DEF 14A 1 ryam2017proxystatement.htm DEF 14A Document


UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
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the Securities Exchange Act of 1934

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PAUL G. BOYNTON                                          Chairman, President and Chief Executive Officer
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April 6, 2018

Dear Stockholder:
We are pleased to invite you to attend our Annual Meeting of Stockholders on May 21, 2018, at the DoubleTree Hotel, 1201 Riverplace Boulevard, Jacksonville, Florida, at 4:30 p.m. local time. In the following Notice of 2018 Annual Meeting and Proxy Statement, we describe the matters upon which you will be asked to vote at the meeting.
In our Annual Report to Stockholders, we have discussed our 2017 achievements, which include:
Providing our stockholders with a 35% total return in 2017.
Completion of our acquisition of Tembec Inc., a strategically compelling transaction which more than doubles our pro forma revenue and is immediately cash and earnings accretive.
With another $30 million in sustainable savings achieved in 2017, our Cost Transformation initiative has resulted in $115 million in savings since 2015 toward our goal of $140 million by the end of 2018.
We have put in place a strategic roadmap for growth, to continue to build value for our stockholders for the long term.
Please review the proxy/notice card for instructions how to vote on the Internet, by telephone or by mail in order to be certain that your stock is represented at the meeting, even if you plan to attend. It is important that all Rayonier Advanced Materials stockholders vote and participate in the affairs and governance of our Company.
Thank you for your continued trust, confidence and investment in Rayonier Advanced Materials.


 
By:
/s/Paul G. Boynton

 
 
Paul G. Boynton
Chairman, President and Chief Executive Officer




 
 
Corporate Headquarters

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April 6, 2018
NOTICE OF 2018 ANNUAL MEETING
Notice is hereby given that the 2018 Annual Meeting of Stockholders of Rayonier Advanced Materials Inc., a Delaware corporation, will be held at the DoubleTree Hotel, 1201 Riverplace Boulevard, Jacksonville, Florida on Monday, May 21, 2018 at 4:30 p.m. local time, for purposes of:
1)
electing three Class I directors to terms expiring in 2021;
2)
approving, in a non-binding vote, the compensation of our named executive officers as disclosed in the attached Proxy Statement;
3)
approving the French Sub-Plan to be implemented under the Rayonier Advanced Materials Inc. 2017 Incentive Stock Plan;
4)
ratifying the appointment of Grant Thornton as our independent registered public accounting firm for 2018; and
5)
acting upon such other matters as may properly come before the meeting.
All Rayonier Advanced Materials stockholders of record at the close of business on March 23, 2018 are entitled to vote at the meeting.
WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING IN PERSON, PLEASE PROMPTLY SUBMIT YOUR PROXY OR VOTING INSTRUCTION. Most stockholders have a choice of voting over the Internet, by telephone or by using a traditional proxy card. Please refer to the enclosed proxy materials or the information forwarded by your bank, broker or other holder of record to determine which voting methods are available to you. We urge you to complete and submit your proxy electronically or by telephone (if those options are available to you) as a means of reducing the Company’s expenses related to the meeting.

Please be aware that, if you own shares in a brokerage account, you must instruct your broker on how to vote your shares. Without your instructions, New York Stock Exchange rules do not allow your broker to vote your shares on any of the proposals except the ratification of the appointment of the Company’s independent registered public accounting firm. Please exercise your right as a stockholder to vote on all proposals, including the election of directors, by instructing your broker by proxy.

We urge you to vote your stock, by any of the available methods, at your earliest convenience.

 
By:
/s/Michael R. Herman

 
 
Michael R. Herman
Corporate Secretary




TABLE OF CONTENTS
Item
 
Page
 
GENERAL INFORMATION ABOUT THIS PROXY STATEMENT AND THE ANNUAL MEETING
 
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting
 
QUESTIONS AND ANSWERS
 
NOTE ABOUT FORWARD-LOOKING STATEMENTS
 
NOTE ABOUT NON-GAAP FINANCIAL MEASURES
 
CORPORATE GOVERNANCE
 
Corporate Governance Highlights
 
Corporate Governance Principles
 
Certain Key Governance Features
 
Classified Board
 
Certain Voting Provisions
 
Engagement with Our Stockholders and Communications with our Board
 
Formal Director Onboarding Process
 
Director Independence
 
Committees of the Board of Directors
 
Board Leadership Structure
 
Independent Lead Director
 
Independent Non-Management Director Meetings
 
Oversight of Risk
 
Management Succession Planning
 
Director Nomination Process
 
Diversity
 
Related Person Transactions
 
Standard of Ethics and Code of Corporate Conduct
 
Compensation Committee Interlocks and Insider Participation; Processes and Procedures
 
Director Attendance at Annual Meeting of Stockholders
1
ELECTION OF DIRECTORS
 
Director Qualifications
 
Director Skill/Experience Snapshot
 
Information as to the Three Nominees for Election to the Board of Directors
 
Information as to Other Directors
 
EXECUTIVE COMPENSATION
 
Compensation Discussion and Analysis
 
Executive Summary
 
2017 Highlights
 
Key Terms Used in this CD&A
 
Best Compensation Practices and Policies
 
2017 Say-On-Pay
 
2017 Compensation Metrics and Performance
 
CEO Pay At-A-Glance
 
What Guides Our Program
 
Our Compensation Philosophy
 
The Principal Elements of Pay: Total Direct Compensation
 
Pay Mix



Item
 
Page
 
Our Decision Making Process
 
The Role of the Compensation Committee
 
The Role of Management
 
The Role of the Independent Consultant
 
The Role of Benchmarking and the Compensation Peer Groups
 
The 2017 Executive Compensation Program
 
Base Salary
 
2017 Annual Corporate Bonus Program
 
2017 Final Bonus Program Payouts
 
Long-Term Incentives: Equity Awards
 
     Other Practices, Policies and Guidelines
 
Stock Ownership Requirements
 
Anti-Hedging Policy
 
Clawback Policy
 
2017 Risk Assessment
 
Severance and Change in Control Benefits
 
Other Benefits and Perquisites
 
Retirement Benefits
 
Personal Benefits
 
2018 Compensation Decisions
 
Tax and Accounting Considerations
 
Report of the Compensation and Management Development Committee
 
SUMMARY COMPENSATION TABLE
 
CEO Pay Ratio
 
GRANTS OF PLAN BASED AWARDS
 
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
 
OPTION EXERCISES AND STOCK VESTED
 
PENSION BENEFITS
 
NON-QUALIFIED DEFERRED COMPENSATION
 
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
 
AGREEMENTS WITH OUR NEOS
 
DIRECTOR COMPENSATION
 
2017/2018 Cash Compensation Paid to Non-Management Directors
 
Annual Equity Awards
 
Limit on Annual Equity Awards
 
Cash Fees Deferral Plan
 
Mandatory Stock Ownership
 
Other Compensation and Benefits
 
2017 Director Compensation Table
 
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
 
STOCK OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
 
Section 16(a) Beneficial Ownership Reporting Compliance
 
EQUITY COMPENSATION PLAN INFORMATION
 
EXECUTIVE OFFICERS
2
ADVISORY VOTE ON “SAY ON PAY”



Item
 
Page
3
PROPOSAL TO APPROVE THE FRENCH SUB-PLAN TO BE IMPLEMENTED UNDER THE RAYONIER ADVANCED MATERIALS INC. 2017 INCENTIVE STOCK PLAN
 
Summary of the French Sub-Plan To Be Implemented Under the 2017 Plan
 
Summary of the 2017 Plan
 
Board Recommendation
4
RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
Change in Independent Registered Public Accounting Firm in 2016
 
Appointment of Grant Thornton as Independent Registered Public Accounting Firm for Fiscal Year 2018
 
REPORT OF THE AUDIT COMMITTEE
 
Audit Committee Financial Experts
 
Information Regarding Independent Registered Public Accounting Firm
 
MISCELLANEOUS
 
Annual Report
 
Delivery of Materials to Stockholders Sharing an Address
 
RAYONIER ADVANCED MATERIALS INC. 2017 INCENTIVE STOCK PLAN AND FRENCH SUB-PLAN
 
RAYONIER ADVANCED MATERIALS INC. AUDIT COMMITTEE POLICIES AND PROCEDURES















PROXY STATEMENT
2018 Annual Meeting of Stockholders of Rayonier Advanced Materials Inc.
Monday, May 21, 2018

The 2018 Annual Meeting of Stockholders of Rayonier Advanced Materials Inc. (the “Annual Meeting”) will be held on May 21, 2018, for the purposes set forth in the accompanying Notice of 2018 Annual Meeting. This Proxy Statement and the accompanying proxy card are furnished in connection with the solicitation by the Board of Directors of proxies to be used at the meeting and at any adjournment of the meeting. We may refer to Rayonier Advanced Materials Inc. in this Proxy Statement as “we”, “us”, “our”, the “Company” or “Rayonier Advanced Materials”.

GENERAL INFORMATION ABOUT THIS PROXY STATEMENT AND THE ANNUAL MEETING

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting
We are utilizing Securities and Exchange Commission (the “SEC”) rules that allow companies to furnish proxy materials to stockholders via the Internet. If you received a Notice of Internet Availability of Proxy Materials (the “Internet Notice”) by mail, you will not receive a printed copy of the proxy materials unless you specifically request one. The Internet Notice tells you how to access and review the Proxy Statement and our 2018 Annual Report to Stockholders (the “Annual Report”), which includes our 2017 Annual Report on Form 10-K, as well as instructions how to submit your proxy over the Internet. If you received the Internet Notice and would still like to receive a printed copy of our proxy materials, simply follow the instructions for requesting printed materials included in the Internet Notice.
The Internet Notice, these proxy solicitation materials and our Annual Report were first made available on the Internet and mailed to certain stockholders on or about April 6, 2018.
The Notice of 2018 Annual Meeting, this Proxy Statement and our Annual Report are available at www.ProxyVote.com.

QUESTIONS AND ANSWERS
Q:
WHAT AM I VOTING ON?
A:
You are being asked by the Company to vote on four matters: (1) the election of three Class I directors: Charles E. Adair, Julie A. Dill and James F. Kirsch (information about each nominee is included in the “Information as to Nominees for Election to the Board of Directors” section); (2) the approval, in a non-binding vote, of the compensation of our named executive officers as disclosed in this Proxy Statement (referred to herein as “Say on Pay”, information can be found in the “Advisory Vote on Say on Pay” section); (3) approval of the French Sub-Plan to be implemented under the Rayonier Advanced Materials Inc. 2017 Incentive Stock Plan (information can be found in “Item 3”); and (4) ratification of Grant Thornton LLP as the Company’s independent registered public accounting firm for 2018 (information can be found in the “Ratification of Independent Registered Public Accounting Firm” section). The Board of Directors recommends that you vote “FOR” each of the director nominees listed above and “FOR” each of the other proposals.
Q:
WHO IS ENTITLED TO VOTE?
A:
The record holder of each of the 51,856,185 shares of Rayonier Advanced Materials common stock (“Common Stock”) outstanding at the close of business on March 23, 2018 is entitled to one vote for each share of stock owned.
Q:
HOW DO I VOTE?
A:
You can vote in any one of the following ways:

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You can vote on the Internet by following the “Vote by Internet” instructions on your Internet Notice or proxy card.
You can vote by telephone by following the “Vote by Phone” instructions on the www.ProxyVote.com website referred to in the Internet Notice, or, if you receive hard copies of the proxy solicitation materials, by following the “Vote by Phone” instructions referred to in your proxy card.
If you receive hard copies of the proxy solicitation materials, you can vote by mail by signing and dating your proxy card and mailing it in the provided prepaid envelope. If you mark your voting instructions on the proxy card, your stock will be voted as you instruct. If you return a signed and dated card but do not provide voting instructions, your stock will be voted in accordance with the recommendations of the Board of Directors.
You can vote in person at the Annual Meeting by delivering a completed proxy card or by completing a ballot available upon request at the meeting. However, if you hold your stock in a bank or brokerage account rather than in your own name, you must obtain a legal proxy from your stockbroker in order to vote at the meeting.
Regardless of how you choose to vote, your vote is important and we encourage you to vote promptly.
Q:
HOW DO I VOTE STOCK THAT I HOLD THROUGH AN EMPLOYEE BENEFIT PLAN SPONSORED BY THE COMPANY?
A:
If you hold Common Stock of the Company through any of the following employee benefit plans, you can vote them by following the instructions above:
Rayonier Advanced Materials Inc. Investment and Savings Plan for Salaried Employees
Rayonier Advanced Materials Inc. Jesup Plant Savings Plan for Hourly Employees
Rayonier Advanced Materials Inc. Fernandina Plant Savings Plan for Hourly Employees
Rayonier Investment and Savings Plan for Salaried Employees
Note that if you do not vote your stock held in any of these Company employee benefit plans or do not specify your voting instructions on your proxy card, the trustee of the employee benefit plans will vote your plan stock in the same proportion as the stock for which voting instructions have been received. To allow sufficient time for voting by the trustee, your voting instructions for stock held in the above employee benefit plans must be received by May 16, 2018.
Q:
WHAT DO I NEED TO DO TO ATTEND THE ANNUAL MEETING?
A:
To attend the Annual Meeting, you will need to bring (1) proof of ownership of Common Stock as of the record date, which is the close of business on March 23, 2018 and (2) a valid government-issued photo identification. If you are a stockholder of record, proof of ownership can include your proxy card or the Internet Notice. If your stock is held in the name of a broker, bank or other holder of record, you must present proof of your beneficial ownership, such as a proxy obtained from your street name nominee (particularly if you want to vote your stock at the Annual Meeting) or a bank or brokerage account statement (in which case you will not be able to vote your stock at the Annual Meeting), reflecting your ownership of Common Stock as of the record date. If you do not have proof of ownership together with a valid picture identification, you will not be admitted to the meeting.
Admission to the Annual Meeting is limited to stockholders as of the record date and one immediate family member; one individual properly designated as a stockholder’s authorized proxy holder; or one qualified representative authorized to present a stockholder proposal properly before the meeting.
No cameras, recording equipment, large bags, briefcases, or packages will be permitted in the Annual Meeting. The Company may implement additional security procedures to ensure the safety of the meeting attendees.

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Q:
IS MY VOTE CONFIDENTIAL?
A:
Proxy cards, ballots and reports of Internet and telephone voting results that identify individual stockholders are mailed or returned directly to Broadridge Financial Services, Inc. (“Broadridge”), our vote tabulator, and handled in a manner that protects your privacy. Your vote will not be disclosed except:
as needed to permit Broadridge and our inspector of elections to tabulate and certify the vote;
as required by law;
if we determine that a genuine dispute exists as to the accuracy or authenticity of a proxy, ballot or vote; or
in the event of a proxy contest where all parties to the contest do not agree to follow our confidentiality policy.
Q:
WHAT STOCK IS COVERED BY MY INTERNET NOTICE OR PROXY CARD?
A:
You should have been provided an Internet Notice or proxy card for each account in which you own Common Stock either:
directly in your name as the stockholder of record, which includes stock purchased through any of our employee benefit plans; or
indirectly through a broker, bank or other holder of record.
Q:
WHAT DOES IT MEAN IF I RECEIVE MORE THAN ONE INTERNET NOTICE OR PROXY CARD?
A:
It means that you have multiple accounts in which you own Common Stock. Please vote all stock in each account for which you receive an Internet Notice or proxy card to ensure that all your stock is voted. However, for your convenience we recommend that you contact your broker, bank or our transfer agent to consolidate as many accounts as possible under a single name and address. Our transfer agent is Computershare. All communications concerning stock you hold in your name, including address changes, name changes, requests to transfer stock and similar issues, can be handled by making a toll-free call to Computershare at 1-866-246-0322. From outside the U.S. you may call Computershare at 201-680-6578.
Q:
HOW CAN I CHANGE MY VOTE?
A:
You can revoke your proxy and change your vote by:
voting on the Internet or by telephone before 11:59 p.m. Eastern Daylight Time on the day before the Annual Meeting or, for employee benefit plan stock, the cut off date noted above (only your most recent Internet or telephone proxy is counted);
signing and submitting another proxy card with a later date at any time before the polls close at the Annual Meeting;
giving timely written notice of revocation of your proxy to our Corporate Secretary at 1301 Riverplace Boulevard, Suite 2300, Jacksonville, Florida 32207; or
voting again in person before the polls close at the Annual Meeting.
Q:
HOW MANY VOTES ARE NEEDED TO HOLD THE MEETING?
A:
In order to conduct the Annual Meeting, a majority of the Common Stock outstanding as of the close of business on March 23, 2018 must be present, either in person or represented by proxy. All stock voted pursuant to properly submitted proxies and ballots, as well as abstentions and stock voted on a discretionary basis by banks or brokers in the absence of voting instructions from their customers, will be counted as present and entitled to vote for purposes of satisfying this requirement.

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Q:
HOW MANY VOTES ARE NEEDED TO ELECT THE NOMINEES FOR DIRECTOR?
A:
The affirmative vote of a majority of the votes cast with respect to each nominee at the Annual Meeting is required to elect that nominee as a director. For this proposal, a majority of the votes cast means that the number of votes “FOR” a nominee must exceed the number of votes “AGAINST” a nominee. Abstentions will therefore not affect the outcome of director elections.
Please note that under New York Stock Exchange (“NYSE”) rules, banks and brokers are not permitted to vote the uninstructed stock of their customers on a discretionary basis (referred to as “broker non-votes”) in the election of directors. As a result, if you hold your stock through an account with a bank or broker and you do not instruct your bank or broker how to vote your stock in the election of directors, no votes will be cast on your behalf in the election of directors. Because broker non-votes will have no effect on the outcome of the vote, it is critical that you instruct your bank or broker if you want your vote to be counted in the election of directors.
Q:
HOW MANY VOTES ARE NEEDED TO APPROVE THE “SAY ON PAY” PROPOSAL?
A:
The affirmative vote of a majority of shares of Common Stock represented in person or by proxy at the Annual Meeting and entitled to vote is required for approval, on an advisory basis, of the Say on Pay proposal. Abstentions will have the same effect as a vote "AGAINST" this proposal. Broker non-votes will not affect the outcome of the proposal.
Banks and brokers are not permitted to vote uninstructed stock for any Company proposals relating to executive compensation. As a result, if you hold your stock through an account with a bank or broker and you do not instruct your bank or broker how to vote your stock on this proposal, no votes will be cast on your behalf with regard to approval of the proposal. Because broker non-votes will have no effect on the outcome of the vote, it is critical that you instruct your bank or broker if you want your vote to be counted in the approval of the proposal.
Q:
HOW MANY VOTES ARE NEEDED TO APPROVE THE FRENCH SUB-PLAN TO BE IMPLEMENTED UNDER THE RAYONIER ADVANCED MATERIALS INC. 2017 INCENTIVE STOCK PLAN?
A:
The proposal to approve the French Sub-Plan to be implemented under the Rayonier Advanced Materials Inc. 2017 Incentive Stock Plan will be approved if the number of votes cast “FOR” the Plan exceeds the number of votes cast “AGAINST” it plus abstentions. As a result, abstentions will have the same effect as a vote “AGAINST” the proposal, and broker non-votes will not affect the outcome of the vote.
Banks and brokers are not permitted to vote uninstructed stock for any Company proposals relating to executive compensation. As a result, if you hold your stock through an account with a bank or broker and you do not instruct your bank or broker how to vote your stock on this proposal, no votes will be cast on your behalf with regard to approval of the proposal. Because broker non-votes will have no effect on the outcome of the vote, it is critical that you instruct your bank or broker if you want your vote to be counted in the approval of the proposal.
Q:
HOW MANY VOTES ARE NEEDED TO APPROVE THE RATIFICATION OF THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM?
A:
The affirmative vote of a majority of shares of Common Stock represented in person or by proxy at the Annual Meeting and entitled to vote is required to ratify the appointment of the Company's independent registered public accounting firm. Abstentions will have the same effect as a vote "AGAINST" this proposal. We do not anticipate that there will be any broker non-votes with regard to the proposal.
Q:
WILL ANY OTHER MATTERS BE VOTED ON?
A:
We do not expect any other matters to be considered at the Annual Meeting. However, if a matter not listed on the Internet Notice or proxy card is legally and properly brought before the Annual Meeting, the proxies will vote on the matter in accordance with their judgment of what they believe to be in the best interest of our stockholders. Under the Company’s bylaws, all stockholder proposals must have been received by December 8, 2017 to be

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considered for inclusion in this Proxy Statement, and all other stockholder proposals and director nominations must have been received between January 22, 2018 and February 21, 2018 to be otherwise properly brought before the Annual Meeting. We have not received any stockholder proposals or director nominations from stockholders to be acted upon at the Annual Meeting.
Q:
WHO WILL COUNT THE VOTES?
A:
Representatives of Broadridge will count the votes, however submitted. A Company representative will act as inspector of elections.
Q:
HOW WILL I LEARN THE RESULTS OF THE VOTING?
A:
We will announce the voting results of the proposals at the Annual Meeting and in a Form 8-K to be filed with the SEC no later than four business days following the Annual Meeting.
Q:
WHO PAYS THE COST OF THIS PROXY SOLICITATION?
A:
The Company pays the costs of soliciting proxies and has retained The Proxy Advisory Group, LLC to assist in the solicitation of proxies and provide related advice and informational support. For these services, the Company will pay The Proxy Advisory Group, LLC a services fee and reimbursement of customary expenses, which are not expected to exceed $30,000 in the aggregate. The Company will also reimburse brokers, dealers, banks and trustees, or their nominees, for reasonable expenses incurred by them in forwarding proxy materials to beneficial owners of the Common Stock. Additionally, directors, officers and employees may solicit proxies on behalf of the Company by mail, telephone, facsimile, email and personal solicitation. Directors, officers and employees will not be paid additional compensation for such services.
Q:
WHEN ARE STOCKHOLDER PROPOSALS FOR THE 2019 ANNUAL MEETING OF STOCKHOLDERS DUE?
A:
For a stockholder proposal (other than a director nomination) to be considered for inclusion in the Company’s Proxy Statement for the 2019 Annual Meeting of Stockholders (the “2019 Annual Meeting”), the Company’s Corporate Secretary must receive the written proposal at our principal executive offices no later than the close of business on December 7, 2018. Such proposals also must comply with SEC regulations under Rule 14a-8 regarding the inclusion of stockholder proposals in company-sponsored proxy materials. The submission of a proposal in accordance with these requirements does not guarantee we will include the proposal in our Proxy Statement or on our proxy card. Proposals should be addressed to:
Corporate Secretary
Rayonier Advanced Materials Inc.
1301 Riverplace Boulevard, Suite 2300
Jacksonville, Florida 32207
For a stockholder proposal (including a director nomination) to be properly brought before the stockholders at the 2019 Annual Meeting outside of the Company’s Proxy Statement, the stockholder must comply with the requirements of the Company’s bylaws and give timely notice in accordance with such bylaws, which, in general, require the notice be received by the Corporate Secretary: (i) no earlier than the close of business on January 22, 2019; and (ii) no later than the close of business on February 21, 2019.
If the date of the 2019 Annual Meeting is moved more than 30 days before or more than 60 days after May 21, 2019, then notice of a stockholder proposal that is not intended to be included in the Company’s Proxy Statement must be received no earlier than the close of business 120 days prior to the meeting and not later than the close of business on the later of: (a) 90 days prior to the meeting; or (b) if the first public announcement of the date of the 2019 Annual Meeting is less than 100 days prior to the date of such meeting, 10 days after public announcement of the meeting date.
We strongly encourage any stockholder interested in submitting a proposal for the 2019 Annual Meeting to contact our Corporate Secretary at (904) 357-4600 prior to submission in order to discuss the proposal.

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NOTE ABOUT FORWARD-LOOKING STATEMENTS
Certain statements in this Proxy Statement, including statements in the Compensation Discussion and Analysis, regarding anticipated financial, business, legal or other outcomes, including business and market conditions, outlook and other similar statements regarding the Company, and the assumptions on which those statements are based, are “forward-looking statements” made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. These forward-looking statements are identified by the use of words such as “may,” “will,” “should,” “expect,” “estimate,” “believe,” “intend,” “anticipate,” “forecast” and other similar language. However, the absence of these or similar words or expressions does not mean a statement is not forward-looking. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties that may cause actual events, results, or performance to differ materially from those indicated by the forward-looking statements. A detailed discussion of risks and uncertainties that could cause actual results and events to differ materially from such forward-looking statements is included in Item 1A - Risk Factors in our Annual Report on Form 10-K . Forward-looking statements are only as of the date they are made, and the Company undertakes no duty to update its forward-looking statements except as required by law.

NOTE ABOUT NON-GAAP FINANCIAL MEASURES

This document contains and discusses certain non-GAAP (as defined below) financial measures, including Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”), Adjusted EBITDA and Adjusted Free Cash Flows. These non-GAAP measures are discussed in the Compensation Discussion and Analysis section and in the Advisory Vote on “Say on Pay” section and are reconciled to each of their respective most directly comparable GAAP financial measures as described therein.
  
We believe these non-GAAP measures provide useful information to our Board of Directors, management and investors, and our management uses these non-GAAP measures to compare our performance to that of prior periods for trend analyses, for purposes of determining management incentive compensation and budgeting, forecasting and planning purposes.

We do not consider these non-GAAP measures an alternative to financial measures determined in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”). The principal limitations of these non-GAAP financial measures are that they may exclude significant expenses and income items that are required by GAAP to be recognized in our consolidated financial statements. In addition, they reflect the exercise of management’s judgment about which expenses and income items are excluded or included in determining these non-GAAP financial measures. In order to compensate for these limitations, management provides reconciliations of the non-GAAP financial measures we use to their most directly comparable GAAP measures. Non-GAAP financial measures should not be relied upon, in whole or part, in evaluating the financial condition, results of operations or future prospects of the Company.


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CORPORATE GOVERNANCE

Corporate Governance Highlights
Our Board of Directors recognizes our need for effective corporate governance that allows our Board and management, while focused primarily on the creation of long term value for our stockholders, to also consider the interests of our employees and the communities in which we do business. Supporting that philosophy, we have adopted many leading corporate governance practices, including:
Practice
Description
BOARD COMPOSITION AND ACCOUNTABILITY
Independence
Our Corporate Governance Principles (CGPs) require that not less than 75% of our directors must be independent. During 2017, 89% (8 of 9) of our directors are independent and each of our Board committees consists entirely of independent directors. See “Director Independence” section.
Experience and
 Qualifications
The composition of our Board represents a diverse and broad mix of skills, experience, knowledge and perspectives relevant to our business. A summary of relevant director experience can be found in the “Director Qualifications” section.
Independent Lead
 Director
Our CGPs require an Independent Lead Director with specific responsibilities to ensure independent oversight of management whenever our CEO is also the Chair of the Board. See “Independent Lead Director” section.
Annual Management
 Succession Planning
 Review
Our Board conducts an annual review of management development and succession planning for the CEO and Company senior leadership. See “Management Succession Planning” section.
Director Tenure
Our CGPs provide that no director may be nominated for election following the director’s 74th birthday. In addition, a director is required to submit an offer of resignation for consideration by the Board upon any significant change in the director’s principal employment or personal circumstance that could adversely impact his or her reputation or the reputation of the Company. See “Director Qualifications” section.
Director Overboarding
 Limits
Our CGP’s contain provisions to ensure that each of our directors is able to dedicate the meaningful amount of time and attention necessary to be a highly effective member of the Board. A director who is not serving as CEO of a public company may serve on no more than three public company boards (in addition to our Board) and a director serving as the CEO of a public company (including our CEO) may serve on no more than one other public company board (in addition to our Board). Also, no director serving on the Company’s Audit Committee may also serve on the Audit Committee of more than two other companies.
Mandatory Stock
 Ownership
Each of our directors is required to own Company stock totaling not less than the number of shares constituting the equity portion of his or her annual retainer for the previous four years. See “Mandatory Stock Ownership” section.
Limit on Equity Awards
Our Equity Incentive Plan limits annual director equity awards. See “Limit on Annual Equity Awards” section.
SHAREHOLDER RIGHTS
Single Voting Class
All holders of Rayonier Advanced Materials Common Stock have the same voting rights -- one vote per share of stock.
Majority Voting Standard for Director Elections
Our by-laws mandate that directors be elected under a “majority voting” standard in uncontested elections. Each director must receive more votes “For” his or her election than votes “Against” in order to be elected.
Director Resignation
Any incumbent nominee for director who does not receive the affirmative vote of a majority of the votes cast in any uncontested election must promptly offer to resign. The Nominating and Corporate Governance Committee (“Nominating Committee”) will make a recommendation on the offer and the Board must accept or reject the offer and publicly disclose its decision and rationale.
No Poison Pill
We do not have a shareholder rights plan, also known as a “poison pill,” in place.

7



Corporate Governance Principles

Our Board of Directors operates under a set of Corporate Governance Principles (“CGPs”), which includes guidelines for determining director independence and consideration of potential director nominees. Our CGPs are found on the Company’s website at www.rayonieram.com. The Board, through its Nominating Committee, regularly reviews developments in corporate governance and best practices and modifies the CGPs, committee charters and key practices as necessary or desirable.

Certain Key Governance Features

Classified Board

When the Company’s governance structure was designed in connection with our 2014 spinoff from our former parent Rayonier Inc., it was determined that a classified board of directors was in the best interest of the Company and its stockholders, and the Company’s current Board continues to believe this structure is in the best interest of the Company and its stockholders. The Board believes that a classified board structure creates the stability and continuity that allows the Board to develop substantive knowledge about the Company’s specific operations and goals, and assists the directors in the exercise of their business judgment about the best long-term, strategic course for the Company in a deliberate and considered fashion.

This has been particularly important for implementation of the Company’s long term strategy for value creation. The Company’s management has been very transparent in communicating its long-term strategy to investors in its public written disclosures, quarterly calls, conferences, meetings and otherwise. This strategy has included actions to address headwinds in the Company’s key markets, a transformative cost-cutting program, a successful preferred stock offering in August 2016, which was made to raise funds primarily to facilitate acquisitive growth, and the November 2017 acquisition of Tembec Inc., a major transaction (funded in part by cash raised through the preferred equity offering) that has more than doubled our pro forma revenue and which we expect to fuel cash flow and earnings growth for the Company over the next several years. In 2017, total return for our stockholders was about 35%.

The decision to implement the classified board structure has proved to be prescient, as its existence has allowed the Board and management to explain and implement this long-term strategy to build stockholder value without undue pressure from short-term, event-driven investors to take actions inconsistent with this strategy. This continues to be of the utmost importance as we implement our integration strategy for the Tembec transaction.

The Board and management are focused on creating long-term value and sustainable growth. We believe that the classified board structure will continue to be critical to attracting Board members who are willing to demonstrate a commitment to the Company over the long-term, and also enabling our Board to make long-term strategic decisions that are in the best interests of our stockholders. If our Board were declassified, it could be wholly replaced by directors unfamiliar with our history and strategies at a single meeting. This structure allows for orderly change, with new directors with fresh perspectives benefiting from interaction with experienced directors. In fact, assuming election of the slate of candidates nominated for election at the upcoming Annual Meeting, we will have seen a 30% change in our Board (three of ten) since our 2014 spinoff as a public company.


8



Certain Voting Provisions

Also, as part of our corporate governance design in connection with our 2014 spinoff, it was also determined that certain provisions of our governance structure, including our classified board, were fundamental to the strategy we put in place to build long-term value for our stockholders. As such, our articles and bylaws require that they can be changed only by a supermajority vote of stockholders representing 80% of the shares outstanding.

The Board and management continue to believe that these provisions are and will be critical to enabling our Board to make long-term strategic decisions in the best interest of all stockholders, for all the reasons described above in our discussion of our classified board structure. Our Board owes fiduciary obligations to all stockholders to act in their best interest and in the best interest of the Company, rather than to any individual stockholder or group of stockholders. These fundamental governance features help to preclude a small group of self-interested, short-term focused stockholders, who owe no fiduciary duties to the Company or its other stockholders, from exerting unreasonable influence over the strategy, policies or decisions of the Board.

Therefore, the Board and management believe that any changes to these fundamental provisions should require a broad and significant consensus among our stockholders, as changes could materially alter how the Company is managed and its long-term strategy for stockholder creation.

In sum, the Board and management of the Company strongly believe that our classified board structure and supermajority voting provisions have enabled and continue to enable them to focus on long-term strategy and value creation for the Company’s stockholders. Management and the Board regularly evaluate the Company’s governance structure in order to ensure that it aligns with the best interests of the Company’s stockholders. If the Board believes that these governance features no longer foster that objective, it will revisit them.

Engagement with Our Stockholders and Communications with our Board

To foster effective communication with our stockholders, since our inception as a public company in 2014 we have maintained active engagement with and outreach to our stockholders, speaking and, in many cases, meeting with them throughout each year during non-black-out periods. In 2017 we had approximately 250 calls and meetings with investors and analysts, as well as discussions with leading proxy advisors who serve our investors. In addition, in 2017 we presented at four industry conferences and in March of 2017, held an “investor day” at our Jesup, Georgia facility, where investors and analysts heard presentations from our management.

To continuously improve our stockholder communication and outreach, we review with our Board the key takeaways from these calls and meetings to enable our directors to consider and evaluate this valuable feedback. We intend to continue to build upon our stockholder engagement and outreach efforts.

Stockholders and other interested parties who would like to communicate to one or more members of the Board, a Board committee, the Independent Lead Director or the independent non-management directors as a group may do so by writing to any such party at Rayonier Advanced Materials Inc., c/o Corporate Secretary, 1301 Riverplace Boulevard, Suite 2300, Jacksonville, Florida 32207. All communications received will be forwarded to the intended or appropriate recipient.

Formal Director Onboarding Process

Upon joining our Board, new directors are provided with a comprehensive orientation and participate in a formal onboarding process to facilitate their transition onto our Board. Our onboarding process familiarizes new directors with the Company’s businesses, strategic plans, governance program, Board policies, and the director’s responsibilities on assigned committees. New directors hold meetings with the Company’s senior leadership and key management representatives to learn about the Company and participate in site visits. Based on feedback received, we believe this onboarding program, coupled with participation in regular Board and committee meetings, provides new directors with a strong foundation in our Company’s business, and accelerates their ability to fully engage in Board discussions.

9



Director Independence

The Company’s Common Stock is listed on the NYSE. In accordance with NYSE listing standards, the Board makes affirmative determinations annually as to the independence of each director and nominee for election as a director. To assist in making such determinations, the Board has adopted a set of Director Independence Standards which conform to or, in some cases, are more exacting than, the independence requirements set forth in the NYSE listing standards. Our Director Independence Standards are appended to the Company’s CGPs, and are available at www.rayonieram.com. Based on our Director Independence Standards, the Board has affirmatively determined that all persons who have served as directors of our Company at any time since January 1, 2017, other than Mr. Boynton, are independent (i.e., 8 of 9 directors in 2017).


10



Committees of the Board of Directors

Our Board of Directors has three standing committees, each of which operates under a written charter available in the Investor Relations section of the Company’s website at www.rayonieram.com.
Name of Committee and Members
 
Functions of the Committee
 
Number of Meetings in 2017
AUDIT:
 
This committee is responsible for advising the Board concerning the financial structure of the Company and oversight of our accounting and financial reporting policies, processes and systems, as well as our systems for internal control, including:
oversight of financial reporting, controls and audit performance
monitoring and oversight of the independence and performance of our independent registered public accounting firm, with responsibility for such firm’s selection, evaluation, compensation and, if applicable, discharge
approving, in advance, all of the audit and non-audit services provided to the Company by the independent registered public accounting firm
facilitating open communication among the Board, senior management, internal audit and the independent registered public accounting firm
oversight of our cybersecurity, enterprise risk management and legal compliance and ethics programs, including our Standard of Ethics and Code of Corporate Conduct
oversight of financing and hedging activity
oversight of our investment policies and financial performance of the assets invested in our pension and savings plans

 
9
Mark E. Gaumond, Chair
 
 
Charles E. Adair
 
 
De Lyle W. Bloomquist
 
 
James F. Kirsch
 
 
Thomas I. Morgan
 
 
Lisa M. Palumbo
 
 
 
 
 
 
 
 
 
 
COMPENSATION AND MANAGEMENT DEVELOPMENT:
 
This committee is responsible for overseeing the compensation and benefits of senior-level employees, including:
evaluating senior management performance, succession and development matters
establishing executive compensation
reviewing and approving the Compensation Discussion and Analysis included in the annual Proxy Statement
recommending compensation actions regarding our CEO for approval by non-management directors of our Board
approving individual compensation actions for all senior executives other than our CEO (which is approved by the Board)

 
5
 
 
Thomas I. Morgan, Chair
 
 
De Lyle W. Bloomquist
 
 
C. David Brown, II
 
 
Mark E. Gaumond
 
 
Ronald Townsend
 
 
 
 
 
 
 
 
 
 
NOMINATING AND CORPORATE GOVERNANCE:

 
This committee is responsible for advising the Board with regard to Board structure, composition and governance, including:
establishing criteria for Board nominees and identifying qualified individuals for nomination to become Board members, including engaging advisors to assist in the search process where appropriate, and considering potential nominees recommended by stockholders
recommending the structure and composition of Board committees
overseeing evaluation of Board and committee effectiveness
recommending director compensation and benefits programs to the Board
overseeing our corporate governance structure and practices, including our CGPs
reviewing and approving changes to the charters of the other Board committees

 
3
 
 
Ronald Townsend, Chair
 
 
Charles E. Adair
 
 
C. David Brown, II
 
 
James F. Kirsch
 
 
Lisa M. Palumbo
 
 
 
 
 

11



Board Leadership Structure

Paul Boynton has served as Chairman of the Board of Directors and CEO of the Company since June 2014. We believe that the appropriate leadership structure for our Company is to have a combined Chairman and CEO, and also an Independent Lead Director (described below). The combined Chairman and CEO role provides unambiguous reporting lines for management and allows the Company to communicate to customers, suppliers, stockholders, employees and other stakeholders with a single consistent and knowledgeable voice.

Independent Lead Director

Our Independent Lead Director is nominated and elected to a two-year term by the other independent Board members. In 2016, the independent non-management Board members re-elected C. David Brown, II to a two-year term.

The Independent Lead Director has comprehensive, clearly delineated duties including:

presiding at all meetings of the Board at which the Chairman/CEO is not present, including executive sessions and separate meetings of the independent directors
serving as liaison between the Chairman/CEO and the independent directors
approving meeting agendas for the Board
approving information sent to the Board
approving meeting schedules to assure there is sufficient time for discussion of all agenda items
having the authority to call meetings of the independent directors
if requested by major stockholders, ensuring he or she is available for consultation and direct communication

Independent Non-Management Director Meetings

Our independent non-management directors met separately in 2017 during six regularly scheduled meetings, chaired by our Independent Lead Director. Independent non-management directors on our Board committees also have the opportunity to meet without management present at every Committee meeting. The duties and responsibilities of the Independent Lead Director are described above.

Oversight of Risk

The Board oversees risk management at the Company through a management-led risk assessment process that involves direct Board and Board committee oversight. Most importantly, the Board annually appoints the members of the Enterprise Risk Management (“ERM”) Committee, which is chaired by the CEO, who also serves as the Company’s Chief Risk Officer. Senior executives of the Company are members of the ERM Committee. The ERM Committee in turn appoints the members of business unit and staff function-level Risk Assessment and Mitigation teams, which continually identify and assess the material risks facing their respective business or function and submit semi-annual reports to the ERM Committee. These reports form the basis for the ERM Committee’s annual risk assessment whereby risks are evaluated and categorized based on probability, potential impact and the Company’s tolerance for the risk type, and are used to develop a list of enterprise-level material risks which are reported to the Audit Committee for review and evaluation of mitigation strategies. The Audit Committee then assigns ongoing Board level oversight responsibility for each material risk to either the full Board or the appropriate Board committee. The ERM Committee’s annual risk assessment with regard to the Company’s overall compensation policies and practices is presented to the Compensation and Management Development Committee. We believe that these governance practices, including the interaction of the Board and various Board committees with our CEO, facilitate effective Board oversight of our significant risks.


12



Management Succession Planning

One of the primary responsibilities of our Board is to ensure that the Company has a high-performing management team in place. Our full Board has responsibility for management succession planning. The Board manages the succession planning process and, on an annual basis, reviews and approves succession plans for the CEO and other senior executives. This detailed process and review of management development and succession planning activities is designed to maximize the pool of internal candidates who can assume top management positions. To assist the Board, the CEO annually provides our Board with an assessment of senior managers and their potential to succeed him or her. The CEO also provides the Board with an assessment of persons considered potential successors to senior management positions.

Director Nomination Process

Potential director candidates may come to the attention of the Nominating Committee through current directors, management, business leaders, stockholders and others. Our Nominating Committee will consider director nominees submitted by stockholders based on the same criteria used in evaluating candidates for Board membership identified from any other source. The directions for stockholders to submit director nominations for the 2019 Annual Meeting are set forth in the “Questions and Answers” section under “When Are Stockholder Proposals for the 2019 Annual Meeting of Stockholders Due?” The Nominating Committee also has, from time to time, utilized independent third-party search firms to identify potential director candidates and may do so in the future.

Ms. Dill, who has been nominated for election to the Board as a Class 1 Director effective as of the conclusion of the Annual Meeting on May 21, 2018, was identified as a director candidate by a non-management director. Mr. Hepler, who was appointed to the Board effective as of the conclusion of the Annual Meeting on May 21, 2018, was identified and named to the Board in accordance with an agreement entered into between the Company, Marcato Capital Management L.P. and its affiliates (who collectively are significant stockholders of the Company) and Mr. Hepler, dated February 18, 2018. Information about this agreement was disclosed in the Company’s Form 8-K filed on February 20, 2018. In connection with this agreement, the Board voted to increase the size of the Board from nine to ten.

Diversity

Our Nominating Committee evaluates the specific personal and professional attributes of each director candidate versus those of the existing Board members to ensure diversity of competencies, experience, personal history and background, thought, skills and expertise among our directors. While our Nominating Committee has not adopted a formal diversity policy in connection with the evaluation of director candidates or the selection of nominees, consideration is also given to diversity in terms of gender, ethnic background, age and other similar attributes that could contribute to Board perspective and effectiveness. The Nominating Committee also assesses diversity through its annual assessment of Board structure and composition and review of the annual Board and committee performance evaluations. The Nominating Committee and the Board believe that considering diversity is consistent with the goal of creating a Board that best serves the needs of the Company and the interests of its stockholders, and it is one of the many factors that they consider when identifying individuals for Board membership. In addition, we believe that diversity with respect to tenure is important in order to provide for both fresh perspectives and deep experience and knowledge of the Company. Therefore, we aim to maintain an appropriate balance of tenure across our directors. In furtherance of the Board’s active role in Board succession planning, the Board has appointed three new directors since 2014.

We note:

Average Board member tenure is less than four years.
Two of our nine directors (22%) in place during 2017 are diverse in terms of gender and race, with both being independent directors. Assuming Ms. Dill is elected to the Board, two of our directors will be gender diverse.

13



We have a range of age diversity on our Board, with two of our 2017 directors being in their 50’s, five in their 60’s and two in their 70’s. Assuming Ms. Dill is elected to the Board, as well as considering Mr. Hepler’s appointment, commencing at the conclusion of the Annual Meeting on May 21, 2018, our Board will have one director in his 30’s, three in their 50’s, five in their 60’s, and one in his 70’s.
Our CGPs preclude nomination of a candidate for director who has reached age 74.

Related Person Transactions

Our Board has adopted a written policy designed to minimize potential conflicts of interest in connection with Company transactions with related persons. Our policy defines a “Related Person” to include any director, executive officer or person owning more than five percent of the Company’s stock, any of their immediate family members and any entity with which any of the foregoing persons are employed or affiliated. A “Related Person Transaction” is defined as a transaction, arrangement or relationship in which the Company is a participant, the amount involved exceeds $120,000 and a Related Person has or will have a direct or indirect material interest.

To implement the policy, each year a Related Person list is compiled based on information obtained from our annual Director and Officer Questionnaires and, after review and consolidation by our Corporate Secretary, is provided to business unit, accounts payable, accounts receivable, financial, legal and communications managers and other persons responsible for purchasing or selling goods or services for the Company. Prior to entering into any transaction with a Related Person, the manager responsible for the potential transaction, or the Related Person, must provide notice to the Corporate Secretary setting out the facts and circumstances of the proposed transaction. If the Corporate Secretary determines the transaction would constitute a Related Person Transaction, it is then submitted for consideration by the Audit Committee, which will approve only those transactions determined to be in, or not inconsistent with, the best interests of the Company and its stockholders. In reviewing Related Person Transactions, the Audit Committee considers:

the Related Person’s relationship to the Company and interest in any transaction with the Company

the material terms of a transaction with the Company, including the type and amount

the benefits to the Company of any proposed or actual transaction

the availability of other sources of comparable products and services that are part of a transaction with the Company; and

if applicable, the impact on a director’s independence

In the event we become aware of a completed or ongoing Related Person Transaction that has not been previously approved, it is promptly submitted to the Audit Committee for evaluation and, if deemed appropriate, ratification.

In addition, each year the persons and entities identified as Related Persons are matched against the Company’s accounts payable and accounts receivable records to determine whether any Related Person participated in a transaction with the Company, regardless of the amount involved. A report of all such transactions is prepared by the Corporate Secretary and reviewed with the Audit Committee to determine if any would constitute a Related Person Transaction under our policy or would require Proxy Statement disclosure under applicable SEC rules and regulations. After conclusion of this process, the Audit Committee did not identify any Related Person transactions under our policy.

Standard of Ethics and Code of Corporate Conduct
The Company’s Standard of Ethics and Code of Corporate Conduct is available on the Company’s website at www.rayonieram.com.

14



Compensation Committee Interlocks and Insider Participation; Processes and Procedures

Each of Messrs. Bloomquist, Brown, Gaumond, Kirsch, Morgan, and Townsend served as a member of our Compensation and Management Development Committee (the “Compensation Committee”) during the fiscal year ended December 31, 2017. Each member of the Compensation Committee has been determined to be “independent” in accordance with the Director Independence Standards adopted by the Board as part of the CGPs. No member of the Compensation Committee served as one of our officers or employees at any time during 2017 or engaged in any related person transaction or relationship required to be disclosed in this Proxy Statement. None of our executive officers serve, or served during 2017, as a member of the board of directors or compensation committee of a public company that has at least one of its executive officers serving on our Board or Compensation Committee.

Director Attendance at Annual Meeting of Stockholders

Directors are encouraged to attend each Annual Meeting of Stockholders. At the 2017 Annual Meeting, all directors were in attendance.

ITEM  1 - ELECTION OF DIRECTORS

Our Board of Directors is responsible for establishing overall corporate policy and for overseeing management and the ultimate performance of the Company. The Board reviews strategy and significant developments affecting the Company and acts on matters requiring Board approval. The Board held 17 meetings during fiscal year 2017 and all directors attended at least 75% of the combined total of all (i) Board meetings and (ii) meetings of committees of the Board of which the director was a member during his or her tenure as a Board member.

Our Board currently consists of nine directors divided as evenly as possible into three classes (I, II and III) serving staggered three-year terms, with an increase to ten to be implemented immediately following the 2018 Annual Meeting. Directors for each class will be voted on at the annual meeting of stockholders held in the year in which the term for that class expires, and after election, will serve for a term of three years. The terms of the Class I directors expire at the Annual Meeting and two of such directors, as well as Ms. Dill, are nominees for election. The terms of the Class II directors will expire at the 2019 Annual Meeting, and the terms of the Class III directors are set to expire at the 2020 Annual Meeting of Stockholders.

Accordingly, stockholders are being asked to vote on the election of the three Class I directors, each to serve until the 2021 Annual Meeting of Stockholders (and their successors are duly elected and qualified). The Board has no reason to believe any nominee will be unable to serve as a director. If, however, a nominee should be unable to serve at the time of the Annual Meeting, Common Stock properly represented by valid proxies will be voted for a substitute nominee nominated by the Board. Alternatively, the Board may either allow the vacancy to remain unfilled until an appropriate candidate is located or may reduce the authorized number of directors to eliminate the unfilled seat.

If any incumbent nominee for director should fail to receive the required affirmative vote of a majority of the votes cast with regard to his or her election, under Delaware law (the Company’s state of incorporation) the director would remain in office as a “holdover” director until a successor is elected or the director resigns, retires or is otherwise removed. In such a situation, our CGPs require the director to tender his or her resignation to the Board. The Nominating and Corporate Governance Committee (the “Nominating Committee”) would then consider such resignation and make a recommendation to the Board as to whether to accept or decline the resignation. The Board would then make a determination and publicly disclose its decision and rationale within 90 days after receipt of the tendered resignation.


15



Director Qualifications

We believe the members of our Board of Directors have an optimal mix of relevant and diverse experience, skills, knowledge and expertise given the Company’s business, together with demonstrated integrity, judgment, leadership and collegiality, to effectively advise and oversee management in executing our strategy. There are no specific minimum qualifications for director nominees other than, as required by our CGPs, no director nominee may stand for election after he or she has reached the age of 74. In identifying and evaluating potential nominees, our Nominating Committee seeks individuals who have the experience, skills, knowledge, expertise and personal and professional integrity to be effective, in conjunction with the other Board members, in collectively serving the long-term interest of our stockholders. Criteria for Board membership are periodically evaluated by the Nominating Committee taking into account the Company’s strategy, objectives, markets, operations, regulatory environment and other relevant factors, as well as changes, if any, in applicable laws and NYSE listing standards.

The Nominating Committee believes that each of our directors has an established record of accomplishment in areas relevant to our business and objectives and possesses the characteristics identified in our CGPs as essential to a well-functioning and deliberative governing body, including integrity, independence and commitment.

Each of the directors listed below, including the three nominees for election, has experience as a senior executive and also is serving or has served as a director of one or more private or public companies and on a variety of board committees. As such, each has executive experience, as either or both of a director or senior executive, in most, if not all, of the following areas which are critical to the conduct of the Company’s business: strategy development and implementation, global operations, risk assessment and management, accounting and financial reporting, internal controls, corporate finance, the evaluation, compensation, motivation and retention of senior executive talent, public policy as it impacts global industrial companies, compliance program oversight and corporate governance. Many of the directors also bring particular insights into specific end-markets and geographic markets that are important to the Company. Our directors collectively provide a range of perspectives, experiences and competencies well-suited to providing advice and counsel to management and to overseeing the Company’s business and operations. Below is a statement regarding each nominee’s individual qualifications for Board service, as well as a statement of individual qualifications for each of the other directors.


16



Director Skill/Experience Snapshot

Set forth below is additional information for each of our Directors detailing their skills illustrating the high level of experience and skills each brings to the Board.

 
Charles Adair
DeLyle Bloomquist
Paul Boynton
David Brown
Julie Dill
Mark Gaumond
Matthew Hepler
James Kirsch
Thomas Morgan
Lisa Palumbo
Ron Townsend(1)
Public Company CEO
 
 
X
 
X
 
 
X
X
 
 
Other Pubic Board Service
X
X
X
X
X
X
X
X
X
 
X
Finance/Accounting
X
X
 
 
X
X
 
X
X
 
 
Forest Products Industry
 
 
X
 
 
 
 
 
 
X
X
Chemical Industry
 
X
X
 
 
 
X
X
 
 
 
Manufacturing/Distribution
X
X
X
 
X
 
X
X
X
 
 
Consulting/ Academic
 
 
 
 
 
X
 
 
 
 
X
Government/Legal/ Regulatory
 
 
 
X
X
 
 
 
 
X
 
International Experience
X
X
X
 
X
 
 
X
X
X
 
Investor Relations/Communications
 
 
X
 
X
 
X
 
 
 
X
Diversity
 
 
 
 
X
 
 
 
 
X
X

______________
(1) Mr. Townsend will be retiring from the Board following the Annual Meeting.


17



A biography of each member of the Company’s Board of Directors, including the three nominees for election, is set forth below.


THE BOARD OF DIRECTORS RECOMENDS THAT YOU VOTE “FOR” EACH OF THE THREE NOMINEES NAMED BELOW FOR ELECTION TO THE BOARD OF DIRECTORS FOR A TERM TO EXPIRE IN 2021.


Information as to the Three Nominees for Election to the Board of Directors

Class I, Terms to Expire in 2021
 
CHARLES E. ADAIR, Age 70    Director Since 2015

adaireddie9389a.jpg
Mr. Adair has been a partner of Cordova Ventures and Kowaliga Capital, Inc. (venture capital fund management companies) since 1993, where he serves as manager of venture capital funds. Mr. Adair was associated with Durr-Fillauer Medical, Inc. where he served in various capacities including President and Chief Operating Officer from 1973 to 1992. Mr. Adair serves on the Board of Directors of Tech Data Corporation and Torchmark Corporation. Mr. Adair also served on the Board of Directors of PSS World Medical, Inc. (“PSS”), from 2002 through February 2013, when PSS was acquired by McKesson Corp. Mr. Adair is a Certified Public Accountant (inactive) and holds a B.S. degree in Accounting from the University of Alabama.

Mr. Adair brings significant experience in public company governance as a director, financial management and accounting, as well as extensive distribution and global supply chain expertise. As a result, we believe he is particularly well suited to contribute to Board oversight of the Company’s governance and overall financial performance, auditing and its external auditors, and controls over financial reporting.
 
JULIE A. DILL, Age 58 Director Since 2018

dillbiopicturenew.jpg
Ms. Dill most recently served as the Chief Communications Officer for Spectra Energy Corp. (Spectra) (which operated in three key areas of the natural gas industry: transmission and storage, distribution, and gathering and processing) from 2013 until completion of Spectra's merger with Enbridge, Inc. in February 2017. She previously served as the Group Vice President of Strategy for Spectra and the President and CEO of Spectra Energy Partners, LP from 2012 until 2013, and prior to that served as President of Union Gas Limited from 2007 until 2011. Previously, Ms. Dill served in various financial and operational roles with Duke Energy, Duke Energy International and Shell Oil Company. She is also a member of the Advisory Council for the College of Business and Economics at New Mexico State University. Ms. Dill serves on the Board of Directors of QEP Resources, Inc. and served on the Board of Directors of Spectra Energy Partners from 2012 to February 2017.

As a result of Ms. Dill’s experience as the President and CEO of a publicly-traded energy company, her strong financial background, investor relations and communications experience and her more than 35 years of experience in the energy industry, including in Canada, we believe she will provide valuable insight and knowledge to our Board’s oversight of the Company’s internal operations, investor relations and communications strategies.


18



 
JAMES F. KIRSCH, Age 60    Director Since 2014

kirschjim9368.jpg
Mr. Kirsch served as the Chairman, President and CEO of Ferro Corporation (a leading producer of specialty materials and chemicals) from 2006 to 2012. He joined Ferro in October 2004 as its President and Chief Operating Officer, was appointed CEO and Director in November 2005 and was elected Chairman in December 2006. Prior to that, from 2002 through 2004, he served as President of Quantum Composites, Inc. (a manufacturer of thermoset molding compounds, parts and sub-assemblies for the automotive, aerospace, electrical and HVAC industries). From 2000 through 2002, he served as President and director of Ballard Generation Systems and Vice President for Ballard Power Systems in Burnaby, British Columbia, Canada. Mr. Kirsch began his career with The Dow Chemical Company, where he spent 19 years and held various positions of increasing responsibility, including global business director of Propylene Oxide and Derivatives and Global Vice President of Electrochemicals. He formerly served as a director of Cliffs Natural Resources, Inc. from March 2010 to August 2014 and as the Executive Chairman from January 2014 to August 2014. He is a graduate of The Ohio State University.

Mr. Kirsch brings a wealth of senior management experience with major organizations with international operations, and has substantial experience in the areas of specialty materials and chemicals. As a former chairman, president and CEO of a NYSE-listed company, he brings considerable senior leadership experience to the Board and the committees thereof on which he serves.



Information as to Other Directors

Class II, Terms to Expire in 2019
 
C. DAVID BROWN, II, Age 66    Director Since 2014
browndavid9563.jpg
Mr. Brown is Chairman of Broad and Cassel (a law firm based in Orlando, Florida he joined in 1980), a position he has held since 2000. Previously, he served as Managing Partner of the firm’s Orlando office from 1990. Mr. Brown serves on the Board of Directors of CVS Health Corporation and as Vice Chairman of the Board of Orlando Health, a not-for-profit healthcare network. Mr. Brown formerly served as a director of Rayonier Inc. (November 2006 through June 2014), ITT Educational Services (April 2015 through September 2016), Old Florida National Bank, N.A. (January 2005 through February 2015), and as Chairman of the Board of Trustees for the University of Florida through January 2015. He holds bachelor’s and juris doctorate degrees from the University of Florida.
Over a 37-year legal career, Mr. Brown has developed and demonstrated extensive expertise in public company corporate governance, strategy and finance, as well as extensive experience in structuring corporate transactions, both domestically and internationally. We believe his experience and expertise facilitate our Board’s oversight of our corporate strategy, capital structure and commercial transactions.








19



 
THOMAS I. MORGAN, Age 64    Director Since 2014

morgantom9487.jpg
Mr. Morgan is a Senior Adviser to AEA Investors (a New York private equity firm). He was formerly a partner and Lead Director of the Advisory Board of BPV Capital Management LLC (an investment manager of mutual funds) from April 2013 to May 2016. Mr. Morgan also served as the Chairman of Baker & Taylor, Inc. (a leading distributor of books, videos and music products to libraries, institutions and retailers) from July 2008 to January 2014, and served as the CEO from 2008 to 2012. Mr. Morgan also served as the CEO of Hughes Supply Inc. (a diversified wholesale distributor of construction, repair and maintenance-related products) from 2003 to 2006, as President from 2001 to 2006, and as Chief Operating Officer from 2001 to 2003. Previously, he served as CEO of EnfoTrust Network, Value America and US Office Products. He also served for 22 years at Genuine Parts Company in positions of increasing responsibility from 1975 to 1997. Mr. Morgan is a director of Tech Data Corporation. He formerly served as a director of ITT Educational Services, Inc. (January 2013 to September 2016), Rayonier Inc. (January 2012 to June 2014) and as a director of Baker & Taylor, Inc. and Waste Management, Inc. Mr. Morgan holds a bachelor’s degree in Business Administration from the University of Tennessee.

Mr. Morgan brings both public and private company leadership and public company CEO experience and a deep understanding of distribution and global supply chain management. As a result, we believe he is particularly well suited to contribute to Board oversight of overall management and governance issues and our global performance fibers business.



 
LISA M. PALUMBO, Age 60    Director Since 2014

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Ms. Palumbo served as the Senior Vice President, General Counsel and Secretary of Parsons Brinckerhoff Group Inc. (a global consulting firm providing planning, design, construction and program management services for critical infrastructure projects) from 2008 until her retirement in January 2015. Prior to that, Ms. Palumbo served as Senior Vice President, General Counsel and Secretary of EDO Corporation (a defense technology company) from 2002 to 2008. In 2001, Ms. Palumbo served as Senior Vice President, General Counsel and Secretary of Moore Corporation; from 1997 to 2001 she served as Vice President, General Counsel and Secretary of Rayonier Inc., and from 1987 to 1997 she served in positions of increasing responsibility, including Assistant General Counsel and Assistant Secretary for Avnet, Inc. (a global distributor of technology products). Ms. Palumbo holds bachelor’s and juris doctorate degrees from Rutgers University.
With over 27 years of legal experience with international, public and private companies, Ms. Palumbo brings substantial expertise in the areas of law, corporate governance, enterprise risk management, health and safety and compliance. We believe this experience and expertise, together with her prior experience as the General Counsel of Rayonier, uniquely qualify her to contribute to the Board regarding the Company’s business and to assist with the Board’s oversight of the Company’s risk management, legal and compliance responsibilities.


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Class III, Terms to Expire in 2020
 
DE LYLE W. BLOOMQUIST, Age 59    Director Since 2014

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Mr. Bloomquist retired in March 2015 as the President, Global Chemical Business of Tata Chemicals Limited (an international inorganic chemical and fertilizer manufacturing company), a position he held since 2009. Previously, he served as President and Chief Executive Officer (“CEO”) of General Chemical Industrial Products (which was acquired by Tata Chemicals in 2008) from 2004 to 2009. Prior to that, Mr. Bloomquist served at General Chemical Group Inc. in positions of increasing responsibility from 1991 to 2004, including Division Vice President and General Manager, Industrial Chemicals and Vice President and Chief Operating Officer. Mr. Bloomquist serves on the Board of Directors of Crystal Peak Minerals Inc. f/k/a EPM Mining Ventures Inc., Huber Engineered Materials, Gran Colombia Gold Inc. and PDS Biotechnology Corporation. From July 2016 to July 2017 Mr. Bloomquist also served as a director of Costa Farms, Inc. He also serves on the Board of Business Advisors for the Tepper School of Business at Carnegie Mellon University. Mr. Bloomquist is a graduate of Brigham Young University and holds an MBA from Carnegie Mellon University.
Mr. Bloomquist has over 25 years of domestic and international experience in the chemicals industry, including in the areas of finance, sales, logistics, operations, IT, strategy and business development, as well as CEO and other senior leadership experience. We believe Mr. Bloomquist’s depth and breadth of experience and expertise in the chemicals industry makes him particularly well suited to assist the Board with operational and strategic decisions about the Company’s business.

 
PAUL G. BOYNTON, Age 53    Director Since 2014
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Mr. Boynton is Chairman, President and CEO of the Company, a position he has held since June 2014. Previously he held a number of positions of increasing responsibility with Rayonier Inc., including Senior Vice President, Performance Fibers from 2002 to 2008, Senior Vice President, Performance Fibers and Wood Products from 2008 to 2009, Executive Vice President, Forest Resources and Real Estate from 2009 to 2010, President and Chief Operating Officer from 2010 to 2011, President and CEO from January 2012 to May 2012 and Chairman, President and CEO from May 2012 to June 2014. Mr. Boynton joined Rayonier Inc. as Director, Specialty Pulp Marketing and Sales in 1999. Prior to joining Rayonier Inc., he held positions with 3M Corporation from 1990 to 1999, including as Global Brand Manager, 3M Home Care Division. Mr. Boynton serves on the Board of Directors of The Brink’s Company, is also a member of the Board of Governors and its Executive Committee of the National Council for Air and Stream Improvement, a member of the Board of Directors of the National Association of Manufacturers and a member of the Board of Directors of the Federal Reserve Bank of Atlanta’s Jacksonville Branch. From 2012 until 2014 Mr. Boynton also served as a director of Rayonier Inc. He holds a bachelor’s degree in Mechanical Engineering from Iowa State University, an MBA from the University of Iowa and graduated from the Harvard University Graduate School of Business Advanced Management Program.

As a result of Mr. Boynton’s service as the Company’s President and CEO, and his prior service as an officer and director of Rayonier Inc., he has developed valuable business, management and leadership experience, as well as extensive knowledge of the Company and long-standing relationships with its major customers. We believe this experience, together with his marketing and engineering background, make Mr. Boynton uniquely well suited to help lead the Board’s considerations of strategic and operational decisions and manage the Company’s business.


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MARK E. GAUMOND, Age 67    Director Since 2014
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Mr. Gaumond is the former Americas Senior Vice Chair - Markets of Ernst & Young (a global leader in assurance, tax, transaction and advisory services), a position he held from 2006 to 2010. Previously he served as Ernst & Young’s Managing Partner, San Francisco from 2003 to 2006 and as an audit partner on several major clients. Prior to joining Ernst & Young, Mr. Gaumond was a Managing Partner with Arthur Andersen from 1994 to 2002 and a partner in the firm’s audit practice from 1986 to 1994. Mr. Gaumond serves on the Boards of Directors of Booz Allen Hamilton Holding Corporation, First American Funds, the Fishers Island Development Corporation and the Walsh Park Benevolent Corporation. He formerly served as a director of Cliffs Natural Resources, Inc. from July 2013 to September 2014, Rayonier Inc. from November 2010 to June 2014, and is a former trustee of the California Academy of Sciences. Mr. Gaumond holds a bachelor’s degree from Georgetown University, College of Arts and Sciences and an MBA from the Leonard N. Stern School of Business, New York University. In addition, Mr. Gaumond is a member of The American Institute of Certified Public Accountants.

Mr. Gaumond has 35 years of managerial, financial and accounting experience working extensively with senior management, audit committees and boards of directors of public companies. We believe Mr. Gaumond’s experience and financial expertise allow him to significantly contribute to our Board’s oversight of the Company’s overall financial performance, auditing and its external auditors, and controls over financial reporting.

 
MATTHEW P. HEPLER, Age 38                      Director Since 2018
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Mr. Hepler is currently a Partner at Marcato Capital Management L.P. (“Marcato”), a hedge fund. Prior to joining Marcato in March, 2016, Mr. Hepler was a partner at Red Mountain Capital Partners LLC, an investment firm, from March 2015 to December 2015, and was a Managing Director at Relational Investors LLC from 2008 until 2015 where he led the firm’s research team focusing on the industrials and materials sector. Prior to joining Relational Investors in 2008, he spent six years as a Vice President in the investment banking division of Credit Suisse. Mr. Hepler began his career as an analyst in the technology investment banking group at Robertson Stephens.  Mr. Hepler serves on the Board of Directors of Terex Corporation.

Mr. Hepler has strong knowledge of the chemical industry, manufacturing, capital markets and investment community interests and strategies. He has experience executing value-enhancing initiatives through active engagement with portfolio companies in which his firms have invested. As a result, we believe Mr. Hepler provides insight and knowledge to the Board on matters of importance to many of the Company’s more significant stockholders. 







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EXECUTIVE COMPENSATION

Compensation Discussion & Analysis

This Compensation Discussion and Analysis (“CD&A”) contains a description of our executive compensation philosophy and programs, the compensation decisions made under those programs, and the considerations in making those decisions for our named executive officers (“NEOs”) listed below. The CD&A also describes the process of the Compensation Committee in determining our compensation programs. Our fiscal 2017 NEOs and their designated titles are as follows:

Name
Title
Paul G. Boynton
Chairman, President and CEO
Frank A. Ruperto
Chief Financial Officer and Senior Vice President, Finance and Strategy
Michael R. Herman
Senior Vice President, General Counsel and Corporate Secretary
William R. Manzer
Senior Vice President, Manufacturing Operations
James L. Posze, Jr.
Senior Vice President, Human Resources

Executive Summary

2017 Highlights

This last year has been transformative for Rayonier Advanced Materials. Our team continued our hard work to improve our cost structure, upgrade our product portfolio, and bring innovative new products to the market place through focus on the “Four Strategic Pillars”: Cost Transformation, Market Optimization, New Products and Investments/Acquisitions. While these were critical to our ongoing success, the work we did to strengthen our balance sheet through achieving sustainable cost savings and debt reduction enabled us to acquire Tembec Inc., a transaction both strategic to our future and immediately accretive.

Some specific 2017 highlights include:

Our stockholders enjoyed a 35% total return for the year.
We closed on the acquisition of Tembec Inc. on November 17, 2017. This acquisition not only more than doubles our revenue, but is also immediately accretive to cash flows and earnings. The transaction also brought significant additional scale and diversity to our Cellulose Specialties business with the addition of Tembec Inc.’s leading global ethers position. In connection with the acquisition, we are targeting achievement of $75 million of synergies within three years.
Our employees achieved $30 million in sustainable savings through Cost Transformation in 2017. As a result, total cost reductions since 2015 now total $115 million.
We upgraded our product portfolio and better aligned our assets and product offerings to the market. The acquisition of Tembec Inc. increased our Cellulose Specialties production lines from three in the U.S. to a total of five lines located in the U.S., Canada and France.




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Key Terms Used in this CD&A

We use certain key terms throughout this CD&A. The following provides a brief description of what these terms mean:

Annual Corporate Bonus Program refers to the annual cash incentive program that we generally establish at the beginning of each year. Under this program, our eligible employees, including our NEOs, can earn cash bonuses based on performance during the year. When we use the term bonus, we are referring to cash bonus awards paid under our 2017 Annual Corporate Bonus Program.

The term Equity Incentive Program generally refers to equity awards granted on an annual basis under our Rayonier Advanced Materials Inc. 2017 Incentive Stock Plan, which we sometimes refer to as our Equity Incentive Plan.

When we use the term performance metrics or goals, we are referring to pre-established performance goals, which may be based on financial, strategic or individual performance objectives, that must be reached under our Annual Corporate Bonus Program and our performance share awards in order to earn any bonus or shares of Company stock with respect to these awards.

The terms target, threshold and maximum are used in the context of our Annual Corporate Bonus Program and our Equity Incentive Program performance share awards granted and describe the levels of performance that must be met with respect to the applicable performance metrics to earn specified payout amounts under these awards.

The term target refers to the amount an employee would earn under our Annual Corporate Bonus Program and our Equity Incentive Program performance share awards if the applicable performance metrics are achieved at a level that is consistent with our performance metrics set by our Compensation Committee for 2017.
The term threshold refers to the minimum amount an employee would earn under the applicable program/award for performance achievement at a specified level below our target.
The term maximum refers to the maximum amount an employee would earn under the applicable program/award for performance achievement at or above a specified performance metric above target.

Best Compensation Practices and Policies

We believe our practices and policies, described below, promote a sound executive compensation program and are in the best interest of our stockholders:
What We Do
What We Don’t Do
Ÿ
Heavy emphasis on at-risk performance-based compensation
Ÿ
No “single trigger” change-in-control (CIC) cash payments or equity acceleration
Ÿ
70% of annual long-term incentives vesting based upon performance
Ÿ
No tax gross ups
Ÿ
Rigorous stock ownership guidelines
Ÿ
No option repricing
Ÿ
Clawback provisions in equity plan
Ÿ
No hedging or pledging of Company securities by executives
Ÿ
Independent compensation consultant
Ÿ
No NEO employment agreements
Ÿ
Risk assessment performed annually
Ÿ
No significant perquisites


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2017 Say-On-Pay

We achieved 92.9% stockholder approval for our 2017 Say-on-Pay vote. Before and after this vote, we conducted extensive stockholder outreach to ensure that we were engaged with our large stockholders and considered their feedback as it relates to our executive compensation programs, as described below in this CD&A. We believe this was a helpful and productive process and intend to continue this practice.

2017 Compensation Metrics and Performance

The 2017 Annual Corporate Bonus Program targets were consistent with the initial financial guidance of an Adjusted EBITDA1 range of $190 million to $200 million and Adjusted Free Cash Flow of $80 to $90 million provided by the Company to the investment community; specifically, to achieve a target payout based on the organization’s financial metrics, leadership needed to reach $195 million of Adjusted EBITDA and generate $95 million of Adjusted Free Cash Flow in 2017. The Company achieved $212 million in Adjusted EBITDA and generated $91 million of Adjusted Free Cash Flow for the year ended 2017. However, as a result of adjustments for special and non-recurring items approved by the Compensation Committee, the actual amounts used in the calculations for the 2017 Annual Corporate Bonus Program were $194 million of Adjusted EBITDA (1% lower than target) and $113 million of Adjusted Free Cash Flow (19% higher than target). Combined with an outcome of 140% of the organization’s strategic objectives, the calculated potential payout for the NEOs was approximately 136% of their target bonus. As the Compensation Committee considered management’s performance relative to a number of operational factors, including the Company’s overall operational and safety performance, the Committee exercised negative discretion and reduced the calculated payout by 19% for a final payout of 110% of each participant’s target award.

1EBITDA, Adjusted EBITDA and Adjusted Free Cash Flow are non-GAAP measures. For reconciliation of these non-GAAP measures to their directly comparable GAAP measures and related information, see “Note about non-GAAP Financial Measures”, appearing on page two of our Annual Report on Form 10-K for the year ended December 31, 2017, filed with the SEC on March 1, 2018 (“Form 10-K”), and the “Performance and Liquidity Indicators” section beginning on page 31 of our Form 10-K.

In 2017, the performance metrics for our long-term incentive (“LTI”) plan remained Return on Invested Capital (“ROIC”) and Total Shareholder Return (“TSR”). The Compensation Committee continues to believe ROIC is an appropriate metric as it measures how effectively capital is allocated to profitable investments. The use of ROIC was also confirmed as a preferred metric for long range plans during our investor outreach discussions. At the time of the 2017 LTI award grant, the Compensation Committee established one-year ROIC objectives for each of the next three years (each being a “tranche”) based on our long-range plan and is measuring management’s performance relative to these goals. For the first tranche of the 2017 LTI award, performance was achieved at 11.1%, which met the established target metric range of 10.8%-11.3%. The 2017 LTI award also has a TSR modifier that is measured at the end of the three-year performance period. If cumulative three-year TSR is below the 25th percentile of the peer group, the total 2017 LTI award value is reduced by 25%. If cumulative three-year TSR is above the 75th percentile, the total 2017 LTI award value is increased by 25%. There is no modification to the 2017 LTI award if TSR is between these two percentiles.


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CEO Pay At-A-Glance
Mr. Boynton has been CEO of the Company since it was formed in 2014. The majority of his compensation has been pay-at-risk with only 21% of his 2017 targeted total direct compensation2 (“TDC”) being fixed in base salary.
As it relates to our 2017 Annual Corporate Bonus Program, Mr. Boynton’s target bonus is the equivalent of his annual base salary. Our actual performance was slightly below target with respect to Adjusted EBITDA and above target with respect to Adjusted Free Cash Flow performance. Mr. Boynton’s actual bonus payout was higher than the calculated result under the 2017 Annual Corporate Bonus Program due to additional amounts awarded by the Board as a result of his work on the Tembec acquisition.
2 Consisting of annual base salary, annual target bonus opportunity and long-term incentive awards measured at “target”.

What Guides Our Program

Our Compensation Philosophy

The cornerstone of our compensation philosophy is “pay for performance.” This means that a significant portion of an executive’s total compensation should be variable (“at risk”) and dependent upon the attainment of certain specific and measurable annual and long-term business objectives. Underlying this philosophy are our objectives to attract and retain exceptional leaders who will execute on the short- and long-term business goals that we believe will create long-term stockholder value. To this end, our executive compensation program is grounded in two key principles:
Stockholder alignment - Executives should be compensated through pay elements designed to create long-term value for our stockholders, as well as foster a culture of ownership.
Competitiveness - Target compensation should be set at a level that is competitive with that being offered to individuals holding comparable positions at the companies with which we compete for business and leadership talent.

The Principal Elements of Pay: Total Direct Compensation (TDC)

Our compensation philosophy is supported by the following principal elements of pay:
Pay Element
How It Is Paid
Purpose
Base Salary
Cash (Fixed)
Provide a competitive base salary rate relative to similar positions in the market and enable the Company to attract and retain critical executive talent.
Short-Term Incentives (Annual Corporate Bonus Program)
Cash (At Risk)
Focus executives on achieving annual financial and strategic objectives that drive stockholder value
Long-Term Incentives (Equity Incentive Program)
Equity (Variable; At Risk)
Provide incentives for executives to execute on longer-term financial goals that drive stockholder value creation and support the Company’s executive retention strategy; align stockholder and executive’s interests


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Pay Mix

The charts below show the target TDC of our CEO and our other NEOs for fiscal 2017. These charts illustrate that a majority of NEO target TDC is variable (80% for our CEO and an average of 68% for our other NEOs).

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Our Decision Making Process

The Role of the Compensation Committee

Our Compensation Committee has responsibility for both establishing our compensation philosophy and monitoring adherence to it. The Compensation Committee reviews and approves compensation levels for all of our executive officers, including our NEOs, as well as all other programs applicable to such officers.
The Compensation Committee establishes annual performance objectives for our CEO, evaluates his accomplishments and performance against those objectives, and based on such evaluation, makes recommendations regarding his compensation for approval by the independent members of our Board. All of these functions are set forth in the Compensation Committee’s Charter, which appears on our website (www.rayonieram.com) and is reviewed annually by the Compensation Committee.
The Compensation Committee’s work is accomplished through a series of meetings, following a regular calendar schedule, to ensure all major elements of compensation are appropriately considered and that compensation and benefit programs are properly designed, implemented and monitored. Special meetings are held as needed to address matters outside the regular compensation cycle.
The Role of Management

Working with the Compensation Committee Chair, our Senior Vice President, Human Resources prepares an agenda and supporting materials for each meeting. Our Senior Vice President, Human Resources, along with our CEO, Corporate Secretary and Director, Compensation and Payroll, generally attend the Compensation Committee meetings but are excused for executive sessions and as otherwise determined by the Compensation Committee in its discretion. The Compensation Committee invites other members of management to attend meetings as it deems necessary to cover issues within their specific areas of expertise or responsibility. The CEO does not participate in the deliberations of the Compensation Committee or the Board regarding his own compensation.

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The Role of the Independent Consultant

The Compensation Committee also seeks advice and assistance from compensation consultants and outside counsel. The Compensation Committee has engaged Exequity LLP (“Exequity”) to provide advice, relevant market data and best practices to consider when making compensation decisions, including those involving our CEO and the programs applicable to senior executives generally. Exequity also provides the Compensation Committee meaningful input on program design features and the balance of pay among the various components of executive compensation. Exequity provides no additional services to the Compensation Committee. The Compensation Committee has assessed the independence of Exequity against the specific criteria under applicable SEC and NYSE rules and determined no conflict of interest is raised by Exequity’s work for the Compensation Committee.

The Role of Benchmarking and the Compensation Peer Groups

We compete with companies across multiple industries for top executive-level talent. As such, the Compensation Committee studies market norms across the specialty chemicals industry, as well as the standards within the broader community of general industry U.S. manufacturing companies.  However, the Compensation Committee does not establish any individual executive’s compensation level to any specific peer group benchmark.  Instead, consistent with our emphasis on “pay for performance,” we generally expect our base salary and annual bonus opportunities to be between the 25th and 50th percentiles, and expect our Equity Incentive Program award opportunities to be between the 50th and 75th percentiles as measured against our chosen benchmark community, as discussed below. However, variations from these general ranges may occur based on incumbent expertise and experience and other relevant facts and circumstances. For 2017, base salary and annual bonus and Equity Incentive Program target award opportunities for our NEOs were consistent with these general parameters.
In evaluating 2017 compensation levels for senior executives, the Compensation Committee reviewed prevailing base salary, annual bonus and Equity Incentive Program compensation levels in one distinct benchmark community: 530 comparably-sized manufacturing companies from across general industry. The general industry peers are U.S. publicly traded manufacturing companies that generated revenue between $500 million and $5,000 million. The Compensation Committee’s reliance on this benchmark community when assessing senior officer pay ensures its compensation decisions reflect the standards in effect both within the principal industry in which the Company operates and across the broader labor market in which the Company competes for high-level executive talent.
The 2017 Executive Compensation Program

Base Salary

We provide each of our NEOs with a competitive fixed annual base salary. The base salaries for our NEOs are reviewed annually by the Compensation Committee by taking into account the results achieved by each executive, his or her future potential, scope of responsibilities and experience, and competitive pay practices. In making adjustments (or, in the case of our CEO, recommendations to the independent directors for adjustment) to base salary levels, the Compensation Committee considers:
budgeted levels for annual salary and equity adjustments
the executive’s level of responsibility
the executive’s experience and breadth of knowledge
the executive’s individual performance as assessed through annual performance reviews
the executive’s role in management continuity and development plans
the perceived retention risk
internal pay equity factors (that is, relative pay differences among our NEOs)

The base salaries for the NEOs were frozen in 2016, with the exception of Mr. Ruperto and Mr. Manzer, whose base salaries were adjusted to reflect changes in their roles. Recognizing that the last adjustment for the executives had been twenty-four months prior, the 2017 base salary changes were higher than in previous years to ensure each NEO’s base salary remained competitive in the market place. In the case of Mr. Manzer, he received an even higher

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than average increase to more closely align his compensation with the market. The Compensation Committee approved the annual base salary rate for each NEO as follows:
NEO
2016
2017
% Increase
Paul G. Boynton
$927,000
$975,000
5.2%
Frank A. Ruperto
$415,000
$445,000
7.2%
Michael R. Herman
$380,000
$395,000
4.0%
William R. Manzer
$310,000
$365,000
17.7%
James L. Posze, Jr.
$294,000
$314,000
6.8%

2017 Annual Corporate Bonus Program

How the Bonus Program Works

The 2017 Annual Corporate Bonus Program, which was established under our Non-Equity Incentive Plan, provided our NEOs the opportunity to earn a performance-based annual cash bonus. For purposes of Internal Revenue Code (“IRC”) Section 162(m), as in effect during 2017, we use a funded bonus pool approach, whereby once threshold performance goals are reached, the bonus pool is funded at the maximum 200% of target level, and the Compensation Committee may use its negative discretion to reduce that amount to the final payout amount, if any, to which the NEO is entitled based on performance against our pre-established financial, strategic and individual performance metrics as depicted in the below graph and described in more detail below. In no event would an NEO’s bonus payout be greater than the maximum amount payable under the funded bonus pool.
bonusprogramgraphica01.jpg
Target annual bonus opportunities are expressed as a percentage of base salary, and were established based on the NEO’s level of responsibility and ability to impact overall results. The Compensation Committee also considered market data in setting target award amounts as discussed above under “The Role of Benchmarking and the Compensation Peer Groups”. Threshold, target and maximum award opportunities for 2017 were as follows:

NEO
Threshold Award
(as a % of Base Salary)
Target Awards
(as a % of Base Salary)
Maximum Award
(as a % of Base Salary)
Paul G. Boynton
16.0%
100%
200%
Frank A. Ruperto
9.8%
61%
122%
Michael R. Herman
9.8%
61%
122%
William R. Manzer
8.1%
51%
102%
James L. Posze, Jr.
8.1%
51%
102%


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Financial Objectives and Results
Eighty percent (80%) of an individual NEO’s bonus award was based on the achievement of pre-established financial metrics. The relationship between the level of performance achieved with respect to 2017 financial metrics and overall bonus pool funding is as follows:
Performance Level
Level of Performance
Bonus Pool Funding (% of Payout3)
Below Threshold
<85%
Threshold
85%
20%
Target (Budget)
100%
100%
Maximum
≥120%
200%
3 Actual payouts may range between the threshold, target and maximum payout levels based on performance achievement between these levels.
The Annual Corporate Bonus Program for 2017 incorporated a “plateau” at the target level of performance. Under this plateau, target performance is deemed to be achieved if actual performance is within approximately +/- 2.5% of target Adjusted EBITDA and target Adjusted Free Cash Flow.
The table below outlines the 2017 financial metrics, with their respective weightings, as well as the performance targets and actual results for 2017:
 
Metrics
Weighting
2017 Target ($M)
2017 Performance ($M)
Level of Performance Achieved (as a % of Target)
Bonus Pool Funding (% of Payout)
 
 
Adjusted EBITDA4
40%
$195.4 - $205.4
$194
93.8%
37.5%
 
Adjusted Free Cash Flow5
40%
$95.2 - $100
$113
175.4%
70.2%
 
Total Payout Percentage Before Strategic Objective Results
107.7%
4 Adjusted EBITDA is defined by the Company as EBITDA before acquisition related costs, inventory write-up to fair value, gain on bargain purchase, gain on derivative instrument, non-cash impairment, one-time separation and legal costs, insurance recovery, environmental liability adjustments and gain on debt extinguishment.

5 Adjusted free cash flows is defined as cash provided by operating activities adjusted for capital expenditures excluding strategic capital expenditures, acquisition related costs, net of tax, and subsequent tax benefits to exchange the Alternative Fuel Mixture Credit (“AFMC”) for the Cellulosic Biofuel Producer Credit (“CBPC”). Adjusted free cash flows, as defined by the Company, is a non-GAAP measure of cash generated during a period which is available for dividend distribution, debt reduction, strategic capital expenditures and acquisitions and repurchase of the Company’s common stock. Adjusted free cash flows is not necessarily indicative of the adjusted free cash flows that may be generated in future periods.

Why We Use Adjusted EBITDA and Adjusted Free Cash Flow

The Compensation Committee selected these financial metrics due to the importance of earnings and cash generation to the achievement of Rayonier Advanced Materials’ objectives referred to as our “Four Strategic Pillars,” as well as the importance investors place on these financial measures.


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Strategic Objectives and Results

Twenty percent of an individual NEO’s bonus award was based on the achievement of pre-established strategic objectives. Payout levels can range from 0% to 40% of target awards, consistent with the Annual Corporate Bonus Program’s overall payout range of 0% to 200%. The four measured objectives include cost reduction and cash generation, market optimization, innovation, and strategic alternatives (i.e., acquisitions and debt structure). After assessing performance against our 2017 strategic objectives, in particular, the successful completion of our acquisition of Tembec Inc., the Compensation Committee determined that the strategic objectives for 2017 had been achieved at 140% of target, resulting in a total payout percentage of 28%. In addition, safety performance is one of several non-financial, strategic objectives that the Compensation Committee considers, which (in the case of non-achievement of the objective) can only have a negative impact on the bonus outcome. Based on our overall operational and safety performance in 2017, there was a downward adjustment of 19% to the total bonus payout calculations.
Metrics
Weighting
Level of Performance Achieved (as a % of Target)
Bonus Pool Funding (% of Payout)
Strategic Objectives
20%
140%
28%
Individual Performance Modifier
Separate from the financial and strategic objectives, the Compensation Committee may also exercise its judgment to increase an individual NEO’s bonus award by up to 30% or decrease the award by up to 100% to reflect performance against individual objectives. In no event would an NEO’s bonus payout be greater than the maximum amount payable under the funded bonus pool. In 2017, Mr. Ruperto and Mr. Boynton’s bonuses were increased by 20% and 27%, respectively, over the formula calculation to reflect their roles in the accomplishment of acquiring Tembec Inc. Mr. Manzer’s bonus was reduced by 8% to further reflect overall operational and safety results.
2017 Final Bonus Program Payouts
Based on the above financial, strategic and individual performance results, the Compensation Committee approved the following final bonus payouts for 2017:
NEO
Financial Objectives (80%)
Strategic Objectives (20%)
Individual Adjustment (+/-)%
Total Bonus Payout ($)6
Paul G. Boynton
$1,060,000
$265,000
27%
$1,325,000
Frank A. Ruperto
$276,000
$69,000
20%
$345,000
Michael R. Herman
$208,000
$52,000
—%
$260,000
William R. Manzer
$152,000
$38,000
(8)%
$175,000
James L. Posze, Jr.
$140,000
$35,000
—%
$175,000

6 Rounded to the nearest $5,000 increment.

Long-Term Incentives: Equity Awards

The NEOs are eligible to receive Equity Incentive Program awards under the Equity Incentive Plan. For 2017, Equity Incentive Program awards were granted as follows:
Seventy percent (70%) in the form of performance shares. Performance shares are earned and vest based on the achievement of ROIC financial metrics, which are pre-established at the time of grant for each of the one-year periods within the three-year performance period, with final payout subject to potential

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modification based on TSR results relative to our peer group over the cumulative three-year performance period.
Thirty percent (30%) in the form of time-based restricted stock. Restricted stock is subject to three-year cliff vesting and becomes fully vested on the third anniversary of the grant date, subject to continued employment.

2017 Target Equity Incentive Program Award Grants

The table below shows the target Equity Incentive Program award values granted for 2017 for each of the NEOs. The number of performance shares and shares of restricted stock awarded to each NEO was determined based on the average closing stock price for the ten trading days prior to March 1, 2017.

NEO
Performance Based
Time-Based Restricted
Total Target Value
Paul G. Boynton
$1,960,000
$840,000
$2,800,000
Frank A. Ruperto
$630,000
$270,000
$900,000
Michael R. Herman
$490,000
$210,000
$700,000
William R. Manzer
$280,000
$120,000
$400,000
James L. Posze, Jr.
$262,500
$112,500
$375,000

For senior executives, 2017 Equity Incentive Program award levels as established were based on three factors:
1.
The aggregate dollar value of the total Equity Incentive Program award opportunity for the executive approved by the Compensation Committee, or for Mr. Boynton, the independent directors
2.
The Compensation Committee’s allocation of the total value between restricted stock awards and performance share awards
3.
The value of a restricted stock award and performance share award calculated at the grant date of March 1, 2017, using the average close price from the ten trading days prior to March 1, 2017

Total target value of Messrs. Boynton, Herman and Posze for 2017 represents no change from their 2016 Equity Incentive Program awards. The total target values for Messrs. Ruperto and Manzer were increased by 5.8% and 33% respectively based on increased responsibility and to reflect market.

A Closer Look at Performance Shares

Performance is evaluated against pre-established levels of annual Return on Invested Capital (“ROIC”) over a three-year performance period beginning January 1, 2017 and ending December 31, 2019, subject to a cumulative three-year TSR modifier. ROIC is defined as: (Net Operating Profit x (1-Tax Rate)) / (Debt - Cash + Book Equity).
At the time of grant, ROIC targets were established and approved for each of the three performance years and are designed to be challenging, stretch goals, especially considering market-related headwinds we faced at the time of award and the related uncertainty. The Compensation Committee chose this metric to align with the long-term interest of stockholders and to incentivize management to focus on controllable measures, versus a solely TSR model.
Results for each of the three years in the performance period will be measured independently of the results of the other years. Overall ROIC performance for the measurement period will be based on the outcome of each individual year, with each year carrying an equal weight. NEOs can earn between 0% and 200% of the target award, and a payout factor of zero will be used for any year within the performance period where results fall below threshold performance for that period.

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For the 2017 measurement period, ROIC performance metrics were as follows, and we achieved an ROIC outcome of 11.1%:
ROIC Level for 2017
Award Payout (as % of Target)
13.8% or greater
200%
Greater than 11.3%, but less than 13.8%
100%, plus 4.00% for each incremental 0.1% ROIC over 11.3%
Greater than or equal to 10.8%, but less than 11.3%
100%
Greater than 8.3%, but less than 10.8%
30%, plus 2.8% for each incremental 0.1% ROIC over 8.3%
Equal to 8.3%
30%
The ROIC calculation, which is subject to adjustment for pre-established special or nonrecurring items, is reviewed and approved by the Compensation Committee.
Dividend equivalents and interest may be paid in cash, following vesting of the award, on the number of shares of stock actually earned under the 2017 performance share awards. Any dividend equivalents, if paid, will be calculated by taking the dividends paid on one share of our stock during the performance period, multiplied by the number of shares of stock awarded at the end of the period. Interest on such dividends will be earned at a rate equal to the prime rate as reported in the Wall Street Journal, adjusted and compounded annually from the date such cash dividends were paid by the Company.
Performance share awards may also be adjusted based on an additional metric used as a “modifier” to the total award. At the end of the three-year performance period, the payout based on ROIC results is adjusted based on the achievement of TSR relative to our peer group7 for the same cumulative three-year performance cycle as follows:
If relative TSR attainment is...
Then the aggregate Equity Incentive Program award is...
At or below the 25th percentile
Adjusted down by 25%
Greater than or equal to the 25th percentile, but less than the 75th percentile
No adjustment
At or above the 75th percentile
Increased by 25%
7 For purposes of this peer group, the Compensation Committee approved the use of S&P SmallCap 600 Materials Index
Any earned performance shares are paid out after the completion of the three-year performance period following the Compensation Committee’s certification of performance results.
Performance Results Under our Prior Performance Share Awards

Our 2015 performance share awards were granted with a performance period from January 1, 2015 through December 31, 2017. The payout for these awards was based on pre-established levels of annual ROIC over the three-year performance period, subject to a TSR modifier. Each year of the program was earned and “banked” until results could be certified by the Board in February 2018. Based on achievement of 12.7%, 14.2% and 9.4% ROIC in 2015, 2016 and 2017, respectively, the 2015 performance share awards were earned at 200% of target. The cumulative TSR of negative 8.6% for the 2015 - 2017 performance period resulted in an overall reduction of 25% to the award.

The 2015 performance share awards calculated ROIC using Earnings Before Interest and Taxes, which is slightly different from the definition of ROIC under the 2016 and 2017 performance share awards, which utilize Net Operating Profit after Tax, a metric that excludes non-operating income. For additional information regarding the terms of these awards, see “A Closer Look at Performance Shares” in the CD&A included in our Proxy Statement for our 2016 annual meeting.


33



Our 2016 performance share awards covering the 2016 - 2018 performance period were earned at 200% for the 2016 and 2017 tranches of the award based on our annual ROIC performance for those years. Earned performance shares will be subject to adjustment based on cumulative three-year TSR as compared to the applicable peer group and paid out following the completion of the three-year performance period and certification of performance results. For additional information regarding the terms of these awards, see “A Closer Look at Performance Shares” in the CD&A included in our Proxy Statement for our 2018 annual meeting.

Other Practices, Policies and Guidelines

Stock Ownership Requirements 

We believe that stock ownership further focuses the senior management team on the long-term success of our business and the interests of our stockholders. All executives at the Vice President level and higher are subject to rigorous stock ownership guidelines which require them to acquire and hold, within five years after taking such position (and for those who served in such positions at the time of our 2014 spinoff from our former parent company, Rayonier Inc., five years from the date of the spinoff), our stock with a value equal to a designated multiple of their base salary as follows:
Title
Multiple of Base Salary
Chairman, President & CEO
6.0x
Executive Vice President
3.0x
Chief Financial Officer
3.0x
Senior Vice President
2.0x
Vice President
1.0x
We also require that each director, within four years of joining our Board of Directors, maintain a minimum ownership interest in our stock at a level equal to four times the director’s annual equity retainer.
Prior to satisfying the ownership requirement, directors and executives are subject to retention requirements which prohibit them from selling any of our stock, other than stock withheld or sold to satisfy taxes in connection with the vesting of a stock-based award or stock option exercise. The types of securities which count towards satisfaction of the ownership requirements include Common Stock, restricted stock, restricted stock units and vested options but excludes performance shares, unvested options and preferred stock.
Progress toward meeting the guidelines is reviewed by the Compensation Committee annually. Each of our directors and executive officers is within the initial four and five year periods, respectively. As of December 31, 2017, each of our directors and executive officers, with the exception of our CEO who is on track to be in compliance by the fifth year, was in compliance with our ownership requirements.

Anti-Hedging Policy

Our executive officers and directors are not permitted to hedge their economic exposure to our stock, to hold their ownership interests in a margin account, or to otherwise pledge their stock as collateral for a loan.
Clawback Policy

In addition to the clawback provisions in our Equity Incentive Plan and the Non-Equity Incentive Plan that are determined in the discretion of Compensation Committee, each year our NEOs sign a Supplemental Agreement describing the types of detrimental conduct which will trigger a clawback. Specific detrimental conduct includes the following in connection with the performance of duties on behalf of the Company: committing an illegal act, including but not limited to embezzlement or misappropriation of Company funds, or willful failure to comply with the material policies and procedures of the Company as determined by the Compensation Committee.

34




The SEC has proposed new rules relating to clawbacks, but has not yet adopted final rules. Our Compensation Committee intends to modify our clawback policy as appropriate based on any final rules adopted by the SEC.

2017 Risk Assessment

We undertake a thorough risk assessment of our compensation based programs annually. The first phase of the assessment is an analysis by the human resources compensation organization that is reviewed with the Enterprise Risk Management (“ERM”) Committee, which is staffed by senior management. The review includes the individual programs, potential and probable risks, along with mitigation efforts established to reduce or eliminate risk. The results of the ERM assessment are then presented to the Compensation Committee for their approval. Based on its assessment of our compensation programs for our employees and executives for 2017, the Compensation Committee determined that our compensation programs and practices do not motivate behavior that is reasonably likely to have a material adverse impact on the Company.
Severance and Change in Control Benefits

Executive Severance Pay Plan - Change in Control

The Compensation Committee recognizes that, as with all publicly-traded corporations, there exists the possibility of a change in control and the uncertainty created by that possibility could result in the loss or distraction of senior executives, to the detriment of the Company, its business, and its stockholders. The Executive Severance Pay Plan, as amended, otherwise known as the Change in Control Plan (“CIC Severance Plan”), was established by the Compensation Committee based on its view that it is critical for executive retention to be encouraged and that the continued attention and dedication of senior executives be fostered, notwithstanding the possibility, threat, rumor or occurrence of a change in control. The intent is to align executive and stockholder interests by enabling executives to consider corporate transactions that may be in the best interests of stockholders and other constituents without undue concern over whether a transaction would jeopardize the executives’ employment or significantly disrupt or change the culture or environment of their employment.
The CIC Severance Plan achieves these objectives by providing benefits to eligible executives, designated by the Compensation Committee, which includes our NEOs, in the event of a change in control. Under the plan, if the executive is involuntarily terminated (other than for cause or due to death or disability) or terminates his or her employment for good reason (as defined in the CIC Severance Plan) within 24 months of the change in control, he or she will be entitled to enhanced severance benefits, which depend on the executive’s status as a Tier I, Tier II or Tier III participant.
The CIC Severance Plan does not provide any tax gross-up protection for our NEOs. It includes a “net best” provision pursuant to which a participant is entitled to the greater of (i) full CIC severance benefits less the excise tax, with the participant responsible for payment of the excise tax or (ii) a capped benefit, with the CIC severance benefits reduced to an amount just below the threshold for triggering the excise tax. In addition, the plan provides that outstanding stock options, time-based restricted stock and restricted stock unit awards will not automatically vest upon a change in control but will instead vest upon the participant’s involuntary termination of employment by the Company (other than for cause or due to death or disability) or termination for good reason occurring within two years following a change in control transaction. Under the CIC Severance Plan, performance shares that remain outstanding upon a qualifying termination will vest at target if the performance period is not more than 50% complete at the time of such termination, and, for outstanding performance shares for which the performance period is more than 50% complete at the time of the qualifying termination, those will vest at the greater of target or actual performance achievement through the time of such termination as determined pursuant to CIC Severance Plan terms. The Company’s 2017 Incentive Stock Plan adopted by stockholders at our 2017 annual meeting of stockholders included CIC vesting provisions which mirror those in our CIC Severance Plan.
The Compensation Committee reviews the CIC Severance Plan annually and retains the discretion to terminate or amend the CIC Severance Plan, or include or exclude any executive, including any NEO, at any time prior to a change

35



in control. Messrs. Boynton, Ruperto, and Herman are included as Tier I executives and Messrs. Manzer and Posze are included as Tier II executives in the CIC Severance Plan.
Executive Severance Non-Change in Control Plan

Our Executive Severance Non-Change in Control Plan (“Non-CIC Severance Plan”) provides enhanced severance benefits to all salaried employees at the level of vice-president (or their internal equivalent) and above, including the NEOs, in the event their employment is terminated other than for “cause” or other non-qualifying terminations defined in the plan. Benefits may range from 9 months to 24 months of severance and the level of benefits depends on the executive’s status as a Tier I, Tier II, Tier III or Tier IV participant. Messrs. Boynton, Ruperto, and Herman are included as Tier I executives and Messrs. Manzer and Posze are included as Tier II executives in the Non-CIC Severance Plan. In the event of the qualifying termination of an executive that triggers severance benefits under the CIC Severance Plan, the executive would not also receive severance benefits under the Non-CIC Severance Plan. Any employee not covered under the Non-CIC Severance Plan is provided severance protection under our Severance Pay Plan for Salaried Employees.
The potential payments and other benefits under the CIC Severance Plan and the Non-CIC Severance Plan are calculated in the Potential Payments Upon Termination or Change In Control table. Such potential payments do not affect the Compensation Committee’s decisions regarding executive compensation, including base salary, annual bonus and long-term incentive award levels.
Other Benefits and Perquisites

Retirement Benefits
In connection with our 2014 spinoff, we were required to establish tax-qualified pension and 401(k) plans and non-qualified excess pension and excess savings/deferred compensation plans with substantially the same terms as the analogous plans in place at our former parent company, which plans were required to remain in effect through 2015. Accordingly, our Compensation Committee adopted each of the plans described below. In connection with the expiration of the restricted period, the Compensation Committee undertakes an annual, comprehensive review of these plans, with a particular focus on whether any modifications are necessary or appropriate in light of current trends and best practices, the nature of our business and competitive factors. In 2017, the Compensation Committee concluded that the plans remained competitive and were not an undue burden on the Company, and no modifications to the plans were made in 2017.
We maintain the following plans and programs to provide retirement benefits to salaried employees including the NEOs:
the Rayonier Advanced Materials Inc. Investment and Savings Plan for Salaried Employees (“401(k) Plan”)
the Rayonier Advanced Materials Inc. Excess Savings and Deferred Compensation Plan (“Excess Savings and Deferred Compensation Plan”)
the Retirement Plan for Salaried Employees of Rayonier Advanced Materials Inc. (the “Retirement Plan”) for those employees hired before January 1, 2006
the Rayonier Advanced Materials Inc. Excess Benefit Plan (“Excess Retirement Plan”) for employees hired before January 1, 2006
the Rayonier Advanced Materials Inc. Salaried Pre-65 Retiree Medical Plan (the “Pre-65 Retiree Medical Plan”) for those employees hired before January 1, 2006
The benefits available under these plans are intended to provide income replacement after retirement, either through a defined pension benefit (for employees hired prior to January 1, 2006) or distributions from a 401(k) or deferred compensation plan. We place great value on the long-term commitment that many of our employees and NEOs have made to the Company and our former parent company and wish to incentivize our employees to remain with the Company with a focus on building sustainable value over the long-term. Therefore, we have determined that it is appropriate to provide employees with competitive retirement benefits as part of their overall compensation package.

36



Our 401 (k) Plan and Excess Savings and Deferred Compensation Plan are designed to encourage employees to take an active role in planning, saving and investing for retirement.
The Excess Savings and Deferred Compensation Plan is designed to provide eligible executives with a convenient and efficient opportunity to save for retirement or other future events, such as college expenses, while deferring applicable income taxes until withdrawal. For additional information regarding our Excess Savings and Deferred Compensation Plan, see the discussion following the “Nonqualified Deferred Compensation” table.
Consistent with the predecessor plans at our former parent company, which were closed to new employees on January 1, 2006, our Retirement Plan, Excess Retirement Plan and the Pre-65 Retiree Medical Plan are closed to any new participants. Therefore, only two of our NEOs, Messrs. Boynton and Herman, are participants in these plans. For additional information regarding our Retirement Plan and Excess Retirement Plan, see the discussion following the “Pension Benefits” table.
The Pre-65 Retiree Medical Plan provides participants eligible for retirement with access to an employer-sponsored healthcare plan funded entirely by the plan participants. This benefit is extended on an equivalent basis to all eligible retirees.
The Compensation Committee intends to review these programs periodically. However, these programs are generally not considered in setting the level of key elements of compensation for the NEOs.

Personal Benefits

We provide our NEOs with limited perquisites, which are reviewed annually by the Compensation Committee. Under our perquisites program, in addition to personal benefits that are available broadly to our employees, our NEOs are eligible to participate in the following two programs:
Executive Physical Program - Each executive-level employee is encouraged to have a physical examination every other year until age 50, and every year after 50.
Senior Executive Tax and Financial Planning Program - This program provides reimbursement to senior executives, including our NEOs, for expenses incurred for financial and estate planning and for preparation of annual income tax returns. Reimbursements are taxable to the recipient, and are not grossed-up for tax purposes. The annual reimbursement limit for 2017 was $25,000 for Mr. Boynton and $10,000 for all other participants.

The total cost of these programs to us for 2017 was $76,806. We do not pay car allowances (or provide company cars), personal club membership dues, home security expenses or provide chartered aircraft for personal use.
2018 Compensation Decisions

In December 2017 and March 2018, the Compensation Committee approved the 2018 Annual Corporate Bonus Program and the 2018 Equity Incentive Program award structure and objectives, respectively. The 2018 Annual Corporate Bonus Program is similar to and consistent with our 2017 program. For our 2018 awards, our Equity Incentive Program will be awarded 30% in the form of time-based restricted stock units subject to 3-year cliff vesting and 70% in the form of performance share units, 60% of which are subject to vesting based on ROIC measured over a three year performance period and 40% of which vest based on a three year synergy target set in connection with the November 2017 acquisition of Tembec Inc. Consistent with our 2017 Equity Incentive Program, the results measured over this three year period are subject to modification based on cumulative three-year TSR performance measured against the peer group. The Compensation Committee approved, and recommended to the Board for approval, one-time increases in the 2018 Equity Incentive Program award values for Mr. Boynton and Mr. Ruperto of $3.2M and $.75M, respectively, for purposes of retention and performance alignment with the ROIC and synergy targets.

In connection with our acquisition of Tembec Inc. in 2017, we granted Equity Incentive Program awards to certain eligible Canadian employees and intend to grant Equity Incentive Program awards to certain eligible French employees.

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In order to grant Equity Incentive Program awards to our French employees that qualify for preferential tax treatment, we are seeking stockholder approval of a French sub-plan to be implemented under our Equity Incentive Plan at our Annual Meeting. See Item 3 below for additional information on our French sub-plan.

Tax and Accounting Considerations

IRC Section 162(m), as amended by the recently enacted Tax Cuts and Jobs Act (“Tax Act”), restricts deductibility for federal income tax purposes of the annual compensation of our NEOs to $1 million, effective for tax years beginning after 2017, subject to a transition rule for written binding contracts which were in effect on November 2, 2017 and which were not modified in any material respect on or after such date. Previously, IRC Section 162(m) provided an exception to this deductibility limit for compensation that qualified as “performance-based” compensation. Our programs had been designed to permit certain elements of our executive compensation program to qualify for the 162(m) performance-based exception, although we reserved the right to pay compensation that did not qualify as “performance-based”. While the Compensation Committee considers the anticipated tax treatment to the Company in its review and establishment of compensation programs and payments, deductibility is only one factor taken into account in setting executive compensation, and, in appropriate cases, the Committee has retained the flexibility to provide compensation that is consistent with the Company’s goals for its executive compensation program, even if such compensation would not be fully tax-deductible. The Compensation Committee is continuing to assess the impact of the changes to IRC Section 162(m), promulgated under the Tax Act, on our compensation programs, but to date no material changes have been made to our programs as a result.
Report of the Compensation and Management Development Committee
The Compensation and Management Development Committee of the Rayonier Advanced Materials Board of Directors has reviewed and discussed the Compensation Discussion and Analysis as required by Item 402(b) of SEC Regulation S-K with management and, based on such review and discussions, the Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement, which is incorporated by reference into the Company’s 2017 Annual Report on Form 10-K filed with the SEC.
The Compensation and Management Development Committee
Thomas I. Morgan, Chair
Mark E. Gaumond
C. David Brown, II
Ronald Townsend
De Lyle W. Bloomquist
 


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Summary Compensation Table
This table discloses compensation for 2017, 2016 and 2015 for Rayonier Advanced Materials’ Principal Executive Officer, Principal Financial Officer, and the three other most highly compensated executive officers (our “NEOs”).
Name and Principal Position
 
Year
 
Salary ($)
 
Bonus ($)
 
Stock Awards ($) (1)(2)
 
Option Awards ($)(1)
 
Non-Equity Incentive Plan Compensation ($)(3)
 
Change in Pension Value and Non-Qualified Deferred Compensation Earnings ($)(4)
 
All Other Compensation ($)(5)
 
Total ($)
Paul G. Boynton
 
2017
 
951,000
 
 
3,119,589
 
 
1,325,000
 
2,477,194
 
99,224
 
7,972,007
Chairman, President and
 
2016
 
927,000
 
 
2,999,793
 
 
1,715,000
 
1,439,992
 
77,780
 
7,159,565
Chief Executive Officer
 
2015
 
913,500
 
 
2,780,071
 
 
1,450,000
 
559,993
 
69,734
 
5,773,298
Frank A. Ruperto
 
2017
 
430,000
 
 
1,002,727
 
 
345,000
 
 
48,751
 
1,826,478
Chief Financial Officer and Senior Vice
 
2016
 
415,000
 
 
1,074,624
 
 
470,000
 
 
258,306
 
2,217,930
President, Finance and Strategy
 
2015
 
390,625
 
 
913,581
 
 
380,000
 
 
22,803
 
1,707,009
Michael R. Herman
 
2017
 
387,500
 
 
779,908
 
 
260,000
 
509,489
 
28,672
 
1,965,569
Senior Vice President, General Counsel
 
2016
 
380,000
 
 
768,198
 
 
430,000
 
280,053
 
33,991
 
1,892,242
and Corporate Secretary
 
2015
 
375,500
 
 
815,116
 
 
365,000
 
100,735
 
29,452
 
1,685,803
William R. Manzer
 
2017
 
337,500
 
 
445,652
 
 
175,000
 
 
20,178
 
978,330
Senior Vice President,
 
2016
 
300,250
 
 
522,272
 
 
285,000
 
 
24,452
 
1,131,974
Manufacturing Operations
 

 
 
 

 
 
 
 
 
 
 
 
 
 
 
 
James L. Posze Jr.
 
2017
 
304,000
 
 
417,799
 
 
175,000
 
 
40,192
 
936,991
Senior Vice President,
 
2016
 
294,000
 
 
411,532
 
 
280,000
 
 
38,254
 
1,023,786
Human Resources
 
2015
 
289,500
 
 
520,256
 
 
235,000
 
 
36,657
 
1,081,413

(1)
Represents the aggregate grant date fair value for performance share awards and restricted stock awards computed in accordance with FASB ASC Topic 718. A discussion of the assumptions used in calculating these values may be found in the “Incentive Stock Plans” sections in the notes to our financial statement included in our Annual Reports on Form 10-K for 2017, 2016 and 2015.
The grant date fair value of the 2017 performance share awards is as follows: Mr. Boynton, $2,242,236; Mr. Ruperto, $720,720; Mr. Herman, $560,566; Mr. Manzer, $320,322 and Mr. Posze, $300,302.
The grant date fair value of the 2017 restricted stock awards is as follows: Mr. Boynton, $877,353; Mr. Ruperto, $282,007; Mr. Herman, $219,342; Mr. Manzer, $125,330 and Mr. Posze, $117,497.
(2)
The grant date fair value of awards subject to performance conditions, as reported in footnote (1), is computed based on probable outcome of the performance condition as of the grant date for the award. The following amounts reflect the grant date award value assuming maximum performance is achieved under the 2017 performance share awards : for Mr. Boynton, $5,117,859; Mr. Ruperto, $1,645,028; Mr. Herman, $1,279,481; Mr. Manzer, $731,127 and Mr. Posze, $685,434.
(3)
Amounts under the “Non-Equity Incentive Plan Compensation” column represent bonus awards under our 2017, 2016 and 2015 Annual Corporate Bonus Programs discussed in the CD&A.
(4)
Represents the annual change in actuarial present value of the participant’s pension benefit under Rayonier Advanced Materials’ retirement plans and above market interest on non-qualified deferred compensation in 2017.

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(5)    The All Other Compensation column in the Summary Compensation Table above includes the following for 2017:
 
Paul G. Boynton
 
Frank A. Ruperto
 
Michael R. Herman
 
William R. Manzer
 
James L.
Posze Jr.
 
($)
 
($)
 
($)
 
($)
 
($)
Financial/tax planning services (1)
56,806
 
 
10,000
 
 
10,000
Life insurance premiums
1,229
 
659
 
594
 
515
 
466
401(k) Plan company contributions
10,800
 
10,800
 
10,800
 
1,808
 
10,197
401(k) Retirement contribution/Enhanced Match
 
8,100
 
 
8,100
 
8,100
Cell Phone Stipend
360
 
360
 
360
 
360
 
360
Excess Savings Plan company contributions
22,485
 
21,842
 
5,019
 
7,508
 
11,068
Executive annual physical
4,934
 
2,335
 
1,640
 
1,887
 
Wellness
 
 
259
 
 
Payment of accrued dividends
2,610
 
4,655
 
 
 
Total
99,224
 
48,751
 
28,672
 
20,178
 
40,192
(1) Financial/tax planning services for Mr. Boynton are capped at $25,000 for each year, however, unused funds from the prior two years may be added to the current years available balance.


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CEO Pay Ratio

Pursuant to a direction under the Dodd-Frank Wall Street Reform and Consumer Protection Act, the SEC adopted a rule requiring annual disclosure of the ratio between the median of the annual total compensation of our employees to the total annual compensation of the chief executive officer.

The rule allows some flexibility in determining the “median employee”. While all companies must calculate annual total compensation for purposes of calculating the ratio as it would be reported in the Summary Compensation Table of the annual proxy statement, the rule allows companies to use a Consistently Applied Compensation Measure (“CACM”), such as information derived from tax and/or payroll records, for purposes of calculating the compensation used to identify the median employee.

In determining our median employee, a listing was prepared of all employees as of October 1, 2017. As allowed under the rule, non-U.S. employees were excluded from the calculation under a de minimis exemption which permits companies to omit non-U.S. employees where they account for 5% or less of the company’s total employees. Based on this exemption, we excluded 8 employees in the United Kingdom, China and Japan. Without this exemption, we had a total employee population of 1,189 employees which we used for our de minimis calculation. Additionally, pursuant to applicable rules, the calculations exclude approximately 3,000 employees who joined the Company through the acquisition of Tembec Inc. in November 2017, although this population will be included in future years. After determining the list of employees as of October 1, 2017, we applied the following CACM: W-2 Box 1 wages. Our 2017 results are as follows:

Median Employee total annual compensation: $83,104

CEO total annual compensation: $7,972,007

Ratio of CEO total annual compensation to Median Employee Compensation: 96:1

We believe this ratio is a reasonable estimate calculated in a manner consistent with SEC rules based on our payroll and employment records and the methodology described above. The SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices. As such, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may have different employment and compensation practices and may use different methodologies, exclusions, estimates and assumptions in calculating their pay ratios.
.


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Grants of Plan Based Awards
This table discloses potential payouts under the 2017 Annual Corporate Bonus Program for NEOs, together with 2017 Equity Incentive Program restricted stock awards and potential payouts under our 2017 Equity Incentive Program performance share awards.
Name
 
Grant Date
 
Approval Date (1)
 
Estimated Future Payouts Under Non-Equity Incentive Plan Awards (2)
 
Estimated Future Payouts Under Equity Incentive Plan Awards (3)
 
All Other Stock Awards: Number of Shares of Stock or Units (#)(4)
 
Grant Date Fair Value of Stock and Option Awards ($) (5)
 
Threshold
($)
 
Target
($)
 
Maximum
($)
 
Threshold
(#)
 
Target
(#)
 
Maximum
(#)
 
Paul G. Boynton
 
 
 
12/15/2016
 
156,000
 
975,000
 
1,950,000
 
 
 
 
 
 
 
 
 
 
 
 
3/1/2017
 
12/15/2016
 
 
 
 
 
 
 
45,866
 
152,886
 
382,215
 
 
 
2,242,236
 
 
3/1/2017
 
12/15/2016
 
 
 
 
 
 
 
 
 
 
 
 
 
65,523
 
877,353
Frank A. Ruperto
 
 
 
12/15/2016
 
43,432
 
271,450
 
542,900
 
 
 
 
 
 
 
 
 
 
 
 
3/1/2017
 
12/15/2016
 
 
 
 
 
 
 
14,473
 
49,142
 
122,855
 
 
 
720,720
 
 
3/1/2017
 
12/15/2016
 
 
 
 
 
 
 
 
 
 
 
 
 
21,061
 
282,007
Michael R. Herman
 
 
 
12/15/2016
 
38,552
 
240,950
 
481,900
 
 
 
 
 
 
 
 
 
 
 
 
3/1/2017
 
12/15/2016
 
 
 
 
 
 
 
11,467
 
38,222
 
95,555
 
 
 
560,566
 
 
3/1/2017
 
12/15/2016
 
 
 
 
 
 
 
 
 
 
 
 
 
16,381
 
219,342
William R. Manzer
 
 
 
12/15/2016
 
29,784
 
186,150
 
372,300
 
 
 
 
 
 
 
 
 
 
 
 
3/1/2017
 
12/15/2016
 
 
 
 
 
 
 
6,552
 
21,841
 
54,603
 
 
 
320,322
 
 
3/1/2017
 
12/15/2016
 
 
 
 
 
 
 
 
 
 
 
 
 
9,360
 
125,330
James L. Posze Jr.
 
 
 
12/15/2016
 
25,622
 
160,140
 
320,280
 
 
 
 
 
 
 
 
 
 
 
 
3/1/2017
 
12/15/2016
 
 
 
 
 
 
 
6,143
 
20,476
 
51,190
 
 
 
300,302
 
 
3/1/2017
 
12/15/2016
 
 
 
 
 
 
 
 
 
 
 
 
 
8,775
 
117,497

(1)
2017 Equity Incentive Program award grants were approved in December 2016 and the grant date reflects the date on which the Compensation Committee approved the applicable performance measures. The number of shares granted were determined as of March 1, 2017, using the average close price from the ten trading days prior to March 1, 2017. For the Non-Equity Incentive Plan Awards, the approval date reflects the date on which the Compensation Committee approved the 2017 Annual Corporate Bonus Program.
(2)
Reflects potential bonus awards under the 2017 Annual Corporate Bonus Program. Awards can range from 0% to 200% of the target bonus award. See the “2017 Annual Corporate Bonus Program” section of the CD&A. The actual amount earned by each named executive officer for 2017 is reflected in the Summary Compensation Table under the “Non-Equity Incentive Plan Compensation” column. The applicable performance measures for the 2017 Annual Corporate Bonus Program were approved on December 15, 2016.
(3)
Reflects potential payouts, in number of shares, under the 2017 performance share awards, which is part of the overall 2017 Equity Incentive Program. Awards can range from 0% to 200% of the target award based on ROIC performance plus a potential additional 25% based on the cumulative TSR modifier. Please refer to the “A Closer Look at Performance Shares” section of the CD&A.

42



(4)
Reflects time-based restricted stock grant awards for 2017, granted as part of our 2017 Equity Incentive Program, which vest and become exercisable on the third anniversary of the grant date.
(5)
Reflects the grant date fair value of each equity award computed in accordance with FASB ASC Topic 718. For performance shares, the grant date fair value is computed using the Monte Carlo simulation model which utilizes multiple input variables that determine the probability of satisfying the performance conditions stipulated in the award to determine the fair market value.
As discussed in the CD&A, the Summary Compensation Table and Grants of Plan-Based Awards Table reflect that, consistent with the Compensation Committee’s stated philosophy, the majority of total targeted compensation for NEOs for 2017 was allocated to performance-based incentives. Performance-based incentive awards are discussed in further detail in the CD&A.

43



Outstanding Equity Awards at Fiscal Year End

This table discloses outstanding equity awards for the NEOs as of December 31, 2017 (including cash-settled stock units).
Name
 
Option Awards (4)
 
Stock Awards (4)
 
Number of Securities Underlying Unexercised Options (#) Exercisable
 
Number of Securities Underlying Unexercised Options (#) Unexercisable (1)
 
Option Exercise Price ($)
 
Option Grant Date
 
Option Expiration Date
 
 
 
Number of Shares or Units of Stock That Have Not Vested (#)(1)
 
Market Value of Shares or Units of Stock that Have Not Vested ($) (3)
 
Equity Incentive Plan Awards
 
Stock Award Grant Date
 
 
Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) (2)
 
Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (3)
Paul G. Boynton
 
20,091

 

 
36.5528
 
1/2/2014
 
1/2/2024
 
 
 
 
 
 
 
 
 
 
 
 
13,986

 

 
45.2121
 
1/2/2013
 
1/2/2023
 
 
 
 
 
 
 
 
 
 
 
 
13,774

 

 
38.1593
 
1/3/2012
 
1/3/2022
 
 
 
 
 
 
 
 
 
 
 
 
7,523

 

 
31.8108
 
1/3/2011
 
1/3/2021
 
 
 
 
 
 
 
 
 
 
 
 
8,957

 

 
24.2426
 
1/4/2010
 
1/3/2020
 
 
 
 
 
 
 
 
 
 
 
 
14,767

 

 
17.3358
 
1/2/2009
 
1/1/2019
 
 
 
 
 
 
 
 
 
 
 
 
9,799

 

 
26.6823
 
1/2/2008
 
1/2/2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1/2/2015
 
43,922

 
$
898,205

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3/1/2016
 
121,563 (5)(a)

 
$
2,485,963

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3/1/2017
 
65,523

 
$
1,339,945

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1/2/2015
 
 
 
 
 
204,968

 
$
4,191,596

 
 
 
 
 
 
 
 
 
 
 
 
3/1/2016
 
 
 
 
 
180,000 (5)(b)

 
$
3,681,000

 
 
 
 
 
 
 
 
 
 
 
 
3/1/2016
 
 
 
 
 
180,000 (5)(c)

 
$
3,681,000

 
 
 
 
 
 
 
 
 
 
 
 
3/1/2016
 
 
 
 
 
207,294 (5)(d)

 
$
4,239,162

 
 
 
 
 
 
 
 
 
 
 
 
3/1/2017
 
 
 
 
 
305,772

 
$
6,253,037

Frank A. Ruperto
 
4,173

 

 
39.4393
 
3/31/2014
 
3/31/2024
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3/31/2014
 
726 (6)

 
$
14,847

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1/2/2015
 
9,982

 
$
204,132

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1/2/2015
 
12,500 (7)

 
$
255,625

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3/1/2016
 
20,000 (8)

 
$
409,000

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3/1/2016
 
36,903

 
$
754,666

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3/1/2017
 
21,061

 
$
430,697

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1/2/2015
 
 
 
 
 
46,584

 
$
952,643

 
 
 
 
 
 
 
 
 
 
 
 
3/1/2016
 
 
 
 
 
123,097 (9)(a)

 
$
2,517,334

 
 
 
 
 
 
 
 
 
 
 
 
3/1/2016
 
 
 
 
 
49,117 (9)(b)

 
$
1,004,443

 
 
 
 
 
 
 
 
 
 
 
 
3/1/2017
 
 
 
 
 
98,284

 
$
2,009,908

Michael R. Herman
 
4,327

 

 
36.5528
 
1/2/2014
 
1/2/2024
 
 
 
 
 
 
 
 
 
 
 
 
3,263

 

 
45.2121
 
1/2/2013
 
1/2/2023
 
 
 
 
 
 
 
 
 
 
 
 
3,850

 

 
38.1593
 
1/3/2012
 
1/3/2022
 
 
 
 
 
 
 
 
 
 
 
 
4,581

 

 
31.8108
 
1/3/2011
 
1/3/2021
 
 
 
 
 
 
 
 
 
 
 
 
5,981

 

 
24.2426
 
1/4/2010
 
1/4/2020
 
 
 
 
 
 
 
 
 
 
 
 
7,347

 

 
26.6823
 
1/2/2008
 
1/2/2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1/2/2015
 
9,317

 
$
190,533

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1/2/2015
 
10,000 (7)

 
$
204,500

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3/1/2016
 
30,390

 
$
621,476

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3/1/2017
 
16,381

 
$
334,991

 
 
 
 

44



Name
 
Option Awards (4)
 
Stock Awards (4)
 
Number of Securities Underlying Unexercised Options (#) Exercisable
 
Number of Securities Underlying Unexercised Options (#) Unexercisable (1)
 
Option Exercise Price ($)
 
Option Grant Date
 
Option Expiration Date
 
 
 
Number of Shares or Units of Stock That Have Not Vested (#)(1)
 
Market Value of Shares or Units of Stock that Have Not Vested ($) (3)
 
Equity Incentive Plan Awards
 
Stock Award Grant Date
 
 
Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) (2)
 
Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (3)
 
 
 
 
 
 
 
 
 
 
 
 
1/2/2015
 
 
 
 
 
43,478

 
$
889,125

 
 
 
 
 
 
 
 
 
 
 
 
3/1/2016
 
 
 
 
 
141,822

 
$
2,900,260

 
 
 
 
 
 
 
 
 
 
 
 
3/1/2017
 
 
 
 
 
76,444

 
$
1,563,280

William R. Manzer
 
1,390

 

 
36.5528
 
1/2/2014
 
1/2/2024
 
 
 
 
 
 
 
 
 
 
 
 
1,047

 

 
45.2121
 
1/2/2013
 
1/2/2023
 
 
 
 
 
 
 
 
 
 
 
 
1,102