UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to
Section 14(a) of the Securities
Exchange Act of 1934
Filed
by the Registrant x
Filed by a Party other than the Registrant o
Check the appropriate box:
o | Preliminary Proxy Statement | o | Confidential, for Use of the Commission Only | |
x | Definitive Proxy Statement | (as permitted by Rule 14a-6(e)(2)) | ||
o | Definitive Additional Materials | |||
o | Soliciting Material Pursuant to § 240.14a -12 |
Minerals Technologies Inc.
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
x | No fee required. | |
o | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. | |
(1) | Title of each class of securities to which transactions applies: | |
(2) | Aggregate number of securities to which transactions applies: | |
(3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): | |
(4) | Proposed maximum aggregate value of transaction: | |
(5) | Total fee paid: | |
o | Fee paid previously with preliminary materials. | |
o | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. | |
(1) | Amount previously paid: | |
(2) | Form, schedule or registration statement no.: | |
(3) | Filing party: | |
(4) | Date filed: |
Sincerely, | |
/s/ Joseph C. Muscari | |
Joseph C. Muscari | |
Chairman and Chief Executive Officer |
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53
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54
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NOTICE OF THE ANNUAL MEETING OF SHAREHOLDERS
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1.
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the election of one director;
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2.
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a proposal to ratify the appointment of KPMG LLP as the independent registered public accounting firm of Minerals Technologies Inc. for the 2014 fiscal year;
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3.
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an advisory vote to approve executive compensation; and
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4.
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any other business that properly comes before the meeting, either at the scheduled time or after any adjournment.
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Shareholders of record as of the close of business on March 18, 2014, are entitled to notice of and to vote at the meeting.
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April 3, 2014
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New York, New York
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By Order of the Board of Directors,
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/s/ Thomas J. Meek | |
Thomas J. Meek
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Senior Vice President, General Counsel,
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Human Resources, Secretary and Chief Compliance Officer
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IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR
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THE MINERALS TECHNOLOGIES INC. ANNUAL MEETING OF SHAREHOLDERS
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TO BE HELD ON MAY 14, 2014
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The 2014 Proxy Statement and 2013 Annual Report to Shareholders are available at:
www.proxyvote.com |
MINERALS TECHNOLOGIES 2014 Proxy Statement
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1
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PROXY SUMMARY
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This summary highlights information contained elsewhere in this proxy statement. This summary does not contain all of the information that you should consider and you should read the entire proxy statement before voting. For more complete information regarding the Company's 2013 performance, please review the Company's Annual Report on Form 10-K.
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2014 Annual Meeting of Shareholders
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Date, Time and Place: May 14, 2014, 9:00 a.m. 1 Chase Manhattan Plaza, 28th floor, New York, NY 10005
Record Date: March 18, 2014 |
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Voting Matters and Board Recommendations
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Our Board’s Recommendation
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Proposal
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Issue
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FOR
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Item 1.
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Director Nomination
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þ
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01
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Elect Duane R. Dunham
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þ
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Item 2.
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Ratification of Approval of Auditors for 2014 Fiscal Year
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þ
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Item 3.
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Advisory Vote to Approve Executive Compensation
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þ
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2013 Business Highlights
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In 2013, the Company delivered strong operating results. Business highlights included:
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The Company achieved record earnings for the fourth consecutive year with earnings of $2.42 per share in 2013.
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Operating income of $124 million was a record with 10% growth over 2012 and represented 12.2% of sales.
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Our Return on Capital for the year was 9.5%, as compared with 9.2% in 2012.
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Our cash flow for the year and our balance sheet continued to be strong. We generated $138 million in cash, and we repurchased $52 million in Treasury stock through our continuing share repurchase program. Cash, cash equivalents and short-term investments at December 31, 2013 were over $506 million.
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The Company achieved 5% productivity improvements over 2012, which improved operating income by over $3 million in 2013.
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We had a record safety performance in 2013 and are approaching world class safety levels.
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Executing our strategy of geographic expansion, we signed contracts for two new satellite PCC facilities–one in China and one in Europe–and began operation of two new satellite plants, one in Thailand and another in India. In January 2014, we signed an agreement for a 100,000 ton satellite in Changshu, China.
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The Company continues to see progress in its major growth strategy of developing and commercializing new products in advancing our FulFill® platform. FulFill® is a portfolio of high-filler technologies that offers papermakers a variety of solutions that decrease dependency on natural fiber to reduce costs. We signed four commercial agreements for FulFill® in 2013 and one additional contract in early 2014. Today, we have commercial agreements with a total of 15 paper mills, and are actively engaged with 20 other mills around the globe.
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Executive Compensation Highlights
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2013 marked a year of continued significant returns to our shareholders, even while our executive leadership changed. In March 2013, Robert S. Wetherbee became our President and Chief Executive Officer, and Joseph C. Muscari, who had served as Chairman and Chief Executive Officer since 2007, became Executive Chairman. As discussed further below, in February 2014, Mr. Wetherbee resigned and Mr. Muscari resumed responsibilities as Chief Executive Officer. The following illustrates the directional relationship between earnings per share and market capitalization – two key metrics of Company performance that we believe correlate to shareholder value – and the compensation of our executive leadership over the past three years.
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2
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MINERALS TECHNOLOGIES 2014 Proxy Statement
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PROXY SUMMARY
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*
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Compensation for Mr. Muscari, who was Chairman and Chief Executive Officer from March 2007 until March 2013, and Executive Chairman for the remainder of 2013, as reported in the 2013 Summary Compensation Table (see page 54). Mr. Muscari resumed responsibilities as Chief Executive Officer in February 2014.
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**
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Compensation for Mr. Wetherbee, who was Chief Executive Officer beginning in March 2013. Mr. Wetherbee resigned as Chief Executive Officer in February 2014. Compensation total excludes value of long-term incentive awards that were forfeited by Mr. Wetherbee as a result of his resignation.
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See “Compensation Discussion and Analysis – Chief Executive Officer Compansation.”
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For those who wish to consider total shareholder return when evaluating executive compensation, the graphs below compare:
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● |
The Company’s cumulative 1-year total shareholder return on common stock with the cumulative total returns of the S&P 500 Index, the Dow Jones US Industrials Index, the S&P Midcap 400 Index, the Dow Jones US Basic Materials Index, and the S&P MidCap 400 Materials Sector.
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The Company’s cumulative 3-year total shareholder return on common stock with the cumulative total returns of the S&P 400 and the comparator group used for the Company’s long-term incentive plan during this period (see page 50). As illustrated below, the Company’s common stock outperformed both the S&P Midcap 400 Index and the Company’s comparator group during this period.
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These graphs track the performance of a $100 investment in our common stock and in each index (with the reinvestment of all dividends) over the covered periods. |
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MINERALS TECHNOLOGIES | 2014 Proxy Statement | 3 |
PROXY SUMMARY
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As noted above, in March 2013, Robert S. Wetherbee became our President and Chief Executive Officer and Joseph C. Muscari, who had served as Chairman and Chief Executive Officer since 2007, became Executive Chairman. In accordance with the succession plan developed by our Board in 2012, it was the Company’s intention over the remainder of 2013 to transition leadership to Mr. Wetherbee. In addition to effecting this transition, Mr. Muscari’s responsibilities as Executive Chairman were to focus on enhancing our relationships with key customers and to lead the Company’s acquisition efforts. As originally envisioned, over 2013 Mr. Muscari would reduce his executive responsibilities to a part-time basis and later phase them out entirely. During 2013, however, Mr. Muscari became increasingly engaged in the Company’s efforts to acquire Amcol International Corporation. These efforts culminated in our agreement on March 10, 2014 to acquire Amcol. In addition, during 2013, the leadership transition encountered difficulties. Accordingly, Mr. Muscari was required to continue his executive responsibilities on a full-time basis. On February 27, 2014, Mr. Wetherbee resigned as President and Chief Executive Officer for personal reasons. The succession plan developed by the Board allowed for this possibility as part of its overall design, and the Board determined upon Mr. Wetherbee’s resignation that Mr. Muscari should resume responsibilities as the Company’s Chief Executive Officer.
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In accordance with Securities and Exchange Commission (“SEC”) rules, we discuss in this Proxy Statement the compensation of both Mr. Muscari and Mr. Wetherbee. Set forth below is the compensation for Mr. Muscari for the past three years. A full discussion and analysis of the compensation paid to Mr. Muscari in 2013, including the relationship between Mr. Muscari’s pay and the Company’s performance, is set forth in the “Compensation Discussion and Analysis” section of this Proxy Statement, beginning on page 30.
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Non-Equity Incentive Plan Compensation |
Change in
Pension Value
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Name and
Principal Position
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Year
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Salary
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Stock
Awards
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Option
Awards
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Annual
Incentive
Bonus
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Three Year
Long-term
Incentive
Plan Payout
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and Non-
qualified
Deferred
Compensation
Earnings
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All
Other
Compensation
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Total
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||||||||||||||||||||
(a)*
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(b)
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(c)
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(e)
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(f)
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(g)
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(g)
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(h)
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(i)
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(j)
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Joseph C. Muscari
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2013
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$
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900,000
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$
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1,278,049
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$
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935,350
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$
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1,402,500
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$
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2,805,376
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$
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108,348
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$
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50,956
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$
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7,480,579
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Chairman and
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2012
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$
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900,000
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$
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1,397,767
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$
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711,623
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$
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1,206,900
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$
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1,923,840
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$
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92,700
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$
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837,314
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$
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7,070,512
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Chief Executive Officer**
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2011
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$
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900,000
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$
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1,278,143
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$
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752,174
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$
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1,161,300
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$
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998,400
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$
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153,800
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$
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880,053
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$
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6,123,870
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*
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See the notes accompanying the 2013 Summary Compensation Table on page 54 for more information.
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**
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Mr. Muscari was Executive Chairman of the Company from March 2013 to February 2014.
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In connection with his appointment as Chief Executive Officer, we entered into an employment agreement with Mr. Wetherbee, pursuant to which his base salary for 2013 was fixed and he was entitled to a short-term incentive compensation opportunity consistent with that of our other executive leadership. Mr. Wetherbee was also awarded long-term incentives consisting of DRSUs, stock options and Performance Units. Consistent with awards to our other executive officers, the DRSUs and stock options were scheduled to vest in three installments, beginning on the first anniversary of their grant, and the Performance Units were scheduled to vest at the end of their performance period in 2015. Mr. Wetherbee was not entitled to any severance in connection with his resignation and he forfeited all of his long-term incentive awards.
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Set forth below is the compensation actually realized by Mr. Wetherbee for 2013, which excludes the value of the long-term incentives that were forfeited upon his resignation. We believe that this information is valuable, since the majority of the compensation set forth in the 2013 Summary Compensation Table for Mr. Wetherbee was ultimately forfeited by him.
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Non-Equity
Incentive Plan Compensation
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Change in
Pension Value
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Name and
Principal Position
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Year
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Salary
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Stock
Awards
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Option
Awards
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Annual
Incentive
Bonus
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Three Year
Long-term
Incentive
Plan Payout
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and Non-
qualified
Deferred
Compensation
Earnings
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All
Other
Compensation
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Total
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(a)*
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(b)
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(c)
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(e)
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(f)
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(g)
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(g)
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(h)
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(i)
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(j)
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Robert S. Wetherbee
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2013
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538,462
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_
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$
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_
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500,000
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_
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_
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$
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103,464
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$
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1,141,926
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Former President and
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Chief Executive Officer
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* See the notes accompanying the 2013 Summary Compensation Table on page 54 for more information.
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4
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MINERALS TECHNOLOGIES
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2014 Proxy Statement
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PROXY SUMMARY
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Consideration of Results of 2013 Shareholder Advisory Vote
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At our 2013 Annual Meeting, our shareholders approved the 2012 compensation of our named executive officers with 88% of the shares voting on the matter at the meeting voting in favor. We believe that the large margin of approval of our 2013 “Say-on-Pay” proposal resulted in large measure from the extensive shareholder engagement effort we undertook in 2012. We continued this shareholder outreach program in 2013, including contacting all of our top 35 shareholders, who at the time collectively held in excess of 75% of our stock. Specifically, we solicited our shareholders’ views on whether they considered the disclosure in our 2013 proxy statement sufficient and understandable, whether they had any concerns with our executive compensation program, especially our program’s design and the linkage between pay and performance, and whether there were any other ways we could enhance our corporate governance structure to be more effective in driving shareholder value. The shareholders that engaged with us responded positively with respect to our 2013 disclosure, to the changes we had made in 2012 and early 2013 to our executive compensation program and corporate governance, and to the linkage between pay and performance under our executive compensation program. We have also continued to engage with proxy advisory services.
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The following is a sampling of several of the comments we received from our shareholders through this engagement process that reflected the overall response:
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MTI’s 2013 proxy materials were “sufficient and understandable.”
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“We were pleased to see the changes you made.”
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MTI’s proxy disclosure with respect to compensation issues was “well organized” and “very candid” as to the steps they took on their governance program and why we believe their pay is performance-based.
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While compensation is “always a hot topic,” their “outreach in 2013 and the changes that they made to their compensation program” were appreciated.
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As a result of the majority of shares favoring our “Say-on-Pay” proposal at our 2013 Annual Meeting, and the overwhelmingly positive feedback we received during our 2013 shareholder outreach program, we have substantially maintained our executive compensation policies. The Compensation Committee will continue to consider the views of our shareholders in connection with our executive compensation program and make improvements based upon evolving best practices, market compensation information and changing regulatory requirements.
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MINERALS TECHNOLOGIES | 2014 Proxy Statement | 5 |
PROXY STATEMENT
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1.
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Why am I being sent these materials?
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2.
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Who is asking for my proxy?
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3.
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What is the agenda for the Annual Meeting?
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6
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MINERALS TECHNOLOGIES
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2014 Proxy Statement
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QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND THE ANNUAL MEETING
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4.
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How does the Board of Directors recommend I vote?
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5.
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Who can attend the Annual Meeting?
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6.
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Who can vote at the Annual Meeting?
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7.
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What constitutes a quorum for the meeting?
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8.
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How many votes are required for each question to pass?
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9.
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What is the effect of abstentions and broker non-votes?
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MINERALS TECHNOLOGIES
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2014 Proxy Statement
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7
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QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND THE ANNUAL MEETING |
10.
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Who will count the votes?
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11.
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Who are the Company’s largest shareholders?
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12.
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How can I cast my vote?
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13.
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What if I submit a proxy but don’t mark it to show my preferences?
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14.
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What if I submit a proxy and then change my mind?
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15.
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Who is paying for this solicitation of proxies?
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16.
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Where can I learn the outcome of the vote?
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8
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MINERALS TECHNOLOGIES
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2014 Proxy Statement
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CORPORATE GOVERNANCE
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Meetings and Attendance
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Director Independence
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the director was employed by the Company, or an immediate family member of the director was employed by the Company, as an executive officer;
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the director or an immediate family member of the director received more than $120,000 per year in direct compensation from the Company, other than director and committee fees and pensions or other forms of direct compensation for prior service (provided such compensation is not contingent in any way on continued service);
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the director was employed by or affiliated with the Company’s independent registered public accounting firm or an immediate family member of the director was employed by or affiliated with the Company’s independent registered public accounting firm in a professional capacity;
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the director or an immediate family member was employed as an executive officer of another company where any of the Company’s present executives served on that company’s compensation committee; and
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the director was an executive officer or an employee, or had an immediate family member who was an executive officer, of a company that made payments to, or received payments from, the Company for goods or services in an amount which, in any single fiscal year, exceeded the greater of $1,000,000 or 2% of the other company’s consolidated gross revenues.
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MINERALS TECHNOLOGIES | 2014 Proxy Statement | 9 |
CORPORATE GOVERNANCE
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Board Leadership Structure
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Board Size and Committees
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10 | MINERALS TECHNOLOGIES | 2014 Proxy Statement |
CORPORATE GOVERNANCE
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Identification and Evaluation of Directors
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Director Qualifications and Diversity Considerations
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Relevant President Experience—Former Segment President at Goodrich Corporation and former President, Aerospace Customers and Business Development of United Technologies.
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Operational and Engineering Experience—Extensive experience in engineering, management, product delivery and operations.
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Board Experience—Since 2013, has served on the Company’s Audit Committee and Compensation Committee.
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Paula H.J. Cholmondeley
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High Level of Financial Literacy—Extensive financial oversight experience as a member of the Company’s Audit Committee and the audit committees of Nationwide Mutual Fund. Also has background in accounting.
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Industry and Technology Experience—Extensive experience in the paper industry, one of the Company’s most important market areas, as an executive with Sappi Fine Paper. Also has Board experience in the building/construction, healthcare and electrical equipment industries.
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MINERALS TECHNOLOGIES | 2014 Proxy Statement | 11 |
CORPORATE GOVERNANCE
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Board Experience—Prior service on the Company’s Board, as well as on the boards of several other companies and as independent trustee of Nationwide Mutual Funds.
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Governmental Experience—White House Fellow assisting the U.S. Trade Representative.
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Corporate Governance and Compliance Expertise—Chair of the Company’s Corporate Governance and Nominating Committee. Part-time faculty member for National Association of Corporate Directors and an NACP Board Leadership Fellow.
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International Marketing and Operational Experience—Experience in international marketing, manufacturing management and operations with Sappi Fine Paper.
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Robert L. Clark
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Industry and Technology Experience—Extensive academic experience in the materials science field at the University of Rochester and Duke University.
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Research and Development Expertise—Extensive research and development experience through various roles, including his current position as Senior Vice President for Research, University of Rochester, and formerly Senior Associate Dean for Research, Pratt School of Engineering, Duke University and Vice President and Senior Research Scientist for Adaptive Technologies Incorporated.
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Intellectual Property Management Experience—Founder of the intellectual property company SparkIP.
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Process Manufacturing Expertise—Holds a Ph.D. in Mechanical Engineering from Virginia Polytechnic Institute and State University and research in this field.
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Government Contracting Expertise—Headed numerous research programs funded by government agencies, including the National Aeronautics and Space Administration and the National Science Foundation.
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Board Experience—Since January 2010, has served on the Company’s Audit Committee and Corporate Governance and Nominating Committee.
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Duane R. Dunham
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Relevant Chief Executive Officer/President Experience—Former Chairman and Chief Executive Officer of Bethlehem Steel Corporation.
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Industry and Technology Experience—Extensive experience in the steel industry, one of the Company’s most important market areas.
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Board Experience—Prior service on the Company’s Board, as well as on the board of Bethlehem Steel Corporation.
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Operational Experience—Experience in manufacturing, management and operations, mining operations and reserves, marketing, labor relations, environmental, health and safety oversight, compensation, and human resources oversight with Bethlehem Steel Corporation.
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Joseph C. Muscari
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Relevant Chief Executive Officer/President Experience—Executive Chairman of the Company and Chief Executive Officer of the Company since 2007.
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High Level of Financial Literacy—Extensive financial oversight experience in senior management roles with the Company and Alcoa Inc.
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Industry and Technology Experience—Extensive experience in the manufacturing field.
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Board Experience—Prior service on the Company’s Board, as well as on the boards of EnerSys and Dana Holding Corporation.
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Extensive International Experience—Experience from leadership positions with several international divisions of Alcoa, covering Asia, Latin America and Europe.
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Marc E. Robinson
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High Level of Financial Literacy—Extensive experience in managing global and regional business units for Johnson & Johnson, Pfizer Inc, and Warner-Lambert Company.
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Industry and Technology Experience—Extensive strategic and operational experience in the consumer health care industry, with special focus in marketing, sales, research and development, finance, and human resources at Johnson & Johnson, Pfizer Inc, and Warner-Lambert Company.
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Operational Experience—Extensive experience in innovation, human capital development, mergers and acquisitions, licensing, and global marketing.
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Global Expertise—Extensive global experience managing large multi-functional businesses in emerging and developed markets in North America, Europe, Pacific, Asia, and Latin America.
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Barbara R. Smith
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High Level of Financial Literacy—Extensive financial oversight experience in senior management roles with Commercial Metals Company, Gerdau Ameristeel and FARO Technologies Inc., plus over 20 years’ experience in a variety of financial leadership positions with Alcoa Inc.
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12 | MINERALS TECHNOLOGIES | 2014 Proxy Statement |
CORPORATE GOVERNANCE
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●
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Industry and Technology Experience—Extensive experience in the steel industry, one of the Company’s most important markets, as well as in the areas of aerospace, automotive and commercial transportation, much of which are cyclical, commodity-based markets like the Company’s.
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Operational Experience—Experience in manufacturing, mergers and acquisitions, capital markets, and joint ventures.
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International Experience—Experience from leadership positions in international organizations with Commercial Metals Company, Gerdau Ameristeel, FARO Technologies and Alcoa.
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Donald C. Winter
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Industry and Technology Experience—Extensive experience in the aerospace and defense industry as a systems engineer, program manager and corporate executive.
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Engineering Expertise—Holds a doctorate in physics from the University of Michigan and elected as a member of the National Academy of Engineering.
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Operational and International Experience—President and CEO of TRW Systems (later Northrop Grumman Mission Systems) from 2010 to 2012, a business engaged in systems engineering, information technology and services addressing defense, intelligence, civil and commercial markets, with operations throughout the U.S., U.K., Northern and Eastern Europe, the Middle East and the Pacific Rim.
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Governmental Experience—Served as 74th Secretary of the Navy, where he led America’s Navy and Marine Corps Team, from January 2006 to March 2009.
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Board and Committee Self-Evaluation
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Term Limits
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MINERALS TECHNOLOGIES | 2014 Proxy Statement | 13 |
CORPORATE GOVERNANCE
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Director Stock Ownership Requirements
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At least 400 shares of the Company’s common stock outright (excluding any stock units awarded by the Company and any unexercised stock options); and
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a number of shares equal to five times the then current annual cash retainer for directors (inclusive of any stock units, restricted stock or similar awards by the Company in connection with service as an employee or Director, and, if applicable, shares purchased with amounts invested in the MTI retirement plans, but excluding any unexercised stock options).
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The Board’s Role in Risk Oversight
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The Board’s Role in Succession Planning
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14 | MINERALS TECHNOLOGIES | 2014 Proxy Statement |
CORPORATE GOVERNANCE
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Shareholder Proposals and Nominations
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●
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The name and address of the shareholder giving notice, as they appear in our books (and of the beneficial owner, if other than the shareholder, on whose behalf the proposal is made);
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the class and number of shares of stock owned of record or beneficially by the shareholder giving notice (and by the beneficial owner, if other than the shareholder, on whose behalf the proposal is made);
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a representation that the shareholder is a holder of record of stock entitled to vote at the meeting, and intends to appear at the meeting in person or by proxy to make the proposal; and
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a representation whether the shareholder (or beneficial owner, if any) intends, or is part of a group which intends, to deliver a proxy statement and form of proxy to holders of at least the percentage of outstanding stock required to elect the nominee or approve the proposal and/or otherwise solicit proxies from shareholders in support of the nomination or proposal.
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Any notice regarding the introduction of an item of business at a meeting of shareholders must also include:
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●
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A brief description of the business desired to be brought before the meeting;
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●
|
the reason for conducting the business at the meeting;
|
●
|
any material interest in the item of business of the shareholder giving notice (and of the beneficial owner, if other than the shareholder, on whose behalf the proposal is made); and |
●
|
if the business includes a proposal to amend the bylaws, the language of the proposed amendment.
|
Any nomination of a candidate for director must also include:
|
|
●
|
A signed consent of the nominee to serve as a director, if elected;
|
●
|
the name, age, business address, residential address and principal occupation or employment of the nominee;
|
●
|
the number of shares of the Company’s common stock beneficially owned by the nominee; and
|
●
|
any additional information that would be required under the rules of the SEC in a proxy statement soliciting proxies for the election of that nominee as a director.
|
Communications with Directors
|
MINERALS TECHNOLOGIES | 2014 Proxy Statement | 15 |
COMITTEES OF THE BOARD OF DIRECTORS
|
The Audit Committee
|
●
|
To assist the Board in its oversight of (i) the integrity of the Company’s financial statements, (ii) the Company’s compliance with legal and regulatory requirements, (iii) the qualifications and independence of the Company’s independent registered public accounting firm, and (iv) the performance of the Company’s internal audit function and independent registered public accounting firm;
|
●
|
to appoint, compensate, and oversee the work of the independent registered public accounting firm employed by the Company (including resolution of disagreements between management and the auditors concerning financial reporting) for the purpose of preparing or issuing an audit report or related work. The independent registered public accounting firm shall report directly to the Committee;
|
●
|
to prepare the report of the Committee required by the rules of the SEC to be included in the Company’s annual proxy statement; and
|
●
|
to discuss the Company’s policies with respect to risk assessment and risk management, in executive sessions and with management, the internal auditors and the independent auditor, in particular with respect to the Company’s major financial risk exposures and the steps management has taken to monitor and control such exposures.
|
The Compensation Committee
|
●
|
To participate in the development of our compensation and benefits policies;
|
●
|
to establish, and from time to time vary, the salaries and other compensation of the Company’s Chief Executive Officer and other elected officers;
|
●
|
to review the Company’s incentive structure to avoid encouraging excessive risk-taking through financial incentives as well as the relationship between compensation and the Company’s risk management policies and practices; and
|
●
|
to participate in top-level management succession planning.
|
16 | MINERALS TECHNOLOGIES | 2014 Proxy Statement |
COMITTEES OF THE BOARD OF DIRECTORS |
Compensation Committee Interlocks and Insider Participation
|
The Corporate Governance and Nominating Committee
|
●
|
The identification of individuals qualified to become Board members and the recommendation to the Board of nominees for election to the Board at the next annual meeting of shareholders or whenever a vacancy shall occur on the Board;
|
●
|
the establishment and operation of committees of the Board;
|
●
|
the development and recommendation to the Board of corporate governance principles applicable to the Company; and
|
●
|
the oversight of an annual review of the Board’s performance.
|
MINERALS TECHNOLOGIES | 2014 Proxy Statement | 17 |
Paula H.J. Cholmondeley, Chair
|
|
Robert L. Clark
|
|
Duane R. Dunham
|
|
Marc E. Robinson
|
18
|
MINERALS TECHNOLOGIES | 2014 Proxy Statement |
EXECUTIVE OFFICERS
|
Name
|
Age
|
Position
|
||
Joseph C. Muscari
|
67
|
Chairman and Chief Executive Officer
|
||
Douglas T. Dietrich
|
45
|
Senior Vice President, Finance and Treasury, Chief Financial Officer
|
||
Jonathan J. Hastings
|
51
|
Senior Vice President, Corporate Development
|
||
Douglas W. Mayger
|
56
|
Senior Vice President, Performance Minerals and MTI Supply Chain
|
||
Thomas J. Meek
|
57
|
Senior Vice President, General Counsel, Human Resources, Secretary and Chief Compliance Officer
|
||
D.J. Monagle, III
|
51
|
Senior Vice President, Chief Operating Officer
|
||
Michael A. Cipolla
|
56
|
Vice President, Corporate Controller and Chief Accounting Officer
|
||
Johannes C. Schut
|
49
|
Vice President and Managing Director, Minteq International
|
●
|
Joseph C. Muscari was elected Chairman and Chief Executive Officer effective February 27, 2014, having served previously in the same position from March 2007 to March 2013 and as Executive Chairman from March 2013 to February 2014. Prior to that, he was Executive Vice President and Chief Financial Officer of Alcoa Inc. He has served as a member of the Board of Directors since 2005.
|
●
|
Douglas T. Dietrich was elected Senior Vice President, Finance and Treasury, Chief Financial Officer effective January 1, 2011. Prior to that, he was appointed Vice President, Corporate Development and Treasury effective August 2007. He had been Vice President, Alcoa Wheel Products since 2006 and President, Alcoa Latin America Extrusions and Global Rod and Bar Products since 2002.
|
●
|
Jonathan J. Hastings was elected Senior Vice President, Corporate Development effective September 2012. Before that, he was Vice President, Corporate Development. Prior to that, he was Senior Director of Strategy and New Business Development - Coatings, Global at The Dow Chemical Company. Prior to that he held positions of increasing responsibility at Rohm and Haas, including Vice President & General Manager - Packaging and Building Materials - Europe.
|
●
|
Douglas W. Mayger was elected Senior Vice President, Performance Minerals and Supply Chain in June 2012. Prior to that, he was Vice President and Managing Director, Performance Minerals, which encompasses the Processed Minerals product line and the Specialty PCC product line. Prior to that, he was General Manager - Carbonates West, Performance Minerals and Business Manager - Western Region. Before joining the Company as plant manager in Lucerne Valley in 2002, he served as Vice President of Operations for Aggregate Industries.
|
●
|
Thomas J. Meek was elected Senior Vice President, General Counsel and Secretary, Chief Compliance Officer in October 2012. In December 2011, he was given the additional responsibility for Human Resources. Prior to that, he was Vice President, General Counsel and Secretary of the Company effective September 1, 2009. Prior to that, he served as Deputy General Counsel at Alcoa. Before joining Alcoa in 1999, Mr. Meek worked with Koch Industries, Inc. of Wichita, Kansas, where he held numerous supervisory positions. His last position there was Interim General Counsel. From 1985 to 1990, Mr. Meek was an Associate/Partner in the Wichita, Kansas law firm of McDonald, Tinker, Skaer, Quinn & Herrington, P.A.
|
●
|
D.J. Monagle III was elected Senior Vice President, Chief Operating Officer effective February 27, 2014. Prior to that, he was Senior Vice President and Managing Director, Paper PCC, effective October 2008. In November 2007, he was appointed Vice President and Managing Director - Performance Minerals. He joined the Company in January of 2003 and held positions of increasing responsibility including Vice President, Americas, Paper PCC and Global Marketing Director, Paper PCC. Before joining the Company, Mr. Monagle worked for the Paper Technology Group at Hercules between 1990 and 2003, where he held sales and marketing positions of increasing responsibility. Between 1985 and 1990, he served as an aviation officer in the U.S. Army’s 11th Armored Cavalry Regiment, leaving the service as a troop commander with a rank of Captain.
|
●
|
Michael A. Cipolla was elected Vice President, Corporate Controller and Chief Accounting Officer in July 2003. Prior to that, he served as Corporate Controller and Chief Accounting Officer of the Company since 1998. From 1992 to 1998 he served as Assistant Corporate Controller.
|
MINERALS TECHNOLOGIES | 2014 Proxy Statement | 19 |
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
|
●
|
Johannes C. Schut was elected Vice President and Managing Director, Minteq International, in March 2012. He joined the Company in 2004 as Director of Finance - Europe. In 2006, he was named Vice President, Minteq - Europe, including Middle East and India. Before joining Minerals Technologies Inc., Mr. Schut held positions of increasing responsibility with Royal Phillips Electronics and Royal FrieslandCampina - DMV International.
|
Policies and Procedures for Approval of Related Party Transactions
|
2013 Related Party Transactions
|
20 | MINERALS TECHNOLOGIES | 2014 Proxy Statement |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
|
Title of Class
|
Name and Address of
Beneficial Owner(a)
|
Amount and
Nature of
Beneficial
Ownership(b)
|
Percent of
Class
|
Number of
Share
Equivalent
Units
Owned(c)
|
|||||||
Common
|
Royce & Associates LLC
745 Fifth Avenue
New York, NY 10151
|
4,140,589
|
(d)
|
12
|
%
|
—
|
|||||
Blackrock, Inc.
40 East 52nd Street
New York, NY 10022
|
3,016,423
|
(e)
|
8.5
|
%
|
—
|
||||||
Vanguard Group Inc.
100 Vanguard Blvd.
Malvern, Pa 19355
|
2,023,616
|
(f)
|
5.9
|
%
|
—
|
||||||
J.C. Muscari
|
634,415
|
(g)
|
*
|
16,986
|
|||||||
D.T. Dietrich
|
93,596
|
(h)
|
*
|
1,875
|
|||||||
D.J. Monagle
|
134,120
|
(i)
|
*
|
2,430
|
|||||||
T.J. Meek
|
84,677
|
(j)
|
*
|
3,814
|
|||||||
D.W. Mayger
|
36,307
|
(k)
|
*
|
1,013
|
|||||||
R.S. Wetherbee
|
216
|
(l)
|
*
|
486
|
|||||||
J.J. Carmola
|
400
|
*
|
425
|
||||||||
P.H.J. Cholmondeley
|
1,230
|
*
|
21,836
|
||||||||
R.L. Clark
|
400
|
*
|
8,584
|
||||||||
D.R. Dunham
|
1,200
|
*
|
20,610
|
||||||||
M.E. Robinson
|
402
|
*
|
3,815
|
||||||||
B.R. Smith
|
400
|
*
|
5,923
|
||||||||
Directors and Officers as a group
(16 individuals)
|
1,103,370
|
(m)
|
3.1
|
%
|
93,767
|
*
|
Less than 1%.
|
|
**
|
Table does not include Donald C. Winter who was elected February 2014.
|
|
(a)
|
The address of each director and officer is c/o Minerals Technologies Inc., 622 Third Avenue, New York, New York 10017-6707.
|
|
(b)
|
Sole voting and investment power, except as otherwise indicated. Does not include “Share Equivalent Units.”
|
|
(c)
|
“Share Equivalent Units,” which entitle the officer or director to a cash benefit equal to the number of units in his or her account multiplied by the
|
|
closing price of our common stock on the business day prior to the date of payment, have been credited to Messrs. Muscari, Dietrich, Monagle,
|
||
Meek, Mayger and Wetherbee under the Nonfunded Deferred Compensation and Supplemental Savings Plan; and to Ms. Cholmondeley, Dr. Clark,
|
||
Messrs. Dunham, Muscari, Robinson and Ms. Smith under the Nonfunded Deferred Compensation and Unit Award Plan for Non-Employee
|
||
Directors. (See “Director Compensation” below.)
|
||
(d)
|
Based on a statement on Schedule 13G filed on January 13, 2014 with the SEC on behalf of investment adviser Royce & Associates LLC.
|
|
(e)
|
Based on a statement on Schedule 13G filed on January 30, 2014 with the SEC on behalf of Blackrock, Inc. According to Blackrock Inc.’s Schedule
|
|
13G/A, various persons have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of the
|
||
Company’s common stock, but no such person’s interest in the Company’s common stock is more than 5% of the Company’s aggregate outstand-
|
||
ing shares of common stock.
|
||
(f)
|
Based on a statement on Schedule 13G filed on February 11, 2014 with the SEC on behalf of investment adviser Vanguard Group Inc.
|
|
(g)
|
300 of these shares are held by Mr. Muscari and his wife as joint tenants, and Mr. Muscari has shared investment and voting power with respect
|
|
to these shares. 403,265 of these shares are subject to options which are exercisable currently or within 60 days.
|
||
(h)
|
61,192 of these shares are subject to options which are exercisable currently or within 60 days.
|
|
(i)
|
96,074 of these shares are subject to options which are exercisable currently or within 60 days.
|
|
(j)
|
62,259 of these shares are subject to options which are exercisable currently or within 60 days.
|
|
(k)
|
13,032 of these shares are subject to options which are exercisable currently or within 60 days.
|
|
(l)
|
0 of these shares are subject to options which are exercisable currently or within 60 days.
|
|
(m)
|
701,473 of these shares are subjection to options which are exercisable currently or within 60 days.
|
MINERALS TECHNOLOGIES | 2014 Proxy Statement | 21 |
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
|
22 | MINERALS TECHNOLOGIES | 2014 Proxy Statement |
ITEM—ELECTION OF DIRECTORS |
Item 1. Election of Directors
|
Board Recommendation
|
A vote FOR election of Mr. Duane R. Dunham is unanimously recommended.
|
Duane R. Dunham
|
|
Age 72
|
|
Retired President and Chief Operating Officer of Bethlehem Steel Corporation since January 2002. Chairman and Chief Executive Officer of Bethlehem Steel from April 2000 to September 2001. President and Chief Operating Officer from 1999 to April 2000 and President of the Sparrows Point division from 1993 to 1999. Director of Bethlehem Steel Corporation from 1999 to 2002. Director of Minerals Technologies Inc. since 2002. Chairman of the Compensation Committee and member of the Corporate Governance and Nominating Committee of Minerals Technologies Inc.
|
MINERALS TECHNOLOGIES | 2014 Proxy Statement | 23 |
ITEM 1—ELECTION OF DIRECTORS |
Robert L. Clark
|
|
Age 50
|
|
Professor and Dean of the School of Engineering and Applied Sciences, University of Rochester since September 2008 and Senior Vice President for Research since March 2013. Dean of the Pratt School of Engineering at Duke University August 2007 to September 2008. Between 1992 and August 2007, held increasing positions of academic responsibility at Duke University from Assistant Professor to Senior Associate Dean of Pratt School of Engineering and Chair, Mechanical Engineering and Materials Science. Director of Minerals Technologies Inc. and member of the Audit Committee and the Corporate Governance and Nominating Committee as of January 2010.
|
John J. Carmola
|
|
Age 58
|
|
Retired Former Segment President at Goodrich Corporation. Currently a Consultant for Private Equity companies. Previously, President, Aerospace Customers and Business Development of United Technologies in 2012. From 1996 to 2012, held several positions of increasing responsibility at Goodrich, including Segment President for Actuation and Landing Systems and Segment President of Engine Systems and Group President for Engine/Safety/Electronic Systems. From 1977 to 1996, held various engineering and general management positions at General Electric, including Manager of the M&I Engines Division’s Product Delivery Operation. Director of Minerals Technologies Inc. since May 2013. Member of the Audit Committee and the Compensation Committee of Minerals Technologies Inc.
|
Marc E. Robinson
|
|
Age 53
|
|
Senior Executive Advisor of Booz & Company as of December 2011. Company Group Chairman of Johnson & Johnson from 2007 to September 2011. Global President Consumer Healthcare Division of Pfizer from 2003 to 2006. North American President Consumer Healthcare Division of Pfizer from 2000-2002. Regional President, Australia and New Zealand of Warner-Lambert Company from 1999 to 2000. General Manager European Business Process Improvement of Warner Lambert Company from 1996 to 1998. Marketing Assistant, Assistant Product Manager of General Mills from 1984 to 1986. Member of the Capsugel Scientific and Business Advisory Board as of May 2012. Director of Minerals Technologies Inc. and member of the Audit Committee and the Corporate Governance and Nominating Committee as of January 2012.
|
24 | MINERALS TECHNOLOGIES | 2014 Proxy Statement |
ITEM 1—ELECTION OF DIRECTORS
|
Joseph C. Muscari
|
|
Age 67
|
|
Chairman and Chief Executive Officer of the Company from March 2007 to March 2013. Executive Chairman of the Company from March 2013 to February 2014. In February 2014 resumed Chairman and Chief Executive Officer role. Executive Vice President and Chief Financial Officer from January 1, 2006 to December 31, 2006 and Executive Vice President from January 1, 2007 to February 28, 2007 of Alcoa Inc., a producer of aluminum and aluminum products and components and other consumer products. Executive Vice President, Alcoa Inc., and Group President—Rigid Packaging, Foil & Asia from 2004 to 2005; Executive Vice President and Group President, Asia & Latin America from 2001 to 2004; and Vice President Environment, Health, Safety, Audit and Compliance from 1997 to 2001 of Alcoa Inc. Director of Aluminum Corporation of China Limited 2002 to 2007. Director of Dana Holding Corporation since May 2010. Director of EnerSys since June 2008. Director of Minerals Technologies Inc. since January 2005.
|
Barbara R. Smith
|
|
Age 54
|
|
Senior Vice President and Chief Financial Officer of Commercial Metals Company since June 2011. Vice President and Chief Financial Officer of Gerdau Ameristeel from 2007-2011 and Treasurer beginning from July 2006. Senior Vice President and Chief Financial Office of FARO Technologies, Inc. from February 2005 to July 2006. During the more than 20 prior years, Ms. Smith held positions of increasing financial leadership with Alcoa Inc. Director of Minerals Technologies Inc. since May 2011. Chair of the Audit Committee and member of the Compensation Committee of Minerals Technologies Inc.
|
Donald C. Winter
|
|
Age 65
|
|
Independent consultant and a Professor of Engineering Practice at the University of Michigan, where he teaches graduate level courses on Systems Engineering, Safety and Reliability, and Maritime Policy. Dr. Winter served as the 74th Secretary of the Navy from January 2006 to March 2009. Previously, Dr. Winter held multiple positions in the aerospace and defense industry as a systems engineer, program manager and corporate executive. From 2000 to 2005, he was President and CEO of TRW Systems (later Northrop Grumman Mission Systems), which he joined in 1972. From 2010 to 2012, Dr. Winter served as chair of the National Academy of Engineering Committee charged with investigating the causes of the Deepwater Horizon Blowout for the Secretary of the Interior. He continues to consult and lecture on systems safety, worldwide. Dr. Winter received a bachelor’s degree in physics from the University of Rochester, and both a masters and doctorate in physics from the University of Michigan. He is also a graduate of the University of Southern California Management Policy Institute, the UCLA Executive Program, and the Harvard University Program for Senior Executives in National and International Security. In 2002, he was elected a member of the National Academy of Engineering. In 2009, he received the Department of Defense Medal for Distinguished Public Service. Director of Minerals Technologies Inc. since February 2014.
|
MINERALS TECHNOLOGIES | 2014 Proxy Statement | 25 |
PROXY SUMMARY
|
Paula H.J. Cholmondeley
|
|
Age 67
|
|
Former Vice President and General Manager, Specialty Products from 2000 to 2004 of Sappi Fine Paper, North America, a producer of coated fine paper. Ms. Cholmondeley held senior positions with various companies from 1980 through 1998 including Owens Corning, The Faxon Company, Blue Cross of Greater Philadelphia, and Westinghouse Elevator Company, and also served as a White House Fellow assisting the U.S. Trade Representative during the Reagan administration. Ms. Cholmondeley, a former certified public accountant, is an alumnus of Howard University and received a Masters Degree in Accounting from the University of Pennsylvania, Wharton School of Finance. Member of the Board of Directors of Dentsply International Inc. and Terex Corporation, and also a member of the audit committee and independent trustee of Nationwide Mutual Funds. Independent trustee of Nationwide Mutual Funds. Part-time member of the Board Services faculty of the National Association of Corporate Directors. Director of Minerals Technologies Inc. since January 2005. Member of the Audit Committee and Chair of the Corporate Governance and Nominating Committee of Minerals Technologies Inc.
|
26 | MINERALS TECHNOLOGIES | 2014 Proxy Statement |
ITEM 2—RATIFICATION OF APPOINTMENT OF AUDITORS
|
PROXY
SUMMARY
|
Item 2. Ratify Auditors
|
Board Recommendation
|
A vote FOR ratification of the appointment of KPMG LLP as our independent registered public accounting firm for the 2014 fiscal year is unanimously recommended.
|
Principal Accounting Fees and Services
|
2013
|
2012
|
|||||||
Audit Fees
|
$ | 1,567,496 | $ | 1,636,000 | ||||
Audit Related Fees
|
68,229 | 75,448 | ||||||
Tax Fees
|
23,985 | 110,688 | ||||||
All Other Fees
|
4,973 | 5,692 | ||||||
Total Fees
|
$ | 1,664,863 | $ | 1,827,828 |
MINERALS TECHNOLOGIES | 2014 Proxy Statement | 27 |
PROXY SUMMARY |
ITEM 2—RATIFICATION OF APPOINTMENT OF AUDITORS
|
Barbara R. Smith, Chair
|
|
John J. Carmola
|
|
Paula H.J. Cholmondeley
|
|
Robert L. Clark
|
|
Marc E. Robinson
|
28 | MINERALS TECHNOLOGIES | 2014 Proxy Statement |
ITEM 3—ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION
|
PROXY SUMMARY
|
●
|
In 2013, the Company delivered strong results as measured both by our financial performance and execution of our strategies of geographic expansion and new product innovation.
|
●
|
The Company’s common stock outperformed all of its comparative indices as well as the Company’s comparator peer group in 2013.
|
●
|
Over 80% of the compensation of our Chairman and Chief Executive Officer, Mr. Joseph C. Muscari, is at risk and variable depending on company and individual performance. A similar portion of the compensation of our former Chief Executive Officer, Mr. Robert S. Wetherbee, was at risk and performance-based.
|
●
|
In 2013, we extensively engaged with our shareholders to determine how our corporate governance and compensation practices can be improved.
|
Item 3. Advisory Vote to Approve Executive Compensation
|
Board Recommendation
|
A vote FOR the advisory vote approving 2013 executive compensation is unanimously recommended.
|
MINERALS TECHNOLOGIES | 2014 Proxy Statement | 29 |
PROXY SUMMARY |
COMPENSATION DISCUSSION AND ANALYSIS
|
Introduction
|
Name
|
Title
|
Joseph C. Muscari
|
Chairman and Chief Executive Officer
|
Douglas T. Dietrich
|
Senior Vice President, Finance and Treasury, Chief Financial Officer
|
D.J. Monagle III
|
Senior Vice President, Chief Operating Officer
|
Thomas J. Meek
|
Senior Vice President, General Counsel, Secretary, Chief Compliance Officer
|
Douglas W. Mayger
|
Senior Vice President, Performance Minerals and MTI Supply Chain
|
Robert S. Wetherbee
|
Former President and Chief Executive Officer
|
How We Tie Pay to Performance
|
30 | MINERALS TECHNOLOGIES | 2014 Proxy Statement |
COMPENSATION DISCUSSION AND ANALYSIS
|
PROXY SUMMARY
|
Financial Performance Highlights
|
●
|
We had record earnings per share of $2.42, a 12% increase over the previous record in 2012 and the Company has achieved record earnings for four consecutive years. Our 2013 earnings per share of $2.42 represent a 75% increase over 2006 earnings of $1.38 per share. This represents a 7-year compound annual growth rate of 8.4%
|
●
|
Operating income of $124 million was a record with 10% growth over 2012. Operating income represented 12.2% of sales in 2013. |
MINERALS TECHNOLOGIES | 2014 Proxy Statement | 31 |
PROXY SUMMARY |
COMPENSATION DISCUSSION AND ANALYSIS
|
●
|
Our Return on Capital for the year was 9.5%. This represents a compound annual growth rate of 5.8% over 2006. |
●
|
Operating margin increased from 9.0% of sales in 2006 to 12.2% of sales in 2013. This improvement was attributable to cost and expense control, productivity improvements and operational excellence.
|
●
|
Our cash flow for the year and our balance sheet continued to be strong. We generated $138 million in cash, and we repurchased $52 million in stock through our continuing share repurchase program. During the last four years, the Company repurchased over $157 million in treasury stock. Cash and short-term investments at December 31, 2013 were over $506 million and our total debt was approximately $89 million resulting in a net cash position of $417 million compared with a net debt position of $81 million in 2006. The improvement in our net cash position was over $500 million while repurchasing nearly $250 million in treasury stock.
|
32 | MINERALS TECHNOLOGIES | 2014 Proxy Statement |
COMPENSATION DISCUSSION AND ANALYSIS
|
PROXY SUMMARY
|
●
|
Our SG&A expenses have been under control and represent 10.7% of sales in 2013 compared with 12.9% of sales in 2006. We have reduced total expenses, including plant administrative costs, by over $40 million since 2006.
|
●
|
Total working capital remains under control and efficient, reflecting the improvements in working capital management within both business segments over the past several years. Total working capital was reduced from $244 million in 2006 to $162 million in 2013, a reduction of $82 million. Our days working capital were reduced from 82 days in 2006 to 57 days in 2013.
|
MINERALS TECHNOLOGIES | 2014 Proxy Statement | 33 |
PROXY SUMMARY
|
COMPENSATION DISCUSSION AND ANALYSIS
|
●
|
Executing our strategy of geographic expansion, we signed contracts for two new satellite PCC facilities—one in China and one in Europe—and began operation of two new satellite plants, one in Thailand and another in India. In January 2014, we signed an agreement for a 100,000 ton satellite in Changshu, China. We presently have four PCC facilities under construction in China. A significant portion of the reason for our growth success lies in our development of new technologies to increase the amount of PCC in paper—a major cost-saving factor highly sought after by the worldwide paper industry.
|
●
|
The Company continues to see progress in its major growth strategy of developing and commercializing new products in advancing our FulFill® platform. FulFill® is a portfolio of high-filler technologies that offers papermakers a variety of solutions that decrease dependency on natural fiber to reduce costs. We signed four commercial agreements for FulFill® in 2013 and one additional contract in early 2014. Today, we have commercial agreements with a total of 15 paper mills, and are actively engaged with 20 other mills around the globe.
|
●
|
In 2012 our Refractories Segment also signed an agreement with United Steel Company B.S.C. (SULB) to perform all refractory maintenance at a greenfield steel mill in Bahrain that began operation in the third quarter. Minteq, working with other refractory companies, is responsible for coordinating all refractory maintenance of the steel furnaces and the other steel production vessels. This is a new business model for Minteq and we are exploring similar opportunities elsewhere.
|
●
|
In 2006 our Technology Lead Team, which is comprised of senior scientists and business leaders across the Company, was faced with an R&D pipeline that was nearly dry. The team instituted a new product development process that since 2006 has generated more than 300 new ideas, of which 44 were moved to the commercialization stage.
|
34 | MINERALS TECHNOLOGIES | 2014 Proxy Statement |
COMPENSATION DISCUSSION AND ANALYSIS
|
PROXY SUMMARY
|
●
|
Our Specialty Minerals Segment and Performance Minerals product lines achieved record earnings. The segment continued to improve productivity and efficiency through a disciplined effort of deploying Operational Excellence and Lean principles.
|
●
|
The Company achieved 5% productivity improvements over 2012, which improved operating income by over $3 million in 2013. The productivity improvements have been evident within the Company as our tons per hour worked have improved by 18% over the last five years.
|
●
|
Our efforts to embed Operational Excellence and Lean principles into the Company began in 2007. In 2013 our employees held approximately 1,850 Total Kaizen events (Kaizen events are highly focused improvement workshops that address a particular process or area) and generated over 15,000 ideas of which 70% were implemented.
|
●
|
We had a record safety performance in 2013 and we are approaching world class safety levels. Our safety record has improved significantly, from a 3.730 annual recordable injury rate in 2006 to 1.594 in 2013; an improvement of 57%, and from a 2.560 lost workday injury rate in 2006 to 0.386 in 2013; an improvement of 85%.
|
MINERALS TECHNOLOGIES | 2014 Proxy Statement | 35 |
PROXY SUMMARY
|
COMPENSATION DISCUSSION AND ANALYSIS
|
Total Shareholder Return
|
36 | MINERALS TECHNOLOGIES | 2014 Proxy Statement |
COMPENSATION DISCUSSION AND ANALYSIS
|
PROXY SUMMARY
|
What We Do
|
||
þ Pay for Performance – We tie pay to performance. The great majority of executive pay is not guaranteed. We set clear goals for corporate and business unit performance and differentiate based on individual achievement. The vast majority of our named executive officers’ compensation is at risk and variable depending on Company and individual performance.
|
||
þ Use Objective Financial Metrics – A substantial majority (80%) of the awards granted under our Annual Incentive Plan are based on the achievement of corporate financial metrics that we believe are challenging in light of the economic condition in the markets we serve and the risks to achieve high performance.
|
||
þ Link Long-Term Compensation to Stock Performance – The majority of our long-term awards are in the form of equity awards that vest over a three-year period. We believe that such awards directly link pay with the interests of shareholders. In addition, two of the three metrics in our long-term incentive plan are based on our stock performance.
|
||
þ Use An Appropriate Peer Group – We revised the peer group we used in 2012 to ensure that we use appropriate comparators for benchmarking our compensation program.
|
||
þ Expect High Performance – We expect our executives to deliver sustained high performance year-over-year and over time to stay in their respective positions.
|
||
þ Review Tally Sheets – We review tally sheets for our named executive officers prior to making annual executive compensation decisions.
|
||
þ Double Trigger for Vesting on Change in Control – Our equity compensation plan provides for accelerated vesting of awards after a change in control only if an employee is also terminated (a “double trigger”).
|
||
þ Clawback – In 2012, we adopted a policy to recoup certain incentive and other compensation payments (a “clawback” policy) to ensure that our executives do not retain undeserved windfalls and to enhance our pay-for-performance initiatives.
|
||
þ Minimal Perquisites – We provide only minimal perquisites that have a sound benefit to the Company’s business.
|
||
þ Stringent Stock Ownership Guidelines – We have adopted stringent stock ownership guidelines - six times base salary for our CEO, four times base salary for our CFO and COO, three times base salary for our other executives, and for directors five times their annual cash retainer.
|
||
þ Retention Period on Exercised Stock Options and Vested DRSUs – Executives must hold for at least five years a minimum of 50% of after-tax value of appreciation of stock options upon exercise and retain at least 50% of stock received after-tax from Deferred Restricted Stock Units (DRSUs) grants upon vesting.
|
||
þ Independent Compensation Consulting Firm – The Compensation Committee benefits from its utilization of an independent compensation consulting firm which provides no other services to the Company.
|
||
What We Don’t Do
|
||
x No Increase in our CEO’s Base Salary or Target Incentive Compensation - There has been no increase in our Chairman and Chief Executive Officer’s salary since 2009, nor any increase in his target incentive compensation since 2011. At-risk compensation has increased only as a result of improved performance.
|
||
x We Do Not Pay Dividend Equivalents on Stock Options and Unvested DRSUs
|
||
x No Repricing Underwater Stock Options or Backdating Stock Options
|
||
x No Inclusion of the Value of Equity Awards in Pension or Severance Calculations
|
||
x No Excise Tax Gross-Up Payments Upon Change In Control
|
||
x No Hedging Transactions, Pledges of Stock Or Short Sales By Executives Permitted
|
||
MINERALS TECHNOLOGIES | 2014 Proxy Statement | 37 |
PROXY SUMMARY
|
COMPENSATION DISCUSSION AND ANALYSIS
|
●
|
Base salary is the only portion that is not at-risk and not performance-based.
|
●
|
Annual incentive compensation is based on the Company’s achievement with respect to two financial metrics we believe are the most important business metrics that lead to creation of shareholder value (Operating Income (OI) and Return on Capital (ROC)), representing 70% of the plan’s bonus opportunity, and achievement of personal performance objectives. Our OI and ROC performance for the year was strong, with both metrics exceeding the target, leading to payment on this portion of the 2013 Annual Incentive Plan award opportunity at 165.1%. Mr. Muscari’s performance against his personal performance objectives was 134.1% of target. Accordingly, the total 2013 Annual Incentive Plan award paid for the year to Mr. Muscari, based on Company and individual performance, was 155.8% of target.
|
●
|
The majority of our long-term incentives are two forms of equity-based awards: stock options and DRSUs. These awards provide a direct link between pay and shareholder interests. The awards typically vest in three annual increments. Although this vesting is time-based, we strongly believe that our equity-based awards are performance-based, as vesting only occurs if the executive continues to be employed by the Company on the vesting date. We have a high-performance culture. This means that we expect our executives to perform to high levels. Our history is that executives that do not meet such performance standards leave our Company; in the past seven years, there has been 100% turnover of the positions in our executive management team. These officers have forfeited all of their unvested equity awards.
|
●
|
The remaining long-term incentives are grants of Performance Units under our long-term incentive plan. The Performance Units cliff-vest after three years, meaning that executives who leave prior to the vesting date forfeit the awards, and pay out in cash based on three-year performance goals. Payouts are based on achievement relative to three goals: ROC, which is based on a three-year target in contrast to the one-year ROC target under our Annual Incentive Plan, and total shareholder return relative to a peer index and relative to the broader market. The Performance Units that vested on December 31, 2013 were granted in early 2011 and related to the 2011 - 2013 performance period. During this period, our total shareholder return exceeded both the peer index and relative to the broader market (see the chart on pg. 3), and our ROC also approximated its target, which is based on the Company’s cost of capital. This strong performance is reflected in pay-outs at a level of approximately 220% of target value per unit for units that vested at the end of 2013. The increase in long-term incentive compensation constitutes a large majority of the increase in Mr. Muscari’s compensation in 2013.
|
38 | MINERALS TECHNOLOGIES | 2014 Proxy Statement |
COMPENSATION DISCUSSION AND ANALYSIS
|
PROXY SUMMARY
|
Three Year
|
Actual Payout as a Percentage of Payout at
|
|
Grant Date
|
Performance Period
|
Target Performance
|
2011
|
2011 – 2013
|
220%
|
2010
|
2010 – 2012
|
150%
|
2009
|
2009 – 2011
|
78%
|
2008
|
2008 – 2010
|
40%
|
2007
|
2007 – 2009
|
0%
|
2006
|
2006 – 2008
|
0%
|
MINERALS TECHNOLOGIES | 2014 Proxy Statement | 39 |
PROXY SUMMARY
|
COMPENSATION DISCUSSION AND ANALYSIS
|
Consideration of Results of 2013 Shareholder Advisory Vote
|
MTI’s 2013 proxy materials were “sufficient and understandable.”
|
||
“We were pleased to see the changes you made.”
|
||
MTI’s proxy disclosure with respect to compensation issues was “well organized” and “very candid” as to the steps they took on their governance program and why we believe their pay is performance-based.
|
||
While compensation is “always a hot topic,” their “outreach in 2013 and the changes that they made to their compensation program” were appreciated.
|
||
40 | MINERALS TECHNOLOGIES | 2014 Proxy Statement |
COMPENSATION DISCUSSION AND ANALYSIS
|
PROXY SUMMARY
|
What We Pay and Why: Elements of Our Compensation Program for Named Executive Officers
|
2013 Target Direct Remuneration Mix(1)
|
||||||||||||
At-
|
Short-
|
Long-
|
||||||||||
Name
|
Fixed
|
Risk
|
Term
|
Term
|
Cash
|
Equity
|
||||||
J.C. Muscari
|
18%
|
82%
|
36%
|
64%
|
62%
|
38%
|
||||||
D.T. Dietrich
|
24%
|
76%
|
42%
|
58%
|
65%
|
35%
|
||||||
D.J. Monagle
|
23%
|
77%
|
40%
|
60%
|
64%
|
36%
|
||||||
T.J. Meek
|
25%
|
75%
|
44%
|
56%
|
67%
|
33%
|
||||||
D.W. Mayger
|
29%
|
71%
|
50%
|
50%
|
70%
|
30%
|
||||||
R.S. Wetherbee
|
25%
|
75%
|
46%
|
54%
|
67%
|
33%
|
(1)
|
The only fixed component of total direct remuneration at the Company is base salary. All other elements of total direct remuneration are performance-based and at risk (not guaranteed). The short-term components are base salary and annual incentives. The cash component includes base salary, annual incentives and Performance Units (which are denominated in and pay out in cash).
|
Element of
Compensation
Program
|
Description
|
How This Element Promotes
Company Objectives/
Positioning vs. Market
|
||
Annual Compensation:
|
||||
—Base Salary
|
Fixed annual compensation that is certain as to payment; provides continuous income to meet ongoing living costs.
|
Intended to be competitive with marketplace, to aid in recruitment and retention.
|
||
—Annual Incentives
|
Offers opportunity to earn performance-based compensation for achieving pre-set annual goals.
|
Motivate and reward achievement of corporate objectives.
|
||
Long-Term Compensation:
|
||||
—Stock Options
|
Stock options granted at fair market value on date of grant with ratable vesting over three years. This represents approximately 20% of target long-term incentive compensation for each individual.
|
More highly leveraged risk and reward alignment with shareholder value; vesting terms and holding requirements promote retention and a strong linkage to the long-term interests of shareholders.
|
||
—DRSUs
|
Full value grant of stock units with ratable vesting over three years. This represents approximately 40% of target long-term incentive compensation for each individual.
|
Intended to increase long-term equity ownership and to focus executives on providing shareholders with superior investment returns; vesting terms and holding requirements promote retention and a strong linkage to the long-term interests of shareholders.
|
||
—Performance Units
|
Units pay out in cash based on three-year performance goals. This represents approximately 40% of target long-term incentive compensation for each individual.
|
Units earned based on performance metrics that are believed to be key to achieving success in the Company’s strategies.
|
||
Other Compensation Elements:
|
||||
—Retirement Income
|
Qualified and non-qualified defined benefit and qualified defined contribution plans intended to provide for replacement of annual compensation with pension or lump-sum payments upon retirement.
|
Fair and competitive program designed to provide basic retirement benefits and encourage long-term service.
|
||
—Deferred Compensation
|
Supplemental Savings Plan is a nonfunded deferred compensation plan that mirrors the Company’s qualified defined contribution plan and allows for an annual election of deferrals of salary and bonus.Additionally, the program provides a second and separate election opportunity for the deferral of annual base salary and bonus for which these deferrals are credited with interest only.
|
Modest program that allows executives to have same level of benefits as other participants not subject to IRS limits.
|
||
—Severance Payments
|
Payments and benefits upon termination of an executive’s employment in specified circumstances, including after a change in control.
|
Intended to provide assurance of financial security to attract lateral hires and to retain executives, especially in disruptive circumstances, such as a change in control and leadership transitions; encourages management to consider transactions that could benefit shareholders.
|
||
—Benefits
|
Health and welfare benefits.
|
Fair and competitive programs to provide family protection, facilitate recruitment and retention.
|
||
—Perquisites
|
Modest personal benefits limited to financial counseling.
|
Highly desired benefits which can represent cost-effective elements of compensation. We do not provide tax gross-ups for perquisites.
|
MINERALS TECHNOLOGIES | 2014 Proxy Statement | 41 |
PROXY SUMMARY
|
COMPENSATION DISCUSSION AND ANALYSIS
|
42 | MINERALS TECHNOLOGIES | 2014 Proxy Statement |
COMPENSATION DISCUSSION AND ANALYSIS
|
PROXY SUMMARY
|
Name
|
2013 Base
Salary
|
Target
Percentage
of Base
Salary
|
Target Annual
Incentive
Compensation
|
Maximum
Annual
Incentive
Compensation
|
Performance
Factor
Achieved
|
2013 Incentive
Compensation
Earned
|
|||||||||||||
J.C. Muscari
|
$
|
900,000
|
100
|
%
|
$
|
900,000
|
$
|
1,800,000
|
155.80
|
%
|
$
|
1,402,500
|
|||||||
D.T Dietrich
|
$
|
417,450
|
75
|
%
|
$
|
313,000
|
$
|
626,000
|
160.30
|
%
|
$
|
501,700
|
|||||||
D.J. Monagle
|
$
|
408,300
|
75
|
%
|
$
|
306,200
|
$
|
612,400
|
181.40
|
%
|
$
|
555,400
|
|||||||
T.J. Meek
|
$
|
407,875
|
75
|
%
|
$
|
304,300
|
$
|
608,600
|
153.30
|
%
|
$
|
466,500
|
|||||||
D.W. Mayger
|
$
|
382,875
|
75
|
%
|
$
|
285,600
|
$
|
571,200
|
137.30
|
%
|
$
|
392,200
|
|||||||
R.S. Wetherbee
|
$
|
567,671
|
80
|
%
|
$
|
454,100
|
$
|
908,200
|
110.00
|
%
|
$
|
500,000
|
Company Financial Targets
|
Business Unit Financial Targets
|
Personal Performance
|
|||||||||||||||||
Name
|
Weighting
|
Achievement
|
Weighting
|
Achievement
|
Weighting
|
Achievement
|
|||||||||||||
J.C. Muscari
|
70
|
%
|
165.1
|
%
|
—
|
—
|
30
|
%
|
134.1
|
%
|
|||||||||
D.T Dietrich
|
70
|
%
|
165.1
|
%
|
—
|
—
|
30
|
%
|
149.0
|
%
|
|||||||||
D.J. Monagle
|
20
|
%
|
165.1
|
%
|
50
|
%
|
200.0
|
%
|
30
|
%
|
161.3
|
%
|
|||||||
T.J. Meek
|
70
|
%
|
165.1
|
%
|
—
|
—
|
30
|
%
|
125.6
|
%
|
|||||||||
D.W. Mayger
|
20
|
%
|
165.1
|
%
|
50
|
%
|
148.6
|
%
|
30
|
%
|
100.0
|
%
|
MINERALS TECHNOLOGIES | 2014 Proxy Statement | 43 |
PROXY SUMMARY
|
COMPENSATION DISCUSSION AND ANALYSIS
|
●
|
the performance target range for threshold and maximum performance, representing a weighted average composite of the Business Unit minimum (threshold) and maximum performance, respectively,
|
|
●
|
the Company performance target if each of the Business Unit level performance factors were achieved at 100% of target, and
|
|
●
|
actual 2013 performance, representing the weighted average composite performance of the Business Units.
|
Threshold
|
Target
|
Maximum
|
Actual 2013 Performance
|
|||||
Operating Income
|
$66.0 million
|
$114.4 million
|
$130.6 million
|
$124.4 million
|
||||
Return on Capital
|
5.1%
|
8.8%
|
10.1%
|
9.5%
|
●
|
Paper PCC Business Unit: 200%
|
|
●
|
Refractories Business Unit: 128.6%
|
|
●
|
Performance Minerals Business Unit: 148.6%
|
|
●
|
Overall Company: 165.1%.
|
44 | MINERALS TECHNOLOGIES | 2014 Proxy Statement |
COMPENSATION DISCUSSION AND ANALYSIS
|
PROXY SUMMARY
|
●
|
Mr. Muscari: The Compensation Committee reviewed Mr. Muscari’s personal goals and objectives and assessed his performance versus the objectives in areas including, but not limited to, effectively managing the Company and enhancing long-term potential and core competencies, advancing the strategies of the three Business Units including the delivery of significant new business for long-term growth, advancing external growth initiatives, furthering the deployment of Lean management systems to provide for ongoing productivity improvements, improving the Company’s safety environment, succession planning and organizational development including bringing in new talent and further advancing diversity, furthering external and investor relations, and maintaining research and development efforts. Collectively, Mr. Muscari’s performance against his personal performance objectives was 134.1% of target.
|
|
●
|
Mr. Dietrich: Mr. Muscari and the Compensation Committee reviewed Mr. Dietrich’s 2013 personal goals and objectives and assessed his performance versus the objectives in areas such as expense reduction, achievement of Hoshin Plans (Hoshin is a structured methodology for executing and achieving strategic goals and objectives) and overall leadership. For Mr. Dietrich, controllable expenses for his resource unit decreased in 2013 by 2.0% from 2012 levels, and his target was an increase of 2.9%, which resulted in a payout of 200% for this component of the award. Collectively, Mr. Dietrich’s performance against his personal performance objectives was 149.0% of target.
|
|
●
|
Mr. Monagle: Mr. Muscari and the Compensation Committee reviewed Mr. Monagle’s 2013 personal performance goals and objectives and assessed his performance versus the objectives in areas such as Operational Excellence deployment, expense management, productivity and overall leadership. For Mr. Monagle, controllable expenses for his Business Unit decreased in 2013 by 2.5% from 2012 levels, and his target was an increase of 2.4%, which resulted in a payout of 195% for this component of the award. Productivity improvements measured as Tons Produced per Manufacturing Hour increased 4.4% from 2012 levels and his target was an improvement of 1.5% which resulted in a payout of 200% for this component of the award. Collectively, Mr. Monagle’s performance against his personal objectives was 161.3% of target.
|
MINERALS TECHNOLOGIES | 2014 Proxy Statement | 45 |
PROXY SUMMARY
|
COMPENSATION DISCUSSION AND ANALYSIS
|
●
|
Mr. Meek: Mr. Muscari and the Compensation Committee reviewed Mr. Meek’s 2013 personal goals and objectives and assessed his performance versus the objectives in areas such as expense reduction, achievement of Hoshin Plans and overall leadership. For Mr. Meek, controllable expenses for his resource units decreased in 2013 by 2.2% from 2012 levels, and his target was a decrease of 2.2%, which resulted in a payout of 100.0% for this component of the award. Collectively, Mr. Meek’s performance against his personal objectives was 125.6% of target.
|
|
●
|
Mr. Mayger: Mr. Muscari and the Compensation Committee reviewed Mr. Mayger’s 2013 performance goals and objectives and assessed his performance versus the objectives in areas such as Operational Excellence deployment, expense and working capital management, productivity and overall leadership in his Business Unit and his resource unit. For Mr. Mayger, controllable expenses for his Business Unit and his resource unit were reduced in 2013 by 0.5% from 2012 levels, and his target was a decrease of 1.2% which resulted in a payout of 85% for this component of the award. Working capital days for his Business Unit was 63 days, and his target was 52 days, which resulted in a payout of 0% for this component of the award. Productivity improvements for his Business Units measured as Tons Produced per Manufacturing Hour increased 3.3% from 2012 levels and his target was an improvement of 2.0% which resulted in a payout of 116.7% for this component of the award. Collectively, Mr. Mayger’s performance against his personal objectives was 100% of target.
|
46 | MINERALS TECHNOLOGIES | 2014 Proxy Statement |
COMPENSATION DISCUSSION AND ANALYSIS
|
PROXY SUMMARY
|
Grant Date
|
Three Year
Performance Period
|
Actual Payout as a
Percentage of Payout
at Target Performance
|
2011
|
2011 – 2013
|
220%
|
2010
|
2010 – 2012
|
150%
|
2009
|
2009 – 2011
|
78%
|
2008
|
2008 – 2010
|
40%
|
2007
|
2007 – 2009
|
0%
|
2006
|
2006 – 2008
|
0%
|
2005
|
2005 – 2007
|
0%
|
●
|
The Company’s ROC performance as compared to target ROC, which is set to exceed the Company’s weighted average cost of capital.
|
●
|
The Company’s stock performance as compared to the S&P MidCap 400 Index and the Russell 2000 Index, based on total shareholder return for the period from January 1, 2013 to December 31, 2015. For this purpose, the total shareholder return of the S&P MidCap 400 Index and the Russell 2000 Index are weighted equally.
|
●
|
The Company’s stock performance as compared to our Peer Company Index, based on total shareholder return for the period from January 1, 2013 to December 31, 2015. Commencing in 2013, we began using a Peer Company Index that is consistent with the new comparator group of peer companies used for our overall compensation benchmarking, which is described in detail below under “—How We Make Compensation Decisions—Comparator Group Companies.”
|
MINERALS TECHNOLOGIES
|
2014 Proxy Statement
|
47
|
PROXY SUMMARY
|
COMPENSATION DISCUSSION AND ANALYSIS
|
ROC
|
Component
|
||||
Performance*
|
Achievement
|
||||
<7.5
|
%
|
$
|
0
|
||
8.5
|
%
|
$
|
75
|
||
9.5
|
%
|
$
|
100
|
||
10.5
|
%
|
$
|
200
|
||
11.5+
|
%
|
$
|
300
|
||
*
|
Assumes weighted average cost of capital of 9.0% at time of vesting.
|
Performance as
|
Component
|
||||
a% of Target
|
Achievement
|
||||
<75
|
% |
$
|
0
|
||
75
|
% |
$
|
75
|
||
100
|
% |
$
|
100
|
||
120
|
% |
$
|
200
|
||
130+
|
% |
$
|
300
|
Performance as
|
Component
|
||||
a% of Target
|
Achievement
|
||||
<75
|
% |
$
|
0
|
||
75
|
% |
$
|
40
|
||
100
|
% |
$
|
90
|
||
110
|
% |
$
|
100
|
||
120
|
% |
$
|
200
|
||
130+
|
% |
$
|
300
|
48
|
MINERALS TECHNOLOGIES
|
2014 Proxy Statement
|
COMPENSATION DISCUSSION AND ANALYSIS
|
PROXY SUMMARY
|
MINERALS TECHNOLOGIES
|
2014 Proxy Statement
|
49
|
PROXY SUMMARY
|
COMPENSATION DISCUSSION AND ANALYSIS
|
How We Make Compensation Decisions
|
●
|
Provide a market-based, competitive total compensation opportunity that allows the Company to attract, retain, motivate and reward highly skilled executives;
|
●
|
establish a strong pay-for-performance culture based on the achievement of key business objectives and reinforced by incentive-based pay; and
|
●
|
strengthen the linkage between executive and shareholder interests through the usage of equity awards and executive stock ownership.
|
A. Schulman, Inc.
|
Harsco Corporation
|
|
Albermarle Corporation
|
Innophos Holdings, Inc.
|
|
AMCOL International Corporation
|
Koppers Holdings Inc.
|
|
Arch Coal, Inc.
|
Kraton Performance Polymers, Inc.
|
|
Cabot Corporation
|
Kronos Worldwide, Inc.
|
|
Century Aluminum Company
|
Molycorp, Inc.
|
|
Compass Minerals International, Inc.
|
Olin Corporation
|
|
Cytec Industries Inc.
|
OM Group, Inc.
|
|
Ferro Corporation
|
Sensient Technologies Corp.
|
|
H.B. Fuller Company
|
50 | MINERALS TECHNOLOGIES | 2014 Proxy Statement |
COMPENSATION DISCUSSION AND ANALYSIS
|
PROXY SUMMARY
|
MINERALS TECHNOLOGIES | 2014 Proxy Statement | 51 |
PROXY SUMMARY
|
COMPENSATION DISCUSSION AND ANALYSIS
|
●
|
Chief Executive Officer—six times base salary (within five years of election)
|
●
|
Chief Financial Officer and Chief Operating Officer – four times base salary (within five years of election)
|
●
|
Other Elected Officers—three times base salary (within five years of election)
|
52 | MINERALS TECHNOLOGIES | 2014 Proxy Statement |
COMPENSATION DISCUSSION AND ANALYSIS
|
PROXY SUMMARY
|
Duane R. Dunham, Chair
|
|
John J. Carmola
|
|
Barbara R. Smith
|
MINERALS TECHNOLOGIES | 2014 Proxy Statement | 53 |
PROXY SUMMARY
|
COMPENSATION DISCUSSION AND ANALYSIS
|
Name and
Principal Position
(a)
|
Year
(b)
|
Salary
($)
(c)
|
Stock
Awards
($)(1)
(e)
|
Option
Awards
($)(2)
(f)
|
Non-Equity
Incentive Plan
Compensation*
($)(3)
(g)
|
Change in
Pension Value
and Non-qualified
Deferred
Compensation
Earnings
($)(4)
(h)
|
All Other
Compensation
($)(5)
(i)
|
Total
($)
(j)
|
|||||||||||||||||
Joseph C. Muscari
|
2013
|
$
|
900,000
|
$
|
1,278,049
|
$
|
935,350
|
$
|
4,207,876
|
$
|
108,348
|
$
|
50,956
|
$
|
7,480,579
|
||||||||||
Chairman and
|
2012
|
$
|
900,000
|
$
|
1,397,767
|
$
|
711,623
|
$
|
3,130,740
|
$
|
92,700
|
$
|
837,314
|
$
|
7,070,512
|
||||||||||
Chief Executive Officer***
|
2011
|
$
|
900,000
|
$
|
1,278,143
|
$
|
752,174
|
$
|
2,159,700
|
$
|
153,800
|
$
|
880,053
|
$
|
6,123,870
|
||||||||||
Douglas T. Dietrich
|
2013
|
$
|
416,077
|
$
|
406,005
|
$
|
292,714
|
$
|
1,159,210
|
$
|
12,709
|
$
|
26,676
|
$
|
2,313,391
|
||||||||||
Senior Vice President,
|
2012
|
$
|
385,077
|
$
|
393,737
|
$
|
195,972
|
$
|
623,550
|
$
|
25,800
|
$
|
25,432
|
$
|
1,649,568
|
||||||||||
Finance and Treasury,
|
2011
|
$
|
347,692
|
$
|
300,038
|
$
|
165,547
|
$
|
446,300
|
$
|
29,300
|
$
|
26,713
|
$
|
1,315,590
|
||||||||||
Chief Financial Officer
|
|||||||||||||||||||||||||
D.J. Monagle, III
|
2013
|
$
|
407,385
|
$
|
423,966
|
$
|
310,301
|
$
|
1,322,495
|
$
|
15,050
|
$
|
23,985
|
$
|
2,503,182
|
||||||||||
Senior Vice President,
|
2012
|
$
|
386,923
|
$
|
431,990
|
$
|
219,825
|
$
|
787,840
|
$
|
30,300
|
$
|
27,092
|
$
|
1,883,970
|
||||||||||
Chief Operating Officer
|
2011
|
$
|
362,020
|
$
|
363,977
|
$
|
204,116
|
$
|
509,400
|
$
|
48,100
|
$
|
31,739
|
$
|
1,519,352
|
||||||||||
Thomas J. Meek
|
2013
|
$
|
406,731
|
$
|
364,013
|
$
|
264,906
|
$
|
1,145,927
|
$
|
27,022
|
$
|
29,692
|
$
|
2,238,291
|
||||||||||
Senior Vice President, General
|
2012
|
$
|
382,539
|
$
|
360,949
|
$
|
183,713
|
$
|
793,900
|
$
|
29,700
|
$
|
28,617
|
$
|
1,779,418
|
||||||||||
Counsel and Secretary,
|
2011
|
$
|
363,808
|
$
|
305,968
|
$
|
169,504
|
$
|
354,000
|
$
|
34,100
|
$
|
34,960
|
$
|
1,262,340
|
||||||||||
Chief Compliance Officer
|
|||||||||||||||||||||||||
Douglas W. Mayger
|
2013
|
$
|
381,731
|
$
|
267,972
|
$
|
196,720
|
$
|
786,706
|
$
|
25,061
|
$
|
28,808
|
$
|
1,686,998
|
||||||||||
Senior Vice President,
|
2012
|
$
|
356,923
|
$
|
256,980
|
$
|
131,435
|
$
|
545,700
|
$
|
30,100
|
$
|
27,731
|
$
|
1,348,869
|
||||||||||
Performance Minerals and
|
2011
|
$
|
321,346
|
$
|
199,999
|
$
|
155,593
|
$
|
392,400
|
$
|
38,700
|
$
|
15,168
|
$
|
1,123,206
|
||||||||||
MTI Supply Chain
|
|||||||||||||||||||||||||
Robert S. Wetherbee
|
2013
|
538,462
|
$
|
600,003
|
$
|
441,415
|
$
|
500,000
|
—
|
$
|
103,464
|
$
|
2,183,344
|
||||||||||||
Former President and
|
|||||||||||||||||||||||||
Chief Executive Officer
|
*
|
Non-equity Incentive plan compensation consists of the following:
|
Name
|
2013 Annual
Incentive Bonus
|
2013 Long-term
Incentive Payout
|
Total
|
|||||||
J.C. Muscari
|
$
|
1,402,500
|
$
|
2,805,376
|
$
|
4,207,876
|
||||
D.T. Dietrich
|
$
|
501,700
|
$
|
657,510
|
$
|
1,159,210
|
||||
D.J. Monagle
|
$
|
555,400
|
$
|
767,095
|
$
|
1,322,495
|
||||
T.J. Meek
|
$
|
466,500
|
$
|
679,427
|
$
|
1,145,927
|
||||
D.W. Mayger
|
$
|
392,200
|
$
|
394,506
|
$
|
786,706
|
||||
R.S. Wetherbee
|
$
|
500,000
|
—
|
$
|
500,000
|
**
|
There were no discretionary bonuses paid to any of the named executive officers in 2011, 2012 or 2013. Accordingly, the column entitled “Bonus” has been omitted from this table.
|
***
|
Mr. Muscari was Executive Chairman of the Company from March 2013 to February 2014.
|
(1)
|
Represents the aggregate grant date fair value computed in accordance with FASB ASC Topic 718. The Company calculates the “fair value” of stock awards under FASB ASC Topic 718 by multiplying the number of shares by the average of the high and low price of the Company’s common stock on the New York Stock Exchange on the grant date. See Note 2 to the Consolidated Financial Statements in our Annual Report on Form 10-K for the fiscal year ended December 31, 2013 for the assumptions made in determining FASB ASC Topic 718 values.
|
54 | MINERALS TECHNOLOGIES | 2014 Proxy Statement |
COMPENSATION DISCUSSION AND ANALYSIS
|
PROXY SUMMARY
|
(2)
|
Represents the aggregate grant date fair value computed in accordance with FASB ASC Topic 718. The Company calculates the “fair value” of option awards under FASB ASC Topic 718 using the Black-Scholes valuation model. See Note 2 to the Consolidated Financial Statements in our Annual Report for the fiscal year ended December 31, 2013 for the assumptions made in determining FASB ASC Topic 718 values.
|
(3)
|
Amounts shown for 2013 represent the sum of (i) 2013 Annual Incentive awards under the 2013 Annual Incentive Plan and (ii) the value of the Performance Units granted by the Company to the named executive officers in 2011 for the performance period 2011-2013, which vested on December 31, 2013, as detailed in the above note (*).
|
Amounts shown for 2012 represent the sum of (i) 2012 Annual Incentive awards under the 2012 Annual Incentive Plan and (ii) the value of the Performance Units granted by the Company to the named executive officers in 2010 for the performance period 2010-2012, which vested on December 31, 2012. Performance under the Performance Units granted in 2010 met the minimum threshold levels for certain performance measures, and the value of these Performance Units was $150.30 per unit.
|
|
Amounts shown for 2011 represent the sum of (i) 2011 Annual Incentive awards under the 2011 Annual Incentive Plan and (ii) the value of the Performance Units granted by the Company to the named executive officers in 2009 for the performance period 2009-2011, which vested on December 31, 2011. Performance under the Performance Units granted in 2009 met the minimum threshold levels for certain performance measures, and the value of these Performance Units was $78 per unit.
|
|
A Performance Unit is worth $100 per unit at target performance; at maximum performance, $300 per unit. If performance does not meet minimum threshold levels, the Performance Unit will be worth $0. See “Compensation Discussion and Analysis—What We Pay and Why: Elements of Our Compensation Program for Named Executive Officer—Long-term Incentives” for more information.
|
|
(4)
|
Amounts shown in column (h) are solely an estimate of the increase in actuarial present value during 2013 of the named executive officer’s normal retirement age (defined as the earliest age at which the executive can receive a benefit unreduced for early retirement) accumulated benefit under the Company’s Retirement Plan and the Supplemental Retirement Plan for 2013. The amount attributable to each plan is shown in the table below:
|
Change in Pension Value
|
||||||||||
Name
|
Retirement Plan
|
Supplemental
Retirement Plan
|
Total
|
|||||||
J.C. Muscari
|
$
|
13,228
|
$
|
95,120
|
$
|
108,348
|
||||
D.T. Dietrich
|
$
|
2,475
|
$
|
10,234
|
$
|
12,709
|
||||
D.J. Monagle
|
$
|
2,540
|
$
|
12,510
|
$
|
15,050
|
||||
T.J. Meek
|
$
|
9.044
|
$
|
17,978
|
$
|
27,022
|
||||
D.W. Mayger
|
$
|
6,885
|
$
|
18,176
|
$
|
25,061
|
||||
R.S. Wetherbee
|
—
|
—
|
—
|
The change in pension value for Messrs. Muscari, Dietrich, Mayger, Monagle, and Meek is calculated under the cash balance formula which is described in more detail in the narrative following the Pension Benefits table below. The accumulated benefit under the cash balance formula equals the projected annuity benefit payable at normal retirement age, assuming that the executive remains in employment but receives no future pay credits. The projected annuity benefit is calculated by first projecting the end-of-year cash balance account to normal retirement age using annual interest credits of 1.18% for 2013 calculations and 1.11% for 2012 calculations. The projected cash balance is then converted to an annuity using the September 2013 rates (1.40% for 5 years, 4.66% for next 15 years, 5.62% thereafter) and the 2014 IRS prescribed mortality table for 2013 calculations and the September 2012 rates (1.02% for 5 years, 3.71% for next 15 years, 4.67% thereafter) and the 2013 IRS prescribed mortality table for 2012 calculations.
|
|
The present value of accumulated benefits is then calculated using the following discount rate and mortality assumptions:
|
Discount rate:
|
2013 year end:
|
4.45% for the qualified plan
|
|
4.45% for the nonqualified plan
|
|||
2012 year end:
|
3.60% for the qualified plan
|
||
3.60% for the nonqualified plan
|
|||
2011 year end:
|
4.10% for the qualified plan
|
||
4.10% for the nonqualified plan
|
|||
Mortality table:
|
2013 year end:
|
“IRS 2014 Static Mortality Table” – post retirement only
|
|
2012 year end:
|
“IRS 2013 Static Mortality Table” – post retirement only
|
||
2011 year end:
|
“IRS 2012 Static Mortality Table” – post retirement only
|
(5)
|
All Other Compensation for 2013 consists of the following:
|
MINERALS TECHNOLOGIES | 2014 Proxy Statement | 55 |
PROXY SUMMARY
|
COMPENSATION DISCUSSION AND ANALYSIS
|
Name
|
Perquisites*
|
Savings and
Investment
Plan Match
|
Supplemental
Savings Plan
Match
|
Total
|
||||||||||||
J.C. Muscari
|
$ | 8,910 | $ | 10,200 | $ | 31,846 | $ | 50,956 | ||||||||
D.T. Dietrich
|
$ | 1,633 | $ | 10,200 | $ | 14,843 | $ | 26,676 | ||||||||
D.J. Monagle
|
$ | 1,800 | $ | 10,200 | $ | 11,985 | $ | 23,985 | ||||||||
T.J. Meek
|
$ | 5,000 | $ | 10,200 | $ | 14,492 | $ | 29,692 | ||||||||
D.W. Mayger
|
$ | 5,000 | $ | 10,200 | $ | 13,608 | $ | 28,808 | ||||||||
R.S. Wetherbee
|
$ | 85,157 | $ | 6,969 | $ | 11,338 | $ | 103,464 |
*
|
Consists solely of financial counseling, except for $3,910 in medical reimbursements for Mr. Muscari pursuant to his employment agreement and $80,157 to Mr. Wetherbee for relocation expenses.
|
Amount for 2012 and 2011 for Mr. Muscari include the amounts accrued relating to a one-time payment in 2012 pursuant to a provision of his employment agreement representing replacement of certain retirement benefits which Mr. Muscari would have earned had he remained with his prior company. Such accurals have concluded and Mr. Muscari is not entitled to any similar future payments under his employment agreement. See “—Employment Agreements” on page 63 for more information.
|
All Other Stock Awards: Number of Shares of Stock or Units (#)(3) |
All Other Option Awards: Number of Securities Underlying Options (#)(4) |
||||||||||||||||||||||||||||||
Exercise or Base Price of Option Awards ($/Sh)(5) |
Grant Date Fair Value of Stock and Option Awards ($)(6) |
||||||||||||||||||||||||||||||
Performance Units (#) |
Estimated Future Payouts Under
Non-Equity Incentive Plan
Awards
|
Grant Date Closing Price |
|||||||||||||||||||||||||||||
Name*
|
Grant
Date
|
Threshold
($)
|
Target
($)
|
Maximum
($)
|
|||||||||||||||||||||||||||
J.C. Muscari
|
(1)
|
$
|
225,000
|
$
|
900,000
|
$
|
1,800,000
|
||||||||||||||||||||||||
1/22/13
|
(2)
|
12,800
|
$
|
960,000
|
$
|
1,280,000
|
$
|
3,840,000
|
|||||||||||||||||||||||
1/22/13
|
30,953
|
(7)
|
$
|
1,278,049
|
|||||||||||||||||||||||||||
1/22/13
|
59,301
|
(8)
|
$
|
41.50
|
$
|
41.29
|
$
|
935,350
|
|||||||||||||||||||||||
D.T. Dietrich
|
(1)
|
$
|
78,250
|
$
|
313,000
|
$
|
626,000
|
||||||||||||||||||||||||
1/22/13
|
(2)
|
3,940
|
$
|
295,500
|
$
|
394,000
|
$
|
1,182,000
|
|||||||||||||||||||||||
1/22/13
|
9,833
|
$
|
406,005
|
||||||||||||||||||||||||||||
1/22/13
|
`
|
18,558
|
$
|
41.50
|
$
|
41.29
|
$
|
292,714
|
|||||||||||||||||||||||
D.J. Monagle
|
(1)
|
$
|
76,550
|
$
|
306,200
|
$
|
612,400
|
||||||||||||||||||||||||
1/22/13
|
(2)
|
4,240
|
$
|
318,000
|
$
|
424,000
|
$
|
1,272,000
|
|||||||||||||||||||||||
1/22/13
|
10,268
|
$
|
423,966
|
||||||||||||||||||||||||||||
1/22/13
|
19,673
|
$
|
41.50
|
$
|
41.29
|
$
|
310,301
|
||||||||||||||||||||||||
T.J. Meek
|
(1)
|
$
|
76,075
|
$
|
304,300
|
$
|
608,600
|
||||||||||||||||||||||||
1/22/13
|
(2)
|
3,800
|
$
|
258,000
|
$
|
382,000
|
$
|
1,140,000
|
|||||||||||||||||||||||
1/22/13
|
8,816
|
$
|
364,013
|
||||||||||||||||||||||||||||
1/22/13
|
16,795
|
$
|
41.50
|
$
|
41.29
|
$
|
264,906
|
||||||||||||||||||||||||
D.W. Mayger
|
(1)
|
$
|
71,400
|
$
|
285,600
|
$
|
571,200
|
||||||||||||||||||||||||
1/22/13
|
(2)
|
2,676
|
$
|
200,700
|
$
|
267,600
|
$
|
802,800
|
|||||||||||||||||||||||
1/22/13
|
6,490
|
$
|
267,972
|
||||||||||||||||||||||||||||
1/22/13
|
12,472
|
$
|
41.50
|
$
|
41.29
|
$
|
196,720
|
||||||||||||||||||||||||
R.S. Wetherbee
|
(1)
|
$
|
113,525
|
$
|
454,100
|
$
|
908,200
|
||||||||||||||||||||||||
3/20/13
|
(2)
|
6,000
|
$
|
450,000
|
$
|
600,000
|
$
|
1,800,000
|
|||||||||||||||||||||||
3/20/13
|
14,146
|
$
|
600,003
|
||||||||||||||||||||||||||||
3/20/13
|
27,100
|
$
|
42.67
|
$
|
42.42
|
$
|
441,415
|
*
|
The Company did not have any equity incentive plans during 2013, nor does it currently have such plans. Accordingly, the columns entitled “Estimated Future Payouts Under Equity Incentive Plan Awards” have been omitted from this table.
|
56 | MINERALS TECHNOLOGIES | 2014 Proxy Statement |
COMPENSATION DISCUSSION AND ANALYSIS
|
PROXY SUMMARY
|
(1)
|
Represents threshold, target and maximum payout levels under our 2013 Annual Incentive Plan. The actual amount of incentive award earned by each named executive officer in 2013 is reported in the Summary Compensation Table under note (*). For a more detailed discussion of the 2013 Annual Incentive Plan, see “Compensation Discussion and Analysis—What We Pay and Why: Elements of Our Compensation Program for Named Executive Officer—Annual Incentives.”
|
(2)
|
Represents the number of Performance Units granted to the named executive officers in 2013 under the Company’s long-term incentive program and estimated threshold, target and maximum payouts. Except as otherwise noted, Performance Units vest at the end of a three-year performance period. For the 2013-2015 performance period, the value of each performance unit is based on on the Company’s ROC performance and the Company’s stock comparisons to the S&P MidCap 400 Index and the Russell 2000 Index and to a Peer Group Index. If performance does not meet minimum threshold levels, the Performance Unit will be worth $0. At threshold performance, a Performance Unit is worth $75; at target performance, $100 per unit; at maximum performance, $300 per unit. The Performance Unit value for the 2013-2015 performance period will be paid out (subject to meeting the above performance criteria) in early 2016. For a more detailed discussion of Performance Units, see “Compensation Discussion and Analysis—What We Pay and Why: Elements of Our Compensation Program for Named Executive Officer—Long-term Incentives.”
|
(3)
|
Except as otherwise noted, DRSUs vest in three equal annual installments beginning on the first anniversary of the grant date (subject to accelerated vesting in specified circumstances). DRSUs are not credited with dividends or dividend equivalents prior to vesting.
|
(4)
|
Except as otherwise noted, options vest in three equal annual installments beginning on the first anniversary of the grant date and expire on the tenth anniversary of the grant date (subject to accelerated vesting in specified circumstances).
|
(5)
|
The exercise price of option awards is determined by the average of the high and low price of the Company’s common stock on the grant date. Accordingly, the exercise price of option awards granted on January 22, 2013 is $41.29 and on March 20, 2013 is $42.42. The closing price of the Company’s common stock on January 22, 2013 was $41.50 and on March 20, 2013 was $42.67.
|
(6)
|
The grant date fair value of each DRSU is determined by the average of the high and low price of the Company’s common stock on the grant date. Accordingly, the per share grant date fair value of each DRSU granted on January 22, 2013 is $41.29 and on March 20, 2013 is $42.42. The grant date fair value, calculated in accordance with FASB ASC Topic 718 using the Black-Scholes valuation method, of each option granted on January 22, 2013 is $15.77 and on March 20, 2013 is $16.29.
|
(7)
|
DRSUs granted in 2013 vest on the first anniversary of the grant date, subject to accelerated vesting in specified circumstances.
|
(8)
|
Options granted in 2013 vest on the first anniversary of the grant date and expire on the tenth anniversary of the grant date, subject to accelerated vesting in specified circumstances.
|
MINERALS TECHNOLOGIES | 2014 Proxy Statement | 57 |
PROXY SUMMARY
|
COMPENSATION DISCUSSION AND ANALYSIS
|
Option Awards(1)
|
Stock Awards
|
||||||||||||||||||||||
Name
|
Number of
Securities
Underlying
Unexercised
Options
Exercisable
(#)
|
Number of
Securities
Underlying
Unexercised
Options
Unexercisable
(#)
|
Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#)
|
Option
Exercise
Price
($)
|
Option
Expiration
Date
|
Number of
Shares or
Units of
Stock
That
Have Not
Vested
(#)
|
Market
Value of
Shares or
Units of
Stock
That
Have Not
Vested
($)(2)
|
Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units or
Other
Rights
That
Have Not
Vested
(#)
|
Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares,
Units or
Other
Rights
That
Have Not
Vested
($)
|
||||||||||||||
J.C. Muscari
|
140,000
|
(3) |
—
|
N/A
|
$
|
30.10
|
3/1/2017
|
N/A
|
N/A
|
||||||||||||||
70,000
|
—
|
$
|
32.08
|
2/27/2018
|
|||||||||||||||||||
67,672
|
—
|
$
|
32.23
|
1/26/2021
|
|||||||||||||||||||
66,292
|
—
|
$
|
32.03
|
1/25/2022
|
|||||||||||||||||||
—
|
59,301
|
$
|
41.29
|
1/22/2023
|
|||||||||||||||||||
30,953
|
(4)
|
$
|
1,859,347
|
||||||||||||||||||||
D.T. Dietrich
|
4,200
|
—
|
N/A
|
$
|
32.68
|
8/1/2017
|
N/A
|
N/A
|
|||||||||||||||
10,000
|
—
|
$
|
32.08
|
2/27/2018
|
|||||||||||||||||||
13,740
|
—
|
$
|
24.56
|
1/27/2020
|
|||||||||||||||||||
9,930
|
4,964
|
$
|
32.23
|
1/26/2021
|
|||||||||||||||||||
6,086
|
12,170
|
$
|
32.03
|
1/25/2022
|
|||||||||||||||||||
—
|
18,558
|
$
|
41.29
|
1/22/2023
|
|||||||||||||||||||
20,427
|
(5)
|
$
|
1,227,050
|
||||||||||||||||||||
D. J. Monagle
|
2,000
|
—
|
N/A
|
$
|
28.27
|
1/17/2016
|
N/A
|
N/A
|
|||||||||||||||
2,200
|
—
|
$
|
29.67
|
4/26/2016
|
|||||||||||||||||||
2,200
|
—
|
$
|
32.31
|
4/25/2017
|
|||||||||||||||||||
8,000
|
—
|
$
|
32.08
|
2/27/2018
|
|||||||||||||||||||
24,000
|
—
|
$
|
19.86
|
1/28/2019
|
|||||||||||||||||||
19,100
|
—
|
$
|
24.56
|
1/27/2020
|
|||||||||||||||||||
12,244
|
6,120
|
$
|
32.23
|
1/26/2021
|
|||||||||||||||||||
6,826
|
13,652
|
$
|
32.03
|
1/25/2022
|
|||||||||||||||||||
—
|
19,673
|
$
|
41.29
|
1/22/2023
|
|||||||||||||||||||
22,252
|
(6)
|
$
|
1,336,678
|
||||||||||||||||||||
T.J. Meek
|
10,000
|
—
|
N/A
|
$
|
22.18
|
9/1/2019
|
N/A
|
N/A
|
|||||||||||||||
20,000
|
—
|
$
|
24.56
|
1/27/2020
|
|||||||||||||||||||
10,168
|
5,082
|
$
|
32.23
|
1/26/2021
|
|||||||||||||||||||
5,706
|
11,408
|
$
|
32.03
|
1/25/2022
|
|||||||||||||||||||
—
|
16,795
|
$
|
41.29
|
1/22/2023
|
|||||||||||||||||||
18,848
|
(7)
|
$
|
1,132,199
|
||||||||||||||||||||
D.W. Mayger
|
—
|
4,032
|
N/A
|
$
|
32.23
|
1/26/2021
|
N/A
|
N/A
|
|||||||||||||||
760
|
760
|
$
|
28.54
|
8/05/2021
|
|||||||||||||||||||
—
|
8,162
|
$
|
32.03
|
1/25/2022
|
|||||||||||||||||||
—
|
12,472
|
$
|
41.29
|
1/22/2023
|
|||||||||||||||||||
13,474
|
(8)
|
$
|
809,383
|
||||||||||||||||||||
R.S. Wetherbee
|
—
|
27,100
|
N/A
|
$
|
42.42
|
3/20/2023
|
N/A
|
N/A
|
|||||||||||||||
14,146
|
(9)
|
$849,750
|
(1)
|
Except as otherwise noted, option awards vest in three equal annual installments beginning on the first anniversary of the grant date and expire on the tenth anniversary of the grant date, subject to accelerated vesting in specified circumstances. The grant date is ten years earlier than the expiration date reported in the Option Expiration column.
|
58 | MINERALS TECHNOLOGIES | 2014 Proxy Statement |
COMPENSATION DISCUSSION AND ANALYSIS
|
PROXY SUMMARY
|
(2)
|
The market value is calculated by multiplying the number of DRSUs by $60.07, the closing price of the Company’s common stock on December 31, 2013.
|
|
(3)
|
Includes 70,000 options granted on March 1, 2007 and vested on March 1, 2010.
|
|
(4)
|
Consists of unvested portions of the following: 30,953 DRSUs granted on January 22, 2013 and vesting on the first anniversary on January 22, 2014.
|
|
(5)
|
Consists of unvested portions of the following: 3,102 DRSUs granted on January 26, 2011 and vesting in three equal annual installments beginning January 26, 2012; 7,492 DRSUs January 25, 2012 and vesting in three equal annual installments beginning January 25, 2013; and 9,833 DRSUs granted on January 22, 2013 and vesting in three equal annual installments beginning January 22, 2014.
|
|
(6)
|
Consists of unvested portions of the following: 3,764 DRSUs granted on January 26, 2011 and vesting in three equal annual installments beginning January 26, 2012; 8,220 DRSUs granted on January 25, 2012 and vesting in three equal annual installments beginning January 25, 2013; and 10,268 DRSUs granted on January 22, 2013 and vesting in three equal annual installments beginning January 22, 2014.
|
|
(7)
|
Consists of unvested portions of the following: 3,164 DRSUs granted on January 26, 2011 and vesting in three equal annual installments beginning January 26, 2012; 6,868 DRSUs granted on January 25, 2012 and vesting in three equal annual installments beginning January 25, 2013; and 8,816 DRSUs granted on January 22, 2013 and vesting in three equal annual installments beginning January 22, 2014.
|
|
(8)
|
Consists of unvested portions of the following: 1,862 DRSUs granted on January 26, 2011 and vesting in three equal annual installments beginning January 26, 2012; 232 DRSUs granted on August 5, 2011 and vesting in three equal annual installments beginning August 5, 2012; 4,890 DRSUs granted on January 25, 2012 and vesting in three equal annual installments beginning January 25, 2013; and 6,490 DRSUs granted on January 22, 2013 and vesting in three equal annual installments beginning January 22, 2014.
|
|
(9)
|
Consists of invested portions of the following: 14,146 DRSUs granted on March 20, 2013 and vesting in three equal annual installments beginning March 20, 2014.
|
Option Awards
|
Stock Awards
|
||||||||||||
Name
|
Number of Shares
Acquired on Exercise
(#)
|
Value Realized
on Exercise
($)
|
Number of Shares
Acquired on Vesting
(#)(1)
|
Value Realized
on Vesting
($)
|
|||||||||
J.C. Muscari
|
198,800
|
4,868,923
|
39,902
|
1,660,522
|
|||||||||
D.T. Dietrich
|
17,000
|
451,368
|
9,492
|
396,072
|
|||||||||
D.J. Monagle
|
1,500
|
46,710
|
11,602
|
484,203
|
|||||||||
T.J. Meek
|
—
|
—
|
9,932
|
414,522
|
|||||||||
D.W. Mayger
|
18,376
|
200,232
|
5,888
|
246,754
|
|||||||||
R.S. Wetherbee
|
—
|
—
|
—
|
—
|
(1)
|
Certain of these shares were withheld for the payment of taxes.
|
MINERALS TECHNOLOGIES | 2014 Proxy Statement | 59 |
PROXY SUMMARY
|
COMPENSATION DISCUSSION AND ANALYSIS
|
Name
|
Plan Name
|
Number of Years
Credited Service
(#) |
Present Value of
Accumulated
Benefit
($)(1)
|
Payments During
Last Fiscal Year
($)
|
||||||
J.C. Muscari
|
Retirement Plan
|
6.8
|
$
|
86,728
|
—
|
|||||
Supplemental Retirement Plan
|
6.8
|
$
|
523,220
|
—
|
||||||
D.T. Dietrich
|
Retirement Plan
|
6.4
|
$
|
42,475
|
—
|
|||||
Supplemental Retirement Plan
|
6.4
|
$
|
51,834
|
—
|
||||||
D.J. Monagle
|
Retirement Plan
|
11.0
|
$
|
88,340
|
—
|
|||||
Supplemental Retirement Plan
|
11.0
|
$
|
71,910
|
—
|
||||||
T.J. Meek
|
Retirement Plan
|
4.3
|
$
|
46,044
|
—
|
|||||
Supplemental Retirement Plan
|
4.3
|
$
|
63,878
|
—
|
||||||
D.W. Mayger
|
Retirement Plan
|
11.9
|
$
|
95,685
|
—
|
|||||
Supplemental Retirement Plan
|
11.9
|
$
|
55,876
|
—
|
||||||
R.S. Wetherbee
|
Retirement Plan
|
0
|
$
|
0
|
—
|
|||||
Supplemental Retirement Plan
|
0
|
$
|
0
|
—
|
(1)
|
The present value of accumulated benefits is calculated using the following assumptions: (a) a discount rate of 4.45% for the Retirement Plan and 4.45% for the Nonfunded Supplemental Retirement Plan and (b) mortality rates from the “IRS 2014 Static Mortality” Table at 2013 year end, post-retirement only.
|
60 | MINERALS TECHNOLOGIES | 2014 Proxy Statement |
COMPENSATION DISCUSSION AND ANALYSIS
|
PROXY SUMMARY
|
Executive
|
Registrant
|
Aggregate
|
Aggregate
|
Aggregate
|
|||||||
Contributions
|
Contributions
|
Earnings
|
Withdrawals/
|
Balance
|
|||||||
in Last FY
|
in Last FY
|
in Last FY
|
Distributions
|
at Last FYE
|
|||||||
Name
|
($)(1)
|
($)(2)
|
($)(3)
|
($)
|
($)
|
||||||
J.C. Muscari
|
47,769
|
31,846
|
273,945
|
0
|
1,121,775
|
||||||
D.T. Dietrich
|
18,554
|
14,843
|
38,072
|
0
|
201,692
|
||||||
D.J. Monagle
|
23,962
|
11,985
|
50,513
|
0
|
286,722
|
||||||
T.J. Meek
|
25,362
|
14,492
|
74,650
|
0
|
258,350
|
||||||
D.W. Mayger
|
43,584
|
13,608
|
20,461
|
0
|
154,393
|
||||||
R.S. Wetherbee
|
14,173
|
11,338
|
4,165
|
0
|
29,676
|
(1)
|
Named executive officers may elect to defer payment up to the greater of 6% or that percentage of regular earnings that the named executive officer would have been otherwise able to contribute on a before-tax basis to the Company’s Savings and Investment Plan. At the named executive officer’s election, such deferral will be credited to the named executive officer’s account in the dollar amount of the deferred regular earnings, or as the number of units calculated by dividing the dollar amount of regular earnings deferred by the closing price of the Company’s common stock on the last business day of the month in which the payment of such regular earnings would have been made.
|
(2)
|
The amounts reported in this column represent matching contributions by the Company and were also reported as part of the named executive officers’ “All Other Compensation” in the Summary Compensation table and specifically listed in Footnote 5 to such table. Under the Company’s Savings and Investment Plan, the Company contributes $1 for every $1 contributed by the named executive officer of the first 3% of regular earnings and $1 for every $2 of the next 2% of the named executive officer’s regular earnings. If the Code restrictions prevent the named executive officer from receiving matching contributions under the Company’s Savings and Investment Plan, the named executive officer’s account will be credited by the amounts that would have been otherwise contributed by the Company as matching contributions. Matching contributions are held in the general funds of the Company and are credited to the named executive officer’s account in the form of units only, calculated as described in note (1) above.
|
(3)
|
The amounts reported in this column represent the aggregate earnings during 2013 of each named executive officer’s account. Dollar amounts in the named executive officer’s account are credited with the interest at a rate equal to the Fixed Income Fund of the Company’s Savings and Investment Plan; units in a named executive officer’s account are marked to market monthly. Whenever a cash dividend is paid on the Company’s common stock, the number of units is increased as follows: the number of units in the named executive officer’s account are multiplied by the cash dividend and divided by the closing price of the Company’s common stock on the dividend record date. None of the named executive officers had any “above market earnings” reportable in column (h) of the Summary Compensation Table.
|
MINERALS TECHNOLOGIES | 2014 Proxy Statement | 61 |
PROXY SUMMARY
|
COMPENSATION DISCUSSION AND ANALYSIS
|
Upon Termination and
Prior to a Change in Control
|
On or After a
Change in Control
|
|||||||||||||||
Name
|
Voluntary
Resignation
or “For Cause”
Termination
|
Death,
Disability or
Retirement
|
Termination
without “Cause”
or Resignation
for “Good
Reason”
|
No Termination
of Employment
|
Termination
without
“Cause” or
Resignation
for “Good
Reason”
|
|||||||||||
J.C. Muscari
|
||||||||||||||||
Severance Payment(1)
|
$
|
0
|
$
|
0
|
$
|
3,600,000
|
$
|
0
|
$
|
13,166,368
|
(2)
|
|||||
Benefits(3)
|
0
|
0
|
0
|
0
|
36,608
|
|||||||||||
DRSU Vesting(4)
|
0
|
0
|
0
|
0
|
1,859,347
|
|||||||||||
Stock Option Vesting(5)
|
0
|
0
|
0
|
0
|
1,113,673
|
|||||||||||
Performance Unit Vesting(6)
|
0
|
0
|
0
|
0
|
0
|
|||||||||||
D.T. Dietrich
|
||||||||||||||||
Severance Payment(1)
|
$
|
0
|
$
|
0
|
$
|
1,102,500
|
0
|
$
|
2,034,742
|
(2)
|
||||||
Benefits(3)
|
0
|
0
|
0
|
0
|
20,758
|
|||||||||||
DRSU Vesting(4)
|
0
|
0
|
0
|
0
|
1,227,050
|
|||||||||||
Stock Option Vesting(5)
|
0
|
0
|
0
|
0
|
827,964
|
|||||||||||
Performance Unit Vesting(6)
|
0
|
0
|
0
|
0
|
0
|
|||||||||||
D.J. Monagle
|
||||||||||||||||
Severance Payment(1)
|
$
|
0
|
$
|
0
|
$
|
1,077,000
|
$
|
0
|
$
|
2,404,139
|
||||||
Benefits(3)
|
0
|
0
|
0
|
0
|
47,068
|
|||||||||||
DRSU Vesting(4)
|
0
|
0
|
0
|
0
|
1,336,678
|
|||||||||||
Stock Option Vesting(5)
|
0
|
0
|
0
|
0
|
922,642
|
|||||||||||
Performance Unit Vesting(6)
|
0
|
0
|
0
|
0
|
0
|
|||||||||||
T.J. Meek
|
||||||||||||||||
Severance Payment(1)
|
$
|
0
|
$
|
0
|
$
|
1,077,000
|
$
|
0
|
$
|
2,133,443
|
(2)
|
|||||
Benefits(3)
|
0
|
0
|
0
|
0
|
36,701
|
|||||||||||
DRSU Vesting(4)
|
0
|
0
|
0
|
0
|
1,132,199
|
|||||||||||
Stock Option Vesting(5)
|
0
|
0
|
0
|
0
|
776,773
|
|||||||||||
Performance Unit Vesting(6)
|
0
|
0
|
0
|
0
|
0
|
|||||||||||
D.W. Mayger
|
||||||||||||||||
Severance Payment(1)
|
$
|
0
|
$
|
0
|
$
|
1,011,000
|
$
|
0
|
$
|
1,962,480
|
(2)
|
|||||
Benefits(3)
|
0
|
0
|
0
|
0
|
47,068
|
|||||||||||
DRSU Vesting(4)
|
0
|
0
|
0
|
0
|
809,383
|
|||||||||||
Stock Option Vesting(5)
|
0
|
0
|
0
|
0
|
599,300
|
|||||||||||
Performance Unit Vesting(6)
|
0
|
0
|
0
|
0
|
0
|
|||||||||||
R.S. Wetherbee
|
||||||||||||||||
Severance Payment(1)
|
$
|
0
|
$
|
0
|
$
|
1,890,000
|
$
|
0
|
$
|
3,767,400
|
(2)
|
|||||
Benefits(3)
|
0
|
0
|
0
|
0
|
37,415
|
|||||||||||
DRSU Vesting(4)
|
0
|
0
|
0
|
0
|
849,750
|
|||||||||||
Stock Option Vesting(5)
|
0
|
0
|
0
|
0
|
478,315
|
|||||||||||
Performance Unit Vesting(6)
|
0
|
0
|
0
|
0
|
0
|
(1)
|
Represents cash payments potentially payable upon termination of employment. Amounts shown for termination without “Cause” or resignation for “Good Reason” prior to a change in control equal 2 times the sum of base salary and target bonus for Mr. Muscari and 1.5 times the sum of base salary and target bonus for the other named executive officers. Amounts shown for termination without “Cause” or resignation for “Good Reason” on or after a change in control equal 2.99 times the five-year average annual compensation.
|
(2)
|
Severance payment may be reduced if the full payment would result in a portion of the payment being subject to the excise tax under Section 4999 of the Code. In such event, the amount of the severance payment will be reduced by the minimum amount necessary such that no portion of the severance payment is subject to the excise tax.
|
(3)
|
This amount represents the present value of 24 months of life, disability, accident and health insurance coverage.
|
(4)
|
This amount represents the aggregate value of DRSUs which would become vested as a direct result of the termination event and/or change in control before the applicable stated vesting date solely as a direct result of the termination event or change in control before the stated vesting date. The stated vesting date is the date at which an award would have vested absent such termination event or change in control. This calculation of value does not discount the value of awards based on the portion of the vesting period elapsed at the date of the termination event or change in control. The value of DRSUs is based on a closing stock price of $60.07 on December 31, 2013.
|
62 | MINERALS TECHNOLOGIES | 2014 Proxy Statement |
COMPENSATION DISCUSSION AND ANALYSIS
|
PROXY SUMMARY
|
(5)
|
This amount represents the aggregate in-the-money value of stock options which would become vested as a direct result of the termination event and/or change in control before the applicable stated vesting date solely as a direct result of the termination event or change in control before the stated vesting date. The stated vesting date is the date at which an award would have vested absent such termination event or change in control. This calculation of value does not attribute any additional value to stock options based on their remaining term and does not discount the value of awards based on the portion of the vesting period elapsed at the date of the termination event or change in control. Represents the intrinsic value of stock options, based on a closing stock price of $60.07 on December 31, 2013.
|
(6)
|
For termination due to death, disability or retirement, if a participant has been employed for two of the three years of the performance period, participant is eligible to receive a pro rata payout at the end of the performance period based on actual performance. Participants who have been employed for less than two of the three years of the performance period forfeit outstanding units related to that performance cycle. The Plan gives the Compensation Committee discretion to accelerate the vesting of Performance Units upon a change in control. Assumes all unvested performance units are not accelerated by the Committee.
|
MINERALS TECHNOLOGIES | 2014 Proxy Statement | 63 |
PROXY SUMMARY
|
COMPENSATION DISCUSSION AND ANALYSIS
|
64 | MINERALS TECHNOLOGIES | 2014 Proxy Statement |
COMPENSATION DISCUSSION AND ANALYSIS
|
PROXY SUMMARY
|
Fees
Earned
or Paid
in Cash
|
Stock
Awards
|
Option
Awards
|
Non-Equity
Incentive
Plan
Compensation
|
Change in
Pension
Value and
Non-qualified
Deferred
Compensation
|
All Other
Compensation
|
Total
|
||||||||||||||||||||||
Name
|
($)
|
($)(1)
|
($)(2)
|
($)
|
Earnings
|
($)(3)
|
($)
|
|||||||||||||||||||||
John J.Carmola
|
$ | 31,875 | $ | — | N/A | N/A | $ | 25 | $ | 31,900 | ||||||||||||||||||
Paula H.J. Cholmondeley
|
$ | 79,583 | (4) | $ | 75,000 | N/A | N/A | N/A | $ | 4,140 | $ | 158,723 | ||||||||||||||||
Robert L. Clark
|
$ | 72,083 | (4) | $ | 75,000 | N/A | N/A | N/A | $ | 1,607 | $ | 148,690 | ||||||||||||||||
Duane R. Dunham
|
$ | 77,083 | $ | 75,000 | N/A | N/A | N/A | $ | 4,027 | $ | 156,110 | |||||||||||||||||
Steven J. Golub
|
$ | 15,208 | (4) | $ | — | N/A | N/A | N/A | $ | 2,567 | $ | 17,775 | ||||||||||||||||
Joseph C. Muscari(5)
|
$ | — | $ | — | N/A | N/A | N/A | $ | 750 | $ | 750 | |||||||||||||||||
Michael F. Pasquale
|
$ | 72,083 | $ | 75,000 | N/A | N/A | N/A | $ | 5,630 | $ | 152,713 | |||||||||||||||||
Marc E. Robinson
|
$ | 72,083 | 75,000 | N/A | N/A | N/A | $ | 674 | $ | 147,757 | ||||||||||||||||||
Barbara R. Smith
|
$ | 82,083 | $ | 75,000 | N/A | N/A | N/A | $ | 1,039 | $ | 158,122 |
(1)
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Amounts shown represent the aggregate grant date fair value computed in accordance with FASB ASC Topic 718 of phantom stock units awarded to each director pursuant to the Nonfunded Deferred Compensation and Unit Award Plan for Non-Employee Directors calculated by multiply- ing the number of units by the closing price of our common stock on the grant date. Each Non-Employee Director was granted 1,757.26 phantom stock units on May 15, 2013, on which date the closing price of our common stock was $42.68 per share. Such phantom stock units were non-forfeitable upon grant.
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The following table lists the total number of phantom stock units held by each director as of December 31, 2013. The units are payable in cash upon the director’s termination of service on the Board. (See “Nonfunded Deferred Compensation and Unit Award Plan for Non-Employee Directors” below.)
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J.J. Carmola
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342
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P.H.J. Cholmondeley
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21,854
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R.L. Clark
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8,555
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D.R. Dunham
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20,628
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S.J. Golub
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0
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J.C. Muscari
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3,762
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M.F. Pasquale
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28,660
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M.E. Robinson
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3,819
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B.R. Smith
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5,647
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(2)
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The Company does not currently compensate its directors with stock options.
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(3)
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All Other Compensation consists of the value of dividends earned, in the amount of $0.05 per unit awarded quarterly and calculated by multiplying the number of units held by the director on the dividend record date.
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(4)
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During 2013, Ms. Cholmondeley elected to defer her fees, and Dr. Clark and Mr. Carmola elected to partially defer their fees, in units which have the economic value of one share of the Company’s stock as permitted under the Nonfunded Deferred Compensation and Unit Award Plan for Non-Employee Directors.
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(5)
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Mr. Joseph C. Muscari served as a non-employee director until his appointment as Chairman and Chief Executive Officer of the Company on March 1, 2007. Since that date, Mr. Muscari is no longer compensated as a director.
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MINERALS TECHNOLOGIES | 2014 Proxy Statement | 65 |
PROXY SUMMARY
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COMPENSATION DISCUSSION AND ANALYSIS
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By Order of the Board of Directors,
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/s/ Thomas J. Meek | ||
Thomas J. Meek
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Senior Vice President, General Counsel,
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Human Resources, Secretary and
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Chief Compliance Officer
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66 | MINERALS TECHNOLOGIES | 2014 Proxy Statement |
APPENDIX A
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PROXY SUMMARY
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(millions of dollars)
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Year Ended | |||||||
Dec. 31,
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Dec. 31,
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2013
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2012
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Diluted earnings per share from continuing operations
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attributable to MTI, as reported
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$ | 2.46 | $ | 2.16 | ||||
Special items:
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Insurance settlement gain, net of tax
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(0.04 | ) | 0.00 | |||||
Diluted earnings per share from continuing operations
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attributable to MTI, excluding special items
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$ | 2.42 | $ | 2.16 | ||||
Segment Operating Income Data
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Specialty Minerals Segment
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$ | 98.4 | $ | 87.7 | ||||
Refractories Segment
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$ | 35.9 | $ | 32.6 | ||||
Unallocated Corporate Expenses
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$ | (7.4 | ) | $ | (6.7 | ) | ||
Consolidated
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$ | 126.9 | $ | 113.6 | ||||
Special Item: Insurance Settlement Gain
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Refractories Segment
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$ | (2.5 | ) | $ | 0.0 | |||
Consolidated
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$ | (2.5 | ) | $ | 0.0 | |||
Segment Operating Income, Excluding Special Items
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Specialty Minerals Segment
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$ | 98.4 | $ | 87.7 | ||||
Refractories Segment
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$ | 33.4 | $ | 32.6 | ||||
Unallocated Corporate Expenses
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$ | (7.4 | ) | $ | (6.7 | ) | ||
Consolidated
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$ | 124.4 | $ | 113.6 |
MINERALS TECHNOLOGIES | 2014 Proxy Statement | 67 |
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MINERALS TECHNOLOGIES INC. |
VOTE BY INTERNET -
www.proxyvote.com ELECTRONIC DELIVERY OF FUTURE PROXY
MATERIALS VOTE BY PHONE - 1-800-690-6903 VOTE BY MAIL |
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TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: |
KEEP THIS PORTION FOR YOUR RECORDS |
DETACH AND RETURN THIS PORTION ONLY |
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. |
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Withhold |
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For All |
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To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below. |
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The Board of Directors recommends you vote FOR the following: |
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Election of Directors |
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Duane R. Dunham |
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The Board of Directors recommends you vote FOR proposals 2 and 3. |
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Ratify the appointment of KPMG LLP as the independent registered public accounting firm for the 2014 fiscal year. |
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Advisory vote to approve executive compensation. |
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NOTE: Such other business as may properly come before the meeting or any adjournment thereof. |
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Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name, by authorized officer. |
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Signature [PLEASE SIGN WITHIN BOX] |
Date |
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Signature (Joint Owners) |
Date |
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0000205674_1 R1.0.0.51160
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Dear Shareholder, |
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Please take note of the important information enclosed with this Proxy Ballot. | |
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Your vote counts and you are strongly encouraged to exercise your right to vote your shares. | |
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Please mark the boxes on the proxy card to indicate how your shares should be voted. Then sign the card, detach and return your proxy vote in the enclosed postage paid envelope. You may also vote your shares by telephone or via the internet. If you choose to vote by telephone or via the internet, you do not need to return the attached card. | |
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If you are a participant in the Minerals Technologies Inc. Savings and Investment Plan, you may direct the trustee of the Plan how to vote the shares allocated to your account under the Plan by casting your vote by May 12, 2014. If you do not direct the trustee, the trustee will vote any undirected shares in the same proportion as those for which it has received instructions. As a participant in the Plan, your vote remains confidential. | |
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Thank you in advance for your prompt consideration of these matters. | |
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Sincerely, |
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Minerals Technologies Inc. |
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Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Annual Report, Notice & Proxy Statement is/ are available at www.proxyvote.com . |
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MINERALS TECHNOLOGIES INC. |
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The undersigned hereby appoints Thomas J. Meek and Douglas T. Dietrich, and each of them, with power to act without the other and with power of substitution, as proxies and attorneys-in-fact and hereby authorizes them to represent and vote, as provided on the other side, all the shares of Minerals Technologies Inc. Common Stock which the undersigned is entitled to vote and, in their discretion, to vote upon such other business as may properly come before the Annual Meeting of Shareholders of Minerals Technologies Inc. to be held May 14, 2014 or any adjournment thereof, with all powers which the undersigned would posses if present at the Meeting. |
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THIS PROXY CARD, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED. IF NO DIRECTION IS MADE BUT THE CARD IS SIGNED, THIS PROXY CARD WILL BE VOTED FOR THE ELECTION OF ALL NOMINEES UNDER PROPOSAL 1, FOR PROPOSAL 2, FOR PROPOSAL 3, AND IN THE DISCRETION OF THE PROXIES WITH RESPECT TO SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING. |
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Continued and to be signed on reverse side |
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0000205674_2 R1.0.0.51160