| ☐ | Preliminary Proxy Statement | |
| ☐ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |
| ☒ | Definitive Proxy Statement | |
| ☐ | Definitive Additional Materials | |
| ☐ | Soliciting Material Pursuant to §240.14a-12 |
☒ | No fee required. | |||
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☐ | Fee computed on table in exhibit required by Item 25(b) per Exchange Act 14a-6(i)(1) and | |||
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Catalent, Inc.
14 Schoolhouse Road
Somerset, NJ 08873
catalent.com
September 22, 2017
Fellow Shareholders:
You are cordially invited to attend the 2017 Annual Meeting of Shareholders of Catalent, Inc. to be held at 8:30 a.m. on Thursday, November 2, 2017 at the company’s headquarters, 14 Schoolhouse Road, Somerset, New Jersey.
At the Annual Meeting, shareholders will vote on a number of important proposals. Please take the time to read each of the proposals, which we describe in our Proxy Statement for the Annual Meeting. We will primarily use the internet to furnish to shareholders our Proxy Statement and other proxy materials, including our form of ballot. We believe using the internet to distribute our proxy materials expedites shareholders’ receipt of the materials, lowers the costs of the Annual Meeting, and conserves natural resources. We are sending a Notice of Internet Availability of Proxy Materials on or about September 22, 2017 to our shareholders of record as of the close of business on September 6, 2017. The notice contains instructions concerning how to access our Proxy Statement and 2017 Annual Report and vote online. If you would like to receive a printed copy of our proxy materials from us instead of downloading a printable version from the internet, please follow the instructions for requesting such materials included in the Notice.
Your vote is important. You may vote in person at the Annual Meeting, by proxy on the internet or by telephone, or by completing and mailing the enclosed proxy card in the return envelope provided.
Thank you for your support of Catalent.
Sincerely yours,
John Chiminski
Chair of the Board, President and
Chief Executive Officer
Catalent, Inc.
14 Schoolhouse Road
Somerset, NJ 08873
catalent.com
NOTICE OF 2017 ANNUAL MEETING OF SHAREHOLDERS
December 15, 2023 | ||||
Fellow Catalent Shareholders: It is our pleasure to invite you to participate in the 2023 Annual Meeting of Shareholders of Catalent, Inc. (“Catalent”). We will hold the 2023 Annual Meeting of Shareholders of Catalent at 8:00 a.m. Eastern on Thursday, January 25, 2024 via a virtual meeting format. You are invited to attend, submit questions, and vote via the internet at www.virtualshareholdermeeting.com/CTLT2023. You will not be able to attend the 2023 Annual Meeting of Shareholders of Catalent in person. You will need the control number on your proxy card, or, if shares are held in the name of a broker, bank, or other nominee, on the voting instruction form, to participate in the virtual 2023 Annual Meeting of Shareholders of Catalent. Beneficial owners of shares held in street name will need to follow the instructions provided by the broker, bank or other nominee that holds their shares. Online check-in will begin at 7:45 a.m., Eastern, on Thursday, January 25, 2024. Once admitted, you may participate in the meeting and vote during the 2023 Annual Meeting of Shareholders of Catalent by following the instructions that will be available on the meeting website. At the meeting, shareholders will vote on a number of important proposals. Please take the time to read each of the proposals carefully, which we describe in our Proxy Statement for the 2023 Annual Meeting of Shareholders. We will primarily use the internet to furnish our shareholders with our Proxy Statement and other proxy materials. We believe using the internet to distribute our proxy materials expedites shareholders’ receipt of the materials, lowers the costs of conducting the meeting, and conserves natural resources. We are sending a Notice of Internet Availability of Proxy Materials on or about December 15, 2023 to our shareholders of record as of the close of business on December 4, 2023. The notice contains instructions concerning how to access our Proxy Statement and 2023 Annual Report and vote online. If you would like to receive a printed copy of our proxy materials from us instead of downloading a printable version from the internet, please follow the instructions for requesting such materials included in the Notice. Your vote is important. You may vote by participating virtually in the 2023 Annual Meeting of Shareholders, by proxy on the internet or by telephone, or by completing and mailing the enclosed proxy card or voting instruction form in the return envelope provided. Thank you for your support of Catalent. | ||||
Sincerely yours,
Alessandro Maselli President and Chief Executive Officer |  | |||
ITEMS OF BUSINESS:
| December 15, 2023 | ||||
Fellow Catalent Shareholders: As the Executive Chair of the Board and Lead Independent Director, we jointly write to you during this pivotal moment to discuss our fiscal performance, our latest board changes, and the forward-looking direction we aspire for Catalent, Inc. (“Catalent”). The twelve months ended June 30, 2023 (which we often call “fiscal 2023” in this Proxy Statement) brought forth challenges to our financial performance, which did not align with the expectations we set forth at the start of • Net revenue declined 11%, from $4.8 billion to $4.3 billion on a reported basis and from $4.8 billion to $4.4 billion on a constant-currency basis. • Net earnings decreased 151%, from earnings of $499 million to a loss of $256 million. • Adjusted EBITDA declined 43%, from $1.3 billion to $0.7 billion on a constant-currency basis. • Our net leverage ratio increased from 2.9x at the end of fiscal 2022 to 6.6x at the end of fiscal 2023. We understand the significance of these numbers and the implications they carry for our shareholders. The challenges we faced have solidified our commitment to stabilizing our business and restoring our historical profitability levels. As leadership, we own the outcomes and are setting a renewed course to address these areas. To that end, we welcomed Steven Barg, Frank D’Amelio, Stephanie Okey, and Michelle Ryan as new independent directors in August and September, all of whom will stand for election this year. We also signed a Cooperation Agreement with Elliott Investment Management L.P. and certain of its affiliates in August. That agreement and the induction of our new directors is a testament to our commitment to excellence and emphasizes our commitment to continuous shareholder collaboration and transparent engagement. With an eye on strategic depth, we also formed a new Strategic and Operational Review Committee to conduct a review of Catalent’s business, strategy, and operations, as well as Catalent’s capital-allocation priorities, in order to maximize Catalent’s long-term value. New Board members Steven Barg and Michelle Ryan have joined longer-tenured Board members Gregory T. Lucier and Jack Stahl on this committee, with one of us (John J. Greisch) acting as chair. We have also been pleased to welcome Matti Masanovich as our Chief Financial Officer. Matti, who joined us in July 2023, has substantial experience as a CFO of several large, complex multi-national public manufacturing companies and is already making a positive difference. We look forward to his continuing contributions. We remain resolute in our belief in Catalent’s value-creation trajectory. We are making progress in overcoming the operational and market challenges we experienced in fiscal 2023, while also completing our strategic investments in high-demand, high-growth areas, and in talent by hiring industry-leading expertise within our executive ranks. We have also made substantial progress in implementing our company-wide, cost-reduction plans, and we believe the fundamentals of our business remain solid. We are buoyed by the persistent and durable customer demand for our global services and continue to foster closer ties with our stakeholders to align our objectives more seamlessly. Finally, our talented colleagues continue to shine, putting Patients First and delivering on some of the most intricate and impactful programs in the CDMO industry, including the production of Sarepta’s Elevidys, the first gene therapy for the treatment of pediatric patients with Duchenne muscular dystrophy (DMD). In sum, while we face challenges, we are geared to turn them into opportunities. The strategies in place and the unwavering dedication of our team make us optimistic about what lies ahead. | ||||
Your faith in us remains our most treasured asset. We deeply value your continued support and pledge to work tirelessly to uphold and enhance shareholder value. Thank you for your understanding and trust. | ||||
 | Sincerely yours,
John J. Greisch Executive Chair of the Board
Jack Stahl Lead Independent Director |  | ||
Notice of 2023 Annual Meeting
of Shareholders
Annual Meeting of Shareholders | Items of Business: • Elect the twelve director nominees listed in the Proxy | |||
| Statement; • Ratify the appointment of Ernst & Young LLP as |
| fiscal 2024; • Conduct an advisory andnon-binding vote to approve our executive compensation(“say-on-pay”); |
• Approve |
• Consider any other business as may properly come before the 2023 Annual |
| Only shareholders of record at the close of business on | |
 | Date: Thursday January 25, 2024 | |
| Time: 8:00 a.m. Eastern | |
| Access: The meeting can be accessed virtually at: www.virtualshareholder meeting.com/CTLT2023 | |
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING:
You may obtain this 2017 Proxy Statement and our 2017 Annual Report atwww.proxyvote.com.
By order of the Board of Directors,
Steven L. Fasman
Senior Vice President, General Counsel & Corporate Secretary
September 22, 2017
Your vote is important. Review your Proxy Statement and vote in one of four ways:
 | VIRTUALLY. Vote electronically during the 2023 Annual Meeting of Shareholders, which can be accessed at www.virtualshareholdermeeting.com/CTLT2023, and vote in real-time. | |
 | BY TELEPHONE. By calling 1-800-690-6903 (toll free) in the United States or Canada and following the instructions on your proxy card or voting instruction form. | |
 | BY INTERNET. By visiting www.proxyvote.com and following the instructions on your Notice of Internet Availability, proxy card or voting instruction form. | |
 | BY MAIL. By returning a properly completed, signed and dated proxy card or voting instruction form in the postage-paid envelope. If you have not already received a proxy card, you may request a proxy card from us by following the instructions on your Notice of Internet Availability. | |
Important noticeregarding the availability of proxy materials for the Annual Meeting to be held on January 25, 2024: You may obtain this 2023 Proxy Statement and our 2023 Annual Report at www.proxyvote.com.
By order of the Board of Directors,
Joseph A. Ferraro
General Counsel, Chief Compliance Officer, and Corporate Secretary
December 15, 2023
i CATALENT, INC. | 2023 Proxy Statement TABLE OF CONTENTS
Table of Contents
TABLE OF CONTENTS 2023 Proxy Statement | CATALENT, INC. ii
Certain statements in this Proxy Statement contain or may suggest “forward-looking” information (as defined in the Private Securities Litigation Reform Act of 1995) that involves risks and uncertainties that could cause results to be materially different from expectations. The words “will,” “may,” “designed to,” “outlook,” “believes,” “should,” “targets,” “anticipates,” “assumptions,” “plans,” “expects” or “expectations,” “intends,” “estimates,” “forecasts,” “guidance” and similar expressions identify certain of these forward-looking statements. We also may provide forward-looking statements in oral statements or other written materials released to the public. All statements contained or incorporated in this Proxy Statement or in any other public statement that addresses such future events or expectations are forward-looking statements. Important factors that could cause actual results to differ materially from these forward-looking statements are detailed in our 2023 Annual Report on Form 10-K, filed with the Securities and Exchange Commission (the “SEC”) on December 8, 2023. These forward-looking statements are not guarantees of future performance and speak only as of the date made, and, except as required by law, we undertake no obligation to update or revise any forward-looking statement to reflect subsequent events, new information or future circumstances.
2CATALENT, INC. | 2023 Proxy Statement CORPORATE RESPONSIBILITY AND SUSTAINABILITY HIGHLIGHTS
Corporate Responsibility and
Sustainability Highlights
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PATIENTS | ||||
PLANET | ||||
PEOPLE | ||||
COMMUNITY | ||||
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doses manufactured this year for our customers and their patients around the world | 38% reduction of Scope 1 & 2 carbon emissions since 2020 | 3,200+ new hires in fiscal 2023 | 3,700 employees volunteered in Catalent Month of Service in fiscal 2023 | ||||||||||
216 new products launched by customers this year | 2024 is when we will publish our Scope 3 baseline and reduction, per our CEO’s Science Based Target Initiative (SBTi) commitment signed in fiscal 2022 | 2023 Best Place to Work for People with Disabilities, having scored 90 on the Disability Equality Index (an improvement from our score of 80 in 2022) | $1.3 million donated to our communities through employee matching gifts, disaster response and grants to promote STEM and serve patients | ||||||||||
Nearly 8,000 different products produced | 65% of our sites are landfill free, and on track to meet our goal of being landfill free by fiscal 2024, with 1,400 metric tons of uncontaminated by-product diverted from landfill in fiscal 2022 | 66% lower injury rate per 100 employees than reported industry averages | 725 nonprofits supported by our Catalent Cares grants and community programs in fiscal 2023 | ||||||||||
488 Water Intensity (m3/M$ revenue), exceeding reduction goal a year early | 21% increase in the number of employee resource group (ERG) chapters vs. fiscal 2022, a key element of our Diversity & Inclusion efforts | ||||||||||||
Human Rights |  | ||||||||||||
We actively work to develop and strengthen our human rights framework according to the UN Guiding Principles (UNGPs) on Business and Human Rights. We have implemented the UNGPs on Business and Human Rights throughout our business operations. | |||||||||||||
PROXY SUMMARY 2023 Proxy Statement | CATALENT, INC.3
Proxy Summary
This summary highlights certain information in this Proxy Statement, which is first being sent or made available to shareholders on or about September 22, 2017. As it is only aDecember 15, 2023. This summary pleasedoes not contain all the information that you should consider, and you should carefully review the complete Proxy Statement and our 20172023 Annual Report before you vote.
2017 FINANCIAL PERFORMANCE HIGHLIGHTS
The following summary Unless otherwise indicated, the terms “Catalent,” “the Company,” “we,” “our,” and “us” are used in the Proxy Statement to refer to Catalent, Inc., to one or more of our financial results forconsolidated subsidiaries, or to all of them taken as a whole.
Corporate Governance
We have in place what we believe are strong corporate governance standards and practices to assure effective management by our executives and oversight by our Board of Directors (“Board”). We are committed to good governance because it promotes the year ended June 30, 2017 (which we often call “fiscal 2017”long-term interests of shareholders, as well as accountability and trust in this Proxy Statement) highlightsus. This is consistent with our progress in growing our business. In fiscal 2017, we delivered another strong year from a revenue perspective, recording revenue growthintention to create an environment of 15% in constant currency(1) compared to the prior fiscal year, with growth across all three of our reporting segments. Softgel Technologies, our core long-cycle segment, grew revenue 12% at constant currency, with particular strength across the consumer health side of the business. We recorded constant currency revenue growth of 16%accountability, transparency, and trust in our Drug Delivery Solutions segment, which includes our modified release offerings, our sterile offeringsbusiness that fosters business integrity, financial stability, and our fast-growing biologics business. And our short-cycle Clinical Supply Services segment grew revenue by 20% in constant currency and continues to be the fastest growing segment in the portfolio.responsible, long-term growth.
Corporate Governance Highlights of our fiscal 2017 performance are as follows:
ACCOUNTABILITY | BOARD PRACTICES | |||||
• Annual election of Board members • Majority voting standard for director elections and resignation policy • Annual Board and Committee self-evaluation • Annual CEO evaluation • Active oversight by Board-approved Quality and Regulatory Compliance and Strategic and Operational Review Committees • Board-approved human rights policy statement | • Regular meetings of Committees • A strong Lead Independent Director to facilitate independent Board oversight of management • All committees are comprised solely of independent directors (other than the Chair of our new Strategic and Operational Review Committee (the “Strategic Committee”)) • Limits on director “overboarding” to protect against an under-commitment of time and attention • Ten of the twelve director nominees are independent • Non-employee director stock ownership and retention requirement – equal to 5X annual cash retainer | |||||
SHAREHOLDER INTEREST | TRANSPARENCY | |||||
• Emphasize pay-for-performance • Director & executive stock ownership and retention guidelines • Succession and continuity planning • Proxy access • Single voting class • Shareholder right to call special meetings • No super-majority vote requirement to amend any provision of the Certificate of Incorporation • Clawback policy | • Corporate Governance Guidelines • Publicly available Insider Trading Policy • Publicly available Board-approved Code of Ethics, known as our “Standards of Business Conduct,” applicable to all employees, officers, and directors | |||||
EXECUTIVE COMPENSATION
4CATALENT, INC. | 2023 Proxy Statement PROXY SUMMARY
Executive Compensation
For fiscal 2017, 84%2023, 88% of the target total direct compensation of our Chief Executive Officer (“CEO”) consisted of variable pay—pay that is either performance-based or tied to the price of our common stock—and 59%74% of his target compensation consisted of long-term equity awards. For our other executive officers discussed in this Proxy Statement (our(together with our CEO, our “Named Executive Officers” or “NEOs”), an average of 65%78% of their target total direct compensation was variable pay. The following charts illustrate the compensation pay ratiomix for our CEO and NEOs. These charts do not include other compensation, pension values and nonqualified deferred compensation earnings, which are shown in the Summary Compensation Table in this Proxy Statement.NEOs.
 CEO Target Direct Compensation(1) |  | Other NEOs Target Direct Compensation(1) | ||
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| (1) | Does not include any other compensation, pension values, and nonqualified deferred compensation earnings, which are shown in the Summary Compensation Table beginning on page 55. |
The allocation of variable compensation for our CEO and other NEOs aligns with oursupports the organization’s strategic plan and initiatives, compensation philosophy, business goals, competitive outlook, operating objectives, and compensation and total reward strategies. This allocation of motivatingvariable compensation motivates our executive officers to achieve our overall performance objectives in the short term and to grow the business to create long-term value for our shareholders.
2023 Executive Compensation Highlights
The following table provides highlights of the compensation of our CEO and other NEOs in 2017fiscal 2023 as reported in the 20172023 Summary Compensation Table beginning on page 55 in this Proxy Statement. For the complete details of compensation, please review the entire Proxy Statement.
Name (Position)
| Base Salary
| Management (Annual Bonus) ($)
| Long-Term ($)
| All Other
| Total
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Alessandro Maselli (President and Chief Executive Officer) |
| 925,000 |
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| - |
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| 5,500,235 |
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| 158,437 |
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| 6,583,672 |
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| Thomas Castellano (Former Senior Vice President and Chief Financial Officer) (1) | 443,654 | - | 1,250,101 | 1,036,228 | 2,729,983 | |||||||||||||||
| Ricky Hopson (President, Division Head for Clinical Development & Supply and Former Interim Chief Financial Officer) | 380,000 | 139,500 | 350,182 | 102,625 | 972,307 | |||||||||||||||
| Steven L. Fasman (Former Executive Vice President and Chief Administrative Officer) (2) | 625,000 | 135,000 | 1,500,246 | 50,053 | 2,310,299 | |||||||||||||||
Aristippos Gennadios (Group President, Pharma and Consumer Health) |
| 600,000 |
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| 135,000 |
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| 3,000,294 |
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| 64,263 |
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| 3,799,557 |
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John Chiminski (Former Executive Chair) |
| 700,000 |
|
| - |
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| 4,000,069 |
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| 107,698 |
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| 4,807,767 |
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Manja Boerman (Former President, Division Head for Biomodalities) (3) |
| 511,387 |
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| - |
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| 2,650,239 |
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| 818,262 |
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| 3,979,888 |
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PROXY SUMMARY 2023 Proxy Statement | CATALENT, INC.5
| (1) | Mr. Castellano ceased serving as Chief Financial Officer on April 13, 2023 and separated from the Company on April 21, 2023. As a result, all of his outstanding unvested equity grants were cancelled/forfeited, including the grants awarded to him in fiscal 2023 that are reflected in this table. |
| (2) | Mr. Fasman departed the Company on September 13, 2023. As a result, all of his outstanding unvested equity grants were cancelled/forfeited, including the grants awarded to him in fiscal 2023 that are reflected in this table. |
| (3) | Dr. Boerman served as President, Division Head for Biomodalities until April 24, 2023, and, upon her removal from that position, was offered “garden leave” for the entirety of the six months’ notice period under her employment agreement. Dr. Boerman continued to receive her salary through the end of fiscal 2023 while we continued to negotiate the terms of her separation during her period of garden leave. All of her outstanding unvested equity grants will be cancelled/forfeited, including the grants awarded to her in fiscal 2023 that are reflected in this table, based on the existing terms of the awards, in connection with her termination by mutual consent when such negotiations are complete. |
| (4) | Amounts reported include a one-time restricted stock unit (“RSU”) grant to Dr. Gennadios valued at $2,000,097, in connection with his promotion to Group President, Pharma & Consumer Health in fiscal 2023 and a one-time performance restricted stock unit (“PRSU”) granted to Dr. Boerman valued at $2,000,088. As noted above, Dr. Boerman’s PRSUs will be cancelled/forfeited based on the existing terms of the award, in connection with her termination by mutual consent when such negotiations are complete, and she will not obtain any financial benefit from this grant. |
2017 EXECUTIVE COMPENSATION HIGHLIGHTS
Name
| Base Salary ($) | Management ($) | Long-Term ($) | All Other Compensation ($) | Total Compensation ($) | |||||||||||||||
John Chiminski | 975,000 | 1,698,750 | 3,600,078 | 52,787 | 6,326,615 | |||||||||||||||
Matthew Walsh | 675,000 | 580,922 | 675,040 | 41,462 | 1,972,424 | |||||||||||||||
Barry Littlejohns | 448,571 | 355,559 | 440,026 | 22,664 | 1,266,820 | |||||||||||||||
William Downie | 365,333 | 306,156 | 413,632 | 781,171 | 1,866,292 | |||||||||||||||
Steven Fasman | 550,000 | 485,719 | 550,048 | 8,285 | 1,594,052 | |||||||||||||||
Sharon Johnson* | 368,857 | 292,530 | 903,750 | 524,097 | 2,089,234 | |||||||||||||||
* Ms. Johnson’s employment with the company ended on June 30, 2017. As part of her severance, our Compensation and Leadership Committee (the “Compensation Committee”) approved the ordinary course vesting of incentive compensation granted to her in fiscal 2017 and prior years and scheduled to vest up to August 27, 2017, which modification had a fair value of approximately $480,580 as of the date of approval. This amount is included in the amount reported in the Long-Term Incentive Plan (LTIP) column.
At the 2016 Annual Meeting, our shareholders voted 99.4% in favor of oursay-on-pay proposal, demonstrating their concurrence that our executive compensation program reflects apay-for-performance philosophy.
INFAVOROFOURSAY-ON-PAYPROPOSAL | At the 2022 Annual Meeting, our shareholders demonstrated their concurrence that our executive compensation program reflects a pay-for-performance philosophy. |
CORPORATE GOVERNANCE
We have in place what we believe are strong corporate governance standards and practices to assure effective management by our executives and oversight by our Board of Directors. We are committed to good governance because it promotes the long-term interests of shareholders, as well as accountability and trust in us. Highlights of our corporate governance standards and practices include the following:6CATALENT, INC. | 2023 Proxy Statement PROXY SUMMARY
Annual Meeting
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ANNUAL MEETING
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| ACCESS The meeting can be accessed virtually at: www.virtualshareholdermeeting.com/CTLT2023 | |
| RECORD DATE Close of business on | |
 | VOTING Only shareholders on the record date are entitled to vote, with one vote per each common share on each matter to be voted upon at the virtual 2023 Annual | |
| ADMISSION To participate in the virtual 2023 Annual Meeting | |
ANNUAL MEETING PROPOSALSAnnual Meeting Proposals
| Proposal | Description | Board Vote Recommendation | Page Number Reference | |||
1 | Elect Three Members of Our Board of Directors | FOR | 12 | |||
2 | Ratification of Appointment of Independent Auditor for Fiscal 2018 | FOR | 95 | |||
3 | Advisory Vote on the Approval of Executive Compensation(Say-on-Pay) | FOR | 98 | |||
| 4 | Amendment of Amended and Restated Certificate of Incorporation to Eliminate the Supermajority Vote Requirement for Shareholders to Amend our Bylaws | FOR | 99 | |||
| 5 | Amendment of Amended and Restated Certificate of Incorporation to Eliminate the Supermajority Vote Requirement for Shareholders to Remove Directors For Cause | FOR | 101 | |||
| 6 | Amendment of Amended and Restated Certificate of Incorporation to Eliminate Obsolete Provisions and Make Other Non-Substantive and Conforming Changes | FOR | 103 |
Proposal
| Board Vote Recommendation
| Page Number Reference
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1 | Elect the Twelve Director Nominees Listed in this Proxy Statement | FOR | 7 | |||
2 | Ratification of Appointment of E&Y as Independent Auditor for Fiscal 2023 | FOR | 74 | |||
3 | Advisory Vote to Approve Our Executive Compensation (Say-on-Pay) | FOR | 77 | |||
4 | Approval of Amendment No. 1 to the Catalent, Inc. 2018 Omnibus Incentive Plan | FOR | 78 | |||
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ANNUAL MEETING, VOTING, AND PROCEDURES
We are making this proxy statement available to our shareholders in connection with the solicitation of proxies by the Board of Directors for our 2017 Annual Meeting of Shareholders. We are holding our 2017 Annual Meeting of Shareholders at 8:30 a.m. on Thursday, November 2, 2017 at our corporate headquarters located at 14 Schoolhouse Road, Somerset, New Jersey. You may obtain directions from our Corporate Secretary (address on page 26).
We do not require tickets for admission to the meeting, but we do limit attendance to shareholders of record on the record date, September 6, 2017, or their proxy holders. Please bring proof of your common stock ownership, such as a current brokerage statement, the16-digit number included on your proxy card or Notice of Internet Availability, and valid government-issued photo identification. If you hold shares through a bank, broker, or other nominee (also known as shares held in “street name”), you must obtain a valid legal proxy, executed in your favor, from the holder of record if you wish to vote those shares at the meeting.
For safety and security purposes, no camera, camcorder, videotaping equipment, or other recording device, and no large package, banner, placard, or sign will be permitted in the meeting. Since seating may be limited, admission to the Annual Meeting will be on a first-come, first-served basis.
Only shareholders or their valid proxy holders may address the meeting.
AVAILABILITY OF PROXY MATERIALS
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We are furnishing proxy materials to our shareholders via “Notice and Access” delivery. On or aboutSeptember 22, 2017, we mailed to our shareholders a Notice of Internet Availability of Proxy Materials. This notice contains instructions on how to access our 2017 Proxy Statement and 2017 Annual Report and vote online. Our 2017 Proxy Statement and 2017 Annual Report are available online at www.proxyvote.com.
You will not receive a printed, paper copy of our proxy materials unless you request one. To view this material, you must have available the16-digit control number located on the notice mailed on or about September 22, 2017 or the proxy card, or, if shares are held in the name of a broker, bank or other nominee, on the voting instruction form. To request a paper copy of our proxy materials, visit www.proxyvote.com, call1-800-579-1639 or send an email, with your16-digit control number in the subject line, tosendmaterial@proxyvote.com. Please make the request on or before October 19, 2017 to facilitate timely delivery.
WHO IS ENTITLED TO VOTE AT THE ANNUAL MEETING
Only holders of Catalent, Inc. common stock at the close of business on September 6, 2017, the record date fixed by the Board of Directors, may vote the shares of common stock that they hold on that date at the Annual Meeting with respect to the matters submitted for vote at the Annual Meeting. Each share of common stock is entitled to one vote. As of September 6, 2017, there were 125,455,770 shares of our common stock outstanding.
We encourage you to vote as soon as possible, even if you plan to attend the meeting in person. Your vote is important. You may vote shares that you owned as of the close of business on September 6, 2017, which is the record date set by the Board of Directors.
If you own shares registered directly in your name as the shareholder of record, you are a “record owner” and have the right to give your proxy directly to our vote tabulating agent. You may vote by proxy in the following ways:
REVIEW YOUR PROXY STATEMENT AND VOTE IN ONE OF FOUR WAYS:
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For telephone and internet voting, you will need the16-digit control number included on your notice or on your proxy card.
If you own shares in street name, the institution holding the shares is the record owner and you are a “beneficial owner” of those shares. You will receive voting instructions from your
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broker, bank, or plan trustee, and you may direct them how to vote on your behalf by complying with those voting instructions. Those instructions will include a control number for telephone and internet voting, and applicable deadlines.
If you are a shareholder of record and wish to vote your shares in person at the meeting, you should so notify our Corporate Secretary when you arrive at the meeting. If you hold shares in street name, you must obtain a valid legal proxy, executed in your favor, from the holder of record if you wish to vote these shares at the meeting. You should contact your bank, broker, or other nominee to obtain a legal proxy.
If you own shares registered directly in your name as the shareholder of record, you can revoke your proxy at any time before the vote occurs by:
Catalent, Inc.
14 Schoolhouse Road
Somerset, NJ 08873
Attention: Corporate Secretary
If you hold your shares in street name, you must contact your broker, bank, or other nominee for specific instructions on how to change or revoke your vote.
Only the latest, validly executed proxy that you submit will be counted.
Your attendance at the Annual Meeting will not revoke a proxy you have given unless you file a written notice of such revocation as noted above.
PROPOSALS TO BE VOTED ON AND BOARD RECOMMENDATION
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The Board of Directors does not intend to bring any matter before the 2023 Annual Meeting of Shareholders other than those set forth above and the Board of Directors is not aware of any matter that anyone else proposes to present for action at the meeting. However, if any other matter properly comes before the meeting, yourexecuting our form of proxy gives authority to the designated proxy holder to vote on such matters in accordance with the holder’s best judgment.
We will PROPOSAL 1: ELECT THE TWELVE DIRECTOR NOMINEES LISTED IN THIS PROXY STATEMENT 2023 Proxy Statement | CATALENT, INC.7
Proposal 1:
Elect the Twelve Director Nominees Listed in this Proxy Statement
(ITEM 1 ON THE PROXY CARD)
Upon the recommendation of the Nominating and Corporate Governance Committee (the “Nominating Committee”), the Board has considered and nominated the eight incumbent directors listed below for election to the Board at the Annual Meeting. In addition, on August 28, 2023, we entered into a cooperation agreement (the “Cooperation Agreement”) with Elliott Investment Management L.P. and certain of its affiliates (together, “Elliott”). Under the Cooperation Agreement, the four directors that we added when we increased the size of the Board in August 2023 from twelve directors to sixteen directors—Steven K. Barg, Frank D’Amelio, Stephanie Okey, and Michelle R. Ryan—have each been nominated to stand for election at the Annual Meeting.
In accordance with another aspect of the Cooperation Agreement, the Board established the ad hoc Strategic Committee to conduct a quorumreview during the “Cooperation Period” (as defined in the Cooperation Agreement) of the Company’s business, strategy, and operations, as well as the Company’s capital-allocation priorities, in order to maximize the long-term value of the Company. The Strategic Committee consists of John Greisch as committee chair, as well as Steven K. Barg, Gregory T. Lucier, Michelle R. Ryan, and Jack Stahl.
Elliott agreed in the Cooperation Agreement to abide by customary standstill restrictions and voting commitments. The Cooperation Agreement also includes procedures regarding the replacement of the new directors during the Cooperation Period.
Madhu Balachandran, Rosemary Crane, Karen Flynn and Dr. Christa Kreuzburg have decided not to stand for re-election at the Annual Meeting. Accordingly, following the Annual Meeting, the size of the Board will be ablereduced from sixteen to conducttwelve members. In connection with Cooperation Agreement, the businessCompany agreed that, from the closing of the Annual Meeting if a majorityuntil the 2024 Annual Meeting of Shareholders, the size of the outstanding shares of our common stock entitled to vote at the meeting are present, either in person or by proxy. Each share is entitled to one vote on each matter toBoard will be voted uponno greater than twelve (12) members.
The directors elected at the Annual Meeting. Abstentions and brokernon-votesMeeting will be counted as present forhold office until the purpose2024 annual meeting of determining whether a quorum is present for the meeting.
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The table below describes the vote requirements and the effect of abstentions and brokernon-votes, as prescribed under our bylaws and Delaware law, for the election of directors and the approval of the other items on the agenda for the meeting.
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* A brokernon-vote occurs when a broker submits a proxy but does not vote on a Proposal because it is not a “routine” item under New York Stock Exchange (“NYSE”) rules and the broker has not received voting instructions from the beneficial owner of the shares. Your broker may vote without your instructions only on Proposal 2—Ratification of Appointment of Independent Auditor for Fiscal 2018.
EFFECT OF NOT CASTING YOUR VOTE
If we timely receive a proxy specifying your voting choice, your shares will be voted in accordance with that choice.
If you are a registered shareholder and you do not cast your vote, no vote will be cast on your behalf on any of the Proposals at the Annual Meeting. If you sign and return a proxy card without specific voting instructions, or if you vote by telephone or via the internet without indicating how you want to vote, your shares will be voted in accordance with the Board of Directors’ voting recommendations stated above.
If you hold your shares in street name, you will receive a voting instruction form that lets you instruct your bank, broker, or other nominee how to vote your shares. Under NYSE rules, if you do not provide voting instructions to your broker, the broker is permitted to exercise discretionary voting authority only on “routine” matters. The only “routine” item on this year’s Annual Meeting agenda is Proposal 2—Ratification of Appointment of Independent Auditor for Fiscal 2018. If you hold your shares in street name, and you wish to have your shares voted on all proposals in this Proxy Statement, you must complete and return your voting instruction form.If you do not return your voting instruction form, your shares will not be voted on any item, except that your broker may vote in its discretion on Proposal 2.
We will pay the cost of preparing, assembling, printing, mailing, and distributing these proxy materials. We will provide copies of these proxy materials to banks, brokerage houses, fiduciaries, and custodians holding in their names shares of our common stock beneficially owned by others so that they may forward these proxy materials to the beneficial owners. Our directors, officers, or employees may solicit proxies or votes for us in person, or by mail, telephone, or electronic communication. They will not receive any additional compensation for these solicitation activities. In addition, we have retained Innisfree M&A Incorporated (“Innisfree”) to assist in soliciting proxies for a fee of $20,000 plus an additional nominal fee per incoming and outgoing telephone contact. We have also agreed to reimburse Innisfree for certainout-of-pocket fees and expenses and to indemnify Innisfree against certain losses, claims, damages, liabilities, or expenses.
If you have any questions, or need assistance in voting
your shares, please call our proxy solicitor:
Innisfree M&A Incorporated
501 Madison Avenue
New York, NY 10022
Shareholders may call toll-free: (888) 750-5834
Banks and Brokers may call collect: (212) 750-5833
AVAILABILITY OF VOTING RESULTS
We expect to announce preliminary voting results at the Annual Meeting. We will disclose the final voting results in a Current Report on Form8-K to be filed with the U.S. Securities and Exchange Commission (the “SEC”) following the Annual Meeting.
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PROPOSAL 1 - ELECT THREE MEMBERS OF OUR BOARD OF DIRECTORS
(Item 1 on the Proxy Card)
The Board of Directors currently consists of nine directors evenly divided into three classes, I, II and III. Our directors serve for class-based staggered terms of three yearsshareholders and until their successors are duly elected and qualified, or until their earlier death, resignation or removal. Each year, there is anWe have no reason to believe that any of the nominees will be unavailable or, if elected, will decline to serve. In the event that these nominees should become unavailable for election with respectdue to any presently unforeseen reason, the proxies that you designate may be able to vote for a substitute as designated by the Board, or alternatively, the Board may leave a vacancy on the Board or reduce the size of the Board, in each case subject to any right that Elliott may have to designate a successor to certain of the nominees pursuant to the class of directors whose terms are expiring. The directors in Class III, whose terms expire at the 2017 Annual Meeting of Shareholders, are Rolf Classon, Gregory Lucier, and Uwe Röhrhoff. The Board of Directors has nominated each of these directors to stand forre-election for a three-year term, which will expire at the 2020 Annual Meeting of Shareholders. Messrs. Classon, Lucier, and Röhrhoff, as nominees for director, have consented to being named in thisCooperation Agreement.
8CATALENT, INC. | 2023 Proxy Statement and to serve if elected.PROPOSAL 1: ELECT THE TWELVE DIRECTOR NOMINEES LISTED IN THIS PROXY STATEMENT
Our Board of Directors recommends that you vote on your proxy card or voting instruction form“FOR”
Background to the election of eachBoard’s Recommendation in Favor of the Board’s nominees,Mr. Classon, Mr. Lucier, and Mr. Röhrhoff, to serve as Class III directors of Catalent until our 2020 Annual Meeting of Shareholders and until their successors are duly elected and qualified, or until their earlier death, resignation, or removal.
RECOMMENDATION IN FAVOR OF THE NOMINEESNominees
The Nominating and Corporate Governance Committee of the Board of Directors (the “Nominating Committee”) is directed under its charter to oversee searches for and identify qualified individuals to become directors, and to recommend individuals it identifies to theour Board of Directors for nomination. The Nominating Committee considers a number of factors and principles in recommending the slate of director nominees for election. In particular,election, as described below under the Nominating Committee considers the following when evaluating and selecting nominees: the candidate’s individual qualifications, including strength of character, mature judgment, familiarity with our business and industry, independence of thought, an ability to work collegially, and all other factors it considers appropriate, which may include age, gender, and ethnic and racial background, existing commitments to other businesses, potential conflicts of interest with other pursuits, legal considerations such as antitrust issues, corporate governance background, various and relevant career experience, relevant technical skills, relevant business or government acumen, financial and accounting background, executive compensation background, and the size, composition, and combined expertise of the existing Board of Directors.heading “Director Nomination Process” on page 24.
The Nominating Committee has evaluated each of Mr. Classon, Mr. Lucier, and Mr. Röhrhoffthe recommended individuals against the factors and principles it uses to select nominees for director. The Nominating Committee considered, among other things, that eachcertain of the nominees is anare existing member
members of our Board, of Directors, isare familiar with us and the risks and opportunities we face, and hashave demonstrated an ability to work collegially and productively with the remainderother members of our Board of Directors.Board. The Nominating Committee also considered particular aspects of each of the director nominees, as noted below within their biographies and in the nominee’s biography under the heading “Specific qualifications, experience, skillsNominee Qualifications and expertise.”Experience Matrix.
Following its evaluation, the Nominating Committee voted to recommend the nominees to theour Board of Directors as candidates for election to a new term of office. Based in part on the Nominating Committee’s evaluation and recommendation, theour Board of Directors has concluded that it is in our best interest and the best interest of our shareholders for each of the proposed nominees to continue to serve as a member of our Board of Directors.
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| Nominee Qualifications and Experience | |||||||||||||||||||||||||
Rolf Classon
Age: 72
Mr. Classon has been a director since August 2014. From October 2002 until his retirement in July 2004, Mr. Classon was Chairman of the Executive Committee of Bayer HealthCare AG, a subsidiary of Bayer AG. He served as President of Bayer Diagnostics from 1995 to 2002 and as Executive Vice President of Bayer Diagnostics from 1991 to 1995. Prior to 1991, Mr. Classon held various management positions with Pharmacia Corporation. From April 2005 to January 2015, Mr. Classon served as Chairman of the Board of Directors of Auxilium Pharmaceuticals, Inc. and as Vice Chairman from March 2005 to April 2005. Mr. Classon also currently serves as Chairman of the Board of Directors ofHill-Rom Corporation, where he also served as interim chief executive officer from May 2005 until March 2006. Mr. Classon currently serves as Chairman of the Board of Directors of Tecan Group Ltd., and as a member of the Board of Directors of Fresenius Medical Care, Sequanna Medical AG, and Perrigo Company plc. Mr. Classon previously served as a director of Millipore Corporation from December 2005 until July 2010, Prometheus Laboratories Inc. from September 2004 until 2010, and Enzon Pharmaceuticals Inc. from January 1997 until 2011. Mr. Classon received his Chemical Engineering Certificate from the Gothenburg University School of Engineering and a Business Degree from Gothenburg University.
Specific qualifications, experience, skills and expertise:
| Barber | Barg | Carroll | Classon | D’Amelio | Greisch | Lucier | Maselli | Morel | Ryan | Okey | Stahl | ||||||||||||||
| Leadership experience with other public companies |
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| Significant executive experience with pharmaceutical and other healthcare companies | ○ | ○ | ○ | ○ | ○ | ○ | ○ | ○ | ○ | ○ | ○ | |||||||||||||
| Extensive experience overseeing the manufacturing operations of a healthcare company | ○ | ○ | ○ | ○ | ○ | ○ | ||||||||||||||||||
| Extensive experience with the manufacturing and marketing of biologics-based pharmaceuticals and other biologics products | ○ | ○ | ○ | ○ | ||||||||||||||||||||
| Substantial expertise in advising and managing multi-national companies with multiple business units |
Gregory T. Lucier
Age: 53
Mr. Lucier has been a director since April 2015. Mr. Lucier is Chairman and Chief Executive Officer of Nuvasive, Inc., a medical device company focused on developing minimally disruptive surgical products and procedures for the spine. Prior to joining Nuvasive, Inc. in March 2015, Mr. Lucier was Chairman and Chief Executive Officer of Life Technologies Corporation (formerly Invitrogen Corporation), a global biotechnology company, from April 2004 until it was acquired by Thermo Fisher Scientific Inc. in February 2014 and served as its Chief Executive Officer from May 2003 to April 2004. Prior to that, Mr. Lucier was a corporate officer at General Electric Company, where he served in a variety of leadership roles. Mr. Lucier served as a director of Life Technologies Corporation from May 2003 to February 2014 and of Carefusion Corporation from August 2009 until its sale to Becton Dickinson and Company in March 2015. Mr. Lucier received an M.B.A. from Harvard Business School and a B.S. in industrial engineering from Pennsylvania State University.
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Specific qualifications, experience, skills and expertise:
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| ○ | ○ | ○ | ○ | ○ | ○ | ○ | |||||||||||
| Substantial experience serving as a director |
| ○ | ○ | ○ | ○ | ○ | ○ | ○ | |||||||||||||||||
| Substantial experience with |
Uwe Röhrhoff
Age: 55
Mr. Röhrhoff has been a director since February 2017. Mr. Röhrhoff has served as the Chief Executive Officer of Gerresheimer AG since 2010. Mr. Röhrhoff has been with Gerresheimer AG, a German manufacturer of primary packaging products for medication and drug delivery devices made of special purpose glass and plastics, since 1991. He initially headed the Finance and Controlling of Gerresheimer AG’s Moulded Glass Division before assuming the role of Vice President Controlling of Kimble USA, Inc. (an American subsidiary of Gerresheimer AG) from 1996 to 1998, where he was responsible for the American plants. In 1998, Mr. Röhrhoff was appointed head of the Moulded Glass on an international level as well as Chief Executive Officer and Chief Financial Officer of Tettauer Glashuttenwerke AG, a subsidiary of Gerresheimer AG. In 2001 until 2007 Mr. Röhrhoff was appointed CEO and CFO (until 2003) of Kimble USA. In 2003, Mr. Röhrhoff was appointed to the Management Board (a Director) of the Gerresheimer Group and holds that position today. Since Gerresheimer AG’s restructuring at the start of 2007 through 2013, Mr. Röhrhoff was responsible for Gerresheimer AG’s Moulded Glass Division and the Life Science Research Division. In 2013, he became responsible for Gerresheimer AG’s Primary Packaging Glass Division. Mr. Röhrhoff started his career in the finance department of Scheidt & Bachmann GmbH. He holds a business studies degree from the University of Cologne.
Specific qualifications, experience, skills and expertise:
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| Substantial experience |
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John Chiminski
Age: 53
Mr. Chiminski has led Catalent as President and Chief Executive Officer since March 2009. He has served as a director on the Board of Directors since February 2009 and as Chair of the Board since October 2016. Mr. Chiminski brings to Catalent a diversified business background that includes lean manufacturing, supply chain, research and development, customer service, and global business management, with a focus on customers and growth. He joined Catalent after more than 20 years of experience at GE Healthcare in engineering, operations, and senior leadership roles. From 2007 to 2009, Mr. Chiminski was President and Chief Executive Officer of GE Medical Diagnostics, a global business with sales of $1.9 billion. From 2005 to 2007, he served as Vice President and General Manager of GE Healthcare’s Global Magnetic Resonance Business, and from 2001 to 2005, as Vice President and General Manager of Global Healthcare Services. Earlier at GE, he held a series of cross-functional leadership positions in both manufacturing and engineering, including a GE Medical Systems assignment in France. He served as a director of DJO Global, Inc. from March 2012 until October 2015. Mr. Chiminski holds a B.S. from Michigan State University and an M.S. from Purdue University, both in electrical engineering, as well as a Master in Management degree from the Kellogg School of Management at Northwestern University.
Specific qualifications, experience, skills and expertise:
| ○ | ○ | ○ | ○ | ○ | ○ | ○ | ○ | ○ | |||||||||||
| Substantial expertise in advising and managing companies in various segments of the healthcare industry |
| ○ | ○ | ○ | ○ | ○ | ○ | ○ | ○ | ○ | |||||||||||||||
| Extensive experience as a business leader in our industry |
Madhavan “Madhu” Balachandran
Age: 66
Madhu Balachandran has been a director since May 2017. Mr. Balachandran was Executive Vice President, Operations of Amgen Inc., a global biotechnology company (“Amgen”), from August 2012 until July 2016 and retired as an Executive Vice President in January 2017. Mr. Balachandran joined Amgen in 1997 as Associate Director, Engineering. He became Director, Engineering in 1998, and, from 1999 to 2001, he held the position of Senior Director, Engineering and Operations Services before moving to the position of Vice President, Information Systems from 2001 to 2002. Thereafter, Mr. Balachandran was Vice President, Puerto Rico Operations from May 2002 to February 2007. From February 2007 to October 2007, Mr. Balachandran was Vice President, Site Operations, and, from October 2007 to August 2012, he held the position of Senior Vice President, Manufacturing. Prior to his tenure at Amgen, Mr. Balachandran held leadership positions at Copley Pharmaceuticals, now
a part of Teva Pharmaceuticals Industries Ltd., and Burroughs Welcome Company, a predecessor through mergers of GlaxoSmithKline plc. He has served as a member of the advisory board of Stevanato Group since July 2017. Mr. Balachandran holds a Master of Science degree in Chemical Engineering from The State University of New York at Buffalo and an MBA from East Carolina University.
Specific qualifications, experience, skills and expertise:
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J. Martin Carroll
Age: 68
Mr. Carroll has been a director since July 2015. He served as President and Chief Executive Officer of Boehringer Ingelheim Corporation and of Boehringer Pharmaceuticals, Inc. from 2003 until 2011 and as a director of Boehringer Ingelheim Corporation from 2003 until December 2012. Mr. Carroll joined the Boehringer Ingelheim organization in 2002 as President of Boehringer Pharmaceuticals, Inc. Mr. Carroll worked at Merck & Company, Inc. from 1976 to 2001. From 1972 to 1976, Mr. Carroll served in the United States Air Force, where he attained the rank of Captain. Mr. Carroll has been a director of Mallinckrodt plc since June 2013, serving as Chair of its Compliance Committee, and has also served as director of TherapeuticsMD, Inc. since March 2015. He has been a director of Inotek Pharmaceuticals Corporation since March 2016 and became Chairman of the Board in June 2016. Mr. Carroll served as a director of Durata Therapeutics, Inc. from August 2014 until November 2014 when it was acquired by Actavis plc and as a director of Vivus, Inc. from May 2013 until September 2014. Mr. Carroll received a B.A. in accounting and economics from the College of the Holy Cross and an M.B.A. from Babson College.
Specific qualifications, experience, skills and expertise:
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| Substantial experience serving as a |
Donald E. Morel, Jr., Ph.D.
Age: 60
Dr. Morel has been a director since November 2015. Dr. Morel retired in June 2015 as Chairman of West Pharmaceutical Services, Inc. (“West”), a leading manufacturer of packaging components and delivery systems for injectable drugs and healthcare products, a position he had held since March 2003. He also served as West’s Chief Executive Officer
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from April 2002 until April 2015 and as its President from April 2002 until June 2005. Currently, Dr. Morel serves as Chairman of the Board of Directors of the American Oncologic Hospital of the Fox Chase Cancer Center. He also serves as a Chairman of the Board of Trustees of the Franklin Institute and is a Trustee of Lafayette College. Additionally, Dr. Morel has been a director of Integra Life Sciences Holdings Corporation since August 2013 and a member of the advisory board of Stevanato Group since July 2017. Prior to that, he served as a director of Kensey Nash Corporation from 2010 until 2012. Dr. Morel obtained a Master of Science degree and a Ph.D. in Materials Science from Cornell University and a Bachelor of Science degree in Engineering from Lafayette College.
Specific qualifications, experience, skills and expertise:
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| Experience reviewing and analyzing complex public company financial statements | ○ | ○ | ○ | ○ | ○ | ○ | ○ | ○ | ○ | ○ | ||||||||||||||
| Substantial experience and leadership in managing a life sciences business performing contract development and manufacturing services |
James Quella
Age: 67
Mr. Quella has been a director since December 2009. Mr. Quella was a Senior Managing Director and Senior Operating Partner in the Corporate Private Equity group of The Blackstone Group L.P. (“Blackstone”) through June 2013. Mr. Quella was responsible for monitoring the strategy and operational performance of Blackstone’s portfolio companies and providing direct assistance in the oversight of large investments. He was also a member of the firm’s Private Equity Investment Committee. Currently, Mr. Quella serves as a Senior Advisor to the Private Equity Group of Blackstone and continues to be involved in a few key portfolio companies as a board member and executive advisor, as well as participating in selected portfolio review processes and due diligence. Prior to joining Blackstone in 2004, Mr. Quella was a Managing Director and Senior Operating Partner with DLJ Merchant Banking Partners-CSFB Private Equity. Prior to that, Mr. Quella worked at Mercer Management Consulting and Strategic Planning Associates, its predecessor firm, where he served as a senior consultant to CEOs and senior management teams, and wasCo-Vice Chairman with shared responsibility for overall management of the firm. Mr. Quella received a B.A. in International Studies from the University of Chicago/University of Wisconsin-Madison and an M.B.A. with dean’s honors from the University of Chicago. He is also theco-author of Profit Patterns: 30 Ways to Anticipate and Profit from the Strategic Forces Reshaping Your Business. Mr. Quella has been a member of various private equity company boards and currently serves as a director of DJO Global, CF Corporation, and Michaels Stores, Inc.
Specific qualifications, experience, skills and expertise:
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| Substantial experience in mergers and acquisitions |
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| Substantial experience with corporate finance and strategic business planning activities |
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PROPOSAL 1: ELECT THE TWELVE DIRECTOR NOMINEES LISTED IN THIS PROXY STATEMENT 2023 Proxy Statement | CATALENT, INC.9
Director Nominees
MICHAEL J. BARBER | ||
Director since 2021 Age: 63 Committees: • Compensation and Leadership • Nominating and Corporate Governance | Michael J. Barber has been a member of the Board since April 2021. He retired as the Chief Diversity Officer for General Electric Company in January 2022. During his forty-year career at GE, Mr. Barber held a variety of progressively senior roles in engineering, operations, and product management, including service as President and CEO of GE Molecular Imaging and Computed Tomography from 2016 until 2020; as Chief Engineer, GE Healthcare and Chief Operating Officer, GE Healthcare Systems from 2013 until 2015; as VP and General Manager, Molecular Imaging, GE Healthcare in 2012; as Vice President, healthymagination (GE Corporate) from 2009 until 2011; and as Vice President and CTO, GE Healthcare from 2007 until 2008. Among other prestigious awards, he was named a “Master of Innovation” by Black Enterprise in 2009 and elected a Fellow of the American Institute of Medical and Biological Engineering in 2014. He served as a director of Talix, Inc. from 2017 until it was acquired by Edifecs in 2021, and served as a director of Healthline, Inc. from 2009 until its acquisition by Summit Partners in 2016. He also served as a board member of the National Action Council for Minorities in Engineering (NACME) from 2009 until 2022. He also serves on the Board of the Green Bay Packers Football Club and Chairs the Foundation Committee. Mr. Barber received a B.S. in electrical engineering and an honorary doctorate in engineering from the Milwaukee School of Engineering, where he also serves as a Regent. | |
STEVEN K. BARG | ||
Director since 2023 Age: 61 Committees: • Quality and Regulatory Compliance • Strategic and Operational Review | ||
Jack Stahl10CATALENT, INC. | 2023 Proxy Statement PROPOSAL 1: ELECT THE TWELVE DIRECTOR NOMINEES LISTED IN THIS PROXY STATEMENT
Age: 64
Mr. Stahl has been a director since August 2014, and has served as our Lead Director since October 2016. Mr. Stahl was the President and Chief Executive Officer of Revlon, Inc. from 2002 until his retirement in 2006. Prior to joining Revlon, Mr. Stahl served as President and Chief Operating Officer of The Coca-Cola Company from 2000 to 2001, having previously served in various management positions since joining the company in 1979. Mr. Stahl is chairman of the board of managers of New Avon LLC and serves on the board of Advantage Solutions LLC and on the U.S. board of advisors of CVC Capital. Additionally, Mr. Stahl formerly served on the boards of Schering-Plough Corporation, Dr Pepper Snapple Group, Saks, Inc., Coty Inc., and Royal Ahold Delhaize. Mr. Stahl holds a bachelor’s degree in economics from Emory University and a master’s degree from the Wharton School of Business at the University of Pennsylvania.
Specific qualifications, experience, skills and expertise:
J. MARTIN CARROLL | ||
Director since 2015 Age: 74 Committees: • Compensation and Leadership • Nominating and Corporate Governance • Quality and Regulatory Compliance (chair) | J. Martin Carroll has been a member of the Board since July 2015 and served as our lead independent director from October 2021 to June 2023 and our non-executive Chair from July 2023 to August 2023. He served as President and Chief Executive Officer of Boehringer Ingelheim Corporation and of Boehringer Pharmaceuticals, Inc. from 2003 until 2011 and as Head, Corporate Strategy and Development of Boehringer Ingelheim GmbH from 2012 until his retirement in 2013. He served as a director of Boehringer Ingelheim Corporation from 2003 until December 2012. Mr. Carroll joined the Boehringer Ingelheim organization in 2002 as President of Boehringer Pharmaceuticals, Inc. Mr. Carroll worked at Merck & Company, Inc. from 1976 to 2001. From 1972 to 1976, he served in the United States Air Force where he attained the rank of Captain. Mr. Carroll has been chairperson of the board of directors of Esperion Therapeutics since June 2022. He served as a director of Durata Therapeutics, Inc. from August 2014 until November 2014 when it was acquired by Actavis, as a director of Vivus, Inc. from May 2013 until September 2014, as a director of Therapeutics MD from March 2015 until December 2021, and as a director of Mallinckrodt plc from June 2013 until May 2022. He also served as a director of Inotek from April 2016 to June 2016 and as Chairman of its Board from June 2016 until January 2018 when Inotek was sold to Rocket Pharmaceutical. Mr. Carroll received a B.A. in accounting and economics from the College of the Holy Cross and an M.B.A. from Babson College. | |
ROLF CLASSON | ||
Director since 2014 Age: 78 Committees: • Audit • Compensation and Leadership • Nominating and Corporate Governance (chair) | Rolf Classon has been a member of the Board since August 2014. From October 2002 until his retirement in July 2004, Mr. Classon was Chairman of the Executive Committee of Bayer HealthCare AG, a subsidiary of Bayer AG. He served as President of Bayer Diagnostics from 1995 to 2002 and as Executive Vice President of Bayer Diagnostics from 1991 to 1995. Prior to 1991, Mr. Classon held various management positions with Pharmacia Corporation. Mr. Classon currently serves as Vice Chairman of the Supervisory Board of Fresenius Medical Care AG & Co. KGaA. He was previously Chairman of the Board of Directors of Perrigo Company plc from 2018 to 2022, having joined that board as a director in 2017, and Chairman of the Board of Directors of Tecan Group Ltd., serving from 2009 until April 2018. Mr. Classon served as Chairman of the Board of Directors of Hill-Rom Corporation from 2006 until March 2018, also serving as Vice Chairman of the Board from 2003 through May 2005 and as interim chief executive officer from May 2005 until March 2006. From 2005 to 2015, Mr. Classon served as Chairman of the Board of Directors of Auxilium Pharmaceuticals, Inc., and as Vice Chairman from March 2005 to April 2005. He also previously served as a director of Sequanna Medical AG from 2016 to 2017; of Aerocrine AB, Stockholm from 2013 to 2015; of Millipore Corporation from 2005 to 2010; of Prometheus Laboratories Inc. from 2004 to 2010; and of Enzon Pharmaceuticals Inc. from 1997 to 2011. Mr. Classon received his Chemical Engineering Certificate from the Gothenburg School of Engineering and a Business Degree from the Gothenburg University. Mr. Classon was granted a waiver, which will end at our 2024 Annual Meeting of Shareholders, from the resignation obligation imposed by our Corporate Governance Guidelines on directors over the age of 75. | |
PROPOSAL 1: ELECT THE TWELVE DIRECTOR NOMINEES LISTED IN THIS PROXY STATEMENT 2023 Proxy Statement | CATALENT, INC.11
FRANK A. D’AMELIO | ||
Director since 2023 Age: 66 Committees: • Compensation and Leadership • Quality and Regulatory Compliance | Frank D’Amelio has been a member of the Board since August 2023. Mr. D’Amelio is the former Chief Financial Officer and Executive Vice President, Global Supply, of Pfizer Inc. where he was responsible for all corporate finance functions including audit, controllers, tax, and treasury, as well as global supply. Prior to joining Pfizer, Mr. D’Amelio served as Senior Executive Vice President of Integration and Chief Administrative Officer of Alcatel-Lucent, responsible for the 2006 Alcatel-Lucent merger as well as procurement, real estate, IT, and supply chain. Prior to that, Mr. D’Amelio was the Chief Operating Officer of Lucent Technologies, responsible for leading business operations, including sales, the product groups, the services business, the supply chain, information technology operations, human resources, and labor relations. In 2001, he was appointed Executive Vice President and Chief Financial Officer of Lucent. In addition, Mr. D’Amelio held a number of roles while at Lucent Technologies, and before that, served in a variety of positions while at AT&T, including CFO, Transmission Systems and Controller, Network Systems. Mr. D’Amelio has served on the Board of Directors of Humana since September 2003, where he currently serves as Chair of the Audit Committee, on the Board of Directors of Zoetis, Inc. since July 2012, and on the Board of Directors of Hewlett Packard Enterprise since January 2023. He currently serves as a CFO in residence at the Deloitte CFO Academy. Mr. D’Amelio holds an M.B.A. in Finance from St. John’s University and a bachelor’s degree in Accounting from St. Peter’s College. | |
JOHN J. GREISCH | ||
Director since 2018 Executive Chair since August 2023 Age: 68 Committees: • Strategic and Operational Review (chair) | John Greisch has been a member of the Board since February 2018 and was appointed as Executive Chair on August 28, 2023. Mr. Greisch retired in May 2018 from his position as President and Chief Executive Officer of Hill-Rom Holdings, Inc., a position that he had held since 2010. Prior to that, Mr. Greisch was President International Operations for Baxter International, Inc., a position he held beginning in 2006. During his seven-year tenure with Baxter, he also served as Baxter’s Chief Financial Officer and as President of Baxter’s BioScience division. Before his time with Baxter, Mr. Greisch was President and Chief Executive Officer for FleetPride Corporation in Deerfield, Illinois, an independent after-market distribution company serving the transportation industry. Prior to his tenure at FleetPride, he held various positions at The Interlake Corporation, including serving as President of its Materials Handling Group. Mr. Greisch currently serves as chairman of the board of Viant Medical LLC and as lead independent director on the board of Carrier Corporation. He previously served on the boards of Cerner Corporation, Idorsia Pharmaceuticals Ltd., Hill-Rom Holdings, Inc., Actelion Ltd, and TomoTherapy, Inc. Additionally, he serves as a senior advisor to TPG Capital and is on the board of directors for Ann & Robert H. Lurie Children’s Hospital of Chicago. He received a Masters in Management from the Kellogg School of Management at Northwestern University and a B.S. degree from Miami University. | |
INTRODUCTION12CATALENT, INC. | 2023 Proxy Statement PROPOSAL 1: ELECT THE TWELVE DIRECTOR NOMINEES LISTED IN THIS PROXY STATEMENT
We are and have been throughout fiscal 2017 in compliance with the following corporate governance standards:
GREGORY T. LUCIER | ||
Director since 2015 Age: 59 Committees: • Audit • Compensation and • Strategic and Operational Review | Gregory T. Lucier has been a member of | |
ALESSANDRO MASELLI | ||
Director since 2022 Age: 51 | Alessandro Maselli was appointed Catalent’s President and Chief Executive Officer and joined the Board of Directors | |
DONALD E. MOREL, JR., PH.D. | ||
Director since 2015 Age: 66 Committees: • Quality and Regulatory Compliance | Dr. Donald E. Morel has been a member of the | |
PROPOSAL 1: ELECT THE TWELVE DIRECTOR NOMINEES LISTED IN THIS PROXY STATEMENT 2023 Proxy Statement | CATALENT, INC.13
STEPHANIE OKEY | ||
Director since 2023 Age: 62 Committees: • Compensation and Leadership • Nominating and Corporate Governance | Stephanie Okey has been a member of the Board since August 2023. Ms. Okey is the former Senior Vice President, Head of North America, Rare Diseases, and U.S. General Manager, Rare Diseases at Genzyme, a Sanofi company, where she worked for 19 years in various executive management roles. By the time of her retirement in July 2015, Ms. Okey had acquired launch and commercialization experience with nine rare disease therapeutics and 4 large market therapeutics during her career. Prior to joining Genzyme, Ms. Okey served in various positions of increasing responsibility in the biopharmaceutical industry, having held roles in field sales and marketing at Bristol Myers Squibb and later Genentech, Inc. Ms. Okey is currently a member of the board of directors of PTC Therapeutics, Inc. and Crinetics Pharmaceuticals, Inc., both publicly traded biopharmaceutical companies. In addition, Ms. Okey previously served as a member of the board of directors of the California Life Sciences Association from October 2014 to January 2016, and on the board of directors of Albireo Pharma, Inc. from 2018 until its acquisition by Ipsen in March 2023. Ms. Okey holds a B.S. in Zoology from The Ohio State University and an M.S. in Immunology and Medical Microbiology from Wright State University. She has also completed executive training and education in manufacturing resource planning and organizational leadership. | |
MICHELLE R. RYAN | ||
Director since 2023 Age: 57 Committees: • Audit • Strategic and Operational Review | Michelle Ryan has been a member of | |
14CATALENT, INC. | 2023 Proxy Statement PROPOSAL 1: ELECT THE TWELVE DIRECTOR NOMINEES LISTED IN THIS PROXY STATEMENT
JACK STAHL | |||
Director since 2014 Lead Independent Director since August 2023 Age: 70 Committees: • Audit (chair) • Strategic and Operational Review | |||
| Pennsylvania. |
We are committed to ensuring strong
CORPORATE GOVERNANCE 2023 Proxy Statement | CATALENT, INC.15
Corporate Governance
Strong corporate governance practices on behalf ofand responsible corporate behavior are foundational to delivering sustainable value for our shareholders. We believe strong corporate governance and an independent Board of Directors provide the foundation for financial integrity and shareholder confidence. In 2017,As part our ongoing efforts to improve our governance profile, in February 2023 our Nominating Committee concluded that it was in the best interest of the Company and our shareholders to amend our bylaws (i) to enhance the advance notice provisions that apply when a shareholder intends to propose a director nomination or other business at a shareholder meeting, including to address the newly adopted universal proxy rules, (ii) to remove the requirement that the Company make the shareholder list available during the Company’s annual meeting, and (iii) to make certain other technical changes. Based upon this recommendation, our Board of Directors conducted a strategicapproved the proposed amendments to reflect these changes, effective February 2, 2023.
The Nominating Committee will continue to review of our corporate governance program taking into account, among other things, developments in corporate governance, shareholder interactions, legal or regulatory developments, proxy advisory firm positions, SEC guidance,practices as part of its continuing exercise of its Board-delegated authority and NYSE requirements. Based upon its strategic review, our Board of Directors developed a set of changes intended to enhance our corporate governance practices. In particular, our Board of Directors approved amendments to our bylaws to implement proxy access (which will be available to shareholders beginning with our 2018 annual meeting) and a majority voting standard for the election of directors in uncontested elections. In addition, our Board of
Directors revised the Guidelines to adopt a director resignation policy, require that a Lead Director be elected from among the independent directors when a non-independent director serves as Chair of the Board of Directors, and to reflect best practices with respect to director “overboarding.” Unanimously, our Board of Directors recommends that shareholders vote in favor of Proposals 4, 5 and 6 described herein.responsibilities.
Our commitment to good corporate governance is also evidenced by theour Corporate Governance Guidelines (our “Governance Guidelines”), which are available on our corporate website at http://investor.catalent.com/corporate-governance. The Our Governance Guidelines set forth the principles and practices that our Board of Directors will continue to followfollows in carrying out its responsibilities, including ongoing review of our corporate governance practices in light of our business initiatives, the interests of our shareholders, and evolving best practices. The Governance Guidelines were last revised in fiscal 2021, based on the recommendation of the Nominating Committee, to reduce the number of boards on which our directors can serve on (in addition to our Board) from four to three.
KEY CORPORATE GOVERNANCE FEATURESKey Corporate Governance Features
Our keyImportant aspects of our corporate governance features include the following:
Board Independence | • Our Board | |||
Annual Director Elections | • Our Board members serve one-year terms. | |||
Separate Chair & CEO | • Separate Chair and CEO. | |||
Lead Independent Director | • To help facilitate independent Board oversight of management, | |||
• Because our Executive Chair, Mr. Greisch, is not independent, Mr. Stahl has | ||||
Board Committees | • We have four standing committees of the Board—the Audit Committee, the Compensation and Leadership Committee (the “Compensation Committee”), the Nominating Committee and the Quality and Regulatory Compliance Committee (the “Quality Committee”). • All of our standing Board committees are comprised solely of independent directors. • Our fifth committee of the Board, the ad hoc Strategic Committee, is chaired by Mr. Greisch, our Executive Chair. • Each Committee reports regularly to the Board concerning its activities, and each Committee operates under a written charter. | |||
Executive Sessions | • Our Board |
16CATALENT, INC. | 2023 Proxy Statement CORPORATE GOVERNANCE
Board Oversight of Risk | • Risk management, including cybersecurity and social risk, is overseen by our Audit Committee. | |||
| Our full Board also reviews cybersecurity matters, including cybersecurity risk, and environmental, social, and governance (“ESG”) matters, including social risk, at least once each annually. • Our Compensation Committee reviews risks arising from our compensation practices so that those practices encourage management | ||||
• Our Nominating Committee oversees risk associated with potential conflicts of interest as well as the effectiveness of our Governance Guidelines. | ||||
• Our Quality | ||||
Corporate Governance Guidelines | • Our Board |
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| Majority Voting in Director Elections and Director Resignation Policy | • In uncontested elections, directors must garner the approval of a majority of the • In contested elections, directors must garner a plurality of the votes cast. | |||
Accountability | • Our | |||
Stock Ownership | • Eachnon-employee director is required to own shares of our common stock in an amount equal to five times thenon-employee director annual cash | |||
| retainer and must retain 100% of shares received upon settlement of vested RSUs (net of shares used to satisfy applicable tax withholding obligation, if any) until the ownership level is met. • Guidelines adopted by our Compensation Committee state that each of our executive officers must own shares of our common stock: our CEO must own an amount equal to | ||||
Open Lines of Communication | • Our Board | |||
• Our directors have access to all members of management and other employees and are authorized to hire outside consultants or experts at our expense. • Our shareholders have the ability to communicate with our independent directors to raise issues of concern. | ||||
Self-Evaluation | • Our Board | |||
Code of Ethics | • Our Standards of Business Conduct, which, among other things, | |||
Overboarding | • Without specific approval from • No Audit Committee member • It is expected that directors who also serve as CEOs or in equivalent positions at other public companies generally should not serve on more than |
CORPORATE GOVERNANCE 2023 Proxy Statement | CATALENT, INC.17
Proxy Access | • Shareholders who satisfy the standards set forth in our bylaws |
THE BOARD AND COMMITTEES OF THE BOARDThe Board and Committees of the Board
We are governed by aour Board, of Directors, which provides overall direction to and oversight of our business. The Board presently consists of nineBoard’s principal duty is to create and deliver sustainable shareholder value through setting corporate strategy, overseeing its implementation, and selecting the CEO who will manage the business. All directors evenly divided into three classes (I, II and III), eight of whom have been determined by the Board to be independent. Each director servesserve for a staggeredone-year term (based on class membership) of three years until the director’s successor is duly elected and qualified, or until the director’s earlier death, resignation, or removal. Each year, there is an election with respect to the class of directors whose terms are expiring.
Four of the committees established by the Board of Directors—our Board—the Audit Committee, the Compensation Committee, the Nominating Committee, and the Quality and Regulatory Compliance Committee (the “Quality Committee”)—Committee—each meet regularly. TheOur Board of Directors also has a standing Mergers & Acquisitions Committee (the “M&A Committee”) that meets on anad hoc basis. The Board of Directors has adopted written charters for each Strategic Committee, which was established under the Cooperation Agreement and will meet at least once a month during the first year of its committees,term. Each committee has a written charter, which can be found on our website athttp://investor.catalent.com/corporate-governance.
COMMITTEE MEMBERSHIP AND FUNCTION
The following table lists each director’s ClassCommittee Membership and the Chair and current members of each of the Committees.Function
Current Committee Membership
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Madhavan Balachandran | 2023 | YES(3) | ||||||||||||||||||||||||||||||||||||||||||||||||
Michael J. Barber | 2023 | YES | ○ | ○ | ||||||||||||||||||||||||||||||||||||||||||||||
Steven K. Barg | 2023 | YES | ○ | ○ | ||||||||||||||||||||||||||||||||||||||||||||||
J. Martin Carroll | 2023 | YES | ○ | ○ | CHAIR | |||||||||||||||||||||||||||||||||||||||||||||
Rolf Classon | 2023 | YES | ○ | ○ | CHAIR | |||||||||||||||||||||||||||||||||||||||||||||
Rosemary A. Crane | 2023 | YES(3) | ||||||||||||||||||||||||||||||||||||||||||||||||
Frank A. D’Amelio | 2023 | YES | ○ | ○ | ||||||||||||||||||||||||||||||||||||||||||||||
Karen Flynn | 2023 | NO(1) (3) | ||||||||||||||||||||||||||||||||||||||||||||||||
John J. Greisch | 2023 | NO(1) | CHAIR | |||||||||||||||||||||||||||||||||||||||||||||||
Christa Kreuzburg | 2023 | YES(3) | ||||||||||||||||||||||||||||||||||||||||||||||||
Gregory T. Lucier | 2023 | YES | ○ | CHAIR | ○ | |||||||||||||||||||||||||||||||||||||||||||||
Alessandro Maselli | 2023 | NO(1) | ||||||||||||||||||||||||||||||||||||||||||||||||
Donald E. Morel, Jr. | 2023 | YES | ○ | |||||||||||||||||||||||||||||||||||||||||||||||
Stephanie Okey | 2023 | YES | ○ | ○ | ||||||||||||||||||||||||||||||||||||||||||||||
Michelle R. Ryan | 2023 | YES | ○
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Jack Stahl(2) | 2023 | YES | CHAIR | ○ | ||||||||||||||||||||||||||||||||||||||||||||||
| (1) | As current officers, Messrs. Greisch and Maselli cannot be deemed independent. Ms. Flynn served as Interim President, Division Head for BioModalities from April 2023 until October 2023, and also cannot be deemed independent. |
| (2) | Lead Independent Director. |
| (3) | Madhavan Balachandran, Rosemary Crane, Karen Flynn, and Dr. Christa Kreuzburg will be retiring from the Board effective as of the 2023 Annual Meeting. |
18CATALENT, INC. | 2023 Proxy Statement CORPORATE GOVERNANCE
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 | Jack Stahl, Chair | Rolf Classon | Gregory T. Lucier | Michelle R. Ryan
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PRIMARY RESPONSIBILITIES OF BOARD COMMITTEES
The function and membership of the Audit Committee are as follows:
Function:
| • Oversees the adequacy and integrity of our financial statements and our financial reporting and disclosure practices. |
• Oversees the soundness of our system of internal controls to assure compliance with financial and accounting |
| requirements and related laws and regulations. • Retains and reviews the qualifications, performance, and independence of our independent auditor. |
• Reviews and discusses with management and the independent auditor prior to public dissemination our annual audited financial statements, quarterly unaudited financial statements, earnings press releases and financial information and earnings guidance provided to analysts and rating agencies. |
• Oversees our guidelines and policies relating to risk assessment and risk management, and management’s plan for risk monitoring and control. |
|
| • Oversees our internal audit function. |
• Reviews and approves or ratifies all transactions between us and any “Related Person” (as defined in the federal securities laws and regulations) that are required to be disclosed pursuant to Item 404(a) of RegulationS-K |
• Oversees compliance with our Standards of Business Conduct. |
• Prepares for and issues the Audit Committee Report contained in this Proxy Statement. | |||
All members of the Audit Committee are “independent” in accordance with the NYSE listing standards and SEC rules applicable to boards of directors in general and audit committee members in particular. Our Board has determined that each member of the Audit Committee qualifies as an “audit committee financial expert” as defined in SEC rules. The Report of the Audit Committee is included on page 76. | |||
Membership:
Uwe Röhrhoff – ChairCORPORATE GOVERNANCE 2023 Proxy Statement | CATALENT, INC.19
Rolf Classon
Donald E. Morel, Jr.
Our Board of Directors has determined that the Audit Committee is composed entirely of independent directors in accordance with the independence requirements of the NYSE and the Exchange Act for audit committee members, and that each member qualifies as an “audit committee financial expert” as defined in SEC regulations. The Report of the Audit Committee is included on page 81.
Compensation and Leadership Committee |
The function and membership of the Compensation Committee are as follows:
Function:
Membership: |
 | Gregory T. Lucier, Chair | Michael J. Barber | Rolf Classon | J. Martin Carroll | Frank D’Amelio | Stephanie Okey |
Function: | ||
• Establishes and reviews our overall compensation philosophy. |
• Evaluates the performance of the CEO and determines and approves the annual salary, bonus, and equity-based incentive and other benefits, of the CEO. |
• Reviews and approves, or recommends to |
• Reviews and recommends to |
• Reviews and monitors the Company’s regulatory compliance with respect to compensation matters, including developing and recommending to the Board for approval one or more policies for the recovery or clawback of erroneously paid compensation. | • Reviews all employment, severance, and termination agreements with our executive officers. |
• Reviews and approves, or recommends to |
• Oversees certain of our other benefit plans. |
• Prepares for and issues the Compensation Committee Report contained in this Proxy Statement. |
• As delegated by • Reviews and monitors compliance with stock ownership guidelines. • Reviews and assesses reports from management and make reports and recommendations to the Board on the Company’s culture, policies, and strategies relating to human capital management. | |||
The Compensation Committee is permitted to delegate to one or more of our officers the authority to make awards to any non-Section 16 officer under our incentive-compensation or other equity-based plan. The Compensation Committee has delegated authority to management, on a non-exclusive basis, to make awards to employees, other than Section 16 officers, under prescribed conditions, including the condition that no individual award exceeds $250,000 in value, with a $23 million annual cap. The annual cap for fiscal 2024 was decreased to $15 million due to management’s review of historical grant practices and market trends, as well as a decrease in the number of employees eligible to receive incentive compensation. The Report of the Compensation Committee begins on page 53. All members of the Compensation Committee are “independent” in accordance with NYSE listing standards and SEC rules applicable to boards of directors in general and compensation committees in particular. | |||
The charter of the Compensation Committee permitsInterlocks and Insider Participation
During fiscal 2023, no member of our Compensation Committee was an employee or officer or former officer of Catalent or had any relationship requiring disclosure under Item 404 of Regulation S-K. None of our executive officers has served on the board of directors or compensation committee to delegateof any of all of its authority toother entity that has or has had one or more subcommittees and to delegate to oneexecutive officers who served as a member of our Board or more officers of the company the authority to make awards to anynon-Section 16 officer of the company under the company’s incentive-compensation or other equity-based plan, subject to compliance with the plan and the laws of the state of the company’s jurisdiction. Duringour Compensation Committee during fiscal 2023.
20CATALENT, INC. | 2023 Proxy Statement CORPORATE GOVERNANCE
Nominating and Corporate Governance Committee | ||
Membership: |
 | Rolf Classon, Chair | Michael J. Barber | J. Martin Carroll | Stephanie Okey |
fiscal 2017, the Compensation Committee delegated,non-exclusively, its authority to make awards to employees other than Section 16 officers under prescribed conditions, including the condition that no individual award exceeds $200,000 in value.
The section below entitled “Compensation Discussion and Analysis” (“CD&A”) includes a description of the Compensation Committee’s processes and procedures for the consideration and determination of director and executive compensation matters, including the roles of independent consultants and management in those processes and procedures. The Compensation Committee engaged its independent consultant, Frederic W. Cook & Co., Inc. (“FW Cook”), to advise on executive compensation. As part of the process of setting executive compensation, FW Cook obtained information concerning the compensation of executives in our industry (see “Compensation Discussion and Analysis” below).
Membership:
James Quella – Chair
J. Martin Carroll
Gregory Lucier
Donald E. Morel, Jr.
Our Board of Directors has determined that the Compensation Committee is composed entirely of independent directors in accordance with the independence requirements of the NYSE and of Section 162(m) of the Internal Revenue Code (“Code § 162(m)”) for compensation committee members. The Report of the Compensation Committee is included on page 62.
Function: | ||
The function and membership of the Nominating Committee are as follows:
Function:
• Conducts searches for, identifies, and recommends nominees for election to |
| our Board. • Reviews the composition and size of |
| our Board. • Regularly reviews our corporate governance documents, including our corporate charter and bylaws and |
• Recommends members of |
• As delegated by • Oversees an annual evaluation of the Board of Directors and each Committee. |
All members of the Nominating Committee are “independent” in accordance with the NYSE listing standards and SEC rules applicable to boards of directors in general. | ||
Membership:
Quality and Regulatory Compliance Committee | ||
Membership: |
J. Martin Carroll – Chair
Rolf Classon
Jack Stahl
Our Board of Directors has determined that the Nominating Committee is composed entirely of independent directors in accordance with the independence requirements of the NYSE for nominating and corporate governance committee members.
 | J. Martin Carroll, Chair | Steven K. Barg | Frank D’Amelio | Donald E. Morel, Jr. |
| ||
• Oversees our implementation of quality and regulatory compliance programs and compliance with drug development and manufacturing legal and regulatory requirements. As part of this, the Committee oversees the adequacy and effectiveness of policies and programs to ensure our compliance with laws and regulations applicable to our business and any and all associated risks, including, without limitation, in the areas of controlled substance compliance, and environmental, health, and safety compliance. |
The function and membership of the Quality Committee are as follows:
Function:
• Reviews and analyzes key performance indicators regarding the quality of the products we produce, including trends relevant to our business. • Oversees and reviews the recruitment, training, and development of our personnel |
• Receives and |
All members of the | ||
Membership:
Donald E. Morel, Jr. – Chair
Madhavan Balachandran
J. Martin Carroll
James Quella
Our Board of Directors has determined that the Quality Committee is composed entirely of independent directors in accordance with the independence requirements of the NYSE for members of the Board of Directors.directors in general.
The M&A Committee was established by the Board of Directors in May 2017. The function and membership of the M&A Committee are as follows:
Function:
Membership:CORPORATE GOVERNANCE 2023 Proxy Statement | CATALENT, INC.21
Jack Stahl – Chair
Rolf Classon
Gregory Lucier
Our Board of Directors has determined that the M&A Committee is composed entirely of independent directors in accordance with the independence requirements of the NYSE for members of the Board of Directors.
Strategic and Operational Review Committee | ||
Membership: |
 | John Greisch, Chair | Steven K. Barg | Gregory T. Lucier | Michelle R. Ryan | Jack Stahl |
Function: | ||
• Established pursuant to the Cooperation Agreement, the Strategic and Operational Review Committee assists our Board in conducting a review of the Company’s business, strategy, and operations, as well as the Company’s capital-allocation priorities in order to maximize the long-term value of the Company. | • Review, evaluate, and make recommendations to our Board regarding (i) our business, strategy, and operations, including identifying opportunities to enhance the competitive positioning and financial profile of our portfolio of assets and businesses, both individually and as a whole; (ii) us and our portfolio of businesses and assets, including identifying and evaluating potential strategic opportunities that may be available; (iii) our financial and capital-allocation priorities; (iv) our planning, priorities, and leadership; and (v) any other related matters as may be determined by our Board from time to time. |
All members of the Strategic and Operational Review Committee, other than Mr. Greisch, are “independent” as defined under the NYSE listing standards and SEC rules applicable to boards of directors in general. | ||
BOARDBOARD AND COMMITTEE ATTENDANCE COMMITTEE ATTENDANCE
During fiscal 2017,2023, our Board of Directors met sixtwelve times and acted by unanimous written consent twofour times. Each director, with the exception of Messrs. Röhrhoff and Balachandran, attended all of the meetings of our Board of Directors and of the Committees, if any, on which such director served during fiscal 2017. Messrs. Röhrhoff and Balachandran attended all meetings of our Board of Directors and their respective Committees held after they became directors in February and May 2017, respectively.
TheOur Board’s Committees held the following number of meetings and acted by unanimous written consent the following number of times during fiscal 2017:2023, prior to the dissolutions described below:
| Committee | Meetings | Consents | ||
Audit Committee | 4 | — | ||
Compensation Committee | 5 | 1 | ||
Nominating Committee | 4 | — | ||
Quality Committee | 4 | — | ||
M&A Committee(1) | 1 | — |
Committee
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Meetings
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Consents
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Audit Committee |
6 |
– | ||
Compensation Committee |
6 |
4 | ||
Nominating Committee |
3 |
– | ||
Quality Committee |
4 |
– | ||
M&A Committee |
14 |
– | ||
Finance & Capital Markets Committee |
3 |
– |
Each incumbent director attended 75% or more of the aggregate of the meetings of the Board and of the committees of the Board on which such director served during fiscal 2023. We strongly encourage members of theour Board of Directors to attend our Annual MeetingMeetings of Shareholders. All of our then-serving directors then serving attended our 2022 Annual Meeting of ShareholdersShareholders.
In August 2023, the Board determined it advisable and in October 2016.the best interests of the Company and its shareholders to dissolve the Finance and Capital Markets Committee and the M&A Committee, and to form an ad hoc Strategic and Operational Review Committee.
DIRECTOR INDEPENDENCE22CATALENT, INC. | 2023 Proxy Statement CORPORATE GOVERNANCE
Director Independence
Our Governance Guidelines define an “independent” director in accordance with Section 303A.02 of the NYSE’s Listed Company Manual. In addition, members of the Audit Committee and Compensation Committee are subject to the additional independence requirements of applicable SEC rules and NYSE listing standards. Under our Governance Guidelines and the NYSE listing standards, a director is not independent if the director has or had certain specified relationships with us. As a resultpart of its review,process to approve for nomination the current slate of nominees, our Board determined that each of Messrs. Balachandran, Carroll, Classon, Lucier, Morel, Quella, Röhrhoff, and Stahlour director nominees is independent for purposes of our Governance Guidelines, applicable NYSE standards, and applicable SEC rules, including with respect to committee service, other than Mr. Maselli, who is also our CEO, and Mr. Greisch, who is our Executive Chair. The Board previously determined that Melvin D. Booth,each of our directors who servedis not seeking re-election at the Annual Meeting was independent, other than Ms. Flynn, due to her prior service as a director during fiscal 2017our Chief Commercial Officer and Interim President, Division Head for BioModalities. In addition, the Board had previously determined that Peter Zippelius, who retired from the Board of Directors as of August 25, 2017,effective January 31, 2023, was independent under our Guidelines and the NYSE listing standards. Mr. Chiminski serves on our Board of Directors, but as our President and CEO he cannot be deemed independent.
BOARD LEADERSHIP STRUCTUREBoard Leadership Structure
Our Governance Guidelines, which can be found on our website athttp://investor.catalent.com/corporate-governance, provide theour Board of Directors flexibility in determining its leadership structure. The
Our Board of Directorsperiodically considers its structure and leadership each year and, as provided in our Guidelines, maintains the flexibility to determineparticular, whether the roles of Chair and CEO should be combined or separated, and whether the Chair should be independent, based on what it believes is in theour best interests of the company at a given point in time. Currently,In connection with our entry into the Cooperation Agreement, our Board determined that it was in the best interest of the Company and its shareholders to create an Executive Chair role of the Board, and appointed Mr. Chiminski servesGreisch as Executive Chair.
As required by our Governance Guidelines, because our Executive Chair is a director who does not qualify as an “independent director,” our independent directors appointed a Lead Independent Director. Mr. Stahl, our Lead Independent Director, provides a strong counterbalance to the Executive Chair, including by coordinating the efforts of the independent and non-management directors in the interest of ensuring that objective judgment is brought to bear on sensitive issues involving the management of the Company and, in particular, the performance of senior management.
At the present time, our Board believes that our current structure is most appropriate for our Company. Our Board has determined that Mr. Greisch, given his extensive knowledge and understanding of us, as well as his experience leading other boards of directors and serving as CEO and CFO of public healthcare companies, is best positioned to serve as Executive Chair at this time. Our Board will continue to periodically evaluate its leadership structure and determine the appropriate leadership structure on a case-by-case basis, taking into account at any particular time our Board’s assessment of its and the Company’s needs, as well as the Chairpeople and situation involved.
CORPORATE GOVERNANCE 2023 Proxy Statement | CATALENT, INC.23
| Board and Committee Evaluation Process |
The Nominating Committee leads an annual performance evaluation of our Board of Directors. Theand each Board of Directors has determined that combining the CEO and Chair positions is the appropriate leadership structure for the company at this
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time. It has determined that Mr. Chiminski, given his primary responsibility for managing the company’sday-to-day operations and his extensive knowledge and understanding of the company, is best positioned to lead it at this time and to focus its attention on the issues of greatest importance to the company and its shareholders. Our Board of Directors believes that this structure encourages free and open dialogue. The Chair presides at all meetings of our shareholders and of the Board of Directors, and performs such other duties as may be designated in our bylaws or by the Board of Directors. The Board of Directors will continue periodically to evaluate our leadership structure and determine whether continuing the combined roles of CEO and Chair is in our best interest based on circumstances existing at the time.
Our Guidelines require that the independent directors on the Board elect from among themselves a Lead Director whenever the Chair of the Board of Directors is also the CEO or is a director who does not otherwise qualify as an independent director. Mr. Stahl currently serves as our independent Lead Director. The Lead Director helps to assure the appropriate oversight of company management by the Board of Directors and the optimal functioning of the Board of Directors. Among other things, under our Guidelines, the Lead Director has the authority to:
Compile | Discuss | Review | |||||||||||||||||||
| Each director completes a Board self-evaluation questionnaire and a separate questionnaire for each committee on which the | |||||||||||||||||||||
| director serves. The questionnaires request ratings and solicit suggestions for improving Board and committee governance processes and effectiveness. | Questionnaire results are compiled by the Corporate Secretary. Specific director comments are reported without attribution. Each director receives the Board | ||||||
| Committee self-evaluation results are discussed by each committee, and Board self-evaluation results are discussed by the full Board, in each case in executive session. The committees and our Board each identify areas for further consideration and opportunities for improvement, and implement plans to address those matters. | Each committee and the full Board review progress with respect to any identified areas for further consideration. | ||||||||||||||||||||||||||
INDEPENDENCE OF COMMITTEE MEMBERSBoard’s Role in Risk Oversight
Our Board of Directors has determined that all current members of our Audit Committee, Compensation Committee, Nominating Committee, Quality Committee, and M&A Committee are independent within the meaning of the NYSE listing standards and our Guidelines. The members of our Audit Committee and our Compensation Committee also satisfy the additional independence requirements applicable to them as members of those Committees by the NYSE, the Exchange Act, and Code § 162(m). There is no family relationship among our directors or with any of our executive officers.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No Compensation Committee member is our current or former employee or officer. There is no interlock with any other board or company.
BOARD’S ROLE IN RISK OVERSIGHT
The Board of Directors as a whole and through its Committeescommittees oversees our risk management. Members ofmanagement, with senior management regularly report to the Board of Directorsreporting on areas of material
risk. TheOur Board of Directors regularly reviews information regarding our strategy, finances, liquidity, operations, legal and regulatory developments, our research and development activities, and our competitive environment, as well as the risks related to these matters.
The Audit Committee oversees the management of risks related to financial reporting and monitors the annual internal audit risk assessment, which identifies and prioritizes risks related to our internal controls in order to develop internal audit plans for future fiscal years. The Audit Committee also periodically meets with members of our information technology department to assess information security risks (including cybersecurity risks) and evaluate the status of our cybersecurity efforts, which include a broad range of tools and training initiatives that are designed to work together to protect the data and systems used in our business, and with members of our ethics and compliance and corporate responsibility groups to evaluate our regulatory compliance, environmental, sustainability and social efforts and overall strategies. The Board meets annually with members of the information technology department to review information security risks, including cybersecurity risks, and to evaluate the status of our cybersecurity efforts.
The Nominating Committee oversees the management of risks associated with our governance structure, as well as the independence of the Boardmembers of Directors. our Board.
The Compensation Committee oversees risks relating to our compensation plans and arrangements.
The Quality Committee focuses on risks arising out of the extensive food, drug, and cosmetics regulations that govern our operations and our relationships with our customers. They also oversee the risk presented by environmental, health, and safety issues at our sites.
Each Committeeof the Board’s committees provides periodic reports, generally quarterly, to the full Board of Directors regarding their areasits area of responsibility and oversight. We do not believe there is any relationship between how theour Board of Directors oversees management of our risks and its leadership structure.
MAJORITY VOTING AND DIRECTOR RESIGNATION POLICY
In August 2017, our Board of Directors, following its strategic review of our corporate governance program, practices,24CATALENT, INC. | 2023 Proxy Statement CORPORATE GOVERNANCE
Majority Voting in Director Elections and policies and the recommendation of our Nominating Committee, amended and restatedDirector Resignation Policy
Under our bylaws, to provide, among other things, that director nominees in uncontested elections shallmust be elected by the affirmative vote of a majority of the votes cast in respect of the shares present in person or represented by proxy at any annual or special meeting of shareholders for the election of directors and entitled to vote on the election of directors (meaning the number of shares voted for a nominee for director must exceed the total number of shares voted against such nominee for director, with abstentions and brokernon-votes not counted as a vote cast either for or against that nominee for director’s election).
Pursuant to our Governance Guidelines, any incumbent director nominee who does not receive a majority of votes cast for his or hersuch nominee’s election must offer to resign from the Board of Directors.resign. The Nominating Committee will promptly considerthen considers the offer and recommendrecommends to theour Board of Directors whether to accept or reject the offer to resign. In deciding the action to be taken with respect to any such resignation offer tendered under this policy, the Nominating Committee and theit. Our Board of Directors will consider what they believe is in our best interests and the best interests of our shareholders. The Board of Directors will act on the Nominating Committee’s recommendation within ninety days following the date of the shareholder meeting during which the election occurred, taking into accountconsidering the factors considered by the Nominating Committee and any additional relevant information.
Any director who offers a resignation will not participate in the consideration by the Nominating Committee or the Board of Directors concerning whether to accept the offeredsuch resignation. If a majority of the members of the Nominating Committee did not receive more for“for” votes than against“against” votes, then the independent directors (excluding those independent directors, if any, who did not receive more for“for” votes than against“against” votes in the most recent election) will appoint a committee of the Board of Directorscommittee solely for the purpose of considering the offered resignations and making a recommendation to theour Board whether to accept them;provided, however, that if there are fewer than three independent directors who received more for“for” votes than against“against” votes in the election, then such committee will be comprised of all independent directors, and each
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independent director who is required by the Governance Guidelines to offer a resignation will not participate in the consideration by such committee and theour Board of Directors concerning whether to accept that director’s offer to resign.
We will promptly publicly disclose the decision of theour Board of Directors regarding any offer to resign, including an explanation of how the decision was reached and, if applicable, the reasons an offer to resign was not accepted, in a Current Report on Form8-K to be filed or furnished with the SEC. If theour Board of Directors determines to accept a director’s offer to resign, the Nominating Committee will recommend whether to fill such vacancy or whether to reduce the size of the Board of Directors.our Board.
DIRECTOR NOMINATION PROCESSDirector Nomination Process
The Nominating Committee considers and recommends the annual slate of director nominees for approval by the Board of Directors.our Board. The Nominating Committee considers a number of factors and principles in recommendingmaking its recommendations, including the slate of director nominees for election to the Board of Directors. In particular, the Nominating Committee considers the following when evaluating and selecting nominees: the candidate’s following:
individual qualifications, including strength of character, mature judgment, familiarity with our business and industry, independence of thought, an ability to work collegially, and all other factors it considers appropriate, which may include age, gender, and ethnic and racial background
existing commitments to other businesses or any other board of directors (or similar body)
potential conflicts of interest with other pursuits
legal considerations, such as antitrust issues
corporate governance background various
varied and relevant career experience
relevant technical skills and education
relevant business or government acumen
financial and accounting background
executive compensation background and
the size, composition, and combined expertise of the existing Board of Directors.
CORPORATE GOVERNANCE 2023 Proxy Statement | CATALENT, INC.25
Although theour Board and Nominating Committee consider diversity of viewpoints, background, and experiences when identifying and reviewing candidates for theour Board, theour Board does not have a separate diversity policy. In identifying and evaluating prospective director candidates, the Nominating Committee may seek referrals and assistance from other members of theour Board, management, shareholders, and other sources.sources, including third-party search consultants. The Nominating Committee uses the same criteria for evaluating candidates regardless of the source of the referral. When considering director candidates, the Nominating Committee seeks individuals with backgrounds and qualities that, when combined with those of our incumbent directors, provide a blend of skills and experiences to further enhance theour Board’s effectiveness.
From time to time, we have engaged third-party search consultants to assistElliott initially identified Mr. Barg and Ms. Ryan as potential candidates for consideration by the Nominating Committee, in identifying and/or evaluatingwhich interviewed and discussed the candidates before recommending them to the Board. The Nominating Committee also identified Mr. D’Amelio and Ms. Okey as candidates for our Board due to their background and leadership experience and recommended each of Directors.them to the Board for consideration.
Shareholders may nominate directors for election by following the provisions set forth in our bylaws concerning such matters. The Nominating Committee, in accordance with our Governance Guidelines, will consider the qualifications of any nominee proposed by one or more shareholders.
In August 2017, we amended and restated ourOur bylaws to implementprovide for proxy access, which, subject to certain limitations as set forth in our bylaws, allows a shareholder or a group of up to 20 shareholders owning, continuously for at least three years, shares representing at least 3% of our outstanding voting stock entitled to vote in the election of directors, to nominate and include in our Proxy Statement for each annual meetingAnnual Meeting of shareholdersShareholders at which directors may be elected, their own qualifying director nominees constituting up to the greater of 2 or 20% of the total number of directors then serving on our Board (subject to certain limitations as set forth in our bylaws),provided that the nominating shareholder(s) and director nominee(s) must satisfy the eligibility and procedural requirements set forth in our bylaws. Pursuant to our bylaws, each of the. Our Board of Directors (prior to each annual meetingAnnual Meeting of shareholders) orShareholders) and the chair of any annual meetingAnnual Meeting of shareholdersShareholders shall have the power to determine whether a director nominee has been nominated by a shareholder in accordance with the eligibility and procedural requirements of the proxy access provisions included in our bylaws.provisions. Notice of director nominees submitted under the proxy access provision of our bylawsprovisions must include the information required under our bylaws. Such notice must be delivered to our Corporate Secretary at Catalent, Inc., 14 Schoolhouse Road, Somerset, NJ 08873 for nominations for the 20182024 Annual Meeting of Shareholders by the dates specified under “Shareholder Proxy Access” on page 105.The97. The foregoing description of the shareholder proxy access provision included in our bylaws does not purport to be complete and is qualified in its entirety by reference to our bylaws. Our bylaws, which are available on our website underhttp://at investor.catalent.com/corporate-governance.
COMMUNICATIONS WITH THE BOARD OF DIRECTORSCommunications with the Board of Directors
The Board has adopted procedures for communications by shareholders and other interested parties with the Board, the independent directors as a group, any Committee, and individual directors. The Board has designated the Corporate Secretary as its agent for the receipt and processing of such communications. Shareholders or other interested parties wishing to communicate with our Board, of Directors, any of our Committees, any director individually, or the independent directors as a group may do so by contacting the Corporate Secretary either:
By mail, addressed care of Corporate Secretary, Catalent, Inc., 14 Schoolhouse Road, Somerset, New Jersey 08873; or
By email to CorpSec@catalent.com.
Such communications should clearly identify the intended recipient. Communications will be sent to the appropriate recipient, depending on the facts and circumstances outlined in the communication, but the Corporate Secretary will not forward to directors any spam, junk mail, mass mailing, product complaint, product inquiry, new product suggestion, job inquiry, survey, or business solicitation or advertisement. Material that is unduly hostile, threatening, illegal, or similarly unsuitable will also be excluded.
STANDARDS OF BUSINESS CONDUCTStandards of Business Conduct
Our Board of Directors and all of our employees, including our CEO, principal financial officer, principal accounting officer, and all other executive officers are required to abide by our Standards of Business Conduct to ensure that our business is conducted in a consistently legal and ethical manner. A copy of our Standards of Business Conduct can be found on our website underhttp://at
26CATALENT, INC. | 2023 Proxy Statement CORPORATE GOVERNANCE
investor.catalent.com/corporate-governance. We will disclose on our
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website any future amendment to, or waiver from, provisions of our Standards of Business Conduct affecting our directors or executive officers as and to the extent required under applicable SEC and NYSE rules.
TRANSACTIONS WITH RELATED PERSONSTransactions with Related Persons
Our Board of Directors has adopted a written policy regarding the review, approval, and ratification of transactions with related persons. This policy provides that a related person must promptly disclose to theour Board of Directors any related person transaction. No related person transaction will be executed without the approval or ratification of our Board of Directors or a duly authorized committee of our Board of Directors.the Audit Committee. It is our policy that directors interested in a related person transaction will recuse themselves from any vote on a related person transaction in which they have an interest if the amount involved exceeds $120,000 and a “related person” has a direct or indirect material interest. In general, “related persons” are our directors and executive officers, shareholders beneficially owning more than 5% of our outstanding stock, and their immediate family members. We refer to such a transaction as a “related person transaction.”
NOPOST-IPO RELATED PERSON TRANSACTION
Since our IPO on July 30, 2014,Except as set forth below with respect to the Stockholders’ Agreement and Registration Rights Agreement (each as defined below), during fiscal 2023 we did not enter into or have not entered intooutstanding any reportable related person transaction, nor is any related person transaction currently proposed, in which any of our directors, CEO, or executive officers has a direct or indirect material interest.
STOCKHOLDERS’ AGREEMENT
In connection with our sale of our formerly outstanding Series A Convertible Preferred Stock (the “Series A Preferred”) in May 2019, we entered into a stockholders’ agreement (the “Stockholders’ Agreement”) with certain affiliates of Leonard Green & Partners, L.P. that purchased those securities (the “Leonard Green Investors”). Pursuant to the Stockholders’ Agreement, as long as the holders of common stock issued upon conversion of Series A Preferred (the “Relevant Holders”) beneficially owned shares of common stock having an aggregate value of at least $250 million (measured in accordance with the Stockholders’ Agreement), they had the right to designate one nominee for election to our Board and certain customary access and information rights. Peter Zippelius was the designated director of the Relevant Holders; however, on December 14, 2022, Mr. Zippelius notified the Board of his intent to retire, which was made effective as of the end of January 2023 in accordance with the terms and conditions of the Stockholders’ Agreement. The Relevant Holders no longer hold shares of common stock converted from the Series A Preferred having an aggregate value in excess of $250 million, and, therefore, the right to designate a nominee has lapsed.
For so long as the Relevant Holders were entitled to designate a nominee, they were generally required to vote in the manner recommended by our Board in connection with director elections, our “say-on-pay” and other equity compensation proposals, ratification of the appointment of our independent registered public accounting firm, and with respect to any proposed merger or other similar transaction between us and another party. The Relevant Holders were also subject to standstill restrictions that, subject to certain exceptions, prohibited them from purchasing our common stock, publicly proposing any merger or other extraordinary corporate transaction, initiating any shareholder proposal, or soliciting proxies until the date on which they were no longer entitled to designate a nominee to our Board. Restrictions on the ability of the Relevant Holders to transfer the shares of common stock they hold that were issued upon conversion of the Series A Preferred expired on November 17, 2021.
REGISTRATION RIGHTS AGREEMENT
We also entered into a registration rights agreement (the “Registration Rights Agreement”) with the Leonard Green Investors, pursuant to which we must provide to the Leonard Green Investors certain customary registration rights with respect to the shares of common stock they hold that were issued upon conversion of the Series A Preferred. The Registration Rights Agreement contains customary terms and conditions, including certain customary indemnification obligations.
The foregoing descriptions of the Stockholders’ Agreement and the Registration Rights Agreement do not purport to be complete and are subject to, and qualified in their entirety by, the full text of the Stockholders’ Agreement and Registration Rights Agreement, which are filed with the SEC as exhibits to the 2023 Annual Report.
CORPORATE GOVERNANCE 2023 Proxy Statement | CATALENT, INC.27
Executive Officers
ALESSANDRO MASELLI | ||
President and Chief Executive Officer Age: 51 | Mr. Maselli’s biography is set forth above in the Director Nominees section on page 12. | |
MATTI MASANOVICH | ||
Senior Vice President and Chief Financial Officer Age: 51 | Matti Masanovich was named Senior Vice President & Chief Financial Officer in July 2023. Prior to joining Catalent, Mr. Masanovich served as Executive Vice President & Chief Financial Officer of Tenneco Automotive from August 2020 until it was acquired by Apollo in November 2023. Previously he was Chief Financial Officer at Superior Industries International from September 2018 until August 2020 and General Cable Corporation from November 2016 until July 2018. Earlier in his career, Mr. Masanovich held finance leadership roles of increasing responsibility in a number of companies in the automotive industry, where he demonstrated a strong history of improvement and profitability and operating efficiency. Mr. Masanovich began his career with PricewaterhouseCoopers LLP. He has Bachelor of Commerce, Finance & Accounting and M.B.A. degrees from the University of Windsor and is a Chartered Accountant in Canada. | |
LISA EVOLI | ||
Senior Vice President and Chief Human Resources Officer Age: 54 | Lisa Evoli was named Senior Vice President and Chief Human Resources Officer in August 2023. Prior to joining Catalent, Ms. Evoli served as Executive Vice President and Chief Human Resources Officer of Integra LifeSciences Holdings Corporation from January 2016 until July 2023. Prior to that, she served for over two decades in a number of senior HR leadership roles, including at TE Connectivity Ltd., Johnson & Johnson and Motorola. Ms. Evoli holds a bachelor’s degree in business administration from the California University of Pennsylvania and a master’s degree in human resources development from Villanova University. | |
The following persons currently serve as our executive officers:28CATALENT, INC. | 2023 Proxy Statement CORPORATE GOVERNANCE
John Chiminski
Age: 53
President and Chief Executive Officer
Mr. Chiminski’s biography is set forth in the section on continuing directors.
Matthew Walsh
Age: 51
Executive Vice President and Chief Financial Officer
Mr. Walsh has served as our Executive Vice President and Chief Financial Officer since December 2012. Previously, Mr. Walsh served as our Senior Vice President and Chief Financial Officer since April 2008. Prior to joining us, from 2006-2008, Mr. Walsh served as President and Chief Financial Officer of Escala Group, Inc., a global collectibles network and precious metals trader. From 1996 through 2006, Mr. Walsh held positions of increasing responsibility in corporate development, accounting and finance at diversified industrial manufacturer GenTek, Inc., culminating in his appointment as Vice President and Chief Financial Officer. Prior to GenTek, he served in corporate development and other roles in banking and the chemicals industry. He served on the Board of Directors of Multicolor Corporation from 2015 to 2017. Mr. Walsh holds a B.S. in chemical engineering and an M.B.A. from Cornell University and is a CFA® charter holder.
Christine Dolan
Age: 49
Senior Vice President, Product Development
Ms. Dolan has served as our Senior Vice President of Product Development since September 2016, overseeing our innovation and new product development teams. Since joining us in October 2009 in a global quality role, Ms. Dolan has held various senior-level roles, including service as Vice President, Operations in our Softgel Technologies segment; as General Manager for our Woodstock, IL sterile technologies facility; and as Vice President and General Manager of the development and analytical business unit with operations in Kansas City, Mo., Morrisville (RTP), NC and Swindon, UK. Ms. Dolan began her career as a microbiologist for Smith and Nephew Solopak. In 1995, she joined Amersham Health (acquired by GE Healthcare in 2004) where she served in various leadership roles of increasing responsibility. In 2000, she was named the Director of Quality Control and Materials Management, subsequently expanding her responsibilities to include supply chain; environmental, safety, and health; logistics; customer service; and validation. In 2008, she was named Global Quality Operations Director with responsibilities in Germany, the Netherlands, the UK and the US. Ms. Dolan holds a bachelor’s degree in biology from Lenoir-Rhyne College.
JOSEPH A. FERRARO | |||||
Senior Vice President, General Counsel, Chief Compliance Officer, and Secretary Age: 46 | Joseph A. Ferraro was named Senior Vice President, General Counsel, Chief Compliance Officer, and Secretary in February 2023 and is responsible for managing Catalent’s global legal and compliance operations. Prior to joining Catalent, Mr. Ferraro served as Chief Legal Officer and Secretary for Innovate Corp. from September 2017 until October 2022, where he managed global legal and compliance operations. Prior to Innovate, Mr. Ferraro served as General Counsel and Deputy Chief Compliance Officer at Prospect Capital from October 2008 until August 2017, having previously spent his early career at two leading law firms, Sullivan & Cromwell and Boies, Schiller & Flexner, where he focused on corporate and securities law. Mr. Ferraro holds a Juris Doctor degree with honors from The Law School at the University of Chicago, where he was a managing editor of The University of Chicago Law Review, and a Bachelor of Arts cum laude in public and international affairs from Princeton University. He is NACD Directorship Certified®. | ||||
ARISTIPPOS GENNADIOS, PH.D. | |||||
Group President, Pharma & Consumer Age: 58 | Aris Gennadios was named Group President, Pharma and Consumer Health in July 2022. Prior to that, he served as President of our Softgel & Oral Technologies business since September 2013 and, earlier, as Vice President and General Manager of Softgel Technologies. Dr. Gennadios has worked in the pharmaceutical industry since 1996 in roles including R&D, field sales, business development, operations, and leadership. He joined Catalent’s predecessor company, Cardinal Health, in 2002 and held several leadership posts within the softgel technologies business, including Global Vice President of Business Development for Softgel Technologies, General Manager of the Oral Development Center in Somerset, NJ, and Vice President and General Manager for Rx Softgel and Consumer Health products. Dr. Gennadios earned his bachelor’s degree in chemical engineering from the National Technical University of Athens, Greece and his master’s degree in agricultural engineering from Clemson University. Dr. Gennadios holds a doctorate in engineering from the University of Nebraska and an MBA from Wake Forest University. | ||||
SCOTT GUNTHER | |||||
Senior Vice President, Quality & Regulatory Affairs Age: 56 | Scott Gunther was named Senior Vice President of Quality & Regulatory Affairs in May 2017. Mr. Gunther joined Catalent in 2012 as Vice President, Quality and was responsible for overseeing the quality function for the United States and other countries with sites in the Drug Delivery Solutions business unit. He previously also concurrently served as an interim Vice President of Product Development for the DDS business unit. Prior to joining Catalent, Scott spent 22 years with Bristol-Myers-Squibb in various roles of increasing responsibility. In his last role at BMS, he held the position of Executive Director Quality Operations Americas, where he was responsible for quality operations at its manufacturing sites in the U.S., Puerto Rico, and Latin America. Scott holds a Bachelor of Science degree from the State University of New York at Buffalo and an MBA from Canisius College. | ||||
William Downie
Age: 50
Senior Vice President, Global Sales & Marketing
Mr. Downie has served as Senior Vice President, Global Sales & Marketing since June 2010. Mr. Downie joined us as Group President, Medication Delivery Solutions, and Senior Vice President, Global Sales & Marketing in October 2009. Prior to joining us, Mr. Downie served as Vice President and Global Leader of Molecular Imaging at GE Healthcare. Before that, he held several executive positions in other GE Healthcare units, including Vice President and General Manager, Medical Diagnostics-Europe, Middle East and Africa, and Vice President of Sales for Medical Diagnostics-Europe. Prior to GE Healthcare, Mr. Downie was with Innovex UK Limited (part of Quintiles, Inc.), where he held several positions in operations and sales/marketing. Earlier in his career, he held leadership positions with Sanofi-Synthelabo UK; Sanofi-Winthrop Limited; and Merck & Co., Inc. Mr. Downie holds a B.S. degree in biochemistry from the University of Edinburgh.CORPORATE GOVERNANCE 2023 Proxy Statement | CATALENT, INC.29
Steven Fasman
Age: 55
Senior Vice President, General Counsel and Corporate Secretary
Mr. Fasman was named Senior Vice President, General Counsel and Corporate Secretary in October 2014, when he joined us. Prior to that, Mr. Fasman served as Executive VicePresident-Law of MacAndrews & Forbes Holdings Inc., a privately held diversified holding company, from January 2012 to March 2014. Before that, Mr. Fasman held various positions at MacAndrews & Forbes since 1992 of increasing responsibility. From 2008 through March 2014, Mr. Fasman also served as General Counsel and Chief Compliance Officer of M & F Worldwide Corp., a holding company with interests in financial products, customer calling centers, staffing operations, educational software and flavoring products. From 2008 to 2011, Mr. Fasman also served as a director of SIGA Technologies, Inc., a biodefense company. Mr. Fasman holds a law degree from Yale University and an A.B. degree in mathematics from Princeton University.
Aristippos Gennadios, Ph.D.
Age: 52
President, Softgel Technologies
Dr. Gennadios has served as our President, Softgel Technologies since September 2013. Previously, Dr. Gennadios served as Vice President and General Manager of Softgel Technologies. Dr. Gennadios has worked in the pharmaceutical industry since 1996 in roles including R&D, field sales, business development, operations and leadership. He joined our predecessor company, Cardinal Health, in 2002 and has held several key leadership posts within the softgel technologies business including Global Vice President of Business Development for Softgel Technologies, General Manager of the Oral Development Center in Somerset, NJ, and Vice President and General Manager for Rx Softgel and Consumer Health products.
RICKY HOPSON | ||||
Dr. Gennadios holds a bachelor’s degree in chemical engineering from the National Technical University of Athens, Greece and his master’s degree in biological engineering from Clemson University. Dr. Gennadios holds a doctorate in engineering from the University of Nebraska and an M.B.A. from Wake Forest University.
Scott Gunther
Age: 50
Senior Vice President, Quality & Regulatory Affairs
Mr. Gunther was named Senior Vice President of Quality & Regulatory Affairs in May 2017. Mr. Gunther joined us in 2012 as Vice President, Quality and most recently oversaw the quality function for the United States sites in our Drug Delivery Solutions business unit. Previously, he concurrently served as an interim Vice President of Product Development for the Drug Delivery Solutions business unit. Prior to joining Catalent, Mr. Gunther spent 22 years with Bristol-Myers-Squibb (“Bristol”) in various roles of increasing responsibility. In his last role at Bristol, he held the position of Executive Director Quality Operations Americas, where he was responsible for quality operations at its manufacturing sites in the U.S., Puerto Rico, and Latin America. Mr. Gunther holds a B.S. degree from the State University of New York at Buffalo and an M.B.A. degree from Canisius College.
Wetteny Joseph
Age: 45
President, Clinical Supply Services
Mr. Joseph has served as our President, Clinical Supply Services since October 2015. He joined us as Vice President and Corporate Controller and led the finance function for our former Modified Release Technologies business beginning in 2012. He served as Vice President-Finance for our former Development and Clinical Services segment from 2013 to October 2015. Prior to joining us, Mr. Joseph held a variety of senior financial positions at HD Supply and Hughes Supply. He began his career at PricewaterhouseCoopers. Mr. Joseph holds M.S. and B.S. degrees in accounting from Florida Atlantic University.
Barry Littlejohns
Age: 51
President, Drug Delivery Solutions
Mr. Littlejohns was named President, Drug Delivery Solutions (formerly Advanced Delivery Technologies) in July 2013. Previously, Mr. Littlejohns led our Medication Delivery Solutions business from July 2011 to July 2013. Mr. Littlejohns has an extensive background in leading international life science businesses in both US and European organizations. He rejoined us in 2013 after two years as Senior Vice President of Operations and Business Development at the Danish biotechnology company Genmab A/S, where his responsibilities included strategic licensing and manufacturing oversight. Prior to Genmab, he served with us in a broad range of leadership roles, which included Vice President of Global Business Operations, Vice President of Commercial Affairs for Medication Delivery Solutions, Vice President and General
President, Division Head for BioProduct Delivery and Chief of Staff Age: 48 | Ricky Hopson was named President, Division Head for BioProduct Delivery and Chief of Staff in August 2023. From July 2022 until August 2023, he was President, Division Head for Clinical Development and Supply. Concurrently, from April 2023 through July 2023, he served as Interim Chief Financial Officer. Prior to that, he served as Vice President & Chief Accounting Officer since June 2021. Mr. Hopson has been with Catalent for more than 20 years, serving in a variety of finance roles, including Vice President & Corporate Controller, Global Vice President, Operational Finance, and Vice President of Finance for two different business units. Mr. Hopson graduated from the University of Portsmouth and is a chartered management accountant in the U.K. | ||||||||
Manager of Injectables, and various financial, operational and leadership roles. He joined our predecessor RP Scherer Corporation in 1989. Mr. Littlejohns holds a degree in business and finance from Swindon College in Swindon, UK.
Alessandro Maselli
Age: 45
Senior Vice President—Global Operations
Alessandro Maselli was named Senior Vice President—Global Operations in September 2016. Mr. Maselli joined us in 2010 as Director of Operations at our pharmaceutical, nutritional and cosmetics plant in Aprilia, Italy. In 2013, Mr. Maselli was appointed General Manager of Zydis® operations at our facility in Swindon, U.K., and, in 2015, became Vice President of Operations, Europe, for our Drug Delivery Solutions segment. Prior to joining us, Mr. Maselli held operational and business leadership roles at Alstom and SGS S.A. From 1998 to 2006, he held roles of increasing responsibility from process engineer to operations director at ABB Group. Mr. Maselli began his career as automation systems engineer in the food industry. A native of Italy, Mr. Maselli earned bachelor and master degrees in electronic engineering from the University of Rome.
Lance Miyamoto
Age: 62
Senior Vice President—Global Human Resources
Mr. Miyamoto was named Senior Vice President—Global Human Resources in March 2011. Mr. Miyamoto has more than 30 years of experience in delivering HR systems including compensation and career structures that drive business results and growth. In addition to general HR expertise and organization development, he has experience leading in a global environment and has managed global company turnarounds, mergers and acquisitions. Prior to joining Catalent, he ran his own consulting business, and, prior to that, Mr. Miyamoto held a number of HR leadership roles in other companies, including Executive Vice President of Comverse Technology Inc. He also served as Executive Vice President of HR for AOL LLC, a division of Time Warner Inc., from 2004 to 2007. From 2001 to 2004, Mr. Miyamoto was Executive Vice President of HR for Lexis-Nexis. He was also a senior executive with Dun and Bradstreet with responsibility for performance development. Mr. Miyamoto is a graduate of Harvard University, and has an M.B.A. degree from the Wharton School of the University of Pennsylvania, where he was a COGME (Council for Graduate Management Education) Fellow.
DAVID MCERLANE | |||||
Group President, Biologics Age: 50 | David McErlane joined Catalent as Group President of Biologics in September 2023. Prior to joining Catalent, Mr. McErlane served as senior vice president and business unit head for Lonza’s Bioscience business from July 2021 to September 2023 - where he led strategy, sales, marketing, innovation, digital, and operations functions for this division while developing transformational business strategies, executing major investments to digitize the customer journey, and acquiring and integrating new technologies. Earlier in his career, Mr. McErlane held several leadership positions at MilliporeSigma from 2016 to 2021 and BioReliance from 2006 to 2016 after beginning his career as an engineering manager at Zeneca from 1990 to 1999. Mr. McErlane holds a bachelor’s degree in electronic systems engineering from Glasgow Caledonian University. | ||||
KAREN SANTIAGO | |||||
Vice President & Chief Accounting Officer Age: 52 | Karen Santiago was named Vice President & Chief Accounting Officer in September 2022. Prior to joining Catalent, she spent 19 years with Bristol-Myers Squibb Company in various roles of increasing responsibility, including Senior Vice President & Corporate Controller, Principal Accounting Officer from 2018 to 2022 and Lead Enabling Functions and Finance Transformation from 2016 to 2018. Since 2013 Ms. Santiago has served on the board of The Arc of New Jersey, the state’s largest organization advocating for and serving children and adults with intellectual and developmental disabilities and their families. She holds a Masters in Business Administration and a Bachelor of Science in Accounting from Rutgers University. | ||||
30CATALENT, INC. | 2023 Proxy Statement OWNERSHIP OF OUR COMMON STOCK
SECURITIES OWNED BY CERTAIN BENEFICIAL OWNERS, DIRECTORS, AND MANAGEMENT
Ownership of Our Common Stock
Securities Owned by Certain Beneficial Owners, Directors, and Management
The table below shows how many shares of our common stock were beneficially owned as of September 7, 2017December 4, 2023 by (1) owners of more than 5% of the outstanding shares of our common stock, (2) our current directors, (3) the executive officers named in the Summary Compensation table on page 64,our Named Executive Officers, and (4) all current directors and executive officers as a group. A person has beneficial ownership of shares if the person has voting or investment power over the shares or the right to acquire such power within 60 days. Investment power means the power to direct the sale or other disposition of the shares. Each person has (a) an address at 14 Schoolhouse Road, Somerset, NJ 08873 and (b) sole voting and investment power over the shares, in each case except as described below. The percent of class is based upon 180,641,272 shares of common stock outstanding as of December 4, 2023.
| Name of Beneficial Owner | Number of Shares Beneficially Owned | Percent of Class | ||||||
T. Rowe Price Associates, Inc.(1) | 16,008,034 | 12.8 | % | |||||
BlackRock, Inc.(2) | 14,850,119 | 11.8 | % | |||||
The Vanguard Group(3) | 9,446,692 | 7.5 | % | |||||
FMR LLC(4) | 7,937,478 | 6.3 | % | |||||
Janus Capital Management LLC(5) | 7,599,172 | 6.1 | % | |||||
John Chiminski(6) | 1,034,336 | * | ||||||
Matthew Walsh(6) | 128,757 | * | ||||||
William Downie(6) | 48,532 | * | ||||||
Steven Fasman(6) | 70,499 | * | ||||||
Barry Littlejohns(6) | 218,152 | * | ||||||
Sharon Johnson | 30,203 | * | ||||||
Madhavan Balachandran | — | * | ||||||
J. Martin Carroll | 12,523 | * | ||||||
Rolf Classon | 16,665 | * | ||||||
Gregory T. Lucier | 28,663 | * | ||||||
Donald E. Morel, Jr. | 18,799 | * | ||||||
James Quella(6) | 53,625 | * | ||||||
Uwe Röhrhoff | 3,000 | * | ||||||
Jack Stahl | 16,665 | * | ||||||
| Directors and executive officers as a group (19 persons)(7) | 2,078,816 | 1.7 | % | |||||
Name of Beneficial Owner
| Common Stock
| |||||||
Shares owned
|
Percent of Class
| |||||||
| The Vanguard Group(1) | 19,588,103 | 10.8 | % | |||||
| Capital World Investors(2) | 18,029,128 | 10.0 | % | |||||
| T. Rowe Price Investment Management, Inc.(3) | 16,578,946 | 9.2 | % | |||||
| BlackRock, Inc.(4) | 13,788,094 | 7.6 | % | |||||
| Veritas Asset Management LLP(5) | 11,169,815 | 6.2 | % | |||||
| Alessandro Maselli(6) | 112,029 | * | ||||||
| Thomas Castellano | 12,545 | * | ||||||
| Ricky Hopson(6) | 20,544 | * | ||||||
| Steven L. Fasman(6) | 76,467 | * | ||||||
| Aristippos Gennadios(6) | 87,088 | * | ||||||
| John Chiminski(6) | 548,321 | * | ||||||
| Manja Boerman(6) | 25,897 | * | ||||||
| Madhavan Balachandran(6)(7) | 22,172 | * | ||||||
| Michael J. Barber(7) | 6,396 | * | ||||||
| Steven K. Barg(9) | 0 | * | ||||||
| J. Martin Carroll | 32,186 | * | ||||||
| Rolf Classon(7) | 36,328 | * | ||||||
| Rosemary A. Crane(6)(7) | 18,604 | * | ||||||
| Frank A. D’Amelio(9) | 0 | * | ||||||
| Karen Flynn(6) | 19,070 | * | ||||||
| John J. Greisch(7) | 29,196 | * | ||||||
| Christa Kreuzburg(6) | 13,537 | * | ||||||
| Gregory T. Lucier(7) | 25,258 | * | ||||||
| Donald E. Morel, Jr.(7) | 58,462 | * | ||||||
| Stephanie Okey(9) | 0 | * | ||||||
| Michelle R. Ryan(9) | 1,000 | * | ||||||
| Jack Stahl(7) | 36,328 | * | ||||||
| Current directors and executive officers as a group (24 persons)(8) | 561,161 | * | ||||||
| * | Represents less than 1% |
| (1) | Information shown is based on information reported by the filer on a Schedule 13G/A filed with the SEC on February 9, 2023, in which The Vanguard Group reported that it and its affiliates have shared voting power over 252,698 shares, sole dispositive power over 18,859,037 shares, and shared dispositive power over 729,066 shares. Filer’s address is 100 Vanguard Boulevard, Malvern, PA 19355. |
OWNERSHIP OF OUR COMMON STOCK 2023 Proxy Statement | CATALENT, INC.31
| (2) | Information shown is based on information reported by the filer on a Schedule 13G/A filed with the SEC on October 10, 2023, in which Capital World Investors reported that it and its affiliates have sole voting power over 18,012,132 shares and sole dispositive power over 18,029,128 shares. Filer’s address is 333 South Hope Street, 55th Floor, Los Angeles, CA 90071. |
| (3) | Information shown is based on information reported by the filer on a Schedule 13G/A filed with the SEC on February 14, 2023, in which T. Rowe Price Investment Management, Inc. (Price Investment Management) reported that it has sole voting power over 5,925,659 shares and sole dispositive power over 16,578,946 shares. Filer’s address is 101 E. Pratt Street, Baltimore, MD 21201. |
| (4) | Information shown is based on information reported by the filer on a Schedule 13G/A filed with the SEC on February 7, |
|
Information shown is based on information reported by the filer on a Schedule 13G filed with the SEC on |
1 Smart’s Place, London, WC2B 5LW, United Kingdom.
| (6) | The number of shares beneficially owned includes shares of common stock issuable upon (a) vesting of restricted stock units within 60 days after December 4, 2023, (b) vesting of performance share units within 60 days after December 4, 2023, or (c) exercise of options that are currently exercisable and/or will be exercisable within 60 days after |
| (7) | Includes |
| (8) | Includes 485,957 shares of common stock issuable upon (a) vesting of restricted stock units within 60 days after December 4, 2023 or (b) exercise of options that are currently exercisable and/or will be exercisable within 60 days after |
| (9) | ||||
Mr. D’Amelio and Mses. Ryan and Okey joined the Board on August 28, 2023, and Mr. Barg joined the Board on September 10, 2023. |
SECTIONSection 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCEBeneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires our directors, executive officers, and beneficial owners of 10% or more of our shares of common stock to file reports with the SEC about their ownership of and transactions in our common stock. Based solely on our recordsreview of reports filed with the SEC and other information,written representations from our executive officers and directors, we believe that all reports required to be filed under Section 16(a) during fiscal 20172023 were timely filed, except for (a) a delayed filing on Form 4 of a portion of the derivative securities acquired by Mr. Downie on September 9, 2016 (due to administrative error, only 35,000 of the 40,748 derivative securities acquired by him were timely reported, with the balance reported three days late) and (b) a delayed filing on Form 3 of a portion of the securities held by Ms. Dolan as of September 8, 2016 (due to administrative error, only 5,737 of the 7,837 shares of common stock held by her at the time were timely reported, with the balance reported in July 2017). In addition, in connection with a review of prior Section 16(a) filings, we became aware that Mr. Chiminski failed to file a Form 4 in fiscal 2016 to report the withholding of restricted stock units (“RSUs”) in connection with the payment of tax liabilities arising out of the vesting of such securities and the delivery of the common stock underlying them. An amended Form 4 was filed by Mr. Chiminski on August 25, 2017.filed.
EQUITY COMPENSATION PLAN INFORMATIONEquity Compensation Plan Information
The following table provides certain information as of June 30, 20172023 regarding our equity compensation plans.
| Plan category | (a) Number of securities to be issued upon exercise of outstanding options, warrants and rights(3) | (b) Weighted-average exercise price of outstanding options, warrants and rights(4) | (c) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) | |||||||||
Equity compensation plans approved by security holders(1) | 3,196,318 | $24.84 | 3,412,917 | |||||||||
Equity compensation plans not approved by security holders(2) | 1,526,198 | $15.97 | — | (5) | ||||||||
| Plan category | (a) Number of securities to be issued upon exercise of outstanding options, warrants and rights | (b) Weighted-average exercise price of outstanding options, warrants and rights | (c) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) | |||||||||
Equity compensation plans approved by security holders(1)
|
| 2,772,082
| (2)
| $
| 71.19
| (3)
|
| 7,882,520
|
| |||
| Employee Stock Purchase Plan approved by security holders(4) | - | - | 3,180,009 | |||||||||
| (1) | The amounts set forth in this row relate to grants under |
| (2) | The amount shown includes 120,075 vested RSUs and PSUs that have been deferred under our Deferred Compensation Plan (described below on |
| (3) | The weighted-average exercise price shown above reflects stock options only and does not take into account outstanding RSUs or PSUs as these forms of equity securities by their nature have no exercise price. |
| (4) | The amount set forth in this row relates to our |
|
32CATALENT, INC. | 2023 Proxy Statement OWNERSHIP OF OUR COMMON STOCK
Director Compensation
We provide competitive compensation to our non-employee directors to attract and retain qualified individuals. The principal elements of our non-employee director compensation are an annual cash retainer; an annual equity award of RSUs, each of which represents the right to receive one share of our common stock; and additional cash fees for our Lead Independent Director, Committee Chairs (other than the Strategic Committee), Audit Committee members, and Strategic Committee members. In addition, non-employee directors are reimbursed for reasonable out-of-pocket expenses. Mr. Maselli, our CEO, and Mr. Chiminski, our former Executive Chair, did not receive additional compensation for their service as directors during fiscal 2023. Mr. Greisch received compensation as a non-employee director in fiscal 2023 and in fiscal 2024 until his election as Executive Chair, at which point he ceased being eligible for such compensation. In addition, Ms. Flynn, our former Interim President, Division Head for Biomodalities did not receive any additional compensation for her service as a director during her appointment to such position during fiscal 2023 and for the portion of fiscal 2024 in which she served in that role.
The Compensation Committee biennially reviews and considers information from its independent compensation consultant regarding the amounts and type of compensation paid to our non-employee directors at companies within the same Comparison Group (as defined in the CD&A below under the heading “The Use of Market Data in Determining Compensation”) used by the committee to assess executive compensation.
Cash Retainer | Equity Award | Committee Fees | ||||||||||
We provide competitive compensation to ournon-employee directors to attract and retain qualified directors. The principal elements of ournon-employee director compensation are an annual cash retainer, an annual equity award of restricted stock units, and additional cash fees for our Lead Director, Committee Chairs and Audit Committee members. Our directors who are employed by us receive no cash or equity compensation for service as a director.
ANNUAL CASH RETAINER
Eachnon-employee director receives an annual cash retainer of $100,000 for services as a director, with an additional $30,000 annual cash retainer for thenon-employee director, if any, serving as the Lead Director. All cash retainers are paid on a quarterly basis, in arrears. Directors do not receive meeting attendance fees, but each of our directors is reimbursed for theout-of-pocket expenses the director incurs in connection with the director’s service.Non-employee directors who are newly appointed or elected to the Board of Directors during the year receive an annual cash retainer that is prorated from the effective date of appointment or election to the end of the then-current fiscal year.
EQUITY-BASED COMPENSATION
Eachnon-employee director receives an annual grant in the form of restricted stock units in respect of shares of our common stock with a grant date fair value equal to $140,000, with any fractional shares rounded down to the nearest whole share. The grant date fair value is equal to the closing sales price of our common stock as reported on the NYSE on the date of grant. Ownership of the restricted stock units vests on the first anniversary of the grant date, subject to accelerated vesting upon a change of control;provided that the director has not terminated service on or prior to the first anniversary.Non-employee directors who are newly appointed or elected to the Board of Directors receive a restricted stock unit grant that is prorated from the effective date of appointment or election to the end of the then-current fiscal year.
COMMITTEE CHAIR/MEMBER FEES
In addition to the compensation just described, we pay an annual cash fee to the Chair of the Audit Committee of $15,000 and $10,000 to each of the other Audit Committee members. We similarly pay an annual cash fee to the Chair of each of the Compensation, Nominating, Quality, and M&A Committees of $10,000, but no additional fee to the other members of those Committees. All Committee fees are paid on a quarterly basis, in arrears.
Annual $100,000 cash retainer, with an additional $45,000 retainer for the Lead Independent Director. | Annual RSU grant with a grant date fair value of $275,000, vesting on the first anniversary of the grant date (subject to continued service) or upon a change of control. | Annual cash fees to the Chair and each member of the Audit Committee of $25,000 and $10,000, respectively. Annual cash fees to the Chair and each member of the Finance & Capital Markets Committee (prior to its dissolution) of $15,000 and $2,500, respectively, and annual cash fees to each member of the Strategic Committee of $5,000. Annual cash fees to the Chair of the Compensation Committee of $12,500 and $10,000 to the Chairs of each of the Nominating and Quality Committees, as well as the M&A Committee (prior to its dissolution). | Directors may elect to defer any portion of their cash fees or RSUs on a pre-tax basis under our Deferred Compensation Plan. The terms of the plan are described in the executive compensation section below beginning on page 63. | |||||||||
Matching Gift Program
Our directors may also participate in the Catalent Cares matching gift program, which matches on a 1-to-1 basis gifts made by our employees and non-employee directors to eligible nonprofit organizations, subject to a yearly maximum of $2,000. In addition, gifts of up to $1,000 made during fiscal 2023 to support humanitarian efforts in Ukraine were matched on a 2-to-1 basis.
DIRECTOR STOCK
OWNERSHIP POLICYOF OUR COMMON STOCK 2023 Proxy Statement | CATALENT, INC.33
Under
Director Stock Ownership Policy
Each of our stock ownership policy fornon-employee directors each of ournon-employee directors is required to own stock in an amount equal to five times the annual cash retainer. For purposes of this requirement, a director’s holdings includesinclude shares held directly or indirectly, individually or jointly, shares underlying vested equity-based awards and shares held under a deferral or similar plan. Each suchnon-employee director is required to retain 100% of the shares received following exercise of options or upon settlement of vested restricted stock unitsRSUs (net of shares used to satisfy applicable tax withholding obligation, if any) until the required ownership level is met. All of our non-employee directors complied with the retention provisions of this policy throughout fiscal 20172023 and through the printing of this Proxy Statement.
DEFERRED COMPENSATION PLAN
Under the amended and restated Catalent Pharma Solutions, Inc. DeferredDirector Compensation Plan (the “Deferral Plan”), effective January 1, 2016, our directors may separately elect any portion of their cash fees and up to 100% of RSU awards on apre-tax basis by making appropriate elections in the calendar year prior to the year in which the services giving rise to such compensation being deferred is rendered.
Under the Deferral Plan, we also credit each participant’s deferral account with earnings and/or losses based on the deemed investment of the accounts in one or more of a variety of investment alternatives we make available from time to time. Participants select the investment alternatives in which they want their accounts to be deemed to be invested and are credited with earnings and/or losses based on the performance of the relevant investments. Participants are able to change the investment elections for their accounts on a daily basis.
Participants in the Deferral Plan may elect from a variety of forms of payout under the plan, includinglump-sum payment and various types of annual installments, with the timing depending on the form selected.
Cash and equity deferrals, company contributions, and applicable gains are held in a “rabbi” trust. “Rabbi” trust assets are ultimately controlled by us. Operating the Deferral Plan this way permits participants to defer recognition of income for tax purposes on the amounts deferred until they are paid to the participants.
|
DIRECTOR COMPENSATION FOR FISCAL 2017Fiscal 2023
For fiscal 2017, 2023, our non-employee directors received the amounts shown in the schedule below. All cash fees were paid on a quarterly basis, in arrears. Messrs. Chinh Chu and Bruce McEvoy, who each resigned from the Board in October 2016, received no compensation during fiscal 2017 because they were designees of a former principal shareholder.
| Name(1) | Fees Earned or Paid in Cash ($) | Stock Awards ($)(2) | Total ($) | |||||||||
Madhavan Balachandran(3) | 16,438 | 23,008 | 39,446 | |||||||||
Melvin D. Booth(4) | 120,000 | 139,987 | 259,987 | |||||||||
J. Martin Carroll | 100,000 | 139,987 | 239,987 | |||||||||
Rolf Classon(5) | 110,000 | 139,987 | 249,987 | |||||||||
Gregory T. Lucier(6) | 100,000 | 139,987 | 239,987 | |||||||||
Donald E. Morel, Jr.(6) | 110,000 | 139,987 | 249,987 | |||||||||
James Quella | 110,000 | 139,987 | 249,987 | |||||||||
Uwe Röhrhoff(7) | 45,425 | 56,746 | 102,171 | |||||||||
Jack Stahl(8) | 134,562 | 139,987 | 274,549 | |||||||||
| Name(1) | Fees Earned or Paid in Cash ($) | Stock Awards ($)(2) | Total ($) | |||||||||
Madhavan Balachandran(3)(4) |
| 100,000 |
|
| 274,954 |
|
| 374,954 |
| |||
Michael J. Barber(3) |
| 100,000 |
|
| 274,954 |
|
| 374,954 |
| |||
J. Martin Carroll |
| 151,401 |
|
| 274,954 |
|
| 426,355 |
| |||
Rolf Classon(3)(4) |
| 110,000 |
|
| 274,954 |
|
| 384,954 |
| |||
Rosemary A. Crane(3) |
| 110,000 |
|
| 274,954 |
|
| 384,954 |
| |||
Karen Flynn(1) |
| 60,440 |
|
| 296,818 |
|
| 357,258 |
| |||
John J. Greisch(3)(4)(6) |
| 125,907 |
|
| 274,954 |
|
| 400,861 |
| |||
Christa Kreuzburg |
| 100,151 |
|
| 274,954 |
|
| 375,105 |
| |||
Gregory T. Lucier(3) |
| 112,651 |
|
| 274,954 |
|
| 387,605 |
| |||
Donald E. Morel, Jr. |
| 110,000 |
|
| 274,954 |
|
| 384,954 |
| |||
Jack Stahl(3) |
| 120,151 |
|
| 274,954 |
|
| 395,105 |
| |||
Peter Zippelius(5) |
| 58,611 |
|
| 274,954 |
|
| 333,565 |
| |||
| (1) | Neither Mr. Chiminski |
| (2) | Represents the aggregate grant date fair value of stock awards for fiscal |
| (3) | Messrs. Balachandran, Barber, and Classon, Ms. Crane, Messrs. Greisch and Lucier and Mr. |
| (4) | Messrs. Balachandran and Greisch elected to defer 100% of their annual cash retainers for calendar 2022 and 2023 under the |
| Deferred Compensation Plan. Mr. Classon elected to defer 50% of his annual cash retainer for calendar 2022 and |
| (5) | Mr. Zippelius instructed that his cash retainer should be paid to his employer, Leonard Green. He also disclaimed beneficial ownership of his stock award and is holding it on behalf of Leonard Green. Mr. Zippelius retired from the Board, effective as of the end of January 2023 in accordance with the terms and conditions of the Stockholders’ Agreement, and forfeited the RSUs granted through his stock award for fiscal 2023 pursuant to the terms of the award agreement. |
| (6) | The annual RSU award |
| made to Mr. |
34CATALENT, INC. | 2023 Proxy Statement COMPENSATION DISCUSSION AND ANALYSIS
Compensation Discussion and Analysis
Table of Contents
COMPENSATION DISCUSSION AND ANALYSIS 2023 Proxy Statement | CATALENT, INC.35
Introduction
This CD&A explains our executive compensation philosophy and programs, and the decisions made by the Compensation Committee of our Board of Directors during our most recently completed fiscal year, which ended on June 30, 2017,2023, unless otherwise noted. Each reference in this section to a year is a reference to our fiscal year, which ends on June 30, unless otherwise noted.
Our executive compensation program is intended to attract, motivate, retain, and reward our leadership so that they will act to increase shareholder value and to align the interests of our leadership with those of our shareholders on an annual and long-term basis.
In accordance with SEC rules and regulations, thisThis CD&A also discusses the elements of our executive compensation program during the fiscal year ended June 30, 20172023 for our President and Chief Executive Officer, our Executive Vice President andformer Chief Financial Officer, our former Interim Chief Financial Officer who served through the end of our fiscal year, our other three most highly compensated executive officers, and one additional former executive officer who would have been one of the three most highly compensated executive officers had she still been serving as an executive officer as of the end of fiscal 2023 (these sixseven officers collectively are our Named“Named Executive OfficersOfficers” or NEOs)“NEOs”). In 2017,fiscal 2023, our NEOs were:
EXECUTIVE | TITLE | |
| President and | |
| Former Senior Vice President and Chief Financial Officer | |
| President, | |
| ||
Steven L. Fasman | Former Executive Vice President | |
| Group President, Pharma and Consumer Health | |
John Chiminski* | Former | |
Manja Boerman* | Former President, |
| * | Mr. Castellano ceased serving as Chief Financial Officer on April 13, 2023 and separated from the |
EXECUTIVE SUMMARYExecutive Summary
Our executive compensation program is intended to attract, motivate, retain, and reward our leadership team.in a manner that will align their interests with those of our shareholders on an annual and long-term basis and promote sustainable shareholder value creation. We believe that attracting, motivating, retaining, and retainingrewarding superior talent is a keyneeded to deliveringmaintain and improve our performance and shareholder returns, and thatreturns. We therefore seek to maintain a competitive compensation program supports this. Therefore, our executive compensation packagethat ties a significant portion of executive pay to our financial and stock price performance.
The following is a summary of important aspects of our executive compensation program discussed later in this CD&A.program.
Balanced mix of pay components and incentives. Our compensation program targets a market-based mix of cash and equity compensation, and of short- and |
|
|
Pay for Performance. We emphasizepay-for-performance to align executive compensation with our business strategy. Approximately |
Share Retention. Our Compensation Committee has established stock ownership guidelines directing our executive officers to hold a multiple of annual salary in the form of shares of common stock in order to align management and shareholder interests. |
Pledging and Hedging. Our executives are prohibited from pledging our shares (absent our General Counsel’s permission, which has never been granted) or hedging against the economic risk of such ownership. |
Use of Independent Consultant. The Compensation Committee has engaged an independent, third-party consultant, Frederic W. Cook & Co., Inc. (“FW Cook”), to assist it in designing our compensation program and making compensation |
36CATALENT, INC. | 2023 Proxy Statement COMPENSATION DISCUSSION AND ANALYSIS
Clawback/Forfeiture Provisions. The terms of our |
Compensation Peer Group. The Compensation Committee uses a group of peer companies, selected with the assistance of |
ShareholderSay-on-Pay. At the |
OVERVIEW OF 2017 BUSINESSOverview of 2023 Financial Performance and Executive Compensation
2023 FINANCIAL PERFORMANCE AND EXECUTIVE COMPENSATION
2017 BUSINESS PERFORMANCE
Please note: Further information concerning thenon-GAAP performance measures discussed in this section, including information concerning reconciliations between these measuresNet revenue declined 11%, from $4.8 billion to $4.3 billion on a reported basis and from $4.8 billion to $4.4 billion on a constant-currency basis.
Net earnings decreased 151%, from earnings of $499 million to a loss of $256 million.
Adjusted EBITDA declined 43%, from $1.3 billion to $0.7 billion on a constant-currency basis.
Our net leverage ratio increased from 2.9x at the most directly comparable U.S. GAAP-based measures, may be found inend of fiscal 2022 to 6.6x at the footnotes set forth on page 1end of this Proxy Statement and in Appendix A to this Proxy Statement, entitled“Non-GAAP Financial Measures,” beginning on pageA-1 of this Proxy Statement.fiscal 2023.
2023 COMPENSATION HIGHLIGHTS
In fiscal 2017, we delivered another strong year2023, our financial performance was muted, with Budget-Based Revenue and Budget-Based EBITDA (both as defined below) missing target by 24% and 50%, respectively. As a result, our performance-based compensation awarded in fiscal 2023 and paid out in fiscal 2023 from a revenue perspective, recording revenue growthprior awards was meaningfully below target. The fiscal 2023 MIP, comprised of 15%70% business performance and 30% personal goals performance, for our executive officers other than the CEO who remained in constant currencyservice at the payout date, including each of our NEOs besides Mr. Castellano (who departed Catalent prior to payout and therefore received nothing from the MIP), and Dr. Boerman and Mr. Maselli (who received no payout under the MIP), was awarded materially below target, as the business performance factor was 0% for the fiscal year. In addition, our financial performance in fiscal 2023 resulted in materially lower payouts under the long-term incentive program compared to fiscal 2022 payouts, with our Relative Return PSUs, as described below, for the prior fiscal year,2021-2023 performance period having 0% payout, and our Adjusted EPS PSUs, as described below, for the fiscal 2021-2023 performance period vesting at 106%, modestly above target due to our strong performance in fiscal 2021 and 2022 relative to fiscal 2020. Similarly, the values of time-vested RSUs at their vesting in early fiscal 2024 were materially lower than their stated values at the time of their grant due to the decline in our stock price compared to our stock price in early fiscal 2021 when awarded. As of the end of fiscal 2023, outstanding PSUs aligned to both the fiscal 2022-2024 and fiscal 2023-2025 performance periods were also tracking meaningfully below targets.
COMPENSATION DISCUSSION AND ANALYSIS 2023 Proxy Statement | CATALENT, INC.37
EXECUTIVE PAY MIX FOR 2023
The majority of target total direct compensation for our NEOs during fiscal 2023 consisted of variable pay elements. The Compensation Committee believes this allocation aligns with growth
across all three of our reporting segments. Softgel Technologies, our core long-cycle segment, grew revenue 12% at constant currency, with particular strength across the consumer health side of the business. We recorded constant currency revenue growth of 16% in our Drug Delivery Solutions segment, which includes our modified release offerings, our sterile offerings and our fast-growing biologics business. And our short-cycle Clinical Supply Services segment grew revenue by 20% in constant currency and continues to be the fastest growing segment in the portfolio.
Listed below are some highlights of our fiscal 2017 performance:
2017 COMPENSATION HIGHLIGHTS
As highlighted above, in 2017 we delivered strong financial performance. The Compensation Committee determined that our CEO exceeded his individual goals for 2017 and each of our other NEOs partially met or exceeded their respective individual goals for 2017.
| | |||||||||
| (1) | Does not include other compensation, pension values, and nonqualified deferred compensation earnings, which are shown in the Summary Compensation Table beginning on page 55. Mr. Maselli actually received zero short-term compensation for fiscal 2023 due to the performance level of the business for that year. |
Executive Pay Mix for 2017
As shown in the charts below, the majority of target total direct compensation for our CEO and other NEOs during 2017 consisted of variable pay elements—specifically, the short-term incentive bonus award (which was targeted as 25% and 27%, respectively, of our CEO’s and our other NEOs’ total direct compensation) and long-term, equity-based compensation (which was targeted as 59% and 36%, respectively, of our CEO’s and our other NEOs’ total direct compensation). The Compensation Committee believes this allocation aligns with our compensation philosophy of motivating our CEO and other NEOs to achieve our performance objectives in the short term and to grow the business to create value for our shareholders in the long term. In addition, at the 2016 Annual Meeting, our shareholders voted 99.4% in favor of oursay-on-pay proposal, demonstrating their concurrence that our executive compensation program reflects a pay for performance philosophy. 2023 TARGET DIRECT COMPENSATION OVERVIEW
| ||
BASE SALARY | | |
These charts do not include other compensation, pension values, and nonqualified deferred compensation earnings, which are shown in the Summary Compensation Table in this Proxy Statement.
CEO 2017 Compensation Overview
Employment Agreement
Mr. Chiminski, our CEO, entered into a three-year employment agreement in October 2014, replacing an earlier agreement. The October 2014 employment agreement aligned Mr. Chiminski’s compensation with comparable CEOs in our executive compensation benchmarking peer group. Mr. Chiminski’s total compensation consists of salary, an annual cash bonus, long-term equity incentives and the right to participate in benefit programs generally available to executives. The employment agreement with Mr. Chiminski is discussed in detail in “Executive Agreements.”
• $925,000 | ||||
Salary
On October 22, 2014, Mr. Chiminski’s base salary was increased to $975,000. His salary did not increase during fiscal 2017, but was increased to $1,025,000 effective August 23, 2017, in consideration of his performance and reflecting the recommendation of the Compensation Committee’s independent compensation consultant.
Bonus
Mr. Chiminski received a $1,698,750 cash bonus in 2017 under the terms of our Management Incentive Plan (the “MIP”), which is our incentive-based annual cash bonus plan for our senior executives, including our NEOs. His MIP award was based on the annual cash bonus opportunity target set in his employment agreement. The target for 2017 was $1,500,000 (with a maximum payment opportunity of $2,000,000). As discussed below, his amended employment agreement provides for a fiscal 2018 target cash bonus of $1,350,000 with no maximum limit other than the limits of the MIP itself, which in 2018 provides for a maximum payout of 174.4% of target. The removal of the maximum limit increases the cohesiveness of senior management by aligning the method of awarding Mr. Chiminski’s bonus with the other members of the team.
Our revenue, computed at the foreign exchange rates we use internally when budgeting and measuring performance against budget (our “Budget-Based Revenue”), and Adjusted EBITDA, computed at the same rates (our “Budget-Based EBITDA”), in fiscal 2017 resulted in 112.5% achievement against the business performance targets that determined 70% of the MIP bonus for Mr. Chiminski and all other senior executives. The Compensation Committee determined the remaining 30% of his MIP based on his individual achievements. (Budget-Based Revenue and Budget-Based EBITDA, financial measures used by us in calculating incentive compensation awards, arenon-GAAP measures. For an explanation of how we derive these measures and reconciliations to our reported results, please see the Appendix entitled“Non-GAAP Financial Measures,” beginning on pageA-1.)
Mr. Chiminski’s MIP award was equal to 113.25% of his target opportunity. The Compensation Committee believes that his 2017 MIP compensation appropriately reflected our financial performance for the year and his individual contributions as our CEO.
Long-Term Incentive Award
During fiscal 2017, Mr. Chiminski, along with our other NEOs, received long-term incentive compensation awards as part of our long-term incentive plan (the “LTIP”) for the2017-19 performance periods. Those awards are discussed in detail below.
MANAGEMENT INCENTIVE PLAN (MIP) | |||||||||
Total Direct Compensation
The chart below shows Mr. Chiminski’s total direct compensation for the fiscal years 2016 and 2017 and is comprised of salary, MIP and LTIP (using grant date fair value). This chart does not include other compensation, pension values and nonqualified deferred compensation earnings, which are shown in the Summary Compensation Table. The chart includes Mr. Chiminski’s actual bonus for fiscal 2017 and assumes that his long-term incentive compensation will pay out at target. The actual amounts paid could be higher or lower (for further information on our long-term incentive plan, see the section entitled “Compensation Determinations for 2017—Long-Term Incentive Awards”).
Executive Agreements
As discussed in more detail later in this CD&A, we are party to agreements with our NEOs to attract and retain these executives. The agreements with Messrs. Chiminski and Walsh are employment agreements that define the nature of each officer’s employment, compensation and benefits, including certain compensation and benefits following termination, and restrictive covenants. Mr. Downie, Mr. Fasman, and Mr. Littlejohns have offer letters that set forth the nature of each executive’s employment, compensation, and benefits, and Mr. Downie also has a relocation agreement because Mr. Downie formerly worked from and still frequently visits our corporate offices in New Jersey even though his primary residence is in the U.K. Our former executive, Ms. Johnson, had a similar offer letter as well as a relocation agreement.
LONG-TERM INCENTIVE AWARD | • $5,500,000 in grant-date fair value awarded under our long-term incentive plan | ||||
OUR EXECUTIVE COMPENSATION PROGRAM
OVERVIEWPHILOSOPHY AND PRINCIPLES
Our executive compensation philosophy is designed to tie executive compensationprogram ties pay delivery to the successful execution of our overall business goals and adherence to our core values, thatwhich we believe best serves the interests of our shareholders. We believe that attracting, motivating, retaining, and rewarding superior executive talent is a key to delivering attractive shareholder returns, and that an appropriately structured executive compensation program is critical to that end. We believe thatend, with each element of our program supportssupporting the achievement of our compensation philosophy.
38CATALENT, INC. | 2023 Proxy Statement COMPENSATION PHILOSOPHYDISCUSSION AND ANALYSIS
Our executives must be of a caliber and level of experience necessary to manage our complex, global business effectively. Given the long-cycle nature of most of our businesses, the complexity and highly regulated nature of our operations, and the competitive nature of our industry, it is especially important for us to retain our executive compensation program is guidedtalent to ensure continuity of management. We seek to implement this philosophy by the following philosophies:three key principles:
• Competitive compensation. |
• Alignment with shareholder interests. Aligning our executives’ interests with our shareholders’ through equity compensation, short- and long-term absolute and relative performance metrics and share retention guidelines. | |||
• Linking compensation to performance. | |||
EXECUTIVE COMPENSATION PROGRAM ELEMENTS
COMPONENT | DESCRIPTION | OBJECTIVES AND COMMENTS | ||
Cash Compensation | ||||
Base Salary | Fixed cash compensation that is based on |
• Provide a fixed, baseline level of compensation.
• Annual increase, if any, based on market positioning and individual performance. | ||
Management Incentive Plan | Annual cash payment tied to our |
• For | ||
| 1 | Note that “Budget-Based Revenue” and “Budget-Based EBITDA” are non-GAAP financial measures and subject to important limitations. For a discussion of these measures and how they reconcile to our results reported under U.S. GAAP, please see the Appendix entitled “Non-GAAP Financial Measures,” beginning on page A-1 of this Proxy Statement. |
COMPENSATION DISCUSSION AND ANALYSIS 2023 Proxy Statement | CATALENT, INC.39
| ||||||||
COMPONENT | DESCRIPTION | OBJECTIVES AND COMMENTS | ||||||
Long-Term Incentive | ||||||
Awards under our Long-Term Incentive | Annual grants of equity-based awards under our 2018 Omnibus Plan intended to drive (1) absolute and relative long-term performance relative topre-established objectives and (2) robust, continuous executive retention.
|
• Increase equity ownership by
• Promote executive
• Reward absolute and relative stock price | ||||
Retirement Benefits | ||||||
U.S. Savings Plan | Atax-qualified 401(k) defined contribution plan that allows U.S. participants to defer a portion of their compensation, subject to Internal Revenue Code (the “Code”) limits, and receive a partial employer | • Attract, motivate, and retain superior talent. | ||||
U.K. Retirement Plan | A defined contribution retirement plan open | • Attract, motivate, and retain superior talent. | ||||
Deferred Compensation Plan | A
The plan allows NEOs and certain other executives to defer up to 80% of total cash compensation, | • Attract, motivate, and retain superior talent. | ||||
Severance Benefits | ||||||
| ||||||
Executive Severance and Change-in-Control Benefits | Severance benefits provided to NEOs and certain other senior executives upon company-initiated involuntary termination of employment without cause, or upon a “good reason” termination by the executive.
Equity grants |
• Facilitate recruitment and retention of executives by providing income security in the event of involuntary job loss. | ||||
40CATALENT, INC. | 2023 Proxy Statement COMPENSATION PROCESSDISCUSSION AND ANALYSIS
The Compensation Process
THE ROLE OF THE COMPENSATION COMMITTEE, ITS CONSULTANT, AND MANAGEMENT
The Compensation Committee oversees the compensation program for our CEO and our other executive officers, including our Named Executive Officers.other NEOs. Management typically formulates the initial proposalnew proposals concerning a new aspect of executive compensation, including, proposingbut not limited to salary levels, and the form and content of various compensation programs, including incentive or other compensation programs, and benefit programsbenefits such as healthcare and retirement programs.programs (though management does not propose or otherwise participate in the setting of our CEO’s compensation). All management proposals as they relate to our NEOs are subject to Compensation Committee review and approval. The Compensation Committee has retained an independent consultant, FW Cook, to help it fulfill its responsibilities, including its review of management proposals. Among other things, FW Cook benchmarks compensation proposalslevels using available market data and trends.trends and the Comparison Group approved by the Compensation Committee (see discussion of Comparison Group below). In compliance with the NYSE’s listing standards and SEC rules, the Compensation Committee in May 2017April 2023 conducted its annual independence assessment of FW Cook and concluded that it remains independent of management.management and that its work did not raise any conflict of interest.
THE COMPENSATION COMMITTEE’S PROCESS
In accordance with its charter, the Compensation Committee is responsible for, among other duties:
reviewing and approving our overall executive compensation philosophy; |
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reviewing and approving the identification of our peer companies with respect to various benchmarking activities and data sources used in evaluating our compensation competitiveness;
evaluating the performance of the CEO against performance goals and objectives approved by our Board; and
approving the performance metric and corresponding goals, evaluating the performance, and approving the compensation of our executive officers.
THE USE OF MARKET DATA IN DETERMINING COMPENSATION
The Compensation Committee considers numerous factors as it formulates, reviews, and reviewsapproves pay components and the overall structure of our executive compensation program and makes compensation decisions.program. Among these factors are survey data, scoped to focus on companies with revenue comparable to ours, and the compensation practices of select peer companies, which we refer to as the “Comparison Group.” During fiscal 2017,In January 2022, the Compensation Committee used areviewed the Comparison Group recommended by management with input from FW Cook based on, among other things, similaritiesthat would be used to inform pay decisions for fiscal 2023. One of the peers, Varian Medical, was acquired, leaving 15 companies in our linethe Comparison Group. Catalent’s trailing four quarter revenue and market cap at the time the peers in the Comparison Group was reviewed were both near the median of the remaining 15 peers. Additionally, all remaining peers were found to be within a reasonable range of Catalent’s revenue and market cap at the time, and the Compensation Committee determined not to make any change to the Comparison Group (other than removing Varian Medical due to its acquisition).
COMPENSATION DISCUSSION AND ANALYSIS 2023 Proxy Statement | CATALENT, INC.41
Six of the 15 peer companies are pharmaceutical / biotechnology companies, and the remaining peer companies are health care equipment/supplies or life sciences tools/services companies. Other factors that are reviewed during the annual Comparison Group selection process include business revenue, earnings, estimatedsimilarity, profitability, enterprise value, and number of employees. The Compensation Committee believedfurther believes that reference to the Comparison Group wasis appropriate when reviewing our compensation program duringfor fiscal 20172023 because it believedof the potential likelihood that this group may have competed with us for executive talent. The 15 companies in the Comparison Group that informed compensation decisions for fiscal 20172023 were:
| • Agilent Technologies, Inc. • Biogen Inc. • Boston Scientific Corporation • Hologic, Inc. • Incyte Corporation • Mettler-Toledo International Inc. • STERIS plc • Vertex Pharmaceuticals Incorporated | • Align Technology, Inc.
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• Perrigo plc • West Pharmaceutical Services, Inc.
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The Compensation Committee attemptsalso considers other factors in addition to set the compensation of our executive officers at levels that are generally in the range of the median of the market data, with deviations as appropriate based onbenchmarks, including individual factors, includingexecutives’ tenure, proficiency in role, and criticality to our performance. The Compensation Committee reviewsconcluded that our pay strategy is appropriate to assure the rangeattraction and retention of salary, annual incentive targets and long-term incentive grant values (and the combined total of these elements) of persons holding the same or similar positions at the Comparison Group, based on the most recent market data available. The Compensation Committee then generally seeks to approve compensation elements for our NEOs withintop talent in a competitive range, assuming payout of performance-based compensation at target. Our executives’ actual compensation may vary frommarket, particularly as we continue to move into areas where the target amounts set bycompetition for top talent is particularly fierce, including cell and gene therapy, and demands on our senior executives have increased as the business has grown and become more complex. While the Compensation Committee based on our overall performanceconsiders peer and
the individual’s own performance, market data, it does not target a specific market position when determining executive target compensation levels. In addition to referencing market data, as reflected through annual incentive payouts and value realized on vesting and exercise of stock-based, long-term incentive awards.
SECTION 162(m) OF THE INTERNAL REVENUE CODE
Subject to certain limitations and terms, Code § 162(m) and its implementing regulations provide that we may not deduct compensation of more than $1,000,000 paid in any year to our CEO and certain of our NEOs unless certain criteria are met concerning the terms of the compensation and the processes adopted by us to approve the compensation and the forms of payment. Among other things, these rules require that deductible compensation in excess of the limit be approved by a sufficiently disinterested group of directors and that the material terms governing payment be disclosed to and approved by shareholders. Because we only became a publicly traded company upon our IPO on July 30, 2014, we have been subject to a transitional period, during which the restrictions in these rules do not apply to us (though they may apply with respect to certain equity awards granted during the transitional period but that vest and settle thereafter). The transitional period is expected to end at our 2018 annual meeting.
The Compensation Committee intends to structure executive compensation to comply with Code § 162(m) to the extent that doing so is consistent with the best interests of our company and shareholders. A number of requirements must be met for particular compensation to qualify, however, and there can be no assurance that any compensation awarded will be fully deductible under all circumstances. And in appropriate circumstances,described above, the Compensation Committee may approve elementsconsidered prior year compensation history and compensation levels of compensationother Company executives to provide context for certainfiscal 2023 executive officers that are not fully deductible.compensation.
COMPENSATION DETERMINATIONS FOR 2017Details of Total Direct Compensation Elements
For fiscal 2017,2023, compensation paid to our NEOs consisted of the following elements: base salary,salary; short-term incentive pay in the form of participation in the MIP, the opportunity to obtainMIP; equity-based, long-term incentive compensation awards subject to multi-year time- and performance-vesting criteria; and the opportunity to participate in certain benefit programs and other perquisites.
We generally review the base salary and other incentive compensation target amounts of our executive officers, other thanincluding our CEO, including ournon-CEONEOs, every 18 months. For fiscal 2018, however, the Compensation Committee has decided to move to an annual review for our executive officers,annually, consistent with the process for our employees generally. Compensation for each of Mr. Chiminski and Mr. Walsh is governed in part by his respective employment agreement.
BASE SALARY
Base salary is the principal fixed component of the target total direct compensation of ourfor NEOs, and is determined by considering the executive’s job responsibilities, market data, and the individual’s performance and contributions. The Compensation Committee has adopted a
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practice of reviewing the salaries of our NEOs every 18 months, based on the date of employment, which will transition to an annual review process in fiscal 2018.
The 2017 base salaries for Messrs. Chiminski, Walsh, and Fasman remained at $975,000, $675,000, and $550,000, respectively. Following their respective18-month reviews during fiscal 2017, Mr. Littlejohns received a 2.3% increase in base salary, reflecting his performance, leadership, and management of our Drug Delivery Solutions business unit; Mr. Downie received a base salary increase of 4.1%, reflecting his performance, leadership, and management of our Sales & Marketing function; and Ms. Johnson received a base salary increase of 2.6%, reflecting her performance, leadership, and management of our Quality & Regulatory Affairs function. Mr. Chiminski’s fiscal 2018 base salary will increase to $1,025,000, as described above under “CEO 2017 Compensation Overview—Salary.”
MANAGEMENT INCENTIVE PLAN
SummarySUMMARY
The MIP is an annual cash incentive program that rewards performance against annual individual and overall business goals. We extend MIP participation is extended to a broad group of our executives, that includesincluding our Named Executive Officers.NEOs. For fiscal 2017,2023, 70% of alla participant’s MIP target payouts werepayout was based on business goals applicable to that participant and 30% werewas based on the participant’s individual goals. The Compensation Committee selects the overall business goals forapplicable to the NEOs participating in the MIP from among the corporate financial and strategic growth objectives set each year by our Board of Directors.Board. The individual goals for each of our NEOs other than our CEO and former Executive Chair are set jointly by that NEO and the CEO, and theCEO. The individual goals for our CEO and former Executive Chair are set jointly by our CEOeach of these individuals and the Compensation Committee. These individual goals relate generally to the following categories but are not assigned numerical weightings or measuring criteria: quality and compliance, operational excellence, customer innovation/growth, organizational vitality/leadership, and financial accountability.
A graphical summary of how we calculate payment under our MIP is set forth in the charts labeled “MIP Calculation Summary for Fiscal 2017” and “MIP Calculation Summary for Fiscal 2018” at the end of this section.
Performance Targets42CATALENT, INC. | 2023 Proxy Statement COMPENSATION DISCUSSION AND ANALYSIS
2023 PERFORMANCE TARGETS
For fiscal 2017,2023, the Compensation Committee based 25% of the business goals forportion of our MIP on achievement of our Budget-Based EBITDA goal (as defined in Appendix A to this Proxy Statement) and our Budget-Based Revenue goal and 75% on achievement of our Budget-Based EBITDA goal.
(also as defined in Appendix A). The Compensation Committee uses these financial measures because Budget-Based EBITDA and Budget-Based Revenue because:
(a) it believes that they are important indicators of our increasing value and growth,
(b) they are the primary measures by which we set and measure performance for the fiscal year,
(c) they exclude certain items that would normally be part of a calculation of net earnings but that we believe are not representative of our core business, and
(d) they are widely used measures of overall financial performance.
The Compensation Committee believesconcluded for fiscal 2023 that (x)(1) using a weighted combination of
these two measures provideswould provide a balanced set of business performance targets that focus on growth, profitability, and profitability, (y)the most efficient conversion of revenue to profit, (2) at the time the goals are set, the performance targets provide a reasonably achievable, but challenging, set of goals for our NEOs and other MIP participants, and (z) tying the(3) linking our NEOs’ bonuses to company-wide performance goals encourages collaboration across the executive leadership team. These goals are intended to incentivize all participants to maximize their performance for the benefit of our shareholders.
For fiscal 2018,CALCULATING 2023 MIP AWARDS
When determining MIP awards, the Compensation Committee has elected to introduceused a third business goal, Annual Capital Deployed, which will account for 15%matrix approach that simultaneously evaluates performance of the business goalstwo components that comprise the business-goal portion of the MIP. Performance at target for our MIP, witheach of the Budget-Based Revenue goal comprising 20% and Adjusted EBITDA comprising 65%. “Annual Capital Deployed” will equal the average of “Capital Deployed” over the12-month period ending on the month of measurement, with Capital Deployed for a given month equal to the working capital for such month, divided by the revenue for the90-day period ending on the last day of such month, computed on an annualized basis. The Compensation Committee has added this metric because it believes that this will incentivize management to be as efficient as possible in its deployment of our cash resources and thereby enhance our overall profitability.
Funding For, and Payment of, MIP Awards
Achievement at the levels of our performance targetsmetrics results in paymentachievement of the business-goal portion of the MIP award at 100% of thea participant’s target amount. For fiscal 2017, lesser amounts were payable forPerformance below or above the targets, subject to a range of 80% to 125% and a minimum 80% achievement between 90% and 100% of targeted performance, with 90%Budget-Based EBITDA target, results in an achievement entitling the participant to 50% of the participant’s target amount. Similarly, more was payable for greater achievement, with 187.5%business-goal portion of the target amount payable at the maximum of 115% of performance. Achievement under 90% of targeted performance would result in a payment under our MIP onlyaward in the Compensation Committee’s sole discretion. manner set forth in the following table (at 0-200% of target), with linear interpolation applied for results that fall between two consecutive revenue or EBITDA achievement levels:
Revenue Goal Achievement (as a percentage of budget) | ||||||||||||||||||||||||
<80% | 80% | 85% | 90% | 95% | 100% | 105% | 110% | 115% | 120% | 125% | ||||||||||||||
EBITDA Goal Achievement (as a percentage of budget) | <80% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | ||||||||||||
80% | 32% | 32% | 39% | 46% | 53% | 60% | 62% | 64% | 66% | 68% | 70% | |||||||||||||
85% | 49% | 49% | 49% | 56% | 63% | 70% | 72% | 74% | 76% | 78% | 80% | |||||||||||||
90% | 66% | 66% | 66% | 66% | 73% | 80% | 80% | 80% | 80% | 80% | 80% | |||||||||||||
95% | 75% | 75% | 75% | 78% | 85% | 85% | 85% | 85% | 85% | 85% | 85% | |||||||||||||
100% | 90% | 95% | 95% | 95% | 96% | 100% | 105% | 110% | 115% | 115% | 115% | |||||||||||||
105% | 95% | 98% | 100% | 104% | 109% | 113% | 120% | 125% | 125% | 125% | 125% | |||||||||||||
110% | 100% | 109% | 113% | 117% | 122% | 126% | 133% | 140% | 140% | 140% | 140% | |||||||||||||
115% | 104% | 122% | 126% | 130% | 135% | 139% | 146% | 153% | 160% | 160% | 160% | |||||||||||||
120% | 117% | 135% | 139% | 143% | 148% | 152% | 159% | 166% | 173% | 175% | 175% | |||||||||||||
125% | 130% | 148% | 152% | 156% | 161% | 165% | 172% | 179% | 186% | 193% | 200% | |||||||||||||
Achievement by each participant, including each of our NEOs, against individual goals can result in payment of the individual performance portion of the MIP award between 0% and 150%200% of the target amount. Payout of the MIP requires achievement of the minimum thresholds of both the business-goal portion and the individual-performance portion. The target amount for each participant in our MIP, including each of our NEOs, is based either on a fixed sum or a percentage of the NEO’s base salary and is approvedreviewed annually by the Compensation Committee. Committee, consistent with the process for our employees generally.
For fiscal 2017,2023, the business goals were collectively weighted at 70% of the total payout, and the individual goals were weighted at 30%. Thus,, and the maximum payout under our MIP is 176.25%was 200% of each executive target opportunity (187.5%(200% x 70%, plus 150%200% x 30%).
COMPENSATION DISCUSSION AND ANALYSIS 2023 Proxy Statement | CATALENT, INC.43
CLAWBACK/FORFEITURE
Participation in the MIP may be cancelled or forfeited and repaid to us if the participant engages in any “Detrimental Activity,” including but not limited to fraud, breaches of restrictive covenants, and disparagement of the company, as defined in the 2018 Omnibus Plan. In addition, if a participant receives any amount in excess of what the participant should have received for any reason (including by reason of a financial restatement, mistake in calculation, or other administrative error), although Mr. Chiminski’sthe participant must repay the excess. Without limiting the foregoing, all MIP award is further capped atawards are subject to reduction, cancellation, forfeiture, or recoupment to the extent necessary to comply with applicable law.
In connection with the revisions to our audited consolidated financial statements for fiscal 2022, under the clawback provisions of the MIP, the Compensation Committee approved a maximumclawback of $2.0 milliona portion of the amounts paid under his October 2014 employment agreement (which limit has been removedthe MIP for fiscal 2022 for all NEOs who received a MIP payment for such fiscal year. The amount of the clawback was determined in the same manner as the original MIP payment by calculating the value of the appropriate business factor in light of the revision to the audited consolidated financial statements and was equal to approximately 3% of the value of the original fiscal 2022MIP payout to each NEO for fiscal 2022 performance. For NEOs who are active employees, each NEO’s 2023 MIP payment or other amounts due to them are being reduced by the amendmentamount of the clawback.
In October 2023, the Company adopted a Clawback Policy in accordance with Section 10D of the Exchange Act and Rule 10D-1 promulgated thereunder and intended to comply with the agreement entered into on August 23, 2017). The Compensation Committee approves the funding for our NYSE listing standards.
2023 MIP based on the minimum, target and maximum payouts.
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2017 MIP AwardsAWARDS
The business performance goals and achievement levellevels for fiscal 2017,2023, which collectively represented 70% of the overall target MIP award, are as follows (in millions of U.S. dollars, using our internal budget-based currency exchange rates)rates, or percentages):
Performance Measure | Weighting | Threshold Performance (50% of Target) | Target Performance (100% of Target) | Maximum Performance (187.5% of Target) | Actual Performance | Business Performance Factor Payout Percentage | Threshold /
| Actual
| Business
| |||||||||||||||||||||||
| Budget-Based Revenue | 25 | % | 1,775 | 1,972 | 2,420 | 2,104.6 | 30.0 | % | $4,232 / 5,290 / 6,612
| $
| 4,263
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| 0%
| |||||||||||||||||||
| Budget-Based EBITDA | 75 | % | 393 | 437 | 524 | 455.3 | 82.5 | % |
td,126 / 1,407 / 1,759 |
$ |
698 |
| ||||||||||||||||||||
| (1) | When calculating Budget-Based EBITDA and Budget-Based Revenue performance, the target, threshold, and maximum are adjusted by the Compensation Committee for the projected pro forma performance from completed acquisitions over the measurement period. |
The CEO, together with the Senior Vice President and Chief Human Resources Officer during fiscal 2023, evaluated the individual performance of each of our executive officers, including the NEOs other than the CEO, based on theeach individual’s fiscal 20172023 goals and objectives. After combining the individual performance metric with the business performance metrics, as set forth above, management determined a recommended MIP award for each such executive officer, which they presented to the Compensation Committee. In approving MIP awards for the NEOs other NEOs,than the CEO, the Compensation Committee considered our financial performance in 2017fiscal 2023 and the individual assessment of performance and accomplishments relative to their respective 2017 goals and objectives.
The CEO also presented to the Compensation Committee an assessment of his own individual performance, which the Compensation Committee evaluated in determining the CEO’s MIP award. The CEO’s MIP award was based on his 2017fiscal 2023 goals and objectives in the areas of: (1) continuing to progress Catalent’s strategic ambition to build on its broad base of revenueofferings and to expand its position as the preferred strategic CDMO partner in core and advanced technologies, integrated solutions, and first-to-scale innovation, including solidifying and accelerating growth initiatives, integrationin Catalent’s base of product offerings, maximizing growth in Catalent’s biologics division, and continuing to invest in growth enablers; (2) strengthening Catalent’s foundation, including addressing variabilities in performance and On Time Delivery and driving continuous improvement centrally, including by continuing to enhance the IACP audit program and improving IT; (3) offsetting inflationary pressures with total cost excellence (TCE) and inorganic growth, CEO strategic leadershipother cost control and restructuring programs; (4) leveraging a strong financial position to increase M&A selectivity, pursuing portfolio management, delivering fiscal year 2023 financials and making working capital improvements; and (5) improving on our culture and organizational vitality, cash managementincluding executing on cultural assimilation, continuing to find ways to deepen Catalent’s Patient First culture, and margin initiatives,achieving measurable
44CATALENT, INC. | 2023 Proxy Statement COMPENSATION DISCUSSION AND ANALYSIS
progress against stated D&I and operational excellence/quality compliance.ESG goals and targets. The Compensation Committee did not assign weights in considering these areas, but took account of the differing levels of focus in each area as the year progressed.
In August 2017, After consideration of all of these factors, the Compensation Committee determineddecided not to award the amountCEO any MIP bonus for fiscal 2023.
The former Executive Chair also presented to the Compensation Committee an assessment of his own individual performance, which the Compensation Committee evaluated in determining the former Executive Chair’s MIP award, based on his fiscal 2023 goals and objectives in the areas of: (1) advancing our culture and values through acceleration of our ESG goals and targets, focused on sustainability (waste, water usage, and emissions), and acceleration of our TCE goals, including reactivating a LEAN culture; (2) executive coaching to advance our CEO’s transition and to activate CEO succession planning; (3) enhancing Board processes to create better interaction among directors; (4) driving key executive and senior leadership talent acquisition, with a primary focus on senior leadership positions within the finance, operations and quality functions in our Biologics segment and development a bench of industry leaders poised for ELT roles; (5) providing active counsel and support to the company on matters of M&A strategy and execution, transformational projects, and emerging biotech customer development, among others; and (6) leading the Board through setting meeting agendas, working closely with the Lead Independent Director and CEO to set content and manage Board logistics. The Compensation Committee did not assign weights in considering these areas but took account of the fiscal 2017differing levels of focus in each area as the year progressed. After consideration of all of these factors, the Compensation Committee decided not to award the former Executive Chair any MIP award for each of our NEOs. The following table shows for each NEO the 2017 base salary, the MIP payout target either as a fixed sum or a percentage of salary, the individual factor approved for each NEO, and the final MIP award for 2017. These awards are also set forth in the Summary Compensation Table on page 64 under the heading,“Non-Equity Incentive Plan Compensation.”
| NEO | 2017 Salary ($) | MIP Target Amount | Individual Achievement Factor (30%) | Total MIP Award($) | ||||||||||
| John Chiminski | 975,000 | $1,500,000 | 115% | 1,698,750 | ||||||||||
| Matthew Walsh | 675,000 | 75% of salary | 120% | 580,922 | ||||||||||
| Barry Littlejohns | 448,571 | 75% of salary | 90% | 355,559 | ||||||||||
| William Downie(1) | 365,333 | 75% of salary | 110% | 306,156 | ||||||||||
| Steven Fasman | 550,000 | 75% of salary | 130% | 485,719 | ||||||||||
| Sharon Johnson(1)(2) | 368,857 | 75% of salary | 90% | 292,530 | ||||||||||
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MIP Calculation Summary for Fiscal 2017
Provided below is a graphical summary of how we calculated payment under our MIP for fiscal 2017.2023.
MIP Calculation Summary for Fiscal 2017
MIP Calculation Summary for Fiscal 2018
As described above in “Management Incentive Plan—Performance Targets,” our Compensation Committee has approved a change in our MIP for fiscal 2018, adding Annual Capital Deployed as a performance measure. Provided below is a graphical summary of the revised calculation method for our MIP for fiscal 2018.
MIP Calculation Summary for Fiscal 2018
LONG-TERM INCENTIVE AWARDS
Our long-term incentive compensation program is extendedpotentially available to a broad group ofall our senior executives,employees, including our NEOs, and has generally includedincludes one or some combination of three types of equity-based grant: awards:
time-based stock options; options, in which there is a fixed grant to the recipient subject only to a time- and service-based vesting requirement;
time-based RSUs, in which there is a fixed grant to the recipient subject only to a time-basedtime- and service-based vesting requirement; and performance-based restricted stock units (“PSUs”), in which there is a variable grant, with the number of units ultimately earned based on the achievement of performance criteria over a multi-year performance period, subject to continuing service through the date of performance-period certification. Grants to our NEOs in each of fiscal 2016 and 2017 were divided into PSUs (50% of the value awarded), stock options (30%), and RSUs (20%).
| • | performance-based PSUs, in which vesting is based on the achievement of pre-established performance criteria over a multi-year performance period, subject to continuing service through the date of certification of final performance by the Compensation Committee. |
By awarding grants with a multi-year performance period,or vesting periods, we appropriately align executivesprogram participants with the long-term best interests of our shareholders.
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In fiscal 2017, the following long-term incentive grants were awardedAwards to our CEONEOs for the fiscal 2023-25 performance period, awarded in early fiscal 2023, were divided into PSUs (with the target number of shares providing 50% of the target value awarded), stock options (30% of the target value awarded), and RSUs (20% of the target value awarded). In turn, the target value awarded as PSUs was divided evenly between PSUs that use our Adjusted Net Income per diluted share (“Adjusted EPS”) as their performance metric and those that use relative total shareholder return (“Relative Return”), as described below in this section.1 The target size for our NEOs’ LTIP awards was set by the Compensation Committee using a market-based determination of LTIP grant value, individual performance, and other factors.
Awards to our NEOs (which awards are also set forthfor the fiscal 2023-25 performance period, awarded in the Summary Compensation Table on page 64 under the heading, “Stock Awards” and “Option Awards”):
| NEO |
Total Grant Value | Value of 2017 Stock Option Grants ($) | # of 2017 Options Granted | Grant Stock-Based 2017 Awards | #of Stock- Based Awards Granted(1) | |||||||||||||||
John Chiminski | 3,600,078 | 1,080,000 | 151,049 | 2,520,078 | 101,131 | |||||||||||||||
Matthew Walsh | 675,040 | 202,502 | 28,322 | 472,538 | 18,963 | |||||||||||||||
Barry Littlejohns | 440,026 | 132,003 | 18,462 | 308,023 | 12,361 | |||||||||||||||
William Downie | 413,632 | 124,074 | 17,353 | 289,558 | 11,620 | |||||||||||||||
Steven Fasman | 550,048 | 165,001 | 23,077 | 385,047 | 15,452 | |||||||||||||||
Sharon Johnson(2) | 903,750 | 231,271 | 17,753 | 672,479 | 11,888 | |||||||||||||||
Awardsearly fiscal 2023 under our LTIP which operated prior to our IPO under thePre-IPO Stock Plan and now operates under the Omnibus Plan, arewere generally determined and approved by the Compensation Committee on a dollar-value basis, which is then translated into a fixed or target number of options, RSUs, or PSUs as follows:
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by dividing the award by the per-instrument price, using a Black-Scholes valuation for options, grant date share price for RSUs and Adjusted EPS PSUs, and the value derived from a Monte Carlo pricing model for Relative Return PSUs, and then rounding up to the nearest whole number of shares. Subject to the recipient’s continued service with us through each applicable vesting date,one-fourth of options vest in equal installments over the shares subject to stock options will vest on eachone-year anniversaryfirst four anniversaries of the grant date, and the entire award of RSUs granted in fiscal 2016 and 2017 will vest on the third anniversary of the grant date. Subject to the recipient’s continued service with us through the vesting date, theand PSUs granted under the LTIP during fiscal 2016 and 2017 will vest when and if we determine whether we have metthat the performance criteria followingare met at the end of the three-year performance period. The continued service requirement is waived
COMPENSATION DISCUSSION AND ANALYSIS 2023 Proxy Statement | CATALENT, INC.45
in the event of a participant’s disability or retirement in accordance with the “Rule of 65,” which applies if a participant retires on or after the date on which the sum of the participant’s age and period of service with us equals sixty-five (65) years, so long as they are at least the age of fifty-five (55) and give at least six-months’ notice and, beginning with grants awarded in fiscal 2021, have completed at least five years of service with us.
The size of the LTIP award for 2017 for our CEO was fixed in his employment agreement. The Compensation Committee determined in 2017 to award NEOs other than the CEO with long-term incentive grants during 2017 whose target value equaled 100% of base salary, reacting in part to multi-year equity grants made to NEOs prior to our IPO, even though the LTIP grant value was below the median value of long-term incentive grants in the market data. The Compensation Committee has indicated that it expects to adjust grants in future years towards a market-based determination of LTIP grant value.
For fiscal 2016 and fiscal 2017, the Compensation Committee set the performance metricscriteria for the PSUs awarded under our LTIP using adjusted diluted earnings per share (“Adjusted EPS”) and relative total shareholder return (“Relative Return”), each of which will apply to 50% of the overall value of PSUs to be awarded. The actual target number of Relative Return PSUs awarded each year differs slightly from the target number of Adjusted EPS PSUs due to a slight difference in the U.S. GAAP valuation of each type of PSU.granted during fiscal 2023 are as follows:
Adjusted EPS |
Achievement of the target Adjusted EPS will earn the participant the number of shares equal to 100% of the target number of Adjusted EPS PSUs. At 75% achievement, 50% of the target will be earned, with no shares earned for achievement below that threshold. At the maximum achievement level of the greater of (i) 150% of target Adjusted EPS and (ii) the amount determined using the financial goals set forth for the performance period portion of the most recent strategic planning period, the resulting earnout is 200% of the target. Earnouts are interpolated for levels of performance between threshold and target, and between target and maximum.
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Achievement of the median Relative Return will earn the participant |
The performance criteria for the PSUs awarded during fiscal 2015 under our LTIP were based on our cumulative achievement of Budget-Based Revenue (weighted 25%) and Budget-Based EBITDA (weighted 75%) during the performance period of fiscal2015-17 as against the targets established at the beginning of such performance period. If we achieve 100% of the target level of performance, then the participant will earn the target number of PSUs. Lower performance will result in fewer PSUs, but nothing will be earned if achievement is below a minimum threshold set by the Compensation Committee. Similarly, participants will earn more PSUs if achievement exceeds the target, up to a maximum of 200% of the target number of PSUs. As determined by our Compensation Committee after the end of the fiscal year, the PSUs granted during fiscal 2015 were earned at 108% of target for the fiscal2015-17 performance period.
The Compensation Committee believes that the PSU performance targets in all periodsfor both the Adjusted EPS PSUs and the Relative Return PSUs represent reasonably achievable but challenging goals and are intended to incentivize all participants to maximize their performance for the long-term benefit of our shareholders.
OTHER BENEFITS UNDER OUR EXECUTIVE
| 1 | Note that Adjusted Net Income is a non-GAAP financial measure, is not a measure of operating income, operating performance, or liquidity presented in accordance with U.S. GAAP and is subject to important limitations. For a discussion of Adjusted Net Income and a reconciliation to the most directly comparable U.S. GAAP measure, please see Appendix A to this Proxy Statement, entitled “Non-GAAP Financial Measures,” beginning on page A-1. |
FISCAL 2021-2023 PSU PERFORMANCE
In fiscal 2021, the Compensation Committee granted PSUs representing 50% of the total long-term incentives to executives for the fiscal 2021-23 performance period, awarded one-half as Adjusted EPS PSUs and one-half as Relative Return PSUs. These PSUs issued in respect of the fiscal 2021-23 performance period vested in fiscal 2024 at a performance level of 106% of target for the Adjusted EPS PSUs and 0% of target for the Relative Return PSUs earned by our NEOs.
Fiscal 2021-2023 Performance Targets |
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Relative Return PSUs and Performance Shares
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Adjusted EPS PSUs | $7.69 | 101% | 106% | |||
Relative Return PSUs | 15th Percentile | N/A | 0% | |||
46CATALENT, INC. | 2023 Proxy Statement COMPENSATION PROGRAMDISCUSSION AND ANALYSIS
Other Benefits Under Our Executive Compensation Program
BENEFITS AND PERQUISITES
We provide to all our employees, including our NEOs, broad-based benefits that are intended to attract and retain employees while providing them with retirement and health and welfare security. Broad-based employee benefits available to our NEOs include:
a 401(k) savings plan for U.S. |
medical, dental, vision, life and accident insurance, disability coverage, and health savings, dependent care, and healthcare flexible spending accounts; and
employee assistance program benefits.
Under our 401(k) savings plan and the equivalent U.K. plan, we match a portion of the funds set aside by the employee. In the U.S., we match 50%100% of the first 6%up to 4% of eligible annual compensation contributed, up to federal tax law limits on both eligible compensation that may be considered for contribution and the amount employees may contribute. In the U.K., the plan provides for an employer matching contribution of5-8% 5.5-8% of eligible base salary compensation dependent on the participant contributing3-6% 3.5-6% of eligible base salary compensation. At no cost
Our Employee Stock Purchase Plan is designed to allow our eligible employees to purchase shares of our common stock at designated intervals at a discounted price of 10% through their accumulated payroll deductions or other contributions. Employees who are United States tax residents may benefit from favorable tax treatment as the Employee Stock Purchase Plan is intended to qualify as an employee westock purchase plan under Section 423 of the Code.
We provide basic life and accident insurance coverage valued at two times the employee’s annual base salary.salary at no cost to our employees. The employee may also select supplemental life and accident insurance, for a premium to be paid by the employee.
We also provide our NEOs with limited perquisites and personal benefits that are not generally available to all employees, such as executive relocation assistance.financial counseling services. We provide these limited perquisites and personal benefits in order to further our goal of attracting and retaining our executive talent.talent and to avoid unnecessary personal distractions that may impede maximum personal performance. These benefits and perquisites are reflected in the “All Other Compensation” column of the Summary Compensation Table and the accompanying footnotes in accordance with SEC rules. During 2017,Other than with respect to tax equalization and related tax gross-up payments made in respect of two of our NEOs, Mr. Maselli and Dr. Boerman, who lived and worked, at our request, in a jurisdiction other than his or her primary tax domicile, as described below in note 6(C) to our Fiscal 2023 Summary Compensation Table starting on page 55, during fiscal 2023 we did not “gross up” for the income tax consequences of any benefit or perquisite.
DEFERRED COMPENSATION PLAN
Our NEOs are eligible to participate in our Deferral Plan, which allows participants to receivedeferred compensation programs (collectively, the tax benefits associated with delaying the income tax recognition event on the compensation deferred even though our related deduction is also deferred. Participants manage an account that reflects the cash deferred, any investment gain or loss on that deferral, and any equity award deferred, and may take distributions of amounts up to the total reflected in the account according to timing elections they have made.
The Deferral Plan permits“Deferred Compensation Plan”) permit a broad group of U.S.-basedU.S.- and U.K.-based executives, including all of our U.S.-based NEOs (other than Dr. Boerman), to defer up to 80% of base salary, commissions (not applicable to NEOs), and MIP bonus. In addition, as discussed below, these executives may defer their PSU and RSU grants. We credit the first 6% of cash compensation deferred with a matching contribution equal to 50% of the amount deferred. Participants are immediately vested in all amounts they contribute and the related investment gains, but matching contributions and their related investment gains vest ratably over the participant’s first four years of service.
Participants may choose from a variety of investment options for the cash amounts deferred.
Under the Deferred Compensation Plan, we also credit each participant’s deferral account with notional earnings and/or losses based on the deemed investment of the accounts in one or more of a variety of investment alternatives selected by such participant. Participants may elect from a variety of forms of payout, including lump-sum payment and various types of annual installments, with the timing depending on the form selected.
COMPENSATION DISCUSSION AND ANALYSIS 2023 Proxy Statement | CATALENT, INC.47
In addition, our Deferred Compensation Plan permits U.S. participants to defer unvested incentive compensation grants (other than options) in order to delay recognition of income on these awards upon vesting.
Cash and equity deferrals, company contributions, and applicable gains are held in a “rabbi” trust. “Rabbi” trust assets are ultimately controlled by us. Operating the Deferred Compensation Plan this way permits participants to defer recognition of income for tax purposes on the amounts deferred until they are paid to the participants.
Our U.S.- and U.K.-based directors can also participate in the Deferred Compensation Plan on the same terms as our executives, though they are not provided a matching contribution on their cash deferrals.
We believe that providing the NEOs and other eligible participants with deferred compensation opportunities is a market-based benefit plan necessary for us to deliver competitive benefit packages. Additional details of the DeferralDeferred Compensation Plan follow the table entitled “Fiscal 2017Non-Qualified2023 Nonqualified Deferred Compensation Table,” following this CD&A.
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DEFERRED VESTING OR SETTLEMENT OF PSU AND RSU GRANTS
From time to time, we have agreed, in the course ofarm’s-length bargaining with our executives over the terms and conditions of their employment, to set the terms of a PSU or RSU grant so that settlement of the grant (i.e., delivery of the shares of our common stock underlying the RSU or PSU) occurs at a time after the date of vesting. An effect of post-vesting settlement is to defer until settlement recognition of income for U.S. income tax purposes on the receipt of the underlying shares. Messrs. Chiminski and Walsh have each obtained at least one RSU grant that settled on a date after vesting. As of June 30, 2017, Mr. Chiminski’s September 16, 2011 RSU grant remained vested/unsettled; see footnote 4 to the table entitled “Fiscal 2017 Outstanding Equity-Based Awards AtYear-End Table,” following this CD&A. In addition, the current version of the Deferral Plan permits participants to place unvested PSUs and RSUs into the plan’s rabbi trust in order to delay recognition of income on these awards upon vesting.
SEVERANCE AND PAYMENTS ON A CHANGE OF CONTROL
Our NEOs are eligible for severance benefits in connection with a termination of employment and/or a change of control in certain circumstances. The severanceamounts of such benefits and the conditions for their payment are discussed below, and certain aspects of these benefits are further presenteddescribed in the Fiscal 20172023 Potential Payments upon Employment Termination or Change of Control Tables beginning on page 75.64, including the accompanying notes.
Mr. Chiminski’s Severance, Termination,Compensation Determinations for 2023
We generally review the base salary and Changeother incentive compensation target amounts of Control Benefits
Mr. Chiminski’s employment agreement, executedour executive officers, including our NEOs, annually, consistent with the process for our employees generally. For fiscal 2023, compensation paid to our NEOs consisted of base salary, short-term incentive pay in October 2014the form of participation in the MIP, equity-based, long-term incentive awards subject to multi-year time- and amended in August 2017, thePre-IPO Stock Plan, the Omnibus Plan,performance-vesting criteria, and the related stock option agreements, RSU agreements, PSU agreements, restricted stock agreements,opportunity to participate in certain benefit programs and agreements governing Performance Shares each provideother perquisites.
The Compensation Committee observed at the beginning of fiscal 2022 that executive compensation opportunities were meaningfully low versus peer and market data overall and the Compensation Committee determined to move targeted pay levels over a multi-year period which resulted in larger pay increases than in the past for certain benefits to be paid to him upon termination.
If Mr. Chiminski’s employment terminatesindividuals, particularly in their long-term incentive award grant values. It continued with this strategy when setting fiscal 2023 target pay opportunities in July 2022. Despite the target total direct compensation increases, and due to his disability or death, these agreements provide that he or his estate (ascontinued market movement, Catalent’s fiscal 2023 target total direct compensation levels generally remained below the case may be) would become entitledmarket median (except for two NEOs who were provided one-time promotion awards in fiscal 2023 to (1)recognize their increased responsibilities and incentivize continued performance). In line with the above, the Compensation Committee does not target apro-rata portion of any annual cash bonus he would have earned for the year of termination, based on our actual performance in respect of the full bonus year, to be paid within 2 1⁄2 months of the end of the fiscal year in which termination occurred under the employment agreement, and (2) accelerated vesting of the portion of any unvested time-based option or RSU granted to him under thePre-IPO Stock Plan that would otherwise have vested within 12 months following his termination of employment.
Should Mr. Chiminski’s employment terminate due to death, his beneficiaries will receive a death benefit equal to 1.5 times his base salary (currently $1,537,500) under a group life insurance program we provide that covers all eligible active employees.
Furthermore, if Mr. Chiminski’s employment terminates due to death, his beneficiaries will be entitled to accelerated vesting of all unvested options, RSUs, PSUs, restricted stock, and Performance Shares granted under the Omnibus Plan, and, if he terminates due to disability, all unvested options, RSUs, PSUs, restricted stock and Performance Shares granted under the Omnibus Plan will continue to vest as if Mr. Chiminski had continued employment through each applicable anniversary of the grant date.
Alessandro Maselli | The following determinations reflect Mr. Maselli’s transition to President and Chief Executive Officer in fiscal 2023 • Base Salary: Increased to $925,000 from $654,1831 as President and Chief Operating Officer in fiscal 2022 • MIP: Zero bonus, equal to 0% of target opportunity of $1,018,000, or 0% of salary (target increased from 80% of salary as President and Chief Operating Officer in fiscal 2022) • LTIP: Award with a grant date fair value of $5,500,235 (increased from $1,700,177 as President and Chief Operating Officer in fiscal 2022) | |||
Mr. Chiminski’s employment agreement provides that, upon any termination for good reason or due to Mr. Chiminski’s election not to extend the term, he will be entitled to receive certain accrued amounts and benefits, and apro-rata portion of any annual cash bonus he would have earned for the year of termination based on our actual performance in respect of the full fiscal year in which Mr. Chiminski’s employment terminates.
The employment agreement further provides that, if Mr. Chiminski’s employment is terminated by us without cause, by Mr. Chiminski for good reason, or due to our election not to extend the term, then, subject to his execution, delivery, andnon-revocation of a release of claims in our favor, Mr. Chiminski will be entitled to receive, in addition to certain accrued amounts and benefits, and apro-rata bonus, in the amount set forth in the immediately prior paragraph, an amount equal to two times the sum of (x) Mr. Chiminski’s annualized then-current base salary (which salary, for purposes of calculating severance amounts, will in no event be less than $1,025,000) and (y) his annual target bonus, payable in equal monthly installments over atwo-year period;provided, however, that if such termination occurs within thetwo-year period following a change in control, such payment will instead be made in a singlelump-sum payment within thirty days following the termination date. Notwithstanding the foregoing, our obligation to make such payments will cease in the event of a material breach by Mr. Chiminski of the restrictive covenants contained in the employment agreement (described below), if such breach remains uncured for a period of ten days following written notice of such breach.48CATALENT, INC. | 2023 Proxy Statement COMPENSATION DISCUSSION AND ANALYSIS
In addition to the payments described above, if Mr. Chiminski’s employment is terminated by us without cause, by Mr. Chiminski for good reason, or due to our election not to extend the term, Mr. Chiminski (and his spouse and eligible dependents, to the extent covered prior to such termination) will also be entitled to continued participation in our group health plans for up to two years.
The employment agreement provides that Mr. Chiminski would have good reason to terminate employment if any of the following events occur without his consent: (a) any material diminution in his duties, authorities, or responsibilities, or the assignment to him of duties that are materially inconsistent with, or that significantly impair his ability to perform, his duties as our CEO; (b) any material adverse change in his positions or reporting structures, including ceasing to be our CEO or ceasing to be a member of our Board of Directors; (c) any reduction in his base salary or target annual bonus opportunity (other than a general reduction in base salary or target annual bonus opportunity that affects all members of senior management proportionately); (d) any material failure by us to pay compensation or benefits when due under his employment agreement; (e) any relocation of our principal office or of his principal place of employment to a location more than 50 miles from its current location in Somerset, New Jersey; or (f) any failure by us to obtain the assumption in writing of our obligation to perform his employment agreement by any successor to all or substantially all of our assets. No termination of his employment based on a specified good reason event will be effective as a termination for good reason unless (x) Mr. Chiminski gives notice to us of such event within 90 days after he learns that such event has occurred (or, in the case of any event described in clauses (e) or (f), within 30 days after he learns that such event has occurred), (y) such good
Thomas Castellano | • Base Salary: Increased by $50,000 to $ 550,000 • MIP: Target opportunity of $450,000, or 82% of salary (target increased from 80% of salary in fiscal 2022) (forfeited upon his departure from Catalent) • LTIP: Award with a grant date fair value of $1,250,101 (increased from $600,166 in fiscal 2022 in his prior role); all fiscal 2023 awards were forfeited upon his departure from Catalent | |
Ricky Hopson | • Base Salary: $380,000 • MIP: $139,500 bonus, equal to 45% of target opportunity of $310,000, or 37% of base salary • LTIP: Award with a grant date fair value of $350,182 (increased from $280,160 in fiscal 2022) • Monthly stipend in the amount of $10,000 for April 2023, $20,000 for May 2023 and $20,000 for June 2023 ($50,000 paid in fiscal 2023), for his service as Interim Chief Financial Officer | |
Steven L. Fasman | The following determinations reflect Mr. Fasman’s transition to Executive Vice President and Chief Administrative Officer in fiscal 2023 • Base Salary: Increased to $625,000 from $600,000 as Senior Vice President, General Counsel, and Corporate Secretary in fiscal 2022 • MIP: $135,000 bonus, equal to 27% of target opportunity of $500,000, or 22% of base salary (target increased from 77% of base salary as Senior Vice President, General Counsel, and Corporate Secretary in fiscal 2022) • LTIP: Award with a grant date fair value of $1,500,246 (increased from $1,000,193 in fiscal 2022) | |
Aristippos Gennadios | The following determinations reflect Mr. Gennadios’ transition to Group President, Pharma and Consumer Health in fiscal 2023 • Base Salary: Increased by $100,000 to $600,000 • MIP: $135,000 bonus, equal to 27% of target opportunity of $500,000, 23% of salary (target increased from 80% of salary as President, Softgel & Oral Technologies in fiscal 2022) • LTIP: Award with a grant date fair value of $1,000,197 (increased from $500,207 in fiscal 2022) • Award of RSUs with a grant date fair value of $2,000,097 granted in July 2022 in connection with his promotion and additional responsibilities | |
John Chiminski | The following determinations reflect Mr. Chiminski’s transition to Executive Chair of the Board in fiscal 2023 • Base Salary: Decreased to $700,000 from $1,075,000 as Chair and CEO in fiscal 2022 • MIP: Zero bonus, equal to 0% of target opportunity of $700,000, or 0% of salary (target decreased from 126% of salary as Chair and CEO in fiscal 2022) • LTIP: Award with a grant date fair value of $4,000,069 (decreased from $9,300,340 in fiscal 2022) | |
reason event is not fully cured within 30 days after such notice, and (z) Mr. Chiminski’s employment terminates within 60 days following the end of the cure period.
In the event of any termination of Mr. Chiminski’s employment, other than in the limited circumstances described with respect to a termination for death or disability, without good cause, with good reason, or because ofnon-renewal of the term (each, a “Good Termination”), all unvested RSUs and options granted under thePre-IPO Stock Plan that remained outstanding would be immediately forfeited under these agreements without consideration as of the termination date. In the event of a Good Termination, Mr. Chiminski would retain the opportunity through the expiration of a portion of the grant of options to him in June 2013 to become vested, subject to attaining any specified performance goal, in a portion of the unvested grant equal to a fraction, not greater than one, the numerator of which is the number of days elapsing from the grant date through the termination date and the denominator of which is the number of days elapsing from the grant date through the date of the event that triggers additional option vesting.COMPENSATION DISCUSSION AND ANALYSIS 2023 Proxy Statement | CATALENT, INC.49
For options, RSUs, PSUs, restricted stock, and Performance Shares granted under the Omnibus Plan, if Mr. Chiminski incurred a termination, other than for death, disability, or a change of control that occurs during the period commencing on the date of the consummation of a change of control and ending on the date that is eighteen months following the consummation of such change of control, we could cancel any unvested option, RSU, or PSU and he would forfeit any unvested restricted stock or Performance Shares.
Unless otherwise specifically provided for in the stock option agreement, any options that are not vested and exercisable upon Mr. Chiminski’s termination of employment will be immediately cancelled. Any option that already vested at the time of a Good Termination will remain outstanding and exercisable generally for one year from the termination date or the date on which the option vested, as applicable, although the period is reduced to 90 days in the case of a termination of employment that is not a good termination and vested options will terminate immediately if we terminate Mr. Chiminski’s employment for cause. Any vested option that he does not exercise within the applicable post-termination exercise period will terminate.
Effective August 23, 2017, Mr. Chiminski received Performance Shares in lieu of his fiscal 2017 and fiscal 2018 grants of PSUs, and the agreement governing such Performance Shares provides for severance, termination, and change of control benefits equal to those previously described for his PSUs.
Mr. Walsh’s Severance, Termination, and Change of Control Benefits
Mr. Walsh’s employment agreement, executed in October 2011, thePre-IPO Stock Plan, the Omnibus Plan, and the related stock option agreement, RSU agreements, and PSU agreements each provide for certain benefits to be paid to him upon termination.
The employment agreement provides that, if Mr. Walsh’s employment is terminated by us without cause, due to death or disability, by Mr. Walsh for good reason, or due to our election
Manja Boerman | • Base Salary: Increased by $75,000 to $500,000 • MIP: Zero bonus, equal to 0% of target opportunity of $400,000, or 0% of base salary • LTIP: Award with a grant date fair value of $650,151 (increased from $500,207 in fiscal 2022) • Award of Performance Restricted Stock Units (PRSUs) with a grant date fair value of $2,000,088 in connection with her expanded responsibilities, which would vest from 0-200% of target based upon the achievement against pre-determined revenue of the BioModalities Division during fiscal 2026 (all outstanding unvested equity-based awards, including the PRSUs, will be cancelled based on the existing terms of the awards, in connection with her termination by mutual consent when such negotiations are complete) | |||
not to extend the term, then Mr. Walsh will be entitled to receive, in addition to certain accrued amounts, apro-rated annual cash bonus. In addition, if Mr. Walsh’s employment is terminated by us without cause (other than by reason of death or disability), by Mr. Walsh for good reason, or due to our election not to extend the term, Mr. Walsh will also be entitled to receive an amount equal to twice the sum of (x) Mr. Walsh’s then annualized base salary and (y) his target bonus (75% of his current base salary), payable in equal monthly installments over atwo-year severance period. If his employment terminates due to death, his beneficiaries will receive a death benefit equal to 1.5 times his then-current base salary (currently $1,012,500) under our group life insurance program, which covers all eligible active employees.
In addition to the payments described above, if Mr. Walsh’s employment is terminated by us without cause, by Mr. Walsh for good reason, or due to our election not to extend the term, Mr. Walsh (and his spouse and eligible dependents, to the extent applicable) would also be entitled to continued participation in our group health plans for up to two years (for the final six months of this period, if coverage cannot be continued he will be paid an amount on agrossed-up basis for our cost of such coverage).
As of the end of fiscal 2017, the occurrence of any of the following without his consent would have given Mr. Walsh good reason to terminate employment: (1) any substantial diminution in his position or duties, adverse change in reporting lines, up and down, or the assignment to him of duties that are materially inconsistent with his position, (2) any reduction in his base salary, (3) any failure by us to pay compensation or benefits when due, (4) our failure to provide him with an annual bonus opportunity that is at the same level as established in his offer letter, dated February 29, 2008, or (5) he is required to move his principal business location more than 50 miles. No termination of Mr. Walsh’s employment based on a specified good reason event will be effective as a termination for good reason unless (x) he gives notice to us of such event within thirty (30) days after he learns that such event has occurred, (y) such good reason event is not fully cured within 30 days after such notice, and (z) his employment terminates within 60 days following the end of the cure period.
Mr. Walsh’s agreements also provide that, in the event of any termination of his employment, any unvested RSU or option that remained outstanding would be immediately forfeited without consideration as of the termination date; however, that in the event of a termination of Mr. Walsh’s employment (1) by us without cause, (2) by Mr. Walsh for good reason, (3) due to death or disability or (4) due to our election not to extend the employment term, Mr. Walsh would be deemed vested as of the termination date in any portion of any time-based option that would have otherwise vested if he had remained employed by us through the first anniversary of the termination date.
In the event of a change in control of the company or BHP PTS Holdings L.L.C. (the company through which our principalpre-IPO owner owned its interests in the company), all unvested RSUs granted under thePre-IPO Stock Plan would become fully vested under these agreements as of the change in control. Under the Omnibus Plan, if the employment of Mr. Walsh were to terminate due to death, any unvested option, RSU or PSU would become
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fully vestedOther Compensation Practices and exercisable; however, if his employment were terminated due to disability, any unvested award under the Omnibus Plan would continue to vest as if Mr. Walsh had continued employment through each applicable anniversary of the date of grant.Policies
In the event of a change of control in which the exit options vest, any outstanding unvested performance-based options would also vest. Furthermore, under the Omnibus Plan, in the event of a change in control, to the extent the acquiring or successor entity does assume, continue or substitute for any granted option, if Mr. Walsh were to incur a termination without cause during the period commencing on the date of the consummation of a change in control and ending on the date that is eighteen months following the consummation of such change in control, all unvested options, RSUs, and PSUs would become fully vested and exercisable.
Severance, Termination, and Change of Control Benefits for Messrs. Downie, Fasman, and Littlejohns and Ms. Johnson
Mr. Downie’s, Mr. Fasman’s, Mr. Littlejohns’, and Ms. Johnson’s severance agreements, thePre-IPO Stock Plan, the Omnibus Plan, and the related stock option agreements, RSU agreements, and PSU agreements provide for certain benefits to be paid to each of them if their employment terminates for one of the reasons described below. If the employment of Mr. Downie, Mr. Littlejohns, or Ms. Johnson were to terminate due to death or disability, their agreements would entitle each to accelerated vesting of the portion of any time-based option granted under thePre-IPO Stock Plan that would otherwise have vested within 12 months following a termination of employment (like Messrs. Chiminski and Walsh, they would not be entitled to any similar accelerated vesting for performance options and exit options). Under the Omnibus Plan, if the employment of Mr. Downie, Mr. Fasman, Mr. Littlejohns, or Ms. Johnson were to terminate due to death, any unvested option, RSU, or PSU would become fully vested and exercisable; however, if their employment were to terminate due to disability, any unvested award under the Omnibus Plan would continue to vest as if the NEO had continued employment through each applicable anniversary of the date of grant.
Should Mr. Fasman’s or Mr. Littlejohns’ employment terminate due to death, their respective beneficiaries would receive a death benefit equal to 1.5 times their current base salary (currently $825,000 and $675,000, respectively) under our group life insurance program, which covers all eligible active employees. Should Mr. Downie’s or Ms. Johnson’s employment be terminated due to death, their respective beneficiaries would receive a death benefit equal to 4 times their current base salary (totaling $1,470,996 and $1,482,876, respectively, after converting to U.S. dollars) under our U.K. life assurance plan.
If the employment of Mr. Downie, Mr. Fasman, Mr. Littlejohns, or Ms. Johnson were terminated by us without cause or by the executive for good reason, in each case at the end of fiscal 2017, each would become entitled to a severance payment equal to the sum of annual base salary and target annual bonus, payable in equal installments over theone-year period following the date of termination. Mr. Littlejohns and Mr. Fasman would also be entitled to continued participation in our group health plans (to the extent the executive was receiving such coverage as of the termination date), at the same premium rates as may be charged from time to time for our employees generally, which coverage would be provided until the earlier
of (1) the expiration of one year following the date of termination and (2) the date the executive becomes eligible for coverage under at least one group health plan of any other employer. Each NEO is required to enter into a binding general release of claims as a condition of receiving most severance payments and benefits. Ms. Johnson became eligible to receive severance payments totaling $941,288 upon the termination of her employment on June 30, 2017, comprised of a 2017 MIP payment of $292,530 payable when other MIP payments are made in respect of 2017; $370,719 (her base pay), payable in 12 equal monthly installments; and $278,039 (her target 2018 MIP) payable when other MIP payments are made in respect of 2018 (September 2018). In addition, our Compensation Committee approved the ordinary course vesting of incentive compensation scheduled to vest up to August 27, 2017, which incentive compensation had a fair value of approximately $480,580 as of the date of approval. The total severance paid represented an increase of approximately $773,110 over the amounts payable under Ms. Johnson’s existing severance terms, in recognition of her past service as well as in order to assure a smooth transition. Amounts in pounds sterling were converted to U.S. dollars at an exchange rate of 1.2681, which represents the average monthly rates during fiscal 2017.
Under the stock option agreements entered into in connection with thePre-IPO Stock Plan, if the employment of Mr. Downie, Mr. Littlejohns, or Ms. Johnson were terminated by us without cause or by the NEO for good reason, each would become entitled to receive accelerated vesting of the portion of his time options that would otherwise have vested within 12 months following termination of employment (there is no similar accelerated vesting for performance options and exit options). The occurrence of any of the following without consent would give each of Mr. Downie, Mr. Fasman, Mr. Littlejohns, and Ms. Johnson good reason to terminate employment: (a) there is a substantial diminution in his or her position or duties or an adverse change in his or her reporting lines, (b) he or she is assigned duties that are materially inconsistent with his or her position, (c) his or her base salary is reduced or other earned compensation is not paid when due, (d) our headquarters is relocated by more than 50 miles, or (e) he or she is not provided with the same annual bonus opportunity specified in his offer letter, and, in each case, the breach is not cured within 30 days following our receipt of written notice from him describing the event constituting good reason. Under the stock option, RSU, and PSU agreements entered into in connection with the Omnibus Plan, if the employment of Mr. Downie, Mr. Fasman, Mr. Littlejohns, or Ms. Johnson were terminated by us without cause or by the NEO for good reason, we can cancel unvested awards.
In the event of a change of control in which the exit options vest, any outstanding unvested performance-based option would also vest.
In the event of a change in control of the company or BHP PTS Holdings L.L.C., each of Mr. Downie, Mr. Littlejohns and Ms. Johnson would become entitled to full vesting of any unvested time-based option granted under thePre-IPO Stock Plan. As with Mr. Chiminski, their exit options and performance options would not automatically become fully vested in connection with a change in control; however, the exit options and performance options could become vested in connection with the transaction if the applicable performance targets were
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attained. Furthermore, under the Omnibus Plan, in the event of a change in control, to the extent the acquiring or successor entity does assume, continue or substitute for a granted Option, if the NEO were to incur a termination without cause during the period commencing on the date of the consummation of a change in control and ending on the date that is eighteen months following the consummation of such change in control, the unvested options, RSUs, and PSUs would become fully vested and exercisable.
Effective August 23, 2017, Mr. Fasman received Performance Shares in lieu of his fiscal 2017 and fiscal 2018 grants of PSUs, and the agreement governing such Performance Shares provides for severance, termination, and change of control benefits equal to those previously described for his PSUs.
OTHER COMPENSATION PRACTICES AND POLICIES
EXECUTIVE AGREEMENTS
The following is a description of Mr. Chiminski’s employment agreement, as well as of the provisions of employment agreements and offer letters with our other NEOs, as in effect during fiscal 2017.2023. In addition, our NEOs have entered into agreements with respect to the long-term incentive grants they have received, the terms of which are described elsewhere in this Proxy Statement. Severance agreements and arrangements affecting our NEOs are further described above and in the table entitled the Fiscal 2017“Fiscal 2023 Potential Payments Uponupon Employment Termination or Change of Control Tables including the footnotes,Tables” and accompanying notes, beginning on page 75.64.
Employment Agreement of John ChiminskiEMPLOYMENT AGREEMENT FOR ALESSANDRO MASELLI
On October 22, 2014,January 4, 2022, we entered into an employment agreement with Mr. Chiminski, our CEO,Maselli in connection with his transition to his current position as President and Chief Executive Officer. Effective July 1, 2022, (1) his base salary increased to $925,000, (2) his target cash incentive opportunity under the MIP for fiscal 2023 increased to $1,018,000, and (3) his LTIP grant in respect of fiscal 2023 increased to $5,500,000. The terms also include (a) a one-year employment term commencing July 1, 2022, which superseded his prior agreement. We amended this agreement on August 23, 2017. As amended, his employment agreement providesautomatically extends for a three-year employment term, which commenced on August 23, 2017, which initial term will automatically extend for successiveone-year periods thereafter unless one either party gives notice of the parties provides the other with written notice ofnon-renewal at least sixty60 days prior tobefore the end of the applicable term.
The financial terms of the employment agreement include (1) an annual base salary of $975,000, which increased to an annualized rate of $1,025,000 effective August 23, 2017, subject to discretionary increases from time to time, (2) continuedthen-current term, and (b) participation in our MIP, and (3) continued participation in our LTIP. The employment agreement specified a MIP target annual cash bonus amount for fiscal 2017 equal to $1,500,000 and a maximum of $2,000,000, which bonus was calculated using the same methodology as applies to our other NEOs. Effective August 23, 2017, the target annual cash bonus amount decreased to $1,350,000, with no maximum imposed other than the maximum inherent in the MIP itself. The employment agreement further specified an annual LTIP grant with a target value for fiscal 2017 equal to $3,600,000, which grant was calculated using the same methodology as applies to our other NEOs. Effective August 23, 2017, the annual target value of the grant increased to $5,625,000, and Mr. Chiminski’s amended agreement entitled him to atop-up grant equal to $2,025,000 for fiscal 2018, to recognize that the amendment was executed after he received a grant for fiscal 2018 equal to the prior grant level of $3,600,000. The amended
agreement permits us to grant Performance Shares and Restricted Stock in lieu of PSUs and RSUs, respectively.
Under his agreement, Mr. Chiminski is entitled to participate in all group health, life, disability, and other employee benefit and perquisite plans and programs in which our other senior executives generally participate.
Mr. Maselli is subject to a covenant not to (x) compete with us or solicit the business of any client or prospective client while employed and for one year following his termination of employment for any reason or (y) solicit our employees or consultants while employed and for two years following his termination of employment for any reason, in each case subject to certain specified exclusions. The agreement also contains customary confidential information, assignment of intellectual property rights, and indemnification provisions, as well as the severance terms described below under “Fiscal 2023 Potential Payments upon Employment Termination or Change of Control Tables—Severance and Payments on a Change of Control.”
OFFER LETTER FOR THOMAS CASTELLANO
On May 10, 2021, we provided a letter to Mr. Castellano, with an effective date of June 1, 2021, in connection with his appointment as our senior vice president and chief financial officer. The letter set his base salary and MIP target at $500,000 and $400,000, respectively, and provided that he be recommended to receive an LTIP grant for fiscal 2022 of $600,000. On July 27, 2022, we provided a letter to Mr. Castellano that increased his base pay to $550,000, effective July 21, 2022, increased his MIP target to $450,000, and increased his LTIP target for the fiscal 2023-2025 performance period to $1,250,000 for fiscal 2023.
Mr. Castellano ceased serving as Chief Financial Officer effective April 13, 2023 and separated from the Company effective April 21, 2023. For a description of the severance benefits that Mr. Castellano is entitled to receive in connection with his involuntary termination without cause under his pre-existing severance agreement, please see the discussion below under the heading “Severance and Termination Benefits—Mr. Castellano.”
50CATALENT, INC. | 2023 Proxy Statement COMPENSATION DISCUSSION AND ANALYSIS
OFFER LETTER FOR RICKY HOPSON
On July 1, 2022, we provided a letter to Mr. Hopson in connection with his promotion to President, Division Head for Clinical Development & Supply. The letter set his base salary and MIP target at $380,000 and $310,000, respectively, and provided that he be recommended to receive an LTIP grant for fiscal 2023 of $350,000.
On May 1, 2023, we provided a letter to Mr. Hopson, with an effective date of April 14, 2023, in connection with his appointment as our Interim Chief Financial Officer. The letter provided that he would be entitled to receive an additional cash stipend of $20,000 per month for the duration of his assignment until such time as the Company hired a permanent Chief Financial Officer, and that all other elements of his existing compensation would remain unchanged.
OFFER LETTER FOR STEVEN L. FASMAN
On March 13, 2018, we provided a letter to Mr. Fasman setting forth certain terms of his employment, with immediate effect. The letter set his base salary and MIP target at $550,000 and $412,500, respectively, and provided that he be recommended to receive an LTIP grant for fiscal 2019 of $650,000. We increased Mr. Fasman’s base salary, effective July 2020, to $600,000. On July 7, 2022, we provided an updated letter to Mr. Fasman in connection with his transition to Executive Vice President and Chief Administrative Officer. Effective July 1, 2022, (1) his base salary increased to $625,000, (2) his target cash incentive opportunity under the MIP for fiscal 2023 increased to $500,000, and (3) his LTIP grant in respect of fiscal 2023 increased to $1,500,000. Mr. Fasman left the Company in September 2023 to take another opportunity.
OFFER LETTER FOR ARISTIPPOS GENNADIOS
On March 15, 2018, we provided a letter to Dr. Gennadios setting forth certain terms of his employment, with immediate effect. The letter set his base salary and MIP target at $420,000 and $315,000, respectively, and provided that he be recommended to receive an LTIP grant for fiscal 2019 of $450,000. We increased Dr. Gennadios’s base salary, effective July 2021, to $500,000. On July 7, 2022, we provided an updated letter to Dr. Gennadios in connection with his transition to Group President, Pharma and Consumer Health. Effective July 1, 2022, (1) his base salary increased to $600,000, (2) his target cash incentive opportunity under the MIP for fiscal 2023 increased to $500,000, and (3) his LTIP grant in respect of fiscal 2023 increased to $1,000,000. In addition, Dr. Gennadios received a one-time grant of RSUs vesting three years from the grant date with a grant-date value of $2,000,000.
EMPLOYMENT AGREEMENT OF JOHN CHIMINSKI
As in effect at the beginning of fiscal 2022, Mr. Chiminski’s employment agreement, also providesas amended, provided for reimbursement to Mr. Chiminski, ona three-year employment term commencing August 23, 2017, which automatically extended for successive one-year periods unless either party gave notice of non-renewal at least 60 days before the end of the then-current term. The terms included (1) an annual basis during each calendar yearbase salary of the employment term,$1,075,000, subject to discretionary increases from time to time, (2) continued participation in our MIP, with a minimum annual target amount of $1,350,000, (3) continued participation in our annual LTIP with a minimum annual target grant value of $9,075,000, and (4) participation in all group health, life, disability, and other employee benefit and perquisite plans and programs in which our other senior executives generally participate. He also received annual reimbursements for the reasonable cost of (1) premiums for an executive life insurance policy (not to exceed $15,000) and (2) financial services/planning (not to exceed $15,000). He is also entitled to reimbursement for the reasonable legal feesOn January 4, 2022, we entered into an amended and expenses incurredrestated one-year employment agreement with Mr. Chiminski in connection with negotiatinghis transition to Executive Chair. Effective July 1, 2022, (1) his annual base salary decreased to $700,000, (2) his target cash incentive opportunity under the MIP for fiscal 2023 decreased to $700,000, and documenting the 2017 amendment(3) his LTIP grant in respect of his employment agreement, subjectfiscal 2023 decreased to customary documentation and an aggregate cap of $20,000.
Mr. Chiminski’s employment agreement provides for certain benefits to be paid to him upon termination, as described$4,000,000 (granted entirely in the section above entitled “Other Benefits Under Our Executive Compensation Program—Severance and Payments on a Changeform of Control—Mr. Chiminski’s Severance, Termination, and Change of Control Benefits.”RSUs vesting one year from the grant date).
Pursuant to the terms of the employment agreement, Mr. Chiminski is subject to a covenant not to (x) compete with us or solicit the business of any client or prospective client while employed and for one year following his termination of employment for any reason andor (y) solicit our employees or consultants while employed and for two years following his termination of employment for any reason, in each case subject to certain specified exclusions.
The employment agreement also contains a covenant not to disclosecustomary confidential information, an assignment of intellectual property rights, and customary indemnification provisions.
Certain provisions ofEffective June 30, 2023, Mr. Chiminski retired from the Company. In connection with Mr. Chiminski’s earlier employmentretirement from the Company, all of his then-outstanding equity awards will continue to vest in accordance with the terms of his outstanding award agreements required paymentand he continues to be eligible to receive financial planning reimbursements up to $15,000 (per calendar
COMPENSATION DISCUSSION AND ANALYSIS 2023 Proxy Statement | CATALENT, INC.51
year) for one-year following his departure in accordance with the policy approved by the Compensation Committee for all members of taxgross-ups of specified amounts due under the contracts. All such taxgross-up provisions were removed by mutual agreement in his current employment agreement.Executive Leadership Team following their retirement from the Company.
Employment Agreement of Matthew WalshEMPLOYMENT AGREEMENT AND LONG-TERM ASSIGNMENT LETTER FOR MANJA BOERMAN
On October 11, 2011, we8, 2019, Dr. Boerman entered into an employment agreement with Mr. Walsh, with an effective date of September 26, 2011. The agreement providesCatalent Pharma Solutions GmbH, for an initial term of three years commencing September 26, 2011, which will automatically extend for successiveone-year terms thereafter unless one ofemployment in the parties provides the other with notice ofnon-renewal no later than 60 days priorNetherlands as Region President, Biologics—EU to such anniversary date.
The financial terms of the employment agreement include (1) ancommence on January 2, 2020. Effective June 1, 2020, Dr. Boerman was promoted to President, Cell & Gene Therapy, her annual base salary of $600,000, effective September 2011, subjectincreased to discretionary increases from time$425,000, her MIP target increased to time (it is $675,000 as$340,000, and her LTIP target increased to $500,000 for the fiscal 2021-2023 performance period. She was also granted RSUs valued at $200,000 that would vest 100% on the third anniversary of the date of this Proxy Statement)grant date. Effective July 21, 2022, Dr. Boerman’s base salary increased to $500,000, her MIP target increased to $400,000 for fiscal year 2023, and (2) continued participation in our MIP,her LTIP target for the fiscal 2023-2025 performance period increased to $650,000. In addition, Dr. Boerman received a PRSU incentive grant with a target annual cash bonus amount equal to 75%value of Mr. Walsh’s annual base salary. Mr. Walsh’s agreement also entitles him to participate in all group health, life, disability, and other employee benefit and perquisite plans and programs in which our other senior executives generally participate.
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Mr. Walsh’s employment agreement provides for certain benefits to be paid to him upon termination, as described in the section above entitled “Other Benefits Under Our Executive Compensation Program—Severance and Payments on a Change$2,000,000. The actual number of Control—Mr. Walsh’s Severance, Termination, and Change of Control Benefits.”
Pursuant to the termsPRSUs that would ultimately vest would range from 0-200% of the target number of shares. The vesting of the PRSU grant and distribution of shares under the grant, if any, would be based on revenue targets for fiscal year 2026 and would occur after the Board approves the Company’s audited consolidated financial statements for that fiscal year. If Dr. Boerman’s employment agreement, Mr. Walsh is subject to a covenant not to (x) compete with us while employed and for two years following his terminationwas terminated before the completion of employmentsuch revenue determination for any reason other than death or disability, the PRSUs would cease vesting and (y) solicit our employees, consultants and certain actual and prospective clients while employed and for two years following his termination of employment for any reason, in each case, subject to certain specified exclusions. The employment agreement also contains a covenant not to disclose confidential information and an assignment of intellectual property rights.
Relocation Agreement for William Downie
In connection with Mr. Downie’s repatriation in October 2014, from our corporate offices in the United States to our facility in Swindon, U.K., he entered into a letter agreement dated March 23, 2015 that provides an annual base salary of GBP 278,570 (it is GBP 290,000 as of the date of this Proxy Statement) and continued participation in the MIP with a target of 75% of base salary. Under this letter agreement, Mr. Downie is entitled to participate in employee benefit and perquisite plans and programs in which our other senior executives generally participate. In addition, Mr. Downie is also entitled to participate in our U.K. health benefit plan, continued participation in our U.K. pension plan and the U.K. national insurance contribution program (the U.K. statutory retirement plan), and continuation of his U.K. car allowance, and tax assistance for completing taxes for income earned through the end of his assignment in the U.S.
Offer Letter for Steven Fasman
would be forfeited. On October 6, 2014,10, 2022, we provided Dr. Boerman a long-term international assignment letter to Mr. Fasman, with an effective date of October 14, 2014, setting forth certain terms of his employment. The letter set his initialher long-term assignment from the Netherlands to the United States. Dr. Boerman was provided a car allowance of €24,000 per year, a cost of living differential of $3,455 per month, a lodging stipend of $6,360 net per month, and was enrolled in an international benefit plan. Dr. Boerman’s assignment-related allowances and benefits are consistent with our standard practices and polices applicable, by location, to employees on long-term assignments. Dr. Boerman’s base salary, at $500,000 (it is $550,000MIP and LTIP targets, and other conditions of employment remained unchanged.
Dr. Boerman was removed from her position as President, Division Head for Biomodalities effective as of April 25, 2023, and upon her removal was offered “garden leave” for the dateentirety of this Proxy Statement) and grants participation in our MIP. For eachthe six months’ notice period under her employment agreement. Dr. Boerman continued to receive her salary through the end of 2017 and 2018, his MIP target was set at 75%fiscal 2023 while we continued to negotiate the terms of base salary. The letter also provides that heher separation during her period of garden leave. All outstanding unvested equity-based awards granted to Dr. Boerman, including the PRSUs, will be recommended to receive an LTIP grant equal to 100% of base salary (raised to $650,000 for fiscal 2018).
Offer Letter for Barry Littlejohns
On May 2, 2011, we provided a letter to Mr. Littlejohns, with an effective date of July 1, 2011, setting forth certaincancelled based upon the existing terms of his employment. The letter set his initial base salary at $370,000 (it is $450,000 as of the date of this Proxy Statement) and grants participationawards, in our MIP. For each of 2017 and 2018, his MIP target was set at 75% of base salary. The letter also provides for a grant of 2,500 stock options and a signing bonus of $115,000.
Letter Agreement for Sharon Johnson
In connection with Ms. Johnson’s relocation in June 2013, from our facility in Swindon, U.K., to our corporate offices in the United States, pursuant to a letter agreement dated June 18,
2013, we confirmed the continuation of her home country compensation and benefits and made available to her certain international relocation benefits. These benefits include shipment of household goods, eligibility to participate in our U.S. health and welfare benefits plans, continued participation in our U.K. pension plan and the U.K. national insurance contribution program, payments for housing costs (grossed up for U.S. taxes), and continuation of her U.K. car allowance.
EXECUTIVE STOCK OWNERSHIP GUIDELINES
Our executive stock ownership guidelines for our CEO and certain of our executives, including the other NEOs, set a multiple of each executive’s base salary as the amount of qualifying equity to be acquired and held by each executive. In assessing compliance with the guidelines, we count shares held outright, 50% of the value of unvested restricted stock and RSUs (or Restricted Stock issued in lieu thereof), and 100% of shares held in benefit plans, if any. Shares underlying stock options (vested or unvested) or unearned PSUs do not count toward achievement of the guidelines. Our guidelines by executive level are as follows:
Class of Executive | Multiple of Base Salary | |||||||||||||||||||||||||||||||||||||||||||||
CEO | 5X | |||||||||||||||||||||||||||||||||||||||||||||
Other | 2.5X | |||||||||||||||||||||||||||||||||||||||||||||
If, on the date of any exercise of an option to purchase our common stock or the delivery of our common stock underlying any vested RSU or PSU, an executive has not reached the minimum ownership level under the guidelines, then the executive should retain and not sell that portion of the delivered shares whose market value is equal to at least 50% of theafter-tax market value of all shares delivered on that date. For purposes of complying with this provision of the guidelines, the market value is equal to the average closing price per share of our common stock as reported on the NYSE for all trading days in the last month of the prior fiscal year.
52CATALENT, INC. | 2023 Proxy Statement COMPENSATION DISCUSSION AND ANALYSIS
All of our NEOs have complied with the retention provisions of these guidelines during fiscal 2017.2023 and have remained in compliance through the date of this Proxy Statement.
HEDGING AND PLEDGING
Our SecuritiesInsider Trading Policy prohibits directors and all of our employees, including our executive officers, from hedgingengaging in any transactions that are designed to hedge or monetization transactions involvingoffset any decrease in the market value of our stock,securities, including, but not limited to, through the use of financial instruments such as exchange funds, variable forward contracts, equity swaps, puts, calls, and other derivative instruments, or through the establishment of a short position in our securities. Our SecuritiesThough our Insider Trading Policy limitsallows the pledging by our directors and employees, including our executive officers, of our securities to thosein situations approved by our General Counsel.Counsel, our current policy and practice is that no such pledging is allowed.
RISK ASSESSMENT OF COMPENSATION PRACTICES AND POLICIES
With the assistance of its independent consultant, the Compensation Committee annually reviews our compensation program from a risk perspective. Based on that review, the Compensation Committee believes that our program is not reasonably likely to have a material adverse effect on us and our shareholders. Our compensation program achieves this by striking an appropriate balance between short-term and long-term incentives, using a diversity of metrics to assess performance and payout under our incentive programs, placing caps on our incentive award payout opportunities, and having stock ownership and retention requirements. For example, our current long-term equity incentive program incorporates our financial performance and stock price into its performance measures and generally magnifies the impact of changes in our stock price as well as Relative Return performance.
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REPORT OF THE COMPENSATION COMMITTEE 2023 Proxy Statement | CATALENT, INC.53
Report of the Compensation Committee
The Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis contained in this Proxy Statement. Based on its review and discussions, the Compensation Committee recommended to theour Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement as filed on Schedule 14A with the SEC.
Submitted by the Compensation Committee:
James Quella,Gregory T. Lucier, Chair
Michael J. Martin CarrollBarber
Gregory LucierRolf Classon
Donald E. Morel, Jr.Frank D’Amelio
Stephanie Okey
Date: August 23, 2017December 6, 2023
54CATALENT, INC. | 2023 Proxy Statement EXECUTIVE COMPENSATION TABLES
Executive Compensation Tables
The following tables summarize our NEO compensation:
1.Fiscal 2017 Summary Compensation Table. This table summarizes the compensation earned by or paid to our NEOs for the fiscal years ended June 30, 2017, 2016, and 2015, to the extent applicable, including salary earned, annual incentive plan payments, the aggregate grant date fair value of stock awards and option awards granted to our NEOs, and all other compensation paid to our NEOs.
2.Fiscal 2017 Grants of Plan-Based Awards Table. This table summarizes all grants of plan-based awards made to our NEOs for the fiscal year ended June 30, 2017.
3.Fiscal 2017 Outstanding Equity-Based Awards atYear-End Table. This table summarizes the unvested stock awards and all stock options held by our NEOs as of June 30, 2017.
4.Fiscal 2017 Option Exercises and Stock Vested Table. This table summarizes our NEOs’ option exercises and stock award vesting during the fiscal year ended June 30, 2017.
5.Fiscal 2017Non-Qualified Deferred Compensation Table. This table summarizes the activity during 2017 and account balances under our Deferral Plan as of June 30, 2017, as well as amounts attributable to RSUs that vested prior to fiscal 2017 but where delivery of the underlying shares of common stock was delayed until fiscal 2018. Following the table is a description of our Deferral Plan. For additional discussion of the Deferral Plan, see “Compensation Discussion and Analysis—Other Benefits under Our Executive Compensation Program—Deferred Compensation Plan” elsewhere in this Proxy Statement.
6.Fiscal 2017 Potential Payments Upon Employment Termination or Change of Control Tables. These tables summarize payments, rights, and benefits that would be provided to our NEOs in the event of certain employment terminations or a change of control, assuming such event occurred on June 30, 2017.
Fiscal 2023 Summary Compensation Table PAGE 55 | This table summarizes the compensation earned by or paid to our NEOs for fiscal years 2023, 2022, and 2021, to the extent applicable, including salary and annual incentive plan payments earned, the aggregate grant date fair value of stock awards and option awards granted to our NEOs, and all other compensation paid to our NEOs. | |||||||
Fiscal 2023 Grants of Plan-Based Awards Table PAGE 57 | This table summarizes all grants of plan-based awards made to our NEOs during fiscal 2023. | |||||||
Fiscal 2023 Outstanding Equity PAGE 58 | This table summarizes the unvested stock awards and all stock options held by our NEOs as of June 30, 2023. | |||||||
Fiscal 2023 Option Exercises and Stock Vested Table PAGE 62 | This table summarizes our NEOs’ option exercises and stock award vesting during fiscal 2023. | |||||||
Fiscal 2023 Nonqualified Deferred Compensation Table PAGE 62 | This table summarizes the activity during fiscal 2023 and account balances under our Deferred Compensation Plan as of June 30, 2023. Following the table is a description of our Deferred Compensation Plan. For additional discussion of the Deferred Compensation Plan, see “Compensation Discussion and Analysis—Other Benefits under Our Executive Compensation Program—Deferred Compensation Plan” on page 46 of this Proxy Statement. | |||||||
Fiscal 2023 Potential Payments upon Employment Termination or Change of Control Tables PAGE 64 | These tables summarize payments, rights, and benefits that would be provided to our NEOs in the event of certain employment terminations or a change of control, assuming such event occurred on June 30, 2023. |
EXECUTIVE COMPENSATION TABLETABLES 2023 Proxy Statement | CATALENT, INC.55
Name and Principal position | Year | Salary ($)(4) | Bonus ($)(5) | Stock Awards ($)(6) | Option Awards ($)(7) | Non- Equity Plan sation | All sation | Total ($)(10) | ||||||||||||||||||||||
John Chiminski
Chair, President and Chief Executive Officer |
2017
|
|
975,000
|
|
|
-
|
|
|
2,520,078
|
|
|
1,080,000
|
|
|
1,698,750
|
|
|
52,787
|
|
|
6,326,615
|
| ||||||||
2016
|
|
975,000
|
|
|
-
|
|
|
2,520,060
|
|
|
1,080,003
|
|
|
1,053,750
|
|
|
38,179
|
|
|
5,666,992
|
| |||||||||
2015
|
|
935,921
|
|
|
500,000
|
|
|
1,260,036
|
|
|
540,010
|
|
|
1,635,600
|
|
|
39,828
|
|
|
4,911,394
|
| |||||||||
Matthew Walsh
Executive Vice President and |
2017
|
|
675,000
|
|
|
-
|
|
|
472,538
|
|
|
202,502
|
|
|
580,922
|
|
|
41,462
|
|
|
1,972,424
|
| ||||||||
2016
|
|
661,676
|
|
|
-
|
|
|
455,043
|
|
|
195,003
|
|
|
416,091
|
|
|
20,267
|
|
|
1,748,080
|
| |||||||||
2015
|
|
650,000
|
|
|
200,000
|
|
|
455,016
|
|
|
195,004
|
|
|
570,570
|
|
|
8,925
|
|
|
2,079,515
|
| |||||||||
Barry Littlejohns(1)
President, Drug Delivery Solutions |
2017 |
|
448,571 |
|
|
- |
|
|
308,023 |
|
|
132,003 |
|
|
355,559 |
|
|
22,664 |
|
|
1,266,820 |
| ||||||||
William Downie
Senior Vice President, Sales and Marketing |
2017
|
|
365,333
|
|
|
-
|
|
|
289,558
|
|
|
124,074
|
|
|
306,156
|
|
|
781,171
|
|
|
1,866,292
|
| ||||||||
2016
|
|
413,565
|
|
|
-
|
|
|
307,189
|
|
|
131,627
|
|
|
269,076
|
|
|
251,192
|
|
|
1,372,649
|
| |||||||||
2015
|
|
416,455
|
|
|
-
|
|
|
290,525
|
|
|
124,501
|
|
|
360,119
|
|
|
181,518
|
|
|
1,373,118
|
| |||||||||
Steven Fasman(2)
Senior Vice President, General Counsel and Secretary |
2017
|
|
550,000
|
|
|
-
|
|
|
385,047
|
|
|
165,001
|
|
|
485,719
|
|
|
8,285
|
|
|
1,594,052
|
| ||||||||
2016
|
|
510,275
|
|
|
-
|
|
|
687,246
|
|
|
150,005
|
|
|
355,225
|
|
|
7,615
|
|
|
1,710,366
|
| |||||||||
Sharon Johnson(3)
Senior Vice President, Quality & |
2017
|
|
368,857
|
|
|
-
|
|
|
672,479
|
|
|
231,271
|
|
|
292,530
|
|
|
524,097
|
|
|
2,089,234
|
| ||||||||
2016
|
|
424,622
|
|
|
-
|
|
|
314,247
|
|
|
134,672
|
|
|
232,447
|
|
|
228,374
|
|
|
1,334,362
|
| |||||||||
2015
|
|
401,060
|
|
|
-
|
|
|
272,032
|
|
|
116,579
|
|
|
347,305
|
|
|
345,844
|
|
|
1,482,820
|
| |||||||||
Fiscal 2023 Summary Compensation Table
Name and Principal position(1)
| Year
| Salary
| Bonus
| Stock
| Option
| Non-Equity
| All
| Total ($)(7)
| ||||||||||||||||||||||||
Alessandro Maselli
|
| 2023
|
|
| 925,000
|
|
| -
|
|
| 3,850,216
|
|
| 1,650,019
|
|
| -
|
|
| 158,437
|
|
| 6,583,672
|
| ||||||||
President and Chief Executive Officer
|
| 2022
|
|
| 654,183
|
|
| -
|
|
| 1,190,169
|
|
| 510,008
|
|
| 733,000
|
|
| 146,670
|
|
| 3,234,030
|
| ||||||||
| 2021 | 639,689 | - | 908,287 | 375,022 | 770,144 | 1,866,588 | 4,559,730 | |||||||||||||||||||||||||
Thomas Castellano(8)
|
| 2023
|
|
| 443,654
|
|
| -
|
|
| 875,098
|
|
| 375,003
|
|
| -
|
|
| 1,036,228
|
|
| 2,729,983
|
| ||||||||
Former Senior Vice President and Chief Financial Officer
| 2022 | 500,000 | - | 420,150 | 180,016 | 548,240 | 22,661 | 1,671,067 | ||||||||||||||||||||||||
| 2021 | 372,949 | - | 964,123 | 82,507 | 337,003 | 21,964 | 1,778,546 | |||||||||||||||||||||||||
Ricky Hopson(9)
|
| 2023
|
|
| 380,000
|
|
| -
|
|
| 245,150
|
|
| 105,032
|
|
| 139,500
|
|
| 102,625
|
|
| 972,307
|
| ||||||||
President, Division Head for Clinical Development & Supply and Former Interim Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Steven L. Fasman(10)
|
| 2023
|
|
| 625,000
|
|
| -
|
|
| 1,050,221
|
|
| 450,025
|
|
| 135,000
|
|
| 50,053
|
|
| 2,310,299
|
| ||||||||
Former Executive Vice President & Chief Administrative Officer |
| 2022
|
|
| 600,000
|
|
| -
|
|
| 1,200,253
|
|
| 300,016
|
|
| 644,276
|
|
| 54,978
|
|
| 2,799,523
|
| ||||||||
| 2021 | 591,313 | - | 791,744 | 210,008 | 670,036 | 54,504 | 2,317,605 | |||||||||||||||||||||||||
Aristippos Gennadios(9)
|
| 2023
|
|
| 600,000
|
|
| -
|
|
| 2,700,277
|
|
| 300,017
|
|
| 135,000
|
|
| 64,263
|
|
| 3,799,557
|
| ||||||||
Group President, Pharma and Consumer Health
|
| 2022
|
|
| 485,769
|
|
| -
|
|
| 850,275
|
|
| 150,008
|
|
| 572,240
|
|
| 67,212
|
|
| 2,125,504
|
| ||||||||
John Chiminski
|
| 2023
|
|
| 700,000
|
|
| -
|
|
| 4,000,069
|
|
| -
|
|
| -
|
|
| 107,698
|
|
| 4,807,767
|
| ||||||||
Former Executive Chair
|
| 2022
|
|
| 1,075,000
|
|
| -
|
|
| 6,510,335
|
|
| 2,790,005
|
|
| 1,890,810
|
|
| 141,367
|
|
| 12,407,517
|
| ||||||||
| 2021 | 1,052,569 | - | 6,689,674 | 2,722,522 | 2,000,000 | 116,374 | 12,581,139 | |||||||||||||||||||||||||
Manja Boerman(9) (11)
|
| 2023
|
|
| 511,387
|
|
| -
|
|
| 2,455,217
|
|
| 195,022
|
|
| -
|
|
| 818,262
|
|
| 3,979,888
|
| ||||||||
Former President, Division Head for Biomodalities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
| (1) | As of June 30, 2023. Mr. |
| (2) |
Values reflect the |
| (3) |
| Represents the aggregate grant date fair value of stock awards for fiscal years |
| NEO | Fiscal Year(a) | ASC Topic 718 Value at Maximum ($) | ||||
Mr. Chiminski | 2017 | 3,150,114 | ||||
| 2016 | 3,150,062 | |||||
| 2015 | 1,800,051 | |||||
Mr. Walsh | 2017 | 590,676 | ||||
| 2016 | 568,802 | |||||
| 2015 | 650,010 | |||||
Mr. Littlejohns | 2017 | 385,024 | ||||
| 2016 | (b) | |||||
| 2015 | (b) | |||||
Mr. Downie | 2017 | 361,946 | ||||
| 2016 | 384,000 | |||||
| 2015 | 415,042 | |||||
Mr. Fasman | 2017 | 481,326 | ||||
| 2016 | 437,579 | |||||
| 2015 | (c) | |||||
Ms. Johnson | 2017 | 370,301 | ||||
| 2016 | 392,829 | |||||
| 2015 | 388,592 | |||||
| ASC Topic 718 Value | |||||||||||
Alessandro Maselli | 4,812,785 | |||||||
Thomas Castellano | 1,093,889 | |||||||
Ricky Hopson | 306,425 | |||||||
Steven L. Fasman | 1,312,769 | |||||||
Aristippos Gennadios | 875,206 | |||||||
Manja Boerman | 568,979 |
Relative Return PSUs are subject to market conditions, as opposed to performance conditions, and therefore do not have maximum grant date fair values that differ from the |
The actual value of the PSUs, if any, that ultimately convert to shares of our common stock on the respective vesting dates will depend on (x) our share price on such dates and (y) our performance according to the applicable PSU’s performance criteria.
The amount reported for Mr. Fasman in this column includes aone-time equity award of 15,000 RSUs granted on January 28, 2016 to recognize his leading performance and dedication as our General Counsel.56CATALENT, INC. | 2023 Proxy Statement EXECUTIVE COMPENSATION TABLES
After the end of the fiscal year, the PSUs issued to Messrs. Chiminski and Fasman during fiscal 2017 were cancelled and reissued as Performance Shares with identical performance criteria in order to avoid a deductibility issue under Code § 162(m). There was no incremental fair value compensation charge associated with this change.
For Ms. Johnson, the value reported for stock awards includes a modification value of $376,243 which represents RSUs and PSUs scheduled to vest through August 27, 2017. The modification approved by the Compensation Committee on May 1, 2017 allowed for the awards to remain outstanding past her date of termination.
The amount reported for Dr. Gennadios for fiscal 2023 include RSUs with a grant date fair value of $2,000,097 granted on July 1, 2022 in connection with his promotion to Group President, Pharma and Consumer Health. The amount reported for Mr. Chiminski for fiscal 2023 represents RSUs granted in connection with his role as Executive Chair. The amount reported for Dr. Boerman for fiscal 2023 includes PRSUs with a grant date target value of $2,000,088 granted on July 26, 2022. Under the terms of the award to Dr. Boerman, the actual number of PRSUs that will become payable can range from 0% to a maximum 200% of target ($4,000,176 at maximum), based on the future net revenue achievement of the BioModalities division during fiscal 2026. |
| (4) | Reflects nonqualified stock options |
For Ms. Johnson, the value reported for option awards includes a modification value of $104,337 which represents options scheduled to vest through August 27, 2017. The modification approved by the Compensation Committee on May 1, 2017 allowed for the awards to remain outstanding past her date of termination.
| (5) | Amounts reported reflect the MIP awards earned by |
| (6) | ||||
| The amounts set forth as “All Other Compensation” for fiscal |
Name
| Employer 401(k) Matching Contributions ($)(A) | Employer Non- Qualified Deferred Compensation Matching Contributions ($)(B) | Employer Qualified UK DC Plan Contributions ($)(C) | Relocation/ Ex-Pat Allowances & Benefits ($)(D) | Financial Services Reimbursement ($)(E) | Life Insurance Policy Reimbursement ($)(F) | Total ($) | |||||||||||||||||||||
John Chiminski | 4,050 | 31,613 | - | - | 8,349 | 8,775 | 52,787 | |||||||||||||||||||||
Matthew Walsh | 7,950 | 33,512 | - | - | - | - | 41,462 | |||||||||||||||||||||
Barry Littlejohns | 7,904 | 14,760 | - | - | - | - | 22,664 | |||||||||||||||||||||
William Downie | - | - | 26,775 | 754,396 | - | - | 781,171 | |||||||||||||||||||||
Steven Fasman | 8,285 | - | - | - | - | - | 8,285 | |||||||||||||||||||||
Sharon Johnson | - | - | 25,820 | 498,277 | - | - | 524,097 | |||||||||||||||||||||
| Name | Employer 401(k) Matching Contributions ($)(A) | Employer Non- Qualified | Assignment- Related Allowances & Benefits ($)(C) | Financial Services Reimbursement ($)(D) | Severance Benefits | Other ($)(F) | Total ($) | |||||||||||||||||||||
| Alessandro Maselli | - | - | 139,104 | 19,333 | - | - | 158,437 | |||||||||||||||||||||
| Thomas Castellano | 10,831 | - | - | - | 1,025,397 | - | 1,036,228 | |||||||||||||||||||||
| Ricky Hopson | 12,800 | 23,386 | - | 16,439 | - | 50,000 | 102,625 | |||||||||||||||||||||
| Steven L. Fasman | 12,700 | 18,724 | - | 16,629 | - | 2,000 | 50,053 | |||||||||||||||||||||
| Aristippos Gennadios | 14,200 | 35,063 | - | 15,000 | - | - | 64,263 | |||||||||||||||||||||
| John Chiminski | 10,044 | 78,114 | - | 10,765 | - | 8,775 | 107,698 | |||||||||||||||||||||
| Manja Boerman | - | - | 818,262 | - | - | - | 818,262 | |||||||||||||||||||||
| (A) | Under our 401(k) |
| (B) | Represents company contributions under our |
| (C) | Mr. |
Dr. Boerman received certain benefits, including tax equalization, during fiscal year 2023 in connection with the start of her long-term assignment from the Netherlands to the U.S. in October 2022. Such benefits are consistent with our standard policies and practices applicable, by location, to employees on long-term assignments. The amount reported in this column for Dr. Boerman comprises the following: allowances through April 2023 for housing, car and cost of living in the amounts of $32,778, $20,958, and $21,643, respectively; a $74,219 pension allowance – Dr. Boerman did not participate in |
| (D) | Each of |
As a result of Ms. Johnson’s extensive travel to the U.S., we provided Ms. Johnson with certain tax equalization benefits. The amount reported in this column for Ms. Johnson reflects the following: $17,373 for her UK car and fuel allowance; $500 for tax preparation; an aggregate taxgross-up of $466,146 with respect to tax equalization benefits paid by the company; and $14,258 for holiday pay reflecting accrued untaken Paid Time Off as a result of Ms. Johnson’s termination of employment on June 30, 2017.
Amounts reported in this column were paid in pounds sterling and converted to U.S. dollars using an exchange rate of 1.2681, which represents the average monthly rate during fiscal 2017.
|
| (E) | The amount reported for Mr. Castellano includes a severance benefit in the amount of |
|
| (F) | The amount reported for Mr. Hopson includes an aggregate stipend of $50,000 paid in connection with Mr. Hopson’s services as Interim Chief Financial Officer from April through June 2023. The amount reported for Mr. Fasman represents contributions we made under our Catalent Cares matching gift program. Mr. Chiminski’s employment agreement |
| (7) | We have not included |
| (8) | ||||
The grants awarded to Mr. Castellano in fiscal 2023 were cancelled in accordance with their terms when his employment ended on April 21, 2023. |
FISCAL 2017 GRANTS OF PLAN-BASED AWARDS TABLE
Estimated Possible Payouts Incentive Plan Awards(1) |
Estimated Future Payments under Equity Incentive Plan Awards(2) | All Other (#) | All Other Option Awards: Number of Securities Underlying Options(4) (#) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Option | |||||||||||||||||||||||||||||||||||||||
| Name | Grant Date | Threshold ($) | Target ($) | Max ($) | Threshold (#) | Target (#) | Max (#) | |||||||||||||||||||||||||||||||||||||
John Chiminski | 7/26/2016 | 525,000 | 1,500,000 | 2,000,000 | 18,413 | 36,825 | 73,650 | 29,460 | 151,049 | 24.44 | 2,700,006 | |||||||||||||||||||||||||||||||||
| 7/26/2016 | 17,423 | 34,846 | 52,269 | 25.83 | 900,072 | |||||||||||||||||||||||||||||||||||||||
Matthew Walsh |
| 7/26/2016
|
|
| 177,188
|
|
| 506,250
|
|
| 892,266
|
|
| 3,453
|
|
| 6,905
|
|
| 13,810
|
|
| 5,524
|
|
| 28,322
|
|
| 24.44
|
|
| 506,267
|
| |||||||||||
| 7/26/2016 | 3,267 | 6,534 | 9,801 | 25.83 | 168,773 | |||||||||||||||||||||||||||||||||||||||
Barry Littlejohns |
| 7/26/2016
|
|
| 117,679
|
|
| 336,226
|
|
| 592,598
|
|
| 2,251
|
|
| 4,501
|
|
| 9,002
|
|
| 3,601
|
|
| 18,462
|
|
| 24.44
|
|
| 330,016
|
| |||||||||||
| 7/26/2016 | 2,130 | 4,259 | 6,389 | 25.83 | 110,010 | |||||||||||||||||||||||||||||||||||||||
William Downie |
| 7/26/2016
|
|
| 95,888
|
|
| 273,965
|
|
| 482,864
|
|
| 2,116
|
|
| 4,231
|
|
| 8,462
|
|
| 3,385
|
|
| 17,353
|
|
| 24.44
|
|
| 310,209
|
| |||||||||||
| 7/26/2016 | 2,002 | 4,004 | 6,006 | 25.83 | 103,423 | |||||||||||||||||||||||||||||||||||||||
Steven Fasman | 7/26/2016 | 144,375 | 412,500 | 727,031 | 2,814 | 5,627 | 11,254 | 4,501 | 23,077 | 24.44 | 412,529 | |||||||||||||||||||||||||||||||||
| 7/26/2016 | 2,662 | 5,324 | 7,986 | 25.83 | 137,519 | |||||||||||||||||||||||||||||||||||||||
Sharon Johnson(6) |
| 7/26/2016
|
|
| 96,818
|
|
| 276,623
|
|
| 487,548
|
|
| 2,165
|
|
| 4,329
|
|
| 8,658
|
|
| 3,463
|
|
| 17,753
|
|
| 24.44
|
|
| 317,370
|
| |||||||||||
|
| 7/26/2016
|
|
| 2,048
|
|
| 4,096
|
|
| 6,144
|
|
| 25.83
|
|
| 105,800
|
| |||||||||||||||||||||||||||
| 5/01/2017 | 2,241 | 8,962 | 17,924 | 3,792 | 25,522 | 29.50 | 480,580 | |||||||||||||||||||||||||||||||||||||
| (9) | Mr. Hopson, Dr. Gennadios, and Dr. Boerman did not qualify as NEOs in one or more previous years. Accordingly, disclosure of their compensation for such prior years is not required. |
| (10) | The grants awarded to Mr. Fasman in fiscal 2023 were cancelled in accordance with their terms when his employment ended on September 13, 2023. |
| (11) | All outstanding unvested equity-based awards granted to Dr. Boerman, including the awards granted during fiscal 2023 and shown in the table above, will be cancelled in accordance with their terms upon her termination by mutual consent when such negotiations are complete. |
EXECUTIVE COMPENSATION TABLES 2023 Proxy Statement | CATALENT, INC.57
Fiscal 2023 Grants of Plan-Based Awards Table
Estimated Possible Payouts Incentive Plan Awards(1) |
Estimated Future Payments under Equity Incentive Plan Awards(2) | All Other (#)
| All Other
| Exercise
| Grant Date Option
| |||||||||||||||||||||||||||||||||||||||||||
Name
| Grant
| Threshold
| Target
| Max
| Threshold (#)
| Target
| Max
| |||||||||||||||||||||||||||||||||||||||||
Alessandro Maselli |
|
|
|
| 228,032 |
|
| 1,018,000 |
|
| 2,036,000 |
|
|
|
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
| ||||||||||||
| 7/26/2022 |
|
| - |
|
| - |
|
| - |
|
|
|
|
| - |
|
| - |
|
| - |
|
| - |
|
| 44,427 |
|
| 107.63 |
|
| 1,650,019 |
| |||||||||||||
| 7/26/2022 |
|
| - |
|
| - |
|
| - |
|
|
|
|
| - |
|
| - |
|
| - |
|
| 10,221 |
|
| - |
|
| - |
|
| 1,100,086 |
| |||||||||||||
| 7/26/2022 |
|
| - |
|
| - |
|
| - |
|
|
|
|
| 6,388 |
|
| 12,776 |
|
| 25,552 |
|
| - |
|
| - |
|
| - |
|
| 1,375,081 |
| |||||||||||||
| 7/26/2022 |
|
| - |
|
| - |
|
| - |
|
|
|
|
| 6,948 |
|
| 13,895 |
|
| 20,843 |
|
| - |
|
| - |
|
| - |
|
| 1,375,049 |
| |||||||||||||
Thomas Castellano(6) |
|
|
|
| 100,800 |
|
| 450,000 |
|
| 900,000 |
|
|
|
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
| ||||||||||||
| 7/26/2022 |
|
| - |
|
| - |
|
| - |
|
|
|
|
| - |
|
| - |
|
| - |
|
| - |
|
| 10,097 |
|
| 107.63 |
|
| 375,003 |
| |||||||||||||
| 7/26/2022 |
|
| - |
|
| - |
|
| - |
|
|
|
|
| - |
|
| - |
|
| - |
|
| 2,323 |
|
| - |
|
| - |
|
| 250,024 |
| |||||||||||||
| 7/26/2022 |
|
| - |
|
| - |
|
| - |
|
|
|
|
| 1,452 |
|
| 2,904 |
|
| 5,808 |
|
| - |
|
| - |
|
| - |
|
| 312,558 |
| |||||||||||||
| 7/26/2022 |
|
| - |
|
| - |
|
| - |
|
|
|
|
| 1,579 |
|
| 3,158 |
|
| 4,737 |
|
| - |
|
| - |
|
| - |
|
| 312,516 |
| |||||||||||||
Ricky Hopson |
|
|
|
| 69,440 |
|
| 310,000 |
|
| 620,000 |
|
|
|
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
| ||||||||||||
| 7/26/2022 |
|
| - |
|
| - |
|
| - |
|
|
|
|
| - |
|
| - |
|
| - |
|
| - |
|
| 2,828 |
|
| 107.63 |
|
| 105,032 |
| |||||||||||||
| 7/26/2022 |
|
| - |
|
| - |
|
| - |
|
|
|
|
| - |
|
| - |
|
| - |
|
| 651 |
|
| - |
|
| - |
|
| 70,067 |
| |||||||||||||
| 7/26/2022 |
|
| - |
|
| - |
|
| - |
|
|
|
|
| 407 |
|
| 813 |
|
| 1,626 |
|
| - |
|
| - |
|
| - |
|
| 87,503 |
| |||||||||||||
| 7/26/2022 |
|
| - |
|
| - |
|
| - |
|
|
|
|
| 443 |
|
| 885 |
|
| 1,328 |
|
| - |
|
| - |
|
| - |
|
| 87,580 |
| |||||||||||||
Steven L. Fasman(7) |
|
|
|
| 112,000 |
|
| 500,000 |
|
| 1,000,000 |
|
|
|
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
| ||||||||||||
| 7/26/2022 |
|
| - |
|
| - |
|
| - |
|
|
|
|
| - |
|
| - |
|
| - |
|
| - |
|
| 12,117 |
|
| 107.63 |
|
| 450,025 |
| |||||||||||||
| 7/26/2022 |
|
| - |
|
| - |
|
| - |
|
|
|
|
| - |
|
| - |
|
| - |
|
| 2,788 |
|
| - |
|
| - |
|
| 300,072 |
| |||||||||||||
| 7/26/2022 |
|
| - |
|
| - |
|
| - |
|
|
|
|
| 1,743 |
|
| 3,485 |
|
| 6,970 |
|
| - |
|
| - |
|
| - |
|
| 375,091 |
| |||||||||||||
| 7/26/2022 |
|
| - |
|
| - |
|
| - |
|
|
|
|
| 1,895 |
|
| 3,790 |
|
| 5,685 |
|
| - |
|
| - |
|
| - |
|
| 375,058 |
| |||||||||||||
Aristippos Gennadios |
|
|
|
| 112,000 |
|
| 500,000 |
|
| 1,000,000 |
|
|
|
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
| ||||||||||||
| 7/01/2022 |
|
| - |
|
| - |
|
| - |
|
|
|
|
| - |
|
| - |
|
| - |
|
| 18,689 |
|
| - |
|
| - |
|
| 2,000,097 |
| |||||||||||||
| 7/26/2022 |
|
| - |
|
| - |
|
| - |
|
|
|
|
| - |
|
| - |
|
| - |
|
| - |
|
| 8,078 |
|
| 107.63 |
|
| 300,017 |
| |||||||||||||
| 7/26/2022 |
|
| - |
|
| - |
|
| - |
|
|
|
|
| - |
|
| - |
|
| - |
|
| 1,859 |
|
| - |
|
| - |
|
| 200,084 |
| |||||||||||||
| 7/26/2022 |
|
| - |
|
| - |
|
| - |
|
|
|
|
| 1,162 |
|
| 2,323 |
|
| 4,646 |
|
| - |
|
| - |
|
| - |
|
| 250,024 |
| |||||||||||||
| 7/26/2022 |
|
| - |
|
| - |
|
| - |
|
|
|
|
| 1,264 |
|
| 2,527 |
|
| 3,791 |
|
| - |
|
| - |
|
| - |
|
| 250,072 |
| |||||||||||||
John Chiminski |
|
|
|
| 156,800 |
|
| 700,000 |
|
| 1,400,000 |
|
|
|
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
| ||||||||||||
| 7/26/2022 |
|
| - |
|
| - |
|
| - |
|
|
|
|
| - |
|
| - |
|
| - |
|
| 37,165 |
|
| - |
|
| - |
|
| 4,000,069 |
| |||||||||||||
Manja Boerman(8) |
|
|
|
| 89,600 |
|
| 400,000 |
|
| 800,000 |
|
|
|
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
| ||||||||||||
| 7/26/2022 |
|
| - |
|
| - |
|
| - |
|
|
|
|
| - |
|
| - |
|
| - |
|
| - |
|
| 5,251 |
|
| 107.63 |
|
| 195,022 |
| |||||||||||||
|
| 7/26/2022 |
|
| - |
|
| - |
|
| - |
|
|
|
|
| - |
|
| - |
|
| - |
|
| 1,208 |
|
| - |
|
| - |
|
| 130,017 |
| ||||||||||||
|
| 7/26/2022 |
|
| - |
|
| - |
|
| - |
|
|
|
|
| 755 |
|
| 1,510 |
|
| 3,020 |
|
| - |
|
| - |
|
| - |
|
| 162,521 |
| ||||||||||||
|
| 7/26/2022 |
|
| - |
|
| - |
|
| - |
|
|
|
|
| 822 |
|
| 1,643 |
|
| 2,465 |
|
| - |
|
| - |
|
| - |
|
| 162,591 |
| ||||||||||||
|
|
| 7/26/2022 |
|
| - |
|
| - |
|
| - |
|
|
|
|
| 9,292 |
|
| 18,583 |
|
| 37,166 |
|
| - |
|
| - |
|
| - |
|
| 2,000,088 |
| ||||||||||||
| (1) | For each NEO, represents potential cash payments for fiscal |
| (2) |
|
58CATALENT, INC. | 2023 Proxy Statement EXECUTIVE COMPENSATION TABLES
|
| (3) | Represents RSUs granted to the NEOs during fiscal |
| (4) | Represents |
| (5) | The values of equity-based grants presented in this table were calculated in accordance with FASB ASC Topic 718 using the assumptions discussed in Note |
| (6) | The grants awarded to |
FISCAL 2017 OUTSTANDING EQUITY-BASED AWARDS AT YEAR-END TABLE
| Option Awards(1) | Stock Awards(1) | |||||||||||||||||||||||||||||||||||||||
| Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable(2) | Number of Securities Underlying Unexercised Options (#) Unexercisable(2) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)(2) | Option Exercise Price ($) | Option Expiration Date(3) | Number of Shares or Units of Stock That Have Not Vested (#)(4) | Market Value of Shares or Units of Stocks That Have Not Vested ($)(5) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(6) | Equity Incentive Plan Awards: Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(5) | ||||||||||||||||||||||||||||||
| (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | (k) | ||||||||||||||||||||||||||||||
John Chiminski | 7/26/2016 | - | 151,049 | - | 24.44 | 7/26/2026 | - | - | - | - | ||||||||||||||||||||||||||||||
| 7/26/2016 | - | - | - | - | - | - | - | 36,825 | 1,292,558 | |||||||||||||||||||||||||||||||
| 7/26/2016 | - | - | - | - | - | - | - | 34,846 | 1,223,095 | |||||||||||||||||||||||||||||||
| 7/26/2016 | - | - | - | - | - | 29,460 | 1,034,046 | - | - | |||||||||||||||||||||||||||||||
| 8/27/2015 | 25,093 | 75,279 | - | 31.96 | 8/27/2025 | - | - | - | - | |||||||||||||||||||||||||||||||
| 8/27/2015 | - | - | - | - | - | - | - | 28,161 | 988,451 | |||||||||||||||||||||||||||||||
| 8/27/2015 | - | - | - | - | - | - | - | 23,930 | 839,943 | |||||||||||||||||||||||||||||||
| 8/27/2015 | - | - | - | - | - | 22,529 | 790,768 | - | - | |||||||||||||||||||||||||||||||
| 10/23/2014 | 19,580 | 19,580 | - | 24.26 | 10/23/2024 | - | - | - | - | |||||||||||||||||||||||||||||||
| 10/23/2014 | - | - | - | - | - | - | - | 19,580 | 687,258 | |||||||||||||||||||||||||||||||
| 10/23/2014 | - | - | - | - | - | 7,832 | 274,903 | - | - | |||||||||||||||||||||||||||||||
| 9/3/2014 | - | - | - | - | - | - | - | 19,604 | 688,100 | |||||||||||||||||||||||||||||||
| 7/30/2014 | - | - | - | - | - | 8,293 | 291,084 | - | - | |||||||||||||||||||||||||||||||
| 7/30/2014 | 20,732 | 20,732 | - | 20.50 | 7/30/2024 | - | - | - | - | |||||||||||||||||||||||||||||||
| 6/25/2013 | 140,000 | - | 210,000 | 18.71 | 6/25/2023 | - | - | - | - | |||||||||||||||||||||||||||||||
| 9/16/2011 | - | - | - | - | - | 50,480 | 1,771,848 | - | - | |||||||||||||||||||||||||||||||
| 10/23/2009 | 23,316 | - | - | 10.71 | 10/23/2019 | - | - | - | - | |||||||||||||||||||||||||||||||
| 10/23/2009 | 183,369 | - | - | 10.71 | 10/23/2019 | - | - | - | - | |||||||||||||||||||||||||||||||
Matthew Walsh | 7/26/2016 | - | 28,322 | - | 24.44 | 7/26/2026 | - | - | - | - | ||||||||||||||||||||||||||||||
| 7/26/2016 | - | - | - | - | - | - | - | 6,905 | 242,366 | |||||||||||||||||||||||||||||||
| 7/26/2016 | - | - | - | - | - | - | - | 6,534 | 229,343 | |||||||||||||||||||||||||||||||
| 7/26/2016 | - | - | - | - | - | 5,524 | 193,892 | - | - | |||||||||||||||||||||||||||||||
| 8/27/2015 | 4,530 | 13,593 | - | 31.96 | 8/27/2025 | - | - | - | - | |||||||||||||||||||||||||||||||
| 8/27/2015 | - | - | - | - | - | - | - | 5,085 | 178,484 | |||||||||||||||||||||||||||||||
| 8/27/2015 | - | - | - | - | - | - | - | 4,321 | 151,667 | |||||||||||||||||||||||||||||||
| 8/27/2015 | - | - | - | - | - | 4,068 | 142,787 | - | - | |||||||||||||||||||||||||||||||
| 9/3/2014 | - | - | - | - | - | - | - | 14,991 | 526,184 | |||||||||||||||||||||||||||||||
| 7/30/2014 | - | - | - | - | - | 6,342 | 222,604 | - | - | |||||||||||||||||||||||||||||||
| 7/30/2014 | 15,854 | 15,854 | - | 20.50 | 7/30/2024 | - | - | - | - | |||||||||||||||||||||||||||||||
| 6/25/2013 | - | - | 28,686 | 18.71 | 6/25/2023 | - | - | - | - | |||||||||||||||||||||||||||||||
Barry Littlejohns | 7/26/2016 | - | 18,462 | - | 24.44 | 7/26/2026 | - | - | - | - | ||||||||||||||||||||||||||||||
| 7/26/2016 | - | - | - | - | - | - | - | 4,501 | 157,985 | |||||||||||||||||||||||||||||||
| 7/26/2016 | - | - | - | - | - | - | - | 4,259 | 149,491 | |||||||||||||||||||||||||||||||
| 7/26/2016 | - | - | - | - | - | 3,601 | 126,395 | - | - | |||||||||||||||||||||||||||||||
| 8/27/2015 | 3,067 | 9,201 | - | 31.96 | 8/27/2025 | - | - | - | - | |||||||||||||||||||||||||||||||
| 8/27/2015 | - | - | - | - | - | - | - | 3,442 | 120,814 | |||||||||||||||||||||||||||||||
| 8/27/2015 | - | - | - | - | - | - | - | 2,925 | 102,668 | |||||||||||||||||||||||||||||||
| 8/27/2015 | - | - | - | - | - | 2,754 | 96,665 | - | - | |||||||||||||||||||||||||||||||
| 9/3/2014 | - | - | - | - | - | - | - | 9,572 | 335,977 | |||||||||||||||||||||||||||||||
| 7/30/2014 | - | - | - | - | - | 4,049 | 142,120 | - | - | |||||||||||||||||||||||||||||||
| 7/30/2014 | 10,122 | 10,122 | - | 20.50 | 7/30/2024 | - | - | - | - | |||||||||||||||||||||||||||||||
| 12/11/2012 | 14,000 | 3,500 | - | 18.57 | 12/11/2022 | - | - | - | - | |||||||||||||||||||||||||||||||
| 12/11/2012 | 3,528 | - | 2,352 | 18.57 | 12/11/2022 | - | - | - | - | |||||||||||||||||||||||||||||||
| 12/11/2012 | 6,764 | - | - | 18.57 | 12/11/2022 | - | - | - | - | |||||||||||||||||||||||||||||||
| 9/15/2011 | 87,500 | - | - | 14.86 | 9/15/2021 | - | - | - | - | |||||||||||||||||||||||||||||||
| 9/15/2011 | 23,408 | - | - | 14.86 | 9/15/2021 | - | - | - | - | |||||||||||||||||||||||||||||||
| 9/15/2011 | 33,903 | - | - | 14.86 | 9/15/2021 | - | - | - | - | |||||||||||||||||||||||||||||||
|
| Option Awards(1) | Stock Awards(1) | |||||||||||||||||||||||||||||||||||||||
| Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable(2) | Number of Securities Underlying Unexercised Options (#) Unexercisable(2) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)(2) | Option Exercise Price ($) | Option Expiration Date(3) | Number of Shares or Units of Stock That Have Not Vested (#)(4) | Market Value of Shares or Units of Stocks That Have Not Vested ($)(5) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(6) | Equity Incentive Plan Awards: Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(5) | ||||||||||||||||||||||||||||||
| (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | (k) | ||||||||||||||||||||||||||||||
William Downie | 7/26/2016 | - | 17,353 | - | 24.44 | 7/26/2026 | - | - | - | - | ||||||||||||||||||||||||||||||
| 7/26/2016 | - | - | - | - | - | - | - | 4,231 | 148,508 | |||||||||||||||||||||||||||||||
| 7/26/2016 | - | - | - | - | - | - | - | 4,004 | 140,540 | |||||||||||||||||||||||||||||||
| 7/26/2016 | - | - | - | - | - | 3,385 | 118,814 | - | - | |||||||||||||||||||||||||||||||
| 8/27/2015 | 3,058 | 9,175 | - | 31.96 | 8/27/2025 | - | - | - | - | |||||||||||||||||||||||||||||||
| 8/27/2015 | - | - | - | - | - | - | - | 3,433 | 120,498 | |||||||||||||||||||||||||||||||
| 8/27/2015 | - | - | - | - | - | - | - | 2,917 | 102,387 | |||||||||||||||||||||||||||||||
| 8/27/2015 | - | - | - | - | - | 2,746 | 96,385 | - | - | |||||||||||||||||||||||||||||||
| 9/3/2014 | - | - | - | - | - | - | - | 9,572 | 335,977 | |||||||||||||||||||||||||||||||
| 7/30/2014 | - | - | - | - | - | 4,049 | 142,120 | - | - | |||||||||||||||||||||||||||||||
| 7/30/2014 | - | 10,122 | - | 20.50 | 7/30/2024 | - | - | - | - | |||||||||||||||||||||||||||||||
| 6/25/2013 | - | - | 18,606 | 18.71 | 6/25/2023 | - | - | - | - | |||||||||||||||||||||||||||||||
Steven Fasman | 7/26/2016 | - | 23,077 | - | 24.44 | 7/26/2026 | - | - | - | - | ||||||||||||||||||||||||||||||
| 7/26/2016 | - | - | - | - | - | - | - | 5,627 | 197,508 | |||||||||||||||||||||||||||||||
| 7/26/2016 | - | - | - | - | - | - | - | 5,324 | 186,872 | |||||||||||||||||||||||||||||||
| 7/26/2016 | - | - | - | - | - | 4,501 | 157,985 | - | - | |||||||||||||||||||||||||||||||
| 1/28/2016 | - | - | - | - | - | 15,000 | 526,500 | - | - | |||||||||||||||||||||||||||||||
| 8/27/2015 | 3,485 | 10,456 | - | 31.96 | 8/27/2025 | - | - | - | - | |||||||||||||||||||||||||||||||
| 8/27/2015 | - | - | - | - | - | - | - | 3,912 | 137,311 | |||||||||||||||||||||||||||||||
| 8/27/2015 | - | - | - | - | - | - | - | 3,324 | 116,672 | |||||||||||||||||||||||||||||||
| 8/27/2015 | - | - | - | - | - | 3,129 | 109,828 | - | - | |||||||||||||||||||||||||||||||
| 10/23/2014 | 10,305 | 10,306 | - | 24.26 | 10/23/2024 | - | - | - | - | |||||||||||||||||||||||||||||||
| 10/23/2014 | - | - | - | - | - | - | - | 10,306 | 361,741 | |||||||||||||||||||||||||||||||
| 10/23/2014 | - | - | - | - | - | 4,123 | 144,717 | - | - | |||||||||||||||||||||||||||||||
Sharon Johnson(7) | 7/26/2016 | - | 4,438 | - | 24.44 | 10/24/2017 | - | - | - | - | ||||||||||||||||||||||||||||||
| 8/27/2015 | 3,129 | - | - | 31.96 | 9/28/2017 | - | - | - | ||||||||||||||||||||||||||||||||
| 8/27/2015 | - | 3,129 | - | 31.96 | 11/25/2017 | - | - | - | ||||||||||||||||||||||||||||||||
| 9/3/2014 | - | - | - | - | - | - | - | 8,962 | 314,566 | |||||||||||||||||||||||||||||||
| 7/30/2014 | - | 4,739 | - | 20.50 | 10/28/2017 | - | - | - | - | |||||||||||||||||||||||||||||||
| 7/30/2014 | - | - | - | - | - | 3,792 | 133,099 | - | - | |||||||||||||||||||||||||||||||
| 6/25/2013 | - | - | 11,648 | 18.71 | 11/22/2017 | - | - | - | - | |||||||||||||||||||||||||||||||
| 6/30/2012 | 2,338 | - | - | 18.57 | 9/28/2017 | - | - | - | - | |||||||||||||||||||||||||||||||
| 6/30/2012 | - | - | 1,568 | 18.57 | 11/22/2017 | - | - | - | - | |||||||||||||||||||||||||||||||
The |
| (8) | All outstanding |
Fiscal 2023 Outstanding Equity Awards at Year-End Table
| Option Awards(1) | Stock Awards | |||||||||||||||||||||||||||||||||||||
Name | Grant | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date(2) | Number of Shares or Units of Stock That Have Not Vested (#)(3) | Market Value of Shares or Units of Stock That Have Not Vested ($)(4) | Equity Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(5) | Equity Market or Rights That Have Not ($)(4)(5) | |||||||||||||||||||||||||||||
(a)
| Date
| (b)
| (c)
| (e)
| (f)
| (g)
| (h)
| (i)
| (j)
| |||||||||||||||||||||||||||||
Alessandro Maselli |
| 7/26/2022 |
|
| - |
|
| 44,427 |
|
| 107.63 |
|
| 7/26/2032 |
|
|
| - |
|
| - |
|
| - |
|
| - |
| ||||||||||
|
| 7/26/2022 |
|
| - |
|
| - |
|
| - |
|
| - |
|
|
| 10,221 |
|
| 443,183 |
|
| - |
|
| - |
| ||||||||||
|
| 7/26/2022 |
|
| - |
|
| - |
|
| - |
|
| - |
|
|
| - |
|
| - |
|
| 6,388 |
|
| 276,984 |
| ||||||||||
|
| 7/26/2022 |
|
| - |
|
| - |
|
| - |
|
| - |
|
|
| - |
|
| - |
|
| 6,948 |
|
| 301,265 |
| ||||||||||
|
| 7/26/2021 |
|
| 3,892 |
|
| 11,676 |
|
| 113.00 |
|
| 7/26/2031 |
|
|
| - |
|
| - |
|
| - |
|
| - |
| ||||||||||
|
| 7/26/2021 |
|
| - |
|
| - |
|
| - |
|
| - |
|
|
| 3,009 |
|
| 130,470 |
|
| - |
|
| - |
| ||||||||||
|
| 7/26/2021 |
|
| - |
|
| - |
|
| - |
|
| - |
|
|
| - |
|
| - |
|
| 1,881 |
|
| 81,560 |
| ||||||||||
|
| 7/26/2021 |
|
| - |
|
| - |
|
| - |
|
| - |
|
|
| - |
|
| - |
|
| 1,949 |
|
| 84,509 |
| ||||||||||
|
| 7/30/2020 |
|
| 7,696 |
|
| 7,699 |
|
| 88.10 |
|
| 7/30/2030 |
|
|
| - |
|
| - |
|
| - |
|
| - |
| ||||||||||
|
| 7/30/2020 |
|
| - |
|
| - |
|
| - |
|
| - |
|
|
| 2,838 |
|
| 123,056 |
|
| - |
|
| - |
| ||||||||||
|
| 7/30/2020 |
|
| - |
|
| - |
|
| - |
|
| - |
|
|
| 3,761 |
|
| 163,077 |
|
| - |
|
| - |
| ||||||||||
|
| 7/22/2019 |
|
| 10,299 |
|
| 3,436 |
|
| 54.94 |
|
| 7/22/2029 |
|
|
| - |
|
| - |
|
| - |
|
| - |
| ||||||||||
|
| 7/23/2018 |
|
| 10,523 |
|
| - |
|
| 43.88 |
|
| 7/23/2028 |
|
|
| - |
|
| - |
|
| - |
|
| - |
| ||||||||||
|
| 7/24/2017 |
|
| 10,375 |
|
| - |
|
| 36.02 |
|
| 7/24/2027 |
|
|
| - |
|
| - |
|
| - |
|
| - |
| ||||||||||
|
|
| 9/08/2016 |
|
| 11,093 |
|
| - |
|
| 23.89 |
|
| 9/8/2026 |
|
|
| - |
|
| - |
|
| - |
|
| - |
| ||||||||||
EXECUTIVE COMPENSATION TABLES 2023 Proxy Statement | CATALENT, INC.59
| Option Awards(1) | Stock Awards | |||||||||||||||||||||||||||||||||||||
Name | Grant | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date(2) | Number of Shares or Units of Stock That Have Not Vested (#)(3) | Market Value of Shares or Units of Stock That Have Not Vested ($)(4) | Equity Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(5) | Equity Market or Rights That Have Not ($)(4)(5) | |||||||||||||||||||||||||||||
(a)
| Date
| (b)
| (c)
| (e)
| (f)
| (g)
| (h)
| (i)
| (j)
| |||||||||||||||||||||||||||||
Thomas Castellano(6) |
| 7/26/2021 |
|
| 1,373 |
|
| - |
|
| 113.00 |
|
| 7/26/2031 |
|
|
| - |
|
| - |
|
| - |
|
| - |
| ||||||||||
|
| 7/30/2020 |
|
| 1,692 |
|
| - |
|
| 88.10 |
|
| 7/30/2030 |
|
|
| - |
|
| - |
|
| - |
|
| - |
| ||||||||||
|
| 7/22/2019 |
|
| 2,698 |
|
| - |
|
| 54.94 |
|
| 7/22/2029 |
|
|
| - |
|
| - |
|
| - |
|
| - |
| ||||||||||
|
| 7/23/2018 |
|
| 2,806 |
|
| - |
|
| 43.88 |
|
| 7/23/2028 |
|
|
| - |
|
| - |
|
| - |
|
| - |
| ||||||||||
|
| 7/24/2017 |
|
| 1,730 |
|
| - |
|
| 36.02 |
|
| 7/24/2027 |
|
|
| - |
|
| - |
|
| - |
|
| - |
| ||||||||||
Ricky Hopson |
| 7/26/2022 |
|
| - |
|
| 2,828 |
|
| 107.63 |
|
| 7/26/2032 |
|
|
| - |
|
| - |
|
| - |
|
| - |
| ||||||||||
|
| 7/26/2022 |
|
| - |
|
| - |
|
| - |
|
| - |
|
|
| 651 |
|
| 28,227 |
|
| - |
|
| - |
| ||||||||||
|
| 7/26/2022 |
|
| - |
|
| - |
|
| - |
|
| - |
|
|
| - |
|
| - |
|
| 407 |
|
| 17,648 |
| ||||||||||
|
| 7/26/2022 |
|
| - |
|
| - |
|
| - |
|
| - |
|
|
| - |
|
| - |
|
| 443 |
|
| 19,208 |
| ||||||||||
|
| 7/26/2021 |
|
| 641 |
|
| 1,924 |
|
| 113.00 |
|
| 7/26/2031 |
|
|
| - |
|
| - |
|
| - |
|
| - |
| ||||||||||
|
| 7/26/2021 |
|
| - |
|
| - |
|
| - |
|
| - |
|
|
| 496 |
|
| 21,507 |
|
| - |
|
| - |
| ||||||||||
|
| 7/26/2021 |
|
| - |
|
| - |
|
| - |
|
| - |
|
|
| - |
|
| - |
|
| 310 |
|
| 13,442 |
| ||||||||||
|
| 7/26/2021 |
|
| - |
|
| - |
|
| - |
|
| - |
|
|
| - |
|
| - |
|
| 321 |
|
| 13,919 |
| ||||||||||
|
| 6/01/2021 |
|
| - |
|
| - |
|
| - |
|
| - |
|
|
| 3,432 |
|
| 148,812 |
|
| - |
|
| - |
| ||||||||||
|
| 7/30/2020 |
|
| 1,526 |
|
| 1,529 |
|
| 88.10 |
|
| 7/30/2020 |
|
|
| - |
|
| - |
|
| - |
|
| - |
| ||||||||||
|
| 7/30/2020 |
|
| - |
|
| - |
|
| - |
|
| - |
|
|
| 563 |
|
| 24,412 |
|
| - |
|
| - |
| ||||||||||
|
| 7/30/2020 |
|
| - |
|
| - |
|
| - |
|
| - |
|
|
| 747 |
|
| 32,390 |
|
| - |
|
| - |
| ||||||||||
|
| 7/22/2019 |
|
| 2,432 |
|
| 1,218 |
|
| 54.94 |
|
| 7/22/2029 |
|
|
| - |
|
| - |
|
| - |
|
| - |
| ||||||||||
|
| 7/23/2018 |
|
| 2,622 |
|
| - |
|
| 43.88 |
|
| 7/23/2028 |
|
|
| - |
|
| - |
|
| - |
|
| - |
| ||||||||||
|
| 7/24/2017 |
|
| 1,550 |
|
| - |
|
| 36.02 |
|
| 7/24/2027 |
|
|
| - |
|
| - |
|
| - |
|
| - |
| ||||||||||
Steven L. Fasman(7) |
| 7/26/2022 |
|
| - |
|
| 12,117 |
|
| 107.63 |
|
| 7/26/2032 |
|
|
| - |
|
| - |
|
| - |
|
| - |
| ||||||||||
|
| 7/26/2022 |
|
| - |
|
| - |
|
| - |
|
| - |
|
|
| 2,788 |
|
| 120,888 |
|
| - |
|
| - |
| ||||||||||
|
| 7/26/2022 |
|
| - |
|
| - |
|
| - |
|
| - |
|
|
| - |
|
| - |
|
| 1,743 |
|
| 75,576 |
| ||||||||||
|
| 7/26/2022 |
|
| - |
|
| - |
|
| - |
|
| - |
|
|
| - |
|
| - |
|
| 1,895 |
|
| 82,167 |
| ||||||||||
|
| 1/03/2022 |
|
| - |
|
| - |
|
| - |
|
| - |
|
|
| 4,017 |
|
| 174,177 |
|
| - |
|
| - |
| ||||||||||
|
| 7/26/2021 |
|
| 2,289 |
|
| 6,869 |
|
| 113.00 |
|
| 7/26/2031 |
|
|
| - |
|
| - |
|
| - |
|
| - |
| ||||||||||
|
| 7/26/2021 |
|
| - |
|
| - |
|
| - |
|
| - |
|
|
| 1,770 |
|
| 76,747 |
|
| - |
|
| - |
| ||||||||||
|
| 7/26/2021 |
|
| - |
|
| - |
|
| - |
|
| - |
|
|
| - |
|
| - |
|
| 1,107 |
|
| 48,000 |
| ||||||||||
|
| 7/26/2021 |
|
| - |
|
| - |
|
| - |
|
| - |
|
|
| - |
|
| - |
|
| 1,147 |
|
| 49,734 |
| ||||||||||
|
| 7/30/2020 |
|
| 2,155 |
|
| 4,311 |
|
| 88.10 |
|
| 7/30/2030 |
|
|
| - |
|
| - |
|
| - |
|
| - |
| ||||||||||
|
| 7/30/2020 |
|
| - |
|
| - |
|
| - |
|
| - |
|
|
| 1,590 |
|
| 68,942 |
|
| - |
|
| - |
| ||||||||||
|
| 7/30/2020 |
|
| - |
|
| - |
|
| - |
|
| - |
|
|
| 2,838 |
|
| 123,056 |
|
| - |
|
| - |
| ||||||||||
|
| 7/30/2020 |
|
| - |
|
| - |
|
| - |
|
| - |
|
|
| 2,107 |
|
| 91,360 |
|
| - |
|
| - |
| ||||||||||
|
| 7/22/2019 |
|
| 3,311 |
|
| 3,311 |
|
| 54.94 |
|
| 7/22/2029 |
|
|
| - |
|
| - |
|
| - |
|
| - |
| ||||||||||
|
|
| 7/23/2018 |
|
| 3,802 |
|
| - |
|
| 43.88 |
|
| 7/23/2028 |
|
|
| - |
|
| - |
|
| - |
|
| - |
| ||||||||||
60CATALENT, INC. | 2023 Proxy Statement EXECUTIVE COMPENSATION TABLES
| Option Awards(1) | Stock Awards | |||||||||||||||||||||||||||||||||||||
Name | Grant | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date(2) | Number of Shares or Units of Stock That Have Not Vested (#)(3) | Market Value of Shares or Units of Stock That Have Not Vested ($)(4) | Equity Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(5) | Equity Market or Rights That Have Not ($)(4)(5) | |||||||||||||||||||||||||||||
(a)
| Date
| (b)
| (c)
| (e)
| (f)
| (g)
| (h)
| (i)
| (j)
| |||||||||||||||||||||||||||||
Aristippos Gennadios |
| 7/26/2022 |
|
| - |
|
| 8,078 |
|
| 107.63 |
|
| 7/26/2032 |
|
|
| - |
|
| - |
|
| - |
|
| - |
| ||||||||||
|
| 7/26/2022 |
|
| - |
|
| - |
|
| - |
|
| - |
|
|
| 1,859 |
|
| 80,606 |
|
| - |
|
| - |
| ||||||||||
|
| 7/26/2022 |
|
| - |
|
| - |
|
| - |
|
| - |
|
|
| - |
|
| - |
|
| 1,162 |
|
| 50,384 |
| ||||||||||
|
| 7/26/2022 |
|
| - |
|
| - |
|
| - |
|
| - |
|
|
| - |
|
| - |
|
| 1,264 |
|
| 54,807 |
| ||||||||||
|
| 7/01/2022 |
|
| - |
|
| - |
|
| - |
|
| - |
|
|
| 18,689 |
|
| 810,355 |
|
| - |
|
| - |
| ||||||||||
|
| 1/03/2022 |
|
| - |
|
| - |
|
| - |
|
| - |
|
|
| 4,017 |
|
| 174,177 |
|
| - |
|
| - |
| ||||||||||
|
| 7/26/2021 |
|
| 1,144 |
|
| 3,435 |
|
| 113.00 |
|
| 7/26/2031 |
|
|
| - |
|
| - |
|
| - |
|
| - |
| ||||||||||
|
| 7/26/2021 |
|
| - |
|
| - |
|
| - |
|
| - |
|
|
| 885 |
|
| 38,374 |
|
| - |
|
| - |
| ||||||||||
|
| 7/26/2021 |
|
| - |
|
| - |
|
| - |
|
| - |
|
|
| - |
|
| - |
|
| 554 |
|
| 24,021 |
| ||||||||||
|
| 7/26/2021 |
|
| - |
|
| - |
|
| - |
|
| - |
|
|
| - |
|
| - |
|
| 574 |
|
| 24,889 |
| ||||||||||
|
| 7/30/2020 |
|
| 3,078 |
|
| 3,080 |
|
| 88.10 |
|
| 7/30/2030 |
|
|
| - |
|
| - |
|
| - |
|
| - |
| ||||||||||
|
| 7/30/2020 |
|
| - |
|
| - |
|
| - |
|
| - |
|
|
| 1,136 |
|
| 49,257 |
|
| - |
|
| - |
| ||||||||||
|
| 7/30/2020 |
|
| - |
|
| - |
|
| - |
|
| - |
|
|
| 1,505 |
|
| 65,257 |
|
| - |
|
| - |
| ||||||||||
|
| 7/22/2019 |
|
| 6,621 |
|
| 2,209 |
|
| 54.94 |
|
| 7/22/2029 |
|
|
| - |
|
| - |
|
| - |
|
| - |
| ||||||||||
|
| 7/23/2018 |
|
| 10,523 |
|
| - |
|
| 43.88 |
|
| 7/23/2028 |
|
|
| - |
|
| - |
|
| - |
|
| - |
| ||||||||||
|
| 7/24/2017 |
|
| 3,243 |
|
| - |
|
| 36.02 |
|
| 7/24/2027 |
|
|
| - |
|
| - |
|
| - |
|
| - |
| ||||||||||
John Chiminski |
| 7/26/2022 |
|
| - |
|
| - |
|
| - |
|
| - |
|
|
| 37,165 |
|
| 1,611,474 |
|
| - |
|
| - |
| ||||||||||
|
| 7/26/2021 |
|
| 21,291 |
|
| 63,874 |
|
| 113.00 |
|
| 7/26/2031 |
|
|
| - |
|
| - |
|
| - |
|
| - |
| ||||||||||
|
| 7/26/2021 |
|
| - |
|
| - |
|
| - |
|
| - |
|
|
| 16,461 |
|
| 713,749 |
|
| - |
|
| - |
| ||||||||||
|
| 7/26/2021 |
|
| - |
|
| - |
|
| - |
|
| - |
|
|
| - |
|
| - |
|
| 6,859 |
|
| 297,406 |
| ||||||||||
|
| 7/26/2021 |
|
| - |
|
| - |
|
| - |
|
| - |
|
|
| - |
|
| - |
|
| 7,107 |
|
| 308,160 |
| ||||||||||
|
| 7/30/2020 |
|
| 55,880 |
|
| 55,882 |
|
| 88.10 |
|
| 7/30/2030 |
|
|
| - |
|
| - |
|
| - |
|
| - |
| ||||||||||
|
| 7/30/2020 |
|
| - |
|
| - |
|
| - |
|
| - |
|
|
| 20,602 |
|
| 893,303 |
|
| - |
|
| - |
| ||||||||||
|
| 7/30/2020 |
|
| - |
|
| - |
|
| - |
|
| - |
|
|
| 27,298 |
|
| 1,183,641 |
|
| - |
|
| - |
| ||||||||||
|
| 7/22/2019 |
|
| 64,748 |
|
| 32,375 |
|
| 54.94 |
|
| 7/22/2029 |
|
|
| - |
|
| - |
|
| - |
|
| - |
| ||||||||||
|
|
| 7/23/2018 |
|
| 34,638 |
|
| - |
|
| 43.88 |
|
| 7/23/2028 |
|
|
| - |
|
| - |
|
| - |
|
| - |
| ||||||||||
EXECUTIVE COMPENSATION TABLES 2023 Proxy Statement | CATALENT, INC.61
| Option Awards(1) | Stock Awards | |||||||||||||||||||||||||||||||||||||
Name | Grant | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date(2) | Number of Shares or Units of Stock That Have Not Vested (#)(3) | Market Value of Shares or Units of Stock That Have Not Vested ($)(4) | Equity Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(5) | Equity Market or Rights That Have Not ($)(4)(5) | |||||||||||||||||||||||||||||
(a)
| Date
| (b)
| (c)
| (e)
| (f)
| (g)
| (h)
| (i)
| (j)
| |||||||||||||||||||||||||||||
Manja Boerman(8) |
| 7/26/2022 |
|
| - |
|
| 5,251 |
|
| 107.63 |
|
| 7/26/2032 |
|
|
| - |
|
| - |
|
| - |
|
| - |
| ||||||||||
|
| 7/26/2022 |
|
| - |
|
| - |
|
| - |
|
| - |
|
|
| 1,208 |
|
| 52,379 |
|
| - |
|
| - |
| ||||||||||
|
| 7/26/2022 |
|
| - |
|
| - |
|
| - |
|
| - |
|
|
| - |
|
| - |
|
| 755 |
|
| 32,737 |
| ||||||||||
|
| 7/26/2022 |
|
| - |
|
| - |
|
| - |
|
| - |
|
|
| - |
|
| - |
|
| 822 |
|
| 35,642 |
| ||||||||||
|
| 7/26/2022 |
|
| - |
|
| - |
|
| - |
|
| - |
|
|
| - |
|
| - |
|
| 18,583 |
|
| 805,759 |
| ||||||||||
|
| 1/03/2022 |
|
| - |
|
| - |
|
| - |
|
| - |
|
|
| 4,017 |
|
| 174,177 |
|
| - |
|
| - |
| ||||||||||
|
| 7/26/2021 |
|
| 1,144 |
|
| 3,435 |
|
| 113.00 |
|
| 7/26/2031 |
|
|
| - |
|
| - |
|
| - |
|
| - |
| ||||||||||
|
| 7/26/2021 |
|
| - |
|
| - |
|
| - |
|
| - |
|
|
| 885 |
|
| 38,374 |
|
| - |
|
| - |
| ||||||||||
|
| 7/26/2021 |
|
| - |
|
| - |
|
| - |
|
| - |
|
|
| - |
|
| - |
|
| 554 |
|
| 24,021 |
| ||||||||||
|
| 7/26/2021 |
|
| - |
|
| - |
|
| - |
|
| - |
|
|
| - |
|
| - |
|
| 574 |
|
| 24,889 |
| ||||||||||
|
| 7/30/2020 |
|
| 3,078 |
|
| 3,080 |
|
| 88.10 |
|
| 7/30/2030 |
|
|
| - |
|
| - |
|
| - |
|
| - |
| ||||||||||
|
| 7/30/2020 |
|
| - |
|
| - |
|
| - |
|
| - |
|
|
| 1,136 |
|
| 49,257 |
|
| - |
|
| - |
| ||||||||||
|
| 7/30/2020 |
|
| - |
|
| - |
|
| - |
|
| - |
|
|
| 1,505 |
|
| 65,257 |
|
| - |
|
| - |
| ||||||||||
|
|
| 12/2/2019 |
|
| 6,333 |
|
| 2,112 |
|
| 51.43 |
|
| 12/2/2029 |
|
|
| - |
|
| - |
|
| - |
|
| - |
| ||||||||||
| (1) | Unvested outstanding time-based options are |
| (2) | The expiration |
| (3) | ||||||||
|
| The |
The amounts shown also include PSUs granted on July 30, 2020 that were earned as of the end of the three-year performance period ending on June 30, 2023 and vested on December 8, 2023, the date the Compensation Committee certified the attainment of actual performance levels achieved relative to the pre-determined Adjusted EPS performance targets. No portion of the PSUs granted on July 30, 2020 were earned based on performance relative to pre-determined Relative Return performance targets.
As described in the section of the Proxy Statement entitled “Fiscal 2023 Potential Payments Upon Employment Termination or Change in Control,” all or a portion of the RSUs or PSUs may vest earlier in connection with a change of control of our company or certain terminations of employment.
| (4) | Shares/units are valued based on the |
| (5) | The |
| (6) | Mr. |
| (7) | Mr. Fasman’s employment ended on September |
| (8) | Dr. Boerman was offered “garden leave” for the |
62CATALENT, INC. | 2023 Proxy Statement EXECUTIVE COMPENSATION TABLES
Fiscal 2023 Option Exercises and Stock Vested Table
| Option Awards | Stock Awards | |||||||||||||||||||
| Name | Number of (#) | Value Realized ($) |
| Number of (#)(1) | Value Realized ($)(2) | |||||||||||||||
Alessandro Maselli |
| - |
|
| - |
|
| 13,081 |
|
| 1,355,829 |
| ||||||||
Thomas Castellano |
| - |
|
| - |
|
| 5,141 |
|
| 532,859 |
| ||||||||
Ricky Hopson |
| - |
|
| - |
|
| 6,256 |
|
| 560,623 |
| ||||||||
Steven L. Fasman |
| - |
|
| - |
|
| 17,164 |
|
| 1,797,055 |
| ||||||||
Aristippos Gennadios |
| - |
|
| - |
|
| 8,410 |
|
| 871,687 |
| ||||||||
John Chiminski |
| - |
|
| - |
|
| 123,302 |
|
| 12,780,095 |
| ||||||||
Manja Boerman |
| - |
|
| - |
|
| 11,136 |
|
| 912,408 |
| ||||||||
| (1) | Represents the vesting during fiscal 2023 of RSU and |
| (2) |
FISCAL 2017 OPTION EXERCISES AND STOCK VESTED TABLE
| Option Awards | Stock Awards | |||||||||||||||||||
| Name | Number of (#) | Value Realized ($)(1) | Number of (#) | Value Realized ($) | ||||||||||||||||
John Chiminski | 206,684 | 3,676,020 | - | - | ||||||||||||||||
Matthew Walsh | 74,651 | 1,878,488 | - | - | ||||||||||||||||
Barry Littlejohns | - | - | - | - | ||||||||||||||||
William Downie | 58,103 | 891,922 | - | - | ||||||||||||||||
Steven Fasman | - | - | - | - | ||||||||||||||||
Sharon Johnson | 70,716 | 1,002,878 | - | - | ||||||||||||||||
Value realized |
Fiscal 2023 Nonqualified Deferred Compensation Table
| Name | Executive Contributions in Last FY ($)(1) | Registrant Contributions in Last FY ($)(2) | Aggregate Earnings in Last FY ($)(3) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at Last FYE ($)(4) | |||||||||||||||
| Alessandro Maselli(5) | - | - | - | - | - | |||||||||||||||
| Thomas Castellano | - | - | - | - | - | |||||||||||||||
| Ricky Hopson | 123,700 | 23,386 | 60,360 | - | 593,774 | |||||||||||||||
| Steven L. Fasman | 37,448 | 18,724 | 28,532 | - | 327,706 | |||||||||||||||
| Aristippos Gennadios | 70,127 | 35,063 | 151,802 | - | 1,271,889 | |||||||||||||||
| John Chiminski | 911,327 | 78,114 | 731,608 | - | 7,999,846 | |||||||||||||||
| Manja Boerman | - | - | - | - | - | |||||||||||||||
| (1) | Represents (a) salary deferrals during fiscal 2023, included in the amounts reported, |
| Name | Fiscal 2022 Bonus ($) | Fiscal 2023 Salary Deferral ($) |
| |||||||||
| Alessandro Maselli | - | - | ||||||||||
| Thomas Castellano | - | - | ||||||||||
| Ricky Hopson | 80,114 | 43,586 | ||||||||||
| Steven L. Fasman | - | 37,448 | ||||||||||
| Aristippos Gennadios | 34,334 | 35,793 | ||||||||||
| John Chiminski | 661,784 | 249,543 | ||||||||||
| Manja Boerman | - | - | ||||||||||
EXECUTIVE COMPENSATION TABLES 2023 Proxy Statement | CATALENT, INC.63
| (2) | ||||||||
|
FISCAL 2017NON-QUALIFIED DEFERRED COMPENSATION TABLE
| Name | Executive Contributions in Last FY ($)(1) | Registrant Contributions in Last FY ($)(2) | Aggregate Earnings in Last FY ($)(3) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at Last FYE ($)(4) | |||||||||||||||
John Chiminski | ||||||||||||||||||||
| Deferred Compensation | 316,125 | 31,613 | 259,965 | - | 2,131,135 | |||||||||||||||
Vested but Undelivered | - | - | 611,313 | - | 1,771,848 | |||||||||||||||
| Total | 316,125 | 31,613 | 871,278 | - | 3,902,983 | |||||||||||||||
Matthew Walsh | ||||||||||||||||||||
| Deferred Compensation | 101,061 | 33,512 | 102,643 | - | 1,144,172 | |||||||||||||||
Barry Littlejohns | ||||||||||||||||||||
| Deferred Compensation | 39,136 | 14,760 | 8,822 | - | 90,179 | |||||||||||||||
William Downie | ||||||||||||||||||||
| Deferred Compensation | - | - | - | - | - | |||||||||||||||
Steven Fasman | ||||||||||||||||||||
| Deferred Compensation | - | - | - | - | - | |||||||||||||||
Sharon Johnson | ||||||||||||||||||||
| Deferred Compensation | - | - | - | - | - | |||||||||||||||
| The amounts reported |
| (3) | The amounts reported in this column are not |
| (4) | Includes |
| (5) | ||||
Messrs. Maselli and Castellano did not participate in the Deferred Compensation Plan during fiscal 2023. Dr. Boerman was ineligible to participate in our U.S.-based plan as she was an expatriate employee during fiscal 2023. |
DEFERRED COMPENSATION
We provide certain of our U.S.-basedU.S.- and U.K.-based executives, including our U.S.-basedU.S.- and U.K.-based NEOs, with the opportunity to participate in the DeferralDeferred Compensation Plan, which allows participating executives to defer receipt of a portion of their compensation. Deferrals occur and may be invested notionally on apre-tax basis, in addition to the amounts that the executive is allowed to contribute to ourtax-qualified 401(k) plan. and U.K. pension plans.
The DeferralDeferred Compensation Plan permits a broad group of U.S.-based executives, including our U.S.-based NEOs,participants may elect to defer up to 80% of base salary, commissions (not applicable to NEOs), and MIP bonus. In addition, theseU.S.-based executives may elect to defer their PSU and RSU grants. We credit the first 6% of cash compensation deferred with a matching contribution equal to 50% of the amount deferred. Participants are immediately vested in all amounts they contribute and the related investment gains, but matching contributions and their related investment gains vest ratably over the participant’s first four years of service.service to the Company. Participants in the Deferred Compensation Plan may elect from a variety of payout options under the plan, including lump-sum or installment payments, with the timing depending on the form selected at the time of the deferral election.
Under the DeferralDeferred Compensation Plan, we also credit each participant’s deferral account with notional earnings and/or losses based on the deemed investment of the accounts in one or more of a variety of investment alternatives we make available from time to time. Participants selectunder the investment alternatives in which they wanted their accounts to be deemed to be invested and are credited with earnings and/or losses based on the performance of the relevant investments.plan. Participants are able to change themake changes to their investment elections for their accounts on a daily basis.
Newport Group serves as the plan administrator of our Deferral Plan. Participants in the Deferral Plan may elect from a variety of forms of payout under the plan, includinglump-sum payment and various types of annual installments, with the timing depending on the form selected.
The accounts of U.S.-based participants in the prior version of the DeferralDeferred Compensation Plan that are paid out in alump-sum cash payment are paid on the 15th day of the month immediately following the month that includes thesix-month anniversary of the participant’s separation from our service (other than due to death) (“separation” as defined by Section 409A of the Internal Revenue Code). In the event of the death of a participant prior to the commencement of the distribution of benefits under the plan, such benefits will be paid no later than the later of (x) December 31 of the year in which the participant’s death occurs and (y) the 90th day following the date of the participant’s death. The accounts for U.K.-based participants are paid in a lump sum cash payment in the next available paycheck following the elected distribution date.
A U.S.-based participant in the prior version of the DeferralDeferred Compensation Plan may also elect to receive a payout in annual installments over a period of 5five or 10ten years after the participant’s separation from service (including death), although, notwithstanding any such election, the participant’s account will be paid in alump-sum cash payment in connection with a participant’s separation
|
from service within two years following a change of control. The DeferralDeferred Compensation Plan also permits participants to receive a distribution in connection with an unforeseeable emergency, in accordance with the requirements of Section 409A of the Internal Revenue Code. A U.K.-based participant receives a lump sum payout of all outstanding cash deferrals six months after the participant’s separation from service.
Cash and equity deferrals, companyemployer contributions, and applicable gains are held in a “rabbi”“rabbi trust. “Rabbi”” Rabbi trust assets are ultimately controlled by us. Operating the Deferral Plan this way permitsus, permitting participants to defer recognition of income for tax purposes on the amounts deferred until they are paid toin accordance with their elections.
Our U.S.- and U.K.-based directors can also participate in the participants.Deferred Compensation Plan by deferring receipt of their cash retainers, though they are not provided a matching contribution.
64CATALENT, INC. | 2023 Proxy Statement EXECUTIVE COMPENSATION TABLES
FISCAL 2017 POTENTIAL PAYMENTS UPON EMPLOYMENT TERMINATION OR CHANGE OF CONTROL TABLES
Fiscal 2023 Potential Payments Uponupon Employment Termination
or Change of Control - JohnTables
Except in the case of Messrs. Castellano and Chiminski, the tables below set out what the specified NEOs would have received assuming a termination of employment effective as of June 30, 2023. With respect to Mr. Castellano, the table below sets out the actual payments that Mr. Castellano was contractually entitled to receive, which includes a severance payment equal to the sum of his annual base salary and target annual bonus, payment for any unused paid-time-off days accrued in fiscal 2023, and the right to exercise all vested stock options within 90 days of his departure, in each case, as a result of his termination without “cause” effective April 21, 2023. With respect to Mr. Chiminski, all of his outstanding equity awards will continue to vest and he continues to be eligible to receive financial planning reimbursements for one-year following his departure as a result of his retirement on June 30, 2023 in accordance with the policy approved by the Compensation Committee for all members of the Executive Leadership Team following their retirement from the Company.
ALESSANDRO MASELLI (CEO)
| Triggering Event | Value of Option/RSU/PSU Acceleration ($)(1) | Value of Base Salary and Target Bonus Payment ($)(2) | Value of Continued Benefits Participation ($)(3) | Total ($) | ||||||||||||
Death | 10,471,699 | - | - | 10,471,699 | ||||||||||||
Termination by Us Without Cause or By Mr. Chiminski for Good Reason | - | 4,950,000 | 24,856 | 4,974,856 | ||||||||||||
Change of Control (assuming awards are not assumed, continued, or substituted) | 5,213,748 | - | - | 5,213,748 | ||||||||||||
Termination by Us Without Cause Within 18 Months Following a Change of Control (assuming awards have been assumed, continued, or substituted) | 15,685,447 | 4,950,000 | 24,856 | 20,660,303 | ||||||||||||
| Triggering Event | Value of Option/RSU/PSU/ Restricted Stock/ Performance Share Acceleration ($)(1) | Value of Base Salary and Bonus Payments | Value of Continued Benefits Participation ($)(3) | Total ($) | ||||||||||||
Death or Disability(4) |
| 2,472,214
|
|
| 1,018,000
|
|
| -
|
|
| 3,490,214
|
| ||||
Termination by Us Without Cause or By Mr. Maselli for Good Reason |
| -
|
|
| 4,904,000
|
|
| 36,670
|
|
| 4,940,670
|
| ||||
Termination by Us Without Cause Within 2 Years Following a Change of Control (assuming awards have been assumed, continued, or substituted)
|
| 1,604,103
|
|
| 4,904,000
|
|
| 36,670
|
|
| 6,544,773
|
| ||||
Termination by Us For Cause or By Mr. Maselli without Good Reason
|
| -
|
|
| -
|
|
| -
|
|
| -
|
| ||||
| (1) | Amounts reported for a termination by us without cause within 18 months following a change of control (assuming awards have been assumed, continued, or substituted) |
The amount reported for Mr. Maselli for (i) termination by us without cause within 18 months following a change of control (assuming awards have been assumed, continued, or substituted), take into account future performance as disclosed in the “Fiscal 2023 Outstanding Equity Awards at Year-End” and accompanying footnote in this Proxy Statement; however, the number of Relative Return PSUs that vest in connection with a change of control may vary based on when a change of control occurs during a performance period. |
Distribution of shares underlying PSUs are accelerated upon termination due to death. In the event Mr. Maselli meets the requirements of disability under the terms of the PSU awards, the shares underlying the PSUs remain subject to adjustment and will be distributed following the end of each relevant performance period based on final performance measured against the relevant pre-determined metrics for each award. The amounts shown above in the “Option/RSU/PSU/Restricted Stock/Performance Shares Acceleration” column in the event of termination due to death or disability assume that the PSUs vest at target. The amount would equal $1,604,103 when taking into account assumptions for future performance as disclosed in the “Fiscal 2023 Outstanding Equity Awards at Year-End” and accompanying footnote in this Proxy Statement. |
| (2) | Upon termination due to death or disability, Mr. Maselli or his estate is entitled to receive a pro-rata portion of the annual bonus that he would have been entitled to for the bonus year in which the termination occurs, based on our actual performance (the “Annual Bonus”). The amount reported above for death or disability represents his target annual bonus for fiscal 2023 and assumes (a) he would have served for the entire year and (b) on-target business and individual performance results. The amounts reported for Termination by Us Without Cause or By Mr. Maselli for Good Reason and Termination by Us Without Cause Within 2 Years Following a Change of Control (assuming awards have been assumed, continued, or substituted) are comprised of (a) the Annual Bonus plus (b) two (2) times the sum of |
|
| (3) | The amount reported represents income attributable to the health care premiums paid by us with respect to Mr. |
Potential Payments Upon Termination
or Change of Control - Matthew Walsh
(CFO)
| Triggering Event | Value of Option/RSU/PSU Acceleration ($)(1) | Value of Base Salary and Target Bonus Payment ($)(2) | Value of Continued Benefits Participation ($)(3) | Total ($) | ||||||||||||
Death | 2,463,390 | - | - | 2,463,390 | ||||||||||||
Termination by Us Without Cause or By Mr. Walsh for Good Reason | - | 2,362,500 | 28,421 | 2,390,921 | ||||||||||||
Change in Control | 470,164 | - | - | 470,164 | ||||||||||||
Termination Without Cause Within 18 Months Following a Change of Control (assuming awards have been assumed, continued, or substituted) | 2,933,553 | 2,362,500 | 28,421 | 5,324,474 | ||||||||||||
| (4) | Receipt of shares in the event of disability occurs when the relevant vesting period for each grant ends rather than being accelerated to the date of disability. |
EXECUTIVE COMPENSATION TABLES 2023 Proxy Statement | CATALENT, INC.65
MESSRS. HOPSON, FASMAN, CASTELLANO, CHIMINSKI AND DRS. GENNADIOS AND BOERMAN
Triggering Event | Value of Option/RSU/PSU/ Restricted Stock/ Performance Shares Acceleration(1) | Value of Base Salary and Target Bonus Payment(2) | Value of Continued Benefits Participation/ | Total ($) | ||||||||||||
Death or Disability(4)
| ||||||||||||||||
Ricky Hopson
|
| 408,278 |
|
| 690,000 |
|
| 18,204 |
|
| 1,116,482 |
| ||||
Steven L. Fasman
|
| 1,235,370 |
|
| 1,125,000 |
|
| 12,762 |
|
| 2,373,132 |
| ||||
Aristippos Gennadios
|
| 1,575,572 |
|
| 1,100,000 |
|
| 6,155 |
|
| 2,681,727 |
| ||||
Termination by Us Without Cause or By the Executive Officer for Good Reason
| ||||||||||||||||
Ricky Hopson
|
| - |
|
| 690,000 |
|
| 18,204 |
|
| 708,204 |
| ||||
Steven L. Fasman
|
| - |
|
| 1,125,000 |
|
| 12,762 |
|
| 1,137,762 |
| ||||
Thomas Castellano
|
| - |
|
| 1,000,012 |
|
| 25,385 |
|
| 1,025,397 |
| ||||
Aristippos Gennadios
|
| - |
|
| 1,100,000 |
|
| 6,155 |
|
| 1,106,155 |
| ||||
Manja Boerman(6)
|
| - |
|
| 900,000 |
|
| 35,083 |
|
| 935,083 |
| ||||
Termination by Us Without Cause Within 18 Months Following a Change of Control
| ||||||||||||||||
Ricky Hopson
|
| 319,563 |
|
| 690,000 |
|
| 18,204 |
|
| 1,027,767 |
| ||||
Steven L. Fasman
|
| 910,647 |
|
| 1,125,000 |
|
| 12,762 |
|
| 2,048,409 |
| ||||
Aristippos Gennadios
|
| 1,372,127 |
|
| 1,100,000 |
|
| 6,155 |
|
| 2,478,282 |
| ||||
Retirement(5)
| ||||||||||||||||
Steven L. Fasman(7)
|
| 475,703
|
|
| -
|
|
| -
|
|
| 475,703
|
| ||||
Aristippos Gennadios
|
| 301,222
|
|
| -
|
|
| -
|
|
| 301,222
|
| ||||
John Chiminski
|
| 5,007,733
|
|
| -
|
|
| -
|
|
| 5,007,733
|
| ||||
| (1) | For Mr. Hopson, the amounts |
Potential Payments upon Termination or
Change of Control – Messrs. Downie,
Fasman, Littlejohns and Ms. Johnson
| Triggering Event | Value of Option/RSU/PSU Acceleration(1) | Value of Base Salary and Target Bonus Payment(2) | Value of Continued Benefits Participation(3) | Total ($) | ||||||||||||
Death | ||||||||||||||||
William Downie | 1,566,802 | - | - | 1,566,802 | ||||||||||||
Steven Fasman | 2,329,684 | - | - | 2,329,684 | ||||||||||||
Barry Littlejohns | 1,663,448 | - | - | 1,663,448 | ||||||||||||
Termination by Us Without Cause or By the Executive Officer for Good Reason | ||||||||||||||||
William Downie | - | 643,561 | 643,561 | |||||||||||||
Steven Fasman | - | 962,500 | 12,428 | 974,928 | ||||||||||||
Barry Littlejohns | 57,855 | 787,500 | 11,991 | 857,346 | ||||||||||||
Sharon Johnson | - | 941,288 | - | 941,288 | ||||||||||||
Change of Control | ||||||||||||||||
William Downie | 304,952 | - | - | 304,952 | ||||||||||||
Steven Fasman | - | - | - | - | ||||||||||||
Barry Littlejohns | 57,855 | - | - | 57,855 | ||||||||||||
Termination by Us Without Cause Within 18 Months Following a Change of Control | ||||||||||||||||
William Downie | 1,871,755 | 643,561 | - | 2,515,316 | ||||||||||||
Steven Fasman | 2,329,684 | 962,500 | 12,428 | 3,304,612 | ||||||||||||
Barry Littlejohns | 1,663,448 | 787,500 | 11,991 | 2,462,939 | ||||||||||||
For Mr. Downie, the amount reported for death reflects (a) the “spread” value of $10.66 per share for the 17,353 options granted on July 26, 2016, $3.14 per share for the 9,175 options granted on August 27, 2015 and $14.60 per share for the 10,122 options granted on July 30, 2014, representing the difference between the $35.10 closing price per share of our common stock on June 30, 2017, as reported on the NYSE, and the exercise price of the option and (b) 3,385 RSUs and 8,235 PSUs granted on July 26, 2016, 2,746 RSUs and 6,350 PSUs granted on August 27, 2015, 4,049 RSUs granted on July 30, 2014 and 9,572 PSUs granted on September 3, 2014, the value of which is calculated based on the $35.10 closing price per share of our common stock on June 30, 2017, as reported on the NYSE. The amount reported for change of control reflects the “spread” value of $16.39 per share for the 18,606 performance-based options, representing the difference between the $35.10 closing price per share of our common stock on June 30, 2017, as reported on the NYSE, and the exercise price of the option. The amount reported for a termination by us without cause within 18 months following a change of control (assuming awards have been assumed, continued, or substituted) represents (a) the “spread” value of $10.66 per share for the 17,353 options granted on July 26, 2016, $3.14 per share for the 9,175 options granted on August 27, 2015, $14.60 per share for the 10,122 options granted on July 30, 2014, $16.39 per share for the 18,606 performance-based options, representing the difference between the $35.10 closing price per share of our common stock on June 30, 2017, as reported on the NYSE, and the exercise price of the option and (b) 3,385 RSUs and 8,235 PSUs granted on July 26, 2016, 2,746 RSUs
|
and 6,350 PSUs granted on August 27, 2015, 4,049 RSUs granted on July 30, 2014 and 9,572 PSUs granted on September 3, 2014, the value of which is calculated based on the $35.10 closing price per share of our common stock on June 30, 2017, as reported on the NYSE.
For Mr. Fasman, the amounts reported for death and for a termination by us without cause within 18 months following a change of control (assuming awards have been assumed, continued, or substituted) reflects (a) the “spread” value of $10.66$0 per share for the 23,07712,117 options (same in the case of death and retirement) granted on July 26, 2016, $3.142022 (award is underwater as of June 30, 2023 and has no value), $0 per share for the 10,4566,869 options (same in the case of death and retirement) granted on August 27, 2015July 26, 2021 (award is underwater as of June 30, 2023 and $10.84has no value), $0 per share for the 10,3064,311 options (same in the case of death and retirement) granted on October 23, 2014,July 30, 2020 (award is underwater as of June 30, 2023 and has no value), and $0 per share for the 3,311 options (same in the case of death and retirement) granted on July 22, 2019 (award is underwater as of June 30, 2023 and has no value), representing the difference between the $35.10 closing price per share of our common stock on June 30, 2017, as reported on the NYSE,Fiscal 2023 Closing Price and the exercise price of the option, and (b) 4,5012,788 RSUs (same in the case of death and 10,951 PSUsretirement) granted on July 26, 2016, 15,0002022, 4,017 RSUs (same in the case of death) granted on January 28, 2016, 3,1293, 2022 (as to which the retirement provisions do not apply), 1,770 RSUs (same in the case of death and 7,236 PSUs granted on August 27, 2015, and 4,123 RSUs and 10,306 PSUs granted on October 23, 2014, the value of which is calculated based on the $35.10 closing price per share of our common stock on June 30, 2017, as reported on the NYSE.
For Mr. Littlejohns, the amount reported for death reflects (a) the “spread” value of $10.66 per share for the 18,462 optionsretirement) granted on July 26, 2016, $3.14 per share for2021, 1,590 RSUs (same in the 9,201 options granted on August 27, 2015, $14.60 per share for the 10,122 optionscase of death and retirement) granted on July 30, 2014 and $16.53 per share for2020, 2,838 RSUs (same in the 3,500 time-based optionscase of death) granted on December 11, 2012, representingJuly 30, 2020 (as to which the difference betweenretirement provisions do not apply), 2,107 PSUs (Adjusted EPS) (same in the $35.10 closing price per sharecase of our common stockretirement and 1,987 in the case of death) and 0 PSUs (Relative Return) (1,720 in the case of death and 0 in the case of retirement) granted on JuneJuly 30, 2017, as reported on2020, 1,107 PSUs (Adjusted EPS) (2,213 in the NYSE,case of death and 738 in the exercise pricecase of retirement) and 1,147 PSUs (Relative Return) (2,293 in the optioncase of death and (b) 3,601 RSUs and 8,760 PSUs765 in the case of retirement) granted on July 26, 2016, 2,754 RSUs granted2021, and 6,3671,743 PSUs granted on August 27, 2015, 4,049 RSUs(Adjusted EPS) (3,485 in the case of death and 581 in the case of retirement) and 1,895 PSUs (Relative Return) (3,790 in the case of death and 632 in the case of retirement) granted on July 30, 2014 and 9,57226, 2022, multiplied by the Fiscal 2023 Closing Price. In the event of retirement, the number of PSUs granted on September 3, 2014, the value of which that vest is calculatedpro-rated based on the $35.10 closing price per shareportion of our commonthe relevant performance period during which Mr. Fasman is actively employed.
66CATALENT, INC. | 2023 Proxy Statement EXECUTIVE COMPENSATION TABLES
Mr. Castellano’s employment ended on April 21, 2023. As a result of his departure, all of his outstanding unvested awards were immediately forfeited. In addition, Mr. Castellano had the right to exercise all of his 10,299 vested stock on June 30, 2017, as reported onoptions within 90 days of his departure.
For Dr. Gennadios, the NYSE. The amount reported for termination by us without cause or by the executive officer for good reason represents the “spread” value of $16.53 per share for the 3,500 time-based options granted on December 11, 2012 that would have vested within 12 months following the termination. The amount reported for change of control reflects the “spread” value of $16.53 per share for the 3,500 time-based options granted on December 11, 2012, representing the difference between the $35.10 closing price per share of our common stock on June 30, 2017, as reported on the NYSE, and the exercise price of the option. The amount reported for a termination by us without cause within 18 months following a change of control (assuming awards have been assumed, continued, or substituted) representsreflects (a) the spread“spread” value of $10.66$0 per share for 8,078 options (same in the 18,462 optionscase of death and retirement) granted on July 26, 2017, $3.142022 (award is underwater as of June 30, 2023 and has no value), $0 per share for 3,435 options (same in the 9,201 optionscase of death and retirement) granted on August 27, 2015, $14.60July 26, 2021 (award is underwater as of June 30, 2022 and has no value), $0 per share for 3,080 options (same in the 10,122 optionscase of death and retirement) granted on July 30, 2014,2020 (award is underwater as of June 30, 2023 and $16.53has no value), and $0 per share for 2,209 options (same in the 3,500 time-based optionscase of death and retirement) granted on December 11, 2012,July 22, 2019 (award is underwater as of June 30, 2023 and has no value), representing the difference between the $35.10 closing price per share of our common stock on June 30, 2017, as reported on the NYSE,Fiscal 2023 Closing Price and the exercise price of the option, and (b) 3,6011,859 RSUs (same in the case of death and 8,760 PSUsretirement) granted on July 26, 2016, 2,7542022, 18,689 RSUs and 6,367 PSUs(same in the case of death) granted on August 27, 2015, 4,049July 1, 2022 (as to which the retirement provisions do not apply), 4,017 RSUs (same in the case of death) granted on January 3, 2022 (as to which the retirement provisions do not apply), 885 RSUs (same in the case of death and retirement) granted on July 26, 2021, 1,136 RSUs (same in the case of death and retirement) granted on July 30, 2020, 1,505 PSUs (Adjusted EPS) (same in the case of retirement and 1,419 in the case of death) and 0 PSUs (Relative Return) (1,228 in the case of death and 0 in the case of retirement) granted on July 30, 2020, 554 PSUs (Adjusted EPS) (1,107 in the case of death and 369 in the case of retirement) and 574 PSUs (Relative Return) (1,147 in the case of death and 383 in the case of retirement) granted on July 26, 2021, and 1,162 PSUs (Adjusted EPS) (2,323 in the case of death and 388 in the case of retirement) and 1,264 PSUs (Relative Return) (2,527 in the case of death and 422 in the case of retirement), multiplied by the Fiscal 2023 Closing Price. In the event of retirement, the number of PSUs that vest is pro-rated based on the portion of the relevant performance period during which Dr. Gennadios is actively employed.
For Mr. Chiminski, the amounts reported represent accelerated vesting of unvested equity-based awards and reflect (a) the “spread” value of the options, equal to $0 per share for the 63,874 options granted on July 26, 2021 (award is underwater as of June 30, 2023 and has no value), $0 per share for 55,882 options granted on July 30, 2020 (award is underwater as of June 30, 2023 and has no value), and $0 per share for 32,375 options granted on July 22, 2019 (award is underwater as of June 30, 2023 and has no value), in each case representing the difference between the Fiscal 2023 Closing Price, and the exercise price of the option; and (b) 37,165 RSUs granted on July 26, 2022, 16,461 RSUs granted on July 26, 2021, 20,602 RSUs granted on July 30, 20142020, 27,298 PSUs (Adjusted EPS) and 9,5720 PSUs (Relative Return) granted on September 3, 2014,July 30, 2020, and 6,859 PSUs (Adjusted EPS) and 7,107 PSUs (Relative Return) granted on July 26, 2021, multiplied by the valueFiscal 2023 Closing Price.
Distribution of which is calculatedshares underlying PSUs are accelerated upon termination due to death. In the event an NEO meets the requirements of disability under the terms of the PSU awards, the shares underlying the PSUs remain subject to adjustment and will be distributed following the end of each relevant performance period based on final performance measured against the $35.10 closing price per share of our common stock on June 30, 2017, as reported on the NYSE.
For Ms. Johnson, there is no acceleration of awards reportedrelevant pre-determined metrics for each award. The amounts shown above in the table above“Option/RSU/PSU/Restricted Stock/Performance Shares Acceleration” column in the event of termination due to death or disability assume that the PSUs vest at target. The amounts would differ, as she separated fromfollows, when taking into account assumptions for future performance as disclosed in the company“Fiscal 2023 Outstanding Equity Awards at Year-End” and accompanying footnote in this Proxy Statement: Mr. Hopson—$319,563; Mr. Fasman—$910,647; Dr. Gennadios—$1,372,127.
The amounts reported for Messrs. Hopson and Fasman and Dr. Gennadios for (i) termination by us without cause within 18 months following a change of control (assuming awards have been assumed, continued, or substituted) and (ii) for Messrs. Fasman and Chiminski and Dr. Gennadios under retirement, take into account future performance as disclosed in the “Fiscal 2023 Outstanding Equity Awards at Year-End” and accompanying footnote in this Proxy Statement; however, the number of Relative Return PSUs may vary based on June 30, 2017. Her separation agreement dated May 16, 2017 does not allow for any accelerationwhen a change of outstanding equity awards; however, her agreement allows for continued vesting of stock option, RSU and PSU grants that are scheduled to vest prior to September 30, 2017. These total 12,306 options, 3,792 RSUs, and 8,962 PSUs. In addition, 13,216Pre-IPO performance-based options remained outstanding of which only 784 options vested on August 24, 2017 as thecontrol occurs during a performance metrics were met.period.
| (2) | The amounts reported |
For Mr. Downie and Ms. Johnson, amounts in pounds sterling were converted to U.S. dollars at an exchange rate of 1.2681, which represents the average monthly rate during fiscal 2017.
| (3) | The amounts reported for Messrs. Hopson and Fasman, Dr. Gennadios, and |
| (4) | Receipt of shares in the event of disability occurs when the relevant vesting period for each grant ends rather than being accelerated to the date of disability. |
| (5) | Messrs. Chiminski and Fasman and Dr. Gennadios were the only NEOs eligible for retirement as of June 30, 2023. Receipt of shares occurs when the relevant vesting period for each grant ends rather than being accelerated to the date of retirement. |
| (6) | Dr. Boerman was removed as President, Division Head for Biomodalities effective April 25, 2023 and was offered “garden leave” for the entirety of the six months’ notice period under her employment agreement. As of the date of this Proxy Statement, the terms of Dr. Boerman’s separation payments and benefits from the Company are still being negotiated and were not finalized. Accordingly, the figures included in the table above are not necessarily representative of actual payments to be received by Dr. Boerman. |
| (7) | Mr. Fasman left our employ on September 13, 2023 to take another opportunity. The figures included in the table above set out what Mr. Fasman would have received assuming one of the enumerated termination of employment events occurred effective as of June 30, 2023. |
Payments that would be made under our Deferred Compensation Plan are described above in the Fiscal 2023 Nonqualified Deferred Compensation Table.
SEVERANCE AND PAYMENTS ON A CHANGE OF CONTROL
MR. MASELLI’S SEVERANCE, TERMINATION, AND CHANGE OF CONTROL BENEFITS
Mr. Maselli’s employment agreement, the Omnibus Plans, and the grant agreements thereunder each provide for certain benefits to be paid to him upon termination.
Upon disability or death, a pro-rata portion of any annual bonus he would have earned for the year of termination, based on our actual performance in respect of the full fiscal year in which the date of termination occurs, and the prior fiscal year’s annual cash bonus if earned but not then paid, payable as if Mr. Maselli’s employment had not been terminated.
Should Mr. Maselli’s employment terminate due to death, his beneficiaries (i) will receive a death benefit equal to 1.5 times his base salary under a group life insurance program we provide that covers all eligible active U.S.-based employees, and (ii) will be entitled to accelerated vesting of all unvested grants under the Omnibus Plans. If his employment is terminated due to disability, all unvested grants under the Omnibus Plans will continue to vest as if he had continued employment through each applicable anniversary of the grant date.
EXECUTIVE COMPENSATION TABLES 2023 Proxy Statement | CATALENT, INC.67
Under his employment agreement, upon any termination for good reason or due to his election not to extend the term, Mr. Maselli receives certain accrued amounts and benefits and a pro-rata portion of any annual bonus he would have earned for the year of termination, and the prior fiscal year’s annual cash bonus if earned but not then paid, payable as if Mr. Maselli’s employment had not been terminated.
The employment agreement further provides that upon termination by us without cause, or by Mr. Maselli for good reason, or due to our election not to extend the term, subject to a release of claims, he will also be entitled to receive an amount equal to two times the sum of (x) his annualized base salary and (y) his annual target bonus, payable in equal monthly installments over a two-year period;provided, however, that, if such termination occurs within the two-year period following a change in control, such payment will instead be made in a single lump-sum payment within thirty days following termination. Notwithstanding the foregoing, our obligation to make such payments will cease in the event of an uncured material breach by Mr. Maselli of the restrictive covenants contained in the employment agreement.
In addition to the payments described above, if Mr. Maselli’s employment is terminated by us without cause, by Mr. Maselli for good reason, or due to our election not to extend the term, Mr. Maselli (and his spouse and eligible dependents, to the extent covered prior to such termination) will also be entitled to continued participation in our group health plans for up to two years.
For grants under the Omnibus Plans, if Mr. Maselli incurred a termination, other than for death, disability, or a change of control that occurs during the period commencing on the date of the consummation of a change of control and ending on the date that is eighteen months following the consummation of such change of control, we could cancel any unvested option, RSU, or PSU. Any vested option will remain outstanding and exercisable generally for 90 days, and vested options will terminate immediately if we terminate Mr. Maselli’s employment for cause. Any vested option that he does not exercise within the applicable post-termination exercise period will terminate.
SEVERANCE, TERMINATION, AND CHANGE OF CONTROL BENEFITS FOR MESSRS. HOPSON AND FASMAN AND DR. GENNADIOS
The severance and equity grant agreements with each of Messrs. Hopson, Fasman and Dr. Gennadios, as well as the Omnibus Plans and the grant agreements thereunder, provide (or in the case of Mr. Fasman, provided) for benefits in the event of certain events of termination.
Under the Omnibus Plans, any unvested equity-based grant would become fully vested and exercisable in the event of termination due to death; however, if termination was due to disability, unvested equity-based awards would continue to vest as if the executive had continued employment through each applicable anniversary of the date of grant. Under the Omnibus Plans, in the event of a change in control, to the extent the acquiring or successor entity does assume, continue, or substitute for a grants option, if the NEO were to incur a termination without cause during the eighteen months following the consummation of such change in control, the then-outstanding equity awards thereunder would become fully vested and exercisable. Other than in the cases of change of control, death, or disability, a termination will result in the cancellation of unvested equity-based awards under the Omnibus Plans held by any of the NEOs.
Our group life insurance program, which covers all eligible active U.S.-based employees, provides for a death benefit equal to 1.5 times current base salary (currently, the benefit would pay a total of $637,500 (with respect to Mr. Hopson), $937,500 (with respect to Mr. Fasman), and $900,000 (with respect to Dr. Gennadios)).
Under our standard severance arrangement, in the event of death, disability, or termination by us without cause or by the executive for good reason, the executive would be entitled to severance equal to annual base salary plus target annual bonus, payable in equal installments over the one-year period following the date of termination. The NEOs would also be entitled to continued participation in our group health plans (to the extent receiving such coverage as of immediately prior to the termination date), at the premium rates charged to our employees generally, until the earlier of (1) one year after termination and (2) the date the executive becomes eligible for coverage under at least one group health plan of another employer. Each NEO must enter into a release of claims as a condition of receiving most severance payments and benefits.
On December 8, 2023, the Company entered into new Severance Agreements with each of Messrs. Masanovich and Hopson and Dr. Gennadios. The new Severance Agreements provide that in the event of a termination by the Company without cause or by the executive for good reason within 18 months following a change in control, the executive would be entitled to increased cash severance equal to two times the sum of annual base salary plus target annual bonus, payable in
68CATALENT, INC. | 2023 Proxy Statement EXECUTIVE COMPENSATION TABLES
equal installments over the one-year period following the date of termination, subject to entering into a release of claims and certain other terms and conditions. In addition, the new Severance Agreements provide that if any of the payments provided for under such Severance Agreement or otherwise payable to the individual would constitute “parachute payments” within the meaning of Section 280G of the Code and would be subject to the related excise tax under Section 4999 of the Code, then such individual will be entitled to receive either full payment of benefits or such lesser amount that would result in no portion of the benefits being subject to the excise tax, whichever results in the greater amount of after-tax benefits to such individual. The new Severance Agreements also include certain technical changes to the prior severance agreements with the executives, but otherwise are substantially the same as the prior severance agreements.
SEVERANCE, TERMINATION, AND CHANGE OF CONTROL BENEFITS FOR DR. BOERMAN
Dr. Boerman was removed from her position as President, Division Head for Biomodalities effective as of April 25, 2023, and upon her removal was offered “garden leave” for the entirety of the six months’ notice period under her employment agreement. Under Dr. Boerman’s employment agreement with the Company, if each of Dr. Boerman and the Company agree to termination by mutual consent and enter into a written settlement agreement in that regard, she is entitled to six months’ notice of such termination and a severance payment equal to her base salary and target MIP following a termination without cause (as such term is defined under Dutch law). As of the date of this Proxy Statement, the terms of Dr. Boerman’s separation payments and benefits from the Company are still being negotiated and were not finalized. Accordingly, the figures included in the table above are not necessarily representative of actual payments to be received by Dr. Boerman.
SEVERANCE AND TERMINATION BENEFITS FOR MR. CASTELLANO
In connection with Mr. Castellano’s separation from the Company effective April 21, 2023, he is contractually entitled to receive a severance payment equal to the sum of his annual base salary and target annual bonus equivalent to $1,000,012, payment for any unused paid-time-off days accrued in fiscal 2023, and the right to exercise all vested stock options within 90 days of his departure. In fiscal 2023, Mr. Castellano received $153,848 of severance pay and $25,385 representing unused paid-time-off days he accrued in fiscal 2023.
SEVERANCE AND TERMINATION BENEFITS FOR MR. CHIMINSKI
In connection with Mr. Chiminski’s retirement from the Company effective June 30, 2023, all outstanding equity awards will continue to vest in accordance with the terms of his outstanding award agreements and he continues to be eligible to receive financial planning reimbursements up to $15,000 (per calendar year) for one-year following his departure in accordance with the policy approved by the Compensation Committee for all members of the Executive Leadership Team following their retirement from the Company.
PAY RATIO 2023 Proxy Statement | CATALENT, INC.69
Pay Ratio
Presented below is the ratio of annual total compensation in fiscal 2023 of our CEO to the annual total compensation of our median employee (excluding our CEO). We believe the ratio presented below is a reasonable estimate calculated in a manner consistent with the rules set forth in Item 402(u) of Regulation S-K promulgated under the Exchange Act (the “Pay Ratio Rules”).
In identifying our median employee, we calculated the annual total cash compensation for fiscal 2023 of each employee as of June 30, 2023. For these purposes, annual total cash compensation included base salary or hourly wages, cash incentives, commissions, and comparable cash elements of compensation in non-U.S. jurisdictions and was calculated using internal human resources records. All amounts were annualized for permanent employees who did not work for the entire year, such as new hires, employees on paid or unpaid leave of absence and employees called for active military duty. We did not apply any cost-of-living adjustment as part of the calculation.
We selected the median employee from among 17,219 full-time and part-time workers who were employed as of June 30, 2023. We did not exclude any employee (whether pursuant to the de minimis exemption for foreign employees or any other permitted exclusion).
In accordance with the Pay Ratio Rules, we calculated the median employee’s annual total compensation in the same manner as the CEO’s annual total compensation was calculated in the Fiscal 2023 Summary Compensation Table on page 55. The median employee’s annual total compensation was $59,026. The CEO’s annual total compensation was $6,583,672, the amount reported in the “Total” column of the Summary Compensation Table. Accordingly, the ratio of our CEO’s total compensation to our median employee’s total compensation for fiscal 2023 was 112 to 1.
In considering this pay ratio, please note that the Pay Ratio Rules permit companies to calculate pay ratios using a variety of methods, both in determining the median employee and in determining the compensation to be used in calculating the ratio. Thus, our ratio may not be comparable to the ratio determined by any other company.
Value of Initial Fixed $100 Investment Based on | ||||||||||||||||||||||||||||||||||||||||
Fiscal Year (1) | SCT Total for CEO: A. Maselli ($) | SCT Total for Former CEO: J. Chiminski ($) | Compensation Actually Paid to CEO ($) (2) | Compensation Actually Paid to Former CEO ($) (2) | Average SCT Total for Other NEOs ($) | Average Compensation Actually Paid for Other NEOs ($) (3) | Catalent TSR ($) | S&P 500 Healthcare Index TSR ($) (4) | Net Earnings ($M) (5) | Budget- Based EBITDA ($M) (6) | ||||||||||||||||||||||||||||||
| 2023 | 6,583,672 | - | (1,127,981 | ) | - | 3,099,967 | (4,012,430 | ) | 59 | 139 | (232 | ) | 719 | |||||||||||||||||||||||||||
| 2022 | - | 12,407,517 | - | 19,222,011 | 2,457,531 | 3,069,841 | 146 | 132 | 499 | 1,289 | ||||||||||||||||||||||||||||||
| 2021 | - | 12,581,139 | - | 42,605,268 | 2,408,282 | 3,753,625 | 148 | 128 | 585 | 996 | ||||||||||||||||||||||||||||||
| (1) | The CEO, former CEO, and the NEO Group included in the compensation columns above reflect the following: |
Fiscal Year | CEO / Former CEO | NEO Group | ||||
| Alessandro Maselli | Thomas Castellano, Steven Fasman, Aristippos Gennadios, John Chiminski, Ricky Hopson, and Manja Boerman | |||||
| 2022 | John Chiminski | Thomas Castellano, Steven Fasman, Alessandro Maselli, and Aristippos Gennadios | ||||
| 2021 | John Chiminski | Thomas Castellano, Steven Fasman, Alessandro Maselli, Karen Flynn, and Wetteny Joseph |
| Mr. Chiminski served as CEO for each of fiscal 2022 and 2021, and Mr. Maselli served as CEO in fiscal 2023. |
| (2) | The dollar amounts reported represent CAP as computed in accordance with SEC regulations and reflects the following adjustments from the amounts reported as Total Compensation in the SCT to our current and former CEO for each year shown: |
Adjustments to Determine Compensation Actually Paid for CEO and Former CEO (A) | 2023 Maselli ($) | 2022 Chiminski ($) | 2021 Chiminski ($) | |||||||||
| Total Reported in Summary Compensation Table | 6,583,672 | 12,407,517 | 12,581,139 | |||||||||
| Less amounts reported under the “Stock Awards” column of the SCT for the covered year | (3,850,216 | ) | (6,510,335 | ) | (6,689,674 | ) | ||||||
| Less amounts reported under the “Option Awards” column of the SCT for the covered year | (1,650,019 | ) | (2,790,005 | ) | (2,722,522 | ) | ||||||
Plus the fair value as of year-end for unvested equity-based awards granted during the covered year | 1,568,145 | 12,933,481 | 16,740,024 | |||||||||
| Plus/Less the year-over-year increase or decrease in the fair value of equity-based awards granted in prior years | (3,751,271 | ) | (297,239 | ) | 18,786,940 | |||||||
| Plus the vest date fair value of equity-based awards that were granted and vested during the same covered year | - | - | 337,070 | |||||||||
Plus/Less the increase or decrease in fair value from prior fiscal year-end for equity-based awards that vested during the covered year | (28,291 | ) | 3,478,592 | 3,572,291 | ||||||||
Less the fair value of equity-based awards at prior fiscal year-end granted in prior years that were forfeited during the year | - | - | - | |||||||||
| Total Adjustments | (7,711,653 | ) | 6,814,494 | 30,024,129 | ||||||||
Compensation Actually Paid | (1,127,981 | ) | 19,222,011 | 42,605,268 | ||||||||
| (A) | We did not report a change in pension value in theSCT for any of the years reflected in this table; therefore, a deduction from the SCT total related to pension value is not needed. |
| (3) | The dollar amounts reported represent average CAP as computed in accordance with SEC regulations and reflects the following adjustments from the average of the amounts reported as Total Compensation reported in the SCT to our NEO Group for each fiscal year shown: |
Adjustments to Determine Average Compensation Actually Paid for non-CEO NEOs(A) | 2023 Average ($) | 2022 Average ($) | 2021 Average ($) | |||||||||
Average Total Reported in Summary Compensation Table | 3,099,967 | 2,457,531 | 2,408,282 | |||||||||
| Less average amounts reported under the “Stock Awards” column of the SCT for the covered year | (1,887,672 | ) | (915,212 | ) | (617,230 | ) | ||||||
| Less average amounts reported under the “Option Awards” column of the SCT for the covered year | (237,516 | ) | (285,012 | ) | (172,508 | ) | ||||||
Plus the average fair value as of year-end for unvested equity-based awards granted during the covered year | 704,278 | 1,516,953 | 1,316,907 | |||||||||
| Plus/Less the average year-over-year increase or decrease in fair value of unvested equity-based awards granted in prior years | (5,001,908 | ) | (42,790 | ) | 1,204,653 | |||||||
| Plus the average vest date fair value of equity-based awards that were granted and vested during the same covered year | - | - | 14,560 | |||||||||
Plus/Less the average increase or decrease in fair value from prior fiscal year-end for equity-based awards that vested during the covered year | (141,860 | ) | 252,790 | 406,853 | ||||||||
Less the average fair value of awards at prior fiscal year-end granted in prior years that were forfeited during the covered year | (547,718 | ) | - | (807,891 | ) | |||||||
Total Average Adjustments | (7,112,397 | ) | 612,310 | 1,345,343 | ||||||||
Average Compensation Actually Paid | (4,012,430 | ) | 3,069,841 | 3,753,625 | ||||||||
| (A) | We did not report a change in pension value in the SCT for any of the years reflected in this table; therefore, a deduction from the SCT total related to pension value is not needed. |
| (4) | Reflects cumulative total stockholder return of the S&P 500 Healthcare Index (the “HCI”) as of June 30, 2023. The HCI is the peer group we use for the purpose of complying with Item 201(e) of Regulation S-K under the Exchange Act in our 2023 Annual Report. |
| (5) | We refer to net income as net earnings. |
| (6) | Budget-Based EBITDA is a non-GAAP financial measure and subject to important limitations. For a discussion of how this measure reconciles to our results reported under U.S. GAAP, please see the Appendix entitled“Non-GAAP Financial Measures,” beginning on pageA-1 of this Proxy Statement. See the CD&A for more information about our use of Budget-Based EBITDA in our executive compensation program. |
Most Important Performance Measures |
| Budget-Based EBITDA |
| Budget-Based Revenue |
| Adjusted Earnings per Share |
| Relative TSR |
74CATALENT, INC. | 2023 Proxy Statement PROPOSAL 2 -2: RATIFICATION OF APPOINTMENT OF E&Y AS INDEPENDENT AUDITOR FOR FISCAL 20182024
Proposal 2:
Ratification of Appointment of E&Y as Independent Auditor for Fiscal 2024
(ItemITEM 2 on the Proxy Card)ON THE PROXY CARD)
The Audit Committee of our Board of Directors has selected Ernst & Young LLP (“Ernst & Young”) as our independent auditor for the fiscal year ending June 30, 2018.2024. Ernst & Young has served as our independent auditor since prior to our IPO. TheIPO in 2014. Our Board of Directorsunanimously recommends this appointment, and we are asking shareholders to ratify the appointment of Ernst & Young for 2018.2024. Although ratification is not required by our bylaws or otherwise, our Board of Directors is submitting the selection of Ernst & Young to our shareholders for ratification because we value our shareholders’ views on the choice of independent auditor. If shareholders fail to ratify the appointment, the Audit Committee will reconsider the appointment of such firm. A representative of Ernst & Young is expected to be present at the 2023 Annual Meeting of Shareholders to respond to appropriate questions, and to make a statement if desired.
TheOur Board of Directors unanimously recommends that you vote FOR the ratification of the appointment of Ernst & Young as our independent auditor for fiscal 20182024 because it believes that Ernst & Young has appropriately and professionally audited our financial statements for the last several years, it has the resources to do a proper audit of a company of our size and complexity, and it is familiar with our business, our business model, and our personnel, which will enhance the efficiency and effectiveness of the audit and is in our best interest and in the best interests of our shareholders. The Audit Committee, under its charter, reviews, at least annually, the qualifications, performance, and independence of the auditor and considers, among other matters, the following: the auditor’s internal quality control procedures, the selection of the lead audit partner, the rotation of the audit partners on the audit engagement team, the qualifications and experience of the members of the audit engagement team, and the views of management, including our internal audit group, concerning the performance and capabilities of the auditor.
The following table presents the fees for professional services rendered by Ernst & Young for the audit of our annual financial statements for the fiscal years that ended on June 30, 20172023 and June 30, 2016,2022, and the fees billed for other services rendered by Ernst & Young during those same periods.
| SERVICES | 2017 | 2016 | ||||||
Audit Fees | $4,569,000 | $4,081,300 | ||||||
Audit-Related Fees(1) | 49,000 | 1,035,100 | ||||||
Tax Fees(2) | 607,000 | 1,576,800 | ||||||
All Other Fees | - | - | ||||||
Total | $5,225,000 | $6,693,200 | ||||||
SERVICES
| 2023
| 2022
| ||||||
Audit Fees(1)
| $
| 12,967,500
|
| $
| 6,229,100
|
| ||
Audit-Related Fees(2)
| $
| 7,200
|
| $
| 366,200
|
| ||
Tax Fees(3)
| $
| 597,500
|
| $
| 1,283,700
|
| ||
All Other Fees(4)
| $
| 0
|
| $
| 0
|
| ||
Total
| $
| 13,572,200
|
| $
| 7,879,000
|
| ||
| (1) | Includes fees associated with the integrated audit of our annual consolidated financial statements and internal control over financial reporting, review of our quarterly reports on Form 10-Q, and other services that are normally provided by the independent registered public accounting firm in connection with statutory and regulatory filings or engagements. |
| (2) | Includes the aggregate fees recognized in each of the last two fiscal years for professional services rendered by Ernst & Young that are reasonably related to the performance of the audit of our financial |
| statements. Specifically, these costs include fees for |
| (3) | Includes the aggregate fees recognized in each of the last two fiscal years for professional services rendered by Ernst & Young for tax compliance, tax advice, and tax planning. |
| (4) | Ernst & Young did not provide any “other services” during the last two fiscal years. |
All of the services covered under the captions “Audit Fees,” “Audit-Related Fees,” and “Tax Fees” and “All Other Fees” werepre-approved by the Audit Committee, Committee.
PROPOSAL 2: RATIFICATION OF APPOINTMENT OF E&Y AS INDEPENDENT AUDITOR FOR FISCAL 2024 2023 Proxy Statement | CATALENT, INC.75
Pre-Approval of Audit and all approvednon-audit services performed by Ernst & Young were consistent with maintaining Ernst & Young’s independence.
Pre-Approval of Audit andNon-Audit Services
Consistent with requirements of the SEC and the Public Company Accounting Oversight Board regarding auditor independence, the Audit Committee charter provides that the Audit Committee has responsibility for appointing, setting compensation for, and overseeing the work of the independent auditor. Accordingly, all audit and permittednon-audit services for which Ernst & Young was engaged werepre-approved by the Audit Committee.
Prior to engagement of the independent auditor for 2018,2024, management will submit for Audit Committee approval a list of services and related fees expected to be rendered in 20182024 within each of the following categories of services:
Audit services include audit work performed on the financial statements and internal control over financial reporting, as well as work that generally only the independent auditor can reasonably be expected to provide, including comfort letters, statutory audits, and discussions surrounding the proper application of financial accounting and/or reporting standards. |
Audit-Related services are for assurance and related services that are traditionally performed by the independent auditor, including due diligence related to mergers and acquisitions, employee benefit plan audits, and special procedures required to meet certain regulatory requirements. |
Tax services include all services, except those services specifically related to the financial statements, performed by the independent auditor’s tax personnel, including tax analysis; assisting with coordination of execution oftax-related activities, primarily in the area of corporate development; supporting othertax-related regulatory requirements; tax planning; and tax compliance and reporting. |
All Other services are those services not captured in the audit, audit-related or tax categories. |
|
|
76CATALENT, INC. | 2023 Proxy Statement REPORT OF THE AUDIT COMMITTEE
Report of the Audit Committee
The Audit Committee assists theour Board of Directors in its oversight of our financial reporting process. All threefour members of the Audit Committee qualify as independent directors under the listing standards of the NYSE for public companies and the independence requirements of Rule10A-3 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and all are qualified as audit committee financial experts within the meaning of Item 407(d)(5) of RegulationS-K, promulgated under the Exchange Act. Additionally, theour Board of Directors has also determined that each Audit Committee member has accounting and related financial management expertise within the meaning of the NYSE’s listing standards. The Audit Committee’s charter can be viewed online on our website athttp://investor.catalent.com/corporate-governance.corporate-governance.
In fulfilling its duties, the Audit Committee reviewed and discussed the audited financial statements contained in Catalent’s 2017 Annual Report on Form10-K for fiscal 2023 with management and the independent auditor, Ernst & Young LLP. Management is responsible for the financial statements and the reporting process, including the systems for internal control over financial reporting. The independent auditor is responsible for performing an independent audit of Catalent’s financial statements in conformance with accounting principles generally accepted in the United States, and for expressing an opinion on these financial statements based on the audit.
The Audit Committee met with the independent auditor with and without management present and discussed those matters required to be discussed by Auditing Standard No. 1301, “Communications With Audit Committees,” as adopted bythe applicable requirements of the Public Company Accounting Oversight Board.Board and the Securities and Exchange Commission. The Audit Committee has also received the written disclosures and the letter from the independent auditor required by the applicable requirements of the Public Company Accounting Oversight Board regarding the independent auditor’s communications with the Audit Committee concerning independence and discussed with the independent auditor its independence.
Based on the above reviews and discussions, the Audit Committee recommended to theour Board, of Directors, and theour Board of Directors approved, that the audited financial statements be included in Catalent’s 2017 Annual Report on Form10-K for the fiscal year ended June 30, 2017,2023, for filing with the U.S. Securities and Exchange Commission.
Submitted by the Audit Committee:
Uwe Röhrhoff,Jack Stahl, Chair
Melvin Booth
Rolf Classon
Dr. Donald E. Morel, Jr.Gregory T. Lucier
Michelle R. Ryan
Date: August 23, 2017November 27, 2023
PROPOSAL 3 -3: ADVISORY VOTE ON THE APPROVAL OFTO APPROVE OUR EXECUTIVE COMPENSATION (SAY-ON-PAY) 2023 Proxy Statement | CATALENT, INC.77
Proposal 3:
Advisory Vote to Approve Our Executive Compensation (Say-on-Pay)
(ItemITEM 3 on the Proxy Card)ON THE PROXY CARD)
The compensation we provide to our Named Executive Officers is described in detail in the Compensation Discussion and Analysis section of this Proxy Statement. Section 14A of the Exchange Act requires that we provide shareholders with the opportunity to vote, on anon-binding, advisory basis, on the compensation of our Named Executive Officers. Accordingly, you are being asked to vote on the following resolution:
“RESOLVED, that Catalent’s shareholders APPROVE, on an advisory basis, the compensation of the named executive
|
TheOur Board of Directors unanimously recommends that you vote FOR this resolution because it believes that our executive compensation program promotes the following objectives and philosophies, as described in detail in the Compensation Discussion and Analysis section of this Proxy Statement:
competitive compensation to attract, maintain, retain, and reward high-caliber executive talent,
paying for performance, and
alignment with shareholder interests.
This vote is advisory, which means that the vote is not binding on us, our Board, of Directors, or the Compensation Committee. Nonetheless, theour Board of Directors and the Compensation Committee will take into accountconsider the outcome of the vote when considering future compensation decisions.
Consistent with the outcome of a shareholder vote that occurred during our 2015 annual meeting2021 Annual Meeting of shareholders, theShareholders, our Board of Directors has resolved that a shareholder advisory vote on named executive officerNamed Executive Officer compensation should occur every year. Unless this changes,Accordingly, the next advisory vote on named executive officer compensation is expected to be held at the 2024 Annual Meeting of Shareholders. A shareholder advisory vote on the frequency of advisory votes on Named Executive Officer compensation will be conducted again no later than our 2027 Annual Meeting of Shareholders.
78CATALENT, INC. | 2023 Proxy Statement PROPOSAL 4: APPROVAL OF AMENDMENT NO. 1 TO THE CATALENT, INC. 2018 OMNIBUS INCENTIVE PLAN
Proposal 4:
Approval of Amendment No. 1 to the Catalent, Inc. 2018 Omnibus Incentive Plan
(ITEM 4 ON THE PROXY CARD)
We are asking our shareholders to approve Amendment No. 1 (the “Plan Amendment”) to the Catalent, Inc. 2018 Omnibus Incentive Plan (the “2018 Omnibus Plan”). The 2018 Omnibus Plan is structured to provide flexibility in designing equity incentive programs with a broad array of equity incentives, including stock options, stock appreciation rights, restricted stock, restricted stock units, other stock-based awards, and performance compensation awards, so that we may implement competitive incentive compensation programs for our employees, officers, and non-employee directors. Our Board originally adopted the 2018 Omnibus Plan on August 23, 2018, and our shareholders approved the plan on October 31, 2018, at the 2018 Annual Meeting of Shareholders. Our Board adopted the Plan Amendment on December 13, 2023, subject to approval by shareholders at the 2023 Annual Meeting. If approved, the Plan Amendment will become effective as of January 25, 2024 (the “Plan Amendment Effective Date”). The Plan Amendment amends the 2018 Omnibus Plan in the following respects, which are explained in more detail below:
Changes to the number of shares of our common stock available for issuance (the “share reserve”):
| ○ | The number of shares available for issuance is increased by 7,625,000 shares; |
| ○ | The “fungible ratio” used to reduce the share reserve with respect to full-value grants is reduced from 2.25 to 1.7; and |
| ○ | Shares that are used to pay the exercise price or withholding tax upon exercise of stock options or stock appreciation rights, shares not issued or delivered as a result of the net settlement of options and stock appreciation rights, and shares that we reacquire with the amount received upon the exercise of options by grant recipients will not be added back to the share reserve. |
| • | Increase in the maximum dollar value of equity awards and cash paid to non-employee directors in any single fiscal year from $600,000 to $650,000. |
| • | All awards will include a minimum 1-year vesting requirement, subject to certain exceptions. |
Clarifications to the 2018 Omnibus Plan with respect to the potential clawback of awards as required under applicable law, stock exchange listing requirements, or any recoupment policy we may promulgate.
We are asking you to approve the Plan Amendment because the existing 2018 Omnibus Plan does not have sufficient shares available for continued equity awards to our employees, non-employee directors, consultants, and advisors over the next few years. If you do not approve this proposal, the Plan Amendment will not take effect, and the existing 2018 Omnibus Plan will continue to be administered in its current form until such time as the shares available for issuance thereunder have been depleted (or its expiration, whichever occurs first). Following the termination or expiration of the 2018 Omnibus Plan, we would be unable to maintain our current equity grant practices, which, we believe, would place us at a significant competitive disadvantage relative to our competitors for recruiting, retaining, and motivating talented individuals critical to our success. We also could be forced to replace equity incentive awards with cash compensation, which may not align the interests of our executives and employees with those of our shareholders as effectively as equity incentive awards, would reduce resources available to meet our business needs, and may potentially lead to increased indebtedness or loss of needed financial flexibility.
We are seeking shareholder approval of the Plan Amendment because we value your views in matters relating to the use of our equity and also to (i) meet NYSE listing standards and (ii) allow for the grant of incentive stock options that meet the requirements of Section 422 of the Code with respect to the additional shares added by the Plan Amendment.
Number of Shares Available for Awards under the 2018 Omnibus Plan
As of the Plan Amendment Effective Date, no more than 15,507,520 shares of our common stock will be available for awards under the 2018 Omnibus Plan (which share limit is comprised of 7,625,000 new shares authorized for issuance plus
PROPOSAL 4: APPROVAL OF AMENDMENT NO. 1 TO THE CATALENT, INC. 2018 OMNIBUS INCENTIVE PLAN 2023 Proxy Statement | CATALENT, INC.79
7,882,520 shares that remained available for future grants as of June 30, 2023), subject to the adjustments described in the section titled “Securities Subject to the 2018 Omnibus Plan,” and further detailed in the text of the 2018 Omnibus Plan, which is an appendix to the Company’s 2018 Proxy Statement and is also available as an exhibit to our SEC filings, including our 2023 Annual Report, which may be found on investor.catalent.com/financials/sec-filings. The foregoing number of shares will be reduced by one share for each share subject to an option or stock appreciation right granted under the 2018 Omnibus Plan on or after June 30, 2023 and prior to the Plan Amendment Effective Date, and by 1.7 shares for each share subject to awards (other than options and stock appreciation rights) granted under the 2018 Omnibus Plan on or after June 30, 2023 and prior to the Plan Amendment Effective Date.
In determining the number of shares to recommend for the reserve under the Plan Amendment, our Board considered a number of factors, including the number of shares remaining available under the 2018 Omnibus Plan, our past share usage (sometimes called our “burn rate”), our estimate of the number of shares needed for future awards, a dilution analysis, competitive data from relevant peer companies, and the current and anticipated future accounting expenses associated with our equity award practices.
As described in more detail below, we use the so-called “fungible” share counting method to reduce the share reserve as we issue shares under the 2018 Omnibus Plan, pursuant to which (a) each share of our common stock issued pursuant to a stock option or stock appreciation right will reduce the share reserve on a one-for-one basis, and (b) each share of our common stock issued pursuant to an award other than a stock option or stock appreciation right, such as restricted stock or restricted stock units, will reduce the share reserve by more than one share, which previously was 2.25 shares, but pursuant to the Plan Amendment will be, if you approve, 1.7 shares for awards granted on or after June 30, 2023.
Minimum Vesting
The Plan Amendment provides that all awards will be subject to a minimum 1-year vesting provision, meaning that no portion of the award may vest before the first anniversary of the grant date. The minimum vesting requirement enhances the “pay for performance” element of our equity awards. The Plan Amendment includes some limited exceptions to this rule:
The Compensation Committee can grant awards, using up to 5% of the share reserve, that vest sooner than the first anniversary of grant. This provides the Compensation Committee with the flexibility to address specific situations where a shorter vesting period may be appropriate.
| • | The following awards are not subject to minimum vesting provision: substitute awards, shares delivered in lieu of fully vested cash awards, and any award to a non-employee director that vests on the earlier of the one-year anniversary of the grant date and the next annual meeting of shareholders that is at least 50 weeks after the immediately preceding year’s annual meeting. |
The Compensation Committee has flexibility to accelerate the vesting or exercisability of awards under the 2018 Omnibus Plan, as amended, including awards subject to the minimum vesting requirement, including in cases of retirement, termination, death, disability or a change in control, as set forth in the terms of the award or otherwise.
Current Overview of Outstanding Equity Awards
We currently have awards outstanding under the 2018 Omnibus Plan and its predecessor, the 2014 Omnibus Plan. The total shares of our common stock outstanding as of June 30, 2023 was 180,273,081.
Plans as of June 30, 2023
| Shares
| Shares
| Shares
| |||||||||
2018 Omnibus Plan
|
| 802,785
|
|
| 1,687,789
|
|
| 7,882,520
|
| |||
| 2014 Omnibus Plan | 205,962 | 75,546 | 0 | |||||||||
80CATALENT, INC. | 2023 Proxy Statement PROPOSAL 4: APPROVAL OF AMENDMENT NO. 1 TO THE CATALENT, INC. 2018 OMNIBUS INCENTIVE PLAN
| (1) | As of June 30, 2023, the 802,785 stock options outstanding under the 2018 Omnibus Plan had a weighted average exercise price per share of $79.83 and a weighted average life of 6.8 years. As of June 30, 2023, the 205,962 stock options outstanding under the 2014 Omnibus Plan had a weighted average exercise price per share of $37.51 and a weighted average life of 3.8 years. |
| (2) | 2018 Omnibus Plan consists of RSUs and PSUs. The amounts shown includes (a) 44,529 vested RSUs and PSUs that have been deferred under our Deferred Compensation Plan, and (b) 616,531 Adjusted EPS PSUs and Relative Return PSUs at target, which may increase by up to an additional 445,596 shares (not included in the number above) representing the number of shares above target if the maximum performance thresholds are met. 2014 Omnibus Plan includes 75,546 vested RSUs and PSUs that have been deferred under our Deferred Compensation Plan. |
| (3) | Under the terms of the 2018 Omnibus Plan, each issued RSU and PSU reduces the amount remaining available by 2.25 shares, which is reflected in the amount shown, as well as incremental shares underlying PSUs representing performance at maximum above the respective targets. |
Based on our shares of common stock outstanding as of June 30, 2023, the 9,645,855 shares issuable under existing grants or available for future grants, as set forth in the table above, represent “fully diluted overhang” of approximately 5.1% of our shares of common stock (if shares available for future grant are expressed in stock options). If you approve the Plan Amendment, the additional 7,625,000 shares available for issuance would increase the overhang to approximately 8.8% if shares available for future grant are expressed in stock options, or 5.7% if shares available for future grant are expressed in full-value shares. We calculate “fully diluted overhang” as (a) the total number of shares underlying outstanding awards plus shares available for issuance under future equity awards, divided by (b) the total number of shares outstanding, shares underlying outstanding awards, and shares available for issuance under future equity awards.
We recognize that equity awards dilute existing shareholders. In connection with our stock-based compensation programs, we are committed to using equity incentive awards prudently and within reasonable limits. Accordingly, we closely monitor our stock award “burn rate” each year. Our annual burn rate is determined by dividing the number of shares of our common stock subject to stock-based awards we grant in a fiscal year by the weighted average number of our fully diluted shares of our common stock outstanding for that fiscal year.
Fiscal Year
| Options
| RSUs &
| PSUs &
| Total
| Weighted
| Burn
| ||||||||||||||||||
| 2023 | 151,454 | 719,028 | 377,915 | 1,248,397 | 181,000,000 | 0.7 | % | |||||||||||||||||
| 2022 | 182,751 | 324,091 | 300,890 | 807,732 | 176,000,000 | 0.5 | % | |||||||||||||||||
| 2021 | 231,352 | 283,495 | 462,535 | 977,382 | 168,000,000 | 0.6 | % | |||||||||||||||||
| 3-Year Average | 0.6 | % | ||||||||||||||||||||||
| (1) | PSUs reflect vested amounts in each year. |
Based on our current equity award practices, the Compensation Committee’s independent consultant, FW Cook, has estimated that the authorized shares under the 2018 Omnibus Plan, including the Plan Amendment, should be sufficient to provide us with an opportunity to grant equity awards for approximately 2-3 years of awards (including fiscal 2024), in amounts determined appropriate by the Compensation Committee, which administers the 2018 Omnibus Plan (as discussed below). This is only an estimate, and circumstances could cause the share reserve to be used more quickly or more slowly. These circumstances include, but are not limited to, the future price of shares of our common stock, the mix of options and full-value awards provided as long-term incentive compensation, grant amounts provided by our competitors, payout of performance-based awards in excess of target in the event of superior performance, hiring activity, and promotions during the next few years.
Highlights of the 2018 Omnibus Plan
The 2018 Omnibus Plan contains a number of provisions that we believe are consistent with best practices in equity compensation and protect our shareholders’ interests, as described below.
| • | No evergreen authorization: The 2018 Omnibus Plan does not have an evergreen provision, which would permit an automatic annual increase in the share pool without further shareholder approval. |
| • | Reasonable limit on full-value awards: Stock options and stock appreciation rights include an exercise price or strike price that limits the recipient’s benefit to any increase in stock value subsequent to grant. In contrast, restricted stock, restricted stock units, and similar awards are referred to as full-value awards because they provide the recipient with the full value of the shares, without being reduced by an exercise price or strike price. For purposes of calculating the shares that remain |
PROPOSAL 4: APPROVAL OF AMENDMENT NO. 1 TO THE CATALENT, INC. 2018 OMNIBUS INCENTIVE PLAN 2023 Proxy Statement | CATALENT, INC.81
| available for issuance under the 2018 Omnibus Plan, grants of options and stock appreciation rights reduce the share reserve on a one-for-one basis, meaning that the reserve is reduced by one share for each one share subject to a granted award. In contrast, grants of full-value awards will reduce the 2018 Omnibus Plan’s share reserve at the rate of 1.7 shares for every share actually granted after June 30, 2023 (if you approve the Plan Amendment—the current ratio is higher, at 2.25:1). This effectively limits the number of full-value awards that can be granted. For example, if only full-value awards are granted, the 7,625,000 shares added to the share reserve by the Plan Amendment would only permit the issuance of 4,485,294 shares. |
| • | Prohibition on repricing: The 2018 Omnibus Plan prohibits reducing the exercise price or strike price of outstanding options or stock appreciation rights, including indirect reduction in the exercise price or strike price by means of cancelling and replacing stock options or stock appreciation rights with a grant with a lower exercise price or a cash buyout of an underwater option or stock appreciation right (except as permitted in a change in control, as defined in the 2018 Omnibus Plan, or in the case of an adjustment event as described in the section titled “Changes in Capitalization and Similar Events” below or with shareholder approval). |
| • | Minimum Vesting Period: At least 95% of the shares under the 2018 Omnibus Plan must be issued pursuant to grants that include a minimum one-year vesting requirement, such that no portion of the award may vest before the first anniversary of the grant date, with certain limited exceptions as described above. |
| • | No automatic vesting upon a change in control: The 2018 Omnibus Plan does not provide for automatic vesting upon a change in control, but grants the Compensation Committee flexibility to address the treatment of awards under the 2018 Omnibus Plan, including providing for an acquiring corporation to assume or cancel outstanding awards, accelerating the vesting of outstanding awards, or requiring that participants exchange outstanding accelerated awards for cash. |
| • | No discounted stock options or stock appreciation rights: Stock options and stock appreciation rights must have an exercise price or strike price at or above the fair market value on the date of grant. |
| • | Limit on director pay: The maximum number of shares subject to awards made to a non-employee director under the 2018 Omnibus Plan in a single fiscal year, taken together with any cash fees (including the annual retainer and any other compensation) paid to such non-employee director in respect of such fiscal year, shall not exceed $650,000 in total value (measured as of the grant date of the applicable awards) if the Plan Amendment is approved (previously, this number was $600,000). |
| • | No tax gross-up: The 2018 Omnibus Plan does not provide for any tax gross-up. |
| • | Limitation on dividends and dividend equivalents: Any dividend or dividend equivalent must be subject to the same vesting restrictions as the underlying award and will not be paid until and unless such vesting restrictions are satisfied. |
| • | Administered by an independent committee: The 2018 Omnibus Plan will be administered by our Compensation Committee, which consists entirely of independent directors. Our Board or the Compensation Committee may delegate administration of certain aspects of the 2018 Omnibus Plan to one or more officers, and our Board, which is majority-independent, retains certain authority as described in more detail below. |
Summary Description of 2018 Omnibus Plan
The principal terms and provisions of the 2018 Omnibus Plan are set forth below. This summary, however, is not intended to be a complete description of all the terms of the 2018 Omnibus Plan and is qualified in its entirety by reference to the complete text of the 2018 Omnibus Plan, which is an appendix to the Company’s 2018 Proxy Statement and is also available as an exhibit to our SEC filings, including our 2023 Annual Report, which may be found on investor.catalent.com/financials/sec-filings, and the Plan Amendment, which is annexed to this Proxy Statement as Appendix B.
Purpose. The purpose of the 2018 Omnibus Plan is to assist the Company and its affiliates in attracting and retaining selected employees, directors, consultants and/or advisors by providing such individuals with equity compensation, thereby strengthening their long-term commitment to the welfare of the Company and its affiliates.
Types of Awards. The following types of awards may be granted under the 2018 Omnibus Plan: options, stock appreciation rights, restricted stock, restricted stock units, other stock-based awards, and performance compensation awards. The principal features of each type of award are described below.
82CATALENT, INC. | 2023 Proxy Statement PROPOSAL 4: APPROVAL OF AMENDMENT NO. 1 TO THE CATALENT, INC. 2018 OMNIBUS INCENTIVE PLAN
Administration. The Compensation Committee has the authority to administer the 2018 Omnibus Plan. However, the Board may grant awards and administer the Plan with respect to such awards, subject to applicable securities exchange rules. Additionally, to the extent permitted by law, the Compensation Committee may delegate any or all of its authority to administer the 2018 Omnibus Plan to one or more officers (other than with respect to grants to executive officers and non-employee directors). For purposes of this Proposal, the term “Compensation Committee” will mean our Compensation Committee or such other entity or person, as applicable, that may be properly delegated authority to administer the 2018 Omnibus Plan.
Eligibility. Officers and employees, non-employee directors, as well as consultants and other advisors, in our employ or service or in the employ or service of our affiliates (and any prospective employee, non-employee director, consultant, or advisor) are eligible to participate in the 2018 Omnibus Plan. As of October 30, 2023, approximately 17,680 employees (including 9 executive officers) and contractors and 15 non-employee directors were eligible to participate in the 2018 Omnibus Plan. Although we use the services of a number of consultants and other advisors who are or would be eligible to be granted awards under the 2018 Omnibus Plan from time to time, we have never granted awards under the 2018 Omnibus Plan to consultants.
Securities Subject to 2018 Omnibus Plan. Subject to the capitalization adjustments and the add-back provisions, each as described below, as of the Plan Amendment Effective Date, no more than 15,507,520 shares shall be available for awards under the 2018 Omnibus Plan, as amended by the Plan Amendment. This share reserve is comprised of (i) 7,625,000 new shares authorized for issuance under the Plan Amendment and (ii) 7,882,520 shares previously authorized for issuance under the 2018 Omnibus Plan that remained available for future grants under the 2018 Omnibus Plan as of June 30, 2023. The number of shares set forth in clause (ii) above will be reduced by one share for each share of our common stock subject to an option or stock appreciation right granted under the 2018 Omnibus Plan after June 30, 2023 and prior to the Plan Amendment Effective Date and by 1.7 shares for each share of our common stock subject to awards (other than options and stock appreciation rights) granted under the 2018 Omnibus Plan after June 30, 2023 and prior to the Plan Amendment Effective Date (the aggregate share limit after such reduction and after adding any share as described above, the “Absolute Share Limit”).
The Absolute Share Limit shall be reduced on a one-for-one basis for each share of our common stock subject to an outstanding option or stock appreciation right granted under the 2018 Omnibus Plan and by (A) 2.25 shares for each share of our common stock subject to an outstanding award (other than an option or stock appreciation right) granted under the 2018 Omnibus Plan on or before June 30, 2023 and (B) 1.7 shares for each share of common stock subject to an award (other than an option or stock appreciation right) granted under the 2018 Omnibus Plan after June 30, 2023. For example, if we grant an option or stock appreciation right with respect to 1,000 shares, the share reserve will be reduced by 1,000 shares, but if we instead grant 1,000 shares of restricted stock or restricted stock units after June 30, 2023, the share reserve will be reduced by 1,700 shares.
Shares subject to outstanding awards under the 2018 Omnibus Plan and under the 2014 Omnibus Plan that expire or are canceled, forfeited, terminated, settled in cash, or otherwise settled without delivery to the participant of the full number of shares to which the award related (referred to as “retired” awards) will be available for subsequent issuance under the 2018 Omnibus Plan as follows: (a) for each share subject to a retired option or stock appreciation right, one share shall become available for subsequent issuance under the 2018 Omnibus Plan, and (b) for each share subject to a retired award other than an option or stock appreciation right, (A) 2.25 shares shall become available with respect to awards granted on or prior to June 30, 2023 and (B) 1.7 shares shall become available with respect to awards granted after June 30, 2023. However, effective as of June 30, 2023, if you approve the Plan Amendment, shares that are retained as payment of the exercise price or withholding tax upon the exercise of options or stock appreciation rights, shares not issued or delivered as a result of the net settlement of options or stock appreciation rights, and shares reacquired by the Company with the amount received upon exercise of options will not again be available for subsequent issuance under the 2018 Omnibus Plan. For the avoidance of doubt, shares withheld by the Company or tendered by the participant in payment of withholding taxes on awards other than options or stock appreciation rights will continue to be deemed to constitute shares not issued to the participant and will be added to the shares available for awards under the 2018 Omnibus Plan in accordance with the ratios set forth above.
PROPOSAL 4: APPROVAL OF AMENDMENT NO. 1 TO THE CATALENT, INC. 2018 OMNIBUS INCENTIVE PLAN 2023 Proxy Statement | CATALENT, INC.83
The maximum number of shares of our common stock that may be issued pursuant to options intended to qualify as incentive stock options under the federal tax laws shall be limited to the Absolute Share Limit.
The Compensation Committee may grant awards in assumption of, or in substitution for, outstanding awards previously granted by an entity acquired by us or with which we combine. Such substitute awards will not reduce the shares of our common stock authorized for issuance under the 2018 Omnibus Plan (but will count against the aggregate number of incentive stock options available for awards, as described above). Additionally, subject to applicable stock exchange requirements, if the acquired company’s equity plan has shares available, such shares may be available for grant under the 2018 Omnibus Plan, which will not reduce (or be added back to) the shares authorized for issuance under the 2018 Omnibus Plan.
Shares of our common stock that we issue in settlement of awards may be authorized and unissued shares, shares held in our treasury, shares purchased on the open market or in private transactions, or a combination of the foregoing.
Participant Award Limits. Options orstock appreciation rights that are settled in shares may not be granted in any fiscal year to any single participant with respect to more than 1,500,000 shares.
During any fiscal year, no participant may be granted performance compensation awards that are denominated in shares under which more than 750,000 shares may be earned in the aggregate.
During any fiscal year, no participant may be granted performance compensation awards that are denominated in cash under which more than $10,000,000 may be earned in the aggregate.
If you adopt the Plan Amendment, the maximum number of shares subject to awards made to a non-employee director under the 2018 Omnibus Plan in a single fiscal year, taken together with any cash fees (including the annual retainer and any other compensation) paid to such non-employee director in respect of such fiscal year, shall not exceed $650,000 in total value (the current limit is $600,000).
Awards. The Compensation Committee has discretion to determine (a) which eligible individuals are to receive awards, (b) the type or types of awards to be made, (c) the number of shares or amount of payment subject to each such award, (d) the terms and conditions of any award, (e) the circumstances under which awards may be settled or exercised in cash, shares of our common stock, other securities, other awards, or other property, or cancelled, forfeited, or suspended, and the method by which awards may be settled, exercised, cancelled, forfeited, or suspended, and (f) whether the delivery of cash, shares, other securities, or other awards with respect to an award will be deferred. The Compensation Committee also has the authority to interpret and administer the 2018 Omnibus Plan, establish or amend any rule or regulation related to the 2018 Omnibus Plan, appoint such agents as the Compensation Committee deems appropriate for the proper administration of the 2018 Omnibus Plan, adopt sub-plans for purposes of granting awards to eligible individuals located outside of the United States, and take any other action that the Compensation Committee deems necessary or desirable for the administration of the 2018 Omnibus Plan.
Stock Options. Each stock option will have an exercise price per share determined by the Compensation Committee, but the exercise price cannot be less than the fair market value on the grant date of the shares subject to the option (except with respect to substitute awards in the case of acquired businesses, as described above). No option will have a term in excess of ten (10) years. The shares subject to each option will generally vest in one or more installments over a specified period of service measured from the grant date or upon the achievement of pre-established performance objectives. Payment of the exercise price may be paid in one or more of the following forms: cash, shares of our common stock, or by such other method as the Compensation Committee may permit, including through a cashless exercise procedure pursuant to which the optionee effects a same-day exercise of the option and sale of the purchased shares through a broker in order to cover the exercise price for the purchased shares and the applicable withholding taxes or through a net exercise procedure pursuant to which we withhold a number of shares otherwise issuable upon exercise of the option having a value equal to the exercise price and applicable withholding taxes.
Stock options under the 2018 Omnibus Plan may be incentive stock options (i.e., an option described in Section 422 of the Code) or nonqualified stock options. Incentive stock options may provide the optionee with certain advantageous tax treatment, as described below under “Summary of Federal Income tax Consequences.” An option will be a nonqualified
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stock option unless the applicable award agreement expressly states that the option is intended to be an incentive stock option.
Upon cessation of service, the optionee will have a limited period in which to exercise outstanding vested options, with the length of the period varying depending on the reason for the termination of employment. The Compensation Committee will have discretion to waive certain terms of the options when an optionee departs, including waiving the time limit on the post-service exercise period, waiving the requirement of continued service for vesting, or accelerating the vesting of options in whole or in part. Such discretion may be exercised at any time while the options remain outstanding.
The holder of an option shall not have any rights of a shareholder with respect to the shares subject to that option unless and until such holder has exercised the option, paid or otherwise satisfied the exercise price for the purchased shares and shares have been issued in respect of the option exercise.
Stock Appreciation Rights. We will be able to issue two types of stock appreciation rights under the 2018 Omnibus Plan:
Tandem stock appreciation rights granted in conjunction with an option, which provides the holder with the right to surrender the related option following its vesting in exchange for an appreciation distribution from us in an amount equal to the excess of (i) the fair market value of the shares subject to the surrendered option over (ii) the aggregate strike price payable under the option for those shares.
Stand-alone stock appreciation rights, which allows the holder to exercise the right as to that number of shares stated in the grant of the right and receive in exchange an appreciation distribution from us in an amount equal to the excess of (i) the fair market value of the shares as to which the right is exercised over (ii) the aggregate strike price under the right for those shares.
The strike price per share for each stock appreciation right may not be less than the fair market value per share of our common stock on the grant date of the stock appreciation right, and the right may not have a term in excess of ten (10) years.
The appreciation distribution on any exercised stock appreciation right will be paid in (i) cash, (ii) shares of our common stock, or (iii) a combination of cash and shares, as determined by the Compensation Committee. Upon cessation of service with us, the holder of a vested stock appreciation right will have a limited period in which to exercise that right, with the length of the period varying depending on the reason for the termination of employment. The Compensation Committee will have discretion to waive certain terms of the stock appreciation rights when a holder departs, including waiving the time limit on the post-service exercise period, waiving the requirement of continued service for vesting, or accelerating the vesting of stock appreciation rights in whole or in part. Such discretion may be exercised at any time while the stock appreciation rights remain outstanding.
The holder of a stock appreciation right will not have any rights of a shareholder with respect to the shares subject to that right unless and until such holder has exercised the right and shares have been in respect of the stock appreciation right.
Repricing. The Compensation Committee may not implement any of the following repricing programs (except in the case of a corporate transaction as described in the section titled “Changes in Capitalization and Similar Events” below) without shareholder approval: (i) a reduction of the exercise price in effect for an outstanding option or stock appreciation right, (ii) cancellation of an outstanding option or stock appreciation right in return for a new option or stock appreciation right with a lower exercise price per share, (iii) cancellation of an outstanding option or stock appreciation right with an exercise price per share in excess of the then-current fair market value per share for consideration payable in cash or another award, or (iv) any other action that is considered a “repricing” under a rule of the NYSE (or such other securities exchange on which our securities are listed).
Restricted Stock and Restricted Stock Units. Shares of our common stock may be issued under the 2018 Omnibus Plan subject to specified restrictions. Shares of our common stock may also be issued under the 2018 Omnibus Plan pursuant to restricted stock units that entitle the recipients to receive those shares (or cash in lieu of shares), upon vesting or a later date determined by the Compensation Committee, subject to specified restrictions. In either case, the specified restrictions may include a requirement that the recipient remain continuously employed or providing services to us for a specified period or a requirement that certain performance-based goals are met.
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Restricted Stock. Shares of restricted stock are subject to vesting and cannot be transferred before the shares vest. Should the recipient cease to remain in service while holding one or more unvested shares of restricted stock or otherwise fail to satisfy any of the specified restrictions, the restricted shares will be forfeited to the Company. Unless otherwise provided in the award agreement, the holder of a share of restricted stock will have the rights of a shareholder from the date of grant of the award to which the share relates, including the right to vote the shares of common stock and the right to receive dividends; however, any dividend will be subject to the same restrictions as the underlying share of restricted stock. Accordingly, if such share is forfeited because the restrictions are not satisfied, the holder will also forfeit the right to such dividends.
Restricted Stock Units. Restricted stock units are subject to vesting, with shares or the value of shares being paid at the vesting date or some later specified date. Should the recipient cease to remain in service while holding one or more unvested restricted stock units or otherwise fail to satisfy any of the specified restrictions, then those units will automatically be canceled and will not vest. To the extent provided in an award agreement, the holder of a restricted stock unit will be entitled to be credited with dividend equivalent payments upon the payment by us of dividends on shares of our common stock, either in cash or shares; however, any such dividend equivalent will be subject to the same restrictions as the underlying restricted stock unit, so, if such restricted stock unit is forfeited because the restrictions are not satisfied, the holder will also forfeit the right to collect such dividend equivalents.
The Compensation Committee will have discretion to waive certain of the specified restrictions, including the requirement of continued employment or service.
Other Stock-Based Awards. Under the 2018 Omnibus Plan, the Compensation Committee may grant other types of awards that are denominated in shares of our common stock to anyone eligible to participate in the 2018 Omnibus Plan. The Compensation Committee will determine the terms and conditions of such awards.
Performance Compensation Awards. The Compensation Committee may designate any award granted under the 2018 Omnibus Plan, including a cash bonus, as a performance compensation award. The Compensation Committee will determine the length of performance periods, the performance criteria that will be used to establish the performance goals, the kinds and levels of performance goals, and any performance formula used to determine whether a performance compensation award has been earned for the performance period. Such performance criteria may be based on the attainment of specific levels of our performance (or the performance of any affiliate, division or operational or business unit, product line, brand, business segment, administrative department, or any combination of the foregoing), and may include one or more of the following: (i) net earnings or net income (before or after taxes); (ii) basic or diluted earnings per share (before or after taxes); (iii) net revenue or net revenue growth; (iv) gross revenue or gross revenue growth, gross profit, or gross profit growth; (v) net operating profit (before or after taxes); (vi) return measures (including, but not limited to, return on investment, assets, capital, employed capital, invested capital, equity, or sales); (vii) cash flow measures (including, but not limited to, operating cash flow, free cash flow, and cash flow return on capital), which may but are not required to be measured on a per-share basis; (viii) earnings before or after interest, taxes, depreciation, amortization, or rent (including EBIT, EBITDA, and EBITDAR); (ix) gross or net operating margins; (x) productivity ratios; (xi) share price (including, but not limited to, growth measures and total shareholder return, whether measured on an absolute or relative basis); (xii) expense targets or cost reduction goals, general and administrative expense savings; (xiii) operating efficiency; (xiv) objective measures of customer satisfaction; (xv) working capital targets; (xvi) measures of economic value added or other ‘value creation’ metrics; (xvii) inventory control; (xviii) enterprise value; (xix) sales; (xx) shareholder return; (xxi) client retention; (xxii) competitive market metrics; (xxiii) employee retention; (xxiv) timely completion of new product rollouts; (xxv) timely launch of new facilities; (xxvi) measurements related to a new purchasing “co-op”; (xxvii) objective measures of personal targets, goals or completion of projects (including but not limited to succession and hiring projects, completion of specific acquisitions, reorganizations or other corporate transactions or capital-raising transactions, expansions of specific business operations, achieving specified operational objectives, and meeting divisional or project budgets); (xxviii) system-wide revenues; (xxix) royalty income; (xxx) comparisons of continuing operations to other operations; (xxxi) market share; (xxxii) cost of capital, debt leverage year-end cash position or book value; (xxxiii) strategic objectives, development of new product lines, and related revenue, sales and margin targets, co-branding or international operations; or (xxxiv) any combination of the foregoing. The Compensation Committee may also grant awards that are based on performance goals other than those set forth above.
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The Compensation Committee may specify adjustments or modifications to be made to the calculation of a performance goal for such performance period, based on and in order to appropriately reflect the following events: (i) an asset write-down; (ii) litigation or any claim judgment or settlement; (iii) the effect of a changes in tax law, an accounting principle, or another law, stock exchange listing standard, or regulatory rule affecting reported results; (iv) any reorganization or restructuring program; (v) any unusual, infrequently occurring, or nonrecurring item or event, or as described in management’s discussion and analysis of financial condition and results of operations appearing in our annual report to shareholders for the applicable year; (vi) any acquisition or divestiture; (vii) any other specific, unusual, infrequently occurring, or nonrecurring event, or objectively determinable category thereof; (viii) any foreign exchange gain or loss; (ix) discontinued operations and nonrecurring charges; and (x) a change in our fiscal year.
Unless otherwise provided in the applicable award agreement, (i) a participant must be employed by us on the last day of a performance period to be eligible for payment in respect of a performance compensation award for such performance period and (ii) a participant will only be eligible to receive payment in respect of a performance compensation award to the extent that the performance goals for such period are achieved. However, unless otherwise provided in the applicable award agreement, the Compensation Committee shall have the discretion to (i) provide payment in respect of performance compensation awards for a performance period if the performance goals have not been attained or (ii) increase a performance compensation award, subject to the applicable limitations set forth in the section titled “Securities Subject to 2018 Omnibus Plan” above.
New Plan Benefits
No award has been or will be granted under the 2018 Omnibus Plan with respect to the shares to be added by the Plan Amendment unless and until you approve the Plan Amendment. Any award following approval of this Proposal shall be at the discretion of the Compensation Committee. Accordingly, the benefits or amounts that may be received by or allocated to each of (i) the officers listed in the Summary Compensation Table, (ii) each of the nominees for election as a director, (iii) all non-employee directors as a group, (iv) all of our present executive officers as a group, and (v) all of our employees, including all other current officers, as a group under the 2018 Omnibus Plan are not determinable at this time.
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History of Grants Under the 2018 Omnibus Plan
The following table shows the aggregate number of shares of our common stock underlying options, restricted stock units and performance restricted stock units granted to the identified persons under the 2018 Omnibus Plan since its inception through December 4, 2023. No award has been granted under the 2018 Omnibus Plan to any associate of any director, director nominee, or executive officer, and no other person has been granted 5% or more of the total amount of awards granted under the 2018 Omnibus Plan. As of December 4, 2023, the closing price of our common stock on the NYSE was $39.97 per share.
| Name | Shares of (#) | Restricted Stock Units(1) | Performance (#) | |||||||||
| Named Executive Officers and Position |
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| Alessandro Maselli(3) – President and Chief Executive Officer | 192,485 | 65,328 | 106,703 | |||||||||
| Steven L. Fasman – Former Executive Vice President & Chief Administrative Officer | 69,613 | 32,283 | 39,558 | |||||||||
| Aristippos Gennadios – Group President, Pharma and Consumer Health | 47,401 | 37,374 | 26,921 | |||||||||
| Ricky Hopson – President, Division Head for BioProduct Delivery, Chief of Staff, and Former Interim Chief Financial Officer | 23,983 | 19,513 | 13,456 | |||||||||
| John Chiminski – Former Executive Chair | 326,424 | 98,255 | 172,310 | |||||||||
| Thomas Castellano – Former Senior Vice President and Chief Financial Officer | 24,375 | 12,261 | 14,605 | |||||||||
| Manja Boerman – Former President, Division Head for Biomodalities | 24,433 | 15,864 | 32,171 | |||||||||
| All current executive officers as a group | 558,072 | 222,597 | 271,581 | |||||||||
| All current directors who are not executive officers as a group | — | 257,164 | — | |||||||||
| Director Nominees |
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|
|
| |||
| Michael J. Barber | — | 13,389 | — | |||||||||
| Steven K. Barg | | — | | | 7,711 | | | — | | |||
| J. Martin Carroll | — | 19,052 | — | |||||||||
| Rolf Classon | — | 18,497 | — | |||||||||
| Frank D’Amelio | — | 7,972 | — | |||||||||
| John J. Greisch(4) | 127,096 | 11,504 | 22,353 | |||||||||
| Gregory T. Lucier | — | 18,497 | — | |||||||||
| Donald E. Morel, Jr. | — | 18,497 | — | |||||||||
| Stephanie Okey | — | 7,972 | — | |||||||||
| Michelle R. Ryan | — | 7,972 | — | |||||||||
| Jack Stahl | — | 18,497 | — | |||||||||
| All employees, including all current officers who are not executive officers, as a group | 1,216,319 | 2,838,306 | 945,672 | |||||||||
| (1) | Number of stock options and restricted stock units shown above have not been reduced to reflect forfeitures, cancellations, or exercises, as applicable. |
| (2) | Includes performance share units and performance restricted stock awards. The amounts shown above reflects shares earned with respect to completed performance periods, and target awards granted with respect to ongoing performance periods. |
| (3) | Mr. Maselli is also a director nominee. |
| (4) | Mr. Greisch is also an executive officer. |
General Provisions
Changes in Capitalization and Similar Events. In the event of (a) any dividend (other than regular cash dividends) or other distribution (whether in the form of cash, shares of our common stock, other securities, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, split-off, spin-off, combination, repurchase or exchange of shares of common stock or other of our securities, issuance of warrants or other rights to acquire shares of common stock or other of our securities, or other similar corporate transaction or event (including a change in control) that
88CATALENT, INC. | 2023 Proxy Statement PROPOSAL 4: APPROVAL OF AMENDMENT NO. 1 TO THE CATALENT, INC. 2018 OMNIBUS INCENTIVE PLAN
affects the shares of our common stock, or (b) unusual or nonrecurring events (including a change in control) affecting us, any affiliate, or our financial statements or those of any affiliate, or changes in applicable rules, rulings, regulations, or other requirements of any governmental body or securities exchange or inter-dealer quotation system, accounting principles, or law, such that in either case an adjustment is determined by the Compensation Committee in its sole discretion to be necessary or appropriate, then the Compensation Committee shall make any such adjustments in such manner as it may deem equitable, including any or all of the following:
adjusting any or all of (A) the number of shares available for grant under the 2018 Omnibus Plan, (B) the number of shares of common stock or other securities (or number and kind of other securities or other property) that may be issued in respect of awards or with respect to which awards may be granted under the 2018 Omnibus Plan (including adjusting any or all of the limitations as set forth above in the section titled “Securities Subject to 2018 Omnibus Plan”) and (C) the terms of any outstanding award;
providing for a substitution or assumption of awards (or awards of an acquiring company), accelerating the exercisability of, lapse of restrictions on, or termination of, awards or providing for a period (which shall not be required to be more than ten (10) days) for participants to exercise outstanding awards prior to the occurrence of such event (and any such award not so exercised shall terminate upon the occurrence of such event); and
| • | cancelling any one or more outstanding awards and causing to be paid to the holders of vested awards (including any award that would vest as a result of the occurrence of such event but for such cancellation) the value of such awards, if any, as determined by the Compensation Committee (which if applicable may be based upon the price per share of common stock received or to be received by our other shareholders in such event), including, in the case of an outstanding option or stock appreciation right, a cash payment in an amount equal to the excess, if any, of the fair market value (as of a date specified by the Compensation Committee) of the shares of common stock subject to such option or stock appreciation right over the aggregate exercise price of such option or stock appreciation right, respectively (it being understood that, in such event, any option or stock appreciation right having a per-share exercise price equal to, or in excess of, the fair market value of a share of common stock subject thereto may be canceled and terminated without any payment or consideration therefor). |
Valuation. The fair market value per share of our common stock on any relevant date under the 2018 Omnibus Plan is deemed to be equal to the closing selling price per share on that date as determined by the NYSE (or if there was no sale on that date, on the last preceding date on which a sale was reported). As of December 4, 2023, the fair market value of our common stock determined on such basis was $39.97 per share.
Transferability. Awards under the 2018 Omnibus Plan (a) may not be assigned, alienated, pledged, attached, sold, or otherwise transferred or encumbered by a participant other than by will or the laws of descent and distribution and (b) may only be exercised by a participant during the participant’s lifetime or, if permissible under applicable law, by the participant’s legal guardian, representative or devisee. However, the Compensation Committee may permit awards (other than incentive stock options) to be transferred (without consideration) to one or more members of the award recipient’s family, to a trust established for the award recipient or one or more such family members, or to such other transferee as permitted under the 2018 Omnibus Plan, subject to such rules as the Compensation Committee may adopt.
Withholding taxes. A participant shall be required to pay us any required withholding or any other applicable taxes or other amounts due from the participant in respect of an award. Alternatively, we shall have the right to withhold from any cash, share, or other securities or property issuable under any award or from any other compensation, any required withholding or any other applicable taxes or other amounts due from the participant in respect of an award. The Compensation Committee also may allow such individuals to deliver previously acquired shares of our common stock in payment of such withholding tax liability. Any shares withheld in excess of the shares required to satisfy a withholding liability at the minimum statutory withholding rates will not be added back to the share reserve under the recycling rules of the plan.
Clawback/Forfeiture. An award agreement may provide that the Compensation Committee may cancel such award, or require that the participant forfeit any gain realized on the vesting, exercise, or settlement of such award, if the participant
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has engaged in or engages in any “Detrimental Activity” (as defined in the 2018 Omnibus Plan). The Compensation Committee may also provide in an award agreement that, if the participant receives any amount in excess of what the participant should have received under the terms of the award for any reason (including by reason of a financial restatement, mistake in calculation, or other error or problem), then the participant shall be required to repay to us any such excess amount. Without limiting the generality of the foregoing, all awards shall be subject to reduction, cancellation, forfeiture, or recoupment to the extent necessary to comply with applicable law. In addition, if the Plan Amendment is approved, all Awards (and/or any amount received with respect to such Awards) will be subject to reduction, cancellation, forfeiture or recoupment to the extent necessary to comply with applicable law, stock exchange listing requirements, and/or any clawback or recoupment policy we may promulgate.
Minimum Vesting. Pursuant to the Plan Amendment, all awards will be subject to one-year minimum vesting. No portion of the award may vest before the first anniversary of the grant date. After the one-year period, vesting may be on a less than annual basis; subsequent vesting tranches may be on monthly, quarterly or other intervals. The Plan Amendment permits us to grant up to 5% of the shares authorized under the 2018 Omnibus Plan with vesting that does not comply with this rule (i.e., where the initial vesting is less than one year after the grant date). In addition, the follow awards are not subject to the minimum vesting requirement: substitute awards, shares delivered in lieu of fully vested cash awards and awards to non-employee directors that vest at the date of the next annual meeting of shareholders that is at least 50 weeks after the grant date. The minimum vesting restriction does not apply to the Compensation Committee’s discretion to provide for accelerated vesting and/or exercisability of awards, including in cases of retirement, termination, death, disability or a change in control, as set forth in the terms of the award or otherwise.
Amendment and Termination. Our Board may amend the 2018 Omnibus Plan at any time, subject to shareholder approval to the extent required under applicable law or regulation or pursuant to the listing standards of the stock exchange on which our common stock is at the time primarily traded. Unless sooner terminated by our Board, no awards may be granted under the 2018 Omnibus Plan on or after October 31, 2028. The 2018 Omnibus Plan will terminate earlier to the extent that all shares available for issuance under the 2018 Omnibus Plan have been issued as fully vested shares or upon the termination of all outstanding awards in connection with certain changes in control or ownership.
Summary of Federal Income Tax Consequences
The following is a summary of certain material aspects of the U.S. federal income tax consequences applicable to us and the participants who receive awards under the 2018 Omnibus Plan but does not purport to be a complete analysis of all potential tax consequences. This summary is based on the provisions of the Code and related regulations, administrative rulings, and judicial decisions as in effect on the date of this Proxy Statement. Those authorities may change, perhaps retroactively, and are subject to differing interpretations that may result in consequences other than those described in this section. Further, individual participant circumstances not anticipated in this summary may also result in different consequences. This summary does not address other possibly applicable laws, including other kinds of U.S. tax laws or foreign, state, or local tax laws.
Option Grants. Options granted under the 2018 Omnibus Plan may be either incentive stock options, which satisfy the requirements of Section 422 of the Code, or nonqualified stock options, which are not intended to satisfy such requirements. The federal income tax treatment for the two types of options differs as follows:
Incentive Options. The holder of an incentive stock option does not recognize taxable income at the time of the option grant, and no ordinary taxable income is recognized at the time the option is exercised, although there may be taxable income at that time under the alternative minimum tax. The optionee will recognize taxable income in the year in which the purchased shares are sold or otherwise made the subject of certain other dispositions. For federal income tax purposes, dispositions are divided into two categories: (i) qualifying, and (ii) disqualifying. A qualifying disposition occurs if the sale or other disposition is made more than two (2) years after the date the option for the shares involved in such sale or disposition is granted and more than one (1) year after the date the option is exercised for those shares. If the sale or disposition occurs before these two periods are satisfied, then a disqualifying disposition will result.
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Upon a qualifying disposition, the optionee will recognize long-term capital gain in an amount equal to the excess, if any, of (i) the amount realized upon the sale or other disposition of the purchased shares over (ii) the exercise price paid for the shares. If there is a disqualifying disposition of the shares, then the excess of (i) the fair market value of those shares on the exercise date or (if less) the amount realized upon such sale or disposition over (ii) the exercise price paid for the shares will be taxable as ordinary income to the optionee. Any additional gain or loss recognized upon the disposition will be a capital gain or loss.
If the optionee makes a disqualifying disposition of the purchased shares, then generally we will be entitled to an income tax deduction, for the taxable year in which such disposition occurs, equal to the amount of ordinary income recognized by the optionee as a result of the disposition. We will not be entitled to any income tax deduction if the optionee makes a qualifying disposition of the shares.
Nonqualified Stock Options. The holder of a nonqualified stock option does not recognize taxable income at the time of the option grant. The optionee will, in general, recognize ordinary income when the option is exercised, equal to the excess of the fair market value of the purchased shares on the exercise date over the exercise price paid for the shares, and the optionee will be required to satisfy the tax withholding requirements applicable to such income. Generally, we will be entitled to an income tax deduction equal to the amount of ordinary income recognized by the optionee with respect to the exercised non-statutory option. The deduction will in general be allowed for our taxable year in which such ordinary income is recognized by the optionee.
Stock Appreciation Rights. No taxable income is recognized upon receipt of a stock appreciation right. The holder will recognize ordinary income in the year in which the stock appreciation right is exercised, in an amount equal to the excess of the fair market value of the underlying shares on the exercise date over the base price in effect for the exercised right, and the holder will be required to satisfy the tax withholding requirements applicable to such income. Generally, we will be entitled to an income tax deduction equal to the amount of ordinary income recognized by the holder in connection with the exercise of the stock appreciation right. The deduction will in general be allowed for the taxable year in which such ordinary income is recognized.
Restricted Stock. The recipient of unvested shares of common stock will not recognize any taxable income at the time those shares are issued but will have to report as ordinary income, as and when those shares subsequently vest, an amount equal to the excess of (i) the fair market value of the shares on the vesting date over (ii) the cash consideration (if any) paid for the shares. The recipient may, however, elect under Section 83(b) of the Code to include as ordinary income in the year the unvested shares are issued an amount equal to the excess of (i) the fair market value of those shares on the issue date over (ii) the cash consideration (if any) paid for such shares. If the Section 83(b) election is made, the recipient will not recognize any additional income as and when the shares subsequently vest. Generally, we will be entitled to an income tax deduction equal to the amount of ordinary income recognized by the recipient with respect to the unvested shares, whether at grant (pursuant to a Section 83(b) election) or at vesting. The deduction will in general be allowed for our taxable year in which such ordinary income is recognized by the recipient.
Restricted Stock Units. No taxable income is recognized upon receipt of restricted stock units. The holder will recognize ordinary income when the holder receives the shares or the value of the shares subject to the units. The amount of that income will be equal to the fair market value of the shares on the date of issuance, if shares are issued, and the amount of cash, if cash is paid, and the holder will be required to satisfy the tax withholding requirements applicable to such income. Generally, we will be entitled to an income tax deduction equal to the amount of ordinary income recognized by the holder at the time the restricted stock units are settled. The deduction will in general be allowed for the taxable year in which such ordinary income is recognized.
Other Stock-Based Award. The tax consequences of other stock-based awards will depend on the nature of such awards. However, in general, taxable income is recognized when stock-based awards are actually settled and the participant receives shares or the value of shares, and at such time the participant will be required to satisfy the tax withholding requirements applicable to such income. Generally, we will be entitled to an income tax deduction equal to the amount of ordinary income recognized by the participant at the time of settlement. The deduction will in general be allowed for the taxable year in which such ordinary income is recognized.
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Dividends and Dividend Equivalent Rights. No taxable income is recognized upon receipt of a right to dividend or dividend equivalents. The holder will recognize ordinary income in the year in which a dividend or distribution, whether in cash, securities, or other property, is paid to the holder. The amount of that income will be equal to the fair market value of the cash, securities, or other property received, and the holder will be required to satisfy the tax withholding requirements applicable to such income. Generally, we will be entitled to an income tax deduction equal to the amount of the ordinary income recognized by the holder at the time the dividend or distribution is paid to such holder. That deduction will in general be allowed for the taxable year in which such ordinary income is recognized.
Section 162(m) of the Code. Section 162(m) of the Code imposes a $1 million limit on the amount a public company may deduct for compensation paid to a company’s chief executive officer, chief financial officer, or any of the company’s three other most highly compensated executive officers. As in prior years, while deductibility of executive compensation for federal income tax purposes is among the factors the Compensation Committee considers when structuring our executive compensation arrangements, it is not the sole or primary factor considered. Our Board and the Compensation Committee retain the flexibility to authorize compensation that may not be deductible if they believe it is in our best interests.
Accounting Treatment
Pursuant to FASB ASC Topic 718, we must expense all share-based payments, including grants of stock options, stock appreciation rights, restricted stock, restricted stock units and all other stock-based awards under the 2018 Omnibus Plan. Accordingly, stock options and stock appreciation rights which are granted to our employees and non-employee directors and payable in shares will have to be valued at fair value as of the grant date under an appropriate valuation formula, and that value will then have to be charged as a direct compensation expense against our reported earnings over the designated vesting period of the award. Stock appreciation rights that are to be settled in cash will be subject to variable mark-to-market accounting until the settlement date. For shares issuable upon the vesting of restricted stock units awarded under the 2018 Omnibus Plan, we will be required to amortize over the vesting period a compensation cost equal to the fair value of the underlying shares on the date of the award. If any other shares are unvested at the time of their direct issuance, then the fair value of those shares at that time will be charged to our reported earnings ratably over the vesting period. Such accounting treatment for restricted stock units and direct stock issuances will be applicable whether vesting is tied to service periods or performance goals, although, for performance-based awards, the grant date fair value will initially be determined on the basis of the probable outcome of performance goal attainment. The issuance of a fully vested stock bonus will result in an immediate charge to our earnings equal to the fair value of the bonus shares on the issuance date. Dividends or dividend equivalents paid on the portion of an award that vests will be charged against our retained earnings. If the award holder is not required to return the dividends or dividend equivalents if they forfeit their awards, dividends or dividend equivalents paid on instruments that do not vest will be recognized by us as additional compensation cost.
Finally, it should be noted that the compensation expense accruable for performance-based awards under the 2018 Omnibus Plan will, in general, be subject to adjustment to reflect the actual outcome of the applicable performance goals, and any expense accrued for such performance-based awards will be reversed if the performance goals are not met, unless those performance goals are deemed to constitute market conditions (i.e., because they are tied to the price of shares of our common stock) under FASB ASC Topic 718.
Vote Required
Approval of the 2018 Omnibus Plan requires the affirmative vote of a majority of the votes cast, with abstentions considered “votes cast” under current NYSE rules and therefore having the effect of a vote against. Should such shareholder approval not be obtained, then the Plan Amendment will not become effective and awards will continue to be granted under the 2018 Omnibus Plan, subject to previously authorized share limits.
92CATALENT, INC. | 2023 Proxy Statement PROPOSAL 4: APPROVAL OF AMENDMENT NO. 1 TO THE CATALENT, INC. 2018 OMNIBUS INCENTIVE PLAN
Recommendation of the Board of Directors
Our Board recommends that the shareholders vote FOR the approval of the Plan Amendment. Our Board believes that it is in our best interest and yours to provide certain employees, non-employee directors, and certain consultants and advisors with the opportunity to acquire an ownership interest in the company through their participation in the 2018 Omnibus Plan and thereby encourage them to remain in the company’s service and more closely align their interests with those of the shareholders. Our Board believes that the Plan Amendment is necessary for us to be able to continue equity grants under the 2018 Omnibus Plan, and, thereby, to attract and retain the services of individuals essential to our long-term growth and success.
ANNUAL MEETING, VOTING, AND PROCEDURES 2023 Proxy Statement | CATALENT, INC.93
Annual Meeting, Voting, and Procedures
Annual Meeting Information
We are making this Proxy Statement available to our shareholders in connection with the solicitation of proxies by our Board for our 2023 Annual Meeting of Shareholders. We are holding our 2023 Annual Meeting of Shareholders at 8:00 a.m. Eastern on Thursday, January 25, 2024 via a virtual meeting that can be attended at www.virtualshareholdermeeting.com/CTLT2023.
We will limit attendance to shareholders of record on the record date, December 4, 2023, or their proxy holders. In order to access the virtual meeting, you will need the 16-digit control number included on your proxy card, voting instruction form or Notice of Internet Availability. You will be able to submit questions during the meeting by typing your question into the “ask a question” box on the meeting page. If you encounter any difficulty accessing the virtual Annual Meeting during the check-in or meeting time, please call the technical support number that will be posted on the virtual Annual Meeting log-in page. Technical support will be available starting 15 minutes prior to the meeting. If you hold shares through a bank, broker, or other nominee (also known as shares held in “street name”), you will need to follow the instructions provided by such broker, bank or nominee.
Only shareholders or their valid proxy holders may address the meeting.
Availability of Proxy Materials
AVAILABILITY OF
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We are furnishing proxy materials to our shareholders via “Notice and Access” delivery. On or about December 15, 2023, we mailed to our shareholders a Notice of Internet Availability of Proxy Materials. This notice contains instructions on how to access our 2023 Proxy Statement and 2023 Annual Report and vote online. Our 2023 Proxy Statement and 2023 Annual Report are available online at www.proxyvote.com.
You will not receive a printed, paper copy of our proxy materials unless you request one. To view this material, you must have available the 16-digit control number located on the Notice mailed on or about December 15, 2023 or the proxy card, or, if shares are held in the name of a broker, bank, or other nominee, on the voting instruction form. To request a paper copy of our proxy materials, visit www.proxyvote.com, call 1-800-579-1639, or send an email, with your 16-digit control number in the subject line, to sendmaterial@proxyvote.com. Please make the request on or before January 11, 2024 to facilitate timely delivery.
Who is Entitled to Vote at the Annual Meeting?
Only holders of Catalent, Inc. common stock at the close of business on December 4, 2023, the record date fixed by our Board, may vote the shares of common stock that they hold on that date at the 2023 Annual Meeting of Shareholders with respect to the matters submitted for vote. In deciding all matters at the Annual Meeting, each share of common stock represents one vote. As of December 4, 2023, there were 180,641,272 shares of our common stock outstanding.
A list of the holders of record as of December 4, 2023 will be available for inspection by appointment during ordinary business hours at our headquarters at 14 Schoolhouse Road, Somerset, NJ 08873, from January 15, 2024 to January 24, 2024. Appointments can be made by emailing our Corporate Secretary at CorpSec@catalent.com.
94CATALENT, INC. | 2023 Proxy Statement ANNUAL MEETING, VOTING, AND PROCEDURES
Rights Afforded to Virtual Meeting Participants
The virtual meeting format for the Annual Meeting will enable full and equal participation by attending shareholders from any place in the world at little to no cost. We designed the format of the virtual meeting to ensure that our shareholders who attend our Annual Meeting will be afforded the same rights and opportunities to participate as they would at an in-person meeting. We will take the following steps to ensure such an experience:
providing shareholders with the ability to submit appropriate questions real-time via the meeting website, limiting questions to one per shareholder unless time otherwise permits; and
answering as many questions submitted in accordance with the meeting rules of conduct as possible in the time allotted for the meeting without discrimination.
How to Vote
We encourage you to vote as soon as possible, even if you plan to attend the meeting virtually on January 25, 2024. Your vote is important. You may vote shares that you owned as of the close of business on December 4, 2023, which is the record date set by our Board.
If you own shares registered directly in your name as the shareholder of record, you are a “record owner” and have the right to give your proxy directly to our vote tabulating agent. You may vote by proxy in the following ways:
Review Your Proxy Statement and Vote in One of Four Ways:
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VIRTUALLY
| Online at www.virtualshareholdermeeting.com/ CTLT2023 8:00 a.m. Eastern on January 25, 2024. | ||||||||
PROPOSAL 4 - AMENDMENT OF AMENDED AND RESTATED CERTIFICATE OF INCORPORATION TO ELIMINATE THE SUPERMAJORITY VOTE REQUIREMENT FOR SHAREHOLDER AMENDMENTS TO OUR BYLAWS
(Item 4 on the Proxy Card)
Our Board of Directors recommends that our shareholders approve our proposal to amend and restate our Amended & Restated Certificate of Incorporation (the “Current Certificate”) to lower the threshold for amendment by our shareholders of our bylaws from a 66 2⁄3% super-majority of our common stock to a simple majority.
Article V.B of the Current Certificate allows for the amendment of our bylaws by the affirmative vote of shareholders holding at least 66 2⁄3% of our common stock (a level that was reached once the holdings of the Blackstone affiliate that was our former principal owner, fell below 40% of our outstanding common stock). As part of its continuing review of the elements of our corporate governance standard and practices, the Nominating Committee concluded that the voting threshold was unnecessarily high and recommended to the Board of Directors that both the bylaws and the Current Certificate be amended to allow for amendment of our bylaws by simple majority, with the Board of Directors retaining is ability to make changes to the bylaws as well. Assuming this proposal is approved by our shareholders, the Board will amend our bylaws accordingly in order to avoid conflicting standards.
If approved, the revised Article V.B would read as follows, with terms omitted from the Current Certificatestruck out and new terms inbold double underline(and assuming that thenon-substantive changes proposed in Proposal 6 are approved and implemented):
The Board of Directors is expressly authorized to make, repeal, alter, amend and rescind, in whole or in part, the bylaws of the Corporation (as in effect from time to time, the “Bylaws”) without the assent or vote of the stockholders in any manner not inconsistent with the laws of the State of Delaware or thisSecond Amended and Restated Certificate of Incorporation. Notwithstanding anything to the contrary contained in thisSecondAmended and Restated Certificate of Incorporation or any provision of law which might otherwise permit a lesser vote of the stockholders, at any time when Blackstone (as defined below) beneficially owns, in the aggregate, less than 40% in voting power of the stock of the Corporation entitled to vote generally in the election of directors, in addition to any vote of the holders of any class or series of capital stock of the Corporation required herein (including any certificate of designation relating to any series of Preferred Stock), the Bylaws or applicable law, the affirmative vote ofthe holders of at least 66 2/3%a majorityin voting power of all the then-outstanding shares of stock of the Corporation entitled to vote thereon, voting together as a single class, shall be required in order for the stockholders of the Corporation to alter, amend, repeal or rescind, in whole or in part, any provision of the Bylaws or to adopt any provision inconsistent therewith.
BYINTERNET
Online at www.proxyvote.com. 24 hours a day until 11:59 p.m. Eastern on January 24, 2024 for shares held directly and by 11:59 p.m. on January 22, 2024 for shares held in a Plan. | ||||||||
BYTELEPHONE
| By calling 1-800-690-6903 (toll free) in the United States or Canada. 24 hours a day until 11:59 p.m. Eastern on January 24, 2024 for shares held directly and by 11:59 p.m. on January 22, 2024 for shares held in a Plan. | BYMAIL
| By returning a properly completed, signed and dated proxy card or voting instruction form in the postage-paid envelope. If you have not already received a proxy card, you may request a proxy card from us by following the instructions on your Notice of Internet Availability. Allow sufficient time for us to receive your proxy card or voting instruction form before the date of the meeting. | |||||
Set forthIf you own shares in Appendix Bstreet name, the institution holding the shares is the record owner and you are a “beneficial owner” of those shares. You will receive voting instructions from your broker, bank, or plan trustee, and you may direct them how to thisvote on your behalf by complying with those voting instructions. Those instructions will include a control number for telephone and internet voting as well as for accessing and voting at the virtual meeting, and applicable deadlines.
ANNUAL MEETING, VOTING, AND PROCEDURES 2023 Proxy Statement is | CATALENT, INC.95
Revoking a formProxy
If you own shares registered directly in your name as the shareholder of record, you can revoke your proxy at any time before the vote occurs by:
Submitting a written revocation to our Corporate Secretary, which must be received no later than 5:00 p.m. Eastern on January 24, 2024 at Catalent, Inc., 14 Schoolhouse Road, Somerset, NJ 08873, Attention: Corporate Secretary;
Submitting a later-dated proxy;
Providing subsequent telephone or internet voting instructions no later than 11:59 p.m. Eastern on January 24, 2024 for shares held directly and no later than 11:59 p.m. on January 22, 2024 for shares held in a Plan; or
Voting online at the virtual meeting.
If you hold your shares in street name, you must contact your broker, bank, or other nominee for specific instructions on how to change or revoke your vote.
Only the latest, validly executed proxy that you submit will be counted. Your attendance at the 2023 Annual Meeting of Shareholders will not by itself revoke a proxy you have given unless you file a written notice of such revocation as noted above.
Quorum and Required Vote
We will have a quorum and will be able to conduct the business of the Second Amended & Restated Certificate2023 Annual Meeting of Incorporation that wouldShareholders if a majority of the outstanding shares of our common stock entitled to vote at the meeting are present, either in person or by proxy. Each share of common stock is entitled to one vote on each matter to be adopted should eachvoted upon at the 2023 Annual Meeting of Proposals 4, 5,Shareholders. Abstentions and 6broker non-votes will be approved (though nonecounted as present for the purpose of themdetermining whether a quorum is conditioned on or otherwise requirespresent for the meeting.
The table below describes the vote requirements and the effect of abstentions and broker non-votes, as prescribed under our bylaws and Delaware law, for the election of directors and the approval of any other).
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PROPOSAL 5 - AMENDMENT OF AMENDED AND RESTATED CERTIFICATE OF INCORPORATION TO ELIMINATE THE SUPERMAJORITY VOTE REQUIREMENT FOR SHAREHOLDERS TO REMOVE DIRECTORS FOR CAUSE
(Item 5 on the Proxy Card)
Our Board of Directors recommends that our shareholders approve our proposal to amend and restate our Current Certificate to lower the threshold for removal of a director for cause from a 66 2⁄3% super-majority of our common stock to a simple majority.
Article VI.C of the Current Certificate allows for the removal of any or all directors for cause and upon the affirmative vote of shareholders holding at least 66 2⁄3% of our common stock (a level that was reached once the holdings of the Blackstone affiliate that was our former principal owner, fell below 40% of our outstanding common stock). As part of its continuing review of the elements of our corporate governance standard and practices, the Nominating Committee concluded that the voting threshold was unnecessarily high and recommended to the Board of Directors that the Current Certificate be amended to allow removal of a director for cause by a simple majority.
If approved, the revised Article V.B would read as follows, with terms omitted from the Current Certificatestruck out and new terms inbold double underline (and assuming that thenon-substantive changes proposed in Proposal 6 are approved and implemented):
Any or all of the directors (other than the directors elected by the holders of any series of Preferred Stock of the Corporation, voting separately as a series or together with one or more other such series, as the case may be) may be removedfrom officeat any timeeither with or withoutbut only forcauseand onlyby the affirmative vote of a majority in voting power of allthe then-outstanding shares of stock of the Corporation entitled to vote thereon,voting as a single class;provided, however, that at any time when Blackstone beneficially owns, in the aggregate, less than 40% in voting power of the stock of the Corporation entitled to vote generally in the election of directors, any such director or all such directors may be removed only for cause and only by the affirmative vote of the holders of at least 66 2/3% in voting power of all the then-outstanding shares of stock of the Corporation entitled to vote thereon,voting together as a single class.
Set forth in Appendix B to this Proxy Statement is a form of the Second Amended & Restated Certificate of Incorporation that would be adopted should each of Proposals 4, 5, and 6 be approved (though none of them is conditioned on or otherwise requires the approval of any other).
Proposal | Vote Required | Effect of Abstentions and Broker Non-Votes* | Board Recommendations | |||
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Election of Twelve Director Nominees | ||||||||
PROPOSAL 6 - AMENDMENT OF AMENDED AND RESTATED CERTIFICATE OF INCORPORATION TO ELIMINATE OBSOLETE PROVISIONS AND MAKE OTHERNON-SUBSTANTIVE AND CONFORMING CHANGES
Majority of the votes cast.**
(Item 6 on the Proxy Card)
Our Board of Directors recommends that our shareholders approve our proposal to amend and restate our Current Certificate to (i) remove provisions that specifically identify our former majority owner, and (ii) make additionalnon-substantive and conforming changes.
Majority-Owner Provisions
At the time of our IPO, ownership of a majority of our common stock was held by a single holder and its affiliated entities, requiring certain provisions in our certificate of incorporation to accommodate their status as related parties, as well as give effect to the terms of the stockholders agreement that applied at that time. These provisions included, without limitation:
Abstentions and broker non-votes will have no effect on the |
Given that that majority owner completely sold its holdings of our common stock in the fall of 2016, the Nominating Committee concluded that the provisions in the Current Certificate specific to that ownership were no longer appropriate and recommended to the Board of Directors that the Current Certificate be amended to remove said provisions, a recommendation that the Board of Directors endorsed.
FOR
If this Proposal is approved, provisions specific to our former majority owner would be removed from Articles V.A, V.B, VI.B, VI.C, VIII.A, VIII.B, IX (deleted in its entirety) and X.C, as marked in the proposed form of Second Amended & Restated Certificate of Incorporation that is set forth in Appendix B to this Proxy Statement and that would be adopted if each of Proposals 4, 5, and 6 were approved (though none of them is conditioned on or otherwise requires the approval of any other).
Additional Changes
In their review of the Current Certificate, the Board of Directors and the Nominating Committee concluded that certain additional changes to the Current Certificate were appropriate at the present time, including without limitation:
If approved, the additional changes would be as marked in the proposed form of Second Amended & Restated Certificate of Incorporation that is set forth in Appendix B to this Proxy Statement and that would be adopted if each of Proposals 4, 5, and 6 were approved (though none of them is conditioned on or otherwise requires the approval of any other).
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| Majority in voting power of the shares present in person or represented by proxy and entitled to vote on the subject matter. | Abstentions will have the effect of a vote against. | FOR | |||||
Advisory Vote to Approve Our Executive Compensation (Say-on-Pay) | Majority in voting power of the shares present in person or represented by proxy and entitled to vote on the subject matter. | Abstentions will have the effect of a vote against. Broker non-votes will have no effect on the outcome. | FOR | |||||
Approval of Amendment No. 1 to the Catalent, Inc. 2018 Omnibus Incentive Plan | Majority of the votes cast. | Abstentions and broker non-votes will have no effect on the outcome. | FOR | |||||
| * | A broker non-vote occurs when a broker submits a proxy but does not vote on a Proposal because it is not a “routine” item under NYSE rules and the broker has not received voting instructions from the beneficial owner of the shares. Your broker may vote without your instructions only on Proposal 2—Ratification of Appointment of E&Y as Independent Auditor for Fiscal 2024. |
| ** | Pursuant to our Governance Guidelines, any incumbent director nominee who does not receive a majority of votes cast for such nominee’s election must offer to resign. The Nominating Committee considers the offer and recommends to our Board whether to accept or reject it. Our Board will act on the recommendation within ninety days following the date of the shareholder meeting during which the election occurred, considering the factors considered by the Nominating Committee and any additional relevant information. |
96CATALENT, INC. | 2023 Proxy Statement ANNUAL MEETING, VOTING, AND PROCEDURES
Effect of not Casting Your Vote
If we timely receive a proxy specifying your voting choice, your shares will be voted in accordance with that choice. If you are a registered shareholder and you do not cast your vote, no vote will be cast on your behalf on any of the Proposals at the Annual Meeting of Shareholders. If you sign and return a proxy card without specific voting instructions, your shares will be voted in accordance with our Board’s voting recommendations stated above.
If you hold your shares in street name, you will receive a voting instruction form that lets you instruct your bank, broker, or other nominee how to vote your shares. Under NYSE rules, if you do not provide voting instructions to your broker, the broker is permitted to exercise discretionary voting authority only on “routine” matters. The only “routine” item on this year’s Annual Meeting of Shareholders agenda is Proposal 2—Ratification of Appointment of E&Y as Independent Auditor for Fiscal 2024. If you hold your shares in street name, and you wish to have your shares voted on all proposals in this Proxy Statement, you must provide voting instructions. If you do not return your voting instruction form, your shares will not be voted on any item, except that your broker may vote in its discretion on Proposal 2.
Solicitation
We will pay the cost of preparing, assembling, printing, mailing, and distributing these proxy materials. We will provide copies of these proxy materials to banks, brokerage houses, fiduciaries, and custodians holding in their names shares of our common stock beneficially owned by others so that they may forward these proxy materials to the beneficial owners. Our directors, officers, or employees may solicit proxies or votes for us in person, or by mail, telephone, or electronic communication. They will not receive any additional compensation for these solicitation activities.
Availability of Voting Results
We expect to announce preliminary voting results at the 2023 Annual Meeting of Shareholders. We will disclose the final voting results in a Current Report on Form 8-K to be filed with the SEC following the meeting.
INFORMATION ABOUT 20182024 ANNUAL MEETING 2023 Proxy Statement | CATALENT, INC.97
Information About 2024 Annual Meeting
Shareholder Proposals for the 20182024 Annual Meeting of Shareholders
We currently intend to hold our 2018 Annual Meeting of Shareholders on October 31, 2018.
Proposals Pursuant to Rule14a-8. Pursuant to Rule14a-8 promulgated under the Exchange Act (“Rule14a-8”), shareholders may present proper proposals for inclusion in our Proxy Statement. To be eligible for inclusion in our 20182023 Proxy Statement under Rule14a-8, your proposal must be received by us no later than the close of business on May 25, 2018,August 17, 2024 and must otherwise comply with Rule14a-8. While the our Board of Directors will consider shareholder proposals, we reserve the right to omit from our proxy statement shareholder proposals that we are not required to include under the Exchange Act and its implementing rules, including Rule14a-8.
Business Proposals and Nominations Pursuant to Our Bylaws. Under our bylaws, in order to nominate a director or bring any other business before the shareholders at the 20182024 Annual Meeting of Shareholders, you must comply with the advance notice eligibility and procedural requirements specifically described in our bylaws (unless you wish to nominate a director in accordance with the eligibility and procedural requirements set forth in the proxy access provisionprovisions included in our bylaws, as described below). In addition, assuming the date of the 20182024 Annual Meeting of Shareholders is not more than 30 days before and not more than 70 days after the anniversary date of the 20172023 Annual Meeting of Shareholders, you must notify us in writing, and such written notice must be delivered to our Corporate Secretary at Catalent, Inc., 14 Schoolhouse Road, Somerset, NJ 08873 no earlier than July 5, 2018,June 28, 2024, and no later than August 4, 2018.July 28, 2024.
Shareholder Proxy Access.In August 2017, we amended and restatedaddition to satisfying the foregoing requirements under our bylaws, to implementcomply with the universal proxy rules, shareholders who intend to solicit proxies in support of director nominees other than the company’s nominees must provide a notice that sets forth the information required by Rule 14a-19 promulgated under the Exchange Act.
Shareholder Proxy Access. Our bylaws allow for proxy access, which allows a shareholder, or a group of up to 20 shareholders, that has continuously owned for three years or more at least 3% of our outstanding common stock to nominate and include in our Proxy Statement for each annual meetingAnnual Meeting of shareholders at which directors may be electedShareholders their own qualifying director nominees constituting up to the greater of two or 20% of the number of directors then serving on our Board (subject to certain limitations as set forth in our bylaws),provided that the nominating shareholder(s) and the nominee(s) satisfy the eligibility and procedural requirements set forth in. Each of our bylaws. Pursuant to our bylaws, each of the Board of Directors (prior to each annual meetingAnnual Meeting of shareholders)Shareholders) or the chair of any annual meetingAnnual Meeting of shareholdersShareholders shall have the power to determine whether a director nominee has been nominated by a shareholder in accordance with the eligibility and procedural requirements of the proxy access provisions included in our bylaws.provision. Notice of director nominees submitted under the proxy access bylaw provision must include the information required under our bylaws. Such noticebylaws and must be delivered to our Corporate Secretary at Catalent, Inc., 14 Schoolhouse Road, Somerset, NJ 08873 no earlier than the close of business on April 25, 2018July 18, 2024 and no later than the close of business on May 25, 2018August 17, 2024, unless the date of the fiscal 20182024 Annual Meeting of Shareholders is more than thirty (30) days before or after November 2, 2018,January 25, 2025, in which case such notice must be received by our Corporate Secretary by the close of business on the later of the 180th day prior to the 20182024 Annual Meeting of Shareholders or the
close of business on the 10th day following the day on which public announcement of the date of the 20182024 Annual Meeting of Shareholders is first made. The foregoing description of the shareholder proxy access provision included in our bylaws does not purport to be complete and is qualified in its entirety by reference to our bylaws.
A copy of our bylaws setting forth the requirements for the nomination of director candidates by shareholders and the requirements for proposals by shareholders may be obtained free of charge from our website,http://investor.catalent.com/corporate-governance, or from our Corporate Secretary. We are not required to consider a nomination or proposal that does not comply with the eligibility requirements and procedures set forth in our bylaws, and compliance with these procedures does not necessarily require us to include the proposed nominee or proposal in our proxy solicitation material.
98CATALENT, INC. | 2023 Proxy Statement INFORMATION ABOUT 2024 ANNUAL MEETING
Householding of Shareholder Documents
SEC rules permit us to satisfy delivery requirements for proxy statements and notices with respect to two or more shareholders sharing the same address by delivering a single proxy statement or a single notice addressed to those shareholders. This process, which is commonly referred to as “householding,” reduces the cost of the proxy solicitation process. Some brokers household proxy materials, delivering a single proxy statement or notice to multiple shareholders sharing an address unless contrary instructions have been received from the affected shareholders. Once you have received notice from your broker that they will be householding materials to your address, householding will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in householding and would prefer to receive a separate proxy statement or notice, or if your household is receiving multiple copies of these documents and you wish to request that future deliveries be limited to a single copy, please notify your broker. You can also request, and we will promptly deliver, a separate copy of the Notice of Internet Availability or the proxy materials by writingemailing our Corporate Secretary at Catalent, Inc.CorpSec@catalent.com.
Additional Filings
Our reports on Forms 10-K, 10-Q, and 8-K, as well as all amendments to those reports, are available without charge through our website, investor.catalent.com/financials/sec-filings, 14 Schoolhouse Road, Somerset, NJ 08873 or CorpSec@catalent.com or by calling(732) 537-6200.
Notice of Amendment to Bylaws
On August 24, 2017, our Board of Directors amended our bylaws to permit proxy access and implement majority voting for the election of directors as described above. The full text of our bylaws,soon as amended, is filed as Exhibit 3.1 to our Current Report on Form8-Kreasonably practicable after they are electronically filed with the Securities and Exchange CommissionSEC.
You may request a copy of our SEC filings, including a copy of the Annual Report on August 28, 2017. It is also available free of charge fromForm 10-K for the fiscal year ended June 30, 2023, as well as the foregoing corporate documents, at no cost to you, by writing to the Company address appearing in this Proxy Statement or by e-mailing our website,http://investor.catalent.com/corporate-governance, or from our Corporate Secretary.
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APPENDIX A
A: NON-GAAP FINANCIAL MEASURES 2023 Proxy Statement | CATALENT, INC.A-1
Appendix A:
Non-GAAP Financial Measures
Use of EBITDA from continuing operations, and Adjusted EBITDA
Management measures operating performance based on consolidated earnings from continuing operations before interest expense, expense/(benefit) for income taxes and depreciation and amortization, and this amount is adjusted for the income or loss attributable tonon-controlling interest interests (“EBITDA from continuing operations”). EBITDA from continuing operations is not defined under U.S. generally accepted accounting principles (“U.S. GAAP”) and, is not a measure of operating income, operating performance, or liquidity presented in accordance with U.S. GAAP, and is subject to important limitations.
We believe that the presentation of EBITDA from continuing operations enhances an investor’s understanding of itsour financial performance. We believe this measure is a useful financial metric to assess itsour operating performance from period to period by excluding certain items that it believes are not representative of its core businessacross periods and usesuse this measure for business planning purposes.
In addition, given the significant investments that we have made in the past in property, plant and equipment, depreciation and amortization expenses represent a meaningful portion of our cost structure. We believe that disclosing EBITDA from continuing operations will provide investors with a useful tool for assessing the comparability between periods of our ability to generate cash from operations sufficient to pay taxes, to service debt, and to undertake capital expenditures because it eliminateswithout consideration of non-cash depreciation and amortization expense. We present EBITDA from continuing operations in order to provide supplemental information that we consider relevant for the readers ofthose reviewing our consolidated financial statements,results, and such information is not meant to replace or supersede U.S. GAAP measures. Our definition of EBITDA from continuing operations may not be the same as similarly titled measures used by other companies. The most directly comparable measure to EBITDA from operations defined under U.S. GAAP is net earnings. A reconciliation of net earnings to EBITDA from operations is provided below.
Under our credit agreement and the indentures that govern our outstanding debt securities, our ability to engage in certain activities, such as incurring certain additional indebtedness, making certain investments, and paying certain dividends, is tied to ratios based on “AdjustedAdjusted EBITDA” which (which is defined as “Consolidated EBITDA” in the credit agreement and “EBITDA” in the indentures). Adjusted EBITDA is a covenant compliance measure in our credit agreement and indentures, particularly those covenants governing debt incurrence and restricted payments. Adjusted EBITDA is based on the definitions in the credit agreement, is not defined under U.S. GAAP, is not a measure of operating income, operating performance, or liquidity presented in accordance with U.S. GAAP, and is subject to important limitations. Set forth below is a calculation showing the adjustments made to EBITDA from continuing operations to obtain Adjusted EBITDA. Adjusted EBITDA is the covenant compliance measure used in the credit agreement governing debt incurrence and restricted payments. Because not all companies use identical calculations, our presentation of Adjusted EBITDA may not be comparable to other similarly titled measures of other companies.
In addition, we use Adjusted EBITDA as a performance metric that guides management in its operation of and planning for the future of the business and drives certain management compensation programs. Management believes that Adjusted EBITDA provides a useful measure of our operating performance from period to period by excluding certain items that are not representative of our core business, including interest expense and non-cash charges like depreciation and amortization.
The measure under U.S. GAAP most directly comparable U.S. GAAP measure to EBITDA from continuing operations and Adjusted EBITDA is earnings/(loss)net earnings. In calculating Adjusted EBITDA, we add back certain non-cash, non-recurring, and other items that are deducted when calculating EBITDA from continuing operations. Included in this
| does not include non-cash stock-based employee compensation expense and certain other non-cash charges; |
| • | does not include cash and non-cash restructuring, severance and relocation costs incurred to realize future cost savings and enhance operations; |
adds back any non-controlling interest expense, which represents minority investors’ ownership of non-wholly owned consolidated subsidiaries and is, therefore, not available; and |
includes estimated cost savings that have not yet been fully reflected in our results.
appendix is a
A-2CATALENT, INC. | 2023 Proxy Statement APPENDIX A: NON-GAAP FINANCIAL MEASURES
A reconciliation of earnings/(loss) from continuing operationsnet earnings to Adjusted EBITDA from continuing operationsis provided below.
Use of Adjusted Net Income and Adjusted EBITDA.Net Income per share
We use Adjusted Net Income and Adjusted Net Income per share (which we sometimes refer to as “Adjusted EPS”) as performance metrics. Adjusted Net Income is not defined under U.S. GAAP, is not a measure of operating income, operating performance, or liquidity presented in accordance with U.S. GAAP, and is subject to important limitations. We believe that providing information concerning Adjusted Net Income and Adjusted Net Income per share enhance an investor’s understanding of our financial performance. We believe that these measures are useful financial metrics to assess our operating performance from period to period by excluding certain items that we believe are not representative of our core business, and we use these measures for business planning and executive compensation purposes. We define Adjusted Net Income as net earnings adjusted for (1) earnings or loss from discontinued operations, net of tax, (2) amortization attributable to purchase accounting, and (3) income or loss from non-controlling interest in majority-owned operations. We also make adjustments for other cash and non-cash items (as shown above in the description of Adjusted EBITDA), partially offset by our estimate of the tax effects as a result of such cash and non-cash items. Our definition of Adjusted Net Income may not be the same as similarly titled measures used by other companies. Adjusted Net Income per share is computed by dividing Adjusted Net Income by the weighted average diluted shares outstanding. A reconciliation of net earnings to Adjusted Net Income and a computation of Adjusted Net Income per share are provided below.
Use of Constant Currency, Budget-Based Revenue, and Budget-Based EBITDA
Because we are a company with substantial foreign operations, changes inAs exchange rates over which we have no control, can beare an important factor in understandingperiod-to-period comparisons. We therefore use results on a constant currency basis, including revenue and EBITDA computed using constant currency exchange rates, as one means to evaluate our performance as comparisons, we operate our business. We also believe the presentation of results on a constant currencyconstant-currency basis in addition to reported results helps improve investors’ ability to understand our operating results and evaluate our performance in comparison to prior periods. Constant currencyConstant-currency information compares results between periods as if exchange rates had remained constant period over period.period-over-period. We use results on a constant-currency basis as one measure to evaluate our performance. We calculate constant currency results by calculating current-year results using prior-year foreign currency exchange rates from earlier periods.rates. We generally refer to such amounts calculated on a constant-currency basis as excluding the impact of foreign exchange or beingexchange. These results should be considered in addition to, not as a substitute for, results reported in accordance with U.S. GAAP. Results on a constant-currency basis.
basis, as we present them, may not be comparable to similarly titled measures used by other companies and are not measures of performance presented in accordance with U.S. GAAP. When we set the financial goals that we use to operate the business, including the goals that our executives must meet to qualify for our fiscal 20172021 performance-based incentive compensation, and when we determine whether those goals have been met, we use, among other metrics, revenue and Adjusted EBITDA computed using the currency exchange rates that we use internally in budgeting and in measuring performance against budget, in part because we believe that the compensation of our executives should not be affected, to the extent practicable, by factors beyond those executives’ control. We refer in this Proxy Statement to revenue and Adjusted EBITDA computed on this type of constant-currency basis as “Budget-Based Revenue” and “Budget-Based EBITDA,” respectively.
Results at constant currency,on a constant-currency basis, Budget-Based Revenue, and Budget-Based EBITDA should be considered in addition to, not as a substitute for, results reported in accordance with U.S. GAAP. Results on a constant-currency basis, Budget-Based Revenue, and Budget-Based EBITDA, as we present them, may not be comparable to similarly titled measures used by other companies and are not measures of performance presented in accordance with U.S. GAAP.
The reconciliation in this Appendix of Earnings/(Loss) from Continuing Operationsnet earnings to Adjusted EBITDA also includes a reconciliation to Budget-Based EBITDA. The reconciliation of fiscal 20172023 consolidated net revenue reported in accordance with U.S. GAAP to net revenue on a constant-currency basisat budgeted foreign exchange rates is as follows (in millions of U.S. dollars):
Revenue (GAAP) | $4,263 | |||
Foreign exchange impact | (108) | |||
Budget-Based Revenue | $4,155 |
APPENDIX A: NON-GAAP FINANCIAL MEASURES 2023 Proxy Statement | CATALENT, INC.A-3
Catalent, Inc.
Reconciliation of Earnings/(Loss) from Continuing Operations
ToNet Earnings to EBITDA from Continuing Operations, operations,
Adjusted EBITDA and Budget-Based EBITDA
| Fiscal Year Ended June 30, | ||||||||
| (In millions of U.S. dollars) | 2017 | 2016 | ||||||
Earnings from continuing operations |
|
109.8 |
|
|
111.2 |
| ||
Interest expense, net | 90.1 | 88.5 | ||||||
Income tax provision/(benefit) | 25.8 | 33.7 | ||||||
Depreciation and amortization | 146.5 | 140.6 | ||||||
Non-controlling interest | - | 0.3 | ||||||
EBITDA from continuing operations | 372.2 | 374.3 | ||||||
Non-cash stock compensation expense | 20.9 | 10.8 | ||||||
Impairment charges and loss on sale of assets | 9.8 | 2.7 | ||||||
Financing related expenses | 4.3 | - | ||||||
U.S. GAAP restructuring amounts | 8.0 | 9.0 | ||||||
Acquisition, integration and other special items | 25.6 | 18.2 | ||||||
Foreign exchange (gain)/loss | 9.6 | (10.5 | ) | |||||
Other (sponsors’ fee, severance, other items) | (0.4 | ) | (3.3 | ) | ||||
Total adjustments | 77.8 | 26.9 | ||||||
Estimated cost savings | - | - | ||||||
Adjusted EBITDA | 450.0 | 401.2 | ||||||
Foreign exchange impact | (18.9 | ) | (20.8 | ) | ||||
Adjusted EBITDA at constant currency | 468.9 | 422.0 | ||||||
Adjusted EBITDA | 450.0 | 401.2 | ||||||
Foreign exchange impact at internal budget rates | (5.5 | ) | (8.7 | ) | ||||
Budget-Based EBITDA | 444.5 | 409.9 | ||||||
Fiscal Year Ended June 30,
| ||||||||
(In millions of U.S. dollars) | 2023 | 2022 | 2021 | |||||
Net (loss) earnings |
| (256 | ) | 499 | 585 | |||
Depreciation and Amortization |
| 422 |
| 378 | 289 | |||
Interest expense, net |
| 186 |
| 123 | 110 | |||
Income tax (benefit) expense |
| (86 | ) | 80 | 130 | |||
EBITDA from operations |
| 266 |
| 1,080 | 1,114 | |||
Goodwill impairment charges |
| 210 |
| - | ||||
Stock-based compensation |
| 35 |
| 54 | 51 | |||
Impairment charges and gain/loss on sale of assets |
| 98 |
| 31 | 9 | |||
Financing-related expenses and other |
| - |
| 4 | 18 | |||
Restructuring costs |
| 66 |
| 10 | 10 | |||
Acquisition, integration, and other special items |
| 31 |
| 46 | 21 | |||
Gain on sale of subsidiary |
| - |
| (1) | (182) | |||
Foreign exchange loss (gain) (included in other, net)(1) |
| (11 | ) | 31 | (4) | |||
Inventory fair value step-up charges |
| - |
| 7 | - | |||
Other adjustments |
| 2 |
| (3) | (17) | |||
Adjusted EBITDA |
| 697 |
| 1,259 | 1,020 | |||
Favorable (unfavorable) FX impact |
| (17 | ) | (23) | 27 | |||
Adjusted EBITDA at constant currency |
| 714 |
| 1,282 | 993 | |||
Adjusted EBITDA |
| 697 |
| 1,259 | 1,020 | |||
Foreign exchange impact |
| (1 | ) | (30) | (24) | |||
Budget-Based EBITDA |
| 698 |
| 1,289 | 996 | |||
| (1) | Foreign exchange gain of $11 million for the fiscal year ended June 30, 2023, includes $10 million of unrealized gains related to foreign trade receivables and payables and intercompany transactions. |
| Foreign exchange gain of $31 million for the fiscal year ended June 30, 2022, includes: (a) $12 million of unrealized gains related to foreign trade receivables and payables, (b) $11 million of unrealized losses on the unhedged portion of our euro-denominated debt, and (c) $34 million of unrealized losses on inter-company loans. The foreign exchange adjustment was also affected by the exclusion of realized foreign currency exchange rate gains from the settlement of inter-company loans of $2 million. Inter-company loans exist between our subsidiaries and do not reflect the ongoing results of our trade operations. |
A-4CATALENT, INC. | 2023 Proxy Statement APPENDIX A: NON-GAAP FINANCIAL MEASURES
Catalent, Inc.
Reconciliation of Net Earnings to Adjusted Net Income and
Adjusted Net Income per share
Fiscal Year Ended June 30,
| ||||||
(In millions of U.S. dollars, except per share data) | 2023 | 2022 | ||||
Net (Loss) Earnings |
| (256 | ) | 499 | ||
Amortization(1) |
| 136 |
| 123 | ||
Goodwill impairment charges |
| 210 |
| - | ||
Stock-based compensation |
| 35 |
| 54 | ||
Impairment charges and gain/loss on sale of assets |
| 98 |
| 31 | ||
Financing-related expenses |
| - |
| 4 | ||
Restructuring Costs |
| 66 |
| 10 | ||
Acquisition, integration, and other special items |
| 31 |
| 46 | ||
Gain on sale of subsidiary |
| - |
| (1) | ||
Foreign exchange (gain) loss (included in other, net)(2) |
| (11 | ) | 31 | ||
Inventory fair value step-up charges |
| - |
| 7 | ||
Other adjustments |
| 2 |
| (4) | ||
Estimated tax effect of adjustments(3) |
| (126 | ) | (72) | ||
Discrete income tax benefit items(4) |
| (18 | ) | (54) | ||
Adjusted net income (ANI) |
| 167 |
| 674 | ||
| ||||||
ANI per share: | ||||||
ANI per basic share(5) |
| $ 0.92 |
| $ 3.82 | ||
ANI per diluted share(6) |
| $ 0.92 |
| $ 3.73 | ||
| (1) | Represents the amortization attributable to purchase accounting for previously completed business combinations. |
| (2) | Foreign exchange loss of $11 million for the fiscal year ended June 30, 2023, includes $10 million of unrealized gains related to foreign trade receivables and payable intercompany transactions. |
Foreign exchange loss of $31 million for the fiscal year ended June 30, 2022, includes: (a) $12 million of unrealized gains related to foreign trade receivables and payables, (b) $11 million of unrealized losses on the unhedged portion of the euro-denominated debt, and (c) $34 million of unrealized losses on inter-company loans. The foreign exchange adjustment was also affected by the exclusion of realized foreign currency exchange rate gains from the settlement of inter-company loans of $2 million. Inter-company loans exist between our subsidiaries and do not reflect the ongoing results of our trade operations. |
| (3) | We computed the tax effect of adjustments to net earnings by applying the statutory tax rate in the relevant jurisdictions to the income or expense items that are adjusted in the period presented. If a valuation allowance exists, the rate applied is zero. |
| (4) | Discrete period income tax expense (benefit) items are unusual or infrequently occurring items, primarily including: changes in judgment related to the realizability of deferred tax assets in future years, changes in measurement of a prior-year tax position, deferred tax impact of changes in tax law, and purchase accounting. |
| (5) | Represents Adjusted Net Income divided by the weighted average number of shares of Common Stock outstanding. For the fiscal year ended June 30, 2023 and 2022, the weighted average was 181 million and 176 million, respectively. |
| (6) | Represents Adjusted Net Income divided by the weighted average sum of (a) the number of shares of Common Stock outstanding, plus (b) the number of shares of Common Stock that would be issued assuming exercise or vesting of all potentially dilutive instruments, plus, in fiscal 2022, (c) the number of shares of Common Stock equivalent to the shares of Series A Preferred Stock outstanding under the “if-converted” method. For the fiscal years ended June 30, 2023 and 2022, the weighted average was 181 million. |
APPENDIX B
B: PROPOSED SECOND AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OFAMENDMENT NO. 1 TO THE CATALENT, INC.
Note that the proposed certificate is marked to show changes from our current Amended & Restated Certificate of Incorporation and assumes that Proposals 4, 5, and 6 are all approved. Text that will be added is marked inbold double underline and text to be deleted is marked instrike through. If approved and filed, the deleted text will be deleted and the added text will not be specifically highlighted. If only one or two of Proposals 4, 5, and 6 are adopted, corresponding changes to this form will be made before it is filed.
SECONDAMENDED AND RESTATED CERTIFICATE
OF INCORPORATION OF 2018 OMNIBUS INCENTIVE PLAN 2023 Proxy Statement | CATALENT, INC.B-1
The present name of
Appendix B:
Proposed Amendment No. 1 to the corporation isCatalent, Inc. 2018 Omnibus Incentive Plan
AMENDMENT NO. 1 TO THE CATALENT, INC. 2018 OMNIBUS INCENTIVE PLAN
WHEREAS, Catalent, Inc. (the “CorporationCompany”). The Corporation was incorporated maintains the Catalent, Inc. 2018 Omnibus Incentive Plan (the “Plan”) (capitalized terms not defined herein shall have the meaning assigned to such terms in the Plan);
WHEREAS, pursuant to Section 13 of the Plan, the Board may amend the Plan; provided that amendments must be approved by the Company’s stockholders to the extent necessary to comply with any regulatory requirement applicable to the Plan or if any amendment increases the number of securities that may be issued under the name “PTS Holdings Corp.” byPlan;
WHEREAS, the filing of its original Certificate of Incorporation withBoard has determined, following the Secretary of Staterecommendation of the State of Delaware on March 14, 2007. This, which original Certificate of Incorporation was amendedCommittee and restated on August 5, 2014. This Second Amended and Restated Certificate of Incorporationthe Committee’s independent compensation consultant, that it is in the best interests of the Corporation, which restatesCompany and integrates and also further amends the provisions of the Corporation’s Certificate of Incorporation, as amended and restated, was duly adopted in accordance with the provisions of Sections 242 and 245 of the General Corporation Law of the State of Delawareand by the written consent of its stockholders in accordance with Section 228 ofto amend the General Corporation Law ofPlan, subject to stockholder approval, to (i) increase the State of Delaware. The Certificate of Incorporation of the Corporation, as amended and restated, is hereby amended, integrated and restated to read in its entirety as follows:
ARTICLE I
NAME
The name of the Corporation is Catalent, Inc.
ARTICLE II
REGISTERED OFFICE AND AGENT
The address of the registered office of the Corporation in the State of Delaware is Corporation Service Company, 2711 Centerville Road, Suite 400, Wilmington, DE 19808, County of New Castle.
|
ARTICLE III
PURPOSE
The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware (the “DGCL”).
ARTICLE IV
CAPITAL STOCK
The totalaggregate number of shares of all classesCommon Stock available for Awards under the Plan, (ii) increase the annual limit for director compensation, (iii) eliminate a provision that allows for recycling of stock that the Corporation shall have authority to issue is 1,100,000,000, which shall be divided into two classes as follows:
1,000,000,000 shares of common stock, par value $0.01 per share (“Common Stock withheld for taxes when Options and SARs are exercised as well as shares withheld on net-settlement of Options and SARs, (iv) adjust the “fungible ratio” for debiting Plan shares, (v) require a minimum one-year vesting period for Awards, subject to certain limited exceptions, as has been the practice of the Company prior to the Amendment No. 1 Effective Date (as defined below), and (vi) update the clawback language in the Plan;
WHEREAS, the Board has approved the submission of this Amendment No. 1 to the Plan (this “Amendment No. 1”) to the Company’s stockholders for approval and has conditioned the effectiveness of this Amendment No. 1 on such approval (the date of such approval, the “Amendment No. 1 Effective Date”); and
100,000,000WHEREAS, if the Company’s stockholders fail to approve this Amendment No. 1, the existing Plan shall continue in full force and effect, and this Amendment No. 1 shall be void and of no effect.
NOW, THEREFORE, the Plan is hereby amended, effective as of the Amendment No. 1 Effective Date, as follow:
| 1. | A new Section 2.1(bbb) is added to read in its entirety as follows: |
“‘Amendment No. 1 Effective Date’ means the date on which the Company’s stockholders approve Amendment No. 1 to the Plan.”
| 2. | Section 5(b) of the Plan is hereby amended and restated to read in its entirety as follows: |
“(b) The Absolute Share Limit.
(i) Subject to Section 12 and Section 5(d) of the Plan, no more than TOTAL shares of preferred stock, par value $0.01 per share (“Preferred Stock”).
I. Capital Stock.
A. Common Stock and Preferred Stock mayshall be issued from time to time byavailable for Awards under the Corporation for such considerationPlan as may be fixed by the Board of Directors of the Corporation. The BoardAmendment No. 1 Effective Date (which share limit is comprised of Directors is hereby expressly(A) NEW shares of Common Stock authorized by resolution or resolutions, to provide, outfor issuance under the Plan as of the unissuedAmendment No. 1 Effective Date plus (B) REMAIN shares of Preferred Stock,Common stock that remained available for one or more seriesfuture grants under the Plan as of Preferred StockJune 30, 2023 minus (C) INTERIM GRANTS representing shares subject to Awards granted under the Plan after June 30, 2023 and with respectprior to each such series, to fix, without further stockholder approval, the designation of such series,Amendment No. 1 Effective Date) (the aggregate share limit available for Awards under the powers (including voting powers), preferences and relative, participating, optional and other special rights, and the qualifications, limitations or restrictions thereof, of such series of Preferred Stock and the number of shares of such series. The powers, preferences and relative, participating, optional and other special rights of, and the qualifications, limitations or restrictions thereof, of each series of Preferred Stock, if any, may differ from those of any and all other seriesPlan at any time, outstanding.including after any reduction in or addition to such aggregate share limit in accordance with this Section 5 or Section 12 of the Plan, the “Absolute Share Limit”), where
B. Each holder(w) ‘TOTAL’ is equal to the lesser of record of Common Stock, as such, shall have(1) 15,507,520 and (2) NEW plus REMAIN minus INTERIM GRANTS,
(x) ‘NEW’ is equal to 7,625,000,
(y) ‘REMAIN’ is equal to 7,882,520, and
B-2CATALENT, INC. | 2023 Proxy Statement APPENDIX B: PROPOSED AMENDMENT NO. 1 TO THE CATALENT, INC. 2018 OMNIBUS INCENTIVE PLAN
(z) ‘INTERIM GRANTS’ is equal to (1) one voteshare for each share of Common Stock which is outstanding in his, hersubject to an Option or its name onSAR granted under the books ofPlan after June 30, 2023 and prior to the Corporation on all matters on which stockholders are entitled to vote generally. Except as otherwise required by law, holdersAmendment No. 1 Effective Date plus (2) 1.7 shares for each share of Common Stock shall not be entitledsubject to vote on any amendment to thisSecondAmendedan Award (other than an Option or SAR) granted under the Plan after June 30, 2023 and Restated Certificate of Incorporation (including any certificate of designation relating to any series of Preferred Stock) that relates solelyprior to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together with the holders of one or more other such series, to vote thereon pursuant to thisSecondAmended and Restated Certificate of Incorporation (including any certificate of designation relating to any series of Preferred Stock) or pursuant to the DGCL.Amendment No. 1 Effective Date.
C. Except as otherwise required by law, holders of any series of Preferred Stock(ii) The Absolute Share Limit shall be entitledreduced after the Amendment No. 1 Effective Date by (A) one share for each share of Common Stock subject to only such voting rights, if any, as shall expressly bean Option or SAR granted thereto by this
| 3. | ||||
|
SecondAmended and Restated Certificate of Incorporation (including any certificate of designation relating to such series of Preferred Stock).
D. Subject to applicable law and“(c) Awards granted under the rights, if any, of the holders of any outstanding series of Preferred Stock or any class or series of stock having a preference over or the right to participate with the Common Stock with respect to the payment of dividends, dividends mayPlan shall be declared and paid ratably on the Common Stock out of the assets of the Corporation which are legally available for this purpose at such times and in such amounts as the Board of Directors in its discretion shall determine.
E. Upon the dissolution, liquidation or winding up of the Corporation, after payment or provision for payment of the debts and other liabilities of the Corporation and subject to the rights, if any,following limitations: (i) subject to Section 12 of the holdersPlan, grants of any outstanding seriesOptions or SARs under the Plan in respect of Preferred Stock or any class or series of stock having a preference over or the right to participate with the Common Stock with respect to the distribution of assets of the Corporation upon such dissolution, liquidation or winding up of the Corporation, the holdersno more than 1,500,000 shares of Common Stock shallmay be entitledmade to receive the remaining assetsany individual Participant during any single fiscal year of the Corporation available for distribution to its stockholders ratablyCompany (for this purpose, if a SAR is granted in proportiontandem with an Option (such that the SAR expires with respect to the number of shares held by them.
F. Theof Common Stock for which the Option is exercised), only the shares underlying the Option shall count against this limitation); (ii) subject to Section 12 of the Plan, no more than the number of authorized shares of PreferredCommon Stock orequal to the Absolute Share Limit may be issued in the aggregate pursuant to the exercise of Incentive Stock Options granted under the Plan; (iii) subject to Section 12 of the Plan, during any single fiscal year of the Company, no individual Participant may be granted Performance Compensation Awards that are denominated in shares of Common Stock pursuant to Section 11 of the Plan under which more than 750,000 shares of Common Stock may be increased or decreased (but not belowearned in the aggregate; (iv) the maximum number of shares thereofof Common Stock subject to Awards granted during a single fiscal year to any Non-Employee Director, taken together with any cash fees paid to such Non-Employee Director for services rendered for such fiscal year, shall not exceed $650,000 in total value (calculating the value of any such Award based on the grant date fair value of such Awards for financial reporting purposes and counting compensation towards this limit for the year in which it is earned, and not a later year, in the event payment of the compensation is deferred); and (v) subject to Section 12 of the Plan, during any single fiscal year of the Company, no individual Participant may be granted Performance Compensation Awards that are denominated in cash under which more than $10,000,000 may be earned in the aggregate.”
| 4. | Section 5(d) of the Plan is hereby amended and restated to read in its entirety as follows: |
“Other than with respect to Substitute Awards, to the extent that (i) an Award under the Plan expires or is canceled, forfeited, terminated, settled in cash, or otherwise is settled without a delivery to the Participant of the full number of shares of Common Stock to which the Award related, or (ii) after June 30, 2018, an award granted under the 2014 Plan expires or is canceled, forfeited, terminated, settled in cash, or otherwise is settled without a delivery to the Participant of the full number of shares of Common Stock to which the award related, then, outstanding)in each case, the undelivered shares shall thereupon be added to the shares of Common Stock available for Awards under the Plan in accordance with Section 5(e) of the Plan. Shares of Common Stock withheld by the affirmative voteCompany or tendered by the Participant in payment of the holdersExercise Price or taxes and other amounts relating to an Award (or, after June 30, 2018, shares of a majorityCommon Stock withheld or tendered to pay the exercise price or taxes or other amounts relating to an award under the 2014 Plan) shall be deemed to constitute shares of Common Stock not issued to the Participant and shall in voting powereach case thereupon be added to the shares available for Awards under the Plan in accordance with Section 5(e) of the stockPlan; provided, however, that such shares shall not become available for issuance hereunder if either (i) the applicable shares are withheld or surrendered following the termination of the Corporation entitled to vote thereon irrespectivePlan or (ii) at the time the applicable shares are withheld or surrendered, it would constitute a material revision of the provisions of Section 242(b)(2)Plan subject to stockholder approval under any then-applicable rule of the DGCL (or any successor provision thereto), and no vote of the holders of any ofnational securities exchange on which the Common Stock is listed. Upon the exercise of any SAR under the Plan or any stock appreciation right under the Preferred Stock voting separately as a class2014 Plan, the Absolute Share Limit shall be required therefor, unless a vote of any such holder is required pursuant to thisSecondAmended and Restated Certificate of Incorporation (including any certificate of designation relating to any series of Preferred Stock).
ARTICLE V
AMENDMENT OF THE CERTIFICATE OF INCORPORATION
AND BYLAWS
A. Notwithstanding anything contained in thisSecondAmended and Restated Certificate of Incorporation to the contrary, at any time when Blackstone (as defined below) beneficially owns, in the aggregate, less than 40% in voting power of the stock of the Corporation entitled to vote generally in the election of directors, in addition to any vote required by applicable law, the following provisions in thisSecondAmended and Restated Certificate of Incorporation may be amended, altered, repealed or rescinded, in whole or in part, or any provision inconsistent therewith or herewith may be adopted,reduced only by the affirmative vote of the holders of at least 66-2/3% in voting power of all the then-outstanding shares of stock of the Corporation entitled to vote thereon, voting together as a single class: this Article V, Article VI, Article VII, Article VIII, and Article IX and Article X. For the purposes of thisSecondAmended and Restated Certificate of Incorporation, beneficial
|
ownershipnet number of shares shall be determined in accordance with Rule 13d-3 promulgated underissued upon such exercise and not by the Securities Exchange Actgross number of 1934,shares as amended (the “Exchange Act”)., or any successor provision thereto.
B. The Board of Directorsto which such right is expressly authorized to make, repeal, alter, amend and rescind, in whole or in part, the bylaws of the Corporation (as in effect from time to time, the “Bylaws”) without the assent or vote of the stockholders in any manner not inconsistent with the laws of the State of Delaware or thisSecondAmended and Restated Certificate of Incorporation.exercised. Notwithstanding anything to the contrary contained in the foregoing, after June 30, 2023, the following shares of Common Stock may not again be made available for issuance as Awards under the Plan: (i) shares of Common Stock not issued or
delivered as a result of the net settlement of an outstanding Option or SAR, (ii) shares of Common Stock used to pay the Exercise Price or withholding taxes related to any outstanding Option or SAR, or (iii) shares of Common Stock reacquired by the Company as part of the amount received upon exercise of an Option.”
APPENDIX B: PROPOSED AMENDMENT NO. 1 TO THE CATALENT, INC. 2018 OMNIBUS INCENTIVE PLAN 2023 Proxy Statement | CATALENT, INC.B-3
| 5. | Section 5(e) of the Plan is hereby amended and restated to read in its entirety as follows: |
“(e) Any share of Common Stock that again becomes available for Awards under the Plan pursuant to thisSecondAmended Section 5 shall be added as (i) one share for each share subject to an Option or SAR granted under the Plan or options or stock appreciation rights granted under the 2014 Plan, and Restated Certificate of Incorporation(ii) for each share that again becomes available with respect to an Award granted (A) on or prior to June 30, 2023, 2.25 shares, and (B) after June 30, 2023, 1.7 shares, in each case, for each share subject to an Award (other than an Option or SAR) granted under the Plan or an award (other than an option or stock appreciation right) granted under the 2014 Plan.”
| 6. | A new subsection (h) is hereby added to the end of Section 5 of the Plan to read in its entirety as follows: |
“(h) Notwithstanding anything to the contrary in any other provision of law which might otherwise permitthis Plan, equity-based Awards granted under the Plan on or after the Amendment No. 1 Effective Date shall be subject to a lesser voteminimum vesting period of not less than one year from the date of grant of the award; provided, however, that the following Awards shall not be subject to the foregoing minimum vesting requirement: (i) Substitute Awards, (ii) shares delivered in lieu of fully vested cash Awards, (iii) any Award to a non-employee director that vests on the earlier of the one-year anniversary of the date of grant and the next annual meeting of stockholders that is at any time when Blackstone (as defined below) beneficially owns,least 50 weeks after the immediately preceding year’s annual meeting; and (iv) Awards granted by the Committee that do not, in the aggregate, less than 40% in voting powerexceed 5% of the stockAbsolute Share Limit; provided, further, that the restrictions in this Section 5(h) do not apply to the Committee’s discretion to provide for accelerated exercisability or vesting of any Award, including in cases of retirement, Termination, death, Disability or a Change in Control, as set forth in the terms of the Corporation entitledAward or otherwise.”
| 7. | The last sentence of Section 14(u) of the Plan is hereby amended and restated to read in its entirety as follows: |
“Notwithstanding anything to vote generallythe contrary in the election of directors, in addition to any vote of the holders of any class or series of capital stock of the Corporation required herein (including any certificate of designation relating to any series of Preferred Stock), the Bylaws or applicable law, the affirmative vote ofthe holders of at least 66 2/3%a majority in voting power of all the then-outstanding shares of stock of the Corporation entitled to vote thereon, voting together as a single class, shall be required in order for the stockholders of the Corporation to alter, amend, repeal or rescind, in whole or in part, anyother provision of the Bylawsthis Plan or any agreement setting forth terms of and/or conditions to adopt any provision inconsistent therewith.
ARTICLE VI
BOARD OF DIRECTORS
A. The business and affairs of the Corporation shall be managed by oran Award, each Award granted under the direction of the Board of Directors. Except as otherwise provided for Plan (and/or fixed pursuant to the provisions of Article IV (including any certificate of designationamount received with respect to any series of Preferred Stock) and this Article VI relatingsuch Award) shall be subject to reduction, cancellation, forfeiture or recoupment to the rightsextent necessary to comply with any applicable law, stock exchange listing requirement, and/or clawback or recoupment policy of the holders of any series of Preferred Stock to elect additional directors, the total number of directors shall be determined from time to time exclusively by resolution adopted by the Board of Directors. The directors (other than those directors elected by the holders of any series of Preferred Stock, voting separately as a series or together with one or more other such series, as the case may be) shall be divided into three classes designated Class I, Class II and Class III. Each class shall consist, as nearly as possible, of one-third of the total number of such directors. Class I directors shall initially serve for a term expiring at thefirst2015 annual meeting of stockholders following the date the Common Stock is first publicly traded (the “IPO Date), Class II directors shall initially serve for a term expiring at thesecond2016 annual meeting of stockholders following the IPO Date and Class III directors shall initially serve for a term expiring at thethird2017 annual meeting of stockholders following the IPO Date. At each succeeding annual meeting, successors to the class of directors whose term expires at that annual meeting shall be elected for a term expiring at the third succeeding annual meeting of stockholders. If the number of such directors is changed, any increase or decrease shall be apportioned among the classes so as to maintain the number of directors in each class as nearly equal as possible, and any such additional director of any class elected to fill a newly created directorship resulting from an
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increase in such class shall hold office for a term that shall coincide with the remaining term of that class, but in no case shall a decrease in the number of directors remove or shorten the term of any incumbent director. Any such director shall hold office until the annual meeting at whichhis or hersuch director’s term expires and untilhis or hersuch director’s successor shall be elected and qualified, orhis or hersuch director’s death, resignation, retirement, disqualification or removal from office. The Board of Directors is authorized to assign members of the Board of Directors already in office to their respective class.
B. Subject to the rights granted to the holders of any one or more series of Preferred Stock then outstandingor the rights granted pursuant to the Stockholders Agreement, expected to be dated as of August 5, 2014, by and among the Corporation and certain affiliates of The Blackstone Group L.P. (together with its affiliates other than the Corporation and its subsidiaries (including, without limitation, Blackstone Group Management L.L.C.) other than the Corporation and its subsidiaries, subsidiaries, successors and assigns (including, without limitation, any Blackstone Entity as defined in the Stockholders Agreement), collectively, “Blackstone”) (as the same may be amended, supplemented, restated or otherwise modified from time to time, the “Stockholders Agreement”), any newly-, any newlycreated directorship on the Board of Directors that results from an increase in the number of directors and any vacancy occurring in the Board of Directors (whether by death, resignation, retirement, disqualification, removal or other cause) shall be filled by a majority of the directors then in office, although less than a quorum,by a sole remaining director or by the stockholders;provided, however, that at any time when Blackstone beneficially owns, in the aggregate, less than 40% in voting power of the stock of the Corporation entitled to vote generally in the election of directors, any newly-created directorship on the Board of Directors that results from an increase in the number of directors andany vacancy occurring in the Board of Directors shall be filled only by a majority of the directors then in office, although less than a quorum, or by a sole remaining director (and not by stockholders). Any director elected to fill a vacancy or a newly created directorship shall hold office until the next election of the class for which such director shall have been chosen and untilhis or hersuch director’s successor shall be elected and qualified, or untilhis or hersuch director’s earlier death, resignation, retirement, disqualification or removal.
C. Any or all of the directors (other than the directors elected by the holders of any series of Preferred Stock of the Corporation, voting separately as a series or together with one or more other such series, as the case may be) may be removedfrom officeat any timeeither with orwithoutbut only for cause and only by the affirmative vote of a majority in voting power of allthe then-outstanding shares of stock of the Corporation entitled to vote thereon,voting as a single class;provided, however, that at any time when Blackstone beneficially owns, in the aggregate, less than 40% in voting power of the stock of the Corporation entitled to vote generally in the election of directors, any such director or all such directors may be removed only for cause and only by the affirmative vote of the holders of at least 66 2/3% in voting power of all the then-outstanding shares of stock of the Corporation entitled to vote thereon, voting together as a single class.
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D. Elections of directors need not be by written ballot unless the Bylaws shall so provide.
E. During any period when the holders of any series of Preferred Stock have the right to elect additional directors pursuant to the provisions of such Preferred Stock, then upon commencement and for the duration of the period during which such right continues: (i) the then otherwise total authorized number of directors of the Corporation shall automatically be increased by such specified number of directors, and the holders of such Preferred Stock shall be entitled to elect the additional directors so provided for or fixed pursuant to said provisions, and (ii) each such additional director shall serve until such director’s successor shall have been duly elected and qualified, or until such director’s right to hold such office terminates pursuant to said provisions, whichever occurs earlier, subject tohis or hersuch director’s earlier death, resignation, retirement, disqualification or removal. Except as otherwise provided by the Board of Directors in the resolution or resolutions establishing such series, whenever the holders of any series of Preferred Stock having such right to elect additional directors are divested of such right pursuant to the provisions of suchstockPreferred Stock, the terms of office of all such additional directors elected by the holders of such stock, or elected to fill any vacancies resulting from the death, resignation, disqualification or removal of such additional directors, shall forthwith terminate and the total authorized number of directors of the Corporation shall be reduced accordingly.
ARTICLE VII
LIMITATION OF DIRECTOR LIABILITY
A. To the fullest extent permitted by the DGCLas it now exists oror any other law of the State of Delaware (as they exist on the date hereof or as they may hereafter be amended), a director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty owed to the Corporation or its stockholders.
B. Neither the amendment nor repeal of this Article VII, nor the adoption of any provision of thisSecondAmended and Restated Certificate of Incorporation, nor, to the fullest extent permitted by the DGCLor any other law of the State of Delaware (as they exist on the date hereof or as they may hereafter be amended), any modification of law shall eliminate, reduce or otherwise adversely affect any right or protection of a current or former director of the Corporation existing at the time of such amendment, repeal, adoption or modification.
ARTICLE VIII
CONSENT OF STOCKHOLDERS IN LIEU OF MEETING, ANNUAL AND SPECIAL MEETINGS OF STOCKHOLDERS
A. At any time when Blackstone beneficially owns, in the aggregate, at least 40% in voting power of the stock of the Corporation entitled to vote generally in the election of directors, any action required or permitted to be taken at any annual or special meeting of
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stockholders of the Corporation may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to the Corporation by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the Corporation having custody of the books in which proceedings of meetings of stockholders are recorded. Delivery made to the Corporation’s registered office shall be made by hand, overnight courier or by certified or registered mail, return receipt requested. At any time when Blackstone beneficially owns, in the aggregate, less than 40% in voting power of the stock of the Corporation entitled to vote generally in the election of directors, anyAny action required or permitted to be taken by the stockholders of the Corporation must be effected at a duly called annual or special meeting of such holders and may not be effected by any consent in writing by such holders;provided, however,that any action required or permitted to be taken by the holders of Preferred Stock, voting separately as a series or separately as a class with one or more other such series, may be taken without a meeting, without prior notice and without a vote, to the extent expressly so provided by the applicable certificate of designation relating to such series of Preferred Stock.
B. Except as otherwise required by law and subject to the rights of the holders of any series of Preferred Stock, special meetings of the stockholders of the Corporation for any purpose or purposes may be called at any time only by or at the direction of the Board of Directors or theChairmanChair of the Board of Directors;provided, however, that at any time when Blackstone beneficially owns, in the aggregate, at least 40% in voting power of the stock of the Corporation entitled to vote generally in the election of directors, special meetings of the stockholders of the Corporation for any purpose or purposes shall also be called by or at the direction of the Board of Directors or the Chairman of the Board of Directors at the request of Blackstone.
C. An annual meeting of stockholders for the election of directors to succeed those whose terms expire and for the transaction of such other business as may properly come before the meeting, shall be held at such place, if any, on such date, and at such time as shall be fixed exclusively by resolution of the Board of Directors or a duly authorized committee thereof.
ARTICLE IX
COMPETITION AND CORPORATE OPPORTUNITIES
A. In recognition and anticipation that (i) certain directors, principals, officers, employees and/or other representatives of The Blackstone Group L.P. (the “Original Stockholder”) and its Affiliates (as defined below) may serve as directors, officers or agents of the Corporation, (ii) the Original Stockholder and its Affiliates may now engage and may continue to engage in the same or similar activities or related lines of business as those in
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which the Corporation, directly or indirectly, may engage and/or other business activities that overlap with or compete with those in which the Corporation, directly or indirectly, may engage, and (iii) members of the Board of Directors who are not employees of the Corporation (“Non-Employee Directors”) and their respective Affiliates may now engage and may continue to engage in the same or similar activities or related lines of business as those in which the Corporation, directly or indirectly, may engage and/or other business activities that overlap with or compete with those in which the Corporation, directly or indirectly, may engage, the provisions of this Article IX are set forth to regulate and define the conduct of certain affairs of the Corporation with respect to certain classes or categories of business opportunities as they may involve any of the Original Stockholder, the Non-Employee Directors or their respective Affiliates and the powers, rights, duties and liabilities of the Corporation and its directors, officers and stockholders in connection therewith.
B. None of (i) the Original Stockholder or any of its Affiliates or (ii) any Non-Employee Director (including any Non-Employee Director who serves as an officer of the Corporation in both his or her director and officer capacities) or his or her Affiliates (the Persons (as defined below) identified in (i) and (ii) above being referred to, collectively, as “Identified Persons” and, individually, as an “Identified Person”) shall, to the fullest extent permitted by law, have any duty to refrain from directly or indirectly (1) engaging in the same or similar business activities or lines of business in which the Corporation or any of its Affiliates now engages or proposes to engage or (2) otherwise competing with the Corporation or any of its Affiliates, and, to the fullest extent permitted by law, no Identified Person shall be liable to the Corporation or its stockholders or to any Affiliate of the Corporation for breach of any fiduciary duty solely by reason of the fact that such Identified Person engages in any such activities. To the fullest extent permitted by law, the Corporation hereby renounces any interest or expectancy in, or right to be offered an opportunity to participate in, any business opportunity which may be a corporate opportunity for an Identified Person and the Corporation or any of its Affiliates, except as provided in Section (C) of this Article IX. Subject to said Section (C) of this Article IX, in the event that any Identified Person acquires knowledge of a potential transaction or other business opportunity which may be a corporate opportunity for itself, herself or himself and the Corporation or any of its Affiliates, such Identified Person shall, to the fullest extent permitted by law, have no duty to communicate or offer such transaction or other business opportunity to the Corporation or any of its Affiliates and, to the fullest extent permitted by law, shall not be liable to the Corporation or its stockholders or to any Affiliate of the Corporation for breach of any fiduciaryduty as a stockholder, director or officer of the Corporation solely by reason of the fact that such Identified Person pursues or acquires such corporate opportunity for itself, herself or himself, or offers or directs such corporate opportunity to another Person.
C. The Corporation does not renounce its interest in any corporate opportunity offered to any Non-Employee Director (including any Non-Employee Director who serves as an officer of this Corporation) if such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of the Corporation, and the provisions of Section (B) of this Article IX shall not apply to any such corporate opportunity.
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D. In addition to and notwithstanding the foregoing provisions of this Article IX, a corporate opportunity shall not be deemed to be a potential corporate opportunity for the Corporation if it is a business opportunity that (i) the Corporation is neither financially or legally able, nor contractually permitted to undertake, (ii) from its nature, is not in the line of the Corporation’s business or is of no practical advantage to the Corporation or (iii) is one in which the Corporation has no interest or reasonable expectancy.
E. For purposes of this Article IX, (i) “Affiliate” shall mean (a) in respect of the Original Stockholder, any Person that, directly or indirectly, is controlled by the Original Stockholder, controls the Original Stockholder or is under common control with the Original Stockholder and shall include any principal, member, director, partner, stockholder, officer, employee or other representative of any of the foregoing (other than the Corporation and any entity that is controlled by the Corporation), (b) in respect of a Non-Employee Director, any Person that, directly or indirectly, is controlled by such Non-Employee Director (other than the Corporation and any entity that is controlled by the Corporation) and (c) in respect of the Corporation, any Person that, directly or indirectly, is controlled by the Corporation; and (ii) “Person” shall mean any individual, corporation, general or limited partnership, limited liability company, joint venture, trust, association or any other entity.
F. To the fullest extent permitted by law, any Person purchasing or otherwise acquiring any interest in any shares of capital stock of the Corporation shall be deemed to have notice of and to have consented to the provisions of this Article IX.
ARTICLE IXARTICLE X
DGCL SECTION 203 AND BUSINESS COMBINATIONS
A. The Corporation hereby expressly elects not to be governed by Section 203 of the DGCL.
B. Notwithstanding the foregoing, the Corporation shall not engage in any business combination (as defined below), at any point in time at which the Corporation’s Common Stock is registered under Section 12(b) or 12(g) of the Exchange Act, or any successor provisions thereto, with any interested stockholder (as defined below) for a period of three (3) years following the time that such stockholder became an interested stockholder, unless:
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C. For purposes of this ArticleXIX, references to:
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ARTICLE XARTICLE XI
MISCELLANEOUS
A. If any provision or provisions of thisSecondAmended and Restated Certificate of Incorporation shall be held to be invalid, illegal or unenforceable as applied to any circumstance for any reason whatsoever: (i) the validity, legality and enforceability of such provisions in any other circumstance and of the remaining provisions of this Second Amended and Restated Certificate of Incorporation (including, without limitation, each portion of any paragraph of thisSecondAmended and Restated Certificate of Incorporation containing any such provision held to be invalid, illegal or unenforceable that is not itself held to be invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby, and (ii) to the fullest extent possible, the provisions of thisSecondAmended and Restated Certificate of
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Incorporation (including, without limitation, each such portion of any paragraph of thisSecondAmended and Restated Certificate of Incorporation containing any such provision held to be invalid, illegal or unenforceable) shall be construed so as to permit the Corporation to protect its directors, officers, employees and agents from personal liability in respect of their good faith service or for the benefit of the Corporation to the fullest extent permitted by law.
B. Unless the Corporation consents in writing to the selection of an alternative forum, theCourt of Chancerycourts of the State of Delaware shall, to the fullest extent permitted by law, be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Corporation, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director or officer of the Corporation to the Corporation or the Corporation’s stockholders, creditors or other constituents, (iii) any action asserting a claim against the Corporation or any director or officer of the Corporation arising pursuant to any provision of the DGCL or this Second Amended and Restated Certificate of Incorporation or the Bylaws (as either may be amended and/or restated from time to time), or (iv) any action asserting a claim against the Corporation or any director or officer of the Corporation governed by the internal affairs doctrine, in each such case subject to saidcourtcourts having personal jurisdiction over the indispensable parties named as defendants therein; provided, that, if and only ifthe Court of Chanceryno court of the State of Delawaredismisses any such action for lack of subject mattershall have jurisdiction over such action, such action may be brought inanother statea federal court sitting in the State of Delaware, or, if not there, in any other court in the United States having jurisdiction over such action. To the fullest extent permitted by law, any person purchasing or otherwise acquiring any interest in shares of capital stock of the Corporation shall be deemed to have notice of andconsentsprovided consent to the provisions of this ArticleXIX(B).
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IN WITNESS WHEREOF, Catalent, Inc. the Company has caused thisSecondAmended and Restated Certificate of Incorporation Amendment No. 1 to the Plan to be executed by its duly authorized officer on this17th[●] dayto be effective as ofJuly[●], 20147. the Amendment No. 1 Effective Date.
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DETACH AND RETURN
SCAN TO VIEW MATERIALS & VOTE CATALENT, INC. 14 SCHOOLHOUSE ROAD SOMERSET, NJ 08873 VOTE BY INTERNET Before The Meeting - Go to www.proxyvote.com or scan the QR Barcode above Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time on January 24, 2024 for shares held directly and by 11:59 p.m. Eastern Time on January 22, 2024 for shares held in a Plan. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. During The Meeting - Go to www.virtualshareholdermeeting.com/CTLT2023 You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions. ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time on January 24, 2024 for shares held directly and by 11:59 p.m. Eastern Time on January 22, 2024 for shares held in a Plan. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: V26874-P01596 KEEP THIS PORTION ONLY
FOR YOUR RECORDS THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY CATALENT, INC. The Board of Directors recommends you vote FOR the following proposal: 1. Election of Twelve Director Nominees: Nominees: For Against Abstain 1a. Michael J. Barber 1b. Steven K. Barg 1c. J. Martin Carroll 1d. Rolf Classon 1e. Frank A. D’Amelio 1f. John J. Greisch 1g. Gregory T. Lucier 1h. Alessandro Maselli For Against Abstain 1i. Donald E. Morel, Jr. 1j. Stephanie Okey 1k. Michelle R. Ryan 1l. Jack Stahl The Board of Directors recommends you vote FOR the following proposals: For Against Abstain 2. Ratification of Appointment of Ernst & Young LLP as Independent Auditor for Fiscal 2024. 3. Advisory Vote to Approve Our Executive Compensation (Say-on-Pay). 4. Approval of Amendment to Catalent, Inc. 2018 Omnibus Incentive Plan. Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
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V.1.1
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The 20172023 Proxy Statement and 20172023 Annual Report are available at www.proxyvote.com.
E32245-P97350
V26875-P01596 CATALENT, INC.
Annual Meeting of Shareholders
November 2, 2017 January 25, 2024 8:3000 AM
Eastern Time This proxy is solicited by the Board of Directors
The shareholder hereby appoints Steven L. FasmanAlessandro Maselli and Jose Ibietatorremendia,Matti Masanovich, or either of them, as proxies, each with the power to appoint his substitute, and hereby authorizes them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of common stock of Catalent, Inc. that the shareholder is entitled to vote at the Annual Meeting of Shareholders to be held at 8:3000 AM Eastern Time on November 2, 2017,January 25, 2024, at Catalent, Inc., 14 Schoolhouse Road, Somerset, New Jersey 08873,www.virtualshareholdermeeting.com/CTLT2023 and any adjournment or postponement thereof.
thereof, as indicated on this proxy (with discretionary authority under Proposal 1 to vote for a substitute nominee if any nominee is unable to serve or for good cause will not serve) and on such other matters as may properly come before said meeting. This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors’ recommendations.
(If you noted any Address Changes/Comments above, please mark corresponding box on the reverse side.)
Continued and to be signed on reverse side
V.1.1
