UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to
Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
|
|
|
Filed by the Registrant
|
|
Filed by a Party other than the Registrant
|
|
|
Check
the appropriate box:
|
|
|
Preliminary
Proxy Statement
|
|
|
Confidential,
for use of the Commission only (as permitted by Rule 14a-6(e)(2))
|
|
|
Definitive
Proxy Statement
|
|
|
Definitive
Additional Materials
|
|
|
Soliciting
Material Pursuant to ss.240.14a-12
|
LIVENT CORPORATION
(Name of Registrant as Specified
In Its Charter)
(Name of Person(s) Filing
Proxy Statement, if other than the Registrant)
|
Payment
of Filing Fee (Check the appropriate box):
|
|
|
No fee required.
|
|
|
Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
|
|
(1)
|
Title of each class of securities to which transaction applies:
|
|
(2)
|
Aggregate number of securities to which transaction applies:
|
|
(3)
|
Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11
(set forth the amount on which the filing fee is calculated and state how it was determined):
|
|
(4)
|
Proposed maximum aggregate value of transaction:
|
|
(5)
|
Total fee paid:
|
|
|
|
|
|
|
Fee paid previously with preliminary materials.
|
|
|
Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
|
|
(1)
|
Amount Previously Paid:
|
|
(2)
|
Form, Schedule or Registration Statement No.:
|
|
(3)
|
Filing Party:
|
|
(4)
|
Date Filed:
|
DEAR
STOCKHOLDER
|
PIERRE BRONDEAU
CHAIRMAN OF THE BOARD
March 27, 2019
|
|
It is my pleasure to invite
you to attend the Company’s 2019 Annual Meeting of Stockholders. The meeting will be held on Wednesday, May 1, 2019, at 2:00
p.m. local time at the FMC Tower at Cira Centre South, 2929 Walnut Street, 24
th
Floor, Philadelphia, Pennsylvania 19104.
The Notice of Annual Meeting and Proxy Statement accompanying this letter describe the business to be conducted at the meeting.
During the meeting, we will report
to you on the Company’s earnings, results and other achievements during 2018 and on our outlook for 2019. We welcome this
opportunity to have a dialogue with our stockholders and look forward to your comments and questions.
Your vote is important.
Please
vote your proxy promptly so your shares can be represented
. Please see your proxy card for specific instructions on how to
vote.
If you plan to attend the meeting,
please send written notification to the Company’s Investor Relations Department, FMC Tower at Cira Centre South, 2929 Walnut
Street, Philadelphia, Pennsylvania 19104, so that your name can be put on an admission list held at the registration desk at the
entrance to the meeting. If your shares are held by a bank, broker or other intermediary and you plan to attend, you must enclose
with your notification evidence of your ownership, such as a letter from the bank, broker or intermediary confirming your ownership
or a bank or brokerage firm account statement. If you wish to vote at the meeting, please refer to the section of this proxy statement
entitled “How to Vote” for specific instructions.
I look forward to seeing you
on May 1.
Sincerely,
|
NOTICE
OF
ANNUAL MEETING OF STOCKHOLDERS
WEDNESDAY, MAY 1, 2019
2:00 p.m.
FMC Tower at Cira Centre South
2929 Walnut Street, 24
th
Floor
Philadelphia, Pennsylvania 19104
Dear Stockholder:
You are invited to the Annual
Meeting of Stockholders of Livent Corporation. We will hold the meeting at the time and place noted above. At the meeting, we will
ask you to:
|
1.
|
Elect two directors to serve as Class I directors for a three-year term to expire at the 2022 annual meeting of stockholders.
|
|
|
|
|
2.
|
Ratify the appointment of KPMG LLP as our independent registered public accounting firm for 2019.
|
|
|
|
|
3.
|
Consider and act upon any other business properly brought before the meeting.
|
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE FOR ITS NOMINEES FOR DIRECTOR AND FOR PROPOSAL 2.
Your vote is important. To
be sure your vote counts and assure a quorum, please vote, sign, date and return the enclosed proxy card whether or not you plan
to attend the meeting; or if you prefer, please follow the instructions on the enclosed proxy card for voting by Internet or by
telephone whether or not you plan to attend the meeting in person.
IMPORTANT NOTICE REGARDING
THE AVAILABILITY OF PROXY MATERIALS FOR THE STOCKHOLDER MEETING TO BE HELD ON MAY 1, 2019:
The proxy statement and the
annual report to security holders are available at
www.livent.com
By order of the Board of Directors,
SARA PONESSA
Vice President,
General Counsel and Secretary
March 27, 2019
SOLICITATION OF PROXIES
The Board of Directors (“Board”)
of Livent Corporation (the “Company”, “Livent” or “we”) is soliciting proxies for use at the
Company’s 2019 Annual Meeting of Stockholders and any postponements or adjournments of that meeting (as so postponed or adjourned,
the “Annual Meeting”). The Company first mailed this proxy statement, the accompanying form of proxy and the Company’s
Annual Report for 2018 on or about March 27, 2019.
AGENDA ITEMS
The agenda for the Annual Meeting
is to:
|
1.
|
Elect two directors to serve as Class I directors for a three-year
term to expire at the 2022 annual meeting of stockholders;
|
|
|
|
|
2.
|
Ratify the appointment of KPMG LLP as the Company’s independent registered public
accounting firm for 2019; and
|
|
|
|
|
3.
|
Conduct other business properly brought before the meeting.
|
SEPARATION OF LIVENT FROM FMC
CORPORATION
Following the completion of the
Company’s initial public offering in October 2018 (the “IPO”), FMC Corporation (“FMC”) retained approximately
84% of Livent’s outstanding common stock. On March 1, 2019, the Company became an independent company as a result of FMC’s
distribution to FMC stockholders of all 123 million shares of Livent common stock that FMC owned (the “Distribution”).
Each FMC stockholder of record
as of the close of business on February 25, 2019, the record date of the Distribution, received 0.935301 shares of Livent common
stock for each share of FMC common stock held on such date. All shares of Livent common stock issued in the IPO and all shares
distributed as part of the Distribution will be eligible to vote at the Annual Meeting.
INFORMATION ABOUT VOTING
WHO CAN VOTE
You can vote at the Annual Meeting
if you were a holder of the Company’s common stock, par value of $0.001 per share (“Common Stock”), on the
record date. The record date is the close of business on March 11, 2019. You will have one vote for each share of Common Stock.
As of March 11, 2019, there were 146,000,000 shares of Common Stock outstanding.
HOW TO VOTE
You may vote in one of four ways:
|
■
|
You can vote by signing and returning the enclosed proxy card. If
you do, the individuals named on the card will vote your shares in the way you indicate;
|
|
■
|
You can vote by Internet;
|
|
■
|
You can vote by telephone; or
|
|
■
|
You can cast your vote at the Annual Meeting.
|
If you plan to cast your vote
at the meeting, please send written notification to the Company’s Investor Relations Department, FMC Tower at Cira Centre
South, 2929 Walnut Street, Philadelphia, PA, 19104, so that your name can be put on an admission list held at the registration
desk at the entrance to the meeting. If you are a registered stockholder and wish to vote at the Annual Meeting, in addition to
the above-referenced attendance notification, you must provide proper identification as the stockholder of record at the registration
desk, but no additional authorization will be required in order to cast your vote. If you hold your shares through a broker, bank
or other intermediary and you wish to vote at the Annual Meeting, in addition to the above-referenced attendance notifications,
you must obtain a legal proxy from your broker, bank or other intermediary authorizing you to vote at the Annual Meeting. We will
be unable to accept a vote from you at the Annual Meeting without that authorization.
LIVENT
CORPORATION
|
2019
PROXY STATEMENT
5
USE OF PROXIES
Unless you tell us on the proxy
card to vote differently, we plan to vote signed and returned proxies FOR the Board nominees for director and FOR Proposal 2, and
in the discretion of the proxy holders as to any other matters that may properly come before the Annual Meeting.
QUORUM REQUIREMENT
We need a quorum of stockholders
to hold a valid Annual Meeting. A quorum will be present if the holders of at least a majority of the outstanding Common Stock
entitled to vote at the meeting either attend the Annual Meeting in person or are represented by proxy at the Annual Meeting. Abstentions,
broker non-votes (described below) and votes withheld are counted as present for the purpose of establishing a quorum.
VOTE REQUIRED FOR ACTION
Directors are elected by a majority
of the votes cast in an uncontested election. Because the number of nominees properly nominated for the Annual Meeting is the same
as the number of directors to be elected at the Annual Meeting, the election of directors is an uncontested election. As a result,
any nominee who receives a majority of the votes cast with respect to his or her election at the Annual Meeting will be elected
to the Board (or re-elected, in the case of any nominee who is an incumbent director). Incumbent nominees have tendered a contingent
resignation which would become effective if (i) the nominee does not receive a majority of the votes cast with respect to his or
her election at the Annual Meeting and (ii) the Board of Directors accepts such resignation. Adoption of Proposal 2 requires the
affirmative vote of the majority of shares present in person or represented by proxy and entitled to vote at the meeting.
ABSTENTIONS OR LACK OF INSTRUCTIONS TO BANKS OR BROKERS
Abstentions will not be counted
as votes cast for the election of directors, and thus will have no effect on the election of directors. With respect to Proposal
2, abstentions will have the effect of a vote against such proposals.
A broker non-vote occurs when
a bank, broker or other nominee holding shares on behalf of a stockholder does not receive voting instructions from the beneficial
owner with respect to a non-routine matter to be voted on at the Annual Meeting by a specified date before the Annual Meeting.
Banks, brokers and other nominees may vote undirected shares on matters deemed routine in accordance with New York Stock Exchange
(“NYSE”) rules, but they may not vote undirected shares on matters deemed non-routine in accordance with such rules.
For this purpose, the ratification of the appointment of the independent registered public accounting firm is considered a routine
matter, but the election of directors is considered a non-routine matter. In the event of a broker non-vote in the election of
directors at the Annual Meeting, the broker non-vote will not have any effect on the outcome inasmuch as broker non-votes are not
counted as votes cast or as shares present and entitled to be voted with respect to any matter on which the broker has expressly
not voted.
REVOKING A PROXY
You may revoke your proxy at
any time before it is exercised. You can revoke a proxy by:
|
■
|
Sending a written notice to the Corporate Secretary of Livent;
|
|
|
|
|
■
|
Delivering a properly executed, later-dated proxy; or
|
|
|
|
|
■
|
Attending the Annual Meeting and voting in person, provided that you comply with the
conditions set forth in the section of this proxy statement above entitled “How to Vote”.
|
LIVENT
CORPORATION
|
2019
PROXY STATEMENT
6
|
II.
|
THE PROPOSALS TO BE VOTED ON
|
|
PROPOSAL 1
|
ELECTION OF DIRECTORS
|
NOMINEES FOR DIRECTOR
The Board of Directors is divided
into three classes, with one class of our directors standing for election each year, for a three-year term. Directors for each
class are elected at the annual meeting of stockholders held in the year in which the term for their class expires and hold office
until their death, resignation or removal or their successors are duly elected and qualified. Vacancies on the Board of Directors
may be filled by a majority of the Directors then in office, although less than a quorum, or by a sole remaining Director. Any
Director elected to fill a vacancy resulting from an increase in the number of Directors shall hold office for a term that shall
coincide with the remaining term of the class of Directors to which he or she is elected. A Director elected to fill a vacancy
not resulting from an increase in the number of Directors shall have the same remaining term as that of his or her predecessor.
The Board of Directors currently
consists of seven directors, divided into the following three classes:
|
■
|
The Class I directors are Michael F. Barry and Steven T. Merkt,
and their terms will expire at the Annual Meeting;
|
|
|
|
|
■
|
The Class II directors are Paul W. Graves and Andrea Utecht, and their terms will expire
at the 2020 annual meeting of stockholders (the “2020 Annual Meeting”); and
|
|
|
|
|
■
|
The Class III directors are Pierre Brondeau, G. Peter D’Aloia, and Robert C.
Pallash, and their terms will expire at the 2021 annual meeting of stockholders.
|
Both of our Class I directors
have been nominated to serve as Class I directors and have agreed to stand for election. If elected, the Class I directors’
next term will expire at the 2022 annual meeting of stockholders. Information about the nominees is contained in the section of
this proxy statement entitled “Board of Directors”.
The Board of Directors expects
that each of the nominees will be able and willing to serve as directors. If any nominee becomes unavailable, the proxies may be
voted for another person nominated by the Board of Directors to fill the vacancy, or the size of the Board of Directors may be
reduced.
|
THE BOARD OF DIRECTORS RECOMMENDS A
VOTE
FOR
THE ELECTION OF MICHAEL F. BARRY AND STEVEN T. MERKT TO THE BOARD OF
DIRECTORS AS CLASS I DIRECTORS AS DESCRIBED ABOVE.
|
LIVENT
CORPORATION
|
2019
PROXY STATEMENT
7
|
PROPOSAL 2
|
RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
|
The Audit Committee of the Board
of Directors is directly responsible for the appointment, compensation, retention and oversight of the independent external audit
firm retained to audit the Company’s financial statements. The Audit Committee has approved KPMG LLP (“KPMG”)
continuing to serve as the Company’s independent registered public accounting firm for 2019.
The Audit Committee periodically
reviews the performance of the independent external audit firm. In conjunction with the mandated rotation of KPMG’s lead
engagement partner, the Audit Committee and its chairperson also evaluate and approve the selection of KPMG’s new lead engagement
partner.
The Audit Committee is responsible
for the audit fee negotiations associated with the Company’s retention of KPMG. For fiscal year 2018, KPMG’s fees,
all of which were approved by the Audit Committee, are included in the table below. No independent auditors provided any services
directly to the Company during fiscal year 2017, as we had not yet separated from FMC.
|
($000)
|
|
|
2018
|
|
Audit Fees
(1)
|
|
$
|
1,686
|
|
Audit Related Fees
(2)
|
|
$
|
230
|
|
Tax Fees
(3)
|
|
|
–
|
|
All Other Fees
(4)
|
|
|
–
|
|
TOTAL
|
|
$
|
1,916
|
|
(1)
|
Fees for professional services performed by KPMG for the integrated
audit of the Company’s annual consolidated and combined financial statements included in the Company’s Form 10-K
filing and review of the financial statements included in the Company’s Form 10-Q filings. The amount also includes
other services that are normally provided by KPMG in connection with statutory and regulatory filings or engagements.
|
|
|
|
|
(2)
|
Fees for services performed by KPMG that are reasonably related to the performance
of the audit or review of the Company’s financial statements. This includes employee benefit and compensation plan audits,
as well as audit related services in connection with attestations by KPMG that are required by statute, regulation, or contractual
requirements.
|
|
|
|
|
(3)
|
Fees for professional services performed by KPMG with respect to tax compliance,
tax advice and tax planning.
|
|
|
|
|
(4)
|
Fees for other permissible work performed by KPMG that does not fall within the
categories set forth above.
|
PRE-APPROVAL OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM SERVICES
The Audit Committee has adopted
a Pre-Approval Policy with respect to audit and non-audit services performed by its independent registered public accounting firm.
The following is a summary of the Pre-Approval Policy.
Prior to the commencement of
services for a given year, the Audit Committee will grant pre-approvals of expected services and estimated fees, as presented by
the independent registered public accounting firm. The independent registered public accounting firm will routinely update the
Audit Committee during the year in which the services are performed as to the actual services provided and related fees pursuant
to the Pre-Approval Policy.
Unexpected services or services
for which the fees to be incurred would exceed pre-approved amounts, will require specific approval before the services may be
rendered. Requests or applications to provide such services that require specific approval by the Audit Committee will be submitted
to the Chairman of the Audit Committee by both the Company’s Chief Financial Officer and the independent registered public
accounting firm.
The request or application must
include a statement as to whether, in the view of both the independent registered public accounting firm and the Chief Financial
Officer, such request or application is consistent with the rules of the Securities and Exchange Commission (“SEC”)
regarding auditor independence. Authority to grant approval for such services has been delegated to the Chairman of the Audit Committee
subject to a $100,000 limit for each request, provided that any such approval would then be reviewed by the full Audit Committee
at the next regularly scheduled meeting.
The Audit Committee has determined
that the independence of KPMG has not been adversely impacted as a result of the non-audit services performed by such accounting
firm.
We expect a representative of
KPMG to attend the Annual Meeting. The representative will have an opportunity to make a statement if he or she desires and also
will be available to respond to appropriate questions.
|
|
THE BOARD OF DIRECTORS RECOMMENDS A
VOTE
FOR
RATIFICATION OF THE APPOINTMENT OF KPMG LLP AS THE COMPANY’S INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM FOR 2019.
|
LIVENT
CORPORATION
|
2019
PROXY STATEMENT
8
DIRECTOR QUALIFICATIONS
Directors are selected based
on integrity, successful business experience, stature in their own fields of endeavor and diversity of perspectives they bring
to the Board. Desired attributes of all directors include (i) ability to reach thoughtful, independent and logical judgments on
difficult and complex issues; (ii) demonstrated leadership; (iii) knowledge, experience and skills in areas relevant to the
Company’s lines of business; (iv) objectivity; and (v) willingness and ability to cooperate and engage with other
members of the Board openly and constructively. Directors must also be able to view the issues the Company faces from the stockholders’
perspective and be committed to representing the long-term interests of our stockholders. We also require that our directors be
able to commit the time necessary to ensure the diligent performance of their duties. Our Statement of Governance Principles,
Policies and Procedures requires that following the Trigger Date (as defined therein), a majority of directors must be ‘independent’
within the meaning of the Sarbanes Oxley Act and NYSE Listing Standards.
BOARD DIVERSITY
We believe that maintaining
a diverse Board membership with varying backgrounds, skills, expertise and other differentiating personal characteristics enhances
the quality and diversity of thought in the Board’s deliberations and enables the Board to better represent all of the Company’s
constituents. In seeking candidates who possess diversity of experience, background and perspective, the Nominating and Corporate
Governance Committee casts a wide net and considers candidates whose diversity is based on race, gender, industry experience, type
of position held, and other board experience. In addition to reviewing a candidate’s background and accomplishments, candidates
are evaluated in the context of the current composition of the Board and the evolving needs of the Company.
The professional experience,
qualifications, skills and expertise of each director is set forth below.
NOMINEES FOR DIRECTOR
CLASS I DIRECTORS, NEW TERM EXPIRING IN 2022
|
MICHAEL
F. BARRY
|
|
Age 60
Director
since: 2018
|
|
PRINCIPAL OCCUPATION:
Chief Executive Officer and President of Quaker
Chemical since October 2008 and Chairman of the Board of Quaker since May 2009
Mr. Barry has held leadership
and executive positions of increasing responsibility since joining Quaker in 1998, including Senior Vice President and Managing
Director–North America from January 2006 to October 2008; Senior Vice President and Global Industry Leader–Metalworking
and Coatings from July to December 2005; Vice President and Global Industry Leader–Industrial Metalworking and Coatings from
January 2004 to June 2005; and Vice President and Chief Financial Officer from 1998 to August 2004.
OTHER BOARD EXPERIENCE:
Mr. Barry is a member of
the Board of Directors of Rogers Corporation in addition to serving as Chairman of Quaker Chemical’s Board of Directors.
QUALIFICATIONS:
Mr. Barry’s significant
business experience resulting from senior executive positions in the global chemical industry, and his service as a director of
other public companies, make him a valuable contributor to our Board.
|
LIVENT
CORPORATION
|
2019
PROXY STATEMENT
9
|
STEVEN
T. MERKT
|
|
Age 51
Director
since: 2018
|
|
PRINCIPAL OCCUPATION:
President of the Transportation
Solutions segment at TE Connectivity Ltd., one of the world’s largest suppliers of connectivity and sensor solutions to the
automotive and commercial vehicle marketplaces, since August 2012
Before August 2012, Mr. Merkt
was President of TE’s Automotive business. Since joining TE in 1989, Mr. Merkt has held various leadership positions in general
management, operations, engineering, marketing, supply chain, and new product launches.
OTHER BOARD EXPERIENCE:
Mr. Merkt is a member of
the Board of Directors of the Isonoma Foundation.
QUALIFICATIONS:
Mr. Merkt’s experience
particularly in the automotive and commercial vehicle sectors makes him a valuable contributor to our Board.
|
CONTINUING DIRECTORS
CLASS II DIRECTORS, TERM EXPIRING IN 2020
|
PAUL
W. GRAVES
|
|
Age 47
Director
since: 2018
|
|
PRINCIPAL OCCUPATION:
President, Chief Executive Officer and Director
of Livent
Before joining Livent, Mr.
Graves served as Executive Vice President and Chief Financial Officer of FMC from 2012 to 2018. Mr. Graves previously served as
a managing director and partner in the Investment Banking Division at Goldman Sachs Group in Hong Kong and was the co-head of Natural
Resources for Asia (excluding Japan). In that capacity, he was responsible for managing the company’s Pan-Asian Natural Resources
Investment business. Mr. Graves also served as Global Head of Chemical Investment Banking for Goldman Sachs, which he joined in
2000. Mr. Graves previously held finance and auditing roles of increasing responsibility at Ernst & Young, British Sky Broadcasting
Group, ING Barings and J. Henry Schroder & Co.
QUALIFICATIONS:
Mr. Graves’s in-depth
knowledge of the lithium business, his experience as FMC’s Chief Financial Officer and his financial expertise enables him
to offer valuable insights to our Board of Directors.
|
|
ANDREA
E. UTECHT
|
|
Age 70
Director
since: 2018
|
|
PRINCIPAL OCCUPATION:
Executive Vice President, General Counsel and
Secretary of FMC since January 2011
Ms. Utecht joined FMC in
July 2001 as Chief Legal Officer and served as FMC’s Vice President, General Counsel and Secretary since January 2002. Prior
to joining FMC, Ms. Utecht was Senior Vice President, Secretary and General Counsel of ATOFINA Chemicals, Inc. (now known
as Arkema Inc.). She was with ATOFINA and its predecessor companies for 20 years, including three years as Vice President for acquisitions
and divestitures. Ms. Utecht will be retiring from FMC effective March 31, 2019.
QUALIFICATIONS:
Ms. Utecht’s legal
experience and intimate knowledge of the lithium business make her a significant contributor to the Board of Directors.
|
LIVENT
CORPORATION
|
2019
PROXY STATEMENT
10
CLASS III DIRECTORS, TERM EXPIRING IN 2021
|
PIERRE
BRONDEAU
|
|
Age 61
Director
since: 2018
|
|
PRINCIPAL OCCUPATION:
Chairman, Livent, and CEO and Chairman, FMC
Corporation
Mr. Brondeau joined FMC as
President and Chief Executive Officer in January 2010 and became its Chairman in October 2010. Before joining FMC, Mr. Brondeau
served as President and Chief Executive Officer, Dow Advanced Materials Division, until his retirement in September 2009. Prior
to Dow’s acquisition of Rohm and Haas Company in April 2009, he was President and Chief Operating Officer of Rohm and Haas
from May 2008. Mr. Brondeau held numerous executive positions during his tenure at Rohm and Haas from 1989 through May 2008.
OTHER BOARD EXPERIENCE:
Mr. Brondeau is a member
of the Board of Directors of FMC and TE Connectivity. Until March 2016, Mr. Brondeau served on the Board of Directors of Marathon
Oil Corporation.
QUALIFICATIONS:
Mr. Brondeau’s current
role as CEO and Chairman of FMC, where he was responsible for the Lithium Division, and his former senior executive positions in
the chemical industry, make him an important contributor to the Board of Directors.
|
|
G.
PETER D’ALOIA
|
|
Age 74
Director
since: 2018
|
|
PRINCIPAL OCCUPATION:
Former Managing Director
and member of the Board of Directors of Ascend Performance Materials Holdings, Inc., a producer of Nylon 66 and related chemicals
Mr. D’Aloia served
as Managing Director and a member of the Board of Directors of Ascend Performance Materials Holdings, Inc. from June 1, 2009 until
March 31, 2017. From February 2000 until June 2008, Mr. D’Aloia served as Senior Vice President and Chief Financial Officer
of Trane, Inc. (formerly American Standard Companies, Inc.). Prior to that, he was employed by Honeywell (formerly AlliedSignal
Inc.), a diversified industrial company, most recently serving as Vice President-Strategic Planning and Business Development. He
spent 28 years with AlliedSignal Inc. in diverse management positions, including Vice President-Taxes, Vice President and Treasurer,
Vice President and Controller, and Vice President and Chief Financial Officer for the Engineered Materials sector.
OTHER BOARD EXPERIENCE:
Mr. D’Aloia has served
as a member of the Board of Directors of FMC since 2002 and is also is a member of the Board of Directors of Wabco, Inc. Mr. D’Aloia
served on the Board of Directors of ITT Inc. until May 2017.
QUALIFICATIONS:
Mr. D’Aloia’s
significant financial and business experience resulting from senior executive and financial roles in large manufacturing operations,
and his service as a director of other public companies, make him highly qualified to be a director of the Company.
|
|
ROBERT
C. PALLASH
|
|
Age 67
Director
since: 2018
|
|
PRINCIPAL OCCUPATION:
Retired President, Global
Customer Group and Senior Vice President of Visteon Corporation, an automotive parts manufacturer
From January 2008 until December
2013, Mr. Pallash served as President, Global Customer Group and Senior Vice President of Visteon Corporation, an automotive
parts manufacturer. From August 2005 to January 2008, Mr. Pallash was Senior Vice President, Asia Customer Group for Visteon. He
joined Visteon in September 2001 as Vice President, Asia Pacific. Visteon filed for bankruptcy protection under Chapter 11 of the
U.S. Bankruptcy Code in May 2009 and emerged from bankruptcy in October 2010. Prior to joining Visteon, Mr. Pallash served as President
of TRW Automotive Japan from 1999.
OTHER BOARD EXPERIENCE:
Mr. Pallash has served as
a member of the Board of Directors of FMC since 2008, and he served on the Board of Directors of Halla Climate Controls in South
Korea, a majority-owned subsidiary of Visteon Corporation until December 2013.
QUALIFICATIONS:
Mr. Pallash’s international
experience, particularly in Asia where the Company seeks to grow its business, and his automotive industry experience enable him
to bring significant value as a member of the Board of Directors.
|
LIVENT
CORPORATION
|
2019
PROXY STATEMENT
11
|
IV.
|
INFORMATION ABOUT THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
|
MEETINGS
During 2018, the Board of Directors held four
regular meetings and no telephonic meetings. All incumbent directors attended at least 75% of the total number of meetings of the
Board and all Committees on which they served.
COMMITTEES AND INDEPENDENCE OF DIRECTORS AND
CONTROLLED COMPANY EXCEPTION
The current Board was not
fully constituted until October 10, 2018. Prior to that time the Board was composed entirely of officers of FMC, Livent’s
parent company. Following the IPO and prior to March 1, 2019, the date of the Distribution, the Company was a “controlled
company” within the meaning of the NYSE corporate governance standards, because FMC owned a majority of the common stock
eligible to vote in the election of our directors. Under these governance standards, a company of which more than 50% of the voting
power is held by another company is a “controlled company” and may elect not to comply with certain corporate governance
standards, including the requirements that the board of directors (1) be comprised of a majority of independent directors, (2)
have a compensation committee that is comprised entirely of independent directors with a written charter addressing the committee’s
purpose and responsibilities and (3) have a nominating committee that is comprised entirely of independent directors with a written
charter addressing the committee’s purpose and responsibilities.
Although following the IPO
we have had a majority of independent directors, our Nominating and Corporate Governance Committee and our Compensation and Organization
Committee have not consisted entirely of independent directors, as permitted by NYSE’s rules for controlled companies. Since
we ceased to be a “controlled company” on March 1, 2019, we will comply with all applicable NYSE requirements concerning
the independence of our board committees within the one-year transition period permitted by the NYSE.
The Board has affirmatively
determined that each of Messrs. Barry, D’Aloia, Merkt and Pallash meets the NYSE rules regarding independence and has no
relationship with the Company that would interfere with the exercise of independent judgment in carrying out the responsibilities
of a director.
The Board of Directors has
five standing Committees: an Audit Committee, a Compensation and Organization Committee, a Nominating and Corporate Governance
Committee, an Executive Committee and a Sustainability Committee. The Audit Committee is entirely composed of independent directors
as determined by the Board on the basis set forth above. A majority of the members on each of the Compensation and Organization
Committee and Nominating and Corporate Governance Committee are also independent on the basis set forth below.
AUDIT COMMITTEE
The Board of Directors has
adopted a written charter that outlines the duties of the Audit Committee, including conducting an annual self- assessment. A current
copy of the Charter is posted on the Company’s website, as described in the section below entitled “Corporate Governance
Documents”. The principal duties of this Committee, among other things, include:
|
|
■
|
Review the effectiveness and adequacy of
the Company’s internal controls
|
|
|
■
|
Review the annual report, proxy statement
and periodic SEC filings such as the Company’s reports on Form 10-K and 10-Q, including Management’s Discussion and
Analysis, and ensure that the Company’s financial reports fairly represent its operations
|
|
|
■
|
Review the effectiveness, scope and performance
of activities of the independent registered public accounting firm and the internal auditor function
|
|
|
■
|
Review significant changes in accounting
policies
|
|
|
■
|
Select the independent registered public
accounting firm and confirm its independence
|
|
|
■
|
Review potentially significant litigation
|
LIVENT
CORPORATION
|
2019
PROXY STATEMENT
12
|
|
■
|
Review federal income tax issues
|
|
|
■
|
Review environmental matters
|
|
|
■
|
Review the Company’s policies with
respect to risk assessment and risk management
|
|
|
■
|
Review with management the Company’s
earnings releases
|
|
|
■
|
Monitor the Company’s compliance
with legal and regulatory requirements
|
|
|
■
|
Pre-approve audit and non-audit services
provided by the independent registered public accounting firm
|
Members:
Mr. Barry
(Chair), Mr. D’Aloia, and Mr. Merkt. The Board of Directors has determined that each member of the Audit Committee is “independent”
as defined by SEC and NYSE rules, meets the SEC requirements for an “audit committee financial expert” and is “financially
literate” as required by the NYSE. The Board has also determined that no current Audit Committee member sits on the audit
committee of more than three public companies.
Number of Meetings in 2018: two.
COMPENSATION AND ORGANIZATION COMMITTEE
The Board of Directors has
adopted a written charter that outlines the duties of the Compensation and Organization Committee (the “Compensation Committee”),
including conducting an annual self-assessment. A current copy of the Charter is posted on the Company’s website, as described
in the section below entitled “Corporate Governance Documents”.
The principal duties of this
Committee include, among other things:
|
|
■
|
Review and approve compensation policies
and practices for senior executives
|
|
|
■
|
Review and approve corporate goals and
objectives relevant to the compensation of the Chief Executive Officer and the other executive officers
|
|
|
■
|
Review as necessary the Company’s
compensation programs, policies and practices with respect to risk assessment
|
|
|
■
|
Review performance and establish the total
compensation for the Chief Executive Officer and other senior executives
|
|
|
■
|
Approve issuances of equity and other incentive
awards to the Chief Executive Officer and other executive officers
|
|
|
■
|
Administer the Company’s Incentive
Compensation and Stock Plan and determine whether to authorize any delegation permitted under the plan
|
|
|
■
|
Review significant organizational changes
and management succession planning
|
|
|
■
|
Recommend to the Board of Directors candidates
for officers of the Company
|
|
|
■
|
Review the terms of employment agreements,
severance agreements, change in control agreements and other compensatory arrangements for senior executives
|
|
|
■
|
Conduct an annual self-assessment
|
|
|
■
|
Oversee evaluation of management performance
and development
|
|
|
■
|
Review executive stock ownership guidelines
and oversee clawback, hedging, and pledging policies
|
|
|
■
|
Once the Company is no
longer an “emerging growth company,” as defined in the federal securities laws, review the Compensation Discussion
and Analysis and based on such review, recommend to the Board of Directors that it be included in the annual proxy statement
|
|
|
■
|
Once
the Company is no longer an “emerging growth company,” review stockholder votes and other input on executive compensation
practices and independently determine if any changes are necessary
|
|
|
■
|
Prepare
the Compensation Committee Report to be included in the Company’s annual proxy statement or Form 10-K, if required
|
Members:
Mr. Brondeau (Chair), Mr.
Merkt and Mr. Pallash. The Board of Directors has determined that each of Messrs. Merkt and Pallash is independent as defined by
NYSE rules.
Number of Meetings in
2018: one.
NOMINATING AND CORPORATE GOVERNANCE COMMITTEE
The role and responsibilities
of the Nominating and Corporate Governance Committee are set forth in the Statement of Governance Principles, Policies and Procedures
adopted by our Board of Directors. A current copy of this document is posted on the Company’s website, as described in the
section below entitled “Corporate Governance Documents”. The principal duties of this Committee, among other things,
include:
|
|
■
|
Review and recommend candidates for director
|
|
|
■
|
Review, recommend and prioritize criteria
for Board of Directors composition
|
|
|
■
|
Recommend Board of Directors meeting formats
and processes
|
|
|
■
|
Recommend the number, function, composition
and Chairmen of Board of Directors’ Committees
|
|
|
■
|
Oversee corporate governance, including
an annual review of governance principles
|
|
|
■
|
Review and approve director compensation
policies, including the determination of director compensation
|
|
|
■
|
Oversee
Board of Directors and Committee evaluation procedures
|
|
|
■
|
Determine
director independence
|
|
|
■
|
Recommend whether to accept or reject a
director resignation or take other action, where a director has failed to receive a majority of votes cast in an uncontested director
election
|
Members:
Ms. Utecht
(Chair), Mr. Barry, and Mr. D’Aloia. The Board of Directors has determined that each of Messrs. Barry and D’Aloia is
independent as defined by NYSE rules.
Number of Meetings in
2018: none.
LIVENT
CORPORATION
|
2019
PROXY STATEMENT
13
EXECUTIVE COMMITTEE
The Executive Committee will act in place of the
Board of Directors when the full Board of Directors is not in session.
Members:
Mr. Brondeau (Chair), Mr. D’Aloia,
and Mr. Graves.
Number of Meetings in 2018: none.
SUSTAINABILITY COMMITTEE
The Board of Directors has
adopted a written charter that outlines the duties of the Sustainability Committee, including conducting an annual self-assessment.
A current copy of the Charter is posted on the Company’s website, as described in the section below entitled “Corporate
Governance Documents”. The Committee’s scope will encompass safety, environmental and sustainability programs of the
Company and its principal duties include:
|
|
■
|
Monitor the Company’s Sustainability
Program, including program development and advancement, goals and objectives, and progress toward achieving those objectives
|
|
|
■
|
Employee occupational safety and health,
and process safety programs
|
|
|
■
|
Environmental responsibility
|
|
|
■
|
Programs
with regard to the American Chemistry Council’s Responsible Care
®
initiative
|
Members:
Mr. Pallash (Chair), Mr. Brondeau, and Ms. Utecht.
Number of Meetings in
2018: none.
DIRECTOR WHO PRESIDES OVER EXECUTIVE SESSIONS
In accordance with the Livent
Corporation Statement of Governance Principles, Policies and Procedures, the non-employee members of the Board of Directors meet
in regularly scheduled executive sessions without management. These ‘outside director only’ sessions shall be led by
the Chairman of the Board, unless the positions of Chairman of the Board and Chief Executive Officer are not held by separate individuals,
in which case these sessions shall be led by the Lead Director.
DIRECTOR COMPENSATION
COMPENSATION POLICY
The Company maintains
the Livent Corporation Compensation Policy for Non-Employee Directors (“Director Compensation Policy”) to provide
for the compensation described below. The Board administers the Director Compensation Policy. Competitive market data on
director pay levels and design practices are prepared by and reviewed with the Company’s consultant, Aon. The Director
Compensation Policy is not applicable to directors who are also employees of the Company or its affiliates. Accordingly, Mr.
Graves, our CEO, and both Mr. Brondeau and Ms. Utecht, each of whom are executives of FMC, received no additional
compensation for their service as a director in 2018. However, following the Distribution, the Company is no longer an
affiliate of FMC, and Ms. Utecht and Mr. Brondeau will be entitled to be compensated the same as other non-employee directors
pursuant to the Director Compensation Policy. Effective March 31, 2019, Ms. Utecht will be retiring from her position at
FMC.
For a description of the
compensation paid to Mr. Graves for his service during 2018 as our CEO, see below under the heading “Executive Compensation”.
For a description of the compensation paid to Mr. Brondeau and Ms. Utecht with respect to their service during 2018 as FMC executives,
see the proxy statement filed by FMC with the SEC on or about March 22, 2019, which is available at https://www.sec.gov/edgar/searchedgar/companysearch.html.
RETAINER AND FEES
Currently, each non-employee
director is paid an annual retainer of $75,000 or a pro rata amount for any portion of a year served. The retainer is paid in quarterly
installments in cash, unless, for years after 2018, the director elects to receive all or part of it in restricted stock units
(or “RSUs”). Restricted stock units granted in lieu of an annual cash retainer are awarded on May 1 of the relevant
calendar year, and are subject to forfeiture on a pro rata basis if the director does not serve for the full year in respect of
which the retainer is paid. The forfeiture condition is waived in the event of a change in control of the Company or if the director’s
service ceases due to his or her death or disability. Each director who chairs a committee is paid an additional $10,000 per year
except
LIVENT
CORPORATION
|
2019
PROXY STATEMENT
14
the Chairman of the Compensation
Committee is paid an additional $15,000 per year, and the Chairman of the Audit Committee is paid an additional $20,000 per year.
Audit Committee members (other than the Chairman of the Audit Committee) also receive an additional $5,000 annual retainer. The
non-executive Chairman is entitled to an additional $20,000 annual retainer. All such annual retainer, committee and Chairman payments
are paid quarterly.
ANNUAL GRANT OF RESTRICTED STOCK UNITS
Each non-employee director
will also receive an annual grant of restricted stock units on May 1 of each calendar year having a value of $90,000 on the date
of grant. In 2018, each non-employee director serving on the Board at the completion of the IPO received a one-time initial award
of restricted stock units valued at $47,344 on the date of grant. This number represented a pro-rated portion of the $90,000 annual
grant of restricted stock units, calculated with respect to the directors’ service on the Board between the IPO and May 1,
2019 (“IPO Director Awards”).
The IPO Director Awards and
subsequent annual grants will vest at the annual meeting of stockholders held in the year following the date of grant or, if sooner,
upon a change in control of the Company. In addition, the restricted stock units will vest on a pro rata basis if the director
dies before the annual meeting at which the units would have otherwise vested.
PAYMENT OF VESTED RESTRICTED STOCK UNITS
A director is permitted to
specify, prior to the year in which the restricted stock units are credited, the date upon which he or she wishes to receive payment
in Common Stock of any vested restricted stock units. In the absence of an election, payment will be made upon the earlier of a
director’s cessation of service on the Board or a change in control of Livent. The directors’ ability to sell any distributed
shares remains subject to the restrictions of the Company’s Director Stock Ownership Policy, which policy is described below.
OTHER COMPENSATION
Non-employee directors also
receive dividend equivalent rights on all restricted stock units awarded as part of their annual retainers and on any vested restricted
stock units awarded as an annual grant. Such dividend equivalent rights are credited in the form of additional restricted stock
units equal in value to the cash dividends paid to stockholders. No other remuneration is paid to non-employee directors for services
as a director of the Company. Non-employee directors do not participate in the Company’s nonqualified deferred compensation
plan or employee benefit plans. The Company supports the charitable donations of directors under its matching gifts plan that provides
a dollar-for-dollar match of gifts up to $15,000 per year to certain educational institutions, arts and cultural organizations,
and conservation and civic organizations.
DIRECTOR STOCK OWNERSHIP POLICY
The Company has established
guidelines setting expectations for the ownership of Company stock by non-employee directors. The Director Stock Ownership Policy
requires that within 5 years of being elected to the Board, each non-employee director hold a minimum of five times the value of
the annual cash retainer (the “ownership requirement”), currently $375,000. For this purpose, undistributed shares
underlying restricted stock units (both vested and non-vested) are considered “held” by a director. A director has
five years from the date of his or her election to the Board to achieve compliance with the ownership requirement. However, even
during the initial five-year phase-in period, directors are not permitted to sell shares of Common Stock, other than to satisfy
tax liabilities triggered by Company equity grants, unless they will be in compliance with the ownership requirement (calculated
on the then current annual cash retainer) immediately following any sale of Common Stock. Compliance with the ownership requirement
is measured at the time of any proposed sale or disposition of shares of Common Stock by a director, and after the initial five
year phase-in period, on December 31 of each year.
LIVENT
CORPORATION
|
2019
PROXY STATEMENT
15
DIRECTOR COMPENSATION TABLE 2018
The table below shows the
total compensation paid to each non-employee director who served on the Board during 2018.
|
Name(a)
|
|
Fees Earned or
Paid in Cash
($)(b)
|
|
Stock Awards
(1)
($)(c)
|
|
All Other
Compensation
($)(d)
|
|
Total
($)(e)
|
|
Pierre Brondeau
|
|
–
|
|
–
|
|
–
|
|
–
|
|
G. Peter D’Aloia
(2)
|
|
22,356
|
|
47,344
|
|
–
|
|
69,700
|
|
Michel Barry
|
|
26,548
|
|
47,344
|
|
–
|
|
73,892
|
|
Steven Merkt
|
|
22,356
|
|
47,344
|
|
–
|
|
69,700
|
|
Robert C. Pallash
(2)
|
|
23,753
|
|
47,344
|
|
–
|
|
71,097
|
|
Andrea E. Utecht
|
|
–
|
|
–
|
|
–
|
|
–
|
|
(1)
|
The amounts in Column (c) reflect the grant date fair value of directors’ stock awards for 2018 computed in accordance with FASB ASC Topic 718. See Note 12 to the consolidated and combined financial statements contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 for the assumptions used in the valuations that appear in this column. The grant date for the IPO Director Awards was October 15, 2018 and 2,959 RSUs were granted to the non-employee directors on that date. The aggregate number of restricted stock units outstanding at fiscal year-end for each of Messrs. D’Aloia, Barry, Merkt, and Pallash, was 2,959 RSUs.
|
|
(2)
|
Messrs. D’Aloia and Pallash also served as non-employee directors of FMC during 2018 and received the following compensation from FMC in their capacity as such:
|
FMC CORPORATION DIRECTOR COMPENSATION
TABLE 2018
|
Name(a)
|
Fees Earned or
Paid in Cash
($)(b)
|
Stock Awards
($)(c)
|
All Other
Compensation
($)(d)
|
Total
($)(e)
|
|
G. Peter D’Aloia
|
113,333
|
130,040
|
15,044
|
258,417
|
|
Robert C. Pallash
|
105,000
|
130,040
|
20,575
|
255,615
|
CORPORATE GOVERNANCE
COMMUNICATING WITH THE BOARD
Stockholders may communicate
with the Board of Directors, the Chairman of the Compensation and Organization Committee, or any other individual member of the
Board as follows: Communications must be in writing, sent care of the Corporate Secretary, Livent Corporation, FMC Tower at Cira
Centre South, 2929 Walnut Street, Philadelphia, PA 19104. All communications will be delivered as addressed.
DIRECTOR NOMINATION PROCESS
The Nominating and Corporate
Governance Committee is responsible for seeking, screening and recommending to the Board, candidates for Board membership. An executive
search firm may also be utilized to identify qualified candidates for consideration. The Nominating and Corporate Governance Committee
evaluates candidates based on the qualifications for director described in its Charter and summarized in the section above entitled
“Director Qualifications.” The Nominating and Corporate Governance Committee then presents qualified candidates to
the full Board of Directors for consideration and selection. The Nominating and Corporate Governance Committee will consider nominees
for election to the Board that are recommended by stockholders, applying the same criteria for candidates as discussed above, provided
it is timely made and that the other information specified in the By-Laws, accompanies the stockholder’s recommendation.
Any stockholder is entitled to directly nominate one or more candidates for election to the Board of Directors in accordance with
the Company’s By-Laws. Notice of a stockholder’s intent to nominate one or more candidates for election as directors
at the 2020 Annual Meeting must be delivered to the Company at the address set forth below, not later than February 3, 2020. All
nominations, together with the additional information required by the Company’s By-Laws, must be sent to the Corporate Secretary,
FMC Corporation, FMC Tower at Cira Centre South, 2929 Walnut Street, Philadelphia, PA 19104. A copy of the Company’s By-Laws
may be obtained by writing to the Corporate Secretary at the same address. The Board reserves the right not to include such nominees
in the proxy statement.
LIVENT
CORPORATION
|
2019
PROXY STATEMENT
16
ANNUAL PERFORMANCE REVIEW
The Nominating and Corporate
Governance Committee annually surveys all Directors for evaluation of Board and Committee performance overall and in specific areas
of responsibility in accordance with the Company’s Statement of Governance Principles, Policies and Procedures.
The Board and Committees
perform annual self-evaluations of their performance. A lengthy questionnaire is sent to each director covering several topics,
including Board structure and composition (and what additional skills, if any, may be needed), preparation of members and whether
they stay abreast of issues, understanding of Company strategy, whether expectations and concerns are adequately communicated to
the CEO, CEO succession planning procedures, performance of committees, and length and content of Board meetings. Each Committee
member also completes a shorter questionnaire assessing the performance of his or her Committee.
After obtaining written responses
to the questionnaires, the Corporate Secretary conducts a telephone interview with each director to elicit elaboration of views
expressed and any other issues the director wishes to discuss. A written report summarizing the responses from the questionnaires
and the telephone interviews is presented to the Nominating and Corporate Governance Committee to determine whether any action
is required, with a copy of the report also going to the full Board. Individual responses remain anonymous to ensure complete candor.
Any concern or issue with
regard to an individual director’s performance would be reviewed with the Chairman of the Nominating and Corporate Governance
Committee for discussion with the director and any further action. The Board is committed to ensuring that its members maintain
the necessary skills, qualifications, experience and diversity, and the Board will continue to consider and implement changes to
the composition of the Board in light of its annual performance evaluations.
RETIREMENT/RESIGNATION POLICY FOR DIRECTORS
Our Statement of Governance
Principles, Policies and Procedures provides that a range in director age is desirable to allow staggered retirement and replacement
of desired skills on a planned basis with appropriate continuity.
In accordance with our majority
voting standard for the election of directors in uncontested elections, incumbent director nominees are required to tender a contingent
resignation which would become effective if (i) the nominee does not receive a majority of the votes cast with respect to his or
her election at any meeting of stockholders at which directors are being elected and (ii) the Board accepts such resignation.
Non-employee directors are
expected to submit their resignation from the Board upon termination of active service as an employee or a significant change in
responsibilities, unless requested by the Board to continue as a Board member for an agreed period.
Employee directors, specifically
including the Company’s Chief Executive Officer, are expected to retire from the Board simultaneous with retirement from
the Company unless requested by the Board to continue as a Board member for an agreed period.
ATTENDANCE AT ANNUAL MEETINGS
The Company’s policy is that all directors
are expected to attend the annual meeting of stockholders.
STOCKHOLDER PROPOSALS FOR THE 2020 ANNUAL MEETING
Stockholders may make proposals
to be considered at the 2020 Annual Meeting. In order to make a proposal for consideration at the 2020 Annual Meeting, a stockholder
must deliver notice to the Company at the address set forth below, containing certain information specified in the By-Laws, not
less than 60 or more than 90 days before the date of the meeting. However, if the Company provides public disclosure of the date
of the 2020 Annual Meeting less than 70 days in advance of the meeting date, then the deadline for the stockholder’s notice
and other required information is 10 days after the date of the Company’s notice or public disclosure of the date of the
2020 Annual Meeting.
In addition to being able
to present proposals for consideration at the 2020 Annual Meeting, stockholders may also be able to have their proposals included
in the Company’s proxy statement and form of proxy for the 2020 Annual Meeting. In order to have a stockholder proposal included
in the proxy statement and form of proxy, the proposal must be delivered to the Company at the address set forth below not later
than November 23, 2019, and the stockholder must otherwise comply with applicable SEC requirements. If the stockholder complies
with these requirements for inclusion of a proposal in the Company’s proxy statement and form of proxy, the stockholder need
not comply with the notice requirements described in the preceding paragraph.
A copy of the Company’s
By-Laws may be obtained by writing to the Corporate Secretary, and all notices referred to above must be sent to the Corporate
Secretary, FMC Corporation, FMC Tower at Cira Centre South, 2929 Walnut Street, Philadelphia, PA 19104.
LIVENT
CORPORATION
|
2019
PROXY STATEMENT
17
CORPORATE GOVERNANCE DOCUMENTS
The Company’s website
is located at www.livent.com. The following corporate governance documents are posted on the Investor Relations page of the website
under Corporate Governance Guidelines:
|
|
■
|
Audit Committee Charter
|
|
|
■
|
Compensation and Organization Committee
Charter
|
|
|
■
|
Livent Statement of Governance Principles,
Policies and Procedures (This document includes both the Nominating and Corporate Governance Committee Charter and the Company’s
Corporate Governance Principles.)
|
|
|
■
|
Sustainability Committee
Charter
|
BOARD LEADERSHIP STRUCTURE
The positions of Chairman
of the Board and Chief Executive Officer of the Company are separate. Mr. Brondeau serves as Chairman of the Board and Mr. Graves
serves as our Chief Executive Officer and President. Our Corporate Governance principles provide that the Board should consider
the issue of separation of the Chairman and Chief Executive Officer positions under the circumstances prevailing from time to time.
When the positions are not separate, a Lead Director shall be appointed. The responsibilities of the Lead Director under this structure
would include: serving as the liaison between the Chairman and the non-employee directors, reviewing, advising on or approving
information sent to the Board, approving meeting agendas and schedules, calling meetings of the non-employee directors, serving
as a member of the Executive Committee, and presiding at all meetings at which the Chairman is not present, including executive
sessions of the non-employee directors.
BOARD’S ROLE IN OVERSEEING THE RISK MANAGEMENT
PROCESS
As part of the Company’s
risk management process, the Board regularly discusses with management the Company’s major risk exposures, their potential
financial impact on the Company, and the steps the Company takes to manage them. The Board also reviews the designation of the
management person or entity responsible for managing such risks, and evaluates the steps being taken to mitigate the risks. The
Board’s monitoring role is carried out by either the full Board or a Committee that reports to the Board, depending on the
risk in question. The Board has determined that a separate Risk Committee is not warranted at this time.
CODE OF ETHICS AND BUSINESS CONDUCT POLICY
The Company has a Code of
Ethics and Business Conduct policy that applies to all directors, officers (including its Chief Executive Officer, Chief Financial
Officer and Controller) and employees. It is posted on the Investor Relations page of the Company’s website at www.livent.com.
The Company intends to post any amendments to, or waivers from, the Policy required to be disclosed by either SEC or NYSE regulations
on the Corporate Governance Guidelines section of the Investor Relations page of the Company’s website.
COMPENSATION AND
ORGANIZATION COMMITTEE INTERLOCKS AND INSIDER
PARTICIPATION
During the last fiscal year,
Messrs. Brondeau, Merkt and Pallash served as members of the Compensation Committee. Each of Messrs. Merkt and Pallash have been
determined by the Board to be independent on the basis described in the above section entitled “Committees and Independence
of Directors”. None of the members listed above has been an officer or employee of the Company, and no executive officer
of the Company has served as a member of a compensation committee (or if no committee performs that function, the board of directors)
of any other entity that has an executive officer serving as a member of our Board of Directors.
Mr. Brondeau is the Chief
Executive Officer and Chairman of the Board of Directors of FMC. For a description of our agreements with FMC, see below under
the heading “Related Party Transactions Policy—Agreements with FMC.”
RELATED PARTY TRANSACTIONS POLICY
The Board of Directors Statement
of Policy with respect to Related Party Transactions sets forth the Company’s position and procedures with respect to review,
approval or ratification of related party transactions, including the types of transactions addressed by the Policy.
Under the
Policy, “Related Parties” are defined to include executive officers and directors of the Company and their immediate
family members, a stockholder owning in excess of 5% of the Company (or its controlled affiliates), and entities in which any of
the foregoing have a substantial ownership interest or control.
LIVENT
CORPORATION
|
2019
PROXY STATEMENT
18
With respect to any transaction
where a related party receives a benefit equal to or in excess of a de minimis amount of $5,000 (when aggregated with all similar
transactions) the Policy requires that the transaction be pre-approved (or, if equal to or less than $120,000, ratified) by the
Audit Committee and disclosed where required by SEC rules. During the period that the Company was a “controlled company”
as described on page 12, all Related Party Transactions between the Company and FMC were subject to review and approval or ratification
by those members of the Audit Committee who are both independent and not FMC-affiliated directors. The Policy also provides that
any related party (other than FMC, a director who serves as an officer or director of FMC or an otherwise unaffiliated 5% shareholder)
who is presented with a “corporate opportunity” within the Company’s line of business, must first offer that
opportunity to the Company.
Notwithstanding the foregoing,
in the case of an ordinary course of business transaction between the Company and an entity of which a potential director nominee
of the Company is an executive officer or significant stockholder of the entity, provided the director does not otherwise have
a material interest in the transaction, the Policy provides a different standard for the review and approval of transactions that
involve payments in any year to or from the Company in excess of either: (i) 1% of the Company’s consolidated revenues for
the most recently completed fiscal year or (ii) the greater of $1 million or 1% of the other entity’s consolidated revenues
for the most recently completed fiscal year. If the transaction does not exceed the above-mentioned thresholds (and the director
does not have a material interest in the transaction), the transaction will be reviewed by the Nominating and Corporate Governance
Committee as part of its review of director independence. If the director does have a material interest in the transaction, regardless
of whether the above-mentioned thresholds are exceeded, the transaction must be approved or ratified by the Audit Committee in
accordance with the preceding paragraph.
In the event of an ordinary
course of business transaction that exceeds the above-mentioned thresholds associated with prospective directors, review and approval
by the Audit Committee must occur prior to the director’s election, provided that the foregoing does not apply to FMC-affiliated
directors who were members of the Board upon consummation of the IPO. After approval or ratification, in each case the director
will provide updated information at least annually on the aggregate payments involved in the transaction. This information will
be reviewed by the Nominating and Corporate Governance Committee in connection with its review of directors’ independence.
If the aggregate amounts involved in the transaction exceed the thresholds noted above, the Audit Committee shall be required again
to review and ratify the transaction.
The Related Party Transactions
Policy does not apply to transactions available to all employees generally and transactions involving solely matters of executive
compensation.
AGREEMENTS WITH FMC
Prior to the completion of
the IPO, through a series of steps, FMC transferred to us substantially all of the assets and liabilities of its lithium business
(“Lithium Business”). In exchange, we issued or transferred to FMC all of issued and outstanding shares of our capital
stock. Following the completion of the IPO, FMC beneficially owned approximately 84% of our outstanding common stock.
In connection with the IPO
and the separation of the Company into a publicly traded company, the Company and FMC entered into certain agreements to provide
a framework for the Company’s ongoing relationship with FMC. Of the agreements summarized below, the material agreements
are filed as exhibits to the Company’s Annual Report on Form 10-K, filed with the SEC on February 28, 2019. These summaries
are qualified in their entirety by reference to the full text of such agreements.
SEPARATION AND DISTRIBUTION AGREEMENT
We entered into a separation
and distribution agreement with FMC immediately prior to the completion of the IPO that, together with the other agreements summarized
below, governs the relationship between FMC and us following the IPO. The separation and distribution agreement generally allocates
assets and liabilities to us and FMC according to the business to which such assets or liabilities relate. In particular, the separation
and distribution agreement provides, among other things, that, subject to the terms and conditions contained therein: (1) all of
the assets primarily related to the businesses and operations of FMC’s Lithium Business were transferred to us or one of
our subsidiaries; and (2) certain liabilities (whether accrued, contingent or otherwise and regardless of whether arising or accruing
before, on or after the consummation of the IPO) related to or arising out of the businesses and operations of FMC’s Lithium
Business were retained by or transferred to us or one of our subsidiaries.
TRANSITION SERVICES AGREEMENT
We entered into a transition
services agreement to provide each other, on a transitional basis, certain administrative, human resources, treasury and support
services and other assistance, each in a manner and scope generally consistent with the services provided by the parties to each
other before our separation from FMC. Pursuant to the transition services agreement, FMC provides certain support services to us.
Services are provided on a cost-plus basis. During the fiscal year ended December 31, 2018, we paid approximately $2.3 million
to FMC. The transition services agreement was amended on March 1, 2019.
SHAREHOLDERS’ AGREEMENT
We entered into a shareholders’
agreement with FMC immediately prior to the completion of the IPO that governs the relationship between us and FMC as our former
parent company. The shareholders’ agreement provides, among other things, that
LIVENT
CORPORATION
|
2019
PROXY STATEMENT
19
during the 12-month period
following the date FMC ceased to hold a majority of our common stock, neither the Company nor FMC will solicit, aid, induce or
encourage any employee of the other to leave his or her employment or hire any such employee, subject to customary exceptions.
We have also agreed that, for so long as FMC is required to consolidate our results of operations and financial position or account
for its investment in our company under the equity method of accounting, we will, among other things, cooperate with FMC in the
preparation of audited financial statements and quarterly financial statements, not change our independent auditors without FMC’s
prior written approval, use our reasonable best efforts to enable our independent auditors to complete their audit of our financial
statements in a timely manner so as to permit timely filing of FMC’s financial statements, and consult with FMC regarding
the timing and content of our earnings releases and cooperate fully with FMC in connection with any of its public filings. In addition
we and FMC are obligated to provide each other access to information of the other, subject to certain limitations and confidentiality
obligations.
TAX MATTERS AGREEMENT
We entered into a tax matters
agreement that governs the parties’ respective rights, responsibilities and obligations with respect to taxes, including
taxes arising in the ordinary course of business, and taxes, if any, incurred as a result of any failure of the Distribution (or
certain related transactions) to qualify as tax-free for U.S. federal income tax purposes. The tax matters agreement also sets
forth the respective obligations of the parties with respect to the filing of tax returns, the administration of tax contests and
assistance and cooperation on tax matters. Under the tax matters agreement, FMC generally will be responsible for all of our income
taxes that are reported on combined tax returns with FMC or any of its affiliates for tax periods ending on or before December
31, 2017. At December 31, 2018, we have obligations to our parent affiliate, FMC, for approximately $16.9 million related to income
taxes payable to certain tax jurisdictions and $4.6 million for payments made by FMC on Livent’s behalf related to the separation
of Livent from FMC. In addition, at December 31, 2018, we have recorded a $3.1 million indemnification liability to FMC for assets
where the offsetting uncertain tax position is with FMC and a $3.0 million indemnification asset from FMC regarding uncertain tax
positions that are related to our legacy business before the IPO and for which we are indemnified by FMC. We will generally be
responsible for all other income taxes, that would be applicable to us if we filed the relevant returns on a standalone basis,
and all non-income taxes attributable to our business.
REGISTRATION RIGHTS AGREEMENT
We entered into a registration
rights agreement with FMC immediately prior to the completion of the IPO, pursuant to which we agreed that, upon the request of
FMC, we would use our reasonable best efforts to effect the registration under applicable federal and state securities laws of
any shares of our common stock retained by FMC following the IPO. Our obligations under the registration rights agreement were
effectively terminated upon completion of the Distribution.
EMPLOYEE MATTERS AGREEMENT
We entered into an employee
matters agreement with FMC immediately prior to the completion of the IPO that governs the relationship between us and FMC with
respect to employment, compensation and benefits matters. Upon the closing of the IPO, except as otherwise expressly provided in
the employee matters agreement, we generally assumed responsibility for all employment, compensation and benefits-related liabilities
relating to our employees (whether active or inactive) and former employees who were last actively employed primarily in FMC’s
Lithium Business, whom we collectively refer to as “Lithium Employees,” regardless of whether such liabilities arise
before, on or after the closing of the IPO.
Except as otherwise provided
in the employee matters agreement, effective as of January 1, 2019 (or, in the case of Lithium Employees located outside of the
United States, the date of the closing of the IPO), which we refer to as the “Benefits Commencement Date,” Lithium
Employees are eligible to participate in compensation and benefit plans established by us or one of our subsidiaries, and such
plans will generally recognize all service for FMC and its affiliates prior to the applicable Benefits Commencement Date for purposes
of eligibility, vesting and benefit accruals. However, such service will not be recognized to the extent that such recognition
would result in a duplication of benefits. The employee matters agreement was amended and restated on February 4, 2019.
TRADEMARK LICENSE AGREEMENT
We entered into a Trademark
License Agreement pursuant to which FMC granted to us a non-exclusive, worldwide, royalty free license to use the “FMC”
word mark and related logos (which we refer to as the “Licensed Trademarks”) for a period ending two years after the
date of the Distribution solely in connection with any product or service of the Lithium Business as conducted as of the date of
our separation from FMC.
LIVENT
CORPORATION
|
2019
PROXY STATEMENT
20
|
V.
|
SECURITY OWNERSHIP OF LIVENT CORPORATION
|
MANAGEMENT OWNERSHIP
The following table
shows, as of March 11, 2019, the number of shares of Common Stock beneficially owned by each current director or nominee for director,
the executive officers named in the Summary Compensation Table, and all current directors, nominees for director and executive
officers as a group. Each director or nominee and each executive officer named in the Summary Compensation Table (“NEOs”)
beneficially owns less than one percent of the Common Stock.
|
|
Beneficial Ownership
|
|
|
|
|
on March 11, 2019
|
|
|
|
Name
|
Livent Common Stock
|
|
Percent of Class
|
|
Paul W. Graves
(1)
|
322,943
|
|
*
|
|
Gilberto Antoniazzi
(1)
|
34,760
|
|
*
|
|
Thomas Schneberger
(1)
|
6,912
|
|
*
|
|
Pierre Brondeau
(2)
|
270,245
|
|
*
|
|
Michael F. Barry
(2)
|
28,959
|
|
*
|
|
G. Peter D’Aloia
(2)
|
149,417
|
|
*
|
|
Steven T. Merkt
(2)
|
3,459
|
|
*
|
|
Robert C. Pallash
(2)
|
34,524
|
|
*
|
|
Andrea E. Utecht
(2)
|
104,455
|
|
*
|
|
All current directors and executive officers
as a group—10 persons
(1)(2)
|
955,674
|
|
*
|
|
|
|
|
*
|
Less than one percent of class
|
|
|
|
|
(1)
|
Shares “beneficially owned” include: (i) shares
owned or controlled by the individual; (ii) shares held in the Livent Nonqualified Savings Plan for the account of the individual;
and (iii) shares subject to options that are exercisable within 60 days of March 11, 2019 (253,747 for Mr. Graves, 27,715
for Mr. Antoniazzi, 0 for each of Mr. Schneberger and Ms. Ponessa, and 281,462 for all executive officers as
a group).
|
|
|
|
|
(2)
|
Shares “beneficially owned” include: (i) shares
owned or controlled by the individual; (ii) shares held in the FMC Corporation Savings and Investment Plan for the account
of the individual; and (iii) restricted stock units that are vested as of March 11, 2019 or that will vest within 60 days
thereafter (2,959 for each of Messrs. Barry and Merkt, 0 for Mr. Brondeau, 26,642 for Mr. D’Aloia, 34,524
for Mr. Pallash, 8,885 for Ms. Utecht, and 75,969 for all directors as a group). Directors have no power to vote
or dispose of shares represented by restricted stock units until the shares are distributed and, until such distribution,
directors have only an unsecured claim against the Company.
|
LIVENT
CORPORATION |
2019
PROXY
STATEMENT
21
OTHER SECURITY OWNERSHIP
Based on available information, the persons
listed below beneficially own more than five percent of the Company’s outstanding shares of Common Stock as of March 11,
2019:
|
|
|
Amount and Nature
|
|
|
|
|
|
of Beneficial
|
|
|
|
Name and Address of Beneficial Owner
|
|
Ownership
|
|
Percent of Class
|
|
The Vanguard Group, Inc.
|
|
|
|
|
|
100 Vanguard Boulevard
|
|
|
|
|
|
Malvern, PA 19355
|
|
13,716,862
|
(1)
|
9.40%
|
|
Glenview Capital Management, LLC and Larry Robbins
|
|
|
|
|
|
767 Fifth Avenue, 44
th
Floor
|
|
|
|
|
|
New York, NY 10153
|
|
11,844,047
|
(2)
|
8.11%
|
|
BlackRock, Inc.
|
|
|
|
|
|
55 East 52
nd
Street
|
|
|
|
|
|
New York, NY 10055
|
|
8,683,370
|
(3)
|
5.95%
|
|
Wellington Management Group LLP
|
|
|
|
|
|
280 Congress Street
|
|
|
|
|
|
Boston, MA 02210
|
|
7,538,334
|
(4)
|
5.16%
|
|
|
|
|
(1)
|
Based on the number of shares of common stock
of FMC Corporation reported as beneficially owned pursuant to a Schedule 13G/A filing dated February 11, 2019, multiplied
by 0.935301, the distribution ratio in connection with the Distribution. According to the Schedule 13G/A, as of December 31,
2018, The Vanguard Group, Inc. had sole voting power as to 158,905 of such shares, shared voting power as to 35,656 shares,
sole dispositive power as to 14,471,758 shares and shared dispositive power as to 193,962 shares. This amount assumes that
there has been no change in beneficial ownership of shares of common stock of FMC
Corporation
from December 31, 2018 through February 25, 2019, the record date of the Distribution.
|
|
|
|
|
(2)
|
Based on a Schedule 13G filing dated March 14, 2019.
|
|
|
|
|
(3)
|
Based on the number of shares of common stock of FMC Corporation
reported as beneficially owned pursuant to a Schedule 13G/A filing dated February 4, 2019, multiplied by 0.935301, the distribution
ratio in connection with the Distribution. According to the Schedule 13G/A, as of December 31, 2018, BlackRock, Inc. had sole
voting power as to 8,217,379 of such shares and sole dispositive power as to all of the shares. This amount assumes that there
has been no change in beneficial ownership of shares of common stock of FMC Corporation from December 31, 2018 through February
25, 2019, the record date of the Distribution.
|
|
|
|
|
(4)
|
Based on the number of shares of common stock of FMC Corporation
reported as beneficially owned pursuant to a Schedule 13G filing dated February 12, 2019, multiplied by 0.935301, the distribution
ratio in connection with the Distribution. According to the Schedule 13G, as of December 31, 2018, Wellington Management Group
LLP, Wellington Group Holdings LLP and Wellington Investment Advisors Holdings LLP had shared voting power as to 4,812,689
of such shares and shared dispositive power as to all of the shares, while Wellington Management Company LLP had shared voting
power as to 4,390,850 of such shares and shared dispositive power as to 7,104,229 of such shares. This amount assumes that
there has been no change in beneficial ownership of shares of common stock of FMC Corporation from December 31, 2018 through
February 25, 2019, the record date of the Distribution.
|
LIVENT
CORPORATION |
2019
PROXY
STATEMENT
22
|
VI.
|
EXECUTIVE COMPENSATION
|
SUMMARY COMPENSATION TABLE 2018
The following table sets forth information
required under SEC rules concerning the compensation paid to our named executive officers (“NEOs”) by FMC in respect
of our fiscal year ended December 31, 2017 and by FMC and Livent in respect of our fiscal year ended December 31, 2018.
Name and
|
|
Year
|
|
Salary
|
|
Bonus
|
|
Stock
Awards
(1)(2)
|
|
Option
Awards
(1)(3)
|
|
Non-Equity
Incentive Plan
Compensation
(4)
|
|
All Other
Compensation
(5)
|
|
Total
|
|
Principal Position(a)
|
|
(b)
|
|
($)(c)
|
|
($)(d)
|
|
($)(e)
|
|
($)(f)
|
|
($)(g)
|
|
($)(i)
|
|
($)(j)
|
|
Paul Graves
|
|
2018
|
|
723,856
|
|
–
|
|
2,132,872
|
|
1,707,965
|
|
841,064
|
|
203,191
|
|
5,608,948
|
|
President and Chief Executive Officer
|
|
2017
|
|
697,138
|
|
–
|
|
681,964
|
|
291,135
|
|
1,338,535
|
|
196,893
|
|
3,205,665
|
|
Gilberto Antoniazzi
|
|
2018
|
|
285,417
|
|
–
|
|
500,061
|
|
488,169
|
|
199,321
|
|
17,152
|
|
1,490,120
|
|
Vice President and Chief Financial Officer
|
|
2017
|
|
260,000
|
|
160,000
|
|
39,016
|
|
39,040
|
|
166,103
|
|
12,381
|
|
676,540
|
|
Thomas Schneberger
|
|
2018
|
|
341,761
|
|
–
|
|
639,749
|
|
543,321
|
|
287,752
|
|
20,072
|
|
1,832,655
|
|
Vice President and Chief Growth Officer
|
|
2017
|
|
313,061
|
|
–
|
|
186,969
|
|
93,193
|
|
453,302
|
|
15,004
|
|
1,061,529
|
|
|
|
|
(1)
|
The amounts in these columns
reflect the grant date fair value of stock units and option awards with respect to shares of FMC and Livent common stock granted
to our NEOs under the FMC Corporation Incentive Compensation and Stock Plan (“FMC Incentive Plan”) and the Livent
Corporation Incentive Compensation and Stock Plan (“Livent Incentive Plan”), as applicable. In each case, the
grant date fair value was computed in accordance with FASB ASC Topic 718, excluding the effect of estimated forfeitures. For
the assumptions used in the valuations that appear in these columns, see Note 12 to the consolidated and combined financial
statements contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, with respect
to awards of Livent stock, and see Note 15 to the consolidated financial statements contained in FMC’s Annual Report
on Form 10-K for the year ended December 31, 2018, with respect to awards of FMC stock.
The
awards in column (e) are comprised of FMC and Livent RSUs and FMC performance-based restricted stock units (“PRSUs”).
|
|
|
|
|
(2)
|
For 2018, the amounts
listed in this column include:
|
|
|
|
|
|
(i)
|
Livent restricted stock
units (82,353 units for Mr. Graves, and 26,471 units for each of Messrs. Antoniazzi and Schneberger);
|
|
|
|
|
|
|
(ii)
|
FMC restricted stock units (3,652
units for Mr. Graves, 968 units for Mr. Antoniazzi, and 1,101 units for Mr. Schneberger); and
|
|
|
|
|
|
|
(iii)
|
FMC performance-based restricted stock
unit grants (4,748 units for Mr. Graves and 1,080 units for Mr. Schneberger). Per SEC rules, the values of PRSUs
are reported in this column based on their probable (target) outcomes at the grant date. However, the terms of the PRSUs permit
additional shares to be earned based on above-target performance. In each case, the maximum numbers of shares that may be
earned is equal to twice the target amount. The grant date value of the maximum number of shares that may be earned under
the PRSUs was $843,150 for Mr. Graves, and $191,786 for Mr. Schneberger. As described in the section entitled “Equity
Awards” below, Messrs. Graves and Schneberger earned shares with respect to 25% of the PRSU grant at the end of 2018
based on the Company’s actual performance that year. The remaining 75% of the PRSU grants were converted into RSUs denominated
in Livent stock upon the Distribution. The number of PRSUs that were converted was determined by assuming that a target level
of performance had been achieved for open or future performance periods. The as-converted awards ceased to be subject to performance-based
vesting conditions.
|
|
|
|
|
|
(3)
|
For 2018, the amounts
listed in this column include:
|
|
|
|
|
|
(i)
|
Livent stock options (266,667 options
for Mr. Graves, and 85,715 options for each of Messrs. Antoniazzi and Schneberger).
|
|
|
|
|
|
|
(ii)
|
FMC stock options (11,983 options
for Mr. Graves, 1,485 options for Mr. Antoniazzi, and 3,631 options for Mr. Schneberger).
|
|
|
|
|
|
(4)
|
The amounts listed in
this column represent the Annual Incentive earned by the NEOs for 2018, as described in the section entitled “Annual
Incentive Awards” below.
|
|
|
|
|
(5)
|
The amounts reported in
this column for 2018 for our NEOs reflect the following:
|
|
|
(a)
|
For Mr. Graves,
includes: (i) employer matching contribution to the FMC Corporation Savings and Investment Plan ($11,000); (ii) employer matching
contribution to the FMC Corporation Non-Qualified Savings and Investment Plan ($48,492); (iii) employer contributions to the
FMC Corporation Qualified Savings and Investment Plan ($13,750), (iv) employer non-elective contributions to the FMC Corporation
Non-Qualified Savings and Investment Plan ($60,122); and (v) dividends paid on unvested RSUs ($41,169). The amount in
this column also includes the aggregate incremental cost of the following benefits provided to Mr. Graves during 2018:
a golf club membership, financial planning, executive long-term disability insurance and reserved parking.
|
|
|
(b)
|
For Mr. Antoniazzi,
includes: (i) employer matching contribution to the FMC Corporation Savings and Investment Plan ($14,617); and (ii) dividends
paid on unvested RSUs ($1,767). The amount in this column also includes a cell phone stipend, and the aggregate incremental
cost of reserved parking provided to Mr. Antoniazzi.
|
|
|
(c)
|
For Mr. Schneberger,
includes: (i) employer matching contribution to the FMC Corporation Savings and Investment Plan ($14,709); and (ii) dividends
paid on unvested RSUs ($5,333). The amount in this column also includes the aggregate incremental cost of reserved parking
provided to Mr. Schneberger.
|
LIVENT
CORPORATION |
2019
PROXY
STATEMENT
23
NARRATIVE DISCLOSURE TO SUMMARY COMPENSATION
TABLE
THE NEOs
The NEOs commenced
their service as executive officers of Livent in May of 2018. Prior to that time, each NEO was employed by FMC. The amounts reflected
in the Summary Compensation Table for 2018 reflect amounts earned with respect to each NEO’s service to FMC and Livent for
all of fiscal year 2018.
COMPENSATION LETTERS
The NEOs are parties
to compensation letters dated July 24, 2018, which outline the terms of their compensation effective as of the IPO (the “Compensation
Letters”). The Compensation Letters provide for an annual base salary of $800,000 for Mr. Graves and $375,000 for Messrs.
Antoniazzi and Schneberger. In addition, the Compensation Letters set forth the NEOs’ target bonus amounts under the Company’s
annual incentive plan, which are 100% of base salary for Mr. Graves and 60% of base salary for Messrs. Antoniazzi and Schneberger.
Pursuant to the Compensation Letters, the NEOs are also eligible to participate in the Company’s long-term incentive plan,
with a target annual equity award valued on the date of grant at $1,400,000 for Mr. Graves and $450,000 for Messrs. Antoniazzi
and Schneberger. The annual equity award is currently comprised of non-qualified stock options and RSUs, each representing fifty
percent of the target award. As described in the Compensation Letters, the NEOs each received non-qualified stock options and
RSUs upon the IPO (the “IPO NEO Awards”), which were intended to represent two years’ worth of annual equity
awards, and were therefore valued at two times the NEOs’ annual target awards. As a result, the NEOs will not receive an
additional annual equity award in 2019. In addition, the NEOs each executed a separate agreement as of the IPO, which binds them
to certain restrictive covenants during and following their employment with the Company, including an 18 month post-termination
non-compete and non-solicit of employees and customers.
EQUITY AWARDS
In early 2018, the
NEOs received FMC equity grants in the form of stock options and restricted stock units, or RSUs. Messrs. Graves and Schneberger
also received a grant of performance-based restricted stock awards, or PRSUs, under the FMC Incentive Plan. Generally, FMC RSUs
and stock options cliff-vest on the third anniversary of the date of grant, subject to the grantee’s continued employment.
FMC PRSUs are subject to both performance and time-based vesting conditions over a three year period. TSR performance is calculated
for each of the three calendar years beginning with the year of grant, as well as for the cumulative three year period commencing
with the year of grant. Each of these four measurement periods carries a weight of 25% in calculating the final number of shares
due. When the performance measure has been met for a particular calendar year during the three year period of the award, that
portion of units is “banked,” but is not considered “earned” and shares will generally not be delivered
unless and until the executive remains in service for the three-year performance period. In addition, if cash dividends were paid
to FMC’s stockholders during the applicable measurement period, dividend equivalent units are credited with respect to the
banked units, and are delivered to the executive if and when the banked units are delivered.
Prior to the Distribution,
it was necessary for administrative purposes for FMC to impose a blackout period with respect to the trading of FMC stock in FMC’s
401(k) plan. As a result of this 401(k) blackout, FMC was legally required to impose a blackout period outside of the 401(k) plan
as well with respect to the trading of FMC stock by insiders. To provide equity grantees (including the NEOs) with an opportunity
to conduct ordinary course transactions proximate to the usual vesting date of their annual awards, but prior to the blackout,
the vesting date for RSUs and stock option awards granted in 2016 was accelerated by 12 days, as indicated in the Outstanding
Equity Awards Table below.
Upon the Distribution,
outstanding equity awards denominated in FMC stock were converted into Livent equity awards. The number of Company shares subject
to each converted FMC RSU, FMC banked PRSU and FMC stock option award (and in the case of stock options, the exercise price of
the award) was adjusted to preserve the aggregate intrinsic value of the original FMC award as measured before and after the conversion,
subject to rounding. The conversion ratio was 0.935301 shares of Livent stock for each share of FMC stock. These converted awards
remain subject to the same terms and conditions (including vesting and payment schedules) as were applicable immediately prior
to the conversion.
In addition, upon
the Distribution, unbanked PRSUs were converted into Livent RSUs, and they ceased to be subject to performance-based vesting conditions.
The number of unbanked PRSUs that were converted into Livent RSUs was determined by assuming that a target level of performance
had been achieved for open or future performance periods. The converted awards remain subject to time-based vesting conditions.
As described in the
section entitled “Compensation Letters” above, IPO NEO Awards were granted to the NEOs in late 2018 under the Livent
Incentive Plan. The IPO NEO Awards were intended to represent two years’ worth of annual equity awards, and were therefore
valued at two times the NEOs’ annual target awards. The awards will vest in two equal installments on the third and fourth
anniversaries of the date of grant, subject generally to the NEO’s continued employment.
ANNUAL INCENTIVE
AWARDS
In 2018, the NEOs
participated in an annual cash incentive plan that rewards them with “at-risk” performance-based cash for the achievement
of key short-term objectives. During 2018, the NEOs had an annual incentive opportunity at FMC, pro-rated for the first nine months
of the year preceding the IPO (the “Pre-IPO Opportunity”), and an annual incentive opportunity at Livent, pro-rated
for the last three months of the year (the “Post-IPO Opportunity”). For each portion of the annual incentive opportunity,
the NEOs had a target cash incentive opportunity that was a percentage of the individual’s then-current base salary.
LIVENT
CORPORATION |
2019
PROXY
STATEMENT
24
Mr. Graves’s target opportunity
for the year was $516,013, calculated by adding his Pre-IPO Opportunity (60% of his FMC base salary of $702,252, pro-rated for
the first nine months of the year) and his Post-IPO Opportunity (100% of his Livent base salary of $800,000, pro-rated for the
last three months of the year). Mr. Antoniazzi’s target opportunity for the year was $126,450, calculated by adding
his Pre-IPO Opportunity (36% of his FMC base salary of $260,000, pro-rated for the first nine months of the year) and his Post-IPO
Opportunity (60% of his Livent base salary of $375,000, pro-rated for the last three months of the year). Mr. Schneberger’s
target opportunity for the year was $196,500, calculated by adding his Pre-IPO Opportunity (55% of his FMC base salary of $340,000,
pro-rated for the first nine months of the year) and his Post-IPO Opportunity (60% of his Livent base salary of $375,000, pro-rated
for the last three months of the year).
In addition to target opportunity levels,
threshold and maximum opportunity levels were also set for each of our NEOs at 0% and 200% of target opportunity, respectively.
Threshold performance is the performance that must be exceeded in order for any payout to be earned under the annual incentive
plan. Maximum performance is the performance at which the highest payout opportunity is earned (if performance exceeds the maximum
level, payout does not increase further).
For the full year, both the Pre-IPO Opportunity
and Post-IPO Opportunity were divided between Company Measures (70%) and Individual Measures (30%). The Company Measures used
were different for the Pre-IPO Opportunity and Post-IPO Opportunity. The Individual Measures incorporated performance elements
for both periods.
COMPANY MEASURES
The following summarizes the Company Measures
and weightings for each NEO for the Pre-IPO Opportunity.
|
Name
|
FMC Adj. Earnings
(1)
|
Agricultural
Solutions EBITDA
(2)
|
Lithium EBITDA
(3)
|
|
Mr. Graves
|
100%
|
–
|
–
|
|
Mr. Antoniazzi
|
20%
|
80%
|
–
|
|
Mr. Schneberger
|
50%
|
–
|
50%
|
|
|
|
|
(1)
|
FMC Adjusted Earnings
is defined as net income (loss) attributable to FMC stockholders plus the sum of discontinued operations attributable to FMC
Stockholders, net of income taxes and the after-tax effect of Corporate special charges (income) and Non-GAAP Tax adjustments.
Adjusted Earnings amounts in the annual cash incentive plan might differ from the amounts reported in FMC’s financial
statements because the amounts shown for these performance measures have been adjusted to exclude gains or losses attributable
to (i) certain extraordinary and/or non-recurring events (such as business acquisitions or dispositions or business restructuring
charges), and (ii) certain other items not reflective of operating performance (such as the impact of changes in accounting
principles). In 2018, however, these adjustments did not materially affect the amount of any NEO’s Annual Incentive
award.
|
|
|
|
|
(2)
|
FMC Agricultural Solutions Segment
EBITDA (“Agricultural Solutions EBITDA”) is defined as Agricultural Solutions revenue less operating expenses
(Agricultural Solutions operating expenses consist of costs of sales and services, selling, general and administrative expenses,
research and development expenses), excluding depreciation and amortization. We have excluded the following items from Agricultural
Solutions EBITDA: corporate staff expense, interest income and expense associated with corporate debt facilities and investments,
income taxes, gains (or losses) on divestitures of businesses, restructuring and other charges (income), non-operating pension
and postretirement charges, investment gains and losses, loss on extinguishment of debt, asset impairments, Last-in, First-out
(“LIFO”) inventory adjustments, transaction-related charges, and other income and expense items.
|
|
|
|
|
(3)
|
FMC Lithium Segment EBITDA (“Lithium
EBITDA”) is defined as Lithium revenue less operating expenses (Lithium operating expenses consist of costs of sales
and services, selling, general and administrative expenses, research and development expenses), excluding depreciation and
amortization. We have excluded the following items from Lithium EBITDA: corporate staff expense, interest income and expense
associated with corporate debt facilities and investments, income taxes, gains (or losses) on divestitures of businesses,
restructuring and other charges (income), non-operating pension and postretirement charges, investment gains and losses, loss
on extinguishment of debt, asset impairments, LIFO inventory adjustments, transaction-related charges, and other income and
expense items.
|
For the Post-IPO
Opportunity, Lithium EBITDA represented 100% of the Company Measures portion of the annual incentive opportunity for each NEO.
The targets for the
Company Measures were set at a level that FMC and Livent considered rigorous and challenging and considered the relevant risks
and opportunities. Payouts for performance were determined linearly based on a straight-line interpolation of the applicable payout
range.
LIVENT
CORPORATION |
2019
PROXY
STATEMENT
25
The performance results for the 2018 calendar
year were:
|
|
|
Company Measures
|
|
|
|
|
|
|
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
|
Actual Results
|
|
|
Achievement as a
|
|
Performance Metric
|
|
($ in millions)
|
|
|
($ in millions)
|
|
|
($ in millions)
|
|
|
($ in millions)
|
|
|
% of Target
|
|
FMC Adj. Earnings
|
|
$
|
675
|
|
|
$
|
719
|
|
|
$
|
793
|
|
|
$
|
854.7
|
|
|
|
200%
|
|
Agricultural Solutions EBITDA
|
|
$
|
1,010
|
|
|
$
|
1,080
|
|
|
$
|
1,150
|
|
|
$
|
1,217.9
|
|
|
|
200%
|
|
Lithium EBITDA
|
|
$
|
170
|
|
|
$
|
190
|
|
|
$
|
210
|
|
|
$
|
198.2
|
|
|
|
141%
|
|
Payout Percentage (as a % of target)
|
|
|
0%
|
|
|
|
100%
|
|
|
|
200%
|
|
|
|
|
|
|
|
|
The Company Measures listed above are
non-GAAP measures. For a reconciliation of these items to the most directly comparable financial measures calculated and presented
in accordance with GAAP, reference is made to the section captioned “Adjusted Earnings Reconciliation” in FMC’s
Form 10-K for the year ended December 31, 2018, filed with the SEC on February 28, 2019.
INDIVIDUAL MEASURES
The Individual Measures portion of the
annual incentive is 30% of the overall target opportunity for each NEO. NEOs are eligible to receive anywhere between 0% - 200%
of target for this portion of the award, based on performance against individual goals. The Individual Measures consist of non-financial
objectives specific to each NEO, but may include financial measures at the discretion of the CEO. The following is a summary of
the Individual Measures and the ratings received for achievement:
|
■
|
Mr: Graves: led a successful separation of Livent
from FMC and implemented a post-IPO process necessary for a stand-alone public company (rating of 130% of target)
|
|
|
|
|
■
|
Mr. Antoniazzi: successfully transitioned from being the CFO
of the FMC Agricultural Business to becoming the CFO of Livent wherein he created a finance organization for a stand-alone
public company (rating of 120% of target)
|
|
|
|
|
■
|
Mr. Schneberger: successfully ran the operations, sales and
marketing, sustainability, IT and research functions of the Livent business, both before and after the IPO (rating of 110%
of target)
|
TOTAL PAYOUT
Based on the above, the following table
summarizes the actual performance as a percent of target for each portion of the annual incentive plan and the actual 2018 payouts
for the NEOs. These payouts, which are reported in the Summary Compensation Table in column (g), reflect the payout for both the
Pre-IPO Opportunity and Post-IPO Opportunity.
|
|
|
|
|
|
|
|
|
|
|
|
Company
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company
|
|
|
Company
|
|
|
Measures
|
|
|
Individual
|
|
|
Individual
|
|
|
Individual
|
|
|
Total 2018
|
|
|
|
|
|
|
Measures:
|
|
|
Measures
|
|
|
Incentive
|
|
|
Measures:
|
|
|
Measures
|
|
|
Measures
|
|
|
Incentive
|
|
|
|
Target
|
|
|
70% of Target
|
|
|
Performance
|
|
|
Payout
|
|
|
30% of
|
|
|
Performance
|
|
|
Incentive Payout
|
|
|
Payout
|
|
NEO
|
|
Incentive
|
|
|
Incentive
|
|
|
(% of target)
|
|
|
Amount
|
|
|
Target
|
|
|
(% of target)
|
|
|
Amount
|
|
|
Amount
|
|
Mr. Graves
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Pre-IPO Opportunity)
|
|
$
|
316,013
|
|
|
$
|
221,209
|
|
|
|
200%
|
|
|
$
|
442,419
|
|
|
$
|
94,804
|
|
|
|
130%
|
|
|
$
|
123,245
|
|
|
$
|
565,664
|
|
Mr. Graves
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Post-IPO Opportunity)
|
|
$
|
200,000
|
|
|
$
|
140,000
|
|
|
|
141%
|
|
|
$
|
197,400
|
|
|
$
|
60,000
|
|
|
|
130%
|
|
|
$
|
78,000
|
|
|
$
|
275,400
|
|
Mr. Graves
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Total)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
841,064
|
|
Mr. Antoniazzi
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Pre-IPO Opportunity)
|
|
$
|
70,200
|
|
|
$
|
49,140
|
|
|
|
200%
|
|
|
$
|
98,280
|
|
|
$
|
21,060
|
|
|
|
120%
|
|
|
$
|
25,272
|
|
|
$
|
123,552
|
|
Mr. Antoniazzi
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Post-IPO Opportunity)
|
|
$
|
56,250
|
|
|
$
|
39,375
|
|
|
|
141%
|
|
|
$
|
55,519
|
|
|
$
|
16,875
|
|
|
|
120%
|
|
|
$
|
20,250
|
|
|
$
|
75,769
|
|
Mr. Antoniazzi
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Total)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
199,321
|
|
Mr. Schneberger
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Pre-IPO Opportunity)
|
|
$
|
140,250
|
|
|
$
|
98,175
|
|
|
|
170.5%
|
|
|
$
|
167,388
|
|
|
$
|
42,075
|
|
|
|
110%
|
|
|
$
|
46,283
|
|
|
$
|
213,671
|
|
Mr. Schneberger
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Post-IPO Opportunity)
|
|
$
|
56,250
|
|
|
$
|
39,375
|
|
|
|
141%
|
|
|
$
|
55,519
|
|
|
$
|
16,875
|
|
|
|
110%
|
|
|
$
|
18,562
|
|
|
$
|
74,081
|
|
Mr. Schneberger
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Total)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
287,752
|
LIVENT
CORPORATION |
2019
PROXY
STATEMENT
26
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
TABLE 2018
The table below reflects outstanding FMC and
Livent equity awards held by our NEOs as of December 31, 2018. As described above in the section entitled “Equity Awards,”
in advance of the Distribution, the vesting date on FMC stock options and RSUs originally scheduled to vest on February 25, 2019 was accelerated
to February 13, 2019. In addition, FMC equity awards were converted into outstanding equity awards denominated in Livent stock
upon the Distribution.
|
|
|
|
|
Option Awards
|
|
Stock Awards
|
|
Name(a)
|
|
Security
|
|
Number of
Securities
Underlying
Unexercised
Options
Exercisable
(#)(b)
|
|
Number of
Securities
Underlying
Unexercised
Options
Unexercisable
(#)(c)
|
|
|
Equity
Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#)(d)
|
|
Option
Exercise
Price
($)(e)
|
|
Option
Expiration
Date(f)
|
|
Number
of Shares
or Units of
Stock That
Have Not
Vested
(#)(g)
|
|
|
Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
($)(h)
|
|
Equity
Incentive
Plan Awards:
Number of
Unearned
Shares,
Units or
Other Rights
That Have Not
Vested
(#)(i)
|
|
|
Equity
Incentive
Plan
Awards:
Market
or Payout
Value
of Unearned
Shares,
Units or
Other Rights
That Have
Not Vested
($)(j)
|
|
Paul Graves
|
|
Livent
|
|
|
|
266,667
|
(1)
|
|
|
|
17.00
|
|
10/10/2028
|
|
82,353
|
(2)
|
|
1,136,472
|
|
|
|
|
|
|
|
|
FMC
|
|
12,246
|
|
|
|
|
|
|
59.47
|
|
2/18/2023
|
|
8,291
|
(3)
|
|
613,202
|
|
|
|
|
|
|
|
|
FMC
|
|
10,252
|
|
|
|
|
|
|
72.93
|
|
2/17/2024
|
|
5,047
|
(4)
|
|
373,276
|
|
|
|
|
|
|
|
|
FMC
|
|
13,986
|
|
|
|
|
|
|
63.41
|
|
2/27/2025
|
|
3,561
|
(5)
|
|
263,372
|
|
|
|
|
|
|
|
|
FMC
|
|
|
|
36,175
|
(6)
|
|
|
|
37.38
|
|
2/25/2026
|
|
34,000
|
(3)
|
|
2,514,640
|
|
|
|
|
|
|
|
|
FMC
|
|
|
|
18,591
|
(7)
|
|
|
|
57.63
|
|
2/27/2027
|
|
4,272
|
(8)
|
|
315,957
|
|
2,893
|
(9)
|
|
213,966
|
|
|
|
FMC
|
|
|
|
11,983
|
(10)
|
|
|
|
85.24
|
|
2/15/2028
|
|
1,238
|
(11)
|
|
91,562
|
|
3,561
|
(12)
|
|
263,372
|
|
Gilberto Antoniazzi
|
|
Livent
|
|
|
|
85,715
|
(1)
|
|
|
|
17.00
|
|
10/10/2028
|
|
26,471
|
(2)
|
|
365,300
|
|
|
|
|
|
|
|
|
FMC
|
|
1,060
|
|
|
|
|
|
|
59.47
|
|
2/18/2023
|
|
1,112
|
(3)
|
|
82,244
|
|
|
|
|
|
|
|
|
FMC
|
|
1,237
|
|
|
|
|
|
|
72.93
|
|
2/17/2024
|
|
677
|
(4)
|
|
50,071
|
|
|
|
|
|
|
|
|
FMC
|
|
1,688
|
|
|
|
|
|
|
63.41
|
|
2/27/2025
|
|
441
|
(5)
|
|
32,616
|
|
|
|
|
|
|
|
|
FMC
|
|
|
|
4,850
|
(6)
|
|
|
|
37.38
|
|
2/25/2026
|
|
527
|
(13)
|
|
38,977
|
|
|
|
|
|
|
|
|
FMC
|
|
|
|
2,493
|
(7)
|
|
|
|
57.63
|
|
2/27/2027
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FMC
|
|
|
|
1,485
|
(10)
|
|
|
|
85.24
|
|
2/15/2028
|
|
|
|
|
|
|
|
|
|
|
Thomas
Schneberger
|
|
Livent
|
|
|
|
85,715
|
(1)
|
|
|
|
17.00
|
|
10/10/2028
|
|
26,471
|
(2)
|
|
365,300
|
|
|
|
|
|
|
|
|
FMC
|
|
|
|
11,579
|
(6)
|
|
|
|
37.38
|
|
2/25/2026
|
|
2,654
|
(3)
|
|
196,290
|
|
|
|
|
|
|
|
|
FMC
|
|
|
|
5,951
|
(7)
|
|
|
|
57.63
|
|
2/27/2027
|
|
1,615
|
(4)
|
|
119,445
|
|
|
|
|
|
|
|
|
FMC
|
|
|
|
3,631
|
(10)
|
|
|
|
85.24
|
|
2/15/2028
|
|
1,079
|
(5)
|
|
79,803
|
|
|
|
|
|
|
|
|
FMC
|
|
|
|
|
|
|
|
|
|
|
|
|
1,026
|
(8)
|
|
75,883
|
|
695
|
(9)
|
|
51,402
|
|
|
|
FMC
|
|
|
|
|
|
|
|
|
|
|
|
|
283
|
(11)
|
|
20,931
|
|
810
|
(12)
|
|
59,908
|
|
(1)
|
These stock options will vest and become exercisable
in two equal installments, on October 10, 2021 and October 10, 2022.
|
|
(2)
|
These RSUs will vest in two equal installments, on October 10,
2021 and October 10, 2022.
|
|
(3)
|
These RSUs vested on February 13, 2019, and were subsequently
adjusted upon the Distribution.
|
|
(4)
|
These RSUs, as adjusted upon the Distribution, will vest on February
27, 2020.
|
|
(5)
|
These RSUs, as adjusted upon the Distribution, will vest on February
15, 2021.
|
|
(6)
|
These stock options vested and became exercisable on February
13, 2019, and were subsequently adjusted upon the Distribution.
|
|
(7)
|
These stock options, as adjusted upon the Distribution, will
vest and become exercisable on February 27, 2020.
|
|
(8)
|
These units represent the portion of PRSUs granted in 2017 that
were banked based on 2017 performance and 2018 performance. In 2017 they were banked at 200% and in 2018 they were banked
at 92%. The numbers represented also include the dividend equivalent rights credited with respect to those banked units. These
shares, as adjusted upon the Distribution, remain subject to time-based vesting based on continued service through 12/31/2019.
|
|
(9)
|
These units represent the portion of PRSUs granted in 2017 that
remained subject to open or future performance periods as of 12/31/2018, shown here at 100% of target. Upon the Distribution,
these PRSUs were converted into time-based RSUs denominated in Livent stock, which will vest on December 31, 2019.
|
LIVENT
CORPORATION
|
2019
PROXY STATEMENT
27
|
(10)
|
These stock options, as adjusted upon the Distribution,
will vest and become exercisable on February 15, 2021.
|
|
(11)
|
These units represent the portion of PRSUs granted in 2018 that
were banked based on 2018 performance at 103%. The numbers represented also include the dividend equivalent rights credited
with respect to those banked units. These shares, as adjusted upon the Distribution, remain subject to time-based vesting
based on continued service through 12/31/2020.
|
|
(12)
|
These units represent the portion of PRSUs granted in 2018 that
remained subject to open or future performance periods as of 12/31/2018, shown here at 100% of target. Upon the Distribution,
these PRSUs were converted into time-based RSUs denominated in Livent stock, which will vest on December 31, 2020.
|
|
(13)
|
These RSUs, as adjusted upon the Distribution, will vest on January
16, 2021.
|
EXECUTIVE SEVERANCE AND CHANGE IN CONTROL RIGHTS
EXECUTIVE SEVERANCE GUIDELINES
The following is a summary of the arrangements
that were in place during 2018 that provide for certain payments to our NEOs in connection with a change in control and/or termination
of the NEO’s employment.
The Company maintains Executive Severance Guidelines
(the “Severance Guidelines”), which provide for the payment of severance pay and benefits in the event of an executive’s
termination of employment by the Company without cause (other than in connection with a change in control of the Company or as
a result of death, disability or normal retirement). No NEO has a contractual entitlement to any severance pay or benefits under
the Severance Guidelines, and the Compensation Committee has the discretion to enhance or reduce the severance pay or benefits
under the Severance Guidelines in any specific case. As a condition to receiving any severance pay or benefits under the Severance
Guidelines, the NEO must execute a release of claims in favor of the Company, as well as a non-solicitation, non-competition and
confidentiality agreement. The Severance Guidelines provide for the following:
|
■
|
an amount equal to 12 months of the NEO’s base
salary, payable in a lump sum;
|
|
■
|
an amount equal to one times the NEO’s target annual incentive
award, payable in a lump sum;
|
|
■
|
a pro-rated annual incentive award (at target) for the year of termination;
|
|
■
|
transition benefits (e.g., outplacement assistance and financial/
tax planning); and
|
|
■
|
continuation of health benefits for the one-year period following
the date of termination.
|
The Severance Guidelines also describe the treatment
of outstanding long-term incentive awards upon a termination without cause, which is summarized in the Section entitled “Equity
Awards” below.
FMC maintains executive severance guidelines
for the benefit of its executives that are substantially similar to the Company’s Severance Guidelines.
CHANGE IN CONTROL SEVERANCE
RIGHTS
Each of the NEOs entered into an Executive Severance
Agreement with the Company, effective as of the IPO, which generally provides that, in the event such individual’s employment
is terminated by the Company without “cause” or by such individual for “good reason” in each case, within
the 24-month period following a “change in control” of the Company, then such individual would be entitled, contingent
on his execution of a release of claims in favor of the Company and its affiliates, to the following payments and benefits:
|
■
|
an amount equal to three times (in the case of Messrs.
Graves and Antoniazzi) and two times (in the case of Mr. Schneberger) his highest annualized base salary in effect at
any time, payable in a lump sum;
|
|
■
|
an amount equal to three times (in the case of Messrs. Graves and
Antoniazzi) and two times (in the case of Mr. Schneberger) his highest annualized target annual incentive award, payable
in a lump sum;
|
|
■
|
a pro-rated annual incentive award for the year of termination;
|
|
■
|
reimbursement for outplacement services for a two-year period following
the termination date, with the total reimbursements capped at 15% of his base salary as of the termination date;
|
|
■
|
continuation of medical and welfare benefits (including life and
accidental death and dismemberment and disability insurance coverage) for him (and his covered spouse and dependents), at
the same premium cost and coverage level as in effect as of the change in control date, for three years (in the case of Messrs.
Graves and Antoniazzi) and two years (in the case of Mr. Schneberger) following the date of termination (or, if earlier,
the date on which substantially similar benefits at a comparable cost are available to him from a subsequent employer); and
|
|
■
|
benefits accrued under the Company’s savings or retirement
plans will be distributed pursuant to the terms of the applicable plan.
|
Prior to the IPO, Mr. Graves was party
to an executive severance agreement with FMC which provided substantially similar benefits upon a change in control of FMC as
those described above. Mr. Schneberger was party to an executive severance agreement with FMC which also provided substantially
similar benefits as those described above, except that his severance multiple was one times severance and target annual incentive
award, and he was entitled to one year of health and welfare plan continuation. Mr. Antoniazzi was not party to an executive
severance agreement with FMC prior to the IPO.
LIVENT
CORPORATION
|
2019
PROXY STATEMENT
28
EQUITY AWARDS
The following is a summary of the treatment
of equity incentive awards held by our NEOs on a change in control or upon certain specified terminations of employment. Upon
the Distribution, all outstanding FMC equity awards were converted into either Livent RSUs or stock options, as described in the
“Equity Awards” section on page 24 above.
CHANGE IN CONTROL OF LIVENT
To the extent that upon a change in control
of Livent, the Company’s successor or the surviving entity (or its parent) fails to continue or assume the equity awards,
the following will apply with respect to the IPO NEO Awards:
|
■
|
All outstanding and unvested stock options granted pursuant
to an IPO NEO Award will vest and become exercisable on the change in control; and
|
|
■
|
All outstanding
and unvested RSUs granted pursuant to an IPO NEO Award will vest on the change in control.
|
There is no parallel automatic vesting provision
that is applicable to the FMC equity awards which were converted into Livent equity awards.
INVOLUNTARY TERMINATION OF EMPLOYMENT FOLLOWING
A CHANGE IN CONTROL OF LIVENT
In the event of a termination without cause
or a resignation with good reason within two years following a change in control of Livent, contingent on the NEO’s execution
of a release of claims in favor of the Company and its affiliates, the NEOs’ outstanding equity incentive awards will be
treated as follows:
|
■
|
All outstanding and unvested stock options will vest
and become exercisable on the termination date, and will remain exercisable for up to three months following the termination
date; and
|
|
■
|
All outstanding and unvested RSUs will vest on the termination date.
|
INVOLUNTARY TERMINATION OF EMPLOYMENT (OTHER
THAN IN CONNECTION WITH A CHANGE IN CONTROL OF LIVENT)
In the event of a termination of an NEO’s
employment by Livent without cause (other than in connection with a change in control of Livent), contingent on the NEO’s
execution of a release of claims, the NEO’s outstanding equity incentive awards will be treated as follows:
|
■
|
Outstanding and unvested stock options that would have
vested within one year following the termination date will vest and become exercisable on their regularly scheduled vesting
dates, and will remain exercisable for one year thereafter; and
|
|
■
|
All outstanding and unvested RSUs will vest on a pro rata basis based
on the number of days the NEO was employed during the vesting period.
|
DEATH OR DISABILITY
In the event of a termination of an NEO’s
employment due to death or disability, the NEO’s outstanding equity incentive awards will be treated as follows:
|
■
|
All outstanding and unvested stock options will fully
vest and become exercisable, and will remain exercisable for up to five years following the date of termination; and
|
|
■
|
All outstanding and unvested RSUs will fully vest.
|
RETIREMENT
While certain equity awards contain retirement
vesting features, none of the NEOs are currently retirement eligible, nor will they become retirement eligible during the vesting
period applicable to their outstanding awards.
CAUSE
In the event of a termination of an NEO for
cause, all outstanding and unvested equity awards will be cancelled, and all vested stock option awards will expire immediately.
RETIREMENT BENEFITS
QUALIFIED AND NON-QUALIFIED DEFINED BENEFIT
PLANS
In 2018, Messrs. Schneberger and Antoniazzi
participated in the FMC Salaried and Nonunion Hourly Employees Retirement Plan, which we refer to as the “FMC Qualified
Plan”, a non-contributory defined benefit plan that is intended to meet the requirements of a tax-qualified plan. Since
Mr. Graves was hired after July 1, 2007, when the FMC Qualified Plan was closed to new employees, Mr. Graves was not
eligible to participate in the FMC Qualified Plan, but did participate in FMC defined contribution plans.
Under the FMC Qualified Plan, an employee’s
pension benefit is calculated based on credited service and a final average year earnings (“FAYE”) formula, and the
annual benefit payable was subject to a statutory cap of $220,000 for 2018. FAYE is determined using earnings from the highest
60 consecutive months out of the last 120 calendar months that immediately precede the employee’s retirement date. Eligible
compensation includes base salary, annual incentive awards and certain other performance payments, and was subject to a statutory
cap of $275,000 for 2018. However, stock option gains, other equity awards and long-term performance-based cash awards were not
included in eligible compensation.
LIVENT
CORPORATION
|
2019
PROXY STATEMENT
29
The normal retirement age under the FMC Qualified
Plan is age 65. Benefits at normal retirement are calculated using the formula described below.
The retirement formula is 1.0% of FAYE up to
the Social Security covered compensation base plus 1.5% of FAYE in excess of the Social Security covered compensation base times
years of credited service (up to 35 years) plus 1.5% of FAYE times years of credited service in excess of 35. The actual benefit
amount depends on the form of payment selected by the employee, i.e., individual life annuity, joint and survivor annuity or level
income option. All benefits under the FMC Qualified Plan are paid as an annuity. At age 62, an employee can retire without a benefit
reduction. There is no Social Security offset.
Early retirement is defined as retirement from
active service when an employee reaches age 55 with a minimum of ten years credited service. Employees who elect early retirement
receive an actuarially reduced pension. This reduction is 4% per year for each year prior to age 62. The maximum reduction is
28% (62-55 x .04) of the age 65 benefit calculation. The Internal Revenue Code of 1986, as amended (the “Code”) limits
the annual benefits that may be paid from a tax-qualified retirement plan and the compensation that may be taken into account
in calculating those benefits, as noted above.
The FMC Salaried Employees Equivalent Plan,
which we refer to as the “FMC Nonqualified Plan”, is a non-qualified defined benefit plan that restores the benefits
earned under the FMC Qualified Plan formula described above. Messrs. Schneberger and Antoniazzi were eligible to participate in
the FMC Nonqualified Plan. Mr. Graves was not eligible to participate in the FMC Nonqualified Plan, as the plan does not
cover employees who are not also covered by the FMC Qualified Plan.
This plan represents an unfunded and unsecured
obligation of FMC and, therefore, benefits are not guaranteed to be fully paid in the event of FMC’s insolvency or bankruptcy.
These supplemental benefits are calculated using the same formula described above without regard to the Code limits, less amounts
payable under the FMC Qualified Plan. The benefits payable under the FMC Nonqualified Plan are paid in a lump sum on the later
of attainment of age 55 or six months following the employee’s retirement.
Effective as of January 1, 2019, Messrs. Schneberger
and Antoniazzi ceased active participation in the FMC Qualified Plan and the FMC Nonqualified Plan (including the accrual of any
additional benefits under such plans). Under the FMC Qualified Plan, however, they were granted an additional three years of credited
service. In addition, they will receive credit for their service with us or one of our subsidiaries for purposes of attaining
early retirement eligibility under, and in accordance with the terms of, the FMC Qualified Plan. From and after the Distribution,
the terms of the FMC Qualified Plan and FMC Nonqualified Plan will govern the terms of distributions of any benefits payable under
those plans. The Company has not established its own non-contributory defined benefit plan or non-qualified defined benefit plan.
QUALIFIED AND NON-QUALIFIED DEFINED CONTRIBUTION
PLANS
The retirement plan contributions in column
(i) of the Summary Compensation Table above reflect contributions made to the FMC Corporation Savings and Investment Plan, which
we refer to as the “FMC Qualified Savings Plan”, which is a tax-qualified savings plan under Section 401(k) of the
Code, and in the case of Mr. Graves, the FMC Nonqualified Savings and Investment Plan, which we refer to as the “FMC
Nonqualified Savings Plan”, a non-qualified deferred compensation plan that mirrors the FMC Qualified Savings Plan and is
available to certain eligible employees whose annual compensation exceeds $250,000 (in 2018).
The FMC Nonqualified Savings Plan is used to
facilitate the continuation of contributions beyond the limits allowed under the FMC Qualified Savings Plan. In 2018, FMC’s
matching contribution under both plans was 80% of the amount deferred up to a maximum of 5% of eligible earnings, i.e. base salary
and annual incentive paid in fiscal year 2018. In addition to FMC’s matching contribution, Mr. Graves was also entitled
to receive employer non-elective contributions under the FMC Qualified and Nonqualified Savings Plans of 5% of eligible earnings
in the aggregate.
The FMC Nonqualified Savings Plan is subject
to certain disclosure and procedural requirements of ERISA, but as a “top hat” plan is not subject to the eligibility,
vesting, accrual, funding, fiduciary responsibility and similar requirements of the Employee Retirement Income Security Act of
1974 (“ERISA”). This plan represents an unfunded and unsecured obligation of FMC and, therefore, amounts are not guaranteed
to be fully paid in the event of FMC’s insolvency or bankruptcy.
Effective as of January 1, 2019, the NEOs ceased
active participation in the FMC 401(k) Plan and became eligible to participate in a 401(k) plan maintained by us. In addition,
Mr. Graves ceased active participation in the FMC Nonqualified Savings Plan and became eligible to participate in a corresponding
non-qualified savings and investment plan maintained by us, which we refer to as the “Lithium Nonqualified Savings Plan”.
Livent’s matching contribution under both plans is currently 80% of the amount deferred up to a maximum of 5% of eligible
earnings, i.e. base salary and annual incentive paid in a calendar year. However, the matching contribution under both plans may
not exceed 4% of an NEO’s total eligible earnings.
LIVENT
CORPORATION
|
2019
PROXY STATEMENT
30
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING
COMPLIANCE
Section 16(a) of the Securities Exchange Act
of 1934 (The “Exchange Act”) requires the Company’s directors and executive officers, and persons who own more
than ten percent of the Company’s Common Stock, to file with the SEC initial reports of ownership and reports of changes
in beneficial ownership of Common Stock. Executive officers, directors and greater than ten percent stockholders (collectively,
the “Reporting Persons”) are additionally required to furnish the Company with copies of all Section 16(a) forms they
file.
Based on a review of forms filed with the SEC
and information provided by Reporting Persons to the Company, it is believed that all Section 16(a) requirements were fully met
by all Reporting Persons with respect to the year ended December 31, 2018.
HOUSEHOLDING
We have adopted a procedure approved by the
SEC called householding. Under this procedure, we are permitted to deliver a single copy of our proxy materials, including this
proxy statement and our annual report, to stockholders sharing the same address who did not receive this proxy statement and who
did not otherwise notify us of their desire to receive multiple copies of our proxy materials. Householding allows us to reduce
our printing and postage costs and limits the volume of duplicative information received at your household. A separate proxy card
will continue to be mailed for each registered stockholder account.
We will promptly deliver, upon oral or written
request, a separate copy of the proxy materials to any stockholder residing at an address to which only one copy was mailed. If
you wish to receive an additional copy of our proxy materials, or if you received multiple copies of our proxy materials and wish
to request householding in the future, you may make such request by writing to our Corporate Secretary at Livent Corporation,
FMC Tower at Cira Centre South, 2929 Walnut Street, Philadelphia, PA 19104.
If you are a street name holder and wish to
revoke your consent to householding and receive separate copies of our proxy materials for the annual meeting of stockholders
this year or future years, you may call Broadridge Investor Communications Services toll-free at (866) 540-7095 or write to them
c/o Householding Department, 51 Mercedes Way, Edgewood, New York 11717.
AUDIT COMMITTEE REPORT
The Audit Committee Report that follows shall
not be deemed to be incorporated by reference into any filing made by the Company under the Securities Act of 1933 or the Exchange
Act, notwithstanding any general statement contained in any such filing incorporating this proxy statement by reference, except
to the extent the Company incorporates such Report by specific reference.
During the past year, the Audit Committee met
two times, including telephonic meetings, to discuss quarterly results and other matters. In carrying out its duties, the Committee
has:
|
■
|
Reviewed and discussed the audited consolidated and combined
financial statements for the fiscal year ended December 31, 2018 with management and KPMG, the company’s independent
registered public accounting firm;
|
|
■
|
Discussed with KPMG the matters required to be discussed pursuant
to Public Company Accounting Oversight Board Auditing Standard No. 1301,
“Communications with Audit Committees”
;
|
|
■
|
Discussed various matters with KPMG related to the Company’s
consolidated and combined financial statements, including all critical accounting policies and practices used, all alternative
treatments for material items that have been discussed with Company management, and all other material written communications
between KPMG and management; and
|
|
■
|
Received the written disclosures and the letter from KPMG as required
by the Public Company Accounting Oversight Board, and has confirmed with KPMG its independence.
|
In reliance upon the review and discussions
referred to above, the Audit Committee recommended to the Board of Directors that the audited financial statements be included
in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.
The preceding report has been furnished by the
following members of the Audit Committee:
Michael F. Barry,
Chairman
G. Peter D’Aloia
Steven T. Merkt
LIVENT
CORPORATION
|
2019
PROXY STATEMENT
31
EXPENSES RELATING TO THIS PROXY SOLICITATION
The Company will pay all expenses relating to
this proxy solicitation. In addition to this solicitation by mail, Company officers, directors and employees may solicit proxies
by telephone or personal call without extra compensation for that activity. The Company also expects to reimburse banks, brokers
and other persons for reasonable out-of-pocket expenses in forwarding proxy material to beneficial owners of Company stock and
obtaining the proxies of those owners.
SARA PONESSA
Vice President,
General Counsel and Secretary
LIVENT
CORPORATION
|
2019
PROXY STATEMENT
32
Livent (NYSE:LTHM)
Historical Stock Chart
From Mar 2024 to Apr 2024
Livent (NYSE:LTHM)
Historical Stock Chart
From Apr 2023 to Apr 2024
