
3.
|
Nonbinding advisory vote on the approval of the preferred frequency of executive officer compensation votes.
|
☐
|
☐
|
☐
|
☐
|
||||||||||||||||||
4.
|
In their discretion, the proxies are authorized to vote upon such other business as may properly come before the Meeting and any adjournment or postponement thereof.
|
Date (mm/dd/yyyy) – Please print date below.
|
Signature 1 – Please keep signature within the box
|
Signature 2 – Please keep signature within the box
|
||
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|
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