The following table shows the compensation paid to our non-employee directors
for their service during
fiscal year 2018. 19
2020.
NON-EMPLOYEE DIRECTOR COMPENSATION FOR FISCALCALENDAR YEAR 2018 Name | | Fees Earned or Paid in Cash ($) | | Stock Awards ($)(1) | | Non-Equity Incentive Plan Compensation ($) | | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) | | All Other Compensation ($) | | Total ($) |
Sarah R. Coffin | | 83,875 | | 150,044(2) | | — | | — | | — | | 233,919 |
John B. Crowe | | 44,938(3) | | 75,022 | | — | | — | | — | | 119,960 |
Ronald M. De Feo | | 10,598(4) | | 55,985 | | — | | — | | — | | 66,583 |
William A. Foley | | 74,375 | | 150,044(5) | | — | | — | | — | | 224,419 |
Daniel R. Lee | | 42,026(6) | | 75,022 | | — | | — | | — | | 117,048 |
F. Jack Liebau, Jr. | | 146,875(7) | | 150,044 | | — | | — | | — | | 296,919 |
Bruce M. Lisman | | 91,963(8) | | 150,044 | | — | | — | | — | | 242,007 |
Lori Lutey | | 3,872(9) | | 49,997 | | — | | — | | — | | 53,869 |
Jane Scaccetti | | 74,375 | | 150,044 | | — | | — | | — | | 224,419 |
Robert A. Stefanko | | 93,875(10) | | 150,044 (11) | | — | | — | | — | | 243,919 |
2020Sarah R. Coffin | | | $85,000 | | | 74,997 | | | — | | | — | | | — | | | $159,997 |
Ronald M. De Feo | | | $75,000 | | | 74,997 | | | — | | | — | | | — | | | $149,997 |
William A. Foley | | | $75,000 | | | 74,997 | | | — | | | — | | | — | | | $149,997 |
F. Jack Liebau, Jr. | | | $145,000 | | | 74,997 | | | — | | | — | | | — | | | $219,997 |
Bruce M. Lisman | | | $81,000 | | | 74,997 | | | — | | | — | | | — | | | $155,997 |
Lori Lutey | | | $75,000 | | | 74,997 | | | — | | | — | | | — | | | $149,997 |
Jane Scaccetti | | | $81,667 | | | 74,997 | | | — | | | — | | | — | | | $156,664 |
Robert A. Stefanko | | | $78,333 | | | 74,997 | | | — | | | — | | | — | | | $153,330 |
(1)
| Except as otherwise noted, Stock Award amounts do not reflect compensation actually received by the directors. For non-employee directors who served on the Board in both 2017 and 2018,2020, the amounts shown reflect the equity compensation for both of those years of service. The amounts shown reflect thegrant date fair market value of (i) 3,081 shares of common stock awarded in arrears on April 25, 2018 to the non-employee directors for their service for the prior year, and (ii) 3,0815,850 restricted stock units awarded to the non-employee directors on April 25, 2018,29, 2020 with respect to their current service commencing on that date until the 20192021 Annual Meeting of Shareholders, at which time their awards will vest. |
(2)
| Ms. Coffin deferredvest unless the director elects to receive stock units and defer receipt of common stock for her Stock Award in fiscal years 2017 and 2018, and instead received stock units. On the date thatuntil he or she ceases to be a member of the Board for any reason whatsoever, or as soon thereafter as is reasonably practical,at which time the Company shall make a payment to herthe director of one share for every stock unit then held by her as payment with respect to each such stock unit. The supplemental fees for service as Chair of the Audit Committee were pro-rated between Ms. Scaccetti and Mr. Stefanko based on their period of service during 2020. |
2021 Proxy Statement (3)| | Fees paid to Mr. Crowe for his service until the 2018 Annual Meeting of Shareholders. 25
|
(4)
| Fees paid to Mr. De Feo for his service for the period beginning August 2, 2018. The amount of Stock Awards shown reflects the fair market value of 2,574 restricted stock units awarded to Mr. De Feo, pro rata for fiscal year 2018, with respect to his current service commencing on August 2, 2018 until the 2019 Annual Meeting of Shareholders, at which time his awards will vest.
|
(5)
| Mr. Foley deferred the receipt of common stock for his Stock Award in fiscal years 2017 and 2018, and instead received stock units. On the date that he ceases to be a member of the Board for any reason whatsoever, or as soon thereafter as is reasonably practical, the Company shall make a payment to him of one share for every stock unit then held by him as payment with respect to each such stock unit.
|
(6)
| Fees paid to Mr. Lee for his service until the 2018 Annual Meeting of Shareholders.
|
(7)
| Fees Earned or Paid in Cash includes fees in the amount of $10,000 for Mr. Liebau’s service as a member of the Finance Committee, an Ad Hoc committee established for 2018.
|
(8)
| Fees Earned or Paid in Cash includes fees in the amount of $15,000 for Mr. Lisman’s service as Chairman of the Ad-Hoc Finance Committee, an Ad Hoc committee established for 2018.
|
(9)
| Fees paid to Ms. Lutey for her service for the period beginning September 12, 2018. The amount of Stock Awards shown reflects the fair market value of 2,123 restricted stock units awarded to Ms. Lutey, pro rata for fiscal year 2018, with respect to her current service commencing on September 12, 2018 until the 2019 Annual Meeting of Shareholders, at which time his awards will vest.
|
(10)
| Fees Earned or Paid in Cash includes fees in the amount of $10,000 for Mr. Stefanko’s service as a member of the Ad-Hoc Finance Committee, an Ad Hoc committee established for 2018.
|
(11)
| Mr. Stefanko deferred the receipt of common stock for his Stock Award in fiscal years 2017 and 2018, and instead received stock units. On the date that he ceases to be a member of the Board for any reason whatsoever, or as soon thereafter as is reasonably practical, the Company shall make a payment to him of one share for every stock unit then held by him as payment with respect to each such stock unit.
|
20
TABLE OF CONTENTS
PROPOSAL NO. 2
—– AMENDMENT TO ADOPT MAJORITY VOTING STANDARD FOR THE ELECTION OF DIRECTORS IN UNCONTESTED ELECTIONSOverview
In Proposal 2, we are asking shareholders to approve an amendment to Article 7 of our Articles to eliminate plurality voting standards in uncontested elections of directors. Under the current “plurality voting” standard, the nominees who receive the greatest number of affirmative votes are elected to the Board. However, as described under Corporate Governance and Compensation Practices – Director Resignation Policy, the Company has adopted a director resignation policy under which, in an uncontested election, any incumbent director who receives a greater number of votes “Withheld” from his or her election than votes “For” his or her election (and with respect to such incumbent director’s election at least 25% of the Company’s shares outstanding and entitled to vote thereon were “Withheld” from the election of such director) must submit an offer of resignation to the Board. The proposed amendment, described in more detail below, will replace the plurality voting standards in our Articles with majority voting for uncontested elections of directors. If this proposal is approved, the Board will subsequently amend Article 2, Section 3 of our Amended and Restated Code of Regulations (the “Regulations”) to incorporate the majority voting standard for the election of directors in uncontested elections, and will rescind the Director Resignation Policy.
If approved, this proposal will add Article 7, Section B to our Articles to establish majority voting for uncontested elections of directors beginning with the 2022 Annual Meeting. As a result, all director nominees in uncontested elections would be required to receive a number of “FOR” votes representing at least a majority of votes cast in person or by proxy, by the holders of shares entitled to vote at a meeting at which a quorum is present. Abstentions and broker non-votes will have no effect in determining whether the required affirmative majority vote has been obtained. A nominee in an uncontested election who does not receive a majority vote shall not be elected. An incumbent director not elected because he or she does not receive a majority vote shall continue to serve as a holdover director until the earliest of (x) 90 days after the date on which an inspector determines the voting results as to that director; (y) the date on which the Board appoints an individual to fill the office held by such director, which appointment shall constitute the filling of a vacancy by the Board pursuant to Article II, Section 4, or (z) the date of the director’s resignation.
If the proposal is not approved by our shareholders, such amendment will not be implemented, our plurality voting standard for uncontested elections will continue in place, Article 7 of our Articles will continue in its current form, and the Company’s Director Resignation Policy will remain in place.
In contested elections, the directors shall continue to be elected by the vote of a plurality of the votes cast. A contested election is one in which (i) a shareholder has complied with the requirements of Article I, Section 12 regarding one or more nominees, or an Eligible Shareholder has complied with the requirements of Article I, Section 13 regarding one or more nominees, and (ii) prior to the date that notice of the meeting is given, the Board has not made a determination that none of the candidacies of the shareholder or Eligible Shareholder’s nominees creates a bona fide election contest.
Our Board has observed current corporate governance trends and analyzed the benefits to our company and its shareholders of adopting majority voting standards for the uncontested election of directors. Our Board recognizes that many public companies have amended their governing documents to provide for a majority voting standard rather than our current plurality standard. Our Board believes that requiring directors to be elected by a majority of votes cast works to ensure that only director nominees broadly accepted among our voting shareholders will be elected and also bolsters the accountability of each elected director to our shareholders. Accordingly, after careful consideration, our Board has determined that it would be in the best interests of our shareholders to amend our Articles and Regulations to adopt a majority voting standard for uncontested elections of directors.
Text of Proposed Amendment
The following is the text of Article 7, Section B, proposed to be added to the Articles:
“A nominee for a director shall be elected to the Board by the vote of the majority of the votes cast. A majority of votes cast means that the number of votes cast “for” a director’s election exceeds the number of votes cast “against” that director. The following shall not be counted as votes cast: (a) a share whose ballot is marked as withheld; (b) a share otherwise present at the meeting but for which there is an abstention; and (c) a share otherwise present at the
26 | Myers Industries, Inc. |
TABLE OF CONTENTS
25
Description of
CompensationCompensation ElementsOur
20182020 executive compensation program was designed to reinforce the relationship between the interests of our NEOs and our shareholders and is comprised of three primary components: base pay (salary), annual cash bonus and long-term incentives. The objectives and key characteristics of each element of our
20182020 executive compensation
program are summarized
below:in the following table:
| | | | | | | | | | | | | | | | | | |
| | | | | Performance
Periods | | | | Performance
Periods | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
|
| | | Fixed | | | | |
Fixed | | Base Pay (cash) | | | | | | 1 year | | • | | | | •Compensation for job performance |
• | Recognizes individual skills, competencies, and experience |
• | Generally determined based on an individual’s time in the position, experience, performance, future potential, external market conditions, and peer benchmarking |
• | May be influenced/changed as a result of changes in the executive’s responsibilities, an assessment of annual performance, our financial ability to pay base salaries and provide increases, and/or external market data relating to base pay practices of peers | |
| | | | | | | | | | | | | | | | | | | | | | |
|
| | | | | | | |
At Risk | | | | | | Annual Bonus (cash) | | | | | | 1 year | | • | | | | •Variable cash compensation with 80% tied to the achievement of annual corporate operational goals (the Company’s adjusted operating income growth and three-year average ROIC) established by the Compensation Committee each fiscal year to support long-term value creation |
align with corporate strategic goals (for 2020, adjusted operating income growth)
• | Include 20% qualitative element with individual performance goals to maintain personal accountability of each NEO
•Aligns interests of executives with shareholders, with amount earned dependent on Company and individual performance objectives designed to enhance shareholder value | |
| | | | | | | | | | | | | | | | | |
| | | | Long-Term Incentives (performance stock unit awards, stock options, andunits restricted stock unit awards)units) | | | | | | 3 years | | • | | | | •Motivates and rewards leaders for increasing shareholder value and returns while promoting our long-term interests by aiding in the retention of high-quality executives |
consistent with strategic goals
• | Reflects the belief that a significant component of executive compensation should be at risk where the amount earned depends on achieving long-term Company performance objectives (the Company’s three-year cumulative EBITDA and three-year total free cash flow as a percentage of sales) designed to enhance shareholder value |
• | Helps build executive stock ownership consistent with our stock ownership objectives |
• | Encourages retention of executive management team through multi-year vesting | |
26
40 | Myers Industries, Inc. |
TABLE OF CONTENTS
NEO Target
CompensationCompensation MixWe believe in linking pay for performance. The following graphs
indicateillustrate the
percentagepercentages of
each NEO’s total target direct compensation
that isof our CEO and CFO attributable to base salary, target bonus, and target long-term incentives.
ForThe percentages for the CEO are based on annualized targets for Mr.
Anversa the percentages shown were applicable duringMcGaugh in 2020, although his service
as Chief Financial Officer through December 11, 2018,did not commence until April 6, 2020. The percentages for the CFO are based on annualized targets established for Mr. Brackman
at the
percentages shown are as adjusted effective December 11, 2018 in connection withcommencement of 2020, although his
appointment as Chief Financial Officer, and for Ms. Horton, the percentages shown are those effective for 2019 -- Ms. Horton did not receive any long-term incentive awards in 2018 due to her employment commencement date of October 8, 2018.
27
service ended on September 18, 2020.
How Compensation
is DeterminedThe Company believes its practices are consistent with the practices of a company of its size, reflect best practices regarding the governance of executive pay programs and reflect the executive pay program’s objectives of delivering competitive and appropriate pay aligned with our shareholders’ interests.
The Compensation Committee refers to market data to benchmark and help establish pay opportunities for the NEOs that are competitive for a company of our size in our industry, and for the role and experience of the individual executive. The Compensation Committee generally considers a range around the market median when establishing compensation levels for the NEOs.
As part of its annual review and consideration of the benchmarking process used to assess the Company’s pay levels and pay programs for its executives, the Compensation Committee and its independent compensation consultant conduct an executive compensation market analysis that draws from third-party compensation surveys and publicly available data for a group of peer companies. For fiscal 2018,companies (“Compensation Peer Group”). The Compensation Committee annually reviews the Compensation Peer Group, with input from the Committee’s independent compensation peerconsultant, to evaluate whether the composition of the group was developedremains relevant for the ensuing calendar year, with consideration to variousof certain quantitative and qualitative criteria, including: (1) companies within 1/3xapproximately 40% to 3x250% of the Company’s revenue, (2) companies operating within the Company’s industries and end-markets, and (3) companies with similar focus and/or business complexity. Our Compensation Committee regards the Company’s comparison to these companies as reference points only because finding direct publicly-traded peers within the lower end of our revenue range is difficult and does not seek to establish any specific benchmark in reference to these companies or to require changes in our executive compensation to match changes in these companies’ compensation.
2021 Proxy Statement | 41 |
TABLE OF CONTENTS
This peer group will continue
Based on the annual evaluation of the Compensation Peer Group conducted in late 2019, the Compensation Committee determined to
be usedeliminate certain companies for 2020 due to acquisitions or impending acquisitions or due to becoming significantly larger than the Company and added several companies as being size and industry comparatively more appropriate. Accordingly, the following companies comprised the Compensation Peer Group for executive compensation benchmarking purposes
for fiscal year 2019.in 2020.
$ in millions
Chart Industries, Inc. | | | Industrial Machinery | | | $1,177 | $5,196 |
Dorman Products, Inc. | | | Auto Parts & Equipment | | | $1,092 | $3,298 |
Standard Motor Products, Inc. | | | Auto Parts & Equipment | | | $1,087 | $919 |
Alamo Group Inc. | | | Construction Machinery & Heavy Trucks | | | $1,074 | $1,929 |
Stoneridge, Inc. | | | Auto Parts & Equipment | | | $834 | $835 |
Neenah, Inc. | | | Paper Products | | | $792 | $964 |
Esco Technologies | | | Aviation & Space Filtration & Fluid Control | | | $732 | $2,836 |
TriMas Corporation | | | Industrial Machinery | | | $732 | $1,556 |
Commercial Vehicle Group, Inc. | | | Construction Machinery & Heavy Trucks | | | $691 | $289 |
The Shyft Group, Inc.(1) | | | Specialty Vehicle Mfg. and Assembly | | | $684 | $1,228 |
Standex International Corporation | | | Diversified Global Manufacturing | | | $604 | $1,232 |
Motorcar Parts of America, Inc. | | | Auto Parts & Equipment | | | $535 | $406 |
Lindsay Corporation | | | Agricultural & Farm Machinery | | | $474 | $1,757 |
Raven Industries, Inc. | | | Technology Engineering and Manufacturing | | | $382 | $1,510 |
The Gorman-Rupp Company | | | Industrial Machinery | | | $348 | $863 |
Core Molding Technologies, Inc. | | | Commodity Chemicals | | | $217 | $97 |
(1)
| Formerly known as Spartan Motors. |
| | | |
Company Name | Industry | Revenue | Market Cap |
Park-Ohio Holdings Corp. | Industrial Machinery | $1,618 | $373 |
Advanced Drainage Systems, Inc. | Building Products | $1,365 | $1,386 |
Milacron Holdings Corp. | Industrial Machinery | $1,272 | $841 |
Chart Industries, Inc. | Industrial Machinery | $1,210 | $2,029 |
Standard Motor Products, Inc. | Auto Parts & Equipment | $1,085 | $1,086 |
Neenah, Inc. | Paper Products | $1,038 | $994 |
Alamo Group Inc. | Construction Machinery & Heavy Trucks | $996 | $907 |
Dorman Products, Inc. | Auto Parts & Equipment | $941 | $2,966 |
Altra Industrial Motion Corp. | Industrial Machinery | $930 | $1,621 |
Stoneridge, Inc. | Auto Parts & Equipment | $863 | $702 |
Commercial Vehicle Group, Inc. | Construction Machinery & Heavy Trucks | $862 | $176 |
TriMas Corporation | Industrial Machinery | $861 | $1,250 |
OMNOVA Solutions Inc. | Specialty Chemicals | $765 | $329 |
Lindsay Corporation | Agricultural & Farm Machinery | $535 | $1,035 |
Motorcar Parts of America, Inc. | Auto Parts & Equipment | $443 | $315 |
The Gorman-Rupp Company | Industrial Machinery | $406 | $846 |
Core Molding Technologies, Inc. | Commodity Chemicals | $235 | $58 |
| 2018 Revenue | 2018 Market Cap |
Myers Industries | $567 | $534 |
28
Consistent with the objectives of our executive pay philosophy of attracting and retaining a talented and experienced executivesexecutive management team and other key employees, paying for performance, motivating our executive officers to achieve short-term and long-term Company goals that will increaseenhance shareholder value, and rewarding executives whose knowledge, skills, and performance are crucial to our success, actual compensation may be above or below the median for executives in similar roles at companies of similar size and complexity, depending on an evaluation of several factors including, but not limited to, time-in-position, experience, performance, and future potential. We believe this approach is appropriate as it attractsis intended to attract and retainsretain key executives, but does not position our compensation costs out of line with expected or actual performance.
Compensation Elements in
20182020
Base salary provides a fixed element of compensation that competitively rewards our NEOs’ individual skills, competencies, experience and performance. Additionally, the base salaries provide our NEOs with income regardless of the Company’s stock price performance, which acts as a risk-balancing measure in that it helps to avoid incentives to create short-term stock price fluctuations. Furthermore, it helps mitigate elements beyond the control of the Company, like general economic and stock market conditions unrelated to Company performance.
The Company does not have written employment agreements with our NEOs. The Board and Compensation Committee annually review the performance of the CEO and the CEO’s corporate goals and objectives and, in connection with this review, may recommend a merit-based increase to the CEO’s base salary.
For the other NEOs, base salary adjustments are based on recommendations by the CEO to the Compensation Committee. In making such adjustments, the Company’s performance and the individual NEO’s scope of work, performance and competitive benchmarks are
considered. In 2018, Mr. Brackman wasconsidered, based on input from the only NEO who received aindependent consultant to the Compensation Committee.
The 2020 base salary increase assalaries of all NEOs are shown in the table below. Neitherfollowing table. Mr. Banyard nor Mr. Anversa received an increase in base salary in 2018 based on peer benchmarking. Ms. Horton’sMcGaugh’s base salary was established at $375,000 upon herhis appointment as CEO effective April 6, 2020, and reflects a reduction in base salary from the prior CEO of approximately 13%. Mr. Brackman’s base salary was in effect through his departure on September 18, 2020. Ms. Horton began receiving a supplemental monthly payment of $25,000 commencing October 1, 2019 and continuing through April 6, 2020, the period during which she served as the Company’s Interim President and Chief Executive Vice President,Officer in addition to her roles as Chief
42 | Myers Industries, Inc. |
TABLE OF CONTENTS
20182020 Long-Term Incentives
The Company’s long-term incentive plan was established to, among other things, encourage management to drive long-term shareholder value and to align management’s interests with shareholders’ interests, emphasizing the “act like owners” principle of the Company. The long-term incentive plan is intended to motivate and reward leaders for increasing shareholder value and returns. The Company believes the Company’s shareholders and employees are both best served by having our NEOs focused on and rewarded based on the achievement of longer-term results of the Company. To accomplish this, the
BoardCompensation Committee has
over thein recent years awarded a blend of stock options, service-based restricted stock units,
performanceand performance-based restricted stock units to NEOs. In 2020, the Compensation Committee determined to not include stock options in the mix of long-term incentives and instead focus on service-based restricted stock units and performance-based
long-term cash incentives to NEOs. In particular, the use of stock options, service-based restricted stock units
and performance restricted stock units are designed to meet specific reward
objectives:50% Weightingand performance objectives. In doing so, the weighting of performance-based long-term incentives was increased to 60% of total long-term incentives as follows:
• | 60% Weighting: Long-term performance restricted stock units intended to reward our executives for achieving financial goals over a multi-year period. Long-term performance restricted stock units vest at the end of three-year period based on achievement of pre-established objectives over three calendar years. |
• | 40% Weighting: Service-based restricted stock units help retain our key executives. Restricted stock units also align our executives with the total returns earned by our investors. Grants of service-based restricted stock units vest ratably over a three-year period, conditioned on continued employment, providing a strong executive retention device. |
The target long-term incentive opportunity for each NEO was based on a percentage of their respective base salaries as follows: Mr. McGaugh, 200%, Ms. Horton, 100%, Mr. Brackman, 100%, Mr. Harmon, 65%, and Mr. Hoehn, 40%. With respect to Mr. Harmon, he forfeited all of his 2020 long-term incentive awards upon his voluntary resignation on July 10, 2020 and he received an onboarding grant of service-based restricted stock units are intended to reward our executives for achieving financial goals over a multi-year period. Long-term performance restricted stock unitswhen he rejoined the Company on October 19, 2020 which was valued at $100,000 and which will vest at the end of the three-year period and are basedin two equal annual installments on the achievement of pre-established objectives over a three-year period
30% Weighting: Stock options align our executives' interests with those of our shareholders because options only produce rewards to our executives if our stock price increases after options are granted. We believe options are performance-based awards, because the stock price appreciation that produces gains to the executive can generally be achieved if the Company's operatingsecond and financial results improve. In addition, options help build long-term executive stock ownership. Stock options vest ratably on the first threethird anniversaries of the grant and are exercisable within ten years following their grant, consistent with our historical terms for option grants
20% Weighting: Service-based restricted stock unit grants help retain our key executives. Restricted stock units also align our executivesaward subject to the total returns earned by our investors. Service-based restricted stock unit grants vest ratably over a three year period, are tied tohis continued service, and provide a strong device for retaining our executives
The Company had previously included long-term performance cash awards in addition to the long-term equity awards. Starting in 2017, the Company stopped granting long-term performance cash awards as part of its long-term incentive plan and moved to a long-term incentive award mix for executive management (including NEOs) solely comprised of equity awards (performance-based restricted stock units, stock options and restricted stock units). However, certain NEOs may be entitled to payoutsemployment on long-term performance cash awards under prior performance periods that have not concluded.
31
those dates.
Long-Term
PerformancePerformance MetricsPrior to 2017, our long-term incentive performance metrics were based on a single metric. In
Beginning in 2017, the Compensation Committee revised the long-term incentive performance metrics
(as described below)to include the two objective metrics which were used through 2019 – three-year cumulative EBITDA and three-year total free cash flow as a percentage of sales. In 2020, the Compensation Committee determined to (i) revise the EBITDA metric to be based on achievement of target levels of a three-year weighted average EBITDA, and (ii) replace the free cash flow metric with target levels of three-year average return on invested capital (ROIC).
The three-year target levels of average EBITDA and average ROIC were established by the Compensation Committee with input from management. These metrics were adopted to better align with the Company’s strategy, drive consistent performance over time toward achieving objective financial metrics with strong alignment with shareholder value, and to more effectively correlate this performance to compensation. Additionally, these metrics are used by management to assess operating performance of the business.
Cumulative EBITDA acts as a measure of the Company’s operating performance with targets emphasizing growth and relates strongly to shareholder return, creating greater alignment between long-term executive incentive compensation and enhancing shareholder value. ROIC is defined as the Company’s annual return on invested capital as calculated by the following formula: net operating profit after taxes (“NOPAT”)/invested capital (“IC”), with NOPAT based on the Company’s adjusted operating income after taxes and IC based on the Company’s total equity plus par value of debt, in each case as determined from the Company’s audited financial statements for the fiscal year, with such adjustments as may be approved by the Compensation Committee in its discretion.
The following table shows the performance periods for the Company’s long-term incentive programs outstanding as of the end of
2018:2020:
Performance Period
2018-2020 | Grant Date | Settlement Date
(If Earned) | Performance Measures (Weightings in %)
|
2016-2018
March 2018 | March 2016 | 2019 | 3-year average ROIC (100%)
|
2017-2019
2021 | March 2017 | 2020 | 3-year cumulative EBITDA (50%) | | | 3-year total free cash flow as a % of sales (50%) |
2018-2020
2019-2021 | | | March 20182019 | 2021 | | 2022 | | | 3-year cumulative EBITDA (50%) | | | 3-year total free cash flow as a % of sales (50%) |
2020-2022 | | | April 2020 | | | 2022 | | | 3-year weighted average EBITDA | | | 3-year average ROIC |
2021 Proxy Statement | 45 |
For the 2016-2018 performance cycle, average return on invested capital (“ROIC”) targets were adopted to support a focus on returning greater than our cost of capital over time and to supplement the metrics used in the Company’s annual bonus plan.TABLE OF CONTENTS
For the 2017-2019 and 2018-2020 performance cycles, the Compensation Committee changed the long-term performance metrics from three-year average ROIC to three-year cumulative EBITDA and three-year total free cash flow as a percentage of sales. Cumulative EBITDA acts as a measure of the Company’s operating performance with an emphasis on growth, and relates strongly to shareholder return, creating greater alignment between executive compensation and enhancing shareholder value. Free cash flow is defined as cash flow from continuing operations less capital expenditures. Free cash flow as a percentage of sales recognizes the importance of the efficient use of cash to the Company’s ability to fund ongoing investments in our business while incentivizing management to create a business culture that generates strong cash flow year after year. We also believe that cash flow is the strongest measurement of success and has a strong correlation over the long-term to shareholder value.
2018
2020 Long-Term Incentive Mix
Once target values are developed,
annual awards for each long-term element are based on an individual’s position, experience, future potential, organizational level, scope of responsibilities, their ability to impact results, and any special recruiting and retention needs. For the NEOs, the Compensation Committee aimed to emphasize performance-based elements (long-term performance
restricted stock
units and
cash incentives) and optionsoptions) over service-based elements (restricted stock units).
32
For the Company’s NEOs, the
The following mix of target long-term incentives
were set for
2018:
our NEOs was established for calendar year 2020. However, because Mr. Harmon forfeited all of his 2020 long-term incentive awards upon his voluntary resignation, he received an onboarding grant of service-based restricted stock units when he rejoined the Company valued at $100,000, or approximately 30% of his base salary, which will vest in two equal installments on the second and third anniversary of the grant subject to his continued employment on those dates. Mr. Harmon will again be eligible to receive service-based and performance-based long-term incentive awards in 2021.
Long-Term Incentive Performance-Objectives and Achievements for the Three-Year Period Ended in
20182020
For the three-year period ending in
2018, as described above,2020, the Company established three-year
ROIC performance objectives
ranging from 8.7% (minimum) to 18.7% (maximum), with target results achieved at 13.7%. The method for
determining the
corresponding awards aretwo performance metrics of cumulative EBITDA and total free cash flow as
follows:Return on Invested Capital (ROIC): | | Calculation of Award (Percentage of Target Award): | |
Less than 8.7% | | 0% | |
8.7% | | 50% | |
8.71%-13.69% | | 100%, minus the amount, expressed as a percentage, determined by dividing (x) the number of percentage points (not to exceed 5 percentage points) by which the three year average ROIC is lower than 13.7% by (y) 10% | |
13.7% | | 100% | |
13.71%-18.69% | | 100%, plus the amount, expressed as a percentage, determined by dividing (x) the number of percentage points (not to exceed 5 percentage points) by which the three year average ROIC exceeds 13.7% by (y) 5% | |
18.7% or more | | 200% | |
Target ROIC performance reflected the Compensation Committee’s viewa percentage of an appropriate benchmark based on the Company budget presented to the Committee by management. The Compensation Committee set a reasonable target in the preceding years to challenge management to continuously strive for and drive greater shareholder return.
sales. For the three-year period ending in 2018,2020, the Company achieved a three-year average ROICcumulative adjusted EBITDA of 10.7%,$197.6 million, resulting in a settlement percentage of 70%0% of target. This applies toFor the cash-basedsame performance award granted to Mr. Brackman in 2016, and a performance share award granted to Mr. Banyard in 2016.
As noted above, forperiod, the 2017-2019 and 2018-2020 performance cycles, performance will be determined using three-year cumulative EBITDA (50% weighting) and three-yearCompany’s total free cash flow as a percentage of sales (50% weighting). Additionally,was 7.85%, resulting in a settlement percentage of 142.5% of target. The table below summarizes the long-term incentive award mix will be comprised solely of equity and will no longer include long-term cash incentives.
33
Long-Term Incentive Plan – 2019 Structure and Objectives
For 2019, as the third year of the three-year cycle begun in 2017, the Compensation Committee has determined to continue the general structurevesting of our long-term incentive plan consisting of 50% performance-based restricted stock units, with equally weighted metrics of three-year cumulative EBITDA and three-year total free cash flow as a percentage of sales, 30% stock options, and 20% time-based restricted stock units subject to pro rata three year vesting. The threshold, target and maximum goals establishedawards for the 2019 performance based awards exceedperiod 2018 through 2020:
Cumulative EBITDA | | | $222 Million | | | $197.6 Million | | | 0% | | | 50% | | | 71.3% |
Total Free Cash Flow (as a % of Sales) | | | 7.0% | | | 7.85% | | | 142.5% | | | 50% | |
Senior Officer Severance Plan In 2020 the
Compensation Committee recommended, and the Board approved, adoption of a Senior Officer Severance Plan (“Severance Plan”) to provide certain severance benefits for senior officers determined to be eligible to participate in the Plan, including severance benefits in the event of certain terminations of employment, including in connection with a change in control of the Company. The Severance Plan is intended to replace and supersede the severance and change in control agreements previously entered into between the Company and certain of its senior officers and to provide consistency of levels of
termination benefits to our
2017 and 2018 awards and will be disclosed upon the completionsenior officers. A summary of the
three-year performance period ending at December 31, 2021. These rigorous goals are intended to continue to drivebenefits provided under the
Company’s continued growth and long-term financial success. The Compensation Committee will continue to consider, with input from Semler-Brossy, alternative performance metrics which align with shareholder interests for the performance-based component of the Company’s long-term incentive plan for years after 2019.Severance Plan is provided under Severance Arrangements upon Termination Including Change in Control.
NEOs also participate in broad-based benefit plans that are available to allother employees. These benefits are not tied to individual or Company performance, which is the same approach used for other employees. Moreover, changes to executives’ benefits reflect the changes to the benefits of other employees.
46 | Myers Industries, Inc. |
TABLE OF CONTENTS
The Company’s NEOs participate in the following broad-based benefit plans that provide basic health, life, and income security:
The Company maintains qualified and nonqualified retirement programs to providefor which our NEOs with the basic needs described above.are eligible to participate. NEOs participate in our qualified retirement plan, (aa tax-qualified 401(k) plan pursuant to which all participants are eligible to receive matching contributions from the Company)Company on the same terms as all of our other employees
employees. The Company matching contribution is 100% of the first 3% contributed by a participant plus 50% of the next 2% contributed, for a total of up to 4% match on a participant’s compensation up to federal limits.Beginning in 2018, eachEach of our NEOs is eligible to participate in theour Executive Nonqualified Excess Plan (“Nonqualified Deferred Compensation Plan”), which is a nonqualified retirement savings plan that allows for deferrals above the IRS limits on qualified plans. This plan is intended to restore deferred compensation benefits that would have been earned under the tax-qualified 401(k) plan but for certain limitations imposed by the federal tax laws
laws. Participating officers are at all times 100% vested in their voluntary deferrals. The Company may also provide matching or discretionary credits to the accounts of eligible officers, as determined by the Company in its sole discretion. The Compensation Committee believes that maintaining this Nonqualified Deferred Compensation Plan helps to maintain the competitiveness of our entire executive retirement benefits.NEOs also participate in broad-based benefit plans that are available to all employees, including health insurance and life and disability insurance
insurance.The Company provides no
customary executive
perquisites.34
perquisites to our NEOs other than reimbursement of executive physicals. During 2020, the Company reimbursed Mr. Harmon for certain relocation expenses as described in the Summary Compensation Table.
Other Compensation
PoliciesPolicies and PracticesStock Ownership Guidelines | • | | • | | | A key objective of our pay program in general and our long-term equity-based incentive awards in particular is to encourage stock ownership.ownership of insiders. As a result, we have maintained Stock Ownership Guidelines since 2010 |
• | • | | | Under the Stock Ownership Guidelines, our NEOs and non-employee directors are expected to hold a specified amount of our common stock. These expectations arestock, as follows:
CEO: 5X annual base salaryCFO
Executive Vice Presidents (CFO and CLO:CLO): 3X annual base salary
Vice Presidents (including Human Resources): 1X annual base salary
Non-Employee Directors: 5X annual cash Board retainer |
• | | | | |
| • | | | The NEOs and non-employee directors have five years from becoming subject to the guidelines to attain the ownership requirement |
| | | | |
•
| | | • | | | In determining stock ownership for purposes of our ownership guidelines, shares owned outright, including shares owned jointly with a spouse or separately by a spouse and/or children that live in the NEO’s household, vested and unvested time-based restricted stock and stock unit awards, vested stock options, and non-employee deferred stock units, are counted |
| | |
Accounting and
Tax Considerations
| •
| In December 2017, the Tax Cuts and Jobs Act (the “2017 Tax Act”) was signed into law. Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), as further amended by the 2017 Tax Act, restricts deductibility for federal income tax purposes of annual individual compensation in excess of $1 million to the NEOs, effective for tax years beginning after 2017, subject to a transition rule for written binding contracts which were in effect on November 2, 2017, and which were not modified in any material respect on or after such date
|
| |
•
| Prior to the adoption of the 2017 Tax Act, Section 162(m)’s deductibility limitation was subject to an exception for compensation that qualified as “performance-based”. In 2013, our shareholders approved the Performance Bonus Plan which was designed to permit us to grant incentive awards that may qualify as “qualified performance-based compensation” for purposes of Section 162(m) of the Code
|
2021 Proxy Statement | 47 |
TABLE OF CONTENTS
Risk Assessment of Compensation Practices
In the design and approval of the Company’s executive compensation program, the Compensation Committee considers risks that may be inherent in such program. The Compensation Committeethe program, but has designed the Company’s compensation program to guard against excessive risk taking. The following are some features of the compensation program that are designed to help the Company manage compensation-related risk:
Using a variety of vehicles for providing compensation, including salary, bonus, and equity-based compensation, comprised of cash and equity based incentives with different vesting periods, which act to focus executives on specific objectives under the Company’s business plan while creating alignment with shareholders
Providing a mixture of fixed and variable, annual and long-term, and cash and equity compensation to encourage behavior and actions that are in the long-term interests of the Company and our shareholders
Placing an emphasis on performance-based awards more than service-based awards to further align the interests of our employees with those of our shareholders
35
•
| Establishing, and reviewing on an annual basis, base salaries to be consistent with an employee’s responsibilities
|
Establishing, and reviewing on an annual basis, base salaries to be consistent with an employee’s responsibilities
Diversifying incentive-based risk by using differing performance measures, including Company financial performance
Determining and awarding incentive award grants based on a review of multiple indicators of performance that diversify the risk associated with any single indicator of performance
As a result, the Compensation Committee believes that the design of the Company’s compensation
programsprogram does not encourage
our employees to take unnecessary or excessive risks that could harm the
Company’s long
‑term
value of Myers Industries.value.
Compensation Decision-Making
Timeline and
Essential Components of Compensation Decision-Making
The Compensation Committee oversees our executive compensation
plansplan and policies, administers our equity plans, and approves all compensation for our NEOs.
An examplePortions of the Compensation Committee’s annual agenda
is set forthitems are summarized below:
| | | | | | |
| | |
Late Winter/Spring
| | | |
•
| Establish/approve
| | • | | | Approve annual incentive plan goals or targetspayouts for prior year | | • | Approve upcoming year’s annual incentive plan and long-term incentive plan thresholds, targets and maximum goals
|
| | | |
• | Approve long-term performance payouts and awards for applicable period | • | Review proxy advisory firm’s pay for performance reports and proxy recommendations
|
| | | |
•
| Approve long-term incentive plan award levels for NEOs and share pool for all equity awards | • | | |
| | | | | | | | | | | | | | | | |
| | | • | | | Approve long-term performance vesting and payouts for prior performance period | | | | | | • | | | Grant long-term incentive awards | | | |
| | | | | | | | | | | | | | | | |
| | | • | | | Approve current year’s annual incentive plan metrics, NEO performance criteria, and thresholds, targets and maximum goals | | | | | | • | | | Review proxy advisory firmfirms’ pay for performance reports, feedback, and proxy recommendations | | | |
| | | | | | | | | | | | | | | | | | |
•
| Grant of equity
| | • | | | Approve current year’s long-term incentive awards (generally in late February or early March)plan thresholds, targets and maximum goals | • | Review NEO performance criteria | | | | | | | | | | |
| | | | | | | | | | | | |
•
| Value of equity awards is determined | |
Summer
| | | | | |
Fall
| | | |
Summer
| | Fall
|
• | • | | | Review the results of the Company’s “Say-on-Pay” vote (and any other compensation-related items voted upon at the annual meeting) | | • | | | | • | | | Review long-term incentive performance metrics | | | |
| | | | | | | | | | | | | | | | |
•
| | | • | | | Review the Company’s overall compensation program and consider any structural changes | | | | | | • | | | Review peer group composition and executive compensation levels | | |
| | | | |
•
| Review the Company’s compensation program and consider any changes
| | | |
36
48 | Myers Industries, Inc. |
TABLE OF CONTENTS
Parties Involved in
CompensationCompensation Decision-MakingRole of Compensation Committee | • | | • | | | Five independent directors comprise our Compensation Committee, which is responsible for overseeing our executive pay plans and policies, administering our equity plans and approving all compensation for our NEOs |
| |
• | | | The Compensation Committee routinely requests information from senior management regarding the Company’s performance, pay and programs to assist it in its actions |
| |
• | | | The Compensation Committee has the authority to retain outside advisors as needed to assist it in reviewing and modifying the Company’s programs and providing competitive pay levels and terms |
| |
• | | | In arriving at its decision on NEO compensation, the Compensation Committee takes into account the shareholder “say-on-pay” vote results at the previous annual meeting of shareholders |
| |
• | | | The Compensation Committee annually reviews and establishes the goals used for our annual and long-term incentive plans. The Compensation Committee assesses the performance of the Company and the CEO. Based on this evaluation, the Compensation Committee then recommends the CEO’s compensation for the next year to the Board for its consideration and approval |
| |
• | | | The Compensation Committee reviews the CEO’s compensation recommendations for the CFO, providing appropriate input and approving final awards |
| |
• | | | Finally, the Compensation Committee provides guidance and final approval to the CEO with regard to the determination of the compensation of other key executives |
| | |
Role of Senior Management | • | | • | | | The Company’s management serves in an advisory or support capacity as the Compensation Committee carries out its charter regarding executive compensation |
| • | |
• | Typically, the
| The Company’s CEO, CLO, and Senior Vice President of Human Resources typically participate in meetings of the Compensation Committee |
| |
• | | | The Company’s CFO and/or CLO may participate as necessary or at the Compensation Committee’s request |
| |
• | | | The Company’s management normally provides the Compensation Committee with information regarding the Company’s performance as well as information regarding executives who participate in the Company’s various plans. Such data is usually focused on the executives’ historical pay and benefit levels, plan costs, context for how programs have changed over time and input regarding particular management issues that need to be addressed. In addition, management normally furnishes similar information to the Compensation Committee’s independent compensation advisor |
| |
• | | | Management provides input regarding the recommendations made by the Compensation Committee’s independent advisors or the Compensation Committee |
| |
• | | | Management implements, communicates and administers the programs approved by the Compensation Committee, reporting back to it any questions, concerns or issues |
| |
• | | | The CEO annually evaluates the performance of the Company and the CFO and other executives, including the CLO.NEOs. Based on his evaluation, hethese evaluations, the CEO provides the Compensation Committee with his recommendations regarding the pay for such executives for its consideration, input, and approval. The Compensation Committee in turn, authorizes the CEO to establish the pay for the Company’s other executives/executives and senior management based on terms consistent with those used to establish the pay of the NEOs. Members of management present at meetings when pay is discussed are recused from such discussions when the Compensation Committee focuses on his or her individual pay |
37
2021 Proxy Statement | 49 |
TABLE OF CONTENTS
Role of Independent Compensation Advisor | • |
| • | | | The Compensation Committee has the authority to retain independent advisors and compensation consultants to assist in carrying out its responsibilities |
| |
• | In August of 2017, the
| | The Compensation Committee firsthas engaged Semler Brossy as its independent compensation adviser to assist in its duties, and continued to engage Semler Brossy throughout 2018since 2017 |
| |
• | | | Semler Brossy’s lead consultant reportsconsultants report directly to the Compensation Committee Chair, who approves Semler Brossy’s annual work plan |
| |
• | In addition,
| | The lead consultants interact with the lead consultant interactedCompensation Committee regularly, and with management as needed to complete the work requested by the Compensation Committee |
| |
• | | | Semler Brossy did not provide other services to the Company during 20182020 and received no compensation other than with respect to the services it provided to the Compensation Committee |
| |
• | | • | | | The work of Semler Brossy has not raised any conflicts of interest and Semler Brossy annually confirms its independence to the Compensation Committee |
Compensation
and Management Development Committee Interlocks and Insider Participation
At the end of fiscal year
2018,2020, the following directors were members of the Compensation Committee: Sarah R. Coffin
(Chair), Ronald DeFeo, William A. Foley,
F. Jack Liebau, Jr., Bruce M. Lisman, and Robert A. Stefanko.
Chairman F. Jack Liebau, Jr. participates on the Compensation Committee in an ex officio capacity. None of the Compensation Committee’s members have at any time been an officer or employee of the Company. In the past fiscal year, none of our NEOs have served as a member of the board of directors or compensation committee of any entity that has one or more NEOs serving on the Company’s Board or Compensation Committee.
Compensation
and Management Development Committee Report on Executive Compensation
The information contained in this report shall not be deemed to be “soliciting material” or “filed” with the SEC or subject to the liabilities of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
except to the extent that we specifically incorporate it by reference into a document filed under the Securities Act of 1933, as amended (the “Securities Act”) or the Exchange Act.
The Compensation Committee, in the performance of its duties and responsibilities, has reviewed and discussed with management the information provided under the section titled “Compensation Discussion and Analysis.” Based on discussions with management and our review of the “Compensation Discussion and Analysis” disclosure, we have recommended to the Board that the “Compensation Discussion and Analysis” be included in this Proxy Statement and incorporated by reference in the Company’s Annual Report on Form 10-K for the year ended December 31,
2018.2020.
The foregoing report has been furnished by the current members of the Compensation Committee, being:
Sarah R. Coffin, Chair and Presiding Director, Ronald DeFeo, William A. Foley, F. Jack Liebau, Jr.
(ex officio), Bruce M. Lisman and Robert A. Stefanko.
Summary of Cash and Certain Other Compensation
The following table summarizes the compensation paid by us to our named executive officers, as determined in accordance with SEC rules, for the years ended December 31,
2018, 20172020, 2019, and
2016.38
2018.50 | Myers Industries, Inc. |
TABLE OF CONTENTS
SUMMARY
COMPENSATIONCOMPENSATION TABLEMichael McGaugh(6)
President and Chief
Executive Officer | | | 2020 | | | $468,750 | | | – | | | $1,249,999 | | | – | | | $286,875 | | | $1,028 | | | $11,400 | | | $2,018,052 |
Andrean Horton(7)
Executive Vice
President, Chief Legal
Officer and Secretary | | | 2020 | | | $491,282 | | | – | | | $389,993 | | | – | | | $143,208 | | | $10,379 | | | $24,219 | | | $1,059,081 |
| 2019 | | | $450,000 | | | – | | | $362,491 | | | $75,007 | | | $62,550 | | | – | | | $122,192 | | | $1,072,240 |
| 2018 | | | $79,327 | | | – | | | – | | | – | | | $104,795 | | | – | | | $2,163 | | | $186,285 |
Kevin Brackman(8)
Executive Vice
President, Chief
Financial Officer | | | 2020 | | | $307,596 | | | – | | | $367,496 | | | – | | | – | | | $7,751 | | | $769,718 | | | $1,452,561 |
| 2019 | | | $350,000 | | | – | | | $344,658 | | | $100,005 | | | $58,380 | | | – | | | $132,165 | | | $985,208 |
| 2018 | | | $277,850 | | | – | | | $137,892 | | | $59,096 | | | $372,903 | | | – | | | $20,787 | | | $868.528 |
Daniel Hoehn(9)
Interim Chief Financial
Officer, Vice President
and Controller | | | 2020 | | | $277,788 | | | – | | | $101,501 | | | – | | | $62,118 | | | $1,873 | | | $11,400 | | | $454,680 |
Thomas Harmon(10)
Vice President, Chief
Human Resources
Officer | | | 2020 | | | $261,538 | | | $(64,350) | | | $321,003 | | | – | | | $78,030 | | | $3,252 | | | $42,501 | | | $641,974 |
| 2019 | | | $78,462 | | | $100,000 | | | $199,997 | | | – | | | $11,815 | | | – | | | $112,729 | | | $503,003 |
Name and Principal Position | Year | Salary | Bonus | Stock Awards(1)(2) | Option Awards(2) | Non-Equity Incentive Plan Compensation(3) | All Other Compensation(4) | Total |
R. David Banyard, President & Chief Executive Officer | 2018 | $718,940 | $0 | $1,258,145 | $539,205 | $1,437,880 | $122,782 | $4,076,952 |
2017 | $708,067 | $0 | $1,238,823 | $692,323 | $593,210 | $46,741 | $3,279,164 |
2016 | $693,846 | $0 | $1,421,126 | $278,760 | $0 | $44,899 | $2,438,631 |
Matteo Anversa Former Executive Vice President, Chief Financial Officer and Corporate Secretary(5) | 2018 | $425,000 | $0 | $357,000 | $153,000 | $0 | $21,392 | $956,392 |
2017 | $425,000 | $0 | $362,062 | $202,339 | $275,193 | $10,800 | $1,275,393 |
2016 | $27,788 | $100,000(6) | $149,996 | $0 | $0 | $0 | $277,784 |
Kevin Brackman, Executive Vice President, Chief Financial Officer(5) | 2018 | $277,850 | $0 | $137,892 | $59,096 | $372,903 | $20,787 | $868.528 |
2017 | $258,678 | $0 | $135,779 | $75,878 | $178,686 | $23,715 | $672,736 |
2016 | $234,231 | $76,500(7) | $27,888 | $26,565 | $0 | $86,126 | $451,310 |
Andrean Horton, Executive Vice President, Chief Legal Officer and Secretary(5) | 2018 | $79,327 | $0 | $0 | $0 | $104,795 | $2,163 | $186,285 |
| | | | | | | |
| | | | | | | |
(1)
| Amounts shown do not reflect compensation actually received by the executive officers. Instead the amounts shown are reported at grant date fair value in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standard Codification Topic 718, Compensation — Stock Compensation (referred to herein as “FASB ASC Topic 718”). The assumptions used for this calculation are fully described in the footnote titled “Stock Compensation” of the Notes to Consolidated Financial Statements under Item 8 of our Annual Report on Form 10-K for the year ended December 31, 20182020 filed with the SEC. The amounts set forth in this column for 2020 include the grant date fair value of performance share awards granted to the NEOs.stock unit awards. The value of the annual performance sharestock unit awards granted in fiscal year 20182020 if the target level of performance is achieved was: Mr. McGaugh – $749,997, Ms. Horton – $233,995, Mr. Brackman – $220,497, Mr. Hoehn – $60,903, and Mr. Harmon – $132,598 (although Mr. Harmon forfeited all such awards upon his voluntary resignation as an officer of the Company effective July 10, 2020). The value of the annual performance stock unit awards granted in fiscal year 2020 if the maximum performance target is achieved:achieved was: Mr. BanyardMcGaugh – $1,797,350, Mr. Anversa$1,499,994, Ms. Horton – $510,000 and$467,992, Mr. Brackman – $196,988. The$440,995, Mr. Hoehn – $121,806, and Mr. Harmon – $265,196 (although Mr. Harmon forfeited all such awards upon his voluntary resignation as an officer of the Company effective July 10, 2020). |
(2)
| Amounts in this column for 2020 include the grant date fair value of the annual performance share awards granted in fiscal year 2018 if 100% of the performance target is achieved: Mr. Banyard – $898,675, Mr. Anversa – $255,000 and Mr. Brackman – $98,494. |
(2)
| restricted stock unit awards. Information regarding the restricted stock and stock optionsunit awards granted to our NEOs during 2018 are2020 is set forth in the Grants of Plan Based Awards Table for each respective year. The Grants of Plan Based Awards Table also sets forth the grant date fair value in accordance with FASB ASC Topic 718. The assumptions used for this calculation are fully described in the footnote titled “Stock Compensation” of the Notes to our Consolidated Financial Statements under Item 8 of our Annual Report on Form 10-K for the year ended December 31, 20182020 filed with the SEC. |
(3)
| For 2018, the amounts set forthAmounts in this column for 2020 represent (i) incentive bonuses that were earned during 20182020 and paid early in 2019, and (ii) long-term cash incentives that were earned based on average return on invested capital2021.
|
(4)
| Amounts for 2020 reflect earnings/(losses) of the three-year period beginningnamed executive officers participating in 2016 and ending in 2018, which were paid early in 2019.our Nonqualified Deferred Compensation Plan. |
(4) (5)
| The amounts set forth in this column include: (i) Company contributions under our 401(k) plan and non-qualified deferred compensation plan;Nonqualified Deferred Compensation Plan; (ii) dividends from vestedupon vesting of restricted stock;stock awards; (iii) executive physicals, (iv) one-time cash-based retention awards granted in 2019, (v) for Mr. McGaugh in 2020, reimbursement of the cost of an apartment during the transition period of his relocation, (vi) for Mr. Hoehn, value of discounted purchases under our Employee Stock Purchase Plan, and (iii) physicals and auto allowances.(vii) for Mr. Harmon, certain relocation expenses. These benefits are valued based on the incremental costs to the Company. The amountsCompany and are listed in the following table: |
Mr. McGaugh
| | | | | | | | | |
Contributions | | | $11,400 | | | | | | |
Ms. Horton
| | | | | | | | | |
Contributions | | | $22,392 | | | $22,192 | | | $2,163 |
Cash Long-term Retention Award | | | — | | | 100,000 | | | — |
Dividends | | | 1,827 | | | — | | | — |
| | | $24,219 | | | $122,192 | | | $2,163 |
Mr. Brackman | | | | | | | | | |
Contributions | | | $11,400 | | | $27,561 | | | $17,010 |
Automobile allowance | | | — | | | — | | | 1,615 |
Cash Long-term Retention Award | | | — | | | 100,000 | | | — |
Executive physical | | | — | | | 1,997 | | | — |
Severance Benefits | | | 735,173 | | | — | | | — |
Dividends | | | 23,145 | | | 2,607 | | | 2,162 |
| | | $768,718 | | | $132,165 | | | $20,787 |
| | 2018 | | 2017 | | | 2016 |
Mr. Banyard | | | | | | | | | |
Contributions | | 52,488 | | | 10,800 | | | | 10,600 |
Relocation | | — | | | — | | | | 3,518 |
Automobile allowance | | — | | | — | | | | 4,154 |
Executive physical | | 1,568 | | | 3,805 | | | | — |
Dividends | | 68,726 | | | 32,136 | | | | 26,627 |
| | 122,782 | | | 46,741 | | | | 44,899 |
Mr. Anversa | | | | | | | | | |
Contributions | | 11,000 | | | 10,800 | | | | — |
Executive physical | | 3,346 | | | — | | | | — |
Dividends | | 7,046 | | | — | | | | — |
| | 21,392 | | | 10,800 | | | | — |
Mr. Brackman | | | | | | | | | |
Contributions | | 17,010 | | | 10,800 | | | | 5,678 |
Relocation | | — | | | — | | | | 72,048 |
Automobile allowance | | 1,615 | | | 8,400 | | | | 8,400 |
Executive physical | | — | | | 3,543 | | | | — |
Dividends | | 2,162 | | | 972 | | | | — |
| | 20,787 | | | 23,715 | | | | 86,126 |
Ms. Horton | | | | | | | | | |
Contributions | | 2,163 | | | — | | | | — |
| | 2,163 | | | — | | | | — |
(5)
2021 Proxy Statement | 51 |
TABLE OF CONTENTS
Mr. Hoehn
| | | | | | | | | |
Contributions | | | $11,400 | | | — | | | — |
Mr. Harmon
| | | | | | | | | |
Contributions | | | $11,400 | | | $6,854 | | | — |
Cash Long-term Retention Award | | | — | | | 100,000 | | | — |
Relocation | | | 31,101 | | | 5,875 | | | — |
| | | $42,501 | | | $112,729 | | | — |
(6)
| Mr. Anversa servedMcGaugh was appointed President and CEO on April 6, 2020. |
(7)
| Ms. Horton was appointed Interim President and CEO in October 2019 and received a supplemental monthly payment of $25,000 from October 2019 through April 2020 for her service in that role in addition to her roles as Executive Vice President, Chief FinancialLegal Officer and as Corporate Secretary through December 11, 2018 and October 8, respectively, when he resigned from those offices. Secretary. |
(8)
| Mr. Brackman served as Vice President and Chief Accounting Officer through December 11, 2018 when he was appointed Executive Vice President and Chief Financial Officer. Ms. HortonOfficer from December 11, 2018 until September 18, 2020. |
(9)
| Mr. Hoehn was first employed byappointed Interim Chief Financial Officer effective September 18, 2020 began receiving a supplemental monthly payment of $5,000 for his service in that role in addition to his role as Corporate Controller. |
(10)
| Mr. Harmon resigned as Vice President, Chief Human Resource Officer effective July 10, 2020, upon which all equity based long-term incentive awards granted to him in April 2020 were forfeited and Mr. Harmon reimbursed the Company for the net tax effect of a signing bonus he received in 2019. The grant date fair value of the forfeited awards is set forth in the Grants of Plan Based Awards table but is not included in the Summary Compensation Table due to the forfeiture of all value of the awards. Mr. Harmon rejoined the Company as ExecutiveSenior Vice President, Chief Legal Officer and SecretaryHuman Resources on October 8, 2018.19, 2020 and received an onboarding grant of service-based restricted stock units valued at $100,000 as set forth in the Stock Awards column. |
(6)
| This amount represents relocation expenses and other expenses included in Mr. Anversa’s sign-on package.
52 | Myers Industries, Inc. |
(7)
| This amount represents a special bonus for Mr. Brackman in recognition for his service as interim CFO from March 18, 2016 until December 1, 2016.
|
39
TABLE OF CONTENTS
Grants of Plan
Based AwardsThe following table contains information concerning the grants of plan based awards to the NEOs under the 2017
Incentive Stock Plan of Myers Industries, Inc., as Amended and Restated (the “2017 Plan”).Plan. The actual value and gains, if any, on an option exercise are dependent upon the future performance of our common stock and overall market conditions. The
option awardsoutstanding and unvested portion of stock awards identified in the table below are also reported in the Outstanding Equity Awards at Fiscal
20182020 Year-End table below.
Grants of Plan Based Awards During Fiscal Year
20182020 | | | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | | Estimated Future Payouts Under Equity Incentive Plan Awards | | All Other Stock Awards: Number of Shares of Stock or Units(2) (#) | | | All Other Option Awards: Number of Securities Underlying Options(3) (#) | | Exercise or Base Price of Option Awards ($/Sh) | | Grant Date Fair Value of Stock and Option Award ($) |
Name | | Grant Date | | | Threshold ($) | | Target ($) | | Maximum ($) | | Threshold (#) | | Target (#) | | Maximum (#) | | | | | |
R. David Banyard | | 3/8/2018 | | | | | 718,940 | | 1,437,880 | | | | | | | | | | | | | | | |
| | 3/8/2018 | | | | | | | | | 0 | | 42,191(4) | | 84,382(4) | | | | | | | 21.30 | | 898,675(5) |
| | 3/8/2018 | | | | | | | | | | | | | | | 16,877 | | | | | 21.30 | | 359,470 |
| | 3/8/2018 | | | | | | | | | | | | | | | | | | 99,119 | | | | 539,205 |
Matteo Anversa | | 3/8/2018 | | | | | 297,500 | | 595,000 | | | | | | | | | | | | | | | | |
| | 3/8/2018 | | | | | | | | | 0 | | 11,972(4) | | 23,944(4) | | | | | | | | 21.30 | | 255,000(5) |
| | 3/8/2018 | | | | | | | | | | | | | | | | 4,789 | | | | | 21.30 | | 102,000 |
| | 3/8/2018 | | | | | | | | | | | | | | | | | | | 28,125 | | | | 153,000 |
Kevin Brackman | | 3/8/2018 | | | | | 169,512 | | 339,023 | | | | | | | | | | | | | | | |
| | 3/8/2018 | | | | | | | | | 0 | | 4,624(4) | | 9,428(4) | | | | | | | 21.30 | | 98,494(5) |
| | 3/8/2018 | | | | | | | | | | | | | | | 1,850 | | | | | 21.30 | | 39,398 |
| | 3/8/2018 | | | | | | | | | | | | | | | | | | 10,864 | | | | 59,096 |
Andrean Horton | | 10/8/2018 | | | | | 52,397 | | 104,795 | | | | | | | | | | | | | | | |
Michael McGaugh | | | 03/04/2020 | | | | | | 468,750 | | | 937,500 | | | | | | | | | | | | | | | | | | | | | |
| 04/28/2020 | | | | | | | | | | | | 0 | | | 65,674 | | | 131,348 | | | | | | | | | | | | 749,997(4) |
| 04/28/2020 | | | | | | | | | | | | | | | | | | | | | 43,783 | | | | | | | | | 500,002 |
Andrean Horton | | | 03/04/2020 | | | | | | 234,000 | | | 468,000 | | | | | | | | | | | | | | | | | | | | | |
| 04/28/2020 | | | | | | | | | | | | 0 | | | 20,490 | | | 40,980 | | | | | | | | | | | | 233,996(4) |
| 04/28/2020 | | | | | | | | | | | | | | | | | | | | | 13,660 | | | | | | | | | 155,997 |
Kevin Brackman | | | 03/04/2020 | | | | | | 220,500 | | | 441,000 | | | | | | | | | | | | | | | | | | | | | |
| 04/28/2020 | | | | | | | | | | | | 0 | | | 19,308 | | | 38,616 | | | | | | | | | | | | 220,497(4) |
| 04/28/2020 | | | | | | | | | | | | | | | | | | | | | 12,872 | | | | | | | | | 146,998 |
Daniel Hoehn | | | 03/04/2020 | | | | | | 101,500 | | | 121,800 | | | | | | | | | | | | | | | | | | | | | |
| 04/28/2020 | | | | | | | | | | | | 0 | | | 5,333 | | | 10,666 | | | | | | | | | | | | 60,903(4) |
| 04/28/2020 | | | | | | | | | | | | | | | | | | | | | 3,555 | | | | | | | | | 40,598 |
Thomas Harmon(5) | | | 03/04/2020 | | | | | | 127,500 | | | 255,000 | | | | | | | | | | | | | | | | | | | | | |
| 04/28/2020 | | | | | | | | | | | | 0 | | | 11,661 | | | 23,222 | | | | | | | | | | | | 132,598(4) |
| 04/28/2020 | | | | | | | | | | | | | | | | | | | | | 7,741 | | | | | | | | | 88,402 |
| 10/26/2020(6) | | | | | | | | | | | | | | | | | | | | | 6,964 | | | | | | | | | 100,003 |
(1)
| Represents estimated future payout for annual cash bonuses. The payouts are based on results of operating income growth. Mr. McGaugh’s and Harmon’s annual cash bonus opportunity were pro-rated for the periods of their employment in 2020. |
(2)
| Represents awards of performance stock units that will vest on the third anniversary of the grant date with payout based 50% on three-year weighted average EBITDA and 50% on three-year average annual return on invested capital for the performance period of 2020-2022. |
(3)
| Represents awards of restricted stock units which vest ratably in three annual installments on March 6 of each anniversary date of the grant. |
(3)
| Represents grantsfirst three years after the grant date. The grant date fair value of non-qualifiedsuch awards was calculated using the closing price of our common stock options which vest ratably in three annual installments on each anniversary date of the grant.
|
(4)
| Represents target payout of restricted performance shares that will vest on the third anniversary date of the grant. The payout will be based on cumulative adjusted EBITDA and free cash flow as a percentage of sales for the performance period of 2018-2020.
|
(5)
| Represents 100% payout based on the share price on the date of grant of $11.42 per share.
|
(4)
| Represents payout at target based on the grant.grant date fair value of such awards calculated by using the closing price of our common stock on the date of grant of $11.42 per share. |
(5)
| All Equity Incentive Plan Awards granted to Mr. Harmon on April 28, 2020 were forfeited upon his voluntary resignation on July 10, 2020. |
(6)
| Represents an award of restricted stock units granted upon Mr. Harmon’s re-employment which vests in two equal installments on the second and third anniversaries of the grant date. The grant date fair value of such awards was calculated using the closing price of our common stock on the date of grant of $14.36 per share. |
40
2021 Proxy Statement | 53 |
TABLE OF CONTENTS
Outstanding Equity
AwardsAwards at Fiscal Year EndThe following table shows all outstanding equity awards held by the NEOs at the end of fiscal year
20182020 that have not been exercised,
forfeited, or
that have not vested. Certain of the awards identified in the table below are also reported in the “Grants of Plan Based Awards During Fiscal Year
2018”2020” table above.
Outstanding Equity Awards at Fiscal
20182020 Year-End
Michael McGaugh | | | | | | | | | | | | | | | | | | 43,783(2) | | | 909,811 | | | 65,674(3) | | | 1,364,706 |
Andrean Horton | | | 6,488 | | | 12,976(4) | | | | | | 18.58 | | | 3/06/2029 | | | 2,691(5) | | | 55,919 | | | 10,091(6) | | | 209,691 |
| | | | | | | | | | | | | | | | 4,075(7) | | | 84,679 | | | | | | |
| | | | | | | | | | | | | | | | 13,660(2) | | | 283,855 | | | 20,490(3) | | | 425,782 |
Kevin Brackman(8) | | | 10,863 | | | 0 | | | | | | 21.30 | | | 3/18/2021 | | | | | | | | | 9,419(6) | | | 195,727 |
| 18,166 | | | 0 | | | | | | 18.58 | | | 3/18/2021 | | | | | | | | | 4,624(9) | | | 96,087 |
| | | | | | | | | | | | | | | | | | | | | | 19,308(3) | | | 401,220 |
Daniel Hoehn | | | | | | | | | | | | | | | | | | 3,555(2) ) | | | 73,873 | | | 5,333(3) | | | 110,820 |
Thomas Harmon | | | | | | | | | | | | | | | | | | 6,964(10)) | | | 144,712 | | | | | | |
Name | Option Awards | Stock Awards |
Number of securities underlying unexercised options (#) exercisable | Number of securities underlying unexercised options (#) unexercisable | Equity incentive plan awards: number of securities underlying unexercised unearned options (#) | Option exercise price ($) | Option expiration date | Number of shares or units of stock that have not vested (#) | Market value of shares or units of stock that have not vested ($)(1) | Equity incentive plan awards: number of unearned shares, units or other rights that have not vested (#) | Equity incentive plan awards: market or payout value of unearned shares, units or other rights that have not vested ($)(1) | |
R. David Banyard | 53,867 | 26,933(2) | | 11.62 | 3/2/2026 | | | | | |
51,627 | 103,255(3) | 14.30 | 3/2/2027 | | | | | |
| 99,119(4) | 21.30 | 3/8/2028 | | | | | |
| | | | 10,200(5) | 154,122 | 91,700(8) | 1,385,587 | |
| | | | 16,501(6) | 249,330 | 61,879(9) | 934,992 | |
| | | | 16,877(7) | 255,011 | 42,191(10) | 637,506 | |
Matteo Anversa | 15,089 | 0 | | 14.30 | 3/2/2027 | 0 | |
Kevin Brackman | 4,500 | 0 | | 17.95 | 3/23/2025 | | | | | |
5,133 | 2,567(2) | | 11.62 | 3/2/2026 | | | | | |
5,658 | 11,317(3) | | 14.30 | 3/2/2027 | | | | | |
| 10,863(4) | | 21.30 | 3/8/2028 | | | | | |
| | | | | 800(5) | 12,088 | | | |
| | | | | 1,809(6) | 27,334 | 6,782(9) | 102,476 | |
| | | | | 1,850(7) | 27,954 | 4,624(10) | 69,869 | |
Andrean Horton | - | - | | - | - | - | - | - | - | |
(1)
| This is calculatedCalculated by multiplying $15.11,$20.78, the closing market price of our common stock on December 31, 20182020, by the number of unvested restricted shares and unvested performance shares at target payout.
|
(2)
| These stock options were granted on March 2, 2016 with unexercisable shares vesting in March 2019.
|
(3)
| These stock options were granted on March 2, 2017 with unexercisable options vesting in equal installments in March 2019 and March 2020.
|
(4)
| These stock options were granted on March 8, 2018 with unexercisable options vesting in equal installments in March 2019, March 2020 and March 2021.
|
(5)
| Represents unvested service based restricted stock units that were granted on March 2, 2016. The remaining units will vest in March 2019.
|
(6)
| Represents unvested service based restricted stock units that were granted on March 2, 2017. These units will vest in equal installments in March 2019 and March 2020.
|
(7)
| Represents unvested service based restricted units that were granted on March 8, 2018. The remaining units will vest April 28, 2020 which are subject to vesting in equal installments on March 6 in March 2019, March 20202021, 2022 and March 2021. 2023. |
(8) (3)
| Represents unvested performance based restricted stock units that were granted on March 2, 2016. The remaining units will vest in March 2019April 28, 2020 which are subject to vesting based on applicable performance conditions.conditions for the three-year performance period 2020-2022. The units shown indicate the number of shares that would be paid out if 100%performance is achieved at target. |
(4)
| Represents stock options granted on March 6, 2019 which remain subject to vesting in two equal installments on the anniversaries of the performance target is achieved. grant date in 2021 and 2022. |
(9) (5)
| Represents unvested service based restricted units granted on March 6, 2019 which remain subject to vesting in two equal installments on the anniversaries of the grant date in 2021 and 2022. |
(6)
| Represents unvested performance based restricted stock units that were granted on March 2, 2017. The remaining units will vest in March 20206, 2019 which are subject to vesting based on applicable performance conditions.conditions for the three-year performance period 2019-2021. The units shown indicate the number of shares that would be paid out if 100%performance is achieved at target. |
(7)
| Represents unvested service based restricted units that were granted as a one-time retention award on October 16, 2019 which remain subject to vesting in two equal installments on the anniversaries of the performance target is achieved.grant date in 2021 and 2022. |
(10) (8)
| Mr. Brackman’s outstanding service based unit awards vested, and his outstanding stock options vested and became exercisable, upon his departure on September 18, 2020. |
(9)
| Represents unvested performance based restricted stock units that were granted on March 8, 2018. The remainingThese units will vest in March 2021 based on applicable performance conditions. The units shown indicate the number of shares that would be paid out if 100%performance is achieved at target. |
(10)
| Represents unvested service based restricted units that were granted on October 26, 2020 as an onboarding grant upon Mr. Harmon’s re-employment. These units are subject to vesting in two equal installments on the second and third anniversaries of the performance target is achieved.grant date. |
41
54 | Myers Industries, Inc. |
TABLE OF CONTENTS
Option Exercises and
StockStock Vested for Fiscal Year End 20182020
The following table shows the options that were exercised and the restricted stock grants that vested for the NEOs during fiscal year 2018.2020.
Michael McGaugh | | | — | | | — | | | — | | | — |
Andrean Horton | | | — | | | — | | | 3,383 | | | $49,324 |
Kevin Brackman | | | 29,175 | | | 131,451 | | | 31,299 | | | $440,041 |
Daniel Hoehn | | | — | | | — | | | — | | | — |
Thomas Harmon | | | — | | | — | | | — | | | — |
Nonqualified Deferred Compensation The following table shows the contributions, earnings, and balances of the NEOs in our Nonqualified Deferred Compensation Plan with respect to fiscal year 2020.
Michael McGaugh | | | $3,606 | | | $7,350 | | | $1,028 | | | — | | | $4,634 |
Andrean Horton | | | $24,564 | | | $12,753 | | | $10,379 | | | — | | | $68,806 |
Kevin Brackman | | | $8,168 | | | — | | | $7,751 | | | — | | | $56,708 |
Daniel Hoehn | | | $13,889 | | | $566 | | | $1,873 | | | — | | | $15,763 |
Thomas Harmon | | | $9,481 | | | — | | | $3,252 | | | — | | | $12,732 |
(1)
| Contributions by the Company with respect to fiscal year 2020 under the Nonqualified Deferred Compensation Plan. |
(2)
| Earnings in this column represent estimated earnings on the Nonqualified Deferred Compensation Plan, which are based upon participant-directed investment allocations. These amounts are not included in the Summary Compensation Table because they do not constitute above market interest or preferential earnings. |
2021 Proxy Statement | 55 |
TABLE OF CONTENTS
Name | | Option Awards | | Stock Awards | |
| Number of shares acquired on exercise (#) | Value realized on exercise ($) | | Number of shares acquired on vesting (#) | Value realized on vesting ($) |
R. David Banyard | | 0 | | | 51,324 | $893,323 |
Matteo Anversa | | 0 | | | 7,730 | $132,225 |
Kevin Brackman | | 0 | | | 2,204 | $43,428 |
Andrean Horton | | - | | | - | - |
42
EmploymentSeverance Arrangements Includingupon Termination Including Change in ControlThe following table summarizes severance payments and benefits available to our NEOs who were eligible to participate in the Severance Plan adopted by the Company in 2020 if certain terminations of employment occurred in 2020. With respect to Mr. Brackman, the severance benefits described were prescribed by the terms of his Severance Agreement effective December 11, 2018. Mr. Hoehn was not eligible to participate in the Severance Plan.
| Termination without cause or NEO terminates for good reason including within 180 days following a change in control(1) | | | Severance Benefits – Cash Payment | | | Amount equal to the sum of (A) 2X his then-current1.5 times current annual base salary (or highest base salary during prior year) paid in lump sum within 30 days and (B) 2X his annual bonus at the highest rate in effect during the prior two year period. | | | Amount equal to the sum of (A) 1X his then-current1 times current annual base salary (or highest base salary during prior year) paid in lump sum within 30 days and (B) 1X his annual bonus at the highest rate in effect during the prior one year period. | | | Amount equal to the sum of (A) 2X her then-current1 times current annual base salary (or highest base salary during prior year) paid in lump sum within 30 days and (B) 2X her annual bonus at the highest rate in effect during the prior two year period. | |
| Annual Bonus for the Year of Termination –
Cash Payment | Amount equal to 1 times the pro-rata portionsum of the(A) current yearannual base salary (or highest base salary during prior year) and (B) annual target annual bonus, withinpaid in lump sum in 30 days after such termination. | Amount equal to the pro-rata portion of the current year target annual bonus within 30 days after such termination.
| Amount equal to the pro-rata portion of the current year target annual bonus within 30 days after such termination.
| |
Stock
| | | | | All outstanding
| | Outstanding unvested restricted stock awards are forfeited and performance stock unit grants, stock options, andawards fully vest but are subject to settlement based on actual performance | | | Outstanding unvested restricted stock awards will become vested, to the extent not previouslyare forfeited, or terminated. | All outstanding performance stock unit grants,awards fully vest but are subject to settlement based on actual performance, and unvested stock options andare forfeited
| | | Outstanding unvested restricted stock awards will become vested, to the extent not previouslyare forfeited or terminated. | All outstandingand performance stock unit grants, stock options, andawards fully vest but are subject to settlement based on actual performance
| | | Outstanding unvested restricted stock awards willfully vest, performance stock units fully vest but are subject to actual performance, and unvested stock options fully vest and become vested, to the extent not previously forfeited or terminated.exercisable | |
| Certain Benefits and Perquisites | Health coverage, long term disability protection, life insurance protection for two years, and outplacement services for one year. | | Health coverage, long term disability protection, life insurance protection, and outplacement services for one year.year | | | Health coverage, long term disability protection, life insurance protection, and outplacement services for twoone year | | | Health coverage, long term disability protection, life insurance protection, and outplacement services for one year | | | Health coverage, long term disability protection, life insurance protection and outplacement services for one year | |
| Termination without cause or for good reason in connection with a change in control | | | Severance Payment | | | Amount equal to 2 times the sum of (A) current annual base salary (or highest base salary during prior year), and (B) target annual bonus, paid in a lump sum within 30 days | | | Amount equal to 2 times the sum of (A) current annual base salary (or highest base salary during prior year), and (B) target annual bonus, paid in a lump sum within 30 days | | | Amount equal to 1.5 times the sum of (A) current annual base salary (or highest base salary during prior year), and (B) target annual bonus, paid in a lump sum within 30 days | | | Amount equal to 1 times the sum of (A) current annual base salary (or highest base salary during prior year) and (B) annual target bonus, paid in lump sum within 30 days | |
| | | | Annual Bonus for Year of Termination | | | Amount equal to the pro-rata portion of the current year target annual bonus paid within 30 days | | | Amount equal to the pro-rata portion of the current year target annual bonus paid within 30 days | | | Amount equal to the pro-rata portion of the current year target annual bonus paid within 30 days | | | Amount equal to the pro-rata portion of the current year target annual bonus paid within 30 days | |
| | | | LTI Awards | | | Outstanding unvested restricted stock awards fully vest and performance stock unit awards fully vest subject to settlement based on actual performance | | | Outstanding unvested restricted stock awards fully vest, performance stock unit awards fully vest subject to settlement based on actual performance, and stock options fully vest | | | Outstanding unvested restricted stock awards fully vest and performance stock unit awards fully vest subject to settlement based on actual performance | | | All outstanding unvested restricted stock awards, performance stock units, and stock options fully vest | |
| | | | Certain Benefits and Perquisites | | | Health coverage for 18 months; long term disability protection and life insurance protection for 2 years, and outplacement services for one year.year | | | Health coverage for 18 months; long term disability protection and life insurance protection for 2 years, and outplacement services for one year | | | Health coverage for 18 months; long term disability protection and life insurance protection for 2 years, and outplacement services for one year | | | Health coverage, long term disability protection, life insurance protection and outplacement services for one year | |
56 | Myers Industries, Inc. |
TABLE OF CONTENTS
No 280G protection or excise tax gross-up payments provided |
Termination by reason of death or disability | | | Cash Payment | | | Base salary and annual bonus accrued and unpaid to the date of death or disability.disability | | | Base salary and annual bonus accrued and unpaid to the date of death or disability.disability | | | Base salary and annual bonus accrued and unpaid to the date of death or disability.disability | | | Base salary and annual bonus accrued and unpaid to the date of death or disability | |
| | | | LTI Awards | | | Outstanding restricted stock awards fully vest and performance stock unit awards vest on a pro rata basis at target performance | | | Outstanding restricted stock awards fully vest, and performance stock unit awards vest on a pro rata basis at target performance, and stock options fully vest | | | Outstanding restricted stock awards fully vest and performance stock unit awards vest on a pro rata basis at target performance | | | All outstanding restricted stock awards, performance stock units, and stock options fully vest | |
| | | | Certain Benefits and Perquisites | Any amounts
| | Amounts payable under any employee benefit plan of the Company in accordance with the terms of such plan.If Mr. Banyard and/or his surviving spouse and dependents properly elect continued medical coverage in accordance with Code Section 4980B, the Company shall pay the entire cost of the premiums for such continued medical coverage for the longer of (A) the maximum required period of coverage under Code Section 4980B(f) or (B) 24 months. plan | Any amounts
| | Amounts payable under any employee benefit plan of the Company in accordance with the terms of such plan. If Mr. Brackman and/or his surviving spouse and dependents properly elect continued medical coverage in accordance with Code Section 4980B, the Company shall pay the entire cost of the premiums for such continued medical coverage for the longer of (A) the maximum required period of coverage under Code Section 4980B(f) or (B) 12 months. plan | Any amounts
| | Amounts payable under any employee benefit plan of the Company in accordance with the terms of such plan.plan | | | Amounts payable under any employee benefit plan of the Company in accordance with the terms of such plan | |
| Termination with cause or voluntary resignation | | | Other Terms | If Mr. Banyard is terminated by the Company for cause or resigns other than for good reason, then he is entitled only to compensation
| | Compensation earned prior to the date of termination that has not yet been paid and is subject to a two year non-compete agreement. | If Mr. Brackman is terminated by the Company for cause or resigns other than for good reason, then he is entitled only to compensation
| | Compensation earned prior to the date of termination that has not yet been paid and is subject to a one year non-compete agreement. | If Ms. Horton is terminated by the Company for cause or resigns other than for good reason, then she is entitled only to compensation
| | Compensation earned prior to the date of termination that has not yet been paid.paid | | | Compensation earned prior to the date of termination that has not yet been paid | |
(1) With respect to Ms. Horton these benefits apply only in the event of her termination without cause or for good reason within 180 days following a change in control.
43
2021 Proxy Statement | 57 |
TABLE OF CONTENTS
Summary of Potential
TerminationTermination Payments and BenefitsThe following table summarizes the value of the termination payments and benefits that each of our NEOs would receive if he
or she had terminated employment on December 31,
20182020, under the circumstances shown.
Name | | Termination for Cause or Voluntary Resignation(1) | | Termination without Cause or for Good Reason | | Retirement(2) | | Death | | Disability(3) | | Termination without Cause or Resignation for Good Reason in connection with a Change of Control | | Actual Termination Amounts Received |
R. David Banyard | | | | | | | | | | | | | | |
Cash Severance | | - | | 1,437,880 | | - | | 13,826 | | 13,826 | | 1,437,880 | | - |
Bonus Severance | | - | | 1,437,880 | | - | | - | | - | | 1,437,880 | | - |
Other Benefits | | - | | 72,043 | | - | | 302,109 | | 52,109 | | 72,043 | | - |
Equity Acceleration(3) | | - | | 4,075,806 | | - | | 4,075,806 | | 4,075,806 | | 4,075,806 | | - |
Total | | - | | 7,023,609 | | - | | 4,391,741 | | 4,141,741 | | 7,023,609 | | - |
Matteo Anversa | | | | | | | | | | | | | | |
Cash Severance | | - | | - | | - | | - | | - | | - | | - |
Bonus Severance | | - | | - | | - | | - | | - | | - | | - |
Other Benefits | | - | | - | | - | | - | | - | | - | | - |
Equity Acceleration | | - | | - | | - | | - | | - | | - | | - |
Total | | - | | - | | - | | - | | - | | - | | - |
Kevin Brackman | | | | | | | | | | | | | | |
Cash Severance | | - | | 350,000 | | - | | 7,212 | | 7,212 | | 350,000 | | - |
Bonus Severance | | - | | 210,000 | | - | | - | | - | | 210,000 | | - |
Other Benefits | | - | | 35,536 | | - | | 785,592 | | 35,592 | | 35,536 | | - |
Equity Acceleration(4) | | - | | 320,316 | | - | | 320,316 | | 320,316 | | 320,316 | | - |
Total | | - | | 915,852 | | - | | 1,113,120 | | 363,120 | | 915,852 | | - |
Andrean Horton | | | | | | | | | | | | | | |
Cash Severance | | - | | - | | - | | 7,212 | | 7,212 | | 750,000 | | - |
Bonus Severance | | - | | - | | - | | - | | - | | 450,000 | | - |
Other Benefits | | - | | - | | - | | 250,000 | | - | | 19,979 | | - |
Equity Acceleration | | - | | - | | - | | - | | - | | - | | - |
Total | | | | | | | | 257,212 | | 7,212 | | 1,219,979 | | |
Michael McGaugh
| | | | | | | | | | | | | | | | | | |
Cash Severance | | | — | | | $937,500 | | | — | | | $24,038 | | | $24,038 | | | $2,500,000 |
Bonus Severance | | | — | | | — | | | — | | | $625,000 | | | $625,000 | | | $625,000 |
Other Benefits | | | — | | | $50,625 | | | — | | | $295,348 | | | $60,603 | | | $63,711 |
Equity Acceleration(3) | | | — | | | $1,408,588 | | | — | | | $1,408,588 | | | $1,408,588 | | | $1,408,588 |
Total | | | — | | | $2,396,713 | | | — | | | $2,352,975 | | | $2,118,230 | | | $4,597,299 |
Andrean Horton
| | | | | | | | | | | | | | | | | | |
Cash Severance(4) | | | — | | | $440,000 | | | — | | | $57,500 | | | $57,500 | | | $1,298,000 |
Bonus Severance | | | — | | | — | | | — | | | $234,000 | | | $234,000 | | | $234,000 |
Other Benefits | | | — | | | $45,541 | | | — | | | $274,934 | | | $43,943 | | | $57,036 |
Equity Acceleration(3) | | | — | | | $757,647 | | | — | | | $757,647 | | | $757,647 | | | $757,647 |
Total | | | — | | | $1,243,188 | | | — | | | $1,324,081 | | | $1,093,090 | | | $2,346,683 |
Kevin Brackman(5)
| | | | | | | | | | | | | | | | | | |
Cash Severance(3) | | | — | | | $467,500 | | | — | | | — | | | — | | | — |
Bonus Severance | | | — | | | $598,673 | | | — | | | — | | | — | | | — |
Other Benefits | | | — | | | $71,508 | | | — | | | — | | | — | | | — |
Equity Acceleration | | | — | | | $819,367 | | | — | | | — | | | — | | | — |
Total | | | — | | | $1,957,047 | | | — | | | — | | | — | | | — |
Thomas Harmon
| | | | | | | | | | | | | | | | | | |
Cash Severance | | | — | | | $340,000 | | | — | | | $6,538 | | | $6,538 | | | $765,000 |
Bonus Severance | | | — | | | — | | | — | | | $170,000 | | | $170,000 | | | $170,000 |
Other Benefits | | | — | | | $43,731 | | | — | | | $274,934 | | | $43,943 | | | $53,370 |
Equity Acceleration(3) | | | — | | | $145,652 | | | — | | | $145,652 | | | $145,652 | | | $145,652 |
Total | | | — | | | $529,383 | | | — | | | $597,124 | | | $366,133 | | | $1,134,022 |
Daniel Hoehn(6)
| | | | | | | | | | | | | | | | | | |
Cash Severance | | | — | | | — | | | — | | | — | | | — | | | — |
Bonus Severance | | | — | | | — | | | — | | | — | | | — | | | — |
Other Benefits | | | — | | | — | | | — | | | $250,000 | | | — | | | — |
Equity Acceleration | | | — | | | $112,253 | | | — | | | $114,412 | | | $114,412 | | | $114,412 |
Total | | | — | | | $112,253 | | | — | | | $364,412 | | | $114,412 | | | $114,412 |
(1)
| Mr. Anversa’s employment terminated effective December 31, 2018 upon his voluntarily resignation and he received no severance benefits.
|
(2)
| None of the NEOs were eligible for retirement benefits as of December 31, 2018. 2020. |
(3) (2)
| Values for these amounts are based on an assumption of total disability at December 31, 2018. 2020. |
(4) (3)
| Values for these amounts are based on the closing price of our common stock on December 31, 20182020 of $15.11. $20.78. |
(4)
| Values for these amounts include accelerated payments from a cash-based retention award granted on October 16, 2020. |
(5)
| Values for Mr. Brackman reflect amounts received upon termination of service effective September 18, 2020 and, with respect to performance-based restricted stock units that vested upon termination but which are to be settled based on actual performance during respective performance periods, the target level of performance and the closing price of our common stock on September 18, 2020. |
(6)
| Mr. Hoehn was not eligible to participate in the Company’s Severance Plan. |
58 | Myers Industries, Inc. |
TABLE OF CONTENTS
Policies and Procedures with Respect to Related Party Transactions
The Board is committed to upholding the highest legal and ethical conduct in fulfilling its responsibilities and recognizes that related party transactions can present a heightened risk of potential or actual conflicts of interest. Accordingly, it is our preference, as a general rule, to avoid related party transactions. No related party transactions occurred during fiscal year
2018.2020.
Our Governance Committee reviews all relationships and transactions in which we and our directors, nominees for director and executive officers or their immediate family members are participants to determine whether such persons have a direct or indirect material interest. In addition, under Code of Business Conduct and Ethics, our Audit Committee is responsible for reviewing and investigating any matters pertaining to our ethical codes of conduct, including conflicts of interest.
44
As a result of rules adopted under the Dodd-Frank Wall Street Reform and Consumer Protection Act, the SEC has adopted a rule requiring annual disclosure of the ratio of the median employee’s annual total compensation to the total annual compensation of the principal executive officer (in the Company’s case, the CEO). In determining the median employee, a listing of all employees (the Company’s full employee population, but excluding the CEO) as of December
17,31, 2018, was prepared and the Company applied a “consistently applied compensation measure” to determine the median employee. For the consistently applied compensation measure, the Company looked to annual base salaries of employees for 2018. We used an annual base salary as our consistently applied compensation measure as it represents the primary compensation component paid to all of our employees. Non-U.S. employees were included in the determination of the median employee compensation, with the salary amounts of such non-U.S. employees converted to U.S. dollars using the applicable exchange rate as of December
17,31, 2018.
Mr. Banyard, the Company’s CEO, had 2018
The annual total compensation
paid to our CEOs in 2020 on a pro rata basis based on their time of
$4,076,952,service was $2,016,270, as reflected in the Summary Compensation Table
information included in this Proxy Statement. The annual total compensation for
20182020 of our median employee (other than the CEO) was calculated in accordance with the requirements of the Summary Compensation Table and determined to be
$39,810. Mr. Banyard’s$41,809. Accordingly, our CEO annual total
actual compensation
in 2020 was approximately
102.4148.23 times that of our median employee in
2018.2020. The annual total compensation that would have been paid to Mr. McGaugh had he served as our CEO for a full year in 2020 was $2,269,927, resulting in a ratio of 54.29 based on that annualized amount.
The SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee’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 their compensation practices. Accordingly, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.
45
2021 Proxy Statement | 59 |
TABLE OF CONTENTS
Security Ownership of Certain
BeneficialBeneficial Owners and ManagementThe following table shows the number of shares of our common stock beneficially owned as of March 11, 20192021, (unless otherwise indicated) by:
Each shareholder known by us to be the beneficial owner of more than 5% of our common stock;
Each of the Company’s directors and director nominees;
Each named executive officer in our summary compensation table; and
All of our current directors and officers as a group
A beneficial owner of stock is a person who has sole or shared voting power, meaning the power to control voting decisions, or sole or shared investment power, meaning the power to cause the sale of the stock. All individuals listed in the table have sole voting and investment power over the shares unless otherwise noted. The Company had no preferred stock issued or outstanding.
| | Shares Beneficially Owned | | | Percent of Shares Outstanding(1) |
Greater Than 5% Owners(2) | | | | | | | |
GAMCO Investors, Inc.(3) | | 7,162,144 | | | 20.24% |
One Corporate Center 401 Theodore Frems Ave. Rye, NY 10580-1422 | | | | | | | |
T. Rowe Price Associates, Inc.(4) | | 4,723,123 | | | 13.35% |
100 East Pratt Street Baltimore, Maryland 21202 | | | | | | | |
BlackRock, Inc.(5) | | 5,137,165 | | | 14.52% |
55 East 52nd Street New York, NY 10055 | | | | | | | |
The Vanguard Group(6) | | 2,232,015 | | | 6.31% |
100 Vanguard Blvd. Malvern, PA 19355 | | | | | | | |
Directors, Nominees, and Named Executive Officers(7,8) | | | | | | | |
Matteo Anversa | | 5,233 | | | * |
R. David Banyard | | 170,318 | | | * |
Kevin Brackman | | 4,078 | | | * |
Sarah R. Coffin(9) | | 20,029 | | | * |
Ronald M. De Feo(10) | | 0 | | | * |
William A. Foley(11) | | 18,020 | | | * |
Andrean Horton | | 0 | | | * |
F. Jack Liebau, Jr. (12) | | 28,957 | | | * |
Bruce Lisman(13) | | 19,057 | | | * |
Lori Lutey(14) | | 0 | | | * |
Jane Scaccetti(15) | | 17,171 | | | * |
Robert A. Stefanko(16) | | 13,744 | | | * |
All Directors, Nominees and Named Executive Officers as a group (12 persons) | | 296,607 | | | * |
Greater Than 5% Owners(2)
| | | | | | |
GAMCO Investors, Inc.(3)
One Corporate Center
Rye, NY 10580-1435 | | | 5,994,771 | | | 16.6% |
BlackRock, Inc.(4)
55 East 52nd Street
New York, NY 10055 | | | 5,582,348 | | | 15.5% |
T. Rowe Price Associates, Inc.(5)
100 East Pratt Street
Baltimore, Maryland 21202 | | | 2,535,107 | | | 7.0% |
The Vanguard Group(6)
100 Vanguard Blvd.
Malvern, PA 19355 | | | 2,479,596 | | | 6.9% |
Wells Fargo & Company(7)
420 Montgomery Street
San Francisco, CA 94163 | | | 2,202,626 | | | 6.1% |
Directors, Nominees, and Named Executive Officers(8,9)
| | | | | | |
Kevin Brackman | | | 1,597 | | | * |
Thomas Harmon | | | 0 | | | * |
Daniel Hoehn(10) | | | 1,012 | | | * |
Andrean Horton | | | 7,847 | | | * |
Michael McGaugh | | | 62,461 | | | * |
Yvette Dapremont Bright | | | 0 | | | |
Sarah R. Coffin(11) | | | 23,529 | | | * |
Ronald M. De Feo(12) | | | 20,000 | | | * |
William A. Foley(13) | | | 20,520 | | | * |
Jeffrey Kramer | | | 0 | | | |
F. Jack Liebau, Jr. (12) | | | 36,182 | | | * |
Bruce Lisman(12) | | | 30,782 | | | * |
Lori Lutey(12) | | | 16,267 | | | * |
William Sandbrook | | | 0 | | | |
Jane Scaccetti(12) | | | 24,396 | | | * |
Robert A. Stefanko(14) | | | 13,744 | | | * |
All Directors, Nominees and Named Executive Officers as a group (16 persons) | | | 299,786 | | | * |
(1)
| The percentage of shares beneficially owned is based on 35,388,14036,072,596 shares of common stock outstanding as of March 11, 2019.2021. Beneficial ownership is determined in accordance with the rules and regulations of the SEC. Shares of common stock subject to options that are currently exercisable or exercisable within 60 days after March 11, 2019 are deemed to be outstanding and beneficially owned by the person holding such options for the purpose of computing the number of shares beneficially owned and the percentage ownership of such person, but are not deemed to be outstanding for the purpose of computing the percentage ownership of any other person. |
60 | Myers Industries, Inc. |
TABLE OF CONTENTS
options that are currently exercisable or exercisable within 60 days after March 11, 2021, are deemed to be outstanding and beneficially owned by the person holding such options for the purpose of computing the number of shares beneficially owned and the percentage ownership of such person, but are not deemed to be outstanding for the purpose of computing the percentage ownership of any other person.
(2)
| According to filings made with the SEC, this party or an affiliate has dispositive and/or voting power over the shares. Number of shares of common stock beneficially owned is the amount reflected in the most recent Schedule 13D or Schedule 13G filed by such party with the SEC. party. |
46
(3)
| According to a Schedule 13D/A dated September 14, 2018,filed November 13, 2020, (i) Gabelli Funds, LLC possessed sole power to vote and sole power to direct the disposition with respect to 1,777,0761,759,150 of these shares, and shared power to vote and shared power to direct the disposition with respect to none of these shares, (ii) GAMCO Asset Management, Inc. possessed sole power to vote with respect to 4,006,9383,058,947 of these shares, sole power to direct the disposition with respect to 4,321,9383,374,051 of these shares, and shared power to vote and shared power to direct the disposition with respect to none of these shares, (iii) MJG Associates, Inc. possessed sole power to vote and sole power to direct the disposition with respect to 21,00024,000 of these shares, and shared power to vote and shared power to direct the disposition with respect to none of these shares, (iv) Gabelli & Company Investment Advisers,Teton Advisors, Inc. possessed sole power to vote and sole power to direct the disposition with respect to 1,500817,370 of these shares, and shared power to vote and shared power to direct the disposition with respect to none of these shares (v) Teton Advisors,Gabelli Foundation, Inc. possessed sole power to vote and sole power to direct the disposition with respect to 1,027,90018,000 of these shares, and shared power to vote and shared power to direct the disposition with respect to none of these shares, (vi) Gabelli Foundation, Inc. possessed sole power to vote and sole power to direct the disposition with respect to 12,000 of these shares, and shared power to vote and shared power to direct the disposition with respect to none of these shares, (vii) GGCP, Inc. and GAMCO Investors, Inc. each possessed sole power to vote, sole power to direct the disposition, shared power to vote and shared power to direct the disposition with respect to none of these shares, (viii)(vii) Associated Capital Group, Inc. possessed sole power to vote and sole power to direct the disposition with respect to 2,200 of these shares, and shared power to vote and shared power to direct the disposition with respect to none of these shares, and (ix)(viii) Mario J. Gabelli possessed sole power to vote, sole power to direct the disposition, shared power to vote and shared power to direct the disposition, with respect to none of these shares. According to the Schedule 13D/A, Mario J. Gabelli is deemed to have beneficial ownership of the securities owned beneficially by Gabelli Funds, LLC, GAMCO Asset Management, Inc., MJG Associates, Inc., Gabelli & Company Investment Advisers, Inc., Gabelli Foundation, Inc., Associated Capital Group and Teton Advisors, Inc. |
(4)
| According to a Schedule 13G/A filed January 25, 2021, Blackrock, Inc. possessed sole power to vote with respect to 5,539,772 of these shares, sole power to direct the disposition with respect to 5,582,348 of these shares, and shared power to vote and shared power to direct the disposition with respect to none of these shares. |
(5)
| According to the Schedule 13G/A filed February 14, 2019,16, 2021, these securities are owned by various individual and institutional investors that T. Rowe Price Associates, Inc. (“Price Associates”) serves as investment adviser with power to direct investments and/or sole power to vote the securities (including T. Rowe Price Small-Cap Value Fund, Inc., which owns 3,203,414owns1,448,983 shares and has the sole voting power over all such shares, but the sole dispositive power over none and shared voting or shared dispositive power over none) that T. Rowe Price Associates, Inc. (“Price Associates”) serves as investment adviser with power to direct investments and/or sole power to vote the securities.. According to the Schedule 13G/A, filed February 14, 2019, Price Associates possessed sole power to vote with respect to 1,490,234983,410 of these shares, sole power to direct the disposition with respect to 4,723,1232,535,107 of these shares, and shared power to vote and shared power to direct the disposition with respect to none of these shares. For purposes of the reporting requirements of the Securities and Exchange Act of 1934, as amended, Price Associates is deemed to be a beneficial owner of such securities. |
(5) (6)
| According to a Schedule 13G/A dated January 29, 2019, Blackrock, Inc. possessed sole power to vote with respect to 5,072,758 of these shares, sole power to direct the disposition with respect to 5,137,165 of these shares, and shared power to vote and shared power to direct the disposition with respect to none of these shares.
|
(6)
| According to a Schedule 13G/A filed February 11, 2019,10, 2021, The Vanguard Group possessed sole power to vote with respect to 72,700none of these shares, sole power to direct the disposition of 2,161,5112,407,287 of these shares, shared power to vote with respect to 1,70247,162 of these shares, and shared power to direct the disposition of 70,50472,309 of these shares. |
(7)
| According to the Schedule 13G filed February 11, 2021, (i) Wells Fargo & Company possessed sole power to vote and sole power to direct the disposition with respect to 76,857 of these shares, shared power to vote with respect to 396,370 of these shares, and shared power to direct the disposition with respect to 2,125,769 of these shares, and (ii) Wells Capital Management Incorporated possessed sole power to vote and sole power to direct the disposition of none of these shares, possessed shared power to vote with respect to 2,025,363 of these shares and shared power to direct the disposition with respect to 2,121,830 of these shares. For purposes of the reporting requirements of the Securities and Exchange Act of 1934, as amended, Wells Fargo & Company is deemed to be a beneficial owner of such securities. |
(8)
| Unless otherwise noted, the beneficial owner uses the same address as the address of the principal office of the Company for its business address and c/o the Company for any business at which he or she is employed. |
(8) (9)
| According to filings made with the SEC, this party or an affiliate has dispositive and/or voting power over the shares. Unless otherwise indicated, none of the persons listed beneficially owns one percent or more of the outstanding shares of common stock. |
(9) (10)
| Amount includes 250 shares of common stock held in Mr. Hoehn’s account in the Company’s Employee Stock Purchase Plan. |
(11)
| The table does not reflect (i) 11,67818,903 share awards that have been deferred by this director that will be converted into common stock upon the lapse of the deferral period, or (ii) 3,0815,850 restricted stock units awarded to this director on April 25, 2018,29, 2020, with respect to her current service commencing on that date until the 20192021 Annual Meeting of Shareholders, at which time herthe awards will vest. |
(10) (12)
| The table does not reflect 2,5745,850 restricted stock units awarded to this director for a pro rata portion of the 2018-2019 term in connectionon April 29, 2020, with his appointmentrespect to the Boarddirector’s current service commencing on that date until the 20192021 Annual Meeting of Shareholders, at which time histhe awards will vest. |
(11) (13)
| The table does not reflect (i) 9,68716,912 share awards that have been deferred by this director that will be converted into common stock upon the lapse of the deferral period, or (ii) 3,0815,850 restricted stock units awarded to this director on April 25, 2018,29, 2020, with respect to his current service commencing on that date until the 20192021 Annual Meeting of Shareholders, at which time histhe awards will vest. |
(12) (14)
| The table does not reflect 3,081(i) 26,788 share awards that have been deferred by this director that will be converted into common stock upon the lapse of the deferral period, or (ii) 5,850 restricted stock units awarded to this director on April 25, 2018,29, 2020, with respect to his current service commencing on that date until the 20192021 Annual Meeting of Shareholders, at which time histhe awards will vest. |
(13)
| The table does not reflect 3,081 restricted stock units awarded to this director on April 25, 2018, with respect to his current service commencing on that date until the 2019 Annual Meeting of Shareholders, at which time his awards will vest.
2021 Proxy Statement | 61 |
(14) The table does not reflect 2,123 restricted stock units awarded to this director for a pro rata portion of the 2018-2019 term in connection with her appointment to the Board until the 2019 Annual Meeting of Shareholders, at which time her awards will vest.TABLE OF CONTENTS
(15)
| The table does not reflect 3,081 restricted stock units awarded to this director on April 25, 2018, with respect to her current service commencing on that date until the 2019 Annual Meeting of Shareholders, at which time her awards will vest.
|
(16) The table does not reflect (i) 19,563 share awards that have been deferred by this director that will be converted into common stock upon the lapse of the deferral period, or (ii) 3,081 restricted stock units awarded to this director on April 25, 2018, with respect to his current service commencing on that date until the 2019 Annual Meeting of Shareholders, at which time his awards will vest.
Section 16(a) Beneficial Ownership Reporting ComplianceSection 16(a) of the Exchange Act requires Myers Industries’ directors, officers and persons who own more than ten percent of its common stock (“Section 16 Filers”) to file reports of ownership and changes in ownership with the SEC and to furnish Myers Industries with copies of all such forms they file. These reports can be viewed on the SEC’s website at www.sec.gov. For the year ended December 31, 2018, based solely on the review of copies of reports furnished to us or written representations that no reports were required, we believe that all Section 16(a) filing requirements were met in the last fiscal year by our Section 16 Filers.
47
PROPOSAL NO. 3 —6 – RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee is responsible for the appointment, compensation, retention and oversight of the Company’s independent registered public accounting firm. In accordance with these responsibilities, the Audit Committee appointed Ernst & Young LLP (“EY”) as the Company’s independent registered public accounting firm to audit the Company’s consolidated financial statements for the year ended December 31,
2018.2021. Additional information regarding the services provided to the Company by EY during
20182020 is set forth below, under the section titled “Matters Relating to the Independent Registered Public Accounting Firm.”
In selecting EY as the Company’s independent registered public accounting firm, the Audit Committee considered a variety of factors, including:
The firm’s independence and internal quality controls
The overall depth of talent
EY’s experience with the Company’s industry and companies of similar scale and size
In determining whether to reappoint EY as the Company’s independent registered public accounting firm for the year ending December 31,
2019,2021, the Audit Committee again took those factors into consideration along with its evaluation of the past performance of EY and EY’s familiarity with the Company’s business and internal control over financial reporting. EY’s audit report appears in our Annual Report on Form 10-K for the fiscal year ended December 31,
2018.2020.
In accordance with SEC rules and EY policies, audit partners are subject to rotation requirements to limit the number of consecutive years an individual partner may provide audit service to our company. For lead and concurring review audit partners, the maximum number of consecutive years of service in that capacity is five years. The process for selection of the lead audit partner under this rotation policy involves discussions with EY regarding qualified audit experience and ability to devote the time necessary to serve as lead audit partner. The current EY lead audit partner at EY for the Company was appointed in 2017.
The Audit Committee believes that the continued retention of EY as our independent registered public accounting firm is in the best interest of the Company and our shareholders and, although shareholder ratification is not required under the laws of the State of Ohio, we are asking shareholders to ratify the selection of EY as our independent registered public accounting firm for
2019,2021, in order to provide a means by which our shareholders may communicate their opinions to the Audit Committee. If our shareholders do not ratify the appointment of EY, the Audit Committee will reconsider the appointment, but is not obligated to change the appointment, and may for other reasons be unable to make another appointment.
The Board of Directors recommends that you vote “FOR” Proposal
36
relating to the ratification of the appointment of Ernst & Young LLP
48
62 | Myers Industries, Inc. |
TABLE OF CONTENTS
Matters Relating to the Independent
Registered Public Accounting Firm
EY Representatives at Annual Meeting
EY audited the books and records of the Company for the years ended December 31,
20182020 and
2017.2019. Representatives of EY are expected to be available at the Annual Meeting to respond to appropriate questions and will be given the opportunity to make a statement if they desire to do so.
A description of the fees billed to the Company by EY for the years ended December 31,
20182020 and
20172019 is set forth in the table below.
EY was first retained by the Audit Committee in 2011. The Audit Committee reviewed the non-audit services provided by EY during the year ended December 31,
2018,2020, and determined that the provision of such non-audit services was compatible with maintaining its independence (see “Audit Committee Report” on page
50)64).
Audit Fees(1) | | | $1,692,500 | | | $1,680,000 |
Audit Related Fees(2) | | | $0 | | | $14,000 |
Tax Fees (3) | | | $108,000 | | | $10,000 |
All Other Fees(4) | | | $2,000 | | | $32,200 |
Total Fees | | | $1,802,500 | | | $1,736,200 |
| | 2018 | | 2017 | |
Audit Fees(1) | $ | 1,795,500 | | $ | 1,950,000 | |
Audit Related Fees(2) | $ | — | | $ | — | |
Tax Fees (3) | $ | 57,000 | | $ | 320,000 | |
All Other Fees(4) | | — | | | 2,000 | |
Total Fees | $ | 1,852,500 | | $ | 2,272,000 | |
(1)
| Professional fees for the audit of the annual financial statements and the review of the quarterly financial statements. |
(2)
| Fees for assurance and related services reasonably related to merger and acquisition activities. |
(3)
| Professional fees for tax compliance, tax advice, and tax planning. |
(4)
| Fees for all other products and services. |
The Audit Committee’s Pre-Approval Policy requires the pre-approval of all audit and permissible non-audit services provided by the independent registered public accounting firm. These services may include audit services, audit-related services, tax services and other services. Pre-approval is provided for up to one year and any pre-approval is detailed as to the particular service or category of services and is generally subject to a specific fee range or budget. The independent registered public accounting firm and management are required to periodically report to the Audit Committee regarding the extent of services provided by the independent registered public accounting firm in accordance with this policy, and the fees for the services performed to date. During
2018,2020, all services were pre-approved by the Audit Committee in accordance with the policy. The Pre-Approval Policy is available on the “Corporate Governance” page accessed from the “Investor Relations” page of our website at:
www.myersindustries.com.
49
2021 Proxy Statement | 63 |
TABLE OF CONTENTS
Audit
CommitteeCommittee ReportThe information contained in this report shall not be deemed to be “soliciting material” or “filed” with the SEC or subject to the liabilities of Section 18 of the Exchange Act, except to the extent that we specifically incorporate it by reference into a document filed under the Securities Act or Exchange Act.
The Audit Committee, which is composed of five independent directors, is responsible for assisting the Board in fulfilling its oversight responsibilities pertaining to the accounting, auditing and financial reporting processes of the Company. The duties and responsibilities of the Audit Committee are set forth in the Audit Committee Charter, which is published on the Company’s website (
www.myersindustries.com) on the “Corporate Governance” page under the Investor Relations section (and can be found directly here: http://s2.q4cdn.com/555961355/files/doc_downloads/corp-gov/2017/Audit-Committee-Charter-Amended-11-2-2017.pdf).
Management is responsible for establishing and maintaining the Company’s internal control over financial reporting and for preparing financial statements in accordance with accounting principles generally accepted in the United States of America. The Audit Committee is directly responsible for the appointment, oversight, compensation and retention of EY, the independent registered public accounting firm for the Company since 2011. For additional information regarding the Audit Committee’s assessment of EY and tenure of EY as the Company’s independent registered public accounting firm, see “Proposal No.
36 – Ratification of Appointment of Independent Registered Public Accounting
FirmFirm” beginning on page
48.62. EY is responsible for performing an independent audit of the Company’s annual financial statements and expressing an opinion on:
The conformity, in all material respects, of the Company’s financial statements with accounting principles generally accepted in the United States of America and
The effectiveness of internal control over financial reporting
Each member of the Audit Committee is financially literate and independent as defined under the Board of Directors Independence Criteria policy and the independence standards set by the NYSE for both directors and audit committee members.
TheWith respect to 2020, the Board
has identified each of F. Jack Liebau, Jr.
(ex officio), Lori Lutey, Jane Scaccetti, and Robert A. Stefanko as an “audit committee financial expert.”
The Audit Committee’s responsibility is one of oversight. Members of the Audit Committee rely on the information provided and the representations made to them by management, which has primary responsibility for establishing and maintaining appropriate internal control over financial reporting, and for the Company’s financial statements and reports; and by the independent registered public accounting firm, which is responsible for performing an audit in accordance with Standards of the Public Company Accounting Oversight Board —– United States (“PCAOB”) and expressing an opinion on:
The conformity, in all material respects, of the Company’s financial statements with accounting principles generally accepted in the United States of America
The effectiveness of internal control over financial reporting
In the performance of our duties we have:
Reviewed and discussed with management the Company’s audited financial statements as of and for the year ended December 31, 2018
2020Discussed with EY, among other matters, the fair and complete presentation of the Company’s results, the assessment of the Company’s internal control over financial reporting, significant accounting policies applied in the Company’s financial statements, as well as, when applicable, alternative accounting treatments and the matters required to be discussed by Auditing Standard No. 16 (PCAOB 2012-01) and the rules of the SEC
50
•
| Received the written disclosures and the letter from EY required by applicable requirements of the PCAOB Rule 3526 regarding EY’s communications with the Audit Committee concerning independence, and discussed with EY its independence from the Company and its management. As part of that review, we received the written disclosures and the letter required by applicable requirements of the PCAOB regarding the independent accountant’s communications with the Audit Committee concerning independence, and the Committee discussed the independent registered public accounting firm’s independence from the Company
|
Received the written disclosures and the letter from EY required by applicable requirements of the PCAOB Rule 3526 regarding EY’s communications with the Audit Committee concerning independence, and discussed with EY its independence from the Company and its management. As part of that review, we received the written disclosures and the letter required by applicable requirements of the PCAOB regarding the independent accountant’s communications with the Audit Committee concerning independence, and the Committee discussed the independence of the independent registered public accounting firm
The Audit Committee also considered whether the independent registered public accounting firm’s provision of non-audit services to the Company is compatible with the auditor’s independence
64 | Myers Industries, Inc. |
TABLE OF CONTENTS
The Audit Committee concluded that the independent registered public accounting firm is independent from the Company and its management
Based on the reviews and discussions referred to above, and exercising our business judgment, we recommended to the Board that the financial statements referred to above be included in this Proxy Statement and incorporated by reference in the Company’s Annual Report on Form 10-K for the year ended December 31,
2018.2019. We have selected EY as the Company’s independent registered public accounting firm for fiscal
2019,2021, and have approved submitting the selection of the independent registered public accounting firm for ratification by the shareholders.
The foregoing report has been furnished by the current members of the Audit Committee, being:
Robert A. Stefanko, Chair and Presiding Director,
Jane Scaccetti (Chair), Sarah R. Coffin, F. Jack Liebau, Jr.
(ex officio), Lori Lutey, and
Jane Scaccetti
51
Robert A. Stefanko 2021 Proxy Statement | 65 |
TABLE OF CONTENTS
General Information
AboutAbout the Meeting and VotingMeeting Time and Applicable Dates | | | This Proxy Statement is furnished in connection with the solicitation by the Board of Myers Industries, Inc., an Ohio corporation, of the accompanying proxy to be voted at the Annual Meeting to be held on Wednesday,Thursday, April 24, 2019,29, 2021, at 9:00 A.M. (EDT), and at any adjournment thereof. The close of business on March 7, 20195, 2021, , has been fixed as the record date for the determination of the shareholders entitled to notice of and to vote at the meeting. | |
| | | | | | | |
| | | | | | | |
Attending the Meeting Online | | | Myers Industries will host the 20192021 Annual Meeting live via the internet and in person at 1554 South Main Street, Akron, Ohio 44301. Due to federal or state restrictions that may be imposed in connection with COVID-19 mitigation efforts, online participation is encouraged. Any shareholder can listen to and participate in the Annual Meeting live via the internet on the Investor Relations section of the Company’s website at www.myersindustries.com. The webcast will start at 9:00 A.M. (EDT) on April 24, 2019. 29, 2021. | |
| | |
| Shareholders may vote and submit questions in accordance with the rules of conduct for the Annual Meeting while attending the Annual Meeting in person (if permitted under current federal or state restrictions) or while connected to the Annual Meeting on the internet. | |
| | |
| You will need the information printed in the box marked by an arrow included on your proxy card (if you received a printed copy of the proxy materials) in order to be able to vote your shares or submit questions during the meeting. | |
| | |
| Instructions on how to connect and participate via the internet, including how to demonstrate proof of stock ownership, are posted at www.virtualshareholdermeeting.com/MYE2019.MYE2021. | |
| | |
| If you do not have the information provided on your notice or proxy card, you will be able to listen to the meeting only — you will not be able to vote or submit questions during the meeting. | |
| | | | | | | |
| | | | | | | |
| | | If your shares are registered directly in your name with our transfer agent, then you are a shareholder of record with respect to those shares and you may either vote live via webcast or in person at the Annual Meeting or by using the enclosed proxy card to vote by telephone, by internet, or by signing, dating and returning the proxy card in the envelope provided. Whether or not you plan to attend the Annual Meeting in-personin person or via webcast, you should submit your proxy card as soon as possible. If your shares are held in “street name” through a broker, bank or other nominee, then you must instruct them to vote on your behalf, otherwise your shares cannot be voted at the Annual Meeting. You should follow the directions provided by your broker, bank or other nominee regarding how to instruct such party to vote. If you have any questions or need assistance in voting your shares, please contact our Investor Relations Department at the address and phone number below. | |
| | |
| | |
| | | | | | | |
| | | | | | | |
Proxy Revocation and Voting in Person | | | A shareholder who has given a proxy may revoke it at any time prior to its exercise by: | |
• | | | | | |
| • | | | Executing and delivering to the Secretary of the Company a later dated proxy reflecting contrary instructions | |
| | | | | |
• | • | | | Participating live in the Annual Meeting via webcast or in person (if permitted under current federal or state restrictions) and taking appropriate steps to vote in person, or | |
| | | | | |
•
| | | • | | | Giving written notice of such revocation to the Secretary of the Company |
| | | | | | | |
| | | | | | | |
66 | Myers Industries, Inc. |
52
TABLE OF CONTENTS
Voting Confidentiality
| | | Proxies, ballots and voting tabulations are handled on a confidential basis to protect your voting privacy. This information will not be disclosed to anyone outside of the Company or its agents except as required by law. |
| | | | | | |
| | | | | | |
Participants in the Proxy Solicitation | | | This Proxy Statement is furnished in connection with the solicitation of proxies by the Company, the current directors and the nominees for election as director to be used at the Annual Meeting and any adjournment thereof. |
| | | | | | |
| | | | | | |
Outstanding Shares and Quorum | | | On the record date, Myers Industries had outstanding 35,388,09136,008,505 shares of common stock, without par value. Each share of common stock is entitled to one vote. For information concerning our “Principal Shareholders” see the section titled “Security Ownership of Certain Beneficial Owners and Management” above. In accordance with the Company’s Amended and Restated Code of Regulations, the holders of shares of common stock entitling them to exercise a majority of the voting power of the Company, present in person or by proxy, shall constitute a quorum for the Annual Meeting. Shares of common stock represented by signed proxies will be counted toward the establishment of a quorum on all matters even if they represent broker non-votes or they are signed but otherwise unmarked, or marked “Abstain,” “Against” or “Withhold Authority.” |
| | | | | | |
| | | | | | |
Proxy Instructions | | | All shares of common stock represented by properly executed proxies who are returned and not revoked will be voted in accordance with the instructions, if any, given therein. If no instructions are provided in a proxy, the shares of common stock represented by such proxy will be voted “For” the Board’s nominees for director, “For” the approval of the Company’s executive compensation, “For” the ratification of the appointment of EY, and in accordance with the proxy-holder’s best judgment as to other matters, if any, which may be properly raised at the Annual Meeting. |
| | | | | | |
| | | | | | |
| | | The inspector of election for the Annual Meeting shall determine the number of votes cast by holders of common stock for all matters. The Board has appointed Broadridge Financial Solutions, Inc. as the inspector of election to serve at the Annual Meeting. Preliminary voting results will be announced at the Annual Meeting, if practicable. Final voting results will be filed on a Current Report on Form 8-K, which will be filed with the SEC. |
| | | | | | |
| | | | | | |
| | | The mailing address of the principal executive offices of the Company is: |
| | | 1293 South Main Street, Akron, Ohio 44301.44301 |
| | | | | | |
| | | | | | |
Mailing Date | | | This Proxy Statement, together with the related proxy card and our 20182020 Annual Report to Shareholders, is being mailed to our shareholders on or about March 20, 2019.26, 2021. |
| | | | | | |
| | | | | | |
Availability on the Internet | | | This Proxy Statement and the Company’s 20182020 Annual Report to Shareholders are available on Myers Industries’ website at http://investor.myersindustries.com/investor-relations/financial-information/financial-
information/default.aspx. |
| | | | | | |
| |
53
2021 Proxy Statement | 67 |
TABLE OF CONTENTS
Executive
OfficersOfficers of the CompanyDisclosure regarding the executive officers of the Company is set forth in the Company’s Annual Report on Form 10-K for the year ended December 31,
20182020, filed with the SEC under the heading “Directors and Executive Officers of the Registrant,” which is incorporated into this Proxy Statement by reference. This Annual Report will be delivered to our shareholders with the Proxy Statement. Copies of our filings with the SEC, including the Annual Report, are available to any shareholder through the SEC’s website at
www.sec.gov or in person at the SEC’s Public Reference Room at 100 F Street, N.E., Room 1580, Washington, DC 20549. Information regarding operations of the Public Reference Room may also be obtained by calling the SEC at 1-800-SEC-0330. Shareholders may also access our SEC filings free of charge on our own website at
www.myersindustries.com. The content of our website is available for informational purposes only, and is not incorporated by reference into this Proxy Statement.
Shareholder Proposals for Inclusion in Proxy Statement
Any shareholder who intends to present a proposal at the Company’s next Annual Meeting to be held in April 20202022 must deliver a signed letter of proposal to the following address: Corporate Governance and Nominating Committee, c/o Secretary, Myers Industries, Inc., 1293 South Main Street, Akron, Ohio 44301:
Not later than November 21, 2019,22, 2021, if the proposal is submitted for inclusion in the Company’s proxy materials for the Annual Meeting pursuant to Rule 14a-8 under the Exchange Act, or
Not earlier than January 23, 2020December 30, 2021, and not later than February 22, 2020January 29, 2022 (subject to announcement of the Annual Meeting date, as described below), if the proposal is submitted pursuant to the Company’s Amended and Restated Code of Regulations
In accordance with our Amended and Restated Code of Regulations, a shareholder may submit notice of a shareholder proposal that it intends to raise at our Annual Meeting (and not desiring to be included in the Company’s proxy statement) only if advance written notice of such intention is received by the Secretary not less than
sixty (60)90 days nor more than
ninety (90)120 days prior to the
one year anniversary date of
suchthe immediately preceding Annual Meeting of
shareholders. InShareholders; provided, however, that in the event that the
Annual Meeting is called for a date
of such meetingthat is not
publicly disclosed at least seventy (70)within 30 days
priorbefore or after such anniversary date, notice by a shareholder in order to
the date of such meeting, written notice of such shareholder’s intent to submit a proposalbe timely must be
so received
by the Secretary not later than the close of business on the
tenth (10th)10th day following the
dateday on which notice of
such meeting isthe date of the Annual Meeting was mailed or public disclosure of the date of the Annual Meeting was made, whichever first
provided to the shareholders.occurs. A shareholder wishing to submit a shareholder proposal must follow the procedure outlined in Article I, Section 11 of our Amended and Restated Code of Regulations, titled “Advance Notice of Shareholder Proposals” and then send a signed letter of proposal to the following address: Corporate Governance and Nominating Committee, c/o Secretary, Myers Industries, Inc., 1293 South Main Street, Akron, Ohio 44301. The Company disclosed the date of the
20192021 Annual Meeting on February
12, 2019,18, 2021, and
has received no proposals satisfying the requirements of Rule 14a-8 under the Exchange Act or the Company’s Amended and Restated Code of Regulations. The Company intends to hold its
20202022 Annual Meeting of Shareholders on April
22, 2020.28, 2022.
The submission of such a notice does not ensure that a proposal can be raised at our Annual Meeting.
Incorporation by Reference
The Compensation Committee Report and the Audit Committee Report (including reference to the independence of the Audit Committee members) are not deemed filed with the SEC or subject to the liabilities of Section 18 of the Exchange Act, and shall not be deemed incorporated by reference into any prior or future filings made by us under the Securities Act, or the Exchange Act, except to the extent that we specifically incorporate such information by reference. The section of this proxy entitled “Compensation Discussion and Analysis” is specifically incorporated by reference in the Company’s Annual Report on Form 10-K for the year ended December 31,
2018.
54
2019.
Cost of Proxy
SolicitationThe accompanying proxy is solicited by and on behalf of the Board, whose notice of meeting is attached to this Proxy Statement, and the entire cost of such solicitation will be borne by Myers Industries. In addition to the use of the mail, proxies may be solicited by personal interview and telephone by directors, officers and employees of Myers Industries. Arrangements
68 | Myers Industries, Inc. |
TABLE OF CONTENTS
will be made with brokerage houses and other custodians, nominees and fiduciaries for the forwarding of solicitation material to the beneficial owners of stock held of record by such persons, and Myers Industries will reimburse them for reasonable out-of-pocket expenses incurred by them in connection therewith.
Although a copy of the Annual Report on Form 10-K is provided to you at the time of delivery of the definitive Proxy Statement, we will mail without charge, upon written request, a copy of our Annual Report on Form 10-K for the year ended December 31,
2018,2020, including the consolidated financial statements, schedules and list of exhibits, and any particular exhibit specifically requested. Requests should be sent to: Myers Industries, Inc., 1293 South Main Street, Akron, Ohio 44301, Attn: Investor Relations. The Annual Report on Form 10-K is also available at
www.myersindustries.com and at the SEC’s website at
www.sec.gov.
Notice Regarding Delivery of Security Holder Documents
The SEC now permits companies to send a single set of annual disclosure documents to any household at which two or more shareholders reside, unless contrary instructions have been received, but only if the Company provides advance notice and follows certain procedures. In such cases, such shareholders continue to receive a separate notice of the meeting and proxy card. This “householding” process reduces the volume of duplicate information and reduces printing and mailing expenses. We have not instituted householding for shareholders of record; however, a number of brokerage firms may have instituted householding for beneficial owners of the Company’s shares of common stock held through such brokerage firms. If your family has multiple accounts holding shares of common stock of the Company, you already may have received householding notification from your broker. Please contact your broker directly if you have any questions or require additional copies of the annual disclosure documents. The broker will arrange for delivery of a separate copy of this Proxy Statement or our Annual Report promptly upon your written or oral request. You may decide at any time to revoke your decision to household, and thereby receive multiple copies.
Myers Industries, Inc.® is a registered trademark of the Company.
55
2021 Proxy Statement | 69 |
TABLE OF CONTENTS
VOTE BY INTERNET Before The Meeting - Go to www.proxyvote.comAPPENDIX A
MYERS INDUSTRIES, INC. C/O BROADRIDGE CORPORATE ISSUER SOLUTIONS, INC. P.O. BOX 1342 BRENTWOOD, NY 11717
2021 LONG-TERM INCENTIVE PLAN
1. PurposeUse. This 2021 Long-Term Incentive Plan (the “Plan”) is intended to encourage officers, directors and other key employees of, and consultants to, the InternetCompany and its Subsidiaries to transmit youracquire or increase their ownership of common stock of the Company on reasonable terms. Grants made hereunder are part of the total compensation package for such persons and the opportunity so provided is intended to foster in participants a strong incentive to put forth maximum effort for the long-term success and growth of the Company and its Subsidiaries, to encourage long-term strategic decision making on the part of Participants, to aid in retaining individuals who put forth such efforts and strategic decision making, and to assist in attracting the best available individuals to the Company and its Subsidiaries in the future, in each case, for the benefit of the Company’s shareholders.
2. Definitions. In addition to the terms defined in Section 1 above and elsewhere in the Plan, the following capitalized terms used in the Plan have the respective meanings set forth in this Section:
2.1 “Annual Limit” shall have the meaning specified in Section 5(b).
2.2 “Award” means any Option, SAR, Restricted Stock or Restricted Stock Unit, together with any related right or interest, granted to a Participant under the Plan.
2.3 “Beneficiary” means the legal representative of the Participant’s estate entitled by will or the laws of descent and distribution to receive the benefits under a Participant’s Award upon a Participant’s death, provided that, if and to the extent authorized by the Committee, a Participant may be permitted to designate a Beneficiary, in which case the “Beneficiary” instead will be the person, persons, trust or trusts (if any are then surviving) which have been designated by the Participant in his or her most recent written and duly filed beneficiary designation to receive the benefits specified under the Participant’s Award upon such Participant’s death.
2.4 “Board” means the Company’s Board of Directors.
2.5 “Canadian Participants” means Participants who are resident in Canada for purposes of the Income Tax Act (Canada).
2.6 “Change of Control” means a change in control of the Company of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Exchange Act, whether or not the Company is then subject to such reporting requirement; provided that, without limitation, a Change in Control shall be deemed to have occurred if:
(a) Any “person “ (as defined in Sections 13(d) and 14(d) of the Exchange Act), becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing thirty percent (30%) or more of the combined voting instructionspower of the Company’s then outstanding securities; provided that a Change in Control shall not be deemed to occur under this Section 2.4(a) by reason of the acquisition of securities by the Company or an employee benefit plan (or any trust funding such a plan) maintained by the Company;
(b) During any period of one year there shall cease to be a majority of the Board comprised of Continuing Directors; or
(c) There occurs (i) a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than fifty percent (50%) of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation, (ii) the approval by the stockholders of the Company of a plan of complete liquidation of the Company, or (iii) the sale or disposition by the Company of more than fifty percent (50%) of the Company’s assets. For purposes of this Section 2.6(c), (A) a sale of more than fifty percent (50%) of the Company’s assets includes a sale of more than fifty percent (50%) of the aggregate value of the assets of the Company and for electronic deliveryits Subsidiaries or the sale of information up until 11:59 p.m. Eastern Timestock of one or more of the Company’s Subsidiaries with an aggregate value in excess of fifty percent (50%) of the aggregate value of the Company and its Subsidiaries or any combination of methods by which more than fifty percent (50%) of the aggregate value of the Company and its Subsidiaries is sold, and (B) a transfer of Company assets to a corporate or non-corporate entity (such as a
2021 Proxy Statement | A-1 |
TABLE OF CONTENTS
partnership or limited liability company) in which the Company owns equity securities possessing at least fifty percent (50%) of the total combined voting power of all classes of equity securities in such corporate or non-corporate entity shall not be treated as a sale or disposition by the Company of the assets contributed to such corporate or non-corporate entity.
For purposes of this Plan, a “Change of Control” will be deemed to occur:
(i) on the day beforeon which a thirty percent (30%) or greater ownership interest described in Section 2.6(a) is acquired (other than by reason of the cut-offacquisition of securities by the Company or an employee benefit plan (or any trust funding such a plan) maintained by the Company, provided that a subsequent increase in such ownership interest after it first equals or exceeds thirty percent (30%) shall not be deemed a separate Change of Control;
(ii) on the day on which Continuing Directors cease to be a majority of the Board as described in Section 2.6(b);
(iii) on the day of a merger, consolidation or sale of assets as described in Section 2.6(c)(i) or Section 2.6(c)(iii); or
(iv) on the day of the approval of a plan of complete liquidation as described in Section 2.6(c)(ii).
2.7 “Code” means the Internal Revenue Code of 1986, as amended. References to any provision of the Code or regulation thereunder shall include any successor provisions and regulations, and reference to regulations includes any applicable guidance or pronouncement of the Department of the Treasury and the Internal Revenue Service.
2.8 “Continuing Directors” mean individuals who at the beginning of any period (not including any period prior to the date of this Agreement) of one year constitute the Board and any new Director(s) whose election by the Board or meeting date. Have your proxy cardnomination for election by the Company’s stockholders was approved by a vote of at least a majority of the Directors then still in hand when you accessoffice who either were Directors at the web sitebeginning of the period or whose election or nomination for election was previously so approved.
2.9 “Committee” means the Compensation and followManagement Development Committee of the instructionsBoard, the composition and governance of which shall consist of at least two directors who qualify as non-employee directors within the meaning of Rule 16b-3 as established in the Committee’s charter as approved from time to obtain your recordstime by the Board and subject to Section 303A.05 of the Listed Company Manual of the New York Stock Exchange and other corporate governance documents of the Company. No action of the Committee shall be void or deemed to be without authority due to the failure of any member, at the time the action was taken, to meet any qualification standard set forth in the Committee’s charter or the Plan. The full Board may perform any function of the Committee hereunder except to the extent limited under Section 303A.05 of the Listed Company Manual of the New York Stock Exchange, in which case the term “Committee” shall refer to the Board.
2.10 “Director” means a member of the Board who is not also an Employee.
2.11 “Effective Date” means the effective date specified in Section 11(q).
2.12 “Eligible Person” has the meaning specified in Section 5.
2.13 “Employee” means an officer (including officers who are members of the Board), and other key employees of the Company or any of its Subsidiaries.
2.14 “Exchange Act” means the Securities Exchange Act of 1934, as amended. References to any provision of the Exchange Act or rule (including a proposed rule) thereunder shall include any successor provisions and rules.
2.15 “Fair Market Value” means the fair market value of Stock, Awards or other property as determined in good faith by the Committee or under procedures established by the Committee. Unless otherwise determined by the Committee, the Fair Market Value of Stock shall be the closing price per share of Stock reported on a consolidated basis for securities listed on the principal stock exchange or market on which Stock is traded on the day as of which such Fair Market Value is being determined or, if there is no closing price on that day, then the closing price on the last previous day on which a closing price was reported.
2.16 “Incentive Stock Option” or “ISO” means any Option designated as an incentive stock option within the meaning of Code Section 422 and qualifying thereunder.
2.17 “Option” means a right, granted under the Plan, to purchase Stock.
2.18 “Participant” means a person who has been granted an Award under the Plan which remains outstanding, including a person who is no longer an Eligible Person.
A-2 | Myers Industries, Inc. |
TABLE OF CONTENTS
2.19 “Performance Goal” means one or more written objective goals approved by the Committee, which performance goal or goals are determined based on one or more of the following business criteria: (i) increase in the Fair Market Value of the Shares, (ii) total stockholder return, (iii) revenue, sales, settlements, market share, customer conversion, net income, stock price and/or earnings per share, (iv) return on assets, net assets, and/or invested capital, (v) economic value added, (vi) improvements in costs and/or expenses, (vii) EBIT, EBITDA, operating or gross profits, cash earnings or income from continuing operations, (viii) net cash from continuing operations or cash flow from operating activities; (ix) performance relative to peer group; (x) free cash flow as a percentage of sales; or (x) any performance measure established by the Committee.
2.20 “Prior Plan” means the Amended and Restated 2017 Stock Incentive Plan of Myers Industries, Inc.
2.21 “Restricted Stock” means Stock granted under the Plan which is subject to certain restrictions and to createa risk of forfeiture.
2.22 “Restricted Stock Unit” or “RSU” means a right, granted under the Plan, to receive Stock, cash or other Awards or a combination thereof at the end of a specified deferral period.
2.23 “Retirement” eligibility for purposes of the Plan and any Award hereunder means age 65 or older with at least three years of service.
2.24 “Rule 16b-3” means Rule 16b-3, as from time to time in effect and applicable to Participants, promulgated by the Securities and Exchange Commission under Section 16 of the Exchange Act.
2.25 “Share Pool” has the meaning specified in Section 4.
2.26 “Stock” means the Company’s Common Stock, no par value, and any other equity securities of the Company or another issuer that may be substituted or resubstituted for Stock pursuant to Section 11(c).
2.27 “Stock Appreciation Right” or “SAR” means a right granted to a Participant under Section 6(c).
2.28 “Subsidiary” means any corporation or corporations other than the employer corporation in an electronic voting instruction form. During The Meeting - Go to www.virtualshareholdermeeting.com/MYE2019 You may attendunbroken chain of corporations beginning with the Annual Meetingemployer corporation if each of Shareholders via the Internet and vote duringcorporations other than the meeting. Have the information that is printedlast corporation in the box markedunbroken chain owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.
3. Administration.
(a) Authority of the Committee. The Plan shall be administered by the arrow availableCommittee, which shall have full and followfinal authority, in each case subject to and consistent with the instructions. VOTE BY PHONE - 1-800-690-6903 Useprovisions of the Plan, to select Eligible Persons to become Participants; to grant Awards; to determine the type and number of Awards, the dates on which Awards may be exercised and on which the risk of forfeiture shall lapse or terminate, the acceleration of any touch-tone telephonesuch dates, the expiration date of any Award, whether, to transmit your voting instructions up until 11:59 p.m. Eastern Timewhat extent, and under what circumstances an Award may be settled, or the day beforeexercise price of an Award may be paid, in cash, Stock, other Awards, or other property, and other terms and conditions of, and all other matters relating to, Awards; to prescribe documents evidencing or setting terms of Awards (such Award documents need not be identical for each Participant), amendments thereto, and rules and regulations for the cut-off dateadministration of the Plan and amendments thereto (including outstanding Awards); to construe and interpret the Plan and Award documents and correct defects, supply omissions or meeting date. Have your proxy card in hand when you callreconcile inconsistencies therein; and then followto make all other decisions and determinations as the instructions. VOTE BY MAIL Mark, signCommittee may deem necessary or advisable for the administration of the Plan. Decisions of the Committee with respect to the administration and date your proxy cardinterpretation of the Plan shall be final, conclusive and return itbinding upon all persons interested in the postage-paid envelope we have providedPlan, including Participants, Beneficiaries, transferees under Section 11(b) and other persons claiming rights from or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: E59658-P18485 KEEPTHISPORTIONFORYOURRECORDS THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACHANDRETURNTHISPORTIONONLY MYERS INDUSTRIES, INC. For Withhold For All The Board of Directors recommends you vote FOR All All Except allthrough a Participant, and stockholders of the following: Nominees: 01) R. DAVID BANYARD 06) BRUCE M. USMAN 02) SARAH R. COFFIN 07) LORI LUTEY 03) RONALD M. DE FEO 08) JANE SCACCETTI 04) WILLIAM A. FOLEY 09) ROBERTA. STEFANKO 05) F. JACK LIEBAU, JR. To withholdCompany.
(b) Manner of Exercise of Committee Authority. The express grant of any specific power to the Committee, and the taking of any action by the Committee, shall not be construed as limiting any power or authority of the Committee. The Committee may act through subcommittees, including for purposes of perfecting exemptions under Rule 16b-3, in which case the subcommittee shall be subject to and have authority under the charter applicable to the Committee, and the acts of the subcommittee shall be deemed to be acts of the Committee hereunder. The Committee may delegate the administration of the Plan to one or more officers or Employees of the Company, and such administrator(s) may have the authority to votegrant Awards under the Plan, as may be determined by the Committee from time to time, to execute and distribute Award agreements or other documents evidencing or relating to Awards granted by the Committee under the Plan, to maintain records relating to Awards, to process or oversee the issuance of Stock under Awards, to interpret and
2021 Proxy Statement | A-3 |
TABLE OF CONTENTS
administer the terms of Awards and to take such other actions as may be necessary or appropriate for any individual nominee(s), mark "For All Except" and write the number(s)administration of the nominee(s) onPlan and of Awards under the line below. ElectionPlan, provided that in no case shall any such administrator be authorized (i) to take any action that would result in the loss of Directors The Board of Directors recommends you vote FOR proposals 2 and 3. For Against Abstain Advisory approvalan exemption under Rule 16b-3 for Awards granted to or held by Participants who at the time are subject to Section 16 of the compensationExchange Act in respect of the namedCompany, or (ii) to make any determination required to be made by the Committee under the New York Stock Exchange corporate governance standards applicable to listed company compensation committees (currently, Rule 303A.05). Any action by any such administrator within the scope of its delegation shall be deemed for all purposes to have been taken by the Committee and, except as otherwise specifically provided, references in the Plan to the Committee shall include any such administrator. The Committee established pursuant to Section 3(a) and, to the extent it so provides, any subcommittee, shall have sole authority to determine whether to review any actions and/or interpretations of any such administrator, and if the Committee shall decide to conduct such a review, any such actions and/or interpretations of any such administrator shall be subject to approval, disapproval or modification by the Committee.
(c) Limitation of Liability. The Committee and each member thereof, and any person acting pursuant to authority delegated by the Committee, shall be entitled, in good faith, to rely or act upon any report or other information furnished by any executive
officers To ratifyofficer, other officer or Employee of the
appointmentCompany or a subsidiary or affiliate of
Ernst & Young LLP as the
Company'sCompany, the Company’s independent
registered public accounting firm for the fiscal year ending December 31, 2019 NOTE: Such other business as may properly come before the meetingauditors, consultants or any adjournment thereof. For address change/comments, mark here. (see reverse for instructions) Please indicate if you planother agents assisting in the administration of the Plan. Members of the Committee, any person acting pursuant to attend this meeting.□□ Yes No Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator,authority delegated by the Committee, and any officer or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. IfEmployee of the Company or a corporationsubsidiary or partnership, please sign in full corporateaffiliate of the Company acting at the direction or partnership name by authorized officer. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com MYERS INDUSTRIES, INC. Annual Meeting of Shareholders April 24, 2019 9:00 AM EDT This Proxy is solicited on behalf of the Committee or a delegee shall not be personally liable for any action or determination taken or made in good faith with respect to the Plan, and shall, to the extent permitted by law, be fully indemnified and protected by the Company with respect to any such action or determination.
4. Stock Subject to Plan.
(a) Overall Number of Shares Available for Delivery.The Boardtotal number of shares of Stock reserved and available for delivery in connection with Awards under the Plan shall be 2,800,000 (the “Share Pool”). Any Shares that are not subject to an award under the Prior Plan as of the Effective Date of this Plan shall no longer be eligible to be issued. Subject to limitations provided in Section 6(b)(iv), up to 500,000 authorized shares may be granted as ISOs under the Plan. The total number of shares available is subject to adjustment as provided in Section 11(c). Any shares of Stock delivered under the Plan shall consist of authorized and unissued shares or treasury shares.
(b) Share Counting Rules. The Committee may adopt reasonable counting procedures to ensure appropriate counting, avoid double counting (as, for example, in the case of tandem or substitute awards) and make adjustments in accordance with this Section 4(b).
(i) Except as set forth below, to the extent that an Award granted under the Plan expires or is forfeited, cancelled, surrendered or otherwise terminated without issuance of shares to the Participant, settled only in cash or settled by the issuance of fewer shares than the number underlying the Award, the shares retained by or tendered to the Company will be available under the Plan.
(ii) Shares that are withheld from an Award of Restricted Stock or RSUs granted under the Plan to cover withholding tax obligations related to that Award or shares that are separately tendered by the Participant (either by delivery or attestation) in payment of such taxes shall be deemed to constitute shares not delivered to the Participant and will be available for future grants under the Plan.
(iii) Shares that are withheld from, or that are tendered by a Participant (either by delivery or attestation) in connection with, an Award of Options or SARs granted under the Plan to cover withholding tax obligations related to that Award or the exercise price of that Award, shall be deemed to constitute shares delivered to the Participant and shall not be available for future grants under the Plan. For purposes of clarity, upon the exercise of an Option or SAR, the gross number of shares exercised, and not solely the net number of shares delivered upon such exercise, shall be treated as issued pursuant to the Plan and the shares subject to the exercised Option or SAR that are not issued or delivered upon such exercise will not be available for future grants under the Plan.
(iv) In addition, in the case of any Award granted through the assumption of, or in substitution for, an outstanding award granted by a company or business acquired by the Company or a subsidiary or affiliate of the Company or with which the Company or a subsidiary or affiliate of the Company merges, consolidates or enters into a similar corporate transaction, shares issued or issuable in connection with such substitute Award shall not be counted against the Share Pool.
A-4 | Myers Industries, Inc. |
TABLE OF CONTENTS
5. Eligibility; Per-Person Award Limitations.
(a) Eligibility. Awards may be granted under the Plan only to Eligible Persons. For purposes of the Plan, an “Eligible Person” means a Director, a key consultant for the Company or a Subsidiary, or an Employee, including any person who has been offered employment by the Company or a subsidiary or affiliate of the Company, provided that such prospective Employee may not receive any payment or exercise any right relating to an Award until such person has commenced employment with the Company or a subsidiary or affiliate of the Company. An Employee on leave of absence may be considered as still in the employ of the Company or a Subsidiary for purposes of eligibility for participation in the Plan, if so determined by the Committee. Holders of awards granted by a company or business acquired by the Company or a Subsidiary, or with which the Company or a Subsidiary merges, consolidates or enters into a similar corporate transaction, who will become Eligible Persons are eligible for grants of substitute awards granted through the assumption of, or in substitution for, such outstanding awards previously granted, under the Plan in connection with such transaction, if so determined by the Committee.
(b) Per-Person Award Limitations. During any calendar year during any part of which the Plan is in effect, an Eligible Person may be granted Awards under Section 6(b), Section 6(c), Section 6(d), or Section 6(e) up to the Annual Limit (such Annual Limit to apply in the aggregate for all types of Award authorized under the Plan). A Participant’s Annual Limit, in any single fiscal year during any part of which the Participant is then eligible under the Plan, shall equal 1,000,000 shares, subject to adjustment as provided in Section 11(c). The undersigned hereby appoints Kevin Brackmanaggregate grant date fair value (computed as of the date of grant in accordance with applicable financial accounting rules) of all Awards granted to any Director during any single fiscal year shall not exceed $300,000.
6. Specific Terms of Awards.
(a) General. Awards may be granted on the terms and Andrean Horton,conditions set forth in this Section 6. In addition, the Committee may impose on any Award or eitherthe exercise thereof, at the date of them,grant or thereafter (subject to Section 11(e) and Section 11(k)), such additional terms and conditions, not inconsistent with the provisions of the Plan, as the Committee shall determine, including terms requiring forfeiture of Awards in the event of termination of employment or service by the Participant and terms permitting a Participant to make elections relating to his or her Award. The Committee shall retain full power and discretion with respect to any term or condition of substitution,an Award that is not mandatory under the Plan, subject to Section 11(k). The Committee may require payment of consideration for an Award except as proxies,limited by the Plan. The minimum vesting and hereby authorizes themminimum exercisability conditions described below need not apply (i) in the case of the death, disability or Retirement of the Participant or termination of employment of a Participant in connection with a Change of Control, and (ii) with respect to represent andup to vote, as designated on the reverse sidean aggregate of this ballot, all5% of the shares of commonStock authorized under the Plan, which may be granted (or regranted upon forfeiture) in any form permitted under the Plan without regard to such minimum vesting or minimum exercisability requirements.
(b) Options. The Committee is authorized to grant Options to Participants on the following terms and conditions:
(i) Exercise Price. The exercise price per share of Stock purchasable under an Option (including both ISOs and non-qualified Options) shall be determined by the Committee, provided that, notwithstanding anything contained herein to the contrary, such exercise price shall be (A) fixed as of the grant date, and (B) not less than the Fair Market Value of a share of Stock on the grant date. Notwithstanding the foregoing, any substitute award granted through the assumption of, or in substitution for, an outstanding award granted by a company or business acquired by the Company or a subsidiary or affiliate of the Company, or with which the Company or a subsidiary or affiliate of the Company merges, consolidates or enters into a similar corporate transaction, may be granted with an exercise price per share of Stock other than as required above.
(ii) No Repricing. Without the approval of stockholders of the Company, the Committee will not amend or replace previously granted Options in a transaction that constitutes a “repricing,” meaning any reduction in exercise price, cancellation of an Option or exchange for another Option with a lower exercise price, cancellation of an Option for cash, or cancellation of an Option for another grant if the exercise price of the cancelled Option is greater than the Fair Market Value of the shares of Stock subject to the cancelled Option at the time of cancellation, other than in conjunction with a Change of Control or other adjustment under Section 11(c), or any other “repricing” as that term is used in Section 303A.08 of the Listed Company Manual of the New York Stock Exchange (or any successor provision).
(iii) Option Term; Time and Method of Exercise. The Committee shall determine the term of each Option, provided that in no event shall the term of any Option exceed a period of ten years from the date of grant. The
2021 Proxy Statement | A-5 |
TABLE OF CONTENTS
Committee shall determine the time or times at which or the circumstances under which an Option may be exercised in whole or in part, provided that, notwithstanding anything contained herein to the contrary, the sole and exclusive basis for determining both the vesting and exercisability of an Option will be the passage of a specific period of time (which at a minimum shall be a period of one year) or the occurrence or non-occurrence of certain specific performance related or non-performance related events (e.g., death, disability or termination of employment in connection with a Change of Control). In addition, the Committee shall determine the methods by which such exercise price may be paid or deemed to be paid and the form of such payment (subject to Section 11(k) and Section 11(l)), including, without limitation, cash, Stock (including by withholding Stock deliverable upon exercise), other Awards or awards granted under other plans of the Company or any subsidiary or affiliate of the Company, or other property (including through broker-assisted “cashless exercise” arrangements, to the extent permitted by applicable law), and the methods by or forms in which Stock will be delivered or deemed to be delivered in satisfaction of Options to Participants.
(iv) ISOs. Notwithstanding anything to the contrary in this Section 6, in the case of the grant of an Option intending to qualify as an ISO: (A) if the Participant owns stock possessing more than 10 percent of the combined voting power of all classes of stock of the Company (a “10% Stockholder”), the purchase price of such Option must be at least 110 percent of the Fair Market Value of the Common Stock on the date of grant and the Option must expire within a period of not more than five years from the date of grant, and (B) termination of employment will occur when the person to whom an Award was granted ceases to be an Employee (as determined in accordance with Section 3401(c) of the Code and the regulations promulgated thereunder) of the Company and its subsidiaries. Notwithstanding anything in this Section 6 to the contrary, Options designated as ISOs shall not be eligible for treatment under the Code as ISOs to the extent that either (X) the aggregate Fair Market Value of shares of Common Stock (determined as of the time of grant) with respect to which such Options are exercisable for the first time by the Participant during any calendar year (under all plans of the Company and any Subsidiary) exceeds $100,000, taking Options into account in the order in which they were granted, or (Y) such Options otherwise remain exercisable but are not exercised within three months of termination of employment (or such other period of time provided in Section 422 of the Code). Canadian Participants shall not be eligible to receive Incentive Stock Option Awards.
(c) Stock Appreciation Rights. The Committee is authorized to grant SARs to Participants on the following terms and conditions:
(i) Right to Payment. An SAR shall confer on the Participant to whom the SAR is granted a right to receive, upon exercise thereof, shares of Stock having a value equal to the excess of (A) the Fair Market Value of one share of Stock on the date of exercise (or, in the case of a “Limited SAR,” the Fair Market Value determined by reference to the Change of Control Price, as defined under the applicable award agreement) over (B) the exercise or settlement price of the SAR as determined by the Committee. Stock Appreciation Rights may be granted to Participants from time to time either in tandem with or as a component of other Awards granted under the Plan (“tandem SARs”) or not in conjunction with other Awards (“freestanding SARs”) and may, but need not, relate to a specific Option granted under Section 6(b). The per share price for exercise or settlement of SARs (including both tandem SARs and freestanding SARs) shall be determined by the Committee, but in the case of SARs that are granted in tandem with an Option shall not be less than the exercise price of the Option and in the case of freestanding SARs shall be (X) fixed as of the grant date, and (Y) not less than the Fair Market Value of a share of Stock on the grant date.
(ii) No Repricing. Without the approval of stockholders of the Company, the Committee will not amend or replace previously granted SARs in a transaction that constitutes a “repricing,” meaning any reduction in exercise price, cancellation of an SAR in exchange for another SAR with a lower exercise price, cancellation of an SAR for cash, or cancellation of an SAR for another grant if the exercise price of the cancelled SAR is greater than the Fair Market Value of the shares of Stock subject to the cancelled SAR at the time of cancellation, other than in conjunction with a Change of Control or other adjustment under Section 11(c), or any other “repricing” as that term is used in Section 303A.08 of the Listed Company Manual of the New York Stock Exchange (or any successor provision).
(iii) Other Terms. The Committee shall determine the term of each SAR, provided that in no event shall the term of an SAR exceed a period of ten years from the date of grant. The Committee shall determine at the date of grant or thereafter, the time or times at which and the circumstances under which an SAR may be exercised in whole or in part (including based on future service requirements which at a minimum shall be a period of one year), the method of exercise, method of settlement, method by or forms in which Stock will be delivered or deemed to be delivered to Participants, and whether or not an SAR shall be freestanding or in tandem or combination with any other Award. Limited SARs, that may only be exercised in connection with a Change of Control or termination of
A-6 | Myers Industries, Inc. |
TABLE OF CONTENTS
service following a Change of Control as specified by the Committee, may be granted on such terms, not inconsistent with this Section 6(c), as the Committee may determine. The Committee may require that an outstanding Option be exchanged for an SAR exercisable for Stock having vesting, expiration and other terms substantially the same as the Option, so long as such exchange will not result in additional accounting expense to the Company.
(d) Restricted Stock. The Committee is authorized to grant Restricted Stock to Participants on the following terms and conditions:
(i) Grant and Restrictions. Subject to Section 6(d)(ii), Restricted Stock shall be subject to such restrictions on transferability, risk of forfeiture and other restrictions, if any, as the Committee may impose, which restrictions may lapse separately or in combination at such times, under such circumstances (including based on achievement of performance conditions and/or future service requirements), in such installments or otherwise and under such other circumstances as the Committee may determine at the date of grant or thereafter. Except to the extent restricted under the terms of the Plan and any Award document relating to the Restricted Stock, a Participant granted Restricted Stock shall have all of the rights of a stockholder, including the right to vote the Restricted Stock and the right to receive dividends thereon (subject to any mandatory reinvestment or other requirement imposed by the Committee). Upon any forfeiture of Restricted Stock, a Participant shall cease to have any rights of a stockholder of the Company and shall return any certificates representing such Restricted Stock to the Company. Canadian Participants shall not be eligible to receive Restricted Stock Awards.
(ii) Limitation on Vesting. The grant, issuance, retention, vesting and/or settlement of Restricted Stock shall occur at such time and in such installments as determined by the Committee or under criteria established by the Committee. Subject to Section 10, the Committee shall have the right to make the timing of the grant and/or the issuance, ability to retain, vesting and/or settlement of Restricted Stock subject to continued employment, passage of time and/or such performance conditions as deemed appropriate by the Committee; provided that the grant, issuance, retention, vesting and/or settlement of a Restricted Stock Award that is based in whole or in part on performance conditions and/or the level of achievement versus such performance conditions shall be subject to a performance period of not less than one year, and any Award based solely upon continued employment or the passage of time shall vest over a period of not less than three years from the date the Award is made, provided that such vesting may occur in pro rata installments over the three-year period, with the first installment vesting no sooner than the first anniversary of the date of grant of such Award.
(iii) Certificates for Stock. Restricted Stock granted under the Plan may be evidenced in such manner as the Committee shall determine. If certificates representing Restricted Stock are registered in the name of the Participant, the Committee may require that such certificates bear an appropriate legend referring to the terms, conditions and restrictions applicable to such Restricted Stock, that the Company retain physical possession of the certificates, and that the Participant deliver a stock power to the Company, endorsed in blank, relating to the Restricted Stock.
(iv) Dividends and Splits. As a condition to the grant of an Award of Restricted Stock, the Committee may require that any dividends paid on a share of Restricted Stock shall be either (A) paid with respect to such Restricted Stock at the dividend payment date in cash, in kind, or in a number of shares of unrestricted Stock having a Fair Market Value equal to the amount of such dividends, or (B) automatically reinvested in additional Restricted Stock or held in kind, which shall be subject to the same terms as applied to the original Restricted Stock to which they relate. Unless otherwise determined by the Committee, Stock distributed in connection with a Stock split or Stock dividend, and other property distributed as a dividend, shall be subject to restrictions and a risk of forfeiture to the same extent as the Restricted Stock with respect to which such Stock or other property has been distributed.
(e) Restricted Stock Units. The Committee is authorized to grant RSUs to Participants, subject to the following terms and conditions:
(i) Award and Restrictions. Subject to Section 6(e)(ii), RSUs shall be subject to such restrictions on transferability, risk of forfeiture and other restrictions, if any, as the Committee may impose, which restrictions may lapse separately or in combination at such times, under such circumstances (including based on achievement of performance conditions and/or future service requirements), in such installments or otherwise and under such other
2021 Proxy Statement | A-7 |
TABLE OF CONTENTS
circumstances as the Committee may determine at the date of grant or thereafter. A Participant granted RSUs shall not have any of the rights of a stockholder of the Company, including the right to vote, until Stock shall have been issued in the Participant’s name pursuant to the RSUs, except that the Committee may provide for dividend equivalents pursuant to Section 6(e)(iii) below.
(ii) Limitation on Vesting. The grant, issuance, retention, vesting and/or settlement of RSUs shall occur at such time and in such installments as determined by the Committee or under criteria established by the Committee. Subject to Section 10, the Committee shall have the right to make the timing of the grant and/or the issuance, ability to retain, vesting and/or settlement of RSUs subject to continued employment, passage of time and/or such performance conditions as deemed appropriate by the Committee; provided that the grant, issuance, retention, vesting and/or settlement of an RSU that is based in whole or in part on performance conditions and/or the level of achievement versus such performance conditions shall be subject to a performance period of not less than one year, and any Award based solely upon continued employment or the passage of time shall vest over a period of not less than three years from the date the Award is made, provided that such vesting may occur in pro rata installments over the three-year period, with the first installment vesting no sooner than the first anniversary of the date of grant of such Award.
(iii) Dividend Equivalents. Unless otherwise determined by the Committee, dividend equivalents on the specified number of shares of Stock covered by an Award of RSUs shall be either (A) paid with respect to such RSUs at the dividend payment date in cash or in shares of unrestricted Stock having a Fair Market Value equal to the amount of such dividends, or (B) deferred with respect to such RSUs, either as a cash deferral or with the amount or value thereof automatically deemed reinvested in additional RSUs, other Awards or other investment vehicles having a Fair Market Value equal to the amount of such dividends, as the Committee shall determine or permit a Participant to elect.
(f) Director Awards. Directors are generally granted an Award of Restricted Stock on each annual Board annual meeting date. Pursuant to this Section 6(f), a Director may elect to have any such annual Award converted into an equivalent grant of Restricted Stock Units. Any such election must be made in a written notice delivered to the Chairman of the Board or his designee on or before the annual meeting date for the calendar year immediately preceding the applicable annual meeting date. Each deferral election, once made, shall be irrevocable. Any Restricted Stock Units granted to a Director pursuant to any such election shall provide that the Company will issue a Share to such Director for each Restricted Stock Unit on the date that such Director ceases to be a member of the Board for any reason whatsoever. The Restricted Stock Units shall be subject to such other terms, including but not limited to provision for the payment of dividend equivalents, as contained in an Award Agreement approved by the Board.
7. Performance-Based Compensation.
(a) Performance Goals Generally. The Committee may condition the grant, issuance, vesting and/or settlement of any Award contingent upon achievement of pre-established Performance Goals and other terms set forth in this Section 7. The Performance Goal for such Awards shall consist of one or more business criteria and the level or levels of performance with respect to each of such criteria, as specified by the Committee consistent with this Section 7. Performance Goals may differ for Awards granted to any one Participant or to different Participants.
(b) Written Determinations. Determinations by the Committee as to the establishment of performance conditions, the amount potentially payable in respect of performance-based Awards, the level of actual achievement of the specified performance conditions relating to such Awards, and the amount of any final Award shall be recorded in writing. Specifically, the Committee shall certify in writing prior to settlement of each such Award granted to a Covered Employee, that the performance objective relating to the performance-based Award and other material terms of the Award upon which settlement of the Award was conditioned have been satisfied.
(c) Settlement of Performance-Based Awards; Other Terms. Settlement of performance-based Awards shall be in cash or Stock, in the Committee’s discretion. The Committee may, in its discretion, reduce the amount of a settlement otherwise to be made in connection with such Awards. The Committee shall specify the circumstances in which such Awards shall be paid or forfeited in the event of a Participant’s death, disability or Retirement, in connection with a Change of Control or, subject to the one-year performance condition set forth in Section 6(d)(ii) and Section 6(e)(ii), in connection with any other termination of employment prior to the end of a performance period or settlement of such Awards.
A-8 | Myers Industries, Inc. |
TABLE OF CONTENTS
(d) Right of Recapture. If at any time after the date on which a Participant has been granted or becomes vested in an Award pursuant to the achievement of a Performance Goal, the Committee determines that the earlier determination as to the achievement of the performance goal was based on incorrect data and that in fact the Performance Goal had not been achieved or had been achieved to a lesser extent than originally determined and a portion of an Award would not have been granted, vested or paid, given the correct data, then (i) such portion of the Award that was granted shall be forfeited and any related shares (or if such shares were disposed of, the cash equivalent) shall be returned to the Company as provided by the Committee, (ii) such portion of the Award that became vested shall be deemed to be not vested and any related shares (or if such shares were disposed of, the cash equivalent) shall be returned to the Company as provided by the Committee, and (iii) such portion of the Award paid to the Participant shall be paid by the Participant to the Company upon notice from the Company as provided by the Committee.
8. Certain Provisions Applicable to Awards.
(a) Stand-Alone, Additional, and Tandem Awards. Awards granted under the Plan may, in the Committee’s discretion, be granted either alone or in addition to, in tandem with, or in substitution or exchange for, any other Award or any award granted under another plan of the Company, any subsidiary or affiliate of the Company, or any business entity to be acquired by the Company or a subsidiary or affiliate of the Company, or any other right of a Participant to receive payment from the Company or any subsidiary or affiliate of the Company. Awards granted in addition to or in tandem with other Awards or awards may be granted either as of the same time as or a different time from the grant of such other Awards or awards.
(b) Term of Awards. The term of each Award shall be for such period as may be determined by the Committee, subject to the express limitations set forth in Section 6(b)(iii) and Section 6(c)(iii) or elsewhere in the Plan.
(c) Form and Timing of Payment under Awards. Subject to the terms of the Plan (including Section 11(k) and Section 11(l)) and any applicable Award document, payments to be made by the Company or a subsidiary or affiliate of the Company upon the exercise of an Option or other Award or settlement of an Award may be made in such forms as the Committee shall determine, including, without limitation, cash, Stock, other Awards or other property, and may be made in a single payment or transfer, in installments, or on a deferred basis. The settlement of any Award may be accelerated, and cash paid in lieu of Stock in connection with such settlement, in the Committee’s discretion or upon occurrence of one or more specified events, subject to Section 6(b)(iv), Section 11(k) and Section 11(l).
(d) No Dividends Payable with Respect to Unvested Awards. Notwithstanding anything in the Plan to the contrary, with respect to any Award under the Plan, no dividends (or dividend equivalents) shall be payable with respect to any shares of Stock underlying an Award until such underlying shares of Stock have vested.
9. Change of Control.
(a) Impact of Event. Unless the Board or the Committee provides otherwise (either at the time of grant of an Award or thereafter) prior to a Change of Control, this Section 9(a) shall govern the treatment of any Option, SAR, Restricted Stock or RSU, the exercisability, vesting and/or settlement of which is based solely upon continued employment or passage of time. In the case of an Award subject to this Section 9(a) that the acquiring or surviving company in the Change of Control assumes upon and maintains following the Change of Control (which Award shall be adjusted as to the number and kind of shares as may be determined appropriate by the Committee prior to the Change of Control), if there occurs an involuntary termination without cause of the Participant holding such Award (excluding voluntary resignation, death, disability or Retirement) within three months prior to or eighteen months following the Change of Control, such Award shall be treated as provided in clause (i) or clause (ii) of this Section 9(a), as applicable. In the case of an Award subject to this Section 9(a) that the acquiring or surviving company in the Change of Control does not assume upon the Change of Control, immediately prior to the Change of Control, such Award shall be treated as provided in clause (i) or clause (ii) of this Section 9(a), as applicable. The treatment provided for under this Section 9(a) is as follows:
(i) in the case of an Option or SAR, the Participant shall have the ability to exercise such Option or SAR, including any portion of the Option or SAR not previously exercisable, until the earlier of the expiration of the Option or SAR under its original term and a date that is two years (or such longer post-termination exercisability term as may be specified in the Option or SAR) following such date of termination of employment; and
(ii) in the case of Restricted Stock or RSUs, the Award shall become fully vested and shall be settled in full.
2021 Proxy Statement | A-9 |
TABLE OF CONTENTS
The Committee may also, through the terms of an Award or otherwise, provide for an absolute or conditional exercise, payment or lapse of conditions or restrictions on an Award which shall only be effective if, upon the announcement of a transaction intended to result in a Change of Control, no provision is made in such transaction for the assumption and continuation of outstanding Awards.
(b) Effect of Change of Control upon Performance-Based Awards. Unless the Committee specifies otherwise in the terms of an Award prior to a Change of Control, this Section 9(b) shall control the treatment of any Restricted Stock or RSU if, at the time of the Change of Control, the grant, issuance, retention, vesting and/or settlement of such Award is based in whole or in part on performance criteria and level of achievement versus such criteria. In the case of an Award subject to this Section 9(b) in which fifty percent (50%) or more of the performance period applicable to the Award has elapsed as of the date of the Change of Control, the Participant shall be entitled to payment, vesting or settlement of such Award based upon performance through a date occurring within three months prior to the date of the Change of Control, as determined by the Committee prior to the Change of Control, and pro-rated based upon the percentage of the performance period that has elapsed between the date such Award was granted and the date of the Change of Control. In the case of an Award subject to this Section 9(b) in which less than fifty percent (50%) of the performance period applicable to the Award has elapsed as of the date of the Change of Control, the Participant shall be entitled to payment, vesting or settlement of the target amount of such Award, as determined by the Committee prior to the Change of Control, pro-rated based upon the percentage of the performance period that has elapsed between the date such Award was granted and the date of the Change of Control. The Committee may determine either in advance or at the time of the Change of Control the treatment of the pro-rata portion of an Award attributable to the portion of the performance period occurring after the date of the Change of Control.
Notwithstanding the foregoing, in no event shall the treatment specified in Section 9(a) and Section 9(b) apply with respect to an Award prior to the earliest to occur of (i) the date such amounts would have been distributed in the absence of the Change of Control, (ii) a Participant’s “separation from service” (as defined under Section 409A of the Code) with the Company (or six months thereafter for “specified Employees”), (iii) the Participant’s death or “disability” (as defined in Section 409A(a)(2)(C) of the Code), or (iv) a “change in the ownership or effective control” of the Company or in the “ownership of a substantial portion of the assets” of the Company within the meanings ascribed to such terms in Treasury Department regulations issued under Section 409A of the Code, if and to the extent that the Committee determines, in its sole discretion, that the effect of such treatment prior to the time specified in this Section 9(b)(i), (ii), (iii) or (iv) would be the imposition of the additional tax under Section 409A(a)(1)(B) of the Code on a Participant holding such Award.
10. Additional Award Forfeiture Provisions.
(a) Forfeiture of Options and Other Awards and Gains Realized Upon Prior Option Exercises or Award Settlements. Unless otherwise determined by the Committee, each Award granted shall be subject to the following additional forfeiture conditions, to which the Participant, by accepting an Award hereunder, agrees. If any of the events specified in Section 10(b)(i), (ii), (iii) or (iv) occurs (a “Forfeiture Event”), all of the following forfeitures will result:
(i) The unexercised portion of each Option held by the Participant, whether or not vested, and any other Award not then settled will be immediately forfeited and canceled upon the occurrence of the Forfeiture Event; and
(ii) The Participant will be obligated to repay to the Company, in cash, within five business days after demand is made therefor by the Company, the total amount of Award Gain (as defined herein) realized by the Participant upon each exercise of an Option or settlement of an Award that occurred on or after (A) the date that is six months prior to the occurrence of the Forfeiture Event, if the Forfeiture Event occurred while the Participant was employed by the Company or a subsidiary or affiliate of the Company, or (B) the date that is six months prior to the date the Participant’s employment by the Company or a subsidiary or affiliate of the Company terminated, if the Forfeiture Event occurred after the Participant ceased to be so employed. For purposes of this Section 10, the term “Award Gain” shall mean (X) in respect of a given Option exercise, the product of (1) the Fair Market Value per share of Stock at the date of such exercise (without regard to any subsequent change in the market price of shares) minus the exercise price times (2) the number of shares as to which the Option was exercised at that date, and (Y) in respect of any other settlement of an Award granted to the Participant, the Fair Market Value of the cash or Stock paid or payable to the Participant (regardless of any elective deferral) less any cash or the Fair Market Value of any Stock or property (other than an Award or award which would have itself then been forfeitable hereunder and excluding any payment of tax withholding) paid by the Participant to the Company as a condition of or in connection such settlement.
A-10 | Myers Industries, Inc. |
TABLE OF CONTENTS
(b) Events Triggering Forfeiture. The forfeitures specified in Section 10(a) will be triggered upon the occurrence of any one of the following Forfeiture Events at any time during a Participant’s employment by the Company or a subsidiary or affiliate of the Company, or during the one-year period following termination of such employment:
(i) The Participant, acting alone or with others, directly or indirectly, (A) engages, either as employee (Employee), employer, consultant, advisor, or director, or as an owner, investor, partner, or stockholder unless the Participant’s interest is insubstantial, in any business in an area or region in which the Company or a subsidiary or affiliate of the Company conducts business at the date the event occurs, which is directly in competition with a business then conducted by the Company or a subsidiary or affiliate of the Company; (B) induces any customer or supplier of the Company or a subsidiary or affiliate of the Company, with which the Company or a subsidiary or affiliate of the Company has a business relationship, to curtail, cancel, not renew, or not continue his or her or its business with the Company or any subsidiary or affiliate of the Company; or (C) induces, or attempts to influence, any Employee of or service provider to the Company or a subsidiary or affiliate of the Company to terminate such employment or service. The Committee shall, in its discretion, determine which lines of business the Company and the subsidiaries and affiliates of the Company conduct on any particular date and which third parties may reasonably be deemed to be in competition with the Company or a subsidiary or affiliate of the Company. For purposes of this Section 10(b)(i), a Participant’s interest as a stockholder is insubstantial if it represents beneficial ownership of less than five percent of the outstanding class of stock, and a Participant’s interest as an owner, investor, or partner is insubstantial if it represents ownership, as determined by the Committee in its discretion, of less than five percent of the outstanding equity of the entity;
(ii) The Participant discloses, uses, sells, or otherwise transfers, except in the course of employment with or other service to the Company or any subsidiary or affiliate of the Company, any confidential or proprietary information of the Company or any subsidiary or affiliate of the Company, including but not limited to information regarding the Company’s and its subsidiaries’ and affiliates’ current and potential customers, organization, Employees, finances, and methods of operations and investments, so long as such information has not otherwise been disclosed to the public or is not otherwise in the public domain (other than by the Participant’s breach of this provision), except as required by law or pursuant to legal process, or the Participant makes statements or representations, or otherwise communicates, directly or indirectly, in writing, orally, or otherwise, or takes any other action which may, directly or indirectly, disparage or be damaging to the Company or any of its subsidiaries or affiliates or their respective officers, directors, Employees, advisors, businesses or reputations, except as required by law or pursuant to legal process; or
(iii) The Participant fails to cooperate with the Company or any subsidiary or affiliate of the Company in any way, including, without limitation, by making himself or herself available to testify on behalf of the Company or such subsidiary or affiliate of the Company in any action, suit, or proceeding, whether civil, criminal, administrative, or investigative, or otherwise fails to assist the Company or any subsidiary or affiliate of the Company in any way, including, without limitation, in connection with any such action, suit, or proceeding by providing information and meeting and consulting with members of management of, other representatives of, or counsel to, the Company or such subsidiary or affiliate, as reasonably requested.
(iv) The Participant, alone or in conjunction with another person, (A) interferes with or harms, or attempts to interfere with or harm, the relationship of the Company or any subsidiary or affiliate of the Company with any person who at any time was a customer or supplier of the Company or any subsidiary or affiliate of the Company or otherwise had a business relationship with the Company or any subsidiary or affiliate of the Company; or (B) hires, solicits for hire, aids in or facilitates the hire, or causes to be hired, either as an employee, contractor or consultant, any person who is currently employed, or was employed at any time during the six-month period prior thereto, as an employee, contractor or consultant of the Company or any subsidiary or affiliate of the Company.
(c) Agreement Does Not Prohibit Competition or Other Participant Activities. Although the conditions set forth in this Section 10 shall be deemed to be incorporated into an Award, a Participant is not thereby prohibited from engaging in any activity set forth in Section 10(b)(i), including but not limited to competition with the Company and its subsidiaries and affiliates. The non-occurrence of the Forfeiture Events set forth in Section 10(b) is a condition to the Participant’s right to realize and retain value from his or her compensatory Options and Awards, and the consequence under the Plan if the Participant engages in an activity giving rise to any such Forfeiture Event are the forfeitures specified herein. The Company and a Participant shall not be precluded by this provision or otherwise from entering into other agreements concerning the subject matter of Section 10(a) and Section 10(b).
2021 Proxy Statement | A-11 |
TABLE OF CONTENTS
(d) Committee Discretion. The Committee may, in its discretion, waive in whole or in part the Company’s right to forfeiture under this Section 10, but no such waiver shall be effective unless evidenced by a writing signed by a duly authorized officer of the Company. In addition, the Committee may impose additional conditions on Awards, by inclusion of appropriate provisions in the document evidencing or governing any such Award.
11. General Provisions.
(a) Compliance with Legal and Other Requirements. The Company may, to the extent deemed necessary or advisable by the Committee and subject to Section 11(k), postpone the issuance or delivery of Stock or payment of other benefits under any Award until completion of such registration or qualification of such Stock or other required action under any federal or state law, rule or regulation, listing or other required action with respect to any stock exchange or automated quotation system upon which the Stock or other securities of the Company are listed or quoted, or compliance with any other obligation of the Company, as the Committee may consider appropriate, and may require any Participant to make such representations, furnish such information and comply with or be subject to such other conditions as the Committee may consider appropriate in connection with the issuance or delivery of Stock or payment of other benefits in compliance with applicable laws, rules, and regulations, listing requirements, or other obligations. The foregoing notwithstanding, in connection with a Change of Control, the Company shall take or cause to be taken no action, and shall undertake or permit to arise no legal or contractual obligation, that results or would result in any postponement of the issuance or delivery of Stock or payment of benefits under any Award or the imposition of any other conditions on such issuance, delivery or payment, to the extent that such postponement or other condition would represent a greater burden on a Participant than existed on the 90th day preceding the Change of Control.
(b) Limits on Transferability; Beneficiaries. No Award or other right or interest of a Participant under the Plan shall be pledged, hypothecated or otherwise encumbered or subject to any lien, obligation or liability of such Participant to any party (other than the Company or a subsidiary or affiliate thereof), or assigned or transferred by such Participant otherwise than by will or the laws of descent and distribution or to a Beneficiary upon the death of a Participant, and such Awards or rights that may be exercisable shall be exercised during the lifetime of the Participant only by the Participant or his or her guardian or legal representative, except that Awards and other rights (other than ISOs and SARs in tandem therewith) may be transferred to one or more transferees during the lifetime of the Participant, and may be exercised by such transferees in accordance with the terms of such Award, but only if and to the extent such transfers are permitted by the Committee, subject to any terms and conditions which the Committee may impose thereon (which may include limitations the Committee may deem appropriate in order that offers and sales under the Plan will meet applicable requirements of registration forms under the Securities Act of 1933 specified by the Securities and Exchange Commission). A Beneficiary, transferee, or other person claiming any rights under the Plan from or through any Participant shall be subject to all terms and conditions of the Plan and any Award document applicable to such Participant, except as otherwise determined by the Committee, and to any additional terms and conditions deemed necessary or appropriate by the Committee.
(c) Adjustments. In the event that any large, special and non-recurring dividend or other distribution (whether in the form of cash or property other than Stock), recapitalization, forward or reverse Stock split, Stock dividend, reorganization, merger, consolidation, spin-off, combination, repurchase, share exchange, liquidation, dissolution or other similar corporate transaction or event affects the Stock, then the Committee shall, in an equitable manner as determined by the Committee, adjust any or all of (i) the number and kind of shares of Stock or other securities of the Company or other issuer which are subject to the Plan, including the share limits, (ii) the number and kind of shares of Stock or other securities of the Company or other issuer by which annual per-person Award limitations are measured under Section 5, (iii) the number and kind of shares of Stock or other securities of the Company or other issuer subject to or deliverable in respect of outstanding Awards and (iv) the exercise price, settlement price or purchase price relating to any Award or, if deemed appropriate, the Committee may make provision for a payment of cash or property to the holder of an outstanding Option (subject to Section 11(k) and Section 11(l)) or other Award. In addition, the Committee is authorized to make adjustments in the terms and conditions of, and the criteria included in, Awards (including performance-based Awards and performance goals and any hypothetical funding pool relating thereto) in recognition of unusual or nonrecurring events (including, without limitation, events described in the preceding sentence, as well as acquisitions and dispositions of businesses and assets affecting any performance conditions), or in response to changes in applicable laws, regulations, or accounting principles; provided that no such adjustment shall be authorized or made if and to the extent that the existence of such authority (i) would cause Options, SARs, Restricted Stock or RSUs granted under the Plan to Participants designated by the Committee as Covered Employees and intended to qualify as “performance-based compensation” under Code Section 162(m) and regulations thereunder to otherwise fail to qualify as
A-12 | Myers Industries, Inc. |
TABLE OF CONTENTS
“performance-based compensation” under Code Section 162(m) and regulations thereunder, or (ii) would cause the Committee to be deemed to have authority to change the targets, within the meaning of Treasury Regulation 1.162-27(e)(4)(vi), under the performance goals relating to Options or SARs granted to Covered Employees and intended to qualify as “performance-based compensation” under Code Section 162(m) and regulations thereunder.
(d) Tax Provisions.
(i) Withholding. The Company and any subsidiary or affiliate of the Company is authorized to withhold from any Award granted, any payment relating to an Award under the Plan, including from a distribution of Stock, or any payroll or other payment to a Participant, amounts of withholding and other taxes due or potentially payable in connection with any transaction or event involving an Award, or to require a Participant to remit to the Company an amount in cash or other property (including Stock) to satisfy such withholding before taking any action with respect to an Award, and to take such other action as the Committee may deem advisable to enable the Company and Participants to satisfy obligations for the payment of withholding taxes and other tax obligations relating to any Award. This authority shall include authority to withhold or receive Stock or other property and to make cash payments in respect thereof in satisfaction of a Participant’s withholding obligations, either on a mandatory or elective basis in the discretion of the Committee, or in satisfaction of other tax obligations. The Company can delay the delivery to a Participant of Stock under any Award to the extent necessary to allow the Company to determine the amount of withholding to be collected and to collect and process such withholding.
(ii) Required Consent to and Notification of Code Section 83(b) Election. No election under Section 83(b) of the Code (to include in gross income in the year of transfer the amounts specified in Code Section 83(b)) or under a similar provision of the laws of a jurisdiction outside the United States may be made unless expressly permitted by the terms of the Award document or by action of the Committee in writing prior to the making of such election. In any case in which a Participant is permitted to make such an election in connection with an Award, the Participant shall notify the Company of such election within ten days of filing notice of the election with the Internal Revenue Service or other governmental authority, in addition to any filing and notification required pursuant to regulations issued under Code Section 83(b) or other applicable provision.
(iii) Requirement of Notification Upon Disqualifying Disposition Under Code Section 421(b). If any Participant shall make any disposition of shares of Stock delivered pursuant to the exercise of an ISO under the circumstances described in Code Section 421(b) (i.e., a disqualifying disposition), such Participant shall notify the Company of such disposition within ten days thereof.
(e) Changes to the Plan. The Board may amend, suspend or terminate the Plan or the Committee’s authority to grant Awards under the Plan without the consent of stockholders of the Company or Participants; provided, however, that any amendment to the Plan shall be submitted to the Company’s stockholders for approval not later than the earliest annual meeting for which the record date is at or after the date of such Board action:
(i) if such stockholder approval is required by any federal or state law or regulation or the rules of the New York Stock Exchange or any other stock exchange or automated quotation system on which the Stock may then be listed or quoted; or
(ii) if such amendment would materially increase the number of shares reserved for issuance and delivery under the Plan; or
(iii) if such amendment would alter the provisions of the Plan restricting the Company’s ability to grant Options or SARs with an exercise price that is not less than the Fair Market Value of Stock; or
(iv) in connection with any action to amend or replace previously granted Options or SARs in a transaction that constitutes a “repricing,” as such term is used in Section 303A.08 of the Listed Company Manual of the New York Stock Exchange.
The Board may otherwise, in its discretion, determine to submit other amendments to the Plan to stockholders of the Company for approval; and provided further, that, without the consent of an affected Participant, no such Board (or any Committee) action may materially and adversely affect the rights of such Participant under any outstanding Award (for this purpose, actions that alter the timing of federal income taxation of a Participant will not be deemed material unless such actions result in an income tax penalty on the Participant). With regard to other terms of Awards, the Committee shall have no authority to waive or modify any such Award term after the Award has been granted to the extent the waived or modified term would be mandatory under the Plan for any Award newly granted at the date of the waiver or modification.
2021 Proxy Statement | A-13 |
TABLE OF CONTENTS
(f) Right of Setoff. The Company or any subsidiary or affiliate of the Company may, to the extent permitted by applicable law, deduct from and set off against any amounts the Company or a subsidiary or affiliate of the Company may owe to the Participant from time to time (including amounts payable in connection with any Award, owed as wages, fringe benefits, or other compensation owed to the Participant), such amounts as may be owed by the Participant to the Company, including but not limited to amounts owed under Section 10(a), although the Participant shall remain liable for any part of the Participant’s payment obligation not satisfied through such deduction and setoff. By accepting any Award granted hereunder, the Participant agrees to any deduction or setoff under this Section 11(f).
(g) Unfunded Status of Awards; Creation of Trusts. To the extent that any Award is deferred compensation, the Plan is intended to constitute an “unfunded” plan for deferred compensation with respect to such Award. With respect to any payments not yet made to a Participant or obligation to deliver Stock pursuant to an Award, nothing contained in the Plan or any Award shall give any such Participant any rights that are greater than those of a general creditor of the Company; provided that the Committee may authorize the creation of trusts and deposit therein cash, Stock, other Awards or other property, or make other arrangements to meet the Company’s obligations under the Plan. Such trusts or other arrangements shall be consistent with the “unfunded” status of the Plan unless the Committee otherwise determines with the consent of each affected Participant.
(h) Nonexclusivity of the Plan. Neither the adoption of the Plan by the Board nor its submission to the stockholders of the Company for approval shall be construed as creating any limitations on the power of the Board or a committee thereof to adopt such other incentive arrangements, apart from the Plan, as it may deem desirable, including incentive arrangements and awards which do not qualify under Code Section 162(m), and such other arrangements may be either applicable generally or only in specific cases.
(i) Payments in the Event of Forfeitures; Fractional Shares. Unless otherwise determined by the Committee, in the event of a forfeiture of an Award with respect to which a Participant paid cash consideration, the Participant shall be repaid the amount of such cash consideration. In addition, nothing herein shall prevent the Committee from authorizing the payment in cash of any amounts with respect to forfeited Awards. No fractional shares of Stock shall be issued or delivered pursuant to the Plan or any Award. The Committee shall determine whether cash, other Awards or other property shall be issued or paid in lieu of such fractional shares or whether such fractional shares or any rights thereto shall be forfeited or otherwise eliminated.
(j) Certain Limitations on Awards to Ensure Compliance with Code Section 409A. Notwithstanding anything herein to the contrary, any Award that is deferred compensation within the meaning of Code Section 409A shall be automatically modified and limited to the extent that the Committee determines necessary to avoid the imposition of the additional tax under Section 409A(a)(1)(B) of the Code on a Participant holding such Award.
(k) Certain Limitations Relating to Accounting Treatment of Awards. Other provisions of the Plan notwithstanding, the Committee’s authority under the Plan (including under Section 8(c), Section 11(c) and Section 11(d)) is limited to the extent necessary to ensure that any Option or other Award of a type that the Committee has intended to be subject to “equity” accounting with a measurement date at the date of grant under applicable accounting standards shall not become subject to “liability” accounting solely due to the existence of such authority, unless the Committee specifically determines that the Award shall remain outstanding despite such “liability” accounting.
(l) Governing Law. The validity, construction, and effect of the Plan, any rules and regulations relating to the Plan and any Award document shall be determined in accordance with the laws of the State of Delaware, without giving effect to principles of conflicts of laws, and applicable provisions of federal law.
(m) Awards to Participants Outside the United States. The Committee may modify the terms of any Award under the Plan made to or held by a Participant who is then resident or primarily employed outside of the United States in any manner deemed by the Committee to be necessary or appropriate in order that such Award shall conform to laws, regulations, and customs of the country in which the Participant is then resident or primarily employed, or so that the value and other benefits of the Award to the Participant, as affected by foreign tax laws and other restrictions applicable as a result of the Participant’s residence or employment abroad shall be comparable to the value of such an Award to a Participant who is resident or primarily employed in the United States. An Award may be modified under this Section 11(n) in a manner that is inconsistent with the express terms of the Plan, so long as such modifications will not contravene any applicable law or regulation or result in actual liability under Section 16(b) of the Exchange Act for the Participant whose Award is modified.
A-14 | Myers Industries, Inc. |
TABLE OF CONTENTS
(n) Limitation on Rights Conferred under Plan. Neither the Plan nor any action taken thereunder shall be construed as (i) giving any Eligible Person or Participant the right to continue as an Eligible Person or Participant or in the employ or service of the Company or a subsidiary or affiliate of the Company, (ii) interfering in any way with the right of the Company or a subsidiary or affiliate of the Company to terminate any Eligible Person’s or Participant’s employment at any time (subject to the terms and provisions of any separate written agreements), (iii) giving an Eligible Person or Participant any claim to be granted any Award under the Plan or to be treated uniformly with other Participants and Employees, or (iv) conferring on a Participant any of the rights of a stockholder of the Company unless and until the Participant is duly issued or transferred shares of Stock in accordance with the terms of an Award or an Option is duly exercised. Except as expressly provided in the Plan and an Award document, neither the Plan nor any Award document shall confer on any person other than the Company and the Participant any rights or remedies thereunder.
(o) Severability; Entire Agreement. If any of the provisions of the Plan or any Award document is finally held to be invalid, illegal or unenforceable (whether in whole or in part), such provision shall be deemed modified to the extent, but only to the extent, of such invalidity, illegality or unenforceability, and the remaining provisions shall not be affected thereby; provided, that, if any of such provisions is finally held to be invalid, illegal, or unenforceable because it exceeds the maximum scope determined to be acceptable to permit such provision to be enforceable, such provision shall be deemed to be modified to the minimum extent necessary to modify such scope in order to make such provision enforceable hereunder. The Plan and any agreements or documents designated by the Committee as setting forth the terms of an Award contain the entire agreement of the parties with respect to the subject matter thereof and supersede all prior agreements, promises, covenants, arrangements, communications, representations and warranties between them, whether written or oral with respect to the subject matter thereof.
(p) Plan Effective Date and Termination. The Plan shall become effective if, and at such time as, the stockholders of the Company have approved the Plan in accordance with applicable law and stock exchange requirements (such date, the “Effective Date”). Unless earlier terminated by action of the Board, the authority of the Committee to make grants under the Plan shall terminate on the date that is ten years after the latest date upon which stockholders of the Company have approved the Plan, and the Plan will remain in effect until such time as no Stock remains available for delivery under the Plan or as set forth above and the Company has no further rights or obligations under the Plan with respect to outstanding Awards under the Plan.
2021 Proxy Statement | A-15 |
TABLE OF CONTENTS
MYERS INDUSTRIES, INC. that the undersigned is entitled to vote at the Annual Meeting
Reconciliation of Shareholders to be held at 9:00 AM EDT on April 24, 2019, at the Louis S. Myers Training Center, 1554 South Main Street, Akron, Ohio 44301,non-GAAP Financial Measures
Gross Profit, Operating Income and any adjournment or postponement thereof. IF PROPERLY EXECUTED, THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE DIRECTOR NOMINEES LISTED ON THE REVERSE SIDEEBITDA (unaudited)
GAAP Net sales | | | $343,884 | | | $166,544 | | | $510,428 | | | $(59) | | | $510,369 | |
GAAP Gross profit | | | | | | | | | 171,960 | | | — | | | 171,960 | |
Add: Elkhart acquisition and integration costs | | | | | | | | | 552 | | | — | | | 552 | |
Gross profit as adjusted | | | | | | | | | 172,512 | | | — | | | 172,512 | |
Gross profit margin as adjusted | | | | | | | | | 33.8% | | | n/a | | | 33.8% | |
GAAP Operating income (loss) | | | 55,072 | | | 12,157 | | | 67,229 | | | (13,679) | | | 53,550 | |
Add: Severance costs | | | 905 | | | — | | | 905 | | | 1,512 | | | 2,417 | |
Add: Restructuring expenses and other adjustments | | | — | | | — | | | — | | | 249 | | | 249 | |
Add: Tuffy acquisition costs | | | — | | | 17 | | | 17 | | | 35 | | | 52 | |
Add: Elkhart acquisition and integration costs(1) | | | 556 | | | — | | | 556 | | | 500 | | | 1,056 | |
Add: Environmental charges | | | — | | | — | | | — | | | 500 | | | 500 | |
Less: Lawn and Garden sale of note/release of lease guarantee liability | | | — | | | — | | | — | | | (11,924) | | | (11,924) | |
Operating income (loss) as adjusted | | | 56,533 | | | 12,174 | | | 68,707 | | | (22,807) | | | 45,900 | |
Operating income margin as adjusted | | | 16.4% | | | 7.3% | | | 13.5% | | | n/a | | | 9.0% | |
Add: Depreciation and amortization | | | 17,834 | | | 2,300 | | | 20,134 | | | 396 | | | 20,530 | |
EBITDA as adjusted | | | $74,367 | | | $14,474 | | | $88,841 | | | $(22,411) | | | $66,430 | |
EBITDA margin as adjusted | | | 21.6% | | | 8.7% | | | 17.4% | | | n/a | | | 13.0% | |
(1)
| Includes gross profit adjustments of $552 and SG&A adjustments of $504 |
GAAP Net sales | | | $356,407 | | | $159,349 | | | $515,756 | | | $(58) | | | $515,698 | |
GAAP Gross profit | | | | | | | | | 171,312 | | | — | | | 171,312 | |
Add: Restructuring expenses and other adjustments | | | | | | | | | 172 | | | — | | | 172 | |
Gross profit as adjusted | | | | | | | | | 171,484 | | | — | | | 171,484 | |
Gross profit margin as adjusted | | | | | | | | | 33.2% | | | n/a | | | 33.3% | |
| | | | | | | | | | | | | | | | |
GAAP Operating income (loss) | | | 53,144 | | | 10,076 | | | 63,220 | | | (25,954) | | | 37,266 | |
Add: Restructuring expenses and other adjustments(1) | | | 172 | | | 865 | | | 1,037 | | | 265 | | | 1,302 | |
Add: Tuffy acquisition costs | | | — | | | 274 | | | 274 | | | 316 | | | 590 | |
Add: Asset impairment | | | 916 | | | — | | | 916 | | | — | | | 916 | |
Add: Environmental charges | | | — | | | — | | | — | | | 4,000 | | | 4,000 | |
Less: CEO stock award reversal | | | — | | | — | | | — | | | (2,031) | | | (2,031) | |
Operating income (loss) as adjusted | | | 54,232 | | | 11,215 | | | 65,447 | | | (23,404) | | | 42,043 | |
Operating income margin as adjusted | | | 15.2% | | | 7.0% | | | 12.7% | | | n/a | | | 8.2% | |
Add: Depreciation and amortization | | | 21,282 | | | 1,501 | | | 22,783 | | | 413 | | | 23,196 | |
Less: Depreciation adjustments | | | (44) | | | — | | | (44) | | | — | | | (44) | |
EBITDA as adjusted | | | $75,470 | | | $12,716 | | | $88,186 | | | $(22,991) | | | $65,195 | |
EBITDA margin as adjusted | | | 21.2% | | | 8.0% | | | 17.1% | | | n/a | | | 12.6% | |
(1)
| Includes gross profit adjustments of $172 and SG&A adjustments of $1,130 |
2021 Proxy Statement | B-1 |