株探米国株
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
☒ Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended March 31, 2024
or
☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from to
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4350 Congress Street, Suite 600
Charlotte, North Carolina 28209
(Address of principal executive offices)
(704) 885-2555
(Registrant's telephone number, including area code)
 
Commission file
number
  
Exact name of registrant as
specified in its charter
  
IRS Employer
Identification No.
  
State or other jurisdiction of
incorporation or organization
  
  1-03560   Glatfelter Corporation   23-0628360   Pennsylvania  
(N/A)
Former name or former address, if changed since last report
Securities registered pursuant to Section 12(b) of the Act:
Title of each class   Trading Symbol(s)   Name of each exchange on which registered
Common Stock   GLT   New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for at the past 90 days. Yes ☒ No ☐.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐.
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a small reporting company or emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer ☐   Accelerated filer ☒
Non-accelerated filer ☐   Smaller reporting company ☐
    Emerging growth company ☐  
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 
 ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes ☐ No ☒.
Common Stock outstanding on May 6, 2024 totaled 45,252,530 shares.

GLATFELTER CORPORATION AND SUBSIDIARIES
REPORT ON FORM 10-Q
For the Quarterly Period Ended
March 31, 2024
Table of Contents
 
 Page
 2
 
Condensed Consolidated Statements of Operations for the three months ended March 31, 2024 and 2023 (unaudited)
 
 
 
 
Statements of Shareholders’ Equity for the three months ended March 31, 2024 and 2023 (unaudited)
 
 
 
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5
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Item 1B
 


PART I
Item 1 – Financial Statements
GLATFELTER CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
  Three months ended
March 31,
In thousands, except per share 2024 2023
     
Net sales $ 327,256  $ 378,208 
Costs of products sold 292,746  341,994 
Gross profit 34,510  36,214 
Selling, general and administrative expenses 36,057  30,745 
Gains on dispositions of plant, equipment and timberlands, net
 (2) (644)
Operating income (loss) (1,545) 6,113 
Non-operating income (expense)
Interest expense (17,685) (12,594)
Interest income 261  271 
Other, net (2,027) (3,278)
Total non-operating expense (19,451) (15,601)
Loss from continuing operations before income taxes (20,996) (9,488)
Income tax provision
 5,154  3,694 
Loss from continuing operations (26,150) (13,182)
 
Discontinued operations:
Loss before income taxes
 (197) (402)
Income tax provision —  — 
Loss from discontinued operations
 (197) (402)
Net loss $ (26,347) $ (13,584)
 
Basic earnings per share
Loss from continuing operations $ (0.58) $ (0.29)
Loss from discontinued operations —  (0.01)
Basic loss per share $ (0.58) $ (0.30)
 
Diluted earnings per share
Loss from continuing operations $ (0.58) $ (0.29)
Loss from discontinued operations —  (0.01)
Diluted loss per share $ (0.58) $ (0.30)
 
Weighted average shares outstanding
Basic 45,184 44,957 
Diluted 45,184 44,957 
The accompanying notes are an integral part of these condensed consolidated financial statements.
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GLATFELTER CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(unaudited)
  Three months ended
March 31,
In thousands 2024 2023
Net loss $ (26,347) $ (13,584)
Foreign currency translation adjustments (9,164) 6,663 
Net change in:
Deferred gains on derivatives, net of taxes
 of $(618) and $(53), respectively
 1,442  157 
Unrecognized retirement obligations, net of taxes
 of $(7) and $(1), respectively
 20  652 
Other comprehensive income (loss) (7,702) 7,472 
Comprehensive loss $ (34,049) $ (6,112)
The accompanying notes are an integral part of these condensed consolidated financial statements.
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GLATFELTER CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
In thousands March 31,
2024		 December 31,
2023
Assets    
Cash and cash equivalents $ 30,181  $ 50,265 
Accounts receivable, net 180,541  170,974 
Inventories 299,659  298,248 
Prepaid expenses and other current assets 73,925  86,480 
Total current assets 584,306  605,967 
 
Plant, equipment and timberlands, net 648,941  662,916 
Goodwill 106,137  107,691 
Intangible assets, net 98,661  106,333 
Other assets 79,186  80,889 
Total assets $ 1,517,231  $ 1,563,796 
 
Liabilities and Shareholders' Equity
Current portion of long-term debt $ —  $ 1,005 
Short-term debt 7,452  6,150 
Accounts payable 134,241  158,455 
Environmental liabilities 300  2,000 
Other current liabilities 110,588  112,758 
Total current liabilities 252,581  280,368 
 
Long-term debt 868,202  853,163 
Deferred income taxes 51,400  52,219 
Other long-term liabilities 121,726  121,192 
Total liabilities 1,293,909  1,306,942 
 
Commitments and contingencies (Note 18)
 —  — 
 
Shareholders’ equity
Common stock 544  544 
Capital in excess of par value 56,781  58,759 
Retained earnings 393,463  419,810 
Accumulated other comprehensive loss (90,211) (82,509)
  360,577  396,604 
Less cost of common stock in treasury (137,255) (139,750)
Total shareholders’ equity 223,322  256,854 
Total liabilities and shareholders’ equity $ 1,517,231  $ 1,563,796 
The accompanying notes are an integral part of these condensed consolidated financial statements.
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GLATFELTER CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
  Three months ended
March 31,
In thousands 2024 2023
Operating activities    
Net loss $ (26,347) $ (13,584)
Loss from discontinued operations, net of taxes
 197  402 
Adjustments to reconcile to net cash used by continuing operations:
Depreciation, depletion and amortization 15,754  15,731 
Amortization of debt issue costs and original issue discount 1,024  2,246 
Pension settlement charge —  633 
Deferred income tax benefit (275) (675)
Gains on dispositions of plant, equipment and timberlands, net (2) (644)
Share-based compensation 671  931 
Change in operating assets and liabilities:
Accounts receivable (10,070) (2,306)
Inventories (5,082) (8,827)
Prepaid and other current assets 10,892  (9,117)
Accounts payable (21,241) (23,136)
Accruals and other current liabilities (1,216) 7,550 
Other 2,210  164 
Net cash used by operating activities from continuing operations (33,485) (30,632)
Investing activities
Expenditures for purchases of plant, equipment and timberlands (7,482) (9,500)
Proceeds from disposals of plant, equipment and timberlands, net 2  713 
Net cash used by investing activities from continuing operations (7,480) (8,787)
Financing activities
Proceeds from term loan —  262,273 
Repayment of term loans (988) (225,466)
Net borrowings (repayments) under revolving credit facility 22,041  (16,332)
Payments of borrowing costs (60) (5,060)
Payments related to share-based compensation awards and other (154) (236)
Net cash provided by financing activities from continuing operations 20,839  15,179 
Effect of exchange rate changes on cash (882) 1,266 
Net decrease in cash, cash equivalents and restricted cash (21,008) (22,974)
Decrease in cash, cash equivalents and restricted cash from discontinued operations
 (144) (11)
Cash, cash equivalents and restricted cash at the beginning of period 55,360  119,162 
Cash, cash equivalents and restricted cash at the end of period 34,208  96,177 
Less: restricted cash in Prepaid expenses and other current assets (4,027) (3,600)
Less: restricted cash in Other assets —  (3,936)
Cash and cash equivalents at the end of period $ 30,181  $ 88,641 
 
Supplemental cash flow information
Cash paid for:
Interest $ 10,414  $ 4,993 
Income taxes, net 2,758  1,667 
The accompanying notes are an integral part of these condensed consolidated financial statements.
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GLATFELTER CORPORATION AND SUBSIDIARIES
STATEMENTS OF SHAREHOLDERS’ EQUITY
(unaudited)
In thousands
Common
stock
Capital in
Excess of
Par Value
Retained
Earnings
Accumulated
Other
Comprehensive
Loss
Treasury
Stock
Total
Shareholders’
Equity
Balance at January 1, 2024 $ 544  $ 58,759  $ 419,810  $ (82,509) $ (139,750) $ 256,854 
Net loss (26,347) (26,347)
Other comprehensive loss (7,702) (7,702)
Comprehensive loss (34,049)
Share-based compensation expense 671  671 
Delivery of treasury shares:
RSUs and PSAs (2,649) 2,495  (154)
Balance at March 31, 2024 $ 544  $ 56,781  $ 393,463  $ (90,211) $ (137,255) $ 223,322 
 
Balance at January 1, 2023 $ 544  $ 60,663  $ 498,863  $ (97,895) $ (144,171) $ 318,004 
Net loss (13,584) (13,584)
Other comprehensive income
 7,472  7,472 
Comprehensive loss (6,112)
Share-based compensation expense 931  931 
Delivery of treasury shares:
RSUs and PSAs (2,338) 2,102  (236)
Balance at March 31, 2023 $ 544  $ 59,256  $ 485,279  $ (90,423) $ (142,069) $ 312,587 


The accompanying notes are an integral part of these condensed consolidated financial statements.
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GLATFELTER CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

1.ORGANIZATION
Glatfelter Corporation and subsidiaries ("Glatfelter") is a leading global supplier of engineered materials with a strong focus on innovation and sustainability. Glatfelter's high quality, technology-driven, innovative, and customizable nonwovens solutions can be found in products that are Enhancing Everyday Life®. These include personal care and hygiene products, food and beverage filtration, critical cleaning products, medical and personal protection, packaging products, as well as home improvement and industrial applications. Headquartered in Charlotte, NC, our 2023 net sales were $1.4 billion. At March 31, 2024, we employed approximately 2,916 employees worldwide. Glatfelter’s operations utilize a variety of manufacturing technologies including airlaid, wetlaid, and spunlace with fifteen manufacturing sites located in the United States, Canada, Germany, the United Kingdom, France, Spain, and the Philippines. The Company has sales offices in all major geographies serving customers under the Glatfelter and Sontara brands. Additional information about Glatfelter may be found at www.glatfelter.com. The terms “we,” “us,” “our,” “the Company,” or “Glatfelter,” refer to Glatfelter Corporation and subsidiaries unless the context indicates otherwise.


2. ACCOUNTING POLICIES
Basis of Presentation The unaudited condensed consolidated financial statements (“financial statements”) include the accounts of Glatfelter and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated.
We prepared these financial statements in accordance with accounting principles generally accepted in the United States of America (“generally accepted accounting principles” or “GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission pertaining to interim financial statements. In our opinion, the financial statements reflect all normal, recurring adjustments needed to present fairly our results for the interim periods. When preparing these financial statements, we have assumed you have read the audited consolidated financial statements included in our 2023 Annual Report on Form 10-K.
Discontinued Operations The results of operations and cash flows of our former Specialty Papers business have been classified as discontinued operations for all periods presented in the condensed consolidated statements of operations.
Accounting Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingencies as of the balance sheet date and the reported amounts of revenues and expenses during the reporting period. Management believes the estimates and assumptions used in the preparation of these financial statements are reasonable, based upon currently available facts and known circumstances, but recognizes actual results may differ from those estimates and assumptions.
Recently Issued Accounting Pronouncements
In November 2023, the FASB issued ASU 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”). The standard improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. ASU 2023-07 is effective for annual reporting periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The guidance is to be applied retrospectively to all prior periods presented in the financial statements. We are currently evaluating the potential impact of adopting this new guidance on our consolidated financial statements and related disclosures.
In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”). The standard enhances income tax disclosure requirements by requiring specified categories and greater disaggregation within the rate reconciliation table, disclosure of income taxes paid by jurisdiction, and provides clarification on uncertain tax positions and related financial statement impacts. ASU 2023-09 is effective for annual periods beginning after December 15, 2024. We are currently evaluating the potential impact of adopting this new guidance on our consolidated financial statements and related disclosures.
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3.REVENUE

The following tables set forth disaggregated information pertaining to our net sales:

  Three months ended
March 31,
In thousands 2024 2023
Revenue by product category    
Airlaid Materials
Feminine hygiene $ 44,809  $ 58,245 
Specialty wipes 39,919  44,794 
Tabletop 23,994  30,415 
Food pads 3,807  3,540 
Home care 6,147  7,359 
Adult incontinence 6,597  7,359 
Other 6,256  7,729 
131,529  159,441 
Composite Fibers
Food & beverage 68,362  78,944 
Wallcovering 13,921  16,157 
Technical specialties 15,312  21,453 
Composite laminates 11,319  8,983 
Metallized 7,236  7,054 
116,150  132,591 
Spunlace
Consumer wipes 32,706  38,109 
Critical cleaning 28,332  29,149 
Health care 8,767  10,375 
Hygiene 6,965  5,660 
High performance 2,705  3,209 
Beauty care 655  221 
80,130  86,723 
Inter-segment sales elimination (553) (547)
Total $ 327,256  $ 378,208 
Three months ended
March 31,
In thousands 2024 2023
Revenue by geography
Airlaid Materials
Americas $ 75,060  $ 89,837 
Europe, Middle East and Africa 53,631  65,991 
Asia Pacific 2,838  3,613 
131,529  159,441 
Composite Fibers
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Europe, Middle East and Africa 67,335  73,850 
Americas 28,955  34,212 
Asia Pacific 19,860  24,529 
116,150  132,591 
Spunlace
Americas 51,267  53,152 
Europe, Middle East and Africa 22,552  25,063 
Asia Pacific 6,311  8,508 
80,130  86,723 
Inter-segment sales elimination (553) (547)
Total $ 327,256  $ 378,208 

4.PROPOSED MERGER
As previously announced on February 7, 2024, we entered into certain definitive agreements with Berry Global Group, Inc. (“Berry”) for Berry to spin-off and merge the majority of its Health, Hygiene and Specialties segment including its Global Nonwovens and Films business (“HHNF”) with Glatfelter (the “Merger”). The board of directors of both Berry and Glatfelter have unanimously approved the Merger. The Merger is expected to occur through a series of transactions, including a Reverse Morris Trust transaction such that HHNF will become a wholly owned subsidiary of Glatfelter. Upon completion of the Merger, Berry shareholders will hold 90% of the outstanding shares of Glatfelter and Glatfelter shareholders will continue to hold 10% of the outstanding shares of Glatfelter. The combined company’s Board of Directors will include 6 members chosen by Berry and 3 chosen from Glatfelter’s existing Board of Directors, with Curt Begle, the current president of the Health, Hygiene & Specialties Division of Berry becoming the Chief Executive Officer. The transaction is expected to close in the second half of 2024, subject to Glatfelter shareholder approval and customary closing conditions and regulatory approvals. Prior to the completion of the Merger, Glatfelter and HHNF will continue to operate as independent companies.


5.GAINS ON DISPOSITION OF PLANT, EQUIPMENT AND TIMBERLANDS

Timberland and other asset sales for the three months ended March 31, 2024 were inconsequential.

The following table sets forth sales of timberlands and other assets completed during the first three months of 2023:
Dollars in thousands Acres Proceeds Gain (loss)
2023
Timberlands 216 $ 630  $ 617 
Other n/a 83  28 
Total $ 713  $ 644 

6.DISCONTINUED OPERATIONS
For the three months ended March 31, 2024 and 2023, we recognized a loss in discontinued operations of $0.2 million and $0.4 million, respectively, primarily related to an insurance claim settlement in 2023 and legal costs incurred in both periods.


7.EARNINGS PER SHARE
The following table sets forth the details of basic and diluted earnings per share (“EPS”) from continuing operations:
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  Three months ended March 31,
In thousands, except per share 2024 2023
Loss from continuing operations $ (26,150) $ (13,182)
 
Weighted average common shares outstanding used in basic EPS 45,184  44,957 
Common shares issuable upon exercise of dilutive stock options
 and PSAs / RSUs
 —  — 
Weighted average common shares outstanding and common share
 equivalents used in diluted EPS
 45,184  44,957 
 
Loss per share from continuing operations
Basic $ (0.58) $ (0.29)
Diluted (0.58) (0.29)
The following table sets forth potential common shares outstanding that were not included in the computation of diluted EPS for the periods indicated, because their effect would be anti-dilutive:
  Three months ended March 31,
In thousands 2024 2023
Potential common shares 428  618 

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8.ACCUMULATED OTHER COMPREHENSIVE LOSS
The following table sets forth details of the changes in accumulated other comprehensive loss for the three months ended March 31, 2024 and 2023.
In thousands Currency translation adjustments Unrealized gain (loss) on derivatives Change in pensions Change in other postretirement defined benefit plans Total
Balance at January 1, 2024 $ (90,733) $ 10,555  $ (2,692) $ 361  $ (82,509)
Other comprehensive income before reclassifications (net of tax) (9,164) 1,895  —  —  (7,269)
Amounts reclassified from accumulated other comprehensive income (net of tax)
 —  (453) 24  (4) (433)
Net current period other comprehensive income (loss) (9,164) 1,442  24  (4) (7,702)
Balance at March 31, 2024 $ (99,897) $ 11,997  $ (2,668) $ 357  $ (90,211)
 
Balance at January 1, 2023 $ (106,242) $ 11,176  $ (3,247) $ 418  $ (97,895)
Other comprehensive income (loss) before reclassifications (net of tax) 6,663  1,556  —  —  8,219 
Amounts reclassified from accumulated other comprehensive income (net of tax)
 —  (1,399) 660  (8) (747)
Net current period other comprehensive income (loss) 6,663  157  660  (8) 7,472 
Balance at March 31, 2023 $ (99,579) $ 11,333  $ (2,587) $ 410  $ (90,423)

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Reclassifications out of accumulated other comprehensive loss and into the condensed consolidated statements of operations were as follows:
  Three months ended
March 31,		  
In thousands 2024 2023  
Description    
Line Item in Statements of Operations
Cash flow hedges (Note 17)
      
Gains on cash flow hedges $ 165  $ (918) Costs of products sold
Tax benefit
 (618) (481) Income tax provision (benefit)
Net of tax (453) (1,399)  
Total cash flow hedges (453) (1,399)  
Retirement plan obligations (Note 10)
  
Amortization of deferred benefit pension plans  
Prior service costs 4  6  Other, net
Actuarial losses 27  22  Other, net
Pension settlement —  633  Other, net
  31  661   
Tax benefit (7) (1) Income tax provision (benefit)
Net of tax 24  660   
Amortization of deferred benefit other plans  
Prior service costs 12  5  Other, net
Actuarial gain (16) (13) Other, net
  (4) (8)  
Tax expense —  —  Income tax provision (benefit)
Net of tax (4) (8)  
Total reclassifications, net of tax $ (433) $ (747)  
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9.SHARE-BASED COMPENSATION
On May 5, 2023 (the “Effective Date”), the Board and shareholders approved an amendment and restatement of the Glatfelter Corporation 2022 Long-Term Incentive Plan (the “Equity Plan”) to increase the number of shares available for grant under the Equity Plan (as amended and restated, the “Amended Plan”) (collectively, the “LTIP”). The LTIP is a long-term incentive plan, pursuant to which awards may be granted to full-time or part-time employees, officers, non-employee directors, and consultants of the Company or any subsidiary or affiliate of the Company, including stock options, stock-only stock appreciation rights (“SOSARs”), restricted stock awards, restricted stock units (“RSUs”), performance share awards (“PSAs”), and other share-based awards. The Amended Plan was adopted primarily to increase the number of shares of Company common stock reserved for equity-based awards by 675,000 shares (in addition to any shares that remained available for awards under the Equity Plan as of the Effective Date and any shares subject to outstanding awards granted under the Equity Plan as of the Effective Date). As of March 31, 2024, there were 653,316 shares of common stock available for future issuance under the LTIP.
Pursuant to terms of the LTIP, we have issued to eligible participants RSUs, PSAs and SOSARs.

Restricted Stock Units and Performance Share Awards In the first three months of 2024, we granted RSUs to employees under our LTIP. The RSUs awarded in 2024 vest over three years, with 33% vesting on December 31, 2024, 33% on February 28, 2026, and 34% vesting on February 28, 2027. PSAs were not awarded in 2024. Instead, there was a cash restoration award (paid in cash instead of stock) that vests the same as the RSUs. This cash restoration award is outside of the LTIP. In 2023, we granted RSUs and PSAs to employees under our LTIP. In 2023, 50% of fair value of the awards granted were RSUs, which vest based on the passage of time, generally over a graded three-year period or, in certain instances, the RSUs were cliff vesting after one or three years. The remaining 50% of the fair value of the awards granted in 2023 were PSAs. The PSAs awarded vest based on either the achievement of cumulative financial performance targets covering a two-year period or based on the three-year total shareholder return relative to a broad market index. The performance measures include a minimum, target and maximum performance level providing the grantees an opportunity to receive more or less shares than targeted depending on actual financial performance.
For RSUs, the grant date fair value of the awards, or the closing price per common share on the date of the award, is used to determine the amount of expense to be recognized over the applicable service period. For PSAs, the grant date fair value is estimated using a lattice model. The significant inputs include the stock price, volatility, dividend yield, and risk-free rate of return. Settlement of RSUs and PSAs will be made in shares of our common stock currently held in treasury.
The following table summarizes RSU and PSA activity during periods indicated:
Units 2024 2023
Balance at January 1, 2,273,939  1,650,152 
Granted 1,980,593  1,190,206 
Forfeited (144,681) (98,717)
Shares delivered (239,034) (199,263)
Balance at March 31, 3,870,817  2,542,378 
The amount granted in 2023 included 697,045 of PSAs exclusive of reinvested dividends.
The following table sets forth aggregate RSU and PSA compensation expense included in continuing operations for the periods indicated:
  March 31,
In thousands 2024 2023
Three months ended $ 671  $ 931 

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Stock-Only Stock Appreciation Rights Under terms of the SOSAR, a recipient receives the right to a payment in the form of shares of common stock equal to the difference, if any, in the fair market value of one share of common stock at the time of exercising the SOSAR and the exercise price. All SOSARs are vested, exercisable and have a term of ten years. No SOSARs have been awarded since 2016.
The following table sets forth information related to outstanding SOSARs:
  2024 2023
Shares
Wtd Avg
Exercise
Price
 Shares
Wtd Avg
Exercise
Price
Outstanding at January 1, 531,519  $ 22.10  769,544  $ 21.34 
Granted —  —  —  — 
Exercised —  —  —  — 
Canceled / forfeited (103,742) 29.89  (151,487) 18.36 
Outstanding at March 31, 427,777  $ 20.21  618,057  $ 22.07 


10.RETIREMENT PLANS AND OTHER POST-RETIREMENT BENEFITS
The following tables provide information with respect to the net periodic costs of our pension and post-retirement medical benefit plans included in continuing operations.
  Three months ended
March 31,
In thousands 2024 2023
Pension Benefits    
Service cost $ —  $ — 
Interest cost 355  411 
Amortization of prior service cost 4  6 
Amortization of actuarial loss 27  22 
Pension settlement charge —  633 
Total net periodic benefit expense $ 386  $ 1,072 
 
Other Benefits
Service cost $ 5  $ 3 
Interest cost 41  44 
Amortization of prior service cost 12  5 
Amortization of actuarial gain (16) (13)
Total net periodic benefit expense $ 42  $ 39 

11.INCOME TAXES
Income taxes are recognized for the amount of taxes payable or refundable for the current year, and deferred tax liabilities and assets for the future tax consequences of events that have been recognized in our condensed consolidated financial statements or tax returns. The effects of income taxes are measured based on enacted tax laws and rates.
For the three months ended March 31, 2024, we had a pretax loss from continuing operations of $21.0 million and income tax expense of $5.2 million. The effective income tax rate for the three months ended March 31, 2024 was unfavorably impacted by the jurisdictional mix of pretax results among the Company and its subsidiaries and losses which generated no tax benefit in domestic and certain foreign jurisdictions.
For the three months ended March 31, 2024, we recorded an increase in the valuation allowance of $5.2 million for U.S. federal and certain foreign jurisdictions against our net deferred tax assets. In assessing the need for a valuation allowance, management considers all available positive and negative evidence in its analysis.
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Based on this analysis, we recorded a valuation allowance for the portion of deferred tax assets where the weight of the evidence indicated it is more likely than not that the deferred assets will not be realized.
As of March 31, 2024 and December 31, 2023, we had $61.6 million and $60.7 million, respectively, of gross unrecognized tax benefits. As of March 31, 2024, if such benefits were to be recognized, approximately $59.0 million would be recorded as a component of income tax expense, thereby affecting our effective tax rate.
The amount of income taxes we pay is subject to ongoing audits by federal, state and foreign tax authorities, which often result in proposed assessments. Management performs a comprehensive review of its global tax positions on a quarterly basis and accrues amounts for uncertain tax positions. Based on these reviews and the result of discussions and resolutions of matters with tax authorities and the closure of tax years subject to tax audit, reserves are adjusted as necessary. However, future results may include favorable or unfavorable adjustments to our estimated tax liabilities in the period the assessments are determined or resolved or as statutes are closed. Due to potential resolution of federal, state and foreign examinations, and the lapse of various statutes of limitation, it is reasonably possible our gross unrecognized tax benefits may decrease within the next twelve months by a range of zero to $21.0 million. We recognize interest and penalties related to uncertain tax positions as income tax expense.
The following table summarizes information included in continuing operations related to interest on uncertain tax positions:
  Three months ended March 31,
In millions 2024 2023
Interest expense $ 0.7  $ 0.5 
  March 31,
2024		 December 31,
2023
Accrued interest payable $ 7.0  $ 6.3 
Accrued penalties 2.8  2.8 

In 2021, the Organization for Economic Cooperation and Development (OECD) published Pillar Two Model Rules defining a global minimum tax, which calls for the taxation of large corporations at a minimum rate of 15%. The OECD has since issued administrative guidance providing transition and safe harbor rules around the implementation of the Pillar Two global minimum tax. Effective January 1, 2024, a number of countries have proposed or enacted legislation to implement core elements of the Pillar Two proposal. Pillar Two did not have a significant impact on Glatfelter's first quarter 2024 results. While Glatfelter is monitoring developments and evaluating the potential impact on future periods, Glatfelter does not expect Pillar Two to have a significant impact on its 2024 financial results.
12.INVENTORIES
Inventories, net of reserves, were as follows:
In thousands March 31,
2024		 December 31,
2023
Raw materials $ 83,088  $ 82,012 
In-process and finished 150,126  150,220 
Supplies 66,445  66,016 
Total $ 299,659  $ 298,248 

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13.GOODWILL AND OTHER INTANGIBLE ASSETS
The following table sets forth changes in the amounts of goodwill and other intangible assets recorded by each of our segments during the periods indicated:
In thousands December 31,
2023		 Purchase price allocation adjustment Translation March 31,
2024
Goodwill        
Airlaid Materials $ 107,691  $ —  $ (1,554) $ 106,137 
Total $ 107,691  $ —  $ (1,554) $ 106,137 
Other Intangible Assets December 31,
2023
Amortization
 Translation March 31,
2024
Airlaid Materials
Tradename $ 3,566  $ —  $ (77) $ 3,489 
Accumulated amortization (944) (47) 24  (967)
Net 2,622  (47) (53) 2,522 
 
Technology and related 18,121  —  (379) 17,742 
Accumulated amortization (6,819) (308) 156  (6,971)
Net 11,302  (308) (223) 10,771 
 
Customer relationships and related 43,986  —  (519) 43,467 
Accumulated amortization (17,685) (981) 334  (18,332)
Net 26,301  (981) (185) 25,135 
Spunlace
Products and Tradenames 30,064  —  (2,172) 27,892 
Accumulated amortization (3,452) (403) 284  (3,571)
Net 26,612  (403) (1,888) 24,321 
Technology and related 15,833  —  (1,144) 14,689 
Accumulated amortization (3,146) (332) 222  (3,256)
Net 12,687  (332) (922) 11,433 
Customer relationships and related 30,478  —  (2,201) 28,277 
Accumulated amortization (3,669) (429) 300  (3,798)
Net 26,809  (429) (1,901) 24,479 
Total intangibles 142,048  —  (6,492) 135,556 
Total accumulated amortization (35,715) (2,500) 1,320  (36,895)
Net intangibles $ 106,333  $ (2,500) $ (5,172) $ 98,661 

14.LEASES
We enter into a variety of arrangements in which we are the lessee for the use of automobiles, forklifts and other production equipment, production facilities, warehouses, office space and land. We determine if an arrangement contains a lease at inception. All our lease arrangements are operating leases and are recorded in the condensed consolidated balance sheet under the caption “Other assets” and the lease obligation is under “Other current liabilities” and “Other long-term liabilities.” We do not have any finance leases.
Operating lease right of use (“ROU”) assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. ROU assets also include any initial direct costs incurred and any lease payments made at or before the lease commencement date, less lease incentives received. We use our incremental borrowing rate based on information available at the commencement date in determining the lease liabilities as our leases generally do not provide an implicit rate.
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For purposes of recording the lease arrangement, the term of lease may include options to extend or terminate when we are reasonably certain that the option will be exercised. Lease expense is recognized on a straight-line basis over the lease term.
The following table sets forth information related to our leases as of the periods indicated.

Dollars in thousands March 31,
2024		 December 31,
2023
Right of use asset $ 25,222 $ 24,991
Weighted average discount rate 3.85  % 3.63  %
Weighted average remaining maturity (years)
 19 20
The following table sets forth operating lease expense for the periods indicated:
  March 31,
In thousands 2024 2023
Three months ended $ 1,599  $ 1,825 
The following table sets forth required remaining future minimum lease payments during the years indicated:
In thousands  
2024 $ 4,557 
2025 5,358 
2026 3,059 
2027 2,443 
2028 1,844 
Thereafter 18,847 

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15.LONG-TERM DEBT
Long-term debt is summarized as follows:
In thousands March 31,
2024		 December 31,
2023
Revolving credit facility, due Sep 2026
 $ 119,165  $ 99,450 
4.750% Senior Notes, due Oct 2029
 500,000  500,000 
11.25% Term loan, due Mar 2029
 265,517  271,215 
1.10% Term Loan, due Mar 2024
 —  1,005 
Total long-term debt 884,682  871,670 
Less current portion —  (1,005)
Unamortized deferred issuance costs (16,480) (17,502)
Long-term debt, net of current portion $ 868,202  $ 853,163 

On September 2, 2021, we entered into a restatement agreement as part of a Fourth Amended and Restated $400.0 million Revolving Credit Facility and a €220.0 million Term Loan (collectively, the “Credit Agreement”).
On May 9, 2022, we entered into an amendment to the Credit Agreement, which was further amended on March 30, 2023. The March 30, 2023 amendment to the Credit Agreement reduced the Revolving Credit Facility to $250.0 million and had us fully extinguish the €220.0 million Term Loan. All remaining principal outstanding and accrued interest under the Revolving Credit Facility will be due and payable on September 2, 2026.
The Credit Agreement contains a number of customary covenants for financings of this type that, among other things, restrict our ability to dispose of or create liens on assets, incur additional indebtedness, limits certain intercompany financing arrangements, make acquisitions and engage in mergers or consolidations. The Credit Agreement also contains covenants requiring a minimum debt coverage ratio. As of March 31, 2024, the leverage ratio, as calculated in accordance with the definition in our Credit Agreement, was 3.7x. A breach of these requirements would give rise to certain remedies under the Revolving Credit Facility, among which is the termination of the agreement.
On March 30, 2023, we entered into a €250.0 million Term Loan with certain affiliates of Angelo, Gordon & Co., L.P. (“AG Loan”). The net proceeds from the AG Loan were used to extinguish the €220.0 million Term Loan, to repay a portion of outstanding revolving borrowings under the Revolving Credit Facility, for working capital and general corporate purposes and to pay estimated fees and expenses. The AG Loan will mature on March 23, 2029 and is prepayable, in whole or in part, at any time at the prepayable premium specified in the Term Loan Agreement. Prior to September 30, 2024, we may prepay some or all of the AG Loan at a "make-whole" premium as specified.
On October 25, 2021, we issued $500.0 million aggregate principal amount of 4.750% senior notes due 2029 (the “Notes”). The net proceeds from the offering of the Notes, together with cash on hand, were used to pay the purchase price of the Jacob Holm acquisition, to repay certain indebtedness of Jacob Holm, to repay outstanding revolving borrowings under the Revolving Credit Facility, and to pay estimated fees and expenses. The Notes will mature on November 15, 2029. The Notes are redeemable, in whole or in part, at any time at the redemption prices specified in the Indenture. Prior to November 15, 2024, we may redeem some or all of the Notes at a "make-whole" premium as specified in the Indenture.
Glatfelter Gernsbach GmbH (“Gernsbach”), a wholly-owned subsidiary of ours, entered into a series of borrowing agreements with IKB Deutsche Industriebank AG, Düsseldorf (“IKB”). Each of the borrowings require quarterly repayments of principal and interest and provide for representations, warranties and covenants customary for financings of these types. The financial covenants of these borrowings are calculated by reference to the Credit Agreement. These borrowings were fully extinguished on March 14, 2023.
In 2021, Gernsbach also entered into two fixed-rate non-amortizing term loans with certain financial institutions. Similar to the IKB loans discussed above, the financial covenants of these borrowings are calculated by reference to the Credit Agreement. On February 28, 2023, one of these term loans for €20.0 million was fully extinguished. The remaining term loan matured in March 2024.
Aggregated unamortized deferred debt issuance costs incurred in connection with all of our outstanding debt totaled $16.5 million at March 31, 2024. The deferred costs are being amortized on a straight-line basis over the life of the underlying instruments. Amortization expense related to deferred debt issuance costs totaled $0.9 million and $2.2 million in 2024 and 2023, respectively.
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The following schedule sets forth the amortization of our term loan agreements together with the maturity of our other long-term debt during the indicated year.

In thousands
2025 $ —
2026 119,165
2027 —
2028 —
2029 765,517
Thereafter —

Glatfelter Corporation guarantees all debt obligations of its subsidiaries. All such obligations are recorded in these consolidated financial statements.
As of March 31, 2024 and December 31, 2023, we had $4.1 million and $5.7 million, respectively, of letters of credit issued to us by certain financial institutions. The letters of credit, which reduce amounts available under our Revolving Credit Facility, provide financial assurances for the performance of long-term monitoring activities associated with the Fox River environmental matter and for the benefit of certain state workers compensation insurance agencies in conjunction with our self-insurance program. We bear the credit risk on this amount to the extent that we do not comply with the provisions of certain agreements. No amounts are outstanding under the letters of credit.

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16.FAIR VALUE OF FINANCIAL INSTRUMENTS
The amounts reported on the condensed consolidated balance sheets for cash and cash equivalents, accounts receivable, accounts payable and short-term debt approximate their respective fair value. The following table sets forth carrying value and fair value of long-term debt:
  March 31, 2024 December 31, 2023
In thousands
Carrying
Value
 Fair Value
Carrying
Value
 Fair Value
Revolving credit facility, due Sep 2026
 $ 119,165  $ 119,165  $ 99,450  $ 99,450 
4.750% Senior Notes, due Oct 2029
 500,000  427,500  500,000  346,250 
11.25% Term loan, due Mar 2029
 265,517  273,501  271,215  282,586 
1.10% Term Loan, due Mar 2024
 —  —  1,005  993 
Total $ 884,682  $ 820,166  $ 871,670  $ 729,279 
The values set forth above are based on observable inputs and other relevant market data (Level 2). The fair value of financial derivatives is set forth below in Note 18.

17.FINANCIAL DERIVATIVES AND HEDGING ACTIVITIES
As part of our overall risk management practices, we enter into financial derivatives primarily designed to either i) hedge foreign currency risks associated with forecasted transactions (“cash flow hedges”); ii) mitigate the impact that changes in currency exchange rates have on intercompany financing transactions and foreign currency denominated receivables and payables (“foreign currency hedges”); or iii) convert variable-interest-rate debt to fixed rates.
Derivatives Designated as Hedging Instruments - Cash Flow Hedges We use currency forward contracts as cash flow hedges to manage our exposure to fluctuations in the currency exchange rates on certain forecasted production costs. Currency forward contracts involve fixing the exchange for delivery of a specified amount of foreign currency on a specified date. As of March 31, 2024, the maturity of currency forward contracts ranged from one month to 15 months.
We designate certain currency forward contracts as cash flow hedges of forecasted raw material purchases, certain production costs or capital expenditures with exposure to changes in foreign currency exchange rates. Changes in the fair value of derivatives designated and that qualify as cash flow hedges of foreign exchange risk is deferred as a component of accumulated other comprehensive income in the accompanying condensed consolidated balance sheets. With respect to hedges of forecasted raw material purchases or production costs, the amount deferred is subsequently reclassified into costs of products sold in the period that inventory produced using the hedged transaction affects earnings. For hedged capital expenditures, deferred gains or losses are reclassified and included in the historical cost of the capital asset and subsequently affect earnings as depreciation is recognized.
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We had the following outstanding derivatives that were used to hedge foreign exchange risks associated with forecasted transactions and designated as hedging instruments:
In thousands March 31,
2024		 December 31,
2023
Derivative    
Sell/Buy - sell notional    
Euro / British Pound 15,580 15,210
Philippine Peso / Euro 19,962 137,449
U.S. Dollar / British Pound 14,030 18,470
U.S. Dollar / Euro 344 277
 
Sell/Buy - buy notional
Euro / Philippine Peso 683,231 788,342
British Pound / Philippine Peso 947,687 923,653
Euro / U.S. Dollar 80,444 93,397
U.S. Dollar / Canadian Dollar 32,892 30,914
British Pound / U.S. Dollar 368 2,211
Derivatives Designated as Hedging Instruments – Net Investment Hedge The €220 million Term Loan discussed in Note 16 – “Long-Term Debt” was designated as a net investment hedge of our Euro functional currency foreign subsidiaries and was extinguished on March 30, 2023 in conjunction with the amendment of the Credit Facility. During the first three months of 2023, we recognized a pre-tax loss of $3.7 million on the remeasurement of the term loan from changes in currency exchange rates. Such amounts are recorded as a component of Other Comprehensive Income (Loss).
Derivatives Not Designated as Hedging Instruments - Foreign Currency Hedges We also entered into forward foreign exchange contracts to mitigate the impact changes in currency exchange rates have on balance sheet monetary assets and liabilities. None of these contracts are designated as hedges for financial accounting purposes and, accordingly, changes in value of the foreign exchange forward contracts and in the offsetting underlying on-balance-sheet transactions are reflected in the accompanying condensed consolidated statements of operations under the caption “Other, net.”
The following sets forth derivatives used to mitigate the impact changes in currency exchange rates have on balance sheet monetary assets and liabilities:
In thousands March 31,
2024		 December 31,
2023
Derivative    
Sell/Buy - sell notional    
U.S. Dollar / British Pound 22,000 22,800
British Pound / Euro 3,560 3,500
Japanese Yen / Euro 47,920 —
U.S. Dollar / Swiss Franc 14,942 13,620
British Pound / Swiss Franc 1,250 2,240
Euro / Swiss Franc 4,732 4,940
Euro / U.S. Dollar 11,500 11,000
U.S Dollar / Philippine Peso 7,760 6,700
Sell/Buy - buy notional
Euro / U.S. Dollar 8,700 10,200
British Pound / Euro 11,811 6,470
Swiss Franc / Danish Krone 990 —
U.S. Dollar / Canadian Dollar
 3,120 1,120
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These contracts have maturities of one month from the date originally entered into.
Fair Value Measurements The following table summarizes the fair values of derivative instruments for the period indicated and the line items in the accompanying condensed consolidated balance sheets where the instruments are recorded:
In thousands March 31,
2024		 December 31, 2023 March 31,
2024		 December 31, 2023
Balance sheet caption Prepaid Expenses and Other
Current Assets		 Other
Current Liabilities
Designated as hedging:        
Forward foreign currency exchange contracts $ 1,132  $ 851  $ 130  $ 1,653 
 
Not designated as hedging:
Forward foreign currency exchange contracts $ 40  937  $ 866  $ 155 
The amounts set forth in the table above represent the net asset or liability giving effect to rights of offset with each counterparty. The effect of netting the amounts presented above did not have a material effect on our consolidated financial position.

The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The fair values of the foreign exchange forward contracts are considered to be Level 2. Foreign currency forward contracts are valued using foreign currency forward and interest rate curves. The fair value of each contract is determined by comparing the contract rate to the forward rate and discounting to present value. Contracts in a gain position are recorded in the condensed consolidated balance sheets under the caption “Prepaid expenses and other current assets” and the value of contracts in a loss position is recorded under the caption “Other current liabilities.”
The following table summarizes the amount of income or (loss) from derivative instruments recognized in our results of operations for the periods indicated and the line items in the accompanying condensed consolidated statements of operations where the results are recorded:
  Three months ended
March 31,
In thousands 2024 2023
Designated as hedging:    
Forward foreign currency exchange contracts:    
Cost of products sold $ 165  $ (918)
Interest expense —  — 
 
Not designated as hedging:
Forward foreign currency exchange contracts:
Other – net $ 2,035  $ (234)
The impact of activity not designated as hedging was substantially all offset by the remeasurement of the underlying on-balance-sheet item.
A rollforward of fair value amounts recorded as a component of accumulated other comprehensive loss, before taxes, is as follows:
In thousands 2024 2023
Balance at January 1, $ (808) $ 242 
Deferred gains on cash flow hedges 845  1,021 
Reclassified to earnings 165  (918)
Balance at March 31,
 $ 202  $ 345 
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We expect substantially all of the amounts recorded as a component of accumulated other comprehensive loss will be recorded in results of operations within the next 12 to 18 months and the amount ultimately recognized will vary depending on actual market rates.
Credit risk related to derivative activity arises in the event the counterparty fails to meet its obligations to us. This exposure is generally limited to the amounts, if any, by which the counterparty’s obligations exceed our obligation to them. Our policy is to enter into contracts only with financial institutions which meet certain minimum credit ratings.
18.COMMITMENTS, CONTINGENCIES AND LEGAL PROCEEDINGS
Fox River - Neenah, Wisconsin
Background We have previously reported that we face liabilities associated with environmental claims arising out of the presence of polychlorinated biphenyls (“PCBs”) in sediments in the lower Fox River, on which our former Neenah facility was located, and in the Bay of Green Bay, Wisconsin (collectively, the “Site”). Over the past several years, we and certain other PRPs completed all remedial actions pursuant to applicable consent decrees or a Unilateral Administrative Order. Under the Glatfelter consent decrees, we are primarily responsible for long-term monitoring and maintenance in OU1-OU4a and for reimbursement of government oversight costs paid after October 2018.
The monitoring activities consist of, among others, testing fish tissue, sampling water quality and sediment, and inspections of the engineered caps. In 2018, we entered into a fixed-price, 30-year agreement with a third party for the performance of all of our monitoring and maintenance obligations in OU1 through OU4a with limited exceptions, such as, for extraordinary amounts of cap maintenance or replacement. Our obligation under this agreement is included in our total reserve for the Site. We are obligated to make the regular payments under that fixed-price contract until the remaining amount due is less than the OU1 escrow account balance. We are permitted to pay for this contract using the remaining balance of the escrow account established by us and WTM I Company (“WTM I”) another PRP, under the OU1 consent decree during any period that the balance in the escrow account exceeds the amount due under our fixed-price contract. As of March 31, 2024, the balance in the escrow exceeds the amounts due under the fixed-price contract by approximately $0.4 million. At March 31, 2024, the escrow account balance totaled $9.0 million which is included in the condensed consolidated balance sheet under the caption “Other assets.”
Under the consent decree, we are responsible for reimbursement of government oversight costs paid from October 2018 and later over approximately the next 30 years. We anticipate that oversight costs will decline as activities at the site have transitioned from remediation to long-term monitoring and maintenance.
Reserves for the Site Our reserve for past and future government oversight costs and long-term monitoring and maintenance totaled $12.0 million at March 31, 2024, of which $0.3 million is recorded in the accompanying March 31, 2024 condensed consolidated balance sheet under the caption “Environmental liabilities” and the remaining $11.7 million is recorded under the caption “Other long-term liabilities.”
Range of Reasonably Possible Outcomes Based on our analysis of all available information, including but not limited to decisions of the courts, official documents such as records of decision, discussions with legal counsel, cost estimates for future monitoring and maintenance and other post-remediation costs to be performed at the Site, we do not believe that our costs associated with the Fox River matter could exceed the aggregate amounts accrued by a material amount.
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19.SEGMENT INFORMATION
The following tables set forth financial and other information by segment for the period indicated:
Three months ended
March 31,
Dollars in thousands 2024 2023
Net Sales
Airlaid Material $ 131,529  $ 159,441 
Composite Fibers 116,150  132,591 
Spunlace 80,130  86,723 
Inter-segment sales elimination (553) (547)
Total $ 327,256  $ 378,208 
Operating income (loss)
Airlaid Material $ 4,958  $ 13,914 
Composite Fibers 8,259  6,127 
Spunlace 2,764  (2,023)
Other and unallocated (17,526) (11,905)
Total $ (1,545) $ 6,113 
Depreciation and amortization
Airlaid Material $ 7,664  $ 7,686 
Composite Fibers 3,764  3,965 
Spunlace 3,373  3,092 
Other and unallocated 953  988 
Total $ 15,754  $ 15,731 
Capital expenditures
Airlaid Material $ 2,091  $ 2,082 
Composite Fibers 3,664  3,663 
Spunlace 1,378  2,701 
Other and unallocated 349  1,054 
Total $ 7,482  $ 9,500 
Tons shipped (metric)
Airlaid Material 38,341  39,827 
Composite Fibers 25,002  24,818 
Spunlace 16,091  16,420 
Inter-segment sales elimination (337) — 
Total 79,097  81,065 
Segments Results of individual operating segments are presented based on our management accounting practices and management structure. There is no comprehensive, authoritative body of guidance for management accounting equivalent to accounting principles generally accepted in the United States of America; therefore, the financial results of individual segments are not necessarily comparable with similar information for any other company. The management accounting process uses assumptions and allocations to measure performance of the segments. Methodologies are refined from time to time as management accounting practices are enhanced and businesses change. The costs incurred by support areas not directly aligned with the segment are allocated primarily based on an estimated utilization of support area services or are included in “Other and Unallocated” in the table set forth above.
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Management evaluates results of operations of the operating segments before certain corporate level costs and the effects of certain gains or losses not considered to be related to the core business operations. Management believes that this is a more meaningful representation of the operating performance of its core businesses, the profitability of the segments and the extent of cash flow generated from these core operations. Such amounts are presented under the caption “Other and Unallocated.” In the evaluation of operating segments results, management does not use any measures of total assets. This presentation is aligned with the management and operating structure of our company. It is also on this basis that the Company’s performance is evaluated internally and by the Company’s Board of Directors.

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the information in the unaudited condensed consolidated financial statements and notes thereto included herein and Glatfelter’s Financial Statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our 2023 Annual Report on Form 10-K ("2023 Form 10-K").

Forward-Looking Statements This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact, including statements regarding industry prospects and future consolidated financial position or results of operations, made in this Report on Form 10-Q are forward looking. We use words such as “anticipates”, “believes”, “expects”, “future”, “intends” and similar expressions to identify forward-looking statements. Forward-looking statements reflect management’s current expectations and are inherently uncertain. Our actual results may differ significantly from such expectations. The following discussion includes forward-looking statements all of which are inherently difficult to predict. Although we make such statements based on assumptions that we believe to be reasonable, there can be no assurance that actual results will not differ materially from our expectations. Accordingly, we identify the following important factors, among others, which could cause our results to differ from any results that might be projected, forecasted or estimated in any such forward-looking statements:
i.risks related to the military conflict between Russia and Ukraine and related sanctions and its impact on our production, sales, supply chain, cost of energy, and availability of energy due to natural gas supply issues into Europe;
ii.disruptions of our global supply chain, including the availability of key raw materials and transportation for the delivery of critical inputs and of products to customers, and the increase in the costs of transporting materials and products;
iii.risks associated with our ability to increase selling prices quickly or sufficiently enough to recover rapid cost inflation in our raw materials, energy, freight and other costs, and the potential reduction or loss of sales due to price increases;
iv.variations in demand for our products, including the impact of unplanned market-related downtime, variations in product pricing, or product substitution;
v.the impact of competition, changes in industry production capacity, including the construction of new facilities or new machines, the closing of facilities and incremental changes due to capital expenditures or productivity increases;
vi.risks associated with our international operations, including local economic and political environments and fluctuations in currency exchange rates;
vii.our ability to develop new, high value-added products;
viii.changes in the price or availability of raw materials we use, particularly woodpulp, pulp substitutes, synthetic pulp, other specialty fibers and abaca fiber;
ix.changes in energy-related prices and commodity raw materials with an energy component;
x.the impact of unplanned production interruption at our facilities or at any of our key suppliers;
xi.disruptions in production and/or increased costs due to labor disputes;
xii.the gain or loss of significant customers and/or on-going viability of such customers;
xiii.the impact of war and terrorism;
xiv.the impact of unfavorable outcomes of audits by various state, federal or international tax authorities or changes in pre-tax income and its impact on the valuation of deferred taxes; and
xv.enactment of adverse state, federal or foreign tax or other legislation or changes in government legislation, policy or regulation.

Introduction We manufacture a wide array of engineered materials and manage our company along three operating segments:
•Airlaid Materials with sales of airlaid nonwoven fabric-like materials used in feminine hygiene products, adult incontinence products, tabletop, specialty wipes, home care products and other airlaid applications;
•Composite Fibers with sales of single-serve tea and coffee filtration papers, wallcovering base materials, composite laminate papers, technical specialties including substrates for electrical applications, and metallized products; and
•Spunlace with sales of premium quality spunlace nonwovens for critical cleaning, high-performance materials, personal care, hygiene and medical applications.
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The former Specialty Papers business’ results of operations and financial condition are reported as discontinued operations. Following is a discussion and analysis primarily of the financial results of operations and financial condition of our continuing operations.
As previously announced on February 7, 2024, we entered into certain definitive agreements with Berry Global Group, Inc. (“Berry”) for Berry to spin-off and merge the majority of its Health, Hygiene and Specialties segment including its Global Nonwovens and Films business (“HHNF”) with Glatfelter (the “Merger”). The board of directors of both Berry and Glatfelter have unanimously approved the Merger. The Merger is expected to occur through a series of transactions, including a Reverse Morris Trust transaction such that HHNF will become a wholly owned subsidiary of Glatfelter. Upon completion of the Merger, Berry shareholders will hold 90% of the outstanding shares of Glatfelter and Glatfelter shareholders will continue to hold 10% of the outstanding shares of Glatfelter. The combined company’s Board of Directors will include 6 members chosen by Berry and 3 chosen from Glatfelter’s existing Board of Directors, with Curt Begle, the current president of the Health, Hygiene & Specialties Division of Berry becoming the Chief Executive Officer. The transaction is expected to close in the second half of 2024, subject to Glatfelter shareholder approval and customary closing conditions and regulatory approvals. Prior to the completion of the Merger, Glatfelter and HHNF will continue to operate as independent companies.
RESULTS OF OPERATIONS
Three months ended March 31, 2024 versus the three months ended March 31, 2023
Overview For the first quarter of 2024, we reported a loss from continuing operations of $26.2 million, or $0.58 per share compared with a loss of $13.2 million or $0.29 per share in the same period in 2023. The following table sets forth summarized consolidated results of operations:
  Three months ended March 31,
In thousands, except per share 2024 2023
Net sales $ 327,256  $ 378,208 
Gross profit 34,510  36,214 
Operating income (loss) (1,545) 6,113 
Continuing operations
Loss (26,150) (13,182)
Loss per share (0.58) (0.29)
Net loss (26,347) (13,584)
Loss per share (0.58) (0.30)
The reported results are in accordance with generally accepted accounting principles in the United States (“GAAP”) and reflect the impact of a number of significant items including strategic initiatives, turnaround strategy costs, debt refinancing, and CEO transition costs, among others. Our operating results for the three months ended March 31, 2024 reflect: i) the impact of European market challenges resulting in lower sales volumes, as well as, lower production; ii) higher interest expense stemming from the debt refinancing in the first quarter of 2023; iii) costs incurred related to the merger with Berry’s HHNF business.
In addition to the results reported in accordance with GAAP, we evaluate our performance using financial metrics not calculated in accordance with GAAP, including adjusted earnings and adjusted earnings before interest expense, interest income, income taxes, depreciation and amortization and share-based compensation (“Adjusted EBITDA”). On an adjusted earnings basis, a non-GAAP measure, we had an adjusted loss from continuing operations of $14.9 million, or $(0.33) per share for the first quarter of 2024, compared with a loss of $5.9 million, or $(0.13) per share, a year ago. Our Adjusted EBITDA, also a non-GAAP measure, was $23.8 million for the three months ended March 31, 2024 as compared to $24.8 million for the same period in 2023. We disclose this information to allow investors to evaluate our performance exclusive of certain items that impact the comparability of results from period to period and we believe it is helpful in understanding underlying operating trends and cash flow generation.
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Adjusted earnings consists of net income determined in accordance with GAAP adjusted to exclude the impact of the following:
Strategic initiatives. These adjustments primarily reflect professional and legal fees and other costs incurred which are directly related to evaluating and executing certain strategic initiatives including costs associated with the Berry HHNF merger.
Turnaround Strategy costs. This adjustment reflects costs incurred in connection with the Company's Turnaround Strategy initiated in 2022 under its new chief executive officer to drive operational and financial improvement. These costs are primarily related to professional services fees and employee separation costs.
Debt refinancing costs. Represents charges to write-off unamortized debt issuance costs in connection with the extinguishment of the Company’s €220.0 million Term Loan and IKB loans, as well as the amendment to the Company's credit facility. These costs also include an early repayment penalty related to the extinguishment of the IKB loans.
CEO transition costs. This adjustment reflects a non-cash pension settlement charge associated with the separation of our former CEO related to a lump-sum distribution made in Q1 2023 under the terms of his non-qualified pension plan agreement.
Timberland sales and related costs. These adjustments exclude gains from the sales of timberlands as these items are not considered to be part of our core business, ongoing results of operations or cash flows. These adjustments are irregular in timing and amount and may benefit our operating results.
These adjustments are each unique and not considered to be on-going in nature. The transactions are irregular in timing and amount and may significantly impact our operating performance. As such, these items may not be indicative of our past or future performance and therefore are excluded for comparability purposes.
Adjusted earnings and adjusted EBITDA are considered measures not calculated in accordance with GAAP, and therefore are non-GAAP measures. The non-GAAP financial information should not be considered in isolation from, or as a substitute for, measures of financial performance prepared in accordance with GAAP. The following table sets forth the reconciliation of net loss to adjusted earnings for the periods presented:

Adjusted Earnings Three months ended March 31,
  2024 2023
In thousands, except per share Amount EPS Amount EPS
Net loss $ (26,347) $ (0.58) $ (13,584) $ (0.30)
Exclude: Loss from discontinued operations, net of tax
 197  —  402  (0.01)
Loss from continuing operations (26,150) (0.58) (13,182) (0.29)
Adjustments (pre-tax):
    
Strategic initiatives (1)
 10,910  730   
Turnaround strategy costs (2)
 57  4,483 
Debt refinancing (3)
 —  1,883 
CEO transition costs (4)
 —  633 
Timberland sales and related costs —  (617)  
Total adjustments (pre-tax) 10,967  7,112 
Income taxes (5)
 (11) (3)
Other tax adjustments (6)
 255  207 
Total after-tax adjustments 11,211  0.25  7,316  0.16 
Adjusted loss from continuing operations $ (14,939) $ (0.33) $ (5,866) $ (0.13)

(1)For 2024, reflects primarily professional services fees related to the Berry HHNF merger (including transaction advisory, legal and other consultant costs) of $10.5 million and personnel retention, to offset the risk of potential employee departures due to the pending transaction, and other costs of $0.4 million. For 2023, reflects consulting and legal fees of $0.5 million, employee separation costs of $0.1 million, and other costs of $0.1 million.
(2)For 2024, primarily reflects employee separation costs. For 2023, reflects employee separation costs of $3.3 million and $1.2 million in professional fees.
(3)In 2023, reflects $1.8 million write-off of deferred debt issuance costs in connection with the Company’s debt refinancing and $0.1 million in early repayment penalties and write-off of unamortized financing fees on the IKB Deutsche Industriebank AG, Düsseldorf ("IKB") loans.
(4)In 2023, reflects pension settlement charge related to former CEO separation.
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(5)Tax effect on adjustments calculated based on the incremental effective tax rate of the jurisdiction in which each adjustment originated. For items originating in the U.S., no tax effect is recognized due to the previously established valuation allowance on the net deferred tax assets.
(6)Tax effect of applying certain provisions of the CARES Act of 2020.


The following table sets forth the reconciliation of net loss to adjusted EBITDA for the periods indicated:
Adjusted EBITDA Three months ended
March 31,
In thousands 2024 2023
Net loss $ (26,347) $ (13,584)
Exclude: Loss from discontinued operations, net of tax 197  402 
Add back: Taxes on continuing operations 5,154  3,694 
Depreciation and amortization 15,754  15,731 
Interest expense, net 17,424  12,323 
EBITDA 12,182  18,566 
Adjustments:
Turnaround strategy costs 57  4,483 
Strategic initiatives 10,910  730 
Debt refinancing —  59 
CEO transition costs —  633 
Share-based compensation 671  931 
Timberland sales and related costs —  (617)
Adjusted EBITDA $ 23,820  $ 24,785 
EBITDA is a measure used by management to assess our operating performance and is calculated using
income (loss) from continuing operations and excludes interest expense, interest income, income taxes, and
depreciation and amortization. Adjusted EBITDA is calculated using EBITDA and further excludes certain items management considers to be unrelated to the company’s core operations. The adjustments include, among others, strategic initiative costs, turnaround strategy costs, and share-based compensation expense. Adjusted EBITDA is a performance measure that excludes costs that we do not consider to be indicative of our ongoing operating performance.


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Segment Financial Performance
Three months ended March 31,
Dollars in thousands 2024 2023
Net Sales
Airlaid Material $ 131,529  $ 159,441 
Composite Fibers 116,150  132,591 
Spunlace 80,130  86,723 
Inter-segment sales elimination (553) (547)
Total $ 327,256  $ 378,208 
Operating income (loss)
Airlaid Material $ 4,958  $ 13,914 
Composite Fibers 8,259  6,127 
Spunlace 2,764  (2,023)
Other and unallocated (17,526) (11,905)
Total $ (1,545) $ 6,113 
Depreciation and amortization
Airlaid Material $ 7,664  $ 7,686 
Composite Fibers 3,764  3,965 
Spunlace 3,373  3,092 
Other and unallocated 953  988 
Total $ 15,754  $ 15,731 
Capital expenditures
Airlaid Material $ 2,091  $ 2,082 
Composite Fibers 3,664  3,663 
Spunlace 1,378  2,701 
Other and unallocated 349  1,054 
Total $ 7,482  $ 9,500 
Tons shipped (metric)
Airlaid Material 38,341  39,827 
Composite Fibers 25,002  24,818 
Spunlace 16,091  16,420 
Inter-segment sales elimination (337) — 
Total 79,097  $ 81,065 
Segments Results of individual operating segments are presented based on our management accounting practices and management structure. There is no comprehensive, authoritative body of guidance for management accounting equivalent to accounting principles generally accepted in the United States of America; therefore, the financial results of individual segments are not necessarily comparable with similar information for any other company. The management accounting process uses assumptions and allocations to measure performance of the segments. Methodologies are refined from time to time as management accounting practices are enhanced and businesses change. The costs incurred by support areas not directly aligned with the segment are allocated primarily based on an estimated utilization of support area services or are included in “Other and Unallocated” in the table set forth above.
Management evaluates results of operations of the operating segments before certain corporate level costs and the effects of certain gains or losses not considered to be related to the core business operations. Management believes that this is a more meaningful representation of the operating performance of its core businesses, the profitability of the segments and the extent of cash flow generated from these core operations.
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Such amounts are presented under the caption “Other and Unallocated.” In the evaluation of operating segments results, management does not use any measures of total assets. This presentation is aligned with the management and operating structure of our company. It is also on this basis that the Company’s performance is evaluated internally and by the Company’s Board of Directors.

Sales and Costs of Products Sold
  Three months ended March 31,  
In thousands 2024 2023 Change
Net sales $ 327,256  $ 378,208  $ (50,952)
Costs of products sold 292,746  341,994  (49,248)
Gross profit $ 34,510  $ 36,214  $ (1,704)
Gross profit as a percent of Net sales 10.5  % 9.6  %  
The following table sets forth the contribution to consolidated net sales by each segment:
  Three months ended March 31,
Percent of Total 2024 2023
Segment
Airlaid Materials 40.2  % 42.1  %
Composite Fibers 35.3  35.0 
Spunlace 24.5  22.9 
Total 100.0  % 100.0  %
Net sales totaled $327.3 million and $378.2 million in the three months ended March 31, 2024 and 2023, respectively. Net sales for Airlaid Materials, Composite Fibers and Spunlace decreased by 18.0%, 13.1% and 7.9%, respectively, on a constant currency basis.

Airlaid Materials’ first quarter net sales decreased $27.9 million in the year-over-year comparison mainly driven by lower selling prices from cost pass-through arrangements and lower energy surcharges in Europe as both raw materials and energy input costs declined compared to last year. Shipments were 3.7% lower driven by declines in the hygiene categories mainly due to pricing actions taken in 2023 to retain margins in this category. Currency translation was favorable by $0.7 million.

Airlaid Materials’ 2024 first quarter operating income of $5.0 million was $9.0 million lower than the first quarter operating income in 2023. Lower shipments and product mix negatively impacted results by $1.8 million. Selling price decreases and lower energy surcharges of $20.3 million offset lower raw material, energy, and other inflationary costs of $17.9 million. For the first quarter of 2024, primary raw material input costs decreased by $15.3 million, or 19%. Energy costs decreased by $2.0 million, or 20%, compared to 2023. As of March 31, 2024, Airlaid Materials had approximately 77% of its net sales with contracts with pass-through provisions. Operations and other costs were unfavorable by $3.7 million mainly driven by lower production and higher wage inflation. The impact of currency and related hedging negatively impacted earnings by $1.0 million. The primary drivers of the change in Airlaid Materials’ operating income are summarized in the following chart (presented in millions):

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32472

Composite Fibers’ net sales were $16.4 million lower in the first quarter of 2024, compared to 2023 due to lower selling prices of $11.1 million. Even though shipments were higher 0.7%, it was largely driven by composite laminates category that have lower average selling prices compared to other inclined wire products lowering the revenue for the quarter. Currency translation was favorable by $0.9 million.

Composite Fibers 2024 first quarter operating income of $8.3 million was $2.1 million higher than the first quarter operating income in 2023. The price-cost gap continued to trend positive this quarter as the decrease in input prices paid for raw materials, energy, freight, and packaging were more favorable than selling price declines, resulting in earnings improvement of $2.5 million. First quarter energy costs were lower by $2.9 million, or 12% compared to 2023 while primary raw material input costs decreased by $10.6 million, or 7%, compared to 2023. As of March 31, 2024, Composite Fibers had approximately 46% of its net sales with contracts with pass-through provisions. Operations and other costs were unfavorable by $0.5 million mainly driven by lower production. The impact of currency and related hedging negatively impacted earnings by $0.2 million. The primary drivers of the change in Composite Fibers’ operating income are summarized in the following chart (presented in millions):
34630
Spunlace’s net sales were $6.6 million lower in the first quarter of 2024 compared to 2023, mainly driven by lower selling prices of $4.2 million due to cost pass-through arrangements and lower year over year shipments of 2.0%. Currency translation was slightly favorable by $0.2 million.

Spunlace's 2024 first quarter operating income of $2.8 million was $4.8 million higher compared to the operating loss of $2.0 million in 2023. Lower selling prices and energy surcharges were unfavorable by $4.2 million but were more than fully offset by lower raw material and energy costs of $7.4 million. In the first quarter of 2024, primary raw material input costs decreased by $7 million, or 16% while energy costs were lower 6% compared to 2023. As of March 31, 2024, Spunlace had approximately 49% of its net sales with contracts with pass-through provisions. Operations and others were favorable by $2.2 million as actions taken to improve operations, reduce overall spending, and headcount actions provided positive results.
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The impact of currency and related hedging negatively impacted earnings by $0.2 million. The primary drivers of the change in Spunlace’s operating income are summarized in the following chart (presented in millions):
36134
Other and Unallocated The amount of operating expense not allocated to a reporting segment in the Segment Financial Information totaled $17.5 million in the first quarter of 2024 compared with $11.9 million in the same period a year ago. Excluding the items identified to present “adjusted earnings,” unallocated expenses for the first quarter of 2024 decreased $0.7 million compared to the first quarter of 2023 mainly driven by lower professional services costs.

Income taxes In the first quarter of 2024, our U.S. GAAP pre-tax loss from continuing operations totaled $21.0 million and we recorded an income tax provision of $5.2 million, which primarily related to the tax provision for foreign jurisdictions, reserves for uncertain tax positions, and valuation allowances for domestic and foreign jurisdiction losses for which no tax benefit could be recognized. The comparable amounts in the same quarter of 2023 were a pre-tax loss of $9.5 million and an income tax provision of $3.7 million.
Foreign Currency We own and operate facilities in Canada, Germany, France, the United Kingdom, Spain, and the Philippines. The functional currency of our Canadian operations is the U.S. dollar. However, in Germany, France and Spain, it is the euro, in the UK, it is the British pound sterling, and in the Philippines the functional currency is the peso. On an annual basis, our euro denominated net sales exceeds euro expenses by an estimated €190 million. For the three months ended March 31, 2024, the average currency exchange rate was 1.09 dollar/euro compared with 1.01 in the same period of 2023. With respect to the British pound sterling, Canadian dollar, and Philippine peso, we have differing amounts of inflows and outflows of these currencies, although to a lesser degree than the euro. As a result, we are exposed to changes in currency exchange rates and such changes could be significant. The translation of the results from international operations into U.S. dollars is subject to changes in foreign currency exchange rates.
The table below summarizes the translation impact on reported results that changes in currency exchange rates had on our non-U.S. based operations from the conversion of these operation’s results for the first quarter of 2024.
In thousands Three months ended
March 31,
  Favorable
(unfavorable)
 
Net sales $ 1,866 
Costs of products sold (2,749)
SG&A expenses (105)
Income taxes and other (27)
Net loss $ (1,015)
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The above table only presents the financial reporting impact of foreign currency translations assuming currency exchange rates in 2024 were the same as 2023. It does not present the impact of certain competitive advantages or disadvantages of operating or competing in multi-currency markets.
LIQUIDITY AND CAPITAL RESOURCES
Our business requires significant expenditures for new or enhanced equipment, to support our research and development efforts, and to support our business strategy. In addition, we have mandatory debt service requirements of both principal and interest. The following table summarizes cash flow information for each of the periods presented:

  Three months ended March 31,
In thousands 2024 2023
Cash, cash equivalents and restricted cash at the beginning of period $ 55,360  $ 119,162 
Cash provided (used) by
Operating activities (33,485) (30,632)
Investing activities (7,480) (8,787)
Financing activities 20,839  15,179 
Effect of exchange rate changes on cash (882) 1,266 
Change in cash and cash equivalents from discontinued operations (144) (11)
Net cash used (21,152) (22,985)
Cash, cash equivalents and restricted cash at the end of period 34,208  96,177 
Less: restricted cash in Prepaid and other current assets (4,027) (3,600)
Less: restricted cash in Other assets —  (3,936)
Cash and cash equivalents at the end of period $ 30,181  $ 88,641 
At March 31, 2024, we had $30.2 million in cash and cash equivalents (“cash”) held by both domestic and foreign subsidiaries. Approximately 99.6% of our cash and cash equivalents is held by our foreign subsidiaries but could be repatriated without incurring a significant amount of additional taxes.
Cash used by operating activities in the first three months of 2024 totaled $33.5 million compared with $30.6 million in the same period a year ago. The increase in cash used was primarily due to an increase in interest paid of $5.4 million due to the higher interest rates on our debt stemming from the debt refinancing in the first quarter of 2023, an increase in working capital usage of approximately $2.1 million and income taxes paid of $1.1 million. Operating cash improved $5.8 million primarily due to a lump-sum payment in Q1 2023 to our former CEO under the terms of his non-qualified pension plan.
Net cash used by investing activities was $7.5 million in the first three months of 2024 compared with $8.8 million in the same period a year ago. Capital expenditures totaled $7.5 million and $9.5 million for the three months ended March 31, 2024 and 2023, respectively. Capital expenditures are expected to total between $35 million and $40 million in 2024.
Net cash provided by financing activities totaled $20.8 million in the first three months of 2024 compared with $15.2 million in the same period of 2023. The change in financing activities primarily reflects additional borrowings under our existing revolving credit facility . In 2023, we entered into a €250.0 million Term Loan in which the proceeds were used to fully extinguish the €220.0 million Term Loan, the IKB term loans and reduced the revolving credit facility balance.
As discussed in Item 1 - Financial Information, Note - 15, our Credit Agreement and AG Loan contains a number of customary compliance covenants. As of March 31, 2024, the leverage ratio, as calculated in accordance with the definition in our Credit Agreement and AG Loan, was 3.7x, well within the maximum limit. A breach of these requirements would give rise to certain remedies under the Credit Agreement and AG Loan, among which are the termination, and accelerated repayment of the outstanding borrowings plus accrued and unpaid interest. As discussed in Note 15 - “Long Term Debt,” on March 30, 2023, we amended our Credit Agreement to permit the maximum leverage ratio (calculated as consolidated senior secured debt to consolidated adjusted EBITDA) to be 4.25 to 1.0 through the quarter ended December 31, 2024, stepping down to 4.0 to 1.0 at March 31, 2025, and 3.50 to 1.0 at March 31, 2026.
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Details of our outstanding long-term indebtedness are set forth under Item 1 - Financial Statements – Note 15 -“Long-Term Debt."
Our Board of Directors determines what, if any, dividends will be paid to our shareholders. Since the third quarter of 2022, our Board of Directors suspended the Company’s quarterly cash dividend to focus efforts on optimizing the operational and financial results of the business. As such, we paid no cash dividends in the first three months of 2024 or 2023.
We are subject to various federal, state and local laws and regulations intended to protect the environment, as well as human health and safety. At various times, we have incurred significant costs to comply with these regulations and we could incur additional costs as new regulations are developed or regulatory priorities change.
At March 31, 2024, we had ample liquidity consisting of $30.2 million of cash on hand and $53.4 million of capacity under our revolving credit facility. We expect to meet all of our near and long-term cash needs from a combination of operating cash flow, cash and cash equivalents, our existing credit facility and other long-term debt.

Off-Balance-Sheet Arrangements As of March 31, 2024 and December 31, 2023, we had not entered into any off-balance-sheet arrangements. Financial derivative instruments, to which we are a party, and guarantees of indebtedness, which solely consist of obligations of subsidiaries, are reflected in the condensed consolidated balance sheets included herein in Item 1 – Financial Statements.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS
  Year Ended December 31 March 31, 2024
 In thousands, except percentages 2024 2025 2026 2027 2028 Carrying Value Fair Value
Long-term debt              
Average principal outstanding              
At variable interest rates $ 119,165 $ 119,165 $ 80,314 $ 119,165  $ 119,165 
At fixed interest rates 764,870 764,870 764,870 764,870 764,870 765,517  701,001 
  $ 884,682  $ 820,166 
Weighted-average interest rate
On variable rate debt 8.37  % 8.37  % 8.37  %
On fixed rate debt 7.00  % 7.00  % 7.00  % 7.00  % 7.00  %
Our market risk exposure primarily results from changes in interest rates and currency exchange rates. The table above presents the average principal outstanding and related interest rates for the next five years for debt outstanding as of March 31, 2024. Fair values included herein have been determined based upon rates currently available to us for debt with similar terms and remaining maturities.
At March 31, 2024, we had $884.7 million of long-term debt, of which $119.2 million, or 13.5%, was at variable interest rates. Variable-rate debt represents borrowings under our credit agreement. The fixed-rate Term Loans are euro-based borrowings and thus the value of which is also subject to currency risk. Variable-rate debt outstanding represents borrowings under our revolving credit agreement and a euro-denominated term loan which accrue interest based on one-month LIBOR plus a margin.
At March 31, 2024, the weighted-average interest rate paid was equal to 8.34%. A hypothetical 100 basis point increase in the interest rate on variable rate debt would increase annual interest expense by $1.2 million. In the event rates are 100 basis points lower, interest expense would be $1.2 million lower.
As part of our overall risk management practices, we enter into financial derivatives primarily designed to either i) hedge currency risks associated with forecasted transactions – “cash flow hedges”; or ii) mitigate the impact that changes in currency exchange rates have on intercompany financing transactions and foreign currency denominated receivables and payables – “foreign currency hedges.” For a more complete discussion of this activity, refer to Item 8 – Financial Statements and Supplementary Data – Note 17 - “Financial Derivatives and Hedging Activities.”
We are subject to certain risks associated with changes in foreign currency exchange rates to the extent our operations are conducted in currencies other than the U.S. dollar. On an annual basis, our euro denominated net sales is estimated to exceed euro expenses by approximately €170 million. With respect to the British pound sterling, Canadian dollar, and Philippine peso, we have greater outflows than inflows of these currencies, although to a lesser degree. As a result, particularly with respect to the euro, we are exposed to changes in currency exchange rates and such changes could be significant.
Critical Accounting Estimates
The preceding discussion and analysis of our consolidated financial position and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, net sales and expenses, and related disclosures of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related to long-lived assets, environmental liabilities, and income taxes. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. We believe that our policies for long- and indefinite-lived assets, environmental liabilities and income taxes represent the most significant and subjective estimates used in the preparation of our consolidated financial statements and are therefore considered our critical accounting policies and estimates.
During the three months ended March 31, 2024, there were no changes in our critical accounting policies or estimates. See Note 2 — Accounting Policies, of the Condensed Consolidated Financial Statements included elsewhere in this Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the SEC, for additional information regarding our critical accounting policies.
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Long- and indefinite-lived Assets We evaluate the recoverability of our long- and indefinite-lived assets, including plant, equipment, timberlands, goodwill, and other intangible assets periodically or whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. Goodwill is reviewed for impairment annually during the fourth quarter, or more frequently if impairment indicators are present.

The fair value of our reporting units, which are also our operating segments, is determined using a market approach and a discounted cash flow model. Our evaluations include a variety of qualitative factors and analyses based on estimates of future cash flows expected to be generated from the use of the underlying assets, trends or other determinants of fair value. If the value of an asset determined by these evaluations is less than its carrying amount, a loss is recognized for the difference between the fair value and the carrying value of the asset. At March 31, 2024, Airlaid Materials was our only operating segment with goodwill. Our Airlaid Materials segment’s fair value exceeded its carrying value at the time of its last valuation performed in connection with the last annual impairment test in the fourth quarter of 2023 by approximately 19%. Airlaid Material’s fair value, as well as the asset groups within each of our operating segments, could be impacted by factors such as unexpected changes in market demand for our products, the impact of competition, and the inability to successfully adjust selling prices in response to changes in inflation, among other factors. Future adverse changes such as these or in market conditions or poor operating results of the related business may indicate an inability to recover the carrying value of the assets, thereby possibly requiring an impairment charge in the future.


ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures Our Chief Executive Officer and our principal financial officer, after evaluating the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of March 31, 2024, have concluded that, as of the evaluation date, our disclosure controls and procedures are effective.
Changes in Internal Controls There were no changes in our internal control over financial reporting during the three months ended March 31, 2024 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

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PART II – OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS

See the discussion of legal proceedings contained in Note 18 - “Commitments, Contingencies and Legal Proceedings” to our unaudited consolidated financial statements in Part I, Item 1 of this report, which is incorporated herein by reference.

ITEM 5. OTHER INFORMATION
During the three months ended March 31, 2024, none of the Company’s directors or “officers,” as defined in Rule 16a-1(f) of the Exchange Act, adopted, modified, or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408 of Regulation S-K.



























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ITEM 6. EXHIBITS
The following exhibits are filed or furnished herewith or incorporated by reference as indicated.
Incorporated by reference to
2.1
Ex. 2.1 to Form 8-K amendment filed February 12, 2024
2.2
Ex. 2.2 to Form 8-K amendment filed February 12, 2024
3.1
Ex. 3.2 to Form 8-K
filed November 18,
2022
3.2
10.1
Ex. 10.1 to Form 8-K amendment filed February 12, 2024
10.2
Ex. 10.2 to Form 8-K amendment filed February 12, 2024
10.3
Ex. 10.1 to Form 8-K filed April 11, 2024
10.4
Ex. 10.2 to Form 8-K filed April 11, 2024
10.5
10.6
10.7
10.8
31.1
31.2
32.1
32.2
101.INS Inline XBRL Instance Document – the instance document does not appear in the Interactive Data file because its iXBRL tags are embedded within the Inline XBRL document.
101.SCH Inline XBRL Taxonomy Extension Schema.
101.CAL Inline XBRL Extension Calculation Linkbase.
101.DEF Inline XBRL Extension Definition Linkbase.
101.LAB Inline XBRL Extension Label Linkbase.
101.PRE Inline XBRL Extension Presentation Linkbase.
104 Cover Page Interactive Data File (formatted as an inline XBRL and contained in Exhibit 101).

- 39 -


*Certain schedules (or similar attachments) have been omitted pursuant to Item 601(a)(5) or Item 601(b)(2) of Regulation S-K. The registrant agrees to furnish copies of such schedules (or similar attachments) to the U.S. Securities and Exchange Commission upon request.

**Management contract or compensatory plan Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
- 40 -


SIGNATURES
 
Glatfelter Corporation
(Registrant)
     
May 9, 2024    
     
  By /s/ David C. Elder
     David C. Elder
   
Vice President, Strategic Initiatives, Business Optimization, & Chief Accounting Officer
(Principal accounting officer)
- 41 -

EX-3.2 2 glt-amendedandrestatedby.htm EX-3.2 glt-amendedandrestatedby
GLATFELTER CORPORATION (a Pennsylvania corporation) AMENDED AND RESTATED BYLAWS (Amended and Restated as of December 15, 2023)

 
TABLE OF CONTENTS Page -i- DB1/ 137055127.2 ARTICLE I MEETINGS OF SHAREHOLDERS AND RECORD DATE ............................ 1 1.1 ANNUAL MEETING ............................................................................................ 1 1.2 SPECIAL MEETINGS .......................................................................................... 1 1.3 PLACE OF SHAREHOLDERS’ MEETINGS ...................................................... 1 1.4 NOTICE ................................................................................................................. 2 1.5 QUORUM .............................................................................................................. 2 1.6 RECORD DATES ................................................................................................. 2 1.7 VOTING ................................................................................................................ 2 1.8 CONSIDERATION OF DIRECTOR NOMINATIONS AND BUSINESS AT SHAREHOLDERS’ MEETINGS ................................................................... 2 1.9 ADVANCE NOTICE OF SHAREHOLDER NOMINATIONS AND OTHER BUSINESS .............................................................................................. 4 1.10 SUBMISSION OF QUESTIONNAIRE, REPRESENTATION AND AGREEMENT ..................................................................................................... 13 1.11 SHAREHOLDER REQUESTED SPECIAL MEETINGS ................................. 14 1.12 POSTPONEMENT AND CANCELLATION OF MEETINGS ......................... 16 1.13 ORGANIZATION ............................................................................................... 17 ARTICLE II DIRECTORS ..................................................................................................... 17 2.1 NUMBER ............................................................................................................ 17 2.2 TERM .................................................................................................................. 17 2.3 AGE QUALIFICATION ..................................................................................... 17 2.4 ELECTION OF DIRECTORS ............................................................................. 18 2.5 RESIGNATIONS ................................................................................................ 18 2.6 VACANCIES ....................................................................................................... 18 2.7 REMOVAL OF DIRECTORS ............................................................................ 19 2.8 ANNUAL MEETING .......................................................................................... 19 2.9 REGULAR MEETINGS ..................................................................................... 19 2.10 SPECIAL MEETINGS ........................................................................................ 19 2.11 MEETINGS OF INDEPENDENT DIRECTORS ............................................... 19 2.12 QUORUM AND ACTION BY UNANIMOUS CONSENT............................... 20 2.13 COMPENSATION .............................................................................................. 20

 
TABLE OF CONTENTS (continued) Page -ii- 2.14 COMMITTEES.................................................................................................... 20 2.15 PARTICIPATION IN MEETINGS BY COMMUNICATIONS EQUIPMENT ...................................................................................................... 20 2.16 LIABILITY OF DIRECTORS ............................................................................ 20 2.17 OFFICERS ........................................................................................................... 20 2.18 TERM .................................................................................................................. 21 2.19 AUTHORITY, DUTIES AND COMPENSATION ............................................ 21 2.20 CHAIR OF THE BOARD ................................................................................... 21 2.21 CHIEF EXECUTIVE OFFICER ......................................................................... 21 2.22 PRESIDENT ........................................................................................................ 21 2.23 VICE PRESIDENT .............................................................................................. 21 2.24 SECRETARY ...................................................................................................... 21 2.25 TREASURER ...................................................................................................... 21 ARTICLE III INDEMNIFICATION ....................................................................................... 21 3.1 MANDATORY INDEMNIFICATION OF DIRECTORS, OFFICERS AND OTHER PERSONS .................................................................................... 22 3.2 ADVANCEMENT OF EXPENSES .................................................................... 23 3.3 EMPLOYEE BENEFIT PLANS ......................................................................... 23 3.4 EXCEPTIONS ..................................................................................................... 23 3.5 SECURITY FOR INDEMNIFICATION OBLIGATIONS ................................ 24 3.6 CONTRACT RIGHTS......................................................................................... 24 3.7 RELIANCE UPON PROVISIONS ..................................................................... 24 3.8 AMENDMENT OR REPEAL ............................................................................. 24 3.9 NON-EXCLUSIVITY OF RIGHTS.................................................................... 24 3.10 CONTINUATION OF RIGHTS.......................................................................... 25 3.11 NO IMPUTATION .............................................................................................. 25 3.12 ENFORCEMENT OF RIGHTS .......................................................................... 25 ARTICLE IV STOCK CERTIFICATES AND CORPORATE SEAL .................................... 25 4.1 EXECUTION ....................................................................................................... 25 4.2 SEAL.................................................................................................................... 25

 
TABLE OF CONTENTS (continued) Page -iii- ARTICLE V NOTICES .......................................................................................................... 26 5.1 FORM OF NOTICE ............................................................................................ 26 5.2 ADJOURNED SHAREHOLDER MEETINGS .................................................. 26 5.3 WAIVER OF NOTICE ........................................................................................ 26 ARTICLE VI AMENDMENTS ............................................................................................... 26 6.1 AMENDMENTS ................................................................................................. 26 ARTICLE VII EMERGENCY BYLAWS ................................................................................ 27 7.1 WHEN OPERATIVE .......................................................................................... 27 7.2 MEETINGS ......................................................................................................... 27 7.3 LINES OF SUCCESSION ................................................................................... 27 7.4 OFFICES.............................................................................................................. 28 7.5 LIABILITY .......................................................................................................... 28 7.6 REPEAL OR CHANGE ...................................................................................... 28 ARTICLE VIII PENNSYLVANIA ACT 36 OF 1990 ............................................................... 28 8.1 NON-APPLICABILITY OF PENNSYLVANIA’S CONTROL-SHARE ACQUISITION STATUTE ................................................................................. 28 8.2 NON-APPLICABILITY OF PENNSYLVANIA’S DISGORGEMENT STATUTE ............................................................................................................ 28 ARTICLE IX FORUM SELECTION ...................................................................................... 28 9.1 EXCLUSIVE FORUM ........................................................................................ 28

 
GLATFELTER CORPORATION (a Pennsylvania corporation) AMENDED AND RESTATED BYLAWS (Amended and Restated as of April 5, 2023) ARTICLE I MEETINGS OF SHAREHOLDERS AND RECORD DATE 1.1 ANNUAL MEETING. An annual meeting of the shareholders of Glatfelter Corporation (the “Company”) for the election of directors and the transaction of such other business as may properly come before the meeting in accordance with these Bylaws, the Company’s Articles of Incorporation, as amended (the “Articles of Incorporation”), the Pennsylvania Business Corporation Law of 1988, as amended (the “PBCL”), and other applicable law shall be held on the date (which date shall not be a legal holiday in the place where the meeting is to be held, and if held over the Internet or other electronic technology, which date shall not be a federal holiday) and at the time as shall be designated, from time to time, by (i) resolution of the Board of Directors (the “Board” or the “Board of Directors”) adopted by a majority of the total number of authorized directors (whether or not there exist any vacancies in previously authorized directorships at the time such resolution is presented to the Board of Directors for adoption), (ii) resolution of a duly authorized committee of the Board of Directors, or (iii) the Chair of the Board of Directors, if delegated that authority by a resolution of the Board of Directors adopted by a majority of the total number of authorized directors (whether or not there exist any vacancies in previously authorized directorships at the time any such resolution is presented to the Board of Directors for adoption) and which shall be stated in the notice of meeting. The date and time of the annual meeting may subsequently be changed in the same manner as is required to fix the original date and time of the annual meeting. Any and all references hereafter in these Bylaws to an annual meeting or annual meetings also shall be deemed to refer to any special meeting(s) in lieu thereof. 1.2 SPECIAL MEETINGS. Special meetings of the shareholders may be called at any time for any purpose or purposes, (i) by the Board of Directors pursuant to a resolution adopted by a majority of the total number of authorized directors (whether or not there exist any vacancies in previously authorized directorships at the time such resolution is presented to the Board of Directors for adoption), or (ii) by the Secretary of the Company, upon the written request of the record shareholders of the Company as of the record date fixed in accordance with Section 1.9 of these Bylaws who hold, in the aggregate, not less than twenty percent (20%) of the outstanding shares of the Company that would be entitled to vote at the meeting (the “Requisite Percentage”) at the time such request is submitted by the holders of such Requisite Percentage, subject to and in accordance with Section 1.9 of these Bylaws. 1.3 PLACE OF SHAREHOLDERS’ MEETINGS. The Board of Directors, may, in its sole discretion, designate the place of meeting, within or without the Commonwealth of Pennsylvania, for any meeting of the shareholders (or, if not so designated, the place of the meeting shall be the principal office of the Company) or may, in its sole discretion, determine that a shareholder meeting shall not be held at any physical place, but shall instead be held by means of

 
2 the Internet or other electronic communications technology in accordance with Section 1704 of the PBCL. 1.4 NOTICE. Written notice stating the place, day and hour of each meeting of shareholders and, in the case of a special meeting, the general nature of the business to be transacted at such meeting shall be given by the Secretary of the Company or other duly authorized officer of the Company at least ten (10) calendar days before the meeting to each shareholder of record entitled to vote at the meeting. 1.5 QUORUM. Except as otherwise provided in the Articles of Incorporation, the presence in person or by proxy of shareholders entitled to cast at least a majority of the votes which all shareholders are entitled to cast on a particular matter shall constitute a quorum for the purpose of considering such matter at a meeting of shareholders, but less than a quorum may adjourn from time to time to reconvene at such time and place as they may determine. 1.6 VOTING. (a) Voting on Actions Other Than Director Elections. Whenever any action other than the election of directors is proposed to be taken by vote of the shareholders, except as otherwise expressly required by law, in the Articles of Incorporation or in these Bylaws, it shall be authorized by the affirmative vote of a majority of the votes cast in person or by proxy at the meeting of shareholders by the holders of shares entitled to vote thereon and shall constitute an act of the shareholders. (b) One Vote Per Share. Except as otherwise provided by the Articles of Incorporation, each shareholder of the Company entitled to vote on any matter at any meeting of shareholders shall be entitled to one vote for every such share standing in such shareholder’s name on the record date for the meeting. 1.7 RECORD DATES. The Board of Directors may fix a time not more than ninety (90) calendar days prior to the date of any meeting of shareholders, or the date fixed for the payment of any dividend or distribution, or the date for the allotment of rights, or the date when any change or conversion or exchange of shares will be made or go into effect, as a record date for the determination of the shareholders entitled to notice of or to vote at any such meeting, or to receive payment of any such dividend or distribution, or to receive any such allotment of rights, or to exercise the rights in respect to any such change, conversion or exchange of shares. In such case, only such shareholders as shall be shareholders of record at the close of business on the date so fixed shall be entitled to notice of or to vote at such meeting, or to receive payment of such dividend or distribution, or to receive such allotment of rights, or to exercise such rights in respect to any change, conversion or exchange of shares, as the case may be, notwithstanding any transfer of any shares on the books of the Company after the record date so fixed. 1.8 CONSIDERATION OF DIRECTOR NOMINATIONS AND BUSINESS AT SHAREHOLDERS’ MEETINGS. (a) Annual Meetings of Shareholders. At any annual meeting of the shareholders, only such nominations of individuals for election to the Board of Directors shall be made, and only such

 
3 other business shall be conducted or considered, as shall have been properly brought before the meeting in accordance with these Bylaws, the Articles of Incorporation, the PBCL and other applicable law. (i) For nominations of individuals for election to the Board of Directors or proposals of other business to be properly requested by a shareholder to be made at an annual meeting, a shareholder must (i) be a shareholder of record at the time of delivering the advance notice to the Company contemplated by Section 1.9 of these Bylaws, on the record date for the determination of shareholders entitled to notice of and to vote at the annual meeting, at the time of giving of notice of such annual meeting by or at the direction of the Board of Directors (or any duly authorized committee thereof), and at the time of the annual meeting, (ii) be entitled to vote at such annual meeting, and (iii) comply with the procedures set forth in these Bylaws as to such proposed business or nominations. This Section 1.8(a) shall be the exclusive means for a shareholder to make nominations or other business proposals (other than matters properly brought under Rule 14a-8 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and included in the Company’s notice of meeting) before an annual meeting of shareholders. (ii) For nominations of individuals for election to the Board of Directors to be properly made at an annual meeting, and proposals of other business to be properly brought before an annual meeting, nominations and proposals of other business must be: (a) specified in the Company’s notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors (or any duly authorized committee thereof), (b) otherwise properly made at the annual meeting, by or at the direction of the Board of Directors (or any duly authorized committee thereof), or (c) otherwise properly brought before the annual meeting by a shareholder of the Company Present in Person (as defined below) in accordance with these Bylaws . In addition, for proposals of business, including those relating to the composition of the Board of Directors, to be properly brought before an annual meeting for action by the Company’s shareholders, they must relate to an item of business that (i) is a proper subject for shareholder action under the Articles of Incorporation, these Bylaws, the PBCL and other applicable law; and (ii) is not expressly reserved for action by the Board of Directors under the Articles of Incorporation, these Bylaws, the PBCL or other applicable law. For purposes of these Bylaws, “Present in Person” shall mean that the shareholder proposing that the business be brought before a meeting, or, if the proposing shareholder is not an individual, a qualified representative of such proposing shareholder, appear in person at such meeting (unless such meeting is held by means of the Internet or other electronic technology in which case the proposing shareholder or its qualified representative shall be present at such annual meeting by means of the Internet or other electronic technology). A “qualified representative” of such proposing shareholder shall be, if such proposing shareholder is (i) a general or limited partnership, any general partner or person who functions as a general partner of the general or limited partnership or who controls the general or limited partnership, (ii) a corporation or a limited liability company, any officer or person who functions as an officer of the corporation or limited liability company or any officer, director, general partner or person who functions as an officer, director or general partner of any entity ultimately in control of the corporation or limited liability company, or (iii) a trust, any trustee of such trust. (b) Special Meetings of Shareholders. At any special meeting of the shareholders, only such business shall be conducted or considered as shall have been properly brought before the special meeting. For business to be properly brought before a special meeting, it must be (i)

 
4 specified in the Company’s notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors (or any duly authorized committee thereof), (ii) otherwise properly brought before the special meeting, by or at the direction of the Board of Directors (or any duly authorized committee thereof), (iii) with respect to the election of directors, provided that the Board of Directors has called a special meeting of shareholders for the purpose of electing one or more directors to the Board, by any shareholder of the Company Present In Person who complies in all respects with the advance notice and other procedures set forth in these Bylaws relating to bringing such nominations before a special meeting, including, but not limited to, Section 1.9 hereof, or (iv) specified in the Company’s notice of meeting (or any supplement thereto) given by the Company pursuant to a valid shareholder request that the Company call a special meeting of shareholders (a “Shareholder Requested Special Meeting”) in accordance with Sections 1.2 and 1.9 of these Bylaws, it being understood that business brought before such a Shareholder Requested Special Meeting by the shareholders shall be limited to the matters stated in such valid shareholder request; provided, however, that nothing herein shall prohibit the Board of Directors (or any duly authorized committee thereof) from submitting additional matters to shareholders at any such Shareholder Requested Special Meeting. In addition, for proposals of business to be properly brought before a special meeting, they must (i) relate to an item of business that is a proper subject for shareholder action under the Articles of Incorporation, these Bylaws, the PBCL and other applicable law; and (ii) not be expressly reserved for action by the Board of Directors under the Articles of Incorporation, these Bylaws, the PBCL or other applicable law. Nominations of individuals for election to the Board of Directors may be made at a special meeting of shareholders if they are brought before the meeting (a) pursuant to the Company’s notice of meeting by or at the direction of the Board of Directors (or any duly authorized committee thereof), or (b) provided that the Board of Directors has determined that directors shall be elected at such meeting, by any shareholder of the Company who (1) is a shareholder of record at the time of giving of notice of such special meeting and at the time of the special meeting, (2) is entitled to vote at the special meeting, and (3) complies with the advance notice and other procedures set forth in these Bylaws relating to bringing such nominations before a special meeting, including, but not limited to, Section 1.8(b) hereof. This Section 1.8(b) shall be the exclusive means for a shareholder to make nominations or other business proposals (other than matters properly brought under Rule 14a-8 under the Exchange Act and included in the Company’s notice of meeting) before a special meeting of shareholders. (c) General. Except as otherwise provided by the Articles of Incorporation, these Bylaws, the PBCL or other applicable law, the Chair of any annual or special meeting shall have the power to determine, based on the facts and circumstances and in consultation with counsel (who may be the Company’s internal counsel), whether a nomination or any other business proposed to be brought before the meeting was made or proposed, as the case may be, in accordance with these Bylaws and, if any proposed nomination or other business is not in compliance with these Bylaws, to declare that no action shall be taken on such nomination or other proposal and such nomination or other proposal shall be disregarded. In addition, a nomination or other business proposed to be brought by a shareholder may not be brought before a meeting if such shareholder takes action contrary to the representations made in the shareholder notice applicable to such nomination or other business or if (i) when submitted to the Company prior to the deadline for submitting a shareholder notice, the shareholder notice applicable to such

 
5 nomination or other business contained an untrue statement of a fact or omitted to state a fact necessary to make the statements therein not misleading, or (ii) after being submitted to the Company, the shareholder notice applicable to such nomination or other business was not updated in accordance with these Bylaws to cause the information provided in the shareholder notice to be true, correct and complete in all respects. 1.9 ADVANCE NOTICE OF SHAREHOLDER NOMINATIONS AND OTHER BUSINESS. (a) Annual Meeting of Shareholders. Without qualification or limitation, subject to Section 1.9(d)(viii) of these Bylaws, for any nominations or any other business to be properly brought before an annual meeting by a shareholder pursuant to Section 1.8(a) of these Bylaws, (1) the shareholder must have given timely notice thereof (including, in the case of nominations, the completed and signed questionnaire, representation and agreement required by Section 1.9 of these Bylaws), and timely updates and supplements thereof, in each case in proper form, in writing to the Secretary of the Company, (2) the shareholder must have complied in all respects with the requirements of Regulation 14A under the Exchange Act, including, without limitation, the requirements of Rule 14a-19 (as such rules and regulations may be amended from time to time by the SEC including any SEC staff interpretations relating thereto), and (3) the Board of Directors or an executive officer designated thereby shall determine that the shareholder has satisfied the requirements of this clause (a), including without limitation the satisfaction of any undertaking delivered under paragraph (c) below. To be timely, a shareholder’s notice must be delivered to, or mailed and received by, the Secretary of the Company at the principal executive offices of the Company not later than the close of business on the one hundred twentieth (120th) calendar day, nor earlier than the close of business on the one hundred fiftieth (150th) calendar day prior to the first anniversary of the date of the Company’s proxy statement released to shareholders in connection with the annual meeting of shareholders in the immediately preceding year; provided, however, that if the date of the annual meeting of shareholders is more than thirty (30) calendar days prior to, or more than sixty (60) calendar days after, the first anniversary date of the preceding year’s annual meeting of shareholders, or if no annual meeting was held in the preceding year, to be timely, a shareholder’s notice must be received by the Secretary of the Company on the later of (i) the ninetieth (90th) day prior to such annual meeting and (ii) the tenth (10th) calendar day following the day on which public disclosure (as defined below) of the date of the meeting is first made by the Company. In no event shall any adjournment or postponement of an annual meeting, or the public announcement thereof, commence a new time period for the giving of a shareholder’s notice as described above. For purposes of these Bylaws, “public disclosure” or its corollary “publicly disclosed” shall mean disclosure by the Company in (i) a document publicly filed by the Company with, or furnished by the Company to, the SEC pursuant to Section 13, 14 or 15(d) of the Exchange Act, (ii) a press release issued by the Company and distributed through a nationally recognized press release dissemination service, or (iii) another method reasonably intended by the Company to achieve broad-based dissemination of the information contained therein. Notwithstanding anything in the immediately preceding paragraph to the contrary, in the event that the number of directors to be elected to the Board of Directors is increased by the Board of Directors, and there is no public disclosure by the Company naming all of the nominees for

 
6 director or specifying the size of the increased Board of Directors at least one hundred thirty (130) calendar days prior to the first anniversary of the date that the Company’s definitive proxy statement was first made publicly available to shareholders in connection with the preceding year’s annual meeting of shareholders, a shareholder’s notice required by this Section 1.9(a) shall also be considered timely, but only with respect to nominees for any new positions created by such increase, and only with respect to a shareholder who had, prior to such increase in the size of the Board of Directors, previously submitted, on a timely basis and in proper written form, a shareholder notice, if it shall be delivered to the Secretary of the Company at the principal executive offices of the Company not later than the close of business on the tenth (10th) calendar day following the day on which such public disclosure is first made by the Company. In addition, to be considered timely, a shareholder’s notice shall further be updated and supplemented, if necessary, so that the information provided or required to be provided in such notice shall be true and correct as of the record date for the meeting and as of the date that is ten (10) business days prior to the meeting or any adjournment or postponement thereof, and such update and supplement shall be delivered to the Secretary of the Company at the principal executive offices of the Company not later than five (5) business days after the record date for the meeting in the case of the update and supplement required to be made as of the record date, and not later than eight (8) business days prior to the date for the meeting or any adjournment or postponement thereof in the case of the update and supplement required to be made as of ten (10) business days prior to the meeting or any adjournment or postponement thereof. For the avoidance of doubt, the obligation to update and supplement as set forth in this paragraph or any other Section of these Bylaws shall not limit the Company’s rights with respect to any deficiencies in any notice provided by a shareholder, extend any applicable deadlines hereunder or under any other provision of the Bylaws or enable or be deemed to permit a shareholder who has previously submitted notice hereunder or under any other provision of the Bylaws to amend or update any proposal or to submit any new proposal, including by changing or adding nominees, matters, business and or resolutions proposed to be brought before a meeting of the shareholders. (b) Special Meetings of Shareholders. Subject to Section 1.9(d)(viii) of these Bylaws, in the event the Company calls a special meeting of shareholders for the purpose of electing one or more directors to the Board of Directors, any shareholder meeting the requirements set forth in Section 1.8(b) hereof may nominate an individual or individuals (as the case may be) for election to such position(s) as specified in the Company’s notice of meeting, provided that the shareholder gives timely notice of such nomination (including the notice of nomination contemplated by Section 1.9(d) of these Bylaws and the completed and signed questionnaire, representation and agreement required by Section 1.10 of these Bylaws), and timely updates and supplements thereof in each case in proper form, in writing, to the Secretary of the Company. To be timely, a shareholder’s notice pursuant to the preceding sentence shall be delivered to the Secretary of the Company at the principal executive offices of the Company not earlier than the close of business on the one hundred twentieth (120th) calendar day prior to the date of such special meeting and not later than the close of business on the later of (x) the ninetieth (90th) calendar day prior to the date of such special meeting and (y) if the first public disclosure by the Company of the date of such special meeting is less than one hundred (100) calendar days prior to the date of such special meeting, the tenth (10th) calendar day following the day on which public disclosure is first made by the Company of the date of the special meeting and of the nominees

 
7 proposed by the Board of Directors to be elected at such meeting. In no event shall any adjournment or postponement of a special meeting of shareholders, or the public announcement thereof, commence a new time period for the giving of a shareholder’s notice as described above. In addition, to be considered timely, a shareholder’s notice pursuant to the first sentence of this paragraph shall further be updated and supplemented, if necessary, so that the information provided or required to be provided in such notice shall be true and correct as of the record date for the meeting and as of the date that is ten (10) business days prior to the meeting or any adjournment or postponement thereof, and such update and supplement shall be delivered to the Secretary of the Company at the principal executive offices of the Company not later than five (5) business days after the record date for the meeting in the case of the update and supplement required to be made as of the record date, and not later than eight (8) business days prior to the date for the meeting or any adjournment or postponement thereof in the case of the update and supplement required to be made as of ten (10) business days prior to the meeting or any adjournment or postponement thereof. (c) Proxy Access by Shareholders. The Company shall include in its proxy statement for an annual meeting of shareholders the name, together with the information required by Section 1.10, of any person nominated for election (a “Shareholder Nominee”) to the board of directors by a shareholder that satisfies, or by a group of no more than twenty (20) shareholders that, collectively, satisfy, the requirements of this Section 1.9, which shall include owning for at least three (3) years that number of shares of capital stock that constitute three percent (3%) or more of the outstanding capital stock of the Company, and that expressly elects at the time of providing the notice required by this Section 1.9 (the “Nomination Notice”) to have its nominee or nominees included in the Company’s proxy materials pursuant to this Section 1.9. The number of Shareholder Nominees submitted shall not exceed twenty percent (20%) of the number of directors in office as of the last day on which a Nomination Notice may be delivered pursuant to this Section 1.9. (d) Disclosure Requirements. (i) To be in proper form, a shareholder’s notice to the Secretary of the Company must include the following, as applicable: (1) As to the shareholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal, as applicable, is made, a shareholder’s notice must set forth: (i) the name and address of such shareholder, as they appear on the Company’s books, of such beneficial owner, if any, and of their respective Affiliates or Associates (for the purposes of these Bylaws, as such terms are defined in Rule 12b-2 of the Exchange Act) or others acting in concert therewith, (ii) (A) the class or series and number of shares of the Company which are, directly or indirectly, owned by such shareholder, such beneficial owner and their respective affiliates or associates or others acting in concert therewith, of record or beneficially (within the meaning of Rule 13d-3 under the Exchange Act), except that such person shall in all events be deemed to beneficially own any shares of any class or series of the Company as to which such person has a right to acquire beneficial ownership at any time in the future, whether such right is exercisable immediately, only after the passage of time or only upon the satisfaction of certain conditions precedent, (B) any option, warrant, convertible security, stock appreciation right, or similar right with an exercise or conversion privilege or a settlement payment or mechanism at a

 
8 price related to any class or series of shares of the Company or with a value derived in whole or in part from the value of any class or series of shares of the Company, or any derivative or synthetic arrangement having the characteristics of a long position in any class or series of shares of the Company, or any contract, derivative, swap or other transaction or series of transactions designed to produce economic benefits and risks that correspond substantially to the ownership of any class or series of shares of the Company, including due to the fact that the value of such contract, derivative, swap or other transaction or series of transactions is determined by reference to the price, value or volatility of any class or series of shares of the Company, whether or not such instrument, contract or right shall be subject to settlement in the underlying class or series of shares of the Company, through the delivery of cash or other property, or otherwise, and without regard to whether the shareholder of record, the beneficial owner, if any, or any affiliates or associates or others acting in concert therewith, may have entered into transactions that hedge or mitigate the economic effect of such instrument, contract or right, or any other direct or indirect opportunity to profit or share in any profit derived from any increase or decrease in the value of shares of the Company (any of the foregoing, a “Derivative Instrument”) directly or indirectly owned beneficially by such shareholder, the beneficial owner, if any, or any affiliates or associates or others acting in concert therewith, (C) any proxy, contract, arrangement or understanding (written or oral), or relationship or otherwise, pursuant to which such shareholder, such beneficial owner and their respective affiliates or associates or others acting in concert therewith have any right to vote any class or series of shares of the Company, (D) any agreement, arrangement or understanding (written or oral), or relationship or otherwise, including any repurchase or similar so-called “stock borrowing” agreement or arrangement (written or oral), involving such shareholder, such beneficial owner and their respective affiliates or associates or others acting in concert therewith, directly or indirectly, the purpose or effect of which is to mitigate loss to, reduce the economic risk (of ownership or otherwise) of any class or series of the shares of the Company by, manage the risk of share price changes for, or increase or decrease the voting power of, such shareholder, such beneficial owner and their respective affiliates or associates or others acting in concert therewith with respect to any class or series of the shares of the Company, or which provides, directly or indirectly, the opportunity to profit or share in any profit derived from any decrease in the price or value of any class or series of the shares of the Company (any of the foregoing, a “Short Interest”), (E) any rights to dividends on the shares of the Company owned beneficially by such shareholder, such beneficial owner and their respective affiliates or associates or others acting in concert therewith that are separated or separable from the underlying shares of the Company, (F) any proportionate interest in shares of the Company or Derivative Instruments held, directly or indirectly, by a general or limited partnership in which such shareholder, such beneficial owner and their respective affiliates or associates or others acting in concert therewith is a general partner or, directly or indirectly, beneficially owns an interest in a general partner of such general or limited partnership, (G) any performance-related fees (other than an asset-based fee) that such shareholder, such beneficial owner and their respective affiliates or associates or others acting in concert therewith are entitled to, as calculated based on any increase or decrease in the value of shares of the Company or Derivative Instruments, if any, including, without limitation, any such interests held by members of the immediate family sharing the same household of such shareholder, such beneficial owner and their respective affiliates or associates or others acting in concert therewith, (H) any significant equity interests or any Derivative Instruments or Short Interests in any principal competitor of the Company held by such shareholder, such beneficial owner and their respective affiliates or associates or others acting in

 
9 concert therewith and (I) any direct or indirect interest of such shareholder, such beneficial owner and their respective affiliates or associates or others acting in concert therewith in any contract with the Company, any affiliate of the Company or any principal competitor of the Company (including, in any such case, any employment agreement, collective bargaining agreement or consulting agreement), (iii) all information that would be required to be set forth in a Schedule 13D filed pursuant to Rule 13d-1(a) or an amendment thereto pursuant to Rule 13d-2(a) if such a Schedule 13D or amendment thereto were required to be filed under the Exchange Act and the rules and regulations promulgated thereunder by such shareholder, such beneficial owner and their respective affiliates or associates or others acting in concert therewith, if any (regardless of whether the requirement to file a Schedule 13D is applicable to such person), (iv) a description in reasonable detail of any relationship (including any direct or indirect interest in any agreement, arrangement or understanding, whether written or oral and whether formal or informal) between such shareholder, such beneficial owner and their respective affiliates or associates or others acting in concert therewith, if any, and the Company or any director, officer, affiliate or associate of the Company (naming such officer, director, affiliate, or associate), including, but not limited to, a description in reasonable detail of any discussions between such shareholder, such beneficial owner and their respective affiliates or associates or others acting in concert therewith and any officer, director, affiliate, or associate of the Company (naming such officer, director, affiliate, or associate) with respect to (1) the proposal of any business or the proposal of any nominees sought to be brought before an annual meeting by a shareholder, (2) any changes sought to be made to the composition of the Board of Directors or the Company’s strategic direction, or (3) any plans or proposals for the Company to be potentially pursued by the shareholder, such beneficial owner and their respective affiliates or associates or others acting in concert therewith, if any proposed business was approved, or any proposed nominees were elected, at the shareholders’ meeting, (v) a written undertaking by the shareholder giving the notice or, if the notice is given on behalf of a beneficial owner on whose behalf the nomination is made, by such beneficial owner, that such shareholder or beneficial owner will deliver to beneficial owners of shares representing at least 67% of the voting power of the stock entitled to vote generally in the election of directors either (1) at least twenty (20) calendar days before the annual meeting, a copy of its definitive proxy statement for the solicitation of proxies for its director candidates, or (2) at least forty (40) calendar days before the annual meeting a Notice of Internet Availability of Proxy Materials that would satisfy the requirements of Rule 14a-16(d) of the Exchange Act, and (vi) any other information relating to such shareholder, such beneficial owner and their respective affiliates or associates or others acting in concert therewith, if any, that would be required to be disclosed in a proxy statement and form of proxy or other filings required to be made in connection with solicitations of proxies for, as applicable, the proposal and/or for the election of directors in a contested election pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder; (2) If the notice relates to any business other than a nomination of a director or directors that the shareholder proposes to bring before the meeting, a shareholder’s notice must, in addition to the matters set forth in Section 1.9(d)(i)(1) above, also set forth: (i) a reasonably detailed description of the business desired to be brought before the meeting, the reasons for conducting such business at the meeting and any material interest of such shareholder, such beneficial owner and each of their respective affiliates or associates or others acting in concert therewith, if any, in such business, (ii) the complete text of the proposal or business (including the complete text of any resolutions proposed for consideration and, in the event that such proposal or

 
10 business includes a proposal to amend the Bylaws of the Company, the complete text of the proposed amendment), (iii) a reasonably detailed description of all agreements, arrangements and understandings (written or oral) between such shareholder, such beneficial owner and any of their respective affiliates or associates or others acting in concert therewith, if any, and any other person or persons (naming such other person or entity) in connection with the proposal of such business by such shareholder, and (iv) any other information relating to the proposal of such business that would be required to be disclosed in a proxy statement or other filing required to be made with the SEC in connection with any solicitations of proxies or special meeting demands by such shareholder pursuant to Section 14(a) of the Exchange Act; (3) As to each individual, if any, whom the shareholder proposes to nominate for election or re-election to the Board of Directors, a shareholder’s notice must, in addition to the matters set forth in Section 1.9(d)(i)(1) above, also set forth: (i) all information relating to such individual that would be required to be disclosed pursuant to Section 1.9(d)(i)(1) above if such individual was the shareholder giving the advance notice of nomination to the Company, (ii) all information relating to such individual that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors in a contested election pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder (including such individual’s written and executed consent to being named in the proxy statement of such proposing shareholder as a nominee of such proposing shareholder and to serving as a director of the Company if elected), (iii) a reasonably detailed description of all direct and indirect compensation, reimbursement, indemnification and other benefits (whether monetary or non-monetary) agreements, arrangements and understandings (whether written or oral and formal or informal) during the past three (3) years, and any other relationships, between or among such shareholder and beneficial owner, if any, and their respective affiliates and associates, or others acting in concert therewith (naming each such person or entity), on the one hand, and each proposed nominee, and any respective affiliates and associates, or others acting in concert therewith (naming each such person or entity), on the other hand, (iv) to the extent that such proposed nominee has been convicted of any past criminal offenses involving dishonesty or a breach of trust or duty, a description in reasonable detail of such offense and all legal proceedings relating thereto, (v) to the extent that such proposed nominee has been determined by any governmental authority or self-regulatory organization to have violated any federal or state securities or commodities laws, including but not limited to, the Securities Act of 1933, as amended, the Exchange Act or the Commodity Exchange Act, a description in reasonable detail of such violation and all legal proceedings relating thereto, (vi) to the extent that such proposed nominee has ever been suspended or barred by any governmental authority or self-regulatory organization from engaging in any profession or participating in any industry, or has otherwise been subject to a disciplinary action by a governmental authority or self-regulatory organization that provides oversight over the proposed nominee’s current or past profession or an industry that the proposed nominee has participated in, a description in reasonable detail of such action and the reasons therefor, (vii) a description in reasonable detail of any and all litigation, whether or not judicially resolved, settled or dismissed, relating to the proposed nominee’s past or current service on the board of directors (or similar governing body) of any corporation, limited liability company, partnership, trust or any other entity where a legal complaint filed in any state or federal court located within the United States alleges that the proposed nominee committed any act constituting (1) a breach of fiduciary duties, (2) misconduct, (3) fraud, (4) breaches of confidentiality

 
11 obligations, and/or (5) a breach of the entity’s code of conduct applicable to directors, and (viii) all other information that would be required to be disclosed pursuant to Items 403 and 404 under Regulation S-K or any successor provision promulgated under Regulation S-K if the shareholder making the nomination and any beneficial owner on whose behalf the nomination is made, if any, or any affiliate or associate thereof or person acting in concert therewith, were the “registrant” for purposes of such Item and the proposed nominee were a director or executive officer of such registrant; and (4) With respect to each individual, if any, whom the shareholder proposes to nominate for election or re-election to the Board of Directors, a shareholder’s notice must, in addition to the matters set forth in Section 1.9(d)(i)(1) and Section 1.9(d)(i)(3) above, also include such proposed nominee’s (A) statement that the nominee intends to comply with all applicable corporate governance and other policies and guidelines of the Company applicable to directors and in effect during such person’s term in office as a director, including, without limitation, the election policy set forth in the Company’s Corporate Governance Principles, and (B) completed and executed questionnaire, representation and agreement as required by Section 1.10 of these Bylaws. The Company may require any proposed nominee to furnish such other information as may reasonably be required by the Company to determine the eligibility of such proposed nominee to serve as an independent director of the Company or that could be material to a reasonable shareholder’s understanding of the independence, or lack thereof, of such nominee. Notwithstanding anything to the contrary, only persons who are nominated in accordance with the procedures set forth in these Bylaws, including, without limitation, Section 1.8 and this Section 1.9 hereof, shall be eligible for election as directors. (ii) Upon written request by the Secretary of the Company, the Board of Directors or any duly authorized committee thereof, any shareholder submitting a shareholder notice proposing a nomination or other business for consideration at a meeting shall provide, within five (5) business days of delivery of such request (or such other period as may be specified in such request), written verification, satisfactory in the reasonable discretion of the Board of Directors, any duly authorized committee thereof or any duly authorized officer of the Company, to demonstrate the accuracy of any information submitted by the shareholder in the shareholder notice delivered pursuant to the requirements of the Bylaws (including, if requested, written confirmation by such shareholder that it continues to intend to bring the nomination or other business proposed in the shareholder notice before the meeting). If a shareholder fails to provide such written verification within such period, the information as to which written verification was requested may be deemed not to have been provided in accordance with the requirements of the Bylaws. (iii) For a shareholder notice to comply with the requirements of this Section 1.9, each of the requirements of this Section 1.9 shall be directly and expressly responded to and a shareholder notice must clearly indicate and expressly reference which provisions of this Section 1.9 the information disclosed is intended to be responsive to. Information disclosed in one section of the shareholder notice in response to one provision of this Section 1.9 shall not be deemed responsive to any other provision of this Section 1.9 unless it is expressly cross-referenced to such other provision and it is clearly apparent how the information included in one section of the shareholder notice is directly and expressly responsive to the information required to be included in another section of the shareholder notice pursuant to this Section 1.9. For the avoidance of

 
12 doubt, statements purporting to provide global cross-references that purport to provide that all information provided shall be deemed to be responsive to all requirements of this Section 1.9 shall be disregarded and shall not satisfy the requirements of this Section 1.9. (iv) For a shareholder notice to comply with the requirements of this Section 1.9, it must set forth in writing directly within the body of the shareholder notice (as opposed to being incorporated by reference from any other document or writing not prepared solely in response to the requirements of these Bylaws) all the information required to be included therein as set forth in this Section 1.9 and each of the requirements of this Section 1.9 shall be directly responded to in a manner that makes it clearly apparent how the information provided is specifically responsive to any requirements of this Section 1.9. For the avoidance of doubt, a shareholder notice shall not be deemed to be in compliance with this Section 1.9 if it attempts to include the required information by incorporating by reference into the body of the shareholder notice any other document, writing or part thereof, including, but not limited to, any documents publicly filed with the SEC not prepared solely in response to the requirements of these Bylaws. For the further avoidance of doubt, the body of the shareholder notice shall not include any documents that are not prepared solely in response to the requirements of these Bylaws. (v) A shareholder submitting a shareholder notice, by its delivery to the Company, represents and warrants that all information contained therein, as of the deadline for submitting the shareholder notice, is true, accurate and complete in all respects, contains no false or misleading statements and such shareholder acknowledges that it intends for the Company and the Board of Directors to rely on such information as (i) being true, accurate and complete in all respects and (ii) not containing any false or misleading statements. If the information submitted pursuant to this Section 1.9 by any shareholder proposing a nomination or other business for consideration at a meeting shall not be true, correct and complete in all respects prior to the deadline for submitting the shareholder notice, such information may be deemed not to have been provided in accordance with this Section 1.9. (vi) Notwithstanding any notice of the meeting sent to shareholders on behalf of, or any proxy statement filed by, the Company, a shareholder must separately comply with this Section 1.9 to propose a nomination or other business at any meeting and is still required to deliver its own separate and timely shareholder notice to the Secretary of the Company prior to the deadline for submitting a shareholder notice that complies in all respects with the requirements of this Section 1.9. For the avoidance of doubt, if the shareholder’s proposed business is the same or relates to business brought by the Company and included in the Company’s meeting notice or any supplement thereto, the shareholder is nevertheless still required to comply with this Section 1.9 and deliver, prior to the deadline for submitting the shareholder notice, its own separate and timely shareholder notice to the Secretary of the Company that complies in all respects with the requirements of this Section 1.9. (vii) Notwithstanding the provisions of these Bylaws, a shareholder shall also comply with all applicable requirements of the Exchange Act, the rules and regulations thereunder and any other requirements of the SEC, the PBCL and other applicable law with respect to the matters set forth in these Bylaws, any solicitation of proxies contemplated by any notices delivered pursuant to these Bylaws and any filings required to be made with the SEC in connection therewith; provided, however, that any references in these Bylaws to the Exchange Act or the rules

 
13 promulgated thereunder are not intended to and shall not limit the separate and additional requirements set forth in these Bylaws with respect to nominations or proposals as to any other business to be considered. (viii) Nothing in this Section 1.9 shall be deemed to affect any rights (i) of shareholders to request inclusion of proposals in the Company’s proxy statement pursuant to Rule 14a-8 under the Exchange Act or (ii) of the holders of any series of Preferred Stock if and to the extent provided for under the PBCL, any other applicable law, the Articles of Incorporation or these Bylaws. Subject to Rules 14a-8 and 14a-19 under the Exchange Act, nothing in this Section 1.9 shall be construed to permit any shareholder, or give any shareholder the right, to include or have disseminated or described in the Company’s proxy statement any nomination of director or directors or any other business proposal. (ix) For purposes of these Bylaws, a person shall be deemed to be “acting in concert” with another person if such person knowingly acts (whether or not pursuant to an express agreement, arrangement or understanding) in concert with, or towards a common goal relating to the management, governance or control of the Company in parallel with, such other person where (A) each person is conscious of the other person’s conduct or intent and this awareness is an element in their decision-making processes and (B) at least one additional factor suggests that such persons intend to act in concert or in parallel, which such additional factors may include, without limitation, exchanging information (whether publicly or privately), attending meetings, conducting discussions, or making or soliciting invitations to act in concert or in parallel; provided, however, that a person shall not be deemed to be “acting in concert” with any other person solely as a result of the solicitation or receipt of revocable proxies, or special meeting demands from such other person in response to a solicitation made pursuant to, and in accordance with, Section 14(a) of the Exchange Act by way of a proxy statement filed on Schedule 14A. A person deemed to be “acting in concert” with another person shall be deemed to be “acting in concert” with any third party who is also “acting in concert” with such other person. 1.10 SUBMISSION OF QUESTIONNAIRE, REPRESENTATION AND AGREEMENT. To be eligible to be a nominee for election or re-election as a director of the Company, a person nominated by a shareholder for election or re-election to the Board of Directors must deliver (in accordance with the time periods prescribed for delivery of an advance notice of nominations pursuant to Section 1.9 of these Bylaws) to the Secretary of the Company at the principal executive offices of the Company a written questionnaire with respect to the background and qualification of such individual and the background of any other person or entity on whose behalf, directly or indirectly, the nomination is being made (which questionnaire shall be provided by the Secretary of the Company upon written request), and a written representation and agreement (in the form provided by the Secretary of the Company upon written request) that such individual (A) is not and will not become a party to (1) any agreement, arrangement or understanding (written or oral) with, and has not given any commitment or assurance (written or oral) to, any person or entity as to how such person, if elected as a director of the Company, will act or vote on any issue or question (a “Voting Commitment”) that has not been expressly disclosed in writing to the Company, or (2) any Voting Commitment that could limit or interfere with such individual’s ability to comply, if elected as a director of the Company, with such individual’s fiduciary duties under applicable law, (B) is not and will not become a party to any agreement, arrangement or understanding (written or oral) with any person or entity other than the Company with respect to

 
14 any direct or indirect compensation, reimbursement or indemnification in connection with service or action as a director that has not been expressly disclosed therein, (C) is not a party to any agreement, arrangement or understanding (written or oral) with any person or entity, that contemplates such person resigning as a member of the Board of Directors prior to the conclusion of the term of office to which such person was elected, and has not given any commitment or assurance (written or oral) to any person or entity that such person intends to, or if asked by such person or entity would, resign as a member of the Board of Directors prior to the end of the conclusion of the term of office to which such person was elected, except as expressly disclosed therein, (D) has expressly disclosed therein whether all or any portion of securities of the Company were purchased with any financial assistance provided by any other person and whether any other person has any interest in such securities, (E) in such individual’s personal capacity and on behalf of any person or entity on whose behalf, directly or indirectly, the nomination is being made, would be in compliance, if elected as a director of the Company, and will comply, with all applicable code of ethics and/or business conduct, corporate governance, conflicts of interest, confidentiality, public disclosures, hedging and pledging policies relating to the Company’s securities, and stock ownership and stock trading policies and guidelines of the Company that are adopted and publicly disclosed from time to time, (F) consents to being named as a nominee of the proposing shareholder in the proposing shareholder’s proxy statement and agrees to serve as a member of the Board of Directors if elected as a director, and (G) will abide by all applicable corporate governance and other policies and guidelines of the Company applicable to directors and in effect during such person’s term in office as a director, including, without limitation, the Company’s Corporate Governance Principles. 1.11 SHAREHOLDER REQUESTED SPECIAL MEETINGS. (a) No shareholder may request that the Secretary of the Company call a Shareholder Requested Special Meeting unless a shareholder of record of the Company has first submitted a request in writing (“Record Date Request Notice”) that the Board of Directors fix a record date (a “Request Record Date”) for the purpose of determining the shareholders entitled to request that the Secretary of the Company call a Shareholder Requested Special Meeting, which Record Date Request Notice shall be delivered to, or mailed and received by, the Secretary of the Company at the principal executive offices of the Company. (b) Within ten (10) calendar days after receipt of a Record Date Request Notice in compliance with this Section 1.11 from any shareholder of record, the Board of Directors may adopt a resolution fixing a Request Record Date for the purpose of determining the shareholders entitled to request that the Secretary of the Company call a Shareholder Requested Special Meeting, which date shall not precede the date upon which the resolution fixing the Request Record Date is adopted by the Board of Directors. If no resolution fixing a Request Record Date has been adopted by the Board of Directors within the ten (10) calendar day period after the date on which such a request to fix a Request Record Date was received, the Request Record Date in respect thereof shall be deemed to be the twentieth (20th) calendar day after the date on which such a request is received. (c) In order for a Shareholder Requested Special Meeting to be called, one or more written request or requests to call a Shareholder Requested Special Meeting (each, a “Special Meeting Request” and collectively, the “Special Meeting Requests”), must be in proper written

 
15 form and must be signed by shareholders who, as of the Request Record Date, hold of record or beneficially, in the aggregate, the Requisite Percentage and must be timely delivered to the Secretary of the Company at the principal executive offices of the Company. To be timely, a Special Meeting Request must be delivered to the principal executive offices of the Company not later than the sixtieth (60th) calendar day following the Request Record Date. In determining whether a Shareholder Requested Special Meeting has been properly requested, multiple Special Meeting Requests delivered to the Secretary of the Company will be considered together only if (i) each Special Meeting Request identifies the same purpose or purposes of the Shareholder Requested Special Meeting and the same matters proposed to be acted on at such meeting (in each case as determined in good faith by the Board of Directors), and (ii) such Special Meeting Requests have been dated and delivered to the Secretary of the Company within sixty (60) calendar days of the earliest dated Special Meeting Request. (d) In addition to the requirements set forth in Section 1.11(c), to be in proper form for purposes of this Section 1.11, a Special Meeting Request must include and set forth a description of (i) the specific purpose or purposes of the Shareholder Requested Special Meeting, (ii) the matter(s) proposed to be acted on at the Shareholder Requested Special Meeting, and (iii) the reasons for conducting such business at the Shareholder Requested Special Meeting. Shareholders seeking to propose candidates for election to the Board of Directors at a Shareholder Requested Special Meeting where the election of directors is a matter specified in the notice of meeting given by or at the direction of the person calling such Shareholder Requested Special Meeting in accordance with the provisions of Section 1.2 of these Bylaws and this Section 1.11 must also comply with the requirements set forth in Section 1.9 of these Bylaws for providing a timely and proper written notice for the proposal of candidates for election as directors. (e) A shareholder may revoke a Special Meeting Request by written revocation delivered to the Secretary of the Company at any time prior to the Shareholder Requested Special Meeting. If any such revocation(s) are received by the Secretary of the Company after the Secretary’s receipt of Special Meeting Requests from the Requisite Percentage of shareholders, and as a result of such revocation(s) there no longer are unrevoked demands from the Requisite Percentage of shareholders to call a Shareholder Requested Special Meeting, then the Board of Directors shall have the discretion to determine whether or not to proceed with the Shareholder Requested Special Meeting. (f) The Secretary of the Company shall not accept, and shall consider ineffective, a Special Meeting Request if such Special Meeting Request does not comply with this Section 1.11 or relates to an item of business to be transacted at the Shareholder Requested Special Meeting that either (i) is not a proper subject for shareholder action under the Articles of Incorporation, these Bylaws, the PBCL or other applicable law, or (ii) is expressly reserved for action by the Board of Directors under the Articles of Incorporation, these Bylaws, the PBCL or other applicable law (g) If none of the shareholders who submitted and signed the Special Meeting Request appears in person at the Shareholder Requested Special Meeting or sends a qualified representative to the Shareholder Requested Special Meeting to present the matters to be presented for consideration that were specified in the Special Meeting Request (unless the Shareholder Requested Special Meeting is held by means of remote communication in which case the

 
16 requesting shareholder or its qualified representative shall be present by means of remote communication), the Company need not present such matters for a vote at such meeting. (h) After Special Meeting Requests have been received on a timely basis, in proper form and in accordance with this Section 1.11 from a shareholder or shareholders holding the Requisite Percentage, the Secretary of the Company shall duly call, and determine the place, date and time of, a Shareholder Requested Special Meeting for the purpose or purposes and to conduct the business specified in the Special Meeting Requests received by the Company; provided, however that the Shareholder Requested Special Meeting shall be held within sixty (60) calendar days after the Company receives one or more valid Special Meeting Requests in compliance with this Section 1.11 from shareholders holding at least the Requisite Percentage. If the Secretary of the Company neglects or refuses to fix the date of such Shareholder Requested Special Meeting and give the notice of meeting required by Section 1.4 of these Bylaws, then the shareholder or shareholders making the request for the Shareholder Requested Special Meeting may do so. (i) The record date for notice and voting for such a Shareholder Requested Special Meeting shall be fixed in accordance with Section 1.7 of these Bylaws. (j) The Board of Directors shall provide written notice of such Shareholder Requested Special Meeting in accordance with Section 1.4 of these Bylaws. The business brought before any Shareholder Requested Special Meeting by shareholders shall be limited to the matters proposed in the valid Special Meeting Request; provided, however, that nothing herein shall prohibit the Board of Directors from bringing other matters before the shareholders at any Shareholder Requested Special Meeting and including such matters in the notice of the special meeting it provides to shareholders. Notwithstanding any notice of the special meeting sent to shareholders on behalf of the Company, a shareholder must separately comply with this Section 1.11 to conduct business at any Shareholder Requested Special Meeting. If the business proposed by a shareholder to be brought before a Shareholder Requested Special Meeting is the same or relates to business brought by the Company and included in the Company’s notice for such Shareholder Requested Special Meeting, the shareholder is nevertheless still required to comply with this Section 1.11 and deliver its own separate, timely and proper Special Meeting Request to the Secretary of the Company that complies in all respects with the requirements of this Section 1.11. (k) Except in accordance with this Section 1.11 and except as provided in Section 1.8(b) of these Bylaws with respect to a shareholder’s ability to propose candidates for election as directors at a special meeting of shareholders where the election of directors is a matter specified in the notice of meeting given by or at the direction of the person calling such special meeting in accordance with the provisions of Section 1.2 of these Bylaws, shareholders shall not be permitted to propose business to be brought before a special meeting of shareholders. 1.12 POSTPONEMENT AND CANCELLATION OF MEETINGS. Any previously scheduled annual or special meeting of the shareholders may be postponed, and any previously scheduled annual or special meeting of the shareholders called by the Board of Directors may be canceled, by resolution of the Board of Directors upon public notice given prior to the time previously scheduled for such meeting of shareholders.

 
17 1.13 ORGANIZATION. Meetings of shareholders shall be presided over by such person as the Board of Directors may designate as Chair of the meeting, or in the absence of such a person, the Chair of the Board of Directors, or if none, or in the Chair of the Board of Directors’ absence or inability to act, the Chief Executive Officer, or if none, or in the Chief Executive Officer’s absence or inability to act, the President, or if none, or in the President’s absence or inability to act, a Vice President, or, if none of the foregoing is present or able to act, by a Chair to be chosen by the holders of a majority of the shares entitled to vote who are present in person or by proxy at the meeting. The Secretary of the Company, or in the Secretary’s absence, an Assistant Secretary, shall act as secretary of every meeting, but if neither the Secretary nor an Assistant Secretary is present, the presiding officer of the meeting shall appoint any person present to act as secretary of the meeting. The Board of Directors shall be entitled to make such rules or regulations for the conduct of meetings of shareholders as it shall deem necessary, appropriate or convenient. Subject to such rules and regulations of the Board of Directors, if any, the Chair of the meeting shall have the right and authority to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such Chair, are necessary, appropriate or convenient for the proper conduct of the meeting, including, without limitation, establishing an agenda or order of business for the meeting, rules and procedures for maintaining order at the meeting and the safety of those present, limitations on participation in the meeting to shareholders of record of the Company, their duly authorized and constituted proxies and such other persons as the Chair shall permit, restrictions on entry to the meeting after the time fixed for the commencement thereof, appointing inspectors of election, limitations on the time allotted to questions or comments by participants and regulation of the opening and closing of the polls for balloting and matters which are to be voted on by ballot. ARTICLE II DIRECTORS AND OFFICERS 2.1 NUMBER. The Board of Directors shall consist of at least three (3) persons; however, the size of the Board may be set by resolution of the Board from time to time. 2.2 TERM. Each director shall serve a term expiring at the next annual meeting of shareholders of the Company and until a successor shall be selected and qualified or until the earlier of death, resignation or removal. 2.3 AGE QUALIFICATION. No person shall be elected or re-elected as a director after reaching seventy-five (75) years of age (the “Qualifying Age”); provided, however, that the Board has the sole discretion, on a case-by-case basis, to not accept the resignation of a director who has reached the Qualifying Age if it determines, on the recommendation of the Nominating and Corporate Governance Committee, that the director’s continued service (on a year-to-year basis) is in the best interests of the Company in order to retain skills on, or to maintain diversity of, the Board. When the term of any director extends beyond the date when the director reaches the Qualifying Age, such director shall tender notice of resignation from the Board of Directors effective at the annual meeting of shareholders next following the director’s seventy-fifth (75th) birthday.

 
18 2.4 ELECTION OF DIRECTORS. (a) In an election of directors that is not a contested election, a nominee for director shall be elected to the Board of Directors if the votes cast for such nominee’s election exceed the votes cast against such nominee’s election. Abstentions and broker non-votes shall not be considered to be votes cast. In a contested election of directors, the nominees for election to the Board of Directors receiving the highest number of votes, up to the number of directors to be elected in such election, shall be elected. Shareholders shall not have the right to vote against a nominee in a contested election of directors. (b) For purposes of this Section 2.4, an election of directors shall be deemed contested if (i) the Secretary of the Company receives from a shareholder an advance notice indicating that such shareholder intends to propose at least one candidate for election as a director at a meeting of shareholders, which notice is in compliance with the advance notice requirements for shareholder nominees for director set forth in these Bylaws, and (ii) such notice of nomination has not been withdrawn by such shareholder on or before the tenth (10th) calendar day before the Company files its definitive proxy statement for such shareholders’ meeting with the U.S. Securities and Exchange Commission (regardless of whether or not such proxy statement is thereafter revised or supplemented). 2.5 RESIGNATIONS. Any director may resign at any time upon notice given in writing or by electronic transmission to the Chair of the Board, the Chief Executive Officer or the Secretary of the Company; provided, however, that if such notice is given by electronic transmission, such electronic transmission must either set forth or be submitted with information from which it can be determined that the electronic transmission was authorized by the director. A resignation is effective when the resignation is delivered, unless the resignation specifies a later effective date, or an effective date determined upon the occurrence of an event or events. Acceptance of such resignation shall not be necessary to make it effective. Unless otherwise provided in the Articles of Incorporation or these Bylaws, when one or more directors resign from the Board of Directors, effective at a future date, a majority of the directors then in office, including those who have so resigned, shall have power to fill such vacancy or vacancies, the vote thereon to take effect when such resignation or resignations shall become effective. 2.6 VACANCIES. In the case of any vacancy in the Board of Directors by death, resignation or for any other cause, including an increase in the number of directors, the Board may, by the affirmative vote of a majority of the remaining directors, even though less than a quorum or by the sole remaining director, fill the vacancy by choosing a director to serve until the next annual meeting of shareholders of the Company and until a successor has been selected and qualified or until the earlier of death, resignation or removal. 2.7 REMOVAL OF DIRECTORS. Any director, or the entire Board of Directors, may be removed from office without assigning any cause by the vote of shareholders, or of the holders of a class or series of shares, entitled to elect directors. In case the Board of Directors or any one or more directors are so removed, new directors may be elected by the shareholders at the same meeting. 2.8 ANNUAL MEETING. An annual meeting of the Board of Directors shall be held each year after the annual meeting of shareholders of the Company, at such place as the Board of

 
19 Directors may determine, in its sole discretion, for the purposes of organization, election of officers and the transaction of such other business as shall come before the meeting. No notice of the meeting need be given. 2.9 REGULAR MEETINGS. Regular meetings of the Board of Directors may be held without notice at such times and at such places as the Board of Directors may determine. 2.10 SPECIAL MEETINGS. Special meetings of the Board of Directors may be called by the Chair of the Board, the Chief Executive Officer, the President or any two (2) members of the Board of Directors. Notice of every special meeting shall be given to each director not later than the second day immediately preceding the day of such meeting in the case of notice by mail, telegram or courier service, and not later than the day immediately preceding the day of such meeting in the case of notice delivered personally or by telephone, facsimile transmission, email, text messaging or other electronic communication. Such notice shall state the time and place of the meeting, but, except as otherwise provided in these Bylaws, neither the business to be transacted at, nor the purpose of, any special meeting of the Board of Directors need be specified in the notice, or waiver of notice, of such meeting. 2.11 MEETINGS OF INDEPENDENT DIRECTORS. Meetings of the independent members of the Board of Directors may be held without notice at such times and at such places as the independent members of the Board of Directors may determine. In the absence or disability of the Chair of the Board, the Chair of the Nominating and Corporate Governance Committee shall preside at any such meetings. 2.12 QUORUM AND ACTION BY UNANIMOUS CONSENT. (a) Quorum. A majority of the directors in office shall constitute a quorum for the transaction of business but less than a quorum may adjourn from time to time to reconvene at such time and place as they may determine. (b) Action by Unanimous Consent. Any action required or permitted to be taken at a meeting of the Board of Directors may be taken without a meeting if, prior or subsequent to the action, a consent or consents thereto by all of the directors in office is filed with the Secretary of the Company. For the purposes of this Section 2.12(b), consent may be given by means of a physical written copy or transmitted by facsimile transmission, email or similar electronic communications technology; provided that the means of giving consent shall enable the Company to keep a record of the consents in a manner satisfying the requirements of Section 107 of the Pennsylvania Associations Code. 2.13 COMPENSATION. Directors shall receive such compensation for their services as shall be fixed by the Board of Directors. 2.14 COMMITTEES. The Board of Directors may, by resolution adopted by an affirmative vote of the majority of the total number of authorized directors (whether or not there exist any vacancies in previously authorized directorships at the time such resolution is presented to the Board for adoption), designate one or more committees, each committee to consist of two or more of the directors of the Company. The Board may designate one or more directors as alternate

 
20 members of any Committee, who may replace any absent or disqualified member at any meeting of the committee. Any such committee to the extent provided in such resolution shall have and exercise the authority of the Board of Directors in the management of the business and affairs of the Company. 2.15 PARTICIPATION IN MEETINGS BY COMMUNICATIONS EQUIPMENT. One or more directors may participate in a meeting of the Board of Directors or a committee of the Board by means of conference telephone or other electronic technology by means of which all persons participating in the meeting can hear each other. Directors so participating shall be deemed present at the meeting. 2.16 LIABILITY OF DIRECTORS. A director of the Company shall not be personally liable for monetary damages for any action taken, or any failure to take any action, on or after January 27, 1987, unless such director has breached or failed to perform the duties of the office as provided for under Section 1713 of the PBCL and the breach or failure to perform constitutes self-dealing, willful misconduct or recklessness. Any repeal, amendment, or modification of this Section shall be prospective only and shall not increase, but may decrease, the liability of a director with respect to actions or failures to act occurring prior to such change. 2.17 OFFICERS. The officers of the Company shall be a Chief Executive Officer, a President, one or more Vice Presidents, a Secretary, a Treasurer and such other officers as the Board of Directors may deem advisable. Any two or more offices may be held by the same person. 2.18 TERM. Each officer shall hold office until a successor is elected or appointed and qualified or until death, resignation or removal by the Board of Directors. 2.19 AUTHORITY, DUTIES AND COMPENSATION. All officers shall have such authority, perform such duties and receive such compensation as may be provided in the bylaws or as may be determined by the Board of Directors. 2.20 CHAIR OF THE BOARD. The Chair of the Board shall preside at all meetings of the Board of Directors and shall perform such other duties as may be assigned by the Board of Directors. In the absence or disability of the Chair of the Board, the Chair of the Nominating and Corporate Governance Committee shall have the authority and perform the duties of the Chair of the Board. 2.21 CHIEF EXECUTIVE OFFICER. The Chief Executive Officer shall be the chief executive officer of the Company and shall preside at all meetings of the shareholders. The Chief Executive Officer shall be responsible for the general management of the business of the Company, subject to the control of the Board of Directors. In the absence or disability of the President, or if that office is vacant, the Chief Executive Officer shall have the authority and perform the duties of the President. 2.22 CHIEF FINANCIAL OFFICER. The Chief Financial Officer shall keep or cause to be kept the books of account of the Company in a thorough and proper manner and shall render statements of the financial affairs of the Company in such form and as often as required by the Board of Directors or the President. The Chief Financial Officer, subject to the order of the Board of Directors, shall have the custody of all funds and securities of the Company. The Chief Financial Officer shall perform other

 
21 duties commonly incident to his office and shall also perform such other duties and have such other powers as the Board of Directors or the President shall designate from time to time. The President may direct the Treasurer to assume and perform the duties of the Chief Financial Officer in the absence or disability of the Chief Financial Officer, and the Treasurer shall perform other duties commonly incident to the office and shall also perform such other duties and have such other powers as the Board of Directors or the President shall designate from time to time. 2.23 PRESIDENT. The President shall perform such duties as may be assigned by the Board of Directors and, in the absence or disability of the Chief Executive Officer, or if that office is vacant, shall have the authority and perform the duties of the Chief Executive Officer. 2.24 VICE PRESIDENT. In the absence or disability of the Chief Executive Officer and the President, or any other officer or officers, the Vice Presidents in the order designated by the Board of Directors shall have the authority and perform the duties of the Chief Executive Officer, the President or other officer as the case may be. The Vice President, Finance shall be the principal accounting officer and shall keep books recording the business transactions of the Company. The Vice President shall be in charge of the accounts of all of its offices and shall promptly report and properly record in the books of the Company all relevant data relating to the Company’s business. 2.25 SECRETARY. The Secretary shall give notice of meetings of the shareholders, of the Board of Directors and of any Board Committee, attend all such meetings and record the proceedings thereof. In the absence or disability of the Secretary, an Assistant Secretary or any other person designated by the Board of Directors or the Chief Executive Officer shall have the authority and perform the duties of the Secretary. 2.26 TREASURER. The Treasurer shall have charge of the securities of the Company and the deposit and disbursement of its funds, subject to the control of the Board of Directors. In the absence or disability of the Treasurer, an Assistant Treasurer or any other person designated by the Board of Directors or the Chief Executive Officer shall have the authority and perform the duties of the Treasurer. ARTICLE III INDEMNIFICATION 3.1 MANDATORY INDEMNIFICATION OF DIRECTORS, OFFICERS AND OTHER PERSONS. The Company shall, except as otherwise provided in Section 3.4 hereof, indemnify any director or officer of the Company or any of its subsidiaries who was or is an “authorized representative” of the Company (which shall mean for the purposes of this Article III, a director or officer of the Company, or a person serving at the request of, for the convenience of, or to represent the interests of, the Company as a director, officer, employee, partner, agent, manager, member, fiduciary, trustee or other representative of another corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise) and who was or is a “party” (which shall include for purposes of this Article III the giving of testimony or similar involvement) or is threatened to be made a party to any “proceeding” (which shall mean for purposes of this Article III any threatened, pending or completed action, suit, appeal, investigation (including any internal investigation), inquiry, hearing, mediation, arbitration, other alternative dispute mechanism or

 
22 other proceeding of any nature, whether civil, criminal, administrative, regulatory, legislative, investigative or arbitrative, whether formal or informal, and whether brought by or in the right of the Company, its shareholders, the Board of Directors, any duly authorized committee of the Board of Directors, a governmental agency or instrumentality, a self-regulatory organization or otherwise) by reason of the fact that such person was or is an authorized representative of the Company to the fullest extent permitted by the PBCL and other applicable law (as the same exists or may hereafter be amended, but, in the case of any such amendment, only to the extent that such amendment permits the Company to provide broader indemnification rights than said law permitted the Company to provide prior to such amendment), including, without limitation, indemnification against expenses (which shall include for purposes of this Article III attorneys’ fees and disbursements), damages, punitive damages, judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such proceeding unless the act or failure to act giving rise to the claim is finally determined by a court of competent jurisdiction from which there is no further right of appeal to have constituted willful misconduct or recklessness. For the purposes of this Article III, a person’s service to the Company or another enterprise shall be presumed to be “serving at the request of the Company,” unless it is conclusively determined to the contrary by a majority vote of the directors of the Company, excluding, if applicable, such person. With respect to such determination, it shall not be necessary for such person to show any actual or prior request by the Company or its Board of Directors for such service to the Company or such other enterprise. If an authorized representative is not entitled to indemnification in respect of a portion of any liabilities to which such person may be subject, the Company shall nonetheless indemnify such person to the maximum extent for the remaining portion of the liabilities. Notwithstanding the foregoing, the Company shall not indemnify any such authorized representative in connection with a proceeding (or part thereof) initiated by such person unless such proceeding (or part thereof) is brought by the authorized representative due to the failure of the Company to pay indemnification provided under Sections 3.1, 3.2 or 3.3 and the authorized representative is successful in such proceeding. 3.2 ADVANCEMENT OF EXPENSES. Except as otherwise provided in Section 3.4 hereof, the Company shall pay the expenses (including attorneys’ fees and disbursements) actually and reasonably incurred in defending a proceeding on behalf of any person entitled to indemnification under Section 3.1 of this Article III in advance of the final disposition of such proceeding upon receipt of an undertaking by or on behalf of such person to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the Company as authorized in this Article III and may pay such expenses in advance on behalf of any employee or agent on receipt of a similar undertaking. Such advances shall be paid by the Company within ten (10) calendar days after the receipt by the Company of a statement or statements from the person entitled to indemnification requesting such advance or advances from time to time together with a reasonable accounting of such expenses. The financial ability of any person entitled to indemnification under Section 3.1 of this Article III to repay the Company any amounts advanced for expenses shall not be a prerequisite to the making of an advance and any advancement of expenses of such a person shall not be required to be secured and shall not bear interest. Except as otherwise provided in the PBCL or this Section 3.2, the Company shall not impose on any person entitled to indemnification under Section 3.1 of this Article III additional conditions to the advancement of expenses or require from such person additional undertakings regarding repayment. Advancements of expenses to any person entitled to indemnification under Section 3.1 of this Article III shall include any and all reasonable expenses incurred pursuing an action to

 
23 enforce this right of advancement, including expenses incurred preparing and forwarding statements to the Company to support the advancements claimed. 3.3 EMPLOYEE BENEFIT PLANS. For purposes of this Article III, the Company shall be deemed to have requested an officer or director to serve as fiduciary with respect to an employee benefit plan where the performance by such person of duties to the Company also imposes duties on, or otherwise involves services by, such person as a fiduciary with respect to the plan; excise taxes assessed on an authorized representative with respect to any transaction with an employee benefit plan shall be deemed “fines”; and action taken or omitted by such person with respect to an employee benefit plan in the performance of duties for a purpose reasonably believed to be in the interest of the participants and beneficiaries of the plan shall be deemed to be for a purpose which is not opposed to the best interests of the Company. 3.4 EXCEPTIONS. No indemnification under Sections 3.1 and 3.3 of this Article III or advancement or reimbursement of expenses under Section 3.2 of this Article III shall be provided to a person covered by Sections 3.1 and 3.3 of this Article III hereof: (i) with respect to expenses or the payment of profits arising from the purchase or sale of securities of the Company in violation of Section 16(b) of Exchange Act; (ii) if a final unappealable judgment or award establishes that such director or officer engaged in intentional misconduct or a transaction from which the director or officer derived an improper personal benefit; (iii) for expenses or liabilities of any type whatsoever (including, but not limited to, judgments, fines, and amounts paid in settlement) which have been paid directly to, or for the benefit of, such person by an insurance carrier under a policy of officers’ and directors’ liability insurance whose premiums are paid for by the Company or by an individual or entity other than such director or officer; and (iv) for amounts paid in settlement of any threatened, pending or completed action, suit or proceeding without the written consent of the Company, which written consent shall not be unreasonably withheld. The Board of Directors of the Company is hereby authorized, at any time by resolution, to add to the foregoing list of exceptions from the right of indemnification under Sections 3.1 and 3.3 of this Article III or advancement or reimbursement of expenses under Section 3.2 of this Article III, but any such additional exception shall not apply with respect to any event, act or omission which occurred prior to the date that the Board of Directors in fact adopts such resolution. Any such additional exception may, at any time after its adoption, be amended, supplemented, waived or terminated by further resolution of the Board of Directors of the Company. 3.5 SECURITY FOR INDEMNIFICATION OBLIGATIONS. To further effect, satisfy or secure the indemnification obligations provided herein or otherwise, the Company may, at its expense, purchase and maintain insurance, obtain a letter of credit, act as self-insurer, create a reserve, trust, escrow, cash collateral or other fund or account, enter into indemnification agreements, pledge or grant a security interest in any assets or properties of the Company, or use any other mechanism or arrangement whatsoever in such amounts, at such costs, and upon such other terms and conditions as the Board of Directors shall deem appropriate. 3.6 CONTRACT RIGHTS. Without the necessity of entering into an express contract with any person covered by Sections 3.1 and 3.3 of this Article III and entitled to indemnification under Section 3.1 of this Article III, the obligations of the Company to indemnify an indemnified person under Sections 3.1 and 3.3 of this Article III, including the obligation to advance and/or reimburse expenses under Section 3.2 of this Article III, shall be considered a contract right between the Company and such indemnified person pursuant to which the Company and each such

 
24 person intend to be legally bound and shall be effective to the same extent and as if provided for in a contract between the Company and such indemnified person. Such contract right shall be deemed to vest at the commencement of such indemnified person’s service to or at the request of the Company, and no amendment, modification or repeal of this Article III shall affect, to the detriment of the indemnified person and such indemnified person’s heirs, executors, administrators and estate, such obligations of the Company in connection with a claim based on any act or failure to act occurring before such modification or repeal. 3.7 RELIANCE UPON PROVISIONS. Each person who shall act as an authorized representative of the Company shall be deemed to be doing so in reliance upon the rights of indemnification and advancement of expenses provided by this Article III. 3.8 AMENDMENT OR REPEAL. Any repeal, amendment or modification hereof shall be prospective only and shall not limit, but may expand, any rights or obligations in respect of any proceeding whether commenced prior to or after such change to the extent such proceeding pertains to actions or failures to act occurring prior to such change. 3.9 NON-EXCLUSIVITY OF RIGHTS. The right to indemnification and the advancement of expenses, as authorized by this Article III, shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any applicable law (common law or statutory law), any provision of the Articles of Incorporation or these Bylaws, agreement, insurance policy, vote of shareholders or disinterested directors or otherwise, both as to action in an official capacity and as to action in any other capacity while holding such office or while employed by or acting as agent for the Company. The Company is specifically authorized to enter into an agreement with any of its directors, officers, employees or agents providing for indemnification and advancement of expenses that may change, enhance, qualify or limit any right to indemnification or the advancement of expenses provided by this Article III, to the fullest extent not prohibited by the PBCL or other applicable law. 3.10 CONTINUATION OF RIGHTS. The rights of indemnification and advancement or reimbursement of expenses provided by, or granted pursuant to, this Article III shall continue as to an officer or director of the Company who has ceased to be an officer or director in respect of matters arising prior to such time, and shall inure to the benefit of the spouses, heirs, executors and administrators of such person. 3.11 NO IMPUTATION. The knowledge and/or actions, or failure to act, of any officer, director, employee or representative of the Company, another enterprise or any other person shall not be imputed to any person for purposes of determining the right to indemnification or advancement or reimbursement of expenses under this Article III. 3.12 ENFORCEMENT OF RIGHTS. If a request for indemnification or for the advancement or reimbursement of expenses pursuant to this Article III is not paid in full by the Company within thirty (30) calendar days after a written claim has been received by the Company, together with all supporting information reasonably requested by the Company, the claimant may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim (plus interest at the prime rate announced from time to time by the Company’s primary lending bank) and, if successful in whole or in part, the claimant shall be entitled also to be paid the

 
25 expenses (including, but not limited to, attorneys’ and investigation fees and costs) of prosecuting such claim. Neither the failure of the Company (including its Board of Directors or independent legal counsel) to have made a determination prior to the commencement of such action that indemnification of or the advancement or reimbursement of expenses to the claimant is proper in the circumstances, nor an actual determination by the Company (including its Board of Directors or independent legal counsel) that the claimant is not entitled to indemnification or to the reimbursement or advancement of expenses, shall be a defense to the action or create a presumption that the claimant is not so entitled. ARTICLE IV STOCK CERTIFICATES AND CORPORATE SEAL 4.1 EXECUTION. Certificates of shares of capital stock of the Company shall be signed by the Chair of the Board, the Chief Executive Officer, the President or a Vice President and by the Secretary, an Assistant Secretary, the Treasurer or an Assistant Treasurer, but where a certificate is signed by a transfer agent or a registrar, the signature of any corporate officer may be facsimile, engraved or printed. 4.2 SEAL. The Company shall have a corporate seal which shall bear the name of the Company and State and year of its incorporation. The seal shall be in the custody of the Secretary of the Company and may be used by causing it or a facsimile to be impressed or reproduced upon or affixed to any document. ARTICLE V NOTICES 5.1 FORM OF NOTICE. Whenever written notice is required to be given to any person under the provisions of the PBCL, the Articles of Incorporation or these Bylaws, it may be given to a person: (i) by personal delivery, (ii) by facsimile number, email or other electronic communication to a facsimile number or address for email or other electronic communications supplied by such person to the Company for the purpose of notice, or (iii) by sending a copy thereof by first class or express mail, postage prepaid, or by telegram (with messenger service specified), confirmed facsimile transmission or courier service, charges prepaid, to the address (or to the facsimile number) of the person appearing on the books of the Company or, in the case of notice to be given to a director, to the address (or to the facsimile number) supplied by the director to the Company for the purpose of notice. If the notice is sent by mail, telegraph or courier service, it shall be deemed to have been given to the person entitled thereto when deposited in the United States mail or with a telegraph office or courier service for delivery to that person. Notice given by facsimile transmission, email or other electronic communication shall be deemed to have been given to the person entitled thereto when sent. A notice of meeting shall specify the place, day and hour of the meeting and any other information required by any other provision of the PBCL, the Articles of Incorporation or these Bylaws. 5.2 ADJOURNED SHAREHOLDER MEETINGS. When a meeting of shareholders is adjourned, it shall not be necessary to give any notice of the adjourned meeting or of the business to be transacted at an adjourned meeting, other than by announcement at the meeting at which the adjournment is taken, unless the Board of Directors fixes a new record date for the adjourned meeting, in which event the notice shall be given in accordance with this section.

 
26 5.3 WAIVER OF NOTICE. Any notice required to be given under these Bylaws may be effectively waived by the person entitled thereto by written waiver signed before or after the meeting to which such notice would relate or by attendance at such meeting otherwise than for the purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting was not lawfully called or convened. ARTICLE VI AMENDMENTS 6.1 AMENDMENTS. These Bylaws may be amended or repealed and new bylaws may be adopted by the affirmative vote of a majority of the total number of the authorized members of the Board of Directors (whether or not there exist any vacancies in previously authorized directorships at the time a resolution regarding the foregoing is presented to the Board of Directors for adoption) or by the by the affirmative vote of a majority of the votes cast in person or by proxy at the meeting of shareholders by the holders of shares entitled to vote thereon, as the case may be; provided, however, that new bylaws may not be adopted and these Bylaws may not be amended or repealed in any way that limits indemnification rights, increases the liability of directors or changes the manner or vote required for any such adoption, amendment or repeal, except by the affirmative vote of a majority of the votes cast in person or by proxy at the meeting of shareholders by the holders of shares entitled to vote thereon. In the case of any meeting of shareholders, in order to consider the adoption, amendment or repeal of these Bylaws, written notice shall be given to each shareholder entitled to vote thereat that the purpose, or one of the purposes, of the meeting is to consider the adoption, amendment or repeal of these Bylaws, which notice shall also include, without limitation, the text of any resolution calling for any adoption, amendment or repeal. Notwithstanding the foregoing, any shareholder seeking to bring a proposed amendment to these Bylaws before a meeting of shareholders, must comply with Sections 1.8 and 1.9 of these Bylaws. ARTICLE VII EMERGENCY BYLAWS 7.1 WHEN OPERATIVE. The emergency bylaws provided by the following Sections shall be operative during any emergency resulting from warlike damage or an attack on the United States or any nuclear or atomic disaster, notwithstanding any different provision in the preceding Sections of these Bylaws, in the Articles of Incorporation or in the PBCL. To the extent not inconsistent with these emergency bylaws, the Bylaws provided in the preceding Sections shall remain in effect during such emergency and upon the termination of such emergency the emergency bylaws shall cease to be operative unless and until another such emergency shall occur. 7.2 MEETINGS. During any such emergency: (a) Any meeting of the Board of Directors may be called by any director. Whenever any officer of the Company who is not a director has reason to believe that no director is available to participate in a meeting, such officer may call a meeting to be held under the provisions of this Section. (b) Notice of each meeting called under the provisions of this Section shall be given by the person calling the meeting or at his request by any officer of the Company. The

 
27 notice shall specify the time and the place of the meeting, which shall be the head office of the Company at the time if feasible and otherwise any other place specified in the notice. Notice need be given only to such of the directors as it may be feasible to reach at the time and may be given by such means as may be feasible at the time, including publication, radio, email or text messaging. If given by mail, messenger, telephone or telegram, the notice shall be addressed to the director at his residence or business address or such other place as the person giving the notice shall deem suitable. In the case of meetings called by an officer who is not a director, notice shall also be given similarly, to the extent feasible, to the persons named on the list referred to in part (c) of this Section. Notice shall be given at least two (2) calendar days before the meeting if feasible in the judgment of the person giving the notice and otherwise the meeting may be held on any shorter notice as deemed suitable. (c) At any meeting called under the provisions of this Section, the director or directors present shall constitute a quorum for the transaction of business. If no director attends a meeting called by an officer who is not a director and if there are present at least three of the persons named on a numbered list of personnel approved by the Board of Directors before the emergency, those present (but not more than the seven appearing highest in priority on such list) shall be deemed directors for such meeting and shall constitute a quorum for the transaction of business. 7.3 LINES OF SUCCESSION. The Board of Directors, during as well as before any such emergency, may provide, and from time to time modify, lines of succession in the event that during such an emergency any or all officers or agents of the Company shall for any reason be rendered incapable of discharging their duties. 7.4 OFFICES. The Board of Directors, during as well as before any such emergency, may, effective in the emergency, change the head office or designate several alternative head offices or regional offices, or authorize the officers so to do. 7.5 LIABILITY. No officer, director or employee acting in accordance with these emergency bylaws shall be liable except for willful misconduct. 7.6 REPEAL OR CHANGE. These emergency bylaws shall be subject to repeal or change by further action of the Board of Directors or by action of the shareholders, except that no such repeal or change shall modify the provisions of the next preceding Section with regard to action or inaction prior to the time of such repeal or change. ARTICLE VIII PENNSYLVANIA ACT 36 OF 1990 8.1 NON-APPLICABILITY OF PENNSYLVANIA’S CONTROL-SHARE ACQUISITION STATUTE. Subchapter G of Chapter 25 of the PBCL (relating to certain control-share acquisitions of the Company’s common stock and the voting of such shares by certain controlling shareholders) shall not be applicable to the Company. 8.2 NON-APPLICABILITY OF PENNSYLVANIA’S DISGORGEMENT STATUTE. Subchapter H of Chapter 25 of the PBCL (relating to disgorgement to the Company of

 
28 profits made on the sale of its common stock by certain controlling shareholders if the sale occurs within certain periods and under certain circumstances) shall not be applicable to the Company. ARTICLE IX FORUM SELECTION 9.1 EXCLUSIVE FORUM. Unless the Board of Directors adopts a resolution approving the selection of an alternative forum, the exclusive forum shall be the federal District Court for the Middle District of Pennsylvania, or if such federal court does not have jurisdiction, any other federal or state court located within the Commonwealth of Pennsylvania, for the following types of actions: (i) any derivative action or proceeding brought on behalf of the Company, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director or officer of the Company to the Company, (iii) any action asserting a claim against the Company or any director or officer or other employee of the Company arising pursuant to any provision of the PBCL, the Articles of Incorporation or these Bylaws (as each may be amended from time to time), or (iv) any action asserting a claim against the Company or any director or officer or other employee of the Company governed by the internal affairs doctrine. As amended December 15, 2023.

 
EX-10.5 3 ex105-033124.htm EX-10.5 Document


EXHIBIT 10.5
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Corporate Headquarters 4350 Congress Street, Suite 600 · Charlotte, NC 28209 U.S.A. · Phone 704-885-2555 · Fax 704-885-2429
www.glatfelter.com


EXHIBIT 10.5
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Corporate Headquarters 4350 Congress Street, Suite 600 · Charlotte, NC 28209 U.S.A. · Phone 704-885-2555 · Fax 704-885-2429
www.glatfelter.com


EXHIBIT 10.5
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Corporate Headquarters 4350 Congress Street, Suite 600 · Charlotte, NC 28209 U.S.A. · Phone 704-885-2555 · Fax 704-885-2429
www.glatfelter.com
EX-10.6 4 ex106-033124.htm EX-10.6 Document


EXHIBIT 10.6

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Glatfelter Corporation

Restricted Stock Unit Award Certificate
______________________________________________________________________________

Award Number: 2024-RSU-01 Award Date: February 28, 2024


Number of Restricted Stock Units: XXXX

Vesting Schedule:
Vesting Date
RSUs Vesting
December 31, 2024
33.33%
February 28, 2026
 33.33%
February 28, 2027
33.34%

THIS CERTIFIES THAT Glatfelter Corporation, a Pennsylvania corporation (the “Company”) has on the Award Date specified above granted to:

Name

(the “Participant”) an award (the “Award”) to receive that number of Restricted Stock Units (the “RSUs”) indicated above in the space labeled “Number of Restricted Stock Units,” each RSU representing the right to receive one share of the Company’s common stock (the “Common Stock”), subject to the terms and conditions contained in this Award Certificate and the Company’s 2022 Long-Term Incentive Plan, as amended and restated (the “Plan”). In the event of any conflict between the terms of the Plan and this Award Certificate, the terms of the Plan will prevail. Any capitalized terms not defined herein will have the meaning set forth in the Plan.

* * * *
1.Rights of the Participant with Respect to the Restricted Stock Units.

(a) No Shareholder Rights. The RSUs granted under this Award do not and will not entitle the Participant to any rights of a holder of Common Stock. The rights of the Participant with respect to the RSUs will remain forfeitable at all times prior to the date on which the rights become vested, according to Section 2, 3, 4 or 7.

2024 RSU Award Certificate – Page 1 of 6


EXHIBIT 10.6
(b) Dividend Equivalents. During the period from the Award Date to the issuance of shares of Common Stock according to Section 1(c), and assuming the Company issues dividends to its shareholders during this period, the Participant will be credited with deemed dividends (a “Deemed Dividend”) in an amount equal to each cash dividend payable after the Award Date, just as though the Participant, on the record date for payment of the dividend, had been the holder of record of shares of Common Stock equal to the number of RSUs represented by this Award Certificate. The Deemed Dividends will be converted to additional RSUs, rounded down to the nearest whole number, by dividing the Deemed Dividends by the Fair Market Value of one share of Common Stock on the date the cash dividend to which it relates is paid. The Company will establish a bookkeeping record to account for the Deemed Dividends and additional RSUs to be credited to the Participant. The additional RSUs represented by Deemed Dividends are subject to the same vesting requirements as the Award.

(c) Conversion of Restricted Stock Units; Issuance of Common Stock.

(i) No shares of Common Stock will be issued to the Participant prior to the date on which the RSUs vest, in accordance with Section 2, 3, 4 or 7. Neither this Section 1(c) nor any action taken according to this Section will be construed to create a trust of any kind. After vesting takes place according to Section 2, 3, 4 or 7, the Company will cause to be issued, within thirty (30) days following the date of vesting (subject to Section 6(a)), in payment for such RSUs that number of shares of Common Stock equal to the number of vested RSUs.

(ii) Notwithstanding anything in the Agreement to the contrary: If the Participant incurs a Separation from Service on account of Retirement, death, Disability, or a CIC Termination (as defined below), in each case, upon or within two years after a Change in Control that constitutes a “change in control event” for purposes of Code section 409A (“409A CIC”), payment in respect of the vested RSUs will be made to the Participant within sixty (60) days following such Separation from Service, subject to Section 6(a) below. If a Participant incurs a Separation from Service on account of Retirement and a Change in Control that constitutes a 409A CIC subsequently occurs before the Third Vesting Date, any RSUs that vest pursuant to Section 4(c) will be paid upon the Change in Control. If a Change in Control does not constitute a 409A CIC or if the Separation from Service occurs more than two years after a 409A CIC, and if required by Code section 409A, payment will be made on the date on which payment would have been made had there been no Change in Control.


2. Vesting.

(a) Except as set forth in Section 4(b) or 4(c), the RSUs will vest on the following dates; provided the Participant remains continuously employed by the Company on the applicable dates below (each, a “Vesting Date”):

Vesting Date
RSUs Vesting
December 31, 2024 (“First Vesting Date”)
33.33%
February 28, 2026 (“Second Vesting Date”)
33.33%
February 28, 2027 (“Third Vesting Date”)
33.34%

Except as provided in Sections 3, 4 or 7, if the Participant should, prior to the applicable Vesting Date, have a Separation from Service, the unvested RSUs will, upon the occurrence of the event, be forfeited and no shares of common stock will be issued to the Participant.

(b) The vesting of the RSUs is cumulative but shall not exceed 100% of the RSUs. If the foregoing schedule or the provisions of Section 3 would produce fractional units, the number of RSUs vesting shall be rounded up to the nearest whole unit, but not in excess of 100% of the RSUs.

2024 RSU Award Certificate – Page 2 of 6


EXHIBIT 10.6
3. Early Vesting upon Separation following Change in Control. Notwithstanding the vesting provision contained in Section 2 and Section 4(c), but subject to the other terms and conditions set forth herein, including Section 7, and provided that the Participant is employed by the Company immediately prior to a Change in Control, as hereinafter defined, in the event of the Participant’s (i) involuntary Separation from Service by the Company other than for Cause or (ii) voluntary Separation from Service for Good Reason, in each case upon or following a Change in Control and before the Third Vesting Date (in either case, a “CIC Termination”), the next unvested tranche of the RSUs will become fully vested on the date of the Participant’s Separation from Service as if the recipient remained employed by the Company through the next applicable Vesting Date. Any unvested RSUs that do not become vested pursuant to this Section 3 will be immediately and irrevocably forfeited.

4.    Forfeiture or Early Vesting upon Separation from Service.

(a) Separation from Service Generally. If, prior to vesting of the RSUs according to Section 2, the Participant has a Separation from Service with the Company or any of its subsidiaries for any reason (voluntary or involuntary) other than death, Disability, or Retirement, then any unvested RSUs will be immediately and irrevocably forfeited.

(b) Death or Disability. Provided that the Participant is employed by the Company immediately prior to such event, upon the Participant’s death or Disability (whether or not a Separation from Service), then all unvested RSUs will become fully vested.

(c) Vesting upon Retirement. If the Participant incurs a Separation from Service due to Retirement prior to the Third Vesting Date, an amount of unvested RSUs will vest on the next Vesting Date immediately following the date of Retirement, which amount shall be determined by multiplying the number of RSUs by a fraction, the numerator of which is the number of days in the period starting with (i) the Award Date through (ii) the date of Retirement, and the denominator of which is 1,097, and subtracting the RSUs that had vested as of the date of Retirement in accordance with Section 2(a), rounded down to the nearest whole unit, without regard to continued service. Restrictions on all RSUs that vest in accordance with this Section 4(c) will lapse on the next Vesting Date immediately following the date of Retirement and be paid out after such Vesting Date according to Section 1(c). Any unvested RSUs shall be forfeited as of the date of Retirement and cease to be outstanding, unless Section 3 applies.

5. Restriction on Transfer. The RSUs and any rights under the Award may not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of by the Participant, and any such purported sale, assignment, transfer, pledge, hypothecation or other disposition of RSUs or other rights under the Award will be void and unenforceable against the Company and will result in the immediate forfeiture of such RSUs and rights. Notwithstanding the foregoing, the Participant may, in the manner established by the Compensation Committee, designate a beneficiary or beneficiaries to exercise the rights of the Participant and receive any shares of Common Stock issued or any cash paid with respect to the RSUs upon the death of the Participant.

6. Tax Matters; Compliance with Code section 409A.

(a) Distributions of Common Stock in payment for RSUs as described herein which represent a “deferral of compensation” within the meaning of Code section 409A will conform to the applicable requirements of Code section 409A including, without limitation, the requirement that a distribution to a Participant who is a “specified employee” within the meaning of Code section 409A(a)(2)(B)(i) which is made on account of the specified employee’s Separation from Service will not be made before the date which is six (6) months after the date of Separation from Service. If such distribution is delayed pursuant to Code section 409A, the distribution will be paid within thirty (30) days after the end of the six-month period. If the Participant dies during such six-month period, any postponed amounts shall be paid within ninety (90) days of the Participant’s death. In no event shall the Participant, directly or indirectly, designate the calendar year of payment.
2024 RSU Award Certificate – Page 3 of 6


EXHIBIT 10.6

(b) In order to comply with all applicable federal, state and local tax laws or regulations, the Company may take such actions as it deems appropriate to ensure that all applicable federal, state and local payroll, withholding, income or other taxes are withheld or collected from the Participant.

(c) The Company will take such actions as it deems appropriate to ensure all applicable federal, state, local or foreign taxes are withheld or collected from the Participant. In accordance with the terms of the Plan, the Committee hereby confirms that the Participant may elect to satisfy the Participant’s federal, state, local and foreign tax withholding obligations arising from the receipt of shares of Common Stock following the vesting of the RSUs by (i) delivering a check or money order payable to the Company in an amount equal to the federal, state, local or foreign taxes the Company is required to withhold to satisfy its withholding obligations, or (ii) having the Company withhold a portion of the shares of Common Stock otherwise to be delivered having a Fair Market Value equal to the amount of such federal, state, local or foreign taxes the Company is required to withhold to satisfy its minimum withholding obligations (or such other withholding rate as is affirmatively approved by the Committee). The Company will not deliver any fractional share of Common Stock but will instead round down to the next full number the amount of shares of Common Stock to be delivered. The Participant’s election must be made on or before the date that any such withholding obligation with respect to the RSUs arises, based on procedures established by the Company. If the Participant fails to make a timely election, the Company will have the right to withhold a portion of the shares of Common Stock otherwise to be delivered having a Fair Market Value equal to the amount the Company’s minimum withholding obligations with respect to such taxes.

7. Change in Control. In the event of a Change in Control in which the Company’s stock is no longer the stock of the surviving entity, the Company will cause the surviving entity to issue replacement RSUs (“Replacement RSUs”). The number of Replacement RSUs to be issued will be calculated based on the fair market value of the Company’s Common Stock at the date of the Change in Control divided by the fair market value of the surviving entity’s common stock on such date. If such replacement RSUs are not issued for any reason, or if the common stock of the surviving entity is not publicly traded at the date of the Change in Control, then, notwithstanding the provisions of Section 3, all RSUs will vest in full upon the occurrence of the Change in Control. The terms and provisions of this Certificate will continue to apply to the Replacement RSUs when issued, including, without limitation, Section 3.

8. Miscellaneous.

(a) The Award does not confer on the Participant any right with respect to the continuance of any relationship with the Company or its subsidiaries, nor will it interfere in any way with the right of the Company to terminate such relationship at any time.

(b) The Company will not be required to deliver any shares of Common Stock upon vesting or lapse of restrictions of any RSUs until the requirements of any federal or state securities laws, rules or regulations or other laws or rules (including the rules of any securities exchange) as may be determined by the Company to be applicable are satisfied.

2024 RSU Award Certificate – Page 4 of 6


EXHIBIT 10.6
(c) All distributions under this Award shall be subject to any applicable clawback or recoupment policies, insider trading policies, policies prohibiting pledging or hedging of shares of Common Stock, and other polices that may be implemented by the Board from time to time.

(d) An original record of the Award and all the terms thereof, executed by the Company, will be held on file by the Company. To the extent there is any conflict between the terms contained in the Award Certificate and the terms contained in the original record held by the Company, the terms of the original record held by the Company will control.

9. Definitions.

(a) “Board” will have the meaning set forth in the Plan.

(b) “Cause” will mean (i) an act or acts of personal dishonesty taken by the Participant and intended to result in substantial personal enrichment of the Participant at the expense of the Company, (ii) the Participant’s willful, deliberate and continued failure to substantially perform for the Company the normal material duties related to Participant’s job position which are not remedied in a reasonable period of time after receipt of written notice from the Company, (iii) violation by the Participant of any of the Company’s policies, including, but not limited to, policies regarding sexual harassment, insider trading, confidentiality, non-disclosure, non-competition, non-disparagement, substance abuse and conflicts of interest, Code of Business Conduct, and any other written policy of the Company, which violation could result in the termination of the Participant’s employment; or (iv) the conviction of the Participant of a felony.

(c) “Change in Control.” will have the meaning set forth in the Plan.

(d) “Code” will mean the Internal Revenue Code of 1986, as amended.

(e) “Committee” will have the meaning set forth in the Plan.

(f) “Disability” will have the meaning set forth in the Plan.

(g) “Fair Market Value” will have the meaning set forth in the Plan.

(h) “Good Reason” will mean “Good Reason” as defined in the Participant’s Change in Control Employment Agreement for those Participants subject to such agreement; otherwise, “Good Reason” will mean (i) a material diminution in the Participant’s base salary, or (ii) a material change in the geographic location at which the Participant must perform services (for this purpose, a requirement that the Participant’s services be performed at a location less than forty (40) miles from the location where the Participant previously performed services will not be considered a material change. In order for termination to be for Good Reason, within ninety (90) days after the occurrence of any of the events listed in clauses (i) or (ii) above, (x) the Participant must deliver written notice to the Company of his/her intention to terminate his/her employment for Good Reason specifying in reasonable detail the facts and circumstances deemed to give rise to the Participant’s right to terminate his/her employment for Good Reason, (y) the Company will not have cured such facts and circumstances within thirty (30) days after delivery of such notice by the Participant to the Company, and (z) the Participant must have a Separation from Service no later than thirty (30) days following the expiration of such thirty (30) day cure period.

2024 RSU Award Certificate – Page 5 of 6


EXHIBIT 10.6
(i) “Retirement” will mean the retirement of an employee from employment with the Company and all affiliates on or after attaining age sixty five (65), or on or after attaining age fifty five (55) with a minimum of ten (10) years of service.

(j) “Separation from Service” will have the meaning set forth in the Plan.

A copy of the Plan is attached to this Certificate.


GLATFELTER CORPORATION

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________________________________
Eileen L. Beck
Senior Vice President, Human Resources & Administration


By my signature below, I hereby acknowledge receipt of this Award Certificate on the date shown above, which has been issued to me under the terms and conditions of the Plan. I further acknowledge that I reviewed the Plan and agree to conform to all of the terms and conditions of the Award Certificate and the Plan.



Signature: Date:
Name

2024 RSU Award Certificate – Page 6 of 6
EX-10.7 5 ex107-033124.htm EX-10.7 Document


EXHIBIT 10.7
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As noted in your Long-Term Incentive (“LTI”) Program letter, Glatfelter Corporation (“Glatfelter” or “the Company”) is providing you with the opportunity to receive a Cash Restoration payment intended to keep your long-term incentive compensation value whole subject to your continued employment with Glatfelter through the respective vesting dates. The Cash Restoration component represents 25% of your full 2024 LTI award value and is granted outside of Glatfelter’s Amended and Restated 2022 Long-Term Incentive Plan.

You are eligible to receive a gross Cash Restoration payment of $VALUE, provided you remain actively employed by Glatfelter through the respective vesting dates as outlined below.

2024 Cash Restoration Award Details

Your Cash Restoration value is outlined below:

cashrestorationletter2a.jpg

You must remain continuously employed with Glatfelter through each vesting date to receive payment of the applicable tranche of the Cash Restoration. If you terminate your Service prior to a vesting date for any reason other than a “CIC Termination” (as defined below in the Appendix), you will forfeit all unvested tranches of your Cash Restoration for no consideration.

Upon vesting, each tranche of the Cash Restoration will be paid in a lump sum cash payment as soon as administratively feasible after each respective vesting date, but no later than 60 days following the vesting date.



EXHIBIT 10.7
Payment of each tranche of the Cash Restoration is subject to all applicable taxes and deductions under federal, state and local law or regulation.


Additional Transaction-Related Details; Termination

The Cash Restoration will remain outstanding and continue to vest under the vesting schedule set forth above on and after the closing of the proposed merger of Berry Global’s HHNF business with Glatfelter (“Transaction”).

Notwithstanding the foregoing, if you terminate your Service with Glatfelter due to a “CIC Termination” (as defined below in the Appendix), the next unvested tranche of the Cash Restoration will vest on the date of the CIC Termination as if you remained employed through the next vesting date.

–Example: If the Transaction closes in September 2024 and the participant has a CIC Termination, the participant will have accelerated vesting on the termination date of the first tranche of the Cash Restoration that would have otherwise vested on 12/31/2024 as if they remained employed on that date (i.e., 1/3 of the Cash Restoration will vest). The unvested second and third tranches of the Cash Restoration will be forfeited as of the termination date.

–Example: If the Transaction closes in September 2025 and the participant has a CIC Termination, the participant will have accelerated vesting on the termination date of the second tranche of the Cash Restoration that would have otherwise vested on 2/28/2026 as if they remained employed on that date (i.e., the second tranche of 1/3 of the Cash Restoration will vest). The unvested third tranche of the Cash Restoration will be forfeited as of the termination date.


In the event that you are on inactive status (i.e., short- & long-term disability, military leave, leave of absence, etc.) at any time prior to the third vesting date, your Cash Restoration payment will be prorated for the amount of time your employment status is inactive.

Section 409A

All provisions of this Memorandum are intended to comply with Section 409A of the Internal Revenue Code of 1986, as amended, and the applicable Treasury regulations and administrative guidance issued thereunder (“Section 409A”) or an exemption therefrom and shall be construed and administered in accordance with such intent. Any payments under this Memorandum that may be excluded from Section 409A either as separation pay due to an involuntary separation from service or as a short-term deferral shall be excluded from Section 409A to the maximum extent possible. Any payments to be made under this Agreement upon a termination of the Employee’s employment shall only be made if such termination of employment constitutes a “separation from service” under Section 409A. For purposes of Section 409A, each installment payment provided under this Memorandum shall be treated as a separate payment. If any payment provided for herein would be subject to additional taxes and interest under Section 409A if the recipient’s receipt of such payment is not delayed until the earlier of the date that is six months after the date of the recipient’s “separation from service”, then such payment will be paid within 30 days after the end of the six month period (or within 90 days of the recipient’s death, if earlier).





EXHIBIT 10.7

Appendix

Definitions

a."Board” means the board of directors of the Company, as it may be constituted from time to time.

b.“Cause” will mean (i) an act or acts of personal dishonesty taken by the participant and intended to result in substantial personal enrichment of the participant at the expense of the Company, (ii) the participant’s willful, deliberate and continued failure to substantially perform for the Company the normal material duties related to participant’s job position which are not remedied in a reasonable period of time after receipt of written notice from the Company, (iii) violation by the participant of any of the Company’s policies, including, but not limited to, policies regarding sexual harassment, insider trading, confidentiality, non-disclosure, non-competition, non-disparagement, substance abuse and conflicts of interest, Code of Business Conduct, and any other written policy of the Company, which violation could result in the termination of the participant’s employment; or (iv) the conviction of the participant of a felony.

c.“CIC Termination” will mean with respect to a participant employed by the Company immediately prior to a Change in Control, the participant’s (i) involuntary Separation from Service by the Company other than for Cause or (ii) voluntary Separation from Service for Good Reason, in each case upon or following a Change in Control and before the third vesting date of the Cash Restoration.

d.“Change in Control” means:

i.The acquisition, directly or indirectly, other than from the Company, by any person, entity or “group” (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (excluding, for this purpose, the Company, its Subsidiaries, and any employee benefit plan of the Company or its subsidiaries) (a “Third Party”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of the combined voting power of the Company’s then outstanding voting securities entitled to vote generally in the election of directors; or

ii.Individuals who, as of the date hereof, constitute the Board (the “Incumbent Directors”) cease in any 12-month period for any reason to constitute at least a majority of the Board, provided that any person becoming a director subsequent to the date hereof whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the Incumbent Directors who are directors at the time of such vote shall be an Incumbent Director, but excluding for this purpose, any such person whose initial election as a member of the Board occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Third Party other than the Board; or

iii.Consummation of (A) a reorganization, merger or consolidation, in each case, with respect to which persons who were the shareholders of the Company



EXHIBIT 10.7
immediately prior to such reorganization, merger or consolidation (other than the surviving entity) do not, immediately thereafter, beneficially own more than 50% of the combined voting power of the reorganized, merged or consolidated company’s then outstanding voting securities entitled to vote generally in the election of directors, or (B) a liquidation or dissolution of the Company or the sale of all or substantially all of the assets of the Company (whether such assets are held directly or indirectly) to a Third Party.

The Committee may provide for a more restrictive definition of Change in Control in an
Agreement as required to comply with Section 409A of the Code. For the avoidance of
doubt, the Transaction will constitute a Change in Control.

e.“Good Reason” will mean “Good Reason” as defined in the participant’s Change in Control Employment Agreement for those participants subject to such agreement; otherwise, “Good Reason” will mean (i) a material diminution in the participant’s base salary, or (ii) a material change in the geographic location at which the participant must perform services (for this purpose, a requirement that the participant’s services be performed at a location less than forty (40) miles from the location where the participant previously performed services will not be considered a material change. In order for termination to be for Good Reason, within ninety (90) days after the occurrence of any of the events listed in clauses (i) or (ii) above, (x) the participant must deliver written notice to the Company of his/her intention to terminate his/her employment for Good Reason specifying in reasonable detail the facts and circumstances deemed to give rise to the participant’s right to terminate his/her employment for Good Reason, (y) the Company will not have cured such facts and circumstances within thirty (30) days after delivery of such notice by the participant to the Company, and (z) the participant must have a Separation from Service no later than thirty (30) days following the expiration of such thirty (30) day cure period.

f.“Separation from Service” means the termination of the participant’s employment with the Company and all A\affiliates that constitutes a “separation from service” within the meaning of Treas. Reg. Section 1.409A-1(h)(1).

















The Long-Term Incentive Plan document and prospectus are available upon request.

EX-10.8 6 ex108-033124.htm EX-10.8 Document
gzgnllmkh1c00000011a.jpg


Personal and Confidential

(NAME) February 21, 2024

Dear (FIRST NAME),

I am very pleased to inform you that you have been selected to participate in a special retention program that is designed to support a successful closing of the recently announced proposed transaction between Glatfelter and Berry Global’s HHNF business. Details of this program are outlined below.

Retention Award

You are eligible to receive a gross retention payment of (CURRENCY) (100% AMOUNT) contingent upon the successful closing of the proposed transaction, provided you remain actively employed by Glatfelter until reaching the below vesting dates:

•Tranche #1: 50% of the retention payment (CURRENCY) (50% AMOUNT) will be awarded on the closing date of the transaction;

•Tranche #2: 50% of the retention payment (CURRENCY) (50% AMOUNT) will be awarded on the six (6) month anniversary of the transaction’s closing date.

If you are involuntarily terminated for reasons other than misconduct or poor performance prior to the retention payment, you will receive accelerated vesting of any unpaid portion of the retention award effective with your termination date. Any periods of inactive status (sickness/diasbility leave, parental leave, unpaid leave etc.) will result in a reduced, pro rata amount for the time your employment status is inactive.

Each tranche of the retention award will be paid in a lump sum as soon as administratively feasible after each respective vesting date is reached. Payments are subject to applicable taxes and deductions.

The terms of this arrangement are highly confidential and may not be discussed with others. Failure to keep the information confidential could lead to ineligibility for receiving the retention award.

Please direct any questions you may have to Eileen Beck.

Sincerely,

thomasfahnemannsignaturea.jpg

Thomas Fahnemann
President, Chief Executive Officer

Copies:
Personnel File
Corporate Headquarters 4350 Congress Street, Suite 600 · Charlotte, NC 28209 U.S.A. · Phone 704-885-2555 · Fax 704-885-2429
www.glatfelter.com
EX-31.1 7 ex311-033124.htm EX-31.1 Document


EXHIBIT 31.1
CERTIFICATION PURSUANT TO SECTION 302 (a) OF THE SARBANES-OXLEY ACT OF 2002
I, Thomas M. Fahnemann certify that:
1.I have reviewed this Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 of Glatfelter Corporation and subsidiaries (“Glatfelter”);
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.
4.Glatfelter’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for Glatfelter and have:
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to Glatfelter, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)Evaluated the effectiveness of Glatfelter’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)Disclosed in this report any change in Glatfelter’s internal control over financial reporting that occurred during Glatfelter’s most recent fiscal quarter (the fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, Glatfelter's internal control over financial reporting.
5.Glatfelter’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to Glatfelter’s auditors and the audit committee of Glatfelter’s board of directors (or persons performing similar functions):
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect Glatfelter’s ability to record, process, summarize and report financial information; and
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in Glatfelter’s internal control over financial reporting.

May 9, 2024
By /s/ Thomas M. Fahnemann
Thomas M. Fahnemann
President and Chief Executive Officer



EX-31.2 8 ex312-033124.htm EX-31.2 Document


EXHIBIT 31.2
CERTIFICATION PURSUANT TO SECTION 302 (a) OF THE SARBANES-OXLEY ACT OF 2002
I, Ramesh Shettigar, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 of Glatfelter Corporation and subsidiaries (“Glatfelter”);
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.
4.Glatfelter’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for Glatfelter and have:
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to Glatfelter, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)Evaluated the effectiveness of Glatfelter’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)Disclosed in this report any change in Glatfelter’s internal control over financial reporting that occurred during Glatfelter’s most recent fiscal quarter (the fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, Glatfelter's internal control over financial reporting.
5.Glatfelter’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to Glatfelter’s auditors and the audit committee of Glatfelter’s board of directors (or persons performing similar functions):
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect Glatfelter’s ability to record, process, summarize and report financial information; and
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in Glatfelter’s internal control over financial reporting.

May 9, 2024
By /s/ Ramesh Shettigar
Ramesh Shettigar
Senior Vice President, Chief Financial Officer & Treasurer



EX-32.1 9 ex321-033124.htm EX-32.1 Document


Exhibit 32.1
CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 18 U.S.C. SECTION 1350

In connection with the Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 of Glatfelter Corporation (the “Company”) as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Thomas M. Fahnemann, President and Chief Executive Officer of the Company, certify to the best of my knowledge, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

A signed original of this written statement required by Section 906 has been provided to Glatfelter and will be retained by Glatfelter and furnished to the Securities and Exchange Commission or its staff upon request.

May 9, 2024

By /s/ Thomas M. Fahnemann
Thomas M. Fahnemann
President and Chief Executive Officer

EX-32.2 10 ex322-033124.htm EX-32.2 Document


Exhibit 32.2
CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 18 U.S.C. SECTION 1350

In connection with the Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 of Glatfelter Corporation (the “Company”) as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Ramesh Shettigar Senior Vice President, Chief Financial Officer & Treasurer of the Company, certify to the best of my knowledge, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

A signed original of this written statement required by Section 906 has been provided to Glatfelter and will be retained by Glatfelter and furnished to the Securities and Exchange Commission or its staff upon request.

May 9, 2024

By /s/ Ramesh Shettigar
Ramesh Shettigar
Senior Vice President, Chief Financial Officer & Treasurer