| 2022 Proxy Statement 38DIRECTOR DIVERSITY |
BOARD OF DIRECTORS INFORMATION
Diversity factors such as age, gender, race, and ethnic background are other important characteristics considered in identifying director candidates and determining nominees. The Committee also considers the tenure of incumbent Directors to ensure a mix of shorter-tenuredshorter-tenured Directors who provide fresh perspectives and longer-tenuredlonger-tenured Directors who provide experience in the Company and its business. While Luxfer has not adopted a formal diversity policy in connection with the evaluation of director candidates or the selection of nominees, the Board realizes that diversity amongst its members promotes differing perspectives and overall Board effectiveness. As such, promoting diversity is consistent with our goal of creating a Board that best serves the needs of the Company and the interests of our shareholders.  
DIRECTOR SELECTION PROCESS |
The Nominating and Governance Committee selects director candidates and nominees using a procedure by which it: •reviews the experience, qualifications, attributes, and skills of existing Directors; | ● | Reviews the experience, qualifications, attributes, and skills of existing Directors; |
| ● | Determines the experience, qualifications, attributes, and skills desired and/or required in new Directors; |
| ● | Solicits suggestions from the Chief Executive Officer and Directors on potential candidates; |
| ● | Considers candidates recommended by shareholders; |
| ● | Retains a search consultant as needed to identify candidates; |
| ● | Evaluates the experience, qualifications, attributes, and skills of all candidates recommended for consideration; |
| ● | Contacts the preferred candidate(s) to assess their interest; |
| ● | Interviews the preferred candidate(s) to assess their experience, qualifications, attributes, and skills; and |
| ● | Recommends•determines the experience, qualifications, attributes, and skills desired and/or required in new Directors; •solicits suggestions from the Chief Executive Officer and Directors on potential candidates; •considers candidates recommended by shareholders; •retains a search consultant as needed to identify candidates; •evaluates the experience, qualifications, attributes, and skills of all candidates recommended for consideration; •contacts the preferred candidate(s) to assess their interest; •interviews the preferred candidate(s) to assess their experience, qualifications, attributes, and skills; and •recommends candidate(s) for consideration by the Board of Directors. |
Working closely with the full Board, the Nominating and Governance Committee develops criteria for open Board positions, taking into account the needs of the Board and the Company at the time. The Committee commenced a search for a new Non-ExecutiveNon-Executive Director in late 2020,early 2022, following the procedure set forth above. The Committee began by analyzing the current Directors’ experience, qualifications, and skills to identify gaps in the Board’s skill set. This analysis resulted in the creation of a new Director profile. The Committee did not utilize the services of a search consultant to identify Patrick MullenSylvia A. Stein as a potential director candidate. Rather, the Committee utilized contacts within the Directors’ professional networks, and Patrick MullenMs. Stein was identified as a potential candidate based on his reputationher background in the industry as former CEO of CB&I.advising global public companies, particularly in matters related to business strategy, sustainability, regulatory compliance, mergers and acquisitions, and talent management. Following interviews with the Committee, Chief Executive Officer, and the Board, the Committee proposed, and the Board approved, the appointment of Patrick MullenSylvia A. Stein as a Non-ExecutiveNon-Executive Director in September 2021. Following the announcement of David Landless’ retirement from the Board in December 2021, Patrick Mullen was elected Board Chair effective March 11,June 2022. The Company’s Board of Directors has historically included the Chief Executive Officer as the sole Executive Director. Following his appointment as Chief Executive Officer, which will take effect on May 6, 2022, Andy Butcher will serve as a member of the Board of Directors. Given his 30-year tenure with Luxfer and his value-enhancing growth and acquisition experience, the Committee recommended, and the Board approved, Mr. Butcher’s appointment as a Director.
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BOARD OF DIRECTORS INFORMATION
RECOMMENDATIONS, NOMINATIONS, AND PROXY ACCESS |
Our Nominating and Governance Committee Charter provides that the Nominating and Governance Committee will consider persons properly recommended by shareholders or interested parties to become nominees for election as Directors in accordance with the criteria described above under “Director“Director Nominee Skills and Characteristics.”Characteristics” and the requirements of our Articles of Associations. Recommendations for consideration by the Nominating and Governance Committee, together with appropriate biographical information concerning each proposed nominee, should be sent in writing to c/o Company Secretary, Luxfer Holdings PLC, 8989 North Port Washington Road, Suite 211, Milwaukee, Wisconsin, 53217, United States. Further information relating to shareholder nominations and proposals can be found in the section entitled ““2024 Annual General Meeting: Shareholder Proposals and Nominations for the 2023 Annual General Meeting of Shareholders”Nominations” on page 84.91. 
| | Board Composition
and Independence | | | 2022 Proxy Statement 40
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BOARD OF DIRECTORS INFORMATION
CORPORATE GOVERNANCE
 | Board Composition
and Independence
|  | Board and Committee
Practices |  | 
| | Shareholder Rights | ·80%•83% independent Board
·•100% independent Board Committees
·•Independent Board Chair
·•Regular executive sessions
·•Full access to management, employees, and outside advisors
·•No Directors serve on more than 2 boards of other public company boardscompanies
| | ·•Annual Board, Committee, and individual Director self-assessmentevaluation process
·•Comprehensive onboarding and continuing education program
·•Regular Board refreshment and a mix of tenure, including recommended Director retirement age
·•Active consideration of diversity in Director nomination process
| | ·•Annual election of all Directors
·•Majority vote standard for Director elections
·•Equal classes of stock with equal voting power
·•No restrictions on shareholders’ rights to call special meetings
·•No poison pill
·•Processes for Director nomination by shareholders and communication with the Board
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| | Board Oversight Areas |  | 
| | Executive Compensation
Program and Policies | | ·Long-term•Long-term strategic plans and capital allocation
·•Enterprise risk management including
•Governance and ethics policies and practices •ESG, sustainability, and cybersecurity integrated in Company’s long-term strategy ·ESG and sustainability
·•CEO and management succession planning
·•Human capital management
| | ·•Comprehensive clawback policy for cash incentive and equity awards
·•No guaranteed bonuses or special grants to executives
·•Share Plansplans include minimum vesting periods and do not contain evergreen provisions
·•Robust stock ownership guidelines for Executive Officersexecutive officers and Directorsdirectors
·•No hedging or pledging of company securities by Executive Officersexecutive officers and Directorsdirectors
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The Board determines the independence of each Director based upon the NYSE listing standards, SEC regulations, and the Directors’ answers to questions on independence included in our annual Directors'Directors’ and Officers'Officers’ Questionnaire. Based on these standards, the Board of Directors has affirmatively determined that all Non-ExecutiveNon-Executive Directors standing for election at the AGM (i.e., Patrick Mullen, Richard Hipple, Clive Snowdon, Richard Hipple,Sylvia A. Stein, and Lisa Trimberger) are independent and have no material relationship with the Company that would interfere with their exercise of independent judgment. The Company’s Board of Directors has historically included and, to date, includes the Chief Executive Officer as the sole Executive Director. The Board has affirmatively determined that Andy Butcher, currently the only Executive Director, nominee, is not independent because he will serveserves as Luxfer’s Chief Executive Officer, effective May 6, 2022. Officer. In determining independence, the Board considers several factors related to the materiality of each Director'sDirector’s relationship with Luxfer, including the Director'sDirector’s affiliations with other organizations, such as employment, director, officer, shareholder, commercial, industrial, banking, consulting, legal, accounting, charitable, and familial affiliations. Given the nature of the advanced materials industry, an important factor the Board considers is whether the Director serves as an employee of another company that is a customer, supplier, or competitor of Luxfer. While the Board has reviewed relevant relationships and found no significant relationships that would interfere with a Director’s independent judgment, the Board discloses the following relationships as part of its commitment to transparency: •Richard Hipple serves as a Director of KeyCorp, a provider of retail and commercial banking services in the United States. A Metals Equity Research Analyst at KeyCorp has conducted research on Luxfer in the past and continues to do so; however, KeyCorp began research coverage of Luxfer prior to Mr. Hipple joining the Luxfer Board of Directors, and Mr. Hipple has not been involved in any such research. Moreover, KeyCorp does not provide financing to Luxfer, although it has provided banking services to Luxfer prior to Mr. Hipple joining the Board. Because Luxfer’s relationship with KeyCorp is at arms-length and Mr. Hipple has not been directly involved in any of Luxfer’s dealings with KeyCorp, the Board does not view this relationship significant enough to affect Mr. Hipple’s independence as a Director of Luxfer. •Prior to her retirement in 2014, Lisa Trimberger served as an Audit Partner at Deloitte & Touche LLP. Prior to Ms. Trimberger joining the Board, Deloitte was providing and continued to provide non-audit advisory services to the Company through March 2022. Because Luxfer’s relationship with Deloitte is at arms-length and is not independent audit-related the Board does not view this previous relationship significant enough to affect Ms. Trimberger’s independence as a Director of Luxfer. | | 41 | BOARD LEADERSHIP |
BOARD OF DIRECTORS INFORMATION
| ● | Richard Hipple serves as a Director of KeyCorp, a provider of retail and commercial banking services in the United States. A Metals Equity Research Analyst at KeyCorp has conducted research on Luxfer in the past and continues to do so; however, KeyCorp began research coverage of Luxfer prior to Mr. Hipple joining the Luxfer Board of Directors, and Mr. Hipple has not been involved in any such research. Moreover, KeyCorp does not provide financing to Luxfer, although it has provided banking services to Luxfer prior to Mr. Hipple joining the Board. Because Luxfer’s relationship with KeyCorp is at arms-length and Mr. Hipple has not been directly involved in any of Luxfer’s dealings with KeyCorp, the Board does not view this relationship significant enough to affect Mr. Hipple's independence as a Director of Luxfer. |
| ● | Prior to her retirement, Lisa Trimberger served as an Audit Partner at Deloitte & Touche LLP. Deloitte provides non-audit advisory services to the Company. Because Luxfer's relationship with Deloitte is at arms-length and is not independent audit-related, the Board does not view this previous relationship significant enough to affect Ms. Trimberger's independence as a Director of Luxfer. |
In August 2021, David Landless, who has served as Board Chair since 2019, announced his decision not to stand for re-election at the 2022 Annual General Meeting. Mr. Landless’ decision was made in accordance with Luxfer’s Corporate Governance Guidelines, which recommend retirement of Directors after nine years of service. Following this announcement, the Board appointed Patrick Mullen to succeed Mr. Landless as Board Chair, effective March 11, 2022. Mr. Mullen is a Non-Executive Director and is considered independent under the NYSE listing standards and relevant SEC regulations. Luxfer believes that Patrick Mullen’s service as Board Chair is appropriate because of his extensive global industrial experience, history of serving on the boards of other public companies, and knowledge of the manufacturing and engineering industries in general.
The Board believes it is important to maintain flexibility in choosing the leadership structure that best meets the needs of the Company and its shareholders, based on circumstances that exist at the time and the qualifications of available individuals. We do not have a policy requiring the positions of Board Chair and Chief Executive Officer to be held by different persons. However, these two positions have historically been separate and are expected to remain separate. The Board believes this structure is advantageous because it provides the appropriate balance between strategy development and oversight of management. It also allows the CEO to focus attention on driving business performance rather than Board governance. Additionally, this structure is consistent with corporate best practices, the Institutional Shareholder Services’ (ISS) recommendation, the views of Luxfer’s shareholders, and the U.K.UK Corporate Governance Code. The responsibilities of an independent Board Chair include, among other things: •leading the Board, including the oversight and coordination of the Board’s and its Committees’ work; •serving as a liaison between the CEO, other members of senior management, the Non-Executive Directors, and the Committee Chairs; •presiding at all meetings of the Board, including executive sessions of the independent Non-Executive Directors; •presiding at all meetings of the shareholders; •setting the Board’s meeting agendas and ensuring there is sufficient time for discussion of all agenda items; •recommending agendas for shareholder meetings and providing guidance to the Board on positions the Board should take on issues to come before shareholder meetings; 30
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•participating in discussions with the Nominating and Governance Committee on matters related to Board and Committee organization, composition, membership terms, and meeting structure; and •participating in discussions with the Nominating and Governance Committee and Remuneration Committee on matters related to the hiring, evaluation, and compensation of, and the succession planning for, the CEO, other executives, and Directors. Luxfer’s Board of Directors is currently led by Patrick Mullen, who was appointed Board Chair in March 2022. Mr. Mullen is a Non-Executive Director and is considered independent under the NYSE listing standards and relevant SEC regulations. Luxfer believes that Patrick Mullen’s service as Board Chair is appropriate because of his extensive global industrial experience, including his previous executive leadership and management roles within industrial manufacturing companies; history of serving on the boards of other public companies; and knowledge of the manufacturing and engineering industries in general. | ● | leading the Board, including the oversight and coordination of the Board's and its Committees' work; |
| ● | serving as a liaison between the CEO, other members of senior management, the Non-Executive Directors, and the Committee Chairs; |
| ● | presiding at all meetings of the Board, including executive sessions of the independent Non-Executive Directors; |
| ● | presiding at all meetings of the shareholders; |
| ● | setting the Board's meeting agendas and ensuring there is sufficient time for discussion of all agenda items; |
| ● | recommending agendas for shareholder meetings and providing guidance to the Board on positions the Board should take on issues to come before shareholder meetings; |
| ● | participating in discussions with the Nominating and Governance Committee on matters related to Board and Committee organization, composition, membership terms, and meeting structure; and |
| ● | participating in discussions with the Nominating and Governance Committee and Remuneration Committee on matters related to the hiring, evaluation, and compensation of, and the succession planning for, the CEO, other Executive Officers, and Directors.RISK OVERSIGHT |
Luxfer maintains an Enterprise Risk Management (ERM) program, which is the Company’s overall framework for identifying, assessing, monitoring, and mitigating the Company’s most significant risks. A wide breadth of potential risks relevant to the Company are evaluated under our ERM program, including those that could present financial, operational, or strategic risk. Through the ERM program, we apply standard risk management assessments and terminology aligned with the Committee of Sponsoring Organizations (COSO) Enterprise Risk Management Framework to each of Luxfer’s business units and corporate functions. Luxfer’s Directors overseeBoard oversees the management of risks relevant to the Company as part of regular Board and Committee meetings. While the full Board has overall responsibility for risk oversight, the Board has delegated responsibility related to certain risks to the Board Committees, as appropriate. Each Board Committee focuses on specific risks within their respective area of responsibility. Topics reviewed by the Board as part of its risk oversight responsibilities include, but are not limited to, the implementation of the Company’s strategic plan; its acquisitions and divestitures; its capital structure, allocation, and liquidity; material litigation; compliance with laws and regulation; sustainability, climate, and ESG-related risks; and its organizational structure. BOARD OF DIRECTORS INFORMATION
While the full Board has overall responsibility for risk oversight, the Board delegates oversight responsibility for specific risks across its Committees, considering the Committees’ responsibilities, and the skills and experience of the Committees’ members. In particular, the Audit Committee oversees the Company’s annual ERM processes, including the establishment of the Risk Framework and completion of the annual Risk Assessment by management. Luxfer’s management has day-to-dayday-to-day responsibility for identifying, evaluating, managing, and mitigating the Company’s risk. On an annual basis, Luxfer management establishes and/or updates, as appropriate, a Risk Framework and completes a Risk Assessment. Our Risk Framework and Assessments are accompanied by an internal manual to ensure a consistent and methodical assessment of the risks to which the Company is exposed. The fullmanual provides guidance to help quantify the materiality of each risk, including its timing, likelihood, magnitude, scope, and financial impact. Each risk identified in the Risk Framework is reviewed by management and our Internal Audit team. Risks are prioritized based on their relative likelihood and magnitude of the range of expected financial impact. Management and the Internal Audit team review and consolidate risk assessment results at the enterprise level, ensuring they reflect the combined impact of interrelated risks such that they would be managed effectively. Risks identified as “top risks” are reviewed annually with Luxfer’s Executive Leadership Team, the Audit Committee, and the Board regularly reviews reportsof Directors as a whole. After material risks are reviewed, our ERM program involves the development, recommendation, and implementation of response plans appropriate to each risk. Response plans are developed and recommended by regional risk management teams, and then reviewed and modified as necessary by Internal Audit. Once approved, the response plans are implemented under the oversight of management teams across the relevant locations or functions. Throughout the year, Internal Audit, with oversight from the Board and/or specific Board Committee, monitors the implementation and progress of response plans. Results from such monitoring are reported to the Board of Directors as part of regular Committee updates during each quarterly meeting or as otherwise needed. Luxfer’s Board oversees the Company’s long-term business strategy, which includes, among other matters, our strategic framework; business performance and development strategies; growth plans; and approach to commercial excellence, human capital management, on various aspectslean operations, innovation, and sustainability. Working with Luxfer’s Executive Leadership Team and other key personnel, our Board engages in an in-depth strategic review of our business and related risks, including tactics Luxfer’s outlook 31
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| 2023 PROXY STATEMENT |
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and strategies for addressing such risks. Atat least once per year to consider specific issues relevant to the overall conduct of our business, including financial performance, emerging challenges and opportunities, enterprise risks, safety, sustainability, culture, mergers & acquisitions, and other strategic matters. The Company’s strategic plan is approved by the Board of Directorsannually and senior management engage in an in-depth strategic review of Luxfer’s outlook and strategies, which are designed to create long-term shareholder value and serveserves as thea foundation upon which Company goals and actions are established. Throughout the year, the Board of Directors monitors management’s progress against these goals.
MANAGEMENT SUCCESSION PLANNING |
The Board views its role in succession planning and talent development as a key responsibility. At least once annually, usually as part of the annual talent review process, the Board discusses and reviews the succession plans for the Chief Executive Officer, Chief Financial Officer, Executive Leadership Team, and other key contributors. The Directors become familiar with potential successors for key management positions through various means, including annual talent reviews, presentations to the Board, regular updates to the Chair of the Nominating and Governance Committee, and communications outside of meetings. Our succession planning process is an organization-wideorganization-wide practice designed to proactively identify, develop, and retain the leadership talent critical to the future success of the Company. BOARD, COMMITTEE AND COMMITTEE SELF-ASSESSMENTS DIRECTOR EVALUATIONS |
Annual self-assessment and evaluation of Board performance helps ensure that the Board and its Committees function effectively and in the best interest of our shareholders. The Nominating and Governance Committee is responsible for establishing and overseeing a process for self-assessment.evaluation. The Board annually conducts a self-assessmentan annual evaluation of the Board and each Committee. The assessmentevaluation process consists of a written evaluation comprising both quantitative scoring and qualitative comments on a range of topics, including the composition and structure of the Board and Committees, the type and frequency of communications and information provided to the Board and its Committees, the Board'sBoard’s and its Committees’ effectiveness in carrying out their functions and responsibilities, the effectiveness of the Committee structure, Directors’ preparation and participation in the meetings, and the values and culture displayed by the Directors. With the assistance of the Company Secretary, the assessmentevaluation responses are compiled by the Chair of the Nominating and Governance Committee. The Nominating and Governance Committee Chair leads a discussion of the assessmentevaluation results at the following Board and Committee meetings. In additionFollowing review of the evaluation results, particular areas of focus and key actions are identified. Throughout the year, the Nominating and Governance Committee monitors progress against the key actions identified and provides status updates to this annual self-assessment,the full Board as part of regular Board meetings. Additionally, verbal assessmentsevaluations are conducted in independent executive sessions at the end of every Board and Committee meeting. In addition to Board and Committee evaluations, the Nominating and Governance Committee recently implemented, and the Directors complete, peer and self-evaluations of individual Director performance, which are aimed at identifying individual Director strengths and development areas. The results of Director evaluations are anonymous and discussed solely by the individual Director and Chair of the Nominating and Governance Committee. Board education is an ongoing, year-roundyear-round process, which begins when a Director joins our Board. Upon joining the Board, new Directors are provided with an orientation to the Company, including our businesses, strategy, and governance. On an ongoing basis, Directors receive educational presentations on a variety of topics related to their responsibilities as Directors and the industries in which Luxfer operates. These presentations are provided by external advisors and/or our senior management team. In 2021,2022, topics for Board education included Luxfer values and culture; anti-corruption and anti-bribery; anti-trustanti-bribery; anti-trust compliance; global insider dealing; pension regulation and strategy; share repurchase programs and trends;global business ethics; capital markets; merger and acquisition strategy, including strategic options; SEC climate and cybersecurity and privacy;proposals; cybersecurity; ESG; and diversity and unconscious biases. 32
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BOARD OF DIRECTORS INFORMATION
Luxfer is committed to the highest standards of corporate governance and ethics. As such, the Board of Directors has adopted a set of Corporate Governance Guidelines. These guidelines describe the principles and best practices that the Board follows in carrying out its responsibilities in order to (i) ensure that the Company is run in a transparent and ethical manner and (ii) support the Company’s core objectives in furtherance of its values. Additionally, the Board has adopted thea Code of Ethics and Business Conduct, which is the designated code of ethics applicable to our Chief Executive Officer, Executive Officers, Board of Directors, and anyone conducting business on Luxfer’s behalf. The Board reviews best practices and developments in corporate governance, and, if appropriate, revises the Corporate Governance Guidelines, Code of Ethics and Business Conduct, Committee Charters, and other governance instruments at least once annually in accordance with the rules and best practices of the SEC and NYSE. Copies of these documents are available on our website at https://www.luxfer.com/investors/governance/. Luxfer'sLuxfer’s Code of Ethics and Business Conduct and Corporate Governance Guidelines address conflicts of interest. As provided in the Code of Ethics and Business Conduct, a “conflict of interest” occurs when an individual’s private interest (or the interest of a member of their family) interferes, or even appears to interfere, with the interests of the Company. A conflict of interest can arise when an employee, Executive Officer, or Director (or a member of their family) takes actions or has interests that may make it difficult to perform their work for Luxfer objectively and effectively. Conflicts of interest also arise when an employee, Executive Officer, or Director (or a member of their family) receives improper personal benefits as a result of their position in Luxfer or another entity.organization. The Company periodically, but no less frequent than annually, solicits information from Directors and Executive Officers in order to monitor potential conflicts of interest. Directors and Executive Officers are expected to always be mindful of their fiduciary obligations to the Company, and they must seek determinations and prior authorizations or approvals of potential conflicts of interest from (i) the Board Chair or Nominating and Governance Committee, as appropriate, in the case of Directors or (ii) Luxfer’s General Counsel, or where a conflict arises, the Nominating and Governance Committee, in the case of Executive Officers.
In 2021,2022, there were no conflicts of interest. RELATED PARTY TRANSACTIONS |
In addition to standards set forth in our Corporate Governance Guidelines, Luxfer has established a Related Party Transactions Policy. As defined in the Policy, a “Related Person” is any (i) person who is or was (since the beginning of the last fiscal year for which Luxfer has filed a Form 10-K and Proxy Statement, even if they do not presently serve in that role) an Executive Officer, Director, or nominee for election as a Director of Luxfer, (ii) person who is the beneficial owner of greater than 5% of Luxfer’s outstanding ordinary shares, or (iii) Immediate Family Member of any of the foregoing. “Immediate Family Member” is defined as “any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, sister-in-law, or any person (other than a tenant or employee) sharing the household of a person.” In accordance with the Related Party Transactions Policy and consistent with Section 314.00 of the NYSE Listed Company Manual, as amended on April 2, 2021 and August 26, 2021, the Audit Committee must conduct a reasonable prior review of all “Related Party Transactions.”Transactions” and prohibit such a transaction if it determines it to be inconsistent with the interests of the company and its shareholders. A “Related Party Transaction” is any transaction directly or indirectly involving a Related Party that is required to be disclosed under Item 404(a) of Regulation S-K of the Securities Act. Under Item 404(a), the Company is required to disclose any transaction, arrangement, or relationship, or any series of similar transactions, arrangements or relationships (including any indebtedness or guarantee of indebtedness), since the beginning of the Company’s last fiscal year, or any currently proposed transaction, in which (i)(a) the aggregate amount involved will or may be expected to exceed $120,000 in any fiscal year, (ii) Luxferyear; (b) the Company was or is to be a participant,participant; and (iii)(c) any Related Person hasParty had or will have a direct or indirect material interest [other than solely as a result of being a Director or trustee (or any similar position) or a less than 10% beneficial owner of another entity]. interest. In considering whether to approve a Related Party Transaction, the Audit Committee takes into account, among other factorsall of the relevant terms, facts, and circumstances available to it, deems appropriate,including but not limited to the following, if applicable: (i) the information made available in the notice described in Section 3.0 of the Company’s Related Party Transactions Policy; (ii) the purpose of the transaction and its potential risks and benefits to the Company; (iii) the interests of all Related Parties in the Related Party Transaction; (iv) the role, if any, the Related Parties played in arranging the transaction; (v) whether the transaction was or is proposed to be undertaken in the ordinary course of the Company’s and the Related Party’s business; (vi) whether the Related Party Transaction is material to the Company; (vii) whether the terms and conditions of the Related Party Transaction are fair to the Company and usual and customary in the market; (viii) whether the Related Party Transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances andcircumstances; (ix) the extentavailability of other sources for comparable products or services; (xi) in the event the Related Party is a Director, an Immediate Family Member of a Director, 33
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or an entity in which a Director is a partner, shareholder, or executive officer, the impact of the transaction on the Director’s independence, and if the Director serves on the Remuneration Committee, such Director’s status as a “non-employee director” under Rule 16b-3 of the Securities Exchange Act of 1934, as amended, and, if applicable, an “outside director” under Section 162(m) of the Internal Revenue Code of 1986, as amended; and (xii) the information required to be disclosed by the Company pursuant to Item 404(a) of Regulation S-K of the Securities Act if the Company were to enter into the Related Person’s interest in the arrangement. Party Transaction. In 2021,2022, there were no Related Party Transactions. | | | 2022 Proxy Statement 44SECURITY OWNERSHIP |
BOARD OF DIRECTORS INFORMATION
Various Luxfer policies address security ownership, including the Insider Trading and Dealing Policy and the Stock Ownership Guidelines. Particularly, Luxfer'sLuxfer’s Insider Trading and Dealing Policy prohibits a number of transactions by “Covered Persons.” “Covered Persons” include Directors, Executive Officers, and various Luxfer employees and consultants in management, corporate, finance, IT, and investor relations roles. Specifically, the Policy prohibits the following in relation to Company securities: short-termshort-term trading, short sales, options trading, trading on margin, and hedging. All Covered Persons – including family members of Covered Persons, members of a Covered Person'sPerson’s household, and entities controlled by Covered Persons – are expected to comply with the Insider Trading and Dealing Policy, as well as applicable securities laws and regulations. Further, Luxfer has established Stock Ownership Guidelines, which apply to all Directors, Executive Officers, and any other key employees that the Remuneration Committee may identify from time to time in consultation with management. The Company’s Articles of Association do not currently require Directors to hold a minimum number of shares in the Company in order to qualify for appointment to the Board of Directors; however, the Stock Ownership Guidelines provide the Company'sCompany’s expectations as to the minimum amount of shares such persons should own in the Company. These minimum amounts are based on the total value of the shares owned by a person being equal to a certain multiple of such person’s annual base salary or retainer fee. Additionally, the Stock Ownership Guidelines include share retention ratios to assist in a person'sperson’s continuous progress toward their respective ownership guideline. Directors and Executive Officers are expected to achieve the minimum ownership guidelines within five years of the effective date of the Stock Ownership Guidelines or their appointment or election, whichever occurs later. 34
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BOARD OF DIRECTORS INFORMATION
ENVIRONMENT, SOCIAL, AND HUMAN CAPITAL
ENVIRONMENT, SOCIAL AND GOVERNANCE INITIATIVES |
Luxfer remains committed to operating safe, clean, and environmentally compliant facilities while supporting our employees, communities, and offering excellent customer service. Foundational to a sustainability strategy that positions Luxfer for long-term growth, we will uphold these commitments through strong governance practices and policies, ensuring that we always do business based on our mission and values. Luxfer’s Board of Directors overseesis responsible for overseeing the Company’s long-term business strategy, which includes, among other things, the Company’s approach to ESG matters and receives regular updates on the Company’s progress. In general, the Board’s oversight over Luxfer’s ESG initiatives include governance-relatedmatters. The Board considers our governance-related policies and practices; our systems of risk oversight and management; how we advance environmental sustainability in our business and operations;sustainability; health and safety; human rights; human capital management and corporate culture; cybersecurity; and the manner in which we serve our customers and support our communities. In December, we published our 2022 Sustainability Report, a biennial report highlighting our ongoing efforts to drive sustainability in our operations. Building on our inaugural report published in 2020, the 2022 Sustainability Report includes (i) more granular environmental and social data through 2021; (ii) an update on our progress towards meeting our 2025 Environmental Goals; (iii) greater discussion on sustainability governance and climate-related risks; and (iv) insight into new and ongoing sustainability initiatives. We invite you to read the full report on our website at https://www.luxfer.com/environment-social-and-governance/. In 2022, we continued tracking energy and emissions data through our internal ESG Scorecard, which measures progress across a wide range of ESG key performance indicators. In addition to recording data, the ESG Scorecard is the mechanism through which we track performance against our 2025 Environmental Goals, which includes our commitment to reducing our absolute carbon dioxide equivalent (“CO2e”) emissions by 20% by 2025 using a 2019 baseline. Having finalized our full year 2022 emissions figures, we are pleased to have exceeded our 2025 emissions reduction goal ahead of schedule with a 29% decrease in our total absolute CO2e emissions in 2022 from our 2019 baseline. In addition to updates provided in annual reports and other sustainability-related publications, we plan to provide additional details on final full-year 2022 and 2023 emissions data, and an update on progress towards all our 2025 Environmental Goals, in a future sustainability report anticipated in 2024. In 2021, we established stronger internal data collection and reporting procedures on our environmental metrics. Each Luxfer business unitsite compiles greenhouse gas emission inventories and monitors electricity and natural gas usage. AnyAll other greenhouse gases produced as a result of manufacturing processesoperations, such as propane and direct CO2, are also recorded. NaturalScope 1 emissions consist of all direct emissions from fuel combustion, natural gas, propane, usage, and all other COsources of direct emissions. Scope 2e emissions are classified as “Scope 1,” whileconsist of all indirect emissions attributable to the Company through the consumption of purchased electricity, usage is classified as “Scope 2.”steam, heating, or cooling. This data is compiled and converted into CO2eto emissions to calculate our total output according toCO2e output. Our US and Canada facilities use standard CO2 conversion factors frompublished by the U.S.US Environmental Protection Agency.Agency, and our UK facilities use CO2 conversion factors published by the UK Government. Broadly speaking, natural gas and other pure gassesthe gases that compile the bulk of our emissions have very similar CO2e equivalency regardless of where it isthey are sourced. Year-on-yearYear-on-year figures are used to identify any anomalies, and similar business unitssites are compared to one another to ensure consistency and understanding of this data. At present, we do not collect details of any Scope 3 emissions.
The charttable below provides a summary of the Company’s Scope 1 and Scope 2 greenhouse gas emissions for 2021, 2020,2022 and 2019.2021. | 2022 (1) | 2021 | | | (mtCO2e) (2) | (mtCO2e/$1mSV) (3) | (mtCO2e) (1) | (mtCO2e/$1mSV) (3) | Scope 1 | 51,660 | 119.47 | 72,222 | 178.1 | Scope 2 | 20,226 | 46.8 | 31,431 | 77.6 | Total | 71,886 | 166.3 | 103,653 | 255.7 |
| | 2021 | 2020 | 2019 | | (tCO2e)(1) | (tCO2e/$1mSV) | (tCO2e)(1) | (tCO2e/$1mSV) | (tCO2e)(1) | (tCO2e/$1mSV) | | Scope 1 | 72,222 | 178.1 | 54,124 | 166.6 | 71,764 | 192.2 | | Scope 2 | 31,431 | 77.6 | 40,218 | 123.8 | 29,448 | 78.9 | | Total | 103,653 | 255.7 | 94,342 | 290.4 | 101,212 | 271.1 |
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| (1)
| Tons of CO2 equivalent2023 PROXY STATEMENT |
| | |
OurIn 2022, our total absolute emissions (i.e., total metric tons of CO2e) decreased by 30.6% compared to 2021. Absolute Scope 1 emissions decreased 28.5% and absolute Scope 2 emissions decreased 35.7% year-over-year. We attribute this decrease to various energy- and emissions-saving projects implemented in late 2021 and throughout 2022, which are described in greater detail below. These projects also impacted our total emissions intensity (i.e., CO2e emissions per $million in salessales), which decreased 12%by 35.0% in 2022 compared to 2020. CO2e emissions per $million in sales were lower in 2020 as a result of site shutdowns due to the COVID-19 pandemic.2021. Scope 1 emissions increasedintensity decreased by 33% in 2021, as we returned to normal production levels32.9% and in some cases, worked to increase volume to satisfy higher demand levels. Scope 2 emissions intensity decreased 22% year-over-year. Additional investments madeby 39.7% year-over-year. While emissions intensity are useful metrics to normalize our emissions, sales value is affected by exchange and inflation rate effects. Accordingly, it is important to note that the Company’s efforts to pass through inflationary costs in 2021 on electricity-saving projects2022 has impacted our sales value and technology are anticipated to further decreaselikewise impacted our CO2e totals in 2022.
emissions intensity metrics. FACILITIES AND OPERATIONS |
Throughout 2021 and 2022, we invested in multiple energy- and emissions-reduction projects across our global facilities, such as LED lighting, upgrades to compressors and pumps, and the replacement of old equipment with energy-efficient models. In total, these projects saved over 4,700,000 kWh of electricity annually. The SF6 abatement project carried out at the Luxfer MEL Technologies plant in Manchester, UK, which involved installing new technology in their magnesium operations, significantly contributed to the Company’s ability to achieve its 2025 emissions reduction target ahead of schedule. This project alone reduced the Company’s total emissions by approximately 36,000 metric tons of CO2e annually. Other projects carried out in 2022 to improve our environmental footprint include: •Luxfer MEL Technologies in Flemington, NJ installed LED lighting equipped with motion sensors throughout the facility, reducing the sites energy consumption by approximately 243,000 kWh of electricity, or 172 metric tons of CO2e emissions, annually. •Luxfer Magtech in Cincinnati, OH upgraded 290 traditional lights to LED in October 2022, representing an annual emissions savings of approximately 127 metric tons annually. •Luxfer Gas Cylinders in Riverside, CA worked to reduce electricity consumption by installing new high-efficiency pumps used to hydrotest their Type 3 SCBA cylinders, amounting to 41,040 kWh of electricity, or 17.8 metric tons of CO2e emissions, annually. •Through an audit of its water usage, Luxfer MEL Technologies in Tamaqua, PA located and repaired a large on-site leak which is estimated to save over 300,000 gallons of municipal freshwater annually. •Luxfer Graphic Arts in Manchester, UK installed new energy-efficient technology to coat their copper engraving plates with laminate instead of traditional lacquer which increases the recyclability of the copper, reduces downstream disposal and operational costs, and by 2024, is expected to save approximately 265 kg of CO2e. Attracting and retaining talent remains a challenge in the post-COVID landscape. To succeed in today’s competitive labor market, Luxfer takes a proactive approach to human capital management by pursuing several priorities that we believe are critical in recruiting, retaining, motivating, and developing top talent. Such priorities include: (i) ensuring occupational health and safety; (ii) promoting financial, physical, and emotional well-being; (iii) providing opportunities for growth and development; and (iii) maintaining diverse and inclusive workplaces. Our Board of Directors and Executive Leadership Team play a key role in setting our human capital management strategy and driving accountability for meaningful progress. Informed by data, our human capital management initiatives are supported by local leadership, with significant functional oversight by our local human resource teams. All Luxfer facilities collect data on employee retention, talent acquisition, training, and safety. Metrics are recorded quarterly on our internal scorecard and are reported to executive management regularly. 36
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| 2023 PROXY STATEMENT |
| | | | 2022 Proxy Statement 46 |
BOARD OF DIRECTORS INFORMATION
FACILITIES AND OPERATIONS |
As part of our 2025 Environmental Goals, we are committed to reducing our CO2e emissions by 20%, reducing waste-to-landfill by 20%, and reducing freshwater consumption by 10% from our baseline of 2019. With financially sound projects, we have started delivering on our sustainability commitments through improvements to the efficiency of our operations. Our goal in 2021 was to identify priority energy-efficiency projects, and we carried out several kaizen-type events to identify no- or low-cost projects to save energy, water, and improve our waste management. Below is a snapshot of the projects we focused on in 2021:
| · | Luxfer MEL Technologies in Manchester, U.K. recently installed new technology to significantly reduce the use of SF6 in their magnesium operations, which is projected to result in a net savings of over 36,000 metric tons of CO2e annually once fully operational. |
| · | Luxfer Gas Cylinders in Riverside, California modified the method by which its alternative fuel cylinders are tested for leaks by using compressed air instead of nitrogen, saving 26 metric tons of CO2e annually. |
| · | Luxfer Gas Cylinders in Nottingham, U.K., operates a site-wide zero waste initiative, which has decreased the amount of waste sent to landfill from 45% in 2007 to 0.02% in 2021. In 2021, the site was also awarded the Sustainability Award by The Business Desk for their waste reduction initiatives. |
| · | Luxfer Graphic Arts in Madison, Illinois completed an upgrade of approximately 7,500 old lighting fixtures in April 2021, saving approximately 1,490 metric tons of CO2e annually. |
| · | Luxfer Graphic Arts in Madison, Illinois also installed a swarf briquetter to separate magnesium fines from oil, recovering approximately 100 gallons of oil per week to be recycled and reused. |
| OCCUPATIONAL HEALTH & SAFETY |
The occupational health and safety of employees is fundamental to delivering sustainable economic performance. Luxfer has established well-definedwell-defined health and safety policies and procedures, as well as ongoing employee training, as part of the Company’s commitment to being an industry leader in safety. Gap analyses are regularly conducted and safety goals and objectives for all functional business unitslocations are developed. As part of the Company’s enterprise-wideenterprise-wide risk management system, these objectives are monitored, and performance related to them is regularly reviewed and discussed. Employees are encouraged to submit suggestions, ideas, and observations about safety hazards, which are incorporated into a “safety moment” at the beginning of each meeting, to increase awareness and reinforce positive safety behavior. Additional efforts include monthly safety meetings with employees, safety audits by management, safety audits by certain employees, and the inclusion of safety initiatives as part of select employees’ incentive plans. The Company utilizes a mixture of leading and lagging indicators to assess the health and safety performance of its operations. Leading indicators include reporting and closure of all near miss events and safety concerns identified. Lagging indicators include the recordable Incident Frequency Rate, (“IFR”), which is defined by the U.S.US Occupational Safety and Health Administration (OSHA) as the number of work-relatedwork-related injuries per 100 full-timefull-time workers during a one-yearone-year period. Recordable accidents and Lost Time Accidents are also recorded. These safety measures are integrated into the performance evaluations of our executives and are reported to the Board on a quarterly basis. Luxfer’s IFRlagging safety indicators from 20182019 to 2021 is2022 are shown in the table below. | 2022 | 2021 (1) | 2020 | 2019 | Recordable Accidents | 20 | 31 | 25 | 33 | Lost Time Accidents | 8 | 15 | 8 | 5 | Incident Frequency Rate | 1.59 | 2.62 | 1.85 | 2.09 |
| | 2021 | 2020 | 2019 | 2018 | | IFR | 2.62 | 1.85 | 2.09 | 3.14 |
(1) 2021 safety data excludes the following facilities: (i) Niagara, Canada; (ii) Aluminum operations in Riverside, CA, US; (iii) Graham, NC; (iv) Aluminum operations in Worcester, UK; and (v) Shanghai, China. Data from our facility in Pomona, CA is included, beginning in April 2021. | | 47 | EMPLOYEE WELL-BEING |
BOARD OF DIRECTORS INFORMATION
Luxfer'sLuxfer’s workforce is one of our greatest sources of sustainable value. Our ability to deliver on our objectives and build lasting relationships with our customers depends on the capabilities, attraction, and retention of the talented individuals who come to work every day. As such, we continuously strive to offer competitive pay and benefits and maintain a work-lifework-life balance for our employees in order to foster job satisfaction and increase retention.
Fair Wages and Competitive Benefits.The Company’s compensation philosophy aims to attract, retain, and motivate employees through its incentive and benefit programs. Luxfer offers competitive base pay and, depending on position, variable incentive pay associated with both individual performance and theCompany performance, of the Company as a whole, including both short-termshort-term incentive pay and long-termlong-term equity awards. Full-timeFull-time employees and, in some cases, part-time employees who have met the minimum service hour requirements, are offeredeligible to participate in various retirement savings plans, such as the Company’s 401(k) defined contribution plan in the US and various pension schemes available to UK employees. We also offer paid time off, opportunitygroup medical, dental, and vision plans, in addition to participatevarious life, disability, and paid family sick leave options, which vary by jurisdiction. Employee Share Plans.Luxfer encourages participation in the Company’s various pension and retirement savings plans, and, for those employees located in the U.S., a 401(k) retirement savings contribution match. In addition, Luxfer employees may participate in the Company’s U.S.its US Employee Stock Purchase Plan (“ESPP”) and U.K.UK Share Incentive Plan (“SIP”), which provide employees an opportunity to become Luxfer shareholders at a reduced price. Through convenient payroll deductions, U.S.Under the ESPP, US employees can purchase Company stock at a 15% discount under the ESPP. Similarly, underthrough payroll deductions. Under the SIP, U.K.UK employees can purchase Company stockLuxfer shares, subject to certain limits, through payroll deductions and, in turn, the Company grants participating employees one free share per every two shares purchased. 37
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| 2023 PROXY STATEMENT |
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Fitness and Wellness Programs.Luxfer also provides health benefit coverage,is proud to offer several optional fitness and wellness programs and healthy living incentives to our employees. We offer group medical, dental, and vision plans, along with life, disability and paid family leave offerings which vary by jurisdiction. Luxfer is proud to offer several optional fitness and wellness programs, such as ourOur Employee Healthy Lifestyle Program. AvailableProgram is available to our U.S.US employees this programand offers partial reimbursement for certain gym and fitness center memberships, weight loss programs, and group exercise classes. U.S.US employees are also eligible to participate in a smoking cessation program through which employees who complete a 90-day90-day program are rewarded with lowered insurance rates. In addition to financial and physical wellbeing, our employees’Emotional Well-Being.We support the social and emotional health is supported throughof our employees by providing access to wellness clinics and funded mental health counseling services. As a part of Luxfer’s group medical insurance plan, U.S.US employees have convenient access to mental health services through live video visits with a board-certifiedboard-certified doctor or licensed therapist. Luxfer also provides access to the Employee Assistance Program, which is designed to support employees and their families with a variety of work-lifework-life services and resources, including legal assistance, financial budgeting, and more. Through the Employee Assistance Program, employees are connected to a credentialed counselor, free of charge, to provide professional, confidential services to help them and their loved ones improve their quality of life.
GROWTH AND TALENT DEVELOPMENT |
OneProviding opportunities for professional growth and development is key to Luxfer’s retention strategy. Luxfer maintains talent and succession planning processes, including regular review by the Executive Leadership Team and reports to the Board of Luxfer’s core values is ‘Personal Development’ because we are only as strong as our employees who achieve, lead, and revolutionize our business. We believe in each employee’s ability to bring their unique skills and passions into the challenging and constantly evolving industries we serve by providing an environment to grow and take advantage of career opportunities.
Directors. Employees are provided training, learning, and development opportunities at all levels of the Company. AtWe operate leadership and management development programs, which provide a consistent approach to the management level,development of the ManagementCompany’s future leaders and Executive Development Program focuses on individual strengths and fosters technical skills and knowledge to create the next generation of well-rounded Luxfer leaders.managers. With a multi-facetedmulti-faceted curriculum, the Program providesthese programs provide critical problem-solving,problem-solving, communication, business management, and leadership skills. AtLuxfer also maintains various training and development programs for employees at the workforce level, management teams work closely with employeesin addition to ensure they have the skills, knowledge, experience,regular coaching and support necessary to accomplishfrom their goals.supervisors and performance evaluations. Management utilizes a variety of tools to evaluate employee performance, including skills assessments, self-evaluations,self-evaluations, and the achievement of personal objectives. Personal objectives (a list of goals the employee will strive to achieve) are set at the beginning of each year in the form of a balanced scorecard. Managers approve the personal objective scorecard and review the employee’s performance in relation to their scorecard throughout the year. For eligible employees, annual bonusescash incentives are tied to the achievement of personal objectives. Moreover, setting personal objectives gets employees involved withties employee performance to the Company’s overall strategy and improves engagement, thereby supporting Luxfer’s growth and profitability. To further support our employees’ personal development, Luxfer offers a company-widecompany-wide online training and development platform designed to increase access to critical business, leadership, management, productivity, collaboration, and computer software skills. Available to all Luxfer employees, theThe platform provides access to over 180,000 courses, videos, books, and audio books on a variety of topics from world-classworld-class experts. The content is made to suit different learning styles; all one click away in the same user interface. Employees can access the content 24/7 on any desktop computer or mobile device, providing them with the opportunity to improve their performance anytime, anywhere. BOARD OF DIRECTORS INFORMATION
| DIVERSE AND SUPPORTIVE WORKPLACE |
The professional conduct of our employees furthers the Company’s mission, promotes productivity, minimizes disputes, and enhances our reputation. As such, Luxfer is committed to creating and maintaining a work environment in which people are treated with dignity, decency,diverse, global workforce that provides fair and respect. Pursuant to the Company’s Equal Opportunity, Non-Discrimination,equitable opportunities, thereby advancing Luxfer’s innovation culture and Anti-Harassment Policycustomer first values. With continued focus on diversity and Human Rights and Labor Practices Policy, the work environment at Luxfer is characterized by mutual trust and the absence of intimidation, oppression, and exploitation and operates free of discrimination or harassment. equity, Luxfer’s diversity initiatives include, but are not limited to, practices and policies on recruitment and selection, including targeted sourcing of personnel from diverse backgrounds; compensation and benefits; professional development and training; advancement opportunities; and the ongoing development of a diverse and inclusive work environment. To ensure effective teamwork and achievement of common business goals, all Luxfer personnel are required to complete a variety of anti-harassment, non-discrimination,anti-harassment, non-discrimination, diversity, and unconscious bias trainings annually. Luxfer’s talent acquisition teams and hiring managers undergo additional training to ensure that a diverse slate of candidates is considered for all job openings. Further, Luxfer monitors the composition of its current workforce for diversity, age, and gender demographics. The quality of this data is continually improved to ensure that a diverse and talented workforce is maintained. This data is used to enhance employment and recruitment practices to provide the most inclusive work environment possible. 38
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| 2023 PROXY STATEMENT |
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THIRD PARTY RELATIONS AND SUPPLY CHAIN COMPLIANCE |
To ensure that our partners conduct business with a high degree of integrity and in a socially and environmentally responsible manner, all third parties with whom we do business (including suppliers, distributors, contractors, agents, service providers, and customers) are expected to adhere to our Third Party Code of Conduct. Based on our own Code of Ethics and Business Conduct, the Third Party Code of Conduct applies to all third partiesparty representatives worldwide. Under the Code, third parties are expected to respect, acknowledge, uphold, and comply with the following key themes and extend these standards to their supply chain: •working conditions; | · | Employee health and safety; |
| · | Child labor, forced labor, and human trafficking; |
| · | Business ethics, anti-corruption, and anti-bribery; |
| · | Environmental responsibility; |
| · | Conflict-free mineral sourcing; and |
| · | Product•employee health and safety; •child labor, forced labor, and human trafficking; •business ethics, anti-corruption, and anti-bribery; •data privacy; •environmental responsibility; •conflict-free mineral sourcing; and •product and service quality. |
Beginning in 2021, the establishment of new commercial contracts and the continuation of existing commercial arrangements with Luxfer require that third parties complete and return an acknowledgement form as a means to verify compliance with the Third Party Code of Conduct. To ensure ongoing compliance, Luxfer requests that third parties renew their signature on the form once every three years. Presently, acknowledgement of the Third Party Code of Conduct applies only to vendors and suppliers who do $50,000 or more in business with Luxfer annually. In 2022, 49% of suppliers and distributors who meet this threshold attested compliance in writing to Luxfer’s Third Party Code of Conduct. Our goal in 2023 is to continue implementing the appropriate internal processes to achieve a 90% attestation rate from third parties who meet this threshold. This metric is tracked quarterly by each Luxfer location on our internal ESG Scorecard and is reviewed twice annually with the CEO and senior management. We look forward to further refining our internal processes so that we may extend this requirement to 100% of our supply chain in the future. To further improve the sustainability performance of our supply chain, Luxfer facilities conduct due diligenceexaminations of new and existing vendors are conducted regularly. We utilize several methods to ensure that our standards are met, including vendor risk assessments. Through this approach, vendor assessments are conducted based on multiple factors, including risk profile, engagement type and activity, and geography. These assessments evaluate the vendor’s ability to meet both our internal and industry standards for quality, safety, and reliability. Pursuant to our Third Party Code of Conduct, third parties through a variety of methods, including risk assessmentsare required to allow representatives from Luxfer and, both on- and off- site audits, which provide usif requested, Luxfer’s customers full access to policies and records,their production facilities, worker records, and workers for confidential interviews. Buyers inWe use appropriate due diligence procedures to vet our purchasing department also receive additional training on the supplier standards covering human rights, labor practices,vendors prior to entering into any business arrangements and working conditions at least once annually. Objectives related to these topics are also integrated intoreject those who do not fulfill our buyers’ performance reviews. requirements or meet our standards. We encourage and facilitate reporting of environmental, social, or governance non-compliancenon-compliance in our operations and throughout our supply chain through our confidential, anonymous whistleblowing hotline. Concerned individuals may report actual or suspected violations anonymously via our hotline, which is available 24/7 and offers multi-lingualmultilingual support for reporters in more than 170 languages. | | 49 | CYBERSECURITY |
BOARD OF DIRECTORS INFORMATION
Cybersecurity and privacy risks are critical issues for Luxfer, asAs customer preferences and business-efficiencybusiness-efficiency demands continue to lead to a more connected and digitized world.world, cybersecurity and privacy risks have become critical business issues. Because there is no single method to protect against every type of potential attack, we have adopted a risk management approach addressing cyber threats, which includes (i) Board-levelBoard-level oversight; (ii) preventing hackers from penetrating our systems (“cybersecurity”); (iii) containment and recovery measures in the event of an attack (“cyber resilience”); (iv) policies and employee training; (v) third-partythird-party cybersecurity measures; and (vi) compliance with applicable laws and regulations.
Board-Level Oversight. Board-Level Oversight.Luxfer’s Board of Directors is responsible for overseeing cybersecurity, information security, and technology risk. The Committeerisk, and receives regular reports on IT matters at least once quarterly from the Company’s senior management. The day-to-dayday-to-day management of Luxfer’s cybersecurity program is handled by our IT Steering Committee, who maintains the operation of Luxfer’s cybersecurity program and ensures effective implementation of IT policies and practices.
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| 2023 PROXY STATEMENT |
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Cybersecurity.We have operationalized a series of measures that seek to prevent attacks from compromising our systems. Luxfer has a breadth of controls in place to protect against cyberattacks, including firewalls, threat monitoring systems, protected cloud architecture, and more frequent security patching. We have phased out vulnerable operating systems and updated legacy servers with advanced security. Applications that run and manage our core operating data are fully backed up. Cyber Resilience.We have an IT Incident Response Plan in place to quickly identify, track, and respond to potential or confirmed cybersecurity incidents. To protect our assets, we regularly assess security controls to manage potential events, cyber patterns, and attack modes. Although no cybersecurity incidents have been material to the Company to date, we continue to maintain insurance coverage for cybersecurity and business continuity risks. Policies and Employee Training.We have global policies covering IT security standards and annualquarterly compliance training for employees. Our employees are also trained through regular phishing simulations. Third-PartyThird-Party Cybersecurity Measures.Our IT staff perform thorough due diligence and risk analyses on third party vendors, verifying that sufficient security testing is performed on all software before installation on Luxfer’s network. Access and permissions to all software and programs are regularly monitored and reviewed by IT managers.
Compliance with Regulations.We make every effort to comply with the U.K.UK General Data Protection Regulation and other applicable laws relating to the security of personally identifiable information of our customers, employees, and anyone with whom we do business. Our Data Protection Policy is reviewed and audited by our internal audit team once annually. COMMUNICATION WITH SHAREHOLDERS AND INTERESTED PARTIES |
We believe that effective corporate governance includes year-roundyear-round engagement with our shareholders, stakeholders, and any interested party. We regularly meet with our shareholders, including both large and small investors, to discuss business strategy, performance, compensation philosophy, corporate governance, and environmental and social topics. In a typical year, Luxfer engages dozens of shareholders, including our largest shareholders two to three times per year. In 2021,2022, we had more than 100 calls and meetings with investors, including those scheduled as part of investor conferences, non-dealnon-deal roadshows, and post-earningspost-earnings follow up meetings. To continuously improve our shareholder communication and outreach, we review the feedback we receive during these meetings with our Board of Directors. Our Directors, along with management, carefully consider and evaluate this information, and modify the Company’s approach to advance our shareholder engagement efforts. If you wish to provide us with feedback, please send an email to investor.relations@luxfer.com. Alternatively, if you wish to communicate with the Board of Directors, specific Directors as a group, or any individual Director, you may send a letter addressed to the relevant party, c/o Company Secretary, Luxfer Holdings PLC, 8989 North Port Washington Road, Suite 211, Milwaukee, Wisconsin, 53217, United States. Any such communications will be forwarded directly to the addressee(s). Additional information can be found on our website at https://www.luxfer.com/contact/. 40
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| 2023 PROXY STATEMENT |
| | 2022 Proxy Statement 50BOARD MEETINGS AND COMMITTEES |
BOARD OF DIRECTORS INFORMATION
BOARD MEETINGS AND COMMITTEES
The Board meets regularly during the year, holds special meetings, and acts by unanimous written consent wherever circumstances require. In each regularly scheduled Board and committeeCommittee meeting, the independent Directors also met in executive session, without the Chief Executive Officer or other members of management present. Directors are expected to attend all scheduled meetings of the Board of Directors, all meetings of the committee(s)Committee(s) on which they serve, and all shareholder meetings. The Board held sevensix regularly scheduled meetings in 2021, six2022, four of which occurred in person and two of which occurred virtually via videoconference. One hybrid meetingAdditionally, the Board held six special meetings in which matters such as Board and executive succession planning and transitions were discussed. These six meetings occurred in September, at which three Directors attended virtually via videoconference. All incumbent Directors attended 100% of the meetings of the Board and committee(s)Committee(s) on which they served during 2021,2022, and all Directors who served during fiscal year 20212022 attended at least 75%93% of the meetings of the Board and committee(s)Committee(s) on which they served. All Directors then serving attended the 20212022 Annual General Meeting of Shareholders. The Board has three standing committees comprised solely of independent Directors: the Audit Committee, the Nominating and Governance Committee, the Remuneration Committee, and the AuditRemuneration Committee. The functions performed by these committees,Committees, which are set forth in more detail in their charters,Charters, are summarized below. Name | Audit
Committee | Remuneration
Committee | Nominating and
Governance
Committee | Director Nominees | | | | Andy Butcher (1)
Chief Executive Officer | | | | Patrick Mullen (2)
Board Chair | | 
|
| Richard Hipple |
| 
| | Clive Snowdon |
| |
| Sylvia A. Stein (3) |
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| Lisa Trimberger |
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| | Former Directors Serving in Fiscal Year 2022 | | | | Alok Maskara (4) | | | | David Landless (5) | | |
| Total Meetings in 2022 | 6 | 3 | 3 |
________________________ 41
| (1)
| Andy Butcher will join the Company’s Board of Directors upon his appointment as Chief Executive Officer, effective May 6, 2022. |
2023 PROXY STATEMENT | (2) | Alok Maskara elected to leave the Company, effective May 6, 2022, in pursuit of another opportunity. |
| (3) | Patrick Mullen joined the Nominating and Governance Committee and the Remuneration Committee effective January 1, 2022. Mr. Mullen was appointed Board Chair effective March 11, 2022. |
| (4) | David Landless served as Board Chair until March 2022. He will continue serving as a Non-Executive Director and member of the Nominating and Governance Committee through June 8, 2022, as he is not seeking re-election at the 2022 Annual General Meeting. |
| (5) | Allisha Elliott resigned from the Board effective December 31, 2021. |
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BOARD OF DIRECTORS INFORMATION
ROLE | | The Audit Committee oversees the Company’s accounting, financialreporting, and internal control policies and procedures. Responsibilities of the Audit Committee include, among other things, overseeing financial reporting, controls, integrity of the Company’s financial statements, and audit quality and performance; monitoring and overseeing the independence and performance of our independent auditor, with responsibility for the selection, evaluation, remuneration, and, if applicable, discharge of such independent auditor; approving, in advance, all of the audit and non-audit services provided to the Company by the independent auditor; facilitating open communication among our Board, senior management, internal audit, and the independent auditor; and overseeing our enterprise risk management and financial compliance programs. A full description of the Committee’s role is set forth in the Audit Committee Charter, available at https://www.luxfer.com/investors/governance/. | MEMBERS | | Lisa Trimberger (Chair as of April 2020), Richard Hipple (effective November 2018), Clive Snowdon (effective August 2016), and Sylvia A. Stein (effective August 2022). The Board has affirmatively determined that all members of the Audit Committee are independent in accordance with NYSE listing standards and SEC regulations. | REPORT | | The Audit Committee Report can be found under the section entitled “2022 Audit Committee Report” on page 84 of this Proxy Statement. | FINANCIAL LITERACY AND EXPERTISE | | The Board has determined that Lisa Trimberger, Richard Hipple, Clive Snowdon, and Sylvia A. Stein are financially literate under NYSE rules and listing standards. The Board has further determined that Lisa Trimberger and Clive Snowdon qualify as financial experts pursuant to SEC standards. |
NOMINATING AND GOVERNANCE COMMITTEE |
ROLE | ROLE: | The Nominating and Governance Committee advises the Board on matters relating to corporate governance, Board structure, and Board composition. Responsibilities include, among other things, establishing criteria for Director candidates and identifying individuals for nomination to become Directors, including engaging advisors to assist in the search process where appropriate, and considering potential candidates recommended by shareholders; developing plans and making recommendations in relation to the organization, composition, membership terms, and meeting structure of the Board and its committees; overseeing and making recommendations regarding executive succession planning; administering the annual self-assessmentperformance evaluation of the Board and its committees; overseeing Luxfer'sLuxfer’s corporate governance and compliance structure and practices; and overseeing and recommending to the Board changes to our Corporate Governance Guidelines, Committee Charters, and other governing instruments. A full description of the Committee’s role is set forth in the Nominating and Governance Committee Charter, available at https://www.luxfer.com/investors/governance/. |
A full description of the Committee’s role is set forth in the Nominating and Governance Committee Charter, available at https://www.luxfer.com/investors/governance/
MEMBERS | MEMBERS: | Clive Snowdon (Chair since April 2020), Patrick Mullen (beginning(effective January 2022), Sylvia A. Stein (effective August 2022), and David Landless (through June 8, 2022),. The Board has affirmatively determined that all members of the Nominating and Allisha Elliott (through December 2021).Governance Committee are independent in accordance with NYSE listing standards and SEC regulations. |
42 The Board has affirmatively determined that all members of the Nominating and Governance Committee are independent in accordance with the NYSE listing standards and SEC regulations.
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| 2023 PROXY STATEMENT |
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ROLE | ROLE: | The Remuneration Committee sets and administers the policies that govern executive, director and senior managementcompensation. Responsibilities of the Remuneration Committee include, among other things, evaluating Executive Officerexecutive and senior management performance; establishing and administering executive compensation, including base salaries, non-equity incentive compensation,annual cash incentives, and equity incentive awards; reviewing and approving the Executive Compensation Discussion and Analysis included in the annual Proxy Statement; recommending actions regarding the Chief Executive Officer'sOfficer’s compensation for approval by the Non-ExecutiveNon-Executive Directors of our Board; and approving individual compensation actions for all Executive Officers other than the CEO. To assistCEO; and overseeing the Company’s human capital practices as such practices related to the Company’s broader ESG strategy. A full description of the Committee’s role is set forth in the Remuneration Committee in its review of executive compensation programs, Meridian Compensation Partners LLC ("Meridian"), an executive compensation and human resource consulting firm, provides advice, data, and insight. Meridian was retained by the Remuneration Committee in 2021 and provides adviceCharter, available at times the Remuneration Committee deems appropriate. Any other work undertaken by Meridian for the Company must be approved by the Remuneration Committee. The Remuneration Committee has conducted an assessment of the independence of Meridian and has determined that Meridian does not have any conflict of interest. Aside from data provided by Meridian, the Committee also considers other sources to evaluate external market, industry, and peer company practices in its review of our compensation programs.https://www.luxfer.com/investors/governance/. |
A full description of the Committee’s role is set forth in the Remuneration Committee Charter, available at https://www.luxfer.com/investors/governance/.
MEMBERS | MEMBERS: | Richard Hipple (Chair as of November 2018), Patrick Mullen (beginning(effective January 2022), and Lisa Trimberger (effective September 2019). The Board has affirmatively determined that all members of the Remuneration Committee are independent in accordance with NYSE listing standards and Allisha Elliott (through December 2021).SEC regulations. |
The Board has affirmatively determined that all members of the Remuneration Committee are independent in accordance with the NYSE listing standards and SEC regulations.
Remuneration Committee Interlocks and Insider Participation: No member of the Remuneration Committee is involved in a relationship requiring disclosure as an interlocking Director/Executive Officer or otherwise under Item 404 of Regulation S-K.
REPORT | REPORT: | The Directors’ Remuneration Report is available on our website at https://www.luxfer.com/investors/reports-and-presentations/annual-reports/. |
BOARD OF DIRECTORS INFORMATION
| ROLE: | The Audit Committee oversees the Company's accounting, financial reporting, and internal control policies and procedures. Responsibilities of the Audit Committee include, among other things, overseeing financial reporting, controls, and audit quality and performance; monitoring and overseeing the independence and performance of our Independent Auditor, with responsibility for the selection, evaluation, remuneration, and, if applicable, discharge of such Independent Auditor; approving, in advance, all of the audit and non-audit services provided to the Company by the Independent Auditor; facilitating open communication among our Board, senior management, internal audit, and the Independent Auditor; and overseeing our enterprise risk management and financial compliance programs. |
A full description of the Committee’s role is set forth in the Audit Committee Charter, available at https://www.luxfer.com/investors/governance/.
| MEMBERS: | Lisa Trimberger (Chair as of April 2020), Clive Snowdon, and Richard Hipple. |
The Board has affirmatively determined that all members of the Audit Committee are independent in accordance with the NYSE listing standards and SEC regulations.
| REPORT: | The AuditRemuneration Committee Report can be found under the section entitled “Audit“2022 Remuneration Committee Report”Report” on page 8046 of this Proxy Statement.Additionally, the Directors’ Remuneration Report, included in our UK Annual Report and Accounts, is available on our website at https://www.luxfer.com/investors/reports-and-presentations/annual-reports/. |
REMUNERATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION | FINANCIAL | The Board has determined that Lisa Trimberger, Clive Snowdon, and Richard Hipple are all financially literate under |
| EXPERTS: | NYSE rules. The Board has determined that Lisa Trimberger and Clive Snowdon qualify as financial experts pursuant to SEC standards. |
| | No member of the Remuneration Committee is involved in a relationship requiring disclosure as an interlocking Director/Executive Officer or otherwise under Item 404 of Regulation S-K. | 53 INDEPENDENT COMPENSATION CONSULTANT | | The Remuneration Committee engaged Meridian Compensation Partners LLC as its independent compensation consultant in 2022. Additional information regarding Meridian’s role and engagement can be found under the sub-section entitled “Compensation Governance and Processes” on page 52 of this Proxy Statement. |
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| 2023 PROXY STATEMENT |
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BOARD OF DIRECTORS INFORMATION
Our director compensation program reflects our belief that a significant portion of the Directors’ compensation should be tied to long-termlong-term growth in shareholder value. Director compensation is recommended by the Remuneration Committee and approved by the Board of Directors. We use a combination of annual retainer fees and equity-based incentiveequity awards to attract and retain qualified Directors. The Remuneration Committee'sCommittee’s annual compensation review includes a periodic analysis of data, comparing the Company'sCompany’s director compensation levels against a peer group of publicly held companies. In conducting such review, the Remuneration Committee may utilize publicly available market data, compensation survey data, and advice provided by compensation consultants. The Remuneration Committee then reaches a recommendation regarding our director compensation program and the compensation paid to our Directors. The Remuneration Committee'sCommittee’s recommendation is subsequently provided to the full Board for review and final approval. In 2021, Meridian, the Remuneration Committee’s independent compensation consultant, provided the Committee with a benchmark study, as well as advice and recommendations on the composition of the peer group and competitive data used for benchmarking our director compensation program. The Remuneration Committee used the information provided by Meridian, as well as other trend data, to reach an independent recommendation regarding the compensation paid to our Directors. This recommendation was provided to the full Board for review and final approval.
In 2021,2022, the annual retainer payable to Non-ExecutiveNon-Executive Directors, not including the Board Chair, for service on Luxfer’s Board of Directors and its committees was US$82,000. The annual retainer payable to the Board Chair for service on Luxfer’s Board of Directors and its committees was US$115,000. Andy Butcher, our current CEO, and Alok Maskara, our former CEO, waswere the only Executive DirectorDirectors in 2021. He2022. They received no separate compensation for histheir Board service. Directors do not receive additional fees for meeting attendance or service on Board committees. Following the Remuneration Committee'sCommittee’s compensation review, the Board did not implement an increase to the annual retainers paid to Non-ExecutiveNon-Executive Directors for service in 20212022 or 2022. 2023. Director equity awards are designed to (i) align the interests of Luxfer'sLuxfer’s Directors with the interests of the Company's shareholders,Company’s shareholders; (ii) act as a retention tool,tool; (iii) promote sound corporate governance,governance; and (iv) demonstrate a commitment to the Company. Equity awards provided to Non-ExecutiveNon-Executive Directors are granted under the Luxfer Holdings PLC Non-ExecutiveNon-Executive Directors Equity Incentive Plan, as amended and restated on June 8, 2022 (“EIP”). The plan under which awards are granted to Executive Directors is the Luxfer Holdings PLC Long-TermLong-Term Umbrella Incentive Plan (“LTIP”). U.K.-basedUK-based Executive Directors are eligible to participate in Luxfer’s U.K.UK Share Incentive Plan (“SIP”), which is open to all U.K.UK employees and U.K.-basedUK-based Executive Directors. In the U.S.,US, Luxfer has also established an Employee Stock Purchase Plan (“ESPP”), which is open to all U.S.US employees and U.S.-basedUS-based Executive Directors. EIP.Annual awards are made to Non-Executive Directors under the EIP as part of their fees in accordance with the Directors’ Remuneration Policy, which was approved by shareholders at the 2021 Annual General Meeting with 97% of votes casted in favor thereof. The value of the award is defined in the Directors’ Remuneration Policy and, as of 2022, is 100% of the retainer fee paid to a Non-Executive Director. These awards are made the day after Luxfer’s Annual General Meeting each year and vest on or around the following year’s AGM. Annual awards are typically made as restricted stock units. They are paid out immediately on vesting, together with dividends that have accumulated during the vesting period. New Non-Executive Directors cannot participate in the annual awards until they have served six months on the Board of Directors; however, the awards they would have earned from the date of their appointment are added to the next annual award, provided they are re-elected at the AGM. LTIP.The LTIP was adopted as part of Luxfer’s initial public offering in 2012 and amended and restated on June 8, 2022. It is used to grant awards to Executive Directors, Executive Officers, senior managers, and junior managers. A variety of different awards can be granted under the LTIP. The maximum value of awards that can be granted to the Executive Director under the LTIP is defined in the Directors’ Remuneration Policy.
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| EIP: Annual awards are made to Non-Executive Directors under the EIP as part of their fees in accordance with the Directors’ Remuneration Policy, which was approved by shareholders at the 2021 Annual General Meeting with 97% of votes casted in favor thereof. The value of the award is defined in the Directors’ Remuneration Policy and, as of 2021, is 100% of the retainer fee paid to a Non-Executive Director. These awards are made the day after Luxfer's Annual General Meeting each year and vest the day before the following year’s AGM. Annual awards are typically made as restricted stock units. They are paid out immediately on vesting, together with dividends that have accumulated during the vesting period. New Non-Executive Directors cannot participate in the annual awards until they have served six months on the Board of Directors; however, the awards they would have earned from the date of their appointment are added to the next annual award, provided they are re-elected at the AGM.2023 PROXY STATEMENT |
| | · | LTIP: The LTIP was adopted as part of Luxfer’s initial public offering in 2012. It is used to grant awards to Executive Directors, Executive Officers, senior managers, and junior managers. A variety of different awards can be granted under the LTIP. The maximum value of awards that can be granted to the Executive Director under the LTIP is defined in the Directors’ Remuneration Policy. |
SIP.The purpose of the SIP is to provide benefits to employees, including UK-based Executive Directors and Officers, to give such employees a continuing stake in Luxfer. Shares awarded under the SIP are allocated based on payroll contributions made by employees of the Company. BOARD OF DIRECTORS INFORMATION
| · | SIP: The purpose of the SIP is to provide benefits to employees, including U.K.-based Executive Directors and Officers, to give such employees a continuing stake in Luxfer. Shares awarded under the SIP are allocated based on payroll contributions made by employees of the Company. |
| · | ESPP: The purpose of the ESPP is to provide benefits to employees, including U.S.-basedESPP.The purpose of the ESPP is to provide benefits to employees, including US-based Executive Directors and Officers, so as to give such employees a continuing stake in Luxfer. Shares awarded under the ESPP are allocated based on payroll contributions made by employees of the Company. |
Copies of the above-mentionedabove-mentioned EIP, LTIP, SIP and ESPP are on file with the SEC. Additionally, Luxfer has established Stock Ownership Guidelines, which apply to all Directors and provide the Company'sCompany’s expectation as to the minimum amountnumber of shares such Directors should own in the Company. Further information on the Stock Ownership Guidelines is provided in the section entitled “Security Ownership” on page 45. A copy of the Stock Ownership Guidelines can be found on our website at www.luxfer.com/investors/governance/board/. Further information on the Stock Ownership Guidelines is provided in the section entitled “Security Ownership” on page 34. NON-EXECUTIVE DIRECTOR COMPENSATION TABLE |
The following table summarizes the compensation that the Company paid for the period ended December 31, 20212022 to the Non-ExecutiveNon-Executive Directors serving on our Board of Directors at any time from January 1, 20212022 through December 31, 2021.2022. In 2021,2022, the average total Non-ExecutiveNon-Executive Director compensation, excluding Patrick MullenSylvia A. Stein who served for only fourfive months of the year, was US$208,413.80.128,894. | Retainers
(US$) | Equity Awards (1) (2)
(US$) | Total
(US$) | Patrick Mullen (3) | 106,750 | – | 106,750 | Richard Hipple (4) | 82,000 | 55,076 | 137,076 | Clive Snowdon (5) | 82,000 | 55,076 | 137,076 | Sylvia A. Stein (6) | 34,167 | – | 34,167 | Lisa Trimberger (7) | 82,000 | 55,076 | 137,076 | David Landless (8) | 49,250 | 77,240 | 126,490 |
| | Retainers (US$) | Equity Awards (1) (2) (US$) | Total (US$) | | David Landless (3) | 115,000 | 93,901 | 208,901 | | Clive Snowdon (4) | 82,000 | 66,956 | 148,956 | | Richard Hipple (5) | 82,000 | 170,036 | 252,036 | | Allisha Elliott (6) | 82,000 | 150,602 | 232,602 | | Lisa Trimberger (7) | 82,000 | 117,574 | 199,574 | | Patrick Mullen (8) | 27,333 | — | 27,333 |
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| (1)
| Represents the fair value of restricted stock units granted under the EIP in 2020 and which vested on June 8, 2021, at a share price of US$22.96, less the issue cost of US$1.00 per share, as compensation for their services. |
2023 PROXY STATEMENT | (2) | These time-based restricted stock units carry with them the right to receive accumulated dividends (in shares) during the period of the award. The dividends are not credited until the award vests. The value of the dividend shares that vested in 2021, less the issue cost of US$1.00 per share, for each of the Non-Executive Directors were as follows: David Landless US$3,030.48 (138 shares), Clive Snowdon US$2,152.08 (98 shares), Richard Hipple US$5,533.92 (252 shares), Allisha Elliott $4,897.08 (223 shares), and Lisa Trimberger US$3,799.08 (173 shares). These values have not been included in the table above. |
| (3) | As of December 31, 2021, David Landless had 5,040 unvested restricted stock units. The foregoing figure includes 60 dividends (in shares) accumulated through December 31, 2021. |
| (4) | As of December 31, 2021, Clive Snowdon had 3,594 unvested restricted stock units. The foregoing figure includes 43 dividends (in shares) accumulated through December 31, 2021. |
| (5) | As of December 31, 2021, Richard Hipple had 3,594 unvested restricted stock units. The foregoing figure includes 43 dividends (in shares) accumulated through December 31, 2021. |
| (6) | As of December 31, 2021, Allisha Elliott had 3,594 unvested restricted stock units. The foregoing figure includes 43 dividends (in shares) accumulated through December 31, 2021. Pursuant to the terms of the EIP, these unvested restricted stock units and accumulated dividends have been forfeited, as Allisha Elliott stepped down from the Board effective December 31, 2021, prior to the vesting of such restricted stock units. |
| (7) | As of December 31, 2021, Lisa Trimberger had 3,594 unvested restricted stock units. The foregoing figure includes 43 dividends (in shares) accumulated through December 31, 2021. |
| (8) | Patrick Mullen was appointed to the Board on September 1, 2021. His retainer fee in 2021 reflects his service from September 1, 2021, the date of his appointment, through December 31, 2021. |
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2022 REMUNERATION COMMITTEE REPORT The Remuneration Committee is responsible for, among other things, setting, reviewing, and approving executive compensation, including matters regarding Luxfer’s various compensation plans, and continually assessing the effectiveness of our compensation programs considering the Company’s overall compensation strategy. The Remuneration Committee may fulfill these responsibilities independently or in conjunction with the Board, as appropriate. The Remuneration Committee operates independently of management and in consultation with its independent compensation consultant.
The Remuneration Committee has reviewed and discussed the following Executive Compensation Discussion and Analysis, as required by Item 402(b) of Regulation S-K, with management, and basedmanagement. Based upon on such review and discussions,discussion, the Remuneration Committee has recommended to the Board that the Executive Compensation Discussion and Analysis be included in this Proxy Statement on Schedule 14A for the Annual General Meeting, to be filed with the SEC. THE REMUNERATION COMMITTEE
Richard Hipple
Lisa Trimberger
Patrick Mullen
SEC pursuant to Section 14(a) of the Securities Exchange Act of 1934, as amended, and incorporated by reference in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022. In accordance with the recommendation of the Remuneration Committee, ourthe Board of Directors approved inclusion of the Executive Compensation Discussion and Analysis in this Proxy Statement, and its incorporation by reference in the Company’s Annual Report on March 2,Form 10-K for the fiscal year ended December 31, 2022. THE REMUNERATION COMMITTEE 
| | 
| | 
| Richard Hipple Committee Chair | | Patrick Mullen Committee Member | | Lisa Trimberger Committee Member |
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| 2023 PROXY STATEMENT |
| | | | 2022 Proxy Statement 56 |
2022 EXECUTIVE COMPENSATION DISCUSSION
AND ANALYSIS This Executive Compensation Discussion and Analysis describes Luxfer’s compensation practices and the executive compensation policies, decisions, and actions of our Remuneration Committee. Through this Executive Compensation Discussion and Analysis and elsewhere in this Proxy Statement, we refer to the following group of individuals as the “Named Executive Officers.” The titles shown below reflect the position of each Named Executive Officer as of the date of the Annual General Meeting. This Executive Compensation Discussion and Analysis specifically relates to the compensation earned during 20212022 by the current and former Named Executive Officers identified below.  
|  
|  | Andy Butcher(1) Chief Executive Officer | Stephen Webster (2) Chief Financial Officer | Graham Wardlow
Managing Director,
Luxfer MEL Technologies
| |  | |  | | 
| 
| 
| Peter Gibbons Vice President & General Manager,
Luxfer Graphic Arts | Jeffrey Moorefield(3) Vice President & General Manager,
Luxfer Magtech | Graham Wardlow Managing Director,
Luxfer MEL Technologies | 
| 
| | Alok Maskara(3)(4) Former Chief Executive Officer | | Heather Harding (4)(5) Former Chief Financial Officer | | | | | | | | |
47
| (1)
| Andy Butcher was appointed and will serve as Chief Executive Officer of the Company effective May 6, 2022. |
2023 PROXY STATEMENT | (2) | Stephen Webster was appointed Chief Financial Officer of the Company effective March 1, 2022. |
| (3) | Alok Maskara resigned as Chief Executive Officer of the Company effective May 5, 2022. |
| (4) | Heather Harding retired from employment with the Company effective March 1, 2022. |
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EXECUTIVE COMPENSATION DISCUSSION AND ANALYSIS
The following section provides backgroundbiographical information on our Named Executive Officers, other than Andy Butcher, Luxfer’s newly appointed CEO,Chief Executive Officer and Executive Director, about whom information is provided in the section entitled ““Director Biographical Information”Information” with respect to the election of Directors on page 35. 24.  
| Stephen Webster Chief Financial Officer Age: 50 51 Stephen Webster was appointed Chief Financial Officer effective March 1, 2022. From September 2016 to March 2022, Mr. Webster served as Luxfer’s Corporate Controller. Prior to joining Luxfer, Mr. Webster held various finance leadership roles at global businesses, serving as Head of Global Accounting at Seadrill Limited, an OSE-listedOSE-listed offshore drilling company, and ERP Business Integration Lead, IFRS Project Lead, and Financial Accounting Director at JT International, a global tobacco company. He has extensive experience in corporate financial management and external reporting under both U.S.US GAAP and IFRS. Mr. Webster is a Chartered Accountant and holds a degree in International Management and Modern Languages from the University of Bath. | | | | | |  
| Graham Wardlow
Managing Director, Luxfer MEL Technologies
Age: 54
Graham Wardlow was appointed Managing Director of Luxfer MEL Technologies (LMT) in October 2017, following the merger of Luxfer’s MEL Chemicals and Magnesium Elektron Alloys businesses. The Magnesium Powder’s business was subsequently incorporated into LMT in early 2022. Mr. Wardlow joined Magnesium Elektron in 1984 and undertook several technical and commercial roles before becoming Managing Director of the Magnesium Elektron Alloys business in 2008 and Divisional Managing Director of MEL Chemicals in May 2017. Mr. Wardlow holds a degree in Materials Engineering from Imperial College, University of London, as well as an M.B.A. from Keele University.
| | | | |  | Alok Maskara
Former Chief Executive Officer
Age: 51
Alok Maskara has served as Luxfer’s Chief Executive Officer, and a member of the Board of Directors, from July 1, 2017. As announced on March 23, 2022, Mr. Maskara has elected to leave the Company in pursuit of another opportunity. As of May 5, 2022, he will no longer be an Executive Officer of Luxfer. Before joining Luxfer, Mr. Maskara served as President of various business segments at Pentair Plc, a provider of water treatment solutions and sustainable applications, for eight years. He previously held various leadership positions at General Electric Corporation and McKinsey & Company. Mr. Maskara holds an M.B.A. from the J.L. Kellogg Graduate School of Management at Northwestern University, an M.S. in Chemical Engineering from the University of New Mexico, and a Bachelor of Technology degree in Chemical Engineering from the Indian Institute of Technology, Mumbai. Mr. Maskara currently serves as a Non-Executive Director of Franklin Electric Co., a provider of water and fuel movement and management products.
| | | | |  | Heather Harding
Former Chief Financial Officer
Age: 53
Heather Harding served as Luxfer’s Chief Financial Officer from January 1, 2018 to March 1, 2022. As of her retirement from Luxfer on March 1, 2022, Ms. Harding is no longer an Executive Officer of the Company.
From 2012 to 2017, Ms. Harding served as Vice President of Finance for Eaton Lighting, a business unit of Eaton Corporation, a power management company. Prior to that, she was Vice President of Finance for various operating units within Cooper Industries and Emerson Electric. Ms. Harding is a Certified Public Accountant and holds a Bachelor of Science degree in Accounting from Southern Illinois University at Carbondale.
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EXECUTIVE COMPENSATION DISCUSSION AND ANALYSIS
OTHER EXECUTIVE OFFICERS OF THE REGISTRANT |
In addition to the individuals identified as Named Executive Officers in this Proxy Statement, the individuals listed below are current Executive Officers of the Registrant as of April 1, 2022.
 | Peter Gibbons Vice President and General Manager, Luxfer Graphic Arts Age: 51 52 Peter Gibbons was appointed Vice President and General Manager of Luxfer Graphic Arts in July 2019. From July 2017 to July 2019, Mr. Gibbons served as Director of IT and Sourcing. Upon his appointment as Director of IT and Sourcing, Mr. Gibbons became a member of the Executive Leadership Team. Mr. Gibbons joined Luxfer in 2004 as European Financial Controller of the Magnesium Elektron Alloys business. From 2013 to 2014, he served as Luxfer’s Group Financial Controller, and from 2014 to 2017, Mr. Gibbons was the Divisional Finance Director of Luxfer’s Magnesium Elektron Alloys business. | | | | | |  
| Megan Glise
General Counsel and Company Secretary
Age: 29
Megan Glise was appointed General Counsel and Company Secretary in September 2020. Ms. Glise joined Luxfer as U.S. Legal Counsel in July 2018 and was appointed Associate General Counsel in February 2019. In January 2020, she became a member of the Executive Leadership Team and an Executive Officer of the Company. Before joining Luxfer, Ms. Glise was an Associate Attorney at a Wisconsin-based law firm, where she focused her practice on corporate and transactional law. Ms. Glise received her Juris Doctorate from Marquette University Law School and holds a Bachelor of Arts degree in English and Criminology and Law Studies from Marquette University.
| | | | |  | Jeffrey Moorefield Vice President and General Manager, Luxfer Magtech Age: 58 59 Jeffrey Moorefield was appointed Vice President and General Manager of Luxfer Magtech on April 1, 2022, at which time he also became an Executive Officer of the Company. Mr. Moorefield previously served as Luxfer’s Vice President of Operations from March 2019 to March 2022. Before joining Luxfer, Mr. Moorefield served as Senior Vice President of Global Operations at Tennant Company, a provider of floor cleaning machines, products, and services. Prior to that, he served as Global Vice President of Operations for various business segments within Pentair Plc, a provider of water treatment solutions and sustainable applications. Mr. Moorefield holds a Bachelor of Science degree in Industrial Technology from Western Kentucky University. |
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| 2023 PROXY STATEMENT |
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| Graham Wardlow Managing Director, Luxfer MEL Technologies Age: 55 Graham Wardlow was appointed Managing Director of Luxfer MEL Technologies (LMT) in October 2017, following the merger of Luxfer’s MEL Chemicals and Magnesium Elektron Alloys businesses. The Magnesium Powders’ business was subsequently incorporated into LMT in early 2023. Mr. Wardlow joined Magnesium Elektron in 1984 and undertook several technical and commercial roles before becoming Managing Director of the Magnesium Elektron Alloys business in 2008 and Divisional Managing Director of MEL Chemicals in May 2017. Mr. Wardlow holds a degree in Materials Engineering from Imperial College, University of London, as well as an M.B.A. from Keele University. | | | | 59 
| Alok Maskara Former Chief Executive Officer Age: 52 Alok Maskara served as Luxfer’s Chief Executive Officer, and a member of the Board of Directors, from July 1, 2017 to May 5, 2022. Mr. Maskara elected to leave the Company in pursuit of another opportunity. As of May 5, 2022, he was no longer considered an Executive Officer of Luxfer. Before joining Luxfer, Mr. Maskara served as President of various business segments at Pentair Plc, a provider of water treatment solutions and sustainable applications, for eight years. He previously held various leadership positions at General Electric Corporation and McKinsey & Company. Mr. Maskara holds an M.B.A. from the J.L. Kellogg Graduate School of Management at Northwestern University, an M.S. in Chemical Engineering from the University of New Mexico, and a Bachelor of Technology degree in Chemical Engineering from the Indian Institute of Technology, Mumbai. | | | 
| Heather Harding Former Chief Financial Officer Age: 54 Heather Harding served as Luxfer’s Chief Financial Officer from January 1, 2018 to March 1, 2022. As of her retirement from Luxfer on March 1, 2022, Ms. Harding is no longer an Executive Officer of the Company. From 2012 to 2017, Ms. Harding served as Vice President of Finance for Eaton Lighting, a business unit of Eaton Corporation, a power management company. Prior to that, she was Vice President of Finance for various operating units within Cooper Industries and Emerson Electric. Ms. Harding is a Certified Public Accountant and holds a Bachelor of Science degree in Accounting from Southern Illinois University at Carbondale. |
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| 2023 PROXY STATEMENT |
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EXECUTIVE COMPENSATION FRAMEWORK |
| | Executive Compensation Philosophy and Objectives Our goal is to provide executive compensation programs that: •deliver competitive levels of compensation to attract, motivate, and retain executive talent; •alignexecutive compensation withshareholder interestsandlong-termCompanyvalue; and •tieexecutive compensationto Companyperformance. | 
| | Executive Compensation Program Design Our executive compensation program is designed to: •provide appropriate balance between short-term and long-term pay and fixed and variable pay; •includemultiple components,each designed consistent with our compensation philosophy, including a base salary, an annual cash incentive, long-term equity awards, and other benefits; •cultivatesustainable growthandlong-term value creation,without imposing unnecessary risks; and •rewardexecutives for achievingfinancial and strategic objectives. | 
| | Executive Compensation Governance and Process Executive compensation decisions are made independent from management, subject to Remuneration Committee review, as well as approval and/or ratification by the independent Non-Executive Directors of the Board. In reviewing and establishing compensation levels and components, we consider the following factors: •benchmark and market datafor executives serving in similar positions at peer companies; •individualknowledge, experience,andcapabilitiesof the executives; •the executive’s scope ofresponsibility, authority,andaccountability;and •the level of compensation relative to the Company’s otherexecutivesand the Company’s and/or business unit’ssizeandrevenue. |
EXECUTIVE COMPENSATION DISCUSSION AND ANALYSIS OVERVIEW OF COMPENSATION PROGRAM, PHILOSOPHY AND OBJECTIVES |
Luxfer seeks to create and maintain a culture of high performance, teamwork, and accountability. Our executive compensation program is one of the tools we utilize to accomplish this objective. Philosophically, we aim to treat our executives fairly when considering factors such as (i) the complexity of their jobs; (ii) the market for their executive talent; (iii) their individual performance; (iv) the financial and strategic performance of the Company overall, or where applicable, the executive’s particular business unit; (iv) the need to attract and retain the executives; and (v) the geographic location of the executive. The Remuneration Committee sets and administers policies that govern Luxfer’s executive compensation and is responsible for: | ● | establishing and reviewing executive base salaries; |
| ● | overseeing our annual incentive compensation plans; |
| ● | overseeing our long-term, equity-based compensation plans; |
| ● | approving all awards to executives under those plans; |
| ● | annually evaluating risk considerations associated with our executive compensation program; and |
| ● | annually approving all compensation decisions for the Named Executive Officers included in the Summary Compensation Table below. |
The Committee believes that the most effective executive compensation program aligns executive initiatives with our shareholders’ economic interests. The Committee seeks to accomplish such alignment by rewarding the achievement of specific annual, long-termshort-term and long-term financial and strategic goals that create lasting shareholder value. Specific objectivesThrough regular assessment and revision of the Company’s executive compensation program, the Committee continues to align executive compensation with Luxfer’s growth and shareholder value creation. In reviewing our executive compensation philosophy, strategy, and program include:
| ● | motivating and rewarding executives for achieving financial and strategic objectives; |
| ● | aligning management and shareholder interests by encouraging employee stock ownership; |
| ● | providing rewards commensurate with individual and Company performance; |
| ● | encouraging growth and innovation; |
| ● | recognizing advancement of ESG initiatives; and |
| ● | attracting and retaining high caliber executives and key employees. |
To balancedesign and in setting compensation levels for our Named Executive Officers, the Remuneration Committee considers, among other factors, the key financial and operating metrics that drive Luxfer’s growth and shareholder value; the objectives described above,of and risks related to our operations and compensation program; and the components and level of executive compensation at companies within our peer group.
Within that framework, it is critical that we meet our executive compensation program typically includes the following compensation elements: (i) base salary; (ii) non-equity incentive compensation; (iii) long-term equity incentive awards; (iv) pension or 401(k) contributions; (v)objectives to: •motivate and reward executives for achieving financial and strategic objectives; •attract and retain high caliber executives; •align management and shareholder interests by encouraging employee share purchase plans;stock ownership; •encourage growth and (vi) other benefits, such as flex perksinnovation; and healthcare, life, •provide rewards commensurate with individual and disability insurance coverage. Company performance. 50
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| 2023 PROXY STATEMENT |
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The Remuneration Committee reviews total compensation for Executive Officersexecutives and the relative levels of each compensation component against these objectives. We expect that our executives will, in aggregate, be paid fairly compared to the compensation peer group approved by the Remuneration Committee and considering Company performance, individual performance, tenure, and experience. EXECUTIVE COMPENSATION PROGRAM DESIGN |
Our executive compensation program is designed to motivate behaviors that cultivate sustainable growth and shareholder value creation, provide rewards commensurate with individual and Company performance, reward executives for achieving financial and strategic objectives, and provide an appropriate balance between short-term and long-term and fixed and variable pay. The majority of our Named Executive Officers’ compensation is variable and contingent on performance. In designing our executive compensation program, establishing performance measures, and setting executive compensation packages, we conduct benchmarking analyses, no less than every three years, to ensure compensation is competitive with market practices. Total compensation packages, as well as base salary, annual cash incentive opportunities, and target equity awards, are evaluated against comparative peer group companies. While target incentive opportunities are set by reference to a comparable market rate, our incentive plans provide for payouts to be based upon performance, which can result in payouts above or below target levels. Further information regarding our 2022 executive compensation program is provided in the section entitled “2022 Executive Compensation Program” starting on page 53. 
51
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| 2023 PROXY STATEMENT |
| | |
COMPENSATION GOVERNANCE AND PROCESSES |
Remuneration Committee (Independent) | | Non-Executive Directors (Independent) | | Compensation Consultant (Independent) | | Shareholders and Other Key Stakeholders | 
| | 
| | 
| | 
| •Evaluate and approve incentive plan design and performance measures relevant to executive compensation •Review and approve the compensation of each Named Executive Officer, other than the CEO •Recommend the approval of CEO compensation to independent Non-Executive Directors | •Review and approve the compensation of the CEO •Review and ratify the compensation of the other Named Executive Officers •Review and ratify the Company’s executive compensation framework and components | •Provides advice on executive compensation programs, competitive compensation levels, peer groups, emerging trends, and best practices •Provides design advice for incentive compensation plans and other compensation programs | •Provide feedback on various executive compensation practices and governance during periodic meetings with management, which is reviewed and discussed by the Remuneration Committee and independent Non-Executive Directors of the Board |
Remuneration Committee.The Remuneration Committee is responsible for overseeing the establishment, maintenance, administration, and periodic review and evaluation of the Company’s compensation programs and policies that govern executive compensation. The Committee determines, and recommends to the Board, the Company’s framework or broad policy on executive compensation, the cost of such framework, and the specific compensation packages for each of the Company’s executives. Among other things, the Remuneration Committee is responsible for: •reviewing and approving executive compensation packages; •making recommendations to the Non-Executive Directors of the Board with respect to our CEO’s compensation; •overseeing our annual cash incentive program, including the establishment of appropriate performance measures; •overseeing our long-term equity compensation plans; •approving awards to executives under the foregoing plans and programs; •annually evaluating risk considerations associated with our executive compensation program; and •annually approving and/or ratifying all compensation decisions for the Named Executive Officers included in the Summary Compensation Table. The Remuneration Committee evaluates the performance of our Chief Executive Officer and the performance of our other executive officers. Our CEO assists the Remuneration Committee in evaluating the performance of our other executive officers, including the Named Executive Officers other than the CEO. Our CEO does not participate in certain portions of Remuneration Committee or Board meetings when his compensation is discussed and determined. Based on these formsassessments, the members of the Remuneration Committee, each of whom is an independent director, make the final compensation againstdecisions for the program’s objectives. The total compensation structures for our then-servingNamed Executive Officers other than the CEO, and make recommendations to the Board on the CEO’s compensation. Management.The Company’s CEO and CFO work closely with the Remuneration Committee in administering the executive compensation program and attend meetings of the Committee. Specifically, the CEO and CFO are involved in the design and implementation of the executive compensation program, making recommendations to the Remuneration Committee on compensation components, performance measures, equity awards, and executive compensation packages. The CEO assists the Remuneration Committee in evaluating performance of the Company’s executive officers and makes recommendations to the Committee regarding compensation for executive officers other than himself. 52
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| 2023 PROXY STATEMENT |
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Non-Executive Directors.The independent Non-Executive Directors of the Board make decisions with respect to and approve the CEO’s compensation. They also review and ratify (i) the Company’s executive compensation framework and compensation components and (ii) the compensation of the Company’s executive officers, including the Named Executive Officers other than the CEO. Independent Compensation Consultant.The Committee’s independent compensation consultant, Meridian Compensation Partners LLC (“Meridian”), provides research, survey information and analysis, incentive design expertise, and other analyses related to executive compensation levels and design. Meridian also updates the Committee on trends and developments related to executive compensation practices and provides its views to the Committee on best practices when evaluating executive compensation programs and policies. Meridian was retained by the Remuneration Committee in 2022 and provides advice at times the Remuneration Committee deems appropriate. Any other work undertaken by Meridian for the Company must be approved by the Remuneration Committee. The Remuneration Committee assessed the independence of Meridian and determined that Meridian is independent and does not have any conflict of interest. In 2022, the fees paid by the Committee to Meridian were nominal and did not exceed prescribed limits requiring further disclosure. Shareholders and Other Key Stakeholders.At our 2022 Annual General Meeting, 94% of votes cast were in favor of approving the compensation paid to our Named Executive Officers in 2021, areand 99.6% of votes cast were cast in favor of holding a “Say-on-Pay” vote annually, consistent with the Board’s recommendation. We meet with our key investors throughout the year to understand the topics that matter most to them as they relate to executive compensation. In these meetings, we seek the views of our shareholders and other stakeholders with respect to our existing policies and practices. Overall, investors engaged in 2022 reacted positively to our executive compensation governance and programs, noting the continued alignment between executive compensation and the Company’s long-term financial and strategic goals, particularly growth and the long-term EPS goal of $2.00 or more by 2025, which was announced in 2022. We will continue to utilize rigorous governance processes to monitor and evaluate our executive compensation programs, as well as implement best practices in compensation governance. We welcome feedback on our executive compensation practices and will continue to engage with our investors and stakeholders in 2023. 2022 EXECUTIVE COMPENSATION PROGRAM |
The 2022 target compensation for our Named Executive Officers is shown in the graphstable below. 2021 NAMED EXECUTIVE OFFICERS’ COMPENSATION STRUCTURE |
EXECUTIVE COMPENSATION DISCUSSION AND ANALYSIS
In order to assess the appropriateness and effectiveness of Luxfer's fiscal 2021 The target compensation program, Luxfer's overall financial performance and the individual performance offigures detailed in this table were calculated as if the Named Executive Officers is considered.– particularly Andy Butcher, Stephen Webster, Alok Maskara, and Heather Harding – had served in their respective CEO and CFO roles for the entirety of fiscal year 2022. These total target compensation figures do not include indirect forms of compensation, such as retirement and other benefits.
| | | | | | Annual Cash Incentive | | Equity Awards | | | | | | Base
Salary | | Perquisites | | Target
(% of
salary) | | Target
(US$) | | Target
(% of
salary) | | Target
(US$) | | Total Target Compensation | Andy Butcher | | $615,000 | | $40,000 | | 100% | | $615,000 | | 180% | | $1,107,000 | | $2,377,000 | Stephen Webster (1) | | $246,660 | | $24,666 | | 50% | | $123,330 | | 65% | | $160,329 | | $554,985 | Peter Gibbons | | $195,000 | | $20,000 | | 40% | | $78,000 | | 40% | | $78,000 | | $371,000 | Jeffrey Moorefield | | $206,000 | | $20,000 | | 40% | | $82,400 | | 40% | | $82,400 | | $390,800 | Graham Wardlow (1) | | $258,993 | | $24,666 | | 40% | | $103,597 | | 65% | | $168,345 | | $555,601 | Alok Maskara | | $736,000 | | $40,000 | | 100% | | $736,000 | | 180% | | $1,324,800 | | $2,836,800 | Heather Harding | | $375,000 | | $20,000 | | 65% | | $243,750 | | 100% | | $375,000 | | $1,013,750 |
53 
| 2021 Financial Performance
|  | Portfolio |  | Shareholder Value2023 PROXY STATEMENT | ● 15.2% sales increase
● 17.6% EBITDA increase 4
● 7.5% organic revenue growth 4
● Reduced pension deficit from $91 million in 2014 to near-zero in 2021
● Net debt to EBITDA ratio of 0.8x
| ● Strengthened alternative fuel offerings through Structural Composites Industries acquisition
● Divestiture of most aluminum operations to open new avenues for growth
● Continued pursuit of bolt-on acquisitions as a key factor in growth strategy
| ● Returned $20 million to shareholders via dividends and share repurchases
● Announced long-term EPS goal of $2.00 or more by 2025
● Entered final phase of Transformation Plan to simplify Company structure and generate cost savings
|  | Innovation |  | People and Culture | ● New Unitized Group Rations-Express products introduced in our Meals Ready to Eat product line
● New zirconium products in the medical and electronics end-market
| ● Executed several successful leadership transitions
● Expanded DEI recruitment practices and increased diversity training
|
In 2020, our Named Executive Officers showed exceptional performance and leadership in navigating the Company through the COVID-19 pandemic, driving progress on business restructuring initiatives and building long-term value. Notwithstanding their significant accomplishments, the impact of the pandemic on our businesses and the resulting actions of our Remuneration Committee in light of challenging performance led to a meaningful reduction in CEO and other Named Executive Officer compensation in 2020. In contrast, our strong financial performance and execution of long-term strategy in fiscal 2021 resulted in higher payouts to our Named Executive Officers, as described in the following sections. These dynamics contributed to the compensation increases shown in our Summary Compensation Table for fiscal 2021.
In 2021, our Named Executive Officers were compensated as follows:
| ● | A base salary comparative to salaries for their respective role, as measured against external and internal benchmarking data. The base salary is periodically adjusted for inflation and performance; |
| ● | Variable, non-equity incentive compensation, where 80% to 100% of the annual payout is dependent on a well-defined set of annual financial metrics that relate to either the business unit’s or Luxfer’s overall performance, as applicable. The remaining 0% to 20% of the payout depends on a defined set of personal balanced scorecard objectives, which are intended to drive long-term business performance. Personal balanced scorecard objectives are only considered with respect to non-equity incentive compensation awarded to Executive Officers other than the CEO and CFO. The CEO’s and CFO’s non-equity incentive compensation is solely dependent on the achievement of certain financial metrics. Luxfer’s incentive plan allows the Company to withhold non-equity incentive compensation if Luxfer’s EBITA falls below the established Threshold, even if the business units achieve their own EBITA Budget; and |
| ● | A long-term equity incentive award, where the majority of the payout is based on Luxfer’s adjusted earnings per share and relative total shareholder return. The award is vested over a period of four years. Given the Company’s strong financial performance in 2021, equity awards granted to Named Executive Officers for fiscal 2021 performance are expected to be substantial, as the Company achieved a 25.2% adjusted earnings per share increase, which exceeds the Maximum target for the year, and, to date, exceeded Threshold performance on relative total shareholder return.4 |
4 Organic revenue growth, EBITDA, and adjusted earnings per share are non-GAAP measures. For a reconciliation and explanation of these non-GAAP measures, see Appendix A.
| | 61 | |
EXECUTIVE COMPENSATION DISCUSSION AND ANALYSIS
EXECUTIVE PERFORMANCECOMPARATIVE FRAMEWORK |
Consistent with our focus on Pay for Performance, each of our Named Executive Officer's performance in relation to their personal objectives in 2021 contributes to their overall compensation. These objectives include both strategic and financial initiatives, which are aimed at ensuring Luxfer's long-term, sustainable performance and competitive differentiated value proposition. Each of our Named Executive Officer's delivery against these personal objectives is analyzed to determine their overall performance. The following is a summary of the Named Executive Officers’ delivery against their personal objectives in 2021.
| ● | Alok Maskara, Heather Harding, and Stephen Webster (Corporate Executives). Successfully generated strong cash flow throughout the year and maintained a strong balance sheet, while making progress on the Company’s long-term strategic objectives. Enhanced the Company’s portfolio by completing the divestiture of aluminum operations and acquiring Structural Composites Industries. Continued developing and executing strategies to allocate capital, develop talent, and ensure strong governance practices, while making progress on the Company’s Transformation Plan to enhance shareholder value. |
| ● | Andy Butcher and Graham Wardlow (Business Unit Leaders). Successfully delivered on strategic plans specific to their business unit to organically grow revenue, expand margins, and maintain customer service levels despite difficult macroeconomic conditions, including materials and labor shortages. |
In setting compensation for our Executive Officers,executives, including our Named Executive Officers, the Remuneration Committee uses competitive compensation data from a total compensation study of selected peer companies and other relevant survey sources to inform its decisions about overall compensation levels and specific compensation elements.components. Additionally, the Committee uses multiple reference points when establishing targetedtarget compensation levels. The Committee applies judgement and discretion in establishing targetedtarget compensation levels, considering not only competitive market data but also factors such as company, business unit, and individual performance; scope of responsibility; critical needs and skill sets; experience; leadership potential; succession planning; and succession planning.the geographic location of the executive. In setting compensation for 2021,2022, the Committee usedreferenced the output from the total compensation analysis and benchmarking study performed by Meridian Compensation Partners LLC ("Meridian") in December 2020. In its analysis, Meridian utilized data from 2020 proxy statements and other public sources related to a group of peer companies (the “Comparator Group”) to provide a comparison between market pay levels and the target total compensation of Luxfer’s Named Executive Officers. executives. Based on Meridian'sMeridian’s review and recommendations, as well as the foregoing criteria, the Committee used the following Comparator Group for benchmarking purposes: | ● | •Chart Industries, Inc. | ● | •Kadant, Inc. | ● | •SPX FLOW, Inc. | | ● | •Ciner Resources LP | ● | •Kaiser Aluminum Corporation | ● | •Standex International Corporation | | ● | •ESCO Technologies, Inc. | ● | •L.B. Foster Company | ● | •The Gorman-Rupp Company | | ● | •Haynes International, Inc. | ● | •Lydall, Inc. | ● | •TimkenSteel Corporation | | ● | •Helios Technologies, Inc. | ● | •Quaker Chemical Corporation | ● | •TriMas Corporation |
All companies included in the Comparator Group were (i) publicly-tradedpublicly traded on a major exchange; (ii) similar in business size to our business units and global in nature; and (iii) engaged in the same or a similar industry to ours. As provided by Meridian as part of thethis total compensation study completed in December 2020, the Comparator Group companies had revenues ranging from approximately US$370 million to US$1,389 million, with median revenues of approximately US$765 million. On a similar basis, Luxfer’s revenue for the year ended December 31, 2020 was US$324.8 million. Please note that this Comparator Group was used only for purposes of a total compensation study. This Comparator Group, and the data related thereto, should not be referenced for purposes of a valuation or a market capitalization comparison. While the Remuneration Committee generally conducts comprehensive total compensation studies for all executives on a triennial basis, additional analyses and studies were commissioned in 2022 upon the appointment of Andy Butcher as Chief Executive Officer and Stephen Webster as Chief Financial Officer. In setting Andy Butcher’s 2022 target compensation, the Remuneration Committee considered the target pay levels of the then-current CEO; reasonable adjustments based on the factors noted above, including experience, location, and market; the findings of Meridian’s 2020 benchmark study; and the target compensation for CEOs of companies within Luxfer’s GICS code as of March 1, 2022. Many of the Comparator Group companies referenced in Meridian’s study were also included in Luxfer’s GICS code as of March 1, 2022. The companies within Luxfer’s GICS code as of March 1, 2022 included the following: •Albany International Corp. | | •Greenland Technologies Holding Corporation | | •Park-Ohio Holdings Corp. | •Barnes Group Inc. | | •Helios Technologies, Inc. | | •Perma-Pipe International Holdings, Inc. | •Chart Industries, Inc. | | •Hillman Solutions Corp. | | •Proto Labs, Inc. | •CIRCOR International, Inc. | | •Hurco Companies, Inc. | | •RBC Bearings Incorporated | •Columbus McKinnon | | •Kadant Inc. | | •SPX Corporation | •Energy Recovery, Inc. | | •Kornit Digital Ltd. | | •SPX FLOW, Inc. | •Enerpac Tool Group Corp. | | •L.B. Foster Company | | •Standex International Corporation | •EnPro Industries, Inc. | | •Mayville Engineering Company, Inc. | | •Tennant Company | •ESCO Technologies, Inc. | | •Mueller Water Products, Inc. | | •The Eastern Company | •Evoqua Water Technologies Corp. | | •Nisun Intl. Enterprise Development Group Co., Ltd. | | •The Gorman-Rupp Company | •Fathom Digital Manufacturing Corporation | | •NN, Inc. | | •The L.S. Starrett Company | •Graham Corporation | | •Omega Flex, Inc. | | |
54
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| 2023 PROXY STATEMENT |
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These companies had revenues ranging from approximately US$100 million to US$1,529 million, with median revenues of approximately US$710 million. On a similar basis, Luxfer’s revenue for the year ended December 31, 2021 was US$374.1 million. In setting Stephen Webster’s 2022 target compensation, the Remuneration Committee considered the target pay levels of the then-current CFO; adjustments based on the factors noted above, including experience, location, and market; the findings of Meridian’s 2020 benchmark study; and a separate study commissioned from Meridian. This study focused on target compensation for UK-based CFOs of publicly traded companies. The comparator companies set forth in this study included Exscientia plc, Argo Blockchain plc, Adaptimmune Therapeutics plc, Vaccitech plc, Venator Materials PLC, and Mereo BioPharma Group plc. These companies had revenues ranging from approximately US$200 million to US$2,300 million, with median revenues of approximately US$650 million. On a similar basis, Luxfer’s revenue for the year ended December 31, 2021 was US$374.1 million. In order to assess the appropriateness and effectiveness of Luxfer’s 2022 executive compensation program, Luxfer’s overall financial, strategic, and operational performance is evaluated. 
| | 2022 Proxy Statement 62Financial Performance | | 
| | Strategy and Portfolio | | 
| | Shareholder
Value | •13.2% net sales increase •19.2% organic revenue growth 3 •Adjusted EPS increase of $0.07 3 •GAAP net income increase of $0.09 per diluted share •Reduced pension deficit from $91
million in 2014 to near-zero in 2022 •Net debt to EBITDA ratio of 1.1x 3 | | •Pursuing a strategy of Profitable Growth •Launched Luxfer Business System – a critical tool to realize growth potential embedded in our business •Focused on attractive end markets with secular drivers •Manufacturer of market leading
products •Value-add niche applications | | •Returned $25
million to
shareholders via
dividends and share repurchases •Progressed towards
long-term EPS goal
of $2.00 or more by
2025 •Entered final phase
of Transformation
Plan to simplify
Company structure
and generate cost
savings, priming
Company for future
growth | 
| | Innovation | | 
| | Environment, Social and Governance | | •Capital redeployment in new product innovation •New cylinder products developed in green energy and alternative fuels •New Elektron products accelerated in the medical and electronic end-markets | | •Published 2022 Sustainability Report, achieving ISS QualityScores of 1 in each category and improved rating of AA from MSCI •Invested in our people through introduction of development programs and other opportunities •Expanded DEI recruitment practices and increased diversity training •Executed several successful leadership and Board transitions | |
In 2022, our Named Executive Officers continued to show exceptional performance and leadership in navigating the Company through post-pandemic recovery, including unprecedented supply chain disruptions and increased raw material costs. The Named Executive Officers executed on long-term strategy, having launched the Luxfer Business System in 2022, and completed various near-term and long-term initiatives to unlock sustainable growth, progressing toward our long-term EPS goal of $2.00 or more by 2025. Notwithstanding their significant accomplishments, the impact of these external disruptions led to a meaningful reduction in Named Executive Officer compensation in 2022, particularly annual cash incentives for most executives. 55
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| 2023 PROXY STATEMENT |
| | |
2022 COMPENSATION COMPONENTS |
EXECUTIVE COMPENSATION DISCUSSION AND ANALYSIS
2021 COMPENSATION PROGRAM
ELEMENTS
Our compensation programs are designed to provide an appropriate balance of short and long-term compensation, fixed and variable pay, and cash and equity-based compensation, as well as reflect our philosophy of providing pay for performance. Our Named Executive Officers’ total compensation in fiscal 20212022 was comprised of: •a base salary; •an annual cash incentive; •equity awards; •perquisites; •retirement benefits; and •other benefits, such as various insurance coverages, employee share purchase plan participation, and vacation and holiday entitlement. The table set forth below provides an overview of the following elements: key components of our Named Executive Officers’ 2022 compensation. Further information regarding each component is provided in this section. | ●Fixed | base salary; | Variable |
| ●Base Salary | annual non-equityAnnual Cash incentive compensation; | Equity Awards |
What? | ●Cash | Cash | Equity | When? | Annually | Annually | Time-Based (40%) •4-year vesting period Performance-Based (60%) •3-year performance period, with immediate grant and vesting on the third anniversary of the award date | How? Measures, Weight,
and
Payout | Consideration of various factors, including market rate, experience, business unit/company and individual performance, and critical skills | Financial Performance (80-100%)(1) •Management EBITA (40-50%) •Cash Conversion (40-50%) Strategic & Operational Objectives (0-20%)(1) Comprised of various strategic and operational objectives included in the Balanced Scorecard Payout: 0-200% Target | Time-Based •Value delivered through long-term equity incentive awards;share price performance Performance-Based •Earnings Per Share (EPS) Growth (24%) •Total Shareholder Return (TSR) (36%) Payout: 0-200% Target |
Why? | ●Provides competitive rates of fixed pay to attract and retain executives | employeeAttracts executives and incentivizes high performance by linking Company and/or business unit, and in some cases individual, performance with compensation | Time-Based •Promotes retention of key executives and aligns interests with shareholders Performance-Based •Creates strong alignment with shareholder interests by linking long-term compensation to key performance metrics and share purchase plans; |
| ● | pension or 401(k) contributions;price. Provides a balance of internal and |
| ● | benefits, such as flex perks and healthcare, life, and disability insurance coverage. market-based measures to assess long-term performance. |
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| 2023 PROXY STATEMENT |
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Annually, the Committee reviews total compensation for Named Executive Officers, and the relative levels of each of these forms of compensation, against the objectives of the compensation program to (i) align the interests of the Named Executive Officers with those of our shareholders; (ii) attract, retain, and incentivize talented executives; (iii) provide competitive compensation that motivates and rewards the Named Executive Officers for achieving financial and strategic objectives; and (iv) provide compensation commensurate with performance. BASE SALARY |
| We provide each Named Executive Officer with a fixed base salary. Base salaries are set upon appointment to a specific role and periodically adjusted for performance, scope of responsibility, inflation, and other factors. In setting base salaries, the Remuneration Committee generally references comparable positions at peer companies based on available market data, which includes published survey data and proxy statement data for our Comparator Group. The Committee considers compensation at comparable companies as one of many factors in setting base salaries. Differences in base salaries among the Named Executive Officers are determined by the Committee based on numerous factors, such as competitive conditions for the Named Executive Officer’s position within the Comparator Group and in the broader employment market, as well as the Named Executive Officer’s level of responsibility, experience, location, business unit size and revenue, and individual performance. TheIn December 2021, the Committee undertook its annual review of base salaries forreviewed the then-serving Named Executive Officers,Officers’ base salaries in accordance with its normal procedures. There were no increasesFollowing this review, the Committee implemented a 3% salary increase to the base salaries of Andy Butcher (in his previous role as President of Luxfer Gas Cylinders), Peter Gibbons, Jeffrey Moorefield, Graham Wardlow, Alok Maskara, and Heather Harding. This broad-based salary increase was intended to address inflation. Effective January 1, 2022, the Committee approved a 33% increase to Stephen Webster’s base salary upon his assumption of the CFO role. Similarly, Andy Butcher received a 70% annualized increase to his base salary upon his appointment as CEO, resulting in a 53% increase in base salary paid year-over-year. Further information regarding the Committee’s considerations when setting Mr. Webster’s and Mr. Butcher’s 2022 target compensation upon appointment to their respective CFO and CEO roles is included in the section entitled “Comparative Framework” on page 54. The Named Executive Officers’ 2021 and 2022 base salaries are further detailed in the table below.
| | 2021 Base
Salary
(US$) | 2022 Base Salary
(US$) (1) | Increase
(%) | Andy Butcher | Chief Executive Officer
(April 1 – December 31, 2022) (2) | – | $615,000 | 70% | President, Luxfer Gas Cylinders
(January 1 – March 31, 2022) (2) | $362,000 | $372,000 | 3% | Stephen Webster (3) | Chief Financial Officer | $203,737 | $246,660 | 33% (4) | Peter Gibbons | Vice President and General Manager
Luxfer Graphic Arts | $150,000 | $195,000 | 3% (5) | Jeffrey Moorefield | Vice President and General Manager
Luxfer Magtech | $200,000 | $206,000 | 3% | Graham Wardlow (3) | Managing Director
Luxfer MEL Technologies | $275,320 | $258,993 | 3% (6) | Alok Maskara | Former Chief Executive Officer
(January 1 – May 31, 2022) (7) | $715,000 | $736,000 | 3% | Heather Harding | Former Chief Financial Officer
(January 1 – February 28, 2022) | $365,000 | $375,000 | 3% |
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| 2023 PROXY STATEMENT |
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NON-EQUITYANNUAL CASH INCENTIVE COMPENSATION |
| |
The goal of Luxfer’s non-equityannual cash incentive compensation program is to retain, motivate, and incentivize high caliber individuals and promote the achievement of Luxfer'sLuxfer’s key financial and strategic goals and targets by: •providing above-market award opportunities for superior performance; | ● | providing above-market award opportunities for superior performance; |
| ● | placing emphasis on combined company-wide and business unit results; |
| ● | recognizing, as appropriate, individual and non-financial factors that contribute to Luxfer’s overall success; and |
| ● | •placing emphasis on combined company-wide and business unit results; •recognizing, as appropriate, individual and non-financial factors that contribute to Luxfer’s overall success; and •emphasizing teamwork and collaboration across all business units. |
To achieve these objectives, non-equity incentive compensation iscash incentives are tied to financial and individual performance metrics. The Remuneration Committee determines a percentage of each then-serving Named Executive Officer’s base salary as a targeted level of incentive opportunity. These targeted levels are based on the Committee’s review of Meridian's recommendations, relevant survey data, and, in the case of Named Executive Officers other than the CEO and CFO, individual performance measures aligned with the Company’s long-term strategy. 2022 Target Cash Incentives The Remuneration Committee sets a target cash incentive for each Named Executive Officer annually. The target cash incentive represents a percentage of each Named Executive Officer’s base salary. When setting the target cash incentive for each Named Executive Officer, the Remuneration Committee considers Meridian’s recommendations, the median target cash incentives for the Comparator Group, relevant survey data, and – in the case of Named Executive Officers other than the CEO – the recommendations of the CEO. Generally, the Committee sets each Executive'sThe target cash incentive opportunity as a percentage of base salary, with reference to the Comparator Group’s median target payouts. | | 63 | |
EXECUTIVE COMPENSATION DISCUSSION AND ANALYSIS
The actual annual incentive opportunity set by the Committee for each Named Executive Officer varies depending on a wide range of factors, including competitive conditions for the Named Executive Officer’s position within the Comparator Group and in the broader employment market, as well as the Named Executive Officer’s performance, level of responsibility, and experience.
An Executive Officer’s base salary multipliedFollowing the completion of the fiscal year, the target cash incentive is used by the annualRemuneration Committee, together with its assessment of Company performance against established performance measures (the “Performance Payout Factor”), to determine the cash incentive opportunity percentage establishes thepayout. The Performance Payout Factor can range from 0% to 200%.
The 2022 target annual incentivecash incentives for which the Executive Officer is eligible. The Committee determined annual incentive targets in 2021 for alleach Named Executive Officers. These annual incentive targetsOfficer (as a percentage of salary and theirits value in U.S.US dollars) areis shown below, together with the maximum non-equitycash incentive compensation opportunity available andavailable. | Target Cash Incentive
(% of Salary) | Target Cash Incentive
(US$) | Maximum Cash Incentive
(US$) | Andy Butcher | 100% | 554,250(1) | 1,108,500 | Stephen Webster | 50% | 123,330 | 246,660 | Peter Gibbons | 40% | 78,000 | 156,000 | Jeffrey Moorefield | 40% | 82,400 | 164,800 | Graham Wardlow | 40% | 103,597 | 207,194 | Alok Maskara | 100% | 736,000 | 1,472,000 | Heather Harding | 65% | 243,750 | 487,500 |
58
|
| 2023 PROXY STATEMENT |
| | |
2022 Cash Incentive Measures | | Incentive Target as a %
of Salary | Budget (Target)
(US$) | Maximum Non-Equity
Incentive Compensation
(US$) | 2021 Annual Payout
(US$) | | Alok Maskara | 100% | 715,000 | 1,430,000 | 1,330,615 | | Heather Harding | 65% | 237,250 | 474,500 | 441,522 | | Andy Butcher | 50% | 181,000 | 362,000 | 347,520 | | Graham Wardlow | 40% | 110,128 | 220,256 | 72,068 | | Stephen Webster | 25% | 51,623 | 103,246 | 93,375 |
Alok Maskara and Heather Harding
In determining the 2021 non-equity incentive compensation for Luxfer’s then-serving CEO, Alok Maskara, and the then-serving CFO, Heather Harding,For 2022, the Remuneration Committee consideredmaintained Management EBITA and Cash Conversion as the following twofinancial measures applicable to the 2022 cash incentive. With respect to Named Executive Officers other than the CEO and CFO, the Remuneration Committee also measured each Named Executive Officer’s performance measures:against strategic and operational objectives. Strategic and operational objectives are set by the CEO and based on each Named Executive Officer’s performance against Balanced Scorecard Metrics (further described below). When calculating the annual cash incentive, Management EBITA and Cash Conversion are measured at a corporate (group) level for corporate Named Executive Officers (in this case, the CEO and CFO) and at a business unit level for all other Named Executive Officers..4
| | Measure | | Description | | Weight
(%) | CEO and CFO | | Management EBITA 4 | | Calculated as operating income adjusted for equity income/(loss) of unconsolidated affiliates, qualifying restructuring charges, impairment charges, acquisition-related charges/credits, amortization of finance costs, the unwind of deferred consideration, amortization of acquired intangibles, share-based compensation charges, and accounting impacts of stock revaluations. | | 50% | Cash Conversion 4 | | Calculated as the ratio of Management EBITA to adjusted operating cash flow.Adjusted operating cash flow is reconciled from Management EBITA by adding back depreciation; loss/(gain) on the disposal of property, plants, and equipment; and changes in assets and liabilities net of effects of business acquisitions, non-restructuring capital expenditures, equity income of unconsolidated affiliates, and UK pension deficit funding contributions. Threshold, Target, and Maximum Cash Conversion levels may be adjusted in the event that Management EBITA exceeds the Maximum level, in which case Cash Conversion performance targets decrease at a ratio of 1:2. | | 50% | | | | | | | | Business Unit Leaders | | Management EBITA 4 | | As defined above. | | 40% | Cash Conversion 4 | | As defined above. | | 40% | Strategic and Operational Objectives | | Strategic and operational objectives for each of the Business Unit Leaders are determined and measured against Balanced Scorecard Metrics. The Balanced Scorecard Metrics for 2022 included three separate scorecards: Growth Scorecard.The Growth Scorecard includes the following metrics: a net promoter score, sales pipeline value as a percent of revenue, and new product introduction sales value as a percent of sales revenue. Operations Scorecard.The Operations Scorecard includes metrics on quality, delivery, cost, and cash. Human Capital Scorecard.The Human Capital Scorecard includes metrics on voluntary turnover, employee development processes, and development plans implemented. ESG Scorecard. The ESG Scorecard includes metrics on environmental performance and initiatives, specifically in relation to our 2025 environmental goals; safety; human capital; charitable and community involvement; and compliance and governance. | | 20% |
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Chief Executive Officer and equipment; and changes in assets and liabilities net of effects of business acquisitions, non-restructuring capital expenditures, equity income of unconsolidated affiliates, and U.K. pension deficit funding contributions.5 Chief Financial Officer.Each year, the Remuneration Committee reviews and sets, and the Board approves, the Management EBITA and Cash Conversion targets applicable to the CEO and CFO for the following year. The performance measures, together with the corresponding Threshold, Budget,Target, and Maximum values,levels, applicable to our CEO and CFO in 2021,2022, and the weight assigned to each performance measure, were as follows: | Performance Payout Factor as a % of Base Salary | Cash Conversion (1) | Andy
Butcher
(CEO) | Stephen Webster
(CFO) | Alok Maskara
(Former CEO) | Heather Harding
(Former CFO) | Threshold = 80% | 25% | 12.5% | 25% | 16.25% | Target = 90% | 50% | 25% | 50% | 32.5% | Maximum = 100% | 100% | 50% | 100% | 65% | Management EBITA (Group) (2) | | | | | Threshold = US$49.0 million | 25% | 12.5% | 25% | 16.25% | Target = US$52.1 million | 50% | 25% | 50% | 32.5% | Maximum = US$58.5 million | 100% | 50% | 100% | 65% | TOTAL | | | | | Threshold | 50% | 25% | 50% | 32.5% | Target | 100% | 50% | 100% | 65% | Maximum | 200% | 100% | 200% | 130% |
| | Payout Factor as a % of Base Salary | | Cash Conversion (1) | CEO | CFO | | Threshold = 80% | 25% | 16% | | Budget = 90% | 50% | 33% | | Maximum = 100% | 100% | 65% | | Management EBITA (Group) (2) | | | | Threshold = US$40 million | 25% | 16% | | Budget = US$44 million | 50% | 33% | | Maximum = US$48 million | 100% | 65% | | TOTAL | | | | Threshold | 50% | 32.5% | | Budget | 100% | 65% | | Maximum | 200% | 130% |
________________________ | (1) | Cash Conversion achieved in 2021 was approximately 97%. |
| (2) | Management EBITA (Group) achieved in 2021 was approximately US$48.7 M. |
5 | Management EBITA, Cash Conversion, and adjusted operating cash flow are non-GAAP measures. For a reconciliation of these non-GAAP measures, see Appendix A. |
EXECUTIVE COMPENSATION DISCUSSION AND ANALYSIS
While the preceding paragraphs describe the processes and philosophies used by the Remuneration Committee and the Board in setting the Company’s overall performance measures applicable to the CEO and CFO, substantially the same processes and philosophies are used in setting the performance measures applicable to the other Named Executive Officers.
Andy Butcher and Graham Wardlow
In determining the 2021 non-equity incentive compensation for Andy Butcher and Graham Wardlow, the Committee considered, based upon recommendations of the CEO, the following three performance measures in relation to each Named Executive Officer’s business unit: Cash Conversion achieved in 2022 was 34%.
The Threshold Cash Conversion for all business units was set at 85%, the Budget Cash Conversion for all business units was set at 100%, and the Maximum Cash Conversion for all business units was set at 115%Business Unit Leaders. The Cash Conversion performance measures applied to these Named Executive Officers are slightly higher than the measures applied to the CEO and CFO, as the Cash Conversion applicable to the CEO and CFO is based on the overall Cash Conversion of Luxfer as a whole, which includes the overall net cash position for the corporate cost center, traditionally a net cash outflow.
After the Remuneration Committee approves the overall compensation framework in December of each year, the CEO and CFO review and set the Management EBITA targets applicable to the other Named Executive Officers for the following year. Please refer to the chart belowAs in prior years, Cash Conversion targets were set at 85% (Threshold), 100% (Target), and 115% (Max) for theall business units. The performance measures, together with the corresponding Threshold, Budget,Target, and Maximum values,levels, applicable to Andy Butcher and Graham Wardlow in 2021. Theour other Named Executive Officers’ personal objectives are determinedOfficers in 2022, and measured against the Balanced Scorecard Metrics. The Balanced Scorecard Metrics for 2021 included three separate scorecards:
| ● | Growth Scorecard. The Growth Scorecard includes the following metrics: a net promoter score, sales pipeline value as a percent of revenue, and new product introduction sales value as a percent of sales revenue. |
| ● | Operations Scorecard. The Operations Scorecard includes metrics on quality, delivery, cost, and cash. |
| ● | Human Capital Scorecard. The Human Capital Scorecard includes metrics on voluntary turnover, employee development processes, and development plans implemented. |
The performance measures applicable to Andy Butcher and Graham Wardlow, as well as the weight assigned to each performance measure,metric, were as follows:
| | Payout Factor as a % of Base Salary | | Cash Conversion | Andy Butcher | Graham Wardlow | | Threshold = 85% | 10% | 8% | | Budget = 100% | 20% | 16% | | Maximum = 115% | 40% | 32% | | Management EBITA (Business Unit) | | | | Threshold | 10% | 8% | | Budget | 20% | 16% | | Maximum | 40% | 32% | | Personal Objectives (Balanced Scorecard Metrics) | | | | Threshold | 0% | 0% | | Budget | 10% | 8% | | Maximum | 20% | 16% | | TOTAL | | | | Threshold | 20% | 16% | | Budget | 50% | 40% | | Maximum | 100% | 80% |
Stephen Webster
In determining the 2021 non-equity incentive compensation for Stephen Webster, the Committee considered, based on the recommendations of the CEO, the following three performance measures in relation to Mr. Webster’s role as Corporate Controller: Cash Conversion, Management EBITA, and personal objectives. The Threshold, Budget, and Maximum values for Cash Conversion and Management EBITA were the same as those applicable to our CEO and CFO in 2021. Mr. Webster’s personal objectives for
| | | 65 | |
EXECUTIVE COMPENSATION DISCUSSION AND ANALYSIS
2021 included (i) corporate tax compliance and efficiency; (ii) U.S. pension plan transition; (iii) corporate FP&A enhancement; (iv) internal audit effectiveness; and (v) oversight of external financial reporting. The performance measures applicable to Stephen Webster, as well as the weight assigned to each performance measure, were as follows:
| Performance Payout
Factor as a % of Base
Salary | | Cash Conversion | Stephen Webster(1) | Threshold = 80%85% | 5%8% | BudgetTarget = 90%100% | 10%16% | Maximum = 100%115% | 20%32% | Management EBITA (Group)(Business Unit) | | Threshold = US$40 million | 5%8% | Budget = US$44 millionTarget | 10%16% | Maximum = US$48 million | 20%32% | PersonalStrategic and Operational Objectives (Balanced
(Balanced Scorecard Metrics) | | Threshold | 0%-% | BudgetTarget | 5%8% | Maximum | 10%16% | TOTAL | | Threshold | 10%16% | BudgetTarget | 25%40% | Maximum | 50%80% | | | | |
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2022 Cash Incentive Payouts Luxfer’s cash incentive program provides for payout levels between 0% and 200% of the target incentive award for each Named Executive Officer. No payout is made if performance is below the Threshold levels set forth in the foregoing tables. Additionally, our cash incentive program permits the Committee to withhold cash incentives if the Company’s EBITA, as a whole, falls below the established Threshold, even if the business units achieve or exceed their own EBITA Target. Although the cash incentive program uses a formulaic approach, the Remuneration Committee retains discretion in administering the program, which discretion includes selecting the performance measures prior to commencement of the performance period; setting and adjusting Threshold, Target, and Maximum levels; and assessing financial and operational results. Following consideration of the financial and individual performance measures (as applicable), the Remuneration Committee calculated a Performance Payout Factor applicable to each Named Executive Officer. The following chart shows the total non-equityPerformance Payout Factor, target cash incentive, compensation earned bymaximum cash incentive, and 2022 cash incentive payout for each of theour Named Executive Officers are set forth in the below table. | Target
Cash
Incentive
(% of
Salary) | Target Cash
Incentive
(US$) | Maximum Cash
Incentive
(US$) | Performance
Payout Factor | 2022 Cash
Incentive Payout
(US$) | Andy Butcher (1) | 100% | 554,250 | 1,108,500 | 36% | 196,759 | Stephen Webster (2) | 50% | 123,330 | 246,660 | 36% | 43,782 | Peter Gibbons | 40% | 78,000 | 156,000 | 0% | – | Jeffrey Moorefield | 40% | 82,400 | 164,800 | 0% | – | Graham Wardlow (2) | 40% | 103,597 | 207,194 | 185% | 191,999 | Alok Maskara (3) | 100% | 736,000 | 1,472,000 | – | 306,667 | Heather Harding (4) | 65% | 243,750 | 487,500 | – | 81,250 |
Overall, the non-equity incentive compensationcash incentives earned by each of our Named Executive Officers in 2021 was significantly higher2022 were lower than thatthose earned in 2020. This increase was driven by strong performance in Management EBITA and Cash Conversion in fiscal 2021, at both the group-wide and business unit level.2021. The Company as a whole achieved Management EBITA and Cash Conversion at levels above Budget,below Target, with Management EBITA exceeding the Maximum targetThreshold level but falling below Target level and Cash Conversion falling slightly below Threshold. Lower cash incentive payouts were driven by unprecedented increases in the cost of raw materials, which placed considerable pressure on delivery of Management EBITA and Cash Conversion in many business units. Luxfer MEL Technologies successfully passed through raw material costs, resulting in exceptional EBITA performance. As maximizing both EBITA and Cash Conversion is critical, and achieving Maximum target on a group-wide basis.EBITA unintentionally results in lower Cash Conversion, the Remuneration Committee approved an adjustment to the Threshold, Target, and Maximum Cash Conversion levels and Performance Payout Factor applicable to Luxfer MEL Technologies to account for additional inventory holding and non-cash profit resulting from higher raw material prices. 61
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In terms of delivery against personalstrategic and operational objectives, which applies to the Named Executive Officers other than the CEO and CFO, performance in 2021 exceeded historical averages. Despite a challenging business environment resulting fromagainst such objectives were not considered with respect to Peter Gibbons and Jeffrey Moorefield, as no cash incentive payout is permitted if Management EBITA and Cash Conversion performance is below the pandemic, the business unitsThreshold level. Mr. Wardlow achieved Target level on strategic and operational objectives, having made significant progress in the post-COVIDrecovery and in penetratinglandscape, including the pass through of raw material price increases, penetration of new growth opportunities, such as alternative fuel and gasoline particulate filtration technology. Similarly, the Company made significant progressadvances in enhancing corporate financial planning and analysis and bolstering corporate controls to establish and maintain best-in-class processes that meet all external and internal reporting requirements. In addition, the Named Executive Officers played a critical role in furthering succession planning and talent development whichthat resulted in retention rates above the industry average. 2021 NON-EQUITY INCENTIVE COMPENSATION
EQUITY AWARDS |
| | 2022 Proxy Statement 66 |
EXECUTIVE COMPENSATION DISCUSSION AND ANALYSIS
LONG-TERM EQUITY INCENTIVE AWARDS |
AwardsEquity awards granted pursuant to Luxfer’s Long-Termthe Luxfer Holdings PLC Long-Term Umbrella Incentive Plan, (“LTIP”as amended and restated on June 8, 2022 (the “LTIP”) are intended to (i) align executive awards with shareholder returns through personal financial investment; (ii) attract and retain high quality executives in an environment where compensation levels are based on a global market; (iii) strengthen the alignment between executives and shareholders; and (iv) motivate shareholder value creation. The LTIP provides the Remuneration Committee the discretion to grant time-basedtime-based or performance-basedperformance-based awards, including in the form of Restricted Stock Units (“RSUs”) and stock options. Additionally, the Remuneration Committee has discretion tooptions, and use and set a range of performance measures applicable to awards granted under the LTIP.performance-based awards. These performance measures are to be appropriate and support Luxfer’s long-termlong-term strategy at the time the award is granted. For recent awards, the Committee has used the following performance measures in various combinations: time-based (four-year vesting), earnings per share (“EPS”), and total shareholder return (“TSR”).made. Discretion over what type or combination of types of awards to be made is exercised by the Committee based on what the Committee considers to be the market norm in the U.S.US and U.K.,UK, as well as the circumstances in which the award is made.
Awards are made and satisfied using existing treasury shares, shares held in an employee benefit trust, or through the issue of new shares.trust. Participants are required to pay, at minimum, the nominal cost of an ordinary share. RSUs are generally awarded to Named Executive Officers who are based in the United States, and stock options are awarded to Named Executive Officers based in the United Kingdom. In 2021,recent years and in 2022, the RemunerationCommittee used the following forms of awards and performance measures in various combinations: 
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2022 Equity Award Measures and Terms While the Committee awarded long-term incentive compensation undera combination of time-based (40%), TSR performance-based (36%), and EPS performance-based (24%) awards to the LTIP. As it doesNamed Executive Officers in 2022, the Committee, following a program design review with Meridian, implemented changes to the methods by which EPS and TSR performance are measured, as well as other terms of the awards. These changes are consistent with industry practice; provide a more comparable peer group to assess performance against; and are intended to further align management and shareholder interests by supporting our long-term goal of $2.00+ adjusted EPS by 2025. A summary of said changes, as compared to historical practice, is provided below. | Historical
EPS Awards (5) | 2022 EPS Awards (5) | Historical TSR Awards | 2022 TSR Awards | Measure and Method | •Threshold, Target, and Maximum adjusted diluted EPS levels set annually •Measured on an annual basis, using adjusted diluted EPS reported externally for financial year •Award based on achievement of Threshold, Target, or Maximum level | •Measured on a 3-year growth basis, using adjusted diluted EPS reported externally for financial year •EPS growth is measured annually using prior year actual adjusted diluted EPS as the baseline •The payout percentage for each individual year is “banked,” and the average annual growth percentage over the 3-year performance period determines the final payout | •Ranking of Luxfer’s relative TSR performance against a group of 20 pre-selected peer companies for the last 90 days of the year ending 2 years from the year in which the award was communicated •Payout dependent on quartile in which Luxfer’s performance fell, with payout ranging from 0-150% | •Ranking of Luxfer’s relative TSR performance against companies within Luxfer’s 8-digit GICS code for the last 90 days of the year ending 2 years from the year in which the award was communicated •Payout dependent on decile in which Luxfer’s performance fell, with distinct Performance Payout Factors assigned to each decile | Performance Period | 1 year | 3 years | 3 years | 3 years | Vesting Period | Vest 33% on second, third, and fourth anniversary of award communication date Vesting conditional on the Return on Capital Employed (RoCE) being equal to or exceeding a certain percentage after tax in the calendar year for which EPS is measured | Vest 100% on third anniversary of award communication date Vesting conditional on the Return on Capital Employed (RoCE) being equal to or exceeding a certain percentage after tax in the calendar year for which EPS is measured | Vest 50% on third anniversary of award date and 50% on fourth anniversary of award communication date | Vest 100% on third anniversary of award communication date | Cap | 200% Target | 200% Target | 150% Target | 200% Target | Other Terms | $1.00 conversion or exercise price | $1.00 conversion or exercise price | $1.00 conversion or exercise price | $1.00 conversion or exercise price |
2022 EPS Awards.The specific Threshold, Target, and Maximum levels for EPS Growth are not publicly disclosed at the time of award communication due to the proprietary nature and competitive sensitivity of the information. However, the method used to calculate awards will be based on actual performance through December 31, 2024, compared to the Company’s adjusted diluted EPS reported for financial year 2021. Based on the adjusted diluted EPS growth achieved, 2022 EPS awards will be granted and immediately vest on March 14, 2025. 63
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| 2023 PROXY STATEMENT |
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2022 TSR Awards.Further information regarding the comparative group companies within Luxfer’s 8-digit GICS code is provided on page 54. The performance payout level for each year,decile of the Remuneration2022 TSR awards is set forth below, Based on the relative level of shareholder return achieved through December 31, 2024, 2022 TSR awards will be granted and immediately vest on March 14, 2025. Although the performance period remains ongoing, the Company’s TSR performance was in the seventh decile as of December 31, 2022. Relative TSR Ranking Versus Peers | Payout Level | First Decile (Top 10%) | 200% | Second Decile (Between 11% - 20%) | 175% | Third Decile (Between 21% - 30%) | 150% | Fourth Decile (Between 31% - 40%) | 125% | Fifth Decile (Between 41 - 50%) | 100% | Sixth Decile (Between 51% - 60%) | 75% | Seventh Decile (Between 61% - 70%) | 50% | Eighth Decile (Between 71% - 80%) | 25% | Ninth and Tenth Decile (Between 80% - 100% – i.e., Bottom 20%) | 0% |
2022 Time-Based Awards.In 2022, each Named Executive Officer received a time-based award in the form of RSUs or options equal to 40% of their target equity award. The time-based awards were granted on March 14, 2022 and vest in equal installments over four years. 2022 Target Equity Awards In establishing equity award levels (as a percentage of base salary) for each Named Executive Officer in 2022, the Committee referenced benchmark data, (includingincluding compensation surveys, Comparator Group information, and other data provided by Meridian) in settingMeridian, and took into consideration a variety of other factors, including the targeted Budget award level (as a percentage of base salary) for each Named Executive Officer. For each Named Executive Officer’s award available at Budget level, 40% of this award was granted in March 2021 in the form of time-based RSUs or time-based options, vesting evenly on the first four anniversaries of the grant date. The remaining 60% of the Budget award allocation was split as follows: 24% of the award available based on the achievement of a certain adjusted diluted EPS for the year ended December 31, 2021 and 36% of the award available on the delivery of a certain relative TSR. The TSR metric consists of a ranking of Luxfer's performance against a peer group of twenty companies for the last ninety days of the year ending December 31, 2023. Based on the relative level of shareholder return achieved, awards in relation to TSR would vest evenly in March of 2024 and 2025. Stephen Webster was only awarded time-based options in March 2021. For both performance elements of these awards, the Named Executive Officers can achieve a Threshold, Budget, or Maximum number of awards based on deliveryoutstanding and shares remaining available for issuance under the LTIP, the number of financialshares that would be issued under contemplated awards over the range of performance duringperiods, the relevant measurement period. Maximum award potential is capped at a certain percentage of each Named Executive Officer’s salary, depending on the share price at the award communication date.
The adjusted diluted EPS Threshold for the following year is set using the forecasted EPS in Decembertotal number of the current year. The adjusted diluted EPS BudgetCompany’s outstanding shares, the resulting implications for shareholder dilution, and Maximum amounts for the followingnumber of shares awarded to our executives year are set using a calculation that considers the EBITA Budget and Maximum amounts, target tax rate, and target interest expense. RSUs and stock options awarded as a result of EPS achievement are also subject to a service-based vesting requirement, with 33.33% of the earned units vesting on the second anniversary of the grant date, 33.33% on the third anniversary of the grant date, and 33.33% on the fourth anniversary of the grant date. The TSR performance award achievement varies based on Luxfer's TSR being between the 25th and 75th percentile at the end of the measurement period. RSUs and stock options awarded as a result of TSR achievement are also subject to a service-based vesting requirement, with 50% of the earned units vesting on each the third and fourth anniversaries of the grant date.
-over-year. The table below summarizes the total award, at Budget,Target, made available to each Named Executive Officer in 2022, as approved by the Remuneration Committee. Named Executive Officer | # Time Based Awards
(40% award allocation)
4 Year Vesting
@ 25% per year | # EPS Awards
(24% award allocation)
Vesting on 3rd Anniversary
of Award Communication Date | # TSR Awards
(36% award allocation)
Vesting on 3rd Anniversary of
Award Communication Date | Total Target
Award
(# of Awards) | Andy Butcher (1) | 25,200 | 15,120 | 22,680 | 63,000 | Stephen Webster | 4,000 | 2,400 | 3,600 | 10,000 | Peter Gibbons | 1,600 | 960 | 1,440 | 4,000 | Jeffrey Moorefield | 1,600 | 960 | 1,440 | 4,000 | Graham Wardlow | 4,000 | 2,400 | 3,600 | 10,000 | Alok Maskara (2) | 30,000 | 18,000 | 27,000 | 75,000 | Heather Harding (3) | – | – | – | – |
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Additional 2022 Equity Awards To incentivize certain of the Named Executive Officers to achieve the Company’s 2025 EPS goal of $2.00 or more, the Remuneration Committee approved additional EPS performance-based awards to be awarded to Andy Butcher, Stephen Webster, Peter Gibbons, Jeffrey Moorefield, and Graham Wardlow. These additional EPS awards are dependent on the Company’s attainment of a certain adjusted diluted EPS on or before December 31, 2025. Provided the adjusted diluted EPS targets are attained, the awards will be granted and immediately vest on March 14, 2026. If the Company attains an adjusted diluted EPS of $2.00 on or before December 31, 2025, the Target number of awards listed below will be awarded to each of the Named Executive Officers. The Maximum number of awards will be awarded to each of the Named Executive Officers in March 2021, as approved byif the Remuneration Committee.Company attains an adjusted diluted EPS of more than $2.00 (the Maximum level is not publicly disclosed at the time of award communication due to the proprietary nature and competitive sensitivity of the information). In the event that the Company attains an adjusted diluted EPS between the Target and Maximum level, a pro-rated number of awards between the Target and Maximum levels will be awarded to the Named Executive Officers based on the adjusted diluted EPS actually attained. Named Executive Officer | Additional EPS Award
(at Target) | Additional EPS Award
(at Maximum) | Andy Butcher | 32,000 | 64,000 | Stephen Webster | 6,000 | 12,000 | Peter Gibbons | 2,000 | 4,000 | Jeffrey Moorefield | 2,000 | 4,000 | Graham Wardlow | 6,000 | 12,000 |
Named Executive
Officer | # Time Based Awards (4 Year
Vesting @ 25% per year) 40% award allocation | # EPS Awards (Vesting
on 2nd, 3rd and 4th Year)
24% award allocation | # TSR Awards (Vesting
evenly on 3rd and 4th Year)
36% award allocation | Total Target
Award, at Budget (# of Awards) | | Alok Maskara | 24,000 | 14,400 | 21,600 | 60,000 | | Heather Harding | 6,800 | 4,080 | 6,120 | 17,000 | | Andy Butcher | 4,800 | 2,880 | 4,320 | 12,000 | | Graham Wardlow | 3,200 | 1,920 | 2,880 | 8,000 | | Stephen Webster | 3,200 | — | — | 3,200 |
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OTHER BENEFITS |
| EXECUTIVE COMPENSATION DISCUSSION AND ANALYSIS
Perquisites Healthcare Benefits
We provide employee benefits – such as medical, dental, and vision insurance; life insurance; and disability coverage – toEach of our Named Executive Officers receives an annual perquisite allowance, which is paid as a monthly cash stipend. We believe providing reasonable perquisites is a market-competitive practice to attract and other employees. These benefits are available to all full-time U.S. employees through our active employee plans. Luxfer provides complimentary life, accidental death, and dismemberment insurance to its full-time U.S. employees, with a benefit amount of US$50,000. Employees are also offered voluntary life insurance coverage with a benefit amount of 5x such employee's salary (up to a maximum of US$500,000). Additionally, long-term disability insurance coverage is provided complimentary, with a benefit amount of 60% of such employee's salary (up to a maximum of US$6,000). In addition to these benefits for active, full-time U.S. employees,retain top executive talent. Rather than offering individual perquisites, we provide post-retirement medical, dental, vision,a monthly cash stipend to each of our Named Executive Officers to allow more flexibility and life insurance coverage to certain retirees in accordance withchoice. Our Named Executive Officers have full discretion on how the legacy company plans that applied at the time the retiree was actively employed.
The U.K. equivalent of certain healthcare benefitscash perquisite stipend is spent, and insurance coverages are made available to U.K. employees. U.K. employees that are invited and elect to join the healthcare insurance program receive this benefit as a benefit-in-kind. U.K. employees that belong to a Company pension plan receive life insurance coverage with a benefit amount of 7x such employee's salary. U.K. employees that have chosen not to join a Company pension plan receive life insurance coverage with a benefit amount of 3x such employee's salary.
The value of these healthcare benefitsit is not requiredtracked by the Company after the money is paid. Perquisite allowances are intended to cover expenses incidental to the executive’s employment responsibilities, such as use of their personal automobile and mobile phone for business purposes. Perquisite allowances are not considered in cash incentive and equity award calculations, which are calculated with reference to base salary, and cannot be contributed to the Company’s 401(k) plan or otherwise considered in pension calculations. Perquisite allowances for our Named Executive Officers in 2022 are set forth in the section entitled “2022 Target Compensation” on page 53 and included in the Summary Compensation Table as they are generally available on a non-discriminatory basis to all full-time employees.below.
401(k) Savings Plan
Retirement Benefit Programs All of our Named Executive Officers who are based in the U.S.US are eligible to participate in Luxfer'sLuxfer’s 401(k) Savings Plan in the same manner as all U.S.US employees. Participants in the 401(k) Savings Plan are eligible for a 100% match on up to 6% of eligible pay saved, subject to IRS-qualifiedIRS-qualified plan compensation limits and highly compensated threshold limits. Eligible employees may not receive 401(k) benefits in excess of these limits. Other Retirement Benefits
Named Executive Officers based in the U.K.UK are eligible to participate in the defined contribution pension scheme and may have participated in the Luxfer Group Pension and Supplementary Pension Plans in the past, which are now frozen. These pension plans are further described below in the section entitled “2021“2022 Pension Benefits.”Benefits” on page 82. Alok Maskara iswas paid the equivalent of 25% of his annual base salary as a salary supplement in lieu of contributions to the Company’s pension plans. Currently,In 2022, a portion of this supplement is beingwas paid into Luxfer'sLuxfer’s 401(k) Savings Plan for Alok Maskara. Employee Share Purchase Plans Other Paid Time OffOur Named Executive Officers are eligible to participate in the Company’s US Employee Stock Purchase Plan (ESPP) and UK Share Incentive Plan (SIP), which provide employees an opportunity to become Luxfer shareholders at a reduced price. Through payroll deductions, US employees can purchase Luxfer shares, subject to certain limits, at a 15% discount under the ESPP. Similarly, under the SIP, UK employees can purchase Luxfer shares through payroll deductions and, in turn, the Company awards participating employees one free share per every two shares purchased. The Named Executive Officers are eligible to participate in the foregoing employee share purchase plans on the same basis as the Company’s other employees.
Health and Welfare Benefits We provide employee benefits – such as medical, dental, and vision insurance; life insurance; and disability coverage – to our Named Executive Officers and other employees. These benefits are available to all full-time US employees through our active employee plans. Luxfer provides complimentary life, accidental death, and dismemberment insurance to its full-time US employees, with a benefit amount of US$50,000. Employees are also offered voluntary life insurance coverage with a benefit amount of 5x such employee’s salary (up to a maximum of US$500,000). Additionally, long-term disability insurance coverage is provided complimentary, with a benefit amount of 60% of such employee’s salary (up to a maximum of US$6,000 per pay period). In addition to these benefits for active, full-time US employees, we provide post-retirement medical, dental, vision, and life insurance coverage to certain retirees in accordance with the legacy company plans that applied at the time the retiree was actively employed. The UK equivalent of certain health and welfare benefits and insurance coverages are made available to UK employees. UK employees that are invited and elect to join the healthcare insurance program receive this benefit as a benefit-in-kind. UK employees that belong to a Company pension plan receive life insurance coverage with a benefit amount of 7x such employee’s salary. UK employees that have chosen not to join a Company pension plan receive life insurance coverage with a benefit amount of 3x such employee’s salary. The value of these health and welfare benefits are not required to be included in the Summary Compensation Table, as they are generally available on a non-discriminatory basis to all full-time employees. Vacation and Holiday Entitlement We also provide vacation and other paid holidaysholiday entitlement to all employees, including the Named Executive Officers, which we have determined to be comparable to those provided at other similar companies. 66
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| 2023 PROXY STATEMENT |
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As required by the pay versus performance rules adopted by the SEC in 2022 (the “PVP Rules”) and in effect for the first time and applicable to this Proxy Statement, the Pay Versus Performance Table provides information about Named Executive Officer compensation set forth in this Proxy Statement, as well as compensation for the Named Executive Officers set forth in our 2022 and 2021 Proxy Statements (each of 2020, 2021, and 2022, a “Covered Year”). The Pay Versus Performance Table also provides results of certain financial performance measures during those same Covered Years. In reviewing this information, there are a few important things to consider: •The information in columns (B) and (D) comes directly from this and prior year’s Summary Compensation Tables, without adjustment unless otherwise noted (such totals being referred to herein as the “SCT Total”); •As required by the PVP Rules, we describe the information in columns (C) and (E) as “compensation actually paid” (“CAP”) to the applicable Named Executive Officers, but these amounts do not necessarily reflect compensation that our Named Executive Officers actually earned for their service in the Covered Years. Instead, CAP reflects a calculation involving a combination of realized pay (for cash amounts and some equity award amounts) and realizable or accrued pay (primarily for pension benefits and other equity awards); •The PVP Rules require that we choose a peer group for purposes of TSR comparisons, and we have chosen the same peer groups utilized by the Company for purposes of measuring total shareholder return performance with respect to performance-based equity awards. Accordingly, these peer groups differ for each Covered Year, as the Remuneration Committee revised said peer group in 2022, utilizing the companies included in the Company’s GICS Code as of March1, 2022, rather than comparable companies selected by the Remuneration Committee with reference to market data. The companies comprising the peer group for each Covered Year are detailed in footnotes 3 through 5 of the Pay Versus Performance Table on page 68 (collectively and individually referred to herein as the “PVP Peer Group”); and •As required by the PVP Rules, we provide information about our cumulative TSR, cumulative PVP Peer Group TSR results, and US GAAP net income results during the Covered Years in the Pay Versus Performance Table. Pursuant to the PVP Rules, the Company is required to designate one financial measure as the “Company-Selected Measure,” or the most important financial measure that demonstrates how the Company sought to link executive compensation to Company performance in the fiscal year. For 2022, the Company selected adjusted EBITA. However, the Company believes that all of the measures designated under the “Important Financial Performance Measures” section on page 70 are important drivers of Company performance that are designed to link executive compensation to performance. 67
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| 2023 PROXY STATEMENT |
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PAY VERSUS PERFORMANCE TABLE |
(A) | | (B) | | (C) | | (D) | | (E) | | (F) | | (G) | | (H) | | (I) | | | | | | | | | | | | | | Value of Initial Fixed
$100 Investment
Based On: | | | | | Year | | SCT Total for PEO
(US$) | | PEO CAP
(US$) (6) | | Average
SCT Total
for Non-
PEO NEOs
(US$) (2) | | Average
CAP for
Non-PEO
NEOs
(US$) (2) (6) | | Company
TSR (7) | | Peer
Group
TSR (7) | | Net Income
(US$) (8) | | Adjusted
EBITA
(US$) (9) | | | | Andy
Butcher (1) | | Alok
Maskara | | Andy
Butcher (1) | | Alok
Maskara | | | | | | | | | | | | | 2022 | | 2,348,216 | | 2,170,667 | | 1,075,717 | | 346,905 | | 530,489 | | 344,447 | | 73.4 | | 74.9 (3) | | 26,900,000 | | 50,200,000 | 2021 | | – | | 2,339,733 | | – | | 3,622,066 | | 773,235 | | 890,867 | | 120.5 | | 128.8 (4) | | 29,900,000 | | 48,700,000 | 2020 | | – | | 2,033,744 | | – | | 1,161,313 | | 565,323 | | 407,641 | | 92.0 | | 117.9 (5) | | 20,000,000 | | 41,200,000 |
•the aggregate change in actuarial present value of the accumulated benefit under all defined benefit and actuarial pension plans reported in the Summary Compensation Table; •values reported in the Annual Equity Awards column of the Summary Compensation Table; •for any equity awards granted in the Covered Year that are outstanding and unvested as of December 31 of the relevant Covered Year, the year-end fair value of said awards is added; 68
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| 2023 PROXY STATEMENT |
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•for any awards granted in years prior to the Covered Year that are outstanding and unvested as of December 31 of the relevant Covered Year, the increase in fair value is added (or the decrease in fair value is deducted) by comparing the fair value as of December 31 of the Covered Year to the fair value at the end of the prior fiscal year; •for awards that are granted and vest in the same Covered Year, the fair value as of the vesting date is added; •for awards granted in prior years that vest in the Covered Year, the increase in fair value is added (or the decrease in fair value is deducted), by comparing the fair value on the vesting date with the fair value at the end of the prior fiscal year; and •for awards granted in prior years that are deemed to fail to meet the applicable vesting condition during the Covered Year, the fair value as of December 31 of the prior fiscal year is deducted. CLAWBACK PROCEDURESRELATIONSHIPS BETWEEN COMPENSATION ACTUALLY PAID AND CERTAIN PERFORMANCE MEASURES |
The PVP Rules require that comparisons be made between certain columns in the Pay Versus Performance Table. Such comparisons can be provided graphically without further explanation, and we have done so below. In accordance with that approach, the following charts and graphs show the relationships between (i) our cumulative TSR, the cumulative TSR for the PVP Peer Group reflected in the Pay Versus Performance Table above, and our PEO CAP and average CAP for Non-PEO NEOs, as applicable; (ii) the Company’s net income, and our PEO CAP and average CAP for Non-PEO NEOs, as applicable; and (iii) the Company’s adjusted EBITA, and our PEO CAP and average CAP for Non-PEO NEOs, as applicable, for each of the Covered Years. 
69
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| 2023 PROXY STATEMENT |
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IMPORTANT FINANCIAL PERFORMANCE MEASURES |
The following is an unranked list of what we believe to be important financial performance measures (including adjusted EBITA) we used to link executive compensation for our PEO and Non-PEO NEOs to our performance in 2022: •Adjusted EBITA (also referred to in this Proxy Statement as Management EBITA); •Cash Conversion; •Adjusted Diluted EPS Growth; and •TSR. The foregoing financial performance measures were utilized by the Remuneration Committee to assess Company performance and determine the cash incentives and equity awards paid to our PEO and Non-PEO NEOs in 2022.6 70
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| 2023 PROXY STATEMENT |
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COMPENSATION-RELATED POLICIES AND ARRANGEMENTS |
COMPENSATION-RELATED RISK |
The Company’s executive and broad-based compensation programs are intended to promote decision-making that supports a pay for performance philosophy and utilize the following design features to mitigate risk: •Balance of fixed and variable pay opportunities | | •Stock ownership guidelines and requirements | •Oversight by Remuneration Committee comprised of independent Non-Executive Directors | | •Regular risk assessments, particularly when implementing any changes to compensation programs | •Multiple performance measures and performance periods, as well as capped payouts | | •Enhanced clawback policy | •Performance measures and targets set at a Company-
wide or Business Unit level | | •Anti-hedging policy | •Incentive Plan limits on individual awards, pool size, and accelerated vesting | | •Institutional focus on ethical behavior through deployment of Luxfer Values and Code of Ethics and Business Conduct | •Remuneration Committee oversight of equity burn rate and dilution | | |
The Remuneration Committee, in consultation with management, conducts a review of the Company’s compensation plans and practices with respect to risk. To aid in this review, the Remuneration Committee consulted with Meridian, the Committee’s independent compensation consultant, to identify risk aggravators and mitigating factors, particularly in the incentive programs offered to executives, and opine whether such programs and practices are reasonably likely to have a material adverse effect on the Company. In considering Meridian’s analysis and its own discussions, with and without management present, the Remuneration Committee concluded that the Company’s compensation programs and practices are not reasonably likely to incentivize employees to take risks that could have a material adverse effect on the Company. The reasons for concluding that Luxfer’s executive and broad-based compensation programs do not create material risk for the Company include the fact that the Company (i) implements risk mitigation mechanisms; specifically, it utilizes a variety of short performance periods ranging from one to three years, measures performance at a Company-wide and Business Unit level, considers discretionary individual performance factors, and utilizes the Remuneration Committee to oversee awards to executives and employees; (ii) sufficiently monitors the appropriateness of the compensation and benefit plans that are available to Luxfer’s executives and employees; and (iii) leverages the expertise of third party advisors, such as Meridian, where necessary to ensure that Luxfer’s compensation programs are appropriate when compared to market. Luxfer has established policies and procedures, which apply to all employees, our Named Executive Officers, and Directors in relation to the clawback of certain incentive compensation. Specifically, if, during the preparation of the current year’s financial results, a material misstatement of the previous year’s results is discovered, a clawback of the non-equityannual cash incentive compensation and long-term equity awards granted with respect to such misstated financial results may occur. The Remuneration Committee has discretion in applying such policy to recover or recoup incentive compensation in situations involving a material misstatement of financial results. Furthermore, the Remuneration Committee may take into account any factors it deems reasonable in determining whether to seek recoupment of previously paid incentive compensation; how much incentive compensation to recoup from individual Executive Officers, employees, and Directors; and the form of such incentive compensation to be recouped. Given the SEC’s adoption of new Rule 10D-1, the Company will continue to monitor the New York Stock Exchange’s listing standards applicable to Rule 10D-1 and revise, as necessary, its current clawback policy in accordance with the requirements thereof. 71
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| 2023 PROXY STATEMENT |
| EXECUTIVE COMPENSATION DISCUSSION AND ANALYSIS
COMPENSATION-RELATED RISK |
Annually, the Remuneration Committee, in consultation with management, conducts a review of the Company's compensation plans and practices with respect to risk. To aid in this review, the Remuneration Committee consulted with Meridian, the Committee’s independent compensation consultant, to identify risk aggravators and mitigating factors, particularly in the incentive plans offered to management personnel, and opine whether such factors are reasonably likely to incentivize employees to take risks that could have a material adverse effect on the Company. In considering Meridian’s analysis and its own discussions, with and without management present, the Remuneration Committee concluded that the Company’s compensation plans and practices are not reasonably likely to incentivize employees to take risks that could have a material adverse effect on the Company. The reasons for concluding that Luxfer’s compensation plans and practices do not create material risk for Luxfer include that the Company (i) implements risk mitigation mechanisms; specifically, it utilizes short (one-year) performance periods, measures performance at a group-wide level, considers discretionary individual performance factors, and utilizes the Remuneration Committee to oversee awards to executives and employees; (ii) sufficiently monitors the appropriateness of the compensation and benefit plans that are available to Luxfer's executives and employees; and (iii) leverages the expertise of third party advisors, such as Meridian, where necessary to ensure that Luxfer’s compensation and deferred compensation programs are appropriate when compared to market. As there has been no change to the compensation plans and practices in 2021, the Remuneration Committee is still of the opinion that Luxfer’s compensation plans and practices are not reasonably likely to incentivize employees to take risks that could have a material adverse effect on the Company for the reasons stated above.
| TERMINATION AND CHANGE IN CONTROL |
TheCertain of the Named Executive Officers are party to employment agreementscontracts with Luxfer Holdings PLC or one of its subsidiaries. As per the Company’s normal practice, the CEO and CFO are subject to employment contracts, and UK-based executives are subject to employment contracts as required by local law. Accordingly, Andy Butcher, Stephen Webster, and Graham Wardlow are subject to employment contracts. Each employment agreementcontract contains provisions regarding the termination of such Executive’sexecutive’s employment and the Company'sCompany’s related severance obligations.
If Luxfer terminates an Executive who is party to an employment agreement for “Cause”, Luxfer will pay the Executive all accrued and unpaid base salary and any accrued and unpaid benefits, such as vacation, through the date of termination, after which Luxfer will have no further obligation under the employment agreement to the Executive, unless specified by further written agreement.
If the employment of the Executive who is party to an employment agreement terminates due to their death or disability, the Executive or their estate will receive all accrued and unpaid base salary and any accrued and unpaid benefits, such as vacation, through the date of death or disability, after which all right to benefits will terminate and Luxfer will have no further obligation to the Executive or their estate under the employment agreement.
The employment agreements contain various notice periods, which are applicable to both the Executive and the Company,obligations, including in the event either party wishes to terminate the Executive’s employmentof termination for reasons other than “Cause,” “Good Reason,” disability, or death. IfCause and in connection with a Change in Control. 7
Termination Arrangements Andy Butcher.In the event Mr. Butcher’s employment is terminated by the Company for reasons other than Cause, Mr. Butcher is eligible to receive (i) a severance payment equal to twelve (12) months’ base salary at the annualized rate in effect on the effective date of termination; (ii) a payment equal to the actual cash incentive earned for the fiscal year in which Mr. Butcher’s employment terminates, as determined in accordance with the Executive resigns without “Good Reason,” Luxfer will payIncentive Compensation Plan then in effect; however, if the Executive all accrued and unpaid base salary and any accrued and unpaid benefits, suchactual cash incentive earned has not been determined as vacation, throughof the effective date of termination, (typically beingthen the last day of the notice period), after which Luxfercash incentive will have no further obligation under the employment agreement to the Executive, unless specified by further written agreement. If the Executive provides written notice of resignation,be paid at Target level and such resignation is without “Good Reason,” the Company reserves the right to terminate the Executive’s employment, at any time, prior to the expiration of the notice period. In such event, Luxfer will (i) pay the Executive the Executive’s gross base salary (less such tax and other sums as may be lawfully deducted) for the notice period or remaining balance thereof; (ii) pay the Executive a cash payment equal to the Executive’s annual non-equity incentive compensation at Budget, as pro-ratedprorated to reflect actual dates of service during the fiscal year; (iii) in lieu of notice, a severance payment representing Mr. Butcher’s cash incentive for the 12-month notice period, which will be paid at the Target level; (iv) immediate vesting of all outstanding, unvested time-based equity awards; and (v) immediate vesting of any earned and outstanding performance-based equity awards that are scheduled to vest in the twelve (12) month period following the effective date of termination. Stephen Webster.Mr. Webster will continue to receive the compensation and benefits detailed in his employment contract through the end of the 12-month notice period (the “Notice Period”), provided the Company does not exercise its right of payment in lieu of notice. Specifically, Mr. Webster will continue to earn a cash incentive during the Notice Period, and any outstanding equity awards will continue to vest during the Notice Period, in accordance with the applicable vesting schedule. If, as of the termination date, the actual cash incentive earned for the fiscal year has not been determined because the relevant performance period remains ongoing, Mr. Webster’s cash incentive for the fiscal year in which his employment terminates will be paid at Target level and pro-rated to reflect actual dates of service, including the Notice Period, during said fiscal year. Except in the event of termination for Cause or a Change in Control, the Company reserves the right, in lieu of notice and without giving any remainingreason, to (i) pay Mr. Webster his gross salary (less such tax and national insurance, and any pension contributions, as may be properly deductible) for the Notice Period or outstanding balance thereof; (ii) pay Mr. Webster a cash incentive for the fiscal year in which his employment terminates, which shall be the actual cash incentive earned for said fiscal year, or, if the actual cash incentive has not been determined because the relevant performance period remains ongoing, the cash incentive at Target level and pro-rated to reflect actual dates of service, including the notice period;Notice Period, during said fiscal year; and (iii) immediately vest any unvested, and outstanding, time-based equity awards that would have become vested during the Notice Period or balance thereof. Graham Wardlow.Mr. Wardlow will continue to receive the compensation and benefits detailed in his employment contract through the end of the 12-monthnotice period. Performance-basedperiod (the “Notice Period”), provided the Company does not exercise its right of payment in lieu of notice. Specifically, Mr. Wardlow will continue to earn a cash incentive during the Notice Period, and any outstanding equity awards are treatedwill continue to vest during the Notice Period, in accordance with the Remuneration Policyapplicable vesting schedule. If, as of the termination date, the actual cash incentive earned for the fiscal year has not been paid, Mr. Wardlow is not entitled to any separate cash incentive for the fiscal year in which his employment terminates. Except in the event of termination for Cause or a Change in Control, the Company reserves the right, in lieu of notice and without giving any reason, to pay Mr. Wardlow his gross salary (less such tax and national insurance, and any pension contributions, as may be properly deductible) for the Notice Period or outstanding balance thereof, without any further liability on the part of the Company. Outstanding equity awards as of the termination date are handled in accordance with the rules of the Long-Term Umbrella Incentive Plan. Following paymentLTIP, which provide that, except in the event of termination for Cause and subject to the Remuneration Committee’s discretion, (i) the portion of any time-based option that has not become vested or exercisable as of the foregoing, Luxferdate of such termination shall immediately lapse and (ii) any performance-based option shall vest in accordance with the rules of the LTIP, which considers performance as of the termination date and the total and elapsed number of days in the performance period. The portion of any option that is or becomes vested or exercisable as of the date of termination will have no further obligationlapse on the first anniversary of the date of termination to the Executive underextent not theretofore exercised. In the event of termination for Cause, all options, whether then vested or exercisable or not, shall immediately lapse on such termination. Ifcontracts were voluntarily terminated in accordance with their terms, and therefore the employmenttriggering event is not assumed to have occurred on the last business day of the Executive whoCompany’s last completed fiscal year, an analysis of their employment contracts is party to annot provided herein.
72
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| 2023 PROXY STATEMENT |
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Change in Control Arrangements Andy Butcher.If Mr. Butcher’s employment agreement is terminated by the Companyin connection with a Change in Control (other than for any reason other than death, disability, or Cause, the ExecutiveCause) and Mr. Butcher does not receive an offer of employment for an Equivalent Position with a Successor, then Mr. Butcher will be entitledeligible to receive (i) a cash severanceredundancy payment equal to 12 months of the Executive’s annualtwo times his base salary at the timeannualized rate in effect on the effective date of termination; (ii) a cash payment equal to the Executive’s annual non-equityactual cash incentive compensationearned for the fiscal year in which employment terminates, as determined in accordance with the Executive Incentive Compensation Plan then in effect; however, if the actual cash incentive earned has not been determined as of the effective date of the termination, then the cash incentive will be paid at Budget; andthe Target level; (iii) immediate vesting of anyall outstanding, unvested and outstanding, time-basedtime-based equity awards. Performance-based awards, are treatedwhich may be settled in cash or shares in accordance with the Remuneration Policyrules of the LTIP; and (iv) immediate vesting of any performance-based equity awards, which may be settled in cash or shares and which amount shall be calculated in accordance with the rules of the Long-Term Umbrella Incentive Plan. The foregoing severance benefits are subjectLTIP. Subject to the Executive entering intoRemuneration Committee’s discretion, the formula set forth in the LTIP considers performance as of the termination date and not revokingthe total and elapsed number of days in the performance period. Stephen Webster.If Mr. Webster’s employment is terminated in connection with a release of claimsChange in favor of LuxferControl and its affiliated entities. | | 69 | |
EXECUTIVE COMPENSATION DISCUSSION AND ANALYSIS
Upon a “Change in Control” of Luxfer, and provided the ExecutiveMr. Webster does not receive an offer of employment offer fromfor an Equivalent Position with a Successor, then Mr. Webster will be eligible to receive (i) a redundancy payment equal to two times his base salary at the controlling entityannualized rate in effect on the termination date; (ii) a payment equal to the actual cash incentive earned for the year in which his employment terminates, as determined in accordance with the Executive Incentive Compensation Plan then in effect; however, if the actual cash incentive earned has not been determined as of a similar nature on terms no less favorable than thosethe termination date because the relevant performance period remains ongoing, then the cash incentive will be paid at Target level; (iii) immediate vesting of all outstanding, unvested time-based equity awards, which may be settled in cash or shares in accordance with the rules of the LTIP; and (iv) immediate vesting of any performance-based equity awards, which may be settled in cash or shares and which amount shall be calculated in accordance with the rules of the LTIP. Subject to the Remuneration Committee’s discretion, the formula set forth in the employment agreement, Luxfer will pay the Executive a severance payment consisting of (i) two times the highest basic annual salaryLTIP considers performance as of the Executivetermination date and (ii) the Executive’s annual non-equity incentivetotal and elapsed number of days in the performance period.
Graham Wardlow.If Mr. Wardlow’s employment is terminated in connection with a Change in Control and Mr. Wardlow receives an offer of employment for an Equivalent Position with a Successor, then Mr. Wardlow has no claim for compensation at Budget,against the Company. Mr. Wardlow’s employment contract does not provide for a particular compensation package upon a Change in Control, and any amounts paid to him in such event would be subject to negotiated agreement with the applicable fiscal year. Outstanding, but unvested, time-basedCompany or the outcome of any claim brought by him against the Company. Upon a Change in Control, equity awards will vest immediately, while performance-based awards willshall be treatedhandled in accordance with the Remuneration Policy andrules of the LTIP, which provide that all outstanding awards shall become immediately vested. In the case of outstanding performance-based awards, the amount shall be calculated in accordance with the rules of the Long-Term Umbrella Incentive Plan. Following paymentLTIP. Subject to the Remuneration Committee’s discretion, the formula set forth in the LTIP considers performance as of the foregoing, Luxfer will have no further obligation undertermination date and the employment agreement tototal and elapsed number of days in the Executive.performance period. 73
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| 2023 PROXY STATEMENT |
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The table below summarizes the total payout to each of the Named Executive Officers subject to an employment agreementcontract in the event of termination by the Company for reasons other than death, disability, or Cause, as well as termination followingin connection with a Change in Control. The following payouts were | Termination for Reasons
other than Cause | | Termination in connection with
Change in Control | Name and
Principal
Position | Salary
Payment
(US$) | Cash
Incentive
Payment
(US$) | Outstanding
or Unvested
Equity
Awards
(US$) | Total
Payout
(US$) | | Salary
Payment
(US$) | Cash
Incentive
Payment
(US$) | Outstanding
or Unvested
Equity
Awards
(US$) | Total
Payout
(US$) | Andy
Butcher Chief
Executive
Officer | 615,000 | 554,250 (1) | 546,456 | 1,715,706 | | 1,230,000 | 554,250 (1) | 668,873 | 2,453,123 | Stephen Webster Chief
Financial
Officer (2) | 246,660 (3) | 123,330 (4) | 44,926 | 414,916 | | 493,320 | 123,330 (4) | 141,520 | 758,170 | Graham Wardlow Managing Director, Luxfer MEL Technologies (2) | 258,993 (3) | – | 12,669 | 271,662 | | – | – | 190,108 | 190,108 |
74
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| 2023 PROXY STATEMENT |
| Name and
Principal Position | Termination for Reasons other than Death, Disability, or Cause | | Termination following Change in Control | Salary Payment (US$) | Non-Equity Incentive Compensation Payment (US$) | Outstanding or Unvested Time- Based Awards (US$) | Total Payout (US$) | | Salary Severance Payment (US$) | Non-Equity Incentive Compensation Payment (US$) | Outstanding or Unvested Time- Based Awards (US$) | Total Payout (US$) | Alok Maskara Former Chief Executive Officer | 715,000 | 715,000 | 1,669,231 | 3,099,231 | | 1,430,000 | 715,000 | 1,669,231 | 3,814,231 | Heather Harding Former Chief Financial Officer | 365,000 | 237,250 | 466,813 | 1,069,063 | | 730,000 | 237,250 | 466,813 | 1,434,063 | Andy Butcher Chief Executive Officer | 362,000 | 181,000 | 350,765 | 893,765 | | 724,000 | 181,000 | 350,765 | 1,255,765 | Graham Wardlow Managing Director, Luxfer MEL Technologies (1) | 275,320 | 110,128 | 208,313 | 593,761 | | 550,640 | 110,128 | 208,313 | 869,081 | Stephen Webster Chief Financial Officer (1) | 206,490 | 51,623 | 132,473 | 390,586 | | 412,980 | 51,623 | 132,473 | 597,076 |
| (1) | Graham Wardlow and Stephen Webster are employed in the United Kingdom and paid in GBP sterling. The foregoing payouts have been translated into U.S. dollars at the following average exchange rate for 2021: £1: US$1.3766. |
EXECUTIVE COMPENSATION DISCUSSION AND ANALYSIS TABLES EXECUTIVE COMPENSATION TABLES
SUMMARY COMPENSATION TABLE |
The table below summarizes the total compensation paid to or earned by each of the Named Executive Officers for the years ended December 31, 2022, 2021, and 2020. (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | Name and Principal
Position | Year | Salary
(US$) (1) | Annual
Bonus
(US$) | Annual
Equity
Awards
(US$) (2) | Option
Awards
(US$) | Annual Cash
Incentive
(US$) (3) | Change in
Pension Value
and Non-
Qualified
Deferred
Compensation
Earnings (US$) | All Other
Compensation
(US$) (4) | Total
Compensation
(US$) | Andy Butcher
Chief Executive Officer | 2022 | 554,250 | – | 1,542,944 | – | 196,759 | – | 54,263 | 2,348,216 | 2021 | 362,000 | – | 215,073 | – | 347,520 | – | 41,967 | 966,560 | 2020 | 352,254 | – | 193,200 | – | 72,400 | – | 36,165 | 654,019 | Stephen Webster (5)
Chief Financial Officer | 2022 | 246,660 | – | 280,760 | – | 43,782 | – | 47,825 | 619,027 | 2021 | 203,737 | – | 64,288 | – | 93,375 | – | 34,856 | 396,256 | 2020 | 181,930 | – | 33,660 | – | 32,915 | – | 31,605 | 280,110 | Peter Gibbons
Vice President & GM,
Luxfer Graphic Arts | 2022 | 195,000 | – | 106,600 | – | – | – | 36,575 | 338,175 | 2021 | 150,000 | – | 48,216 | – | 22,500 | – | 80,912 | 301,628 | 2020 | 150,000 | – | 53,408 | – | 28,720 | – | 77,137 | 309,265 | Jeffrey Moorefield
Vice President & GM,
Luxfer Magtech | 2022 | 206,000 | – | 106,600 | – | – | – | 33,657 | 346,257 | 2021 | 200,000 | – | – | – | 143,104 | – | 32,000 | 375,104 | 2020 | 195,000 | – | 107,341 | – | – | – | 35,066 | 337,407 | Graham Wardlow (5)
Managing Director,
Luxfer MEL
Technologies | 2022 | 258,993 | – | 280,760 | – | 191,999 | – | 86,747 | 818,499 | 2021 | 275,320 | – | 143,383 | – | 72,068 | – | 87,145 | 577,916 | 2020 | 235,314 | – | 128,297 | – | 48,640 | – | 77,759 | 490,010 | Alok Maskara
Former Chief Executive Officer | 2022 | 306,667 | – | 1,464,000 | – | 306,667 | – | 93,334 | 2,170,667 | 2021 | 715,000 | – | 1,075,368 | – | 1,330,615 | – | 218,750 | 3,339,733 | 2020 | 657,000 | – | 833,764 | – | 337,500 | – | 205,480 | 2,033,744 | Heather Harding
Former Chief Financial Officer | 2022 | 125,000 | – | – | – | 81,250 | – | 9,717 | 215,967 | 2021 | 365,000 | – | 304,687 | – | 441,522 | – | 41,000 | 1,152,209 | 2020 | 314,167 | – | 232,648 | – | 97,500 | – | 36,500 | 680,815 |
75 SUMMARY COMPENSATION TABLE |
| (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | Name and Principal
Position | Year | Salary (US$)(1) | Annual Bonus (US$) | Annual LTIP Stock Awards (US$)(2) | Option Awards (US$) | Non-Equity Incentive Compensation (US$)(3) | Change in
Pension Value
and Non-Qualified
Deferred
Compensation
Earnings (US$) | All Other Compensation (US$)(4) | Total Compensation (US$) | Alok Maskara Former Chief Executive Officer | 2021 | 715,000 | — | 1,075,368 | — | 1,330,615 | — | 218,750 | 3,339,733 | | 2020 | 657,000 | — | 833,764 | — | 337,500 | — | 205,480 | 2,033,744 | | 2019 | 675,000 | — | 940,729 | — | 405,711 | — | 208,750 | 2,230,190 | Heather Harding Former Chief Financial Officer | 2021 | 365,000 | — | 304,687 | — | 441,522 | — | 41,000 | 1,152,209 | | 2020 | 314,167 | — | 232,648 | — | 97,500 | — | 36,500 | 680,815 | | 2019 | 325,000 | — | 248,495 | — | 117,234 | — | 36,800 | 727,529 | Andy Butcher Chief Executive Officer | 2021 | 362,000 | — | 215,073 | — | 347,520 | — | 41,967 | 966,560 | | 2020 | 352,254 | — | 193,200 | — | 72,400 | — | 36,165 | 654,019 | | 2019 | 362,000 | — | 195,245 | — | 142,483 | — | 38,148 | 737,876 | Graham Wardlow (5)
Managing Director, Luxfer MEL Technologies | 2021 | 275,320 | — | 143,383 | — | 72,068 | — | 87,145 | 577,916 | | 2020 | 235,314 | — | 128,297 | — | 48,640 | — | 77,759 | 490,010 | | 2019 | 242,972 | — | 141,997 | — | 43,735 | — | 79,733 | 508,437 | Stephen Webster (5) Chief Financial Officer | 2021 | 203,737 | — | 64,288 | — | 93,375 | — | 34,856 | 396,256 | | 2020 | 181,930 | — | 33,660 | — | 32,915 | — | 31,605 | 280,110 | | 2019 | 172,638 | — | 66,630 | — | 63,838 | — | 31,675 | 334,781 |
| (1)
| Actual base salary paid to most Named Executive Officers in 2020 was lower due to the impact of COVID-related furloughs and voluntary pay reductions. |
2023 PROXY STATEMENT | (2) | The amounts in column (e) represent the aggregate grant date fair value, computed in accordance with Accounting Standards Codification (ASC) 718, of restricted stock units or options granted during each year under the LTIP. |
| (3) | The amounts in column (g) with respect to 2021 reflect cash bonuses awarded to the Named Executive Officers under the Luxfer Holdings Senior Leadership Bonus Plan, with final payouts approved by the Committee at its March 2022 meeting and paid shortly thereafter. |
| (4) | The table below shows the components of column (i) for 2021, which includes perquisites; auto allowances; other personal benefits; and Luxfer contributions under the 401(k) Savings Plan, the U.S. Employee Stock Purchase Plan (the “ESPP”), and the U.K. Share Incentive Plan (the “SIP”): |
| | (A) | (B) | (C) | (D) | (E) | (F) | | Name | Executive
Perquisites Package
(US$) | Auto
Allowance
(US$) | Other Perquisites
and Personal
Benefits (US$) | Contributions Under
Defined Contribution
Plan (US$) (d) | Contributions
Under the ESPP
or SIP (US$) | Total All Other
Compensation
(US$) | | Alok Maskara | 40,000 (a) | — | 157,750 (b) | 21,000 | — | 218,750 | | Heather Harding | 20,000 | — | — | 21,000 | — | 41,000 | | Andy Butcher | 20,000 | — | — | 21,000 | 967 | 41,967 | | Graham Wardlow | 20,649 | — | 65,372 (c) | — | 1,124 | 87,145 | | Stephen Webster | — | 12,389 | 4,167 | 17,176 (e) | 1,124 | 34,856 |
| | | | | (a) | Alok Maskara is given a paid allowance to cover personal automotive costs and other perquisites. Per his employment agreement, this amount is US$40,000 per annum and is included in column (A). |
| | 71 | |
| | (A) | (B) | (C) | (D) | (E) | (F) | Name | Executive
Perquisites
Package
(US$) | Auto
Allowance
(US$) | Other
Perquisites and
Personal
Benefits (US$) | Contributions
Under
Defined
Contribution
Plan (US$) (f) | Contributions
Under the ESPP
or SIP (US$) | Total All Other
Compensation
(US$) | | | Andy Butcher | 35,000 (a) | – | – | 18,300 | 963 | 54,263 | Stephen Webster | 24,666 | – | 5,624 (b) | 16,444 | 1,091 | 47,825 | Peter Gibbons | 20,000 | – | 10,081 (c) | 6,494 | – | 36,575 | Jeffrey Moorefield | 20,000 | – | – | 13,657 | – | 33,657 | Graham Wardlow | 24,666 | – | 60,990 (d) | – | 1,091 | 86,747 | Alok Maskara | 16,667 | – | 69,042 (e) | 7,625 | – | 93,334 | Heather Harding | 6,667 | – | – | 3,050 | – | 9,717 |
76
|
| 2023 PROXY STATEMENT |
| EXECUTIVE COMPENSATION DISCUSSION AND ANALYSIS
| (b) | The amount shown in column (C) for Alok Maskara reflects that, in accordance with his employment agreement, he is eligible to receive cash payments to offset the loss of a Supplemental Executive Retirement Plan that he had with his previous employer. This amount represents 25% of Mr. Maskara’s salary for 2021, less the amount of Luxfer contributions of US$21,000 paid into Mr. Maskara’s 401(k) account. |
| (c) | Graham Wardlow is eligible for a monthly compensation adjustment, paid as a fixed percentage of base salary, in lieu of contributions to a U.K. pension scheme. For 2021, this compensation adjustment was valued at the equivalent of US$61,947 at an exchange rate of £1: US$1.3766. This amount, along with other perquisites and personal benefits, are included within column (C). |
| (d) | The individual amounts shown in column (D) for each Named Executive Officer reflects amounts contributed by Luxfer into individual 401(k) or defined contribution accounts. |
| (e) | Stephen Webster is employed in the U.K., and his pension contributions are paid into his individual U.K. pension plan account. |
| (5) | Graham Wardlow and Stephen Webster are employed in the United Kingdom and paid in GBP sterling. Their compensation has been translated into U.S. dollars at the following average exchange rates for each of the years: 2019: £1: US$1.2788, 2020: £1: US$1.2812, and 2021: £1: US$1.3766. |
EXECUTIVE COMPENSATION DISCUSSION AND ANALYSIS
GRANTS OF PLAN-BASED AWARDS IN 20212022 (1) |
| | | Estimated Future Payouts Under
Cash Incentive Plan Awards (2) | Estimated Future Payouts
Under Equity Plan Awards (3) | | | | | | | | | | | | | | | | | | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | (k) | (l) | (m) | Name | Grant
Date | Remuneration
Committee
Approval Date | Threshold
(US$) | Target
(US$) | Maximum
(US$) | Threshold
(#) | Target
(#) | Maximum
(#) | All
other
Stock
Awards:
Number
of
Shares
of
Stock
or Units
(#) (4) | All other
Stock
Awards:
Number
of
Securities
Underlying
Options
(#) (5) | Exercise
or Base
Price of
Option
Awards
(US$/
Sh) | Grant
Date
Fair
Value of
Stock
and
Option
Awards
(US$) (6) | Andy
Butcher | | | | | | | | | | | | | March 14 | March 1 | | | | 1,800 | 3,600 | 7,200 | | | 1.00 | 64,440 | March 14 | March 1 | | | | 2,700 | 5,400 | 10,800 | | | 1.00 | 120,960 | March 14 | March 1 | | | | | | | 6,000 | | 1.00 | 107,400 | May 6 | March 22 | | | | 5,760 | 11,520 | 23,040 | | | 1.00 | 187,200 | May 6 | March 22 | | | | 8,640 | 17,280 | 34,560 | | | 1.00 | 294,624 | May 6 | March 22 | | | | | | | 19,200 | | 1.00 | 312,000 | July 1 | April 18 | | | | | 32,000 | 64,000 | | | 1.00 | 456,320 | | | | 277,125 | 554,250 | 1,108,500 | | | | | | | | Stephen Webster | | | | | | | | | | | | | March 14 | March 1 | | | | 1,200 | 2,400 | 4,800 | | | 1.00 | 42,960 | March 14 | March 1 | | | | 1,800 | 3,600 | 7,200 | | | 1.00 | 80,640 | March 14 | March 1 | | | | | | | | 4,000 | 1.00 | 71,600 | July 1 | April 18 | | | | | 6,000 | 12,000 | | | 1.00 | 85,560 | | | | 61,665 | 123,330 | 246,660 | | | | | | | | Peter Gibbons | | | | | | | | | | | | | March 14 | March 1 | | | | 480 | 960 | 1,920 | | | 1.00 | 17,184 | March 14 | March 1 | | | | 720 | 1,440 | 2,880 | | | 1.00 | 32,256 | March 14 | March 1 | | | | | | | 1,600 | | 1.00 | 28,640 | July 1 | April 18 | | | | | 2,000 | 4,000 | | | 1.00 | 28,520 | | | | 39,000 | 78,000 | 156,000 | | | | | | | | Jeffrey Moorefield | | | | | | | | | | | | | March 14 | March 1 | | | | 480 | 960 | 1,920 | | | 1.00 | 17,184 | March 14 | March 1 | | | | 720 | 1,440 | 2,880 | | | 1.00 | 32,256 | March 14 | March 1 | | | | | | | 1,600 | | 1.00 | 28,640 | July 1 | April 18 | | | | | 2,000 | 4,000 | | | 1.00 | 28,520 | | | | 41,200 | 82,400 | 164,800 | | | | | | | | Graham Wardlow | | | | | | | | | | | | | March 14 | March 1 | | | | 1,200 | 2,400 | 4,800 | | | 1.00 | 42,960 | March 14 | March 1 | | | | 1,800 | 3,600 | 7,200 | | | 1.00 | 80,640 | March 14 | March 1 | | | | | | | | 4,000 | 1.00 | 71,600 | July 1 | April 18 | | | | | 6,000 | 12,000 | | | 1.00 | 85,560 | | | | 51,799 | 103,597 | 207,194 | | | | | | | | Alok Maskara | | | | | | | | | | | | | March 14 | March 1 | | | | 9,000 | 18,000 | 36,000 | | | 1.00 | 322,200 | March 14 | March 1 | | | | 13,500 | 27,000 | 40,500 | | | 1.00 | 604,800 | March 14 | March 1 | | | | | | | 30,000 | | 1.00 | 537,000 |
| | Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards (2) | Estimated Future Payouts Under
Equity Incentive Plan Awards (3) | | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | (k) | (l) | (m) | | Name | Grant Date | Remuneration
Committee
Approval Date | Threshold
(US$) | Budget (US$) | Maximum
(US$) | Threshold
(#) | Budget
(#) | Maximum
(#) | All other
Stock
Awards: Number of
Shares of
Stock or
Units (#)(4) | All other
Stock
Awards: Number of
Securities
Underlying
Options
(#)(5) | Exercise
or Base
Price of
Option
Awards
(US$/Sh) | Grant
Date Fair
Value of
Stock and
Option
Awards (US$)(6) | | Alok Maskara | March 15, 2021 | March 2, 2021 | | | 7,200 | 14,400 | 28,800 | | | 1.00 | 289,296 | | March 15, 2021 | March 2, 2021 | | | 10,800 | 21,600 | 32,400 | | | 1.00 | 303,912 | | March 15, 2021 | March 2, 2021 | | | | 24,000 | | 1.00 | 482,160 | | | | 357,500 | 715,000 | 1,430,000 | | | Heather Harding | March 15, 2021 | March 2, 2021 | | | 2,040 | 4,080 | 8,160 | | | 1.00 | 81,967 | | March 15, 2021 | March 2, 2021 | | | 3,060 | 6,120 | 9,180 | | | 1.00 | 86,108 | | March 15, 2021 | March 2, 2021 | | | | 6,800 | | 1.00 | 136,612 | | | | 118,625 | 237,250 | 474,500 | | | | Andy Butcher | March 15, 2021 | March 2, 2021 | | | 1,440 | 2,880 | 5,760 | | | 1.00 | 57,859 | | March 15, 2021 | March 2, 2021 | | | 2,160 | 4,320 | 6,480 | | | 1.00 | 60,782 | | March 15, 2021 | March 2, 2021 | | | | | | 4,800 | | 1.00 | 96,432 | | | | 90,500 | 181,000 | 362,000 | | | | | | | | Graham Wardlow | March 15, 2021 | March 2, 2021 | | | 960 | 1,920 | 3,840 | | | 1.00 | 38,573 | | March 15, 2021 | March 2, 2021 | | | 1,440 | 2,880 | 4,320 | | | 1.00 | 40,522 | | March 15, 2021 | March 2, 2021 | | | | | 3,200 | 1.00 | 64,288 | | | | 55,064 | 110,128 | 220,256 | | | | | Stephen Webster | March 15, 2021 | March 2, 2021 | | | — | — | — | | | 1.00 | — | | March 15, 2021 | March 2, 2021 | | | — | — | — | | | 1.00 | — | | March 15, 2021 | March 2, 2021 | | | | | 3,200 | 1.00 | 64,288 | | | | 25,811 | 51,623 | 103,245 | | | |
77
| (1)
| The Remuneration Committee’s practices for granting restricted stock units and options, including the timing of grants and approvals thereof, are described in the section entitled “2021 Compensation Program Elements - Long-Term Equity Incentive Awards.” |
2023 PROXY STATEMENT | (2) | The amounts shown in column (d) reflect the Threshold payment for each Named Executive Officer under our non-equity incentive compensation plan. This amount is 50% of the Budget amounts shown in column (e). The amounts shown in column (f) are 200% of the Budget amounts shown in column (e). These amounts are based on the individual’s current annual base salary as in effect on December 1, 2021. |
| (3) | The amounts shown in column (g), (h) and (i) reflect the Threshold, Budget, and Maximum payment levels for performance-based restricted stock units and stock options awarded to each Named Executive Officer in 2021. Performance-based restricted stock units and stock options were granted for two performance measures: adjusted diluted EPS and relative TSR, as described in the section entitled “2021 Compensation Program Elements – Long-Term Equity Incentive Awards.” Of the performance-based awards granted on March 15, 2021, 40% of this award is related to certain adjusted diluted EPS targets and 60% is related to certain TSR targets. The amounts shown in column (g) reflect the total number of awards (including both performance metrics) at the Threshold level for each of the Named Executive Officers. These amounts are 50% of the total number of awards at the Budget level shown in column (h). The amounts shown in column (i) reflect the total number of awards at 200% of the Budget level for the adjusted diluted EPS awards and 150% of the Budget level for the TSR awards. The award amounts were based on the individual’s annual base salary at the time of the Remuneration Committee's approval in March 2021. The adjusted diluted EPS performance metrics for the year ending December 31, 2021 ranged from: US$1.00 earnings per share at Threshold to US$1.24 or higher earnings per share at Maximum. |
| | 73
| | |
78
|
| 2023 PROXY STATEMENT |
| EXECUTIVE COMPENSATION DISCUSSION AND ANALYSIS
| (4) | All other award amounts in column (j) reflect the 40% time-based awards made in 2021, as further described in the section entitled “2021 Compensation Program Elements – Long-Term Equity Incentive Awards.” |
| (5) | Graham Wardlow and Stephen Webster are employed in the U.K. and received time-based stock options with respect to their 40% time-based award entitlement for 2021, as shown in column (k). These awards vest equally over a four-year period from the anniversary of grant date, and have an option cost equivalent to the nominal value, as detailed in the section entitled “2021 Compensation Program Elements - Long-Term Equity Incentive Awards.” |
| (6) | The amounts shown in column (m) reflect the grant date fair value of the awards of restricted stock units, performance share units, and stock options computed in accordance with ASC 718. |
EXECUTIVE COMPENSATION DISCUSSION AND ANALYSIS
OUTSTANDING EQUITY AWARDS AT DECEMBER 31, 2021 2022 |
| Option Awards | | Stock Awards | Name | Number of
securities
underlying
unexercised
options
(#)
Exercisable | Number of
securities
underlying
unexercised
options (#)
Un-
exercisable | Equity
Incentive
Plan
Awards:
Number of
securities
underlying
unexercised
unearned
options (#) | Option
Exercise
(US$) | Option
Expiration Date | | Number of
shares of
stock or
units that
have not
vested
(#) (1) | Market value
of shares of
stock or
units that
have not
vested
(US$) (2) | Equity
Incentive
Plan Awards:
Number of
unearned
shares that
have not
vested (#) (3) | Equity
Incentive Plan
Awards:
Market payout
value of
unearned
shares that
have not
vested (#) (4) | Andy Butcher | | | | | | | 41,349 | 525,959 | | | 2020 | | | | | | | | | 3,485 | 44,329 | 2021 | | | | | | | | | 2,160 | 27,475 | 2022 | | | | | | | | | 37,688 | 479,391 | Stephen Webster | | | | | | | | | | | 2019 | – | 846 | – | 1.00 | March 14, 2025 | | | | | | 2020 | – | 1,640 | – | 1.00 | March 13, 2026 | | | | | | 2021 | – | 2,522 | – | 1.00 | March 15, 2027 | | | | | | 2022 | – | 4,101 | 9,792 | 1.00 | March 15, 2028 | | | | | | Peter Gibbons | | | | | | | 5,488 | 69,807 | | | 2020 | | | | | | | | | 965 | 12,275 | 2021 | | | | | | | | | – | – | 2022 | | | | | | | | | 3,517 | 44,734 | Jeffrey
Moorefield | | | | | | | 5,157 | 65,597 | | | 2020 | | | | | | | | | 1,935 | 24,613 | 2021 | | | | | | | | | – | – | 2022 | | | | | | | | | 3,517 | 44,734 | Graham Wardlow | | | | | | | | | | | 2019 | – | 903 | – | 1.00 | March 14, 2025 | | | | | | 2020 | 15 | 2,796 | 2,315 | 1.00 | March 13, 2026 | | | | | | 2021 | – | 2,522 | 1,440 | 1.00 | March 15, 2027 | | | | | | 2022 | – | 4,101 | 9,792 | 1.00 | March 15, 2028 | | | | | |
| Name | Option Awards | | Stock Awards | Number of securities underlying unexercised options (#) Exercisable | Number of securities underlying unexercised options (#) Un-exercisable | Equity Incentive plan awards: Number of securities underlying unexercised unearned options (#) | Option exercise (US$) | Option
Expiration
date | | Number of shares of stock or units that have not vested
(#)(1) | Market value of shares of stock or units that have not vested (US$)(2) | Equity incentive plan awards: Number of unearned shares that have not vested (#)(3) | Equity incentive plan awards: Market payout value of unearned shares that have not vested (#)(4) | | Alok Maskara | | | | | | | 91,165 | 1,669,231 | | | | 2019 | | | | | | | | | 9,540 | 174,677 | | 2020 | | | | | | | | | 15,030 | 275,199 | | 2021 | | | | | | | | | 10,800 | 197,748 | | Heather Harding | | | | | | | 25,495 | 466,813 | | | | 2019 | | | | | | | | | 2,520 | 46,141 | | 2020 | | | | | | | | | 4,195 | 76,810 | | 2021 | | | | | | | | | 3,060 | 56,029 | | Andy Butcher | | | | | | | 19,157 | 350,765 | | | | 2019 | | | | | | | | | 1,980 | 36,254 | | 2020 | | | | | | | | | 3,485 | 63,810 | | 2021 | | | | | | | | | 2,160 | 39,550 | | Graham Wardlow | | | | | | | | | | | | 2019 | | 1,734 | | 1.00 | March 14, 2025 | | | | | | | 2020 | | 4,069 | 2,315 | 1.00 | March 13, 2026 | | | | | | | 2021 | | 7,096 | 1,440 | 1.00 | March 15, 2027 | | | | | | | Stephen Webster | | | | | | | | | | | | 2019 | 808 | 1,616 | | 1.00 | March 14, 2025 | | | | | | | 2020 | 787 | 2,363 | | 1.00 | March 13, 2026 | | | | | | | 2021 | | 3,256 | | 1.00 | March 15, 2027 | | | | | |
(1) The grant dates and number of restricted stock units remaining from these grants which have not yet vested are as follows: | (1)Name | The grant dates and number of restricted stock units remaining from these grants which have not yet vested are as follows: |
Name | Grant Date | Number of Restricted Stock Units Remaining | | Alok Maskara | Andy Butcher | March 14, 2019 | 11,497 1,223 (a) | | | March 13, 2020 | 26,440 4,180 (b) | | March 15, 2021 | 24,428 3,750 (c) | | March 15, 2021 | 28,800 5,760 (d) | Heather Harding | March 14, 2022 | 7,085 (e) | | May 6, 2022 | 19,351 (f) | Peter Gibbons | March 14, 2019 | 3,037 833 (a) | | March 13, 2020 | 7,377 1,156 (b) | | March 15, 2021 | 6,921 1,875 (c) | | March 15, 202114, 2022 | 8,160 (d)1,624 (e) | Andy ButcherJeffrey Moorefield | March 14, 2019 | 2,385 670 (a) | | March 13, 2020 | 6,127 2,323(b) | | March 15, 202114, 2022 | 4,885 (c)2,164 (e) |
79
|
| 2023 PROXY STATEMENT | March 15, 2021
| | 5,760 (d) |
| (a) | These awards were granted on March 14, 2019 and include “holding period” and “clawback” provisions. These awards represent the 40% time-based element of the target award, at Budget, allotted for 2019. Time-based restricted stock units accumulate additional restricted stock units when the Company pays a dividend. Shares underlying the total amount of restricted stock units are then issued when the restricted stock units vest. The award will vest evenly in four equal amountsdividend. Shares underlying the total amount of restricted stock units are then issued when the restricted stock units vest. The award will vest evenly in four equal installments on the first four anniversaries of the grant date. |
| | 75 | |
EXECUTIVE COMPENSATION DISCUSSION AND ANALYSIS
| (b) | These awards were granted on March 13, 2020 and include “holding period” and “clawback” provisions. These awards represent the 40% time-based element of the target award, at Budget, allotted for 2020. Time-based restricted stock units accumulate additional restricted stock units when the Company pays a dividend. Shares underlying the total amount of restricted stock units are then issued when the restricted stock units vest. The award will vest evenly in four equal amounts(b) These awards were granted on March 13, 2020 and include “holding period” and “clawback” provisions. These awards represent the 40% time-based element of the award, at Target, allotted for 2020. Time-based restricted stock units accumulate additional restricted stock units when the Company pays a dividend. Shares underlying the total amount of restricted stock units are then issued when the restricted stock units vest. The award will vest evenly in four equal installments on the first four anniversaries of the grant date. |
| (c) | These awards were granted on March 15, 2021 and include “holding period” and “clawback” provisions. These awards represent the 40% time-based element of the target award, at Budget, allotted for 2021. Time-based restricted stock units accumulate additional restricted stock units when the Company pays a dividend. Shares underlying the total amount of restricted stock units are then issued when the restricted stock units vest. The award will vest evenly in four equal amounts on the first four anniversaries of the grant date. |
| (d) | These awards were granted on March 15, 2021 and include “holding period” and “clawback” provisions. These awards represent the adjusted diluted EPS performance element of the award allotted for 2021 as shown in the “Grants of Plan-Based Awards in 2021” table on page 73. Based on the financial performance of Luxfer for the year ended December 31, 2021 and an adjusted diluted EPS of US$1.29, the Maximum level of awards associated with this performance metric has been achieved. As a result, these performance-based awards will vest in equal amounts on March 15, 2023, March 14, 2024, and March 15, 2025. |
(2) | The amounts in this column were calculated by multiplying the closing market price of our ordinary shares on the last trading day of our most recently completed fiscal year, which was US$19.31, less the issue cost of $1.00 per share, by the number of unvested restricted stock units. |
(3) | For the 2019 TSR awards, the number of performance share units shown in this column reflects the Threshold performance level, given relative total shareholder return at the end of the measurement period ended December 31, 2021 was at Threshold. |
80 (4)
| The amounts in this column were calculated by multiplying the closing market price of our ordinary shares on the last trading day of our most recently completed fiscal year, which was US$19.31, less the issue cost of $1.00 per share, by the number of unearned performance-based share awards that have not vested. The following table shows the number of unearned performance-based
| 2023 PROXY STATEMENT |
| | |
|
| Name | Vesting Date | Number of
Performance Share
Units or Options | Name | Vesting Date | Number of
Performance Share
Units or Options | | Alok Maskara | March 14, 2022 | 4,770 | Andy Butcher | March 14, 2022 | 990 | | | March 13, 2023 | 7,515 | | March 13, 2023 | 1,743 | | March 14, 2023 | 4,770 | | March 14, 2023 | 990 | | March 13, 2024 | 7,515 | | March 13, 2024 | 1,743 | | March 15, 2024 | 5,400 | | March 15, 2024 | 1,080 | | March 15, 2025 | 5,400 | | March 15, 2025 | 1,080 | | Heather Harding | March 14, 2022 | 1,260 | Graham Wardlow (a) | March 14, 2022 | 720 | | March 13, 2023 | 2,098 | | March 13, 2023 | 1,158 | | March 14, 2023 | 1,260 | | March 14, 2023 | 720 | | March 13, 2024 | 2,098 | | March 13, 2024 | 1,158 | | March 15, 2024 | 1,530 | | March 15, 2024 | 720 | | March 15, 2025 | 1,530 | | March 15, 2025 | 720 |
| (a)Name | As Graham Wardlow is a U.K.-based employee, he receives awards in the formVesting Date | Number of stock options, which expire two years following the final vesting date of a specific stock option award. |
Performance Share
Units or Options | | Andy Butcher | 2022 Proxy Statement 76March 13, 2023 | 1,742 | | March 13, 2024 | 1,743 | | March 15, 2024 | 1,080 | | March 15, 2025 | 5,418 | | March 14, 2026 | 32,000 | | March 15, 2026 | 1,350 | Stephen Webster (a) | March 13, 2023 | – | | March 13, 2024 | – | | March 15, 2024 | – | | March 15, 2025 | 2,892 | | March 14, 2026 | 6,000 | | March 15, 2026 | 900 | Peter Gibbons | March 13, 2023 | 482 | | March 13, 2024 | 483 | | March 15, 2024 | – | | March 15, 2025 | 1,157 | | March 14, 2026 | 2,000 | | March 15, 2026 | 360 | Jeffrey Moorefield | March 13, 2023 | 967 | | March 13, 2024 | 968 | | March 15, 2024 | – | | March 15, 2025 | 1,157 | | March 14, 2026 | 2,000 | | March 15, 2026 | 360 | Graham Wardlow (a) | March 13, 2023 | 1,157 | | March 13, 2024 | 1,158 | | March 15, 2024 | 720 | | March 15, 2025 | 3,612 | | March 14, 2026 | 6,000 | | March 15, 2026 | 900 | Alok Maskara | March 13, 2023 | – | | March 13, 2024 | – | | March 15, 2024 | – | | March 15, 2025 | – | | March 14, 2026 | – | | March 15, 2026 | – | Heather Harding | March 13, 2023 | – | | March 13, 2024 | – | | March 15, 2024 | – | | March 15, 2025 | – | | March 14, 2026 | – | | March 15, 2026 | – |
81 EXECUTIVE COMPENSATION DISCUSSION AND ANALYSIS
|
| 2023 PROXY STATEMENT |
| | |
20212022 OPTION EXERCISES AND STOCK VESTED TABLE |
The following table shows a summary of the stock options exercised by the Named Executive Officers in 20212022 and the restricted stock or restricted stock units vested for the Named Executive Officers during 2021.2022. Name | Option awards | | Stock awards | Number of shares
acquired on exercise (#) | Value realized on
exercise (US$) (1) | | Number of shares
acquired on vesting | Value realized on
vesting (US$) (2) | Andy Butcher | – | – | | 2,508 | 48,588 | Stephen Webster | 3,107 | 49,462 | | – | – | Peter Gibbons | – | – | | 1,332 | 25,738 | Jeffrey Moorefield | – | – | | 4,110 | 79,843 | Graham Wardlow | 1,827 | 30,109 | | – | – | Alok Maskara | – | – | | 41,608 | 718,748 | Heather Harding | – | – | | 3,761 | 72,807 |
| Name | Option awards | | Stock awards | Number of shares
acquired on exercise (#) | Value realized on
exercise (US$) (1) | | Number of shares
acquired on vesting (#) | Value realized on
vesting (US$) (2) | | Alok Maskara | — | — | | 50,743 | 1,058,757 | | Heather Harding | — | — | | 13,606 | 267,949 | | Andy Butcher | — | — | | 10,020 | 205,440 | | Graham Wardlow | 7,635 | 158,259 | | — | — | | Stephen Webster | 921 | 17,872 | | — | — |
(1) Reflects the amount of shares acquired on exercise at the share price on the date of exercise. The number of shares acquired is after the forfeiture of shares to cover option cost and taxes due. (2) Reflects the amount of shares acquired on vesting of the restricted stock units at the share price on the date of vesting. The number of shares acquired is after the forfeiture of shares to cover issue cost and taxes due. In addition, restricted stock units carry with them the right to receive accumulated dividends, in shares, during the period of the award. The dividends are not credited until the award vests. The value realized on vesting includes the vesting of the required portion of these dividend shares. (1) | Reflects the amount of shares acquired on exercise at the share price on the date of exercise. The number of shares acquired is after the forfeiture of shares to cover option cost and taxes due. |
(2) | Reflects the amount of shares acquired on vesting of the restricted stock units at the share price on the date of vesting. The number of shares acquired is after the forfeiture of shares to cover issue cost and taxes due. In addition, restricted stock units carry with them the right to receive accumulated dividends, in shares, during the period of the award. The dividends are not credited until the award vests. The value realized on vesting includes the vesting of the required portion of these dividend shares. |
Luxfer’s pension plans, the Luxfer Group Pension Plan and the Luxfer Group Supplementary Pension Plan (“Salaried Pension Plans”), were closed to new participants in 1998 but remained open for accrual of future benefits based on career-averagecareer-average salary until April 5, 2016. The Salaried Pension Plans are now frozen. Participants in the Salaried Pension Plans no longer earn additional credited service, and changes in salary for a participant are not considered in determining pension benefits. The Salaried Pension Plans were frozen consistent with contemporary benefit practices. The Named Executive Officers who were employed by Luxfer on or before 1998 participate on the same basis as other salaried employees in the non-contributorynon-contributory Salaried Pension Plans. Stephen Webster, Peter Gibbons, Jeffrey Moorefield, Alok Maskara, and Heather Harding and Stephen Webster do not participate in the Salaried Pension Plans because they joined Luxfer following the Salaried Pension Plans’ closure to new participants in 1998. The table below lists the number of years of credited service and present value of accumulated pension benefits as of December 31, 2021,2022, for each of the Named Executive Officers who participated in the Salaried Pension Plans. The disclosed amounts are actuarial estimates only and do not necessarily reflect the actual amounts that will be paid to the Named Executive Officers, which will only be known at the time they become eligible for payment. Name | Name of Plan | Length of
Credited Service | Present value of
accumulated
benefit
(US$) (1) | Payments during
last fiscal year
(US$) | Graham Wardlow | Luxfer Group Pension Plan | 31 years, 7 months | 1,002,144 | – | Luxfer Group Supplementary Pension Plan | 4 years | 31,317 | – | Andy Butcher | Luxfer Group Pension Plan | 21 years, 6 months | 902,171 | – | Luxfer Group Supplementary Pension Plan | 1 year, 3 months | 16,863 | – |
82 Name | Name of Plan | Length of
Credited Service
| Present value of
accumulated benefit
(US$) (1)
| Payments during
last fiscal year
(US$)2023 PROXY STATEMENT
| Graham Wardlow | Luxfer Group Pension Plan | 31 years, 7 months | 1,600,507 | —
| Luxfer Group Supplementary Pension Plan | 4 years | 55,330 | — | Andy Butcher | Luxfer Group Pension Plan | 21 years, 6 months | 1,477,703 | — | Luxfer Group Supplementary Pension Plan | 1 year, 3 months | 29,689 | — |
| (1) | The present value of accumulated benefit is a U.K. benefit and is paid in GBP sterling. The amounts have been translated into U.S. dollars at the December 31, 2021 exchange rate of £1: US$1.3495. |
| | 77 | |
CEO EXECUTIVE COMPENSATION DISCUSSION AND ANALYSIS
CEO PAY RATIO
Identification of Median Employee
In accordance with Item 402(u) of Regulation S-K,S-K, we are required to provide certain information concerning the ratio between Luxfer's then-serving CEO's, Alok Maskara’s,the annual total compensation of Luxfer’s CEO, Andy Butcher, and the annual total compensation of the Company’s estimated median compensated employee (“MCE”), in each case generally calculated in the manner that annual total compensation is calculated for the purposes of the Summary Compensation Table. Summary
As described in more detail below, the total compensation of the Company’s MCE was US$68,409 in 2021. Mr. Maskara’s compensation for purposes of the ratio totaled US$3,339,733, resulting in an estimated ratio to the MCE’s total fiscal 2021 compensation of 49 to 1. Mr. Maskara’s compensation for purposes of the ratio is the same as that reported in the Summary Compensation Table above.
Methodology Item 402(u) of Regulation S-KS-K requires the identification of a median compensated employee at least once every three years. As the Company last determined its MCE in fiscal 2018, weWe identified a different MCE during and for fiscal 2021year 2022 for the purposes of calculating the CEO Pay Ratio. As of December 31, 2022, Luxfer had approximately 1,350 employees worldwide. Pursuant to the 5% de minimus exception established by the SEC, we excluded a total of 63 employees from this analysis, given the number of employees working at these facilities. The countries and applicable number of employees that were excluded from this analysis were as follows: Country | Headcount | Australia | 3 | Canada | 45 | China | 15 |
From the remaining 1,287 employees, we identified the MCE via payroll data, calculating annual total compensation for these 1,287 employees using the same methodology that we use to determine the annual total compensation of our Named Executive Officers, as reported in the Summary Compensation Table. This calculation included adding the employee’s actual fiscal 2022 hourly pay; overtime pay; fiscal 2022 bonus or cash incentive, if any; perquisites, such as mobile phone allowance, if any; amounts contributed by Luxfer to the employee’s individual defined contribution account in fiscal year 2022; Company contributions to the employee’s ESPP or SIP account, if applicable; and any equity awards granted to the employee in 2022 (valued as of the grant date). The MCE identified and used for purposes of determining our CEO Pay Ratio for fiscal 2021year 2022 was a productionan office employee at one of the Company’s U.S.UK facilities. For fiscal 2021, the Company calculated the The MCE’s annual total compensation ofwas translated from pounds sterling into US dollars at the MCE using the same methodology asfollowing average exchange rate for 2022: £1: US$1.2333.
Conclusion The MCE’s total compensation for fiscal year 2022 was used to calculateUS$53,215. Mr. Maskara’s total fiscal 2021Butcher’s compensation for purposes of the ratio totaled US$2,348,216, being the same as that reported in the Summary Compensation Table. This included addingTable on page 75 of this Proxy Statement. Based on the MCE’s actual fiscal 2021 hourly pay, overtime pay, fiscal 2021 bonus, mobile phone allowance,foregoing information, the ratio between our CEO’s total 2022 compensation and amounts contributed by Luxfer to the MCE’s individual defined contribution account in calendar 2021, which resulted in amedian total 2021 compensation of US$68,409.our workforce is estimated to be 44 to 1. SEC rules and guidance for identifying the median of the annual total compensation of employees and calculating the pay ratio based on the MCE'sMCE’s annual total compensation allow companies to adopt a variety of methodologies; to apply certain exclusions; and to make reasonable estimates and assumptions that reflect employee populations and compensation practices.Accordingly, the pay ratios reported by other companies may not be comparable to Luxfer'sLuxfer’s pay ratio, as other companies may utilize different methodologies, exclusions, estimates, and assumptions in calculating their own pay ratios. 83
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| 2023 PROXY STATEMENT | | 2022 Proxy Statement 78 |
AUDIT COMMITTEE PRE-APPROVAL
POLICY
The Audit Committee reviews and approves the external Independent Auditor’s engagement and audit plan, including fees, scope, staffing, and timing of work. In addition, the Audit Committee Charter and Pre-Approval Policy on Audit and Non-Audit Services to be provided by the Independent Auditor limits the types of non-audit services that may be provided by the Independent Auditor. Any permitted non-audit services to be performed by the Independent Auditor must be pre-approved by the Audit Committee after the Committee is advised of the nature of the engagement and particular services to be provided. The Audit Committee pre-approved audit fees and all permitted non-audit services of the Independent Auditor in 2021. Responsibility for this pre-approval cannot be delegated to one or more members of the Audit Committee, and the Audit Committee may not delegate authority for pre-approvals to Luxfer management.
FEES PAID TO THE INDEPENDENT
AUDITOR
We engaged PricewaterhouseCoopers LLP ("PwC") to provide various audit and other authorized audit-related and non-audit services to the Company during fiscal years 2021, 2020 and 2019.
The Audit Committee approved all fees paid to PwC and the underlying services provided by the Independent Auditor. PwC’s fees for these services were as follows:
| | 2021 (US$) | 2020 (US$) | 2019 (US$) | | Audit Fees (1) | 1,467,434 | 1,655,000 | 1,403,000 | | Audit-Related Fees (2) | 120,501 (3) | 57,000 (4) | 377,000 (5) | | TOTAL | 1,587,935 | 1,712,000 | 1,780,000 (6) |
(1) | Audit Fees consist of fees for audits of our consolidated annual financial statements and the effectiveness of internal controls over financial reporting; reviews of our quarterly financial statements; statutory audits; review of SEC filings; consents for registration statements; comfort letters in connection with securities offerings; and consultation and review work necessary to comply with the standards of the PCAOB. |
(2) | Audit-Related Fees consist of fees for assurance and related services that are reasonably related to the audit or review of our consolidated financial statements and are not reported under “Audit Fees.” These services include, among other things, accounting consultations concerning financial accounting and reporting standards, audit work related to information systems and internal control remediation, and transaction-related consultations. |
(3) | Audit-Related fees in 2021 consist of fees related to the statutory audit for Luxfer Shanghai, as well as incremental scope changes related to acquisitions, disposals, and discontinued operations in 2021. |
(4) | Audit-Related Fees in 2020 consist of fees related to the remediation of a material weakness involving the implementation of a new ERP system. |
(5) | Audit-Related Fees in 2019 consist of fees for additional audit work required in relation to the closure of the Gerzat, France facility and additional audit work relating to the implementation and testing of ERP systems, including internal controls over such systems. |
(6) | Total Audit Fees in 2019 have been restated from the prior year to include an overrun fee for additional audit-related services, which was billed in June of 2020. |
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2022 AUDIT COMMITTEE
REPORT The Audit Committee oversees the Company’s financial reporting process on behalf of the Board of Directors. Management has the primary responsibility for the financial statements and the reporting process, internal control over financial reporting, and compliance with legal and regulatory requirements. The Company’s internal audit function is responsible for, among other things, evaluating and improving the effectiveness of risk management, control processes, and governance practices. The Independent Auditor is responsible for expressing opinions on the conformity of the Company’s consolidated financial statements with generally accepted accounting principles, the fairness of the presentation of the Company’s financial statement schedules, and the effectiveness of internal controls over financial reporting in accordance with the Public Company Accounting Oversight Board (PCAOB). The role of the Audit Committee is to oversee the foregoing activities. Management completed its evaluation of the Company’s internal controls over financial reporting pursuant to the requirements set forth in Section 404 of the Sarbanes-OxleySarbanes-Oxley Act of 2002 and related regulations. The Audit Committee was kept apprised of the progress of the evaluation and provided oversight during the process. In connection with this oversight, the Committee received periodic updates provided by management and the internal audit function at each regularly scheduled Committee meeting. At the conclusion of the process, management concluded that the Company’s internal controls over financial reporting were effective as of December 31, 20212022 and reported its conclusion to the Audit Committee. The Committee reviewed Management’s Assessment of the Effectiveness of Internal Controls over Financial Reporting contained in the Company’s Annual Report on Form 10-K10-K for the year ended December 31, 20212022 filed with the SEC on March 1, 2023, as well as the Independent Auditor’s Report of Independent Registered Public Accounting Firm. Furthermore, the Audit Committee met with the Company’s accounting and financial management team, the internal audit function, and the Independent Auditor to review the Company’s annual and quarterly periodic filingsreports containing consolidated financial statements prior to the Company’s submissionfiling of such filingsreports with the SEC. Additionally, theThe Audit Committee discussed with the Company’s internal auditors and Independent Auditor the overall scope and plans for their respective audits. The Committee meets with the Company’s internal auditors and Independent Auditor, with and without management present, to discuss the results of their examinations, their evaluations of the Company’s internal controls, and the overall quality of the Company’s financial reporting. In fulfilling its oversight responsibilities, the Audit Committee reviewed the audited financial statements with management, and discussed the quality, not just the acceptability, of the accounting principles, the reasonableness of significant judgements, and the clarity of disclosures in the financial statements. Additionally, in conformance with PCAOB rules, the Committee reviewed and discussed with the Independent Auditor one critical audit matter arising from the current period audit of the Company’s financial statements. A critical audit matter (“CAM”) is defined to be any matter arising from the audit of the financial statements that was communicated or required to be communicated to the Audit Committee and that (i) relates to accounts or disclosures that are material to the financial statements and (ii) involves especially challenging, subjective, or complex audit judgment. The Committee concurred with the Independent Auditor’s assessment and identification of the CAM contained in the Report of Independent Registered Public Accounting Firm included within the 20212022 Annual Report on Form 10-K. 10-K. In connection with the financial statements for the year ended December 31, 2021,2022, the Audit Committee has: •reviewed and discussed the Company’s audited US GAAP consolidated financial statements and UK statutory financial statements for the year ended December31, 2022 with management and PricewaterhouseCoopers LLP, the Company’s independent registered public accounting firm; •discussed with PricewaterhouseCoopers LLP the matters required to be discussed by Auditing Standard No. 1301 and Rule 2-07 of SEC Regulation S-X, which addresses communication between audit committees and independent registered public accounting firms; and •received the written disclosures and the letter from PricewaterhouseCoopers LLP, as required by applicable requirements of the PCAOB regarding the independent registered public accounting firm’s communications with the Audit Committee concerning independence, and discussed PricewaterhouseCoopers LLP’s independence with representatives of the firm. 84 ·
| reviewed and discussed the Company’s audited U.S. GAAP consolidated financial statements and U.K. statutory financial statements for the year ended December 31, 2021 with management and PricewaterhouseCoopers LLP, the Company’s independent registered public accounting firm;
| 2023 PROXY STATEMENT |
| | |
· | discussed with PricewaterhouseCoopers LLP the matters required to be discussed by Auditing Standard No. 1301 and Rule 2-07 of SEC Regulation S-X, which addresses communication between audit committees and independent registered public accounting firms; and |
· | received the written disclosures and the letter from PricewaterhouseCoopers LLP, as required by applicable requirements of the PCAOB regarding the independent registered public accounting firm’s communications with the Audit Committee concerning independence, and discussed PricewaterhouseCoopers LLP's independence with representatives of the firm. |
In reliance of the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors that the Company’s audited consolidated financial statements be included in the Annual Report on Form 10-K10-K for the year ended December 31, 2021,2022, filed with the Securities and Exchange Commission on February 25, 2022.March 1, 2023. The Board approved these inclusions. THE AUDIT COMMITTEE Lisa Trimberger
Richard Hipple
Clive Snowdon
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| | 
| | 
| Lisa Trimberger Committee Chair | | Richard Hipple Committee Member | | Clive Snowdon Committee Member | | Sylvia A. Stein Committee Member |
85
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| 2023 PROXY STATEMENT |
| | |
| 2022 Proxy Statement 80AUDIT COMMITTEE PRE-APPROVAL POLICY |
The Audit Committee reviews and approves the external Independent Auditor’s engagement and audit plan, including fees, scope, staffing, and timing of work. In addition, the Audit Committee Charter and Pre-Approval Policy on Audit and Non-Audit Services to be provided by the Independent Auditor limits the types of non-audit services that may be provided by the Independent Auditor. Any permitted non-audit services to be performed by the Independent Auditor must be pre-approved by the Audit Committee after the Committee is advised of the nature of the engagement and particular services to be provided. The Audit Committee pre-approved audit fees and all permitted non-audit services of the Independent Auditor in 2022. Responsibility for this pre-approval cannot be delegated to one or more members of the Audit Committee, and the Audit Committee may not delegate authority for pre-approvals to Luxfer management. FEES PAID TO THE INDEPENDENT AUDITOR |
We engaged PricewaterhouseCoopers LLP (“PwC”) to provide various audit and other authorized audit-related and non-audit services to the Company during fiscal years 2022, 2021, and 2020. The Audit Committee approved all fees paid to PwC and the underlying services provided by the Independent Auditor. PwC’s fees for these services were as follows: | | 2022
(US$) | | 2021
(US$) | | 2020
(US$) | Audit Fees (1) | | 1,493,526 | | 1,467,434 | | 1,655,000 | Audit-Related Fees (2) | | 45,632 (3) | | 120,501 (4) | | 57,000 (5) | TOTAL | | 1,539,158 | | 1,587,935 | | 1,712,000 |
86
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| 2023 PROXY STATEMENT |
| | |
EQUITY COMPENSATION PLAN
INFORMATION PLAN INFORMATION The following table gives aggregate information under all current equity compensation plans of the Company as of December 31, 2021.2022. | Number of securities
to be issued upon
vesting and exercise
of outstanding share
awards | Weighted-average
vesting and exercise
price of outstanding
share awards | Number of securities remaining
available for issuance under
equity compensation plans
(excluding securities reflected in
column (a)) | | | (a) | (b) | (c) | Equity compensation plans approved by security holders (1)(2)(4)(5)(6)(7) | 866,167 | $1.00 (3) | 1,989,075 | TOTAL | 866,167 | | 1,989,075 |
| | Number of securities to be
issued upon vesting and
exercise of outstanding
share awards | Weighted-average
vesting and exercise
price of outstanding
share awards | Number of securities remaining available
for issuance under equity compensation
plans (excluding securities reflected in
column (a)) | | (a) | (b) | (c) | | Equity compensation plans approved by security holders (1)(2) | 423,453 | N/A (3) | 322,719 | | Equity compensation plans not approved by security holders (4)(5)(6)(7) | 297,487 | $0.99 | 295,772 | | Total | 720,940 | | 618,491 |
(1) As of December 31, 2022, 174,468 shares were available for issuance under the Employee Stock Purchase Plan (“ESPP”), which became effective in May 2014. (1) | As of December 31, 2021, 174,468 shares were available for issuance under the Employee Stock Purchase Plan (“ESPP”), which became effective in May 2014. |
(2) | As of December 31, 2021, 148,251 shares were available for issuance under the Share Incentive Plan (“SIP”), which became effective in May 2014. The number of £0.50 ordinary shares registered under this Plan is currently 500,000. |
(3) | Shares awarded under the ESPP and SIP are allocated based on payroll contributions made by employees of the Company. The nominal value of the Company’s shares is £0.50 per share (c. $0.67 per share at December 31, 2021, exchange rate). No exercise or issue price is associated with employees receiving shares under these Plans. |
(4) | As of December 31, 2021, 295,772 shares remained available for issuance under the Long-Term Umbrella Incentive Plan (“LTIP”) and the Non-Executive Directors Equity Incentive Plan (“EIP”). Both Plans were established as part of the IPO arrangements in 2012. |
(4) As of December 31, 2022, 295,772 shares remained available for issuance under the Long-Term Umbrella Incentive Plan (“LTIP”) and the Non-Executive Directors Equity Incentive Plan (“EIP”). Both Plans were established as part of the IPO arrangements in 2012 and amended and restated on June 8, 2022. The amended and restated LTIP and EIP were approved by the Company’s shareholders at the 2022 Annual General Meeting. Awards granted pursuant to the LTIP and EIP carry a $1.00 conversion or exercise price. 87 (5)
| In 2012, as part of the IPO arrangements, the Company implemented the Executive Officer IPO Stock Option Grant Agreement. All the options made available under this Agreement have been exercised or have now lapsed. As a result, information in respect of this arrangement has been excluded from the above analysis. |
(6) | In 2012, as part of the IPO arrangements, the Company implemented the Non-Executive Officer IPO Stock Option Grant Agreement. All the options made available under this Agreement have been exercised or have now lapsed. As a result, information in respect of this arrangement has been excluded from the above analysis. |
2023 PROXY STATEMENT (7) | In 2007, prior to the 2012 IPO, the Company implemented the Luxfer Holdings Executive Share Options Plan (“ESOP 2007”). All the options made available under the 2007 Plan have been exercised. As a result, information in respect of the ESOP 2007 has been excluded from the above analysis. |
| | 81
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SECURITY BENEFICIAL OWNERSHIP AND REPORTING SECURITY OWNERSHIPThe following table contains information concerning the beneficial ownership of our ordinary shares as of April 1, 2022,2023, by each Director, and Director nominee, by each Named Executive Officer listed in the Summary Compensation Table, and by all Directors and Executive Officers as a group. Our ordinary shares subject to share awards that are currently exercisable or exercisable within 60 days of April 1, 2022,2023 are considered outstanding and beneficially owned by the person holding the awards for the purpose of calculating the ownership percentage of that person but not for the purpose of calculating the ownership percentage of any other person. Based on a review of filings with the SEC, the following table also contains information concerning each person who we know beneficially owned more than 5% of our ordinary shares as of December 31, 2021.2022. Name of Beneficial Owner | Number of Shares
Beneficially Owned | Percentage of Shares
Beneficially Owned | Directors and Named Executive Officers | | | Andy Butcher (1) | 118,137 | *% | Patrick Mullen (2) | 7,450 | *% | Richard Hipple (3) | 16,070 | *% | Clive Snowdon (4) | 11,516 | *% | Sylvia A. Stein (5) | – | *% | Lisa Trimberger (6) | 15,443 | *% | Stephen Webster (7) | 16,138 | *% | Peter Gibbons (8) | 15,242 | *% | Jeffrey Moorefield (9) | 5,425 | *% | Graham Wardlow (10) | 39,902 | *% | Alok Maskara (11) | 151,514 | *% | Heather Harding (12) | 51,466 | *% | Aggregate Directors and Executive Officers (15 individuals) (13) | 460,909 | 1.6% | 5% Shareholders | | | BlackRock, Inc. (14) | 2,792,046 | 9.6% | Nantahala Capital Management, LLC (15) | 2,452,319 | 9.0% | Wellington Management Group LLP (16) | 2,316,296 | 8.5% | FMR LLC (17) | 2,044,195 | 7.5% | Van Lanschot Kempen Investment Management N.V. (18) | 1,966,622 | 7.2% | Paradice Investment Management LLC (19) | 1,752,250 | 6.4% | William Blair Investment Management, LLC (20) | 1,426,196 | 5.2% |
| | Number of Shares
Beneficially Owned | Percentage of Shares
Beneficially Owned | | Name and Address of Beneficial Owner | | Directors, Director Nominees and Named Executive Officers: | | | | David Landless (1) | 6,223 | *% | | Clive Snowdon (2) | 9,336 | *% | | Richard Hipple (3) | 10,704 | *% | | Lisa Trimberger (4) | 13,255 | *% | | Patrick Mullen (5) | 1,250 | *% | | Alok Maskara (6) | 259,550 | *% | | Heather Harding (7) | 51,466 | *% | | Andy Butcher (8) | 110,507 | *% | | Graham Wardlow (9) | 34,292 | *% | | Stephen Webster (10) | 16,791 | *% | | Aggregate Directors and Executive Officers (13 individuals) (11) | 532,191 | 1.9% | | 5% Shareholders: | | | | FMR LLC (12) | 3,493,532 | 12.1% | | Wellington Management Group LLP (13) | 2,790,421 | 10.1% | | Paradice Investment Management LLC (14) | 2,234,032 | 8.0% | | Nantahala Capital Management, LLC (15) | 2,118,233 | 7.6% | | William Blair Investment Management, LLC (16) | 2,082,207 | 7.2% | | Kempen Capital Management N.V. (17) | 1,999,576 | 6.9% | | BlackRock, Inc. (18) | 1,576,832 | 5.4% |
*Representing 1% or less ownership 88 *
| Representing 1% or less ownership |
(1) | Represents a shareholding of 6,223 ordinary shares, including 138 additional shares acquired from dividend reinvestment transactions in 2021. |
2023 PROXY STATEMENT (2) | Represents a shareholding of 9,336 ordinary shares, including 98 additional shares acquired from dividend reinvestment transactions in 2021, held in an account owned solely by the Director’s spouse. |
(3) | Represents a shareholding of 10,704 ordinary shares, including 252 additional shares acquired from dividend reinvestment transactions in 2021. |
(4) | Represents a shareholding of (i) 5,000 ordinary shares held as Joint Tenants in Common by trusts of which the Director and the Director’s spouse are the trustee and sole beneficiary; (ii) 5,000 ordinary shares held by a trust of which the Director is the sole beneficiary and the Director’s spouse is the trustee; and (iii) 3,255 ordinary shares, including 173 additional shares acquired from dividend reinvestment transactions in 2021, held in a trust of which the Director’s spouse is the sole beneficiary and the Director is the trustee. |
(5) | Represents a shareholding of 1,250 ordinary shares. |
(6) | Represents a shareholding of 259,550 ordinary shares, including 12,857 ordinary shares acquired upon the vesting of restricted stock units on March 13 - March 15, 2022 (after the forfeiture of shares to cover issue cost and taxes due). Restricted stock units carry with them the right to receive accumulated dividends during the period, in shares. These dividends are credited when the award vests. These amounts have been reflected in the table above. |
SECURITY OWNERSHIP
(7) | Represents a shareholding of 51,466 ordinary shares, including 3,761 ordinary shares acquired upon the vesting of restricted stock units on March 13 - March 15, 2022 (after the forfeiture of shares to cover issue cost and taxes due). Restricted stock units carry with them the right to receive accumulated dividends during the period, in shares. These dividends are credited when the award vests. These amounts have been reflected in the table above. |
(8) | Represents a shareholding of 110,507 ordinary shares, including 2,508 ordinary shares acquired upon the vesting of restricted stock units on March 13 - March 15, 2022 (after the forfeiture of shares to cover issue cost and taxes due). Restricted stock units carry with them the right to receive accumulated dividends during the period, in shares. These dividends are credited when the award vests. These amounts have been reflected in the table above. |
(9) | Consists of (i) 31,252 ordinary shares, including 7,520 ordinary shares held by the Named Executive Officer’s spouse and (ii) 3,040 ordinary shares issuable upon exercise of stock options within 60 days of April 1, 2022. The 3,040 ordinary shares issuable upon exercise of stock options excludes any shares potentially forfeited to cover exercise cost and taxes due. Stock options carry with them the right to receive accumulated dividends during the period, in shares. These dividends are credited when the stock option is exercised and have been reflected in the table above. |
(10) | Consists of (i) 10,444 ordinary shares and (ii) 6,347 ordinary shares issuable upon the exercise of stock options within 60 days of April 1, 2022. The 6,347 ordinary shares issuable upon exercise of stock options excludes any shares potentially forfeited to cover exercise cost and taxes due. Stock options carry with them the right to receive accumulated dividends during the period, in shares. These dividends are credited when the stock option is exercised and have been reflected in the table above. |
(11) | Represents ordinary shares beneficially owned by those individuals listed as Named Executive Officers, Directors, and Director Nominees in the table above, plus ordinary shares beneficially owned by the remaining Executive Officers of the Company as of April 1, 2022 (3 individuals). These three Executive Officers, together, beneficially own 18,817 ordinary shares. The foregoing figure consists of (i) 522,804 ordinary shares and (ii) 9,387 ordinary shares issuable upon exercise of stock options within 60 days of April 1, 2022. Stock options carry with them the right to receive accumulated dividends during the period, in shares. These dividends are credited when the stock option is exercised and have been reflected in the table above. |
(12) | Based solely on a Schedule 13G/A filed by FMR LLC and Abigail P. Johnson on February 8, 2022, FMR LLC has sole voting power with respect to 34,849 shares and sole power to dispose or direct the disposition of 3,493,532 shares. The principal business address for the entity is 245 Summer Street, Boston, Massachusetts 02210. |
(13) | Based solely on a Schedule 13G/A filed by Wellington Management Group LLP, Wellington Group Holdings LLP, Wellington Investment Advisors Holdings LLP, and Wellington Management Company LLP on March 10. 2022, each of the aforementioned filers is deemed to be the beneficial owner with shared dispositive power of 2,790,421 shares and shared voting power with respect to 2,698,057 shares. The principal business address for each of these entities is 280 Congress Street, Boston, Massachusetts 02210. |
(14) | Based solely on a Schedule 13G/A filed by Paradice Investment Management LLC and Paradice Investment Management Pty Ltd on February 10, 2022, both aforementioned filers are deemed to be the beneficial owner with shared dispositive power of 2,234,032 shares and shared voting power with respect to 1,384,662 shares. The principal business address for Paradice Investment Management LLC is 257 Fillmore Street, Suite 425, Denver, Colorado, 80206. The principal business address for Paradice Investment Management Pty Ltd is Level 27, The Chifley Tower, 2 Chifley Square, Sydney NSW 2000, Australia. |
(15) | Based solely on a Schedule 13G/A filed by Nantahala Capital Management, LLC, Wilmot B. Harkey, and Daniel Mack on February 14, 2022, each of the aforementioned filers is deemed to be the beneficial owner with shared dispositive power of 2,118,233 shares and shared voting power of 2,118,233 shares. The principal business address for those beneficial owners is 130 Main Street, 2nd Floor, New Canaan, Connecticut 06840. |
(16) | Based solely on a Schedule 13G filed by William Blair Investment Management, LLC on February 9, 2022, William Blair Investment Management, LLC has sole voting power with respect to 1,662,895 shares and sole power to dispositive power of 2,082,207 shares. The principal business address for the entity is 150 North Riverside Plaza, Chicago, Illinois 60606. |
(17) | Based solely on a Schedule 13G filed by Kempen Capital Management N.V. on February 11, 2022, Kempen Capital Management N.V. has the sole voting power with respect to 1,652,698 shares and sole dispositive power of 1,999,576 shares. The principal business address for the entity is Beethovenstraat 300, 1077WZ Amsterdam, The Netherlands. |
(18) | Based solely on a Schedule 13G/A filed by BlackRock, Inc. on February 2, 2022, BlackRock, Inc has the sole voting power with respect to 1,532,344 shares and sole power dispositive power of 1,576,832 shares. The principal business address for the entity is 55 East 52nd Street, New York, NY 10055. |
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89 OTHER INFORMATION
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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| 2023 PROXY STATEMENT |
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SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE |
Section 16(a) of the Exchange Act requires the Company’s Directors and Officers, and persons who beneficially own more than 10% of the Company’s ordinary shares, to file with the SEC initial reports of ownership and reports of changes in ownership relating to the Company’s ordinary shares. Such persons are required by SEC regulations to furnish the Company with copies of all Forms3,4, and 5 in which they file. Based solely upon a review of the copies of such forms furnished to the Company, the Company believes that each of the said persons complied with all Section 16(a) filing requirements applicable to them during the fiscal year ended December 31, 2021.2022. 90 SHAREHOLDER PROPOSALS AND
NOMINATIONS FOR THE 2023 ANNUAL
GENERAL MEETING OF SHAREHOLDERS
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| 2023 PROXY STATEMENT |
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ADDITIONAL INFORMATION 2024 ANNUAL GENERAL MEETING: SHAREHOLDER PROPOSALS AND NOMINATIONS |
The deadline for submitting a shareholder proposal for inclusion in our proxy materials for our 20232024 Annual General Meeting pursuant to SEC Rule 14a-814a-8 is December 28, 2022.2023. Any such proposal must meet the rules and regulations of the SEC, including Rule 14a-8,14a-8, for such proposals to be eligible for inclusion in our proxy statement and form of proxy for our 20232024 Annual General Meeting. In addition, our Articles of Association establish an advance notice procedure outside of Rule 14a-814a-8 for shareholders who wish to present nominations for the election of Directors at an annual general meeting. Any such nominations must be submitted in accordance with the requirements of our Articles, which provide that no person, other than a Director retiring at the general meeting, shall be appointed or re-appointedre-appointed a Director at any general meeting unless he or she is recommended by the Board of Directors, or, not less than 7 nor more than 42 days before the day appointed for the meeting, notice in writing by a member qualified to vote at the meeting has been given to the Company Secretary with the intention to propose the person for appointment, together with confirmation in writing by that person of their willingness to be appointed. Shareholder and interested party proposals or nominations pursuant to any of the foregoing should be sent to us at our principal executive office: c/o Company Secretary, Luxfer Holdings PLC, 8989 North Port Washington Road, Suite 211, Milwaukee, Wisconsin, 53217, United States of America. | | | 2022 Proxy Statement 84WHERE YOU CAN FIND MORE INFORMATION |
OTHER INFORMATION
SHAREHOLDERS SHARING AN ADDRESS
In addition to furnishing proxy materials electronically, we take advantage of the SEC’s “householding” rules to reduce the delivery cost of materials. Under such rules, only one set of proxy materials is delivered to multiple shareholders sharing an address, unless we have received contrary instructions from one or more of the shareholders.
If you are a shareholder sharing an address and wish to receive a separate copy of the proxy materials, you may so request by contacting Computershare by phone at 1-866-641-4276 or by email at investorvote@computershare.com (please include “Proxy Materials Luxfer Holdings PLC” in the subject line and include your full name and address). A separate copy will be promptly provided following receipt of your request, and you will receive separate materials in the future.
If you currently share an address with another shareholder but are nonetheless receiving separate copies of the materials, you may request delivery of a single copy in the future by contacting Computershare at the phone number or email address shown above.
WHERE YOU CAN FIND MORE
INFORMATION
Luxfer files annual, quarterly, and special reports; proxy statements; and other information with the SEC. You may read and copy any document that Luxfer files with the SEC on their website at www.sec.govor in person at the SEC’s Public Reference Room at 100 F Street, N.E., Washington D.C. 20549. Please call the SEC at 1-800-SEC-03301-800-SEC-0330 for more information about the operation of the Public Reference Room. Any shareholder or interested party wishing to review, without charge, a copy of our 20212022 Annual Report on Form 10-K10-K (without exhibits) filed with the SEC or any other documents incorporated by reference in this Proxy Statement should visit our website at www.luxfer.com.www.luxfer.com. Shareholders or interested parties may also write to us at our principal executive office: c/o Company Secretary, Luxfer Holdings PLC, 8989 North Port Washington Road, Suite 211, Milwaukee, Wisconsin, 53217, United States of America. We can also be reached by telephone at +1-414-269-2419. +1-414-269-2419. FORWARD-LOOKING STATEMENTS |
In this Proxy Statement, the Company has disclosed information that may be forward-looking in nature, including, but not limited to, certain information and opinions regarding financial and operational goals, its ESG and compliance programs and metrics, targets or aspirations for those programs, as well as financial and operational goals for certain variable, performance-based compensation programs. These statements may be identified by words such as “estimate,” “forecast,” “target,” “project,” “plan,” “intend,” “believe,” “expect,” “anticipate,” or variations or negatives thereof, or by similar or comparable words or phrases. Forward-looking statements are estimates only, based on management’s current expectations, currently available information and current strategy, plans, or forecasts, and involve certain known and unknown risks, uncertainties, and assumptions that are difficult to predict and often beyond our control and are inherently uncertain. Such risks and uncertainties could cause actual results to differ materially from those expressed in the statements. Forward-looking statements are not guarantees or promises that goals or targets will be met. In addition, historical, current, and forward-looking information about the Company’s ESG and compliance programs, including targets or goals, may not be considered material for SEC reporting purposes and may be based on standards for measuring progress that are still developing, on internal controls, diligence, or processes that are evolving, and on assumptions that are subject to change in the future. For information regarding risks and uncertainties associated with our business and a discussion of some of the factors that may cause actual results to differ materially from those expressed in these forward-looking statements, please refer to the Company’s SEC filings, including the “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and the “Risk Factors” and “Legal Proceedings” sections of its 2022 Annual Report on Form 10-K. The Company undertakes no obligation to update information in this Proxy Statement, whether as a result of new information, future events, or otherwise, and notwithstanding any historical practice of doing so. 91
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| 2023 PROXY STATEMENT | 85
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APPENDIX A RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP MEASURES |
The following table of non-GAAPnon-GAAP summary financial data presents a reconciliation of adjusted net income, adjusted earnings per share, adjusted diluted earnings per share, adjusted EBITA (also referred to as Management EBITA), adjusted EBITDA, adjusted operating cash flow, and organic revenue for the periods presented, being the most comparable GAAP measure. Management believes that adjusted net income, adjusted earnings per share, adjusted diluted earnings per share, adjusted EBITA, adjusted EBITDA, adjusted operating cash flow, and organic revenue are key performance indicators (“KPIs”) used by the investment community and that such presentation will enhance an investor’s understanding of the Company’s operational results. In addition, Luxfer’s CEO, CFO, and other senior management use these KPIs, among others, to evaluate business performance. However, investors should not consider these metrics in isolation as an alternative to net income, earnings per share, EBITA, EBITDA, operating cash flow, or revenue when evaluating Luxfer’s operating performance or measuring Luxfer’s profitability. Discontinued Operations As a result of our decision to exit non-strategicnon-strategic aluminum product lines, such as our Superform aluminum superplastic forming business operating from sites in the U.K.UK and U.S.US and our U.S.US aluminum gas cylinders business, we have reflected the results of operations of these businesses as discontinued operations in the tables below. Certain amounts in prior-yearprior-year financial statements were reclassified to conform to the current-yearcurrent-year presentation primarily due to the classification of these businesses as discontinued operations. | Years ended December 31, | In millions except per share data | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | Net income from continuing operations | 32.0 | 30.0 | 20.8 | 8.7 | 27.7 | 16.6 | Accounting charges/(credits) related to acquisitions and disposals of businesses | | | | | | | Unwind of discount on deferred consideration | – | – | – | 0.2 | 0.2 | 0.2 | Amortization on acquired intangibles | 0.7 | 0.9 | 0.7 | 1.2 | 1.2 | 1.3 | Acquisitions and disposals | 0.3 | 1.5 | – | 1.4 | 4.3 | (1.3) | Defined benefit pension credit | (0.1) | (2.3) | (4.3) | (1.3) | (4.7) | (4.2) | Restructuring charges | 1.9 | 6.2 | 8.9 | 25.9 | 13.2 | 8.4 | Impairment charges | – | – | – | (0.2) | 5.9 | 3.7 | Other charges (1) | – | 1.1 | 0.4 | 2.5 | – | 5.8 | Share-based compensation charges | 2.5 | 2.8 | 2.8 | 4.5 | 4.8 | 2.2 | Impact of US tax reform | – | – | – | – | – | (2.0) | Other non-recurring tax items | – | (1.9) | – | – | (2.9) | – | Income tax on adjusted items | 0.1 | (2.1) | (0.4) | (2.0) | (1.7) | 3.1 | Adjusted net income from continuing operations | 37.4 | 36.2 | 28.9 | 40.9 | 48.0 | 27.6 | Adjusted earnings per ordinary share | | | | | | | Diluted earnings per ordinary share | 1.16 | 1.07 | 0.74 | 0.31 | 1.00 | 0.62 | Impact of adjusted items | 0.20 | 0.22 | 0.29 | 1.16 | 0.73 | 0.41 | Adjusted diluted earnings per ordinary share (2) | 1.36 | 1.29 | 1.03 | 1.47 | 1.73 | 1.03 |
| | Years ended December 31, | | In millions except per share data | 2021 | 2020 | 2019 | 2018 | 2017 | | Net income from continuing operations | 30.0 | 20.8 | 8.7 | 27.7 | 16.6 | | Accounting charges/(credits) related to acquisitions and disposals of businesses | | | | | | | Unwind of discount on deferred consideration | — | — | 0.2 | 0.2 | 0.2 | | Amortization on acquired intangibles | 0.9 | 0.7 | 1.2 | 1.2 | 1.3 | | Acquisitions and disposals | 1.5 | — | 1.4 | 4.3 | (1.3) | | Defined benefit pension credit | (2.3) | (4.3) | (1.3) | (4.7) | (4.2) | | Restructuring charges | 6.2 | 8.9 | 25.9 | 13.2 | 8.4 | | Impairment charges | — | — | (0.2) | 5.9 | 3.7 | | Other charges (1) | 1.1 | 0.4 | 2.5 | — | 5.8 | | Share-based compensation charges | 2.8 | 2.8 | 4.5 | 4.8 | 2.2 | | Impact of U.S. tax reform | — | — | — | — | (2.0) | | Other non-recurring tax items | (1.9) | — | — | (2.9) | — | | Income tax on adjusted items | (2.1) | (0.4) | (2.0) | (1.7) | 3.1 | | Adjusted net income from continuing operations | 36.2 | 28.9 | 40.9 | 48.0 | 27.6 | | Adjusted earnings per ordinary share | | | | | | | Diluted earnings per ordinary share | 1.07 | 0.74 | 0.31 | 1.00 | 0.62 | | Impact of adjusted items | 0.22 | 0.29 | 1.16 | 0.73 | 0.41 | | Adjusted diluted earnings per ordinary share (2) | 1.29 | 1.03 | 1.47 | 1.73 | 1.03 |
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| (1) | Other charges of $1.1 million in 2021 relates to the settlement of a class action lawsuit in the Gas Cylinders segment in relation to an alleged historic violation of the California Labor Code, concerning a Human Resources administration matter. The Company paid the settlement during the year, with no additional charge to the income statement expected. |
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| (2)
| For the purposes of calculating diluted earnings per share, the weighted average number of ordinary shares outstanding during the financial year has been adjusted for the dilutive effects of all potential ordinary shares and share options granted to employees. |
2023 PROXY STATEMENT APPENDIX A
| | Years ended December 31, | | In millions | 2021 | 2020 | 2019 | 2018 | 2017 | | Adjusted net income from continuing operations | 36.2 | 28.9 | 40.9 | 48.0 | 27.6 | | Add back/(deduct): | | | | | | | Impact of U.S. tax reform | — | — | — | — | 2.0 | | Other non-recurring tax items | 1.9 | — | — | 1.2 | 1.3 | | Income tax on adjusted items | 2.1 | 0.4 | 2.0 | 1.7 | 3.1 | | Income tax expense | 5.4 | 6.9 | 7.6 | 6.5 | 3.3 | | Net finance costs | 3.1 | 5.0 | 4.4 | 4.5 | 6.3 | | Adjusted EBITA from continuing operations (1) | 48.7 | 41.2 | 54.9 | 63.6 | 42.3 | | Loss on disposal of PPE | — | 0.1 | 0.2 | 0.3 | — | | Depreciation | 14.7 | 12.6 | 12.0 | 15.7 | 17.0 | | Adjusted EBITDA from continuing operations | 63.4 | 53.9 | 67.1 | 79.6 | 59.3 | | Adjustments to reconcile from U.S. GAAP (2) | — | — | — | — | 2.0 | | Changes in assets and liabilities, net effects of business acquisition | 17.3 | 20.9 | (5.2) | 3.8 | 5.7 | | Non-restructuring capital expenditures | (9.2) | (8.2) | (12.7) | (10.3) | (11.3) | | Equity income of unconsolidated affiliates | — | (0.1) | 0.7 | 0.4 | (0.1) | | UK pension deficit funding contributions | (18.2) | (5.3) | (5.2) | (5.5) | (7.2) | | Adjusted operating cash flow | 53.3 | 61.2 | 44.3 | 67.2 | 48.4 | | Organic revenue | | | | | | | Group revenue | 374.1 | 324.8 | 373.4 | 401.9 | 441.3 | | Deduct: | | | | | | | SCI acquisition | (24.9) | — | — | — | — | | Czech divestiture | — | — | (7.6) | (18.7) | (15.8) | | Organic revenue | 349.2 | 324.8 | 365.8 | 383.2 | 329.1 | | Organic revenue (decline)/growth | 7.5% | (11.2%) | (4.5%) | 16.4% | 6.7% |
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| (1) | Also referred to in this Proxy Statement as Management EBITA. |
| (2) | Prior to 2018, Luxfer was a Foreign Private Issuer and reported under IFRS as adopted by the E.U. (“IFRS E.U.”), which differs in certain respects from U.S. generally accepted accounting principles (“U.S. GAAP”). The adjusted EBITDA figure for 2017 reported under U.S. GAAP in our Annual Report on 10-K have been reconciled to IFRS E.U. for the purpose of reconciliation to the non-GAAP adjusted operating cash flow metrics. |
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| Years ended December 31, | In millions | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | Adjusted net income from continuing operations | 37.4 | 36.2 | 28.9 | 40.9 | 48.0 | 27.6 | Add back/(deduct): | | | | | | | Impact of US tax reform | – | – | – | – | – | 2.0 | Other non-recurring tax items | – | 1.9 | – | – | 1.2 | 1.3 | Income tax on adjusted items | (0.1) | 2.1 | 0.4 | 2.0 | 1.7 | 3.1 | Income tax expense | 9.0 | 5.4 | 6.9 | 7.6 | 6.5 | 3.3 | Net finance costs | 3.9 | 3.1 | 5.0 | 4.4 | 4.5 | 6.3 | Adjusted EBITA from continuing operations (1) | 50.2 | 48.7 | 41.2 | 54.9 | 63.6 | 42.3 | Loss on disposal of PPE | – | – | 0.1 | 0.2 | 0.3 | – | Depreciation | 12.9 | 14.7 | 12.6 | 12.0 | 15.7 | 17.0 | Adjusted EBITDA from continuing operations | 63.1 | 63.4 | 53.9 | 67.1 | 79.6 | 59.3 | Adjustments to reconcile from US GAAP (2) | – | – | – | – | – | 2.0 | Changes in assets and liabilities, net effects of business acquisition | (31.6) | 17.3 | 20.9 | (5.2) | 3.8 | 5.7 | Non-restructuring capital expenditures | (8.3) | (9.2) | (8.2) | (12.7) | (10.3) | (11.3) | Equity income of unconsolidated affiliates | – | – | (0.1) | 0.7 | 0.4 | (0.1) | UK pension deficit funding contributions | (0.4) | (18.2) | (5.3) | (5.2) | (5.5) | (7.2) | Adjusted operating cash flow | 22.8 | 53.3 | 61.2 | 44.3 | 67.2 | 48.4 | Group revenue | 423.4 | 374.1 | 324.8 | 373.4 | 401.9 | 344.9 | Deduct: | | | | | | | SCI acquisition | (7.1) | (24.9) | – | – | – | – | Czech divestiture | – | – | – | (7.6) | (18.7) | (15.8) | Organic revenue | 416.3 | 349.2 | 324.8 | 365.8 | 383.2 | 329.1 | Organic revenue growth/(decline) | 19.2% | 7.5% | (11.2%) | (4.5%) | 16.4% | 6.7% |
93 
APPENDIX B
The following sets forth the text of the AmendedLUXFER 2023 PROXY STATEMENT ANNUAL GENERAL MEETING OF SHAREHOLDERS We will help to create a safe, clean, and Restatedenergy-efficient world. Luxfer Holdings PLC Long-Term Umbrella Incentive Plan, showing the proposed revisions by way of comparison against the original text of the Plan.
PROPOSED AMENDED AND RESTATED LONG-TERM UMBRELLA INCENTIVE PLAN |
is a global industrial company innovating niche applications in materials engineering. Luxfer’s high-performance materials, components, and high-pressure gas containment devices are used in defense and emergency response, clean energy, healthcare, transportation, and general industrial applications. LUXFER HOLDINGS PLC
lonG-TERM UMBRELLA INCENTIVE PLAN
(Amended Lumns Lane Manchester, M27 8LN United Kingdom +1 (414) 269-2419 investor.relations@luxfer.com www.luxfer.com 
Proposals — The Board of Directors recommend a vote FOR all the nominees listed, FOR Proposals X – X and Restated asfor every X YEARS on Proposal X. 1 Year 2 Years 3 Years Abstain 9. To approve, by non-binding advisory vote, the frequency of June 8, 2022) The purpose“Say-on-Pay” votes. 1 U P X 8. To approve, by non-binding advisory vote, the compensation of the Plan isCompany’s Named Executive Officers. 13. Subject to attract and retain high-quality senior employees inResolution 12 being duly passed as an environment where compensation levels are based on global market practice,ordinary resolution, to align rewards of employees with returns to shareholders and to reward the achievement of business targets and key strategic objectives. The Plan is designed to serve these goals by providing such employees with a proprietary interest in pursuing the long-term growth, profitability and financial success of the Company. Award grants are intended to be determined annually, but may be made on other occasions, such as recruitments.
As used in the Plan or in any instrument governing the terms of any Award, unless stated otherwise, the following definitions apply to the terms indicated below:
(a)“Award” means any Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Unit, or Other Stock Based Award, or Cash Incentive Award granted to a Participant pursuant to the Plan.
(b)“Award Agreement” means any written agreement, contract or other instrument or document evidencing an Award.
(c)“Beneficiary” means a person designated in writing by the Participant to receive any amounts due to the Participant hereunder in the event of the Participant’s death or, absent any such designation, the Participant’s estate. Such designation, if any, must be on file with the Company prior to the Participant’s death.
(d)“Board” meansauthorize the Board of Directors to allot equity securities for cash and/or sell ordinary shares held by the Company as treasury shares for cash, in each case as if section 561 of Luxfer.
(e)“Cash Incentive Award” means an award grantedthe Companies Act regarding preemption rights does not apply to such allotment or sale, pursuant to Section 9sections 570 and 573 of the Plan.
(f)“Cause” means (i) ifCompanies Act. Luxfer Holdings PLC (the “Company”) Using a black ink pen, mark your votes with an X as shown in this example. Please do not write outside the Participant isdesignated areas. 03SF8D of Directors unanimously recommends that you vote FOR Resolutions 1-8 and 10-13, and EVERY 1 YEAR for Resolution 9. qIF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. Annual General Meeting Proxy Card To view the Proxy Statement, Form 10-K and UK Report and Accounts online, please go to www.envisionreports.com/LXFR 1. To re-elect Andy Butcher as a partyDirector of the Company. 2. To re-elect Patrick Mullen as a Director of the Company. 3. To re-elect Richard Hipple as a Director of the Company. 4. To re-elect Clive Snowdon as a Director of the Company. 5. To elect Sylvia A. Stein as a Director of the Company. ORDINARY RESOLUTIONS For Against Abstain 6. To re-elect Lisa Trimberger as a Director of the Company. 7. To approve, by non-binding advisory vote, the Directors’ Remuneration Report for the year ended December 31, 2022. 10. To ratify the re-appointment of PricewaterhouseCoopers LLP as the independent auditor (the “Independent Auditor”) of the Company until conclusion of the 2024 Annual General Meeting. 11. To authorize the Audit Committee of the Board of Directors to an employment agreement withset the Independent Auditor’s remuneration. 12. To authorize the Board of Directors to allot shares in the Company and such agreement providesto grant rights to subscribe for a definitionor to convert any security into shares in the Company, pursuant to section 551 of Causethe UK Companies Act 2006 (the “Companies Act”). For Against Abstain SPECIAL RESOLUTION For Against Abstain For Against Abstain You may vote online instead of mailing this card. Online Go to www.envisionreports.com/LXFR or scan the groundsQR code — login details are located in the shaded bar below. Save paper, time and money! Sign up for summary dismissal, the definition of Cause contained therein or such grounds for summary dismissal, as applicable, or (ii) if no such agreement existselectronic delivery at www.envisionreports.com/LXFR Votes submitted electronically must be received by 6:00 P.M. Eastern Daylight Time on June 6, 2023 (11:00 P.M. BST on June 6, 2023) or, if such agreement does not define Cause and does not provideyou are voting by mail, your printed proxy card must be received at the address stated on the card by June 6, 2023. Your vote matters – here’s how to vote!
Luxfer Holdings PLC 2023 Annual General Meeting of Shareholders Wednesday, June 7, 2023, at 8:30 A.M. BST Luxfer MEL Technologies Lumns Lane, Manchester, M27 8LN, United Kingdom (with entrance on Rake Lane) THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS Important Notice Regarding the Availability of Proxy Materials for the grounds for summary dismissal, such conductAnnual General Meeting: The Notice of a Participant that constitutes grounds for summary dismissal, as determinedAnnual General Meeting is available at www.envisionreports.com/LXFR Small steps make an impact. Help the environment by the Company in its sole discretion. For the avoidanceconsenting to receive electronic delivery, sign up at www.envisionreports.com/LXFR IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. Proxy — Luxfer Holdings PLC Appointment of doubt, grounds for summary dismissal will include, without limitation, (i) gross misconduct, gross incompetence or any other material breach of obligations to the Company, (ii) commission of any criminal offence other than a road traffic offence or any other offence which does not result in a custodial sentence and in the reasonable opinion of the Company does not affect the Participant’s employment, (iii) becoming bankrupt or making any formal arrangement or composition with the Participant’s creditors generally, (iv) disqualification fromProxyholder l/We, being a director of any company by reason of an order made by any competent court other than by reason of mental or physical disability; (v) engaging in any conduct which brings the Participant or the Company into disrepute. (g)“Change in Control” means, unless otherwise defined in the Award Agreement, the occurrence of any of the following after the Effective Date: (i) any Person is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 40% or more of the combined voting power of the Company’s outstanding securities (other than any Person who was a “beneficial owner” of securities of the Company representing 40% or more of the combined voting power of the Company’s outstanding securities prior to the Effective Date); or (ii) dissolution or liquidation of the Company; or (iii) material reconstruction or significant demerger; or (iv) individuals who constitute the Board on the Effective Date (the “Incumbent Board”) cease for any reason to constitute at least a majority of the members of the Board, provided that any person becoming a director subsequent to the Effective Date whose appointment to fill a vacancy or to fill a new Board position was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s shareholders was approved by the same nominating committee serving under an
| | B-1 | |
APPENDIX B
Incumbent Board, shall be, for purposes of this clause (iv), considered as though he or she were a member of the Incumbent Board;Company, hereby appoint the Chair of the meeting, or (v) the occurrencefollowing person (see Note 1) Please leave this box blank if you have selected the Chair. Do not insert your own name(s). Please indicate the number of shares this proxy is appointed over (if less than your full voting entitlement). as my/our proxy to exercise all or any of my/our rights to attend, speak and vote in respect of my/our voting entitlement on my/our behalf at the Company’s Annual General Meeting of Shareholders to be held at the Luxfer MEL Technologies site, which is located at Lumns Lane, Manchester M27 8LN, United Kingdom (with entrance on Rake Lane), on June 7, 2023 and at any adjournment thereof. My/our proxy is to vote on the resolutions as indicated on the reverse side of this card. * For the appointment of more than one proxy, see Note 3. If you fail to select any of the followinggiven options, the proxy is authorised to vote (or abstain from voting) at his or her discretion on the specified resolutions. The proxy is also authorised to vote (or abstain from voting) on any other business which may properly come before the meeting. This Form of whichProxy is solicited by and on behalf of the Incumbent Board doesof Directors. Notes to proxy: 1. A member may appoint a proxy or proxies (who need not approve: (A) merger or consolidation in whichbe a member of the Company is not the surviving corporation or (B) sale ofCompany) to exercise all or substantially allany of his rights to attend, speak and vote at the assets of the Company; or (vi) consummation of a plan of reorganization, merger or consolidation of the Company with one or more corporations as a result of which the outstanding shares of the class of securities then subjectmeeting. If you wish to the plan of reorganization are exchanged or converted into cash or property or securities not issued by the Company, which was approved by shareholders pursuant toappoint a proxy statement soliciting proxies from shareholders of the Company, by someone other than the then current managementChair of the Company.
(h)“Code” meansmeeting, delete the United States Internal Revenue Code of 1986, as amended from time to time, and all regulations, interpretations and administrative guidance issued thereunder.
(i)“Committee” means the Remuneration Committeewords “the Chair of the BoardMeeting” and insert the name and address of your proxy in the space provided. Please initial the amendment (unless you are completing an e-mail or such other committee asonline version). 2. If the Board shall appoint from timeproxy is being appointed in relation to time to administerless than your full voting entitlement, please enter in the Plan and to otherwise exercise and perform the authority and functions assignedbox next to the Committee underproxy holder’s name the termsnumber of the Plan.
(j)“Company” means Luxfer and all of its Subsidiaries, collectively.
(k) “Director EIP” means the Luxfer Non-Executive Directors Equity Incentive Plan,shares in relation to which they are authorised to act as it may be amended from time to time.
(k)(l)“Disability” means any physical or mental impairment which qualifies a Participant for (i) disability benefits under any long-term disability plan maintained by the Company, (ii) workers’ compensation total disability benefits, (iii) Social Security disability benefits, or (iv) as otherwise determined by the Board. For purposes of the Plan, a Participant’s employment shallyour proxy. If left blank, your proxy will be deemed to have terminated as a result of Disability on the date as of which he or she is first entitled to receive disability benefits under such policy, law or regulation or such other date as the Committee shall determine in its sole discretion; provided that with respect to any Award that is subject to Section 409A of the Code, if such Award provides for any payment or distribution upon a Participant’s (i) Disability, then “Disability” shall have the meaning given to such term in Section 1.409A-3(i)(4) of the Treasury Regulations or (ii) termination of employment as a result of Disability, then such Participant’s employment shall be deemed to have terminated as a result of Disability on the date on which such Participant experiences a separation from service within the meaning of Section 409A of the Code and regulations promulgated thereunder.
(l)(m)“Effective Date” means October 2, 2012.
(m)(n)“Exchange Act” means the United States Securities Exchange Act of 1934, as amended from time to time.
(o) “Executive Officers” shall mean the Chief Executive Officer, the Chief Financial Officer, Corporate Secretary and other members of the Executive Leadership Team of Luxfer.
(n)(p)“Exercise Price” means the price per Share at which a holder of an Option or a Stock Appreciation Right may purchase Shares or exercise a Stock Appreciation Right, as applicable.
(o)(q)“Fair Market Value” means, with respect to a Share, as of the applicable date of determination, (i) (x) for purposes of Sections 3(c) and 6(a) hereof,the closing price per Share on the trading day immediately preceding such date as reported on the New York Stock Exchange and (y) for all other purposes, the closing price per Share onthat date as reported on the New York Stock Exchange (or if not reported, the closing price per Share on the trading day immediately preceding such date as reported on the New York Stock Exchange) or (ii) if not so reported, as determined by the Committee in its sole discretion using a reasonable valuation method taking into account, to the extent applicable, the requirements of Section 409A of the Code.
(p)(r)“Luxfer” means Luxfer Holdings PLC, incorporated in England and Wales, and any successor thereto.
(q)(s)“Nonqualified Stock Option” means an Option that is not intended to meet the requirements of Section 422 of the Code or that otherwise does not meet such requirements.
(r)(t)“Option” means a right granted to a Participant pursuant to Section 6 to purchase a specified amount of Shares at an Exercise Price.
(s)(u)“Ordinary Shares” means Luxfer’s ordinary shares, nominal value £0.50 per share, or any other security into which the ordinary shares shall be changed pursuant to the adjustment provisions of Section 12 of the Plan.
(t)(v)“Other Stock Based Award” means an equity-based or equity-related award, other than an Option, Stock Appreciation Right, Restricted Stock, or Restricted Stock Unit, granted to a Participant pursuant to Section 10, including a nil or nominal cost right to acquire Shares.
(u)(w)“Participant” means an employee of the Company who is eligible to participate in the Plan and to whom one or more Awards have been granted pursuant to the Plan.
APPENDIX B
(v)(x)“Performance-Based” means, with respect to an Award, an Award that vests, in whole or in part, on the basis of one or more Performance Targets that are imposed on such Award pursuant to Section 11.
(w)(y)“Performance Measures” means such measures as are described in Section 11on which Performance Targets are basedauthorised in respect of Performance-Based Awards.
(x)(z)“Performance Percentage” meansyour full voting entitlement (or if this proxy form has been issued in respect of a designated account for a shareholder, the factor determined pursuant to a Performance Schedulefull voting entitlement for that is to be applied to a Target Award and that reflects actual performance compareddesignated account). 3. A member can appoint more than one proxy in relation to the Performance Target.
(y)(aa)“Performance Period” meansmeeting, provided that each proxy is appointed to exercise the periodrights attaching to different shares held by him. To appoint more than one proxy you must complete a separate form of time duringproxy for each proxy. Additional proxy forms may be obtained by contacting the Company’s registrars or you may photocopy this form. Please indicate in the box next to the proxy holder’s name the number of shares in relation to which they are authorised to act as your proxy. Please also indicate by ticking the Performance Targetsbox provided if the proxy instruction is one of multiple instructions being given. All forms must be metsigned and, if returned by post, should be included in orderthe same envelope. 4. The proxy must attend the meeting in person to determinerepresent you. The completion of a form of proxy does not preclude the degreemember from attending or voting in person. 5. Please indicate how you wish your proxy to vote on the resolutions by inserting ‘X’ in the appropriate space on the reverse side of payout and/this card. Any alteration made to this form of proxy should be initialled by the person signing it. 6. In the case of a corporation, the proxy must be under its common seal or vesting with respect tobe signed on its behalf by an attorney or a Performance-Based Award. Performance Periods for different Awardsduly authorised officer of the corporation or in such other manner as may be overlapping.
(z)(bb)“Performance Schedule” means a scheduleapproved by the directors. In the case of an individual, the proxy must be signed by the appointor or the appointor’s attorney or in such other objective method for determiningmanner as may be approved by the applicable Performance Percentage to be applied to each Target Award.
(aa)(cc)“Performance Target” means performance goals and objectives with respect to Performance Measures for a Performance Period.
(bb)(dd)“Person” means a “person” as such term is used in Section 13(d) and 14(d) of the Exchange Act, including any “group” within the meaning of Section 13(d)(3) under the Exchange Act.
(ee) “Personal Data” means the name, home address, email address and telephone number, date of birth, social security number or equivalentdirectors. Where an appointment of a Participant, details of all rights to acquire Sharesproxy is signed or other securities or cash granted to the Participant and of Shares or other securities issued or transferred or cash paid to the Participant pursuant to the Plan and any other personal information which could identify the Participant and is necessary for the administration of the Plan.
(cc)(ff)“Plan” means this Luxfer Holdings PLC Long-Term Umbrella Incentive Plan, as it may be amended from time to time.
(dd)(gg)“Restricted Stock” means Shares awarded to a Participant pursuant to Section 7 subject to a substantial risk of forfeiture.
(ee)(hh)“Restricted Stock Unit” means a right to receive a number of Shares subject to the Award or the value thereof as of the specified date granted to a Participant pursuant to Section 8.
(ff)(ii)“Securities Act” means the United States Securities Act of 1933, as amended.
(gg)(jj)“Share” means an Ordinary Share.
(hh)(kk)“Stock Appreciation Right” means a right granted to a Participant under Section 6.
(ii)(ll)“Subsidiary” shall mean any entity of which a majority of the outstanding voting shares or voting power is beneficially owned directly or indirectly by Luxfer.
(jj)(mm)“Target Award” means a target Award determined by the Committee to be payable upon satisfaction of any applicable Performance Targets.
(kk)(nn)“Time-Based“ means, with respect to an Award, an Award that vests solely on the basis of continued employment.
(ll)(oo)“Transfer” means, with respect to any Award, a transfer, sale, exchange, assignment, pledge, hypothecation or other encumbrance or disposition of such Award, whether for or without consideration. “Transferee”, “Transferred” and “Transferability” shall have correlative meanings.
(mm)(pp)“U.S.” shall mean the United States of America.
| 3. | Term; Stock Subject to the Plan; Limitations on Individual Awards |
(a)Term of the Plan
Unless the Plan shall have been earlier terminated by the CompanyBoard, Awards may be granted under the Plan at any time in the period commencing on the Effective Date and ending immediately prior to the tenth anniversary of the Effective Dateon June 8, 2032. Awards granted pursuant to the Plan within that period shall not expire solely by reason of the termination of the Plan.
| | B-3 | |
APPENDIX B
(b)Stock Subject to the Plan
The maximum number of Shares that initiallymay be available for Awards under the Plan and awards under the Director EIPon or after June 8, 2022, in the aggregate, shall be a number equal to 2,010,820, which represents 7.4% of the outstanding share capital of Luxfer as of the Effective Date1,400,000 Shares. The maximum referred to in the preceding sentences of this paragraph shall be subject to adjustment as provided in Section 12. The Board may, subject to any applicable law and approval by the shareholders of Luxfer to the extent required by law or listing conditions of the New York Stock Exchange, from time to time increase the maximum number of Shares that may be available for Awards under the Plan. The Company may satisfy its obligation to deliver Shares under the Plan in any manner permitted by law, including without limitation, by issuing new Shares that are authorized for issuance, using treasury shares or causing an employee benefit trust or any other trust to deliver Shares.
For purposes of the preceding paragraph, if any Shares covered by Awards shall only be counted as used to the extent they are actually transferred or delivered to a Participant (or such Participant’s permitted transferees as described in the Plan) pursuant to the Plan. For purposes of clarification,authenticated in accordance with the preceding sentence, if an Award is settled for cash or if Shares are withheld to pay thesubject to an Award are forfeited, if any Award or any portion of an Award lapses or expires (including the unvested portion of any Award granted subject to Performance Targets, which fails to achieve its Performance Targets in full) or if any Award is settled for cash (in whole or in part) in accordance with its terms, the Shares subject to such Award shall, to the extent of such forfeiture, lapse, expiration or cash settlement, again be available for future grants of Awards under the Plan. Notwithstanding anything to the contrary contained herein, the following Shares shall not be added to the Shares authorized for grant under this Section 3(b) and shall not be available for future grants of Awards: (i) Shares tendered by a Participant or withheld by the Company in payment of theEexercise Pprice of an Option or; (ii) Shares tendered by the Participant or withheld by the Company to satisfy any tax withholding requirementobligation with respect to any Award; (iii) Shares subject to a Stock Appreciation Right that are not issued in connection with an Award, only the shares transferred or delivered (if any), net of the shares withheld or paid, will be deemed transferred or delivered for purposes of determining the number of Shares that arethe settlement of the Stock Appreciation Right in Shares upon exercise thereof; and (iv) Shares purchased on the open market with the cash proceeds from the exercise of Options. The payment of Dividend Equivalents in cash in conjunction with any outstanding Awards shall not be counted against the Shares available for transfer and deliveryissuance under the Plan or the Director EIP. In addition, if Shares are transferred or delivered subject to conditions which may result in the forfeiture, cancellation or return of such Shares to the Company, any portion of the Shares forfeited, cancelled or returned shall thereafter be treated as not transferred or delivered pursuant to the Plan. In addition, if Shares owned by a Participant (or such Participant’s permitted transferees as described in the Plan) are tendered (either actually or through attestation) to the Company in payment of any obligation in connection with an Award, the number of Shares tendered shall be added to the number of Shares that are available for delivery under the Plan or the Director EIP. Shares covered by Awards granted pursuant to the Plan in connection with the assumption, replacement, conversion or adjustment of outstanding equity-based awards in the context of a corporate acquisition or merger (within the meaning of Section 303A.08 of the New York Stock Exchange Listed Company Manual) shall not count as used under the Plan for purposes of this Section 3(b).
For the sake of clarity, no Shares that remained available under the Plan for issuance prior to June 8, 2022 will be issued on or after June 8, 2022, and no Shares underlying Awards granted prior to June 8, 2022 will be or become available for grants of Awards under the Plan on or after June 8, 2022.
(c)Individual Award Limits; Valuation
Unless otherwise determined by the Committee, the maximum value of the Awards granted under the Plan in any calendar year shall not exceed in the aggregate: (i) 220% of base salary for the Chief Executive Officer, (ii) 150% of base salary for the Chief Financial Officer and other members of the Executive Leadership Team of Luxfer (other than the Chief Executive Officer), and (iii) 100% of base salary for other Participants. For purposes of these individual limits, the Awards shall be valued as follows: (i) Time-Based Restricted Stock and Time-Based Restricted Stock Units shall be valued at the Fair Market Value of Shares subject to the Award on the date of grant; (ii) Options and Stock Appreciation Rights shall be valued at one-third of the Fair Market Value of Shares subject to the Award on the date of grant; (iii) Performance-Based Restricted Stock and Performance-Based Restricted Stock Units shall be valued at 50% of the Fair Market Value on the date of grant of the Target Award; (iv) Cash Incentive Awards shall be valued at the maximum cash value payable under the Award, and (v) Other Stock Based Awards shall be valued, as determined by the Committee in good faith at the time of grant, by reference to the Fair Market Value of Shares subject to the Award at the time of grant.
| 4. | Administration of the Plan |
The Plan shall be administered by the Committee. The Committee shall, consistent with the terms of the Plan, from time to time designate those employees of the Company who shall be granted Awards under the Plan and the amount, type and other terms and conditions of such Awards. The Committee, in its discretion and consistent with applicable law and regulations, may delegate its authority and duties under the Plan to any other individual or committee as it deems to be advisable, under any
APPENDIX B
conditions and subject to applicable law and any limitations that the Committee may establish, except that the Committee may not delegate its authority with respect to establishing the terms and conditions of Awards made to the Executive Officersany employee of the Company who is subject to Section 16 of the Exchange Act.
The Committee shall have full discretionary authority to administer the Plan, including discretionary authority to interpret and construe any and all provisions of the Plan and the terms of any Award (and any Award Agreement) granted thereunder and to adopt and amend from time to time such rules and regulations for the administration of the Plan as the Committee may deem necessary or appropriate. The employment of a Participant with the Company shall be deemed to have terminated for all purposes of the Plan if such Participant is employed by a Subsidiary of Luxfer and such Subsidiary ceases to be a Subsidiary of Luxfer, unless the Committee determines otherwise.
On or after the date of grant of an Award under the Plan, the Committee may (i) accelerate the date on which any such Award becomes vested, exercisable or transferable, as the case may beor waive any condition relating to such Award becoming vested, exercisable or transferable, as the case may be, in the event of death or Disability or in the event that the Committee determines the conditions to such vesting, exercisability or transferability to be impractical or unachievable, (ii) extend the term of any such Award, including, without limitation, extending the period following a termination of a Participant’s employment during which any such Award may remain outstanding,or (iii) waive any conditions to the vesting, exercisability or transferability, as the case may be, of any such Award or (iv)provide for the paymentcrediting of dividends or dividend equivalents with respect to any such Award as set forth herein; provided that the Committee shall not have any such authority to the extent that the grant or exercise of such authority would cause any tax to become due under Section 409A of the Code or any other applicable law.
Without limiting the generality of the foregoing, in order to assure the viability of Awards granted to Participants employed in various jurisdictions, the Committee may provide for such special terms as it may consider necessary or appropriate to accommodate differences in local law, tax policy, or custom applicable in the jurisdiction in which the Participant resides or is employed. Moreover, the Committee may approve such supplements to, or amendments, restatements, or alternative version of, the Plan as it may consider necessary or appropriate for such purposes without thereby affecting the terms of the Plan for any other purpose.
Decisions of the Committee shall be final, binding and conclusive on all parties.
To the extent permitted by applicable law, (i) no member of the Committee shall be liable for any action, omission, or determination relating to the Plan, and (ii) the Company shall indemnify and hold harmless each member of the Committee and each other director or employee of the Company to whom any duty or power relating to the administration or interpretation of the Plan has been delegated against any cost or expense (including counsel fees) or liability (including any sum paid in settlement of a claim with the approval of the Committee) arising out of any action, omission or determination relating to the Plan.
| 5. | Eligibility; Award Agreements; Non-Transferability; Vesting; Clawback |
(a)The Committee shall select from time to time the employees of the Company who are eligible to receive Awards pursuant to the Plan, including those key employees who are largely responsible for the management, growth and protection of the business of the Company.
(b)Employees of Subsidiaries may participate in the Plan upon approval of Awards to such employees by the Committee. A Subsidiary’s participation in the Plan may be conditioned upon the Subsidiary’s agreement to reimburse Luxfer for costs and expenses of such participation, as determined by Luxfer. The Committee may terminate the Subsidiary’s participation in the Plan at any time and for any reason. If a Subsidiary’s participation in the Plan shall terminate, such termination shall not relieve it of any obligations theretofore incurred by it under the Plan, except with the approval of the Committee, and the Committee shall determine, in its sole discretion, the extent to which employees of the Subsidiary may continue to participate in the Plan with respect to previously granted Awards. Unless the Committee determines otherwise, a Subsidiary’s participation in the Plan shall terminate upon the occurrence of any event that results in such entity no longer constituting a Subsidiary as defined herein; provided, however, that such termination shall not relieve such Subsidiary of any of its obligations to Luxfer theretofore incurred by it under the Plan, except with the approval of the Committee. Notwithstanding the foregoing, unless otherwise specified by the Committee, upon any such Subsidiary ceasing to be a Subsidiary as defined herein, the Participants employed by such Subsidiary shall be deemed to have terminated employment for purposes of the Plan. With respect to Awards subject to Section 409A of the Code, for purposes of determining whether a distribution is due to a Participant, such Participant’s employment shall be deemed terminated as described in the preceding sentence only if the Committee determines that a separation from service (within the meaning of Section 409A of the Code and regulations promulgated thereunder) has occurred.
(c)Each Award granted under the Plan shall be evidenced by an Award Agreement in form and substance approved by the Committee. Except as otherwise determined by the Committee,which may provide that (i) an Award may not be Transferred and (ii) following the vesting, exercise or lapse of transfer restrictions in respect of an Award, Shares must be held by the Participant for at least 12 months.
| | B-5 | |
APPENDIX B
(d)Notwithstanding any other provision in the Plan, no Award granted to a Participant shall vest, become exercisable or become transferable earlier than the first (1st) anniversary of the grant date; provided, however, up to a maximum of five percent (5%) of the maximum aggregate number of Shares that may be issued under the Plan pursuant to Section 3(a) may be issued pursuant to Awards granted under the Plan without regard for any limitations or other requirements for vesting or transferability under the Plan.
(e)Each Award granted under the Plan shall be subject to the Clawback Policies and Procedures as set forth in Luxfer’s Directors’ Remuneration Policy and the applicable Award Agreement.
| 6. | Options and Stock Appreciation Rights |
The Committee may from time to time grant Time-Based and Performance-Based Options that are Nonqualified Stock Options and Time-Based and Performance-Based Stock Appreciation Rights, subject to the following terms and conditions:
(a)Evidence of Grant
The Award Agreement evidencing the grants of Options and Stock Appreciation Rights shall include the amount of Shares subject to an Award, the Exercise Price, vesting conditions (as set forth below) and such additional provisions as may be specified by the Committee. The Exercise Price per Share covered by any Option or Stock Appreciation Right shall be not less than 100% of the Fair Market Value of a Share on the date on which such Option or Stock Appreciation Right is granted with respect to any Option granted to a Participant who is a U.S. taxpayer.
(b)Vesting
Unless otherwise determined by the Committee, each Time-Based Option or Time-Based Stock Appreciation Right shall become vested and exercisable with respect to one-thirdone quarter of the Shares subject to the Award on each of the first threefour anniversaries from the date of grant provided the Participant is continuously employed through each such respective anniversary.
(c)Exercise Period
No Option or Stock Appreciation Right shall be exercisable after the expiration of ten years from the date such Option or Stock Appreciation Right is granted.
(d)Exercise of Options and Stock Appreciation Rights
Each Option or Stock Appreciation Right may, to the extent vested and exercisable, be exercised in whole or in part. The partial exercise of an Option or Stock Appreciation Right shall not cause the expiration, termination or cancellation of the remaining portion thereof. An Option or Stock Appreciation Right shall be exercised by such methods and procedures as the Committee determines from time to time, including without limitation, in the case of an Option, through net physical settlement or other method of cashless exercise. The Exercise Price of an Option must be paid in full when the Option is exercised. For the avoidance of doubt, the preceding sentence will not prevent the Exercise Price being paid from the proceeds pursuant to the prompt sale of Shares acquired upon exercise or the Participant entering into other permissible arrangements, agreed by the Committee, for procuring payment of the aggregate Exercise Price.
(e)Payment in Cash or Shares
Upon exercise, a Stock Appreciation Right may be settled for cash or Shares or a combination of cash and Shares, in the discretion of the Committee, and as described in the Award Agreement. If a Stock Appreciation Right is settled for cash, the Company shall make a payment to the Participant equal to the excess, if any, of the Fair Market Value of a Share on the date of exercise over the Exercise Price, for each Share for which a Stock Appreciation Right was exercised. If the Stock Appreciation Right is settled for Shares, the Company shall deliver to the Participant a number of Shares in the amount equal to the cash payment amount that would have been payable if the Stock Appreciation Right was settled in cash divided by the Fair Market Value of a Share on the date of exercise, rounded down to the nearest whole number of Shares.
(f)Termination of Employment
Subject to the Committee’s discretion of the Committee, upon the termination of the Participant’s employment for any reason other than for Cause, (i) the portion of anany Time-Based Option or aTime-Based Stock Appreciation Right that has not become vested or exercisable as of the date of such termination shall immediately lapse and (ii) any Performance-Based Option or Performance-Based Stock Appreciation Right shall vest with respect to the number of Shares underlying such Award equal to (a) the number of Shares underlying such Award that would have been vested in the Participant for the full Performance Period, as determined by the Committee in its sole discretion, taking into account actual performance results as of the date of termination multiplied by (b) a fraction, the numerator of which is the number of days during such Performance Period that have elapsed prior to (and including) the date of termination and the denominator of which is the total number of days in such Performance Period,
APPENDIX B
rounded down to the nearest whole number of Shares. Any portion of a Performance-Based Option or Performance-Based Stock Appreciation Right that does not vest pursuant to the clause (ii) of the preceding sentence shall be immediately forfeited by the Participant as of the termination and the Participant shall have no further rights with respect thereto. eExcept as otherwise provided in the Plan or in the applicable Award Agreement, the portion of theany Option or a Stock Appreciation Right that is or becomes vested or exercisable as of the date of termination of employment will lapse on the first anniversary of the date of termination of employment to the extent not theretofore exercised. In the event of the termination of the Participant’s employment for Cause, all Shares subject to an Option or a Stock Appreciation Right, whether then vested or exercisable or not, shall immediately lapse on such termination.
The Committee may from time to time grant Time-Based and Performance-Based Restricted Stock, subject to the following terms and conditions:
(a)Grant of Restricted Stock
At the time of grant, the Committee shall determine, in its discretion, the terms and conditions that will apply to Restricted Stock granted pursuant to this Section 7. Unless otherwise determined by the Committee, Time-Based Restricted Stock shall vest with respect to one-thirdone quarter of the Shares subject to the Award on each of the first threefour anniversaries from the date of grant provided the employee is continuously employed through each such respective anniversary.
(b)Issuance of Restricted Stock; Rights of Participants
As soon as practicable after Restricted Stock has been granted, Restricted Stock shall be transferred to the Participant. Shares of Restricted Stock may be evidenced in such manner as the Committee shall determine. Except as otherwise determined by the Committee, the Participant will have all rights of a shareholder with respect to the Shares of Restricted Stock, including the right to vote and, subject to Section 7(c), to receive dividends or other distributions, except that the Shares may be subject to a vesting schedule and forfeiture and may not be Transferred until the restrictions are satisfied or lapse. The Committee may enforce any restrictions that the Committee may impose on Restricted Stock in such manner as the Committee shall determine, including legends, custody accounts or any other restrictions on transfer.
(c)Dividends
No dividends will be paid to a Participant with respect to unvested Shares of Restricted Stock. The Committee may provide in its sole discretion that any dividends declared on the Shares of Restricted Stock before they are vested shall either (i) be reinvested in the form of additional Shares, which shall be subject to the same vesting provisions that apply to the Shares of Restricted Stock to which they relate, or (ii) be credited by the Company to an account for the Participant and accumulated with or without interest until the date upon which the Shares of Restricted Stock to which they relate become vested, and any dividends accrued with respect to forfeited Restricted Stock will be reconveyed to the Company without further consideration or any act or action by the Participant. In cases where dividends are reinvested, the number of additional Shares shall be determined by first (i) multiplying the number of Shares of Restricted Stock subject to an Award on the dividend payment date by the per-Share dollar amount of the dividend so paid, and then (ii) dividing the resulting amount by the Fair Market Value of Shares on the dividend payment date, with the number of Shares rounded down to the nearest whole number and the cash balance remaining being carried forward and added to the dividend amounts (if any) paid on the next occasion. If Shares of Restricted Stock subject to an Award are forfeited, the additional Shares (or credited cash amounts) that relate to such Restricted Stock shall also be forfeited.”
(d)Termination of Employment.
Subject to the Committee’s discretion of the Committee, upon the termination of the Participant’s employment for any reason other than for Cause, (i) all Shares underlying Time-Based Restricted Stock that have not yet become vested as of the date of the Participant’s termination shall be immediately forfeited by the Participant and the Participant shall have no further rights with respect thereto and (ii) the Performance-Based Restricted Stock shall vest with respect to the number of Shares underlying such Award equal to (a) the number of Shares underlying such Award that would have been vested in the Participant for the full Performance Period, as determined by the Committee in its sole discretion, taking into account actual performance results as of the date of termination multiplied by (b) a fraction, the numerator of which is the number of days during such Performance Period that have elapsed prior to (and including) the date of termination and the denominator of which is the total number of days in such Performance Period, rounded down to the nearest whole number of Shares. Any portion of a Performance-Based Restricted Stock that does not vest pursuant to the clause (ii) of the preceding sentence shall be immediately forfeited by the Participant as of the termination and the Participant shall have no further rights with respect thereto. In the event of the termination of the Participant’s employment for Cause, all unvested Restricted Stock shall be immediately forfeited by the Participant as of the termination and the Participant shall have no further rights with respect thereto.
| | B-7 | |
APPENDIX B
The Committee may from time to time grant Time-Based and Performance-Based Restricted Stock Units, subject to the following terms and conditions:
(a)Grant of Restricted Stock Units
At the time of grant, the Committee shall determine, in its discretion, the terms and conditions that will apply to Restricted Stock Units granted pursuant to this Section 8. Unless otherwise determined by the Committee, Time-Based Restricted Stock Units shall vest with respect to one-thirdone quarter of the Shares subject to the Award on each of the first threefour anniversaries from the date of grant provided the Participant is continuously employed through each such respective anniversary.
(b)Dividend Equivalents
No dividends or dividend equivalents will be paid to a Participant with respect to unvested Restricted Stock Units. The Committee shallmay in its sole discretion provide for the payment of dividend equivalents with respect to Restricted Stock Units. TheIf dividend equivalents will be paid, the Company shall credit the Participant with additional Restricted Stock Units as of each date on which the Company pays a cash dividend on Shares, the number of which shall be determined by first (i) multiplying the number of Restricted Stock Units subject to an Award on the dividend payment date by the per-Share dollar amount of the dividend so paid, and then (ii) dividing the resulting amount by the Fair Market Value of Shares on the dividend payment date. Any Aadditional Restricted Stock Units shall be subject to the same restrictions, including but not limited to vesting, Transferability and payment restrictions, that apply to the Restricted Stock Units to which they relate. If the Restricted Stock Units subject to an Award are forfeited, the additional Restricted Stock Units that relate to such Restricted Stock Units shall also be forfeited.
(c)Form and Timing of Settlement
Payment of earned Restricted Stock Units shall be made as soon as practicable after the date(s) determined by the Committee and set forth in the Award Agreement, provided that with respect to any Restricted Stock Units subject to Section 409A of the Code such payment will occur in a manner that would not cause any tax to become due under Section 409A of the Code. Restricted Stock Units may be settled for cash, Shares, or a combination of both, as determined by the Committee and set forth in the Award Agreement. The Committee may permit Participants to request the deferral of payment of vested Restricted Stock Units (including the value of related dividend equivalents, if any) to a date later than the payment date specified in the Award Agreement, provided that with respect to any Restricted Stock Units subject to Section 409A of the Code such deferral will be made in a manner that would not cause any tax to become due under Section 409A of the Code.
(d)Termination of Employment.
Subject to the Committee’s discretion of the Committee, upon the termination of the Participant’s employment for any reason other than for Cause, (i) all Shares underlying Time-Based Restricted Stock Units that have not yet become vested as of the date of the Participant’s termination shall be immediately forfeited by the Participant, and (ii) the Performance-Based Restricted Stock Units shall vest and be settled in cash or Shares with respect to the number of Shares underlying such Award equal to (a) the number of Shares underlying such Award that would have been delivered to the Participant for the full Performance Period, as determined by the Committee in its sole discretion, taking into account actual performance results as of the date of termination multiplied by (b) a fraction, the numerator of which is the number of days during such Performance Period that have elapsed prior to (and including) the date of termination and the denominator of which is the total number of days in such Performance Period, rounded down to the nearest whole number of Shares. Any portion of a Performance-Based Restricted Stock Units Award that does not vest pursuant to the clause (ii) of the preceding sentence shall be immediately forfeited by the Participant as of the termination and the Participant shall have no further rights with respect thereto. In the event of the termination of the Participant’s employment for Cause, all Restricted Stock Units shall be immediately forfeited by the Participant as of the termination and the Participant shall have no further rights with respect thereto.
The Committee may from time to time grant Cash Incentive Awards. At the time of grant, the Committee shall determine, in its discretion, the terms and conditions that will apply to Cash Incentive Awards granted pursuant to this Section 9. Cash Incentive Awards may be settled in cash or in other property, including Shares, as determined by the Committee at the time of grant. Unless otherwise determined by the Committee, all Cash Incentive Awards shall be granted upon satisfaction of applicable performance conditions and shall be deferred for at least two years, subject to continued service of the Participant. If during such deferral period the Company restates its financial results based on which the Cash Incentive Award was computed, the Participant shall forfeit the excess of the amount of the Cash Incentive Award over what he would have received based on the restated financial results. Upon the termination of the Participant’s employment for any reason other than for Cause, the Cash Incentive Award held by the Participant shall become vested in full and payable within 30 days after the termination of the Participant’s employment, except (i) if the Participant is subject to United States taxation and the Cash Incentive Award is subject to Section
APPENDIX B
409A of the Code, the payment of the Cash Incentive Award shall not be accelerated and (ii) if the Committee, in its sole discretion, reasonably believes that there is more than minimal risk of a restatement of the Company’s financial results during the original deferral period, the Cash Incentive Award shall be treated as if the Participant remained employed through the original payment date set forth in the Award. In the event of the termination of the Participant’s employment for Cause, all outstanding Cash Incentive Awards shall be forfeited by the Participant and the Participant shall have no further rights with respect thereto.
| 10. | Other Stock Based Awards |
The Committee may grant Other Stock Based Awards not otherwise described herein in such amounts and subject to such terms and conditions as the Committee shall determine. Without limiting the generality of the preceding sentence, each such Other Stock Based Award may (i) involve the transfer of Shares to Participants, either at the time of grant or thereafter, or payment in cash or otherwise of amounts based on the value of Shares, and(ii) be Time-Based or Performance-Based and (iii) be in the form of stock appreciation rights, phantom stock, restricted stock, restricted stock units, performance shares, deferred share units or share-denominated performance units; provided that each Other Stock Based Award shall be denominated in, or shall have a value determined by reference to, a number of Shares that is specified at the time of the grant of such award. The UK schedule hereto orapplicable Award Agreement shall specify the consequences, if any, on the Award of the Participant’s termination of employment; provided that in the event of the termination of the Participant’s employment for Cause, all outstanding Other Stock Based Awards shall be immediately forfeited by the Participant and the Participant shall have no further rights with respect thereto.
| 11. | Performance-Based Awards |
The Performance-Based Awards shall be subject to the following terms and conditions:
(a)Performance Targets, Target Awards and Performance Schedules
Within 90 days after the beginning ofThe Committee may establish for any Award (a) a Performance Period, and in any case before 25% of the Performance Period has elapsed, the Committee shall establish(ab) Performance Targets for such Performance Period, (bc) Target Awards for each Participant, and (cd) Performance Schedules for such Performance Period. The Performance Targets may be with respect to corporate performance, operating group or sub group performance, individual company performance, other group or individual performance, or division performance, and shall be based on one or more of the Performance Measures described below.
(b)Performance Measures
The Performance Targets upon which the payment or vesting of any Performance-Based Award depends shall relate to one or more of the followingPerformance Measures including without limitation: (i) net income or operating net income (before or after taxes, interest, depreciation, amortization, and/or nonrecurring/unusual items), (ii) return on assets, return on capital, return on equity, return on economic capital, return on other measures of capital, return on sales or other financial criteria, (iii) revenue or net sales, (iv) gross profit or operating gross profit, (v) cash flow, (vi) productivity or efficiency ratios, (vii) share price or total shareholder return, (viii) earnings per share, (ix) budget and expense management, (x) customer and product measures, including market share, high value client growth, and customer growth, (xi) working capital turnover and targets, (xii) margins, and (xiii) economic value added or other value added measurements, in any such case (x) considered absolutely or relative to historic performance or relative to one or more other businesses and (y) determined for the Company or any business unit or division thereof.
The measurement of any Performance Measure(s) may exclude the impact of charges for restructurings, discontinued operations, extraordinary items, and otherunusual or non-recurring items, fluctuations in currency exchange rates and the cumulative effects of accounting changes, each as defined by generally accepted accounting principles and as identified in the Company’s audited financial statements, including the notes thereto.or such other factors as the Committee, in its sole discretion, deems appropriate .
Each Performance Measure may be expressed on an absolute and/or relative basis and may be used to measure the performance of any Participant or group of Participants, or Luxfer, the Company or a Subsidiary as a whole or any business unit of Luxfer or any Subsidiary or any combination thereof, as the Committee may deem appropriate, or any of the above Performance Measures as compared to the performance of a group of comparator companies, or a published or special index that the Committee, in its sole discretion, deems appropriate.
(c)CertificationPayout
Except as otherwise provided in the Plan, no distribution shall be made under this Plan until after the Committee has certifieddetermined the attainment of the Performance Targets and the amount to be paid to each Participant.
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APPENDIX B
(d)Service Requirements
Nothing in this Section 11 is intended to limit the Committee’s discretion to adopt any service conditions or restrictions with respect to Performance-Based Awards.
| 12. | Adjustment upon Certain Changes |
(a)Adjustment of Shares
If the number of outstanding Shares is changed by a stock dividend, recapitalization, stock split, reverse stock split, subdivision, combination, reclassification or similar change in the capital structure of Luxfer, without thefair market value consideration, or an extraordinary cash dividend or distribution is made, then (i) the number of Shares available for Awards under the Plan and awards under the Director EIPset forth in Section 3, (ii) the Exercise Prices of and number of Shares subject to outstanding Options and Stock Appreciation Rights and (iii) the nominal value per Share, if applicable, and the number of Shares subject to other outstanding Awards, may be proportionately adjusted, subject to any required action by the Board or the shareholders of the Company and in compliance with applicable securities laws and, to the extent applicable, Section 409A of the Code. In addition, except insofar as the Board (on behalf of Luxfer) agrees to capitalize Luxfer’s reserves and apply the same in paying up any difference between the Exercise Price (or any amount payable per Share in relation to an Award) and the nominal value of the Shares, the Exercise Price (or other amount payable per Share in relation to an Award) of any Award over Shares that are to be newly issued by Luxfer in satisfaction of the Award shall not be reduced below a Share’s nominal value.
(b) Certain Mergers
Subject to any required action by the shareholders of Luxfer, in the event that the Company shall be the surviving corporation in any merger, consolidation or similar transaction as a result of which the holders of Shares receive consideration consisting exclusively of securities of such surviving corporation, the Committee may, to the extent deemed appropriate by the Committee, adjust each Award outstanding on the date of such merger or consolidation so that it pertains and applies to the securities which a holder of the number of Shares subject to such Award would have received in such merger or consolidation.
(c) Certain Other Transactions
In the event of (i) a dissolution or liquidation of Luxfer, (ii) a sale of all or substantially all of the Luxfer’s assets (on a consolidated basis), (iii) a merger, consolidation or similar transaction involving Luxfer in which Luxfer is not the surviving corporation or (iv) a merger, consolidation or similar transaction involving Luxfer in which Luxfer is the surviving corporation but the holders of Shares receive securities of another corporation and/or other property, including cash, the Committee shall, in its sole discretion, have the power to:
(i) cancel, effective immediately prior to the occurrence of such event, each Award (whether or not then exercisable), and, in full consideration of such cancellation, pay to the Participant to whom such Award was granted an amount in cash, for each Share subject to such Award equal to the value, as determined by the Committee in its reasonable discretion, of such Award, provided that with respect to any outstanding Option or Stock Appreciation Right, such value shall be equal to the excess of (A) the value, as determined by the Committee in its reasonable discretion, of the property (including cash) received by the holder of a Share as a result of such event over (B) the Exercise Price of such Option or Stock Appreciation Right (which value may be zero); or
(ii) provide for the exchange of each Award (whether or not then exercisable or vested) for an award with respect to, as appropriate, some or all of the property which a holder of the number of Shares subject to such Award would have received in such transaction and, incident thereto, make an equitable adjustment as determined by the Committee in its reasonable discretion in the Exercise Price of the Award, or the number of shares or amount of property subject to the Award or, if appropriate, provide for a cash payment to the Participant to whom such Award was granted in partial consideration for the exchange of the Award.
(d) Notice
The Company shall give each Participant notice of an adjustment, substitution, cancellation or other action hereunder and, upon notice, such adjustment, substitution, cancellation or other action shall be conclusive and binding for all purposes. Notwithstanding the foregoing, the Committee may, in its discretion, decline to take action under this Section 12 with respect to any Award if the Committee determines that such action would violate (or cause the Award to violate) applicable law or result in adverse tax consequences to the Participant or to the Company.
(e) Changes to Awards Subject to Performance Conditions
In the event of any transaction or event described in this Section 12, the Committee may, in its sole discretion, make such adjustments in any Performance Schedule, Performance Targets or Target Award, and in such other terms of any Award, as the Committee may consider appropriate in respect of such transaction or event.
| | | 2022 Proxy Statement B-10 |
APPENDIX B
(f)No Repricing
Notwithstanding any provision of the Plan to the contrary, in no event shall (i) any repricing (within the meaning of U.S. generally accepted accounting principles or any applicable stock exchange rule) of Awards granted under the Plan be permitted at any time under any circumstances or (ii) any new Awards be granted in substitution for outstanding Awards previously granted to Participants if such action would be considered a repricing (within the meaning of U.S. generally accepted accounting principles or any applicable stock exchange rule).
(g)No Other Rights
Except as expressly provided in the Plan, no Participant shall have any rights by reason of any subdivision or consolidation of shares of stock of any class, the payment of any dividend, any increase or decrease in the number of shares of stock of any class or any dissolution, liquidation, merger or consolidation of Luxfer or any other corporation. Except as expressly provided in the Plan, no issuance by Luxfer of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number of Shares or amount of other property subject to, or the terms related to, any Award.
(h)Savings Clause
No provision of this Section 12 shall be given effect to the extent that such provision would cause any tax to become due under Section 409A of the Code.
No person shall have any rights as a shareholder with respect to any Shares covered by or relating to any Award granted pursuant to the Plan until the date of the transfer or delivery of Shares. Except as otherwise expressly provided in Section 12, no adjustment of any Award shall be made for dividends or other rights for which the record date occurs prior to the date such Shares are transferred or delivered. Nothing in this Section 13 is intended, or should be construed, to limit authority of the Committee to cause the Company to make payments based on the dividends that would be payable with respect to any Share if it were transferred or delivered or outstanding, or from granting rights related to such dividends; provided, however, that no dividends or dividend equivalents will be paid to a Participant with respect to unvested Awards.
The Company may, but shall not have any obligation to, establish any separate fund or trust or other segregation of assets to provide for the satisfaction of Awards under the Plan.
| 14. | No Special Employment Rights; No Right to Award |
Nothing contained in the Plan or any Award Agreement shall confer upon any Participant any right with respect to the continuation of his or her employment by or service to the Company or interfere in any way with the right of the Company at any time to terminate such employment or service or to increase or decrease the compensation of the Participant from the rate in existence at the time of the grant of an Award.
No person shall have any claim or right to receive an Award hereunder. The Committee’s granting of an Award to a Participant at any time shall neither require the Committee to grant an Award to such Participant or any other Participant or other person at any time nor preclude the Committee from making subsequent grants to such Participant or any other Participant or other person.
The Company shall be under no obligation to effect the registration pursuant to the Securities Act or any federal, state or non-U.S. securities laws of any Shares to be transferred or delivered hereunder or to effect similar compliance under any state laws. Notwithstanding anything in the Plan to the contrary, the Company shall not be obligated to cause to be transferred or delivered any Shares pursuant to the Plan unless and until the Company is advised by its counsel that the transfer and delivery of Shares is in compliance with all applicable laws, regulations of governmental authority and the requirements of any securities exchange on which Shares are traded. The Committee may require, as a condition to the transfer and delivery of Shares pursuant to the terms hereof, that the recipient of such Shares make such covenants, agreements and representations, and that certificates, if any, evidencing such Shares, bear such legends, as the Committee deems necessary or desirable.
The exercise of any Option or Stock Appreciation Right that is settled in Shares granted hereunder shall only be effective at such time as counsel to the Company shall have determined that the transfer or delivery of Shares pursuant to such exercise is in compliance with all applicable laws and regulations and the requirements of any securities exchange on which Shares are traded. The Company may, in its sole discretion, defer the effectiveness of an exercise of an Award hereunder or the delivery or transfer of Shares pursuant to any Award pending or to ensure compliance under federal, state, non-U.S. securities laws and the
| | B-11 | |
APPENDIX B
requirements of any securities exchange on which Shares are traded. The Company shall inform the Participant in writing of its decision to defer the effectiveness of the exercise of an Award or the delivery or transfer of Shares pursuant to any Award. During the period that the effectiveness of the exercise of an Award has been deferred, the Participant may, by written notice, withdraw such exercise and obtain the refund of any amount paid with respect thereto.
The issue or transfer of any Shares under the Plan shall be subject to Luxfer’s Articles of theAssociation and to any necessary consents of any governmental or other authorities (in any jurisdiction) under any enactments or regulations from time to time in force. The Participant shall comply with any requirements to be fulfilled in order to obtain or obviate the necessity of any such consent.
(a)Payment of Taxes
Participants shall be solely responsible for any applicable taxes imposed on the Participant by applicable law (including without limitation income, social security and excise taxes but excluding any taxes imposed in connection with the issuance of Shares) and penalties, and any interest that accrues thereon, which they incur in connection with the receipt, vesting, settlement or exercise of any Award. Notwithstanding any provision of the Plan to the contrary, in no event shall the Company or the Committee be liable to a Participant on account of an Award’s failure to (i) qualify for favorable U.S. or non-U.S. tax treatment or (ii) avoid adverse tax treatment under U.S. or non-U.S. law, including, without limitation, under Section 409A of the Code.
(b)Cash Remittance
Whenever Shares are to be transferred or delivered upon the exercise, grant or vesting of an Award, and whenever any cash amount shall become payable in respect of any Award, the Company shall have the right to require the Participant to remit to the Company in cash an amount sufficient to satisfy federal, state, local and/or non-U.S. withholding tax requirements, if any, attributable to such exercise, grant, vesting or payment prior to the delivery of Shares or recordation by the Company of the Participant or his or her nominee as the owner of such Shares or the effectiveness of the lapse of such restrictions or making of such payment. In addition, upon the exercise or settlement of any Award in cash, or any payment (including in Shares) with respect to any Award, the Company shall have the right to withhold from any payment required to be made pursuant thereto an amount sufficient to satisfy the federal, state, local and/or non-U.S. withholding tax requirements, if any, attributable to such exercise, settlement or payment.
(c)Share Remittance
At the election of the Participant, subject to the approval of the Committee, when Shares are to be transferred or delivered upon the exercise, grant or vesting of an Award, the Participant may tender to the Company a number of Shares that have been owned by the Participant for at least six months (or such other period as the Committee may determine) having a Fair Market Value at the tender date determined by the Committee to be sufficient to satisfy the minimum federal, state, local and/or non-U.S. withholding tax requirements, if any, attributable to such exercise, grant or vesting, but not greater than the minimum withholding obligations. Such election shall satisfy the Participant’s obligations under Section 16(a) hereof, if any.
(d)Share Withholding
At the election of the Participant, subject to the approval of the Committee, when Shares are to be transferred or delivered upon the exercise, grant or vesting of an Award, the Company shall withhold a number of such Shares determined by the Committee to be sufficient to satisfy the minimum federal, state, local and/or non-U.S. withholding tax requirements, if any, attributable to such exercise, grant or vesting, but not greater than the minimum withholding obligations. Such election shall satisfy the Participant’s obligations under Section 16(a) hereof, if any.
| 17. | Amendment or Termination of the Plan |
(a)The Board may at any time suspend or discontinue the Plan or revise or amend it in any respect whatsoever; provided, however, that to the extent that any applicable law, regulation or rule of a stock exchange requires shareholder approval in order for any such revision or amendment to be effective, such revision or amendment shall not be effective without such approval. The preceding sentence shall not restrict the Committee’s ability to exercise its discretionary authority hereunder pursuant to Section 4 hereof, which discretion may be exercised without amendment to the Plan. No provision of this Section 17 shall be given effect to the extent that such provision would cause any tax to become due under Section 409A of the Code. Except as expressly provided in the Plan, no action hereunder may, without the consent of a Participant, reduce the Participant’s rights under any previously granted and outstanding Award. Nothing in the Plan shall limit the right of the Company to pay compensation of any kind outside the terms of the Plan.
(b)The Committee may amend or modify the terms and conditions of an Award to the extent that the Committee determines, in its sole discretion, that the terms and conditions of the Award violate or may violate Section 409A of the Code;
| | | 2022 Proxy Statement B-12 |
APPENDIX B
provided, however, that (i) no such amendment or modification shall be made without the Participant’s written consent if such amendment or modification would violate the terms and conditions of any other agreement between the Participant and the Company and (ii) unless the Committee determines otherwise, any such amendment or modification of an Award made pursuant to this Section 17(b) shall maintain, to the maximum extent practicable, the original intent of the applicable Award provision without contravening the provisions of Section 409A of the Code. The amendment or modification of any Award pursuant to this Section 17(b) shall be at the Committee’s sole discretion and the Committee shall not be obligated to amend or modify any Award or the Plan, nor shall the Company be liable for any adverse tax or other consequences to a Participant resulting from such amendments or modifications or the Committee’s failure to make any such amendments or modifications for purposes of complying with Section 409A of the Code or for any other purpose. To the extent the Committee amends or modifies an Award pursuant to this Section 17(b), the Participant shall receive notification of any such changes to his or her Award and, unless the Committee determines otherwise, the changes described in such notification shall be deemed to amend the terms and conditions of the Award and the applicable Award Agreement.
Upon the death of a Participant, to the extent provided in the applicable Award Agreement, (i) any outstanding Options and Stock Appreciation Rights granted to such Participant may be exercised only by the Beneficiary and (ii) any Award granted to such Participant may only be transferred to the Beneficiary. The Beneficiary, as a condition of such exercise or transfer, as the case may be, shall be bound in all respects by the provisions of the Plan and the applicable Award Agreement as if the Beneficiary were an original party thereto and by the acknowledgements made by the Participant in connection with the grant of the Award and all references in the Plan and the applicable Award Agreement to the Participant shall be deemed to refer to such Beneficiary. Any attempt to Transfer an Award in violation of the Plan shall render such Award null and void.
(a)Treatment of the Awards
Unless otherwise set forth in the Award Agreement, uUpon a Change in Control,
(i)each outstanding Time-Based Award shall become fully vested and (a) with respect to Options and Stock Appreciation Rights, exercisable or (b) with respect to all other Awards hereunder, settled in cash or Shares, as applicable, and all restrictions thereon shall lapse, and except as otherwise provided in the Plan or in the applicable Award Agreement or as otherwise communicated to the Participants by the Committee in connection with the Change in Control, an Option or a Stock Appreciation Right shall lapse on the first anniversary of the Change in Control to the extent not theretofore exercised.
(ii)each outstanding Performance-Based Award shall become vested and exercisable and/or settled in cash or Shares, as applicable, and the restrictions thereon shall lapse, in each case, with respect to the number of Shares underlying such Award or the amount of cash that is equal to (x) the number of Shares underlying such Award or cash amount under an Award that would have been vested in or delivered to the Participant, as applicable, for the full Performance Period, as determined by the Committee in its sole discretion, taking into account actual performance results as of the date of a Change in Control multiplied by (y) a fraction, the numerator of which is the number of days during such Performance Period that have elapsed prior to (and including) the date of the Change in Control and the denominator of which is the total number of days in such Performance Period, rounded down to the nearest whole number of Shares. Any portion of a Performance-Based Award that does not vest pursuant to this clause (ii) shall be forfeited or lapse, as applicable, as of the date of the Change in Control and the Participant shall have no further rights with respect thereto
(b)409A Savings Clause
Notwithstanding the foregoing and for the purposes of timing of payment, distribution or settlement only, a Change in Control shall not be deemed to occur under this Section 19 of the Plan with respect to any Award that constitutes “non-qualified deferred compensation” within the meaning of Section 409A of the Code and is granted to a Participant subject to United States taxation, unless the events that have occurred would also constitute a “Change in the Ownership or Effective Control of a Corporation or in the Ownership of a Substantial Portion of the Assets of a Corporation” under Treasury Department Final Regulation 1.409A-3(i)(5), or any successor thereto.
(c)280G Cutback
In the event that it shall be determined by the Committee that any benefit provided or payment made by the Company to or for the benefit of the Participant, whether paid or payable or distributed or distributable pursuant to the terms of the Plan or any other agreement, plan, program, arrangement or otherwise (“Parachute Payments”), would subject the Participant to an obligation to pay an excise tax imposed by Section 4999 of the Code or any interest or penalties related to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “Excise Tax”), the amount of Parachute Payments payable to such Participant shall be reduced in the manner determined by the Committee, to the extent
| | B-13 | |
APPENDIX B
and only to the extent that such reduction would result in a greater after-tax benefit for such Participant than if the Parachute Payments were not reduced; provided, however, that in no event shall such reduction be effected through a delay in the timing of any Payment that is subject to Section 409A of the Code (or that would become subject to 409A of the Code as a result of such delay).
The Company shall not be required to issue any fractional Shares pursuant to the Plan. The Committee may provide for the elimination of fractions or for the settlement thereof in cash.
If determined by the Committee, the vesting/exercise of an Award over Shares and the issue of Shares pursuant to the Award will be subject to the payment of the aggregate nominal value of the underlying Shares by the Participant. Any cash payment to be made to a Participant pursuant to Section 12(c)(i) of the Plan in consideration of the cancellation of an Award or an award that is provided in exchange for an Award pursuant to Section 12(c)(ii) of the Plan, shall where appropriate and if determined by the Committee, take account of the nominal value of the Shares subject to the Award.
Any agreements and consents in respect of any personal data of a Participant shall be as set forth in the applicable Award Agreement.
It shall be a condition of an Award that the Participant agrees and consents to:
(a) The collection, use, processing and transfer of Participant’s Personal Data by the Company, any trustee or third party administrator of the Plan, the Company’s registrars, or any broker through whom Shares are to be sold on behalf of a Participant.
(b) The Company, any trustee or third party administrator of the Plan, the Company’s registrars, or any broker through whom Shares are to be sold on behalf of a Participant transferring the Participant's Personal Data amongst themselves for the purposes of implementing, administering and managing the Plan and the grant of Awards and the acquisition of Shares pursuant to Awards, the disposal of such Shares or the making of any cash payment under the Plan.
(c) The use of Personal Data by any such person for any such purposes; and
(d) The transfer to and retention of Personal Data by third parties including any trustee or third party administrator of the Plan for or in connection with such purposes.
(a)Except as otherwise provided in the Plan, any written notice or document to be given by, or on behalf of the appointor by an attorney, the Company may treat the appointment as invalid unless the power of attorney or any administratora notarially certified copy of the Plan to a Participant in accordance or in connection with the Plan may be given by hand or sent by pre-paid first class mail (airmail if overseas), facsimile transmission or emailpower of attorney is submitted to the Participant's home or work address, facsimile number or email address last known to the Company to be the Participant’s address, facsimile number or email address. Subject to the paragraph (d) of this Section 23 any notice or document given in accordance with this Section 23 shall be deemed to have been given: (i) upon delivery, if delivered by hand; (ii) after 24 hours, if sent by mail; after 4 hours, if sent by facsimile transmission; and (iv) at the time of transmission, if sent by email except that a notice or document shall not be duly given by email unless that person is known by his employer company to have personal access during his normal business hours to information sent to him by email.
(b)Any notice or document so sent to a Participant shall be deemed to have been duly given notwithstanding that such person is then deceased (and whether or not the Company has notice of his death) except where his personal representatives have supplied an alternative address to which documents are to be sent to the Company.
(c)Any written notice or document to be submitted or given to the Company or any administrator of the Plan in accordance or in connection with the Plan may be given by hand or sent by pre-paid first class post (airmail if overseas), facsimile transmission or email but shall not in any event be duly given unless it is actually received by the Secretary of the Company or such other individual as may from time to time be nominated by the Company and whose name and address, facsimile number or email address is notified to the Participant.
(d)For the purposes of the Plan, an email shall be treated as not having been duly sent or received if the recipient of such email notifies the sender that it has not been opened because it contains, or is accompanied by a warning or caution that it could contain or be subject to, a virus or other computer program which could alter, damage or interfere with any computer software or email.
| | | 2022 Proxy Statement B-14 |
APPENDIX B
Except as otherwise expressly stated to the contrary, neither the Plan nor the making of any Award shall have the effect of giving any third party any rights under the Plan pursuant to the UK Contracts (Rights of Third Parties) Act 1999 or otherwise and that Act shall not apply to the Plan or to the terms of any Award under it.
(a) This Plan and any Award shall be governed by, and construed in accordance with, English law.
(b) Any person or persons referred to in the Plan shall:
(i) submit to the exclusive jurisdiction of the English courts as regards any claim, legal action, dispute, difference or proceedings concerning an Award or any matter arising from, or in relation to, the Plan;
(ii) waive personal service of any proceedings;
(iii) agree that service on him or it of proceedings may be effected by registered mail to his or its address for service of notices under the Plan; and
(iv) waive any objection to proceedings taking place in the English courts on the grounds of venue or that proceedings have been brought in an inconvenient forum.
| | B-15 | |
APPENDIX C
The following sets forth the text of the Amended and Restated Luxfer Holdings PLC Non-Executive Directors Equity Incentive Plan, showing the proposed revisions by way of comparison against the original text of the Plan.
PROPOSED AMENDED AND RESTATED NON-EXECUTIVE DIRECTORS EQUITY INCENTIVE PLAN |
LUXFER HOLDINGS PLC
AMENDED AND RESTATED
NON-EXECUTIVE DIRECTORS EQUITY INCENTIVE PLAN
(Amended and Restated as of June 8, 2022)
The purpose of the Plan is to promote the interests of the Company and its shareholders, by allowing the Company to attract and retain highly qualified Non-Executive Directors by permitting them to obtain or increase their proprietary interest in the Company.
As used in the Plan or in any instrument governing the terms of any Award, unless stated otherwise, the following definitions apply to the terms indicated below:
(a)“Award” means any Option, Restricted Stock,or Restricted Stock Unit or Nil/Nominal Cost Rightgranted to a Participant pursuant to the Plan.
(b)“Award Agreement” means any written agreement, contract or other instrument or document evidencing an Award.
(c)“Beneficiary” means a person designated in writing by the Participant to receive any amounts due to the Participant hereunder in the event of the Participant’s death or, absent any such designation, the Participant’s estate. Such designation, if any, must be on file with the Company prior to the Participant’s death.
(d)“Board” means the Board of Directors of Luxfer.
(e)“Cause” means (i) absence without the permission of the Board from meetings of the Board for three consecutive full meetings, (ii) any prohibition by law from being a director, (iii) becoming bankrupt or making any formal arrangement or composition with the Participant’s creditors generally, (iv) commission of any serious or repeated breach or non-observance of the Participant’s obligations to the Company (which include an obligation not to breach directors’ statutory, fiduciary or common-law duties), or (v) any conduct involving fraud or dishonesty or acting in any manner which, in the opinion of the Company, brings or is likely to bring the Company into disrepute or is materially adverse to the interests of the Company.
(f)“Change in Control” means, unless otherwise defined in the Award Agreement, the occurrence of any of the following after the Effective Date: (i) any Person is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 40% or more of the combined voting power of the Company’s outstanding securities (other than any Person who was a “beneficial owner” of securities of the Company representing 40% or more of the combined voting power of the Company’s outstanding securities prior to the Effective Date); or (ii) dissolution or liquidation of the Company; or (iii) material reconstruction or significant demerger; or (iv) individuals who constitute the Board on the Effective Date (the “Incumbent Board”) cease for any reason to constitute at least a majority of the members of the Board, provided that any person becoming a director subsequent to the Effective Date whose appointment to fill a vacancy or to fill a new Board position was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s shareholders was approved by the same nominating committee serving under an Incumbent Board, shall be, for purposes of this clause (iv), considered as though he or she were a member of the Incumbent Board; or (v) the occurrence of any of the following of which the Incumbent Board does not approve: (A) merger or consolidation in which the Company is not the surviving corporation or (B) sale of all or substantially all of the assets of the Company; or (vi) consummation of a plan of reorganization, merger or consolidation of the Company with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan of reorganization are exchanged or converted into cash or property or securities not issued by the Company, which was approved by shareholders pursuant to a proxy statement soliciting proxies from shareholders of the Company, by someone other than the then current management of the Company.
| | C-1 | |
APPENDIX C
(g)“Code” means the United States Internal Revenue Code of 1986, as amended from time to time, and all regulations, interpretations and administrative guidance issued thereunder.
(h)“Committee” means the Board or such other committee as the Board may designate from time to time to administer the Plan and to otherwise exercise and perform the authority and functions assigned to the Committee under the terms of the Plan.
(i)“Company” means Luxfer and all of its Subsidiaries, collectively.
(j)“Effective Date” means October 2, 2012.
(k)“Exchange Act” means the United States Securities Exchange Act of 1934, as amended from time to time.
(l)“Exercise Price” means the price per Share at which a holder of an Option may purchase Shares.
(m)“Fair Market Value” means, with respect to a Share, as of the applicable date of determination, (i) (x) for purposes of Sections 6 and 7(a) hereof,the closing price per Share on the trading day immediately preceding such date as reported on the New York Stock Exchange and (y) for all other purposes, the closing price per Share onthat date as reported on the New York Stock Exchange (or if not reported, the closing price per Share on the trading day immediately preceding such date as reported on the New York Stock Exchange) or (ii) if not so reported, as determined by the Committee in its sole discretion using a reasonable valuation method taking into account, to the extent applicable, the requirements of Section 409A of the Code.
(n)“Luxfer” means Luxfer Holdings PLC, incorporated in England and Wales, and any successor thereto.
(o) “Nil/Nominal Cost Right” means an equity-based award granted to a UK Participant pursuant to the UK Schedule to the Plan.
(o)(p)“Non-Executive Director” shall mean a member of the Board who is not an employee of the Company.
(p)(q)“Option” means a right granted to a Participant pursuant to Section 7 to purchase a specified amount of Shares at an Exercise Price.
(q)(r)“Ordinary Shares” means Luxfer’s ordinary shares, nominal value £0.50 per share, or any other security into which the ordinary shares shall be changed pursuant to the adjustment provisions of Section 10 of the Plan.
(r)(s)“Participant” means a Non-Executive Director to whom one or more Awards have been granted pursuant to the Plan.
(s)(t)“Person” means a “person” as such term is used in Section 13(d) and 14(d) of the Exchange Act, including any “group” within the meaning of Section 13(d)(3) under the Exchange Act.
(u) “Personal Data” means the name, home address, email address and telephone number, date of birth, social security number or equivalent of a Participant, details of all rights to acquire Shares or other securities or cash granted to the Participant and of Shares or other securities issued or transferred or cash paid to the Participant pursuant to the Plan and any other personal information which could identify the Participant and is necessary for the administration of the Plan.
(t)(v)“Plan” means this Luxfer Non-Executive Directors Equity Incentive Plan, as it may be amended from time to time.
(u)(w)“Restricted Stock” means Shares awarded to a Participant pursuant to Section 8 subject to a substantial risk of forfeiture.
(v)(x)“Restricted Stock Unit” means a right to receive a number of Shares subject to the Award or the value thereof as of the specified date granted to a Participant pursuant to Section 9.
(w)(y)“Securities Act” means the United States Securities Act of 1933, as amended.
(x)(z)“Share” means an Ordinary Share.
(y)(aa)“Subsidiary” shall mean any entity of which a majority of the outstanding voting shares or voting power is beneficially owned directly or indirectly by Luxfer.
(z)(bb)“Transfer” means, with respect to any Award, a transfer, sale, exchange, assignment, pledge, hypothecation or other encumbrance or disposition of such Award, whether for or without consideration. “Transferee”, “Transferred” and “Transferability” shall have correlative meanings.
(cc) “UIP” means the Luxfer Holdings PLC Long-Term Umbrella Incentive Plan, as it may be amended from time to time.
(aa)(dd)“U.S.” shall mean the United States of America.
APPENDIX C
| 3. | Term; Stock Subject to the Plan |
(a)Term of the Plan
Unless the Plan shall have been earlier terminated by the CompanyBoard, Awards may be granted under the Plan at any time in the period commencing on the Effective Date and ending immediately prior to the tenth anniversary of the Effective Dateon June 8, 2032. Awards granted pursuant to the Plan within that period shall not expire solely by reason of the termination of the Plan.
(b)Stock Subject to the Plan
The maximum number of Shares that initially may beavailable for Awards under the Plan and awards under the UIP, in the aggregate, shall be a number equal to 680,410, which represents 5% of the outstanding share capital of Luxfer as of the Effective Date150,000. The maximum referred to in the preceding sentences of this paragraph shall be subject to adjustment as provided in Section 10. The Board may, subject to any applicable law and approval by the shareholders of Luxfer to the extent required by law or listing conditions of the New York Stock Exchange, from time to time increase the maximum number of Shares that may be available for Awards under the Plan. The Company may satisfy its obligation to deliver Shares under the Plan in any manner permitted by law, including without limitation, by issuing new Shares that are authorized for issuance, using treasury shares or causing any trust to deliver Shares.
For purposes of the preceding paragraph, if any Shares covered by Awards shall only be counted as used to the extent they are actually transferred or delivered to a Participant (or such Participant’s permitted transferees as described in the Plan) pursuant to the Plan. For purposes of clarification, in accordance with the preceding sentence, if Shares are withheld to paysubject to an Award are forfeited, if any Award or any portion of an Award lapses or expires or if any Award is settled for cash (in whole or in part) in accordance with its terms, the Shares subject to such Award shall, to the extent of such forfeiture, lapse, expiration or cash settlement, again be available for future grants of Awards under the Plan. Notwithstanding anything to the contrary contained herein, the following Shares shall not be added to the Shares authorized for grant under this Section 3(b) and shall not be available for future grants of Awards: (i) Shares tendered by a Participant or withheld by the Company in payment of the Exercise Price of an Option or; (ii) Shares tendered by the Participant or withheld by the Company to satisfy any tax withholding requirement in connection with an Award, only the shares transferred or delivered (if any), net of the shares withheld or paid, will be deemed transferred or delivered for purposes of determining the number of Shares that areobligation with respect to any Award; and (iii) Shares purchased on the open market with the cash proceeds from the exercise of Options. The payment of dividend equivalents in cash in conjunction with any outstanding Awards shall not be counted against the Shares available for transfer and deliveryissuance under the Plan or the UIP. 7. In addition, if Shares are transferred or delivered subject to conditions which may result in the forfeiture, cancellation or return of such Shares to the Company, any portion of the Shares forfeited, cancelled or returned shall thereafter be treated as not transferred or delivered pursuant to the Plan. In addition, if Shares owned by a Participant (or such Participant’s permitted transferees as described in the Plan) are tendered (either actually or through attestation) to the Company in payment of any obligation in connection with an Award, the number of Shares tendered shall be added to the number of Shares that are available for delivery under the Plan or the UIP. Shares covered by Awards granted pursuant to the Plan in connection with the assumption, replacement, conversion or adjustment of outstanding equity-based awards in the context of a corporate acquisition or merger (within the meaning of Section 303A.08 of the New York Stock Exchange Listed Company Manual) shall not count as used under the Plan for purposes of this Section 3(b).
For the sake of clarity, no Shares that remained available under the Plan for issuance prior to June 8, 2022 will be issued on or after June 8, 2022, and no Shares underlying Awards granted prior to June 8, 2022 will be or become available for grants of Awards under the Plan on or after June 8, 2022.
| 4. | Administration of the Plan |
The Plan shall be administered by the Committee. The Committee shall, consistent with the terms of the Plan, designate the type and other terms and conditions of Awards under the Plan.
The Committee shall have full discretionary authority to administer the Plan, including discretionary authority to interpret and construe any and all provisions of the Plan and the terms of any Award (and any Award Agreement) granted thereunder and to adopt and amend from time to time such rules and regulations for the administration of the Plan as the Committee may deem necessary or appropriate.
On or after the date of grant of an Award under the Plan, the Committee may (i) accelerate the date on which any such Award becomes vested, exercisable or transferable, as the case may be, (ii) extend the term of any such Award, including, without limitation, extending the period following a termination of a Participant’s directorship during which any such Award may remain outstanding, (iii) provide for the paymentscrediting of dividends or dividend equivalents with respect to any such Award, or (iv) waive any conditions to the vesting, exercisability or transferability, as the case may be, of any such Award; provided that the
| | C-3 | |
APPENDIX C
Committee shall not have any such authority to the extent that the grant or exercise of such authority would cause any tax to become due under Section 409A of the Code or any other applicable law.
Without limiting the generality of the foregoing, in order to assure the viability of Awards granted to Participants acting as a director of Luxfer in various jurisdictions, the Committee may provide for such special terms as it may consider necessary or appropriate to accommodate differences in local law, tax policy, or custom applicable in the jurisdiction in which the Participant resides or acts as a director of Luxfer. Moreover, the Committee may approve such supplements to, or amendments, restatements, or alternative version of, the Plan as it may consider necessary or appropriate for such purposes without thereby affecting the terms of the Plan for any other purpose.
Decisions of the Committee shall be final, binding and conclusive on all parties.
To the extent permitted by applicable law, (i) no member of the Committee shall be liable for any action, omission, or determination relating to the Plan, and (ii) the Company shall indemnify and hold harmless each member of the Committee and each other director or employee of the Company to whom any duty or power relating to the administration or interpretation of the Plan has been delegated against any cost or expense (including counsel fees) or liability (including any sum paid in settlement of a claim with the approval of the Committee) arising out of any action, omission or determination relating to the Plan.
| 5. | Eligibility; Award Agreements; Non-Transferability |
(a)Non-Executive Directors of the Company shall be eligible to receive Awards pursuant to the Plan.
(b)Each Award granted under the Plan shall be evidenced by an Award Agreement (which in the case of Options may be a simplified certificate of entitlement), in form and substance approved by the Committee. Except as otherwise determined by the Committee, an Award may not be Transferred.
| 6. | Non-Discretionary Grants. |
Each calendar year during the term of the Plan, within 10 days of the Annual General Meeting, on a date determined by the Committee (the “Award Grant Date”), each Non-Executive Director who is acting as a director of Luxfer on the Award Grant Date and who has at the Award Grant Date been acting as a director of Luxfer for at least six months after his or her initial appointment or election shall receive up to 55100% of such director’s annual fee in Awards. In the event a Non-Executive Director has not been acting as a director of Luxfer for at least six months on the Award Grant Date, the annual fee earned in that year and payable in Awards shall be included in the Awards in respect of the following calendar year.
Subject to the Committee’s discretion, for purposes of the Plan, the Awards shall be valued as follows: (i) Options shall be valued at one-third of the Fair Market Value of Shares subject to the Award on the date of grant:and (ii) Restricted Stock and Restricted Stock Units shall be valued at the Fair Market Value of Shares subject to the Award on the date of grant; and (iii) Nil/Nominal Cost Rights shall be valued at the Fair Market Value of Shares subject to the Award on the date of grant.
Unless otherwise provided in the applicable Award Agreement, each Award of an Option granted under the Plan shall have the following terms and conditions:
(a)Evidence of Grant
The Award Agreement evidencing the grants of Options shall include the amount of Shares subject to an Award, the Exercise Price, vesting conditions (as set forth below)and such additional provisions as may be specified by the Committee. The Exercise Price per Share covered by any Option shall be not less than 100% of the Fair Market Value of a Share on the date of grant with respect to any Option granted to a Participant who is a U.S. taxpayer.
(b)Award Agreement
Each Award granted under the Plan shall be evidenced by an Award Agreement (which in the case of Options may be a simplified certificate of entitlement), in form and substance approved by the Committee. Except as otherwise determined by the Committee, an Award may not be Transferred.
(c)Exercise Period
No Option shall be exercisable after the expiration of ten years from the date it is granted.
(d)Exercise of Options
APPENDIX C
Each Option may, to the extent vested and exercisable, be exercised in whole or in part. The partial exercise of an Option shall not cause the expiration, termination or cancellation of the remaining portion thereof. An Option shall be exercised by such methods and procedures as the Committee determines from time to time, including without limitation through net physical settlement or other method of cashless exercise. The Exercise Price of an Option must be paid in full when the Option is exercised. For the avoidance of doubt, the preceding sentence will not prevent the Exercise Price being paid from the proceeds pursuant to the prompt sale of Shares acquired upon exercise or the Participant entering into other permissible arrangements, agreed by the Committee, for procuring payment of the aggregate Exercise Price.
(e)Cessation of Directorship
Subject to the discretion of the Committee, if the Participant ceases to be a director of Luxfer for any reason other than for Cause, (i) the portion of the Option that has not become vested or exercisable as of the date when the Participant ceases to be a director shall immediately lapse and (ii) except as otherwise provided in the Plan or in the applicable Award Agreement, the portion of the Option that is vested or exercisable as of the date when the Participant ceases to be a director will lapse on the first anniversary of such date to the extent not theretofore exercised. If the Participant ceases to be a director of Luxfer because of removal or vacation of office for Cause, the Option, whether then vested or exercisable or not, shall immediately lapse on such cessation of directorship.
Unless otherwise provided in the applicable Award Agreement, each Award of Restricted Stock granted under the Plan shall have the following terms and conditions:
(a)Grant of Restricted Stock
At the time of grant, the Committee shall determine, in its discretion, the terms and conditions that will apply to Restricted Stock granted pursuant to this Section 8. Restricted Stock shall vest with respect to one-third of the Shares subject to the Award on each of the first three anniversaries from the date of grant provided the Participant is continuously acting as a director of Luxfer through each such respective anniversary.
(b)Issuance of Restricted Stock; Rights of Participants
As soon as practicable after Restricted Stock has been granted, Restricted Stock shall be transferred to the Participant. Shares of Restricted Stock may be evidenced in such manner as the Committee shall determine. Except as otherwise determined by the Committee, the Participant will have all rights of a shareholder with respect to the Shares of Restricted Stock, including the right to vote and, subject to Section 8(c), to receive dividends or other distributions, except that the Shares may be subject to a vesting schedule and forfeiture and may not be Transferred until the restrictions are satisfied or lapse. The Committee may enforce any restrictions that the Committee may impose on Restricted Stock in such manner as the Committee shall determine, including legends, custody accounts or any other restrictions on transfer.
(c)Dividends
No dividends will be paid to a Participant with respect to unvested Shares of Restricted Stock. The Committee may provide in its sole discretion that any dividends declared on the Shares of Restricted Stock before they are vested shall either (i) be reinvested in the form of additional Shares, which shall be subject to the same vesting provisions that apply to the Shares of Restricted Stock to which they relate, or (ii) be credited by the Company to an account for the Participant and accumulated with or without interest until the date upon which the Shares of Restricted Stock to which they relate become vested, and any dividends accrued with respect to forfeited Restricted Stock will be reconveyed to the Company without further consideration or any act or action by the Participant. In cased dividends are reinvested, the number of additional Shares shall be determined by first (i) multiplying the number of Shares of Restricted Stock subject to an Award on the dividend payment date by the per-Share dollar amount of the dividend so paid, and then (ii) dividing the resulting amount by the Fair Market Value of Shares on the dividend payment date, with the number of Shares rounded down to the nearest whole number and the cash balance remaining being carried forward and added to the dividend amounts (if any) paid on the next occasion. If Shares of Restricted Stock subject to an Award are forfeited, the additional Shares (or credited cash amounts) that relate to such Restricted Stock shall also be forfeited.
(d)Cessation of Directorship
Subject to the discretion of the Committee, if the Participant ceases to be a director of Luxfer for any reason, all Shares underlying Restricted Stock that have not yet become vested as of the date the Participant ceases to be a director shall be immediately forfeited by the Participant and the Participant shall have no further rights with respect thereto
| | C-5 | |
APPENDIX C
Unless otherwise provided in the applicable Award Agreement, each Award of Restricted Stock Units granted under the Plan shall have the following terms and conditions:
(a)Grant of Restricted Stock Units
At the time of grant, the Committee shall determine, in its discretion, the terms and conditions that will apply to Restricted Stock Units granted pursuant to this Section 9. Unless otherwise determined by the Committee, Restricted Stock Units shall vest with respect to one-third of the Shares subject to the Award on each of the first three anniversaries from the date of grant provided the Participant is continuously acting as a director of Luxfer through each such respective anniversary.
(b)Dividend Equivalents
No dividend or dividend equivalents will be paid to a Participant with respect to unvested Restricted Stock Units. The Committee shallmay in its sole discretion provide for the payment of dividend equivalents with respect to Restricted Stock Units. TheIf dividend equivalents will be paid, the Company shall credit the Participant with additional Restricted Stock Units as of each date on which the Company pays a cash dividend on Shares, the number of which shall be determined by first (i) multiplying the number of Restricted Stock Units subject to an Award on the dividend payment date by the per-Share dollar amount of the dividend so paid, and then (ii) dividing the resulting amount by the Fair Market Value of Shares on the dividend payment date. Any Aadditional Restricted Stock Units shall be subject to the same restrictions, including but not limited to vesting, Transferability and payment restrictions, that apply to the Restricted Stock Units to which they relate. If the Restricted Stock Units subject to an Award are forfeited, the additional Restricted Stock Units that relate to such Restricted Stock Units shall also be forfeited.
(c)Form and Timing of Settlement
Payment of earned Restricted Stock Units shall be made as soon as practicable after the date(s) determined by the Committee and set forth in the Award Agreement, provided that with respect to any Restricted Stock Units subject to Section 409A of the Code such payment will occur in a manner that would not cause any tax to become due under Section 409A of the Code. Restricted Stock Units may be settled for cash, Shares, or a combination of both, as determined by the Committee and set forth in the Award Agreement. The Committee may permit Participants to request the deferral of payment of vested Restricted Stock Units (including the value of related dividend equivalents, if any) to a date later than the payment date specified in the Award Agreement, provided that with respect to any Restricted Stock Units subject to Section 409A of the Code such deferral will be made in a manner that would not cause any tax to become due under Section 409A of the Code.
(d)Cessation of Directorship
Subject to the discretion of the Committee,, if the Participant ceases to be a director of Luxfer for any reason, all Shares underlying Restricted Stock Units that have not yet become vested as of the date the Participant ceases to be a director shall be immediately forfeited by the Participant and the Participant shall have no further rights with respect thereto.
| 10. | Adjustment upon Certain Changes |
(a)Adjustment of Shares
If the number of outstanding Shares is changed by a stock dividend, recapitalization, stock split, reverse stock split, subdivision, combination, reclassification or similar change in the capital structure of Luxfer, without thefair market value consideration, or an extraordinary cash dividend or distribution is made, then (i) the number of Shares available for Awards under the Plan and awards under the UIPset forth in Section 3, (ii) the Exercise Prices of and number of Shares subject to outstanding Options, (iii) the nominal value per Share, if applicable, and the number of Shares subject to other outstanding Awards, may be proportionately adjusted, subject to any required action by the Board or the shareholders of the CompanyLuxfer and in compliance with applicable securities laws and, to the extent applicable, Section 409A of the Code. In addition, except insofar as the Board (on behalf of Luxfer) agrees to capitalize Luxfer’s reserves and apply the same in paying up any difference between the Exercise Price (or any amount payable per Share in relation to an Award) and the nominal value of the Shares, the Exercise Price (or other amount payable per Share in relation to an Award) of any Award over Shares that are to be newly issued by Luxfer in satisfaction of the Award shall not be reduced below a Share’s nominal value.
(b) Certain Mergers
Subject to any required action by the shareholders of Luxfer, in the event that the Company shall be the surviving corporation in any merger, consolidation or similar transaction as a result of which the holders of Shares receive consideration consisting exclusively of securities of such surviving corporation, the Committee may, to the extent deemed appropriate by the Committee, adjust each Award outstanding on the date of such merger or consolidation so that it pertains and applies to the securities which a holder of the number of Shares subject to such Award would have received in such merger or consolidation.
APPENDIX C
(c) Certain Other Transactions
In the event of (i) a dissolution or liquidation of Luxfer, (ii) a sale of all or substantially all of the Luxfer’s assets (on a consolidated basis), (iii) a merger, consolidation or similar transaction involving Luxfer in which Luxfer is not the surviving corporation or (iv) a merger, consolidation or similar transaction involving Luxfer in which Luxfer is the surviving corporation but the holders of Shares receive securities of another corporation and/or other property, including cash, the Committee shall, in its sole discretion, have the power to:
(i) cancel, effective immediately prior to the occurrence of such event, each Award (whether or not then exercisable), and, in full consideration of such cancellation, pay to the Participant to whom such Award was granted an amount in cash, for each Share subject to such Award equal to the value, as determined by the Committee in its reasonable discretion, of such Award, provided that with respect to any outstanding Option, such value shall be equal to the excess of (A) the value, as determined by the Committee in its reasonable discretion, of the property (including cash) received by the holder of a Share as a result of such event over (B) the Exercise Price of such Option (which value may be zero); or
(ii) provide for the exchange of each Award (whether or not then exercisable or vested) for an award with respect to, as appropriate, some or all of the property which a holder of the number of Shares subject to such Award would have received in such transaction and, incident thereto, make an equitable adjustment as determined by the Committee in its reasonable discretion in the Exercise Price of the Award, or the number of shares or amount of property subject to the Award or, if appropriate, provide for a cash payment to the Participant to whom such Award was granted in partial consideration for the exchange of the Award.
(d) Notice
The Company shall give each Participant notice of an adjustment, substitution, cancellation or other action hereunder and, upon notice, such adjustment, substitution, cancellation or other action shall be conclusive and binding for all purposes.Notwithstanding the foregoing, the Committee may, in its discretion, decline to take action under this Section 10 with respect to any Award if the Committee determines that such action would violate (or cause the Award to violate) applicable law or result in adverse tax consequences to the Participant or to the Company.
(e) No Repricing
Notwithstanding any provision of the Plan to the contrary, in no event shall (i) any repricing (within the meaning of U.S. generally accepted accounting principles or any applicable stock exchange rule) of Awards granted under the Plan be permitted at any time under any circumstances or (ii) any new Awards be granted in substitution for outstanding Awards previously granted to Participants if such action would be considered a repricing (within the meaning of U.S. generally accepted accounting principles or any applicable stock exchange rule).
(b)(f)No Other Rights
Except as expressly provided in the Plan, no Participant shall have any rights by reason of any subdivision or consolidation of shares of stock of any class, the payment of any dividend, any increase or decrease in the number of shares of stock of any class or any dissolution, liquidation, merger or consolidation of Luxfer or any other corporation. Except as expressly provided in the Plan, no issuance by Luxfer of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number of Shares or amount of other property subject to, or the terms related to, any Award.
(c)(g)Savings Clause
No provision of this Section 10 shall be given effect to the extent that such provision would cause any tax to become due under Section 409A of the Code.
No person shall have any rights as a shareholder with respect to any Shares covered by or relating to any Award granted pursuant to the Plan until the date of the transfer or delivery of Shares. Except as otherwise expressly provided in Section 10, no adjustment of any Award shall be made for dividends or other rights for which the record date occurs prior to the date such Shares are transferred or delivered. Nothing in this Section 11 is intended, or should be construed, to limit authority of the Committee to cause the Company to make payments based on the dividends that would be payable with respect to any Share if it were transferred or delivered or outstanding, or from granting rights related to such dividends; provided, however, that no dividend or dividend equivalents will be paid to a Participant with respect to unvested Awards.
| | C-7 | |
APPENDIX C
The Company may, but shall not have any obligation to, establish any separate fund or trust or other segregation of assets to provide for the satisfaction of Awards under the Plan.
| 12. | No Special Rights to Continue as a Director; No Right to Awards |
Neither the Plan, nor any Award Agreement nor action taken under the Plan, shall be construed as conferring upon a Participant any right to continue as a director of Luxfer, to be renominated by the Board or re-elected by the shareholders of Luxfer or shall interfere in any way with the right of Luxfer or its shareholders at any time to remove such Participant from his or her position as director or to increase or decrease the annual fees of any Non-Executive Director or change the portion thereof paid in cash or Awards.
The Company shall be under no obligation to effect the registration pursuant to the Securities Act or any federal, state or non-U.S. securities laws of any Shares to be transferred or delivered hereunder or to effect similar compliance under any state laws. Notwithstanding anything in the Plan to the contrary, the Company shall not be obligated to cause to be transferred or delivered any Shares pursuant to the Plan unless and until the Company is advised by its counsel that the transfer and delivery of Shares is in compliance with all applicable laws, regulations of governmental authority and the requirements of any securities exchange on which Shares are traded. The Committee may require, as a condition to the transfer and delivery of Shares pursuant to the terms hereof, that the recipient of such Shares make such covenants, agreements and representations, and that certificates, if any, evidencing such Shares, bear such legends, as the Committee deems necessary or desirable.
The exercise of any Option granted hereunder shall only be effective at such time as counsel to the Company shall have determined that the transfer or delivery of Shares pursuant to such exercise is in compliance with all applicable laws and regulations and the requirements of any securities exchange on which Shares are traded. The Company may, in its sole discretion, defer the effectiveness of an exercise of an Award hereunder or the delivery or transfer of Shares pursuant to any Award pending or to ensure compliance under federal, state, non-U.S. securities laws and the requirements of any securities exchange on which Shares are traded. The Company shall inform the Participant in writing of its decision to defer the effectiveness of the exercise of an Award or the delivery or transfer of Shares pursuant to any Award. During the period that the effectiveness of the exercise of an Option has been deferred, the Participant may, by written notice, withdraw such exercise and obtain the refund of any amount paid with respect thereto.
The issue or transfer of any Shares under the Plan shall be subject to Luxfer’s Articles of theAssociation and to any necessary consents of any governmental or other authorities (in any jurisdiction) under any enactments or regulations from time to time in force. The Participant shall comply with any requirements to be fulfilled in order to obtain or obviate the necessity of any such consent.
(a)Payment of Taxes
Participants shall be solely responsible for any applicable taxes imposed on the Participant by applicable law (including without limitation income, social security and excise taxes) and penalties, and any interest that accrues thereon, which they incur in connection with the receipt, vesting, settlement or exercise of any Award. Notwithstanding any provision of the Plan to the contrary, in no event shall the Company or the Committee be liable to a Participant on account of an Award’s failure to (i) qualify for favorable U.S. or non-U.S. tax treatment or (ii) avoid adverse tax treatment under U.S. or non-U.S. law, including, without limitation, under Section 409A of the Code.
(b)Cash Remittance
Whenever Shares are to be transferred or delivered upon the exercise, grant or vesting of an Award, and whenever any cash amount shall become payable in respect of any Award, the Company shall have the right to require the Participant to remit to the Company in cash an amount sufficient to satisfy federal, state, local and/or non-U.S. withholding tax requirements, if any, attributable to such exercise, grant, vesting or payment prior to the delivery of Shares or recordation by the Company of the Participant or his or her nominee as the owner of such Shares or the effectiveness of the lapse of such restrictions or making of such payment. In addition, upon any payment (including in Shares) with respect to any Award, the Company shall have the right to withhold from any payment required to be made pursuant thereto an amount sufficient to satisfy the federal, state, local and/or non-U.S. withholding tax requirements, if any, attributable to such exercise, settlement or payment.
(c)Share Remittance
At the election of the Participant, subject to the approval of the Committee, when Shares are to be transferred or delivered upon the exercise, grant or vesting of an Award, the Participant may tender to the Company a number of Shares that have been
APPENDIX C
owned by the Participant for at least six months (or such other period as the Committee may determine) having a Fair Market Value at the tender date determined by the Committee to be sufficient to satisfy the minimum federal, state, local and/or non-U.S. withholding tax requirements, if any, attributable to such exercise, grant or vesting, but not greater than the minimum withholding obligations. Such election shall satisfy the Participant’s obligations under Section 14(a) hereof, if any.
(d)Share Withholding
At the election of the Participant, subject to the approval of the Committee, when Shares are to be transferred or delivered upon the exercise, grant or vesting of an Award, the Company shall withhold a number of such Shares determined by the Committee to be sufficient to satisfy the minimum federal, state, local and/or non-U.S. withholding tax requirements, if any, attributable to such exercise, grant or vesting, but not greater than the minimum withholding obligations. Such election shall satisfy the Participant’s obligations under Section 14(a) hereof, if any.
| 15. | Amendment or Termination of the Plan |
(a) The Board may at any time suspend or discontinue the Plan or revise or amend it in any respect whatsoever; provided, however, that to the extent that any applicable law, regulation or rule of a stock exchange requires shareholder approval in order for any such revision or amendment to be effective, such revision or amendment shall not be effective without such approval. The preceding sentence shall not restrict the Committee’s ability to exercise its discretionary authority hereunder pursuant to Section 4 hereof, which discretion may be exercised without amendment to the Plan. No provision of this Section 15 shall be given effect to the extent that such provision would cause any tax to become due under Section 409A of the Code. Except as expressly provided in the Plan, no action hereunder may, without the consent of a Participant, reduce the Participant’s rights under any previously granted and outstanding Award. Nothing in the Plan shall limit the right of the Company to pay compensation of any kind outside the terms of the Plan.
(b) The Committee may amend or modify the terms and conditions of an Award to the extent that the Committee determines, in its sole discretion, that the terms and conditions of the Award violate or may violate Section 409A of the Code; provided, however, that (i) no such amendment or modification shall be made without the Participant’s written consent if such amendment or modification would violate the terms and conditions of any other agreement between the Participant and the Company and (ii) unless the Committee determines otherwise, any such amendment or modification of an Award made pursuant to this Section 15(b) shall maintain, to the maximum extent practicable, the original intent of the applicable Award provision without contravening the provisions of Section 409A of the Code. The amendment or modification of any Award pursuant to this Section 15(b) shall be at the Committee’s sole discretion and the Committee shall not be obligated to amend or modify any Award or the Plan, nor shall the Company be liable for any adverse tax or other consequences to a Participant resulting from such amendments or modifications or the Committee’s failure to make any such amendments or modifications for purposes of complying with Section 409A of the Code or for any other purpose. To the extent the Committee amends or modifies an Award pursuant to this Section 15(b), the Participant shall receive notification of any such changes to his or her Award and, unless the Committee determines otherwise, the changes described in such notification shall be deemed to amend the terms and conditions of the Award and the applicable Award Agreement.
Upon the death of a Participant, to the extent provided in the applicable Award Agreement, (i) any outstanding Options granted to such Participant may be exercised only by the Beneficiary and (ii) any Restricted Stock granted to such Participant may only be transferred to the Beneficiary. The Beneficiary, as a condition of such exercise or transfer, as the case may be, shall be bound in all respects by the provisions of the Plan and the applicable Award Agreement as if the Beneficiary were an original party thereto and by the acknowledgements made by the Participant in connection with the grant of the Award and all references in the Plan and the applicable Award Agreement to the Participant shall be deemed to refer to such Beneficiary. Any attempt to Transfer an Award in violation of the Plan shall render such Award null and void.
(a)Treatment of the Awards
Unless otherwise set forth in the Award Agreement, uUpon a Change in Control, each outstanding Award shall become fully vested and exercisable, as applicable, and all restrictions thereon shall lapse. Except as otherwise provided in the Plan or in the applicable Award Agreement or as otherwise communicated to the Participants by the Committee in connection with the Change in Control, an Option shall lapse on the first anniversary of the Change in Control to the extent not theretofore exercised.
| | C-9 | |
APPENDIX C
(b)409A Savings Clause
Notwithstanding the foregoing and for the purposes of timing of payment, distribution or settlement only, a Change in Control shall not be deemed to occur under this Section 17 of the Plan with respect to any Award that constitutes “non-qualified deferred compensation” within the meaning of Section 409A of the Code and is granted to a Participant subject to United States taxation, unless the events that have occurred would also constitute a “Change in the Ownership or Effective Control of a Corporation or in the Ownership of a Substantial Portion of the Assets of a Corporation” under Treasury Department Final Regulation 1.409A-3(i)(5), or any successor thereto.
The Company shall not be required to issue any fractional Shares pursuant to the Plan. The Committee may provide for the elimination of fractions or for the settlement thereof in cash.
If determined by the Committee, the vesting/exercise of an Award and the issue of Shares pursuant to the Award will be subject to the payment of the aggregate nominal value of the underlying Shares by the Participant. Any cash payment to be made to a Participant pursuant to Section 10(c)(i) of the Plan in consideration of the cancellation of an Award or an award that is provided in exchange for an Award pursuant to Section 10(c)(ii) of the Plan, shall where appropriate and if determined by the Committee, take account of the nominal value of the Shares subject to the Award.
| 20. | Section 409A Exemption |
All Awards under the Plan are intended to be exempt from Section 409A of the Code and shall be construed in accordance with the foregoing.
It shall be a condition of an Award that the Participant agrees and consents to:
Any agreements and consents in respect of any personal data of a Participant shall be as set forth in the applicable Award Agreement.
(a) The collection, use, processing and transfer of Participant’s Personal Data by the Company, any trustee or third party administrator of the Plan, the Company’s registrars, or any broker through whom Shares are to be sold on behalf of a Participant.
(b) The Company, any trustee or third party administrator of the Plan, the Company’s registrars, or any broker through whom Shares are to be sold on behalf of a Participant transferring the Participant's Personal Data amongst themselves for the purposes of implementing, administering and managing the Plan and the grant of Awards and the acquisition of Shares pursuant to Awards, the disposal of such Shares or the making of any cash payment under the Plan.
(c) The use of Personal Data by any such person for any such purposes; and
(d) The transfer to and retention of Personal Data by third parties including any trustee or third party administrator of the Plan for or in connection with such purposes.
(a)Except as otherwise provided in the Plan, any written notice or document to be given by, or on behalf of, the Company or any administrator of the Plan to a Participant in accordance or in connection with the Plan may be given by hand or sent by pre-paid first class mail (airmail if overseas), facsimile transmission or email to the Participant's home or work address, facsimile number or email address last known to the Company to be the Participant’s address, facsimile number or email address. Subject to the paragraph (d) of this Section 22 any notice or document given in accordance with this Section 22 shall be deemed to have been given: (i) upon delivery, if delivered by hand; (ii) after 24 hours, if sent by mail; after 4 hours, if sent by facsimile transmission; and (iv) at the time of transmission, if sent by email except that a notice or document shall not be duly given by email unless that person is known by the Company to have personal access during his normal business hours to information sent to him by email.
(b)Any notice or document so sent to a Participant shall be deemed to have been duly given notwithstanding that such person is then deceased (and whether or not the Company has notice of his death) except where his personal representatives have supplied an alternative address to which documents are to be sent to the Company.
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APPENDIX C
(c)Any written notice or document to be submitted or given to the Company or any administrator of the Plan in accordance or in connection with the Plan may be given by hand or sent by pre-paid first class post (airmail if overseas), facsimile transmission or email but shall not in any event be duly given unless it is actually received by the Secretary of the Company or such other individual as may from time to time be nominated by the Company and whose name and address, facsimile number or email address is notified to the Participant.
(d)For the purposes of the Plan, an email shall be treated as not having been duly sent or received if the recipient of such email notifies the sender that it has not been opened because it contains, or is accompanied by a warning or caution that it could contain or be subject to, a virus or other computer program which could alter, damage or interfere with any computer software or email.
Except as otherwise expressly stated to the contrary, neither the Plan nor the making of any Award shall have the effect of giving any third party any rights under the Plan pursuant to the UK Contracts (Rights of Third Parties) Act 1999 or otherwise and that Act shall not apply to the Plan or to the terms of any Award under it.
(a) This Plan and any Award shall be governed by, and construed in accordance with, English law.
(b) Any person or persons referred to in the Plan shall:
(i) submit to the exclusive jurisdiction of the English courts as regards any claim, legal action, dispute, difference or proceedings concerning an Award or any matter arising from, or in relation to, the Plan;
(ii) waive personal service of any proceedings;
(iii) agree that service on him or it of proceedings may be effected by registered mail to his or its address for service of notices under the Plan; and
(iv) waive any objection to proceedings taking place in the English courts on the grounds of venue or that proceedings have been brought in an inconvenient forum.
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APPENDIX D
The following is an excerpt of Articles 1 through 7 of the Company’s Articles of Association. If Resolution 14 is duly passed as a Special Resolution and, subject to the Capital Reduction described in Resolution 13 taking effect, the definition of Deferred Shares set forth in Article 2.1 and Article 5.2, in full, will be removed from the Company’s Articles of Association, as shown below. The Company’s existing Articles of Association, which were filed with the SEC as an Exhibit to a Form 8-K on May 15, 2019, can be found at https://www.sec.gov/Archives/edgar/data/1096056/000089534519000220/ce-s8ex41_luxfer.htm.
PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION |
INTERPRETATION
| 1. | Exclusion of Other Regulations or Articles |
No regulations or articles set out in any statute, or in any statutory instrument or other subordinate legislation made under any statute, concerning companies shall apply as the regulations or articles of the company.
| 2.1 | In these articles unless the context otherwise requires: |
"address" includes a number or address used for the purposes of sending or receiving documents or information by electronic means;
"these articles" means these articles of association as altered from time to time and the expression "this article" shall be construed accordingly;
"the auditors" means the auditors from time to time of the company or, in the case of joint auditors, anyholders, the signature of only one of them;
"the board" meansjoint holders is required but, if more than one votes, the board of directors from time to timevote of the company or the directors present at a meeting of the directors at which a quorum is present;
"certificated share" means a share which is not an uncertificated share and references in these articles to a share being held in certificated form shall be construed accordingly;
"chair" means the chair of the board from time to time;
"clear days" in relation to the period of a notice means that period excluding the day when the notice is served or deemed to be served and the day for which it is given orfirst named on which it is to take effect;
"the Companies Acts" means every statute (including any orders, regulations or other subordinate legislation made under it) from time to time in force concerning companies in so far as it applies to the company;
"Deferred Shares" means the deferred shares of £O.OOO1 each in the share capital of the company;
"the holder" in relation to any shares means the person whose name is entered in the register as the holder of those shares;
"member" means a member of the company;
"the office" means the registered office from time to time of the company;
"Operator" means a person approved under the Uncertificated Securities Regulations 2001 as operator of a relevant system;
"ordinary shares" means ordinary shares of EO.50 each in the share capital of the company;
"paid up" means paid up or credited as paid;
"participating class" means a class of shares title to which is permitted by an Operator to be transferred by means of a relevant system;
"person entitled by transmission" means a person whose entitlement to a share in consequence of the death or bankruptcy of a member or of any other event giving rise to its transmission by operation of law has been noted in the register;
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APPENDIX D
"the register" means the register of members of the company;
"relevant system" means a computer-based system which allows units of securities without written instruments towill be transferred and endorsed pursuantaccepted to the uncertificated securities
"seal" means an commonexclusion of other joint holders. B Authorized Signatures — This section must be completed for your vote to count. Please date and sign below. NOTE: Please sign as name appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, trustee or official seal thatguardian, please give full title as such. Date (mm/dd/yyyy) — Please print date below. Signature 1 — Please keep signature within the company may be permitted to have underbox. Signature 2 — Please keep signature within the Companies Acts;box. IF VOTING BY MAIL, YOU MUST COMPLETE SECTIONS A AND B ON BOTH SIDES OF THIS CARD.
"the secretary" means the secretary, or (if there are joint secretaries) any one of the joint secretaries, of the company and includes an assistant or deputy secretary and any person appointed by the board to perform any of the duties of the secretary;
"the uncertificated securities rules" means any provision of the Companies Acts relating to the holding, evidencing of title to, or transfer of uncertificated shares and any legislation, rules or other arrangements made under or by virtue of such provision;
"uncertificated share" means a share of a class which is at the relevant time a participating class, title to which is recorded on the register as being held in uncertificated form and references in these articles to a share being held in uncertificated form shall be construed accordingly; and
"United Kingdom" means Great Britain and Northern Ireland.
| 2.2 | References to a document being executed, signed or to signature include references to its being executed or signed under hand or under seal or by any other method and, in the case of a communication in electronic form, such references are to its being authenticated as specified by the Companies Acts. |
| 2.3 | References to writing and to any form of written communication include references to any method of representing or reproducing words in a legible and non-transitory form whether sent or supplied in electronic form or otherwise. |
| 2.4 | Words or expressions to which a particular meaning is given by the Companies Acts in force when these articles or any part of these articles are adopted bear (if not inconsistent with the subject matter or context) the same meaning in these articles or that part (as the case may be) save that the word "company" shall include any body corporate. |
| 2.5 | References to a meeting shall not be taken as requiring more than one person to be present if any quorum requirement can be satisfied by one person. |
| 2.6 | Headings are included only for convenience and shall not affect meaning. |
The liability of members of the company is limited to the amount: if any, unpaid on the shares in the company held by them.
The company may change its name by resolution of the board.
SHARE CAPITAL
| 5. | Rights Attached to Shares |
| 5.1 | Subject to the provisions of the Companies Acts and to any rights attached to existing shares, any share may be issued with or have attached to it such rights and restrictions as the company may by ordinary resolution decide or, if no such resolution has been passed or so far as the resolution does not make specific provision, as the board may decide. Such rights and restrictions shall apply to the relevant shares as if the same were set out in these articles. |
| 5.2 | The following special rights and restrictions shall apply to the Deferred Shares: |
(a) Income
The holders of Deferred Shares shall not be entitled to receive any dividend or other distribution;
(b) Capital
On a winding up (but not otherwise) the holders of Deferred Shares shall be entitled to the repayment of the paid up nominal amount on their Deferred Shares, but only after any payment to the holders of Ordinary Shares of an amount equal to 100 times the amount paid up on such Ordinary Shares; and
(c) General Meetings
0001096056 4 2022-01-01 2022-12-31 APPENDIX D
The holders of Deferred Shares shall not be entitled to receive notice of or attend or vote at any general meeting of the company.
Subject to the provisions of the Companies Acts and to any rights attached to existing shares, any share may be issued which is to be redeemed, or is liable to be redeemed et the option of the company or the holder. The board may determine the terms, conditions and manner of redemption of any redeemable share so issued. Such terms and conditions shall apply to the relevant shares as if the same were set out in these articles.
Subject to the provisions of the Companies Acts, all or any of the rights attached to any existing class of shares may from time to time (whether or not the company is being wound up) be varied either with the consent in writing of the holders of not less than three-fourths in nominal value of the issued shares of that class (excluding any shares of that class held as treasury shares) or with the sanction of a special resolution passed at a separate general meeting of the holders of those shares. All the provisions of these articles as to general meetings of the company shall, with any necessary modifications, apply to any such separate general meeting, but so that the necessary quorum shall be two persons entitled to vote and holding or representing by proxy not less than one-third in nominal value of the issued shares of the class in question (excluding any shares of that class held as treasury shares), (but so that at any adjourned meeting one holder entitled to vote and present in person or by proxy (whatever the number of shares held by such person) shall be a quorum), that every holder of shares of the class present in person or by proxy and entitled to vote shall be entitled on a poll to one vote for every share of the class held by such person (subject to any rights or restrictions attached to any class of shares) and that any holder of shares of the class present in person or by proxy and entitled to vote may demand a poll. The foregoing provisions of this article shall apply to the variation of the special rights attached to some only of the shares of any class as if each group of shares of the class differently treated formed a separate class and their special rights were to be varied. For the purposes of this article, where a person is present by proxy or proxies such person is treated as holding only the shares in respect of which those proxies are authorised to exercise voting rights.
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