UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
x | Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the quarterly period ended March 31, 2014
or
¨ | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the transition period from to
96 South George Street, Suite 520
York, Pennsylvania 17401
(Address of principal executive offices)
(717) 225-4711
(Registrants telephone number, including area code)
Commission file number |
Exact name of registrant as specified in its charter |
IRS Employer Identification No. |
State or other jurisdiction of incorporation or organization | |||
1-03560 | P. H. Glatfelter Company | 23-0628360 | Pennsylvania |
N/A
(Former name or former address, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for at the past 90 days. Yes x No ¨.
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨.
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company. See the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.
Large accelerated filer | x | Accelerated filer | ¨ | |||
Non-accelerated filer | ¨ (Do not check if a smaller reporting company). | Small reporting company | ¨ |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes ¨ No x.
Common Stock outstanding on April 30, 2014 totaled 43,068,901 shares.
P. H. GLATFELTER COMPANY AND
SUBSIDIARIES
REPORT ON FORM 10-Q
For the QUARTERLY PERIOD ENDED
March 31, 2014
Page | ||||||
Item 1 |
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2 | ||||||
3 | ||||||
Condensed Consolidated Balance Sheets as of March 31, 2014 and December 31, 2013 (unaudited) |
4 | |||||
5 | ||||||
Notes to Condensed Consolidated Financial Statements (unaudited) |
6 | |||||
Item 2 |
Managements Discussion and Analysis of Financial Condition and Results of Operations |
25 | ||||
Item 3 |
33 | |||||
Item 4 |
33 | |||||
Item 6 |
34 | |||||
35 |
P. H. GLATFELTER COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
Three months ended March 31 |
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In thousands, except per share |
2014 | 2013 | ||||||
Net sales |
$ | 455,721 | $ | 405,189 | ||||
Energy and related sales, net |
5,262 | 1,101 | ||||||
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Total revenues |
460,983 | 406,290 | ||||||
Costs of products sold |
405,943 | 348,915 | ||||||
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Gross profit |
55,040 | 57,375 | ||||||
Selling, general and administrative expenses |
33,551 | 33,487 | ||||||
Gains on dispositions of plant, equipment and timberlands, net |
(809 | ) | (73 | ) | ||||
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Operating income |
22,298 | 23,961 | ||||||
Non-operating income (expense) |
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Interest expense |
(4,812 | ) | (3,841 | ) | ||||
Interest income |
61 | 102 | ||||||
Other, net |
211 | 247 | ||||||
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Total non-operating expense |
(4,540 | ) | (3,492 | ) | ||||
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Income before income taxes |
17,758 | 20,469 | ||||||
Income tax provision |
3,110 | 4,840 | ||||||
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Net income |
$ | 14,648 | $ | 15,629 | ||||
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Earnings per share |
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Basic |
$ | 0.34 | $ | 0.36 | ||||
Diluted |
0.33 | 0.36 | ||||||
Cash dividends declared per common share |
$ | 0.11 | $ | 0.10 | ||||
Weighted average shares outstanding |
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Basic |
43,366 | 42,966 | ||||||
Diluted |
44,360 | 43,921 |
The accompanying notes are an integral part of these condensed consolidated financial statements.
- 2 -
GLATFELTER
3.31.14 Form 10-Q
P. H. GLATFELTER COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(unaudited)
Three months ended March 31 |
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In thousands |
2014 | 2013 | ||||||
Net income |
$ | 14,648 | $ | 15,629 | ||||
Foreign currency translation adjustments |
728 | (11,957 | ) | |||||
Net change in: |
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Deferred gains (losses) on cash flow hedges, net of taxes of $27 and $(170), respectively |
(79 | ) | 441 | |||||
Unrecognized retirement obligations, net of taxes of $(1,415) and $(2,313), respectively |
2,316 | 3,827 | ||||||
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Other comprehensive income (loss) |
2,965 | (7,689 | ) | |||||
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Comprehensive income |
$ | 17,613 | $ | 7,940 | ||||
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The accompanying notes are an integral part of these condensed consolidated financial statements.
- 3 -
GLATFELTER
3.31.14 Form 10-Q
P. H. GLATFELTER COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
March 31 | December 31 | |||||||
In thousands |
2014 | 2013 | ||||||
Assets | ||||||||
Cash and cash equivalents |
$ | 74,785 | $ | 122,882 | ||||
Accounts receivable, net |
179,599 | 167,830 | ||||||
Inventories |
247,769 | 236,310 | ||||||
Prepaid expenses and other current assets |
60,407 | 59,560 | ||||||
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Total current assets |
562,560 | 586,582 | ||||||
Plant, equipment and timberlands, net |
717,731 | 723,340 | ||||||
Goodwill |
95,629 | 95,948 | ||||||
Intangible assets |
94,727 | 96,081 | ||||||
Other assets |
178,349 | 176,459 | ||||||
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Total assets |
$ | 1,648,996 | $ | 1,678,410 | ||||
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Liabilities and Shareholders Equity | ||||||||
Accounts payable |
$ | 150,880 | $ | 161,242 | ||||
Dividends payable |
4,807 | 4,363 | ||||||
Environmental liabilities |
125 | 125 | ||||||
Other current liabilities |
111,400 | 122,637 | ||||||
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Total current liabilities |
267,212 | 288,367 | ||||||
Long-term debt |
424,826 | 442,325 | ||||||
Deferred income taxes |
138,502 | 141,020 | ||||||
Other long-term liabilities |
121,606 | 122,222 | ||||||
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Total liabilities |
952,146 | 993,934 | ||||||
Commitments and contingencies |
| | ||||||
Shareholders equity |
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Common stock |
544 | 544 | ||||||
Capital in excess of par value |
53,830 | 53,940 | ||||||
Retained earnings |
879,203 | 869,329 | ||||||
Accumulated other comprehensive loss |
(72,392 | ) | (75,357 | ) | ||||
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861,185 | 848,456 | |||||||
Less cost of common stock in treasury |
(164,335 | ) | (163,980 | ) | ||||
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Total shareholders equity |
696,850 | 684,476 | ||||||
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Total liabilities and shareholders equity |
$ | 1,648,996 | $ | 1,678,410 | ||||
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The accompanying notes are an integral part of these condensed consolidated financial statements.
- 4 -
GLATFELTER
3.31.14 Form 10-Q
P. H. GLATFELTER COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
Three months ended March 31 |
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In thousands |
2014 | 2013 | ||||||
Operating activities |
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Net income |
$ | 14,648 | $ | 15,629 | ||||
Adjustments to reconcile to net cash (used) provided by operations: |
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Depreciation, depletion and amortization |
18,615 | 15,358 | ||||||
Amortization of debt issue costs and original issue discount |
328 | 327 | ||||||
Pension expense, net of unfunded benefits paid |
1,179 | 3,577 | ||||||
Deferred income tax (provision) benefit |
(2,184 | ) | 906 | |||||
Gains on dispositions of plant, equipment and timberlands, net |
(809 | ) | (73 | ) | ||||
Share-based compensation |
1,844 | 1,878 | ||||||
Change in operating assets and liabilities |
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Accounts receivable |
(11,227 | ) | (19,475 | ) | ||||
Inventories |
(11,679 | ) | (2,100 | ) | ||||
Prepaid and other current assets |
(2,330 | ) | 8,885 | |||||
Accounts payable |
(5,990 | ) | 2,331 | |||||
Accruals and other current liabilities |
(11,814 | ) | (10,751 | ) | ||||
Other |
(791 | ) | (697 | ) | ||||
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Net cash (used) provided by operating activities |
(10,210 | ) | 15,795 | |||||
Investing activities |
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Expenditures for purchases of plant, equipment and timberlands |
(14,435 | ) | (31,391 | ) | ||||
Proceeds from disposals of plant, equipment and timberlands, net |
839 | 73 | ||||||
Other |
| (175 | ) | |||||
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Net cash used by investing activities |
(13,596 | ) | (31,493 | ) | ||||
Financing activities |
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Net repayments of revolving credit facility |
(17,933 | ) | | |||||
Payments of borrowing costs |
| (108 | ) | |||||
Repurchases of common stock |
(1,251 | ) | | |||||
Payments of dividends |
(4,363 | ) | (3,905 | ) | ||||
Payments related to share-based compensation awards and other |
(781 | ) | (586 | ) | ||||
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Net cash used by financing activities |
(24,328 | ) | (4,599 | ) | ||||
Effect of exchange rate changes on cash |
37 | (942 | ) | |||||
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Net decrease in cash and cash equivalents |
(48,097 | ) | (21,239 | ) | ||||
Cash and cash equivalents at the beginning of period |
122,882 | 97,679 | ||||||
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Cash and cash equivalents at the end of period |
$ | 74,785 | $ | 76,440 | ||||
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Supplemental cash flow information |
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Cash paid (received) for: |
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Interest, net of amounts capitalized |
$ | 1,249 | $ | 145 | ||||
Income taxes, net |
5,628 | (3,742 | ) |
The accompanying notes are an integral part of these condensed consolidated financial statements.
- 5 -
GLATFELTER
3.31.14 Form 10-Q
P. H. GLATFELTER COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
- 6 -
GLATFELTER
3.31.14 Form 10-Q
- 7 -
GLATFELTER
3.31.14 Form 10-Q
6. | ACCUMULATED OTHER COMPREHENSIVE INCOME |
The following table sets forth details of the changes in accumulated other comprehensive income (losses) for the three months ended March 31, 2014 and 2013.
in thousands |
Currency Translation Adjustments |
Unrealized gain (loss) on cash flow hedges |
Pension Plans | Other postretirement benefit plans |
Total | |||||||||||||||
Balance at January 1, 2014 |
$ | 15,141 | $ | (941 | ) | $ | (89,547 | ) | $ | (10 | ) | $ | (75,357 | ) | ||||||
Other comprehensive income before reclassifications (net of tax) |
728 | (403 | ) | | | 325 | ||||||||||||||
Amounts reclassified from accumulated other comprehensive income (net of tax) |
| 324 | 2,281 | 35 | 2,640 | |||||||||||||||
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Net current period other comprehensive income (loss) |
728 | (79 | ) | 2,281 | 35 | 2,965 | ||||||||||||||
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Balance at March 31, 2014 |
$ | 15,869 | $ | (1,020 | ) | $ | (87,266 | ) | $ | 25 | $ | (72,392 | ) | |||||||
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Balance at January 1, 2013 |
$ | 315 | $ | (424 | ) | $ | (159,560 | ) | $ | (4,297 | ) | $ | (163,966 | ) | ||||||
Other comprehensive income before reclassifications (net of tax) |
(11,957 | ) | 390 | | | (11,567 | ) | |||||||||||||
Amounts reclassified from accumulated other comprehensive income (net of tax) |
| 51 | 3,779 | 48 | 3,878 | |||||||||||||||
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Net current period other comprehensive income (loss) |
(11,957 | ) | 441 | 3,779 | 48 | (7,689 | ) | |||||||||||||
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Balance at March 31, 2013 |
$ | (11,642 | ) | $ | 17 | $ | (155,781 | ) | $ | (4,249 | ) | $ | (171,655 | ) | ||||||
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- 8 -
GLATFELTER
3.31.14 Form 10-Q
Reclassifications out of accumulated other comprehensive income were as follows:
Three months ended March 31 |
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In thousands |
2014 | 2013 | ||||||||
Description | Line Item in Statements of Income | |||||||||
Cash flow hedges (Note 14) |
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(Gains) losses on cash flow hedges |
$ | 449 | $ | 70 | Costs of products sold | |||||
(125 | ) | (19 | ) | Income tax provision | ||||||
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Net of tax |
324 | 51 | ||||||||
Retirement plan obligations (Note 9) |
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Amortization of deferred benefit pension plan items |
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Prior service costs |
548 | 613 | Costs of products sold | |||||||
186 | 161 | Selling, general and administrative | ||||||||
Actuarial losses |
2,196 | 4,114 | Costs of products sold | |||||||
744 | 1,175 | Selling, general and administrative | ||||||||
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3,674 | 6,063 | |||||||||
(1,393 | ) | (2,284 | ) | Income tax provision | ||||||
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Net of tax |
2,281 | 3,779 | ||||||||
Amortization of deferred benefit other plan items |
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Prior service costs |
(59 | ) | (100 | ) | Costs of products sold | |||||
(13 | ) | (25 | ) | Selling, general and administrative | ||||||
Actuarial losses |
106 | 155 | Costs of products sold | |||||||
23 | 47 | Selling, general and administrative | ||||||||
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57 | 77 | |||||||||
(22 | ) | (29 | ) | Income tax provision | ||||||
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Net of tax |
35 | 48 | ||||||||
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Total reclassifications, net of tax |
$ | 2,640 | $ | 3,878 | ||||||
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- 9 -
GLATFELTER
3.31.14 Form 10-Q
- 10 -
GLATFELTER
3.31.14 Form 10-Q
- 11 -
GLATFELTER
3.31.14 Form 10-Q
- 12 -
GLATFELTER
3.31.14 Form 10-Q
- 13 -
GLATFELTER
3.31.14 Form 10-Q
- 14 -
GLATFELTER
3.31.14 Form 10-Q
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GLATFELTER
3.31.14 Form 10-Q
- 16 -
GLATFELTER
3.31.14 Form 10-Q
- 17 -
GLATFELTER
3.31.14 Form 10-Q
- 18 -
GLATFELTER
3.31.14 Form 10-Q
17. SEGMENT INFORMATION
The following table sets forth financial and other information by business unit for the period indicated:
Three months ended March 31 Dollars in millions |
Composite Fibers | Advanced Airlaid Materials |
Specialty Papers | Other and Unallocated |
Total | |||||||||||||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||||||||||||||
Net sales |
$ | 158.6 | $ | 111.8 | $ | 71.3 | $ | 66.2 | $ | 225.8 | $ | 227.1 | $ | | $ | | $ | 455.7 | $ | 405.2 | ||||||||||||||||||||
Energy and related sales, net |
| | | | 5.3 | 1.1 | | | 5.3 | 1.1 | ||||||||||||||||||||||||||||||
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Total revenue |
158.6 | 111.8 | 71.3 | 66.2 | 231.1 | 228.2 | | | 461.0 | 406.3 | ||||||||||||||||||||||||||||||
Cost of products sold |
126.0 | 90.4 | 63.1 | 59.5 | 215.0 | 195.5 | 1.8 | 3.5 | 405.9 | 348.9 | ||||||||||||||||||||||||||||||
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Gross profit (loss) |
32.6 | 21.5 | 8.2 | 6.7 | 16.1 | 32.7 | (1.8 | ) | (3.5 | ) | 55.0 | 57.4 | ||||||||||||||||||||||||||||
SG&A |
13.3 | 9.8 | 2.3 | 2.2 | 13.7 | 14.5 | 4.3 | 7.0 | 33.6 | 33.5 | ||||||||||||||||||||||||||||||
Gains on dispositions of plant, equipment and timberlands, net |
| | | | | | (0.8 | ) | (0.1 | ) | (0.8 | ) | (0.1 | ) | ||||||||||||||||||||||||||
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Total operating income (loss) |
19.3 | 11.6 | 5.9 | 4.5 | 2.4 | 18.3 | (5.2 | ) | (10.5 | ) | 22.3 | 24.0 | ||||||||||||||||||||||||||||
Non-operating expense |
| | | | | | (4.5 | ) | (3.5 | ) | (4.5 | ) | (3.5 | ) | ||||||||||||||||||||||||||
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Income (loss) before income taxes |
$ | 19.3 | $ | 11.6 | $ | 5.9 | $ | 4.5 | $ | 2.4 | $ | 18.3 | $ | (9.8 | ) | $ | (13.9 | ) | $ | 17.8 | $ | 20.5 | ||||||||||||||||||
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Supplementary Data |
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Net tons sold (thousands) |
40.0 | 22.5 | 25.1 | 23.9 | 202.2 | 202.3 | | | 267.3 | 248.8 | ||||||||||||||||||||||||||||||
Depreciation, depletion and amortization |
$ | 7.6 | $ | 4.6 | $ | 2.3 | $ | 2.2 | $ | 8.3 | $ | 8.3 | $ | 0.5 | $ | 0.2 | $ | 18.6 | $ | 15.4 | ||||||||||||||||||||
Capital expenditures |
6.0 | 17.5 | 1.5 | 2.1 | 6.2 | 8.6 | 0.8 | 3.2 | 14.4 | 31.4 |
The sum of individual amounts set forth above may not agree to the consolidated financial statements included herein due to rounding.
On April 30, 2013, we completed the acquisition of Dresden for $211 million. Dresdens results are included prospectively from the acquisition date as part of the Composite Fibers business unit. For additional information related to this acquisition, refer to Note 3 Acquisition.
- 19 -
GLATFELTER
3.31.14 Form 10-Q
18. | CONDENSED CONSOLIDATING FINANCIAL STATEMENTS |
Our 5.375% Notes are fully and unconditionally guaranteed, on a joint and several basis, by certain of our 100%-owned domestic subsidiaries, PHG Tea Leaves, Inc., Mollanvick, Inc., and Glatfelter Holdings, LLC. The guarantees are subject to certain customary release provisions including i) the designation of such subsidiary as an unrestricted or excluded subsidiary; (ii) in connection with any sale or disposition of the capital stock of the subsidiary guarantor; and (iii) upon our exercise of our legal defeasance option or our covenant defeasance option, all of which are more fully described in the Indenture dated as of October 3, 2012 among us, the Guarantors and US Bank National Association, as Trustee, relating to the 5.375% Notes. The following presents our condensed consolidating statements of income, including comprehensive income for the three months ended March 31, 2014 and 2013, our condensed consolidating balance sheets as of March 31, 2014 and December 31, 2013 and condensed consolidating cash flows for the three months ended March 31, 2014 and 2013. These financial statements reflect P. H. Glatfelter Company (the parent), the guarantor subsidiaries (on a combined basis), the non-guarantor subsidiaries (on a combined basis) and elimination entries necessary to combine such entities on a consolidated basis. Effective December 31, 2013, Glatfelter Pulpwood Company, previously a guarantor, was merged with and into the parent. Accordingly, all condensed consolidating financial statements have been restated to give effect to this merger as of the earliest period presented. In addition, the amounts of intercompany investing and financing activities and the related interest expense and interest income previously presented net for the three months ended March 31, 2013 have been presented on a gross basis to conform to the current years presentation.
Condensed Consolidating Statements of Income and Comprehensive Income for the
three months ended March 31, 2014
In thousands |
Parent Company |
Guarantors | Non Guarantors |
Adjustments/ Eliminations |
Consolidated | |||||||||||||||
Net sales |
$ | 225,831 | $ | 18 | $ | 229,890 | $ | (18 | ) | $ | 455,721 | |||||||||
Energy and related sales, net |
5,262 | | | | 5,262 | |||||||||||||||
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Total revenues |
231,093 | 18 | 229,890 | (18 | ) | 460,983 | ||||||||||||||
Costs of products sold |
216,716 | 17 | 189,228 | (18 | ) | 405,943 | ||||||||||||||
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Gross profit |
14,377 | 1 | 40,662 | | 55,040 | |||||||||||||||
Selling, general and administrative expenses |
17,793 | 13 | 15,745 | | 33,551 | |||||||||||||||
(Gains) losses on dispositions of plant, equipment and timberlands, net |
(812 | ) | | 3 | | (809 | ) | |||||||||||||
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Operating income (loss) |
(2,604 | ) | (12 | ) | 24,914 | | 22,298 | |||||||||||||
Other non-operating income (expense) |
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Interest expense |
(4,739 | ) | | (2,731 | ) | 2,658 | (4,812 | ) | ||||||||||||
Interest income |
153 | 2,559 | 7 | (2,658 | ) | 61 | ||||||||||||||
Other, net |
21,618 | 10 | 1,082 | (22,499 | ) | 211 | ||||||||||||||
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Total other non-operating income (expense) |
17,032 | 2,569 | (1,642 | ) | (22,499 | ) | (4,540 | ) | ||||||||||||
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Income before income taxes |
14,428 | 2,557 | 23,272 | (22,499 | ) | 17,758 | ||||||||||||||
Income tax provision (benefit) |
(220 | ) | 913 | 2,417 | | 3,110 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net income |
14,648 | 1,644 | 20,855 | (22,499 | ) | 14,648 | ||||||||||||||
Other comprehensive income |
2,965 | 1 | 885 | (886 | ) | 2,965 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Comprehensive income (loss) |
$ | 17,613 | $ | 1,645 | $ | 21,740 | $ | (23,385 | ) | $ | 17,613 | |||||||||
|
|
|
|
|
|
|
|
|
|
- 20 -
GLATFELTER
3.31.14 Form 10-Q
Condensed Consolidating Statements of Income and Comprehensive Income for the
three months ended March 31, 2013
In thousands |
Parent Company |
Guarantors | Non Guarantors |
Adjustments/ Eliminations |
Consolidated | |||||||||||||||
Net sales |
$ | 227,116 | $ | 6 | $ | 178,072 | $ | (5 | ) | $ | 405,189 | |||||||||
Energy and related sales, net |
1,101 | | | | 1,101 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total revenues |
228,217 | 6 | 178,072 | (5 | ) | 406,290 | ||||||||||||||
Costs of products sold |
198,947 | 5 | 149,968 | (5 | ) | 348,915 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Gross profit |
29,270 | 1 | 28,104 | | 57,375 | |||||||||||||||
Selling, general and administrative expenses |
21,128 | 14 | 12,345 | | 33,487 | |||||||||||||||
Gains on dispositions of plant, equipment and timberlands, net |
(73 | ) | | | | (73 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Operating income (loss) |
8,215 | (13 | ) | 15,759 | | 23,961 | ||||||||||||||
Other non-operating income (expense) |
||||||||||||||||||||
Interest expense |
(4,716 | ) | | (814 | ) | 1,689 | (3,841 | ) | ||||||||||||
Interest income |
84 | 1,689 | 18 | (1,689 | ) | 102 | ||||||||||||||
Other, net |
11,956 | (4 | ) | 740 | (12,445 | ) | 247 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total other non-operating income (expense) |
7,324 | 1,685 | (56 | ) | (12,445 | ) | (3,492 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Income before income taxes |
15,539 | 1,672 | 15,703 | (12,445 | ) | 20,469 | ||||||||||||||
Income tax provision (benefit) |
(90 | ) | 675 | 4,255 | | 4,840 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net income |
15,629 | 997 | 11,448 | (12,445 | ) | 15,629 | ||||||||||||||
Other comprehensive income (loss) |
(7,689 | ) | (4,608 | ) | (7,978 | ) | 12,586 | (7,689 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Comprehensive income (loss) |
$ | 7,940 | $ | (3,611 | ) | $ | 3,470 | $ | 141 | $ | 7,940 | |||||||||
|
|
|
|
|
|
|
|
|
|
- 21 -
GLATFELTER
3.31.14 Form 10-Q
Condensed Consolidating Balance Sheet as of
March 31, 2014
In thousands |
Parent Company |
Guarantors | Non Guarantors |
Adjustments/ Eliminations |
Consolidated | |||||||||||||||
Assets | ||||||||||||||||||||
Cash and cash equivalents |
$ | 41,133 | $ | 232 | $ | 33,420 | $ | | $ | 74,785 | ||||||||||
Other current assets |
212,640 | 331,139 | 288,578 | (344,582 | ) | 487,775 | ||||||||||||||
Plant, equipment and timberlands, net |
244,809 | 1,036 | 471,886 | | 717,731 | |||||||||||||||
Other assets |
1,000,015 | 235,893 | 213,125 | (1,080,328 | ) | 368,705 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total assets |
$ | 1,498,597 | $ | 568,300 | $ | 1,007,009 | $ | (1,424,910 | ) | $ | 1,648,996 | |||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Liabilities and Shareholders Equity | ||||||||||||||||||||
Current liabilities |
$ | 374,451 | $ | 3,030 | $ | 240,477 | $ | (350,746 | ) | $ | 267,212 | |||||||||
Long-term debt |
250,000 | | 496,352 | (321,526 | ) | 424,826 | ||||||||||||||
Deferred income taxes |
72,281 | (169 | ) | 78,671 | (12,281 | ) | 138,502 | |||||||||||||
Other long-term liabilities |
105,015 | | 13,881 | 2,710 | 121,606 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total liabilities |
801,747 | 2,861 | 829,381 | (681,843 | ) | 952,146 | ||||||||||||||
Shareholders equity |
696,850 | 565,439 | 177,628 | (743,067 | ) | 696,850 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total liabilities and shareholders equity |
$ | 1,498,597 | $ | 568,300 | $ | 1,007,009 | $ | (1,424,910 | ) | $ | 1,648,996 | |||||||||
|
|
|
|
|
|
|
|
|
|
Condensed Consolidating Balance Sheet as of
December 31, 2013
In thousands |
Parent Company |
Guarantors | Non Guarantors |
Adjustments/ Eliminations |
Consolidated | |||||||||||||||
Assets | ||||||||||||||||||||
Cash and cash equivalents |
$ | 56,216 | $ | 501 | $ | 66,165 | $ | | $ | 122,882 | ||||||||||
Other current assets |
208,814 | 327,152 | 253,779 | (326,045 | ) | 463,700 | ||||||||||||||
Plant, equipment and timberlands, net |
247,243 | 1,054 | 475,043 | | 723,340 | |||||||||||||||
Other assets |
973,748 | 236,411 | 214,301 | (1,055,972 | ) | 368,488 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total assets |
$ | 1,486,021 | $ | 565,118 | $ | 1,009,288 | $ | (1,382,017 | ) | $ | 1,678,410 | |||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Liabilities and Shareholders Equity | ||||||||||||||||||||
Current liabilities |
$ | 375,535 | $ | 2,855 | $ | 247,855 | $ | (337,878 | ) | $ | 288,367 | |||||||||
Long-term debt |
250,000 | | 513,120 | (320,795 | ) | 442,325 | ||||||||||||||
Deferred income taxes |
70,989 | (283 | ) | 78,633 | (8,319 | ) | 141,020 | |||||||||||||
Other long-term liabilities |
105,021 | | 13,792 | 3,409 | 122,222 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total liabilities |
801,545 | 2,572 | 853,400 | (663,583 | ) | 993,934 | ||||||||||||||
Shareholders equity |
684,476 | 562,546 | 155,888 | (718,434 | ) | 684,476 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total liabilities and shareholders equity |
$ | 1,486,021 | $ | 565,118 | $ | 1,009,288 | $ | (1,382,017 | ) | $ | 1,678,410 | |||||||||
|
|
|
|
|
|
|
|
|
|
- 22 -
GLATFELTER
3.31.14 Form 10-Q
Condensed Consolidating Statement of Cash Flows for the three
months ended March 31, 2014
In thousands |
Parent Company |
Guarantors | Non Guarantors |
Adjustments/ Eliminations |
Consolidated | |||||||||||||||
Net cash provided (used) by |
||||||||||||||||||||
Operating activities |
$ | (3,797 | ) | $ | 981 | $ | (7,394 | ) | $ | | $ | (10,210 | ) | |||||||
Investing activities |
||||||||||||||||||||
Expenditures for purchases of plant, equipment and timberlands |
(6,979 | ) | | (7,456 | ) | | (14,435 | ) | ||||||||||||
Proceeds from disposal plant, equipment and timberlands, net |
838 | | 1 | | 839 | |||||||||||||||
Advances of intercompany loans |
| (1,250 | ) | | 1,250 | | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total investing activities |
(6,141 | ) | (1,250 | ) | (7,455 | ) | 1,250 | (13,596 | ) | |||||||||||
Financing activities |
||||||||||||||||||||
Net repayments of indebtedness |
| | (17,933 | ) | | (17,933 | ) | |||||||||||||
Payment of dividends to shareholders |
(4,363 | ) | | | | (4,363 | ) | |||||||||||||
Repurchases of common stock |
(1,251 | ) | | | | (1,251 | ) | |||||||||||||
Borrowings of intercompany loans |
1,250 | | | (1,250 | ) | | ||||||||||||||
Payments related to share-based compensation awards and other |
(781 | ) | | | | (781 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total financing activities |
(5,145 | ) | | (17,933 | ) | (1,250 | ) | (24,328 | ) | |||||||||||
Effect of exchange rate on cash |
| | 37 | | 37 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net decrease in cash |
(15,083 | ) | (269 | ) | (32,745 | ) | | (48,097 | ) | |||||||||||
Cash at the beginning of period |
56,216 | 501 | 66,165 | | 122,882 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Cash at the end of period |
$ | 41,133 | $ | 232 | $ | 33,420 | $ | | $ | 74,785 | ||||||||||
|
|
|
|
|
|
|
|
|
|
- 23 -
GLATFELTER
3.31.14 Form 10-Q
Condensed Consolidating Statement of Cash Flows for the three
months ended March 31, 2013
In thousands |
Parent Company |
Guarantors | Non Guarantors |
Adjustments/ Eliminations |
Consolidated | |||||||||||||||
Net cash provided (used) by |
||||||||||||||||||||
Operating activities |
$ | 7,674 | $ | 1,727 | $ | 6,394 | $ | | $ | 15,795 | ||||||||||
Investing activities |
||||||||||||||||||||
Expenditures for purchases of plant, equipment and timberlands |
(11,820 | ) | | (19,571 | ) | | (31,391 | ) | ||||||||||||
Proceeds from disposal plant, equipment and timberlands, net |
73 | | | | 73 | |||||||||||||||
Repayments from intercompany loans |
| 6,193 | | (6,193 | ) | | ||||||||||||||
Advances of intercompany loans |
| (6,350 | ) | | 6,350 | | ||||||||||||||
Intercompany capital contributed |
| (90 | ) | | 90 | | ||||||||||||||
Other |
(175 | ) | | | | (175 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total investing activities |
(11,922 | ) | (247 | ) | (19,571 | ) | 247 | (31,493 | ) | |||||||||||
Financing activities |
||||||||||||||||||||
Payments of note offering costs |
(108 | ) | | | | (108 | ) | |||||||||||||
Payment of dividends to shareholders |
(3,905 | ) | | | | (3,905 | ) | |||||||||||||
Repayments of intercompany loans |
(1,107 | ) | | (5,086 | ) | 6,193 | | |||||||||||||
Borrowings of intercompany loans |
6,350 | | | (6,350 | ) | | ||||||||||||||
Intercompany capital received |
| | 90 | (90 | ) | | ||||||||||||||
Payments related to share-based compensation awards and other |
(586 | ) | | | | (586 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total financing activities |
644 | | (4,996 | ) | (247 | ) | (4,599 | ) | ||||||||||||
Effect of exchange rate on cash |
| | (942 | ) | | (942 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net increase (decrease) in cash |
(3,604 | ) | 1,480 | (19,115 | ) | | (21,239 | ) | ||||||||||||
Cash at the beginning of period |
43,781 | 4,278 | 49,620 | | 97,679 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Cash at the end of period |
$ | 40,177 | $ | 5,758 | $ | 30,505 | $ | | $ | 76,440 | ||||||||||
|
|
|
|
|
|
|
|
|
|
- 24 -
GLATFELTER
3.31.14 Form 10-Q
- 25 -
GLATFELTER
3.31.14 Form 10-Q
- 26 -
GLATFELTER
3.31.14 Form 10-Q
Business Unit Performance
Three months ended March 31 Dollars in millions |
Composite Fibers | Advanced Airlaid Materials |
Specialty Papers | Other and Unallocated |
Total | |||||||||||||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||||||||||||||
Net sales |
$ | 158.6 | $ | 111.8 | $ | 71.3 | $ | 66.2 | $ | 225.8 | $ | 227.1 | $ | | $ | | $ | 455.7 | $ | 405.2 | ||||||||||||||||||||
Energy and related sales, net |
| | | | 5.3 | 1.1 | | | 5.3 | 1.1 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total revenue |
158.6 | 111.8 | 71.3 | 66.2 | 231.1 | 228.2 | | | 461.0 | 406.3 | ||||||||||||||||||||||||||||||
Cost of products sold |
126.0 | 90.4 | 63.1 | 59.5 | 215.0 | 195.5 | 1.8 | 3.5 | 405.9 | 348.9 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Gross profit (loss) |
32.6 | 21.5 | 8.2 | 6.7 | 16.1 | 32.7 | (1.8 | ) | (3.5 | ) | 55.0 | 57.4 | ||||||||||||||||||||||||||||
SG&A |
13.3 | 9.8 | 2.3 | 2.2 | 13.7 | 14.5 | 4.3 | 7.0 | 33.6 | 33.5 | ||||||||||||||||||||||||||||||
Gains on dispositions of plant, equipment and timberlands, net |
| | | | | | (0.8 | ) | (0.1 | ) | (0.8 | ) | (0.1 | ) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total operating income (loss) |
19.3 | 11.6 | 5.9 | 4.5 | 2.4 | 18.3 | (5.2 | ) | (10.5 | ) | 22.3 | 24.0 | ||||||||||||||||||||||||||||
Non-operating expense |
| | | | | | (4.5 | ) | (3.5 | ) | (4.5 | ) | (3.5 | ) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Income (loss) before income taxes |
$ | 19.3 | $ | 11.6 | $ | 5.9 | $ | 4.5 | $ | 2.4 | $ | 18.3 | $ | (9.8 | ) | $ | (13.9 | ) | $ | 17.8 | $ | 20.5 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Supplementary Data |
||||||||||||||||||||||||||||||||||||||||
Net tons sold (thousands) |
40.0 | 22.5 | 25.1 | 23.9 | 202.2 | 202.3 | | | 267.3 | 248.8 | ||||||||||||||||||||||||||||||
Depreciation, depletion and amortization |
$ | 7.6 | $ | 4.6 | $ | 2.3 | $ | 2.2 | $ | 8.3 | $ | 8.3 | $ | 0.5 | $ | 0.2 | $ | 18.6 | $ | 15.4 | ||||||||||||||||||||
Capital expenditures |
6.0 | 17.5 | 1.5 | 2.1 | 6.2 | 8.6 | 0.8 | 3.2 | 14.4 | 31.4 |
The sum of individual amounts set forth above may not agree to the consolidated financial statements included herein due to rounding.
- 27 -
GLATFELTER
3.31.14 Form 10-Q
- 28 -
GLATFELTER
3.31.14 Form 10-Q
- 29 -
GLATFELTER
3.31.14 Form 10-Q
- 30 -
GLATFELTER
3.31.14 Form 10-Q
- 31 -
GLATFELTER
3.31.14 Form 10-Q
- 32 -
GLATFELTER
3.31.14 Form 10-Q
ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS |
Year Ended December 31 | At March 31, 2014 | |||||||||||||||||||||||||||
Dollars in thousands |
2014 | 2015 | 2016 | 2017 | 2018 | Carrying Value | Fair Value | |||||||||||||||||||||
Long-term debt |
||||||||||||||||||||||||||||
Average principal outstanding |
||||||||||||||||||||||||||||
At fixed interest rates Bond |
$ | 250,000 | $ | 250,000 | $ | 250,000 | $ | 250,000 | $ | 250,000 | $ | 250,000 | $ | 265,416 | ||||||||||||||
At fixed interest rates Term Loan |
58,919 | 57,814 | 51,554 | 44,189 | 36,825 | 58,919 | 58,536 | |||||||||||||||||||||
At variable interest rates |
115,907 | 115,907 | 101,419 | | | 115,907 | 115,907 | |||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||||||
$ | 424,826 | $ | 439,859 | |||||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||||||
Weighted-average interest rate |
||||||||||||||||||||||||||||
On fixed rate debt Bond |
5.375 | % | 5.375 | % | 5.375 | % | 5.375 | % | 5.375 | % | ||||||||||||||||||
On fixed rate debt Term Loan |
2.05 | % | 2.05 | % | 2.05 | % | 2.05 | % | 2.05 | % | ||||||||||||||||||
On variable rate debt |
1.97 | % | 1.97 | % | 1.97 | % | 1.97 | % | 1.97 | % |
- 33 -
GLATFELTER
3.31.14 Form 10-Q
ITEM 6. | EXHIBITS |
The following exhibits are filed herewith or incorporated by reference as indicated.
10.1 | P.H. Glatfelter Company Supplemental Long Term Disability Plan dated February 25, 2014, between the registrant and certain employees, filed herewith. ** | |
10.2 | Form of Performance Share Award Certificate (form effective February 26, 2014). ** | |
10.3 | Form of Stock-Only Stock Appreciation Right Award Certificate (form effective February 26, 2014). ** | |
31.1 | Certification of Dante C. Parrini, Chairman and Chief Executive Officer of Glatfelter, pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002. | |
31.2 | Certification of John P. Jacunski, Executive Vice President and Chief Financial Officer of Glatfelter, pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002. | |
32.1 | Certification of Dante C. Parrini, Chairman and Chief Executive Officer of Glatfelter, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350. | |
32.2 | Certification of John P. Jacunski, Executive Vice President and Chief Financial Officer of Glatfelter, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350. | |
101.INS | XBRL Instance Document, filed herewith | |
101.SCH | XBRL Taxonomy Extension Schema, filed herewith | |
101.CAL | XBRL Extension Calculation Linkbase, filed herewith | |
101.DEF | XBRL Extension Definition Linkbase, filed herewith | |
101.LAB | XBRL Extension Label Linkbase, filed herewith | |
101.PRE | XBRL Extension Presentation Linkbase, filed herewith |
** | Management contract or compensatory plan. |
- 34 -
GLATFELTER
3.31.14 Form 10-Q
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
P. H. GLATFELTER COMPANY | ||||||
(Registrant) | ||||||
May 2, 2014 | ||||||
By | /s/ David C. Elder | |||||
David C. Elder | ||||||
Vice President, Finance |
- 35 -
GLATFELTER
3.31.14 Form 10-Q
EXHIBIT INDEX
Exhibit |
Description | |
10.1 | P.H. Glatfelter Company Supplemental Long Term Disability Plan dated February 25, 2014, between the registrant and certain employees, filed herewith. ** | |
10.2 | Form of Performance Share Award Certificate (form effective February 26, 2014). ** | |
10.3 | Form of Stock-Only Stock Appreciation Right Award Certificate (form effective February 26, 2014). ** | |
31.1 | Certification of Dante C. Parrini, Chairman and Chief Executive Officer of Glatfelter, pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350 Chief Executive Officer, filed herewith. | |
31.2 | Certification of John P. Jacunski, Executive Vice President and Chief Financial Officer of Glatfelter, pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002 Chief Financial Officer, filed herewith. | |
32.1 | Certification of Dante C. Parrini, Chairman and Chief Executive Officer of Glatfelter, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 Chief Executive Officer, filed herewith. | |
32.2 | Certification of John P. Jacunski, Executive Vice President and Chief Financial Officer of Glatfelter, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350 Chief Financial Officer, filed herewith. | |
101.INS | XBRL Instance Document, filed herewith | |
101.SCH | XBRL Taxonomy Extension Schema, filed herewith | |
101.CAL | XBRL Extension Calculation Linkbase, filed herewith | |
101.DEF | XBRL Extension Definition Linkbase, filed herewith | |
101.LAB | XBRL Extension Label Linkbase, filed herewith | |
101.PRE | XBRL Extension Presentation Linkbase, filed herewith |
** | Management contract or compensatory plan. |
- 36 -
GLATFELTER
3.31.14 Form 10-Q
Exhibit 10.1
P. H. GLATFELTER COMPANY
SUPPLEMENTAL LONG TERM DISABILITY
Background
On February 25, 2014, the Compensation Committee of the Board of Directors approved a new supplemental Long Term Disability Plan (Supplemental LTD) to be offered to employees of P. H. Glatfelter Company (the Company) with annual base earnings in excess of $100,000. The goal of the Supplemental LTD benefit is to provide eligible employees with an overall income replacement of 60% in the event of a long-term disability.
Benefit Provisions
The following table provides an overview of the supplemental LTD benefit provisions:
Feature |
Supplemental LTD Provision | |
Insures Total Compensation | Base salary + Prior Year Paid Bonus | |
Definition of Disability- own occupation | Full benefit period to age 65 | |
Benefits payable upon full recovery while rebuilding compensation | 6 month recovery benefit | |
Catastrophic Disability Coverage (covers cost of care due to loss of Activities of Daily Living) | Full benefit period up to an additional $10,000 / month subject to individual underwriting | |
Mental / Nervous Disorders | Up to age 65 | |
Pre-existing condition limitation | No restrictions | |
Portability of Coverage | Fully Portable | |
Premium and Benefit Guarantees (non-cancellable) | Full benefit period; benefits paid by the Company while actively employed | |
Benefit Taxability | Benefits would be treated as imputed income thereby preserving the income replacement ratio |
Additional Plan Features
| Beginning in 2015, annual eligibility will be evaluated for new entrants in the May timeframe following the completion of the annual merit increase process. Once an employee is enrolled in the program, they would not be removed until terminated or retired from the Company. The employee would then have the option of converting the program to a private policy. |
| The guaranteed standard issue would be up to $15,000 of monthly disability income and underwritten by Unum. |
| A six-month provision for recovery of benefits would be provided to participants. Recovery benefits are payable to an employee who returns to work full-time but continues to suffer at least a 20% income loss as a result of the prior disability. Benefits are proportionate to the income loss provided the income loss continues, not to exceed 6 months. |
| A three-month work incentive benefit would be provided to include an additional incentive to return to work while partially disabled, benefitting both the employer and employee. When returning to work with a partial disability, the Work Incentive Benefit will pay a benefit based on the difference between an executives pre-disability income and the current income, up to the maximum benefit amount. |
| Catastrophic disabilities are classified as a loss of two Activities of Daily Living (ADL) (eating, bathing, dressing, using the toilet, and continence); cognitive impairment; or one is presumptively disabled (totally and irrecoverably loses the power of speech, hearing in both ears, sight in both eyes, or use of two limbs). |
| The benefit will be treated as imputed income thereby requiring employees to pay taxes on the benefit. Employees will have the ability to opt out of the benefit if objecting to the coverage and subsequent tax treatment. |
P. H. Glatfelter Company |
By: /s/ William T. Yanavitch II |
Senior Vice President of Human Resources and Administration |
Exhibit 10.2
(form effective as of February 26, 2014)
P. H. GLATFELTER COMPANY
Performance Share Award Certificate
Award Number: | 2014-PSA-01 | |
Award Date: | February 26, 2014 | |
Award Type: | Performance Share | |
Number of Performance Shares granted at Target:1 |
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Performance Period: | January 1, 2014 to December 31, 2016 | |
Vesting Date: | December 31, 2016 | |
Method of Payment: | If vested and earned, this Performance Award shall be paid in shares of Common Stock. |
THIS CERTIFIES THAT P. H. Glatfelter Company (the Company) has, on the Award Date specified above, granted to (the Participant, as defined in the Plan) a Performance Share Award (the Award) subject to the terms of this Award Certificate and the Companys Amended and Restated Long-Term Incentive Plan as amended effective May 9, 2013 (the Plan). Capitalized terms used in this Award Certificate without definition shall have the meanings set forth in the Plan.
Each Performance Share, if vested and earned, shall entitle the Participant to receive one (1) share of the Companys Common Stock. In the event of any conflict between the terms of the Plan and this Award Certificate, the terms of the Plan shall prevail.
1 | The actual number of Performance Shares earned by the Participant will be determined following the Vesting Date based on the degree of achievement of the Performance Goals relative to the applicable minimum, target and maximum thresholds, as more fully described in Section 3, and may be more or less than the number of Performance Shares granted at the target threshold. |
February 2014 PSA Award Certificate Page 1 of 7
(form effective as of February 26, 2014)
* * * *
1. Vesting of Performance Shares. The Performance Shares (and any Deemed Dividends with respect to such Performance Shares as set forth in Section 4) shall vest and be earned based on the achievement of the Company performance goals set forth below (the Performance Goals) and the Participants continued employment or service with the Company or one of its subsidiaries through the Vesting Date. The Companys Board of Directors (the Board) will determine whether the Performance Goals have been achieved. Except in the case of the Companys CEO whose compensation is determined by the Board, the number of Performance Shares earned by the Participant will be determined by the Compensation Committee of the Companys Board of Directors (the Committee), based on the level of achievement of the Performance Goals as more fully described in Section 3. These determinations shall be made no later than March 15, 2017.
2. Performance Goals. The Company must meet or exceed the applicable minimum Performance Goal listed immediately below for the Performance Period in order for that portion of the Performance Share Award corresponding to such Performance Level on the chart in Section 3 below to vest and be earned.
Performance Goals
(For the Performance Period
beginning January 1, 2014 and ending December 31, 2016)
Cumulative EBITDAP (40% weight)
|
+ |
3-Year Average ROCE (60% weight)
| ||||||||||||||
% of Target |
Payout |
% of Target |
Payout | |||||||||||||
Maximum |
$ | Maximum | ||||||||||||||
Target |
$ | Target | ||||||||||||||
Threshold |
$ | Threshold | ||||||||||||||
< Threshold |
<$ | < Threshold |
For purposes of this Award Certificate, the following terms shall have the following meanings:
3-year Cumulative Adjusted EBITDAP means the Companys cumulative earnings before interest, taxes, depreciation, amortization and pension income or pension expense, during the Performance Period, as determined by the Committee. EBITDAP is, generally speaking, equal to the Companys revenues minus its costs, after excluding from such costs interest expense, taxes, depreciation, amortization and pension income or pension expense, subject to adjustment as contemplated by the Plan.
3-year Average ROCE means the Companys average annual percentage return on capital employed during the Performance Period, as determined by the Committee. ROCE is, generally speaking, calculated as the tax-effected value of earnings before interest and taxes (EBIT) divided by the Companys total capital outstanding, subject to adjustment as contemplated by the Plan.
February 2014 PSA Award Certificate Page 2 of 7
(form effective as of February 26, 2014)
3. Determination of Achievement of Performance Goals. No later than March 15, 2017, the Board shall determine whether the Performance Goals have been achieved, and the level of such achievement, and the Committee (or the Board in the case of the Companys CEO) shall determine the number of Performance Shares, if any, earned by the Participant. The number of Performance Shares to be vested and earned (provided the Participant remains continuously employed through the Vesting Date) shall be based on the degree of achievement of the Performance Goals, in accordance with the following guidelines:
Company Performance: |
3-year Cumulative Adjusted EBITDAP (40% Weight) |
3-year Average ROCE (60% Weight) | ||
Is at target | 100% of Performance Shares payable with respect to this Performance Goal at target | 100% of Performance Shares payable with respect to this Performance Goal at target | ||
Meets minimum Performance Goal | 50% of the Performance Shares payable with respect to this Performance Goal at target | 50% of the Performance Shares payable with respect to this Performance Goal at target | ||
Exceeds the minimum Performance Goal but is less than target | Interpolated between minimum and target | Interpolated between minimum and target | ||
Meets or exceeds the maximum Performance Goal | 200% of the Performance Shares payable with respect to this Performance Goal at target | 200% of the Performance Shares payable with respect to this Performance Goal at target | ||
Exceeds the target Performance Goal but is less than maximum | Interpolated between target and maximum | Interpolated between target and maximum |
The Committee (or the Board in the case of the Companys CEO) has the discretion to reduce (but not increase) some or all of the number of shares of Common Stock that would otherwise be earned as a result of the satisfaction of the Performance Goals. In making this determination, the Committee may take into account any such factor or factors it determines are appropriate, including but not limited to Company, business unit or individual performance.
4. Dividends on Performance Shares. During the period from the Award Date to the issue of shares of Common Stock in accordance with Section 7, the Participant shall be credited with deemed dividends (a Deemed Dividend) in an amount equal to each cash dividend payable subsequent to the Award Date, just as though such Participant, on the record date for payment of such dividend, had been the holder of record of shares of Common Stock equal to the number of Performance Shares at target (adjusted as described in the following sentence) represented by this Award Certificate. The Deemed Dividends will be converted to additional Performance Shares at target, rounded down to the nearest whole number, by dividing the Deemed Dividends by the Fair Market Value (as defined in the Plan) of one share of Common Stock on the record date for the cash dividend to which it relates is paid. The Company shall establish a bookkeeping account to account for the Deemed Dividends and additional Performance Shares at target to be credited to the Participant. The additional Performance Shares represented by Deemed Dividends are subject to the same vesting requirements (see Section 1) as other Performance Shares, including without limitation the requirement that the applicable Performance Goals described herein have been achieved.
February 2014 PSA Award Certificate Page 3 of 7
(form effective as of February 26, 2014)
5. Separation from Service Prior to the Vesting Period.
(a) In General. Subject to paragraphs (b) and (c) below, if, prior to the Vesting Date, the Participant ceases to be an employee of, or to provide services to, the Company or any of its subsidiaries for any reason (whether voluntarily or involuntarily) then this Performance Shares Award shall be immediately and irrevocably forfeited.
(b) Retirement, Death or Disability. Notwithstanding the foregoing, if the Participant has a Separation from Service due to the death or Retirement of the Participant, or a termination of service due to Disability (whether or not a Separation from Service), and such event takes place on or after January 1, 2015 but prior to the Vesting Date, then the Participant shall be entitled to receive a pro-rated Performance Share Award following the end of the Performance Period, provided that the Performance Goal(s) are determined to have been achieved. Such pro-ration shall be determined by multiplying the number of Performance Shares the Participant would have received by a fraction, the numerator of which equals the number of days that elapse between the first day of the Performance Period and the date of death, Retirement, or Disability commencement, and the denominator shall equal the total number of days in the Performance Period. Payment of such pro-rated Award shall be made in accordance with the provisions set forth in Section 7.
(c) Impact of a Change in Control. In the event of a Change in Control in which the Company is not the surviving entity, this Performance Share Award shall be deemed to be earned at the greater of target or actual performance through the date of the Change in Control, as determined by the Board, for each Performance Goal as of the date of the consummation of such Change in Control, and shall be replaced with the common stock of the surviving entity (Replacement Performance Shares). The number of Replacement Performance Shares shall be calculated based on the Fair Market Value of the Companys Common Stock at the date of the Change in Control divided by the fair market value of the surviving entitys common stock on such date. If the Replacement Performance Shares are not issued for any reason, or if the common stock of the surviving entity is not publically traded at the date of the Change in Control, then, all Performance Shares shall be deemed to be earned upon the occurrence of the Change in Control at the greater of target or actual performance through the date of the Change in Control, as determined by the Board.
The Participants right to such Replacement Performance Shares shall not vest unless and until the Participant has remained in continuous employment with the Company or a subsidiary, or the Companys successor or a subsidiary, through the Vesting Date. Notwithstanding the foregoing, if the Participant has (i) an involuntary Separation from Service, other than for Cause, with the Company or the surviving entity following a Change in Control or (ii) a voluntary Separation from Service for Good Reason following a Change in Control, the requirement of continued employment through the Vesting Date shall be waived and the Participant shall be deemed vested with respect to payment of the Replacement Performance Shares on the date of such Separation from Service.
The terms and provisions of this Certificate shall continue to apply to the Replacement Performance Shares upon issuance. In addition, if the Participant remains in continuous employment with the Company or its successor, or a subsidiary of the Company or its successor,
February 2014 PSA Award Certificate Page 4 of 7
(form effective as of February 26, 2014)
through the Vesting Date, the Participant shall be entitled to receive a value restoration payment with respect to such Replacement Performance Shares as are deemed vested on such Vesting Date (a Value Restoration Payment). The Value Restoration Payment shall be equal to the difference between the fair market value of the surviving entitys common stock on the date of the Change in Control and, if less, the fair market value of the surviving entitys common stock on the Vesting Date (which shall be deemed to mean the date of the Participants involuntary Separation from Service other than for Cause, or voluntary Separation from Service for Good Reason, as described in the last sentence of the paragraph immediately above). For example, if the surviving entitys common stock fair market value is $20.00 per share on the date of the Change in Control and is $15.00 per share on the Vesting Date, the Participant shall be entitled to receive a Value Restoration Payment equal to $5.00 per Replacement Performance Share. Any such Value Restoration Payment shall include interest (at the prime rate of interest of the Companys principal bank in effect on the vesting date for the period between the date of the Change in Control and the Vesting Date), and shall be paid in cash within thirty (30) days after the Vesting Date.
6. Restriction on Transfer. No rights under this Performance Shares Award may be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of by the Participant, and any such purported sale, assignment, transfer, pledge, hypothecation or other disposition of Performance Shares or other rights under this Performance Shares Award shall be void and unenforceable against the Company and shall result in the immediate forfeiture of such Performance Shares Award and rights. Notwithstanding the foregoing, the Participant may, in the manner established by the Committee, designate a beneficiary or beneficiaries to exercise the rights of the Participant and receive any shares of Common Stock issued with respect to the Performance Shares Award upon the death of the Participant.
7. Payment of Performance Shares. Payment in respect of the vested and earned Performance Shares shall be made to the Participant no later than March 15, 2017 but only to the extent it is determined that the applicable Performance Goal(s) and other requirements set forth herein have been met. Payment of vested and earned Performance Shares shall be made in shares of Common Stock. The number of shares issued shall be rounded down to the next whole number of shares and the Company shall cause the shares to be issued, in book-entry form, registered in the Participants name or in the name of the Participants legal representatives, beneficiaries or heirs, as the case may be, in satisfaction of such Performance Shares, the number of shares of Common Stock equal to the number of vested and earned Performance Shares.
The Company shall take such actions as it deems appropriate to ensure all applicable federal, state, local or foreign payroll, withholding, income or other taxes are withheld or collected from the Participant. In accordance with the terms of the Plan, the Committee hereby confirms that the Participant may elect to satisfy the Participants federal, state, local and foreign tax withholding obligations arising from the receipt of, or the vesting of, Performance Shares by (i) delivering check or money order payable to the Company in any amount equal to the federal, state, local or foreign taxes the Company determines is required to satisfy its minimum withholding obligations, or (ii) having the Company withhold a portion of the shares of Common Stock otherwise to be delivered having a Fair Market Value equal to the amount of such federal, state, local or foreign taxes the Company determines is required to satisfy its minimum withholding obligations. The Company will not deliver any fractional share of Common Stock
February 2014 PSA Award Certificate Page 5 of 7
(form effective as of February 26, 2014)
but will instead round down to the next full number the amount of shares of Common Stock to be delivered. The Participants election must be made on or before the date that any such withholding obligation with respect to the Performance Shares arises. If the Participant fails to make a timely election, the Company shall have the right to withhold a portion of the shares of Common Stock otherwise to be delivered having a Fair Market Value equal to the amount the Company determines is required to satisfy its minimum withholding obligations with respect to such taxes.
8. Compliance with Code Section 409A. To the extent that distributions of Common Stock or cash in payment of this Performance Shares Award represent a deferral of compensation within the meaning of Internal Revenue Code of 1986, as amended (Code) section 409A, such distributions shall conform to the applicable requirements of Code section 409A including, without limitation, the requirement that a distribution to a Participant who is a specified employee within the meaning of Code section 409A(a)(2)(B)(i) which is made on account of the specified employees Separation from Service shall not be made before the date which is six (6) months after the date of Separation from Service. However, distributions as aforesaid shall not be deemed to be a deferral of compensation subject to Code section 409A to the extent provided in the exception in Treasury Regulation Section 1.409A-1(b)(4) for short-term deferrals.
9. Miscellaneous.
(a) The Award does not confer on the Participant any right with respect to the continuance of any relationship with the Company or its subsidiaries, nor will it interfere in any way with the right of the Company to terminate such relationship at any time.
(b) The Company shall not be required to deliver any shares of Common Stock upon vesting of the Performance Shares until the requirements of any federal or state securities laws, rules or regulations or other laws or rules (including the rules of any securities exchange) as may be determined by the Company to be applicable are satisfied.
(c) Definitions. In addition to the definitions set forth in the Plan, the following definitions shall apply to this Award Certificate:
Cause means (i) an act or acts of personal dishonesty taken by the Participant and intended to result in substantial personal enrichment of the Participant at the expense of the Company, (ii) the Participants willful, deliberate and continued failure to substantially perform for the Company the normal material duties related to Participants job position which are not remedied in a reasonable period of time after receipt of written notice from the Company, (iii) violation by the Participant of any of the Companys policies, including, but not limited to, policies regarding sexual harassment, insider trading, confidentiality, non-disclosure, non-competition, non-disparagement, substance abuse and conflicts of interest and any other written policy of the Company, which violation could result in the termination of the Participants employment; or (iv) the conviction of the Participant of a felony.
Change in Control shall have the meaning set forth in the Plan.
February 2014 PSA Award Certificate Page 6 of 7
(form effective as of February 26, 2014)
Good Reason means (i) a material diminution in the Participants base salary, or (ii) a material change in the geographic location at which the Participant must perform services (for this purpose, a requirement that the Participants services be performed at a location less than forty (40) miles from the location where the Participant previously performed services shall not be considered a material change); provided that within ninety (90) days after the occurrence of any of the events listed in clauses (i) or (ii) above the Participant delivers written notice to the Company of his/her intention to terminate his/her employment for Good Reason specifying in reasonable detail the facts and circumstances deemed to give rise to the Participants right to terminate his/her employment for Good Reason and the Company shall not have cured such facts and circumstances within thirty (30) days after delivery of such notice by the Participant to the Company (unless the Company shall have waived its right to cure by written notice to the Participant) and provided further that the Participant in fact has a Separation from Service no later than thirty (30) days following the expiration of such cure period.
Retirement shall mean the retirement of an employee from employment with the Company and all affiliates on or after attaining age 65, or on or after attaining age 55 with a minimum of ten (10) years of service
A copy of the Amended and Restated Long-Term Incentive Plan is available by request to the office of the Corporate Secretary.
P. H. GLATFELTER COMPANY |
|
By my signature below, I hereby acknowledge receipt of this Award Certificate on the date shown above, which has been issued to me under the terms and conditions of the Plan. I further acknowledge that I reviewed the Plan and agree to conform to all of the terms and conditions of the Award Certificate and the Plan.
Signature: |
|
Date: | ||||||
(Name of Participant) |
February 2014 PSA Award Certificate Page 7 of 7
Exhibit 10.3
(form effective February 26, 2014)
STOCK-ONLY STOCK APPRECIATION RIGHT AWARD CERTIFICATE
Award Number: 2014 SAR-01 | Award Date: February 26, 2014 | |
Expiration Date: February 26, 2024 | Number of Stock-Only | |
Stock Appreciation Rights: 9999 | ||
Fair Market Value on Grant Date (the Exercise Price): $ 29.89 |
1st Tranche Vesting Date: February 26, 2015 | |
2nd Tranche Vesting Date: February 26, 2016 | ||
3rd Tranche Vesting Date: February 26, 2017 |
THIS CERTIFIES THAT P. H. Glatfelter Company, a Pennsylvania corporation (the Company), has on the Award Date specified above granted to:
[Name of Employee]
(the Participant as defined in the Plan) an award (the Award) to receive the number of Stock-Only Stock Appreciation Rights (SOSARs) indicated above in the box labeled Number of Stock-Only Stock Appreciation Rights, each SOSAR representing the right to receive a payment of Shares having a Fair Market Value equal to the amount of appreciation, if any, in the Fair Market Value of one share of Common Stock from the date of grant of a SOSAR to the date of its exercise, subject to certain restrictions and on the terms and conditions contained in this Award Certificate and the Companys Amended and Restated Long-Term Incentive Plan, as amended effective May 9, 2013 (the Plan). In the event of any conflict between the terms of the Plan and this Award Certificate, the terms of the Plan will prevail. Any capitalized terms not defined herein will have the meaning set forth in the Plan.
* * * *
1. Rights of the Participant with Respect to the Stock-Only Stock Appreciation Rights.
(a) No Shareholder Rights. The SOSARs granted pursuant to the Plan do not and will not entitle the Participant to any rights of a holder of Common Stock. The rights of the Participant with respect to the SOSARs will remain forfeitable at all times prior to the date on which such rights become vested, in accordance with Sections 2, 3 or 4.
February 2014 SOSAR Award Certificate Page 1 of 6
(form effective February 26, 2014)
(b) Expiration of Stock-Only Stock Appreciation Rights. Each SOSAR was granted on the Award Date indicated above and will expire on the Expiration Date indicated above (based on a ten-year expiration term). Notwithstanding Section 4, no SOSAR will be exercisable after the Expiration Date.
2. Vesting. One-third (1/3) of the total amount of SOSARs awarded will vest and become exercisable on the first, second and third anniversaries of the Award Date if the Participant remains continuously employed by the Company or any of its subsidiaries until the respective vesting dates. In the event the vesting schedule set forth above yields a fractional number of SOSARs, the number of SOSARs subject to vesting in any given year will be rounded down to the nearest number of SOSARs.
3. Early Vesting upon Separation Following Change in Control. Notwithstanding the other vesting provisions contained in Section 2, but subject to the other terms and conditions set forth herein including Section 10 herein, in the event of the Participants (i) involuntary Separation from Service by the Company or any of its subsidiaries other than for Cause or (ii) voluntary Separation from Service with the Company or any of its subsidiaries for Good Reason, which follows by a Change in Control, all of the SOSARs will become immediately and unconditionally vested.
4. Forfeiture or Early Vesting upon Separation from Service.
(a) Separation from Service for Cause. If the Company or any of its subsidiaries terminates the Participants employment for Cause, then all outstanding SOSARs, whether vested or unvested, will be immediately and irrevocably forfeited.
(b) Death or Disability. Upon the Separation from Service due to death of the Participant, or the termination of service of the Participant due to Disability (whether or not a Separation from Service), then all unvested SOSARs shall accelerate and become fully vested and exercisable for three years from the date of such death or Disability, or, if shorter, until the end of the term of a particular SOSAR as set forth herein.
(c) Vesting upon Retirement. In the event of the Participants Retirement , then an amount of unvested SOSARs shall vest equal to a percentage, the numerator of which equals the number of days that have elapsed as of the date in the applicable vesting period on which Retirement occurs, and the denominator of which equals the total number of days in such applicable vesting period, rounded down to the nearest whole Share. For example, if a Participant holds a SOSAR Award for 12,000 shares vesting one-third in each year, and Retires on July 31 of the second year of the vesting period, such Participant would have vested in one-third of the Award at the end of the first year of the vesting period, and will have accelerated vesting of 2,323 Shares under such SOSAR Award as of the date of Retirement (4,000 Shares X 212/365). Such vested SOSARS, together with all other vested and unexercised SOSARS may be exercised by the Participant, or his or her beneficiaries, for three years following the date of Retirement, or, if shorter, until the end of the term of a particular SOSAR as established in the original Award Agreement.
February 2014 SOSAR Award Certificate Page 2 of 6
(form effective February 26, 2014)
(d) Other Termination. If a Participant ceases to be an employee of the Company or any of its subsidiaries for reasons other than death, Disability, Retirement, or involuntary Termination for Cause, this is referred to as an Other Termination. For a period of ninety days following such Other Termination, the Participant may exercise any SOSARs that vested prior to such Other Termination. All unvested SOSARs on the date such Other Termination will be immediately and irrevocably forfeited.
5. Exercise of Stock-Only Stock Appreciation Rights. Any SOSAR may be exercised at any time during the period commencing with the first date such SOSAR has vested under the vesting schedule set forth in Section 2 above, or as otherwise provided for in Sections 3 and 4 above, and ending on the Expiration Date, or as otherwise provided in Section 4 above (the SOSAR Term). A Participant may exercise the SOSAR for all or part of the number of Shares which he or she is eligible to exercise under the terms of the SOSAR. Upon exercise of a vested SOSAR, the Participant will receive Shares having a Fair Market Value equal to the excess, if any, of the Fair Market Value of a Share on the date of exercise over the amount indicated above in the box labeled Exercise Price.
6. Method of Exercise. SOSARs may be exercised by delivering written notice to the Company during the SOSAR Term which notice must state the Participants election to exercise the SOSARs, the number of SOSARs being exercised and such other representations and agreements as to the Participants investment intent with respect to such SOSARs as may be required pursuant to the provisions of the Plan. The written notice must be signed by the Participant, or, in the event of the exercise of a SAR following the death of the Participant pursuant to Section 4, by the legal representative of the Participants estate.
7. Delivery of Shares. Upon the exercise of a SOSAR, the Company will issue or deliver to the Participant certificates for the number of Shares the Participant is entitled to receive under the terms of this Award Certificate as soon as practicable; and, when possible, in the same calendar year. The Company will not deliver any fractional share of Common Stock but will instead round down to the next full number the amount of Shares to be delivered.
8. Restriction on Transfer. No SOSARs will be transferable by the Participant otherwise than by will or by the laws of descent and distribution, to the extent consistent with the terms of the Plan and the Award Certificate, and all SOSARs will be exercisable, during the Participants lifetime, only by the Participant.
9. Tax Matters.
(a) In order to comply with all applicable federal, state and local tax laws or regulations, the Company may take such actions as it deems appropriate to ensure that all applicable federal, state and local payroll, withholding, income or other taxes are withheld or collected from the Participant.
(b) In accordance with the terms of the Plan, and such rules as may be adopted by the Committee under the Plan, the Participant may elect to satisfy the Participants federal, state and local tax withholding obligations arising from the receipt of or the vesting of the SOSARs, by (i) delivering cash, check or money order payable to the Company, or (ii) having the Company withhold a portion of the Shares otherwise to be delivered having a
February 2014 SOSAR Award Certificate Page 3 of 6
(form effective February 26, 2014)
Fair Market Value equal to the amount of such taxes. The Participants election must be made on or before the date that any such withholding obligation with respect to the SOSARs arises. If the Participant fails to make a timely election, the Company will have the right to withhold a portion of the Shares otherwise to be delivered having a Fair Market Value equal to the amount of such taxes.
10. Change in Control; Value Restoration Payment. In the event of a Change in Control in which the Companys stock is no longer the stock of the surviving entity, the Company shall cause the surviving entity to issue replacement SOSARs (Replacement SOSARs). The number of Replacement SOSARs to be issued shall be calculated based on the fair market value of the Companys Common Stock at the date of the Change in Control divided by the fair market value of the surviving entitys common stock on such date. For purposes of determining the economic equivalence of the Replacement SOSARs, the exercise price of the Replacement SOSARs shall be determined so that the ratio between the Fair Market Value of the Companys Common Stock on the date of grant of the original SOSAR and the Fair Market Value of the Companys Common Stock on the date of the Change in Control is preserved with respect to the Replacement SOSARs exercise price in relation to the surviving entitys common stock underlying the Replacement SOSARs; provided that no such replacement shall cause the Replacement SOSARs to become subject to Section 409A of the Internal Revenue Code of 1986, as amended (the Code). If such Replacement SOSARs are not issued for any reason, or if the common stock of the surviving entity is not publicly traded at the date of the Change in Control, then, notwithstanding the provisions of Section 3, all SOSARs shall vest in full upon the occurrence of the Change in Control.
The terms and provisions of this Certificate shall continue to apply to the Replacement SOSARs upon issuance, including, without limitation, Section 3. In addition, the Participant shall be entitled to receive, with respect to Replacement SOSARs that vest on each vesting date a value restoration payment with respect to such Replacement SOSARs (a Value Restoration Payment). The Value Restoration Payment shall be equal to the difference between the fair market value of the shares of the surviving entitys common stock the Participant would have received had he/she exercised the Replacement SOSARs on the date of the Change in Control and, if less, the fair market value of the surviving entitys common stock the Participant would receive if he/she were to exercise the Replacement SOSARs on the date of vesting (including the date of accelerated vesting, if applicable, in the event of termination as described in Section 3). For example, if the value of the surviving entitys common stock is $20.00 per share on the date of the Change in Control and is $15.00 per share on the date of vesting, the Participant shall be entitled to receive a Value Restoration Payment equal to $5.00 per Replacement SOSAR with respect to each Replacement SOSARs vesting on such vesting date. Any such Value Restoration Payment shall include interest (at the prime rate of interest of the Companys principal bank in effect on the vesting date for the period between the date of the Change in Control and the applicable vesting date), and shall be paid in cash within thirty (30) days after the applicable vesting date.
February 2014 SOSAR Award Certificate Page 4 of 6
(form effective February 26, 2014)
11. Miscellaneous.
(a) The Plan does not confer on the Participant any right with respect to the continuance of any relationship with the Company or its subsidiaries, nor will it interfere in any way with the right of the Company to terminate such relationship at any time.
(b) The Company will not be required to deliver any Shares upon exercise of any SOSARs until the requirements of any federal or state securities laws, rules or regulations or other laws or rules (including the rules of any securities exchange) as may be determined by the Company to be applicable are satisfied.
(c) An original record of the Award and all the terms thereof, executed by the Company, will be held on file by the Company. To the extent there is any conflict between the terms contained in the Award Certificate and the terms contained in the original record held by the Company, the terms of the original record held by the Company will control.
12. Certain Definitions.
(a) Cause shall mean (i) an act or acts of personal dishonesty taken by the Participant and intended to result in substantial personal enrichment of the Participant at the expense of the Company, (ii) the Participants willful, deliberate and continued failure to substantially perform for the Company the normal material duties related to Participants job position which are not remedied in a reasonable period of time after receipt of written notice from the Company, (iii) violation by the Participant of any of the Companys policies, including, but not limited to, policies regarding sexual harassment, insider trading, confidentiality, non-disclosure, non-competition, non-disparagement, substance abuse and conflicts of interest and any other written policy of the Company, which violation could result in the termination of the Participants employment; or (iv) the conviction of the Participant of a felony.
(b) Change in Control shall have the meaning set forth in the Plan.
(c) Committee shall have the meaning set forth in the Plan.
(d) Disability shall have the meaning set forth in the Plan.
(e) Fair Market Value shall have the meaning set forth in the Plan.
(f) Good Reason shall mean Good Reason as defined in the Participants Change in Control Employment Agreement for those Participants subject to such agreement; otherwise, Good Reason shall mean (i) a material diminution in the Participants base salary, or (ii) a material change in the geographic location at which the Participant must perform services (for this purpose, a requirement that the Participants services be performed at a location less than forty (40) miles from the location where the Participant previously performed services shall not be considered a material change); provided that within ninety (90) days after the occurrence of any of the events listed in clauses (i) or (ii) above the Participant delivers written notice to the Company of his/her intention to terminate his/her employment for Good Reason specifying in reasonable detail the facts and circumstances deemed to give rise to the Participants right to
February 2014 SOSAR Award Certificate Page 5 of 6
(form effective February 26, 2014)
terminate his/her employment for Good Reason and the Company shall not have cured such facts and circumstances within thirty (30) days after delivery of such notice by the Participant to the Company (unless the Company shall have waived its right to cure by written notice to the Participant) and provided further that the Participant in fact have a Separation from Service no later than thirty (30) days following the expiration of such thirty (30) day period.
(g) Retirement shall mean the retirement of an employee from employment with the Company and all affiliates on or after attaining age 65, or on or after attaining age 55 with a minimum of ten (10) years of service.
(h) Separation from Service shall have the meaning set forth in the Plan.
(i) Share shall have the meaning set forth in the Plan.
A copy of the Amended & Restated Long-Term Incentive Plan is available by request to the office of the Corporate Secretary.
P. H. GLATFELTER COMPANY |
|
By my signature below, I hereby acknowledge receipt of this Award Certificate on the date shown above, which is made pursuant to the terms and conditions of the Plan. I further acknowledge that I have reviewed the Plan and agree to conform to all of the terms and conditions of this Award Certificate and the Plan.
Signature: |
|
Date: | ||||||
[Name of Participant] |
February 2014 SOSAR Award Certificate Page 6 of 6
EXHIBIT 31.1
CERTIFICATION PURSUANT TO SECTION 302 (a) OF THE SARBANES-OXLEY ACT OF 2002
I, Dante C. Parrini certify that:
1. | I have reviewed this Quarterly Report on Form 10-Q for the quarter ended March 31, 2014 of P. H. Glatfelter Company (Glatfelter); |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report. |
4. | Glatfelters other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for Glatfelter and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to Glatfelter, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of Glatfelters disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in Glatfelters internal control over financial reporting that occurred during Glatfelters most recent fiscal quarter (the fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, Glatfelters internal control over financial reporting. |
5. | Glatfelters other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to Glatfelters auditors and the audit committee of Glatfelters board of directors (or persons performing similar functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect Glatfelters ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in Glatfelters internal control over financial reporting. |
May 2, 2014
By | /s/ Dante C. Parrini | |
Dante C. Parrini | ||
Chairman and Chief Executive Officer |
EXHIBIT 31.2
CERTIFICATION PURSUANT TO SECTION 302 (a) OF THE SARBANES-OXLEY ACT OF 2002
I, John P. Jacunski certify that:
1. | I have reviewed this Quarterly Report on Form 10-Q for the quarter ended March 31, 2014 of P. H. Glatfelter Company (Glatfelter); |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report. |
4. | Glatfelters other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for Glatfelter and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to Glatfelter, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of Glatfelters disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in Glatfelters internal control over financial reporting that occurred during Glatfelters most recent fiscal quarter (the fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, Glatfelters internal control over financial reporting. |
5. | Glatfelters other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to Glatfelters auditors and the audit committee of Glatfelters board of directors (or persons performing similar functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect Glatfelters ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in Glatfelters internal control over financial reporting. |
May 2, 2014
By | /s/ John P. Jacunski | |
John P. Jacunski | ||
Executive Vice President and Chief Financial Officer |
EXHIBIT 32.1
CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 18 U.S.C. SECTION 1350
In connection with the Quarterly Report on Form 10-Q for the quarter ended March 31, 2014, of P. H. Glatfelter Company (the Company) as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Dante C. Parrini, Chairman and Chief Executive Officer of the Company, certify to the best of my knowledge, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:
1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
A signed original of this written statement required by Section 906 has been provided to Glatfelter and will be retained by Glatfelter and furnished to the Securities and Exchange Commission or its staff upon request.
May 2, 2014
By | /s/ Dante C. Parrini | |
Dante C. Parrini | ||
Chairman and Chief Executive Officer |
EXHIBIT 32.2
CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 18 U.S.C. SECTION 1350
In connection with the Quarterly Report on Form 10-Q for the quarter ended March 31, 2014, of P. H. Glatfelter Company (the Company) as filed with the Securities and Exchange Commission on the date hereof (the Report), I, John P. Jacunski, Executive Vice President and Chief Financial Officer of the Company, certify to the best of my knowledge, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:
1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
A signed original of this written statement required by Section 906 has been provided to Glatfelter and will be retained by Glatfelter and furnished to the Securities and Exchange Commission or its staff upon request.
May 2, 2014
By | /s/ John P. Jacunski | |
John P. Jacunski | ||
Executive Vice President and Chief Financial Officer |
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Segment Information (Tables)
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3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2014
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Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Financial and Other Information by Business Unit | The following table sets forth financial and other information by business unit for the period indicated:
|
Stock-Based Compensation - Compensation Expense for Stock Option Activity (Detail) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | |
---|---|---|
Mar. 31, 2014
|
Mar. 31, 2013
|
|
Restricted Stock Units (RSU) and Performance Share Awards (PSAs) [Member]
|
||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Compensation expense | $ 579 | $ 720 |
Stock Only Stock Appreciation Rights (SOSARs) [Member]
|
||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Compensation expense | $ 449 | $ 385 |
Accumulated Other Comprehensive Income - Schedule of Amounts Reclassifications Out of Accumulated Other Comprehensive Income (Detail) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | |
---|---|---|
Mar. 31, 2014
|
Mar. 31, 2013
|
|
Defined Benefit Plan Disclosure [Line Items] | ||
Costs of products sold | $ (405,943) | $ (348,915) |
Selling, general and administrative | (33,551) | (33,487) |
Income tax provision | (3,110) | (4,840) |
Reclassifications Out of Accumulated Other Comprehensive Income [Member]
|
||
Defined Benefit Plan Disclosure [Line Items] | ||
Net of tax | 2,640 | 3,878 |
Reclassifications Out of Accumulated Other Comprehensive Income [Member] | Amortization of Deferred Benefit Pension Plan Items [Member]
|
||
Defined Benefit Plan Disclosure [Line Items] | ||
Before tax | 3,674 | 6,063 |
Income tax provision | (1,393) | (2,284) |
Net of tax | 2,281 | 3,779 |
Reclassifications Out of Accumulated Other Comprehensive Income [Member] | Amortization of Deferred Benefit Pension Plan Items [Member] | Prior Service Costs [Member]
|
||
Defined Benefit Plan Disclosure [Line Items] | ||
Costs of products sold | 548 | 613 |
Selling, general and administrative | 186 | 161 |
Reclassifications Out of Accumulated Other Comprehensive Income [Member] | Amortization of Deferred Benefit Pension Plan Items [Member] | Actuarial Losses [Member]
|
||
Defined Benefit Plan Disclosure [Line Items] | ||
Costs of products sold | 2,196 | 4,114 |
Selling, general and administrative | 744 | 1,175 |
Reclassifications Out of Accumulated Other Comprehensive Income [Member] | Amortization of Deferred Benefit Other Plan Items [Member]
|
||
Defined Benefit Plan Disclosure [Line Items] | ||
Before tax | 57 | 77 |
Income tax provision | (22) | (29) |
Net of tax | 35 | 48 |
Reclassifications Out of Accumulated Other Comprehensive Income [Member] | Amortization of Deferred Benefit Other Plan Items [Member] | Prior Service Costs [Member]
|
||
Defined Benefit Plan Disclosure [Line Items] | ||
Costs of products sold | (59) | (100) |
Selling, general and administrative | (13) | (25) |
Reclassifications Out of Accumulated Other Comprehensive Income [Member] | Amortization of Deferred Benefit Other Plan Items [Member] | Actuarial Losses [Member]
|
||
Defined Benefit Plan Disclosure [Line Items] | ||
Costs of products sold | 106 | 155 |
Selling, general and administrative | 23 | 47 |
Reclassifications Out of Accumulated Other Comprehensive Income [Member] | Cash Flow Hedges [Member] | (Gains) Losses on Cash Flow Hedges [Member]
|
||
Defined Benefit Plan Disclosure [Line Items] | ||
Costs of products sold | 449 | 70 |
Income tax provision | (125) | (19) |
Net of tax | $ 324 | $ 51 |
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