Preliminary Proxy Statement

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

Definitive Proxy Statement

Definitive Additional Materials

Soliciting Material Pursuant to §240.14a-12

Title of each class of securities to which transaction applies:

Aggregate number of securities to which transaction applies:

Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

Proposed maximum aggregate value of transaction:

Total fee paid:

Amount Previously Paid:

Form, Schedule or Registration Statement No.:

Filing Party:

Date Filed:

Annual Meeting of Shareholders

Items of Business:

• Elect four members of our Board of Directors, each for a term of three years;

• Ratify the appointment of Ernst & Young LLP as the independent auditor for 2019;

• Conduct an advisory and non-binding vote to approve our executive compensation (“say-on-pay”);

• Approve the adoption of our 2018 Omnibus Incentive Plan;

• Approve the adoption of our 2019 Employee Stock Purchase Plan;

• Approve an amendment and restatement of our Second Amended and Restated Certificate of Incorporation to declassify our Board of Directors over a three-year period; and

• Consider other business as may properly come before the Annual Meeting of Shareholders.

Wednesday

October 31, 2018

Time:

8:30 a.m.

Eastern Standard Time

Place:

Catalent, Inc.

14 Schoolhouse Road

Somerset, New Jersey

Record Date:

Only shareholders of record at the close of business on September 4, 2018 will be entitled to attend and vote at the Annual Meeting of Shareholders.

REVENUE OF

$2,463.4 MILLION

GROWTH OF 16% ON CONSTANT-CURRENCY BASIS⁽¹⁾

NET EARNINGS OF

$83.6 MILLION

$0.63 PER DILUTED SHARE

ADJUSTED EBITDA OF

$550.7 MILLION

GROWTH OF 20% ON CONSTANT-CURRENCY BASIS⁽²⁾

NET LEVERAGE RATIO OF

4.2x

4.9X INTEREST COVERAGE RATIO

SHAREHOLDER RETURN OF

19%

COMPLETED

major biologics

ACQUISITION

Amounts at “constant currency,” or constant exchange rates, assume that exchange rates from foreign currencies into the U.S. dollar, the currency in which we report our financial results, did not fluctuate from those used to calculate the corresponding fiscal 2017 amounts. Percent change at constant currency is a financial reporting measure not prepared in accordance with generally accepted accounting principles (“non-GAAP”). For a further discussion of this measure, please see the Appendix entitled “Non-GAAP Financial Measures,” beginning on page A-1.

For an explanation of how we determine Adjusted EBITDA and how this non-GAAP financial measure reconciles to our reported results, please see the Appendix entitled “Non-GAAP Financial Measures,” beginning on page A-1.

CEO Target Direct Compensation

Other NEOs Target Direct Compensation

  Name

Base Salary
($)

Management
Incentive Plan
(MIP)

(Annual Bonus)

($)

Long-Term
Incentive  Plan
(LTIP)⁽¹⁾

($)

All Other
Compensation
($)

Total
Compensation
($)

John Chiminski

1,017,610

1,774,400

5,625,227

109,631

8,526,868

Wetteny Joseph

418,610

370,402

900,089

36,386

1,725,487

Jonathan Arnold

387,095

288,356

840,109

282,243

1,797,803

William Downie

390,659

335,040

500,096

626,895

1,852,690

Steven L. Fasman

550,000

533,570

840,092

23,949

1,947,611

Matthew Walsh⁽²⁾

432,074

-

950,071

64,229

1,446,374

Amounts reported under the Long-Term Incentive Plan include one-time restricted stock grants to Messrs. Joseph and Fasman valued at $500,034 and $190,000, respectively, and a one-time restricted stock unit grant to Mr. Arnold valued at $400,002.

Mr. Walsh’s service as our chief financial officer ended on February 6, 2018 and his employment ended on February 16, 2018. As a result, all outstanding unvested equity grants were cancelled/forfeited, including the grants awarded to him in fiscal 2018 that are reflected in this table, and he was ineligible for a payment under our MIP plan.

    98.1%    

    IN FAVOR OF OUR  SAY-ON-PAY PROPOSAL    

At the 2017 Annual Meeting, our shareholders demonstrated their concurrence that our executive compensation program reflects a pay-for-performance philosophy.

ACCOUNTABILITY

BOARD PRACTICES

• Annual Board and Committee self-evaluation

• Annual CEO evaluation

• Board-approved Quality and Regulatory Compliance and Mergers & Acquisitions Committee

• Board-approved statement opposing modern slavery

• Declassification of Board (proposed change)

• Regular meetings of Committees

• Lead Director requirement

• Independent Committee chairs and members

• Limits on director “overboarding”

• Majority-independent board

SHAREHOLDER INTEREST

TRANSPARENCY

• Emphasize pay-for-performance

• Director & executive stock ownership goals

• Continuity planning

• Shareholder proxy access

• Corporate Governance Guidelines

• Securities trading policy

• Board-approved Code of Ethics, known as our “Standards of Business Conduct,” applicable to all employees, officers, and directors

• Resignation policy in uncontested elections

Proposal   

    Board Vote     

    Recommendation    

    Page Number    

Reference

1

Elect Four Members of Our Board of Directors

FOR

5

2

Ratification of Appointment of Independent Auditor for Fiscal 2019

FOR

65

3

Advisory Vote on the Approval of Executive Compensation (Say-on-Pay)

FOR

68

4

Approval of 2018 Omnibus Incentive Plan

FOR

69

5

Approval of 2019 Employee Stock Purchase Plan

FOR

82

6

Amendment and Restatement of Second Amended and Restated Certificate of Incorporation to Declassify our Board of Directors

FOR

87

JOHN CHIMINSKI

Director since 2009

Chair since 2016

Age: 54

John Chiminski has led Catalent as Chief Executive Officer since March 2009. He joined our company after more than 20 years of experience at GE Healthcare in engineering, operations, and senior leadership roles. From 2007 to 2009, Mr. Chiminski was President and Chief Executive Officer of GE Medical Diagnostics, a global business with sales of $1.9 billion. From 2005 to 2007, he served as Vice President and General Manager of GE Healthcare’s Global Magnetic Resonance Business, and from 2001 to 2005, as Vice President and General Manager of Global Healthcare Services. Earlier at GE, he held a series of cross-functional leadership positions in both manufacturing and engineering, including a GE Medical Systems assignment in France. Mr. Chiminski holds a B.S. from Michigan State University and an M.S. from Purdue University, both in electrical engineering, as well as a Master’s degree in Management from the Kellogg School of Management at Northwestern University.

Specific qualifications, experience, skills and expertise:

• Substantial expertise in advising and managing companies in various segments of the healthcare industry

• Significant experience overseeing the day-to-day business operations of a healthcare company

• Extensive experience as a business leader in our industry

• Experience serving on corporate boards

ROSEMARY A. CRANE

Director since 2018

Age: 58

Committees:

•  Audit

Ms. Crane is currently a member of the board of directors of each of Edge Therapeutics, Inc., Teva Pharmaceutical Industries Limited, and Zealand Pharma A/S and has previously served as a director of Unilife Corporation, Cipher Pharmaceuticals, MELA Sciences, Inc., Epocrates Inc., and Targanta Therapeutics. Ms. Crane retired in 2014 from MELA Sciences, Inc., where she served as President and Chief Executive Officer beginning in 2013. From 2011 to 2013, she was a Partner and Head of Commercialization at Appletree Partners and, from 2008 to 2011, served as Chief Executive Officer and President of Epocrates Inc. From 2002 to 2008, Ms. Crane served in several senior executive positions at the Johnson & Johnson Group of Companies, ending as Company Group Chairman, OTC and Nutritional Group. From 1982 to 2002, she was at Bristol-Myers Squibb Company, ending her tenure there as President, U.S. Primary Care. Ms. Crane received her M.B.A. from Kent State University and her B.A. in Communications and English from the State University of New York at Oswego.

Specific qualifications, experience, skills and expertise:

• Substantial experience in commercialization and business operations in the pharmaceutical and biotechnology industries

• Substantial experience serving on the boards of directors of healthcare companies

• Experience reviewing and analyzing complex public company financial statements

DONALD E. MOREL, JR., PH.D.

Director since 2015

Age: 60

Committees:

•  Quality and Regulatory Compliance (chair)

•  Audit

•  Compensation and Leadership

Dr. Morel retired in June 2015 as Chairman of West Pharmaceutical Services, Inc. (“West”), a leading manufacturer of packaging components and delivery systems for injectable drugs and healthcare products, a position he had held since March 2003. He also served as West’s Chief Executive Officer from April 2002 until April 2015 and as its President from April 2002 until June 2005. Currently, Dr. Morel serves as Chairman of the Board of Directors of the American Oncologic Hospital of the Fox Chase Cancer Center. He also serves as a Chairman of the Board of Trustees of the Franklin Institute and is a Trustee of Lafayette College. Additionally, Dr. Morel has been a director of Stevanato Group since September 2018 and of Integra Life Sciences Holdings Corporation since August 2013. Prior to that, he served as a director of Kensey Nash Corporation from 2010 until 2012. Dr. Morel obtained a Master of Science degree and a Ph.D. in Materials Science from Cornell University and a Bachelor of Science degree in Engineering from Lafayette College.

Specific qualifications, experience, skills and expertise:

• Substantial experience and leadership in managing a life sciences business performing contract development and manufacturing services

• Substantial experience serving on the boards of directors of public companies

• Experience reviewing and analyzing complex public company financial statements

JACK STAHL

Director since 2014

Lead Director since 2016

Age: 65

Committees;

•  Mergers & Acquisitions (chair)

•  Nominating and Corporate Governance

Mr. Stahl was the President and Chief Executive Officer of Revlon, Inc. from 2002 until his retirement in 2006. Prior to joining Revlon, Mr. Stahl served as President and Chief Operating Officer of The Coca-Cola Company from 2000 to 2001, having previously served in various management positions since joining the company in 1979. Mr. Stahl serves on the board of Advantage Solutions LLC and on the U.S. board of advisors of CVC Capital. Additionally, Mr. Stahl formerly served on the boards of Schering-Plough Corporation, Dr Pepper Snapple Group, Saks, Inc., Coty Inc., and Royal Ahold Delhaize, and was chairman of the board of managers of New Avon LLC. Mr. Stahl holds a bachelor’s degree in economics from Emory University and a master’s degree from the Wharton School of Business at the University of Pennsylvania.

Specific qualifications, experience, skills and expertise:

• Leadership experience with other public companies

• Substantial experience serving as a director

• Substantial expertise in advising and managing multi-national companies with multiple business units

• Accounting experience and experience preparing and analyzing complex corporate financial statements

MADHAVAN “MADHU” BALACHANDRAN

Director since 2017

Age: 67

Committees;

• Nominating and Corporate Governance

• Quality and Regulatory Compliance

Mr. Balachandran was Executive Vice President, Operations of Amgen Inc., a global biotechnology company (“Amgen”), from August 2012 until July 2016 and retired as an Executive Vice President in January 2017. Mr. Balachandran joined Amgen in 1997 as Associate Director, Engineering. He became Director, Engineering in 1998, and, from 1999 to 2001, he held the position of Senior Director, Engineering and Operations Services before moving to the position of Vice President, Information Systems from 2001 to 2002. Thereafter, Mr. Balachandran was Vice President, Puerto Rico Operations from May 2002 to February 2007. From February 2007 to October 2007, Mr. Balachandran was Vice President, Site Operations, and, from October 2007 to August 2012, he held the position of Senior Vice President, Manufacturing. Prior to his tenure at Amgen, Mr. Balachandran held leadership positions at Copley Pharmaceuticals, now a part of Teva Pharmaceuticals Industries Ltd., and Burroughs Welcome Company, a predecessor through mergers of GlaxoSmithKline plc. He has served as a director of Stevanato Group since September 2018. Mr. Balachandran holds a Master of Science degree in Chemical Engineering from The State University of New York at Buffalo and an MBA from East Carolina University.

Specific qualifications, experience, skills and expertise:

• Extensive experience overseeing the manufacturing operations of a healthcare company

• Leadership experience with other public companies

J. MARTIN CARROLL

Director since 2015

Age: 68

Committees;

• Nominating and Corporate Governance (chair)

• Compensation and Leadership

• Quality and Regulatory Compliance

Mr. Carroll served as President and Chief Executive Officer of Boehringer Ingelheim Corporation and of Boehringer Pharmaceuticals, Inc. from 2003 until 2011 and as Head, Corporate Strategy and Development of Boehringer Ingelheim GmbH from 2012 until his retirement in 2013. Mr. Carroll served as a director of Boehringer Ingelheim Corporation from 2003 until December 2012. Mr. Carroll joined the Boehringer Ingelheim organization in 2002 as President of Boehringer Pharmaceuticals, Inc. Mr. Carroll worked at Merck & Company, Inc. from 1976 to 2001. From 1972 to 1976, Mr. Carroll served in the United States Air Force, where he attained the rank of Captain. Mr. Carroll has been a director of Mallinckrodt plc since June 2013, serving as Chair of its Compliance Committee, and has also served as a director of TherapeuticsMD, Inc. since March 2015. He served as a director of Inotek from April 2016 to June 2016 and as Chairman of its Board from June 2016 until January 2018 when Inotek was sold to Rocket Pharmaceutical. Mr. Carroll also served as a director of Durata Therapeutics, Inc. from August 2014 until November 2014 when it was acquired by Actavis plc, and as a director of Vivus, Inc. from May 2013 until September 2014. Mr. Carroll received a B.A. in accounting and economics from the College of the Holy Cross and an M.B.A. from Babson College.

Specific qualifications, experience, skills and expertise:

• Substantial experience with sales and marketing issues

• Substantial experience serving as a director

• Substantial expertise in advising and managing multi-national companies with multiple business units

• Substantial experience with pharmaceutical and other healthcare companies

• Substantial experience reviewing and analyzing executive compensation programs

ROLF CLASSON

Director since 2014

Age: 72

Committees;

•  Audit

•  Mergers & Acquisitions

From October 2002 until his retirement in July 2004, Mr. Classon was Chairman of the Executive Committee of Bayer HealthCare AG, a subsidiary of Bayer AG. He served as President of Bayer Diagnostics from 1995 to 2002 and as Executive Vice President of Bayer Diagnostics from 1991 to 1995. Prior to 1991, Mr. Classon held various management positions with Pharmacia Corporation. Mr. Classon currently serves as Chairman of the Board of Directors of Perrigo Company plc and as a member of the Supervisory Board of Fresenius Medical Care. He was previously Chairman of the Board of Directors of Tecan Group Ltd., serving from 2009 until April 2018. Mr. Classon served as Chairman of the Board of Directors of Hill-Rom Holdings, Inc. from 2006 until March 2018, also serving as Vice Chairman of the Board from 2003 through May 2005 and as interim chief executive officer from May 2005 until March 2006. From 2005 to 2015, Mr. Classon served as Chairman of the Board of Directors of Auxilium Pharmaceuticals, Inc., and as Vice Chairman from March 2005 to April 2005. Mr. Classon previously served as a director of Sequanna Medical AG from 2016 until 2017, Aerocine AB, Stockholm from 2013 until 2015, Millipore Corporation from 2005 until 2010, Prometheus Laboratories Inc. from 2004 until 2010, and Enzon Pharmaceuticals Inc. from January 1997 until 2011. Mr. Classon received his Chemical Engineering Certificate from the Gothenburg University School of Engineering and a Business Degree from Gothenburg University.

Specific qualifications, experience, skills and expertise:

• Leadership experience with other public companies

• Substantial experience serving as a director and as a member of public company audit committees

• Substantial expertise in advising and managing multi-national companies with multiple business units

• Substantial experience with pharmaceutical and other healthcare companies

• Experience reviewing and analyzing complex public company financial statements

JOHN J. GREISCH

Director since 2018

Age: 63

Committees;

•  Audit (chair)

•  Compensation and Leadership

Mr. Greisch retired in May 2018 from his position as President and Chief Executive Officer of Hill-Rom Holdings, Inc., a position that he had held since 2010. Prior to that, Mr. Greisch was President International Operations for Baxter International, Inc., a position he held beginning in 2006. During his seven-year tenure with Baxter, he also served as the company’s Chief Financial Officer and as President of its BioScience division. Before his time with Baxter, Mr. Greisch was President and Chief Executive Officer for FleetPride Corporation in Deerfield, Illinois, an independent after-market distribution company serving the transportation industry. Prior to his tenure at FleetPride, he held various positions at The Interlake Corporation, including serving as President of its Materials Handling Group. Mr. Greisch currently serves as chairman of the board of Viant Medical, LLC and as a director on the board of Idorsia Pharmaceuticals Ltd., and previously served on the boards of Hill-Rom Holdings, Inc., Actelion Ltd, TomoTherapy, Inc., and AdvaMed. Additionally, he serves as a senior advisor to TPG Capital and is on the board of directors for Ann & Robert H. Lurie Children’s Hospital of Chicago. He received a Master’s in Management from the Kellogg School of Management at Northwestern University and a B.S. degree from Miami University.

Specific qualifications, experience, skills and expertise:

• Leadership experience with other public companies, including service as a chief executive officer and chief financial officer

• Substantial experience with other healthcare companies

• Substantial experience preparing and analyzing complex public company financial statements

• Substantial experience reviewing and analyzing executive compensation programs

CHRISTA KREUZBURG, PH.D.

Director since 2018

Age: 58

Committees;

•  Nominating and Corporate Governance

•  Quality and Regulatory
Compliance

Dr. Kreuzburg has been consulting in the healthcare sector since retiring from Bayer AG in 2009, after 19 years of service in a variety of roles, including service as Head of the Bayer Schering Pharma Europe/Canada unit of Bayer Healthcare from 2007 to 2008, and as Head of the Pharma Primary Care/International Operations unit of Bayer Healthcare from 2006 to 2007. She also held roles in the Strategic Planning and Central Research groups. Dr. Kreuzburg is currently a member of the board of directors of Tecan Trading AG of Switzerland and has previously served as a director of Freedom Innovations LLC. Dr. Kreuzburg received her Ph.D. and Bachelor’s degrees in Physical Chemistry from Duisburg University in Germany.

Specific qualifications, experience, skills and expertise:

• Substantial experience with the management and operations of pharmaceutical companies

• Substantial expertise in advising and managing multi-national companies with multiple business units

GREGORY T. LUCIER

Director since 2015

Age: 54

Committees;

•  Compensation and
Leadership (chair)

• Mergers & Acquisitions

Mr. Lucier is the Chairman and Chief Executive Officer of Nuvasive, Inc., a medical device company focused on developing minimally disruptive surgical products and procedures for the spine. Prior to joining Nuvasive, Inc. in March 2015, Mr. Lucier was Chairman and Chief Executive Officer of Life Technologies Corporation (formerly Invitrogen Corporation), a global biotechnology company, from May 2003 until it was acquired by Thermo Fisher Scientific, Inc. in February 2014. Prior to that, Mr. Lucier was a corporate officer at General Electric Company, where he served in a variety of leadership roles. Mr. Lucier is a director of Nuvasive, Inc. and served as a director of Life Technologies Corporation from May 2003 to February 2014 and of Carefusion Corporation from August 2009 until its sale to Becton, Dickinson and Company in March 2015. Mr. Lucier received an M.B.A. from Harvard Business School and a B.S. in industrial engineering from Pennsylvania State University.

Specific qualifications, experience, skills and expertise:

• Leadership experience with other public companies

• Substantial experience serving as a director

• Substantial expertise in advising and managing multi-national companies with multiple business units

• Substantial experience with pharmaceutical and other healthcare companies

• Substantial experience reviewing and analyzing executive compensation programs

Board Independence

• Our Board has determined that nine out of ten of our directors are “independent” under the NYSE listing standards, with our CEO being the only member of management who serves as a director.

Board Committees

• We have five committees of the Board—the Audit Committee, the Compensation and Leadership Committee, the Nominating Committee, the Quality and Regulatory Compliance Committee, and the Mergers & Acquisitions Committee—each of which is composed entirely of independent directors.

• Each of our five Committees operates under a written charter and reports regularly to the Board concerning its activities.

Lead Director

• When a non-independent director serves as Chair of our Board, our Governance Guidelines require the independent directors to appoint a Lead Director from among them. Mr. Stahl has served in that role since October 2016.

Executive Sessions

• Our Board holds regular executive sessions of non-management directors, which are chaired by our Lead Director.

Board Oversight of Risk

• Risk management is overseen by our Audit Committee.

• Our Compensation and Leadership Committee reviews risks arising from our compensation practices so that those practices encourage management only to act in the best interests of our shareholders.

• Our Nominating Committee oversees risk associated with potential conflicts of interest as well as effectiveness of our Governance Guidelines.

• Our Quality and Regulatory Compliance Committee focuses on risks arising out of the extensive food, drug, and cosmetics regulations that govern our operations and our relationships with our customers.

Corporate Governance Guidelines

• Our Board operates under our Governance Guidelines, which define director qualification standards and other appropriate governance procedures.

Majority Voting and Director Resignation Policy

• Directors in uncontested elections must garner the approval of a majority of the shares cast. Any director not receiving a majority of the cast shares in an uncontested election must tender his or her resignation to the Nominating Committee, which shall promptly consider such resignation and make a recommendation to our Board with respect to what action should be taken.

Accountability

• Our only authorized stock consists of one class of common stock and one class of preferred stock. Each share of our common stock is entitled to one vote. We have not issued any preferred stock.

Stock Ownership

• Each non-employee director is required to own shares of our common stock in an amount equal to five times the non-employee director annual cash retainer.

• Guidelines adopted by our Compensation and Leadership Committee state that each of our executive officers must own shares of our common stock: our CEO must own an amount equal to 5 times his annual salary, and each of our other executive officers must own an amount equal to two and one-half times the officer’s salary.

Open Lines of Communication

• Our Board promotes open and frank discussions with senior management.

• Our directors have access to all members of management and other employees and are authorized to hire outside consultants or experts at our expense.

Self-Evaluation

• Our Board and each of the Committees conduct annual self-evaluations.

Code of Ethics

• Our Standards of Business Conduct, which, among other things, requires compliance with law and the maintenance of appropriate ethical standards, is applicable to all of our directors and employees.

Overboarding

• Without specific approval from our Board, no director will serve on more than four other public company boards; no Audit Committee member will serve on more than two other public company audit committees; and it is expected that directors who also serve as CEOs or in equivalent positions at other public companies generally should not serve on more than two outside public company boards.

Shareholder Proxy Access

• Shareholders who satisfy the standards set forth in our bylaws have the ability to include on our proxy their own nominees for election to our Board, provided that such director nominees satisfy the eligibility requirements set forth in our bylaws.

Current Committee Membership

Name

Class

Current

Term End

Year

Determination of

Independence?

        Audit        

Compensation
and
    Leadership    

Nominating
and Corporate
    Governance    

Quality and
Regulatory
    Compliance    

Mergers &
    Acquisitions    

John Chiminski⁽¹⁾

Class I

2018

NO

Rosemary A. Crane⁽²⁾

Class I

2018

YES

¡

Donald E. Morel, Jr.

Class I

2018

YES

¡

¡

CHAIR

Jack Stahl⁽³⁾

Class I

2018

YES

¡

CHAIR

Madhavan Balachandran

Class II

2019

YES

¡

¡

J. Martin Carroll

Class II

2019

YES

¡

CHAIR

¡

John J. Greisch⁽⁴⁾

Class II

2019

YES

CHAIR

¡

Rolf Classon

Class III

2020

YES

¡

¡

Christa Kreuzburg⁽⁵⁾

Class III

2020

YES

¡

¡

Gregory Lucier

Class III

2020

YES

CHAIR

¡

As our President and CEO, Mr. Chiminski cannot be deemed independent.

Ms. Crane was appointed to our Board effective February 16, 2018.

Mr. Stahl serves as the Lead Director.

Mr. Greisch was appointed to our Board effective February 16, 2018, replacing James Quella who had retired from our Board effective as of that same date.

Dr. Kreuzburg was appointed to our Board effective February 16, 2018, replacing Uwe Röhrhoff who had retired from our Board effective as of February 4, 2018.

  Audit Committee

Number of 2018 Meetings: 4

  Membership:

John J. Greisch, Chair  |  Rolf Classon  |  Rosemary A. Crane  |  Donald E. Morel, Jr.

  Function:

• Oversees the adequacy and integrity of our financial statements and our financial reporting and disclosure practices.

• Oversees the soundness of our system of internal controls to assure compliance with financial and accounting requirements.

• Retains and reviews the qualifications, performance, and independence of our independent auditor.

• Reviews and discusses with management and the independent auditor prior to public dissemination our annual audited financial statements, quarterly unaudited financial statements, earnings press releases and financial information and earnings guidance provided to analysts and rating agencies.

• Oversees our guidelines and policies relating to risk assessment and risk management, and management’s plan for risk monitoring and control.

• Oversees our internal audit function.

• Reviews and approves or ratifies all transactions between us and any “Related Person” (as defined in the federal securities laws and regulations) that are required to be disclosed pursuant to Item 404(a) of Regulation S-K under the Exchange Act.

• Oversees compliance with our Standards of Business Conduct.

• Prepares for and issues the Audit Committee Report contained in this Proxy Statement.

Our Board has determined that each member of the Audit Committee qualifies as an “audit committee financial expert” as defined in SEC regulations. The Report of the Audit Committee is included on page 67.

  Compensation and Leadership Committee

Number of 2018 Meetings: 8

  Membership:

Gregory Lucier, Chair  |  J. Martin Carroll  |  John J. Greisch  |  Dr. Donald E. Morel, Jr.

  Function:

• Establishes and reviews our overall compensation philosophy.

• Evaluates the performance of the CEO and determines and approves the annual salary, bonus, and equity-based incentive and other benefits, of the CEO.

• Reviews and approves, or recommends to our Board, the annual salary, bonus, and equity-based incentives and other benefits of our other executive officers.

• Reviews and recommends to our Board on the compensation of directors.

• Reviews all employment, severance, and termination agreements with our executive officers.

• Reviews and approves, or recommends to our Board, our incentive-compensation plans and equity-based plans.

• Oversees certain of our other benefit plans.

• Prepares for and issues the Compensation Committee Report contained in this Proxy Statement.

• As delegated by our Board, oversees management continuity and succession as well as executive officer development.

The Compensation Committee is permitted to delegate its authority to one or more of our officers the authority to make awards to any non-Section 16 officer under our incentive-compensation or other equity-based plan. During fiscal 2018, the Compensation Committee delegated, non-exclusively, its authority to make awards to employees other than Section 16 officers under prescribed conditions, including the condition that no individual award exceeds $200,000 in value. The Report of the Compensation Committee is included on page 48.

  Nominating and Corporate Governance Committee

Number of 2018 Meetings: 2

  Membership:

J. Martin Carroll, Chair  |  Madhavan Balachandran  |  Christa Kreuzburg  |  Jack Stahl

  Function:

• Identifies and recommends nominees for election to our Board.

• Reviews the composition and size of our Board.

• Oversees an annual evaluation of the Board of Directors and each Committee.

• Regularly reviews our corporate governance documents, including our corporate charter and bylaws and our Governance Guidelines.

• Recommends members of our Board to serve on Committees.

• As delegated by our Board, oversees and approves the management continuity planning process.

  Quality and Regulatory Compliance Committee

Number of 2018 Meetings: 4

  Membership:

Donald E. Morel, Jr., Chair  |  Madhavan Balachandran  |  J. Martin Carroll  |  Christa Kreuzburg

  Function:

•  Oversees and reviews our personnel, activities, processes and procedures that assure the quality of the products and services we deliver.

•  Oversees our quality and regulatory compliance programs with respect to legal and regulatory requirements.

•  Reports on significant audits, inspections and corrective and preventative actions on relative governmental investigations to our Board.

•  Oversees the implementation of our quality and regulatory compliance program.

  Mergers & Acquisitions Committee

Number of 2018 Meetings: 8

  Membership:

Jack Stahl, Chair  |  Rolf Classon  |  Gregory Lucier

  Function:

•  Assists our Board in reviewing and assessing potential mergers, acquisitions, divestitures, and other similar strategic transactions, taking into account, among other things, (i) the risks and benefits to the company and (ii) our Board’s obligation to oversee and provide overall direction to management with respect to such transactions.

 Committee

Meetings          

Consents          

 Audit Committee

4          

–          

 Compensation Committee

8          

1          

 Nominating Committee

2          

1          

 Quality Committee

4          

–          

 M&A Committee

8          

–          

convene meetings of the independent directors as the Lead Director deems necessary;

preside over all meetings of our Board at which the Chair is not present, including any executive sessions of the independent directors;

act as a liaison between the Chair and the independent directors; and

recommend to the other members of our Board the retention of consultants and advisors who directly report to it, without consulting or obtaining the advance authorization of any officer of the company.

Compile

Discuss

Review

Questionnaire results are compiled by the Corporate Secretary. Specific director comments are reported without attribution. Each director receives the Board self-evaluation results and the self-evaluation results for each committee on which the director serves. The Chair and the Lead Director receive all of the self-evaluation results.

Committee self-evaluation results are discussed by each committee, and Board self-evaluation results are discussed by the full Board, in each case in executive session. The committees and our Board each identify areas for further consideration and opportunities for improvement, and implement plans to address those matters.

Each committee and the full Board review progress with respect to any identified areas for further consideration.

By mail, addressed care of Corporate Secretary, Catalent, Inc., 14 Schoolhouse Road, Somerset, New Jersey 08873; or

By email to CorpSec@catalent.com.

JOHN CHIMINSKI

  President and Chief

  Executive Officer

  Age: 54

WETTENY JOSEPH

  Senior Vice President and

  Chief Financial Officer

  Age: 46

Mr. Joseph has served as our Senior Vice President and Chief Financial Officer since February 2018. He first joined us in 2008 as our Vice President and Corporate Controller, and held senior finance positions until October 2015, when he was named President, Clinical Supply Services, one of our principal business units. Before joining us, Mr. Joseph held a variety of senior financial positions at the industrial distribution company HD Supply, including as CFO of its $1.2 billion plumbing and HVAC business unit. He also served as Corporate Controller for Hughes Supply, a Fortune 500, NYSE-listed company that was acquired by Home Depot and became part of HD Supply. In his early career, Mr. Joseph spent six years at PricewaterhouseCoopers as an auditor and strategic financial advisor across a variety of industries. Mr. Joseph holds both a master’s and bachelor’s degrees in accounting from Florida Atlantic University and is a Certified Public Accountant.

JONATHAN ARNOLD

  President, Oral Drug

  Delivery

  Age: 52

Mr. Arnold was named President of our Oral Drug Delivery business in October 2017. Previously, he served for six years as Vice President and General Manager of our Drug Delivery Solutions business unit. Mr. Arnold’s career in the life sciences contract development and manufacturing organization sector began in 1995, when he joined RP Scherer, a specialist in softgel technologies and now an important part of Catalent, where he served in a variety of international business development and strategic customer account roles over the course of 5 years. Mr. Arnold then spent 11 years working for Patheon, another contract development and manufacturing organization, in multiple different locations, including Italy, the U.K., and Switzerland, serving in roles of increasing responsibility, including Vice President of Global Supply Chain and, ultimately, Chief Procurement Officer, before returning to us in 2011. Prior to working in the life sciences sector, Mr. Arnold had an international business development and strategic marketing role for the U.K.’s largest waste management company, Shanks & McEwan. Mr. Arnold earned his bachelor’s degree in Agricultural, Biochemistry and Nutrition from the University of Newcastle upon Tyne, U.K.

WILLIAM DOWNIE

  Senior Vice President,

  Global Sales & Marketing

  Age: 51

Mr. Downie has served as our Senior Vice President, Global Sales & Marketing since June 2010. He joined us as Group President, Medication Delivery Solutions, and Senior Vice President, Global Sales & Marketing in October 2009. Prior to joining us, Mr. Downie served as Vice President and Global Leader of Molecular Imaging at GE Healthcare. Before that, he held several executive positions in other GE Healthcare units, including Vice President and General Manager, Medical Diagnostics-Europe, Middle East and Africa, and Vice President of Sales for Medical Diagnostics-Europe. Prior to GE Healthcare, Mr. Downie was with Innovex UK Limited (part of Quintiles, Inc.), where he held several positions in operations and sales/marketing. Earlier in his career, he held leadership positions with Sanofi-Synthelabo UK; Sanofi-Winthrop Limited; and Merck & Co., Inc. Mr. Downie holds a B.S. degree in biochemistry from the University of Edinburgh.

STEVEN L. FASMAN

  Senior Vice President,

  General Counsel, and

  Corporate Secretary

  Age: 56

Mr. Fasman was named Senior Vice President, General Counsel, and Corporate Secretary in October 2014, when he joined us. Prior to that, he served as Executive Vice President-Law of MacAndrews & Forbes Holdings Inc., a privately held diversified holding company, from January 2012 to March 2014. Before that, Mr. Fasman held various positions at MacAndrews & Forbes since 1992 of increasing responsibility. From 2008 through March 2014, he also served as General Counsel and Chief Compliance Officer of M & F Worldwide Corp., a holding company with interests in financial products, customer calling centers, staffing operations, educational software and flavoring products. From 2008 to 2011, Mr. Fasman also served as a director of SIGA Technologies, Inc., a biodefense company. Mr. Fasman spent his early career at the law firm of Paul, Weiss, Rifkind, Wharton & Garrison, where he focused on domestic and international litigation and regulatory proceedings. Mr. Fasman holds a law degree from Yale University and an A.B. degree in mathematics from Princeton University. Mr. Fasman is a trustee of the Jewish Board of Family & Children’s Services in New York City.

ARISTIPPOS GENNADIOS, PH.D.

  President, Softgel

  Technologies

  Age: 53

Dr. Gennadios has served as our President, Softgel Technologies since September 2013. Previously, he served as Vice President and General Manager of Softgel Technologies. Dr. Gennadios has worked in the pharmaceutical industry since 1996 in roles including R&D, field sales, business development, operations and leadership. He joined our predecessor company, Cardinal Health, in 2002 and has held several key leadership posts within the softgel technologies business, including Global Vice President of Business Development for Softgel Technologies, General Manager of the Oral Development Center in Somerset, NJ, and Vice President and General Manager for Prescription Softgel and Consumer Health products. Dr. Gennadios holds a bachelor’s degree in chemical engineering from the National Technical University of Athens, Greece and a master’s degree in agricultural engineering from Clemson University. He also holds a doctorate in engineering from the University of Nebraska and an M.B.A. from Wake Forest University.

SCOTT GUNTHER

  Senior Vice President,

  Quality & Regulatory

  Affairs

  Age: 51

Mr. Gunther was named our Senior Vice President of Quality & Regulatory Affairs in May 2017. Mr. Gunther joined us in 2012 as Vice President, Quality and most recently oversaw the quality function for the United States sites in our Drug Delivery Solutions business unit. Previously, he concurrently served as an interim Vice President of Product Development for our Drug Delivery Solutions business unit. Prior to joining us, Mr. Gunther spent 22 years with Bristol-Myers-Squibb (“Bristol”) in various roles of increasing responsibility. In his last role at Bristol, he held the position of Executive Director Quality Operations Americas, where he was responsible for quality operations at its manufacturing sites in the U.S., Puerto Rico, and Latin America. Mr. Gunther holds a B.S. degree from the State University of New York College at Buffalo and an M.B.A. degree from Canisius College.

PAUL HEGWOOD, JR.

  President, Clinical Supply   Services

  Age: 60

Mr. Hegwood was named our President, Clinical Supply Services in May 2018. Previous roles at Catalent include Vice President, Clinical Supply Services Operations between April 2017 and May 2018, where he oversaw all clinical supply facilities with an emphasis on quality, service delivery excellence, and operational harmonization; Global Vice President, Customer Service Excellence between April 2015 and April 2017, where he focused on driving excellence and service delivery throughout our global network; and Vice President of Operations for Development and Clinical Services between February 2012 and April 2015. He was instrumental in the expansion of our footprint within the Asia-Pacific region, including the opening of our Shanghai facility in October 2013. Prior to joining us, Mr. Hegwood held senior operational roles at Stanadyne Corporation, Delphi, and General Motors and had extensive experience developing operations in several emerging markets including China. He has a BS in Mechanical Engineering from Kettering University and an MBA from the University of Michigan.

BARRY LITTLEJOHNS

  President, Biologics &

  Specialty Drug Delivery

  Age: 52

Mr. Littlejohns was named our President, Biologics & Specialty Drug Delivery in October 2017. Previously, he was President of our Drug Delivery Systems Solutions since July 2013. Prior to that, he led our Medication Delivery Solutions business from July 2011 to July 2013. He rejoined us in 2011 after two years as Senior Vice President of Operations and Business Development at Danish biotechnology company Genmab, where his responsibilities included strategic licensing and manufacturing oversight. Prior to Genmab, he served in a broad range of leadership roles at Catalent. These include Vice President of Global Business Operations, Vice President of Commercial Affairs for Medication Delivery Solutions, Vice President and General Manager of Injectables, and various financial, operational and leadership roles. He joined our predecessor RP Scherer Corporation in 1989. Mr. Littlejohns has a degree in business & finance from Swindon College, UK.

ALESSANDRO MASELLI

Senior Vice President—Global Operations

Age: 46

Mr. Maselli was named our Senior Vice President, Global Operations in September 2016. He joined us in 2010 as Director of Operations at our pharmaceutical, nutritional and cosmetics plant in Aprilia, Italy. In 2013, Mr. Maselli was appointed General Manager of Zydis^® operations at our facility in Swindon, U.K., and, in 2015, became Vice President of Operations, Europe, for our Drug Delivery Solutions business unit. Prior to joining us, Mr. Maselli held operational and business leadership roles at Alstom and SGS S.A. From 1998 to 2006, he held roles of increasing responsibility from process engineer to operations director at ABB Group. Mr. Maselli began his career as automation systems engineer in the food industry. A native of Italy, Mr. Maselli earned bachelor’s and master’s degrees in electronic engineering from the University of Rome.

LANCE MIYAMOTO

Senior Vice President—Global Human Resources

Age: 63

Mr. Miyamoto was named our Senior Vice President, Global Human Resources in March 2011. Prior to joining us, Mr. Miyamoto ran his own consulting business, and, prior to that, he held a number of Human Resources leadership roles in other companies, including Executive Vice President of Comverse Technology Inc. He also served as Executive Vice President of HR for AOL LLC, a division of Time Warner Inc., from 2004 to 2007. From 2001 to 2004, Mr. Miyamoto was Executive Vice President of HR for Lexis-Nexis, a $2.2 billion division of Reed Elsevier. He was also a senior executive with Dun and Bradstreet with responsibility for performance development. Mr. Miyamoto is a graduate of Harvard University, and holds an M.B.A. degree from the Wharton School of the University of Pennsylvania, where he was a COGME (Council for Graduate Management Education) Fellow.

BlackRock, Inc.⁽¹⁾

T. Rowe Price Associates, Inc.⁽²⁾

The Vanguard Group⁽³⁾

John Chiminski⁽⁴⁾

Wetteny Joseph⁽⁴⁾⁽⁵⁾

Jonathan Arnold⁽⁴⁾

William Downie⁽⁴⁾

Steven L. Fasman⁽⁴⁾

Matthew Walsh⁽⁶⁾

Madhavan Balachandran

J. Martin Carroll

Rolf Classon

Rosemary A. Crane

John J. Greisch

Christa Kreuzburg

Gregory T. Lucier

Donald E. Morel, Jr.

Jack Stahl

Directors and executive officers as a group (20 persons)⁽⁷⁾

Represents less than 1%

Information shown is based on information reported by the filer on a Schedule 13G/A filed with the SEC on January 17, 2018, in which BlackRock, Inc. reported that it has sole voting power over 16,047,104 shares and sole dispositive power over 16,721,278 shares. The address of BlackRock, Inc. is 55 East 52nd Street, New York, NY 10055.

Information shown is based on information reported by the filer on a Schedule 13G/A filed with the SEC on February 14, 2018, in which T. Rowe Price Associates, Inc. reported that it and its affiliates have sole voting power over 4,535,549 shares and sole dispositive power over 15,213,453 shares. The address of T. Rowe Price Associates, Inc. is 100 E. Pratt Street, Baltimore, MD 21202.

Information shown is based on information reported by the filer on a Schedule 13G filed with the SEC on February 7, 2018, in which The Vanguard Group reported that it and its affiliates have sole voting power over 258,930 shares, shared voting power over 22,302 shares, sole dispositive power over 11,593,734 shares, and shared dispositive power over 271,332 shares. The address of The Vanguard Group is 100 Vanguard Boulevard, Malvern, PA 19355.

The number of shares beneficially owned includes shares of common stock issuable upon exercise of options that are currently exercisable and/or will be exercisable within 60 days after September 4, 2018, as follows: Mr. Chiminski (272,627), Mr. Joseph (38,437), Mr. Arnold (19,535), Mr. Downie (16,059), and Mr. Fasman (31,829).

The number of shares beneficially owned includes 883 restricted stock units scheduled to vest within 60 days after September 4, 2018.

The address of Mr. Walsh is c/o Allergan, 5 Giralda Farms, Madison, NJ 07940.

Includes 861,402 shares of common stock issuable upon (a) vesting of restricted stock units within 60 days after September 4, 2018 or (b) exercise of options that are currently exercisable and/or exercisable within 60 days after September 4, 2018. Does not include amounts held by Mr. Walsh, who stepped down as Senior Vice President and Chief Financial Officer effective February 6, 2018.

Plan category

(a)

Number of

securities to be

issued upon exercise

of outstanding

options, warrants

and rights⁽³⁾

(b)

Weighted-average

exercise price of

outstanding options,

warrants and rights⁽⁴⁾

(c)

Number of securities

remaining available for

future issuance under

equity compensation

plans (excluding

securities reflected in

column (a))

Equity compensation plans approved by security holders⁽¹⁾

3,479,275

$28.07

2,184,859

The amounts set forth in this row relate to grants under the Catalent, Inc. 2014 Omnibus Incentive Plan (the “Omnibus Plan”), which was approved by a majority shareholder prior to our 2014 IPO. If our shareholders approve Proposal 4, relating to our new 2018 Omnibus Incentive Plan, then we will stop issuing awards under the Omnibus Plan, but all of the shares that otherwise would have been available for issuance thereunder will be available for issuance under the new plan.

Our Board approved the 2007 PTS Holdings Corp. Stock Incentive Plan (the “Pre-IPO Stock Plan”) on May 7, 2007, and it was amended on September 8, 2010 and June 25, 2013, all prior to our IPO. (“PTS Holdings Corp.” is a former name of Catalent, Inc.)

For the Omnibus Plan, the amount reported in this column excludes 473,234 performance-based restricted stock units (“PSUs”) that have the potential to vest if the maximum performance targets are met for the Adjusted EPS PSUs and Relative Return PSUs issued thereunder. Assuming maximum PSU targets are met, the total number of securities to be issued upon exercise of outstanding options, warrants, and rights as of June 30, 2018 is 3,952,509. All awards under the Pre-IPO Stock Plan were stock options, except for 260,480 restricted stock units ("RSUs") granted to Mr. Chiminski and 64,400 RSUs granted to Mr. Walsh, each of which converted to one share of our common stock and none of which remains outstanding.

The weighted-average exercise price does not take into account RSUs, restricted stock, PSUs, and performance-based restricted stock, which by their nature do not have an exercise price.

As of May 7, 2017, awards may no longer be made under the Pre-IPO Stock Plan.

Name⁽¹⁾

Fees Earned or
Paid in Cash
($)

Stock Awards
($)⁽²⁾

Total
($)

Madhavan Balachandran⁽³⁾

100,000

139,995

239,995

Melvin D. Booth⁽⁴⁾

17,935

-

17,935

J. Martin Carroll

108,505

139,995

248,500

Rolf Classon⁽⁵⁾

110,000

139,995

249,995

Rosemary A. Crane⁽⁶⁾

39,008

51,740

90,748

John J. Greisch⁽⁶⁾

42,806

51,740

94,546

Christa Kreuzburg⁽⁶⁾

37,222

51,740

88,962

Gregory T. Lucier⁽⁷⁾

101,786

139,995

241,781

Donald E. Morel, Jr.

120,000

139,995

259,995

James Quella⁽⁸⁾

69,361

172,439

209,356

Uwe Röhrhoff⁽⁹⁾

68,681

139,995

208,676

Jack Stahl⁽¹⁰⁾

$140,542

139,995

280,537

Mr. Chiminski did not receive any compensation as a director during fiscal 2018. He received compensation during fiscal 2018 as our employee, and his compensation is reported in this Proxy Statement in the executive compensation tables.

Represents the aggregate grant date fair value of stock awards for fiscal 2018, computed in accordance with the Financial Accounting Standards Board’s Accounting Standards Codification (“FASB ASC”) Topic 718, using the assumptions discussed in Note 12, “Equity-Based Compensation,” to the consolidated financial statements included in our Annual Report on Form 10-K for fiscal 2018. Messrs. Balachandran, Carroll, Classon, Lucier, and Stahl and Dr. Morel each had 3,976 unvested RSUs as of June 30, 2017. Ms. Crane, Mr. Greisch, and Dr. Kreuzburg each had 1,193 unvested RSUs as of June 30, 2017. See note 6 below.

Mr. Balachandran elected to defer 100% of his annual cash retainer for calendar 2018 under the Deferral Plan.

Mr. Booth retired from our Board as of August 25, 2017.

Mr. Classon elected to defer 50% of his annual cash retainer for calendar 2017 and 2018 and 100% of his annual RSU award under the Deferral Plan.

Became a member of our Board as of February 16, 2018.

Mr. Lucier elected to defer 100% of his annual RSU award under the Deferral Plan.

Mr. Quella retired from our Board as of February 16, 2018. In connection with his retirement, the vesting date of his outstanding stock award was accelerated, resulting in incremental fair value of $32,444, which is included in the amount reported in the Stock Awards column.

Mr. Röhrhoff retired from our Board as of February 4, 2018. His outstanding stock award was forfeited as a result.

Mr. Stahl served as Chair of the Audit Committee from February 4, 2018 until February 16, 2018, and his fee for such service was correspondingly prorated.

John Chiminski

Chair of the Board, President and CEO

Wetteny Joseph

Senior Vice President and Chief Financial Officer

Jonathan Arnold

President, Oral Drug Delivery

William Downie

Senior Vice President, Global Sales and Marketing

Steven L. Fasman

Senior Vice President, General Counsel & Secretary

Matthew Walsh*

Former Executive Vice President and Chief Financial Officer

Mr. Walsh’s service as our chief financial officer ended on February 6, 2018 and his employment ended on February 16, 2018.

Principle

Balanced mix of pay components and incentives. Our compensation program targets a market-based mix of cash and equity compensation, and of short and long-term incentives. The principal elements of our program are salary, performance-based annual bonus and long-term equity awards.

Pay for Performance. We emphasize pay-for-performance to align executive compensation with our business strategy. Approximately 87% of the target total direct compensation of our CEO in 2018 was variable or performance-based.

Share Retention. Our Compensation Committee has established stock ownership guidelines directing our executive officers to hold a multiple of annual salary in the form of shares of common stock in order to align management and shareholder interests.

Pledging and Hedging. Our executives are prohibited from pledging our shares or hedging against the economic risk of such ownership.

Use of Independent Consultant. The Compensation Committee has engaged an independent, third-party consultant, Frederic W. Cook & Co., Inc. (“FW Cook”), to assist it in designing our compensation program and making compensation decisions as we seek to align with best practices.

Principle

Claw-Back/Forfeiture Provisions. The terms of our long-term, equity-based awards allow us in certain circumstances to “claw back” shares received pursuant to such awards or to require the repayment of all gains realized on the vesting or exercise of such awards.

Compensation Peer Group. The Compensation Committee uses a group of peer companies, selected with the assistance of its independent compensation consultant, FW Cook, to benchmark its pay levels and benefit packages.

Shareholder Say-on-Pay. At the 2017 Annual Meeting of Shareholders, our shareholders voted 98.1% in favor of our say-on-pay proposal, demonstrating their concurrence that our executive compensation program reflects a pay for performance philosophy. In fiscal 2018, the Compensation Committee took into account the outcome of the shareholder advisory vote when making decisions relating to the compensation of our NEOs and our executive compensation program and policies. Based on the level of support, the Compensation Committee did not see a need for substantive changes to our compensation program.

REVENUE OF

$2,463.4 MILLION

GROWTH OF 16% ON CONSTANT-CURRENCY BASIS⁽¹⁾

NET EARNINGS OF

$83.6 MILLION

$0.63 PER DILUTED SHARE

ADJUSTED EBITDA OF

$550.7 MILLION

GROWTH OF 20% ON CONSTANT-CURRENCY BASIS⁽²⁾

NET LEVERAGE RATIO OF

4.2x

4.9X INTEREST COVERAGE RATIO

SHAREHOLDER RETURN OF

19%

COMPLETED

major biologics

ACQUISITION

• Competitive compensation. Providing a competitive compensation package that enables us to attract, motivate, retain, and reward superior executive talent.

• Alignment with shareholder interests. Align our executives’ interests with our shareholders’ through equity compensation, short- and long-term absolute and relative performance metrics and share retention guidelines.

• Linking compensation to performance. Fostering a pay-for-performance philosophy by tying a significant portion of pay to financial and stock-price performance as well as other goals that support the creation of sustainable long-term shareholder value.

COMPONENT

DESCRIPTION

OBJECTIVES AND COMMENTS

Cash Compensation

Base Salary

• Attract, motivate, and retain superior talent.

• Provide a fixed, baseline level of compensation.

• Annual increase based on market positioning and individual performance.

Annual Bonus Opportunity:

Management Incentive

Plan (our “MIP”)

• Variable pay for short-term achievement of financial results and individual goals.

• For 2018, 70% based on financial performance (budget-based EBITDA, budget-based revenue, and annual capital deployed) and 30% based on individual goals.

COMPONENT

DESCRIPTION

OBJECTIVES AND COMMENTS

Long-Term Incentive

Long-Term Equity

Incentive Awards

• Align compensation with the creation of shareholder value and achievement of business goals.

• Increase equity ownership by executives

• Promote executive retention and achievement of long-term performance objectives.

• Reward absolute and relative stock price performance over a multi-year period.

Retirement