Item 9A. Controls and Procedures
ITEM 9A. CONTROLS AND PROCEDURES
(a) Evaluation of Disclosure Controls and Procedures
The Company’s management, with the participation of the Chief Executive Officer and Chief Financial Officer and utilizing the Committee of Sponsoring Organizations of the Treadway Commission (COSO) Internal Control – Integrated Framework (2013), have evaluated the effectiveness of the Company’s disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that these controls and procedures were effective as of the end of the period covered by this report.
(b) Changes in Internal Control Over Financial Reporting
There was no change in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
See Management Report on page 45 for management’s annual report on internal control over financial reporting. See Report of Independent Registered Public Accounting Firm on page 46 for KPMG LLP’s attestation report on internal control over financial reporting.
ITEM 9B. OTHER INFORMATION
None.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The information required by Item 401 of Regulation S-K with respect to directors is contained in our definitive Proxy Statement for our 2022 Annual Meeting of Shareholders (the “Proxy Statement”) which we will file with the Securities and Exchange Commission, pursuant to Regulation 14A, not later than 120 days after the end of our fiscal year under the caption “Proxy Item 1 – Proposal for Election of Directors”, and is incorporated herein by reference.
The information required by this item concerning our executive officers is incorporated by reference herein from Part I of this report under “Information About Our Executive Officers”.
The information required by Item 405 of Regulation S-K, if disclosure is required thereunder, is included in the Proxy Statement under the caption “General Matters – Delinquent Section 16(a) Reports” and is incorporated herein by reference.
The information required by Item 407(d)(4) and Item 407(d)(5) of Regulation S-K is included in the Proxy Statement under the caption “Proxy Item 1 – Proposal for Election of Directors – Board Meetings and Committees” and is incorporated herein by reference.
The audit committee and our board have approved and adopted a Code of Conduct for all directors, officers and employees and a Code of Ethics Applicable to Senior Officers, copies of which are available on our website at www.koppers.com and upon written request by our shareholders at no cost. Requests should be sent to Koppers Holdings Inc., Attention: Corporate Secretary’s Office, 436 Seventh Avenue, Suite 1550, Pittsburgh, Pennsylvania 15219. We will describe the date and nature of any amendment to our Code of Conduct or Code of Ethics Applicable to Senior Officers or any waiver (implicit or explicit) from a provision of our Code of Conduct or Code of Ethics Applicable to Senior Officers within four business days following the date of the amendment or waiver on our Internet website at www.koppers.com. We do not intend to incorporate the contents of our website into this report.
ITEM 11. EXECUTIVE COMPENSATION
The information required by Item 11 is contained in the Proxy Statement under the captions “Executive and Director Compensation” and “Corporate Governance Matters – Committee Reports to Shareholders – Management Development and Compensation Committee Report” and is incorporated herein by reference.
80
Koppers Holdings Inc. 2021 Annual Report
ITEM 12. S ECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The information required by Item 12 is contained in the Proxy Statement under the caption “Common Stock Ownership” and is incorporated herein by reference.
The following table provides information as of December 31, 2021, regarding the number of shares of our common stock that may be issued under our 2020 Long Term Incentive Plan:
Plan Category:
Number of securities to be issued upon exercise of outstanding options, warrants and rights
Weighted average exercise price of outstanding options, warrants and rights
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in first column)
Equity compensation plans approved by
security holders
2,034,325
(1)
$26.89
(2)
2,068,859
Equity compensation plans not approved by
security holders
0
0.00
0
Total
2,034,325
$26.89
2,068,859
(1)
Includes shares of our common stock that may be issued pursuant to outstanding options, time-based restricted stock units (“RSUs”) and performance-based RSUs awarded under our 2020 Long-Term Incentive Plan.
(2)
Does not reflect time-based RSUs and performance-based RSUs included in the first column, which do not have an exercise price.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
The information required by Item 13 is contained in the Proxy Statement under the captions “Transactions with Related Persons” and “Corporate Governance Matters – Director Independence” and is incorporated herein by reference.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Auditor Name: KPMG LLP
Auditor Location: Pittsburgh, Pennsylvania (US Firm)
Auditor Firm ID: PCAOB ID 185
All other information required by Item 14 is contained in the Proxy Statement under the caption “Auditors” and is incorporated herein by reference.
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) 1. Financial Statements
Financial statements filed as part of this report are included in “Item 8 – Financial Statements and Supplementary Data” as listed on the index on page 44.
(a) 2. Financial Statement Schedules
“Schedule II – Valuation and Qualifying Accounts and Reserves” is included on page 87. All other schedules are omitted because they are not applicable or the required information is contained in the applicable financial statements or notes thereto.
(a) 3. Exhibits
81
EXHIBIT INDEX
Exhibit No.
Exhibit
Incorporation by Reference
3.1
Amended and Restated Articles of Incorporation of the Company, as amended on May 7, 2015
Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q filed on August 6, 2015 (Commission File No. 001-32737).
3.2
Second Amended and Restated Bylaws of the Company, as adopted on August 2, 2017
Exhibit 3.2 to the Company’s Quarterly Report on Form 10-Q filed on August 3, 2017 (Commission File No. 001-32737).
4.1
Indenture, dated as of January 25, 2017, among Koppers Inc., Koppers Holdings Inc., the other guarantors named therein and Wells Fargo Bank, National Association, as Trustee
Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on January 25, 2017 (Commission File No. 001-32737).
4.2
First Supplemental Indenture, dated as of March 7, 2018, among M.A. Energy Resources, LLC, Koppers Inc., Koppers Holdings Inc., as a Guarantor, the other Subsidiary Guarantors and Wells Fargo Bank, National Association, as trustee
Exhibit 4.8 to the Company’s Quarterly Report on Form 10-Q filed on May 3, 2018 (Commission File No. 001-32737).
4.3
Second Supplemental Indenture, dated as of April 17, 2018, among the Guaranteeing Subsidiaries party thereto, Koppers Inc., Koppers Holdings Inc., as a Guarantor, the other Subsidiary Guarantors and Wells Fargo Bank, National Association, as trustee
Exhibit 4.9 to the Company’s Quarterly Report on Form 10-Q filed on May 3, 2018 (Commission File No. 001-32737).
4.4
Description of Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934
Exhibit 4.4 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 filed on February 27, 2020 (Commission File No. 001-32737).
4.5
Third Supplemental Indenture, dated as of August 20, 2020, among Koppers Utility Services LLC, Koppers Inc., Koppers Holdings Inc., as a Guarantor, the other Subsidiary Guarantors and Wells Fargo Bank, National Association, as trustee
Exhibit 4.1 to the Company’s Quarterly Report on Form 10-Q filed on November 4, 2020 (Commission File No. 001-32737).
10.1
Asset Purchase Agreement by and between Koppers Inc. and Koppers Company, Inc., dated as of December 28, 1988
Respective exhibits to the Koppers Inc. Prospectus filed on February 7, 1994. (P)
10.2
Asset Purchase Agreement Guarantee provided by Beazer PLC, dated as of December 28, 1988
Respective exhibits to the Koppers Inc. Prospectus filed on February 7, 1994. (P)
10.3*
Koppers Industries, Inc. Non-contributory Long Term Disability Plan for Salaried Employees
Respective exhibits to the Koppers Inc. Prospectus filed on February 7, 1994 pursuant to Rule 424(b) of the Securities Act of 1933, as amended, in connection with the offering of the 8 1 / 2 % Senior Notes due 2004. (P)
10.4*
Koppers Industries, Inc. Survivor Benefit Plan
Respective exhibits to the Koppers Inc. Prospectus filed on February 7, 1994 pursuant to Rule 424(b) of the Securities Act of 1933, as amended, in connection with the offering of the 8 1 / 2 % Senior Notes due 2004. (P)
10.5
Amendment and Restatement to Article VII of the Asset Purchase Agreement by and between Koppers Inc. and Beazer East, Inc., dated July 15, 2004
Exhibit 10.33 to the Koppers Inc. Quarterly Report on Form 10-Q filed on August 6, 2004 (Commission File No. 001-12716).
82
Koppers Holdings Inc. 2021 Annual Report
Exhibit No.
Exhibit
Incorporation by Reference
10. 6
Agreement and Plan of Merger dated as of November 18, 2004, by and among Koppers Inc., Merger Sub for KI Inc. and Koppers Holdings Inc. (f/k/a KI Holdings Inc.)
Exhibit 10.34 to the Company’s Registration Statement on Form S-4 filed on February 14, 2005 (Registration No. 333-122810).
10.7*
Koppers Holdings Inc. 2005 Long Term Incentive Plan, as Amended and Restated effective March 24, 2016
Appendix A to the Company’s Definitive Proxy Statement for its 2016 Annual Meeting of Shareholders filed on April 5, 2016 (Commission File No. 001-32737).
10.8*
Koppers Holdings Inc. Benefit Restoration Plan
Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed on August 9, 2007 (Commission File No. 001-32737).
10.9*
Koppers Inc. Supplemental Executive Retirement Plan I
Exhibit 10.53 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2008 filed on February 20, 2009 (Commission File No. 001-32737).
10.10*
Koppers Inc. Supplemental Executive Retirement Plan II, as amended and restated
Exhibit 10.93 to the Company’s Quarterly Report on Form 10-Q filed on August 7, 2014 (Commission File No. 001-32737).
10.11*
Amendment to Koppers Holdings Inc. Benefit Restoration Plan effective as of January 1, 2009
Exhibit 10.57 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2008 filed on February 20, 2009 (Commission File No. 001-32737).
10.12*
Restricted Stock Unit Issuance Agreement – Time Vesting
Exhibit 10.62 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2012 filed on February 25, 2013 (Commission File No. 001-32737).
10.13*
Restricted Stock Unit Issuance Agreement – Performance Vesting
Exhibit 10.63 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2012 filed on February 25, 2013 (Commission File No. 001-32737).
10.14*
Notice of Grant of Stock Option
Exhibit 10.64 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2012 filed on February 25, 2013 (Commission File No. 001-32737).
10.15*
Form of Koppers Holdings Inc. Restricted Stock Unit Issuance Agreement Non-Employee Director –Time Vesting
Exhibit 10.66 to the Company’s Quarterly Report on Form 10-Q filed on May 5, 2011 (Commission File No. 001-32737).
10.16*
Form of Amended and Restated Change in Control Agreement entered into as of May 6, 2013 between the Company and the named Executive
Exhibit 10.80 to the Company’s Quarterly Report on Form 10-Q filed on August 8, 2013 (Commission File No. 001-32737).
10.17*
2014 Restricted Stock Unit Issuance Agreement – Time Vesting
Exhibit 10.84 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2013 filed on March 3, 2014 (Commission File No. 001-32737).
83
Exhibit No.
Exhibit
Incorporation by Reference
10. 18 *
Koppers Annual Incentive Plan, as amended January 25, 2016.
Exhibit 10.97 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 filed on February 29, 2016 (Commission File No. 001-32737).
10.19*
Restricted Stock Unit Issuance Agreement – Time Vesting
Exhibit 10.98 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 filed on March 2, 2015 (Commission File No. 001-32737).
10.20*
Restricted Stock Unit Issuance Agreement – Performance Vesting
Exhibit 10.99 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 filed on March 2, 2015 (Commission File No. 001-32737).
10.21*
Notice of Grant of Stock Option
Exhibit 10.100 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 filed on March 2, 2015 (Commission File No. 001-32737).
10.22*
2016 Restricted Stock Unit Issuance Agreement – Performance Vesting
Exhibit 10.107 to the Company’s Quarterly Report on Form 10-Q filed on May 6, 2016 (Commission File No. 001-32737).
10.23
Credit Agreement, dated as of February 17, 2017, by and among Koppers Inc., as Borrower, the Guarantors party thereto, the Lenders party thereto, PNC Bank, National Association, as Administrative Agent, and the other agents party thereto
Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 22, 2017 (Commission File No. 001-32737).
10.24
First Amendment to Credit Agreement dated as of February 26, 2018, by and among Koppers Inc., as Borrower, the Guarantors party thereto, the Lenders party thereto, PNC Bank, National Association, as Administrative Agent, and the other agents party thereto
Exhibit 10.118 to the Company’s Quarterly Report on Form 10-Q filed on May 3, 2018 (Commission File No. 001-32737).
10.25
Agreement and Plan of Merger, dated April 10, 2018, by and among Koppers Inc., Cox Industries, Inc., each of the Selling Shareholders party thereto, and the Shareholder Representative party thereto
Exhibit 2.5 to the Company’s Quarterly Report on Form 10-Q filed on May 3, 2018 (Commission File No. 001-32737).
10.26
Second Amendment to Credit Agreement and Joinder, dated as of April 10, 2018, by and among Koppers Inc., as Borrower, the Guarantors party thereto, the Lenders party thereto, and PNC Bank, National Association, as Administrative Agent
Exhibit 10.119 to the Company’s Quarterly Report on Form 10-Q filed on May 3, 2018 (Commission File No. 001-32737).
10.27*
Koppers Holdings Inc. 2018 Long Term Incentive Plan
Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on May 3, 2018 (Commission File No. 001-32737).
10.28*
Form of Restricted Stock Unit Issuance Agreement Time Vesting
Exhibit 10.120 to the Company’s Quarterly Report on Form 10-Q filed on August 9, 2018 (Commission File No. 001-32737).
10.29*
Form of Restricted Stock Unit Issuance Agreement – Performance Vesting
Exhibit 10.121 to the Company’s Quarterly Report on Form 10-Q filed on August 9, 2018 (Commission File No. 001-32737).
84
Koppers Holdings Inc. 2021 Annual Report
Exhibit No.
Exhibit
Incorporation by Reference
10.30*
Form of Restricted Stock Unit Issuance Agreement Non-Employee Director – Time Vesting
Exhibit 10.122 to the Company’s Quarterly Report on Form 10-Q filed on August 9, 2018 (Commission File No. 001-32737).
10.31*
Form of Notice of Grant of Stock Option
Exhibit 10.123 to the Company’s Quarterly Report on Form 10-Q filed on August 9, 2018 (Commission File No. 001-32737).
10.32*
Form of Restricted Stock Unit Issuance Agreement – Performance Vesting
Exhibit 10.125 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 filed on March 1, 2019 (Commission File No. 001-32737).
10.33
Third Amendment to Credit Agreement and Joinder, dated as of May 1, 2019, by and among Koppers Inc., as Borrower, the Guarantors party thereto, the Lenders party thereto, and PNC Bank National Association, as Administrative Agent.
Exhibit 10.126 to the Company’s Quarterly Report on Form 10-Q filed on May 3, 2019 (Commission File No. 001-32737).
10.34*
Form of Restricted Stock Unit Issuance Agreement – Time Vesting
Exhibit 10.38 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 filed on February 27, 2020 (Commission File No. 001-32737).
10.35*
Form of Restricted Stock Unit Issuance Agreement – Performance Vesting
Exhibit 10.39 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 filed on February 27, 2020 (Commission File No. 001-32737).
10.36*
Form of Notice of Grant of Stock Option
Exhibit 10.40 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 filed on February 27, 2020 (Commission File No. 001-32737).
10.37
Fourth Amendment to Credit Agreement, dated as of February 26, 2020, by and among Koppers Inc., as Borrower, the Guarantors party thereto, the Lenders party thereto and PNC Bank, National Association, as Administrative Agent.
Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 27, 2020 (Commission File No. 001-32737).
10.38*
Koppers Holdings Inc. 2020 Long Term Incentive Plan
Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on May 7, 2020 (Commission File No. 001-32737).
10.39
Fifth Amendment to Credit Agreement, dated as of August 28, 2020, by and among Koppers Inc., as Borrower, the Guarantors party thereto, the Lenders party thereto, and PNC Bank, National Association, as Administrative Agent.
Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed on November 4, 2020 (Commission File No. 001-32737).
10.40*
Form of Restricted Stock Unit Issuance Agreement – Time Vesting
Exhibit 10.40 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 filed on February 24, 2021 (Commission File No. 001-32737).
10.41*
Form of Restricted Stock Unit Issuance Agreement – Performance Vesting
Exhibit 10.41 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 filed on February 24, 2021 (Commission File No. 001-32737).
85
Exhibit No.
Exhibit
Incorporation by Reference
10.42*
Form of Notice of Grant of Stock Option
Exhibit 10.42 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 filed on February 24, 2021 (Commission File No. 001-32737).
10.43*
Amendment to the Koppers Holdings Inc. Benefit Restoration Plan
Exhibit 10.44 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 filed on February 24, 2021 (Commission File No. 001-32737).
10.44*
First Amendment to the Koppers Holdings Inc. 2020 Long Term Incentive Plan
Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on May 7, 2021 (Commission File No. 001-32737).
10.45*
Amended and Restated Koppers Holdings Inc. Employee Stock Purchase Plan
Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on May 7, 2021 (Commission File No. 001-32737).
10.46*
Form of Change in Control Agreement entered into as of March 1, 2021 between Koppers Holdings Inc. and the named Executive.
Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed on May 7, 2021 (Commission File No. 001-32737).
10.47*
Koppers Holdings Inc. Director Deferred Compensation Plan
Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed on August 6, 2021 (Commission File No. 001-32737).
10.48***
Sixth Amendment to Credit Agreement, dated as of December 28, 2021, by and among Koppers Inc., as Borrower, the Guarantors party thereto, the Lenders party thereto, and PNC Bank, National Association, as Administrative Agent.
10.49* ***
Form of Restricted Stock Unit Issuance Agreement – Time Vesting
10.50* ***
Form of Restricted Stock Unit Issuance Agreement – Performance Vesting
10.51* ***
Form of Notice of Grant of Stock Option
21***
List of subsidiaries of the Company.
23.1***
Consent of Independent Registered Public Accounting Firm.
24***
Powers of Attorney.
31.1***
Certification of Chief Executive Officer pursuant to Rule 13a-14(a).
31.2***
Certification of Chief Financial Officer pursuant to Rule 13a-14(a).
32.1***
Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 1350.
86
Koppers Holdings Inc. 2021 Annual Report
Exhibit No.
Exhibit
Incorporation by Reference
101.INS***
Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded with the Inline XBRL document
101.SCH***
Inline XBRL Taxonomy Extension Schema Document
101.CAL***
Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF***
Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB***
Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE***
Inline XBRL Taxonomy Extension Presentation Linkbase Document
104
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
* Management Contract or Compensatory Plan.
*** Filed herewith.
(P) Paper exhibits
ITEM 16. FORM 10-K SUMMARY
None.
KOPPERS HOLDINGS INC.
SCHEDULE II – VALUATION AND QUALIFYING ACCOUNTS
For the years ended December 31, 2021, 2020 and 2019
Balance at
Increase
Balance
Beginning
(Decrease)
Net
Currency
at End
of Year
to Expense
Write-offs
Translation
of Year
(Dollars in millions)
2021
Allowance for doubtful accounts
$
2.6
$
1.2
$
( 0.5
)
$
0.0
$
3.3
Deferred tax valuation allowance
$
44.6
$
3.6
$
( 3.6
)
$
( 0.1
)
$
44.5
2020
Allowance for doubtful accounts
$
2.6
$
0.2
$
( 0.2
)
$
0.0
$
2.6
Deferred tax valuation allowance
$
58.0
$
( 12.1
)
$
( 1.7
)
$
0.4
$
44.6
2019
Allowance for doubtful accounts
$
2.5
$
0.6
$
( 0.5
)
$
0.0
$
2.6
Deferred tax valuation allowance
$
59.9
$
3.3
$
( 5.2
)
$
0.0
$
58.0
87
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, Koppers Holdings Inc. has duly caused this annual report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized.
K oppers H oldings I nc .
BY:
/ s / J immi S ue S mith
Jimmi Sue Smith
Chief Financial Officer and Treasurer
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this annual report on Form 10-K has been signed below by the following persons on behalf of the Registrant and in the capacities and on the date indicated.
Signature
Capacity
Date
/ s / L eroy M. B all
Leroy M. Ball
Director, President and Chief
Executive Officer (Principal Executive Officer)
February 23, 2022
/ s / J immi S ue S mith
Jimmi Sue Smith
Chief Financial Officer and Treasurer (Principal Financial Officer)
February 23, 2022
/ s / B radley A. P earce
Bradley A. Pearce
Chief Accounting Officer (Principal Accounting Officer)
February 23, 2022
Stephen R. Tritch
Director and Non-Executive
Chairman of the Board
Xudong Feng
Director
Traci L. Jensen
Director
David L. Motley
Director
By
/s/ Leroy M. Ball
Albert J. Neupaver
Director
Leroy M. Ball Attorney-in-Fact
Louis L. Testoni
Director
Sonja M. Wilkerson
Director
February 23, 2022
88